From soncu at pacbell.net Sun Jun 2 02:04:19 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sun, 02 Jun 2002 01:04:19 -0700 Subject: [A-List] US: Bush says be ready for war Message-ID: Bush Tells West Point Graduates They Should Be Ready for War By David Morris and Holly Rosenkrantz West Point, New York, June 1 (Bloomberg) -- U.S. President George W. Bush said he'll wage an aggressive fight against new terrorism threats and will send graduates of the U.S. Military Academy and other soldiers to any part of the world where peace is at risk. Bush, who took office last year questioning the U.S. role in peacekeeping operations in Kosovo and other parts of the world, said responding to terrorist threats requires "a military that must be ready to strike at a moment's notice in any dark corner of the world." To the 958 cadets who received diplomas, the president said, "We will send diplomats where they are needed and we will send you, our soldiers, where you're needed." In Bush's first commencement speech since the Sept. 11 terrorist attacks, the president said that while the war against terrorism is going well, he expects future attacks that will challenge the nation's newest officers. "The bicentennial class at West Point now enters this drama," Bush said. "You will stand between your fellow citizens and grave danger. You'll face times of calm and times of crisis." Pearl Harbor Bush compared this year's cadets to those who graduated in 1942, just six months after Japan's attack on Pearl Harbor drew the U.S. into World War II. "History has also issued its call to your generation," the commander-in-chief said. "In your last year, America was attacked by a ruthless and resourceful enemy. You graduate from this academy at a time of war." By tradition, the U.S. commander-in-chief delivers the commencement address at one of the service academies each year. Bush spoke at the U.S. Naval Academy last year and will speak next year at either the U.S. Air Force Academy or the U.S. Coast Guard Academy. At the Naval Academy last year, Bush talked of the need to transform the military into a faster-moving force. This year, he said, that message takes on new urgency. "We are on watch and we're ready because we know the terrorists have more money, more men and more plans," Bush said. He promised an aggressive fight, saying if the government waits for the next attack to happen, "we will have waited too long. The only path to safety is the path of action, and this nation will act." The president was supposed to begin his day as honorary starter of a charity race in Washington. Although his pep talk was broadcast to reporters at West Point, a communications breakdown kept the runners from hearing his telephoned remarks at the race. "You mean they haven't heard a word yet?" Bush said when he was told of the breakdown about three minutes into his remarks. "God dang it." A few minutes later, Bush tried again, with a shorter speech. Those remarks, too, went unheard in Washington because of another communications breakdown. This time, no one told Bush. From jfgf.consult at mail.telepac.pt Sun Jun 2 03:14:22 2002 From: jfgf.consult at mail.telepac.pt (Jorge Figueiredo) Date: Sun, 02 Jun 2002 10:14:22 +0100 Subject: [A-List] Last insertions in resistir.info, Portuguese web site Message-ID: <5.1.0.14.0.20020602100614.03cf9388@mail.telepac.pt> Last articles inserted in http://resistir.info: A curva da estrada, por Jorge Figueiredo O auto-golpe como mecanismo de pol?tica exterior, por Fernando Montiel T. O iminente decl?nio do petr?leo, por Rui Namorado Rosa Jo?o Amazonas, revolucion?rio irrepet?vel, por Miguel Urbano Rodrigues Reforma Agr?ria no Brasil: s? na televis?o, por Jo?o Pedro Stedile e Gerson Teixeira Washington empurra a ?ndia e o Paquist?o para a guerra, por Michel Chossudovsky Quadros t?cnicos e cient?ficos: ideias de ontem e de hoje, por J. M. Costa Feij?o Do genoc?dio fascista israelense ? her?ica saga palestina, por Miguel Urbano Rodrigues Militares brasileiros planeiam defesa da Amazonia, entrevista do Gen. ?talo F. Avena Bento de Jesus Cara?a, por Rui Namorado Rosa Pearl Harbor & 11 de Setembro, entrevista ao escritor Robert B. Stinnett Administra??o Bush precisa ser investigada, reitera congressista dos EUA, por Cynthia McKinney VISITE http://resistir.info From ewc at onetel.net.uk Sun Jun 2 05:06:04 2002 From: ewc at onetel.net.uk (ewc) Date: Sun, 2 Jun 2002 12:06:04 +0100 Subject: [A-List] the truth about gold References: Message-ID: <000c01c20a25$7da79e80$7d714ed5@oemcomputer> Pasted to todays a-list I find Emeritus Professor of Economics Sennholz eulogises about "the pivotal role that gold played throughout the ages" I note that he does so with the assistance of the Mises Institute whose aims state: "It is the mission of the Mises Institute to ................encourage a revival of critical historical research" In line with this philosophy, I would be grateful if he could tell me what ages he is talking about? On what planet? (Gold has only rarely been the monetary standard on Earth for the last 2,500 years). Copies to a-list and Prof Sennholtz direct Robert From annewilliamson at msn.con Sun Jun 2 05:41:20 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Sun, 2 Jun 2002 07:41:20 -0400 Subject: [A-List] the truth about gold References: <000c01c20a25$7da79e80$7d714ed5@oemcomputer> Message-ID: <037701c20a2a$6b0b44c0$0100a8c0@igrushkii> Robert: You seem to want to argue all of economic history with gold as the villain. Do you deny that gold has been the preferred instrument of exchange for millenia? Do you deny that all fiat currencies have either failed or are in the process of failing? When given a choice (i.e., when private ownership of gold has been allowed unimpeded by legal tender laws), mankind has always chosen gold. That's why there are legal tender laws! The classical gold standard prevailed de facto and finally de jure from the late 1700s through the early 20th century, and this is the first period of time in which it is possible to study gold as part of an international system. It worked well, which can not be said of our current, vast monetary experiment of the last 30 years, i.e., a world of floating rates that is unravelling before our very eyes. Are you sure it isn't "money" and economic activity in general to which you object? Anne ----- Original Message ----- From: ewc To: Cc: Sent: Sunday, June 02, 2002 7:06 AM Subject: [A-List] the truth about gold > Pasted to todays a-list I find > > Emeritus Professor of Economics Sennholz > > eulogises about > > "the pivotal role that gold played > throughout the ages" > > I note that he does so with the assistance of the Mises Institute > whose aims state: > > "It is the mission of the Mises Institute to ................encourage > a revival of critical historical research" > > In line with this philosophy, I would be grateful if he could tell me > what ages he is talking about? On what planet? (Gold has only rarely > been the monetary standard on Earth for the last 2,500 years). > > Copies to a-list and Prof Sennholtz direct > > Robert > > > > > From soncu at pacbell.net Sun Jun 2 14:46:22 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sun, 02 Jun 2002 13:46:22 -0700 Subject: [A-List] US: Investor confidence Message-ID: The other day Michael Perelman posted this to PEN-L. It is by Keynes, and according to Ian Murray, from "A Tract on Monetary Reform": > To convert the businessman into the profiteer > is to strike a blow at capitalism, because it > destroys the psychological equilibrium which > permits the perpetuance of unequal rewards. > The economic doctrine of normal profits, vaguely > apprehended by everyone, is a necessary condition > for the justification of capitalism. Today there is this article in New York Times. Sabri ++++++++++++++++++++ New York Times June 2, 2002 What If Investors Won't Join the Party? By GRETCHEN MORGENSON By many measures, the United States economy is rebounding smartly from its desultory performance in late 2001. But even as economic output surges and corporate profits appear once more to be rising, one closely watched indicator of economic oomph remains depressed: the broad stock market indexes. All of the big-company indexes, the ones that reflect what investors are most likely to own through mutual funds, are still down for the year. Because stocks normally begin to rise well before evidence of an economic recovery drives up to the door, many investors are baffled by the fact that the market is in reverse. And they are angry, after already enduring two years of losses in the major indexes. Stocks may bounce back during the summer, of course, as investors gain their footing in unstable times. Indeed, on Friday, stocks rose slightly after the University of Michigan monthly consumer confidence report showed confidence rising in May to its highest level since December 2000. But if stocks remain stuck in their underlying slump, consumers may rein in their spending, which would damage a fragile economic recovery. Even more ominous, if investors shun stocks for a prolonged period, companies will find it much more difficult and costly to raise the capital they need to expand their operations and increase revenue and profits. That possibility is worrying leaders of corporate America. "The fundamental issue we're dealing with is uncertainty," said Samuel J. Palmisano, president and chief executive of I.B.M. "It is both geopolitical uncertainty in the aftermath of Sept. 11 and the war on terrorism, and market uncertainty in reaction to the flame-out of the dot-coms and Enron." That instability is depressing business investment and weighing down the stock market, Mr. Palmisano said. Investors are not only focusing on fundamentals like a company's ability to generate cash, he explained, but they are also demanding sound strategy, skilled management and by-the-book accounting from companies. "It is incumbent on business leadership to demonstrate that," Mr. Palmisano said, "so our credibility will not be questioned." Terrorist threats and fears about the possibility of nuclear war between Pakistan and India have definitely added to market jitters. A decline in the value of the dollar may be hurting stock prices because it encourages foreign investors to repatriate some funds they have held in dollar-denominated assets like stocks. And what looked like a recovering economy early in the year may falter over the summer or fall, causing what economists call a recessionary double dip. But another factor weighing on stock prices may not be as evident as tensions in South Asia and the Middle East yet is every bit as menacing to investors. This is investors' growing sense of mistrust in the nation's capital markets and the role they play in helping to generate growth and prosperity. The steady stream of accounting scandals, corporate chicanery and questionable practices at Wall Street firms is taking a toll on investor confidence ? and that has major implications for the stock market as a whole. Felix G. Rohatyn, the financier and former American ambassador to France, says investors' belief in the integrity of the financial markets has been severely damaged in the last year. "Our system of market capitalism requires a high level of Protestant ethic," he said. "You need a regulatory system on one hand and a very strong ethic on the other, and within those guideposts you can let the market hopefully promote growth and wealth creation. But if either the regulatory or ethical base begins to erode, then you've got some real problems. And I think that is where we are right now." Not all stocks are down, by any means. Shares of medium-sized companies have been strengthening, perhaps reflecting a belief among investors that because these companies were more obscure, their managements did not feel the need to resort to aggressive accounting to meet or beat their financial forecasts and prop up their stocks. The Standard & Poor's midcap index of 400 companies is up 4 percent since the beginning of the year. But larger stocks ? and the investors who own them ? have definitely felt the pain. The S.& P. 500 has lost 7 percent of its value this year while the Dow Jones industrial average is flat. The Nasdaq composite, where many investors have been hit hardest, has lost 17.2 percent of its value and is trading 68 percent below its 2000 peak. With returns like these, it is perhaps not surprising that the number of investors who say that now is a good time to invest has dropped to levels not recorded since September 2001, according to the investor optimism poll conducted monthly by UBS and Gallup. The results of the May poll also indicate where investors think the market is most vulnerable. Their largest concern is dubious accounting practices: 84 percent feel that this issue is punishing stock prices, ranking it ahead of conflict in the Middle East and terrorism. Almost two-thirds of those polled say conflicts of interest between brokerage firms' research departments and investment banking activities are hurting the investment climate. The poll results also show how much damage the Enron eruption has done to investor confidence. Nearly three-quarters of investors surveyed ? 71 percent ? said they believe questionable accounting practices are widespread in business, up from 62 percent in February. As a result, 40 percent of the 1,002 investors responding to the poll say they are less likely to invest in stocks or mutual funds. That figure was 34 percent in February. It appears unlikely that investor confidence will jump anytime soon. Jason Trennert, managing director and investment strategist at the I.S.I. Group, a brokerage firm in New York, said regulatory investigations into the business practices of brokerage firms were a cloud over the industry that was not going away. "You're going to continue to see things coming out every day that question how Wall Street does business, and that is not helpful for investor confidence," he said. "Longer term, reforms will be positive to the extent that it will make investors more confident, but the investigations will be a heavy headwind for investor confidence." Judging from the e-mail messages he has received recently from investors, David M. Blitzer, chief investment strategist at Standard & Poor's, said investors appeared deeply frustrated today. "In the scandals of the last year, a few people have gotten rich and most investors have gotten poorer," Mr. Blitzer said. "I think they want a sense that it is a fair game and that everybody has an equal chance to win or lose. People seem to feel that for the matter to be settled, somebody is going to have to go to jail." Mr. Blitzer said he is amazed at the number of investors who have stayed in the market throughout the crashing fall of the Internet and telecommunications stocks and, now, almost daily reports of fresh accounting fiascos at big public companies. He fears that if significant changes are not made to restore investor confidence, many will drift away from stocks. Volume figures show that this drift has begun, at least among individual investors. While trading volume is still high on the New York Stock Exchange, average daily trades at Charles Schwab in April came in at 192,900, down from 235,000 a year earlier. In March 2000, when the market peaked, Schwab clients conducted 420,100 trades daily. Mitchell H. Caplan, president of the E*Trade Group, characterized many of his firm's customers ? particularly those with more than $100,000 in investable assets ? as frozen. "People are trying to figure out what to do and more often than not they are going to cash," he said. James B. Stack, president of InvesTech Research in Whitefish, Mont., recently returned from the Las Vegas Money Show, a four-day conference where purveyors of investment information make presentations to individual investors. Mr. Stack met hundreds of investors at the show and has concluded that most of them are only now beginning to realize that the $5 trillion they have lost in stocks is not coming back anytime soon, if ever. "What was lost in paper wealth was real money," Mr. Stack said. "It may not have been booked profits in investor portfolios, but it was perceived as retirement funds. The pain of today is going to evolve into anger; unfortunately, along the way comes mistrust. They're asking: "Who's telling us the truth? Who's giving us the real numbers?' " One measure of wealth noted by Moody's Investors Service shows how much poorer consumers are today than they were just two years ago. In the first quarter of this year, real liquid financial assets per worker were down an estimated 24 percent from the high of early 2000. Americans are still 36 percent wealthier than they were from 1991 through 1995, but the recent decline is troubling nonetheless. "Real wealth might seem ample compared to its historical trend," said John Lonski, chief economist at Moody's. "But an extended slide by equity prices could be damaging. Consumer confidence would suffer, and businesses would be less inclined to pursue expansion amid slumping equities. Declining share prices would curb both capital spending and hiring activity." Perhaps reflecting their fears about investment prospects, consumers are less confident about the possibilities for income growth than they have been in recent years. In a recent confidence report cited by Moody's, tracking the first five months of 2002, only 21 percent of respondents expect higher incomes in six months. That is below the 25.7 percent average from 1996 to 2000 and below the 23.9 percent of a year ago. The trouble with the current market malaise may come down to this: While nobody wants a frightened investor class, few think that its suspicions or frustrations are irrational. "As the average investor learns more about the shenanigans that went on, he is going to get mad and he has every right to be mad," Mr. Stack said. "You hate to see it because the small investor is paying the steepest price, not because they lost the most but because they lost the greatest amount of what they could not afford to lose." Full at: http://www.nytimes.com/2002/06/02/business/yourmoney/02CONF.html From hliu at mindspring.com Sun Jun 2 18:50:06 2002 From: hliu at mindspring.com (Henry C.K. Liu) Date: Sun, 02 Jun 2002 20:50:06 -0400 Subject: [A-List] US: Bush says be ready for war References: Message-ID: <3CFABD3E.568732C9@mindspring.com> To fight the enemy, you have to first find him. Pearl Harbor was simple. Germany, an ally if Japan, declared war on the US. The War on Terrorism apears to be showdow boxing witha lot of collateral damage, not just in dark corners of the world, but in the US home land. The events of 9:11 reversed the US from the path of anti-statism, anti-government set by Reagan, back to the path of rising statism and giant government. In foreign policy, national security becomes a justification for effectuating regime changes in "evil" nations accused of harboring ofr supporting terrorism. Economically, the financial market has shown itself to be indifferent to national security needs. This has brought about government restriction of the free flow of funds so fundamental to neo-liberalism merely to stop terrorism financing. Military Keynesianism is now in full swing. The War on Terrorism has put the US in a garrison state mentality which ironically is the aim of terrorism. Thus the War on Terrorism is proof of the success of terrorism. Henry C.K. Liu Sabri Oncu wrote: > Bush Tells West Point Graduates They Should Be Ready for War > By David Morris and Holly Rosenkrantz > > West Point, New York, June 1 (Bloomberg) -- U.S. President George > W. Bush said he'll wage an aggressive fight against new terrorism > threats and will send graduates of the U.S. Military Academy and > other soldiers to any part of the world where peace is at risk. > > Bush, who took office last year questioning the U.S. role in > peacekeeping operations in Kosovo and other parts of the world, > said responding to terrorist threats requires "a military that > must be ready to strike at a moment's notice in any dark corner > of the world." > > To the 958 cadets who received diplomas, the president said, "We > will send diplomats where they are needed and we will send you, > our soldiers, where you're needed." > > In Bush's first commencement speech since the Sept. 11 terrorist > attacks, the president said that while the war against terrorism > is going well, he expects future attacks that will challenge the > nation's newest officers. > > "The bicentennial class at West Point now enters this drama," > Bush said. "You will stand between your fellow citizens and grave > danger. You'll face times of calm and times of crisis." > > Pearl Harbor > > Bush compared this year's cadets to those who graduated in 1942, > just six months after Japan's attack on Pearl Harbor drew the > U.S. into World War II. > > "History has also issued its call to your generation," the > commander-in-chief said. "In your last year, America was attacked > by a ruthless and resourceful enemy. You graduate from this > academy at a time of war." > > By tradition, the U.S. commander-in-chief delivers the > commencement address at one of the service academies each year. > Bush spoke at the U.S. Naval Academy last year and will speak > next year at either the U.S. Air Force Academy or the U.S. Coast > Guard Academy. > > At the Naval Academy last year, Bush talked of the need to > transform the military into a faster-moving force. This year, he > said, that message takes on new urgency. > > "We are on watch and we're ready because we know the terrorists > have more money, more men and more plans," Bush said. > > He promised an aggressive fight, saying if the government waits > for the next attack to happen, "we will have waited too long. The > only path to safety is the path of action, and this nation will > act." > > The president was supposed to begin his day as honorary starter > of a charity race in Washington. Although his pep talk was > broadcast to reporters at West Point, a communications breakdown > kept the runners from hearing his telephoned remarks at the race. > > "You mean they haven't heard a word yet?" Bush said when he was > told of the breakdown about three minutes into his remarks. "God > dang it." > > A few minutes later, Bush tried again, with a shorter speech. > Those remarks, too, went unheard in Washington because of another > communications breakdown. This time, no one told Bush. From cburford at gn.apc.org Mon Jun 3 02:29:30 2002 From: cburford at gn.apc.org (Chris Burford) Date: Mon, 03 Jun 2002 09:29:30 +0100 Subject: [A-List] Europe's fisheries near collapse Message-ID: <4.3.2.7.1.20020603092809.037d0bc0@pop3.norton.antivirus> From New Scientist News Service:- "Make or break" for Europe's fisheries 10:33 29 May 02 Debora MacKenzie, Brussels The unveiling of the European Commission's last-ditch effort to save Europe's fisheries on Tuesday has unleashed a desperate political battle in Brussels. "It's make or break time," said Franz Fischler, EU fisheries Commissioner, as the Commission approved a proposed Common Fisheries Policy that would slash Europe's fleet, pay fishermen to change jobs - and finally pay attention to scientists after a decade of warnings. Now the plan must be approved by EU fisheries ministers, but there will be immense opposition. The reason is clear: Europe must slash its fishing fleet to halt overfishing, but those cuts will result in tens of thousands of jobs being lost. In launching its new plan, the Commission stated that "10 vessels are chasing fish that five or six could catch without damaging the fish stocks or harming the environment". Fischler wants to cut fishing effort by 30 to 60 per cent, and to cut fleet tonnage by 18 per cent, by 2006. Spain has by far Europe's largest fleet and therefore has most to lose. It is unlikely to give in without a fight. Permanent collapse Yet scientists at the International Council for the Exploration of the Seas in Copenhagen warn that without such measures, Spain's and every other European country's fishermen could find themselves permanently unemployed. Some stocks, especially cod in the North Sea, are perilously close to potentially permanent collapse. In an unusually frank memo accompanying the proposal, the Commission noted that since 1987 Europe's fisheries ministers have consistently set catch quotas higher than scientists recommended. Quotas are set once a year at an all-night political session. The new plan, the Commission promises, "will end the annual political horse-trading about ... quotas, and replace it with multi-annual catch targets within safe biological limits". Most innovatively, the Commission proposes using 460 million Euros earmarked for "modernising" fishing vessels - funds that often ended up surreptitiously increasing fishing capacity - to instead find fishermen other jobs. The threat of unemployment in fishing regions is the main reason ministers have been unwilling to cut catches and capacity in the past. But the Commission notes that falling catches lost the industry almost a quarter of its jobs during the 1990s. From cburford at gn.apc.org Mon Jun 3 02:52:11 2002 From: cburford at gn.apc.org (Chris Burford) Date: Mon, 03 Jun 2002 09:52:11 +0100 Subject: [A-List] How Europe controls South American Banks Message-ID: <4.3.2.7.1.20020603094825.03113600@pop3.norton.antivirus> At least, one way:- Bank scandal shakes Spanish government MADRID, Spain (AP) --When $200 million appeared out of nowhere on the balance sheet of one of Europe's most successful banks, Spanish regulators took notice -- and went to work. They unearthed evidence that chief executives had been funneling profits into offshore tax havens since the late 1980s to fatten directors' pensions and allegedly grease the palms of Latin American politicians in exchange for control of national banks. With 26 current and former board members embroiled in criminal proceedings, the probe has only added to the woes of Spain's Banco Bilbao Vizcaya Argentaria, which last year had to set aside $1.2 billion for a possible write-off of losses in Argentina. Meanwhile, Prime Minister Jose Maria Aznar's pro-business government and the opposition Socialists accuse each other of cover-ups as the secret accounts scandal sends shock waves through Spanish boardrooms far from BBVA's roots in the prosperous northern Basque region. "Five years ago, when we started talking about good corporate governance, people thought we were crazy," said Tomas Garicano of the Instituto de Empresa business school in Madrid. "Now many companies are very worried." In an attempt to clean up BBVA's image, the bank's new CEO, Francisco Gonzalez Rodriguez -- a 58-year-old former stockbroker and computer programmer who shuns the extravagance of Spain's moneyed classes -- has fired all executives implicated in the scandal. He has appointed a new, slimmed-down board and plans to make executive salaries a matter of public record. BBVA will "emerge reinforced from this crisis, thanks to the huge transparency effort we are making," Gonzalez told the Efe news agency recently. But on Thursday the National Stock Market Commission said it had launched its own investigation into whether the BBVA's offshore activities violated securities laws. The future of BBVA, which has $275 billion in assets and controls banks in more than a dozen Latin American countries, may depend on whether Gonzalez is able to bury the ghosts of its past. Regulators say the shady dealing began in 1987 when the bank's branch on the English Channel island of Jersey, BBV Privanza, started setting up trusts in Jersey and Liechtenstein. Meant to finance share repurchases aimed at warding off foreign predators, they grew with stock-trade profits and were used to less honorable ends. In 1998 and 1999, $1.5 million went to the successful presidential campaign of Venezuela's Hugo Chavez to protect its Banco Provincial subsidiary from nationalization, according to prosecutors, who say bribes were also paid to acquire banks in Mexico and Peru. BBVA has admitted that in 2000, $20 million was deposited with American Life Insurance Company of Wilmington, Delaware, to enhance the pension packages of 22 former bank board members. Last March, Spain's top investigating magistrate, Baltasar Garzon, better known for his pursuit of Latin American dictators such as Chile's Augusto Pinochet, took over the case from the central bank. Working like a U.S. grand jury, Garzon has subpoenaed an all-star cast of former BBVA executives -- many from the dynasties that have controlled Basque industry and finance since the 19th century, when mines, shipyards and steelworks first brought wealth to the region. Among them are former BBVA chairman Emilio Ybarra -- whose uncle, the son of the bank's founder, was abducted and killed by Basque separatists in 1977 -- and Ybarra's predecessor, Jose Angel Sanchez Asiain, now financial adviser to Pope John Paul II. Garzon has heard Deputy Treasury Minister Estanislao Rodriguez-Ponga deny allegations by the former vice president of the bank's Puerto Rican branch that the official wrote a tax evasion guide while he was BBVA's fiscal lawyer in the mid-1990s. The accuser, Nelson Rodriguez, approached the FBI several years ago with allegations of the bank's involvement in bribery and laundering drug money in Latin America. Although Garzon has dismissed Rodriguez's testimony, the scandal has been damaging for Aznar, elected in 1996 largely on pledges of honest government. From sherrynstan at igc.org Mon Jun 3 06:48:57 2002 From: sherrynstan at igc.org (Sherry & Stan Goff) Date: Mon, 3 Jun 2002 08:48:57 -0400 Subject: [A-List] US: Bush says be ready for war References: <3CFABD3E.568732C9@mindspring.com> Message-ID: <003101c20afd$08b553a0$0300a8c0@earthlink.net> Henry C.K. Liu said: > To fight the enemy, you have to first find him. Pearl Harbor was > simple. Germany, an ally if Japan, declared war on the US. The War on > Terrorism apears to be showdow boxing witha lot of collateral damage, > not just in dark corners of the world, but in the US home land. > > The events of 9:11 reversed the US from the path of anti-statism, > anti-government set by Reagan, back > to the path of rising statism and giant government. In foreign policy, > national security becomes a > justification for effectuating regime changes in "evil" nations accused > of harboring ofr supporting > terrorism. Economically, the financial market has shown itself to be > indifferent to national security > needs. This has brought about government restriction of the free flow of > funds so fundamental to > neo-liberalism merely to stop terrorism financing. Military > Keynesianism is now in full swing. The War > on Terrorism has put the US in a garrison state mentality which > ironically is the aim of terrorism. Thus > the War on Terrorism is proof of the success of terrorism. Stan replies: Henry's points are very important. I've been reading "The New Imperialism", by Robert Biel, and frankly Biel makes some very compelling points. He glosses over the strategic devaluation and petrodollar aspects of the 1970's, which has been paid much attention here in the past on this list, but he clearly identifies a crisis-driven adjustment by capital at that time, emphasizing instead the capitlaist-cooperative [and political] aspects of neoliberalism, that is, the multi-lateral integration of the Northern metropoles to more effectively salvage accumulation at the expense of the Southern periphery. Part of that process of adjustment was the overthrow of Keynesianism and the implementation of "structural adjustment" using debt leverage as the crow bar to tear open the sovereignty of peripheral nations. He also writes in 2000, when the book was published, that the "system" was showing signs of severe strain. I myself have used the term, military keynesianism, but I will qualify that by saying that keynesianism was earlier characterized by policies that attempted to secure full employment in the core. It looks more to me like the Bush-Rumsfeld junta is blundering its way toward some kind of return to mercantilism, though I'd heavily qualify that, too, and a kind of archaic return to the foreign policies of the Cold War, with "terrorism" the new enemy. It's obviously a response to yet another crisis of accumulation, this time compounded by a political crisis, that is, the beginning of the unravelling of the empire (especially in Latin America) with the ultimate goal being the establishment of control of the world's energy resources as the strategic linchpin. Biel points out that there was an inherent danger in offering portions of the northern working class a "white privilege" as a way of maintaining domestic tranquility in the metropoles, which was that, paradoxically, the inequality of remuneration for labor might strengthen the hand of peripheral nations (as we have seen to some extent in China, which can no longer be called truly "peripheral"). To rationalize the system, then, the core must eventually attack the living standards of its own workers, not just to expand capital against the falling rate of profit, but to maintain political hegemony. Seems to me that we have some studying to do to figure out what this qualitatively different approach is all about, beyond the outlines of it, concretely. Much has been said about currency on this list, and that's one aspect of it. And much has been alluded to with regard to the resurgence of inter-imperialist rivalry, as a reaction to the "unilateralism" of the US [mercantilism?]. I am seriously missing the voice of Mark Jones lately (are you okay, Mark?), who occasionally and brilliantly took a crack at some kind of integrative totalization. Henry is dead right about one thing, and that's that war on "terrorism" is a military blunder from A to Z. We all realize that it's a pretext to give the junta a free hand, but it really appears that they believe they can indefinitely support a hi-tech, highly mobile, highly flexible military regime... one reason, I suspect, that the Joint Chiefs are at loggerheads with Rumsfeld... they know he is a crackpot technophilic generalissimo who doesn't know shit from shinola about the principles of war. Reading between the lines, it's fairly apparent that Afghanistan is an unmitigated military disaster, and an expensive one at that. Mobility and flexibility are essential to "warfighting" in the tactical realm, and a high tech bag of tricks can deliver significant tactical advantages. But tactics that do not take a larger strategic overview as their referent are bees in bottles. Past military doctrine was predicated on conflict between nation-states, and this provided focus; strategic, operational, and tactical. The new doctrine that is emerging, "full-spectrum response", provides military-police structures with a much longer menu of tactical options, but it can't overcome the fundamental strategic contradictions that continually return to initiative to the regimes opponents, and that continually generate more antipathy for the regime and sympathy for its enemies. Of course, we know that the enemy is not "terrorism". We are seeing the inauguration of a a pure, unadulterated [literal] class war, and that's why the weakened and marginalized states across which the exploited masses grow restless are no longer at the center of military doctrine. From soncu at pacbell.net Mon Jun 3 12:09:29 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Mon, 03 Jun 2002 11:09:29 -0700 Subject: [A-List] US: Investor confidence In-Reply-To: Message-ID: Bloomberg provides this information about Tyco: "Tyco, based in Bermuda and run from Exeter, New Hampshire, is the biggest maker of electronic connectors, undersea fiber-optic cable, valves used in the oil and natural-gas industries and fire and security systems. It's also the second-biggest maker of disposable medical products behind Johnson & Johnson." Also note that GE is the largest competitor of Tyco and suffering serious losses. The suicide of the treasurer of El Paso, the largest U.S. natural gas pipeline owner, was a also major "shock" to the US market today. It is getting very dangerous. Sabri +++++++++++++++++ Top Financial News 06/03 13:17 U.S. Stocks Fall After Tyco CEO Resigns; Williams, El Paso Drop By Danielle Sessa New York, June 3 (Bloomberg) -- U.S. stocks fell to their lowest in almost a month as a criminal investigation of Tyco International Ltd. Chairman Dennis Kozlowski for evading New York state sales taxes aggravated investor skepticism toward corporate America. Energy companies Williams Cos. and El Paso Corp. plummeted. Their trading business is shrinking amid disclosures of sham transactions by rivals and increased scrutiny by state regulators. "You can't ignore that we have a loss of investor confidence," said Susan Everly, who manages $5 billion in large- company stocks at Credit Suisse Asset Management. The Standard & Poor's 500 Index dropped 12.76, or 1.2 percent, to 1054.38. Tyco, which constitutes 0.3 percent of the index, contributed 11 percent of the decline. Tyco's larger rival, General Electric Co., tumbled to its lowest since December 1998. The Dow Jones Industrial Average lost 88.43, or 0.9 percent, to 9836.82, led by International Business Machines Corp. The Nasdaq Composite Index shed 29.34, or 1.8 percent, to 1586.39. For all three indexes, it was their lowest since May 7. The S&P 500 has lost 8 percent this year after dropping the previous two years. The benchmark hasn't had three straight annual declines since 1939-1941. Stocks fell even after an industry report showed U.S. manufacturing expanded in May at a faster pace than a month earlier. The Institute for Supply Management's factory index rose to 55.7 last month from 53.9. Economists surveyed by Bloomberg expected a reading of 54.7. A reading above 50 represents expansion. Disillusioned' Investors "Investors are disillusioned," said Scott Schermerhorn, head of large-cap value investing at FleetBoston Financial Corp.'s Columbia Management Group Inc., which oversees $170 billion. More than two stocks fell for every one that rose on the New York Stock Exchange and the Nasdaq Stock Market. Some 673 million shares traded on the Big Board by 1 p.m. New York time, up 26 percent from two weeks ago. Tyco slumped $5.05, or 23 percent, to $16.90. The Manhattan district attorney's office said it launched a sales-tax investigation that involves Kozlowski. The company said it ousted Kozlowski after he told the board he was being probed for personal tax evasion in New York. Shares of the biggest maker of electrical connectors and securities alarm systems have lost 72 percent this year on concern the company's accounting practices masked slowing growth. Kozlowski withdrew a proposal to split the company into four units as the stock extended its decline. Williams, El Paso Slide Williams slid $2.99, or 22 percent, to $11.21. The owner of the second-biggest U.S. gas pipeline has failed to reassure investors about its natural-gas business in California and energy- trading accounting. The state may ask federal regulators to probe allegations that the company tried to corner the state's gas market during last year's energy crisis. El Paso fell $3.43 to $22.22 after Reuters reported that the largest U.S. natural gas pipeline owner's treasurer had killed himself. Charles Dana Rice was found dead Sunday in an apparent suicide, Reuters reported, citing a company spokeswoman. Knight Trading Group Inc. fell 51 cents to $5.84. The biggest market maker in Nasdaq stocks said a software glitch caused its computer system to send a "large series" of orders to sell the company's stock, sending shares down more than 50 percent before the start of regular trading. Comverse Technology Inc. slipped $1.05 to $10.80. Goldman, Sachs & Co. analyst Elan Zivotofsky said the maker of telephone software lacks a catalyst to propel shares over the next two quarters. He cut his revenue and earnings estimates for 2002 and 2003 and lowered his recommendation to "market perform" from "market outperform." Dead Money There are no signs of a pick up in the software industry, said Lehman Brothers Inc. analyst Neil Herman in a report. Software shares will likely be "dead money" for at least the next two quarters, Herman said. He cut his ratings on six stocks including BEA Systems Inc. and Veritas Software Corp. BEA Systems, a maker of Web software, dropped $1.03 to $9.73 and Veritas, which makes data-storage programs, fell $1.22 to $21.45. Xilinx Inc. shed $3.60 to $31.66. The world's biggest maker of programmable semiconductors said fiscal first-quarter sales will be 8 percent higher than in the previous quarter. While the forecast matched the high end of analysts' estimates, investors were disappointed the company failed to raise its projection. The Philadelphia Semiconductor Index dropped 3.5 percent, its 10th slide in 11 sessions. Intel Corp., the biggest chipmaker, shed 73 cents to $26.89. IBM, the largest computer maker, dropped $1.81 to $78.64. Bristol-Myers Squibb Co. shed $1.16 to $29.96. Potential buyers of the world's fifth largest drugmaker may reconsider the company as a merger partner because a patent on its cardiovascular drug Plavix expires next year, the Wall Street Journal reported. The Russell 2000 Index of smaller stocks fell 8.72, or 1.8 percent, to 478.75. The Wilshire 5000 Total Market Index, the broadest measure of U.S. shares, dropped 124.03, or 1.2 percent, to 9982.46. From annewilliamson at msn.con Mon Jun 3 12:24:08 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Mon, 3 Jun 2002 14:24:08 -0400 Subject: [A-List] Gold strikes back References: <018601c208de$f25342e0$0100a8c0@igrushkii> Message-ID: <002601c20b2b$da707ea0$0100a8c0@igrushkii> Last week I posted North's "Sellers of Gold" to the A-List. "Buyers of Gold," posted below, is the second half of Dr. North's discussion of gold initiated last week. Anne Gary North's REALITY CHECK Issue 146 June 3, 2002 BUYERS OF GOLD At every recorded price, there is an exchange. For every buyer, there is a seller. Gold has a price. Someone is buying gold. Why? There are several possibilities. (1) He thinks the price of gold has not yet peaked. (2) He thinks he has no better use for his capital. (3) It isn't his gold; he's buying it on behalf of someone else. If "someone else" is the electorate, then the buyer can do what he wants. Voters have no meaningful understanding of gold. In this respect, they are a lot like University of Chicago economists. Who are the major buyers of gold? Gold mining companies, central banks, gold speculators, and Indians. Then there are short-term speculators who sell promises to buy gold in the future at a fixed price, but who own no gold. We call them long speculators. What I have written here is the mirror image of what I wrote in my previous report, "Sellers of Gold." The main point I am trying to make here is this: the primary buyers of gold are members of the same classes of people as the primary sellers of gold. GOLD IN THE GROUND This observation may not seem to be apply to gold mining companies. It initially appears that a gold mining company is exclusively a seller of gold. This is not the case, however. A gold mining company is an owner of gold in the ground. At some additional price, this gold could be mined at a more rapid rate. This would take additional capital investment and additional laborers, but the gold is there. It is, in this sense, stored in a vault. The vault is the ground. This is Milton Friedman's argument against the gold standard. He says that an economy wastes resources by extracting gold from a below-ground vault in order to store it in another vault. In his book, CAPITALISM AND FREEDOM (1962), which was the book that launched his long career among non-economists, Friedman wrote this: The fundamental defect of a commodity standard, from the point of view of the society as a whole, is that it requires the use of real resources to add to the stock of money. People must work hard to dig gold out of the ground in South Africa -- in order to rebury it in Fort Knox or some similar place (p. 40). The argument is clever but specious (i.e., anti- specie). The central economic issue here is liquidity. Gold in the ground is "dry" -- illiquid. Men do not know exactly how much there is in some mine's ground. They do not know how much it will cost to extract it and refine it. Owners cannot extract gold ore fast enough, or get it into a recognized, certified form fast enough, to enable them to respond rapidly to consumer demand. Consumers cannot use gold in the ground to make precise exchanges -- exchanges precise enough for gold in the ground to serve as money, which is properly defined as the most marketable commodity. Gold in the ground is "maybe." Gold stored in the form of ingots or coins in a vault above ground (or at least below street level) is "almost for sure." Let me put this a different way. (1) The information costs of refined, certified, and labeled gold in a vault are much lower than the information costs of gold ore in the ground. (2) It is not possible to reduce information costs -- a major advantage for economic participants -- at zero price. (3) The cost of lowering the information costs regarding gold is what gold mining is all about. Friedman, in his career-long, ideologically driven quest for arguments favoring the government-created monopoly of central banking, has always ignored one of the truly important insights of the Chicago School of economics, of which he is the leading member: information is not a zero-cost resource. (By far, the best book on this subject is Thomas Sowell's KNOWLEDGE AND DECISIONS.) Friedman continues: My conclusion is that an automatic commodity standard is neither a feasible nor a desirable solution to the problem of establishing monetary arrangements of a free society. It is not desirable because it would involve a large cost in the form of resources used to produce the monetary commodity" (p. 42). This chapter of his book should have been titled, "Anti-capitalism and Freedom." On matters monetary, Friedman has always been a statist. It is also worth noting that his reputation as a great economist among his professional peers has always been based primarily on his monetary writings. (Note: I like Milton Friedman personally. I have known him for almost 30 years. But on the issues of gold as money and educational vouchers as freedom-producing, he and I have disagreed -- sometimes publicly -- for years. On the voucher question, see THE FREEMAN, July, 1993.) Gold mining firms are owners of less liquid gold. Managers may decide that at the present price, it is uneconomic to supply gold to buyers. Because they are holders of gold, gold mining companies are in effect buyers of gold. We call this form of demand "reservation demand." It is that form of demand that says, "at this price, I am not a seller of gold." RESERVATION DEMAND Most demand is reservation demand. We forget this because prices are set by buyers and sellers at the margin. Here is how this process works. Fred and Bill make an exchange. Fred (a buyer of gold and a seller of dollars) and Bill (a seller of gold and a buyer of dollars) act as self-interested individuals in making an exchange: dollars for gold/gold for dollars. If this exchange is recorded on an open free market, and it is also the most recent exchange, then the free market's participants impute this price of gold in dollars to the value of the same quantity of gold in everyone's holdings. If Fred buys an ounce of gold for $320, and if this exchange takes place in an open market in which other participants are allowed to make bids to buy or sell, then the market's decision-makers impute to every ounce of gold a price of $320. The reservation demand for both money and gold is gigantic. Everyone except Fred and Bill are implicit participants in the gold market, either as demanders of dollars or demanders of gold. Fred and Bill are explicit participants. The two of them act as surrogates for the rest of us. A holder of gold who refuses to sell to Fred for $320 when Bill is willing to sell gold to Fred at $320 is an implicit buyer of gold. He is an owner of gold who hangs onto it. His demand is implicit, but it is nonetheless real. The gold owner thinks, "I want a higher price than $320. I will hold onto my gold." The same analysis applies to the holders of dollars. This is why the primary classes of sellers of gold are the same as the primary classes of buyers of gold. They are the people who "make the market." They are the people who are best informed about the relationship between gold and money. As specialists with their own money at risk, or the money of the organization that employs them, the members of these groups act on behalf of all holders of gold or money. The best information available (at today's price of information) is brought to bear on the price of gold. The same analysis applies to all other specialized markets. Conclusion: reservation demand dwarfs recorded demand on every market at any point in time. HOLDING ON TIGHT On both sides of the Bill and Fred's final, marginal transaction of gold vs. dollars are hundreds of millions of people. Most people hold onto dollars, caring little about gold. A comparatively few people hold onto gold in preference to dollars. Or, I should say, more people hold onto monetary gold in preference to dollars. With respect to gold jewelry, holders of gold are quite numerous. The extension of the credit-based-money economy has escalated steadily since the day that commercial banks confiscated their depositors' gold at the outbreak of World War I, and then all national governments immediately legalized this confiscation. The public has been taught by government-funded and government-regulated schools and also by the media that the pre-war gold standard was inefficient. Hardly anyone knows that the wholesale price level for commodities remained stable, 1815 to 1914, in those economies that were part of the international gold standard. The largest confiscations of monetary wealth in man's history took place in Europe in 1914, and in the United States in 1933, yet the vast majority of the victims never complained. They were told that this violation of contract was necessary for the good of the nation, which in fact meant the good of the politicians, the commercial bankers, and the central bankers. Three generations of government-funded propaganda and central bank-funded propaganda have produced today's world, which Friedman identifies as one in which "the mythology and beliefs required to make it [the gold standard] effective do not exist" (CAPITALISM AND FREEDOM, p. 42). The result has been the depreciation of the purchasing power of the dollar since 1914 by a factor of about 18, according to the inflation calculator on the Web site of the Bureau of Labor Statistics: http://www.bls.gov. Gold in 1914 sold for $20.67. Today, it is over $300: an increase of about 15 to one, i.e., a little less than the general depreciation of the dollar. Will gold remain in the present price range? Will prices in general stabilize? If consumer prices do stabilize, and gold's relation to prices also stabilizes, then there will be no spectacular rise in the price of gold. If gold's price were to rise to 18 to one over 1914's price of $20.67, it would rise to $372. Yet a few forecasters today are talking about gold at $1,000. The speculator who believes that gold's price will rise to such levels has to believe one or more of the following: (1) the price of gold is being kept down by gold sales by central banks that have been disguised as gold leasing. (2) Future reservation demand by central bankers is significantly lower than future reservation demand by Indian housewives and gold speculators. (3) The thinness of the gold market at the margin will result in a major price increase when a relatively small number of holders of dollars start buying gold. (4) The general economy is about to become more visibly inflationary. I believe in all four. I believe them in descending order. Central bankers hold most of the world's monetary gold. Indian housewives hold gold in the form of jewelry. Either form of gold can be converted into the other. The question is: which way is the conversion process likely to take place? I think from monetary gold to jewelry gold. Central bankers don't like gold, since it inhibits their monetary independence. They hold it mainly because they don't trust the dollar, the world's reserve currency. Putting it bluntly, they don't trust each other. On this matter, I fully agree with them. When we read of gold sales today, these are generally inter-central bank gold sales. They are not sales to the general public. The sales to the public are disguised as gold leasing. Gold leasing is one-way: from monetary bullion bars into jewelry or private hoards of coins (minimal). I believe that this one-way flow of gold will deplete the major reserves of gold that central bankers are willing to transfer to the general public. I think the United States and Great Britain will run out of disposable gold in this decade. I think that the would-be holders of gold have been hampered in their willingness to hold gold by their fear of a falling price of gold. They are convinced that two factors are responsible: (1) falling prices of commodities in general; (2) central bank sales. They are unaware of the permanent nature of gold leasing. They are unaware of the magnitude of the one-way flow of gold into the hands of gold accumulators, such as Indian housewives, at the expense of central banks. The gold confiscations of 1914 and especially 1933 are being reversed. But instead of Europeans and middle-class Americans taking advantage of the return of gold into the private sector, Indian housewives, Asians, gold bugs, and other "ill-informed" consumers are buying at central bank- subsidized prices what had once been the property of European and American commercial bank depositors. Three decades ago, an economist friend of mine who served on the Senate Banking Committee's staff suggested a way to hurt sellers of illegal drugs. The government should occasionally take its supplies of confiscated heroin and cocaine and dump them onto the market. This would force down the price of drugs and bankrupt drug dealers. This, he thought, would reduce the supply of illegal drugs by reducing the supply of pushers. The government has never followed his advice, but central bankers have. MR. GREENSPAN, MEET THE PATELS The reservation demand by central bankers is low compared to the reservation demand by Indian families. This is my personal estimation, which I cannot prove from statistics I am aware of. I base it on what I know about official central bank statements regarding the monetary role of gold (decreasing) and the size of the gold leasing market (increasing). Central bankers have an ideological commitment to reduce the use of gold in monetary affairs. So do Indian families. There is mutual agreement here, and therefore the basis of a long-term exchange of gold ownership. These exchanges produce a one-way flow of gold from central bank reserves into jewelry. The steady purchase of gold by Indians will continue for as long as central bankers sell gold to the general public, either officially (Bank of England, 1999-2002) or unofficially (gold leasing market). The primary limit is not demand by Indian families. The primary limit is central bank reserves. Reservation demand by Western central bankers is lower than reservation demand by Indian families. If demand increases from other Asians, plus Indians whose income has risen or whose fear of war has risen, plus the central bank of China, then either the one-way flow of gold will accelerate or the price of gold will rise. GOLD MINES AND RESERVATION DEMAND Reservation demand by gold mining companies will increase. Here is why. Ask yourself this question: "If I were sitting on top of a gold mine, and I believed that the price of gold is likely to rise, would I sell all of the gold I produce, day by day?" Not if you were profit- motivated. You would hoard some of it. Meanwhile, your competitors, who made a lot of money by selling future supplies of gold at a fixed price, and then profited when the price fell, are now experiencing the opposite effect. They are now required by contract to deliver gold at a fixed price. Their profits are falling. Yours are rising. Gold mines that did not lock themselves into such contracts are now making more money per ounce sold. They can sell less gold, make a profit, and hold gold reserves for a future rise in price. Mining operations reverse the conventional textbook picture of supply and demand. As prices fall, mining output increases for a long time before bankruptcy closes a lot of them. Mines have fixed costs, such as debt obligations. Management also doesn't want to lose workers. So, when metals prices fall, mines increase output to meet payments on their fixed costs. They keep increasing output until their income from sales will no longer pay for their variable costs (e.g., labor expenses). Managers deplete existing reserves in order to keep the mines operating. On the other hand, when metals prices rise, managers cut back on output for the opposite reasons. They seek a speculative profit either by withholding part of their output or by actually reducing output, thereby reducing their variable costs. So, when gold rises in price and is expected to keep rising, buyers find that the supply of gold from mines does not rise fast enough to push prices back down. Would-be buyers find that they are facing new competition from gold mining companies whose managers have increased corporate reservation demand. If central banks decide to buy gold, they must pay the going price. Usually, they buy either from gold mines or each other. If gold mines refuse to sell all of their output, and if other central banks refuse to sell, and if Indian families are unwilling to sell enough gold to meet demand at older prices, then the price of gold will rise. Western central bankers are unlikely to increase their demand for central bank gold reserves. After all, it is not their gold. It belongs to the central bank, whose profits are regulated by governments. In contrast, the central bank of China is likely to increase its demand for gold as a way to demonstrate China's growing influence in world markets. While Chinese central bankers have read the same textbooks as Western central bankers, Chinese government officials are interested in showing the West that China is no longer a backwater country. Gold has long been a way that most Chinese have measured their wealth and influence. They have not all accepted the West's economic dogma that monetary gold is either a barbarous relic (Keynes) or a waste of resources (Friedman). CONCLUSION Buyers of gold (sellers of dollars) at the margin are likely to increase their demand. Gold's price is going to increase because: 1. More investors will perceive that gold leasing is a one-way street, and so will not greatly fear gold dumping by central banks. 2. More Indians will be able to afford to buy gold if the Indian economy grows. 3. More Indians will buy gold if the threat of war increases. 4. China's central bank will increase gold purchases. 5. Central banks always inflate. Today's reservation demand by gold mining companies is likely to increase when the price increases. This will reduce supplies offered to the public from new sources of gold. Gold is a political metal. Central bankers will use gold reserves owned by the banks (not by themselves personally) to increase central banking's autonomy from gold. They will sell gold to the general public from time to time. But, never forget, central banking's autonomy from gold requires central banking's dependence on the world's reserve currency, which is the dollar. The more gold central banks sell, the more green they accumulate. Central bankers face a dilemma: "More green => more Greenspan." Over the long haul, more people than today will learn to trust gold rather than central bankers. Friedman dismissed "the mythology and beliefs required to make it [the gold standard] effective. . . ." But he was correct in his general thesis: capitalism does increase freedom, and freedom increases people's wealth. Although Friedman and Keynes and central bankers dismiss the suggestion that the monetary system should be based on "an automatic commodity standard," the essence of capitalism is reliance on automatic, market-created, market-supplied, market- policed institutional means of exchange, including money. To reject a free market in money is to reject the ideal of capitalism. It is also to reject the idea of freedom. The 1990's proved that freedom works. Communism collapsed. Capitalism is efficient. Statism doesn't work. Today's monetary system is statist. As surely as the public in 1980 should have expected the collapse of the Soviet economy, people should expect the failure of central banking. Gold or green? Gold or Greenspan? Choose gold. * * * * * * * * * * * * * * * * * * * * * * * * * * * * From soncu at pacbell.net Mon Jun 3 14:36:22 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Mon, 03 Jun 2002 13:36:22 -0700 Subject: [A-List] Turkey: on the brink of chaos Message-ID: Also see http://www.dailystar.com.lb/opinion/01_06_02_c.htm for an alternative analysis. I thank John Enyang for bringing the above article to my attention. Sabri +++++++++++++++++++ Turkish Daily News June 3, 2002 All roads lead to early elections Dervis is signalling his intention to enter active politics... One after the other new parties are being established... Members of the three-way coalition government are accusing each other... The military is suggestion resolution to the death penalty and education and broadcasting in Kurdish issues... TUSIAD is intervening in politics by placing ads in papers... The president is gathering a summit of party leaders The political crisis has deepened enough to reach the 'deep state.' For the first time since its creation four decades ago, a National Security Council meeting was not attended by the prime minister, deputy prime minister and the interior minister... Because of his aggravated illness, contrary to claims of recuperation, Ecevit is likely to stay indoors and won't be able to attend the June 7 summit of the party leaders at the Cankaya Presidential Palace The conditions for EU membership, that is lifting of the death penalty, education and broadcasting in Kurdish and lifting of the emergency rule will be resolved, though with pains. The real crisis, however, will be over Cyprus. Neither the deep state, nor the Anatolian people will accept total Turkish withdrawal from Cyprus. 'We may pay a high price over Cyprus' warning of Foreign Minister Ismail Cem months ago had stemmed from this reality Headed by the pro-EU ANAP, the 'Euro-Club' circles are unaware how the pressures on Cyprus and the pro-Kurdish impositions on Ankara are fuelling 'racist-nationalist' tendencies amongst the Anatolian people. It will be too late when those who have not tolerated Le Pen and Haider, realize the sentimental reaction of the silent Anatolian masses. The government is aware that after political criteria time we will come to Cyprus. As it will be unable to resist pressures this year end, it is very likely that it will have to take an early poll decision this fall A development that might alter all calculations and designs, on the other hand, can be lived with the deterioration of the health situation of Prime Minister Bulent Ecevit. As Turkish politics has been no post-Ecevit contingency plan, incapacitation of the prime minister may land the country into political chaos, derail Turkish economy and easily place Turkish democracy on a path of no-return. Irrespective whether they want it, parties may find soon an early election as the sole way out from a catastrophic situation. ------------------------ By Kemal Balci The most critical week for a way out from the crisis that has engulfed Turkish politics has started. The health of Prime Minister Bulent Ecevit, the outcome of the summit of political leaders at the Cankaya Presidential Palace, the unending and uncompromising political contradiction between ruling coalition's senior partner the Nationalist Movement Party (MHP) and the junior partner the Motherland Party (ANAP) will all be clarified this week. The political crisis that's being gradually deepening appears making an early general elections this fall unavoidable, but there is also the risk of Turkey undergoing at any moment an extraordinary development. There are many signs that indicate that the country is being pulled to an early election. It was the Turkish Daily News (TDN) which had reported first that Turkey has entered into an election atmosphere. It was the analysis published in the TDN two months ago that first underlined that an early election was brewing. Two months after a large segment of those interested in Turkish politics conceded that there were many developments that press for an early election this fall. Most lately, the hints of State Minister Kemal Dervis during his trip to London that he was preparing to enter active politics, were indicators that all other options to come out from this political crisis but an early election have all exhausted. Dervis, who had started his revelations with a statement that disclosing an early election date would relieve the Turkish economy as it would end the atmosphere of uncertainty, is still talking on the issue despite a call for "silence" from Prime Minister Ecevit. Dervis did not stop at stating that a poll would relieve the economy, he furthermore stated that being afraid of an election would mean some other problems existed in a democracy. Apart from Dervis, the Turkish political elite outside Parliament who has also seen an approaching early election, has intensified efforts to establish political parties. Thus, one after the other new political parties are emerging on the political spectrum. The Democratic Turkey Party (DTP), which is known with its close links with former President Suleyman Demirel, has replaced its aged leader Ismet Sezgin with Mehmet Ali Bayar and intensified its grassroots activities. All together some 50 parties have so far become eligible to run in an early general election. Those who oppose an early election, on the other hand, defend that an election cannot be held with such a high number of parties and that a ballot paper having names of all 50 parties would be more than one meter long. The reaction of the MHP The public debate and constant contradiction between the senior and junior partners, MHP and ANAP, of the three-way coalition government has further fuelled the early elections speculations. ANAP has been demanding that the reforms and steps Turkey was required to take for its EU bid should be unconditionally taken without any debate that may cause a delay. Yilmaz, who appeared sympathetic to "Kurdish nationalists" with his declaration that "The road to EU passes from Diyarbakir, has become nowadays the open target of the MHP. MHP leader Deputy Prime Minister Devlet Bahceli, while on a trip to China, listed the conditions of his party for EU membership. The MHP leader stressed that the death sentence file against separatist chieftain Abdullah Ocalan should be sent to Parliament for approval and the terrorist leader be transferred from his island-prison at Imrali to an F-type prison. This statement of Bahceli further increased the tension between MHP and ANAP. Furthermore, after Bahceli's statement, MHP deputy Edip Ozbas even started preparations of demanding a Parliament inquiry against Prime Minister Ecevit, on grounds that he held Ocalan's death file at the Prime Ministry. It was again MHP's Deputy Chairman Sefkat Cetin who expressed with most open terms the reaction of his party to Yilmaz and ANAP. Writing in "Ortadogu" newspaper, which is considered to be the press organ of the MHP, Cetin said: "The strategy of a political party and its chairman who has assumed the duty of being the spokesman of the EU in Turkey, is composed of elements that rather than carrying Turkey to EU full membership, aims at serving their target electoral groups. Therefore, rather than examining the conditions put infront of us for EU, they have been looking what domestic benefit such steps would provide to them. In a country like Turkey which has struggled for long years with terrorism and which has not yet been relieved of this menace, nobody could consider as innocent demands the attempt to lift the death penalty and allow Kurdish broadcasting and education rights together." "By passing the road to the EU from Diyarbakir, rather than Ankara, or by defending some cultural rights and the lifting of the death penalty one may appear cute to certain circles or may help to have election flirt with a political party on the edge of being closed down (meaning People's Democracy Party, HADEP). Do you see the EU as an opportunity for your or your party's salvation? If not so, why are you rather than explaining to the EU the realities of Turkey you has been involved in a campaign of making us accept the conditions they have been trying to impose on us?" Cetin asked. In another question he addressed to Yilmaz, without referring to him using his name, Cetin asked what kind of a resolution Yilmaz wanted to the Cyprus problem. "They should clearly tell the Turkish public what they wanted us to accept and what they wanted us to abandon for the sake of EU membership," he said. MHP's Parliamentary Group deputy chairman Ismail Kose, again in an interview with the "Ortadogu" newspaper stressed that MHP won't change its position because that TUSIAD's placed ads in newspapers. "MHP won't bow to impositions of the EU because the Turkish nation wants so," he said. Accusing the TUSIAD of becoming and acting like the "spokesman" of "imperialist circles" Kose accused the powerful industrialist group of making unjust attacks on Turkish Cypriot President Rauf Denktas and acting as if the train would be missed and of deviating from national goals and of becoming the messenger of imperialist philosophy. Again TUSIAD ads While two partners of Prime Minister Ecevit are feuding, the Turkish Industrialists and Businessmen's Association (TUSIAD) placed full page ads in newspapers last week. In the ads, the association that brings together the most wealthy Turkish businessmen, urged the government to take the reforms demanded by the EU and not to "miss the EU train." The full page ads of TUSIAD was reminiscent of the ads the rich businessmen's group had placed in papers in the late 1970s. This time, however, TUSIAD was not complaining about the government to the nation, but appealing to the parties represented in Parliament, to unite forces in a bi-partizan manner and act together to promote the European Union membership bid of the country. In an ultimatum-like attitude, TUSIAD urged politicians, without discriminating any party, to take the necessary steps, in a bi-partizan manner, that will facilitate Turkey's European Union accession. Stressing that "Turkey is at a crossroads," the group asked politicians in full-page ads in newspapers, that they should stop using the EU as a domestic policy tool. Besides the full-page ads, in an unprecedented manner TUSIAD came up last week with two drafts, one suggesting a way out from the death penalty deadlock and the other providing besides Turkish education and broadcasting rights in "languages traditionally spoken" in the country or "foreign languages that has contributed to the enhancement of science and culture." Indeed, what TUSIAD suggested were nothing more than what intellectuals of the country have been debating for the past several months, but the industrialist group took the initiative with the bold move. Stressing that Turkey ought to take some urgent steps or would miss the EU-train, TUSIAD suggested replacement of the "death penalty" in the Turkish Penal Code, as well as a set of other laws including the Anti-Terrorism Law, Military Penal Code and the Forestry Law with a new "heavy life-term" sentence, and thus called for total deletion of the death penalty from the Turkish judicial system. The TUSIAD proposal defined the "heavy life-term" as 40 years behind bars. According to the proposal prisoners serving a "heavy life-term" would be eligible for parole or reduction in sentence only after serving 30 years of their sentence. TUSIAD also called for a language reform and lifting of restriction on the use of Kurdish in education and broadcasting. According to a draft prepared by leading law professor Prof. Suheyl Batum and released by the powerful industrialists group, stressed that besides Turkish "languages traditionally spoken" in the country and "foreign languages that have contributed to the enhancement of science and culture" could be used by the TV and radio stations in their music and news broadcasts. The draft also states that it was the duty of the state to make regulations so that citizens exercise their right of learning "the languages traditionally spoken in the country." It said the state would either undertake the responsibility of learning its citizens those languages or would allow the private sector to undertake that responsibility. The MHP reacted strongly to the TUSIAD's ads in paper, as well as to the draft laws the group suggested. It was reported that TUSIAD would visit MHP leader Bahceli this week and try to "convince" the deputy prime minister to support the reform drive. Will they succeed? That will be seen this week. Suggestions from the military With the interference of TUSIAD the political crisis further deepened and has apparently reached even the "deep state." The newspapers, without naming the "commander" run stories based on remarks of a general "who represented the views of the military." The general was suggesting ways of resolving the death penalty, Kurdish education and broadcasting problems, that is the issues demanded from Turkey by the EU. The "resolution" proposal of the military on the death penalty and other issues was considered as an interference by the army into an area in which the civilians could not reconcile their differences. According to the reports, like the TUSIAD, the military was suggesting conversion of the death penalty to a "heavy life term" without parole, and teaching of Kurdish in special courses outside the curriculum and broadcasts in Kurdish and other languages on a special channel of the state TV. Sezer bringing leaders together The failure of civilian politicians in resolving their differences on key issues, the military and business circles suggesting their resolution proposals are developments that analysts say underline a deadlock of the political system. In an attempt to eradicate this image that may hamper Turkish democracy, President Ahmet Necdet Sezer has invited leaders of political parties for a summit meeting at the Cankaya Presidential Palace. The meeting will take place on June 7 and will be participated by leaders of all six parties represented in Parliament (God willing and Ecevit's health permitting). High on the agenda of that summit will be the "conventional issues" like the death penalty, education and broadcasting rights in Kurdish, the future of the emergency rule -- on which the National Security Council decided last week to recommend government phased out -- as well as the demands of the opposition parties for amendments to be made in the law on political parties and the election law. If the leaders reconcile their differences on these issues, legislative steps, including constitutional amendments, will be taken swiftly. If, however, the leaders don't come out from that summit with reconciliation that would let another indication that an early election has become a must. If the three ruling parties, because of their parliamentary majority, block an early election decision, the dimension of the deadlock would further enhance and become a state crisis that may land the country in a chaotic situation. Cyprus: The difficult subject for EU Even though it appears difficult, there is a possibility of the three partners reconcile their differences by fall and resolve the death penalty, Kurdish education and broadcasting issues. The real problem between Turkey and the EU, however, is the demand to have a Cyprus resolution by the year end. No Turkish government has the power and courage to unconditionally pull out from Cyprus, because it would be impossible to sell such a situation to the conservative masses in Anatolia who constititute the grassroots of all center-right and nationalist parties. Increased impositions on Turkey and demands for a Cyprus resolution in a manner that could be interpreted as a "sellout" would only feed "racist-nationalist" feelings of the silent masses of central Anatolia. The failure of the pro-EU "Euro-Club" in Turkey and the EU countries to realize this threat is indeed making the threat even more dangerous. The Turkish military has been very sensitive on the Cyprus issue, because of its awareness of this national sensitivity on the Cyprus problem. Thinking that the Anatolian people, who has lost hundreds of their sons in the 1974 intervention on the island to prevent total annihilation of the Turkish Cypriot people by Greek Cypriots, could be convinced to accept a Cyprus withdrawal before a resolution on the island that would be acceptable to Turkish Cypriots and which would safeguard Turkey's rights on the island, would be naive. Such an understanding would be condemned in an election as "treason" and would be buried in the election box. Neither Turkish military, intellectuals or politicians can dare to commit such a mistake. If the government compromises on Cyprus for the sake of a resolution before the year end, the ruling parties will suffer a humiliating defeat in the next elections. Besides, they will have to be faced with the "treason" charge for years to come. Thus, to avoid being forced to take a decision on Cyprus, coalition partners may decide for an election in fall and thus evade both the responsibility as well as possible pressures from the EU with the pretext that in an election period no such decision was possible. Rise of nationalism Another reality that pro-EU circles in Turkey and European countries fail to recognize is the fact that pressures and impositions on Turkey have been fuelling racist and nationalist ideologies. It would of course be unacceptable for Europe who could not tolerate to Le Pen in France and Haidar in Austria, to see a mass shift in Anatolia to "racist nationalist" ideologies. Because of the election system of the country such a development may make the MHP the largest party in Parliament. The only way to prevent this slide to the extreme right in Anatolia is to adopt a new approach taking into consideration the "emotional nature" of the Turkish people, and to avoid giving the image that "concessions" were being made. The memory of the sons of the Anatolian people lost in the 15-year fight with the PKK are still very fresh. A political approach that was not devised by taking into account the some 30,000 victims of the 15-year war against the PKK, will be devoid of realism. The dust is yet fresh on the photographs of the sons of the Anatolian people lost in Cyprus or in the fight against separatist terrorism. This reality has to be taken into account by politicians both at home and abroad. Finding a way out from the deepening crisis is of course the duty of civilian politicians. It appears, however, that excluding an early election there is no single option that may cater to a solution of all these problems. Although no one is publicly talking on it, a drastic development in the health of ailing Prime Minister Ecevit could further aggravate the already delicate situation and make Turkey unmanageable. Such a negative development may even force an early election option shelved. Turkish politics which has no contingency plans for a post-Ecevit era, may land into chaos. This chaos may disrupt the already fragile balances in the economy. Under such a situation, if rather than going to fresh polls, precious time is wasted by searching other government models in Parliament, Turkish democracy may plunge into a path of no return. Though no one is talking on such a dangerous probability but the threat remains there... Ankara - Turkish Daily News From annewilliamson at msn.con Mon Jun 3 19:53:00 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Mon, 3 Jun 2002 21:53:00 -0400 Subject: [A-List] Uruguay's neighborly comments on Argentina References: Message-ID: <001901c20b6a$8fafd7a0$0100a8c0@igrushkii> Uruguay's President Batlle Calls Argentines a 'Bunch of Thieves' Bloomberg News | June 3, 2002 | David Plumb Posted on 6/3/02 6:03 PM Pacific by HAL9000 Montevideo, June 3 (Bloomberg) -- Uruguayan President Jorge Batlle accused his neighbors in Argentina of being a ``bunch of thieves'' and said Argentine President Eduardo Duhalde may be forced to leave office at any moment. ``Do you know the kind, the volume and the magnitude of corruption that exists in Argentina?'' Batlle said in an interview, pounding his hands on the table. ``Don't compare Argentina with Uruguay, or you're absolutely ignorant.'' Argentina's economic and financial crisis has sent shock waves across South America, threatening its neighbors with financial instability. No country has been hit harder than Uruguay, whose $20 billion economy has depended on Argentina for almost a fifth of its exports and about half of the tourists drawn to attractions such as its Punta del Este sea-side resort. Batlle, who sat for an hour-long interview at his presidential office in Montevideo, blamed Argentina for costing Uruguay its investment-grade credit rating and draining almost a fifth of his country's bank deposits and 40 percent of its reserves. ``In 2001, the situation of Argentina was a problem of Argentines, a bunch of thieves from the first to the last,'' Batlle said, shouting across the wooden conference table he uses as a desk. Uruguay's president, elected in 1999, called on Argentina to take ``responsibility'' for its financial collapse by either meeting International Monetary Fund demands for new aid or finding another solution. `They Don't Understand' ``I'm 74. Do know how many crises I've seen like this in Argentina?'' said Batlle, a former senator whose father, Luis Batlle-Berres, served two terms as president in the 1940s and 1950s and whose great uncle founded Uruguay's welfare state in the early 20th century. ``It's the tragedy of Argentines,'' he said. ``Argentines spend their time saying, `Who is the guilty one for not helping us?' They need to help themselves. They don't understand that the language they speak is no longer spoken in the world.'' Argentina's default on $95 billion of government bonds, a run on its banks, and currency devaluation have pushed Uruguay deeper into recession. ``Everybody has agreed internationally that Uruguay is a case of contagion,'' said Arturo Porzecanski, head of emerging-markets research at ABN Amro in New York and a Uruguayan. In 2000, Argentines bought 18 percent of Uruguay's $2.3 billion of exports and represented about half of the 2 million tourists who spent $713 million. Argentina's portion of exports dropped to 5.4 percent during the first four months of this year. Tourist revenue is forecast to fall to $450 million in 2002, said Isaac Alfie, chief adviser of the Ministry of Economy and Finance. Questions About Duhalde Batlle said he had little faith Argentine President Eduardo Duhalde has the political skill or support to rebuild his country's banking system, pull the economy out of recession and start creating jobs for the estimated 19 million Argentines living below the poverty line. ``How can I pose any of this to Duhalde?'' Batlle said. ``He doesn't have political power, he doesn't have support, he doesn't know where he's going. How can I pose anything to a citizen who arrived by coincidence and is leaving -- who knows if its next week or in March?'' Batlle predicted Carlos Menem, Argentina's president from 1989 to 1999, would succeed Duhalde. Duhalde, a former vice president and governor of Buenos Aires, was appointed by Congress to the presidency in January, the fifth man to hold that office since President Fernando de la Rua was forced to step down following a week of food riots and 27 deaths in December. Since taking office, Duhalde has failed to make good on promises to re-build the banks, create jobs and keep the Argentine peso from plunging. Batlle today sought to muffle the impact of his statements, which were carried on television and radio stations throughout Argentina. In a Montevideo press conference carried live in Buenos Aires, Battle said that he supports Argentina and shares the pain of its people. Argentina's presidential spokesman Eduardo Amadeo said tonight that Batlle spoke with Duhalde by telephone and promised to fly to Buenos Aires tomorrow to ``personally clarify'' his comments. Duhalde considers the ``episode resolved,'' Amadeo said. `Feel Pain' Batlle, speaking to reporters in Montevideo, said that he had spoken with ``too much innocence'' to reporters who were not aware of his personality, which he said people have likened to a ``spontaneous combustion.'' ``I feel pain for Argentina,'' Battle said. ``People have accused me of being more Argentine than anything else.'' Argentina's Foreign Ministry called a meeting to discuss Batlle's remarks, spokesman Julio Macchi said. It wasn't the first time this year Batlle has been in the spotlight. He broke off diplomatic ties with Cuba in April to protest ``insults'' leveled by the Cuban government after Uruguay sponsored a United Nations motion calling on Cuba to extend civil and political rights to its citizens. Batlle's comments come days after he said the country received $2.7 billion in new loans from the IMF, World Bank and Inter-American Development Bank. The IMF agreed to give new aid after Uruguay's Congress voted to raise taxes to help close a budget deficit. Bond Yield Soared The aid package, about half of which is scheduled to be disbursed this year, stopped the run on deposits last week, Batlle and Central Bank President Cesar Rodriguez Batlle said. The government now plans to ask Congress to cut 20 percent off most ministries' budgets and save money by offering private concessions for water utilities, railroads and other state enterprises. The yield on Uruguay's 7.625 percent bond due 2012 has almost doubled to 13.1 percent this year, and climbed to as high as 16.8 percent before the country announced new IMF aid last week. Batlle said he is seeking a free-trade agreement with the U.S. because he feels limited by the Mercosur customs bloc with Brazil, Argentina and Paraguay. Some analysts said the plans come late. ``Uruguay could have withstood the shock better if it had implemented structural reforms to reduce its budget deficit and its dependence on U.S.-dollar borrowing,'' said Pablo Goldberg, senior Latin America strategist at Merrill Lynch & Co. and an Argentine. From durable at earthlink.net Mon Jun 3 20:02:28 2002 From: durable at earthlink.net (Barry Brooks) Date: Mon, 3 Jun 2002 21:02:28 -0500 Subject: [A-List] Economic policy considerations beyond the merely measurable. Message-ID: The concept that the easy options are in the past is important because this is still the past regarding oil. Oil production is near it's peak, which means that we have about half of the world's oil left. We need to identify our easy options. A few people have said that conservation is the easy option, but few leaders have been persuaded. Very few people really want to conserve; it might hurt our "way of life." Like it or not, we have come to suspect that we may need to throttle back our economy to reduce the burden we place on natural systems, and not just energy. But that would require a "post-Keynesian" economic policy. Labor power been increasing, due to productivity growth, for centuries. Automation multiplying labor power has not caused much unemployment recently because the consumer economy has kept us busy by making demand grow along with productivity. Our economy, indeed our world, is being arranged to consume or waste all that that multiplied labor can produce. Now, because we have become a significant burden on the other components of nature, we need to abandon what has been blamed on Keynes, the consumer economy. If the goal of the economy was only to produce goods and services we could give it up easily. The hyper-active consumer economy designed to make jobs. The consumer economy has a lot of support. Yet, the economy can be slowed, and real income can fall without a decline in wealth if we realize that our stock of wealth depends on the wise use resources. Human labor is no longer the longer the scarce factor that should be limiting output in our economy. How should we measure economic efficiency? Is it (Actual Output)/(Maximum Possible Output)? Should we open cans all day to keep our can openers busy? That would be an efficient use of the can opener, but a waste of food. When productive capacity is more than needed, efficient (full) use of that capacity is a partial waste of the inputs. A more logical and useful concept of efficiency would focus on (be a ratio of) the desired output factor, goods-in-service, and the really scarce input factor, resources. Goods-in-service is the product of the rate of production times the lifespan of the goods. Thus, efficiency = output(GoodsProductionRate?ServiceYears)/input(ResourceTons). Maybe it's the problem of apples and oranges that makes this useful concept of efficiency so hard to quantify. While the most important concepts may defy precise measurement, that doesn't justify ignoring them. Maybe such judgments aren't scientific, but failure to make them retards economic thought to the merely measurable. Our natural resources are obtained through the application of human skills and technology. Wealth comes from nature, and nature can't be paid. Thus, prices reflect only human considerations. The market doesn't just pretend that resources are free, they really are. Since the market only looks at money it is blind to looming scarcity of something that is free. That's one reason the market doesn't respond to resource scarcity before it occurs, which may to too late for easy correction. When a system doesn't have an indication of looming trouble, planning tends to be impaired. The highest economic goal is to sate demand. Increased durability is an important tool for achieving economic satiation of non-perishable goods with low rates of production. As we approach a durable sated economy the economic throttle can be backed-off by increasing the level of income transfers. We can adjust the dole to stabilize wages and supply all the really needed labor. The needed labor will decline as automation replaces workers, and as the need for production is cut by conservation and the end of population growth. As we approach full-automation of services, perishable production, and durable goods production then total wages will fall to toward zero while profit income will rise. This trend is underway now. While some people think we can't afford to offer unearned income to everyone the numbers aren't so bad. With the present income levels in the U.S., and taking the poverty level to be $9000 makes the total universal payments of $9000/person equal about 38% of all personal income. The tax rates needed to support a universal income with the current U.S. income, poverty level, and income distribution could be: Income Percentile Bottom1/5 2/5 3/5 4/5 Top1/5 Percent Total Income 3.6 9 15 23.2 49.2 Percent Tax Rate 0 10 20 35 53 Revenue as Percent of Total Income 0 .9 3 8.1 26 = 38% With a direct income to paupers and others the need for many social programs and economic stimulation would decline. Thus, the expenditure of taxes on a universal income would cut the need for other kinds of government spending. Once we don't need to "make" (fake) jobs anymore we can really cut CO2 emission by 90% like they say we must to be safe, we could make the oil last until the next big comet hits, and the insecurity of work or starve could end for people with no capital. Barry Brooks From soncu at pacbell.net Mon Jun 3 21:10:02 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Mon, 03 Jun 2002 20:10:02 -0700 Subject: [A-List] US: Bush says be ready for war Message-ID: Henry writes: > To fight the enemy, you have to first find him. This is exactly what Bush (I mean, the current rulers of the US) is (are) trying to do. Bush says "The United States must be prepared to take the War on Terror to up to 60 countries." I hope mine is not one of them, neither is yours. Sabri +++++++++++++ The Times June 03, 2002 Terror war must target 60 nations, says Bush From James Doran in Washington THE United States must be prepared to take the War on Terror to up to 60 countries if weapons of mass destruction are to be kept out of terrorists? hands, President Bush said at the weekend. His impassioned speech to 1,000 graduates of West Point Military Academy in New York State on Saturday marks a watershed in the Administration?s foreign policy. Mr Bush said that terrorism cells in countries that make up close to one third of the globe must be actively sought and dismantled. "We must take that battle to the enemy, disrupt his plans and confront the worst threats before they emerge," he said, adding that Americans must be "ready for pre-emptive action when necessary to defend our liberty and to defend our lives". He said: "In the world we have entered, the only path to safety is the path of action. And this nation will act." The 52-minute speech also contained a series of thinly veiled attacks on countries already singled out as enemies of the US. Mr Bush did not mention any country by name, but he pointed repeatedly to non-democratic regimes that are said to sponsor terrorism. In what officials later hinted was a reference to President Saddam Hussein?s regime in Iraq, Mr Bush said that attempts to contain terrorist activity and anti-US sentiments within some countries would fail without direct action. "(Containment) is not possible when unbalanced dictators with weapons of mass destruction can deliver those weapons on missiles or can provide them to terrorist allies," he said. The criticism of foreign countries appeared to go further than any other he has made since September 11. "Some nations need military training to fight terror and we will provide it," Mr Bush said. "Other nations oppose terror but tolerate the hatred that leads to terror and that must change." White House officials told The Washington Post that these comments were directed at Middle East allies such as Saudi Arabia and Jordan. If the United States decides to make surprise strikes on other countries, it will mark a big change in strategy for the US military, which traditionally acts only in self-defence. The speech was billed by the White House as the first instalment of a renewed "overall security framework". The framework will be expanded in a national security strategy document expected in July. Mr Bush said that America?s foreign policy would have three strands. "We will defend the peace against threats from terrorists and tyrants. We will preserve the peace by building good relations among the great powers. And will we will extend the peace by encouraging free and open societies on every continent." He said that the conflict the graduates would be required to fight would differ greatly from that fought by their forefathers in Japan and Europe. "Enemies in the past needed great armies and great industrial capabilities to endanger the American people and our nation," Mr Bush said. "The attacks of September 11 required a few hundred thousand dollars in the hands of a few dozen evil and deluded men. All of the chaos and suffering they caused came at much less than the cost of a single tank." Abdul Rahman Yassin, one of the men accused of bombing the World Trade Centre in 1993, planned to attack New York?s biggest Jewish districts, but his cohorts decided that more Jews would be killed if the Twin Towers were destroyed, according to CBS news. The station said that the bomber had told them that he was talked into the attack as revenge for "my Palestinian brothers and my brothers in Saudi Arabia". Full at: http://www.timesonline.co.uk/article/0,,3-315250,00.html From soncu at pacbell.net Mon Jun 3 22:27:52 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Mon, 03 Jun 2002 21:27:52 -0700 Subject: [A-List] US: Bush says be ready for war In-Reply-To: Message-ID: Take a look at this site for some fun: http://www.dubyaspeak.com/ The sky maybe falling but despite that we need to laugh every now and then. Crying is also okay. Sabri By the way, here is my favorite from Dubya's recent: I first of all, there's a lot of brains in this room. And you get to decide whether there's a brain drain in Russia. I tell Vladimir all the time -- I mean, Mr. President all the time -- that Russia's most precious resource is the brain power of this country. And you've got a lot of it. It's going to take a lot of brains in Russia to create a drain. -- The Russian interpreter must have had a great time with this, St. Petersburg University, St. Petersburg, Russia, May 25, 2002 From nestorgoro at fibertel.com.ar Mon Jun 3 06:35:06 2002 From: nestorgoro at fibertel.com.ar (Nestor Gorojovsky) Date: Mon, 3 Jun 2002 09:35:06 -0300 Subject: [A-List] (Spa) Arg: Desocupación supera 25% / Unemployment above 25% Message-ID: <3CFB384A.26183.37D8FC@localhost> .........1.........2.........3.........4.........5.........6 BUENOS AIRES, 3(PSI).- LA DESOCUPACI?N YA SUPERA EL 25 POR CIENTO. La desocupaci?n en el pa?s ya supera el 25 %. S?lo en el ?ltimo a?o se sumaron 1,5 millones de desempleados y la cifra seguir? subiendo ante la falta de medidas. Por la continua p?rdida de puestos de trabajo, ahora uno de cada cuatro trabajadores -el 25,2%- est? sin trabajo. En total son 3.600.000 personas desocupadas, seg?n las proyecciones de la consultora Equis. Este r?cord en el nivel de desocupaci?n, unido al impacto de la inflaci?n sobre el poder adquisitivo de los salarios e ingresos, en gran medida explica el fuerte incremento de la pobreza que ya engloba a 18 millones de personas, el 50% de la poblaci?n total. De esas personas, 6 millones son indigentes. De acuerdo a un estudio de Siempro, un organismo que depende de la Presidencia, en base a la experiencia de los ?ltimos a?os, indica que un retroceso del 10% en la econom?a determina una ca?da del 5% en la tasa de empleo y adem?s impulsa una reducci?n del 10% en el salario. Tambi?n Siempro determin? que una ca?da del 10% en el PBI, sin considerar el impacto de la inflaci?n, llevar?a a la pobreza al 43,1% de la poblaci?n. Seg?n las proyecciones oficiales, que se est?n discutiendo con el Fondo Monetario Internacional (FMI), este a?o la econom?a retroceder?a entre un 12 y 13%. El mayor porcentaje de desempleo, con el 18,4%, se alcanz? durante la crisis del "tequila" en 1995. Pero en cantidad de gente el r?cord anterior se registr? en octubre de 2001 cuando la desocupaci?n fue del 18,3% y afect? a 2,5 millones de personas. Con estos nuevos datos, en los ?ltimos 6 meses, 1.100.000 personas se agregaron a la vasta legi?n de los sin empleo, a raz?n de 183.000 por mes. Con relaci?n a abril de 2001, hay 1,5 mill?n de nuevos desocupados, o 125.000 por mes. Estas cifras est?n corroboradas por la cantidad de jefes de familia desocupados que se inscribieron en los planes sociales para recibir 150 LECOP por mes. En promedio, un tercio de los desocupados son jefes de hogar y ya se registraron para cobrar el subsidio 1,2 mill?n de personas, lo que equivale a un universo de 3,6 millones de desempleados.- XXX N?stor Miguel Gorojovsky nestorgoro at fibertel.com.ar ********************************************************************** * Compa?eros del exercito de los Andes. ...La guerra se la tenemos de hacer del modo que podamos: sino tenemos dinero, carne y un pedazo de tabaco no nos tiene de faltar: cuando se acaben los vestuarios, nos vestiremos con la bayetilla que nos trabajen nuestras mugeres, y sino andaremos en pelota como nuestros paisanos los indios: seamos libres, y lo dem?s no importa nada... Jose de San Mart?n, 27 de julio de 1819. ********************************************************************** * ****** From mstainsby at tao.ca Mon Jun 3 17:45:57 2002 From: mstainsby at tao.ca (Macdonald Stainsby) Date: Mon, 03 Jun 2002 16:45:57 -0700 Subject: [A-List] Call to Action for the G8 Summit Message-ID: <000b01c20b58$cf33c7e0$291f5318@vc.shawcable.net> Call to Action for the G8 Summit. Macdonald Stainsby, External Relations, Douglas College Students Union (private opinion) The upcoming meetings in Kananaskis, Alberta Canada -- meetings of the leaders of the G8 countries on June 26 and 27-- will prove to be something akin to a watershed moment in our young and advancing movement. Since the July 20, 2001 actions against the G8 meeting in Genoa, Italy that culminated in the murder of our fellow activist Carlo Guliani, the preparations by both local and international activist forces have been underway. The main organisers were and are stationed in Alberta: Calgary and Edmonton (with co-ordinating being done in and around Red Deer quite often). It should, of course, come as no major surprise that upon discussions with the activists in these cities I discovered that there was a steep drop off of participation immediately following the attacks of September 11 on the World Trade Centre and the Pentagon. What has followed in the terms of activism in general -- never even mind the "anti-globalisation" movement -- has been an unprecedented attack on civil liberties here in nice, peacekeeping Canada. Security Bills -- to ostensibly "fight terror"-- have been put through the legislature and now allow the government the latitude to label almost any dissenting actions as a form of terrorism. This, in concert with the new tack being used by the rulers of the world in how they deal with the "anti-globalisation" movement paint a radically different picture about how the upcoming demonstrations are to possibly pan out. Our global rulers have adopted a new approach to how they wish to stifle the rising awareness and opposition to their plunderous rule. While before the attacks of 9-11 the attempt was to mock, ridicule and occasionally insult the motives of our new activist consciousness, today the unwritten rule is to omit our very existence. The choice to simply not report on our activities more than necessary has been so consistent it would be a tremendous leap-of-faith for us to believe that it wasn't a conscious decision. A decision such as this does not come from rank and file journalists; to achieve this form of consensus it must come from higher up editorial orders, something that can be obtained only now that the daily independent national press has shrunk from hundreds of outlets to four in the last thirty years. This must be noted for us to be clear as to what is happening. Unconvinced? I only make one reference for you -- March 16, 2002 saw a meeting of the EU in Barcelona, Spain that saw the opposition of five hundred thousand protesters. Let me use blunt numerals here: 500 000 people converged on the Spanish city and consciously linked their demonstration to the larger, first world resistance movement. It was not an action against the Spanish government but was pronouncedly "anti-globalisation" (and even anti-imperialist war). This was the single greatest victory our young movement has seen so far. Despite the Italian Carabinieri murder of Carlo, despite the scare tactics of the war on terror -- and despite the about face of the "popular" media in regards to our concerns for the environmental and social issues put at risk by the acronyms of death -- we had our largest convergence yet. It is a cause for great joy, pride and ever more optimism about our current situation, and our growing understanding of "connecting the dots" between war, globalisation and imperialism itself as a construct rather than a policy. However, the main lesson we can draw over here on the Pacific coast is simple: THE MEDIA MADE ALMOST NO MENTION OF THIS GREAT DAY. Surely this action was a major media story, but we heard not a peep more than what trickled through. Myself, I didn't know about this until an email was sent my way regarding the issue. So what are we left with? Well, it is almost a year on from when we saw a white man in the First World get shot through the head for opposing the G8 in Genoa. It is now almost nine months since the world situation entered a period of deep right wing reaction where war has become "fashionable" and movies that come out of Hollywood regularly celebrate militarism and whitewash the true nature of imperialist wars in the still-colonised in all but name Third World. The silver lining in many parts of the First World is simply that these brutal realities have made great lessons that books could not. A lack of innocence now permeates our activities. In other words, the gift from the ugliness of reality is an understanding of just how ugly imperialism actually is. We now know a lot better, as a result of the tragedies in New York, Washington and Pennsylvania, how the rest of the world suffers. We are still here -- and in greater numbers in many cases-- despite the attacks on our rights, our movement in general and our right to speak our minds. We didn't run and hide because the governments imposing corporate take-overs allowed their police forces to kill one of our own. We remained despite the fact we were called "anti-American", people who thought the American people "deserved it", people who want a throw back to the days of Stalin, people who are "terrorists" and "terrorist lovers", etc. We heard the names and have remained convinced of the justice of our cause. Now here's the real catch. As we begin not to look for the carnival atmosphere any longer, but instead are trying to build a long term movement which can gain steam through community organising, building sustainable roots among the masses of the people -- we have begun to learn that activism does not take place only at these meetings of misleaders but on a day to day basis, in our neighbourhoods, our cafes and even our !gasp! shopping centres. The problem we face right now, in contradiction, is the immediate threat being posed to our movements via the wholly undemocratic (nay, anti-democratic) moves of the Canadian government at the upcoming G8 summit next month. We need to pay very close attention to how this is being played out, because it is now my contention that we need to organise -- more than ever before-- to get our people involved directly through further "summit hopping", despite the overall weakness and increasing isolationism of such as a tactic. It is often noted, and quite rightly, that the movement is talking about eliminating poverty and squalor both at home and abroad. This is in direct contradiction to the evolution of going from one city to the next, not being a direct part of society and being fortunate enough to be able to afford such ventures, be it in time or money spent. I am writing to make a call in precisely the opposite direction to our evolving strategy (however loose that is). Kananaskis will not be seeing the Solidarity Village originally conceived as a site for protesters to converge near the conference. The province of Alberta and the Federal Government have harassed, intimidated and outright bribed the owners and keepers of the lands near the conference site that would have been able to accommodate a campground for protest. Thus, that village has begun attempting to put together the conceived protest site inside the City of Calgary itself. The City of Calgary is trying its best to make it impossible for any action in the city to place as well: There is no public right to demonstrate in the City of Calgary. The parks have been denied, even to the Alberta Federation of Labour -- hardly the face of militant, violent activists -- as "political use of the parks". The terror bills I previously mentioned have given the state of Canada the self-appointed right to arrest anyone on charges of terrorism -- loosely defined though such a label is-- without charge, without a lawyer and without a phone call. It is more than obvious that these new abilities will be warmed up and used for the first time in Alberta. This coincides with the military presence -- over 5000 troops, nearly three times the total deployment in Afghanistan since the start of the campaign in that beleaguered nation-- who have been given the right to shoot to kill. It is highly unlikely (beyond highly, in point of fact) that this will be used in the Calgary area (it is designed for the mountain fortress of the so-called K Country), but the gauntlet to our collective rights has been dropped. In the myriad of attacks by the different levels of government to all the activist organisers throughout Alberta, a state of psychological terror has been employed against the population as much as it has the activists. The media of Calgary is constantly issuing thinly veiled threats to the public, most notably the small businesses-- the mom and pop operations that often vacillate their support between government and protester in such situations. Statements about how there will be no Federal bailout (ala Quebec City over a year ago) for damages done "as a result of riots", but that you'd better go and get insurance. Activists who are trying to have small planning sessions are being chased out of cafeterias. I can say that I've never walked into a city more than a month before a planned action and found people acting nervous and suspicious when you ask questions about the radical organising community. Our great strengths have been to operate openly, honestly and non-hierarchically -- and that approach has most certainly been the main one used for over the last year in Alberta, without question-- but people are feeling the warm hand and boot of the capitalist state interfering with their work at every single level possible. Without proper co-ordination and communications being used in the Calgary area after the labour rally of the 23rd, there could be massive chaos. Another problem facing the situation is the amount of "diversity of tactics" spouters -- the people in our movement who use the phrase as a talisman to toss rocks and engage the police (now, the military) regardless of the majority of the demonstrators wishes or even the safety of all concerned. This demonstration is NOT QUEBEC CITY. There is not the safety, the ability to declare "red, yellow and green zones", nor is there going to be even a clearly defined space for protest of any sort-- much less for the adventurous of spirit but short of intellect. With all of the above reasons, I hesitate but spit out the uncomfortable: activists who can do so, the job that needs to be done is to A) get more people available to the major demonstrations the "family day" on the 23rd, but more importantly the events afterwards on the start of the summit itself. What needs to be done among the capable and experienced activists is serious co-ordination, boundary setting and over-all communications, otherwise what will take place could be a massive police action, attack a disorganised crowd and sparking "resistance" among the crowd itself, which can (and usually does) lead to scraps, fights and chaos within the ranks of the very demonstrators themselves. Considering, as it was explained to me by a Calgarian organiser herself, "thousands of people are coming, and the city can't stop it", it is also of great import that people who can travel- even as a simple attendee at the events as they unfold -- come out to protect our rights to simple protest, for as the saying goes, your rights are only as valuable and as effective as your ability to use them. Such actions from all levels of governance against simply the right to assemble politically are only countered by people assembling politically. This demonstration will hopefully end the chapter in our movement where we think revolutionary tourism can win the day. We need to rethink and re-orient radically, with losing our initiative or our pro-activity. However, what needs to be done now is to help our committed activist brothers and sisters from Alberta avert a massive morale crushing defeat in the oil province. The federal government wants to crush our rights to continue to denounce and present alternatives to the corporate globalisation agenda. We need to answer their challenge first, before forsaking the game (as it is currently played) entirely. Come to Calgary, stand up for your rights while we have them. ------------------------------------------- Macdonald Stainsby http://lists.econ.utah.edu/mailman/listinfo/rad-green http://lists.econ.utah.edu/mailman/listinfo/leninist-international -- In the contradiction lies the hope. --Bertholt Brecht From Michael.Keaney at mbs.fi Tue Jun 4 06:57:27 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Tue, 4 Jun 2002 15:57:27 +0300 Subject: [A-List] Russia/NATO alliance: China shivers Message-ID: Sabri asks: By the way, I sometimes feel as if I am sending you unnecessary information: "Russia ends Cold War with NATO, China shivers". Is this too deep an insight? ===== Often it's not a question of the content but the form in which it is arranged -- what is it that "they" want "us" to know. Or, to use New Labour-speak, what spin is it being given. Also, it may spark some interesting responses from other subscribers in the know. For example, from experience I would respect Henry's comments on the subject of China (among others), so he could tell us if Doss was peddling drivel or not. More generally, your sound judgment is normally recommendation enough that whatever you forward is worthy of attention. Michael From Michael.Keaney at mbs.fi Tue Jun 4 07:14:41 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Tue, 4 Jun 2002 16:14:41 +0300 Subject: [A-List] The U.S.-Europe Divide Message-ID: The other day I sent a link to an article by Kristol and Kagan at the Weekly Standard. Below is a response to that article by the Independent columnist Bruce Anderson. We never know what exactly will happen in the future and when but like Anderson I have no doubt that Mr Rumsfeld is still a hawk on Iraq. Sabri +++++++++++++++++++ Bruce Anderson is a die-hard Conservative Party hack -- an increasingly rare breed in the otherwise very conservative British state apparatus, given Anderson's slavish adherence to whatever Conservative Party line is currently in vogue. To give a hint, when Major replaced Thatcher Anderson rushed out a brown-nosing biography of the new prime minister, applauding all his achievements, policies, etc. Now he is the Independent's resident punk Thatcherite, or at least was during the time of William Hague's leadership. With Duncan Smith softening the hard image no doubt Anderson will become yet another "compassionate" Conservative. It's also worth bearing in mind, however, that Duncan Smith had privileged access to Rumsfeld thanks to Thatcher, and before the British defence minister Geoff Hoon. The well-connected Anderson, lickspittle-in-chief to all Conservative Party leaderships, is therefore an authoritative source on whatever Rumsfeld is feeding his UK followers. Michael Keaney From hliu at mindspring.com Tue Jun 4 10:34:03 2002 From: hliu at mindspring.com (Henry C.K. Liu) Date: Tue, 04 Jun 2002 12:34:03 -0400 Subject: [A-List] Russia/NATO alliance: China shivers References: Message-ID: <3CFCEBFB.24827B96@mindspring.com> In a US-Russian condominium, both would then play its China card for advantage. Fundamentally, a weak Russia will focus more on Europe on its west while a strong Russia can afford to play both East and West. Similarly, a strong US will have a strong Pacific strategy while a weak US will focus more on Europe in its tradition Euro-centric attitude. Ironically, the US push to transform China in its own neo-liberal image is not in the US national interest, because a China under neo-liberal market fundamentalism will either end in chaos and revert back to warlordism or alternatively become an imperialist nation of enomrmous power projection capability to challlenge US dominance in East, Central, South and South-East Asia. The day will soon come when US policy planners will undrstand that a socialist system in China is less confrontational to US interests now that US phobia against socialism is less hyterical after the Cold War. In many respects, the Cold War was fueled not by the USSR as a communist polity, but that a nation the size of Russia was becoming strong. Even if the USSR were capitalistic, US-USSR relationship would remain confrontational. Within the next two decades, the EU, Russia and China will all be powerful entities. If all three operate under capitalism, the world will again face the conditions of WWI, a clash of empires in an insatiable quest for bigger share in saturated markets. If the EU and China operate under socialism, their need for empire would lessen. If the socialists re-emerge in Russia, Russia will be less a threat to Europe. The US after the crash may in fact turn socialist in practice while remianing capitalist in name, the oppositie of the path China has taken. The fall of the USSR is not the end of socialism, but it frees socialism from a garrison state mentality. My bet is that the most violent social changes will be in the US, toward traditional populism. Henry C.K. Liu Keaney Michael wrote: > Sabri asks: > > By the way, I sometimes feel as if I am sending you unnecessary > information: "Russia ends Cold War with NATO, China shivers". Is > this too deep an insight? > > ===== > > Often it's not a question of the content but the form in which it is arranged -- what is it that "they" want "us" to know. Or, to use New Labour-speak, what spin is it being given. Also, it may spark some interesting responses from other subscribers in the know. For example, from experience I would respect Henry's comments on the subject of China (among others), so he could tell us if Doss was peddling drivel or not. > > More generally, your sound judgment is normally recommendation enough that whatever you forward is worthy of attention. > > Michael From soncu at pacbell.net Tue Jun 4 14:56:39 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Tue, 04 Jun 2002 13:56:39 -0700 Subject: [A-List] =?iso-8859-1?Q?Re:_=28Spa=29_Arg:_Desocupaci=F3n_supera_25%_/_Unemploymen?= =?iso-8859-1?Q?t_above_25%_?= Message-ID: You are not alone Nestor. We are doing even worse. What is mysterious is that only 21 million of 46 million who are over the age of 15 in Turkey are considered to represent the country?s workforce by the State Statistics Institute. Assuming that all of this 46 million make up the country's workforce, since only 18 million of them are currently in employement, the unemployement rate in Turkey is roughly 61%. Let us be fair and take the average of their "unbiased" offical number and my "upwardly biased" unofficial number to reach a "rough" unemployment estimate of 36%. It is mind boggling that the peoples of Turkey are not on the streets as yet. Do you mind sending some Argentines to Turkey to help my people to pull their act together? Best, Sabri +++++++ Unemployment keeps increasing in Turkey The State Statistics Institute (D?E) report showed that the negative impact of the February 2001 economic crisis on unemployment is intensifying. May 23? The effects of Turkey?s economic crisis are still hitting home, with jobless figures continuing to rise, according to a study undertaken by a government agency. Turkey?s unemployment rate has risen to 11.8 percent of the country?s 21 million strong workforce, according to a report issued by the State Statistics Institute (DIE) on Monday said. Some 2,462,000 Turks have been left jobless, with more than a quarter of those becoming unemployed since the beginning of the economic crisis in February 2001. Approximately 653,000 people have swelled the ranks of the jobless in the past year, according to the DIE report. Among those hardest hit are educated youth, with the unemployment rate for those under 25 hitting 29.4 percent. Almost 21 million of the 46 million Turks who are over the age of 15 are considered to represent the country?s workforce, with an estimated 18 million currently in employment. Full article: http://www.ntvmsnbc.com/news/154928.asp From soncu at pacbell.net Tue Jun 4 15:38:01 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Tue, 04 Jun 2002 14:38:01 -0700 Subject: [A-List] =?iso-8859-1?Q?_Re:_=28Spa=29_Arg:_Desocupaci=F3n_supera_25%_/_Unemployme?= =?iso-8859-1?Q?nt_above_25%_?= In-Reply-To: Message-ID: I said: > What is mysterious is that only 21 million of > 46 million who are over the age of 15 in Turkey > are considered to represent the country?s workforce > by the State Statistics Institute. For your information, according to the last census, the total population of Turkey is above 65 million. Roughly 20 million under the age of 15. A very young population, which makes the matters worse in the years to come. Sabri From soncu at pacbell.net Tue Jun 4 16:31:39 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Tue, 04 Jun 2002 15:31:39 -0700 Subject: [A-List] US: Investor confidence Message-ID: >From the below article: > Now that three and four shoes are dropping, > the market worries it may be dealing with an > octopus. How many more revelations will there be? I bet there will be many many more. I used to attend the quarterly employee meetings of a company I worked at for about three years and listen to the reports of record profits quarter after quarter. I had access to much of the clients database and managed a few products of the company, which means that I had a good deal of information regarding how the company was doing. The company was doing miserably with most product lines failing and a few acquisitions bleeding. The profession of Chief Financial "Officership" was just another name for con artistry. Most of the US companies in these days, especially in the "service" sector, which constitute most of the US economy, are like Hollywood cowboy towns: Just the front walls with almost nothing behind. Sabri ++++++++++++++++++++ Selloff May Continue By Margaret Webb Pressler Washington Post Staff Writer Tuesday, June 4, 2002; 8:44 AM The late-day selloff on Wall Street shows no signs of abating this morning, and U.S. investors are getting little help from overseas markets, either. There's not much driving this morning's pessimism, other than the same old worries that have dogged the market for months, and intensified yesterday. Shortly after 8:30 this morning, the S&P futures index was trading more than seven points below fair value, suggesting another decline in the first block of trading after the opening bell rings. Typically, each point of difference between futures index and fair value represents about eight points of the Dow Jones industrial average. Nasdaq futures, though, are flat this morning, so the declines may be limited to blue chip issues. What was especially striking about the swift decline in the Dow yesterday afternoon was how thoroughly the market ignored the latest good news from the nation's manufacturing sector. That suggests that the state of the economy has taken a back seat to more pressing, and specific, concerns about how companies are run, how they report their numbers and what kind of credibility public financial reports have anymore. It seems quite likely that investors will continue to dwell on the sudden resignation yesterday of embattled Tyco International Ltd. chief executive L. Dennis Kozlowski, who revealed that he is the subject of a criminal investigation for tax evasion. His resignation came the same day as it was revealed that another energy executive had committed suicide -- the senior vice president of El Paso Corp. of Houston--and shortly after disturbing revelations about the Rigas family's financial dealings with cable giant Adelphi. Add to that the news from the Securities and Exchange Commission that Microsoft had broke federal securities laws by manipulating profit figures in the mid 1990's, and it doesn't add up to much confidence in the nation's public companies. After Enron, investors were waiting for the second shoe to drop. Now that three and four shoes are dropping, the market worries it may be dealing with an octopus. How many more revelations will there be? International tensions, especially between India and Pakistan, are not helping the market's mood, of course, and overseas markets are giving Wall Street little reason to ignore all the worries. In Tokyo, the Nikkei 225 plunged 248.32 today, to close at 11,653.07. In Europe, as well, major indexes are trading lower in Frankfurt and Paris. The only good news is coming out of London, where revelers are still celebrating the Queen's jubilee and are probably grateful stocks are not trading. Full article: http://www.washingtonpost.com/wp-dyn/articles/A50778-2000Jun2.htm l From Michael.Keaney at mbs.fi Wed Jun 5 04:37:33 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 5 Jun 2002 13:37:33 +0300 Subject: [A-List] UK corporate state: PPPs in disarray Message-ID: Also very much a part of our occasional series on the UK infrastructure crisis: The subject of public private partnerships (PPPs), the nom du jour of New Labour for its Private Finance Initiative (PFI) gifted by the Conservatives under John Major, has been one of the defining features of Blair's/Brown's administration. Brown particularly has been assiduous in promoting the financial "superiority" of PPPs, most notably in the case of the London underground network. Therefore it is interesting, politically, that in Scotland, supposedly Brown's political base, PPPs are being so openly rejected by those who, not so long ago, seemed happy to tag along with the "there is no alternative" line spouted by the Treasury and a spineless Scottish Executive. Will the trickle become a flood? Second council in cash revolt EXCLUSIVE: ROBBIE DINWOODIE The Herald, 5 June 2002 ANOTHER local authority is poised to deliver a hammer-blow to the government's insistence on private finance for school building projects. Falkirk council is saying enough is enough, claiming that the programme had been "horrendous". The council was the Scottish flagship for private finance, its five new schools seen as the highlight of Labour's "what matters is what works" approach which came in the wake of the Treasury's clampdown on public spending. West Dunbartonshire indicated that it would next week become the first Scottish council to reject public-private-partnership (PPP) schemes as a way of rebuilding or refurbishing its crumbling schools. Now Falkirk is to follow suit. After a meeting of the council's policy committee yesterday, David Alexander, the leader of the administration and SNP councillor, said: "The legacy of the previous Labour administration's privatisation programme is horrendous. "Our flagship five new schools are all run for private profit with the major losers being the pupils, taxpayers and surrounding communities. It is calculated that Falkirk council will pay ?360m over the 25 years of the lease for these schools and at the end of that period the authority won't own as much as one single brick." The fear and loathing between Labour and the SNP over this whole debate has been evident. Many Labour MSPs privately supported the SNP policy of not-for-profit public trusts to borrow money against guaranteed future income and to commission, own and operate new hospitals or schools. But as a Nationalist scheme, it has had to be opposed, even when - or, perhaps, especially when - it became the preferred option for Ken Livingstone, the mayor of London, to refurbish his city's underground. In West Dunbartonshire, it all changed when four Labour councillors quit the party and became Independents, joining seven SNP councillors and one from the Scottish Socialists to form an administration that was hostile to PPP. However, Andy White, the leader of the Labour group, yesterday made a scathing attack on Danny McCafferty, his former leader, who on Monday said the community had been consulted and rejected PPP. Mr White, who said he doubted the community consultation exercise undertaken, insisted: "The issue is warm dry schools fit for purpose and not the ideological purity of the accounting method." In the way that West Dunbartonshire shifted policy on PPP because the political colour of the authority shifted, the same happened in Falkirk, where two Independents, three ex-Labour and one former SNP member councillor combined to give Mr Alexander bare control which has, nevertheless, been enough to pass a ruling that PPP is now dead. There are Labour councillors and MSPs across the country who doubt the PPP philosophy but back away from speaking out because it has become an article of faith over new Labour orthodoxy. Mr Alexander insists it is "the economics of the madhouse" to have comprehensive schools which councils will never own and where there will be rows over repairs and damage, bars on use by community groups, and privatisation of janitors, cleaners and auxiliaries. "We want to see our schools run for the benefit of local communities, not for faceless shareholders, and for that ownership must remain in the locality of the school." Let the council decide, say the people HELEN PUTTICK The Herald, 5 June 2002 LORNA Harkin, a mother of four, cares about the education of her children. She is on the parent-teacher association at their Dumbarton school and wants to raise funds so the classrooms are better equipped. But ask her what PPP or PFI stands for and she shakes her head. Does she know West Dunbartonshire Council was considering using a private company to build and run a new building for St Peter's RC primary in Bellsmyre, Dumbarton, which two of her children attend? "We haven't heard much about it," she said yesterday. She wants to overhaul the dull, brown premises behind her, with its peeling window frames and ageing toilets, but somehow amid the demands of children aged 13, nine, seven, and three she has missed all the meetings and notes about it. Perhaps she is an exception. More than 1000 mothers and fathers, trade unionists, community figureheads and church leaders have been consulted about this by the local authority. Other St Peters' parents do recall forms on the doormat seeking their opinion about a private company giving a whole new look to the regions' schools. "I threw mine in the bin," said one mother yesterday. "I didn't understand it," another said. Isabel Laughland, 41, whose 10-year-old son attends St Peter's, returned hers though. "I do not want the private sector to take over the schools," she said. "Look at what they have done to the health service and to the transport system and things like that." She said the state of St Peter's is "a disgrace" but added: "I would rather wait and get the right people in to do anything with it. It is the education that counts, not what the building is like. The kids need a good education." The buried fear is that some corporate body, loaded with logos and fat cats, would be in charge of teaching under PPP - and not just the classrooms. In fact only the bricks and mortar, the cleaning and the patching-up would be left to the X and Y consortium while the council remained in charge of the education itself. But confusion about what a public-private partnership would have meant for their child's school, and what not having it will mean now, is a problem families share. Moving Catholic school St Peter's and non-denominational Aitkenbar Primary, which is just a stroll further up Howatshaws Road, on to the same site was one of the options outlined to families in the same breath as a private finance scheme. Jane Liddell, mother-of-seven, insisted yesterday that if PPP is off then the merger would be too - although if different ways of procuring cash emerge this might not be the case. But for her it was this amalgamating, and not who signed the cheque, which really mattered. "It is a way for them to get rid of Catholics," interjected her friend. "They really want to do away with Catholic schools." Neither of them got to the meetings however, which were held so their opinions could be expressed. "Only about six parents turned out," said Ms Liddell, although others disputed this. The feeling is attendance would not have made any difference. William Alan, father of six-year-old Thomas of St Peter's, said: "I think the basic attitude is the same with everything in this area. What the council says goes." The 1000-people consultation concluded that there was no significant support for PPP in the community. However, Geoffrey Calvert, a Labour councillor representative for Bellsmyre, said he attended the meetings and formed the impression people were not concerned about private finance. "No-one has been beating a path to my door saying 'over my dead body," he added. However Ronnie Alexander, secretary for the West Dumbarton branch of the Educational Institute of Scotland who works from St Peter's, said: "In the local shop the other day the man behind the counter complained about the council schemes for privatising the schools and council tax payers being held in throttle for 25, 30 years. That man seemed to know all about it." Plaster peeling from corridor walls, children from two different schools shoved in one playground, higher bills to pay - all important issues for Bellsmyre residents. But tackling the central problem of how to fund the renovation, without massive bills, is not something most want to grapple with. "I don't know what to do," Ms Liddell said yesterday. "I elect them to make these decisions. If I knew what to do I would be up there myself." SNP alternative to PPP * Trusts are designed to cut the cost of borrowing for investment in roads, schools, hospitals, prisons, and housing. * Funding sources would include bond issues, the European Investment Bank, commercial loans at low interest. * Trusts would be self-financing. * They would operate outside the public sector. * They would spread risk across various capital projects. * Trusts to be neutral on whether services were provided by the public or private sector - value for money would be the key. * The SNP estimates that, for each ?1bn invested over 30 years and for each 1% drop in the cost of capital below the PPP average, a trust should save up to ?240m over the course of the contract. From Michael.Keaney at mbs.fi Wed Jun 5 04:38:50 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 5 Jun 2002 13:38:50 +0300 Subject: [A-List] 9/11: conspiracy or cock-up? Message-ID: Egypt warned US about terrorist attack WILLIAM TINNING The Herald, 5 June 2002 HOSNI Mubarak, the president of Egypt, has claimed his country's intelligence officials warned the US before September 11 about a possible attack by Osama bin Laden's terror network. Mr Mubarak, one of Washington's closest allies in the Middle East, told the New York Times that his agents warned US officials about a week before that al Qaeda was in the advanced stages of a planned strike against an American target. The warning followed the recruitment by Egyptian intelligence of a secret agent who was in close contact with al Qaeda. The Egyptian leader said his intelligence chiefs had no indication the attack would be as extensive as those of September 11. "We didn't know that such a thing could take place," Mr Mubarak told the newspaper. He said Egyptians officials thought the target they had word of "was an embassy, an airplane, something, the usual thing". Experts said Mr Mubarak's acknowledgment that his intelligence officials were unable to determine the target or exact time of the attack suggested that the Egyptian "mole" was not senior enough to take part in the planning of the September 11 attacks. America said yesterday it had no information to support the claims by the Egyptian president, who is scheduled to travel to the US this week for talks about the Middle East with President George W Bush. Ari Fleischer, a White House spokesman, said US and Egyptian intelligence agencies exchanged information in the early part of last year about a general terrorism threat outside the US, but that there was no specific suggestion about September 11. He said: "Nothing that I've been made aware of would support Mubarak's quoted remarks." The New York Times report came as US lawmakers yesterday began congressional hearings behind closed doors into the failure of US intelligence agencies, such as the FBI and CIA, to thwart the September 11 attacks. Members of the intelligence committees of the senate and house of representatives want to determine what went wrong and what must be fixed to get the FBI and CIA to track terrorists more efficiently, exchange information and safeguard the nation. The two agencies have been criticised after a string of disclosures that they failed to share information that could have warned of the impending attack, and the Bush administration has been criticised for not being open enough about what it knew. A series of hearings will be held over the coming months. The proceedings will be opened to the public at the end of this when Robert Mueller, FBI director, and George Tenet, CIA director, are expected to testify. It has been claimed that both the CIA and FBI knew as early as January, 2000 that one of the eventual September 11 hijackers would be attending a meeting of suspected al Qaeda members, a CIA official said. Mr Bush said it was clear the FBI and CIA were not communicating properly before September 11. But he insisted they were now in closer contact and said he saw no evidence which suggested the US had information that would have allowed it to prevent the four hijack attacks which killed about 3000 people. Donald Rumsfeld, US defence secretary, yesterday said he did not believe bin Laden was still formally directing the al Qaeda network, although he believes the organisation remains active worldwide. Speaking before setting off on diplomatic visits to US allies in Europe and the Persian Gulf to discuss the war on terrorism and other issues, he said: "My guess is, if he (bin Laden) were active, we would know it - we would have some visible sense of it, which we haven't seemed to have had, for some reason." Mr Rumsfeld said he did not know whether bin Laden was simply lying low, was ill, or was dead. From Michael.Keaney at mbs.fi Wed Jun 5 04:40:32 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 5 Jun 2002 13:40:32 +0300 Subject: [A-List] Afghanistan: US pill-popping pilots? Message-ID: Friendly-fire pilots 'exhausted' before mission IAN BRUCE The Herald, 5 June 2002 PILOTS from the US national guard squadron which killed four Canadian soldiers in a friendly-fire incident in Afghanistan in April had complained of being exhausted and demanded more rest between missions less than a week before the fatal bombing. At least one of the military part-timers from the 183rd Fighter Wing was also allegedly told that further requests for regular rest periods would "not be looked on favourably by the wing command" and that he should speak to a flight surgeon about being issued with "go-faster" amphetamine pills if he had problems staying awake. The Ohio-based wing, whose manpower is drawn mainly from volunteer civilian airline pilots, had been flying combat patrols over southern Iraq from an airbase in Kuwait since March. The squadrons also provided regular sorties over Afghanistan, 1400 miles away, to relieve navy and marine aircraft operating from carriers in the Indian Ocean. Two days before the incident which killed the four Canadians and wounded eight more, the 183rd is understood to have been involved in another incident in which some of its aircraft bombed the wrong target in Iraq, fortunately without causing civilian casualties. A delegation was formed after this "site misidentification" fiasco to protest about lack of "down time" for pilots, claiming they should have 12 hours' rest between missions unless a state of alert was in force. A spokeswoman for the US air force surgeon-general's office confirmed yesterday that amphetamine-based stimulants could be prescribed for pilots "if they can't work around the scheduling and people are flying extended hours", but added that this was normally for long-distance cargo and transport crews and not usually for fighter missions. Use of stimulant pills was commonplace among US pilots during the punishing flight schedules of the Gulf war, although some squadron leaders became so concerned about the risks of amphetamine addiction and flawed judgment that they ordered their flight surgeons to stop prescribing them. The sortie over Afghanistan on April 17 which ended with an F-16 dropping a 500lb fragmentation bomb on the Canadian troops training at a firing range outside Kandahar involved between three and eight hours of briefings and equipment checks and up to three hours of flying time. The "two-ship", a pair of F-16s, had not been informed that a Canadian unit was training with live ammunition on a night exercise. The pilots spotted tracer ricocheting into the sky and thought they were being fired on. US central command, the Florida-based headquarters controlling the war in Afghanistan, refused to confirm which US squadron was involved in the incident over Iraq, or whether any meeting took place between the pilots and commanders of the 183rd wing in its aftermath. A spokesman also refused to confirm or deny the use of stimulants for pilots on long-haul missions. The US investigation into the April 17 tragedy has not yet been completed. Both Canada and the US have convened separate boards of inquiry into the friendly-fire incident. The Canadians last month published a preliminary report which absolved the Canadian infantry unit involved of all blame for the tragedy. Despite US promises that the Canadian inquiry would be offered every assistance, it remains unclear, according to the Canadian defence ministry, whether the board will be allowed to interview the American pilot who dropped the bomb. From Michael.Keaney at mbs.fi Wed Jun 5 04:42:32 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 5 Jun 2002 13:42:32 +0300 Subject: [A-List] Afghanistan: no more dress down Fridays Message-ID: Smarten-up rule could put lives at risk, claim soldiers IAN BRUCE The Herald, 5 June 2002 THE new commander of all US forces in Afghanistan has launched a "spit-and-polish" campaign which his troops say is denting morale and could put lives at risk for the sake of military manners. Lieutenant General Dan K McNeill, a combat veteran of Vietnam, the Gulf and Panama, arrived at his Bagram airbase headquarters late last week and has already ordered his 12,000 soldiers to smarten up, wear standard uniforms and equipment, and to salute officers when they meet them. Every army in the world abandons obvious badges of rank and saluting in a combat zone because it identifies commanders for enemy spotters and marks them as targets for snipers. Some officers are now refusing to return salutes, but the reinstatement of the military protocol has been extended even to the special forces' "hooches" - a relatively anarchic tented encampment on the edge of the base which until now has been a law unto itself. Many of the Delta and Green Berets troopers at the cutting edge of the war sport long hair, go unshaven and have been allowed to wear combinations of GI issue kit and practical and comfortable local garb for their dangerous behind-the-lines missions. Even there, a sign which until Saturday read: "This is a no-saluting zone," has been removed and standardisation of appearance is to be enforced while the men known to their conventional colleagues as "snake-eaters" are on base and to some extent in the public eye. General McNeill, who has made 300 parachute jumps, yesterday dismissed the protests as he settled in for what is likely to be the toughest phase of the war, rooting out and destroying small pockets of al Qaeda and Taliban fighters in remote mountain strongholds. "Up to 800 people were killed by terrorist action on September 11 at the Pentagon. We haven't stopped saluting there. It's a custom and tradition of the military and I see no reason why we shouldn't do it here," he said. McNeill, who replaced General Franklin Hagenbeck, was previously senior officer at Fort Bragg, North Carolina, and in overall charge of the 18th airborne corps' 101st and 82nd airborne divisions. He also has close links with the army's special operations command. General Gordon R Sullivan, a former US army chief of staff, said General McNeill should not be judged on his apparent spit-and-polish surface. "He knows how to knit forces together," he said. He also has lots of muddy-boots soldiering experience. "He's a guy who knows how to command troops." From Michael.Keaney at mbs.fi Wed Jun 5 04:50:27 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 5 Jun 2002 13:50:27 +0300 Subject: [A-List] UK corporate state: PPPs in disarray Message-ID: More on the mess created by PPPs, this time in the prison sector. And very revealing that it is the state executive (via the SPS), and not the private company, that has been insisting on the commercial confidentiality of performance assessment figures. So much for the increased accountability for the taxpayer, then. Private prison attacked over inmates being released in error ROBBIE DINWOODIE The Herald, 5 June 2002 THE private prison at Kilmarnock has racked up alarming penalty points for its security lapses and other failures, including two inmates released incorrectly and another incident in which a prisoner went missing inside the jail. These shortcomings are revealed in parliamentary answers to questions about the performance of the private prison and come on the eve of today's examination by MSPs on the justice 1 committee of the contract which saw the private operator Premier Prisons win the right to operate Kilmarnock. Michael Matheson, the SNP's deputy shadow justice minister, has been asking a series of questions about Kilmarnock prison and he pointed yesterday to a series of answers which he says paint a worrying picture about the running of the institution. There have been two instances in which prisoners have been released by mistake, one in each of the second and third years of the running of the prison. There was also an incident in the third year in which a prisoner went missing in the jail. This was categorised as a "failure to inform controller of mislocation of prisoner within prison". As well as the released prisoners, there were also problems with assaults on staff, two of these serious, along with a number of assaults on prisoners. The prison's performance has deteriorated over the years. Mr Matheson said the record on prisoners assaulted reflected concern by the chief inspector of prisons. And Mr Matheson claimed that the whole record should be a cause for concern at a time when public private partnerships are being mooted by the government for all parts of public sector. He said: "Our experience to date with one private prison in Scotland has not been a good one. "We have had considerable difficulty obtaining information regarding the running of the prison, which is cloaked in commercial confidentiality. "Recent figures published in parliamentary answers raise serious concerns about the operation there - with two prisoners released by mistake in two years and a third lost within the prison, and with a failure to report these matters properly to the prison service. "I understand from the Prison Officers' Association that these are extremely rare occurrences. "With the executive's proposals for three further private prisons in Scotland and our other experiences with PPP projects in health and education there is increasing evidence to suggest that further privatisation of public services is not in the best interests of the Scottish taxpayers." The parliament's justice 1 committee will today finally get its hands on the contract which led to the creation of Scotland's first private prison after a row going back several months. In October last year, Premier Prisons relented and agreed to release these details, only to be overridden by the Scottish Prison Service, which said this remained commercially confidential. The company then said its original agreement to open up had been made in error. Now shareholders have given their blessing and the full documentation can now be seen by committee members, although there are fears that they will be so complex and extensive that it will be impossible to disentangle the details in the original tender from the contract finally agreed. From Michael.Keaney at mbs.fi Wed Jun 5 04:52:37 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 5 Jun 2002 13:52:37 +0300 Subject: [A-List] Destructive creation: "eco"-tourism Message-ID: Eco-tourists can snorkel with sharks off Cornwall By Cahal Milmo The Independent, 03 June 2002 Forget about swimming with dolphins - the next big thing in eco-tourism is climbing into the water with an endangered, five-tonne, ocean-going vacuum cleaner. Conservationists have announced the first opportunity in Britain for the public to get up close with the world's second largest fish - the basking shark. Snorkellers will be able to swim alongside the huge creature, which grows up to 35 feet (10m) long, off the Cornish coast next month as part of an effort to publicise its plight. The species, which feeds by opening its mouth and filtering up to 2,000 tonnes of water an hour to extract plankton, is being endangered by fishermen hunting it for its fins and oil. Conservationists, who are pressing for the sharks to be given international protection, believe that, in a world where eco-tourism is big business, Britain is ignoring its own unique natural asset. Clive James, director of the Plymouth-based Shark Trust, said: "The basking shark is a wonderful creature but it is largely unknown by the wider public in this country. People pay hundreds of pounds to fly abroad to go whale-watching and catch a glimpse of a large species when all the time we have our own magnificent creature here." Participants in the swimming with sharks experience will have to earn their brush with "baskers" by walking along clifftops of The Lizard peninsula to spot one of the animals feeding on the surface. Armed with a snorkel and wetsuit, swimmers will go to a point on the route of the feeding sharks and then watch as they pass, filtering the equivalent of an Olympic swimming pool every hour. Despite their size and alarming feeding style, basking sharks are placid, harmless creatures. The only danger is on the rare occasions when they "breach" or jump out of the water. From Michael.Keaney at mbs.fi Wed Jun 5 04:56:12 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 5 Jun 2002 13:56:12 +0300 Subject: [A-List] Destructive creation: sponsored conservation Message-ID: Unnatural habitats Nature conservation is big business. There are, for example, more trees in Britain now than at any time since the Middle Ages. But, asks Peter Marren, is this actually good news for the countryside? The Independent, 27 May 2002 The road banks near Cirencester were bright with flowers this spring. But they were not the ones you would expect to find on a Cotswold hillside. These were a vivid purple-red, and their seeds had been sprayed on by a lorry, complete with a dollop of fertiliser and mulch. In all probability, they came from a consignment of seeds labelled "wild flowers" - maybe even "Cotswold mix" - and, like most such seeds, they originate not from natural meadows, but from the plant breeder's laboratory. Nevertheless, this project, and countless others like it, is considered to be a contribution to Britain's natural diversity, and is funded on that basis. Last year the Forestry Commission announced that there are now 25 trees for every man, woman and child in the country. That is twice as many trees as there were a century ago, and probably more than at any time since the Middle Ages. This was also represented as a triumph for nature conservation. Yet about 20 of these 25 trees are either saplings or conifers, and they will have come from a nursery. Moreover, these trees are of foreign origin. The hawthorns used for new hedging are said to come from Hungary. Most of the newly planted oaks are from Germany. Our new woods will be nothing if not cosmopolitan, but sometimes they are planted in places which, in conservation terms, would be better left alone. Enthusiasts have even discovered ways of effectively "planting" wild animals. A month ago, we learned that the osprey had returned to Rutland Water. In fact, it did not have much choice. Migrating ospreys instinctively return to the place where they were born, which in this case was a cage overlooking a reservoir. The youngsters had been reared, and, after release, fed with regularly replenished fishy snacks. And in case they have any difficulty settling in after their winter holiday, artificial nests have been built for them. This year anyone visiting Rutland Water will be able to see an osprey, providing they pay up ?3 for the privilege. Since projects like this are expensive and need partnership funding, they are likely to be confined to big, impressive animals (sponsors have been hard to find for endangered beetles or water snails). Even so, we may soon have "planted" beavers in Argyll, choughs in Cornwall, martens in southern England, and - who knows - maybe wild oxen in Oxon or lynx in Lincs. But where does nature conservation turn into zookeeping? Does the "wild" in wildlife matter? Nature conservation has come a long way in the past 20 years. As a business, it has blossomed and flourished, turning from a minority pursuit with an income of less than ?10m to a popular crusade with an annual turnover of at least 20 times that. With growing wealth and influence has come a much more businesslike approach, and a sophisticated public-relations machine. Wildlife is commonly "sold", using attractive animals such as otters to attract more custom in the form of membership subscriptions and legacies. To do so more effectively, they borrow the aspirant language of government and businesses. The Wildlife Trusts partnership talks confidently of "green shoots of recovery starting to come through". The Woodland Trust is busy "planting the seeds of hope". The general sense of what they are saying is that the losses of wildlife we have experienced are recoverable, once "environmentally friendly" policies start to kick in, and so long as we go on supporting the trusts. If so, it has to be said that there is not the slightest sign of it so far. It would take a hard heart to mock David Bellamy's vision of "skylarks singing over every home in the land", but the sad truth is that skylark numbers are going down, not up, having fallen by more than half since 1975. And they go on falling, despite supposedly environment-friendly farming schemes like ESAs (Environmentally Sensitive Areas) or Countryside Stewardship. The well-researched reason is that the larks cannot find enough to eat in the modern British countryside. We are just too efficient. The idea of happy families living in close harmony with larks or cuckoos or otters is a touchy-feely, human fantasy. The truth is that, as a species, our attitude to the natural world is ruthless and exploitative. To which one might add, hypocritical. The Government's support for GM crops threatens to finish off the skylark in sugar-beet growing areas. Another government policy is to increase skylarks. Meanwhile, their natural habitats continue to suffer eradication by a thousand cuts. A recent report by the Wildlife Trusts and Plantlife reveals that counties have lost up to half of their remaining meadows during the past 10 years. In other words, since conservation schemes like stewardship and environmentally sensitive areas were introduced. Many meadows are too small and isolated to qualify for support, but we are also in the ridiculous situation where a farmer receives three times as much money to sow a new meadow as he does to preserve an old one. It is as if government believes that wildlife is a kind of crop that can be created by agricultural methods. Unfortunately, it doesn't work. New meadows are not as good for wildlife as old ones. We are at risk of deluding ourselves that losses in wildlife and natural habitat can be made good by the methods of the landscape architect and town planner. Resources are being made available for techniques of habitat creation, rather than for protection, in the evident belief that the public benefit will be greater. This is a self-serving fallacy, and it ignores very real dangers. These, as I see it, are twofold. Habitat creation channels the available resources into projects that, even if successful, can only produce a feeble, second-rate copy of the real thing: sown grassland, planted trees, released wildlife. The wilting saplings in their rows of Tuley tubes, and resembling a cemetery more than a wood, will never look anything like the New Forest. Competition will soon reduce the most fragrant wild-flower seed-mix to ryegrass and thistles. Far from being the policy of the future, the planned countryside that is seemingly the ideal of planners everywhere is a tacit admission that we have failed completely to preserve a pleasant, diverse countryside. Actually, although things are in truth bad, they are not yet that bad. Worse, the excitement of habitat creation overlooks the fundamental problems. The uplands are overgrazed from top to bottom. The lowlands are awash with chemicals in the soil and in the waterways. And then there is climate change, and the blitzing of foreign plant and animal invasions it will bring. This is why it is essential to maintain a distinction between what is wild and natural, and what is created and man-made. If habitat creation comes to mean conservation, then we will have transformed the remaining wild countryside into a suburban garden. In a sense, we will have created the environment we deserve: fake, second-rate and based on illusions. Shortly before writing this, I went for a walk in a local bluebell wood. The blooms have rarely looked so ravishing, the sky truly breaking through the earth, as Tennyson described it. And, as I reached the far side, at least a mile from the nearest road, and a long way from any garden, I found a purple Polyanthus flower on a bank among the fading primroses. Did it get there naturally, or was it planted by a well-meaning idiot? May this be the primrose of the future? And, if so, will we miss the old one? 'Nature Conservation: The conservation of wildlife in Britain 1950-2001', by Peter Marren, is published by HarperCollins, price ?19.99 From Michael.Keaney at mbs.fi Wed Jun 5 04:59:00 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 5 Jun 2002 13:59:00 +0300 Subject: [A-List] Spain: separation of church and state Message-ID: Aznar calls on Vatican to discipline bishops By Elizabeth Nash in Madrid The Independent, 04 June 2002 The Spanish government has called on the Vatican to discipline three Basque bishops over their pastoral letter urging dialogue rather than repression to solve Spain's separatist conflict. The Prime Minister, Jose Maria Aznar, described the bishops' declaration as "a grave moral and intellectual perversion" yesterday. It was his first comment in a bitter argument that threatens to cause a crisis in relations with the Roman Catholic hierarchy. The bishops of San Sebastian, Vitoria and Bilbao warned last week that plans by the government to ban the pro-separatist Batasuna party would produce more confrontation. They urged all parties to soften their rigid positions; in particular, Eta prisoners should be brought nearer home "as a humanitarian gesture". The government was furious. The Foreign Minister, Josep Pique, summoned the Papal Nuncio to express the government's "disgust and unease". The leader of Spain's ruling Popular Party in the Basque country, Carlos Iturgaiz, condemned the bishops' letter as absurd. "The bishops are closer to the executioners than their victims," he said. Other government spokesmen expressed their "stupefaction" to the Bishops' Conference, who said it was nothing to do with them. But the Basque Nationalist leader of the region, Juan Jose Ibarretxe, defended the bishops. "What they said only reflects what the majority of Basque people think," he said. From Michael.Keaney at mbs.fi Wed Jun 5 05:06:15 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 5 Jun 2002 14:06:15 +0300 Subject: [A-List] US: frying fast food Message-ID: Fast Food Nation: An appetite for litigation The US lawyer John Banzhaf was the first to sue the tobacco companies in the mid-Sixties. But now he wants to prosecute the junk-food industry for making Americans obese. Has he bitten off more than he can chew? Andrew Gumbel reports The Independent, 04 June 2002 John Banzhaf likes to pose this challenge to students who enroll in his graduate class on legal activism at George Washington University, in Washington, DC. Think of something that really irritates you or smacks of obvious civil injustice, he tells them. Then think of a way of using the law to right the wrong and seek redress. In other words, as Professor Banzhaf himself puts it with the freewheeling candour we have come to expect from both heroes and villains in the American legal system, let's sue the bastards. It's a unique approach to legal education that has had some astonishing results down the years. Banzhaf's students successfully forced the stuffy Washington Cosmos Club to admit women for the first time, and got dry-cleaners to stop charging women more than men for laundering their shirts. Back in the 1970s, they sued Spiro Agnew, the Vice-President who left office in disgrace shortly before his boss, Richard Nixon, forcing him to return the bribes he had received. Most famously, Banzhaf pioneered the notion of suing tobacco companies for the deleterious health consequences of smoking. He started doing it in the mid-1960s, when everyone thought he was nuts, and he was still doing it in 1998 when the US states successfully pried hundreds of millions of dollars out of the Big Five tobacco companies as compensation for their smoking-related health-care costs. If tobacco advertising is now banned on television, and smoking no longer tolerated on planes or in shops and restaurants in many parts of the United States, it is largely due to Banzhaf's 35 years of campaigning and savvy application of public-interest law. And now, he has a new target: the junk-food industry. America, as we all know, is the fattest nation on the planet and getting fatter all the time. According to a report by the US Surgeon-General, released a few months ago, 61 per cent of Americans are now significantly overweight, compared with 55 per cent in the early 1990s, and 46 per cent in the late 1970s. Obesity generates $117bn in annual medical bills and triggers 300,000 premature deaths each year. Is this a health problem on a par with the effects of tobacco-smoking? Banzhaf thinks so, and the government's figures are there to bear him out. Can the fast-food companies and the agribusiness giants, the packagers and marketers, be held responsible for the problem? Banzhaf argues that they are certainly the ones stuffing the nation's consumers full of fat, sugar and chemical additives. With a little statistical analysis, he believes, it should be possible to assign specific shares of the blame to specific companies. And so, he is embarking on a new adventure in legal activism. Already, his graduate class has inspired one lawsuit, against McDonald's, and at least three others are in the works around the country. And that is just the beginning. As a recent magazine headline memorably put it, he wants to see whether Americans can sue their own fat asses off. Banzhaf, it must be said, is far from your stereotypical litigation lawyer, forever looking out for an opportunity to screw a corporation or public institution and make a fast buck. Not only does he not make a penny from the suits that he inspires, he would, in fact, much rather not bring them in the first place. He would love it if the government would overhaul the food industry to make Americans healthier, just as he would have preferred the government to take action on smoking unprompted. But America is a country where recourse to the courts is frequently the only way to effect social change, since Congress and the federal government are all too often beholden to powerful industry lobbies, and public activism is rarely effective on its own because of the country's sheer size and deep-rooted conservatism. As the mantra goes, "If you can't regulate, litigate", and that is exactly what Professor Banzhaf has in mind. "If government is willing to regulate, force disclosure of fat and calorie content, get fast food out of schools, put more health foods in vending machines, install bike racks and showers at public buildings to encourage more exercise, and so on, great," he said in an interview. "But if government does with obesity what it did with tobacco, which is largely nothing, then we may be forced to go to our third branch, the legal system." The big question is how to go about it. It's one thing to say that diet has a lot to do with the growing obesity problem in America, quite another to prove in court that client A's heart attack was caused specifically by McDonald's hamburgers, or by excessive bingeing on Cherry Coke. Nobody sticks to one brand of food like they stick to one brand of cigarettes, so individual suits are out of the question and class action suits would have to depend on highly complicated statistical analyses of food intake and medical cause and effect. Also, unlike smoking, there is nothing intrinsically unhealthy about eating. >From the standpoint of food chemistry, at any rate, the worst that can be said about junk food is that it contains large amounts of sugar and fat, both of which are actually important parts of a balanced diet as long as they are consumed in moderation. Can individual food companies really be held responsible for the immoderate appetites of their customers? Clearly, if there is a legal case to be made, it is going to have to be fairly ingenious. Banzhaf's approach is a gradualist one, to start with the relatively easy stuff and see how far he can take it. The first line of attack is to go after food companies that misrepresent their products by understating the fat content, say, or omitting to mention certain ingredients. That is the basis of all the suits currently going through the courts. The second, slightly harder one is to accuse companies of making misleading health claims for their products - proclaiming pork to be "the other white meat", for example, when its fat and cholesterol content are in fact closer to beef than to chicken. The third approach would be to pick up on sins of omission, or failure to warn consumers of certain health risks. Is it wrong of a fast-food chain to fail to point out that its triple-bacon double cheeseburger supersize meal contains more fat than any sane human being should consume in a week? Arguably so. Is it grounds for a lawsuit? Maybe, if the plaintiffs can work with laws on "clear and conspicuous disclosure of material facts". And finally, the real zinger, if it can be made to work: an onslaught on the junk-food industry as a whole, in which McDonald's et al would be made to pay their share of responsibility for the adult-onset diabetes, sclerotic arteries, heart attacks and strokes that fast food helps to cause. Legal analysts are highly sceptical as to whether such an approach could ever work, and even Professor Banzhaf describes it as "a reach". But there are some promising avenues to explore, including the possibility of describing fast food as something akin to an addiction deliberately fostered by manufacturers through their marketing, especially to children. "We know that people can become biologically predisposed to getting overfed, that once they grow extra fat cells, their bodies become accustomed to having that fat," he said. "Those fat cells never die, and even if you lose weight they lie dormant and constantly try to get you to eat more. It's not an addiction exactly, but it doesn't leave people with a completely free choice in what they eat, either." Banzhaf has other strategies up his sleeve, first developed in the tobacco campaigns, for exerting pressure on government. One is to push for higher health- insurance premiums for the overweight, a measure that would act as an incentive for people to shed some pounds, and would also shift more of the health-care costs towards the people who incur them. Another is to push for higher taxes. After all, if one of junk food's principle attractions is that it is cheap, taxation is a simple way for governments to ensure that it does not stay that way. Banzhaf does not pretend that any of these strategies would be a golden bullet, legally speaking, or even that successful lawsuits, on their own, would solve the problem of obesity. What he does believe is that intelligently mounted lawsuits can help change the climate of public opinion and pressurise junk-food companies and government regulators into changing some of their ways. "None of the things I'm suggesting are panaceas," he said. "But even the threat of lawsuits might be enough to make some helpful changes." On the tobacco issue, it was the change in public perceptions that turned the cultural tide, and that was due to a mixture of government action, anti-smoking health messages, public exposure of dishonest practices by the tobacco companies and, yes, the lawsuits. His is undoubtedly an idea whose time has come. Drive along just about any stretch of highway in the United States, and the evidence of a nation addicted to junk is all too abundant in the endless string of signs for McDonald's, for Burger King, for In and Out Burger, Arby's and Kentucky Fried Chicken, for Taco Bell and 99-cent Tacos. There is rarely any healthier alternative. According to Eric Schlosser, author of last year's bestselling book Fast Food Nation , which has itself helped to stimulate debate on the subject, Americans now spend more on fast food than they do on movies, books, magazines, newspapers videos and recorded music combined. They spend more on mass-produced burgers than on higher education, or computers, or cars. More than 90 per cent of American children eat at McDonald's at least once a month, and the average American eats three hamburgers and four orders of fries every week. There is certainly no problem in eating well in the cosmopolitan big cities, where the health kick has long since brought in its wake organic vegetables, farmers' markets, sun-dried tomatoes from Italy and home-made bread. But once you head inland from the coasts, away from the big population centres and the college towns, you find not only that the fancy olive oils and foreign speciality foods have vanished; and so, too, have most of the fruits and vegetables and, with them, the very notion of unprocessed fresh food. It's a straightforward question of availability, giving the lie to food industry claims that consumers can exercise free choice in deciding what to put in their mouths: in the heartland, the chains and big supermarkets have, by and large, taken over, and the few remaining family-owned businesses tend to survive through imitation rather than by providing any significant alternative. Thinness and healthy eating are increasingly becoming the preserve of the wealthy and the educated living in privileged urban cocoons. Fast-food chains and soda vendors have penetrated college campuses and even state-run schools, where they have successfully offered sponsorship to cash-strapped school districts in exchange for the right to install their vending machines outside the classrooms. They have even invaded hospitals. While the cafeteria at the UCLA Medical Center in Los Angeles, one of the premier research hospitals in the country, offers sushi made on the premises and a full salad bar, at the main hospital in Toledo, Ohio, in the heart of the Midwestern rust belt, much of the catering is provided by fast food chains. With such excesses and disparities, not to mention the manifest effect on American bellies, chins and thighs, have come the beginnings of a backlash. The junk-food merchants themselves have felt it, and have changed their strategies accordingly, with Coca-Cola and Pepsi diversifying into fruit juice, and McDonald's going on a corporate buying spree to move upscale into so-called family restaurants and fresh-sandwich chains. "Mad cow disease" hasn't hit US cattle yet, but the scare has prompted some reassessment of a food economy excessively reliant on the poorly regulated mass-production of minced beef. There are also signs that a new generation of mass-market restaurant chains might grow up with a greater emphasis on quality - the Starbucks craze is one manifestation, and so, too, are smaller initiatives like the Wolfgang Puck caf?s (founded by Hollywood's most prominent celebrity chef) springing up across the West. California, with its reputation for health-consciousness, has been an obvious battleground for the first stirrings of an anti-junk food movement - just last week, the city of Oakland, across the bay from San Francisco, voted to ban fast food and soda from all of its publicly run schools. John Banzhaf's own involvement in the issue began with a student of his, a vegan who had avoided fast-food fries for years because he knew that they were dipped in beef tallow. The student was appalled by a McDonald's advertisement claiming that its fries were cooked in 100 per cent pure vegetable oil - a statement that was literally true but omitted to mention that the fries were pre-cooked in beef fat. Soon, classwork on the issue evolved into a full-blown class action suit brought by Hindus in Seattle and a number of other cities, who said that the failure to disclose the beef content was an offence to their religion and constituted an "intentional tort". McDonald's has acknowledged the oversight and, according to Banzhaf, is on the verge of settling the case for around $12.6m. The hidden beef issue has prompted another, more recent lawsuit against Pizza Hut, the allegation being that the chain's Veggie Delight pizza has beef products in it. Hidden fat content, meanwhile, is behind two other actions, one against an ice-cream manufacturer in Florida, and another against a line of corn and rice puffs called Pirate's Booty that, according to a test conducted by Good Housekeeping magazine, contains 340 per cent more fat than is stated on the bag it comes in. Naturally, there are some pretty powerful interests anxious to stop any anti-obesity campaign in its tracks. Already, food-industry lobbyists and laissez-faire economic thinkers have lambasted Professor Banzhaf as some kind of food Nazi, seeking to dictate what people should put into their mouths. (The epithets "grease Gestapo" and "calorie cop" have been hurled in his direction.) In a particularly bruising appearance on one of the more vulgar discussion programmes on the Fox news channel, the presenters sought to trash Banzhaf as a hypocrite because he is somewhat overweight himself. A burgeoning "fat power" movement, meanwhile, argues that any attempt to get people to lose weight is tantamount to discrimination, that it is perfectly possible for a woman of average height to have a "natural" body weight of 20 stone or more, and that airlines, car manufacturers and restaurants should be obliged to provide larger seats. Talking to Banzhaf, one senses that it is going to take a lot more than a few gratuitous insults and fat-is-good activists to undermine his determined sense of purpose. Unlike many consumer advocates - especially those involved in the anti-smoking movement - he is no pious moralist trying to tell people what is good for them. He is a legal thinker first and foremost, and his primary motivation is his belief that the law can be used as an activist tool for the public good. "As a lawyer, I have two choices," he said. "I can litigate on behalf of whoever brings the buck into my office. Or I can look around and ask what kinds of problems I can attack through legal action. I find the latter much more interesting." It's the kind of thinking that caused his alarmed detractors to describe him down the years as a flame-thrower, a troublemaker, even a "legal terrorist". Banzhaf has no illusions about the fact that what he is doing is profoundly political, and, indeed, he is plotting out his war on obesity in political terms. "What we are seeing is a large number of groups that might not previously have had much in common, coming together - vegans, Muslims, Hindus, conservative Jews, scientists, physicians, animal-rights groups, children's rights groups, sports organisations, and so on," he said. "Once they start joining forces, lawyers are going to smell the money, and legal action will gain its own momentum." It could take years, or even, like the tobacco campaign, several decades. But Banzhaf is perfectly lucid about what he can and can't achieve: "Are suits possible? Yuh. Are some already successful? Yuh. Can we predict which ones will go and which ones will not? No we can't," he says. "But we'll soon find out." From Michael.Keaney at mbs.fi Wed Jun 5 05:07:44 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 5 Jun 2002 14:07:44 +0300 Subject: [A-List] Merrill Lynch update Message-ID: Merrill Lynch still promoting companies that are its clients By Katherine Griffiths The Independent, 05 June 2002 Fresh doubts about the independence of Merrill Lynch's research emerged yesterday when the bank admitted its analysts were still recommending more stocks in companies that are clients of its investment banking department than in other companies. New research notes by the bank show that Merrill analysts rated 26 per cent of clients as "strong buys", compared with 18 per cent of all the stocks they cover. Merrill denies that clients receive a more positive recommendation. The bank argues its clients' score higher ratings because its investment banking side does business with companies it thinks will be successful. It does not tend to take on clients it does not believe will be profitable, as they would be unable to earn high fees for the bank. The bank has been forced to disclose the information as part of its settlement with the New York Attorney General, Eliot Spitzer. Mr Spitzer was investigating Merrill over allegations that its relationship with customers influenced its recommendation on the stock. Mr Spitzer confirmed in April that he was combing through Merrill's records and created massive public embarrassment for the bank by publishing e-mails, including one from the former internet analyst, Henry Blodget, showing employees recommending stocks to investors that they were privately criticising. Merrill paid $100m (?70m) in compensation in order to avoid a court battle over the issue two weeks ago, but did not admit its analysts had been influenced by its relationship with companies. Merrill was also compelled to publish much more information about its clients and its analysts' position on their shares. The information is disclosed as footnotes on new research publications. A number of notes published this week show that Merrill rated 40 per cent of all companies as "neutral", compared with only 30 per cent of investment banking clients. Of all companies it follows, 6 per cent were deemed a "sell", compared to 4 per cent of clients. A spokeswoman for the investment bank said: "Analysts play an important role in the capital raising process, identifying investments that are good for Merrill Lynch and for our other clients." Merrill also argues that it concentrates most of its research resources on stocks that are likely to be successful and profitable because they will be the ones which are most useful to other clients. The bank pointed out that it does not favour its clients in all sectors. One of the most recent notes on the telecommunications industry shows that it recommends selling 15 per cent of companies that are also clients. That is higher than the percentage for all telecoms companies it researches, where it has a "sell" call on 12 per cent. Merrill's agreement to disclose more information under the settlement will shed light for the first time on investment banks' research positions. Until now, banks have kept much of their research under wraps, because it is a service that their clients pay for. Other banks must also disclose this information under new rules coming into force at the New York Stock Exchange. Other institutions could yet come under fire from Mr Spitzer. He has widened his investigation to scrutinise other banks for evidence that they too have recommended buying shares while privately criticising them From Michael.Keaney at mbs.fi Wed Jun 5 05:09:36 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 5 Jun 2002 14:09:36 +0300 Subject: [A-List] Unhealthy accumulation Message-ID: Courtrooms hold the key to big pharma's future profitability Fears of a new wave of generic competition to blockbuster drugs following Augmentin patent defeat for GlaxoSmithKline By Stephen Foley The Independent, 31 May 2002 In just a week, the scales of US justice have tipped first one way and then the other in the global pharmaceuticals industry's war with the tiny manufacturers who produce cheap copies of the world's biggest-selling drugs. In this battle, being fought in courtrooms in the globe's biggest drugs market, a judge's decision can wipe billions of dollars from a company's sales and, as one did for GlaxoSmithKline last week, wipe billions from its value. Last Friday's decision by a judge in Virginia invalidated three of GSK's patents on its biggest antibiotic, Augmentin, and left generic rivals free to start selling copycat products. That decision has induced another wave of panic among shareholders in drugs companies, supposedly the most defensive of defensive investments in these times of stock market turbulence. GSK said if generic Augmentin was launched in a few weeks, earnings growth this year would be 10 per cent, not in the "mid-teens" as previously forecast. Put more starkly, ?260m of this year's expected profit will simply dissolve. One analyst yesterday calculated that almost ?2bn of earnings could disappear over the next three years. GSK's earnings guidance is based on a worst-case scenario, involving what Jean-Pierre Garnier, its chief executive, called a "Prozac-type decline" in sales of Augmentin as result of switching to generic copies. Prozac, the anti-depressant developed by Eli Lilly, an American group, went off-patent last year. Within three months, the drug had lost 70 per cent of its sales in a vicious price war with copycat rivals. High stakes. And GSK is far from alone in facing the generic threat this year. AstraZeneca is just weeks away from a fateful New York court decision that will decide if generics companies are free to make copies of its ulcer drug, Losec, which had sales of ?10m a day last year (see below). The industry has seen a wave of patents expire this year, exposing drugs with annual sales of $11bn (?7.5bn) to copycat competition - unless big pharma's army of lawyers can stop them. Alistair Campbell, pharmaceuticals sector analyst at Schroder Salomon Smith Barney, says the industry is having to pay for a burst of scientific discovery in the late Seventies. Patents are valid for 20 years. "The industry finds a new class of drug and two or three similar drugs follow - such as the cholesterol-lowering statins now, or proton pump inhibitors, which is what Losec is. These first entries become huge sellers, and that is what drives the waves of patent expiries years later," Mr Campbell said. Generic companies are the "good guys", on the side of the consumer and pushing down the cost of drugs. The US healthcare system, paid for as it is by private insurers, forces doctors to prescribe the most cost-effective medicine, and in most cases that means generic copies of branded drugs. But they face huge and increasing competitive pressures of their own. Margins on copycat drugs are wafer thin. Although 48 per cent of prescriptions are for generic drugs, they account for just 10 per cent of the US market by value. The competitive landscape for generics companies has tightened in recent years after the arrival of several new India-based companies, with lower wage costs and therefore cheaper manufacturing capabilities. The first company to produce a generic drug gets a 180-day exclusivity period in the US and Andrew Pendrill, at ABN Amro, says it is a race that generics companies must take seriously. "The first to market will start a price war, which will be carried on, if not by the second then by the third. If a firm is below third to market, it is simply going to make no money from the product. First mover advantage is critical," he said. Generic companies have become more aggressive in challenging patents, and drugs companies' tactics for extending patent life. These tactics - analysts and generics company bosses call them delaying tactics - include fighting to maintain patents on the formulation on drugs where the main molecule has already gone off-patent. These are seen as flimsier than the core molecule patents, and most analysts forecast that the courts will favour generics when the issues get to court. There is evidence that the American courts are taking a more cynical view of these tactics. That was certainly observers' judgement on GlaxoSmithKline's defeat in the Augmentin case. GSK claims the US Patent Office asked it to split some of the existing patents on the antibiotic, creating new 20-year patents that will protect the drug from competition until 2018. The Virginia judge agreed with the generics companies that the new patents were invalid, and all now rests on an appeal that could take more than a year. Mr Garnier demurs from the view that courts are shifting the balance in favour of generics companies, arguing that there have simply been a few high-profile cases because of the latest wave of patent expiries and challenges. But Max Herrmann, analyst at ING Financial Markets, said: "You have the US government talking about the need to reduce the cost of drugs. In the US there are no price controls on drugs, to get more pricing pressure, you have to encourage generic competition. "Courts do reflect changes in the political and social pressures. It is clearly seen as unacceptable now that the big pharmaceuticals companies should be trying to get patent protection for 40 years rather than the usual 20." In the Augmentin case, the generics companies may decide to wait to launch, scared of the damages they would face if they launched the drug now but lost on appeal. But there has been speculation in recent weeks that several of these companies are close to arranging insurance that will protect them from the cost of damages, should they lose on appeal. Insured or not, SSSB's Mr Campbell believes generics companies have shown they are willing to take greater risks on all fronts. "They are becoming bolder and realising that the net present value of winning a court case far outweighs the costs of running these trials. They can mount five or 10 significant challenges on big drugs, and don't need to win that many." But while it has looked as if the scales of justice have tilted in the direction of generics in recent months, a decision by the US Supreme Court earlier this week has given new heart to those who take the pharmaceuticals industry line. This is that intellectual property must be defended to the last even if, as in GSK's attempt to sue the South African government for infringing patents on its Aids drugs, the process can look heartless. The US Supreme Court voted to overturn a lower court ruling that had limited a legal doctrine that lets patent holders sue others who make equivalent products. That court had said inventors should be limited to the literal wording of the patent, rather than being able to sue on the basis of "equivalence". The Supreme Court said limiting patents to their literal terms would invite copycats to get round patents with only tiny modifications. ABN Amro's Mr Pendrill said the judgment "dramatically improves the hand of the big drug companies". AstraZeneca: World's biggest patent expiry Investors in AstraZeneca have been chewing their nails for months awaiting the long-delayed ruling on whether generic drug makers infringe its patents on Losec. The treatment for stomach acid-related disorders such as ulcers had sales of ?10m a day last year, accounting for more than 40 per cent of AstraZeneca's turnover. AstraZeneca says generic copies of the drug would infringe patents it has over the way it formulated the drug. Generics says these are invalid, and accuse the company of delaying tactics which have kept their cheap versions off the market since the main molecule patent expired in October last year. Tom McKillop, AstraZeneca's chief executive, says that it took the company's scientists years to turn the molecule omeprazole into a stable molecule which did not break up in the stomach. "Clearly we are not taking advantage of legal loopholes or engaging in any activities that are unfairly delaying the entry of generic omeprazole," the company says. "Our approach throughout has been founded in the research of our many scientists, who deserve credit for the Losec inventions." AstraZeneca's lawyers will begin the final stage of their suit against four generics companies in a court in New York on 10 June, and a judgment may be handed down within days. But the legal fight is just one tactic among several AstraZeneca has used to try to keep earnings buoyant after omeprazole went off-patent. The main one has been to create a purer drug, branded Nexium, which it claims is more effective than Losec, and which it is aggressively marketing, both to doctors and, through television advertising in the US, direct to the consumer. By March, Nexium accounted for 19 per cent of the market for such drugs, while sales of Losec had declined by almost a fifth since the previous year. From Michael.Keaney at mbs.fi Wed Jun 5 05:13:48 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 5 Jun 2002 14:13:48 +0300 Subject: [A-List] 9/11: conspiracy or cock-up? Message-ID: CIA blames FBI over 11 September failures By Rupert Cornwell in Washington The Independent, 05 June 2002 Finger-pointing over the massive 11 September intelligence failure increased yesterday after the CIA said it had passed crucial information to the FBI. The Senate and House intelligence committees began secret joint hearings yesterday on whether the terrorist attacks could have been prevented, amid evidence of the entrenched feud between two pillars of the US security establishment. CIA officers have told American newspapers that they passed on information to the FBI about two future hijackers identified at an al-Qa'ida "summit" in Malaysia in January 2001. Tomorrow the dispute will go public when Coleen Rowley, the "whistleblower" at the FBI field office in Minnesota, tells the Senate Judiciary Committee that the Bureau's head office in Washington refused pleas for an aggressive investigation of Zacarias Moussaoui, the alleged 20th hijacker. ===== FBI and CIA fight it out over who was to blame for September 11 blunders Julian Borger in Washington Wednesday June 5, 2002 The Guardian An acrimonious rift broke open between the CIA and FBI yesterday over which agency was more to blame for failing to prevent the September 11 attacks, on the day Congress launched hearings into a string of intelligence blunders. An extraordinary finger-pointing battle broke through the usual wall of secrecy surrounding intelligence matters and surfaced in the press, where unnamed officials blamed the CIA for failing to pass on critical information about two al-Qaida suspects the agency tracked from January 2000, who were later among the hijackers behind the September 11 attacks. CIA officials, also unidentified, retorted in yesterday's newspapers claiming they had passed along the name and passport number of at least one of the suspects, Khalid al-Midhar, to the FBI in an email message on January 6 2000. One agency official told the New York Times that the email correspondence proved that "to say we held out information on him is wrong". However, other administration officials struck back, defending the FBI and claiming the CIA had failed to pass on crucial details, including the fact that al-Midhar and the other suspect under CIA surveillance, Nawaf al-Hazmi, had flown to the US, and that they were linked to suspects in a previous terrorist attack. Both men helped seize American Airlines flight 77 and fly it into the Pentagon. President George Bush yesterday dismissed the cycle of recriminations as "typical Washington DC" infighting, and claimed that both the CIA and FBI had acted to correct their failings. "In terms of whether or not the FBI and the CIA were communicating properly, I think it is clear that they weren't," the president said. "Now, we've addressed that issue, and the CIA and the FBI are now in close communications. There's better sharing of intelligence. And one of the things that is essential to win this war is to have the best intelligence possible and, when we get the best intelligence, to be able to share it throughout our government." Mr Bush repeated his insistence that he had "seen no evidence" to suggest the attacks could have been prevented. That claim contradicted the admission last week by the FBI director, Robert Mueller, that the plot might have been pre-empted if important clues had not been missed. The CIA-FBI row broke out just as a congressional intelligence committee began hearings behind closed doors in a soundproof chamber in the roof of the Capitol building, specially insulated against electronic eavesdropping. The 37-member committee, drawn from both the Senate and the House of Representatives, will examine a string of reports of opportunities missed by the FBI and CIA to spot the al-Qaida conspiracy. But Mr Bush was insistent that the proceedings remain classified and that no other congressional panels should launch inquiries of their own. "I want the Congress to investigate. But I want a committee to investigate, not multiple committees to investigate, because I don't want to tie up our team when we're trying to fight this war on terror," he said during a visit to the national security agency. The Egyptian president Hosni Mubarak added to the discomfort of the US intelligence agencies by claiming his government had warned Washington of an imminent attack the week before September 11. He said the information came from an Egyptian secret agent who was in close contact with Osama bin Laden's organisation, but he admitted that the Egyptians had no details of the plot. From Michael.Keaney at mbs.fi Wed Jun 5 05:16:00 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 5 Jun 2002 14:16:00 +0300 Subject: [A-List] El Salvador: blowback Message-ID: Exiled Salvadorean military chiefs face atrocity trial Florida court to hear civil action against two former defence ministers Duncan Campbell in Los Angeles Wednesday June 5, 2002 The Guardian More than 20 years after the torture, rape and murder of opponents of the military regime in El Salvador, two former defence ministers exiled in Florida are to appear in court later this month in connection with the atrocities. It is one of a growing number of legal actions being brought by civil rights groups against members of military regimes alleged to have been involved in torture and extra-judicial killings who have sought a safe haven in the US. Former generals Jose Guillermo Garcia, minister of defence from 1979 to 1983, and Carlos Eugenio Vides Casanova, director general of the national guard from 1979 until 1983, when he became defence minister. They have been living in Florida since 1989. Gen Garcia was granted political asylum because he claimed he had had deaths threats in El Salvador. They will appear before the federal court in West Palm Beach, Florida, in connection with a number of atrocities committed during the civil war, in which more than 80,000 people were killed and 500,000 fled the country. The civil action is brought by Juan Romagoza, who was abducted, detained and tortured by at the national guard HQ in late 1980; Neriz Gonzalez, a church lay worker tortured and raped by national guardsmen in 1979; and Professor Carlos Mouricio of the University of El Salvador, tortured at the national police HQ in 1983. It is the result of a long investigation by the Centre for Justice and Accountability (CJA) in San Francisco, one of several groups pursuing members of military regimes under whose command torture, rape and extra-judicial executions were carried out. A similar action was brought last year by the families of four American nuns raped and murdered by members of the Salvadorean national guard in 1980, but it was rejected by the US appeal court in Florida. "The difference this time is that the three victims are all alive and will be giving evidence in person," Chris McKenna of the CJA said yesterday. "What they have to say will be very powerful." The CJA has close links with many refugee groups, which is how the latest action arose. Mr McKenna said its aim was two-fold: to ensure that the US did not become a safe haven for torturers and to bring some belated justice to people in El Salvador unable to pursue such actions because of a general amnesty given to the armed forces 1993. Since 1994 US law has allowed the criminal prosecution of torturers found in the US but the act is not retrospective. "They [the plaintiffs] seek official acknowledgement by a court of law that Vides Casanova and Garcia committed acts that were not only unconscionable but also illegal under the laws of all civilised countries," Mr McKenna said. They felt an obligation to seek on behalf of friends and countrymen unable to speak: those who had been killed and those who "cannot talk about the terrible things that were done to them or that they witnessed" because they were too traumatised or because they feared retaliation against themselves or their relatives. "They hope to disrupt the defendants' lives, and to ensure that their community and family know what they did." The CJA has already won a US court order against an Indonesian general to pay $66m (?45m) compensation to the victims of the Indonesian government in East Timor. Action against people allegedly involved in atrocities in Latin America and in Bosnia has also been investigated. "Many high-ranking military and civilian officials around the world dream about living in the US," Mr McKenna said. "This case and similar cases are sending a powerful message to torturers and war criminals around the world ... that as many perpetrators as possible should be held accountable." From Michael.Keaney at mbs.fi Wed Jun 5 05:19:35 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 5 Jun 2002 14:19:35 +0300 Subject: [A-List] Denmark: friendly fascism Message-ID: Yet more on the rapidly creeping authoritarianism and anti-immigrant policies that are becoming a defining characteristic of the EU... Copenhagen flirts with fascism Denmark is about to head the EU. It's a worrying prospect Stephen Smith Wednesday June 5, 2002 The Guardian If I'd been given a pound for every time a visitor to our Holocaust centre, shaking his head, solemnly stated, "I can't believe that nobody said anything," I would be a very wealthy man. Listening to these words, I would naively believe that if the clock were rewound to the 1930s, these people would speak out. But not so; it appears these moralisers were merely commenting on the inaction of the silent, before proceeding to join their ranks. Over the past year, the unheralded swing to the right in Danish politics has made the gradual increase in Germany's vote for the Nazis look slow. In the words of a Danish friend of mine, now living in Brussels: "The country has gone crazy and no one has noticed." It is more disturbing than that. What we are witnessing in Denmark is nothing less than the return of rightwing extremism to respectability - not through the acceptance of a controversial Haider or Le Pen, but through the quiet adoption of their stance by mainstream political parties. Denmark takes over the EU presidency on July 1 and will heavily influence the whole European immigration and asylum debate, which is set to dominate the EU summit in Seville later this month. Conscious of rising support for the far-right Danish People's party in the run-up to last November's election, Denmark's mainstream Liberal party decided that if it couldn't beat them, it should join them. It took a hard line on immigration which paid off. The Liberals beat the Social Democrats to form the new government, in coalition with Denmark's Conservative party and with the parliamentary support of the DPP. Budgets were immediately cut to reduce public spending, especially for anything to do with human rights, civil society or overseas aid. Denmark's government is now taking steps which will turn one of the world's most liberal countries into a bastion of introverted nationalism. There is no "final solution" looming in Copenhagen, but there is the creation of new solutions, using legalised discrimination. A law was passed in the Danish parliament last week which prevents anyone under the age of 24 from living in Denmark with a non-EU spouse. It also prevents asylum seekers from marrying while their applications are being processed. As if to underline the cowardice of the Act, it was the last piece of business in the parliament before the summer recess. The law's unspoken rationale includes a deterrent to arranged marriages between members of Denmark's Muslim community and people in Islamic countries abroad. Legislation making this explicit would be racist, so the Danish authorities have chosen xenophobia instead - equal discrimination against all foreigners. It works from the point of view of the immigration department, but then so would many other more drastic measures if human rights were no longer part of the equation. In 1935, the Nazis found a great many "reasonable" measures once they had disregarded the rights of Jews. What the new law means is that young refugees in Denmark are now second-class people deprived of the most basic of human rights - that of finding a partner for life - and this is the law. At a time when countries like Poland, Lithuania and the Czech Republic are trying to pass strict tests on human rights to join the European Union, a member state is creating laws that would exclude them instantly, if they happened to be from east of Berlin. All of this apparently goes unsanctioned. The same moraliser is still standing there shaking his head about the world's silence, and he then voices the predictable punchline: "We have to be so careful, because history always repeats itself." Not true. History never repeats itself. If you can give me one instance where exactly the same thing happened twice, I would be interested to hear it. So for all those people looking out for goose-stepping thugs led by a former German army corporal with a little moustache, you can stop looking now. History mutates. It comes back in different forms, with a different appearance and different consequences for different people. It defies us to recognise its genetic material because it changes its shape and colour to suit its environment. As it stands, the nationalism now rife in Europe is a more timid mutant of fascism. It comes with a suit and a smile. But beware. Its parentage is the same, and who knows what monster it might grow into. So for all of those who shake their heads over the silence of our forebears, here's a chance to show we are not like them. In the heartland of liberal Europe, there is now a minority community, defined by their age and lack of Danish citizenship, who have just lost a key component of their human rights. What have we got to say about that? Stephen Smith is co-founder of the UK-based Beth Shalom Holocaust Centre From soncu at pacbell.net Wed Jun 5 10:51:04 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Wed, 05 Jun 2002 09:51:04 -0700 Subject: [A-List] Netherlands: liberal racism Message-ID: The author of the below article is a member of the anti-racist organisation De Fabel van de illegaal (The myth of illegality) from Netherlands. De Fabel van de illegaal was one of the founding organizations of the so-called "anti-mai" movement and one of the much respected organizations in the so-called "anti-globalization" movement in those "good old days" when most people did not even know that such a movement existed. You can read about their self-description here: http://www.gebladerte.nl/30007v02.htm Sabri +++++++++++ Liberal racism in the Netherlands By: Eric Krebbers In the local elections in march 2002 over one third of the population of Rotterdam voted for the Right-wing populist Pim Fortuyn. Two months later Fortuyn was killed. Just 10 days later his party Lijst Pim Fortuyn (LPF) got 26 out of 150 seats in national parliament. Only founded some 3 months before, the LPF became the second biggest party in the Netherlands. Fortuyns major victory was based on 10 years of anti-immigrant campaigns by opinionleaders, social scientists and conservative, liberal, christian-democrat and social-democrat politicians. Conservative leader Bolkestein spent most of the nineties bashing immigrants and refugees as criminals and profiteers from social security, until he was promoted to Brussels to become an EU-commissioner. Feelings of racial superiority dating back to the colonial period surfaced easily again. Dutch people began to percieve migrants and refugees foremost as a problem. As a result many harsh anti-immigration laws were introduced without much protest. The social-fiscal number was introduced in 1992, compulsory identification in 1995, and the "Koppelingswet" in 1998, a law by which all governmental databases are coupled to exclude undocumented people from all services. In 2001 a new immigration law made it allmost impossible for refugees to get asylum in the Netherlands. At the same time bordercontrols were expanded, the number of razzia's at workplaces grew, just as the numer of special jails for undocumented people. Due to internal struggles the extreme-Right wasn't able to use the racist atmoshere and to get to the streets and to build a serious party. They wouldn't have been able to mobilise many people anyway, because they are still associated with the nazi occupation in World War Two and also because the decent mainstream was already fiercly attacking foreigners. In spring 2000 ex-communist opinionleader Paul Scheffer published his famous article on "the multicultural drama". According to him migrants and refugees do not integrate enough in Dutch society. Most other mainstream opinionleaders agree and say the Dutch have been too tolerant towards foreigners, who have "barbaric" ideas and habits that "we liberal Dutch do not approve of". They all pose as great defenders of the Enlightenment, and argue for the equality between man and woman, for the seperation between church and state, for the rights of the individual and so on, ideals that have supposedly all been realised for al long time in the "free west" by people like themselves. This self-aggrandizement takes place on the expense of all foreigners whom they picture as just the opposite of themselves, as fanatical islamic fundamentalists. The opinionleaders stage a mediawar against "the islam", which they simply cannot lose. For who would chose sides with "dangerous backward people", who, according to Scheffer, "have put the evolutionairy clock of Dutch history back for half a century". Most opinionleaders argue against allowing any migrants and refugees to enter the country. The opinionleaders were able to mobilize virtually the entire society, not only the expected traditional Right. For instance, by continually arguing that the headscarfs, some islamic women wear, are by definition repressive to women, the opinionleaders managed to win over large parts of the womens movement. The same thing happened with the gay-movement, when little known imam Khalil el-Moumni mentioned that being gay is a sickness. His remark was blown up to a giant scandal. Strinkingly, a similar stament, that gays aren't any better than thieves, by christian fundamentalist member of parliament Van Dijke a few months earlier didn't cause that much anger. More and more evils like fundamentalism, homophobia, patriarchy, and also antisemitism are seen as "un-Dutch" and imported by foreigners. That is utter nonsense, which is of course not to say that these problems are nonexistent among migrants and refugees. It just has nothing to do with nationality. Then came september 11th. Not surprisingly, the reaction in the Netherlands was extremely violent compared to neighboring countries. Dozens of mosques and asylumcentres were attacked. All foreigners were expected to publicly denounce Bin Laden, fundamentalism or even the islam as a whole. That summer opinionleader Fortuyn had decided to go into politics. Being an university professor he was allowed to state racist opinions for which neo-nazi's used to get convicted. He called islam "a backward" religion and always suggested that gay men like himself couldn't feel safe anymore because of gaybashing Moroccans. He warned for the "islamisation" of Dutch culture and argued for a "cold war against islam" because "moslims are busy conquering Western Europe". Foreigners should learn to be Dutch or get out of the country, he said. He often referred to foreigners as criminals. We should be free to mention these "truths" about foreigners, without being called racists, said Fortuyn. With every racist remark his popularity grew. On the sixth of may, only 9 days before the elections, Fortuyn was killed. Suddenly the racist climate that had been building up for so long, became perfectly clear to everyone. There were progroms in the air. Was the attacker a foreigner, or even worse: a moslim? That was the question. Luckily he turned out to be white and no racist attacks followed. But tens of thousands of Fortuyn-fans did demonstrate for days together with nazi-activists. Dutch flags were everywhere, and people cried that their "saviour" was dead, the man who would "deliver us from the swamps of immigration and criminality", the man "who wasn't afraid to say what we all think". Now, after the elections, a new government is being formed including the LPF, which is planning new harsh anti-immigrant laws against family reunion and the last few refugees that still manage to reach the country. Eric Krebbers is a member of the anti-racist organisation De Fabel van de illegaal (The myth of illegality) in Leiden, the Netherlands. Website: . *********************************************** Wil je regelmatig (max. 2 x per week) actie-aankondigingen en discussiestukken van De Fabel ontvangen? Stuur een e-mailtje naar info at defabel.nl met daarin "Fabel Nieuws". Afmelden met een mailtje " stop Fabel Nieuws" . *********************************************** DE FABEL VAN DE ILLEGAAL Koppenhinksteeg 2, 2312 HX Leiden, The Netherlands +31-71-5127619 (tel), +31-71-5134907 (fax), info at defabel.nl (e-mail), www.defabel.nl (Website), www.gebladerte.nl (Archief). Bereikbaar op werkdagen/open at workdays: 14:00-17:00. Spreekuur illegalen: woensdag/ consultation for undocumented: wednesday 14:00-17:00. Girorekening 4418467 t.n.v. De Fabel van de illegaal, Leiden. From soncu at pacbell.net Wed Jun 5 12:43:14 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Wed, 05 Jun 2002 11:43:14 -0700 Subject: [A-List] Perot's unquestioned record of integrity Message-ID: Perot Systems Shares Down After Calif. Allegation Wed Jun 5, 1:59 PM ET LOS ANGELES (Reuters) - A California state senator has alleged Perot Systems Corp. , which designed the computer systems for the state's power exchanges, with showing power companies how to exploit loopholes in those systems to inflate prices. Shares of Perot Systems, founded in 1988 by former presidential candidate H. Ross Perot, plunged in response to the allegation, trading down more than 24 percent on Wednesday at $13.60 on the New York Stock Exchange (news - web sites). State Sen. Joseph Dunn, who chairs a committee investigating price manipulation in California's energy markets, on Tuesday released documents from a presentation that Plano, Texas-based Perot allegedly made to Reliant Energy and other participants in California's electricity markets. That presentation, which mapped out a strategy for creating congestion on the California electricity grid and driving up prices, represented a clear conflict of interest and could open Perot to civil and criminal liability, Dunn said, according to the Los Angeles Times. Perot Systems designed the computer systems for the now-defunct California Power Exchange and the state's Independent System Operator, which runs most of California's electric grid. Perot Systems designs and maintains complex computer systems. H. Ross Perot remains chairman of the board and his son, Ross Perot Jr., is president and chief executive. A staff member in Dunn's office confirmed the senator, a Democrat who represents a district in Orange County south of Los Angeles, had released the alleged presentation on Tuesday. Copies of the documents were not immediately available. It was not immediately clear when the alleged presentation had been made or whether any of the companies that had seen it had acted on the advice it contained. A Perot Systems spokesman said: "While we have not had the opportunity to review any documents, we are proud of the work we have done for California consumers and even more proud of our unquestioned record of integrity." California opened its power markets to competition in 1998 and two years later prices for electricity skyrocketed. The rise has been attributed in part to a shortage linked to rising demand but also drew allegations that power marketers were manipulating the market. Bankrupt energy giant Enron Corp. , in memos released by federal regulators last month, outlined strategies with names such as "Fat Boy" and "Death Star" through which they used California's flawed deregulation model to reap huge profits. The state's largest utility, Pacific Gas & Electric, a unit of San Francisco-based PG&E Corp. , filed for Chapter 11 bankruptcy protection in April 2001 after state regulators refused to allow the company to fully pass on soaring power purchase costs to its customers. Full article: http://story.news.yahoo.com/news?tmpl=story&u=/nm/20020605/tc_nm/ tech_perotsystems_dc_1 From soncu at pacbell.net Wed Jun 5 12:57:28 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Wed, 05 Jun 2002 11:57:28 -0700 Subject: [A-List] Perot's unquestioned record of integrity In-Reply-To: Message-ID: Here is some more info. Sabri ++++++++++++++++ Improper Power Data Sale Alleged Electricity: Bidding system 'holes' reportedly were revealed to energy companies by computer firm Perot Systems. By NANCY RIVERA BROOKS TIMES STAFF WRITER June 5 2002 Perot Systems Corp., a Texas company that set up the computer systems behind California's electricity markets, peddled a detailed blueprint of how to exploit market loopholes to raise power prices--a clear conflict of interest, a state senator said Tuesday. Sen. Joseph Dunn (D-Santa Ana), who chairs a committee investigating price manipulation in California's energy markets, released a document by Plano-based Perot Systems that discusses "holes" in the bidding systems of the California Power Exchange and the California Independent System Operator, the two markets set up in 1998 to trade power under California's newly deregulated electricity business. The document consists of 43 graphics from a computerized presentation made to Reliant Energy and other sellers in California's electricity market. A Perot Systems spokesman said: "While we have not had the opportunity to review these documents, we are proud of the work we did for California consumers." The firm, which designs and maintains computer systems, was founded in 1988 by H. Ross Perot, the former presidential candidate. He remains chairman of the board. Perot Systems did not create the rules governing California's electricity markets but did design the computer systems for the PX and Cal-ISO and continued to offer technology services for a time. The Perot Systems presentation appears to be a primer on California's markets for electricity that seeks to answer the question: "What strategies will help you prosper in the California market structure?" It notes that "strategies can affect prices" and "a small participant could control prices in CA and destabilize the PX market." The final pages of the document map out a "game" to create congestion on the electricity grid that could significantly increase the price that the seller would receive for electricity--a strategy similar to one Enron Corp. used in California, as detailed in recently disclosed memos. "It is the ultimate of conflicts of interest. It could open them up to civil and criminal liability issues," Dunn said, adding that Perot Systems had the duty to alert the PX and Cal-ISO to loopholes, not sell the information to market participants. The undated presentation appears to have been created early in the markets' life, Dunn said. Reliant included the Perot presentation in documents it sent to Dunn's committee and to the Federal Energy Regulatory Commission, which also is investigating manipulation of Western energy markets. Dunn released the document after Reliant waived confidentiality, noting that the presentation had been made to other California market participants. Full article: http://www.latimes.com/business/la-000039414jun05.story?coll=la%2 Dheadlines%2Dbusiness From soncu at pacbell.net Wed Jun 5 14:18:19 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Wed, 05 Jun 2002 13:18:19 -0700 Subject: [A-List] =?iso-8859-1?Q?The_more_it_changes=2C_the_more_it's_the_same?= Message-ID: Morgan Stanley - Global Economic Forum Jun 05, 2002 Revisiting Graham and Dodd Stephen Roach (New York) The French said it best, "Plus ca change, plus c'est la meme chose." Or loosely translated into English, "the more it changes, the more it?s the same." I was reminded of this the other night while rereading excerpts from Graham and Dodd at the suggestion of a colleague. Originally published in 1934, Security Analysis by Benjamin Graham and David Dodd could have been written yesterday. The players have changed but the conceptual framework is as fresh as ever. The introduction and the first chapter of this opus are especially chilling. Intended as an indictment of the excesses of the roaring Twenties, these first 15 pages of a more than 700-page book are equally applicable to our bubble -- and, by inference, to much that is now unfolding in its aftermath. The insights of Graham and Dodd are timeless when it comes to diagnosing what ails today?s US economy and its sagging stock market. Obviously, it?s all in the eyes of the beholder. But as I continue to see it, the biggest difference between my bearishness and the outlook of a more sanguine consensus is a debate over the very character of this business cycle. I view the US economy as being in the early stages of a post-bubble shakeout. Most others see the context quite differently -- as a fairly standard business cycle, dominated by a powerful, yet self-correcting, inventory dynamic. Only time will tell who?s got this one right. Meanwhile, Graham and Dodd have something to say about today?s debate, as well. In their depiction of the boom and subsequent bust of some 70 years ago, they unwittingly provide us with rich insights as to where we?ve come from in the late 1990s and what now lies ahead. Five insights literally jump off the page: "The ?new era? doctrine -- that ?good? stocks were sound investments regardless of how high the price paid for them -- was at bottom only a means of rationalizing under the title of ?investment? the well-nigh universal capitulation to the gambling fever." For Graham and Dodd, this was all about the speculative mania that took the Dow Jones Industrial Average from a low of 63.90 in 1921 to a peak of 381.17 in September 1929. It was also about the theories that were concocted to justify this speculation on the basis of a seemingly extraordinary confluence of powerful innovations -- the car, rural electrification, and radio broadcasting. For us, it was the surge in Nasdaq from 965 in early 1996 to nearly 5100 in March 2000. It was also about another powerful wave of technological innovation that gave rise to the untested theories of a new productivity-based foundation of sustained economic prosperity. Far be it for me to compare the innovations of the 1990s with those of the 1920s. The National Academy of Engineering is, however, very qualified to perform this task. By their reckoning, the Internet pales in comparison with the breakthroughs earlier in the twentieth century; it is ranked 13 in the top 20 innovations in the twentieth century, whereas electrification (#1), the car (#2), and radio and television (#6) are all ranked considerably higher. Try telling that to the equity bubble of the late 1990s! " This psychological phenomenon is closely related to the dominant importance assumed in recent years by intangible factors of value, viz., good will, management, expected earning power, etc." For Graham and Dodd, unrealistic earnings expectations were found to rest on the seemingly arbitrary and unquantifiable potential of these intangibles to deliver extraordinary profitability and wealth. Seventy years later, it was the "asset light" companies that were awarded dot-com-like valuation status. We all read books like Lowell Bryan?s Race for the World, which extolled the virtues of enhanced enterprise value through strategies of building intangible capital. Enron was the model of such corporate "success" -- on a pedestal that mortal companies could only dream of. "In the last three decades the prestige of securities analysis on Wall Street has experienced both a brilliant rise and an ignominious fall -- a history related but by no means parallel to the course of stock prices." Painfully, not much to say on this one, except read the newspapers -- then and now. Cyclical bear markets come and go, while the secular strain always seems to linger long enough to create a new generation of scapegoats. Touch?! " The ?new era? commencing in 1927 involved at bottom abandonment of the analytical approach; and while emphasis was still seemingly placed on facts and figures, these were manipulated in a sort of pseudo-analysis to support the delusions of the period." In other words, Graham and Dodd were bemoaning the sad state of rigorous valuation standards in the late 1920s, as well as the willingness of analysts and investors to ignore the excesses signaled by conventional valuation metrics. According to Yale Professor Robert Shiller, the price-earnings ratio for the S&P composite (based on a 10-year moving average of past earnings, as suggested in Graham and Dodd) surged from about 5 in the early 1920s to 33 in 1929 (see Irrational Exuberance, Princeton University Press 2000). The same, of course, can be said for the extraordinary valuations placed on the profitless dot-com companies of the late 1990s. According to Shiller?s estimates, the broader market multiple went from about 7 in the early 1980s to 44 in early 2000 -- well in excess of the valuation spike in the late 1920s. This time, like most new eras, was supposed to be different. " The ultimate result was that serious analysis suffered a double discrediting: the first -- prior to the crash -- due to the persistence of imaginary values, and the second -- after the crash -- due to the disappearance of real values." This could well be the most painful parallel of all. Graham and Dodd were, of course, making the connection between the stock market crash and the resulting collapse in the real economy -- the collateral damage that further destroyed earnings power and the credibility of valuation metrics. In the debate raging over the prognosis of today?s economy, this is where the rubber meets the road. To me, the capital spending collapse of 2001 says it all -- an 11.3% decline over the past five quarters that far outstrips that which would have been expected in a mild recession. This reflects efforts to eliminate the massive overhang of excess capacity that I believe stems from Corporate America?s desire to achieve Nasdq-type valuations through massive investments in new information technologies. Needless to say, the unwinding of the IT bubble has played a key role in accounting for the earnings carnage of the past year -- yet another painful example of the "double discrediting" of stock market analysis that Graham and Dodd wrote of nearly 70 years ago. Don?t get me wrong, I am not suggesting that the United States is about to fall into a 1930s-style abyss. The Great Depression was far more than a stock-market crash. More importantly, it reflected the confluence of a number of major policy blunders on both the domestic and international fronts. America?s Federal Reserve committed serious errors and there was no policy coordination at the international level -- whether it pertained to exchange rates or trade policy. But that?s not to say that aren?t some very important lessons that can be gleaned from the excesses of 70 years ago. In the end, Graham and Dodd sum it up all too well. "That enormous profits should have turned into still more colossal losses, that new theories have been developed and later discredited, that unlimited optimism should have been succeeded by the deepest despair are all in strict accord with age-old tradition." Plus ca change, plus c'est la meme chose! From soncu at pacbell.net Wed Jun 5 14:53:01 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Wed, 05 Jun 2002 13:53:01 -0700 Subject: [A-List] US: On the future of dollar Message-ID: We all have biases. Mine is downward obviously when it comes to the future of the US economy. I sincerely hope that I will be proven wrong. Sabri +++++++ Morgan Stanley - Global Economic Forum Jun 04, 2002 What If the Dollar Crashes? Stephen Roach (New York) Our central case continues to call for a soft landing of an overvalued US dollar. According to Stephen Li Jen, the dollar began this year about 14% over-valued. Against that backdrop, our baseline global forecast incorporates two years of 7% declines in the trade-weighted value of the dollar, in both 2002 and 2003. By our reckoning, such an orderly currency depreciation would leave the dollar "fairly valued" by the end of 2003. Such a soft landing would be just what the doctor ordered -- it would go along way in facilitating the rebalancing that a US-centric global economy so desperately needs. Everyone knows that a soft landing of the dollar is in the world? s best interest. Stephen Li Jen has also done a masterful job in making and defending this case (see his May 22 dispatch, "The Case for a Soft Landing in the USD"). Yet, however compelling the logic, history cautions against betting too heavily on soft landings in over-valued asset markets. Once they finally give way, market excesses have a painful knack of getting corrected rather quickly. Remember Nasdaq 5000? The Nikkei at 38,900? The dollar collapse of the mid-1980s? In all of these instances, the adjustments were swift and wrenching -- with landings that ultimately had little respect for the equilibrium valuations of our finely calibrated models. While the trade-weighted dollar is down only about 3% from its peak earlier this year, it has now fallen about 9% against both the euro and the yen. With the downslide accelerating in recent days, fears of a hard landing are now in the air. As always, it?s the tails of the probability distribution that tend to have the greatest impact on financial markets. Largely for those reasons, we feel it?s appropriate to ponder the low-probability ramifications of a hard landing for the dollar. By Stephen Li Jen?s reckoning, a dollar landing would qualify as "hard" when the greenback?s monthly declines against other major currencies exceed 3% (see his 30 May dispatch, "A Defining Moment for a USD ?Hard Landing?"). In keeping with this metric, we have examined a hard-landing shock framed around a 20% drop of the dollar against both the euro and the yen by the end of 2002. Relative to levels prevailing on May 24, when we first began to ponder such a scenario, this shock would be sufficient to take the dollar/euro cross-rate to 1.15 and the yen/dollar to 100. What would be the implications of such an outcome? In theory, shifts in relative prices -- and that?s exactly what a currency is -- should have a zero-sum impact on the global economy. It changes the "terms of trade" within the world but not the overall level of global output. In the simplified model of a two-country world, a shift in the currency alignment would find one economy gaining and the other losing. In the case of a soft landing for the dollar, I believe the zero-sum global outcome would be reasonably close to the mark. A strengthening of both the euro and the yen would restrain export growth in Euroland and Japan, while stimulating foreign demand for US-made products. Inflation would be a little higher in the United States, but a bit lower in Euroland and Japan. By impeding external demand, a stronger euro and yen would put some additional pressure on both Europe and Japan to implement additional reform and restructuring initiatives; a failure to do so would result in a permanent erosion of market share in an ever-expanding global economy. I would be willing to bet that Japan, in particular, but also Euroland, will take extraordinary actions to ward off just such a possibility. A hard landing, I fear, would be a different matter altogether. The impacts would be especially severe in Europe, where the confluence of wage rigidity and fiscal constraints on Germany and France would exacerbate the first-round impacts. Our Euro team believes that a dollar crash would knock at least one percentage point off Euroland GDP growth over a four-quarter time frame. We believe the impacts would be a little smaller in Japan, where there is a bit more leeway for wage adjustments to cushion the blow of a stronger yen; our estimates suggest that a dollar crash would probably be sufficient to knock around 0.5% off Japanese GDP growth in the first year and even more in the second. The resulting pressure on exporters would undoubtedly trigger intensified corporate cost-cutting of both capacity and headcount, resulting in second-round effects that would restrain capital spending and personal consumption. In the United States, the currency-induced boost to exports would be an obvious plus -- sufficient to probably boost real GDP growth by a little less than 0.5% in the first year following the dollar?s crash. The inflationary consequences would be comparable -- an immediate 20% depreciation of the dollar likely would boost US inflation by about 0.4% over the next year. Elsewhere in the world, the open economies of Asia would be most effected by a depreciation of the dollar. Inasmuch as half of non-Japan Asia -- China, Hong Kong, and Malaysia -- is pegged to the US dollar, a depreciation of the US currency would provide a significant boost to these nations? exports. Korea, which accounts for another 25% of pan-regional GDP, has a currency that moves in much closer alignment with the yen; for that reason alone, a crash in the dollar against the yen would boost the won and severely crimp Korean export growth. Taiwan is also yen-sensitive, but as Andy Xie notes, its currency only moves by half as much as the yen; as a result, any export hit on Taiwan would be relatively muted when compared with the rest of the region. Andy estimates that the first-round effects of a dollar crash would boost pan-regional exports to Japan and Europe, sufficient to raise Asian real GDP growth by approximately one percentage point in the year immediately following the depreciation. Alas, there?s more to the story of hard landing for the dollar than macro terms-of trade effects. In my view, a dollar crash would have a devastating impact on US financial markets that could well be amplified in other capital markets around the world. Foreign investors would continue to reduce their exposure to dollar-denominated assets and US investors would undoubtedly rebalance their portfolios in an effort to seek greater exposure to non-dollar-denominated assets. The result would be lower prices for equities and bonds, alike. This could have significant negative consequences for a wealth-dependent US economy. It would undoubtedly deal a devastating blow to consumer confidence, finally sealing the fate of the long-awaited consolidation of the American consumer. The negative asset effects would also result in a higher cost of capital that would most likely impede business capital spending. Moreover, an increase in precautionary saving could be expected under a dollar-crash scenario. With currency volatility likely to lead to increased pricing uncertainty, businesses would be exceedingly reluctant to make major commitments to new capacity expansion programmes. Consumers would also tend to boost personal saving in response to increased uncertainty of purchasing power. In short, under a hard landing, wealth and saving effects driven by further downward pressure on asset prices could swamp the positive benefits of the income and price effects. That would spell tough news for the US economy -- more than enough to stoke renewed fears of a double-dip. Nor would the rest of the world -- still overly dependent on the US, in my view -- take kindly to wealth-induced shortfall in America. If the world?s growth engine gets hit by a currency-related wealth shock, the global reverberations would come at a fast and furious pace, in my view. All this suggests that a dollar crash should be viewed as a negative-sum game for the global economy. With negative wealth effects likely to outweigh terms-of-trade effects and with currency volatility likely to encourage risk aversion and higher precautionary saving, a dollar shock would undoubtedly result in a significant haircut on world GDP growth. A back-of-the-envelope guesstimate suggests such a scenario would lower global GDP growth by at least 0.5 to 1.0 percentage point over a four-quarter time frame beginning in 3Q02. Yes, a hard landing of the dollar is a low-probability event. But so, too, is the creation and subsequent popping of any asset bubble. In many respects, the strong dollar was the linchpin of the virtuous circle of the late 1990s. Yet in the post-bubble era, complete with a massive and ever-widening US current-account deficit, the strong dollar has remained largely unscathed -- at least until recently. But suddenly the bloom is off the rose. Fears of a profitless recovery raise serious questions about returns on dollar-denominated assets. America?s recent protectionist forays -- especially steel tariffs and increased agricultural subsidies -- hardly instill confidence in the dollar as the mainstay of global commerce. Nor does the Bush Administration get high marks in the international community for its recent handling of geopolitical crises. Moreover, there is a general perception that US foreign policy has become increasingly ineffective by spreading itself too thin on three fronts -- the war against terrorism, the Middle East, and India-Pakistan. Suddenly, all that looked so virtuous about America now looks increasingly vicious. The odds of a dollar crash scenario, while still low, suddenly look higher. Normally, we would assign a 5% probability to such an outcome. Today, we would raise that probability into the 10% to 15% zone. For an overvalued currency, the increased odds of a hard landing spells trouble -- not just at home but elsewhere around the world. If the dollar crashes, the global economy could be in serious trouble. Let?s hope it won ?t. From hliu at mindspring.com Wed Jun 5 20:10:28 2002 From: hliu at mindspring.com (Henry C.K. Liu) Date: Wed, 05 Jun 2002 22:10:28 -0400 Subject: [A-List] Re: "Revisiting Graham and Dodd " References: Message-ID: <3CFEC493.64D0DE1B@mindspring.com> Jas, I agree that there is a great deal, in fact pervasive amount, of fraud in the market. Fraud is a natural byproduct of deregulation. You are right that what ails the market is fraud. But it does not follow that the impending crash is caused by fraud. Fraud caused the boom and the exposure of fraud contributes to the bust. The crash is, as Raoch suggests, the result of a confluence of wrong-headed policies based on inoperative ideology. The ideology of a "free market" masked all sense of reality. The crash is merely reality catching up. For those who stay on this earth, there is no escaping gravity. Yes, the economy is ailed by fraud, but its illusionary health earlier was also caused by fraud. Henry Jas Jain wrote: > I reread Graham and Dodd's Security Ananlysis, "the Bible," in 1999, in > 2000, and in 2001. Some of you on my private list received some choice > excerpts from it in the past. Looks like some of the top Wall Street > economists are finally getting to it. It was so clear to me what was going > on in corporate America -- Deception at Grand Scale. I have relentlessly > made that point for the four years now. Even SEC and politicians have > discovered this fact. So, watch out below when it comes to stock prices. > > What is ailing the stock market? It is Fraud, Stupid! > > Jas > -x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x- > http://www.morganstanley.com/GEFdata/digests/20020605-wed.html#anchor0 > > Jun 05, 2002 > > Global: Revisiting Graham and Dodd > > Stephen Roach (New York) > > The French said it best, "Plus ca change, plus c'est la meme chose." Or > loosely translated into English, "the more it changes, the more it?s the > same." I was reminded of this the other night while rereading excerpts > from Graham and Dodd at the suggestion of a colleague. Originally > published in 1934, Security Analysis by Benjamin Graham and David > Dodd could have been written yesterday. The players have changed but > the conceptual framework is as fresh as ever. The introduction and the > first chapter of this opus are especially chilling. Intended as an > indictment of the excesses of the roaring Twenties, these first 15 pages > of a more than 700-page book are equally applicable to our bubble -- > and, by inference, to much that is now unfolding in its aftermath. > > The insights of Graham and Dodd are timeless when it comes to > diagnosing what ails today?s US economy and its sagging stock market. > Obviously, it?s all in the eyes of the beholder. But as I continue to see > it, > the biggest difference between my bearishness and the outlook of a > more sanguine consensus is a debate over the very character of this > business cycle. I view the US economy as being in the early stages of a > post-bubble shakeout. Most others see the context quite differently -- > as a fairly standard business cycle, dominated by a powerful, yet > self-correcting, inventory dynamic. Only time will tell who?s got this one > right. > > Meanwhile, Graham and Dodd have something to say about today?s > debate, as well. In their depiction of the boom and subsequent bust of > some 70 years ago, they unwittingly provide us with rich insights as to > where we?ve come from in the late 1990s and what now lies ahead. Five > insights literally jump off the page: > > "The ?new era? doctrine -- that ?good? stocks were sound investments > regardless of how high the price paid for them -- was at bottom only a > means of rationalizing under the title of ?investment? the well-nigh > universal capitulation to the gambling fever." For Graham and Dodd, this > was all about the speculative mania that took the Dow Jones Industrial > Average from a low of 63.90 in 1921 to a peak of 381.17 in September > 1929. It was also about the theories that were concocted to justify this > speculation on the basis of a seemingly extraordinary confluence of > powerful innovations -- the car, rural electrification, and radio > broadcasting. For us, it was the surge in Nasdaq from 965 in early 1996 > to nearly 5100 in March 2000. It was also about another powerful wave > of technological innovation that gave rise to the untested theories of a > new productivity-based foundation of sustained economic prosperity. Far > be it for me to compare the innovations of the 1990s with those of the > 1920s. The National Academy of Engineering is, however, very qualified > to perform this task. By their reckoning, the Internet pales in > comparison with the breakthroughs earlier in the twentieth century; it is > ranked 13 in the top 20 innovations in the twentieth century, whereas > electrification (#1), the car (#2), and radio and television (#6) are all > ranked considerably higher. Try telling that to the equity bubble of the > late 1990s! > > " This psychological phenomenon is closely related to the dominant > importance assumed in recent years by intangible factors of value, viz., > good will, management, expected earning power, etc." For Graham and > Dodd, unrealistic earnings expectations were found to rest on the > seemingly arbitrary and unquantifiable potential of these intangibles to > deliver extraordinary profitability and wealth. Seventy years later, it was > the "asset light" companies that were awarded dot-com-like valuation > status. We all read books like Lowell Bryan?s Race for the World, which > extolled the virtues of enhanced enterprise value through strategies of > building intangible capital. Enron was the model of such corporate > "success" -- on a pedestal that mortal companies could only dream of. > > "In the last three decades the prestige of securities analysis on Wall > Street has experienced both a brilliant rise and an ignominious fall -- a > history related but by no means parallel to the course of stock prices." > Painfully, not much to say on this one, except read the newspapers -- > then and now. Cyclical bear markets come and go, while the secular > strain always seems to linger long enough to create a new generation of > scapegoats. Touch?! > > " The ?new era? commencing in 1927 involved at bottom abandonment > of the analytical approach; and while emphasis was still seemingly > placed on facts and figures, these were manipulated in a sort of > pseudo-analysis to support the delusions of the period." In other words, > Graham and Dodd were bemoaning the sad state of rigorous valuation > standards in the late 1920s, as well as the willingness of analysts and > investors to ignore the excesses signaled by conventional valuation > metrics. According to Yale Professor Robert Shiller, the price-earnings > ratio for the S&P composite (based on a 10-year moving average of past > earnings, as suggested in Graham and Dodd) surged from about 5 in > the early 1920s to 33 in 1929 (see Irrational Exuberance, Princeton > University Press 2000). The same, of course, can be said for the > extraordinary valuations placed on the profitless dot-com companies of > the late 1990s. According to Shiller?s estimates, the broader market > multiple went from about 7 in the early 1980s to 44 in early 2000 -- well > in excess of the valuation spike in the late 1920s. This time, like most > new eras, was supposed to be different. > > " The ultimate result was that serious analysis suffered a double > discrediting: the first -- prior to the crash -- due to the persistence of > imaginary values, and the second -- after the crash -- due to the > disappearance of real values." This could well be the most painful > parallel of all. Graham and Dodd were, of course, making the connection > between the stock market crash and the resulting collapse in the real > economy -- the collateral damage that further destroyed earnings power > and the credibility of valuation metrics. In the debate raging over the > prognosis of today?s economy, this is where the rubber meets the road. > To me, the capital spending collapse of 2001 says it all -- an 11.3% > decline over the past five quarters that far outstrips that which would > have been expected in a mild recession. This reflects efforts to eliminate > the massive overhang of excess capacity that I believe stems from > Corporate America?s desire to achieve Nasdq-type valuations through > massive investments in new information technologies. Needless to say, > the unwinding of the IT bubble has played a key role in accounting for > the earnings carnage of the past year -- yet another painful example of > the "double discrediting" of stock market analysis that Graham and > Dodd wrote of nearly 70 years ago. > > Don?t get me wrong, I am not suggesting that the United States is about > to fall into a 1930s-style abyss. The Great Depression was far more than > a stock-market crash. More importantly, it reflected the confluence of a > number of major policy blunders on both the domestic and international > fronts. America?s Federal Reserve committed serious errors and there > was no policy coordination at the international level -- whether it > pertained to exchange rates or trade policy. But that?s not to say that > aren?t some very important lessons that can be gleaned from the > excesses of 70 years ago. In the end, Graham and Dodd sum it up all > too well. "That enormous profits should have turned into still more > colossal losses, that new theories have been developed and later > discredited, that unlimited optimism should have been succeeded by the > deepest despair are all in strict accord with age-old tradition." Plus ca > change, plus c'est la meme chose! > > _________________________________________________________________ > Send and receive Hotmail on your mobile device: http://mobile.msn.com From annewilliamson at msn.con Wed Jun 5 22:58:33 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Thu, 6 Jun 2002 00:58:33 -0400 Subject: [A-List] Re: "Revisiting Graham and Dodd " References: <3CFEC493.64D0DE1B@mindspring.com> Message-ID: <039101c20d16$d03d11e0$0100a8c0@igrushkii> Henry, The fraud is the result of wanton credit creation and fiat money....and - no one cared so long as they were getting some of the juice......the accounting tricks have been around for many, many years for anyone who cared to look, but no one did. It was all right there all along. Pump the money, pump the money, buy the votes, keep Bubba in office, pump the money, pump the money, faster, faster, faster! It wasn't the free market which we certainly haven't had, it was a bunch of fatheaded, decadent loons drunk on Keynesianism, central banking, and power. Anne ----- Original Message ----- From: Henry C.K. Liu To: Jas Jain ; ; Sent: Wednesday, June 05, 2002 10:10 PM Subject: [A-List] Re: "Revisiting Graham and Dodd " > Jas, > > I agree that there is a great deal, in fact pervasive amount, of fraud in the > market. Fraud is a natural byproduct of deregulation. You are right that what > ails the market is fraud. But it does not follow that the impending crash is > caused by fraud. Fraud caused the boom and the exposure of fraud contributes > to the bust. The crash is, as Raoch suggests, the result of a confluence of > wrong-headed policies based on inoperative ideology. The ideology of a "free > market" masked all sense of reality. The crash is merely reality catching up. > For those who stay on this earth, there is no escaping gravity. > > Yes, the economy is ailed by fraud, but its illusionary health earlier was also > caused by fraud. > > Henry > > Jas Jain wrote: > > > I reread Graham and Dodd's Security Ananlysis, "the Bible," in 1999, in > > 2000, and in 2001. Some of you on my private list received some choice > > excerpts from it in the past. Looks like some of the top Wall Street > > economists are finally getting to it. It was so clear to me what was going > > on in corporate America -- Deception at Grand Scale. I have relentlessly > > made that point for the four years now. Even SEC and politicians have > > discovered this fact. So, watch out below when it comes to stock prices. > > > > What is ailing the stock market? It is Fraud, Stupid! > > > > Jas > > -x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x- > > http://www.morganstanley.com/GEFdata/digests/20020605-wed.html#anchor0 > > > > Jun 05, 2002 > > > > Global: Revisiting Graham and Dodd > > > > Stephen Roach (New York) > > > > The French said it best, "Plus ca change, plus c'est la meme chose." Or > > loosely translated into English, "the more it changes, the more it's the > > same." I was reminded of this the other night while rereading excerpts > > from Graham and Dodd at the suggestion of a colleague. Originally > > published in 1934, Security Analysis by Benjamin Graham and David > > Dodd could have been written yesterday. The players have changed but > > the conceptual framework is as fresh as ever. The introduction and the > > first chapter of this opus are especially chilling. Intended as an > > indictment of the excesses of the roaring Twenties, these first 15 pages > > of a more than 700-page book are equally applicable to our bubble -- > > and, by inference, to much that is now unfolding in its aftermath. > > > > The insights of Graham and Dodd are timeless when it comes to > > diagnosing what ails today's US economy and its sagging stock market. > > Obviously, it's all in the eyes of the beholder. But as I continue to see > > it, > > the biggest difference between my bearishness and the outlook of a > > more sanguine consensus is a debate over the very character of this > > business cycle. I view the US economy as being in the early stages of a > > post-bubble shakeout. Most others see the context quite differently -- > > as a fairly standard business cycle, dominated by a powerful, yet > > self-correcting, inventory dynamic. Only time will tell who's got this one > > right. > > > > Meanwhile, Graham and Dodd have something to say about today's > > debate, as well. In their depiction of the boom and subsequent bust of > > some 70 years ago, they unwittingly provide us with rich insights as to > > where we've come from in the late 1990s and what now lies ahead. Five > > insights literally jump off the page: > > > > "The 'new era' doctrine -- that 'good' stocks were sound investments > > regardless of how high the price paid for them -- was at bottom only a > > means of rationalizing under the title of 'investment' the well-nigh > > universal capitulation to the gambling fever." For Graham and Dodd, this > > was all about the speculative mania that took the Dow Jones Industrial > > Average from a low of 63.90 in 1921 to a peak of 381.17 in September > > 1929. It was also about the theories that were concocted to justify this > > speculation on the basis of a seemingly extraordinary confluence of > > powerful innovations -- the car, rural electrification, and radio > > broadcasting. For us, it was the surge in Nasdaq from 965 in early 1996 > > to nearly 5100 in March 2000. It was also about another powerful wave > > of technological innovation that gave rise to the untested theories of a > > new productivity-based foundation of sustained economic prosperity. Far > > be it for me to compare the innovations of the 1990s with those of the > > 1920s. The National Academy of Engineering is, however, very qualified > > to perform this task. By their reckoning, the Internet pales in > > comparison with the breakthroughs earlier in the twentieth century; it is > > ranked 13 in the top 20 innovations in the twentieth century, whereas > > electrification (#1), the car (#2), and radio and television (#6) are all > > ranked considerably higher. Try telling that to the equity bubble of the > > late 1990s! > > > > ".This psychological phenomenon is closely related to the dominant > > importance assumed in recent years by intangible factors of value, viz., > > good will, management, expected earning power, etc." For Graham and > > Dodd, unrealistic earnings expectations were found to rest on the > > seemingly arbitrary and unquantifiable potential of these intangibles to > > deliver extraordinary profitability and wealth. Seventy years later, it was > > the "asset light" companies that were awarded dot-com-like valuation > > status. We all read books like Lowell Bryan's Race for the World, which > > extolled the virtues of enhanced enterprise value through strategies of > > building intangible capital. Enron was the model of such corporate > > "success" -- on a pedestal that mortal companies could only dream of. > > > > "In the last three decades the prestige of securities analysis on Wall > > Street has experienced both a brilliant rise and an ignominious fall -- a > > history related but by no means parallel to the course of stock prices." > > Painfully, not much to say on this one, except read the newspapers -- > > then and now. Cyclical bear markets come and go, while the secular > > strain always seems to linger long enough to create a new generation of > > scapegoats. Touch?! > > > > " .The 'new era' commencing in 1927 involved at bottom abandonment > > of the analytical approach; and while emphasis was still seemingly > > placed on facts and figures, these were manipulated in a sort of > > pseudo-analysis to support the delusions of the period." In other words, > > Graham and Dodd were bemoaning the sad state of rigorous valuation > > standards in the late 1920s, as well as the willingness of analysts and > > investors to ignore the excesses signaled by conventional valuation > > metrics. According to Yale Professor Robert Shiller, the price-earnings > > ratio for the S&P composite (based on a 10-year moving average of past > > earnings, as suggested in Graham and Dodd) surged from about 5 in > > the early 1920s to 33 in 1929 (see Irrational Exuberance, Princeton > > University Press 2000). The same, of course, can be said for the > > extraordinary valuations placed on the profitless dot-com companies of > > the late 1990s. According to Shiller's estimates, the broader market > > multiple went from about 7 in the early 1980s to 44 in early 2000 -- well > > in excess of the valuation spike in the late 1920s. This time, like most > > new eras, was supposed to be different. > > > > " The ultimate result was that serious analysis suffered a double > > discrediting: the first -- prior to the crash -- due to the persistence of > > imaginary values, and the second -- after the crash -- due to the > > disappearance of real values." This could well be the most painful > > parallel of all. Graham and Dodd were, of course, making the connection > > between the stock market crash and the resulting collapse in the real > > economy -- the collateral damage that further destroyed earnings power > > and the credibility of valuation metrics. In the debate raging over the > > prognosis of today's economy, this is where the rubber meets the road. > > To me, the capital spending collapse of 2001 says it all -- an 11.3% > > decline over the past five quarters that far outstrips that which would > > have been expected in a mild recession. This reflects efforts to eliminate > > the massive overhang of excess capacity that I believe stems from > > Corporate America's desire to achieve Nasdq-type valuations through > > massive investments in new information technologies. Needless to say, > > the unwinding of the IT bubble has played a key role in accounting for > > the earnings carnage of the past year -- yet another painful example of > > the "double discrediting" of stock market analysis that Graham and > > Dodd wrote of nearly 70 years ago. > > > > Don't get me wrong, I am not suggesting that the United States is about > > to fall into a 1930s-style abyss. The Great Depression was far more than > > a stock-market crash. More importantly, it reflected the confluence of a > > number of major policy blunders on both the domestic and international > > fronts. America's Federal Reserve committed serious errors and there > > was no policy coordination at the international level -- whether it > > pertained to exchange rates or trade policy. But that's not to say that > > aren't some very important lessons that can be gleaned from the > > excesses of 70 years ago. In the end, Graham and Dodd sum it up all > > too well. "That enormous profits should have turned into still more > > colossal losses, that new theories have been developed and later > > discredited, that unlimited optimism should have been succeeded by the > > deepest despair are all in strict accord with age-old tradition." Plus ca > > change, plus c'est la meme chose! > > > > _________________________________________________________________ > > Send and receive Hotmail on your mobile device: http://mobile.msn.com > > > From hliu at mindspring.com Wed Jun 5 23:48:33 2002 From: hliu at mindspring.com (Henry C.K. Liu) Date: Thu, 06 Jun 2002 01:48:33 -0400 Subject: [A-List] Re: "Revisiting Graham and Dodd " References: <3CFEC493.64D0DE1B@mindspring.com> <039101c20d16$d03d11e0$0100a8c0@igrushkii> Message-ID: <3CFEF7B0.80CEF0CC@mindspring.com> Anne, We don't disagree. That is why I keep "free market" in quotations. Below is what I posted on Gang8: Stiglitz is not anti-market or anti-globalization. He is out to save both from its excesses. This means that he does not recognize the structural fault of both. He is no Luther, but a Loyola. There is a confusion of terms here. As I have pointed out repeatedly, Laisse faire does not mean no government intervention, but the opposite: activist government against trade retraints either by other governments or by private entities or by market forces. A truely free market cannot tolerate monopolistic practices. Yet unregulated markets naturally drift towards monopolies. In other words, markets fail when left along without regulations. No game can survive without rules, and rules made up by the players as the game proceeds ends the game. So much for self regulation. There are anti-globalist who are economic nationalists who merely want a better deal or a level playing field. And there are those who truly believe that globalization even if conducted fairly is destrucutive, that the world would be better off with regional and national differences rather than universality, with different cultures and values systems. The US is culturally boring because within the US, universal standards rule, the same institutions, the same shops, the same restaurants, the same corporations in every city. Go to any airport and you will see the future of a globalizaed world. You need to read the signs to know what country you are in. Economists do not know how to price culture. They aim at standardization to achieve efficiency. It is about time that economists understand that inefficiency can be a positive factor, and people who do not survive on fast food are not necessarily underdeveloped.. Henry Anne Williamson wrote: > Henry, > > The fraud is the result of wanton credit creation and > fiat money....and - no one cared so long as they were > getting some of the juice......the accounting tricks have > been around for many, many years for anyone who > cared to look, but no one did. It was all right there > all along. Pump the money, pump the money, buy > the votes, keep Bubba in office, pump the money, > pump the money, faster, faster, faster! It wasn't the > free market which we certainly haven't had, it was a > bunch of fatheaded, decadent loons drunk on Keynesianism, > central banking, and power. > > Anne > > ----- Original Message ----- > From: Henry C.K. Liu > To: Jas Jain ; ; > > Sent: Wednesday, June 05, 2002 10:10 PM > Subject: [A-List] Re: "Revisiting Graham and Dodd " > > > Jas, > > > > I agree that there is a great deal, in fact pervasive amount, of fraud in > the > > market. Fraud is a natural byproduct of deregulation. You are right that > what > > ails the market is fraud. But it does not follow that the impending crash > is > > caused by fraud. Fraud caused the boom and the exposure of fraud > contributes > > to the bust. The crash is, as Raoch suggests, the result of a confluence > of > > wrong-headed policies based on inoperative ideology. The ideology of a > "free > > market" masked all sense of reality. The crash is merely reality catching > up. > > For those who stay on this earth, there is no escaping gravity. > > > > Yes, the economy is ailed by fraud, but its illusionary health earlier was > also > > caused by fraud. > > > > Henry > > > > Jas Jain wrote: > > > > > I reread Graham and Dodd's Security Ananlysis, "the Bible," in 1999, in > > > 2000, and in 2001. Some of you on my private list received some choice > > > excerpts from it in the past. Looks like some of the top Wall Street > > > economists are finally getting to it. It was so clear to me what was > going > > > on in corporate America -- Deception at Grand Scale. I have relentlessly > > > made that point for the four years now. Even SEC and politicians have > > > discovered this fact. So, watch out below when it comes to stock prices. > > > > > > What is ailing the stock market? It is Fraud, Stupid! > > > > > > Jas > > > -x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x- > > > http://www.morganstanley.com/GEFdata/digests/20020605-wed.html#anchor0 > > > > > > Jun 05, 2002 > > > > > > Global: Revisiting Graham and Dodd > > > > > > Stephen Roach (New York) > > > > > > The French said it best, "Plus ca change, plus c'est la meme chose." Or > > > loosely translated into English, "the more it changes, the more it's the > > > same." I was reminded of this the other night while rereading excerpts > > > from Graham and Dodd at the suggestion of a colleague. Originally > > > published in 1934, Security Analysis by Benjamin Graham and David > > > Dodd could have been written yesterday. The players have changed but > > > the conceptual framework is as fresh as ever. The introduction and the > > > first chapter of this opus are especially chilling. Intended as an > > > indictment of the excesses of the roaring Twenties, these first 15 pages > > > of a more than 700-page book are equally applicable to our bubble -- > > > and, by inference, to much that is now unfolding in its aftermath. > > > > > > The insights of Graham and Dodd are timeless when it comes to > > > diagnosing what ails today's US economy and its sagging stock market. > > > Obviously, it's all in the eyes of the beholder. But as I continue to > see > > > it, > > > the biggest difference between my bearishness and the outlook of a > > > more sanguine consensus is a debate over the very character of this > > > business cycle. I view the US economy as being in the early stages of a > > > post-bubble shakeout. Most others see the context quite differently -- > > > as a fairly standard business cycle, dominated by a powerful, yet > > > self-correcting, inventory dynamic. Only time will tell who's got this > one > > > right. > > > > > > Meanwhile, Graham and Dodd have something to say about today's > > > debate, as well. In their depiction of the boom and subsequent bust of > > > some 70 years ago, they unwittingly provide us with rich insights as to > > > where we've come from in the late 1990s and what now lies ahead. Five > > > insights literally jump off the page: > > > > > > "The 'new era' doctrine -- that 'good' stocks were sound investments > > > regardless of how high the price paid for them -- was at bottom only a > > > means of rationalizing under the title of 'investment' the well-nigh > > > universal capitulation to the gambling fever." For Graham and Dodd, this > > > was all about the speculative mania that took the Dow Jones Industrial > > > Average from a low of 63.90 in 1921 to a peak of 381.17 in September > > > 1929. It was also about the theories that were concocted to justify this > > > speculation on the basis of a seemingly extraordinary confluence of > > > powerful innovations -- the car, rural electrification, and radio > > > broadcasting. For us, it was the surge in Nasdaq from 965 in early 1996 > > > to nearly 5100 in March 2000. It was also about another powerful wave > > > of technological innovation that gave rise to the untested theories of a > > > new productivity-based foundation of sustained economic prosperity. Far > > > be it for me to compare the innovations of the 1990s with those of the > > > 1920s. The National Academy of Engineering is, however, very qualified > > > to perform this task. By their reckoning, the Internet pales in > > > comparison with the breakthroughs earlier in the twentieth century; it > is > > > ranked 13 in the top 20 innovations in the twentieth century, whereas > > > electrification (#1), the car (#2), and radio and television (#6) are > all > > > ranked considerably higher. Try telling that to the equity bubble of the > > > late 1990s! > > > > > > ".This psychological phenomenon is closely related to the dominant > > > importance assumed in recent years by intangible factors of value, viz., > > > good will, management, expected earning power, etc." For Graham and > > > Dodd, unrealistic earnings expectations were found to rest on the > > > seemingly arbitrary and unquantifiable potential of these intangibles to > > > deliver extraordinary profitability and wealth. Seventy years later, it > was > > > the "asset light" companies that were awarded dot-com-like valuation > > > status. We all read books like Lowell Bryan's Race for the World, which > > > extolled the virtues of enhanced enterprise value through strategies of > > > building intangible capital. Enron was the model of such corporate > > > "success" -- on a pedestal that mortal companies could only dream of. > > > > > > "In the last three decades the prestige of securities analysis on Wall > > > Street has experienced both a brilliant rise and an ignominious fall -- > a > > > history related but by no means parallel to the course of stock prices." > > > Painfully, not much to say on this one, except read the newspapers -- > > > then and now. Cyclical bear markets come and go, while the secular > > > strain always seems to linger long enough to create a new generation of > > > scapegoats. Touch?! > > > > > > " .The 'new era' commencing in 1927 involved at bottom abandonment > > > of the analytical approach; and while emphasis was still seemingly > > > placed on facts and figures, these were manipulated in a sort of > > > pseudo-analysis to support the delusions of the period." In other words, > > > Graham and Dodd were bemoaning the sad state of rigorous valuation > > > standards in the late 1920s, as well as the willingness of analysts and > > > investors to ignore the excesses signaled by conventional valuation > > > metrics. According to Yale Professor Robert Shiller, the price-earnings > > > ratio for the S&P composite (based on a 10-year moving average of past > > > earnings, as suggested in Graham and Dodd) surged from about 5 in > > > the early 1920s to 33 in 1929 (see Irrational Exuberance, Princeton > > > University Press 2000). The same, of course, can be said for the > > > extraordinary valuations placed on the profitless dot-com companies of > > > the late 1990s. According to Shiller's estimates, the broader market > > > multiple went from about 7 in the early 1980s to 44 in early 2000 -- > well > > > in excess of the valuation spike in the late 1920s. This time, like most > > > new eras, was supposed to be different. > > > > > > " The ultimate result was that serious analysis suffered a double > > > discrediting: the first -- prior to the crash -- due to the persistence > of > > > imaginary values, and the second -- after the crash -- due to the > > > disappearance of real values." This could well be the most painful > > > parallel of all. Graham and Dodd were, of course, making the connection > > > between the stock market crash and the resulting collapse in the real > > > economy -- the collateral damage that further destroyed earnings power > > > and the credibility of valuation metrics. In the debate raging over the > > > prognosis of today's economy, this is where the rubber meets the road. > > > To me, the capital spending collapse of 2001 says it all -- an 11.3% > > > decline over the past five quarters that far outstrips that which would > > > have been expected in a mild recession. This reflects efforts to > eliminate > > > the massive overhang of excess capacity that I believe stems from > > > Corporate America's desire to achieve Nasdq-type valuations through > > > massive investments in new information technologies. Needless to say, > > > the unwinding of the IT bubble has played a key role in accounting for > > > the earnings carnage of the past year -- yet another painful example of > > > the "double discrediting" of stock market analysis that Graham and > > > Dodd wrote of nearly 70 years ago. > > > > > > Don't get me wrong, I am not suggesting that the United States is about > > > to fall into a 1930s-style abyss. The Great Depression was far more than > > > a stock-market crash. More importantly, it reflected the confluence of a > > > number of major policy blunders on both the domestic and international > > > fronts. America's Federal Reserve committed serious errors and there > > > was no policy coordination at the international level -- whether it > > > pertained to exchange rates or trade policy. But that's not to say that > > > aren't some very important lessons that can be gleaned from the > > > excesses of 70 years ago. In the end, Graham and Dodd sum it up all > > > too well. "That enormous profits should have turned into still more > > > colossal losses, that new theories have been developed and later > > > discredited, that unlimited optimism should have been succeeded by the > > > deepest despair are all in strict accord with age-old tradition." Plus > ca > > > change, plus c'est la meme chose! > > > > > > _________________________________________________________________ > > > Send and receive Hotmail on your mobile device: http://mobile.msn.com > > > > > > From soncu at pacbell.net Wed Jun 5 23:56:05 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Wed, 05 Jun 2002 22:56:05 -0700 Subject: [A-List] Re: "Revisiting Graham and Dodd " Message-ID: > Henry, > > The fraud is the result of wanton credit > creation and fiat money....and - no one > cared so long as they were getting some > of the juice......the accounting tricks have > been around for many, many years for anyone > who cared to look, but no one did. It was all > right there all along. Pump the money, pump > the money, buy the votes, keep Bubba in office, > pump the money, pump the money, faster, faster, > faster! It wasn't the free market which we > certainly haven't had, it was a bunch of fatheaded, > decadent loons drunk on Keynesianism, > central banking, and power. > > Anne Anne, I am sure Henry can speak for himself but here I will have to agree with him. In this world we live in, free markets are neither achievable nor desirable. If we can somehow approach anything resembling free markets, we will sooner or later find ourselves back to the stone age. Whether you agree with this or not, one thing I should mention is that what Henry means by "the ideology of free markets" has nothing to do with free markets. What you see is what you get and what you see is "the ideology of free markets" Henry is talking about. Best, Sabri PS: As a side note, all corporations are "central planners". How are we going to achive free markets where the major market players are centrally planned corporations, assuming that free markets are achivable, of course? From Michael.Keaney at mbs.fi Thu Jun 6 05:11:30 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Thu, 6 Jun 2002 14:11:30 +0300 Subject: [A-List] India/Pakistan: reassuring news Message-ID: Nuclear war fallout poses small risk to US and Europe IAN BRUCE The Herald, 6 June 2002 RADIOACTIVE fallout from a full-blown nuclear exchange between India and Pakistan would probably be contained within the sub-continent by terrain and weather conditions, according to a series of think-tank studies carried out for the US government. But the death-toll in the region's teeming cities could be anywhere between 12 million and 30 million in the short-term, depending on the size and number of warheads used. An estimate of the worst-case scenario assumes strikes by 24 missiles or freefall bombs on 15 major cities. It also assumes the weapons will be fused to detonate at or near ground level, creating the maximum fallout by irradiating dust and debris from the blasts. The National Resources Defence Council, an influential environmental group, says westerly winds at this time of year would spread the contamination in a cigar-shaped "footprint" between 25 and 50 miles from each explosion. Huge casualties would come initially from the colossal blast and heat created by a nuclear burst. The pressure wave would strike with hurricane-strength force, crushing buildings and uprooting trees. It would be followed a millisecond later by a pulse of energy which can cause third-degree burns a mile from ground zero and vapourise all life within half-a-mile. Anyone within a three-mile radius would receive a lethal dose of gamma rays and neutrons, but according to Arthur Upton, a former director of the US National Cancer Institute and an expert on the effects of radiation, the fallout would not be a global threat. He said: "In terms of worldwide health effects, a nuclear war between Pakistan and India would produce risks for Europe and America which are vanishingly small." From Michael.Keaney at mbs.fi Thu Jun 6 05:13:29 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Thu, 6 Jun 2002 14:13:29 +0300 Subject: [A-List] Afghanistan: pass the remote Message-ID: US marines' report criticises 'remote control' campaign IAN BRUCE The Herald, 6 June 2002 RUNNING the campaign in Afghanistan by remote control, from a headquarters 7000 miles away and in a different time zone, delayed crucial airstrikes and caused needless friction between the top brass and combat commanders on the ground, according to a US marines' study. The initial marine corps report on the military lessons to be learned from the first war of the 21st century says people on the ground ended up working 14 to 16-hour days to compensate for time differences while they waited for the decision-makers to wake up and return to duty at Central Command's Florida nerve-centre. Failure to move the command element to a forward base in the region meant it could take as long as four hours between identifying a target and receiving permission to attack it. The complex weapons' release process involved routing requests through the Prince Sultan airbase in Saudi Arabia to Tampa in the US and back again. Critics claim up 10 senior al Qaeda and Taliban leaders "in the crosshairs" early in the air campaign were allowed to escape because of delays in the chain of command. The marines identify the bottleneck as "a target clearance problem" and say that even after US and coalition forces established a foothold inside Afghanistan, it could take 40 minutes to bring down bombs on identified enemy positions. Some of the delay was caused by the fact military lawyers from the judge advocate general's office had the power of veto over strike requests if there was the slightest perceived risk of inflicting civilian casualties. The marines also complain that Florida imposed a "cap" of 1000 men on their presence at Kandahar to "minimise the footprint" and keep the potential American bodycount low. Headquarters also ordered the garrison to take down its US flag, a move which dented morale and caused immense resentment. As a result of the "cap" decision, marine officers spent more time shuttling men back out to ships 350 miles away in the Arabian Sea than focusing on combat operations. The artificial ceiling on numbers also meant a large proportion of the 1000 permitted "grunts" were tied down in providing base security rather than in conducting raids. The report says special forces' contributions were the undoubted success story of the eight-month war. At one stage, more than 2000 US, British, Australian, German, Danish, Norwegian and Canadian troopers were roaming the "back country" and taking an active part in "the Olympics of special operations." The US air force and army are also preparing reports highlighting flaws and lessons for the next stage in the international war against terror. The air force's preliminary study identifies the need for moving supplies and communications specialists and equipment before fighting units in a future deployment. Commanders on the ground wanted combat formations, but these were then restricted in operational capability until the logistics to sustain them caught up. The army, while pleased with the success of its training and equipment programmes when translated into warfighting, wants an overhaul of the air support system to have aerial firepower on tap. Its draft study cites the same command decision delays, but praises the efforts of close support pilots from both air force and marine squadrons in bringing often decisive weaponry to bear within five minutes of any call from units engaged in a ground battle. It has, however, reservations about the average 40-minute delay in providing suppressive raids against more distant targets not involved in the immediate combat zone. From Michael.Keaney at mbs.fi Thu Jun 6 05:16:53 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Thu, 6 Jun 2002 14:16:53 +0300 Subject: [A-List] Lockerbie verdict: Mandela weighs in Message-ID: Mandela wants to visit Lockerbie bomber GILLIAN McCORMACK The Herald, 6 June 2002 NELSON MANDELA wants to visit Barlinnie next week to see the Libyan convicted of the Lockerbie bombing. Zelda la Grange, spokeswoman for the former South African president, said that Mr Mandela was speaking to government officials to arrange details of a visit to see Abdel Basset Ali al-Megrahi. She said: "We are in the process of planning to go there early next week." Mr Mandela played a crucial role in persuading Libyan leader Moammar Gaddafi to hand over two men suspected of involvement in the 1988 bombing. A total of 270 people were killed when PanAm flight 103 exploded over Lockerbie. Al-Megrahi, a former Libyan intelligence agent, was convicted of murder and sentenced to life in prison with no possibility of parole for 20 years. The second Libyan was acquitted. Libyan television said that Mr Mandela had telephoned Colonel Gaddafi to tell him of his plans to visit al-Megrahi and check his health and detention conditions. Ms la Grange said: "He's had a personal involvement in this case throughout, so it would only be expected of him to go there and see the prisoner and see the conditions in the prison," The Scottish Prison Service said it had not received any confirmation of Mr Mandela's visit. Government officials from Britain, the US, and Libya are to meet in London tomorrow to discuss the ?1.86 billion compensation offer to relatives of the Lockerbie bombing victims. It is part of tripartite discussions which have taken place since the Libyan intelligence agent was convicted. Kriendler and Kriendler, the New York law firm which has been negotiating on behalf of some of the families last week said Libya was prepared to pay compensation. It said Libya had offered to pay ?1.86 billion - or almost ?7m per family - as compensation for the 270 people killed in the bombing, with payments linked to the lifting of sanctions. The Foreign Office yesterday confirmed a meeting with US and Libyan officials would take place tomorrow. A spokesman said: "It is about Libya's response to the requirements of the UN resolutions, which cover not just compensation." Later, Tam Dalyell, the Labour MP, said:"Nelson Mandela and I, separately, were as responsible as anybody for persuading the two Libyans to have a trial in a third country and to persuade them as well to submit themselves to trial. "I feel an obligation to make sure, in any way I can, that justice has been done. I believe there has been a catastrophic miscarriage of justice." Mr Dalyell, MP for Linlithgow, went on: "I went a fortnight ago to see Mr Megrahi for more than two hours in Barlinnie. "He explained to me in detail that he was for 10 years a sanctions buster for Libyan-Arab Airlines. This is very different from being a mass murderer." From Michael.Keaney at mbs.fi Thu Jun 6 05:20:59 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Thu, 6 Jun 2002 14:20:59 +0300 Subject: [A-List] Destructive creation: "eco"-tourism Message-ID: Grantown buys its wild woods at third attempt DAVID ROSS The Herald, 6 June 2002 THE people of Grantown-on-Spey followed in the footsteps of those of Assynt, Eigg, Knoydart, and Gigha yesterday and joined the growing ranks of community landowners when they assumed ownership of 1000 acres of woodland. They bought the Wild Woods of Anagach, at the third time of trying, from the Seafield Estate for just under ?1m, having received a grant of ?724,125 from the Scottish Land Fund. It was the second largest pay-out made by the lottery-backed fund, only surpassed by the ?3.5m funding package to support the community buy-out of Gigha. Highlands and Islands Enterprise's Community Land Unit contributed ?181,000, Scottish Natural Heritage ?15,000, the Highland Council ?10,000 and the Cairngorm Partnership ?5000. The community itself raised more than ?66,000 in just a few months. It is almost 230 years since the first Scots pine was planted at Anagach with seeds from the ancient Caledonian forest. That was when James Grant, son of the then laird of Grant, was laying out Grantown as a new town. The woods are directly accessible from Grantown on the south of the town and have flourished on either side of the old military road from Deeside built in the aftermath of the 1745 Jacobite rising. Today they are home to an array of birds, plants, and animals, including signature species such as capercailzie, crested tit, red squirrel, Scottish crossbill, pine-marten, wildcat and twinflower. The woods are mostly Scots pine, but punctuated by birch, willow, alder, aspen, juniper, rowan and hazel. The community was deeply concerned that the woods might be sold on the open market. It feared that this would lead to inappropriate development and commercial felling on what was seen as a community resource. Now its plans include the promotion of green tourism, improving the woods as a resource for environmental and forestry education and sustainable timber management. Yesterday when 16 children from Grantown Primary cut the ribbon across the old military road to start a new era for Anagach, many people could still scarcely believe they had succeeded in their long-held ambition. Councillor Basil Dunlop, a forester to trade and chairman of Anagach Woods Trust, said: "This is a great day for Grantown. It is something we have been trying to achieve for so many years, and it is great that we have managed to secure the funding and are now owners of the wood. We are really thankful to everyone who has invested in this project." David Campbell, chairman of the Scottish Land Fund Committee, said: "I have no doubt that community ownership of Anagach Woods will greatly expand the environmental, educational and economic potential of the area." Jim Hunter, HIE chairman: said: "It's very heartening for the HIE network to have been able to help place such an important resource back in the hands of the local community. The trust's plans will help ensure this resource is maintained and enhanced for future generations." Rise of eco-tourism may be putting wildlife in danger By Charles Arthur Technology Editor The Independent, 06 June 2002 Eco-tourism might be endangering wildlife, scientists warn today. Among those at risk are mongooses and meerkats in Africa and penguins in Antarctica, areas where environmental tourism is on the increase. Scientists in Chobe National Park, Botswana, have documented how tuberculosis was passed on to mongooses in the reserve, leading to two outbreaks of the disease. An outbreak also killed meerkats in the Kalahari desert. Kathleen Alexander, a senior wildlife veterinary officer in Botswana, and her team, whose work is revealed in New Scientist magazine, believe the mongooses picked up the illness from contaminated rubbish heaps in the park. The researchers suspect the meerkats were infected from people, because no animals in the region are known carriers of human TB. Eco-tourism is one of the fastest-expanding areas of tourism, growing at between 10 and 30 per cent annually. The United Nations has designated 2002 as the International Year of Eco-tourism. Research suggests some mountain gorillas in Uganda might be catching mange from humansas they lose their fear of people. Thaddeus Graczyk, a parasitologist at Johns Hopkins University in Baltimore, said: "People leave clothes behind, and curious gorillas play with them." The mite Sarcoptes scabiei, which causes mange in furry animals and scabies in humans, causes fur loss in the gorillas. It makes them look less attractive to each other and, ironically, to the tourists who pay the local community to see the animals. People have to be warned in the Antarctic not to go too close to penguins incubating eggs, which are on such a tight "energy budget" that any unnecessary rise in heart rate could force them to abandon the egg to look for food to survive, leaving the embryo to die. Melissa Giese of the Australian Antarctic Division said: "There is also potential for the tourists to introduce and spread exotic diseases. If it ever did occur, the effect would be catastrophic." Eco-tourism is a huge source of revenue for wildlife conservation, particularly in Africa, but Dr Alexander thinks contact between animals and humans should be minimised to reduce the threat of infection. From Michael.Keaney at mbs.fi Thu Jun 6 05:24:50 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Thu, 6 Jun 2002 14:24:50 +0300 Subject: [A-List] 9/11: conspiracy or cock-up? Message-ID: Colonel who called Bush 'a joke' suspended By Andrew Gumbel The Independent, 06 June 2002 An American Air Force colonel has been suspended and could be court-martialled because he wrote to a newspaper describing George Bush as "sleazy and contemptible" and accusing the administration of ignoring advance warnings on the 11 September attacks for political gain. Lieutenant-Colonel Steve Butler was suspended from his job at a military language academy in Monterey, California, under Article 88 of the Uniform Code of Military Justice. Article 88, which dates back to the War of Independence, prohibits disparaging remarks about the President or senior figures in the White House or Congress. It stipulates a maximum punishment of dismissal and one year in military detention. Colonel Butler, who has been in the air force for 24 years and served in the Gulf War, called the President a joke who had taken advantage of the war on terrorism to deflect attention from his questionable election and the poor state of the economy. "Of course Bush knew about the impending attacks on America," he wrote in The Monterey County Herald . "He did nothing to warn the American people because he needed this war on terrorism. His daddy had Saddam and he needed Osama ... His presidency was going nowhere." The letter did not appear to be the result of any inside knowledge, merely the officer's forthright opinions. Colonel Butler was suspended three days after it was published. The guidelines state it does not matter whether the accusations against a President are just. The issue is whether an officer spoke inappropriately, and publicly. Nobody has been prosecuted under Article 88 since the Vietnam War, when a junior officer was court-martialled for holding up a sign describing President Lyndon Johnson as an ignorant fascist at an anti-war rally in Texas. He was discharged and sentenced to two years of hard labour. Officers are periodically disciplined, including two who were forced into early retirement during the Clinton era for describing the President as a gay-loving, womanising, lying, pot-smoking draft dodger. From Michael.Keaney at mbs.fi Thu Jun 6 05:28:43 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Thu, 6 Jun 2002 14:28:43 +0300 Subject: [A-List] India/Pakistan: British responsibility Message-ID: Hoon's talk of pre-emptive strikes could be catastrophic The defence secretary's defiance makes nuclear war more likely Hugo Young Thursday June 6, 2002 The Guardian Before Jack Straw went to the subcontinent to lecture India and Pakistan on the consequences of nuclear war, he irritably brushed aside a pertinent question. Asked by John Humphrys why they should pay attention to a country that had itself never renounced first use of nuclear weapons, he said everyone knew the prospect of Britain (and the US and France) using nuclear weapons was "so distant as not to be worth discussing". It sounded like a reassuring platitude. In fact it was about as misleading an answer as can be found in the entire record of Britain's conduct as a nuclear power. Normally, British ministers are reticent about their nuclear weapons. The standard formula is to say, if asked, that we don't rule anything out if anyone attacks us. All this has now changed. The first person who says nuclear use is worth discussing happens to be Straw's colleague, Geoff Hoon, the defence secretary. In March, Hoon said, in the context of Iraq: "I am absolutely confident, in the right conditions, we would be willing to use our nuclear weapons." Those who heard him say this, including some expert advisers, were startled. Such explicitness broke a norm that even Washington has usually observed. But they thought it was an accidental one-off occurring, as it did, at the end of a select committee session and without obvious premeditation. However, a few days later Hoon gave more particulars to Jonathan Dimbleby, insisting that the nuclear option would be taken pre-emptively, if we thought British forces were about to be attacked by Iraqi chemical or biological weapons. My colleague Richard Norton-Taylor reported and commented on this at the time, but there was little political fall-out. Then, to make sure we understood, Hoon said it for a third time, telling the full House of Commons: "A British government must be able to express their view that, ultimately and in conditions of extreme self-defence, nuclear weapons would have to be used." This triple whammy, insisting on Britain's right to use nukes, pre-emptively if necessary, against states of concern that aren't themselves nuclear powers, has made the quietest of impacts. Yet it has no precedent in the policy of any government, Labour or Conservative. It's not merely the words that are new. Some officials close to high policy making tried to pretend to me that Hoon was merely saying what any informed interpreter of British nuclear policy could have known all along. This is nonsense. Dr Stephen Pullinger, author of an instructive recent Isis paper on military options against Iraq, shows clearly how much has changed. In cold war days Britain, like Nato as a whole, opposed a policy of no-first-use because we feared superior Warsaw pact conventional forces might make the nuclear option imperative to save Europe. The scenario Hoon envisages is quite different. Instead of deploying nukes in a conflict initiated by the other side, we claim the right to start nuclear war before any attack is made; and we contemplate doing so, for the first time, against a state that is neither nuclear itself nor allied with a nuclear power. The best case for this language is that it's intended to be deterrent. Leaders unversed in the calculations that sustained nuclear inertia in the cold war need to be reminded in plainest detail of the terrible risks they might be running. That certainly seems to be true of Pakistan. But if further evidence were needed of how much has changed in the case of Iraq, it's supplied by what happened under the Major government, at which time Saddam Hussein was deterred from using chemical and biological (CB) weapons, which he had in plenty, by less apocalyptic means. John Major was asked about that at the start of the Gulf war. He said Britain had a range of weapons and resources to deal with CB attacks on her troops. "We [do] not envisage the use of nuclear weapons," he added. "We would not use them." It's still possible to argue that his successors are engaged in sabre-rattling against a reckless enemy, though Saddam didn't show that kind of recklessness in 1991. There's not much doubt, either, that Iraq is trying to become nuclear-equipped. Maybe intelligence sources think they're closer to getting there than the public can be allowed to know, and far sooner than outside experts have contemplated. In which case a break with the old nuclear grammar might start to be defensible. What's more obviously happening is a change in the rules of the game being written in Washington. Hoon's readiness to import first-strike thinking into his public discourse, which has shocked old nuclear hands, is consistent with many hours spent in the company of the visitor whom Tony Blair and he received in Downing Street yesterday, the US defence secretary, Donald Rumsfeld. The Pentagon's nuclear posture review, leaked in March, scatters nuclear threats around the globe, listing Libya, Syria, Iraq, Iran and North Korea, as well as any Chinese threat to Taiwan, as potentially necessary first-strike targets. It also spells out a plan for the US to develop new nuclear weapons, allegedly low-yield, "smart", mini not mega, perhaps bunker-busting bombs eventually applicable against al-Qaida's caves and Saddam's labs alike. Britain has no such weaponry. Our usable nukes are almost entirely on top of Trident ICBMs. Is this what Hoon means we might use against Baghdad? What exactly would be our targets? How hard have we thought about Iraqi civilian casualties? Or about what we say when Saddam turns out to have survived our nuclear strike? These are questions of detail, which the defence secretary should surely answer. But more general issues arise from the strategic turmoil that's replacing the nuclear discipline of the cold war. First, what's supposed to happen to the nuclear non-proliferation treaty, the bulwark on which so much depends? A crucial element of the treaty was the 1978 pledge by the US, Britain and the Soviet Union never to use nuclear weapons against non-nuclear states, except when they started a war in alliance with a nuclear state. In 1995, China and France joined in reiterating this. More than 180 non-nuclear states accepted the deal. If the US or Britain takes Iraq as a pretext to break the promise, what's to stop many countries rushing to acquire the only weaponry they think might keep them safe? Second, and more acutely, we're witnessing the banal-isation of nuclear weapons. Suddenly they seem to have lost their unique horror. Pakistan and India needed teaching about the truth, and may yet not have learned it even with a potential 12 million deaths held out for their inspection. The British case is much worse. The defence secretary's strutting defiance makes the nuclear option sound like merely a stepped-up version of a regular battlefield weapon. Every time he flourishes it, his insouciance renders it more normal, instead of the most terrible calamity that could be visited on the earth. Any use of it, by any power, at any time, would fit such a description. What is it about our times that allows a Labour minister - a Labour minister - to forget that? From ewc at onetel.net.uk Thu Jun 6 05:26:33 2002 From: ewc at onetel.net.uk (ewc) Date: Thu, 6 Jun 2002 12:26:33 +0100 Subject: [A-List] Truth about gold (and motives) References: Message-ID: <001201c20d4d$432c1300$6e784ed5@oemcomputer> Hi Anne First my motives: Afraid your speculations about my motives were all incorrect. The truth is simple. When I find Emeritus Professors writing nonsense, about anything, I always get this urge to correct them - regardless of the topic they are talking about. I see it as a kind of public duty, and have always been puzzled and disappointed that so few other people seem to feel the same. Second the facts: Gold has not played a pivotal role throughout the ages. Throughout the ages, Europe, Persia and India were primarily on a silver standard, China on a copper standard. In the long run the move to a gold standard has tended to be to be an end game of economic systems - (ie something they do as they collapse.) Specific to the gold standard you are talking about - its origins were pretty specific to the evolution of the British Empire in the 18th century. Britain went onto a gold standard, getting an upper hand on its trading partners (and its internal labour force). Persia, India & China were effectively on a silver standard (British labour was largely paid in truck). Germany and then the rest of the west only joined Britain on the gold standard in 1871, on the back of German victory over France. Britain and Germany went to war in 1914, so gold gave 43 years of peace (in Europe). These facts are readily available in standard reference works. If the Emeritus Professor wants to challenge them, I would be pleased to hear what he has to say Copies to a-list and Prof Sennholtz direct Robert From Michael.Keaney at mbs.fi Thu Jun 6 05:33:38 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Thu, 6 Jun 2002 14:33:38 +0300 Subject: [A-List] UK corporate state: PPPs in disarray Message-ID: Hospital plans hit by union revolt Kevin Maguire Thursday June 6, 2002 The Guardian Government plans to create a new wave of NHS hospitals built and operated by private companies have been jeopardised by a union revolt over the employment of staff. The consent of Unison, the health service's biggest union, is in doubt after workers unexpectedly voted against a compromise approved by their own negotiators. Ministers are discreetly pressing Unison leaders to rubber-stamp the public finance initiative deal and override a decision of the union's health conference to reject it. Unison health service members objected to the exclusion of supervisors and white collar grades, such as receptionists and secretaries, from a formula to protect pay and conditions in new PFI hospitals by effectively seconding staff from the NHS. The smaller GMB union had already rejected the deal, arguing the protection was inadequate and covered only porters, cooks, cleaners, security and laundry staff. Unison's agreement is considered vital before three pilot schemes can be signed at Stoke Mandeville, Roehampton and Havering, with the deal expected to be extended to all new PFI hospitals. Private contractors had objected to the concessions to the unions. Ministers, who had already hailed a "breakthrough", hope Unison's health executive will endorse the plan at the end of the month. John Edmonds, GMB general secretary, said: "The only people who will be toasting this deal will be the CBI and the private contractors who are making a fortune out of the NHS at the expense of dedicated public sector workers. "If the government is genuine about ending the two tier workforce, they would guarantee that no member of staff will be expected to pay in terms of lower wages and conditions." Companies also paying out millions of pounds after a ruling yesterday that NHS, council and civil service staff aged over 50 made redundant after being contracted out are entitled to compensation. Firms had refused to stick to public sector terms which entitled employees to an immediate enhanced pension, arguing a European acquried rights directive did not cover "old age" benefits. But the European court of justice ruled the payments were linked to redundancy rather than retirement and should be paid. Katia Beckmann, made redundant two years after being transferred in 1995 to a private practice by the North West regional health authority, stands to gain more than ?50,000 after Unison backed her test case. From annewilliamson at msn.con Thu Jun 6 07:44:27 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Thu, 6 Jun 2002 09:44:27 -0400 Subject: [A-List] Re: "Revisiting Graham and Dodd " References: <3CFEC493.64D0DE1B@mindspring.com> Message-ID: <042e01c20d60$47d8b080$0100a8c0@igrushkii> Very pro-active and utterly shameless "ink" for Goldman courtesty of NYT! June 6, 2002 Goldman Chief Urges Reforms in Corporations By PATRICK McGEEHAN ASHINGTON, June 5 - In a rare public appearance, the chairman and chief executive of Goldman Sachs, Henry M. Paulson Jr., called for changes today in how public companies are run, audited and regulated to help restore investor confidence. Mr. Paulson said faith in corporate executives was at a low and was forestalling a recovery in financial markets. He proposed several measures to rebuild trust, including restrictions on the ability of chief executives to sell shares of their own companies. Tracing the crisis back to the collapse of the Enron Corporation last fall, Mr. Paulson said during a lunch meeting at the National Press Club here, "I cannot think of a time when business over all has been held in less repute." In his speech, he was surprisingly critical of the corporate executives and directors who make up the client base of major investment banks like Goldman. Seldom does such a powerful Wall Street executive take on corporate America so directly. "The business community has been given a black eye by the activities and behavior of some C.E.O.'s and other notable insiders who sold large numbers of shares just before dramatic declines in their companies' share prices," he said in his speech. He did not name any companies on that score. Corporate directors should require executive officers to hold their company stock for "significant periods of time" and company insiders should have to give back any gains from sales of their companies' stock made less than a year before a bankruptcy filing, he said. Wall Street firms have their own troubles, of course, and Mr. Paulson spent a few minutes discussing conflicts of interest at investment banks like Goldman. He said he felt compelled to speak out because the situation had become dire. Other than the two top executives of Merrill Lynch, which has been embroiled in an investigation into investment recommendations of its stock analysts, senior executives on Wall Street have kept low profiles in recent months. "I think this speech is a month or two overdue," Mr. Paulson said. Still, he devoted most of his speech to corporate governance and accounting reform. In the wake of several notable restatements of company earnings, investors have lost faith in the American accounting system, he said. He cited two factors: the pressure chief executives feel to report bigger profits every quarter and the complexity of the "rules-based approach" that underlies the generally accepted accounting principles set by the Financial Accounting Standards Board. That system, he said, is "ripe for manipulation" and should be updated and simplified quickly, under the oversight of the Securities and Exchange Commission. "If the outcome of all we have been through in the last six months, all the soul-searching and debate, is business as usual at the F.A.S.B., then we will have missed an enormous opportunity for improvement," Mr. Paulson said. The accounting used by J. P. Morgan Chase and some of the huge banks that compete with Goldman has long been a pet peeve among their investment bank rivals. Mr. Paulson reiterated that complaint yesterday, saying that companies specializing in financial services should be forced to carry assets and liabilities on their books at their current market value, not at their historical cost as many do now. To the certain consternation of many of Goldman's clients, Mr. Paulson predicted that companies eventually would have to treat the stock options they give executives and employees as an expense. Executives of technology companies, among others, have fiercely fought efforts to make companies count the value of options - a big component of pay in certain industries - as a cost of doing business. "Ultimately, I think options will be expensed and the accountants will win out," he said. "But who knows?" Mr. Paulson also said companies, to avoid the appearance of a conflict of interest, should not buy consulting services from the accounting firms that audit their financial reports. As for Goldman's own conflicts of interest in trying to serve corporations and investors who buy their stocks and bonds, investors should trust the firm to police itself, he said. "For an integrated investment bank like Goldman Sachs, conflict management has always been a core competency," he said. But he added that, through the boom and bust of telecommunications and technology stocks, "we have not done as good a job as we might have of preserving and protecting the independence of our research analysts." Goldman has made some changes in the organization of its stock research operation, installing an ombudsman and giving the audit committee of the firm's board oversight of research. But the firm, like Merrill and others, has clung to the view that analysts must play a role in helping to land investment banking assignments from the companies that they rate. "The major part of our effort will be to continue to focus on doing better fundamental analysis," Mr. Paulson said. "The next time something looks too good to be true, we hope we have the wisdom to see it and the courage of our conviction to act accordingly." Copyright 2002 The New York Times Company | Permissions | Privacy Policy From annewilliamson at msn.con Thu Jun 6 08:26:35 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Thu, 6 Jun 2002 10:26:35 -0400 Subject: [A-List] Truth about gold (and motives) References: <001201c20d4d$432c1300$6e784ed5@oemcomputer> Message-ID: <047a01c20d66$2aae81a0$0100a8c0@igrushkii> I can't agree with you on gold, Robert; whether hoarded in a potentate's treasury, or still underground, gold has played a pivotal role in history. However, you do raise a very important issue and absolutely factual history, i.e., the role of silver (the "peoples' money") in monetary history. In fact, there is quite a compelling argument that it was a pure gold standard which allowed for the introduction of fiat, i.e., the single standard of gold crowded out the far more plentiful and widely-distributed silver coinage, much to the peoples' detriment. And, in fact, that's what happened - The Gold Standard Act (supported by the East's financial elite) paved the way for The Federal Reserve Act of 1913. On the question of silver, Robert, I ride with you. Anne PS It's an objective monetary standard I advocate; silver would - and has! - done nicely on that matter, IMO. Hugo Salinas, who has introduced a silver peso in Mexico, is a man whose work you might enjoy reading. ----- Original Message ----- From: ewc To: Cc: Sent: Thursday, June 06, 2002 7:26 AM Subject: [A-List] Truth about gold (and motives) > Hi Anne > > First my motives: > > Afraid your speculations about my motives were all incorrect. The > truth is simple. When I find Emeritus Professors writing nonsense, > about anything, I always get this urge to correct them - regardless of > the topic they are talking about. I see it as a kind of public duty, > and have always been puzzled and disappointed that so few other people > seem to feel the same. > > Second the facts: > > Gold has not played a pivotal role throughout the ages. Throughout > the ages, Europe, Persia and India were primarily on a silver > standard, China on a copper standard. In the long run the move to a > gold standard has tended to be to be an end game of economic systems - > (ie something they do as they collapse.) > > Specific to the gold standard you are talking about - its origins were > pretty specific to the evolution of the British Empire in the 18th > century. Britain went onto a gold standard, getting an upper hand on > its trading partners (and its internal labour force). Persia, India > & China were effectively on a silver standard (British labour was > largely paid in truck). Germany and then the rest of the west only > joined Britain on the gold standard in 1871, on the back of German > victory over France. Britain and Germany went to war in 1914, so gold > gave 43 years of peace (in Europe). > > These facts are readily available in standard reference works. If the > Emeritus Professor wants to challenge them, I would be pleased to hear > what he has to say > > Copies to a-list and Prof Sennholtz direct > > > Robert > > > > > > > From annewilliamson at msn.con Thu Jun 6 09:05:51 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Thu, 6 Jun 2002 11:05:51 -0400 Subject: [A-List] Re: "Revisiting Graham and Dodd " References: Message-ID: <048b01c20d6b$a6c22bc0$0100a8c0@igrushkii> Henry and Sabri: Thanks for the correction on Henry's usage of the term "free market," my misunderstanding a result of hasty late night reading. As you have witnessed, I go blue in the face when the mess we have today is described as "free market" economics (aside from anyone's view of laissez-faire's worthiness.) I agree with so much in Henry's posting to Gang8, which touched on a subject about which I am passionate - the value of "regional and national differences." I couldn't agree more about the mind- dulling, soul-killing "homogenity" US culture induces. But it's not only economists who aim at standardization to achieve efficiency, it's bureaucrats! Otherwise, they can't deliver on their "targets" and fail to implement effectively their "policies," bedeviled as they are by what appears to them as the irrational, self-destructive, and quixotic behavior of troublesome mankind. Our disagreement is centered yet again on the role of the state. Where each of you see "regulation" as the cure, I see it as the flourishing disease. Government is not self-funding, to thrive it must coerce funding from the population under its jurisdiction. But since government produces nothing - but excess paper money in a central banking system - it has only privilege to "sell," and to the productive sector of the population it willing whores the right of monopoly which is achieved through regulation! We had plenty of rules and standards and laws to prevent the bubble disaster of the late 90s, but they were not enforced....and were fudged by the state in order to extract more funding and co-operation from the financial corporate sector. Enron, a debacle shared by both the Clinton and Bush administrations (Bush probably more vis a vis Enron, and ain't it amazin' how he's escaped the bullet on that one?), is a perfect case in point. So where Henry says "so much for self-regulation," I say "so much for government regulation in place of free competition." As far as corporations being "central planners," well I think that's stretching "corporate planning" - a prudent activity - into something it is not. They should plan! Let them so long as they have no privileged control beyond their own operations, and their competitors are free to plan, as well. And, BTW, Henry you used my absolute favorite example of our coming "new world" when wrote, "Go to any airport and you will see the future of a globalized world." Thumbs up on that! All best, Anne http://www.mises.org/fullstory.asp?control=971 Professor Stiglitz and Lord Keynes by Dr. Frank Shostak [Posted June 4, 2002] The newest issue of The Nation herald's the 2001 Nobel Laureate Joseph Stiglitz as a "rebel with a cause." That characterization is certainly a stretch for an economist, who is former senior vice president of the World Bank and who adheres to orthodox Keynesian doctrine, the dominate economic paradigm of mainstream political and economic theory for the past 50 years. Stiglitz's Keynesianism isn't just a matter of habit, as it is with so many economists, but instead amounts to a strict doctrinal adherence. In his recent article, "IMF should take a lesson on Keynesian economics" in the Straits Times, Stiglitz went so far as to resurrect the New Deal era bromide that market economies are to blame for the boom-bust economic cycles. According to Stiglitz, Since capitalism's beginnings, the market economy has been subject to fluctuations--to booms and busts. Capitalist economies are not self-adjusting: Market forces might restore eventually an economy of full employment, as economist John Maynard Keynes said, but, in the long run, we are all dead. Boom-bust cycles, however, are not caused by the market economy. They are the outcome of central authorities' interventionary monetary policies. The monetary theory of boost-bust cycles as developed by Ludwig von Mises provides an accurate explanation of the boom-bust cycle phenomenon. It is about activities that sprang up on the back of loose monetary policies of the central bank. Thus, whenever the central bank loosens its monetary stance, it sets in motion an economic boom by means of diverting real funding from wealth generators to various false activities that a free unhampered market would not facilitate. Whenever the central bank reverses its monetary stance, this slows down or puts to an end the diversion of funding toward false activities, and that in turn undermines their existence. In short, the trigger to boom-bust cycles is central bank monetary policies, not capitalism. Furthermore, in an unhampered market, human errors are self-correcting. The corrections tend to be rather quick. Following in the footsteps of Keynes, Stiglitz holds that expansionary monetary and fiscal policies must be used in hard economic times. Also, again following Keynes, Stiglitz believes that fiscal policies are more effective than monetary policies. Regardless of the state of an economy, however, every economic activity has to be funded. Neither printing money nor expansionary fiscal policies generate wealth. What loose monetary and fiscal policies do is divert real funding from wealth generators to wealth consumers. Consequently, neither loose monetary nor loose fiscal policy can lift an economy if the wealth, capital, and savings are not there to support it. It is a myth that fiscal policy can be more effective than monetary policy in growing an economy. None of these policies can. Only an expanding capital base, based on savings and profitable investment, "grows" an economy. Stiglitz is of the view that, in advanced economies, Keynesian economics is the bread and butter of economic forecasting and policymaking. He also suggests that, because of Keynesian policies, expansions are longer and downturns shallower and shorter in advanced economies. It is a great tragedy that Keynesian economics provides the foundation of thinking of most economists and policymakers. In advanced economies, expansions are longer and recessions are shorter due to accumulated capital and the power of free enterprise, not because Keynesian prescriptions work. There are, however, indications that this may not last. For instance, the flow of savings is barely visible, and individuals' indebtedness is now at a record high. As a proof that Keynesian policies are valid, Stiglitz insists that, We learn from economic policy failures as well as successes. When the International Monetary Fund (IMF) forced large expenditure cuts in East Asia, output in those countries fell just as Keynesian theory predicted. But the output in these economies fell, not because of the cut in government expenditure, but because the previous loose monetary and fiscal policies had severely diminished the quantity of investable resources. A cut in government expenditure has revealed the fact of reality--that there is not much left to invest. If lifting government expenditure drives an economy, then why do we still experience many economic problems? According to the Keynesian magic formula, all that is needed is to increase government spending and the rest should follow suit. If this view were correct, then poverty in the world would have been eliminated a long time ago. Not so, maintains Stiglitz: In early 1998, when I was chief economist of the World Bank, I debated the United States Treasury and the IMF concerning Russia. They said that any stimulation of the Russian economy would incite inflation. This was a remarkable admission: Through their transition policies, they had managed, in just a few years, to decrease the productive capacity of the world's No. 2 superpower by more than 40 percent, a devastating outcome greater than that of any war. In August 1998, with the rouble's devaluation, we tested the alternative, Keynesian hypotheses: Production soared, and relatively quickly, showing that policies emphasizing excessive austerity had caused unnecessary idleness of human and physical resources, and unnecessary suffering. In fact, the productive capacity collapsed, not because of austerity, but because of previous loose policies. For instance, between January 1993 and April 1996, the yearly rate of growth in money M1 fluctuated between 120 percent and 500 percent. Austerity measures have only revealed the extent of the damage caused by loose monetary policy. The recovery emerged because there was still something left in the "kitty" and because austerity helped strengthen the basis for future sustainable growth. On Argentina's crisis, Stiglitz wrote, Remarkably, the IMF was slow to learn the lesson. While it recognized belatedly its fiscal-policy mistake in East Asia, it repeated it in Argentina, forcing expenditure cuts that deepened recession and boosted unemployment to the point where things fell apart finally. Even now, the IMF has not acknowledged the lesson: It still insists on further cutbacks as a condition for assistance. It continues to insist on an alternative economic "theory"--one which Prof. Keynes fought against over 60 years ago. In a nutshell, he struggled against the notion that if only countries would cut their deficits, confidence would be restored, investment would return, and their economies would again attain full employment. But cuts in government expenditure did not cause Argentina's present economic crisis. There are several factors responsible for the crisis. Prior to the introduction of the currency board and the currency peg, money supply was growing in excess of 100 percent annually. So the IMF is to be blamed for endorsing a peg to the dollar while the peso was extremely overvalued. This destroyed the export sector. Furthermore, the high money rate of growth severely distorted the structure of production and depleted the capital base. The IMF is wrong in focusing on the reduction of the budget deficit. The focus must be on the reduction of government expenditure that Stiglitz opposes. A cut in government expenditure is a blessing for wealth generators and frees up property for productive use, so why should it be seen as bad news? Obviously, the cut in government outlays is bad for various activities that only consume real wealth without making any contribution to productive capacity. If the percentage of these activities exceeds the percentage of wealth generators, the economy will suffer. Aggressive government spending will only further deplete investable resources and prolong the depression. A good example of this is Japan. Aggressive Keynesian policies have been employed for over 10 years, yet the economy has continued to fall. Surely by now Keynesians should concede that these policies are a recipe for disaster. In conclusions, Stiglitz says: Economics is difficult because we cannot conduct controlled experiments. But we do have a wealth of experience from which to draw inferences. This wealth of experience all points in one direction: Prof. Keynes's teachings are very much alive, and Argentina today would be in far better shape if his lessons had been taken to heart. Indeed we do have a wealth of experience--which clearly indicates that Keynesian policies based on the view that something can be created out of nothing are responsible for economic misery in the world. Professor Keynes's teachings may still be alive, but they are killing economies all over the world. ---------------------------------------------------------------------------- ---- Frank Shostak, Ph. D., is an adjunct scholar of the Mises Institute and a frequent contributor to Mises.org. Send him MAIL and see his outstanding Mises.org Articles Archive. Dr. Shostak expresses gratitude to Michael Ryan for helpful comments during the writing of this article. From annewilliamson at msn.con Thu Jun 6 09:27:15 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Thu, 6 Jun 2002 11:27:15 -0400 Subject: [A-List] Re: "Revisiting Graham and Dodd " References: <3CFEC493.64D0DE1B@mindspring.com> <042e01c20d60$47d8b080$0100a8c0@igrushkii> Message-ID: <04bd01c20d6e$a445d9c0$0100a8c0@igrushkii> Lawyers, who enjoy a state-issued monopoly via the state's licensing regulations and therefore will always chose the state's interest over that of their clients', were also AWOL during the bubble years when laws as well as standards and regulations were ignored routinely. They have a racket equal to that of the bureaucrats'.........A. Contributions to AGs a National Scandal 06/01/2002 By Barbara Bruin The American Legislative Exchange Council The controversy swirling around Attorney General Patricia Madrid spotlights what's becoming a national scandal - the unholy alliance between the plaintiffs' attorneys and the state attorneys general. Madrid has reported receiving political contributions from law firms she has hired to bring lawsuits on behalf of the state. One firm hired to prosecute an environmental case gave $50,000 to Madrid's campaign. Several other law firms that have received lucrative contracts from the attorney general have also donated to her campaign. "Pinstripe Patronage" - the hiring of lawyers on the basis of campaign contributions - has existed for years. The game has been elevated to an entirely new level, however, due to the recent tobacco settlement. In the early 1990s, attorneys general in several states joined forces with the plaintiffs' bar to sue the tobacco industry. This resulted in a settlement of more than $250 billion to the states over the next 25 years. Less publicized was the fact that the settlement also resulted in billions of dollars in fees for private plaintiff attorneys. Several elected officials are taking heat for the way the fees were distributed. In Kansas, Attorney General Carla Stovall hired her former law firm to work on the tobacco litigation for the state, even though her firm had no experience in this type of litigation. The contract did not require the firm to keep track of the number of hours they worked on the case. The case was settled without going to trial, but the attorney general's former firm eventually received $27 million for its work. In Texas, there's an ongoing federal criminal investigation over the way then-Attorney General Dan Morales awarded the contracts for the state's tobacco litigation. With allegations of "campaign contributions for contracts" and fraudulent, forged and shredded documents, it has all the markings of a Texas-sized scandal. And in Alabama, there is a pending ethics investigation of Gov. Don Siegelman, who has been accused of taking a cut of the fees for himself, based on a tobacco case he worked on while he was lieutenant governor. Siegelman faces a tough primary on Tuesday, with ethics being a major issue. The staggering amount of money and publicity involved in the tobacco litigation has led the plaintiffs' bar and the attorneys general to seek out other such lawsuits. In various states they are targeting pharmaceutical companies, brokerage houses, Microsoft and homebuilders. Some activists are even seeking action against "unhealthy" foods, such as Coca Cola, McDonalds and Taco Bell. This "for profit" public interest litigation raises serious concerns. Will a case be decided in the interest of the public, or in the interest of the private lawyers who stand to gain millions? Will suits be brought based on actual wrongdoing, or the easy chance for quick legal fees? Will our public officials have a private stake in these decisions? One way to address this problem is "sunshine." In other words, let the contracting process be public and competitive. The American Legislative Exchange Council, a bipartisan group of legislators nationwide, has developed model state legislation designed to bring the hiring of law firms by state governments out in the open. The model legislation, called the Sunshine Act, provides that a state agency or agent shall not enter into a contract for legal services over a certain amount of money without an open and competitive bidding process - just like the contracting process for virtually every other kind of services in most states. This legislation has been enacted in four states and introduced in 20 states. As the idea picks up momentum, we anticipate seeing more state lawmakers adopting this measure. This legislation isn't a cure-all, but it is a start. This reform will still leave growing concern over the impact on public policy of class action lawsuits brought by the states. All too often, lawyers bring lawsuits only because of the potential windfall legal fees. The result is public policy crafted not in the public interest but in the pursuit of personal wealth. The Sunshine Act won't stop that - but at the very least the actions of our elected officials and government will be in full view of the public. ?1998 - 2002 ALEC All RIGHTS RESERVED All trademarks mentioned herein belong to their respective owners. From annewilliamson at msn.con Thu Jun 6 09:29:51 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Thu, 6 Jun 2002 11:29:51 -0400 Subject: [A-List] Regulatory Blowback References: <001201c20d4d$432c1300$6e784ed5@oemcomputer> <047a01c20d66$2aae81a0$0100a8c0@igrushkii> Message-ID: <04ca01c20d6f$012f4040$0100a8c0@igrushkii> EPA Ruling Backfires, Spurs Sales of Diesel Trucks DATE: June 5, 2002 BACKGROUND: The Wall Street Journal (1) reported recently that long-haul truck sales have skyrocketed primarily as trucking firms buy new rigs before new anti-pollution rules for diesel engines take effect October 1, 2002. The added cost of the new less polluting engines is estimated to be between $3000 and $5000. In addition, the engines are reported to be less fuel efficient, more costly to maintain and possibly more prone to breakdowns while in use. TEN SECOND RESPONSE: Here's another example of how over-reaching regulation can backfire and have just the opposite effect it intended. THIRTY SECOND RESPONSE: By trying to impose mandatory changes in diesel engines as of October, EPA pushed the trucking industry to buy trucks before the new rule goes into effect, thus thwarting its intentions. These trucks will stay on the roads for several years before being replaced. Whereas if the market were allowed to work unfettered, consumer demand for cleaner diesel engines would have accomplished the same thing. DISCUSSION: Manufacturers of the diesel engines have reportedly told EPA that they may not be able to produce reliable new engines as required as of October 1, 2002. However, EPA has not yet granted an extension of the timetable and is recommending fines of up to $15,000 per engine sold after Oct. 1 that don't meet the new standard. The new standard set in 1998 would reduce the nitrogen oxide (NOX) emissions from diesel engines by about one-third by 2008, according to EPA. NOX emissions are thought to be one of the major contributors to smog. by Gretchen Randall, Director John P. McGovern, MD Center for Environmental and Regulatory Affairs The National Center for Public Policy Research Contact the author at: 773-857-5086 or GRandall at nationalcenter.org The National Center for Public Policy Research, Chicago office 3712 North Broadway - PMB 279 Chicago, IL 60613 ---------------------------------------------------------------------------- ---- Footnote: 1 "Truck Firms Go on Buying Binge to Circumvent a New EPA Rule," Jeffrey Ball, The Wall Street Journal, May 28, 2002, downloaded from http://online.wsj.com/article/0,,SB1022539501352661400-search,00.html?collec tion=wsjie/30day&vql-string=%28truck+firms+go+on+buying+binge%29%3Cin%3E%28a rticle%2Dbody%29, subscription required. From hliu at mindspring.com Thu Jun 6 10:23:37 2002 From: hliu at mindspring.com (Henry C.K. Liu) Date: Thu, 06 Jun 2002 12:23:37 -0400 Subject: [A-List] Truth about gold (and motives) References: <001201c20d4d$432c1300$6e784ed5@oemcomputer> Message-ID: <3CFF8C88.B7AD55B2@mindspring.com> Gold is widely distributed on earth, large amounts are also under sea. The cost of mining new gold determines its supply. As POG rises, more gold will be mined until the profit margin is neutralized. There is a relationship between rate of mining new gold and the release of gold inventory into the market. Ores containing as little as $100 worth of gold per ton can be worked economically by using chemical methods of extraction. Gold production was stimulated by an advance of POG in 1934 to $35 a troy ounce. Bimetalism was a term coined by Cernuschi of France in 1869 to describe a monetary system in which two commodities, gold and silver, are used as a standard and minied without limit at a ratio fixed ly legislation which also designates both of them as legally acceptable for all payments, anchored by payment of taxes. The ratio is expressed in terms of weight: 16 oz. of silver to 1 z. of gold. The ratio has no relationship to the commercial value of the metals. Greshams law states that the metal that is commercially valued at less than its face value tends to to be used as money, as the metal commercially valued at more than its face value tends to be used as metal, valued by weight, hence is withdrawn from circulation as money. Popularly, Gresham's Law states that bad money drives out good money. In reality, undr bimetalism, the debtor tends to pay in the metal commercially valued cheaper, thus creating a demad which will bring its commercial value to its face value. Until the acts of 1708 anf 1816 under which ngland made gold the standard, all countries practiced bimetalism which was styrengthened by the formation in 1866 of the Latin Union, which included France, Belgium, Italy and Switzerland, join in 1873 by Greece and Rumania. In 1873, the new German Empire adopted the gold standard and shortly thereafter the Latin Union eas dissolved, and most nations adopted the gold standard. The US abandoned bimetalism in 1873 but the Bland-Allison Act of 1878 allowed a limited coinageof silverdollars, which ended with the Gold Standard Act of 1900. I have in my poccession a US silver dollar minted in 1875, inscribed with : United States of American Trade Dollar 420grains 900 fine, which I acquired in a flea market in South West China in 1990. The term money refers to two concepts: 1)the abstract unit of account in terms of which the value of goods, services, assets and obligations can be measured; 2) anything which is generally accepted as a means of payment, thus the literal meaning of currency. Frequently, the standard of value also serves a a medium of exchange but this is not always the case. The Code Of Hammuabi used silver for both purposes. Many early communities use cattle as standard of value but use more managable objects as payments. The use of money enabled specialization and the development of monetary institutions parallel the development of trade and industrailizatio which required capital. State coinage started in Lydia during 7 century B.C. Fernaud Braudel noted that the value of silver increased from 13th to 16th century until 1550, which he called the age of gold inflation, which lasted 6 centuries. In 1955, Enrope had 20,000 tons of silver. By 1650, another 16,000 tons had been added to the money supply. The gold inflation was replaced by ilver inflation as the value of silver fell, a phenonoenon which supported Gresham's Law. The basic fact is that capitalism cannot survbive stable prices. Any government or monetary system that maintains price stability for long would evetually face political upheaval. Henry C.K. Liu ewc wrote: > Hi Anne > > First my motives: > > Afraid your speculations about my motives were all incorrect. The > truth is simple. When I find Emeritus Professors writing nonsense, > about anything, I always get this urge to correct them - regardless of > the topic they are talking about. I see it as a kind of public duty, > and have always been puzzled and disappointed that so few other people > seem to feel the same. > > Second the facts: > > Gold has not played a pivotal role throughout the ages. Throughout > the ages, Europe, Persia and India were primarily on a silver > standard, China on a copper standard. In the long run the move to a > gold standard has tended to be to be an end game of economic systems - > (ie something they do as they collapse.) > > Specific to the gold standard you are talking about - its origins were > pretty specific to the evolution of the British Empire in the 18th > century. Britain went onto a gold standard, getting an upper hand on > its trading partners (and its internal labour force). Persia, India > & China were effectively on a silver standard (British labour was > largely paid in truck). Germany and then the rest of the west only > joined Britain on the gold standard in 1871, on the back of German > victory over France. Britain and Germany went to war in 1914, so gold > gave 43 years of peace (in Europe). > > These facts are readily available in standard reference works. If the > Emeritus Professor wants to challenge them, I would be pleased to hear > what he has to say > > Copies to a-list and Prof Sennholtz direct > > Robert From hliu at mindspring.com Thu Jun 6 10:23:37 2002 From: hliu at mindspring.com (Henry C.K. Liu) Date: Thu, 06 Jun 2002 12:23:37 -0400 Subject: [A-List] Truth about gold (and motives) References: <001201c20d4d$432c1300$6e784ed5@oemcomputer> Message-ID: <3CFF8C88.B7AD55B2@mindspring.com> Gold is widely distributed on earth, large amounts are also under sea. The cost of mining new gold determines its supply. As POG rises, more gold will be mined until the profit margin is neutralized. There is a relationship between rate of mining new gold and the release of gold inventory into the market. Ores containing as little as $100 worth of gold per ton can be worked economically by using chemical methods of extraction. Gold production was stimulated by an advance of POG in 1934 to $35 a troy ounce. Bimetalism was a term coined by Cernuschi of France in 1869 to describe a monetary system in which two commodities, gold and silver, are used as a standard and minied without limit at a ratio fixed ly legislation which also designates both of them as legally acceptable for all payments, anchored by payment of taxes. The ratio is expressed in terms of weight: 16 oz. of silver to 1 z. of gold. The ratio has no relationship to the commercial value of the metals. Greshams law states that the metal that is commercially valued at less than its face value tends to to be used as money, as the metal commercially valued at more than its face value tends to be used as metal, valued by weight, hence is withdrawn from circulation as money. Popularly, Gresham's Law states that bad money drives out good money. In reality, undr bimetalism, the debtor tends to pay in the metal commercially valued cheaper, thus creating a demad which will bring its commercial value to its face value. Until the acts of 1708 anf 1816 under which ngland made gold the standard, all countries practiced bimetalism which was styrengthened by the formation in 1866 of the Latin Union, which included France, Belgium, Italy and Switzerland, join in 1873 by Greece and Rumania. In 1873, the new German Empire adopted the gold standard and shortly thereafter the Latin Union eas dissolved, and most nations adopted the gold standard. The US abandoned bimetalism in 1873 but the Bland-Allison Act of 1878 allowed a limited coinageof silverdollars, which ended with the Gold Standard Act of 1900. I have in my poccession a US silver dollar minted in 1875, inscribed with : United States of American Trade Dollar 420grains 900 fine, which I acquired in a flea market in South West China in 1990. The term money refers to two concepts: 1)the abstract unit of account in terms of which the value of goods, services, assets and obligations can be measured; 2) anything which is generally accepted as a means of payment, thus the literal meaning of currency. Frequently, the standard of value also serves a a medium of exchange but this is not always the case. The Code Of Hammuabi used silver for both purposes. Many early communities use cattle as standard of value but use more managable objects as payments. The use of money enabled specialization and the development of monetary institutions parallel the development of trade and industrailizatio which required capital. State coinage started in Lydia during 7 century B.C. Fernaud Braudel noted that the value of silver increased from 13th to 16th century until 1550, which he called the age of gold inflation, which lasted 6 centuries. In 1955, Enrope had 20,000 tons of silver. By 1650, another 16,000 tons had been added to the money supply. The gold inflation was replaced by ilver inflation as the value of silver fell, a phenonoenon which supported Gresham's Law. The basic fact is that capitalism cannot survbive stable prices. Any government or monetary system that maintains price stability for long would evetually face political upheaval. Henry C.K. Liu ewc wrote: > Hi Anne > > First my motives: > > Afraid your speculations about my motives were all incorrect. The > truth is simple. When I find Emeritus Professors writing nonsense, > about anything, I always get this urge to correct them - regardless of > the topic they are talking about. I see it as a kind of public duty, > and have always been puzzled and disappointed that so few other people > seem to feel the same. > > Second the facts: > > Gold has not played a pivotal role throughout the ages. Throughout > the ages, Europe, Persia and India were primarily on a silver > standard, China on a copper standard. In the long run the move to a > gold standard has tended to be to be an end game of economic systems - > (ie something they do as they collapse.) > > Specific to the gold standard you are talking about - its origins were > pretty specific to the evolution of the British Empire in the 18th > century. Britain went onto a gold standard, getting an upper hand on > its trading partners (and its internal labour force). Persia, India > & China were effectively on a silver standard (British labour was > largely paid in truck). Germany and then the rest of the west only > joined Britain on the gold standard in 1871, on the back of German > victory over France. Britain and Germany went to war in 1914, so gold > gave 43 years of peace (in Europe). > > These facts are readily available in standard reference works. If the > Emeritus Professor wants to challenge them, I would be pleased to hear > what he has to say > > Copies to a-list and Prof Sennholtz direct > > Robert From soncu at pacbell.net Thu Jun 6 11:30:42 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Thu, 06 Jun 2002 10:30:42 -0700 Subject: [A-List] US: A call to Democrats Message-ID: NO SURRENDER Democrats Should Be the War Party A hawk can't fly without its left wing. BY RICHARD J. TOFEL Thursday, June 6, 2002 12:01 a.m. EDT Ever since the liberation of Kabul last fall, the Democratic Party has been publicly floundering, clearly clueless about how effectively to play the role of the loyal opposition in the war on terror. It now seems, at least to this Democrat, that only one course offers the virtues of serving the national interest, offering a clear alternative to President Bush, and holding out the possibility of political gain. That course is for the Democrats to become the true War Party, the clear-eyed hawks--in essence, to outflank Mr. Bush on the right. Such a policy would entail criticizing the administration's policy toward Iraq not for excessive bombast, or lack of enthusiasm for multilateralism, but for insufficient results. It was widely mentioned, beginning about eight months ago, that we had about one year before Saddam Hussein would pose a mortal threat to our interests. (Where this one-year estimate came from no one ever seemed to say--just as no one ever said how many months' margin of error might be implicit in the estimate.) Well, we've exhausted perhaps two-thirds of our supposed window of nonvulnerability--and we have almost nothing to show for it. Beyond Iraq, a War Party critique would ask why we were so timid at Tora Bora, and again in Operation Anaconda. It would ask why we have been reticent about pursuing al Qaeda into Pakistan's northwestern tribal territories, or into Kashmir. It would also ask why we have pussyfooted in Indonesia and the Philippines. More fundamentally, it would ask why we continue to seem so solicitous of a Saudi regime that expresses no gratitude for our rescue of it from Saddam just 11 years ago, and no real remorse for its citizens' predominant role in the events of Sept. 11 and in the hierarchy of al Qaeda. This is a regime, moreover, that constantly drags its feet in efforts to choke off the financing of terror, upgrade airline security and end the teaching of anti-American and anti-Israeli hatred to children. A War Party critique would then ask why such a regime remains within the defense perimeter of the U.S. The jihadis want Mecca and Medina; we want the uninterrupted flow of oil. Perhaps both objectives can be met, even if the Saudi regime doesn't survive such a division. A War Party policy would seek to put into practice what President Bush has only preached about other nations and the people in them being held to a choice of being "either with us or against us." That is attractive rhetoric indeed--especially as we now face that rare choice between good and evil, between the quick and the dead. But President Pervez Musharraf, and Pakistan's Inter-Services Intelligence agency, have not truly been forced to choose. Nor has the House of Saud. Yasser Arafat has not even been asked to choose. Above everything, a War Party policy would be focused on the future, and not on the past. It would move beyond the political game-playing of investigations about pre-Sept. 11 warnings, and the posterior-protecting trivialization of color-coded threat levels. It would, instead, recognize that we already have ample warnings of innumerable future threats--and would concentrate on curbing them rather than just listing them. A War Party policy in this new shadowy war would no more deride our agencies in the shadows--the FBI and the CIA--than any party, in wartime, would consider deriding our military. Instead a War Party would amply fund the FBI, provide incentives for amply staffing it, and quietly insist on excellence from top to bottom. The focus on the future would be spurred by a simple, and central, insight: that after the next attack, the American people will ask their leaders not why they didn't provide a warning of the carnage, but why they didn't do more to prevent it. And they will ask this especially of the president of the United States, who swears an oath to "preserve, protect and defend." Which brings us to the politics of such a policy. Seen in the light of today's events, Democratic leaders view a War Party policy as unthinkable. What of our "allies"? they wonder. What of academia? The Washington press corps? The State Department? The United Nations? Jimmy Carter? Jesse Jackson? But this was precisely the sort of thinking that paralyzed the Republican Party before Pearl Harbor (and even after the Anschluss, the fall of France and the Battle of Britain). It is why virtually an entire generation of Republican leaders became ineligible to lead the country after Dec. 7, 1941--and why no one in the pre-Pearl Harbor leadership of the party was ever nominated for president, much less elected. That is the choice for Democrats today, I believe. The Pearl Harbor of our time--the moment that truly changes everything--was not last Sept. 11, I fear. It lies ahead. And that looming threat requires us to choose between becoming the America Firsters of the 21st Century and returning to being the party of Franklin Roosevelt, Harry Truman and John Kennedy. It is still not too late to make our choice. But time is growing short. Mr. Tofel is assistant to the publisher of The Wall Street Journal. Full at: http://www.opinionjournal.com/editorial/feature.html?id=110001805 From soncu at pacbell.net Thu Jun 6 11:57:10 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Thu, 06 Jun 2002 10:57:10 -0700 Subject: [A-List] US: Woolsey on Iraq and more Message-ID: Ankara - Turkish Daily News June 6, 2002 Woolsey: "Not accepting Turkey's membership is crazy" "To cope with Middle East Turkey's democratic, secular, muslim structure and prosperity should continue" The former chairman of the American Central Intelligence Agency (CIA) James Woolsey said, "European Union would be crazy, not to accept Turkey's membership." Answering the questions of the Anatolian News Agency, Woolsey stated that omission of Turkey is crazy. "The EU membership of Turkey is good for both the Turkish economy and the EU. The United States has only a middle term effect on the EU. Because we also have problems with the EU. But in terms of commerce and economic modernization not to accept the Turkish membership is crazy." said Woolsey. Turkey is a wonderful model for the Middle East Woolsey stated that to cope with the Middle East, Turkey's democratic, secular, muslim structure and prosperity should continue. Woolsey also indicated that all the muslim countries in the Middle East should take the happenings in Turkey in the 1920s as a sample and added "this is the wish of United States." "I always say something to my Turkish friends. I know two leaders who won a revolutionary war, founded a state, created a democracy which has a continuity and was selected as president in democratic ways, they are Ataturk and the other George Washington" said Woolsey. Woolsey pointed out that Turkey is an open country for all the religions and a secular one and said that, "Turkey is a wonderful model that indicates how the Middle East should be. The accession to the Turkish model for the Middle East would not be easy and at once. But Turkey has indicated the way of this 80 years before. Not doing anything for establishing Turkish type democracy in the Middle East is our fault. We should have done this in Iraq in 1991." Operation only from the north would not be adequate Woolsey also mentioned the Iraqi operation and "Turkey is our vital ally besides England" he said. He also went on in his words like this "We have to convince both Turkey and the two big Kurd groups in North Iraq that we are serious to overthrow the Baghdad regime, we are looking for your help, we are searching for a democratic Iraq which has a federal structure and a separate Kurdish state would be established." The former CIA chairman said that, "If we can achieve this, the Kurds in the north have a chance to play a role like the Northern Alliance played in Afghanistan." James Woolsey also said that to perform an operation from north would not be adequate and they also have to perform an operation from the south with U.S. forces. James Woolsey is among the chief supporters of the military operation over Iraq. The former chairman of CIA is also the Democrat Party deputy and supports Turkey's EU membership. From annewilliamson at msn.con Thu Jun 6 11:58:35 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Thu, 6 Jun 2002 13:58:35 -0400 Subject: [A-List] US: A call to Democrats References: Message-ID: <04f601c20d83$c85844a0$0100a8c0@igrushkii> This is possibly the worst thing I've read written by a Democrat in many a moon - "Yeah, let's seize upon war to get the election edge back from DUH-bya...". All quite alarming until one notes the publisher - WSJ Online. Natch this is a DNC opinion they are happy to flaunt! Anne PS The Dems could do a lot of good - and get traction - if they would but focus on the loss of Americans' civil rights which is serving of no use in the idiotic War on Terrorism. I know! Let's have a "war" on snipers! Or maybe flanking tank movements! Yeah, that'll work.... ----- Original Message ----- From: Sabri Oncu To: ALIST Sent: Thursday, June 06, 2002 1:30 PM Subject: [A-List] US: A call to Democrats > NO SURRENDER > > Democrats Should Be the War Party > > A hawk can't fly without its left wing. > > BY RICHARD J. TOFEL > Thursday, June 6, 2002 12:01 a.m. EDT > > Ever since the liberation of Kabul last fall, the Democratic > Party has been publicly floundering, clearly clueless about how > effectively to play the role of the loyal opposition in the war > on terror. It now seems, at least to this Democrat, that only one > course offers the virtues of serving the national interest, > offering a clear alternative to President Bush, and holding out > the possibility of political gain. That course is for the > Democrats to become the true War Party, the clear-eyed hawks--in > essence, to outflank Mr. Bush on the right. > > Such a policy would entail criticizing the administration's > policy toward Iraq not for excessive bombast, or lack of > enthusiasm for multilateralism, but for insufficient results. It > was widely mentioned, beginning about eight months ago, that we > had about one year before Saddam Hussein would pose a mortal > threat to our interests. (Where this one-year estimate came from > no one ever seemed to say--just as no one ever said how many > months' margin of error might be implicit in the estimate.) Well, > we've exhausted perhaps two-thirds of our supposed window of > nonvulnerability--and we have almost nothing to show for it. > > Beyond Iraq, a War Party critique would ask why we were so timid > at Tora Bora, and again in Operation Anaconda. It would ask why > we have been reticent about pursuing al Qaeda into Pakistan's > northwestern tribal territories, or into Kashmir. It would also > ask why we have pussyfooted in Indonesia and the Philippines. > > More fundamentally, it would ask why we continue to seem so > solicitous of a Saudi regime that expresses no gratitude for our > rescue of it from Saddam just 11 years ago, and no real remorse > for its citizens' predominant role in the events of Sept. 11 and > in the hierarchy of al Qaeda. This is a regime, moreover, that > constantly drags its feet in efforts to choke off the financing > of terror, upgrade airline security and end the teaching of > anti-American and anti-Israeli hatred to children. A War Party > critique would then ask why such a regime remains within the > defense perimeter of the U.S. The jihadis want Mecca and Medina; > we want the uninterrupted flow of oil. Perhaps both objectives > can be met, even if the Saudi regime doesn't survive such a > division. > > A War Party policy would seek to put into practice what President > Bush has only preached about other nations and the people in them > being held to a choice of being "either with us or against us." > That is attractive rhetoric indeed--especially as we now face > that rare choice between good and evil, between the quick and the > dead. But President Pervez Musharraf, and Pakistan's > Inter-Services Intelligence agency, have not truly been forced to > choose. Nor has the House of Saud. Yasser Arafat has not even > been asked to choose. > > Above everything, a War Party policy would be focused on the > future, and not on the past. It would move beyond the political > game-playing of investigations about pre-Sept. 11 warnings, and > the posterior-protecting trivialization of color-coded threat > levels. It would, instead, recognize that we already have ample > warnings of innumerable future threats--and would concentrate on > curbing them rather than just listing them. > > A War Party policy in this new shadowy war would no more deride > our agencies in the shadows--the FBI and the CIA--than any party, > in wartime, would consider deriding our military. Instead a War > Party would amply fund the FBI, provide incentives for amply > staffing it, and quietly insist on excellence from top to bottom. > > The focus on the future would be spurred by a simple, and > central, insight: that after the next attack, the American people > will ask their leaders not why they didn't provide a warning of > the carnage, but why they didn't do more to prevent it. And they > will ask this especially of the president of the United States, > who swears an oath to "preserve, protect and defend." > > Which brings us to the politics of such a policy. Seen in the > light of today's events, Democratic leaders view a War Party > policy as unthinkable. What of our "allies"? they wonder. What of > academia? The Washington press corps? The State Department? The > United Nations? Jimmy Carter? Jesse Jackson? > > But this was precisely the sort of thinking that paralyzed the > Republican Party before Pearl Harbor (and even after the > Anschluss, the fall of France and the Battle of Britain). It is > why virtually an entire generation of Republican leaders became > ineligible to lead the country after Dec. 7, 1941--and why no one > in the pre-Pearl Harbor leadership of the party was ever > nominated for president, much less elected. > > That is the choice for Democrats today, I believe. The Pearl > Harbor of our time--the moment that truly changes everything--was > not last Sept. 11, I fear. It lies ahead. And that looming threat > requires us to choose between becoming the America Firsters of > the 21st Century and returning to being the party of Franklin > Roosevelt, Harry Truman and John Kennedy. > > It is still not too late to make our choice. But time is growing > short. > > Mr. Tofel is assistant to the publisher of The Wall Street > Journal. > > Full at: > http://www.opinionjournal.com/editorial/feature.html?id=110001805 > > > From annewilliamson at msn.con Thu Jun 6 12:26:27 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Thu, 6 Jun 2002 14:26:27 -0400 Subject: [A-List] Truth about gold References: <001201c20d4d$432c1300$6e784ed5@oemcomputer> <3CFF8C88.B7AD55B2@mindspring.com> Message-ID: <050201c20d87$aca2ed60$0100a8c0@igrushkii> Gary North's REALITY CHECK Issue 147 June 6, 2002 GOLD'S DUST VS. DUSTY GOLD The best way for a nation to build confidence in its currency is not to bury lots of gold in the ground; it is, instead, to pursue responsible financial policies. If a country does so consistently enough, it's likely to find its gold growing dusty from disuse. Editorial, WALL STREET JOURNAL (July 8, 1969) This statement is true, but it is unlikely that the editorial writer all those years ago understood why it is true. When it comes to wise economic policy-making, let us get one thing straight: it doesn't come like manna from heaven. It isn't a free lunch. It comes only because there are political sanctions that reward government officials who devise and enforce policies that make consumers better off, and punish government officials who devise and enforce policies that make consumers worse off. These institutional sanctions must be consistent with the laws of economics -- and there really are laws of economics. If the policies violate economics law, then nation will get irresponsible financial policies, and lots of other kinds of irresponsible government policies. The editorial writer implied that dusty gold is a silly thing to pursue. He also implied that a nation doesn't need a supply of gold if it pursues wise financial policies. What he was really saying is that gold has nothing to do with wise financial policies. A gold standard is therefore irrelevant. It is an anachronism. It gathers dust, like gold itself. I think otherwise. I think dusty gold is a great thing. I believe that gold bullion is good. I even believe that gold dust is good. But dust on a government's supply of gold is even better, assuming that the public can legally obtain this gold on demand, as is the case with a gold coin standard. Permit me to explain why I believe this. But first, let me mention a fact of political life: the Establishment hates gold. THE ESTABLISHMENT VS. GOLD Hostility to the traditional gold coin standard has been the mark of Establishment economists and editorialists ever since the U.S. government confiscated Americans' gold in 1933. The Establishment hates gold. Its spokesmen ridicule gold. They want responsible fiscal and monetary policies, of course -- all of them publicly assure of this fact, decade after decade -- but the national debt just keeps getting bigger, and price inflation never ceases, also decade after decade. Somehow, fiscal and monetary responsibility just never seem to arrive. Why do they hate gold? Because gold represents the public. More than this: gold is a powerful tool of control by the public. A gold coin standard places in the hands of consumers a means of controlling the national money supply. A gold coin standard transfers monetary policy-making from central bankers and government officials to the common man, who can walk into a bank and demand payment for paper or digital currency in gold coins. This is the ultimate form of democracy, and the Establishment hates it. The Establishment can and does control political affairs. They make democracy work for them. They are masters of political manipulation. But they cannot control long-run monetary policy in a society that has a gold coin standard. They hate gold because they hate the sovereignty of consumers. We are also officially assured by Establishment-paid experts that fiscal and monetary responsibility has nothing to do with a gold coin standard, in the same way that international price stability, 1815-1914, had nothing to do with the presence of a gold coin standard. A gold coin standard would not provide fiscal responsibility, we are told. This is a universal affirmation, the shared confession of faith that unites all branches of the Church of Perpetual Re-election. On this one thing, the economists are agreed, whether Keynesians, Friedmanites, or supply siders: gold should have no role to play in today's monetary system. (A few supply siders do allow a role for bullion gold in central bank vaults -- without full redeemability by the public -- as a psychological confidence-builder in a pseudo-gold standard economy. They do not call for full gold coin redeemability by the public, or 100% reserve banking.) The WALL STREET JOURNAL is no exception to this rule. It thinks that we can somehow get fiscal responsibility without a gold standard. Nevertheless, the editorial writer stumbled upon a very important point. The gathering of dust on a government's stock of monetary gold is as good an indicator of fiscal responsibility as would be the addition of gold dust to the stock of monetary gold. ENOUGH IS ENOUGH New money, including newly mined gold, confers no net benefit to society. New money does confer benefits on those people who get access to it early, but it does this at the expense of late-comers who get access to the new money late in the process. Those people who have early access to the new money gain a benefit: they can spend the newly mined (or newly printed) money at yesterday's prices. Competing consumers who do not have immediate access to the new money are forced to restrict their purchases as supplies of available goods go down and/or prices of the goods increase. Thus, those people on fixed incomes cannot buy as much as they would have been able to buy had the new money not come into existence. Some people benefit in the short run; others lose. There is no way that an economist can say scientifically that society has benefited from an increase in the money supply. He cannot add up losses and gains inside people's minds. There is no such standard of measurement. Murray Rothbard made this point a generation ago. Thus, we see that while an increase in the money supply, like an increase in the supply of any good, lowers its price, the change does not - unlike other goods -- confer a social benefit. The public at large is not made richer. Whereas new consumer or capital goods add to standards of living, new money only raises prices -- i.e., dilutes its own purchasing power. The reason for this puzzle is that money is only useful for its exchange-value. Other goods have "real" utilities, so that an increase in their supply satisfies more consumer wants. Money haws only utility for prospective exchange; its utility lies in its exchange-value, or "purchasing power." Our law -- that an increase in money does not confer a social benefit -- stems from its unique use as a medium of exchange. [Murray N. Rothbard, WHAT HAS GOVERNMENT DONE TO OUR MONEY? (1964), p. 13. Available from the Mises Institute, Auburn, Alabama.] Rothbard's point is vital: an increase of the total stock of money cannot be said, a priori, to have increased a nation's aggregate social wealth. This implication has a crucial policy implication: the existing supply of money is sufficient to maximize the wealth of nations. Enough is enough. "Stop the presses!" An economist who says that society has benefitted from an increase in the money supply has an unstated presupposition: it is socially beneficial to aid one group in the community (the miners, or those printing the money) at the expense of another group (those on fixed incomes). This is hardly neutral economic analysis. Let us assume a wild, unlikely hypothesis: the supply of dollars will someday be tied, both legally and in fact, to the stock of gold in the Federal Reserve System' vault. Let us also assume that banks can issue dollars only for gold deposited. For each ounce of gold deposited in a bank, a paper receipt called a "dollar" is issued by the bank to the person bringing in the gold for deposit. At any time, the bearer of this IOU can redeem a paper "dollar" for an ounce of gold. By definition, one dollar is now worth an ounce of gold, and vice versa. What would take place if an additional supply of new gold is made by some producer, or if the government (illegally) should spend an unbacked paper dollar? Rothbard describes the results. An increase in the money supply, then, only dilutes the effectiveness of each gold ounce; on the other hand, a fall in the supply of money raises the poser of each gold ounce to do its work. [Rothbard is speaking of the long-run effects in the aggregate.] We come to the startling truth that it doesn't matter what the supply of money is. Any supply will do as well as any other supply. The free market will simply adjust by changing the purchasing-power, or effectiveness of its gold unit. There is no need whatever for any planned increase in the money supply, for the supply to rise to offset any condition, or to follow any artificial criteria. More money does not supply more capital, is not more productive, does not permit "economic growth." Once a society has a given supply of money in its national economy, people no longer need to worry about the efficiency of the monetary unit. People will use money as an economic accounting device in the most efficient manner possible, given the prevailing legal, institutional, and religious structure. In fact, by adding to the existing money supply in any appreciable fashion, banks bring into existence the "boom-bust" phenomenon of inflation and depression. The old cliche, "let well enough alone," is quite accurate in the area of monetary policy. This leads to a startling conclusion: the existing money supply is sufficient for all economic transactions. We don't need any more money. (Well, actually, I do. But you don't.) We also don't need a Federal Reserve System to manage the money supply. We don't need a government rule that compels the Federal Reserve or the Treasury to increase the money supply by 3% per annum or maybe 5% (Friedman's suggested rule). Besides, who would enforce such a rule? It's a rule for rulers enforced by rulers. Then what do we need? Freedom of contract and the enforcement of contracts. Nothing else? Only laws that prohibit fraud. To issue a receipt for which there is nothing in reserve to back up the receipt is fraudulent. WHY GOLD? A productive gold miner, by slightly diluting the purchasing power of the gold-based monetary unit, achieves short-run benefits for himself. He gets a little richer. Those people on fixed incomes now face a slightly restricted supply of goods available for purchase at the older, less inflated, price levels. Miners and mine owners bought these goods with their newly mined gold. This is a fact of life. But this is a minor redistribution -- miner redistribution -- of wealth compared to the effects of a government monopoly over money. The compulsion of government vastly magnifies the redistribution effects of monetary inflation. It is cheaper to print money than to mine gold. We live in an imperfect universe. We are not perfect creatures, possessing omniscience, omnipotence, and perfect moral natures. We therefore find ourselves in a world in which some people will choose actions which will benefit them in the short run, but which may harm others in the long run. Our judicial task is to minimize these effects. We should pursue a world of minor imperfections rather than accept a world with major imperfections. But we would be wise not to demand political perfection. Messianic societies never attain perfection. They attain only tyranny. To compare a gold standard with perfection -- zero monetary expansion -- misses the point. Perfection is not an available option. Instead, we should compare the effects of a gold coin standard, where no one can issue receipts for gold unless he owns gold, with the effects of a monetary system in which the government forces people to accept its money in payment for all debts, goods, and services. Compared to the cost of creating a blip on a computer, the costs of mining are huge. The rate of monetary inflation will be vastly lower under a pure gold coin standard with 100% reserve banking than under a credit money standard run by central bankers through the fractionally reserved commercial banks. Professor Mises defended the gold standard as a great foundation of our liberties precisely because gold is so expensive to mine. Mining expenses reduce the rate of monetary inflation. The gold standard is not a perfect arrangement, he said, but its effects are far less deleterious than the power of a monopolistic State or a State-licensed banking system to create credit money. The economic effects of gold are far more predictable, because they are more regular. Geology acts as a greater barrier to monetary inflation than can any man-made institutional arrangement. [Ludwig von Mises, THE THEORY OF MONEY AND CREDIT (New Haven, Connecticut: Yale University Press, [1912] 1951), pp. 209-11, 238-40.] The booms will be smaller, the busts will be less devastating, and the redistribution involved in all inflation (or deflation, for that matter) can be more easily planned for. On all this, see my on-line book, MISES ON MONEY. http://www.lewrockwell.com/north/mom.html Nature is niggardly. This is a blessing for us in the area of monetary policy, assuming that we limit ourselves to a monetary system legally tied to specie metals. We would not need gold if, and only if, we could be guaranteed that the government or banks would not tamper with the supply of money in order to gain their own short-run benefits. For as long as that temptation exists, gold (or silver, or platinum) will alone serve as a protection against policies of mass inflation. HOW WOULD THE SYSTEM WORK? The collective entity known as the nation, as well as another collective, the State, will always have a desire to increase its percentage of the world's economic goods. In international terms, this means that there will always be an incentive for a nation to mine all the gold that it can. While it is true that economics cannot tell us that an increase in the world's gold supply will result in an increase in aggregate social utility, economic reasoning does inform us that the nation which gains access to newly mined gold at the beginning will able to buy at yesterday's prices. World prices will rise in the future as a direct result, but he who gets there "fustest with the mostest" does gain an advantage. What applies to an individual citizen miner applies equally to national entities. So much for technicalities. What about the so-called "gold stock"? In a free market society that permits all of its residents to own gold and gold coins, there will be a whole host of gold coins, there will be a whole host of gold stocks. (By "stock," I mean gold hoard, not a share in some company.) Men will own stocks of gold, institutions like banks will have stocks of gold, and all levels of civil government -- city, county, national -- will possess gold stocks. All of these institutions, including the family, could issue paper IOU slips for gold, although the slips put out by known institutions would no doubt circulate with greater ease (if what is known about them is favorable). The "national stock of gold" in such a situation would refer to the combined individual stocks. Within this hypothetical world, let us assume that the United States Government wishes to purchase a fleet of German automobiles for its embassy in Germany. The American people are therefore taxed to make the funds available. Our government now pays the German central bank (or similar middleman) paper dollars in order to purchase German marks. Because, in our hypothetical world, all national currencies are 100 per cent gold-backed, this would be an easy arrangement. Gold would be equally valuable everywhere (excluding shipping costs and, of course, the newly mined gold which keeps upsetting our analysis), so the particular paper denominations are not too important. Result: the German firm gets its marks, the American embassy gets its cars, and the middleman has a stock of paper American dollars. These bills are available for the purchase of American goods or American gold directly by the middleman, but he, being a specialist working the area of currency exchange, is more likely to make those dollars available (at a fee) for others who want them. They, in turn, can buy American goods, services, or gold. This should be clear enough. PAPER PROMISES ARE EASILY BROKEN Money is useful only for exchange, and this is especially true of paper money (gold, at least, can be made into wedding rings, earrings, nose rings, and so forth). If there is no good reason to mistrust the American government -- we are speaking hypothetically here -- the paper bills will probably be used by professional importers and exporters to facilitate the exchange of goods. The paper will circulate, and no one bothers with the gold. Gold just sits there in the vaults, gathering dust. As long as the governments of the world refuse to print more paper bills than they have gold to redeem them, their gold stays put. It would be wrong to say that gold has no economic function, however. It does, and the fact that we must forfeit storage space and payment for security systems testifies to that valuable function. It keeps governments from tampering with their domestic monetary systems. Obviously, we do not live in the hypothetical world which I have sketched. What we see today is a short- circuited international gold standard. National governments have monopolized the control of gold for exchange purposes; they can now print more IOU slips than they have gold. Domestic populations cannot redeem their slips. The governments create more and more slips, the banks create more and more credit, and we are deluged in money of decreasing purchasing power. The rules of the game have been shifted to favor the expansion of centralized power. The laws of economics, however, are still in effect. TRADING WITHOUT GOLD One can easily imagine a situation in which a nation has a tiny gold reserve in its national treasury. If its people produce, say, bananas, and they limits their purchases of foreign goods by what they receives in foreign exchange for exported bananas, the national treasury needs to transfer no gold. The nation's currency unit has purchasing power (exported bananas) apart from any gold reserves. If, for some reason, it wants to increase its national stock of gold (perhaps the government plans to fight a war, and it wants a reserve of gold to buy goods in the future, since gold stores more conveniently than bananas), the government can get the gold. All it needs to do is take the foreign money gained through the sale of bananas and use it to buy gold instead of other economic goods. This will involve taxation, of course, but that is what all wars involve. If you spend less than you receive, you are saving the residual. A government can save gold. That's really what a gold reserve is: a savings account. This is a highly simplified example. I use it to convey a basic economic fact: if you produce a good (other than gold), and you use it to export in order to gain foreign currency, than you do not need a gold reserve. You have chosen to hoard foreign currency instead of gold. That applies to citizens and governments equally well. What, then, is the role of gold in international trade? Free market economist Patrick Boarman (the translator of Wilhelm Roepke's ECONOMICS OF THE FREE SOCIETY) explained the mechanism of international exchange in THE WALL STREET JOURNAL (May 10, 1965). The function of international reserves is NOT to consummate international transactions. These are, on the contrary, financed by ordinary commercial credit supplied either by exporters, or in some cases by international institutions. Of such commercial credit there is in individual countries normally no shortage, or internal credit policy can be adjusted to make up for any un-toward tightness of funds. In contrast, international reserves are required to finance only the inevitable net differences between the value of a country's total imports and its total exports; their purpose is not to finance trade itself, but net trade imbalances. The international gold standard, like the free market's rate of interest, served as an equilibrating device. I think it will again someday. What it is supposed to equilibrate is not gross world trade but net trade imbalances. Boarman's words throw considerable light on the perpetual discussion concerning the increase of "world monetary liquidity." A country will experience a net movement of its reserves, in or out, only where its exports of goods and services and imports of capital are insufficient to offset its imports of goods and services and exports of capital. Equilibrium in the balance of payments is attained not by increasing the quantity of a mythical "world money" but by establishing conditions in which autonomous movements of capital will offset the net results, positive and negative, of the balance of trade. Some trade imbalances are temporarily inevitable. Natural or social disasters take place, and these may reduce a nation's productivity for a period of time. The nation's "savings" -- its gold stock -- can then be used to purchase goods and services from abroad. Specifically, it will purchase with gold all those goods and services needed above those available in trade for current exports. If a nation plans to fight a long war, or if it expects domestic rioting, then, of course, it should have a larger gold stock than a nation which expects peaceful conditions. If a nation plans to print up millions and even billions of IOU slips in order to purchase foreign goods, it had better have a large gold stock to redeem the slips. But that is merely another kind of trade imbalance, and is covered by Boarman's exposition. THE GUARDS A nation that relies on the free market to balance supply and demand, imports and exports, production and consumption, will not need a large gold stock to encourage trade. Gold's function is to act as a restraint on government's spending more than the government takes in. If a government takes in revenues from its citizenry, and then exports the paper bills or fully baked credit to pay for some foreign good, then there is no necessity for the government to deplete its semi-permanent gold reserves. The gold will sit idle -- idle in the sense of physical movement, but not idle in the sense of being economically irrelevant. The fact that a nation's gold does not move is no more (and no less) significant than the fact that the guards who are protecting this gold can sit quietly on the job if the storage system is really efficient. Gold in a nation's treasury guards its citizens from that old messianic dream of getting something for nothing. This is also the function of the guards who protect the gold. The guard who is not very important in a "thief-proof" building is also a kind of "equilibrating device." He is there just in case the over-all system should experience a temporary failure. A nation that permits the free market to function is, by analogy, also "thief-proof" Everyone who consumes is required by the system to offer something in exchange. During economic emergencies, the gold is used, like the guard is used during vault emergencies. Theoretically, the free market economy could do without a large national gold reserve, in the same sense that a perfectly designed vault could do without guards. The nation that requires huge gold reserves is like a vault that needs extra guards: something is probably breaking down somewhere -- or breaking in. CONCLUSION What I have been trying to explain is that a full gold coin standard, within the framework of a free market economy, would permit the large mass of citizens to possess gold. This means that the "national reserves of gold," that is, the State's gold hoard, would not have to be very large. If we were to re-establish full domestic convertibility of paper money for gold coins (as it was before 1933), while removing the "legal tender" provision of the Federal Reserve Notes, the American economy would still function. It would function far better in the long run. Consumers would be able to reassert their sovereignty over politicians and government-licensed bankers. This, of course, is not the world we live in. Because America is not a free society in the sense that I have pictured here, we must make certain compromises with our theoretical model. The statement in THE WALL STREET JOURNAL's editorial would be completely true only in an economy using a full gold coin standard: "The best way for a nation to build confidence in its currency is not to bury lots of gold in the ground." Quite true; gold would be used for purposes of exchange, although one might save for a "rainy day" by burying gold. But if governments refused to inflate their currencies, few people would need to bury their gold, and neither would the government. If a government wants to build confidence, it should "pursue responsible financial policies," that is, it should not spend more than it takes in. The editorial's conclusion is accurate: "If a country does so consistently enough, it's likely to find its gold growing dusty from disuse." In order to remove the necessity of a large gold hoard, all we need to do is follow policies that will "establish Justice, insure domestic Tranquility, provide for the common defense [with few, if an, entangling alliances], promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity." To the extent that a nation departs from those goals, it will need a large gold hoard, for it costs a great deal to finance injustice, domestic violence, and general illfare. With the latter policies in effect, we find that the gold simply pours out of the Treasury, as "net trade imbalances" between the State and everyone else begin to mount. A moving ingot gathers no dust. This leads us to "North's Corollary to the Gold Standard" (tentative): "The fiscal responsibility of a nation's economic policies can be measured directly in terms of the thickness of the layer of dust on its gold reserves: the thicker the layer, the more responsible the policies." Note: this article is a revision of an article that I published in THE FREEMAN in 1969. My analysis has not changed since 1969, but the price level in the United States is 4.9 times higher. See the inflation calculator on the home page of the Bureau of Labor Statistics. http://www.bls.gov The government's gross national debt (on-budget debt, not accrual debt, which is vastly larger) at the end of 1969 was $366 billion. At the end of this year, it will be approximately $5.8 trillion. http://www.treas.gov/education/fact-sheets/taxes/fed-debt.html The Establishment still ridicules gold. The public still doesn't understand gold. And academic economists tell us that central banking is the wave of the future: the best conceivable world. The more things change (debt, prices), the more they stay the same (economic opinions). In my next report, I will describe the institutional arrangement by which the world's economy could function on a pure coin standard: 100% reserves. In fact, a company actually exists that has begun to offer just such an alternative to the existing system. * * * * * * * * * * * * * * * * * * * * * * * * * * * * From soncu at pacbell.net Thu Jun 6 13:25:40 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Thu, 06 Jun 2002 12:25:40 -0700 Subject: [A-List] South Korea: Houshold debt Message-ID: 03 Jun 2002 Drastic plastic? The credit card boom COUNTRY BRIEFING FROM THE ECONOMIST INTELLIGENCE UNIT Most football fans flocking to South Korea for the World Cup will pay for goods and services the modern way, using credit cards. Few will know that their hosts sport more plastic than they do. With 89m cards issued, the average adult Korean has four, compared with two in Japan, 1.8 in the US, or 0.9 in the UK. Yet this is a very recent phenomenon. Here, as so often, Korea has come from behind: three years ago there were only 42m cards. Card transactions soared from $33bn in value in 1998 to $333bn last year, doubling in both 2000 and 2001. In 1999 16% of total consumer spending was by credit card; now it is 56%. With plastic usage forecast to go on growing for several years yet at 25% annually, a hot debate has sprung up in Seoul on whether this carries risks. This is a revolution on many fronts. Hitherto Koreans, like others in Asia, were famed for thrift and high savings rates. In truth they had little choice, as credit instruments for big-ticket items - house mortgages, or hire purchase for cars and consumer durables - hardly existed. Filling the gap were usurers and a shady kerb market, charging vast interest; or "kye" (traditional communal savings clubs, mostly of women who in Korea run household finances). Banks largely ignored individual customers, whose deposits they lent to "chaebol" (conglomerates) on easy terms (often based on connections or official fiat and without proper evaluation). Small businesses suffered too, using chaebol promissory notes as quasi-currency in the absence of loans. All rather primitive. The 1997 financial crisis exploded this system. Banks most heavily exposed to the chaebol had to be bailed out by government, leaving those focussed on retail business in better shape. The government also wanted to get consumers spending: in 1998 their instinctive reaction of belt-tightening had deepened the post-crisis recession, and GDP shrank by 5.8%. Separately, it needed to tighten its tax take - not least to pay for bank and related rescues, to the tune of W150trn ($120bn) so far. Plastic fitted the bill all round. Banks suddenly discovered consumers as a market: good risks, under-borrowed, diverse and enabling higher margins than on corporate lending. Government offered tax rebates on credit card use, with huge success. The Ministry of Finance and Economy (MOFE) reckons this raised an extra W3.8trn in revenue last year, with small businesses no longer able to evade the net. It now wants to force self-employed professionals to take payment by card for the same reason. In addition the card boom saved South Korea from recession, with consumer demand making up for flagging exports. Last year private consumption accounted for 58% of GDP. This sounds like win-win all round, but some are worried. According to Morgan Stanley, South Korea has the world's fastest growing household debt - up from 18% to 62% of GDP in just two years, a rise which even in the profligate US took a decade. Moreover 60% of transactions are cash advances, at interest rates above 20%. The fear is that spendthrift consumers - and pushy lenders - could collapse just as big firms did, if growth falters. With real estate prices in Seoul up 19% last year, store sales rising 18.8%, and this year's GDP growth predicted at 5-6%, another concern is overheating, although May's 0.25% rise in the base lending rate signalled that the Bank of Korea is vigilant. Is there cause for alarm? A strong dose of moralism, mainly in older Koreans but fomented by former administrations, paints spending - especially on luxuries, above all if foreign - as sinful; conversely, frugality and saving are patriotic. This attitude has seized on the odd crime by debt-ridden teens as proof of the end of civilisation. Such anxieties aside, two concrete concerns are aggressive credit card distribution (even on the street, and to minors) without proper checks; and inadequate provisioning against default, expecting only a 2-3% rate where 8-10% would be more realistic. In mid-May the government banned house calls by credit card sellers, but relented on May 30th on fears this would put most of the 100,000 agents out of work. But it will regulate companies' use of member information, while seeking to separate card firms from instalment finance and leasing. Under official pressure, major lenders are cutting cash advance interest rates slightly. Yet on the tax front, MOFE plans to extend the deduction for card use by three years to 2005. At 96% of disposable income, Korean household debt is now comparable to that in the west. Personal borrowers will be less reckless than Korea Inc - which in turn must now rely more on equity issues, strengthening shareholders. Consumer demand is good for growth, and it forces firms to make what people want. All this is healthy - if the binge does not become a bubble. SOURCE: ViewsWire London Full at: http://www.viewswire.com/index.asp?layout=display_article&doc_id= 192875 From soncu at pacbell.net Thu Jun 6 14:28:51 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Thu, 06 Jun 2002 13:28:51 -0700 Subject: [A-List] Re: "Revisiting Graham and Dodd " Message-ID: Anne writes: > I couldn't agree more about the mind- > dulling, soul-killing "homogenity" US > culture induces. But it's not only economists > who aim at standardization to achieve efficiency, > it's bureaucrats! Let us be fair Anne, We need to add corporations to this list. Homogeneity in tastes gives rise to lower production costs: you don't need to waste resources on adding different bells and whistles to your products depending on the geographical variance of tastes. > Our disagreement is centered yet again > on the role of the state. Where each of > you see "regulation" as the cure, I see it > as the flourishing disease. I don't see "regulation" as the cure. I don't think this system is curable. This is why I am for revolution. Best, Sabri From soncu at pacbell.net Thu Jun 6 15:04:34 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Thu, 06 Jun 2002 14:04:34 -0700 Subject: [A-List] US: Housing market Message-ID: Bubble or not, it sure feels like one The housing market may be frothy. But economists don't expect a sharp drop in prices. June 6, 2002: 4:27 PM EDT By Martine Costello, CNN/Money Staff Writer NEW YORK (CNN/Money) - If you believe what you hear from economists these days, the hotly-debated real estate bubble is nothing more than urban myth. But try telling that to the residents of Broward County, Fla., where housing prices have jumped 22 percent in the past year and 85 percent since 1993. You'll not get a sympathetic ear in the San Francisco Bay area, either, where $1 million buys you a measely 1,200 feet of space, a far cry from the 9,000-square-foot McMansions sprouting up in less inflated parts of the country at half the price. Indeed, the average price of a single-family home rose 7.1 percent in April over a year ago, or nearly double the rate of inflation. Existing home sales, a key barometer of the housing market's health, hit records in four of the past five years, rising to 5.3 million last year from 4.2 million in 1997, according to the National Association of Realtors. This year, they're still smashing records and are on pace to hit 5.43 million in annual sales. Looks like a duck, quacks like a duck ... There's no technical definition of what constitutes a bubble, but economists point to the Internet stock phenomenon of the late 1990s as a good example. History buffs might recall another classic bubble -- the tulip mania in 17th Century Holland, when the price of a bulb skyrocketed to about 80 times the average annual salary at the time. Plot the prices on a chart and it looks like Mount Everest. "During the 1980s, the land at the emperor's palace in Tokyo was worth the value of all of the land in California," said Gerald Cohen, an economist at Merrill Lynch. "Now that's a bubble." In the United States, there has never been a nationwide housing bubble. In fact, you need to look back more than 60 years, to the Great Depression, to find a case where the average national price of a single-family home declined year over year, said Frank Nothaft, chief economist at Freddie Mac. Indeed, the housing market has shown remarkable strength in recent years, thanks to several factors. For one, mortgage rates are at 30-year lows, making home ownership more affordable to millions of people. The 30-year mortgage hit 6.76 percent for the week ending May 31. (Click here for more on the story.) Personal income levels also have been rising steadily, though unemployment is still historically low. Investors have been turning to real estate en masse since the stock market slump began in 2000 -- seeking the relative safety of a stable asset. Many are using dollars once earmarked for equities to upgrade into a larger home or improve their existing properties, said David Kelly, economic advisor at Putnam Investments. Last year, the total national wealth in real estate hit $12 trillion, compared with $5.8 trillion in stocks. About 70 percent of Americans are homeowners. The housing market is so mighty, in fact, that it snuffed out the economic recession months ahead of time. The reason is simple -- when you buy a house, you need a lawnmower, appliances and furniture. When you renovate, you need new windows and construction crews. Hence, consumer spending has remained robust in spite of the slowdown. "People talk about the real estate bubble as a threat to the economy, but it's just the opposite," Kelly said. "The real estate market is one of the main reasons why consumer confidence is at the same level it was before the recession." Don't brace for a plunge in prices Nothing injects fear into the hearts of homeowners like the prospect of a plunge in prices. Some may recall getting stung when markets deflated in1990-1991. Perhaps they bought at the peak and got stuck for years with a high mortgage and couldn't refinance because the value of their house had fallen too far. Or maybe they were forced to sell at a loss because of a new job, or a divorce. Either way, it's tough medicine. This time, though, economists say the post-boom is unlikely to play itself out so darkly. Inflation remains low and the economy is poised for a turnaround. There's no glut of inventory -- supply and demand are in balance. They add, too, that homeowners need not worry about a collapse in prices. At worst, prices nationally will simply flatten out as the market cools off. "Bubbles to me have a huge psychological component -- this mania that you're going to miss out if you don't buy," said Greg Jones, an economist with Briefing.com. "You can't make that case in the real estate market." It's worth noting, though, that there are signs things are starting to cool off. For example, the average home increased in value by 7 percent in 2001, according to Nothaft. This year, the average increase is likely to be 4 to 5 percent. Fannie Mae expects housing prices to increase by that amount annually over the next decade. Anthony Chan, chief economist at Banc One Investment Advisors, cautions against buying real estate as an investment at this stage of the game. But he thinks homes will continue to appreciate over the long term. That means it's still the best hedge against inflation -- and the best way for the little guy to watch his money grow. Full at: http://money.cnn.com/2002/06/03/pf/yourhome/q_realestate_bubble/i ndex.htm From hliu at mindspring.com Thu Jun 6 15:56:42 2002 From: hliu at mindspring.com (Henry C.K. Liu) Date: Thu, 06 Jun 2002 17:56:42 -0400 Subject: [A-List] US: Housing market References: Message-ID: <3CFFDA99.9F66C010@mindspring.com> I know of no economist who became rich by his/her prediction of the market. There is no escape from a real estate crash. The current "strength" in the residential market has been driven by downsizing, people selling $10 million homes to buy $3 million homes. That trend is running out of steam. Layoffs and home forclosure are Siamese twins. Rental is already a bust, commercial real estate is sinking fast, the pool of new qualified home martgage borrowers is sinking even faster. Real estate will crash within 6 to 18 months and stay down for at least 7 years, making 1987 look like good times. Henry C.K. Liu Sabri Oncu wrote: > Bubble or not, it sure feels like one > > The housing market may be frothy. But economists don't expect a > sharp drop in prices. > > June 6, 2002: 4:27 PM EDT > By Martine Costello, CNN/Money Staff Writer > > NEW YORK (CNN/Money) - If you believe what you hear from > economists these days, the hotly-debated real estate bubble is > nothing more than urban myth. > > But try telling that to the residents of Broward County, Fla., > where housing prices have jumped 22 percent in the past year and > 85 percent since 1993. You'll not get a sympathetic ear in the > San Francisco Bay area, either, where $1 million buys you a > measely 1,200 feet of space, a far cry from the 9,000-square-foot > McMansions sprouting up in less inflated parts of the country at > half the price. > > Indeed, the average price of a single-family home rose 7.1 > percent in April over a year ago, or nearly double the rate of > inflation. Existing home sales, a key barometer of the housing > market's health, hit records in four of the past five years, > rising to 5.3 million last year from 4.2 million in 1997, > according to the National Association of Realtors. This year, > they're still smashing records and are on pace to hit 5.43 > million in annual sales. > > Looks like a duck, quacks like a duck ... > > There's no technical definition of what constitutes a bubble, but > economists point to the Internet stock phenomenon of the late > 1990s as a good example. History buffs might recall another > classic bubble -- the tulip mania in 17th Century Holland, when > the price of a bulb skyrocketed to about 80 times the average > annual salary at the time. Plot the prices on a chart and it > looks like Mount Everest. > > "During the 1980s, the land at the emperor's palace in Tokyo was > worth the value of all of the land in California," said Gerald > Cohen, an economist at Merrill Lynch. "Now that's a bubble." > > In the United States, there has never been a nationwide housing > bubble. In fact, you need to look back more than 60 years, to the > Great Depression, to find a case where the average national price > of a single-family home declined year over year, said Frank > Nothaft, chief economist at Freddie Mac. > > Indeed, the housing market has shown remarkable strength in > recent years, thanks to several factors. For one, mortgage rates > are at 30-year lows, making home ownership more affordable to > millions of people. The 30-year mortgage hit 6.76 percent for the > week ending May 31. (Click here for more on the story.) Personal > income levels also have been rising steadily, though unemployment > is still historically low. > > Investors have been turning to real estate en masse since the > stock market slump began in 2000 -- seeking the relative safety > of a stable asset. Many are using dollars once earmarked for > equities to upgrade into a larger home or improve their existing > properties, said David Kelly, economic advisor at Putnam > Investments. Last year, the total national wealth in real estate > hit $12 trillion, compared with $5.8 trillion in stocks. About 70 > percent of Americans are homeowners. > > The housing market is so mighty, in fact, that it snuffed out the > economic recession months ahead of time. The reason is simple -- > when you buy a house, you need a lawnmower, appliances and > furniture. When you renovate, you need new windows and > construction crews. Hence, consumer spending has remained robust > in spite of the slowdown. > > "People talk about the real estate bubble as a threat to the > economy, but it's just the opposite," Kelly said. "The real > estate market is one of the main reasons why consumer confidence > is at the same level it was before the recession." > > Don't brace for a plunge in prices > > Nothing injects fear into the hearts of homeowners like the > prospect of a plunge in prices. Some may recall getting stung > when markets deflated in1990-1991. Perhaps they bought at the > peak and got stuck for years with a high mortgage and couldn't > refinance because the value of their house had fallen too far. Or > maybe they were forced to sell at a loss because of a new job, or > a divorce. Either way, it's tough medicine. > > This time, though, economists say the post-boom is unlikely to > play itself out so darkly. Inflation remains low and the economy > is poised for a turnaround. There's no glut of inventory -- > supply and demand are in balance. > > They add, too, that homeowners need not worry about a collapse in > prices. At worst, prices nationally will simply flatten out as > the market cools off. > > "Bubbles to me have a huge psychological component -- this mania > that you're going to miss out if you don't buy," said Greg Jones, > an economist with Briefing.com. "You can't make that case in the > real estate market." > > It's worth noting, though, that there are signs things are > starting to cool off. For example, the average home increased in > value by 7 percent in 2001, according to Nothaft. This year, the > average increase is likely to be 4 to 5 percent. Fannie Mae > expects housing prices to increase by that amount annually over > the next decade. > > Anthony Chan, chief economist at Banc One Investment Advisors, > cautions against buying real estate as an investment at this > stage of the game. But he thinks homes will continue to > appreciate over the long term. That means it's still the best > hedge against inflation -- and the best way for the little guy to > watch his money grow. > > Full at: > http://money.cnn.com/2002/06/03/pf/yourhome/q_realestate_bubble/i > ndex.htm From annewilliamson at msn.con Thu Jun 6 15:59:47 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Thu, 6 Jun 2002 17:59:47 -0400 Subject: [A-List] Re: "Revisiting Graham and Dodd " References: Message-ID: <056901c20da5$7a850ca0$0100a8c0@igrushkii> Thanks for the correction regarding your goal, Sabri! And, yes, I concede the point regarding lower costs for corporations due to homogenity.......ah, if only we sought the same revolution....what a world we'd make :-). Tongue-in-cheek kidding, Sabri....Best, A. ----- Original Message ----- From: Sabri Oncu To: ALIST Sent: Thursday, June 06, 2002 4:28 PM Subject: [A-List] Re: "Revisiting Graham and Dodd " > Anne writes: > > > I couldn't agree more about the mind- > > dulling, soul-killing "homogenity" US > > culture induces. But it's not only economists > > who aim at standardization to achieve efficiency, > > it's bureaucrats! > > Let us be fair Anne, > > We need to add corporations to this list. Homogeneity in tastes > gives rise to lower production costs: you don't need to waste > resources on adding different bells and whistles to your products > depending on the geographical variance of tastes. > > > Our disagreement is centered yet again > > on the role of the state. Where each of > > you see "regulation" as the cure, I see it > > as the flourishing disease. > > I don't see "regulation" as the cure. I don't think this system > is curable. This is why I am for revolution. > > Best, > Sabri > > > From soncu at pacbell.net Thu Jun 6 16:37:52 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Thu, 06 Jun 2002 15:37:52 -0700 Subject: [A-List] Re: "Revisiting Graham and Dodd " Message-ID: > Thanks for the correction regarding your > goal, Sabri! And, yes, I concede the point > regarding lower costs for corporations due > to homogenity.......ah, if only we sought > the same revolution....what a world we'd > make :-). Tongue-in-cheek kidding, Sabri.... > Best, A. I know how we can start this revolution Anne. Henry, you and I start a business and, of course, invite Rob as a partner residing in Australia, and while four of us work, we also write a book entitled "Why the sky is gonna fall", making sure that the dominant color on its cover is gold. Of course, we should not forget dipping it in oil before it hits the markets. Rob, What are these recent lies about the Australian economy? I keep reading that it is doing quite well in these days. Please tell me that it is not true. Best, Sabri From hliu at mindspring.com Thu Jun 6 16:52:49 2002 From: hliu at mindspring.com (Henry C.K. Liu) Date: Thu, 06 Jun 2002 18:52:49 -0400 Subject: [A-List] Re: "Revisiting Graham and Dodd " References: Message-ID: <3CFFE7C1.D854CFB8@mindspring.com> A revolution is not a coup. Henry Sabri Oncu wrote: > > Thanks for the correction regarding your > > goal, Sabri! And, yes, I concede the point > > regarding lower costs for corporations due > > to homogenity.......ah, if only we sought > > the same revolution....what a world we'd > > make :-). Tongue-in-cheek kidding, Sabri.... > > Best, A. > > I know how we can start this revolution Anne. Henry, you and I > start a business and, of course, invite Rob as a partner residing > in Australia, and while four of us work, we also write a book > entitled "Why the sky is gonna fall", making sure that the > dominant color on its cover is gold. Of course, we should not > forget dipping it in oil before it hits the markets. > > Rob, > > What are these recent lies about the Australian economy? I keep > reading that it is doing quite well in these days. Please tell me > that it is not true. > > Best, > Sabri From soncu at pacbell.net Thu Jun 6 17:55:13 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Thu, 06 Jun 2002 16:55:13 -0700 Subject: [A-List] Re: "Revisiting Graham and Dodd " Message-ID: > A revolution is not a coup. > > Henry What coup are you talking about? It is the screwed of the world who will make that revolution, not us. We will just write one book among many and hopefully join them in their efforts. Hmmm. You mean you don't like my business proposition. Is this what you are trying to say? After this, I tell you, I am not going to call you my friend anymore. By the way, here are some titles from today's Financial Times print edition: -Goldman chief urges swift reforms -Israeli tanks attack Arafat HQ after car bomb kills 16 -Panama port's tale of two cities: Foreign investment has poured into Colon but much of the population has seen no benefit and tension is rising amid battles between police and the unemployed -Poll worries hit Brazilian currency and bonds -"Superpeso" [Mexican peso/Sabri] losing some of its shine -Warming "shrinks Everest glaciers" I think this much is enough and just keep in mind that this is just one newspaper. As you see, it will not be that difficult for us to write that book. Think about my business proposition again please. Best, Sabri From hliu at mindspring.com Thu Jun 6 18:24:03 2002 From: hliu at mindspring.com (Henry C.K. Liu) Date: Thu, 06 Jun 2002 20:24:03 -0400 Subject: [A-List] Re: "Revisiting Graham and Dodd " References: Message-ID: <3CFFFD23.CA508BEF@mindspring.com> Calm down Sabr. It was said in jest. Not that I don't like your business proposition, but to start a business is not theway to start a revolution. A revolution is not a take over, but a change over. Revolutions are serious business. Million will have to be sacrificed to make a revolution, so we had better make sure we know where we want to go. At any rate nothing is worth losing a friend. Henry Sabri Oncu wrote: > > A revolution is not a coup. > > > > Henry > > What coup are you talking about? It is the screwed of the world > who will make that revolution, not us. We will just write one > book among many and hopefully join them in their efforts. Hmmm. > You mean you don't like my business proposition. Is this what you > are trying to say? After this, I tell you, I am not going to call > you my friend anymore. > > By the way, here are some titles from today's Financial Times > print edition: > > -Goldman chief urges swift reforms > > -Israeli tanks attack Arafat HQ after car bomb kills 16 > > -Panama port's tale of two cities: Foreign investment has poured > into Colon but much of the population has seen no benefit and > tension is rising amid battles between police and the unemployed > > -Poll worries hit Brazilian currency and bonds > > -"Superpeso" [Mexican peso/Sabri] losing some of its shine > > -Warming "shrinks Everest glaciers" > > I think this much is enough and just keep in mind that this is > just one newspaper. As you see, it will not be that difficult for > us to write that book. Think about my business proposition again > please. > > Best, > Sabri From soncu at pacbell.net Thu Jun 6 20:28:40 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Thu, 06 Jun 2002 19:28:40 -0700 Subject: [A-List] Re: "Revisiting Graham and Dodd " Message-ID: > Calm down Sabr. It was said in jest. Not > that I don't like your business proposition, > but to start a business is not theway to start > a revolution. A revolution is not a take over, > but a change over. Revolutions are serious business. > Million will have to be sacrificed to make a > revolution, so we had better make sure we know > where we want to go. At any rate nothing is worth > losing a friend. Hey. Mine was said in jest too. I am just too lazy to use those smiley faces to indicate the presence of a joke, dispite Micheal Pollack's suggestions. I agree with everything you said above. By the way, is it not the time to examine what we are doing on this list? What is the point of collecting all this information if we do not know what to do with them? We should be able to do "something" with them that would help the ongoing struggle against the ills of the world. Best, Sabri From rschaap at iprimus.com.au Thu Jun 6 21:39:25 2002 From: rschaap at iprimus.com.au (Rob Schaap) Date: Fri, 07 Jun 2002 13:39:25 +1000 Subject: [A-List] "Revisiting Graham and Dodd " References: Message-ID: <3D002AEF.35C556D9@iprimus.com.au> G'day Sabri and all, > I know how we can start this revolution Anne. Henry, you and I > start a business and, of course, invite Rob as a partner residing > in Australia, and while four of us work, we also write a book > entitled "Why the sky is gonna fall", making sure that the > dominant color on its cover is gold. Of course, we should not > forget dipping it in oil before it hits the markets. > > Rob, > > What are these recent lies about the Australian economy? I keep > reading that it is doing quite well in these days. Please tell me > that it is not true. I'll forward the article I think you have in mind, and give notice of my optimistic intention to critique it over the next day or two (it's marking season, when tutors get a taste of what surplus value means). Be assured that the current Australian economy (ie that set of numbers taken to represent it) has been expensively bought, and from a not-too-distant future. http://quote.bloomberg.com/fgcgi.cgi?ptitle=Latest%20Columns&touch=1&s1=blk&tp=ad_topright_bbco&T=markets_fgcgi_content99.ht&s2=blk&bt=blk&s=APP7jRxRSR3JlZW5z 06/06 00:21 Greenspan's Oasis Is Just 10,000 Miles Away: William Pesek Jr. Sydney, June 6 (Bloomberg) -- ``An oasis of prosperity.'' That's how Alan Greenspan described the U.S. a few years ago as a financial contagion oozed around the globe, infecting one country after another. The U.S. boom kept the world economy afloat. These days, the kinds of oases to which the Federal Reserve chairman referred are few and far between. Yet Australia comes close. The Australian economy isn't big enough to influence world demand the way the U.S. did in 1997 and 1998, when chaos spread from Asia and shoulder-checked financial systems near and far. At less than 2 percent of global output, it's hardly a locomotive the world can depend on to pull it through rough times. But if you're looking for an example of an economy that's forging its own path, independent of the weakness slamming most, Australia is it. And if it's a safe haven from market volatility you're after, you could do worse than give Australia a look. For that, this nation of 20 million people has Reserve Bank of Australia Governor Ian Macfarlane, as much as anyone, to thank. While no economic boom or bust is one person's doing, Macfarlane's steady hand gets much of the credit. It was Macfarlane's aggressive interest-rate cuts over recent years that helped Australia weather -- and largely avoid -- the 1997-1998 Asian crisis and last year's global slowdown. His tutelage since September 1996 helped set the stage for the economic revival currently unfolding here. It's also earned him an almost Greenspan-like mystique with locals and investors. Economic Boom News today that Australian business confidence hit an eight- year high last month -- and that the economy added another 44,400 jobs -- demonstrates the point. Macfarlane's interest-rate policies helped fuel powerful booms in housing and consumer spending. Recent data leave little doubt that ``the economy continues to expand at a brisk pace,'' says Paul Brennan, co-head of economic and market analysis at Salomon Smith Barney/Citibank Ltd. Here in Sydney, taxi drivers and waiters are just as likely to interject Macfarlane's name into a conversation as are economists and business people. The phenomenon offers hints of the fame Greenspan amassed during the 1990s, when the Fed chief became a bona fide celebrity. His photo began appearing in magazines next to Tom Cruise and Cameron Diaz. What helps explain all this is that central bankers, like it or not, increasingly are ruling the globe. Traveling around the world these days, one begins to see the global economy as a vast network of interconnected strings, all being controlled from above by Greenspan, Macfarlane and a handful of other monetary policy makers. Puppet Masters The image of non-elected, independent economists as puppet masters doesn't go over well with local government policymakers and politicians. But the amount of attention paid here to this week's rate hike by the Reserve Bank -- and to recent actions by the Fed and Bank of Japan -- bolsters the point. Here in Australia, it's the central bank on which the nation is depending to prolong the nation's rebound. Macfarlane's move to boost short-term rates a quarter percentage point to 4.75 percent was big news -- not just because households will be affected, but also because the nation's economic leader had spoken. Over the last 10 years, politicians have done little to help economies. In fact, they made things worse by issuing mountains of debt to finance stimulus efforts. All the while, central bankers were there to print lots of money. In Japan, for example, politicians have used zero interest rates as a crutch to avoid enacting painful reforms. In the U.S., the Fed is firmly in control. An unelected economist, Greenspan has been holding the economic reins since the early 1990s, when lawmakers turned to the task of moving the federal budget into surplus. Economic Sovereignty If the White House and Congress monkey with the economy, it's up to Greenspan to keep things moving and, if needed, pick up the pieces. Talking to folks in Asia, it's clear Greenspan is seen as the glue holding a troubled U.S. financial system together. As we've seen in recent years, Greenspan's not infallible, but he is the adult in the room. In Europe, 12 countries adopted a single currency and effectively forfeited economic sovereignty to the European Central Bank. From Frankfurt, the ECB steers economic activity in an area roughly the size of the United States without a government looking over its shoulder. A Dutchman, ECB President Wim Duisenberg, has more say over growth trends in countries from Ireland to Greece than their elected leaders. New World Order By any objective measure, the BOJ, Fed, ECB and Australia's central bank dominate global economic decision-making. Together, they control well over 80 percent of growth in the developed world. Governments have largely ceded to them the responsibility of controlling world inflation, which means they also have to influence gross domestic product and employment. Central banks also have been charged with figuring out how to deal with the uncertain forces of globalization. Rarely has so much power been wielded by such a small number of policy makers sitting outside the direct democratic process. Investors have few qualms with the arrangement. Many would rather have a Greenspan, Duisenberg or Macfarlane holding the reins than politicians who are up for re-election every four years or so. If average taxpayers have a different view, it's not getting across. There's been minimal backlash against this new world economic order, save the occasional protest at meetings of the World Trade Organization or International Monetary Fund. In fact, economic crises and equity-market losses in recent years seem to have voters and politicians finding comfort in knowing that a seasoned economic policy maker is at the controls. From soncu at pacbell.net Thu Jun 6 22:35:31 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Thu, 06 Jun 2002 21:35:31 -0700 Subject: [A-List] "Revisiting Graham and Dodd " Message-ID: Rob writes: > I'll forward the article I think you have in mind, Yes. This was the one I had in mind. Your address I have doesn't work in these days. Is there a change? Best, Sabri PS: Sorry for posting this to the list but the reason is as explained above. From mstainsby at tao.ca Fri Jun 7 02:44:49 2002 From: mstainsby at tao.ca (Macdonald Stainsby) Date: Fri, 07 Jun 2002 01:44:49 -0700 Subject: [A-List] Re: "Revisiting Graham and Dodd " References: Message-ID: <003901c20dff$95f3ce40$291f5318@vc.shawcable.net> ----- Original Message ----- From: "Sabri Oncu" > By the way, is it not the time to examine what we are doing on > this list? What is the point of collecting all this information > if we do not know what to do with them? Right on, Sabri my comrade. I will most definitely give Albertans just that much more welcome for you... There is nothing revolutionary that can develop deviod of praxis. Period. Macdonald From Michael.Keaney at mbs.fi Fri Jun 7 04:18:34 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Fri, 7 Jun 2002 13:18:34 +0300 Subject: [A-List] China: muscular trade policy Message-ID: Dumping allegations: China fights back Asia Times, June 7 2002 BEIJING - With its burgeoning manufacturing base and low labor costs, China has become a major target for dumping charges in international trade. And the government wants its enterprises to fight back. Official figures show that more than 30 countries have made a total of 480 anti-dumping charges against China since it was first accused of dumping products on to the European market in 1979. China has chalked up 13.3 percent of the total number of anti-dumping charges imposed worldwide, against 3.6 percent in the mid-1980s. That figure is higher than the country's percentage of world trade. China's export-oriented eastern province of Zhejiang has had 10 dumping charges laid from abroad since China formally entered the World Trade Organization (WTO) in December. The provincial government said the charges involved various industries and products such as food, machinery, textiles, honey, ball bearings and even sunglasses. The Chinese government is improving advice to export-oriented enterprises on how to protect themselves against anti-dumping allegations, which the Ministry of Foreign Trade and Economic Cooperation (MOFTEC) claims are on the rise because of lower tariffs and looser quotas after China's accession to the WTO and the rising trend of protectionism overseas. The MOFTEC says anti-dumping cases require a long procedure of legal investigation but can be predicted and pre-empted. It says the government should play a fundamental role in developing a warning system and an information channel for Chinese enterprises. An effective warning system could include market investigation, policy study and communication between the government and enterprises. The first Chinese firm to respond to a dumping charge was located in Zhejiang province. The case has been going on since 1992 and legal costs have topped 6 million yuan (US$720,000). The number of Chinese firms responding to charges has been rising year by year. Zhejiang's Foreign Trade Bureau has set up an independent department to study foreign anti-dumping laws and regulations. The Fair Trade Department also offers professional advice to local enterprises and has helped set up a fund for filing against anti-dumping litigation. Before the 1990s, Chinese enterprises seldom responded to anti-dumping charges raised by foreign companies. Since 1994, the MOFTEC has encouraged Chinese enterprises to protect their legitimate interests by actively answering anti-dumping litigation. More Chinese enterprises have responded to foreign charges. In the past 10 years, enterprises from Zhejiang have all responded to charges. It was reported on Monday that two Chinese steel firms, the Ma'anshan Iron and Steel Co and the Weifang Steel Tube Co, have been cleared by the US Department of Commerce in its anti-dumping investigation. In its preliminary probe, the US authority had ordered that a 153 percent anti-dumping tariff be imposed on products of Ma'anshan Iron & Steel exported to the United States. The ruling means that the two firms will face no restrictions in exports to the US and will be exempt from punitive anti-dumping tariffs, according to O'Melveny & Myers LLP, the US law firm representing the Chinese firms. Patric Norton, head of the US law firm's Shanghai office, was quoted as saying that the experience of the two firms shows that more Chinese companies should feel encouraged to act against foreign anti-dumping accusations. Meanwhile, Chinese companies have started to impose dumping charges on their foreign counterparts as foreign products begin entering the Chinese market. The Chinese government announced an anti-dumping regulation in 1997 and so far 18 charges have been laid by domestic companies against overseas companies. From Michael.Keaney at mbs.fi Fri Jun 7 04:24:46 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Fri, 7 Jun 2002 13:24:46 +0300 Subject: [A-List] Japan: financial crisis Message-ID: Bad idea, Japan picking a fight with rating agencies By Scott B MacDonald Asia Times, June 7 2002 The Japanese government is not happy with the rating agencies and hates the idea that its ratings could end up at the same level as the small African country of Botswana. The government has demanded that Moody's, Standard & Poors (S&P) and Fitch explain their reasons for lowering the rating from AAA to mid-AA, with the possibility for further downgrades. Poking at the rating agencies is not a good approach. Indeed, the strategy is likely to fail as the Japanese government is giving the agencies more space to communicate their criticism. The views of all three major rating agencies are now well known. The key issues of concern are Japan's massive buildup in public-sector debt (140 percent of gross domestic product and going higher), ongoing large fiscal deficits and a troubled banking sector overburdened with bad debt, much of it from a decade earlier. In addition, deflation, dysfunctional and protected sectors of the economy, ongoing resistance to structural reform, and a rapidly aging population all have troubling implications. What makes all of this an issue to the rating agencies is how Japan compares with other countries in terms of key ratios and the government's approach, especially in terms of timing. Japanese officials have stated that public-sector debt is not a problem and do not see it falling until later in the decade. Yet Japan is easily leading the way to higher levels of public-sector debt among Group of Seven (G-7) economies. While most of this debt is held by Japanese investors, it is still growing and will some day have to be repaid. At some point there is a confidence issue - can the government make its repayments without borrowing more money? If not, how comfortable is an investor holding bonds only as good as what the next investor is willing to back? There are a number of other ratios that draw concern from the rating agencies, but most significant is the primary budget balance. This is where a government usually generates money to pay the interest on debt. Japan has run a deficit in its primary balance since 1993 and was -5.1 percent of GDP in 2001, compared with surpluses in Italy (4.2 percent of GDP), Belgium (5.7 percent) and the United States (2.9 percent). It has also been asked why the United States during the late 1980s and early 1990s, with large budget deficits and foreign funding via US Treasury bonds, did not receive a downgrade. Although the rating agencies did not downgrade the United States nor change their outlook to negative, they did warn about the dangers of failing to address these issues. An important difference between the US and Japan is timing. After the US economic slowdown of 1989-90, the United States undertook structural reforms, including the cleaning up of its bad bank debt, in a relatively short period. Public-sector debt to GDP peaked in 1993 at 75.8 percent, while the budget deficit peaked in 1992 at 5.9 percent of GDP. Japan's bubble economy burst at the end of the 1980s and problems from that period are still very much in evidence. One last point that is hurting the Japanese government is that its claims of cleaning up bad debt and dealing with "zombie" companies are constantly being undermined by bank bailouts. For example, while the government was complaining about the rating agencies, UFJ Bank announced it would forgive 470 billion yen (US$3.68 billion) in loans to Daikyo Inc, a construction company. If this bailout goes through it would be Japan's second-biggest this year, behind the 520 billion yen in aid given in February to Daiei Inc, the nation's third-largest retailer. This is in sharp contrast to the United States, which let one of its major retailers, Kmart, file for bankruptcy in January. The debate on ratings comes at a pivotal time for Japan. Prime Minister Junichiro Koizumi is in another major fight to push his reforms through the Diet. The three major items on the reform agenda now are to dissolve the state housing loan corporation, pass legislation to privatize the postal office, and speed up the disposal of non-performing loans in the banking sector. Postal-system reform is probably the most significant. It is felt that the postal system has too much power with its huge amount of savings and is distorting the banking system and helping to feed wasteful public-works programs. The reform bills are expected to face strong opposition from the Liberal Democratic Party (LDP), as the postal office has considerable clout among senior party members. These reform bills are highly important to Koizumi. He is putting considerable pressure on the LDP to support him. The premier has hinted he might reshuffle his cabinet next month to include conservative LDP members. This is meant to show that cooperation will be repaid with cabinet positions. However, if LDP conservatives still seek to stop his reform bills in the Diet, Koizumi has also indicated he could call another general election. This is expected to reduce the number of conservative LDP seats. Despite a decline in the polls, Koizumi remains by far Japan's most popular politician. Moreover, the opposition parties remain weak and ineffectual. Japan is not Botswana or Argentina. It will remain the world's second-largest economy, with a huge amount of national savings and internationally competitive corporations. However, Japan does have problems and the basic fundamentals upon which all countries are compared are getting worse and have been doing so for more than a decade. When this happened to Canada, Sweden and Italy in the early 1990s, those countries lost their AAA ratings, with Italy falling to A1. All three of those countries have regained AAA or high AA ratings, but only after maintaining tight fiscal policies for a number of years, reforming their banking sectors, implementing structural reforms and greatly reducing public-sector debt. Japan is expected to do the same. Koizumi recognizes that the next few months are critical for his government. With some degree of economic recovery behind him and the passage of his reform bills, he could recover lost ground in the opinion polls while strengthening the economy. It could also prevent the economy from falling back into recession in late 2003. This would also reduce the pressure on Japan's ratings and make the references to Botswana go away. Consequently, Japanese politics will guide the country's economic agenda in the next few months. If the reforms pass, prospects for a sustainable recovery improve considerably; if not, the ratings agencies will have their day, arguing that the Japanese government is not capable of reform. We wish Mr Koizumi well. From Michael.Keaney at mbs.fi Fri Jun 7 04:31:05 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Fri, 7 Jun 2002 13:31:05 +0300 Subject: [A-List] US imperialism: Afghanistan Message-ID: US's Afghan aid package fuels pipeline politics By James Borton Asia Times, May 29 2002 WASHINGTON - Washington's approval of more than US$1.4 billion for the economic recovery of barren and battle-scarred Afghanistan provides the Bush administration with possible insurance for deepening its petro-political sphere of influence along Russia's borders in the form of a revived Trans-Afghan pipeline. No one disputes that America is critically in need of alternative sources of oil from outside the politically volatile Middle East. This is particularly true since Iraq's Saddam Hussein recently, albeit temporarily, halted his country's oil exports to the US. With Iran and Libyan leaders also supporting the idea of renewing the 1973 Arab oil embargo, the White House has no intention of standing idly by as frustrated Americans fight long lines and higher prices at the pump. Since the early 1990s, three countries around the Caspian Sea - Azerbaijan, Kazakhstan and Turkmenistan - have yielded a vast reserve of oil and gas. Because all three are landlocked, however, control over their billions of dollars worth of oil and gas depends on the security and economic influence of the pipelines. For keen Washington energy analysts, the recent deployment of US special operations forces to the state of Georgia can only help enforce a Washington pipeline policy aimed at neutralizing Russian influence in oil-rich Central Asia. Several important transit lines already exist, including the existing Russian pipeline from Baku to Novorossiisk on the Black Sea, which passes through troublesome Chechnya. US oil companies, which have had difficulty dealing with the Russians, and that includes paying excessively high pipeline fees, have previously proposed alternative pipeline routes that pass through Georgia and Armenia. These pipelines would allow US companies, and not Soviet ones, to control oil and pipeline prices. The geopolitics of putting together deals in this region are so complex that only one of seven new pipelines proposed since 1996 has been built. However, a secure and stable Afghanistan offers the US a new opportunity to fulfill its expanding energy needs. Afghanistan's US-led reconstruction plan includes not only an economic aid lift-off, but also calls for a closer military presence, brokering warlord divisions, and avoidance of any Russian intervention. Now that the Taliban are no longer an obstacle and the interim government is shaping Afghanistan's economic and political future, the Bush administration plans to accelerate the project referred to by some savvy Texas oil men as the new "Silk Road". It was in early February that Afghanistan's interim leader Hamid Karzai and Pakistan's President General Pervez Musharraf agreed to revive plans for a trans-Afghanistan route for Iranian gas. The next day, neighboring Turkmenistan chimed in by stating that it hoped the trans-Afghanistan route would soon be built with full American participation. The demonstrative support for the war on terrorism against the Taliban was most clearly visible in US energy company board rooms. Unocal headquarters, located in Sugarland, Texas, was no exception. Board members were elated when the Taliban were deposed; after all, these were the same individuals who had held up their expensive pipeline project a few years ago. It is noteworthy that Vice President Dick Cheney, as former CEO of the oil-services company Halliburton, is also a veteran of the American oil industry's presence in the Caspian basin. Cheney met as recently as last spring with many of these companies, including Unocal, whose oil investments in the Caspian basin are now languishing. With almost $30 billion already invested by US oil companies in Kazakhstan, Turkmenistan, Uzbekistan and Azerbaijan, the suggested Afghan route would cost only one-half the amount of the other alternative which would run through Georgia to Turkey's Mediterranean coast. "Unocal was part of a consortium that had proposed to build a pipeline from fields in Turkmenistan to markets in Pakistan. That line would have crossed Afghanistan. We officially withdrew from that proposed consortium in December 1998 because of many unresolved issues related to the Taliban," according to Unocal's senior spokesman Barry Lane. As early as October 1995, Unocal Corp and Delta Oil Co of Saudi Arabia inked an agreement with Turkmenistan that was destined to open new markets in Pakistan. The agreement with Turkmenistan involved a detailed plan to develop an oil pipeline from Turkmenistan through Afghanistan to a crude oil export terminal and or refineries in Pakistan on the Indian Ocean. This trans-Afghan pipeline would be engineered to transport crude oil from fields inside Turkmenistan and from the surrounding region. Almost two years later, in the fall and early winter of 1997, numerous meetings and dinners were held with several ranking Taliban members who traveled to Unocal's corporate offices in Texas to explore this pipeline plan. The Taliban and Unocal were hoping to build a $4.5 billion pipeline network to transport Caspian Sea oil and gas across Afghanistan to the Indian subcontinent. But the position was radically reversed in August of 1998 after the US missile strikes ordered by the Clinton administration hit Afghanistan. A corporate communications release stated that "Unocal will only participate in construction of the proposed Central Asia Gas Pipeline when and if Afghanistan achieves the peace and stability necessary to obtain financing from international lending agencies for this project and an established government is recognized by the United Nations and the United States". As part of its initial Taliban pipeline courtship, Unocal conservatively spent $20 million and donated more than $1 million to various Afghan charities. The Texas oil company's lobbying efforts included providing testimony in Washington on a cold wintry morning in February 1998. Unocal's vice president for international relations John Maresca appeared before the House Committee on International Relations in Washington to state its case for multiple pipeline routes for Central Asian oil and gas. Almost four years later, there is a major reshufffling of the petro-political stakes and perhaps in the necessary and costly battle for energy dominance and stability, courtesy of the resurrected trans-Afghan pipeline blueprint. As part of Afghanistan's pipeline political recovery, some in Washington questioned President George W Bush's new appointment of Zalmay Khalilzad, a former Unocal consultant, as his special envoy to Afghanistan. This is the same consultant who once served as Unocal's point man assisting with the energy company's earlier plans to build a pipeline through Afghanistan. Coinciding with this appointment, a recent Reuters release stated that Afghanistan hopes to strike a deal by the end of May to build a $2 billion pipeline through the country to take gas from energy-rich Turkmenistan to Pakistan and India. Karzai is scheduled to hold talks with his Pakistani and Turkmenistan counterparts later this year on Afghanistan's largest foreign investment project, according to Afghan Minister for Mines and Industries Mohammad Alim Razim. According to Razim, Unocal is still considered the "lead company" among those that would build the pipeline, which would bring 30 billion cubic meters of Turkmen gas to market annually. Unocal, which led a consortium of companies from Saudi Arabia, Pakistan, Turkmenistan, Japan and South Korea, had previously maintained the project is both economically and technically feasible once Afghan stability was secured. Back on Capitol Hill, energy companies and numerous consultants are weighing in on whether the former CEO of Halliburton, Dick Cheney, will yield to a formal demand from a Congressional inquiry. In an unprecedented move against a sitting vice president, the investigative arm of Congress filed a suit in federal court last week challenging Cheney's refusal to hand over documents related to national energy policy. Some observers have speculated that these newest developments may actually lead to an Enron investment trail in Central Asia. The Caspian Sea region is widely viewed as important to world markets because of its large oil and gas reserves. Most energy companies regard the Caspian basin as the Persian Gulf of the 21st century. However, uncertainty over the status of the Caspian has held back oil development in the resource-rich water body, although an $8 billion international consortium is already in production off the shores of Azerbaijan. Furthermore, there is mounting geological evidence that the reserve potential even in Kazakhstan remains substantial. ENI, ExxonMobil, and other energy companies are developing one of the largest oil fields at Kashagan, estimated to contain 50 billion barrels. Conservative forecasts demonstrate that the Caspian shelf holds at least 75 billion barrels of oil. Halliburton does not intend to be left out of this Caspian rich black gold marketplace. Cheney's former company signed a major contract with the State Oil Company of Azerbaijan to develop a 6,000-square-meter marine base to support offshore oil construction in the Caspian Sea. The base will be used to assist Halliburton's catamaran crane vessel, the Qurban Abbasov, in upcoming offshore pipe-laying and subsea activities, according to a statement the company released in mid-May. It is the Caspian Pipeline Consortium, which links Kazakhstan's rich oil fields to the Russian ports on the Black Sea, which are most likely to add up to 1.5 million barrels of crude oil per day. Oil from the vast Tengiz field is pumped by the Caspian Pipeline Consortium (CPC) route to Novorossiisk. Unfortunately, numerous oil rich field finds, like those in Kashaghan, have few outlets to the global markets. Meanwhile, all of Russia's leading producers like Lukoil and Yukos have benefited from business relationships with US firms like Conoco, ExxonMobil and Halliburton. For example, these direct benefits include last week's awarding of a $140 million contract to a Russian company, Amur Shipbuilding, by ExxonMobil to refurbish an oil-drilling rig that the US energy company needs to develop for the rich oil fields off Sakhalin, an island near the Pacific coast of Russia. Moscow's energy authorities are holding later this week an "Oil and Gas Summit: Caspian XXI". There, numerous oil executives and foreign ministry officials from all the neighboring "stans" are converging in Russia's Caspian capital Astrakhan. The purpose is to figure out a cooperative plan for sharing the wealth found in the often contested sea's oil deposits and also to stonewall any plans for any American companies' unilateral participation in the trans-Afghan pipeline. Prior to September 11, the US had actively encouraged the Russians to protect American energy interests and to also assist Caspian countries in developing their own hydrocarbons. Now it has become more apparent to Washington that Russia's ranking oil companies want to keep the black gold or "crown jewels" for themselves. The US national energy plan drawn up last year and now revived calls on the Bush administration to undertake initiatives aimed at increasing oil and gas imports from alternative sources of supply. With Afghanistan's billion-dollar economic aid package, the new government will at least insure that some infrastructure requirements will be safely met. But the new coalition of warlords is also very cognizant that Afghanistan's wealth is found not in what in holds or produces, but largely in what may pass through it. Some policy shapers and also energy consultants believe that if the pipeline transit through Afghanistan can be jump-started again there will be also clear dividends for America which may include the following: * With the absence of the Taliban, the international investor community, including foreign banks and governments may now be quite predisposed to this oil-driven pipeline. The cost of such a pipeline may run as high as $2 billion or more with as much as $500 million of it spent in the ravaged and poor Afghanistan; * It will enable the US to create a safe and secure transit point for oil reserves found in the Caspian shelf, and; * With fees being paid to all parties, many energy consultants and policy shapers suggest that this project might also become a "peace pipeline" since it will also provide much needed economic benefits in the form of transit fees to the saber-rattling and warring states of Pakistan and India. Adding ballast to this scenario, World Bank president James Wolfensohn spoke in Kabul only two weeks ago about financing a fuel pipeline to channel massive gas reserves from Turkmenistan through Afghanistan to India and/or Pakistan. Wolfensohn was in the Afghan capital to open the financial institution's Kabul office and to confirm $100 million of World Bank grants for the interim administration. It was in 1996 when Unocal won its initial contract to build a 1,005-mile pipeline in an effort to exploit the vast Turkmenistan natural gas fields. The pipeline would extend through Afghanistan and Pakistan, terminating at Multan, with a proposed 400-mile extension into India. Of course, the project was halted when the Taliban regime became unmanageable. With the Taliban no longer a political impediment, the primary stumbling block to the Caspian-Pakistan pipeline is removed. " I cannot state strongly enough that Unocal did not negotiate with the Taliban or any other faction in Afghanistan. Unocal met with the factions so they could be acquainted with our company and the proposed pipeline. But no negotiations were conducted. There was no globally recognized government in Afghanistan that could negotiate a pipeline franchise," added Unocal's spokesman Barry Lane in an Asia Times Online interview . The US Energy Information Agency confirmed several years ago that Afghanistan's significance from an energy standpoint stems from its geographical position as potential transit route for oil and natural gas exports from Central Asia to the Arabian Sea. This potential includes the possible construction of oil and gas export pipelines through Afghanistan. S Frederick Starr, chairman of the Central Asia-Caucasus Institute at Johns Hopkins University, advocates that whatever nation shapes this pipeline map will influence a huge part of the world. In regard to Unocal's previous exploratory efforts in Afghanistan, Starr added, "Unocal's relationship was killed as much by the failure of Unocal's president at the time to develop a working relation with [Turkmen President Sapar] Niyazof as by events in Afghanistan. I don't expect any real breakthroughs now until the price of hydrocarbons rises enough to warrant the investment. That can happen, of course, and could open a new page." There remain far more questions than answers: Will Russia continue on its course in supporting America's war on terrorism? With continuing instability in the Caucasus and in developing repressive regimes like Kyrgystan, how long will an American presence even be tolerated? Can the competing warlords in Afghanistan manage such an ambitious pipeline project, ensure its security, and will these proposed transit fees replace the opium cash crops? Will Pakistan and India stand down and accept a shared peace pipeline? With so many questions and so many more looming, it was not surprising that at last week's Unocal annual meeting, chairman and CEO Charles Williamson reiterated that Unocal has no plans or interest in becoming involved in any projects in Afghanistan, including natural gas or crude oil pipelines. But Ian Bremmer, president of the Eurasia Group, a New York think tank, reinforces the views that all multinational energy companies will continue to capitalize on the lucractive reserves discovered in the Caspian Sea and will be engaged in both back-door channels and politically sensitive development of appropriate transit points for shipment of their black gold. There is ample evidence to support Washington's desire to fuel its petro-politics agenda in Central Asia. Cemented with diplomatic detente with Russia, and strongly reinforced with US troops positioned in Georgia, Uzbekistan, Tajikistan, and Kyrgyzstan, the revisited Silk Road winding through Afghanistan may yet prove to be an American-led commercial corridor. But as author and journalist Ahmed Rashid writes purposely in his book Taliban, "peace can bring a pipeline, but a pipeline cannot bring peace". From Michael.Keaney at mbs.fi Fri Jun 7 04:33:40 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Fri, 7 Jun 2002 13:33:40 +0300 Subject: [A-List] Afghanistan: the blowback continues Message-ID: Afghan minister 'accepted ransom' IAN BRUCE The Herald, 7 June 2002 GENERAL Abdul Rashid Dostum, the interim Afghan government's deputy defence minister, accepted ransom payments of up to ?20,000 a head to free captured al Qaeda members last year, it was claimed yesterday. Najib bin Al-Nauimi, the lawyer acting for dozens of Arabs and Afghans being held at the US Guantanamo base in Cuba, says the former warlord operated a sliding scale of payments for the release of prominent prisoners. Pakistani officials confirmed thousands of pounds had been paid by the relatives of men who feared they would be slaughtered by General Dostum's Northern Alliance fighters. The going rate for Osama bin Laden's Arab "volunteers" held at the notorious Qala-i-Jangi prison near the northern city of Mazar-e-Sharif was between ?8000 and ?20,000, depending on their rank and importance. Pakistani captives were handed over for ?1800. Those who bought their freedom were allowed to cross into Pakistan unmolested by Dostum, one of America's most trusted allies and a veteran of the earlier guerrilla war against the Soviet Union in the 1980s. Mr Nauimi, a former Qatari justice minister, said Gulf Arab businessmen and other unidentified "wealthy Muslims" raised the ransom money after hearing rumours General Dostum intended to kill all Arab prisoners in revenge for the assassination of his friend Ahmed Shah Masood, the Northern Alliance's legendary commander. Masood was killed in a suicide attack by two suspected al Qaeda Arabs two days before the September 11 attacks. Mr Nauimi has formed a committee of lawyers to provide legal representation for the 384 Taliban and al Qaeda prisoners at Guantanamo. From ewc at onetel.net.uk Fri Jun 7 06:21:44 2002 From: ewc at onetel.net.uk (ewc) Date: Fri, 7 Jun 2002 13:21:44 +0100 Subject: [A-List] truth about gold References: Message-ID: <001601c20e1e$6053af20$b5634ed5@oemcomputer> Hi Anne Thanks for the concessions earlier, but then you go on to write > let me mention a fact of political life: > the Establishment hates gold. This is arguably correct about a big part of the American establishment post 1933, but is false if taken out of that very narrow context. Thus what you are doing is applying US hegemony to scholarly matters Surely US hegemony is something you object to when applied in other spheres? Robert From nestorgoro at fibertel.com.ar Fri Jun 7 07:58:49 2002 From: nestorgoro at fibertel.com.ar (Nestor Gorojovsky) Date: Fri, 7 Jun 2002 10:58:49 -0300 Subject: [A-List] Soccer and Politics: England 1, Argentina 0 Message-ID: <3D0091E9.22137.22BFD8@localhost> Such is life. England won the Argentine-England match on the World Soccer Cup. Penalty by Pochettino, 1-0, the whole English team ran back to their field and made access to the goal line impossible. The right thing to do. England deserved the victory. I send my hommage to that great lion Seaman (a goalkeeper of 39 who gallantly became a youthful Gallahad against Argentinean attackers), my warm salute to the British working class who offered her best children to the team, and another -less warm- one to the former colonial subjects who make their old slaveowning and opium-introducing masters the present of their talents. But I want to add a domestic, Argentinean, political comment. During the whole week before the match, the Argentinean media were hammering in our heads the wishy-washy and false idea that this was "just another match". Demalvinisation is still full gear. They were trying to make us forget the obvious symbolism of the situation: "if we can at least be better than them on soccer, then we can expect to be better than them on any field of human life" The English fans gave them the answer: when they realized (say, around the 35/40 minutes of the second part) that they were winning the match, a brass band that was with them began to play _Rule Britannia_. They don't forget. Neither do we. Only the commercial media in Argentina look elsewhere. N?stor Miguel Gorojovsky nestorgoro at fibertel.com.ar ********************************************************************** * Compa?eros del exercito de los Andes. ...La guerra se la tenemos de hacer del modo que podamos: sino tenemos dinero, carne y un pedazo de tabaco no nos tiene de faltar: cuando se acaben los vestuarios, nos vestiremos con la bayetilla que nos trabajen nuestras mugeres, y sino andaremos en pelota como nuestros paisanos los indios: seamos libres, y lo dem?s no importa nada... Jose de San Mart?n, 27 de julio de 1819. ********************************************************************** * ****** From Michael.Keaney at mbs.fi Fri Jun 7 08:34:50 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Fri, 7 Jun 2002 17:34:50 +0300 Subject: [A-List] FW: Noam Chomsky in the Ivory Tower Message-ID: Forwarded from Louis Proyect: Although Noam Chomsky enjoys a well-deserved reputation as a tireless and effective critic of US foreign policy, there is an unfortunate tendency on the left to view him in saintly terms. Despite the fact that Robert Barsky's biography (http://mitpress2.mit.edu/e-books/chomsky/) is written from the point of view of an unabashed admirer, there is troubling evidence in it that Chomsky is far from perfect. In Chapter Four (The Intellectual, the University and the State), we learn that Chomsky views the university as some kind of refuge from politics and the class struggle. He also has a "hands off" attitude toward the hard sciences that is reminiscent of the analysis put forward by social democratic physicist Alan Sokal and his reactionary associate Norman Levitt. As Chomsky would put it in 1996, "Nothing should be done to impede people from teaching and doing their research even if at that very moment it was being used to massacre and destroy." During the time Chomsky was involved with protests against the war in Vietnam, he was always hostile--like Theodor Adorno--to on-campus protests that got in the way of pursuing the Truth. It was one thing to march against the war; it was another thing entirely to occupy a building that was dedicated to counter-insurgency research. According to Barsky, Chomsky admired "the challenge to the universities" but thought their rebellions were "largely misguided," and he "criticized [them] as they were in progress at Berkeley (1966) and Columbia (1968) particularly. This is corroborated by Norman Mailer, who spent time with Chomsky in a jail cell after being arrested at the Pentagon protest in 1969: "He had, in fact, great reservations about the form that the 1968 student uprisings ultimately took." To a large extent, Chomsky viewed student revolutionaries as foolish and excessive. He admitted to Barsky that he took no interest in the 1968 May-June events in France. But more importantly, Chomsky was imbued with the elitism that went with his professional territory. From the standpoint of a neo-Cartesian linguist involved with cutting edge research, the student 'enrag?s' were people from another planet. Barsky writes: "The fact that Chomsky was immersed, primarily, in a scientific environment had a profound impact on his perception of the role of the intellectual, the way that institutions in this society function, and the value to society of science. His extremely well-developed, libertarian-inspired political sensibilities, and his awareness of individuals and groups far more radical than those of the late 1960s, was the source of his acute skepticism about the ability of many high-profile contemporary activists to contribute anything of lasting value." He quotes Chomsky: "Guevara was of no interest to me; this was mindless romanticism, in my view." >From this standpoint, Chomsky's life-long cozy association with a militarist institution like MIT begins to make sense. In 1969, the Pentagon and NASA were financing two MIT laboratories. One was working on inertial guidance systems; the other was "engaged in some things that involved ongoing counterinsurgency," according to Chomsky's best recollection in 1996. Chomsky *opposed* severing such ties to the military because it would undercut the university's ability to function. Rather disingenuously he proposed that such departments rename themselves the Department of Death, etc. (From this rather hare-brained scheme, one can gather why so few people have actually gone out and built organizations or developed strategies based on Chomsky's writings.) When Chomsky has been challenged for this posture, he offers a lame excuse: "Did you ever hear anyone suggest that Marx shouldn't have worked in the British Museum, the very symbol of British Imperialism?" Chomsky's tendency to reflexively defend the right of an institution like MIT to do research unimpeded even if it is "used to massacre and destroy" can best be explained by his blind spot with respect to the hard sciences. Since his intellectual roots are in the Cartesian wing of the Enlightenment, he is ill-equipped to understand the class nature of scientific institutions. He states: "[T]here is a noticeable general difference between the sciences and mathematics on the one hand, and the humanities and social sciences on the other. It's a first approximation, but one that is real. In the former, the factors of integrity tend to dominate more over the factors of ideology. It's not that scientists are more honest people. It's just that nature is a harsh taskmaster. You can lie or distort the story of the French Revolution as long as you like, and nothing will happen. Propose a false theory in chemistry, and it'll be refuted tomorrow." This, of course, is exactly the stance that Alan Sokal takes in the "science wars" debate and it is obviously false. Nazi science was virtually synonymous with false theories. US biology was characterized by racism through the entire 19th century and much of the 20th century. Virtually the entire scientific establishment was suckered into the "Star Wars" project of the Reagan era, while any novice understood that not only was the project based on unscientific assumptions, but that it might lead to pre-emptive nuclear strikes against the USSR. Barsky tries to explain away Chomsky's rather na?ve assumptions: "For example, although a government might decide to give massive funding to a researcher who is working on a truth serum so that its agents can extract information from captured spies, that researcher will be obliged, in formulating the serum, to analyze how particular drugs affect the thinking process, and thus be of use to the population at large in a variety of crucial ways." Needless to say, this would have provided a comfortable rationale for a Nazi scientist doing experiments on a Jewish inmate at Auschwitz. Louis Proyect Marxism mailing list: http://www.marxmail.org From soncu at pacbell.net Fri Jun 7 12:56:54 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Fri, 07 Jun 2002 11:56:54 -0700 Subject: [A-List] Brazil: Market nervousness Message-ID: Brazil central bank under fire amid rocky markets Thursday June 6, 4:08 PM EDT By Carlos A. DeJuana SAO PAULO, Brazil, June 6 (Reuters) - Brazil's Central Bank came under fire on Thursday for what observers said were perhaps ill-timed moves that further agitated debt and currency markets already roiled by the outlook for October presidential elections. As Brazil's currency, the real, weakened to its lowest point in seven months, stocks fell and bond prices plunged, the bank said it would auction off short-term treasury notes in hopes of easing some of the pressure on markets. Economists and pundits faulted a Central Bank usually known for savvy financial operators for stirring an already turbulent market by enacting a rule that forces investment funds to mark the value of their assets according to daily market prices. Although praised in theory and seen as necessary by analysts, in practice the rule heightened market tension by bringing to light sharp losses suffered in the treasury notes market. "The outlook has deteriorated strongly this week. We have the political issue, which is the main problem, and the Central Bank's difficulties in understanding and making itself understood with the market," said Alexandre Vasarhelyi, head of foreign exchange at ING Barings in Sao Paulo. The bank said the "mark-to-market" move was meant to bolster transparency and help small investors, but the accounting change caused steep losses for many funds, especially those focused on treasury notes. The notes had already slumped due to oversupply and market worries that leftist candidate Luiz Inacio Lula da Silva will turn his commanding lead in opinion polls into a victory in October's elections. Although the former union leader has moved his positions toward the center, investors are still haunted by his talk of debt renegotiations in past campaigns. Luiz Gonzaga Belluzzo, a former government official under the Sarney administration and economist at the University of Campinas, lambasted the bank. "The election climate surely helped a bit, but it was the bank's reckless driving that set this all off," he told Folha de Sao Paulo newspaper. Even Central Bank President Arminio Fraga admitted perhaps the timing was not right. "If I could go back and do it differently, I would have done the mark-to-market adjustment earlier," he told Estado de Sao Paulo newspaper. WORRIES SPREAD Concerns over the outlook for the Brazilian elections and their impact on the country's economic policy spread across the Atlantic, where stocks for Portuguese and Spanish companies with big investments in Brazil, such as Portugal Telecom (PTCO) and Telefonica (TEF), fell. Because most of Brazil's local debt is tied to currency fluctuations or re-prices daily with floating interest rates, when markets get nervous its debt becomes more expensive and harder to roll over. This week, the government tried to force banks to buy its treasury notes by offering banks poor returns on inter-bank loans, leaving extra liquidity in the market. But banks refused to buy the notes and opted to buy dollars instead, further fueling instability and making the rollover more expensive. Constantin Jancso, an economist at MCM Consultants, said in a report the bank's recent policy of buying up longer-term treasury notes in exchange for short-term notes was aimed at easing turbulence. But at the same time it was worsening the country's debt profile considerably and undercutting its past policy of extending the length of its maturities. Still, most analysts supported the bank's decision to make funds mark-to-market and many said the market was simply overreacting. In Washington, the International Monetary Fund reiterated its support for Brazil's economic policies. IMF spokesman Tom Dawson told a regular news briefing that market volatility was "understandable" but underscored that the lender believes "Brazil has a good policy framework." Full at: http://money.iwon.com/jsp/nw/nwdt_rt.jsp?cat=USMARKET&src=201&fee d=reu§ion=news&news_id=reu-n06325113&date=20020606&alias=/ali as/money/cm/nw From mstainsby at dojo.tao.ca Fri Jun 7 14:34:35 2002 From: mstainsby at dojo.tao.ca (Macdonald Stainsby) Date: Fri, 7 Jun 2002 20:34:35 -0000 Subject: [A-List] Re: Soccer and Politics: England 1, Argentina 0 In-Reply-To: <3D0091E9.22137.22BFD8@localhost> Message-ID: <20020607203435.1613017DD7E@dojo.tao.ca> Nestor Gorojovsky said: > Such is life. *snip* > But I want to add a domestic, Argentinean, political comment. > > During the whole week before the match, the Argentinean media were > hammering in our heads the wishy-washy and false idea that this was > "just another match". Demalvinisation is still full gear. They were > trying to make us forget the obvious symbolism of the situation: "if > we can at least be better than them on soccer, then we can expect to > be better than them on any field of human life" > > The English fans gave them the answer: when they realized (say, > around the 35/40 minutes of the second part) that they were winning > the match, a brass band that was with them began to play _Rule > Britannia_. > > They don't forget. Neither do we. Only the commercial media in > Argentina look elsewhere. > N?stor Miguel Gorojovsky > nestorgoro at fibertel.com.ar Hello Nestor, Well put. A few years ago, the World Cup match between America and Iran took place while my partner at the time was a Persian woman, and for obvious reasons that go beyond that much, I was cheering for Iran and attended a local cafe that included mostly former Iranian nationals. For these people- my partner was a woman who had fled Iran for political reasons, she had been labelled a feminist agitator and had to leave for her freedom if not her life-- almost all opponents of the Mullahs, some from a Shah-favouring perspective, some from a left to radical perspective but the moment was not at all lost on them either. These people were vindicated, partially in that they have membership of a nation that is constantly given threats and intimidation, and more importantly, they celebrated because it proved to them "that Americans cannot push us around at everything." That night was the only time I ever saw my ex-partner march up and down the roads chanting nationalist slogans. By the end of the night, people were engaged in discussions about the way forward for their people as a result of their increased feeling of strength. The moment not only was political- it cannot be underestimated. When you are from a country that is assaulted in almost every way, the simpest things allow you to fight on. Imagine should there be a futbol match between Palestinans and, say, the Egyptians- and the Palestinans won. Israel would clearly know they were in for a more determined struggle. Soccer (as we call it) is clearly the sport of internationalists. thanks again, Macdonald From soncu at pacbell.net Fri Jun 7 15:40:07 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Fri, 07 Jun 2002 14:40:07 -0700 Subject: [A-List] Asia into the center Message-ID: Frankfurter Allgemeine Zeitung June 7, 2002 Turning Heads -- to the East By Jochen Buchsteiner The U.S. president's European tour last month was a historic event -- not in the sense of any act that makes history, but as the ceremonial seal ending an epoch. George W. Bush's speech to the German parliament and his signing of a disarmament treaty with Russia mark a turning point in history. After a transitional period of more than a decade, world politics has finally shaken off for good the last vestiges of the Cold War and its fixation on the Atlantic alliance. Now, the world is beginning to look to the east. By inviting Russia into the "house of freedom," Mr. Bush has brought the former adversaries -- known as the "first" and "second world" -- together in the modern version of a communal home. The antagonism between Russia and the United States, molded over a period of more than 70 years, has become a post-ideological "axis of civilization." A united Europe will also revolve around it. The differences of opinion that exist, and will continue to exist, between the United States and an enlarged Europe, are slight compared with the conflicts that loom elsewhere. International Islamist terrorism is certainly one of the greatest dangers to the "new West." Yet it is only a symbol for a far broader, geographically distinct challenge. Almost all of this century's great threats to global politics are brewing in Asia, a gigantic continent stretching from the eastern Mediterranean Sea to the Pacific Ocean that, historically, has never regarded itself as a single entity. No continent houses more religions cheek to cheek, side by side, or face to face with each other. Islam, in all its variations, stretches from the Middle East across southern and central Asia into the Indonesian archipelago. In eastern Asia, it is bordered by Buddhism, while in India, it rubs up against Hinduism. Indian and Pakistan's dispute over Kashmir, an invisible companion on Mr. Bush on his European tour, is by far the most dangerous conflict of our time. American political scientist Paul Bracken warned in 1999 in his book, "Fire in the East," that a nuclear arms race was developing in that previously ignored region of the world. But so far, the United States has failed in efforts to de-escalate the conflict, although at least, in contrast to Europe, Washington is paying attention. Just four hours by plane from the eastern border of the European Union, more than 1 million soldiers are facing off, while the supreme commanders on either side of the Indian-Pakistani divide sit with fingers on (tested) nuclear buttons. Yet it was not until last week that a European government -- Britain's -- publicly expressed concern about a potential nuclear war. Nor is the situation in eastern Asia any less tense. From an economic perspective, China may be the object of awe or fear. The Middle Kingdom has also not given up on its military ambitions, either. Beijing's defense budget is growing dramatically, a trend watched nervously, not least of all by Taiwan, the breakaway island wanna-be state. Asia's third nuclear power continues to strive for "reunification" with Taiwan and continues to occupy the Spratly Islands in the South China Sea, which are also claimed by several other countries. On the other side of the Asian continent, along the eastern edge of the Mediterranean, a war that many thought had been banished for good in the 1990s has erupted again. The conflict between Israel and the Palestinians presents a far greater danger for the world than the three Asian trouble spots that Mr. Bush designated an "axis of evil." The tinpot dictatorship in North Korea is likely to continue emitting its ignis fatuus for some time to come, keeping South Korea on its toes, but Pyongyang, Tehran and Baghdad do not represent any real risk to their neighbors, let alone Europe or the United States. Altogether Asia is on the boil, with more and more bubbles rising to the surface every day. So far, there is no way to regulate the temperature; no security structure comparable to the European-Atlantic one. The U.S. troops stationed in South Korea, Japan, Central Asia and the Persian Gulf probably provide a deterrent to precipitous acts, but they do not confer true stability. Two conditions that could guarantee that temperatures continue to increase have already been met. First, the population of Asia is once again growing, a development that will intensify conflicts over the distribution of natural resources and means of existence. Second, modernization and (sometimes considerable) economic advancement are not occurring across the continent, but only in some areas, another development that is likely to increase tensions between the various regions and countries. These demographic, economic and security-policy developments will almost inevitably force Asia into the center of global politics. Soon, European leaders, too, will have to look eastward. Jun. 7 ? Frankfurter Allgemeine Zeitung 2002 All rights reserved. Reproduction in whole or in part is prohibited. Full at: http://www.faz.com/IN/INtemplates/eFAZ/docmain.asp?rub={B1311FCC- FBFB-11D2-B228-00105A9CAF88}&doc={A0C9967B-FFCE-4CC6-BE8E-9A9DBDF 929B6} From soncu at pacbell.net Fri Jun 7 17:53:11 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Fri, 07 Jun 2002 16:53:11 -0700 Subject: [A-List] Venezuela: Coup rumors again Message-ID: Venezuelan opposition plans new protests amid coup rumors. AFP - June 7, 2002 CARACAS -- Opponents of Venezuelan President Hugo Chavez were preparing a new protest against his rule Friday, amid rumors that military elements are plotting a new coup to remove him from power. Opponents plan to demonstrate June 15 to demand Chavez's resignation and an end to the politicization of the armed forces. Meanwhile, Foreign Minister Roy Chaderton charged government opponents with floating rumors of another coup to create a climate of instability. "They want to create an impression of instability and of the imminent downfall of the legitimate government of Venezuela," Chaderton said. The Caracas daily El Universal published portions of what it said were communiques in which military officers call for a "constitutional rebellion" against Chavez. Earlier in the week, opposition journalist Patricia Poleo, editor of the daily Nuevo Pais, divulged the contents of a videotape of hooded officers declaring that they would "do whatever is necessary" to defend Venezuela's institutions and denouncing Chavez as a leftist. The authenticity of the tape could not be confirmed. A week ago, a hooded man claiming to be an officer of the National Guard made public statements against Chavez. Rumors circulating by word of mouth have been reinforced by news reports and handbills calling for an overthrow of the government. Chaderton said well-financed groups were using the Internet to foment subversion. +++++++++++++++ Storm Clouds Again Forming Over Venezuela 7 June 2002 Summary Multiple STRATFOR military and political sources in Caracas report that Venezuela soon may experience another outbreak of violence. This could result in a forced regime change, or it could serve to consolidate President Hugo Chavez's so-called "Bolivarian Revolution." If the reports are accurate, the violence likely will involve opposing elements of the armed forces and Chavez's armed civilian militias, called the "Bolivarian Circles." Analysis Multiple military and political sources in Caracas, including some within President Hugo Chavez's government, say another outbreak of violence in Venezuela, on par with that seen in April before the president's brief removal, is likely. Given the elevated political tensions between the Chavez government and its numerous (if uncoordinated) opponents, the possibility of a more permanent ousting of Chavez could be wishful thinking by some of these sources and exaggerated emotionalism by others. However, if the consensus opinion STRATFOR has obtained in the past two weeks is accurate, Venezuela could be on the verge of a violent confrontation between the Chavez government and groups seeking a change of regime by any means. The sources agree that potentially violent actors in a conflict would include opposing elements of the armed forces (FAN), National Guard and armed members of the Bolivarian Circles -- civilian militia groups financed and coordinated by the Chavez regime. If violent confrontation eclipses efforts to negotiate a political deal between Chavez and his opponents, there could be two possible outcomes. On one hand, if a second military rebellion fails to oust Chavez, he would finish ferreting out his political and military foes and consolidate his regime's control despite an economic crisis. On the other hand, if a rebellion against Chavez were to succeed, Venezuela's political instability likely would grow worse in the near- to mid-term, making it almost impossible for any post-Chavez transition regime to stabilize the economy. Moreover, regardless of the outcome, Venezuela likely would continue to suffer political instability, violence and economic stagnation for several years. The first scenario -- Chavez surviving a rebellion and consolidating his power -- would be a geopolitical nightmare for the United States, which is eyeing conflict in Colombia and economic collapse in Argentina with growing concern. A new regime without Chavez would be far less problematic in some respects for the U.S. administration, although many international critics of the United States likely would accuse the Bush administration yet again of encouraging a forced regime change. Defense Minister Lucas Rincon Romero, who will retire from the military on Venezuela's July 5 independence day holiday, when the president traditionally announces military promotions, insists that the internal situation within the armed forces is stable and controlled. The reality, however, is starkly different. The command purge Chavez launched after barely surviving a 48-hour military rebellion on April 11-13 has intensified the factionalism in the armed forces between those for and against Chavez. This situation has been exacerbated by the rapidly deteriorating economic conditions among military families, and what appears to be a deliberate government strategy to dismantle the FAN as an effective professional military institution. On June 4, a clandestine group of middle- and lower-ranking officers, called the "comacates" -- which stands for commanders, majors, captains and lieutenants -- issued a communiqu? and videotape through Venezuelan reporter Patricia Poleo that openly threatened to kill all armed Bolivarian Circle members and force a regime change if Chavez did not drastically reform his policies. The alleged officers who appeared on the videotape hid their faces behind hoods, but the majority wore National Guard uniforms. Interior and Justice Minister Diosdado Cabello, a former army captain, dismissed the videotape as a fake, but STRATFOR sources in Venezuela's military intelligence have confirmed the comacates do exist within the military. Three days later on June 7, the Caracas daily El Universal published another document entitled "Manifesto of the Constitutional Rebellion," sent by a clandestine group that described itself as including active duty officers in all branches of the FAN and civil society groups from Caracas and the states of Carabobo and Aragua. A large proportion of the country's private industrial and manufacturing base is concentrated in these states, near Caracas, as well as most of the personnel and weapons assigned to the army's Fourth Infantry Division, which now is commanded by Brigadier Gen. Raul Baduel. An ongoing military command purge has inflamed the political tensions and potential disloyalties it was meant to suppress. So far at least 117 of the FAN's 260 general and admiralty-rank officers have been relieved of their commands and sent home, and as many as 700 active duty officers are believed to be under investigation to determine whether or not they are loyal politically to Chavez and his increasingly socialist "Bolivarian Revolution." Moreover, the military command purge is happening as Venezuela's economic crisis takes an ever-bigger chunk from the pocketbooks of middle- and lower-class Venezuelan families. Military families have not been spared the impact of their country's economic crisis and in fact may be hurting even more than civilian families because many military garrisons have not received their budgeted operating funds for fiscal year 2002, STRATFOR sources in the FAN report. These budgets include not only funds for military training purposes but also salaries and other social benefits military families have not received because the central government has run out of cash. Since Chavez became president in 1999, the military's economic difficulties have mounted while its operational readiness and personnel have declined, military sources in Caracas report. In fact, high-ranking sources in all branches of the FAN -- army, air force, navy and National Guard -- acknowledged that their equipment is deteriorating, training maneuvers have been scaled back drastically and the number of soldiers in many battalion-size units is down to company-size strength. Additionally, army sources told STRATFOR that the FAN's defensive deployments along Venezuela's frontier with Colombia have been reduced to significantly less than 10,000 soldiers, instead of the nearly 30,000 claimed as recently as three months ago by then-Defense Minister Jose Vicente Rangel. Our sources also report that the FAN is having manifold difficulties recruiting personnel despite laws mandating 24 months of service for army and air force personnel and 30 months of conscript service in the navy. As the FAN's operational readiness has deteriorated over the past three years, the Chavez government has spent, by the president's own public admission, millions of dollars organizing, training and indoctrinating thousands of Bolivarian Circles members. Cabello told a national assembly hearing in May that there were 130,000 Bolivarian Circles groups throughout the country, with 12 members in each circle or more than 1.5 million members in all. Chavez, Cabello and other government officials insist they are peaceful and unarmed. In fact, FAN intelligence officials who oppose the circles think there are likely no more than 180,000 individual members in all of Venezuela, and of these only a handful are armed and spoiling for a confrontation to consolidate Chavez's revolution. However, even a relatively small number of organized armed civilian militias could inflict a significant amount of carnage and panic, especially if pro- and anti-Chavez elements in the military and National Guard were to open fire against the circles and each other simultaneously. From soncu at pacbell.net Sat Jun 8 00:09:38 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Fri, 07 Jun 2002 23:09:38 -0700 Subject: [A-List] US: Robber barons Message-ID: Financial Times A tolerant heartland By Caroline Daniel Published: June 7 2002 20:07 | Last Updated: June 7 2002 20:07 This March, the federation of US trade unions, the AFL-CIO, put a new interactive game up on its website called "Smash Corporate Greed!" Players can bash "a greedy chief executive" with a virtual mallet as he emerges - hands stuffed with dollars - from one of six holes on screen. Visitors can also play "Take the Money and Run", a game that asks players to guess which executives accepted high salaries or substantial pay-offs at a time when thousand of employees have lost their jobs. Those cited include Dennis Kozlowski of Tyco and Carly Fiorina at Hewlett-Packard. Labour unions are making the most of corporate America's humiliations, after years in which chief executives were in the ascendant. Last week in Chicago, 350 people attended a packed town hall meeting organised by the AFL-CIO to discuss the collapse of Enron, the energy company. Debbie Perrotta, a 53-year-old former administrative assistant at Enron, addressed the meeting. "We worked very hard for Enron and felt they would reciprocate and there would be something for us . . . Yet one executive got $5m for 90 days' work - that's outrageous," she said. Ms Perrotta says she has met many on a 12-state tour who are now "questioning the accounting practices, the analysts, the conflicts of interest and their own 401K plans. A lot feel they have been gullible about corporations." But she is pressing for a relatively modest reform: statutory employee representation on committees that set guidelines for investment in 401K personal pension plans. In Europe, large pay-offs to corporate executives have attracted public ire. Yet Chuck Fuller, a 35-year-old technician at National Steel in Ecorse, Michigan, is typical in being insouciant about US examples. "The higher-ups have always made large sums of money. It happens so much, you don't think about it. People are angry - but not to the point where they protest, like in Europe. You just shake your head." Eric Rauchway, associate professor of history at the University of California, says this is typical of public re- action to most past episodes of corporate excess. "Americans will just shrug their shoulders. They know there are intimate links between the very powerful and the very seedy . . . There is a deep and corrosive expectation of those in power. If all that happens is that a few high-fliers get taken down, nobody cares that much." That view is borne out by a poll from the Pew Research Centre in Washington, carried out in February. About 70 per cent of those polled believed the worst aspect of Enron's collapse was that employees had lost money. By comparison, only 26 per cent of respondents were worried about untrust-worthy accounting. Yet the practical effects of corporate deception on employee wealth does worry many. "The things people care about are their retirement benefits," says Tanya Pullin, a state legislator in Kentucky. Barbara Pratt, a part-time Red Cross worker from Portsmouth, Ohio, says she is now "more wary of investing. I pulled all my money out of the stock market in the last two years. I am thinking about reinvesting but I am still very apprehensive." Robert Reich, former labour secretary under President Bill Clinton, who is running for governor of Massachusetts, says repeated examples of misbehaviour could affect confidence in the system: "Most Americans don't mind much about individual executive malfeasance but there is a cumulative effect and we are getting close to a tipping-point where overall confidence in the system is potentially jeopardised." Mr Reich cites the activities of America's 19th century corporate "robber barons". He says: "The robber barons were indulging in practices, even if not technically illegal, that were violating the spirit of the law. But how different is that from what we are seeing now? You might not want to use the same term - but they are acting like barons and robbing innocent people." The last time that concern over corporate misbehaviour prompted wholesale regulatory changes was during the 1930s, following the Great Crash of 1929. That led to measures such as the Glass-Steagall legislation separating commercial and investment banks. "There was a great period of promise in the 1920s but the happy talk turned out to be just that in the 1930s, when there were a lot of agencies and investigations created to look at misconduct," says Richard Tedlow, professor of business administration at Harvard Business School. "There are similarities with now. A rising tide floats all boats but tends to hide wrongdoing." For now, the impetus for corporate reform is from lawyers rather than from widespread public anger. Employees are demonstrating shaken faith by holding back from equity investment, and trading volumes on stock exchanges have fallen. This is likely to affect corporate America more than any angry banner-waving in its heartlands. Full at: http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/ FullStory&c=StoryFT&cid=1023101557245&p=1012571727126 From soncu at pacbell.net Sat Jun 8 21:45:53 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat, 08 Jun 2002 20:45:53 -0700 Subject: [A-List] UK: Police to spy on all emails Message-ID: Police to spy on all emails Fury over Europe's secret plan to access computer and phone data Kamal Ahmed, political editor Sunday June 9, 2002 The Observer Millions of personal emails, other internet information and telephone records are to be made accessible to the police and intelligence services in a move that has been denounced by critics as one of the most wide-ranging extensions of state power over private information. Plans being drawn up by Europol, the police and intelligence arm of the European Union, propose that telephone and internet firms retain millions of pieces of data - including details of visits to internet chat rooms, and of calls made on mobile phones and text messages. In a move that has been condemned by privacy campaigners, a draft document passed to The Observer reveals that the EU is now drawing up a 'common code' on data retention which will be applicable in all member states. Security and police sources said new powers on accessing personal data will come into force in Britain towards the end of the year. 'It is typical that such a significant change in the control over private information is being worked out in secret,' said Dr Ian Brown, a leading expert on data privacy and director of the Foundation for Information Policy Research. 'It does seem to have been Britain that has put pressure on other member states to put in place this type of legislation. In 99 per cent of cases it will be used properly, but what about the other one per cent? There is not enough scrutiny of what is going on.' The Europol document was drawn up at a private meeting of police, intelligence services and customs and excise officials from across Europe in The Hague last April. It lists 10 areas where companies will be required to keep information to help in the fight against international terrorism, domestic crime and drug running. Companies that run internet sites will be required to retain passwords used by individuals, record which website addresses are visited, and keep details of webpages looked at and any credit card or bank details used for subscriptions. The information retained about emails will include who sent the message, where the email went, its contents and the time and date it was sent. It is believed that Britain will push for the data to be kept for up to five years. At the moment much of it is only kept for one or two months, for billing purposes, by the companies that run internet and email services. Sources at the National High-tech Crime Unit, which is overseeing implementation of plans for data retention in Britain, point out that the growth of so-called 'cyber crime' means that they need new powers to keep ahead of the criminals. One official also said that investigations into crimes such as the murders carried out by the GP Harold Shipman relied on the retention of old telephone records. 'We need to codify how this happens, so all countries in Europe are dealing with the same set of rules,' the source said. 'The internet does not recognise national boundaries and international companies don't need the confusion of dealing with separate codes in different countries.' The Europol document says the use of telephones - land lines and mobiles - will be monitored. Numbers dialled, when and where they were dialled from and personal details such as the address, date of birth and bank details of the subscriber who paid for the call will also be kept. The document, headed 'Expert Meeting on Cyber Crime: Data Retention', suggests mobile phones records could be used by police and the intelligence services to track the geographical location of people making calls. Mobiles use a network of masts to convey the calls, placing the user in a geographically distinct 'cell' at the time of the call. Records using such geographical locations were used to acquit the teenagers accused of murdering Damilola Taylor. The Association of Chief Police Officers is also drawing up a manual of standards so that police forces across the country use similar methods when accessing the data. Full at: http://www.observer.co.uk/politics/story/0,6903,730091,00.html From annewilliamson at msn.con Sun Jun 9 13:26:35 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Sun, 9 Jun 2002 15:26:35 -0400 Subject: [A-List] Human Rights Industry's Imperial Agenda References: Message-ID: <002701c20feb$92cdfea0$0100a8c0@igrushkii> JUDGE NOT The Spectator | June 08 2002 | Neil Clark THE SPECTATOR June 08 2002 Judge not Neil Clark says that the ICC and the human rights industry are making the world a more miserable and dangerous place These are golden days for the international human-rights movement. Slobo is in the dock, the Rome Statute that provides for the setting up of the permanent International Criminal Court has been ratified by more than 50 nations, and the murderous antics of Messrs Sharon and Mugabe have seen thousands getting ready to light candles and fill in their application forms to join Amnesty. Human rights are on the march and, if there is something of a triumphalist air about the recent pronouncements of prominent activists such as Elizabeth Andersen of Human Rights Watch, it is only to be expected. While most sane people would share many of the leading human-rights groups' objectives - such as an international ban on landmines and an end to torture - there are nevertheless strong grounds for concern over the increasingly prominent role that organisations such as Human Rights Watch and Amnesty International are playing in international affairs. For a start, far from being impartial and independent of any government, as they routinely claim, these groups are essentially Trojan Horses for a very specific political agenda: that of the politically correct liberal-capitalist elite of the United States and Western Europe. The fact that the US opposes the International Criminal Court and is regularly criticised by human-rights groups for retaining capital punishment should not delude us into believing otherwise. Mention the name Human Rights Watch, and one thinks automatically of earnest, spotty US graduates traipsing round the world's trouble-spots, championing the cause of 'oppressed' minorities and seeking to enlighten their 'oppressors'. While much of the fieldwork for the organisation is carried out by such people, the composition of the various governing committees that determine where the human-rights spotlight is shone is rather different. In the words of Jared Israel, the problem with Human Rights Watch 'is not that it is controlled by the US foreign-policy elite, but that it is the US foreign-policy elite'. Conspiracy theorists with a spare half-hour should indulge themselves by having a look at the list of board members of HRW's European and Central Asia division, which reads like a Who's Who of US foreign-policy makers in the last 20 or so years. There is Morton Abramowitz, the former US ambassador to Turkey and assistant secretary of state for intelligence and research 1985-89, who is now a fellow of the Council for Foreign Relations, the neo-conservative interventionist pressure group so loathed by those on the traditional isolationist Right. Other ex-ambassadors on the board include Warren Zimmerman and Jack Matlock, whose spells in Yugoslavia and the Soviet Union both coincided with the disintegration of those countries. There is also the pro-interventionist Harvard professor Stanley Hoffman; Paul Goble, the director of communications and political commentator at the Congress-funded Radio Free Europe; and career diplomat Herbert Okun, who, apart from being US ambassador to East Germany, was also deputy chairman of the US delegation at the Salt II negotiations. Last, but certainly not least, comes the name of the man who pays the cheques, the well-known philanthropist and 'private individual' Mr George Soros, who, in addition to his numerous business activities, still finds time to play a role in such 'altruistic' pastimes as human rights. That such powerhouse names are behind Human Rights Watch should come as no surprise when one considers how the organisation came into being. After the signing of the Helsinki Accords in 1975, the US was understandably keen to use the issue of human rights as a way of weakening the Soviet Union and its control over Eastern Europe. Human Rights Watch, set up in 1978 as Helsinki Rights Watch by the publishing tycoon Bob Bernstein, was to be the vehicle for achieving this. Over the next ten years the organisation was to play a key role in publicising human-rights breaches behind the Iron Curtain and helping dissident groups there to organise and eventually grow into opposition parties. Vaclav Havel, the Czech President, recognises the debt that he and many others owe to the organisation, and is on record as stating that without Human Rights Watch there would have been no Velvet Revolution in his country. Since the fall of the Berlin Wall, HRW has continued to play its part as a spearhead for spreading US global influence, helping to undermine regimes that Washington deems undesirable. If Slobodan Milosevic is ever again a free man and desires a reckoning with those responsible for his ordeal in The Hague, he should head straight to Fifth Avenue and HRW's headquarters, as it was that organisation's mainly anecdotal evidence which provided the basis for six of the seven charges for which he was indicted. The executive director Elizabeth Andersen is proud of the role that her organisation played in Kosovo, boasting that it was HRW's reports 'which helped to shape opinion and mobilise a response', i.e., a 78- day, $7 billion bombing campaign that killed hundreds of people and left thousands more displaced. In the circumstances, it is hardly surprising that Richard Dicker, HRW's observer at The Hague trial, announces that he is 'impressed' with the prosecution's case, especially when one considers that the man who pays his wages, the ubiquitous Mr Soros, also funds the Tribunal. The political links of Amnesty International, HRW's British counterpart, may be less blatant, but it, too, cannot be absolved from the charge of following a politicised agenda. Beloved of bleeding-heart liberals and alternative comedians since its foundation more than 40 years ago, Amnesty has been showing since 1997 where its political allegiances really lie. The organisation has buttered up New Labour in a way that has all but destroyed its traditional claims to impartiality. Although Amnesty called the deliberate targeting of civilians at Yugoslav television a war crime and slated Britain for still being the second biggest arms dealer in the world, its UK director, Kate Allen, still feels able to award the Blair government 'seven out of 10' for its 'constructive' human-rights record. One shudders to think what it would have to do to achieve only five. Like HRW, Amnesty seeks to promote policies based on its own elite liberal interpretation of human rights; namely that they are for the benefit of mankind, even if the majority of less 'enlightened' individuals are not convinced. A striking example of this is human-rights groups' obsession with abolishing the death penalty, seen by Amnesty as 'the ultimate cruel, inhuman and degrading punishment'. The idea that they may be wrong on this issue and that by seeking the global abolition of capital punishment they may actually be increasing the sum of misery in the world never occurs to our human-rights activists, so sure are they in their convictions. It is, of course, not just the rights of prisoners that concern our leading rights groups; in the words of the HRW mission statement: 'We now challenge the wrongs that befall refugees and the internally displaced, women, children, workers, gay men and lesbians.' Unemployed heterosexuals seem to have been missed out somewhere. Amnesty, too, has been keen to enter the realm of sexual politics, and has recently set up 'Lesbian, Gay and Bisexual Networks' and also a 'Transgender Network' to lobby for the international rights of transsexuals. In June 2000 Amnesty took part in the World Pride rally in Rome 'to highlight discrimination against the gay community as a human-rights issue'. Yet, for all its grandeur and fashionability, we must not lose sight of the fact that human-rights talk is merely a set of moral claims, and that is why we should be so worried when it is used to intervene in other cultures on minor grounds. If we know anything at all about moral issues, it is that they are extremely difficult to resolve, are inevitably marked by disagreement, and that different cultural premises lead to startlingly different moral conclusions. Understanding this is important, as it underlies the whole idea of self-determination by societies, cultural groups or nation states. Only these groupings can determine what political structures they take to be moral and what privileges they acknowledge as rights. What is so scary about today's human-rights activists is that, contrary to all the obvious evidence, they believe themselves to have found clear and universally applicable cultural and political truths. Supremely confident in their moral conclusions, they now seek to apply them in other countries and cultures, even against the will of the majority in those cultures. Never mind that capital punishment still enjoys widespread support in Turkey; if that country wishes to join the EU, she must conform to the European Convention on Human Rights, which means that the death penalty must go. Given the failure of every attempt, from Immanuel Kant to John Rawls, to establish moral truths agreed on not just by those in our culture, but across cultures, one can only be shocked by the audacity of the human-rights agenda. At the very heart of the movement is a repellent, imperialistic view of the inferiority of the moral capacities and conclusions of others - and all this from the very people who invariably rail most loudly against the excesses of 19th-century imperialism. Auberon Waugh once predicted that 'politically correct opinion' would one day lead to the 'advanced' world invading Easter Island to stop the natives smoking in public. That may still be many years away, but unless the relentless progress of human-rights groups is checked, the prospect of the 'advanced' world imposing sanctions on a country not honouring an International Convention on Transsexual Rights may be considerably nearer. From hliu at mindspring.com Sun Jun 9 20:42:46 2002 From: hliu at mindspring.com (Henry C.K. Liu) Date: Sun, 09 Jun 2002 22:42:46 -0400 Subject: [A-List] Russia's Lost to Japan Message-ID: <3D041225.1729BF7D@mindspring.com> Czarist Russia lost a war to Japan which unleashed a chain of events that evetually toppled the Romanovs. The Russian Revolution was ignited by a mixture of would national pride and domestic economic collapse. The World Cup loss highlighted to the Russians that their motherland is no longer the power it was a decade ago. Putin will be on the defensive. To be like by the West is a liability for a Russian politician. Russia is weaker than it should be and stronger than its present government think it is. The greatest danger for world peace is not a War on Terrorism running out of control, but a US underestimation of Russia power and frustration. Henry C.K. Liu From soncu at pacbell.net Sun Jun 9 23:06:52 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sun, 09 Jun 2002 22:06:52 -0700 Subject: [A-List] Russia's Lost to Japan Message-ID: I guess this was what prompted your mail Henry. By the way, I watched the Turkey - Costa Rica game last night. It was a mediocre game I must say. A big disappointment for Turkey who is hungry for a victory of any kind. A Turkish football commentator, very angry at the Korean referee who gave that penalty in favour of Brazil past Monday, wrote the other day: "We fought a war for the South Koreans and this is what we get in return." This is probably the most interesting World Cup I have ever watched since the 1970s, although not necessarily one of the best as far as football quality goes. To me Pele is still the best football player. I loved him. At least, it was Pele's team to which we lost that game and we did not do that bad either. And I am happy for that. Best, Sabri ++++++++++++++ Japan Upsets Russia; Russians Riot By THE ASSOCIATED PRESS Filed at 1:30 p.m. ET YOKOHAMA, Japan (AP) -- Japan's victory over Russia set off jubilant celebrations in the co-host nation of the World Cup. It also set off the worst kind of reaction in Moscow. Russian fans angered by the 1-0 loss Sunday went on a rampage, overturning cars and setting them on fire in the center of the city. At least one man was killed, and the Interfax news agency said five music students from Japan were beaten. An Associated Press photographer saw a mutilated corpse lying on the street during the chaos, which erupted across a square from the Kremlin walls and lasted for more than an hour. Officials said 27 people were hospitalized. The scene was vastly different in the streets of Yokohoma, where the Japanese won a World Cup game for the first time. They were 0-3 in their debut four years ago. Drivers honked horns and pedestrians chanted "Nippon, Nippon," waving flags and jerseys. Japan was cheered on at the site of the June 30 championship game by Prime Minister Junichiro Koizumi. "I think we've changed the view people have of Japanese soccer with this victory," said Junichi Inamoto, who scored the goal. "But we still have to advance to the next round." That could come Friday if they tie or beat Tunisia. The Tunisians played Belgium on Monday at Oita, Japan. Spanish players partied, waiting for the rest of the World Cup to catch up with them. Spain was the first team to qualify for the second round. Brazil matched that Sunday and it didn't even play -- Costa Rica's 1-1 tie with Turkey ensured its advance and eliminated China. When Mexico beat Ecuador 2-1 and Costa Rica tied, it improved CONCACAF's record to 4-0-1. Long considered one of the weakest regions in FIFA, its spotless mark was on the line Monday when the United States played host South Korea in Daegu. South Korea President Kim Dae-jung was not scheduled to attend the game. FIFA spokesman Walter Gagg, in charge of stadiums and security, said security would be "much tougher than all the matches before. They will not be afraid, but they will be very, very careful." Aside from possible terrorism, authorities want to head off protests against the United States. U.S. military bases in the country cause some friction, and Koreans still are upset over the Olympic short track speedskating race where a South Korean disqualification let American Apolo Anton Ohno win gold. South Korean organizers said Sunday they planned to sell 7,028 tickets for the U.S.-South Korea match to fans at the stadium hours before the game. About 3,600 tickets were leftovers allotted for fans outside the co-host nation. The rest were seats with obstructed views. Also Monday, Portugal played Poland in Jeonju, South Korea. Mexico won its second straight for the first time in a World Cup on Gerardo Torrado's 57th-minute goal. But to reach the second round, it needs at least a draw with Italy, or help from Ecuador against Croatia on Thursday. " We are still hopeful we can win the final match against Italy and go on to the next round," midfielder Joahan Rodriguez said. Costa Rica's tie came on Winston Parks' nifty left-footed shot in the 86th minute. "I was ready and just wanted to show why everyone has put so much confidence in me," Parks said. "My family and girlfriend told me I'd have a chance and I'd take advantage." Against Mexico, Ecuador's Agustin Delgado headed home a cross from Ulises De la Cruz in the fifth minute, scoring newcomer Ecuador's first goal in the World Cup. Mexico's Jared Borgetti tied it in the 28th minute. "We're just happy that our chances of advancing now depend on us," said Mexico coach Javier Aguirre. "This was an even match and either team could have won." From soncu at pacbell.net Mon Jun 10 00:02:34 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sun, 09 Jun 2002 23:02:34 -0700 Subject: [A-List] Paraguay: General Strike Message-ID: PARAGUAY: Protests, General Strike Threaten Government Thu Jun 6, 6:39 AM ET IPS Correspondents,Inter Press Service ASUNCION, Jun 5 (IPS) - Trade unionists and farmers in Paraguay will hold a general strike Thursday to protest the government's economic policy and privatization plans, adding fuel to a crisis that threatens to destabilize the administration of Luis Gonz?lez Macchi, which has already cost the life of one protester. The Central Nacional de Trabajadores (CNT), the country's main trade union, announced the strike to demand changes in the government's economic policy and the revocation of the law on privatization. "We are calling on all citizens to support this measure, in order to rectify the direction our country is taking, reject the prescriptions of the International Monetary Fund (news - web sites) (IMF) and World Bank (news - web sites), and defend our sovereignty," said CNT president Eduardo Ojeda. The call for the strike was endorsed by civic groups that for the past few weeks have been holding marches against the government's proposed structural reforms, including the sale of the public telephone company, the Compan?a Paraguaya de Comunicaciones (Copaco). The crisis peaked at noon Tuesday in the city of Coronel Oviedo, 140 kms east of Asuncion, where police harshly cracked down on around 5,000 peasants marching on the Paraguayan capital to demand that the law on privatizations be overturned. The Chamber of Deputies voted May 23 in favor of abolishing the law, which civil society organizations are now trying to pressure the Senate to overturn. Tuesday's violence occurred when protesting farmers, who were accompanied by lawmakers Waldemar Zarate, Daniel Rojas and Luis Alberto Wagner of the opposition Liberal Party, and Assistant People's Defender Raul Marin, tried to break through a police cordon to continue their march. Calixto Cabral, a 34-year-old farmer, was killed by a bullet to the head. Another peasant, Teresio Velazquez, was critically wounded when he was shot in the stomach. At least five other marchers were injured. The Democratic Congress of the People, made up of peasants, trade unionists and activists from a number of non-governmental organizations, announced after the clash between protesters and the police that the talks with the "criminal" government of Gonzalez Macchi had been broken off. The president called an emergency cabinet meeting to study the situation. A few hours later, he announced on television that he had decided to indefinitely postpone the sale of Copaco, scheduled for Jun 14, in order to "calm things down." Gonzalez Macchi blamed "the damages caused to the citizenry as well as the lamentable bloody incidents" on "groups that resort to violence." Cabinet chief Jaime Bestard said Zarate, Rojas, Wagner and Marin were the "chief instigators" of the protests. Meanwhile, the president of the governing Colorado Party, Nicanor Duarte, said the privatization of Copaco is a process that has failed, and if a process fails, then those who have organized it must resign or leave. "There are proceedings that have not brought the expected results, and officials depend on the success or failure of their plans," warned Duarte. However, Gonzalez Macchi said he had no plans to resign, and he called on Congress and social organizations to engage in a "broad dialogue" to work out "the differences that may exist with respect to the major social and economic issues under debate today." The privatization of Copaco has already been suspended six times due to complaints of supposed irregularities, including the participation of a public notary who was a personal friend of the president, and who reportedly received over 500,000 dollars for his role in the transaction. Gonzalez Macchi considers the sale of Copaco essential, because it would bring the government 400 million dollars to be earmarked for infrastructure works, with the aim of restarting the economy, caught in the grip of recession since 1995. On more than one occasion, Vice-President Julio C?sar Franco of the Liberal Party criticized the privatization of the telephone company due to the "lack of transparency" surrounding the process, and the "irresponsible" way in which it was being handled by Gonzalez Macchi. The president of the Central Bank, Raul Vera Bogado, stressed Wednesday that the sale of Copaco was indispensable for reaching an agreement with the IMF on a stand-by loan for 60 million dollars, which the government has been negotiating for weeks. "If there are things to be investigated, there are channels for that to happen. If the capacity to investigate is doubted, society must assume the role of overseer, and monitor the process," said Vera Bogado. Minister of Reform Oscar Stark and Finance Minister James Spalding warned that the suspension of the privatization would hurt Paraguay's foreign image and discourage foreign investors interested in Copaco. Colorado Party Senator Juan Carlos Galaberna complained that the protests against the law on privatizations were backed and financed by supporters of former general Lino Oviedo, who is living in exile in Brazil. Galaberna and Senator Luis Alberto Mauro of the National Encounter party, which is allied with the government, say Oviedo is seeking the resignation of Gonzalez Macchi with the aim of becoming president himself before next year's elections. During Tuesday's incidents, the police confiscated a car from the protesters containing t-shirts sporting pro-Oviedo slogans. Oviedo was arrested on Jun 11, 2000 in the Brazilian (news - web sites) town of Foz de Iguazu, on the border with Paraguay. He is accused of planning and ordering the Mar 23, 1999 assassination of Paraguayan Vice-President Luis Maria Argana in Asuncion. The former general, who was released last year by the courts in Brazil after that country rejected a Paraguayan extradition request, announced his aim of returning to Asuncion to run for president in 2003. Full at: http://story.news.yahoo.com/news?tmpl=story&u=/oneworld/20020606/ wl_oneworld/1032_1023362895 From rschaap at iprimus.com.au Mon Jun 10 00:07:16 2002 From: rschaap at iprimus.com.au (Rob Schaap) Date: Mon, 10 Jun 2002 16:07:16 +1000 Subject: [A-List] Russia's Lost to Japan References: Message-ID: <3D044216.8AE147E2@iprimus.com.au> G'day Sabri, Henry and Nestor, > By the way, I watched the Turkey - Costa Rica game last night. It > was a mediocre game I must say. A big disappointment for Turkey > who is hungry for a victory of any kind. Their coach seems more intent on avoiding defeat; Sukur needs a fast striker running off him, Basturk needs to get a full 90 minutes behind the forwards, and I doubt even Wanchope warranted two permanent markers. I fear a certain decline in national self-confidence was in evidence ... > A Turkish football > commentator, very angry at the Korean referee who gave that > penalty in favour of Brazil past Monday, wrote the other day: "We > fought a war for the South Koreans and this is what we get in > return." I've been a footballiac for forty years and will still never understand this sort of rubbish talk. Sure, the penalty shouldn't have been given (and, sure, Rivaldo's dying-swan effort was disgusting), but Turkey did not really deserve a point (and I suspect Rivaldo's header should've been allowed). Where's the beef? > This is probably the most interesting World Cup I have ever > watched since the 1970s, although not necessarily one of the best > as far as football quality goes. To me Pele is still the best > football player. I loved him. At least, it was Pele's team to > which we lost that game and we did not do that bad either. And I > am happy for that. I doubt even Pele could've done anything lovable with this marketer's excuse for a ball. Money is killing football dead - from leagues comprised of three or four super-teams (eg. Galatasaray, Fenerbahce, &Besiktas or Man Utd, Arsenal & Liverpool) and dozens of doomed wannabes, to the devastation of feeder-leagues and hundred-year-old clubs, to a FIFA executive no-one trusts, to the demoralised 'Team Nike' of Brazil in '98, to a ball with which the world's best players can't shoot, cross, pass or dribble. And now Uncle Sam is taking notice, it's only a matter of time till cavernous goal mouths, ten-minute commercial intervals and no off-side ... I don't know if that's my conservative streak or the radical critic in me coming out, but football brings it to the surface every time. I'll still be watching each and every game, of course - 'coz it's all on public service broadcasting here (as it is in Turkey) in what's left of the almost great Australian welfare state ... Ole! Rob. From soncu at pacbell.net Mon Jun 10 00:20:28 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sun, 09 Jun 2002 23:20:28 -0700 Subject: [A-List] Japan: Nuclear arms taboo challenged Message-ID: New York Times June 9, 2002 Nuclear Arms Taboo Is Challenged in Japan By HOWARD W. FRENCH TOKYO, June 8 ? Alarmed by the rising power of China and anxious about the effectiveness of security guarantees from the United States, some of Japan's most powerful politicians have begun to consider breaking with a half-century-old policy of pacifism by acquiring nuclear weapons. In comments that stunned many here, Prime Minister Junichiro Koizumi's top aide told reporters last week that what Japan calls its three non-nuclear principles could soon come under review. "The principles are just like the Constitution," Yasuo Fukuda, the chief cabinet secretary, was quoted as saying. "But in the face of calls to amend the Constitution, the amendment of the principles is also likely." The Koizumi government was particularly embarrassed by the timing of the controversy. The first news stories about Mr. Fukuda's comments appeared while he was in South Korea attending opening ceremonies of the World Cup, for which Japan is a co-host, and came at the same time as Japan's foreign minister was calling upon India and Pakistan to pledge not to use nuclear weapons against each other. Amid a wave of criticism, Mr. Koizumi's government initially denied that the remarks had been made. Then came a belated admission by Mr. Fukuda, who insisted, however, that his comments were not intended to signal a policy shift. Mr. Koizumi went even further, saying his government has no intention of obtaining nuclear weapons. Mr. Fukuda's comments came barely a week after another senior official, the deputy chief cabinet secretary, Shinzo Abe, said publicly that Japan could legally possess nuclear weapons, so long as they were "small." As a result, for many political analysts Mr. Fukuda's words became much more than a gaffe. In one of his many attempts to explain away his remarks, Mr. Fukuda, one of Japan's most sober and sure-footed political figures, said he was merely trying to get "young reporters" to begin thinking differently about their country's future. Despite the denials of an imminent change, remarks like these indicate that a major shift in Japanese security thinking is under way. Japan's official pacifism is more than a simple policy. Since the country's defeat in World War II with the bombings of Hiroshima and Nagasaki ? the only time atomic weapons have been used in a conflict ? it has been an integral element of the national identity. The three non-nuclear principles ? never to own, produce or allow nuclear weapons on Japanese territory ? were overwhelmingly ratified in a parliamentary vote in 1971, reflecting the strong national consensus on the issue. The principles supplement the explicitly pacifist Constitution, which does not refer directly to nuclear weapons. The comments by officials in Mr. Koizumi's government, however, come against a backdrop of other recent statements that show an erosion of support for pacifism, at least among the political class. Barely a month ago, an influential opposition leader, Ichiro Ozawa, all but predicted Japan's nuclear armament. "If China gets too inflated, the Japanese people will become hysterical in response," he said. "We have plenty of plutonium in our nuclear power plants, so it's possible for us to produce 3,000 to 4,000 nuclear warheads." Mr. Ozawa was pressured to retract his remarks. But then, according to the newspaper Tokyo Shimbun, Tokyo's mayor, Shintaro Ishihara, called Mr. Fukuda to congratulate him for his comments about nuclear weapons. Mr. Ishihara, a nationalist and one of Japan's most popular politicians, is widely seen as a possible successor to Mr. Koizumi. All this was in telling contrast with the last time a prominent politician entertained such an idea. In October 1999, Shingo Nishimura, then the new vice minister of defense in the cabinet of Prime Minister Keizo Obuchi, said in an interview that Japan's failure to consider nuclear armament left it open to "rape" by China. The chorus of criticism that followed became so shrill that Mr. Nishimura was forced to resign. "What we are seeing is vastly accelerated change post 9/11," said Robyn Lim, a professor of international relations at Nanzan University, in Nagoya. "Japan has watched how nifty Putin's diplomacy has been, deciding that Russia will cooperate on missile defense with the United States, and the effects of this will be transmitted here through China. China will build up even faster than they might have. "You have to wonder then," she said, "how long Japan can remain the only non-nuclear power among the major countries in the region?" The nationalist-leaning Mr. Koizumi came into office just over a year ago promising sweeping economic reforms, which he has largely failed to deliver, earning him unfavorable ratings. But he has used the alarm raised by the Sept. 11 attacks and the hawkish sentiments of Japan's politicians to push through big changes in Japan's defense posture. Japan's neighbors have always regarded its non-nuclear status with skepticism. Japan spends lavishly on nuclear energy, promoting nuclear fuel enrichment programs that have produced stockpiles of weapons-grade uranium. Japan's space program, meanwhile, has developed rockets that could be converted into missile launchers. Japan's mastery of these two technologies already makes it a "virtual nuclear power," arms control experts say. Japanese conservatives have long been frustrated by a Constitution that was written by the United States during the postwar occupation, from 1945 to 1952. The Constitution prohibits Japan from having an army or using force to settle disputes. Revising this clause would require a two-thirds majority in both houses of Parliament. Such backing would be difficult to achieve because pacifism enjoys continuing popular support. Rather than try to revise the Constitution, Mr. Koizumi has simply decided to reinterpret it liberally. With little opposition, he dispatched warships overseas for the first time in the postwar period, to the Indian Ocean in support of the American campaign in Afghanistan. This month, he is pushing a bill before Parliament that would give Japan's armed forces much broader powers in an emergency. "During the 1990's we had almost constant cabinet changes, and you could describe the process as one of drifting or being carried by the currents," said Yasuhiro Nakasone, a former prime minister who has supported a more assertive defensive posture for Japan. "What the Koizumi cabinet has been doing is trying to recover the lost ground." North Korea, an ally of China, first set off reappraisals of Japan's defense needs when it test fired a ballistic missile over Japan in 1998. That missile launching also served to renew doubts here about American guarantees of Japanese security under a longstanding mutual defense treaty. Japanese complained bitterly that Washington failed to share its reconnaissance intelligence and gave the country no warning of the North Korean launching. In response, Japan accelerated development of its own costly spy satellite program, and politicians began discussing the need for something beyond American guarantees to defend their country. "Simply put, we doubt that the United States would sacrifice Los Angeles for Tokyo," said Taro Kono, a member of Parliament. Mr. Kono does not support nuclear armament, but he is one of a growing number of young Liberal Democratic politicians who favor constitutional reform to allow Japan to defend itself with conventional arms. Bush administration officials said they did not yet see any substantial shift in Japan. "We see no change in Japan's policy," said Sean McCormack, a spokesman for the National Security Council. "The U.S.-Japan alliance has never been stronger." Full at: http://www.nytimes.com/2002/06/09/international/asia/09JAPA.html From soncu at pacbell.net Mon Jun 10 00:47:16 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sun, 09 Jun 2002 23:47:16 -0700 Subject: [A-List] Guatemala: Return of death squads Message-ID: Return of Guatemala's death squads By Andrew Bounds Financial Times; Jun 08, 2002 The bullet that killed Guillermo Ovalle as he was eating lunch in a Guatemala City cafe delivered a simple message: the death squads are back. Mr Ovalle worked for the foundation set up by Nobel peace prize winner Rigoberta Menchu, one of a number of organisations trying to prosecute generals responsible for atrocities in the country's genocidal civil war. Shadowy armed groups now appear to be trying to intimidate them into silence. Shortly after Mr Ovalle was killed in what appeared to be a messy hold-up someone called the foundation and played a funeral march down the telephone, confirming the incident was anything but accidental. The assassination in May was the most serious of a growing wave of attacks on human rights activists in Guatemala, including kidnappings, beatings, break-ins and death threats. The methods have all the hallmarks of those who prosecuted the dirty war against leftist guerrillas and the indigenous Mayan population, particularly in the 1980s, and who still fear prosecution. Six years after the conflict ended Hina Jilani, the United Nations' top human rights official last week called on the government to "unmask" the death squads. President Alfonso Portillo admitted clandestine groups with military links existed but said he was powerless to combat them. It is perhaps no coincidence that the attacks are increasing as the human rights community celebrates the anniversary of its greatest victory, the conviction on June 8 2001 of three soldiers for involvement in the murder of a crusading bishop. They included a colonel, the highest ranking military officer to be jailed in Guatemala. Juan Gerardi, the auxiliary bishop of Guatemala City, was bludgeoned to death in his home on April 26 1998, two days after presenting an exhaustive report detailing the army's role in hundreds of massacres in a war that killed 200,000. The court found Colonel Byron Lima Estrada, his son Capt Byron Lima Oliva, Jose Obdulio Villanueva and Mario Orantes, Msgr Gerardi's assistant, guilty of involvement in a murder plot hatched by the army. The verdict came after three months of evidence and three years of investigation marked by incompetence, interference and delays. It was achieved under great diplomatic pressure from the international community, which saw the Gerardi murder as a test case for ending the army's impunity. However, a year on and with an appeal pending, it looks more like a one-off victory. "I think it was a historic verdict. But we cannot talk of the end of impunity because there are so many unresolved cases," said Edgar Gutierrez, who worked on the Gerardi report and is now in government. "It is the exception to the rule." Such cases include genocide charges laid against former heads of state, including Gen Efrayn Ryos Montt, head of Mr Portillo's Guatemalan Republican Front and president of Congress. A recent UN report said the armed forces remained overmighty and prepared more for internal repression than external conflict. In violation of UN-monitored 1996 peace accords, the two units responsible for most human rights abuses - the presidential bodyguard, to which Capt Lima and Mr Villanueva belonged, and military intelligence - have not been disbanded. Nery Rodenas, one of the church's lawyers in the Gerardi case, says it is probable that the soldiers' appeal, scheduled for July, will succeed. The prosecution evidence was mostly circumstantial. His office tried and failed to replace the presiding magistrate, who has a reputation for being soft on the army. One year later, observers agree, another Gerardi-style killing is far more likely than another Gerardi-style conviction. Full at: http://search.ft.com/search/article.html?id=020608001332&query=gu atemala&vsc_appId=totalSearch&state=Form From soncu at pacbell.net Mon Jun 10 01:34:39 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Mon, 10 Jun 2002 00:34:39 -0700 Subject: [A-List] Russia's Lost to Japan Message-ID: > I'll still be watching each and every game, > of course - 'coz it's all on public service > broadcasting here (as it is in Turkey) in what's > left of the almost great Australian welfare state ... One of the greatest welfare states I have ever lived was Canada. My brother's daughter was born at the University Hospital in Edmonton and I had spent half a day or so there in 1990, waiting for my niece's arrival. Everything was covered by an $18/month state health insurance, the attention was exceptional and the hospital looked like as if it was from a 23rd century Star Trek show. Alberta at the time was an oil-rich province after all. My sister-in-law spent two days at the hospital after an easy birth and it was covered by the insurance. In 1995, here in Berkeley, USA, I had to bring my spouse home about 10 hours after she gave birth to our son, because our son was born just before midnight and they kicked us out the next day. She was still bleeding after a difficult birth and we were told that for each additional day she stays at the hospital we had to pay about $2000. The monthly insurance payments, though not paid by us but by our employers, were about a few hundred dollars per month at the time. When I broke my arm while roller blading a few years ago, I had to wait in a temporary sling for two days to get a real cast and it only happened that soon because I bugged my doctor consistently to remind him the pain I was in. Otherwise, I had to wait for longer than a week to get that cast. This is the "free market" way was I suppose. I wonder how my Canadian friends are doing in these days as far as social services go. Best, Sabri From ectoren at myrealbox.com Fri Jun 7 15:42:40 2002 From: ectoren at myrealbox.com (Erik Toren) Date: Fri, 7 Jun 2002 16:42:40 -0500 Subject: [A-List] Re: Soccer and Politics: England 1, Argentina 0 References: <20020607203435.1613017DD7E@dojo.tao.ca> Message-ID: <014e01c20e6c$41124b50$6e00a8c0@GUEVARA> Hola Camaradas: Sometimes is very easy to dismiss futbol or any other sport as the "opium of the masses", but for me, and any other socialist involved en el jogo bonito, there is another level to futbol. Amateur futbol leagues are one of the few spheres where, we, the workers, have the power to organize and control our destiny. Each amateur futbol team is a commune, a co-operative, a team. If you don't have a clue as to what I am talking about, I ask you that you help organize a team amongst your friends and see that we, as workers, have the capacity to be leaders and, most importantly, to organize. Que bello es el futbol! Futbol IS the Internationalist Sport! por el socialismo, erik carlos toren ----- Original Message ----- From: "Macdonald Stainsby" > > Soccer (as we call it) is clearly the sport of internationalists. > thanks again, > Macdonald From nestorgoro at fibertel.com.ar Fri Jun 7 22:40:11 2002 From: nestorgoro at fibertel.com.ar (Nestor Gorojovsky) Date: Sat, 8 Jun 2002 01:40:11 -0300 Subject: [A-List] Boinas verdes actúan en Buenos Aires / Green berets operating in Buenos Aires Message-ID: <3D01607B.1729.2469B6@localhost> BUENOS AIRES, 7(PSI).- AHORA LOS ?BOINAS VERDES?. ?Y DESPU?S LOS MARINES?. Un equipo de los comandos estadounidenses "boinas verdes" y efectivos del Grupo Especial de Operaciones Federales (GEOF) de la Polic?a Federal realizaron un simulacro de rescate de rehenes en manos de ?terroristas? en una estaci?n del subte porte?o. El procedimiento, que pas? pr?cticamente inadvertido para el p?blico, se efectu? la noche del mi?rcoles en la estaci?n S?enz Pe?a de la l?nea "A" del subte, que une Plaza de Mayo y Primera Junta. El grupo de comandos norteamericanos pertenece a la "Compa??a C" o "Charlie" del Ej?rcito de ese pa?s, conocidos con el ya m?tico nombre de "boinas verdes". Y el GEOF est? entrenado tambi?n para tareas especiales, como precisamente la liberaci?n de rehenes. Estos comandos de la Federal est?n dirigidos por el subcomisario Claudio Marcelo Pereyra, de la Direcci?n General de Terrorismo Internacional y Delitos Complejos. Y la direcci?n antiterrorista depende directamente del Jefe de la Polic?a Federal, el comisario general Roberto Eduardo Giacomino, y a su frente se halla el comisario inspector Jorge Alberto Palacios. El GEOF, creado cuado era jefe de la Federal el comisario general (r) Adri?n Juan Pelacchi, cont? en su inicio con el entrenamiento, justamente, de la "Compa??a Charlie", especializada en operaciones especiales de contraterrorismo e intervenci?n r?pida. Los comandos estadounidenses permanecer?an varios d?as en el pa?s.- XXX N?stor Miguel Gorojovsky nestorgoro at fibertel.com.ar ********************************************************************** * Compa?eros del exercito de los Andes. ...La guerra se la tenemos de hacer del modo que podamos: sino tenemos dinero, carne y un pedazo de tabaco no nos tiene de faltar: cuando se acaben los vestuarios, nos vestiremos con la bayetilla que nos trabajen nuestras mugeres, y sino andaremos en pelota como nuestros paisanos los indios: seamos libres, y lo dem?s no importa nada... Jose de San Mart?n, 27 de julio de 1819. ********************************************************************** * ****** From nestorgoro at fibertel.com.ar Fri Jun 7 22:59:29 2002 From: nestorgoro at fibertel.com.ar (Nestor Gorojovsky) Date: Sat, 8 Jun 2002 01:59:29 -0300 Subject: [A-List] Lula sigue creciendo en las encuestas Message-ID: <3D016501.9690.361756@localhost> SAO PAULO, (ANS-PSI).- LULA AMPL?A SU VENTAJA EN UN SONDEO ELECTORAL EN BRASIL. El candidato de la izquierda en las elecciones de Brasil, Luiz Inacio Lula da Silva, favorito en las encuestas, ampli? su ventaja a 41,6 por ciento de la preferencia electoral, seg?n el ?ltimo sondeo de opini?n difundido el mi?rcoles. Lula, en su cuarto intento a la presidencia como candidato del Partido de los Trabajadores, avanz? casi tres puntos porcentuales en el sondeo del Instituto GPP realizado el pasado fin de semana, en comparaci?n con un sondeo similar de abril, inform? el peri?dico O Estado de Sao Paulo. La encuesta fue comisionada por el Partido Frente Liberal, cuyo candidato se retir? en abril de la carrera presidencial. El candidato del gobierno y favorito de los mercados, el ex ministro de salud Jose Serra, logr? mejorar la preferencia electoral, a 18,4 por ciento desde 14,5 por ciento en el sondeo de 4.000 votantes. La mejora en las encuestas estuvo aparentemente impulsada por la decisi?n que adopt? Serra hace dos semanas de presentar a Rita Camata, una fotog?nica legisladora, como compa?era de f?rmula, dijo el diario. El ex gobernador de R?o de Janeiro, Anthony Garotinho, cay? 1,4 punto porcentual, a 12,5 por ciento, mientras que el ex ministro de Finanzas, Ciro Gomes, retrocedi? hasta el 12 por ciento, desde 13,8 por ciento que registr? en abril.- XXX N?stor Miguel Gorojovsky nestorgoro at fibertel.com.ar ********************************************************************** * Compa?eros del exercito de los Andes. ...La guerra se la tenemos de hacer del modo que podamos: sino tenemos dinero, carne y un pedazo de tabaco no nos tiene de faltar: cuando se acaben los vestuarios, nos vestiremos con la bayetilla que nos trabajen nuestras mugeres, y sino andaremos en pelota como nuestros paisanos los indios: seamos libres, y lo dem?s no importa nada... Jose de San Mart?n, 27 de julio de 1819. ********************************************************************** * ****** From nestorgoro at fibertel.com.ar Fri Jun 7 22:59:31 2002 From: nestorgoro at fibertel.com.ar (Nestor Gorojovsky) Date: Sat, 8 Jun 2002 01:59:31 -0300 Subject: [A-List] Incremento de pobreza en Argentina Message-ID: <3D016503.32424.362089@localhost> BUENOS AIRES, 6(PSI).- AUMENTO DE LA POBREZA ARGENTINA. La escalada de la pobreza en la Argentina parece no tener l?mites: en los ?ltimos cinco meses cinco millones de personas, en su mayor parte de clase media, pasaron a ser pobres elevando la cifra total a 19 millones, de acuerdo con un estudio privado. Pero adem?s de los pobres, hay otros siete millones de argentinos en situaci?n de indigencia, que no pueden siquiera acceder a una canasta b?sica de alimentos. La pobreza alcanz? en mayo pasado al 52% de la poblaci?n, mientras que la indigencia afecta al 21% de los 36 millones de argentinos, de acuerdo con un trabajo realizado por la consultora privada Equis. En diciembre de 2001 la pobreza alcanzaba al 38,3% de la poblaci?n, unos 14 millones de personas, de acuerdo con Equis. Seg?n las definiciones oficiales, por debajo de la l?nea de pobreza se encuentran los hogares que no pueden satisfacer un conjunto de necesidades consideradas esenciales, entre ellas el transporte, la salud, la alimentaci?n y la vestimenta. Por debajo de la l?nea de indigencia, en tanto, se encuentran hogares cuyos ingresos no alcanzan para comprar una canasta de alimentos capaz de satisfacer el m?nimo de necesidades energ?ticas y proteicas. El soci?logo Artemio L?pez, director de Equis, dijo que el sostenido aumento de la pobreza y la indigencia se debe, en gran medida, al creciente desempleo, que alcanzar?a al 25% de la poblaci?n econ?micamente activa. "A diferencia de lo que ocurr?a en los inicios de la d?cada del 90, los ?ndices de pobreza no est?n solamente vinculados a la inflaci?n, sino que debe agregar un fen?meno mucho m?s complejo y dif?cil de revertir como es la desocupaci?n", explic? L?pez. Afirm? que revertir el empobrecimiento de la poblaci?n "podr?a tardar cinco a?os como m?nimo". El gobierno admiti? en mayo pasado que "es muy probable" que m?s de la mitad de la poblaci?n sea pobre, es decir que oficialmente habr?a m?s de 18 millones de pobres. Se trata de niveles de pobreza similares a los de los ?ltimos a?os de la d?cada de 1980 y primeros de la d?cada de 1990, cuando en el pa?s hab?a una hiperinflaci?n galopante de m?s de cuatro d?gitos. La inflaci?n asciende a cerca del 21% en los primeros cuatro meses del a?o, como consecuencia de la devaluaci?n de enero pasado. La moneda ha perdido el 70% de su valor desde entonces. De acuerdo con informaci?n oficial, una familia tipo -un matrimonio y dos hijos- necesitaba en abril pasado 252 pesos (71 d?lares) para satisfacer sus necesidades alimenticias y 598 pesos (unos 168 d?lares) para cubrir todas sus necesidades de servicios y alimentos. El gobierno ha otorgado poco m?s de un mill?n de planes de trabajo equivalentes a 150 pesos (42 d?lares) en un intento por ayudar a los m?s necesitados.- XXX N?stor Miguel Gorojovsky nestorgoro at fibertel.com.ar ********************************************************************** * Compa?eros del exercito de los Andes. ...La guerra se la tenemos de hacer del modo que podamos: sino tenemos dinero, carne y un pedazo de tabaco no nos tiene de faltar: cuando se acaben los vestuarios, nos vestiremos con la bayetilla que nos trabajen nuestras mugeres, y sino andaremos en pelota como nuestros paisanos los indios: seamos libres, y lo dem?s no importa nada... Jose de San Mart?n, 27 de julio de 1819. ********************************************************************** * ****** From rschaap at iprimus.com.au Mon Jun 10 04:27:01 2002 From: rschaap at iprimus.com.au (Rob Schaap) Date: Mon, 10 Jun 2002 20:27:01 +1000 Subject: [A-List] Quick State-of-the-Nation spleen vent from Oz References: <3D002AEF.35C556D9@iprimus.com.au> Message-ID: <3D047EF8.BC01F1BB@iprimus.com.au> G'day all, So much for that promise about point-for-point critiques of sanguine articles about Australian economies. No time for that, so just a couple of notes for now. (1) We are living on the card in a big way: a net $37 billion in 1999/2000, $21 billion in the 2000/2001, and $22 billion in the first nine months of 2001/2002. In 1980 the net foreign debt incurred by a recognisably quasi-Keynesian Australian economy was A$8 billion. In the six years since the so-called neoliberal Howard Government waltzed into office, ti has soared from A$193 billion to A$332 billion. High growth by way of structural dependence on foreign borrowing. In June, 1996, the finance sector owed a net $80 billion overseas. By December, 2001, that had more than trebled to a net $251 billion. The amount the sector has lent out for housing has more than doubled: an average house in the state capitals cost about four years' wages in 1990; it now costs more than eight years' wages. Low interest rates have enticed Australians to borrow at unprecedented rates, demanding on credit today what they will now not be able to demand with readies tomorrow. The credit sector has been lending at one per cent safety margin, and rates have gone up half that in five weeks. Negative equity is a real concern throughout suburban Australia, and within a few months. Also, Australian business is in debt. It has to fund new investment with more debt. But interest rates are going up to forestall inflation. But more expensive money equals higher costs of production equals inflationary pressure, no? So an article that worships central banks forgets just how contradictory their primary instrument is ... As professional dissentoid economist Petyer Brain points out (and apologies for misplacing the citation), "Australia's trade deficit in elaborately transformed manufactures (ETMs such as machinery, computers, cars, processed foods, paper, chemicals and the like) is now the major problem with Australia's current account deficit and this will put a speed limit on growth and job creation over the next decade. Although exports of ETMs have risen from a low base, that rate of increase is declining while imports continue to expand. In 1999, Australia's trade deficit in ETMs was a huge $9.5 billion, well in excess of the current account trade deficit of that year of $5.1 billion. On Brain's projections, the situation will show little improvement for a decade as in 2009 the trade deficit of ETMs will still be at $9.6 billion with the current account trade deficit at $5.1 billion. Writing in The Age a month later, under the headline, `Borrowing puts Australia on road to a meltdown?, Dr Brain elaborated. For the past 20 years, he said, Australia has run one of the world?s highest current account deficits, periodically more than 6 per cent of gross domestic product, borrowing heavily overseas to bridge the gap between what we earn from exports and what we spend on imports "The neglect of manufacturing in this country is inexplicable. Put simply, Australia has a savings problem because of the neglect of the manufacturing sector. No-one seems to have noticed that the 13 per cent share of the Australian manufacturing sector in total output is 5-7 per cent below comparable overseas countries. This equals the current and long-term Australian savings/current account deficit gap." That ain't quite Argentina, perhaps - nor even quite Japan - but there are bits of both stories in this mix, I think. As Mark Twain said, if history does not repeat itself, it certainly rhymes. Australia's song is not the original number messrs Howard and Costello claim it to be, indeed all they did coming up to the last election was speed a familair ditty on its remorseless way, and all they can hope is that they're safely back on the Opposition cushions when the large turd they've produced approaches the Fan Of Reckoning. Back to the marking ... Rob. From ewc at onetel.net.uk Mon Jun 10 04:38:25 2002 From: ewc at onetel.net.uk (ewc) Date: Mon, 10 Jun 2002 11:38:25 +0100 Subject: [A-List] Truth about Gold and Braudel References: Message-ID: <002e01c2106b$152226e0$076f4ed5@oemcomputer> Hi Henry First to say I strongly agree with your definition of money, and a good number of the things you put as facts. So I will just focus on a couple of matters where we differ I would distance myself from 'Greshams law' - Thomas Gresham himself was concerned with the relationship between pure and debased currency in Elizabethan England. To pull his comments out of that context and make them a law seem to me to be a mistake. If you seek definitions rich enough to make the 'law' work in diverse historical situations you end up with either a vacuous statement (people prefer the money they prefer) or a false one (eg 'silver is better than gold' etc etc). Paper, copper, silver and gold etc all can and have been dominant. In my judgement talk of 'Greshams law' is usually at base a ruse to pre-empt and side-track discussion about how one form of media becomes dominant, rather than offer a genuine insight. It blocks understanding rather than assists it. I guess I would generalise this point further, to say that historically the monetary media is an important aspect of the political and social structure of a society, and that much of modern economic dogma exist to deflect our attention into a desert of superficialities and unanswerable questions, away from the richer realities of past situations. (Am not decrying all economic theory here - just bad economic theory) And I am fascinated to find you apparently quoting Braudel as a kind of bible of economic historical fact. Braudel's theories of economic history are almost all fictions. He constructed a fake version of the past - very much like the fake past that Orwell postulated in '1984'. Braudel himself was Febvre's creature. Febvre started negotiations with the Rockerfeller Foundation as far back as 1927, but the real push to produce a de-politicised (dumbed down) version of the economic past began in earnest in 1946, and was funded primarily by the Ford Foundation. (As Febrve was manoeuvring himself into a plum job at UNESCO) About 10 years back I wrote out a couple of pages of criticism of Braudel's account of 17th cent India (Braudel's speculation on monetary media are all bunk, but those on India are especially shoddily constructed). I sent them off to Wallerstein at the Braudel centre. His comment came back that Braudel did not know anything about 17th century India. Does not it strike anyone on a-list as odd that a man becomes the world's greatest 20th century historian by writing standard reference books on things he knows nothing about? Of course Wallerstein is a Ford Foundation creature too - writing his 'core-periphery' thesis at Ford Foundation's Palo Alto retreat, and getting Ford Funding to 'perpetuate' (actually further mangle) Braudel's heritage at Binghamton. Andre Gunder Frank's continued silence on these matters is surely a matter of note I am out of station for the next couple of weeks - so if anyone wants to comment on these issues, please ensure to put 'Braudel' on the subject line Robert From sherrynstan at igc.org Mon Jun 10 05:19:49 2002 From: sherrynstan at igc.org (Sherry & Stan Goff) Date: Mon, 10 Jun 2002 07:19:49 -0400 Subject: [A-List] Climate change and IMF assault southern Africa References: <002e01c2106b$152226e0$076f4ed5@oemcomputer> Message-ID: <016b01c21070$bd9f23e0$0300a8c0@earthlink.net> Once again, African children are dying of hunger. But why is famine afflicting places of such natural wealth? By Karen MacGregor in Durban and Katherine Butler 07 June 2002 Hunger stalks southern Africa. In Malawi, the men risk their lives to dive for water-lily bulbs in crocodile-infested rivers and kill mice to eat and sell. The women gather wild grasses and boil up weeds to feed their children. Nearly 13 million people are on the brink of starvation as the worst food crisis in a decade spreads across six countries: Malawi, Mozambique, Swaziland, Zambia, Zimbabwe and Lesotho. A meeting in Johannesburg of aid officials and government leaders has heard a stark warning from the United Nations. Jean-Jacques Graisse, the deputy director of the UN World Food Programme (WFP), said: "This is a crisis of enormous dimensions. The situation worsens each day." More than 1 million tonnes of emergency food aid is required to avert an unfolding disaster in which many people will die. "We'll talk about a famine the day we see thousands and thousands of people dying," said Mr Graisse. "At this stage, we have a great number of people facing malnourishment and starvation in some areas, and if we do nothing, we will face a famine." The most vulnerable - the very young and the sick - are already perishing, and millions are surviving on staple foods supplemented by scraps foraged from the wild. The British charity Christian Aid is assessing the crisis in Malawi and is poised to launch a major appeal. "People here are so desperate they are hunting mice to eat and sell," said the agency's Dominic Nutt, speaking from Blantyre. "Many villages are getting no help at all. We saw the fresh graves of hundreds of people in one village who have died since February. Children, many of them HIV orphans, have swollen stomachs from chronic malnutrition," he said. In Zambia there has been a 90 per cent crop failure and the price of maize has spiralled Joanne Mut?, of the aid agency Tearfund, who is in the worst-hit area in the south of the country, said: "Families here are eating roots and even rats when they can find them." Yesterday, the UN organisations released new estimates of food-aid needs in the six countries, based on the reports of its own fact-finding missions. The total number of people going hungry is 7.7 million, and they urgently require 262,000 tonnes of food aid. This number will soar to 11.5 million people from September to November, and to 12.8 million from December to March. Some four million tonnes of aid will be required to see the region through to the end of the year, the UN said. By then, there will be 6 million Zimbabweans in need of emergency food aid, 3.2 million people in Malawi, 2.3 million in Zambia, 500,000 in Mozambique, 445,000 in Lesotho and 231,000 in Swaziland. Southern Africa is a region of enormous natural wealth. So why are 13 million people enduring these pitiful conditions? Drought and floods are certainly to blame, but man-made calamities, such as the decision of the authorities in Malawi to sell off a strategic 167,000-tonne grain reserve and President Robert Mugabe's controversial land seizures in Zimbabwe, have played a big part. It is no coincidence that the countries worst hit by food shortages are those in the greatest political turmoil - Zimbabwe, Malawi and Zambia. But only now are governments in the region admitting that they share the blame. Non-governmental organisations have criticised the IMF for encouraging Malawi, where up to 3.2 million people are going hungry, to reduce its grain reserves. Yet Malawi itself ordered the total sale, and the government is now investigating where the money went. The privatisation of agencies that previously regulated the price paid to farmers and the distribution of seed and fertiliser has also contributed to the crisis. Zimbabwe used to export food to the entire region. Now an extraordinary 5.3 million people need aid. Yesterday a minister in Mr Mugabe's government admitted for the first time that politically inspired invasions of thousands of white-owned commercial farms were partly to blame for the crisis. Simba Makoni, Zimbabwe's Finance minister, conceded at a summit in Durban that his country's land-redistribution policies had reduced the amount of commercial farmland growing maize, the staple food. "It compounds, it exacerbates, but it is not the primary cause of the problem," he added, placing the blame primarily on drought. The ruling Zanu-PF party is also accused of delivering food aid only to its supporters. Nobody at the gleaming International Conference Centre in Durban is going hungry. There, in a separate meeting, eight African presidents and 700 delegates from 47 countries (28 of them African) are thrashing out ways of implementing Nepad - the New Economic Partnership for African Development - the continent's renaissance plan, and attracting funding for it at the upcoming G8 summit in Canada. The summit in Durban and the famine gathering in Johannesburg are inextricably linked. Nepad would help Africa cope with famine in the future by tackling issues such as the need to stamp out corruption. The meeting in Johannesburg, organised by the WFP and the Food and Agricultural Organisation, has brought together some 100 aid agency, donor and government officials to coordinate their responses and to tackle issues such as accountability and donor concerns about giving aid to governments they view as unreliable. The focus is also on an Aids epidemic that is deepening the effects of crop failure. While climate has played an important role in the impending food security crisis the need for more effective governance is highlighted by a new problem being faced this year, according to Brenda Barton, of the WFP. "Governments said they would import large amounts of food, but these have largely not materialised," she said. "Lack of imports has meant lack of food on the market, which has fuelled price hikes. This has made the poor unable to buy food when their harvests run dry." Zimbabwe, like Malawi, sold maize reserves even as shortages escalated. Zimbabwe has had its longest dry spell in 20 years. But that is far from the only reason for its worst agricultural crisis since the country achieved independence in 1980. Drought has been aggravated by a sharp fall in maize production by commercial farmers, who used to produce a third of total cereals but whose farming has been severely disrupted by land reform and invasions. While the area of planted maize has grown through the resettlement of peasant farmers, the area of commercial farmland planted with maize - the most productive sector - has plummeted by 62 per cent in two years since the start of farm occupations. Maize production is 77 per cent less than it was two years ago, other cereal production is 67 per cent less. The WFP says: "The extremely poor main season has been caused by a severe drought between January and April in most parts of the country and the near collapse of large-scale commercial production due to land reform activities. Zimbabwe is facing an immediate, serious food crisis. Unless sufficient food can be imported, and the poorest people can access it, severe malnutrition and death caused by hunger will occur in the coming months". Mr Mugabe may also be facing a torrid time from fellow African political leaders in the coming month, as they prepare to sell the Nepad scheme to the G8. Zimbabwe's political crisis could make it a test case for the regeneration plan, which promises political and economic reform in return for debt relief and increased Western aid. Zimbabwe has expressed fears that it will be "abandoned" by the rest of Africa. Olusegun Obasanjo, the Nigerian President, said that Africa would not hesitate to "sanction itself" if necessary. full at http://news.independent.co.uk/world/africa/story.jsp?story=302878 From annewilliamson at msn.con Mon Jun 10 10:13:51 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Mon, 10 Jun 2002 12:13:51 -0400 Subject: [A-List] Turkey's dilemma References: Message-ID: <00df01c21099$d019fd00$0100a8c0@igrushkii> June 9, 2002 Turkey: Where East reluctantly meets West By ERIC MARGOLIS -- Contributing Foreign Editor ISTANBUL -- American politicians and media keep asking, "Why can't other Muslims be more like the Turks?" In the North American view, Turks are "good Muslims" - democratic, pro-western, co-operative, and don't make trouble. Turkey is assuming command of the western "protective" force in Kabul, Afghanistan propping up the U.S.-installed regime of Hamid Karzai. Turkish intelligence works closely with America's CIA and Israel's Mossad against Islamic militants. Turkey has become a close ally and major arms customer of Israel. Islam - particularly its political and social sides - is severely restricted by Turkey's militantly secular regime. In return for this "strategic partnership," Washington just rushed to save Turkey from financial collapse through a $12-billion US loan through the International Monetary Fund. Turkey's shaky economy shrank nearly 10% last year; inflation is rampant, with one U.S. dollar now equal to almost 1.5 million Turkish lire. The ongoing illness of Turkish prime minister Bulent Ecevit has only worsened the financial crisis. On closer view, Turkey's credentials as a western-style democracy are far from perfect. When U.S. Vice President Dick Cheney came to Turkey to drum up support for a war against Iraq, he devoted far more time meeting with the chief of staff of Turkey's powerful armed forces than with Prime Minister Ecevit. Turkey, like Prussia, is an army disguised as a nation. Behind a facade of squabbling, impotent politicians, real power in Turkey is held by the generals, who throw out prime ministers whenever they please. Turkey's generals see themselves as keepers of the sacred flame of Kemalism, the statist political system created by Kemal Ataturk in the 1930s. Ataturk was a brilliant general who saved post-World War I Turkey from being carved up by Britain, France, Italy and Greece. As the father of modern Turkey, he imposed a dictatorial regime that was influenced by 1930s fascism and communism. Ban the fez Ataturk sought to remake Turkey into a European nation by banning the Arabic alphabet and the fez, by repressing Islam and even hanging Islamic scholars. He literally ripped out Turkey's Islamic roots and replaced them with a form of imitation Europeanism that left Turks with a national identity crisis, unsure of what they really are: easterners, westerners, or something in between. Turkey's armed forces perpetuate Ataturk's philosophy. Enshrined in a regal mausoleum, Ataturk has become the secular god of Turkey. Anyone daring to question Kemalism is jailed - or worse. Leaders of Turkey's moderate Islamic parties have been routinely ousted from office on phony charges and thrown into prison. This happened to the popular mayor of Istanbul, for daring to read a classic poem deemed too Islamic by the generals. Turkey's Kemalist political system is designed to perpetuate the interests of the nation's U.S.-supported ruling elite, an alliance between the military and big industrialists. Leftist critics call it the last of the 1930s' totalitarian systems. Westernized urban Turks, mostly nominal Muslims, generally support the status quo and favour joining Europe. Rural Turks, larger in number but without any political power, are deeply religious, do not support westernization and favour a return to Turkey's Islamic roots. The nation's largest minority, the Kurds, remain a central problem for Turkey. Though the long Kurdish struggle for an independent state has been suppressed, and Kurdish leader Ocalan captured, Kurdish nationalism still remains sand in the eye of the Turkish nation. A brutal war against equally brutal Kurdish insurgents was marked by human rights violations that earned condemnation by Europe. Turkey's oft-criticized rights record has been the ostensible reason Europe has continued to deny Turkey admission to the EU. The true reason: Christian Europe's potent prejudice against admitting Muslim Turkey, with millions of farmers. Europe is up in arms against its Muslim emigrant population, and certainly has too many subsidized farmers. Strategic alliance Turkey's strategic alliance with Israel - underlined by a recent $800-million tank deal signed during the Israeli invasion of Palestinian territory - won Ankara important support in the U.S. Congress and silenced complaints over its human rights record, but outraged the Muslim world. The Israel lobby has been running interference for Turkey in Washington and preventing the Greek and Armenian lobbies from imposing restrictions on U.S.-Turkish relations. Good relations with Israel assures good press in the U.S. President George Bush's crusade against Iraq and militant Islam has put the Turks in a difficult position. Turkey has lost billions on trade with Iraq by supporting U.S. sanctions against Baghdad. Now, the U.S. is pressing Turkey to act as policeman against Islamic groups and deepen its anti-Islamic co-operation with Israel. A majority of Turks opposes such policies; many Turks are calling on Ankara to embrace moderate Islam, stop acting as Washington's gendarme, forget hostile Europe and resume Turkey's traditional close relations with the Arab Mideast. Turks have long complained their enormous contribution to NATO - its second largest army - has been ignored and their nation taken for granted by the West. A few Turkish intellectuals and writers risk prison by proposing to ditch Kemalism, get the army out of politics, build a genuine democracy and allow Turks to be the fierce, self-assured and devoutly Islamic people they once used to be. ---------------------------------------------------------------------------- ---- Eric can be reached by e-mail at margolis at foreigncorrespondent.com. Letters to the editor should be sent to editor at sunpub.com or visit his home page. Know someone who might be interested in this page? Just type in the email address to send them the URL Enter a destination email address: Enter your email address: ---------------------------------------------------------------------------- ---- From hliu at mindspring.com Mon Jun 10 16:13:49 2002 From: hliu at mindspring.com (Henry C.K. Liu) Date: Mon, 10 Jun 2002 18:13:49 -0400 Subject: [A-List] Truth about Gold and Braudel References: <002e01c2106b$152226e0$076f4ed5@oemcomputer> Message-ID: <3D05249C.7167993F@mindspring.com> Robert, I am aware of the limitation of Braudel's perspective. I wrote: "Fernaud Braudel noted that the value of silver increased from 13th to 16th century until 1550, which he called the age of gold inflation, which lasted 6 centuries. In 1595, Enrope had 20,000 tons of silver. By 1650, another 16,000 tons had been added to the money supply. The gold inflation was replaced by ilver inflation as the value of silver fell, a phenonoenon which supported Gresham's Law. The basic fact is that capitalism cannot survive stable prices. Any government or monetary system that maintains price stability for long would evetually face political upheaval." What I used was Braudel's data to show that any government or monetary system that maintains price stability for long would evetually face political upheaval. Money is created to facilitate economomic growth, not to enhance its own value. Henry ewc wrote: > Hi Henry > > First to say I strongly agree with your definition of money, and a > good number of the things you put as facts. So I will just focus on a > couple of matters where we differ > > I would distance myself from 'Greshams law' - Thomas Gresham himself > was concerned with the relationship between pure and debased currency > in Elizabethan England. To pull his comments out of that context and > make them a law seem to me to be a mistake. If you seek definitions > rich enough to make the 'law' work in diverse historical situations > you end up with either a vacuous statement (people prefer the money > they prefer) or a false one (eg 'silver is better than gold' etc etc). > Paper, copper, silver and gold etc all can and have been dominant. In > my judgement talk of 'Greshams law' is usually at base a ruse to > pre-empt and side-track discussion about how one form of media becomes > dominant, rather than offer a genuine insight. It blocks > understanding rather than assists it. I guess I would generalise this > point further, to say that historically the monetary media is an > important aspect of the political and social structure of a society, > and that much of modern economic dogma exist to deflect our attention > into a desert of superficialities and unanswerable questions, away > from the richer realities of past situations. (Am not decrying all > economic theory here - just bad economic theory) > > And I am fascinated to find you apparently quoting Braudel as a kind > of bible of economic historical fact. Braudel's theories of economic > history are almost all fictions. He constructed a fake version of the > past - very much like the fake past that Orwell postulated in '1984'. > Braudel himself was Febvre's creature. Febvre started negotiations > with the Rockerfeller Foundation as far back as 1927, but the real > push to produce a de-politicised (dumbed down) version of the economic > past began in earnest in 1946, and was funded primarily by the Ford > Foundation. (As Febrve was manoeuvring himself into a plum job at > UNESCO) About 10 years back I wrote out a couple of pages of > criticism of Braudel's account of 17th cent India (Braudel's > speculation on monetary media are all bunk, but those on India are > especially shoddily constructed). I sent them off to Wallerstein at > the Braudel centre. His comment came back that Braudel did not know > anything about 17th century India. Does not it strike anyone on > a-list as odd that a man becomes the world's greatest 20th century > historian by writing standard reference books on things he knows > nothing about? > > Of course Wallerstein is a Ford Foundation creature too - writing his > 'core-periphery' thesis at Ford Foundation's Palo Alto retreat, and > getting Ford Funding to 'perpetuate' (actually further mangle) > Braudel's heritage at Binghamton. > > Andre Gunder Frank's continued silence on these matters is surely a > matter of note > > I am out of station for the next couple of weeks - so if anyone wants > to comment on these issues, please ensure to put 'Braudel' on the > subject line > > Robert From nestorgoro at fibertel.com.ar Mon Jun 10 23:26:24 2002 From: nestorgoro at fibertel.com.ar (Nestor Gorojovsky) Date: Tue, 11 Jun 2002 02:26:24 -0300 Subject: [A-List] (Sp) Official: During the 90s, Argentinean did not overspend, it undercollected! Message-ID: <3D055FD0.25171.AA484C@localhost> Sorry for lack of translation (if someone could draft one, it would be a great service to fight the bourgeoisie and to help my country). This is a most important article from a mildly conservative domestic newspaper, Clar?n, which draws on recently released official figures which demonstrate that the Argentinean crisis in state funding was not due to any form of overspending but due to intentionally pursued policies of undercollection of taxes! ------- Forwarded message follows ------- [Gentileza de Edmundo Ruckauf] Reproduzco nota aparecida en el diario _Clar?n_ de Buenos Aires (fuente insospechable de toda aspiraci?n revolucionaria), donde se demuestra con datos oficiales que toda la canalla financiera internacional y nativa miente cuando afirma que la tragedia de la Argentina se debe a un incremento del gasto p?blico. Muy por el contrario, se debe a que los ingresos p?blicos fueron jibarizados y saqueados por los que ahora se rasgan las vestiduras ante cualquier intento de aumentar los impuestos, aunque m?s no sea para que los ni?os de este pa?s tan rico en alimentos dejen de morirse de hambre. ------- Forwarded message follows ------- Domingo 26 de mayo de 2002 Clar?n BOLSAS Y MERCADOS ECONOMIA: EL DEBATE SOBRE EL FINANCIAMIENTO AL ESTADO EN LOS 90 El mito del gasto p?blico No hubo despilfarro: el d?ficit fiscal fue causado por el recorte de ingresos y no por un exceso de gasto, muestran nuevas cifras oficiales. ISMAEL BERMUDEZ. El Ministerio de Econom?a dio a conocer un informe sobre la evoluci?n del gasto p?blico total (Naci?n, provincias y municipios) en los ?ltimos 21 a?os de 1980 al 2001. El trabajo ?que se encuentra en www.mecon.gov.ar? es muy importante porque pulveriza varios mitos que se han instalado en la Argentina y en la comunidad financiera internacional. La f?bula m?s importante es la que dice que en los '' 90 hubo una "explosi?n del gasto p?blico" y que ese despilfarro, concentrado en las provincias o en la seguridad social, explica, en gran medida, los recurrentes d?ficits fiscales y la crisis presente. Para sostener esa tesis, los te?ricos de la "explosi?n del gasto p?blico" recurren a una manipulaci?n burda: comparan las cifras del gasto en precios corrientes. Pero es sabido que as? como no se pueden comparar peras con manzanas, tampoco se pueden igualar los pesos de 1991 (entonces australes) con los de 1994, 1998 o 2001 porque el valor del peso fue variando por el componente inflacionario. Este principio elemental parece no haber sido a?n comprendido por destacados economistas. Otra manipulaci?n es el a?o de base que se toma para las comparaciones. Es sabido que los per?odos de alta inflaci?n o directamente hiperinflacionarios ayudan a licuar el gasto p?blico. Por ejemplo, en 1989 y 1990 hubo una fuerte reducci?n del gasto p?blico. Esto se debi? a que en pesos "inflados" el PBI fue creciendo, aunque la econom?a retrocedi?, mientras los gastos del Estado se achicaron porque se siguieron pagando en pesos devaluados o con gran retraso respecto de la inflaci?n. El a?o 1991, con una inflaci?n del 84%, todav?a refleja esta situaci?n por lo que constituye un a?o de base relativamente baja en t?rminos de gasto p?blico, a tal punto que en pesos constantes es inferior al de 1985, 1986, 1987 y 1988, a?os de relativa estabilidad. De las cifras oficiales surge que efectivamente el gasto total, incluido los intereses de la deuda, entre 1991 y 2001 aument? en 45.000 millones de pesos Sin los intereses, el aumento fue de 35.000 millones de pesos. Pero ese incremento surge de comparar el gasto de 1991 con el del 2001 a precios corrientes cuando es sabido que en ese lapso la inflaci?n fue del 50%. Si se considera el gasto a precios constantes ?excluyendo el componente inflacionario? el gasto subi? en 28.800 millones. Y sin los intereses, el aumento fue de 18.700 millones. Pero a?n as?, lo correcto es comparar la evoluci?n del gasto con relaci?n al tama?o de la econom?a y tomar en cuenta el crecimiento vegetativo de la poblaci?n. Para hablar de un exceso del gasto lo que habr?a que determinar es si el gasto p?blico aument? m?s que el crecimiento del PBI y el aumento de la poblaci?n. Pues bien, a lo largo de la d?cada del 90, y partiendo de un a?o base relativamente bajo, el gasto p?blico primario (sin intereses) como porcentaje del PBI se mantuvo casi constante en torno a los 29 o 30% del PBI Si a esto se le agrega el crecimiento de la poblaci?n (14% en la d?cada), el gasto p?blico primario por habitante tuvo una reducci?n significativa. Lo que s? hubo fue un aumento del gasto de las provincias y una reducci?n del nacional. Pero en gran medida esto obedeci? a que la Naci?n transfiri? a las provincias los gastos de educaci?n y de salud y hubo cambios en la coparticipaci?n de los impuestos. En cambio, el gasto p?blico total consolidado aument? 4,28 puntos del PBI: del 31,04% en 1991 al 35,32 en el 2001. Este aumento se explica casi por entero por los servicios de la deuda que pasaron de representar el 1,99% del PBI en 1991 al 5,33% en el 2001. Solo en el 2001 los intereses de la deuda p?blica representaron la friolera de 14.323 millones de pesos o d?lares, equivalente a todo el d?ficit fiscal consolidado. Explicaciones ?Si el gasto p?blico primario no aument? y las deficitarias y no deficitarias empresas p?blicas fueron privatizadas, por qu? creci? el d?ficit fiscal? El tema hay que mirarlo por el lado de los ingresos, algo que no hacen los te?ricos de la "explosi?n del gasto". Bajo la primera gesti?n de Domingo Cavallo, reforzada luego por Roque Fern?ndez, a partir de 1994 se redujeron los aportes patronales a la seguridad social, mientras se puso en marcha una reforma previsional que implicaba un elevado costo fiscal de transici?n por un per?odo de 15 a?os porque los aportes personales de los afiliados a las AFJP pasaban del Estado a los privados. Entre 1994 y el 2001 por esos dos conceptos el Estado dej? de recaudar unos 70.000 millones de pesos: 30.000 millones fueron a las AFJP y otros 40.000 millones a las empresas por la reducci?n de las al?cuotas de las cargas sociales. En parte eso fue compensado por el aumento de 3 puntos en el IVA (del 18 al 21%) dispuesto en 1995 y a partir de 1996 por subas de impuestos (combustibles, aportes de aut?nomos), una reforma impositiva (1999) que cre? nuevos impuestos (a los intereses, ganancia m?nima presunta) y otra reforma en el 2000. Pero las subas de impuestos contrajeron a?n m?s la econom?a, sin cubrir el bache fiscal. As?, en mayo del 2000, se redujeron los sueldos mayores a 1.000 pesos de los empleados p?blicos. En abril del 2001, Cavallo cre? el impuesto a las cuentas corrientes con una al?cuota del 1,2% y extendi? el IVA a nuevas actividades. Luego se redujeron el 13% las jubilaciones y sueldos p?blicos de m?s de 500 pesos. A?n as?, en ning?n momento, con relaci?n al tama?o de la econom?a, el Tesoro recuper? con los nuevos impuestos o subas de al?cuotas, la p?rdida de ingresos derivada de la rebaja de los aportes y la reforma previsional. Pero, adem?s, entre 1991 y 1995, Cavallo increment? los impuestos al consumo (el IVA salt? del 13% al 21%), lo que adem?s de su regresividad, son muy el?sticosmeables a los cambios en la actividad econ?mica: su recaudaci?n se desploma en per?odos de recesi?n. Primero el Tequila y luego la recesi?n iniciada en 1998 castigaron la recaudaci?n impositiva. Los baches fiscales originados por la resignaci?n de impuestos se cubrieron con deuda, potenciados por la carga de los intereses. Los intereses de la deuda p?blica entre 1991 y 2001 sumaron 82.717 millones de d?lares. Casi todo el incremento de la deuda se explica por esta carga de intereses. Los intereses, aparte, aumentaron por varias razones: En su primera gesti?n, Domingo Cavallo consolid? la deuda con los jubilados y proveedores con bonos p?blicos a 10 y 16 a?os, que reci?n comenzaban a cancelarse, tanto los intereses como el capital, a partir del s?ptimo a?o. Esos intereses ten?an una tasa fija (Libor) del 4%. As?, Cavallo transfiri? para 1997 en adelante una sobrecarga que, para cancelarla, su sucesor Roque Fern?ndez tuvo que endeudarse a una tasa mayor, del orden del 10%, porque en el inter?n peg? un salto la tasa de inter?s internacional. A partir de febrero de 1994 la tasa de inter?s internacional sufri? varias subas. Salt? del 3% a m?s del 6% hasta mediados del 2000, para bajar despu?s y ubicarse ahora en torno al 2% anual. Por la crisis del Tequila (1995), del sudeste asi?tico (1997), Rusia (1998) y Brasil (1999), la tasa de inter?s para los emergentes, entre ellos la Argentina, aument? m?s a?n por el llamado "riesgo-pa?s". A partir de 1997 se hicieron varias operaciones de canje que alargaron los vencimientos de la deuda. Los nuevos bonos se colocaron a una tasa de inter?s superior a la de los rescatados, en especial con el "megacanje", lo que oblig? al pago de mayores intereses. Como los d?ficits fiscales se financiaron con pr?stamos y bonos, la deuda creci? en volumen, realimentada por el crecimiento de los intereses. La insistencia en sostener que hubo una "explosi?n del gasto" no resiste las cifras reales. Su objetivo es, m?s bien, ocultar el peso del servicio de la deuda, las reducciones de impuestos y el costo de la reforma previsional. ? Copyright 1996- Clar?n.com. All rights reserved Directora: Ernestina Herrera de Noble ------- End of forwarded message ------- ------- End of forwarded message ------- N?stor Miguel Gorojovsky nestorgoro at fibertel.com.ar ********************************************************************** * Compa?eros del exercito de los Andes. ...La guerra se la tenemos de hacer del modo que podamos: sino tenemos dinero, carne y un pedazo de tabaco no nos tiene de faltar: cuando se acaben los vestuarios, nos vestiremos con la bayetilla que nos trabajen nuestras mugeres, y sino andaremos en pelota como nuestros paisanos los indios: seamos libres, y lo dem?s no importa nada... Jose de San Mart?n, 27 de julio de 1819. ********************************************************************** * ****** From nestorgoro at fibertel.com.ar Mon Jun 10 23:26:38 2002 From: nestorgoro at fibertel.com.ar (Nestor Gorojovsky) Date: Tue, 11 Jun 2002 02:26:38 -0300 Subject: [A-List] (Spa) Turning Argentina into a gigantic Warsaw ghetto Message-ID: <3D055FDE.24994.AA7D5E@localhost> I don't have the time to translate what follows. But please someone do! The following report is just as appalling as preliminary (not even deep). ------- Forwarded message follows ------- From: Nestor Gorojovsky No es una exageraci?n. Han cerrado las fronteras para millones de personas, y ha comenzado el exterminio por hambre y enfermedades. Siguen algunos datos. Origen de la informaci?n: Agencia Prensa Sindical Internacional. **************************************************************** .........1.........2.........3.........4.........5.........6 BUENOS AIRES, 11(PSI).- DE NORTE A SUR. LA DESTRUCCI?N PROGRESIVA DEL POTENCIAL HUMANO DE LA NACI?N. Producto de la pol?tica de devastaci?n del aparato productivo nacional y el aniquilamiento de los puestos de trabajo en la Argentina, la desocupaci?n masiva en el pa?s, cobra v?ctimas en la infancia y en la juventud mediante la desnutrici?n y el abandono creciente de las actividades educacionales, en tanto los clanes pol?ticos olig?rquicos conformados por capangas corruptos que administran los distintos feudos provinciales bajo diferentes siglas partidarias, viven cumplimentando ?rdenes que desde el Fondo Monetario Internacional tratan de profundizar la destrucci?n de la Naci?n Argentina. OBER?, MISIONES.- El 60% de los ni?os que se atienden en el SAMIC son an?micos. Las estad?sticas fueron dadas por los titulares de la Unidad de Recuperaci?n Nutricional del hospital y superan las que registr? en el 2.001 el Ministerio de Salud P?blica de la Naci?n. De acuerdo con un relevamiento efectuado en 90 ni?os internados en la Unidad de Recuperaci?n Nutricional y Pediatr?a del hospital Samic Ober?, el 60 por ciento se encuentra en estado de anemia lo que indicar?a que se super? el ?ndice que el Ministerio de Salud de la Naci?n hab?a detectado en el 2001 (del 55 por ciento). La informaci?n la dieron los titulares del ?rea, Basilio Malczewski y Patricia Triciuzzi, quienes indicaron que "las estad?sticas de anemia en la poblaci?n infantil han sido superada en este a?o. En el 2001, seg?n el Ministerio de Salud de la Naci?n y Unicef Argentina exist?a un 55 por ciento de anemia en esta poblaci?n y ahora hemos detectado en un muestreo realizado en 90 pacientes internados que existe un 60 por ciento". Si bien es peque?a la franja consultada, esos par?metros estar?an demostrando que el porcentaje no ha disminuido sino que ha ascendido levemente. La anemia es un problema que afecta a gran porcentaje de esta poblaci?n y que cada vez se agudiza m?s. "Hay m?s ni?os desnutridos an?micos que an?micos desnutridos, pero de todas formas la anemia deviene en una desnutrici?n a la larga ", dijeron. "Si hablamos de porcentajes, en la provincia de Misiones hasta el a?o pasado exist?a un 55 por ciento de la poblaci?n infantil con anemia, entonces imaginemos la cantidad de ni?os desnutridos que puede haber ya que tiene relaci?n directa", explic? Malczewski. "La anemia proviene de la insuficiente ingesta de hierro en la dieta alimentaria, sobretodo en una poblaci?n de riesgo como los ni?os o mujeres embarazadas y mujeres en edad f?rtil, es el descenso de la concentraci?n de hemoglobina en sangre por debajo del l?mite normal", explicaron los facultativos. En el mismo manual, entregado a todos los agentes sanitarios que participaron el a?o pasado en un encuentro nacional en Formosa, se mencionan adem?s las estad?sticas de anemia en las provincias argentinas y Latinoam?rica, donde Misiones aparece con el 55 por ciento de su poblaci?n an?mica. A un ni?o normal hay que suplementarle con hierro su comida en forma permanente. "Imag?nense si no habr? anemia en nuestra provincia o localidad si lo que comen hoy por hoy los chicos, sobretodo de escasos recursos, tiene cero porcentaje de hierro fuera de la alimentaci?n que ocasionalmente reciben en el comedor", indic? Triciuzzi. De todas formas, puntualiz? que "la anemia se da en todos los estratos sociales igualmente, porque falta informaci?n acerca de la valoraci?n nutricional que tiene que tener cada persona". Del muestreo efectuado por Malczewski se detect? en 90 pacientes un 60 por ciento de anemia de los cuales en menores de un a?o se detect? un 29 por ciento y en ni?os mayores de un a?o un 43,7 por ciento que incluso requirieron transfusi?n de sangre. Se tomaron muestras en hemoglobina y hematocritos en 43 ni?os menores de un a?o, 19 ni?os comprendidos entre 1 y 2 a?os, 18 infantes entre los 2 y 4 a?os y 10 peque?os mayores de 5 a?os. OR?N, SALTA.- Hay m?s desnutrici?n urbana que rural. Durante la prerronda de APS se relevaron m?s de 7.000 chicos oranenses. El jefe del servicio de Atenci?n Primaria de la Salud en Or?n, H?ctor Banille, inform? que en la primera prerronda del a?o se hizo cobertura de m?s de 2.100 chicos menores de 2 a?os y de 5.300 entre los 2 y los 5 a?os, detect?ndose 16 por ciento de desnutrici?n entre los m?s chicos y s?lo 6 por ciento en el segundo grupo. Contrariamente a lo que se pueda esperar -dijo- "la zona urbana es la de mayor porcentaje de desnutrici?n, en comparaci?n con la rural, a pesar de que esta ?ltima comprende la zona de r?o Pescado, los cerros y Los Toldos". Esto se explica por distintos factores. En la parte rural las madres tienen mayor relaci?n con los ni?os, mayor cuidado, mayor posibilidad de autoproducci?n de alimentos y la lactancia materna es m?s prolongada. En la zona urbana, los barrios que tienen mayor porcentaje de desnutrici?n son Caballito y Estaci?n, donde se superan los promedios en m?s de un 70 por ciento, elevando el promedio del total del ?rea operativa. Para bajar estos ?ndices se trabaja en varias acciones como recuperaci?n nutricional en base a soja, saneamiento ambiental y letrinizaciones, prevenci?n y autocuidado de madres primerizas y adolescentes, enfrentando la crisis con organizaciones vecinales y comunitarias dedicadas a la alimentaci?n y la salud, con microemprendimientos para la elaboraci?n de jab?n y desarrollando huertas hogare?as. Banille reconoci? adem?s que la cobertura lograda es el 65 por ciento del ?rea operativa, ya que se considera que la poblaci?n del sector c?ntrico de la ciudad y de algunos barrios nuevos concurren al hospital u otros centros asistenciales. NEUQU?N.- El hambre lleg? a las escuelas secundarias. El problema se advierte desde hace dos a?os, pero se agudiz? en los ?ltimos meses. En las escuelas secundarias de esta ciudad hay hambre y manifestaciones palpables de est?magos vac?os, como los desmayos en las aulas, episodios que ocurren con m?s frecuencia de lo que muchos suponen. El problema alcanza tal magnitud que existe un clamor de la comunidad educativa para instrumentar refuerzos alimentarios, una propuesta que insumir?a recursos adicionales en el presupuesto educativo del orden de no menos de un mill?n de pesos anuales, seg?n estimaciones oficiales. La informaci?n que transmitieron directores y docentes de ocho escuelas consultadas por la prensa tambi?n la conoce el secretario de Educaci?n, Mario Pilatti. "No hay cifras, pero tenemos la impresi?n de que est? habiendo problemas" en las escuelas, admiti? el funcionario. Es cierto; la cartera educativa no cuenta con datos oficiales sobre subalimentaci?n en la poblaci?n secundaria. Pero luego de hablar con docentes, preceptores y autoridades se llega a una conclusi?n del drama que se vive en las aulas: en modo creciente, el problema de la mala alimentaci?n de los j?venes se advierte desde hace por lo menos dos a?os y se acentu? en los ?ltimos meses. El hambre, dijeron los consultados, impacta en el rendimiento acad?mico. "Con la panza vac?a nadie aprende", grafic? el director de una las escuelas consultadas. El nivel medio presenta particularmente un serio problema de deserci?n: las cifras oficiales indican que 4 de cada 10 alumnos abandona el colegio secundario antes de tiempo. El gobierno estima que, en parte, los problemas sociales del nivel medio se atienden a trav?s de 4.500 becas que llegan a los j?venes. Sin embargo, los consejeros escolares solicitaron un plan de refrigerio para las escuelas del nivel medio. En los niveles inicial y primario el Estado interviene con una fuerte contenci?n: distribuye 110.000 raciones de refrigerio y 27.000 de comida. Pero los adolescentes tambi?n padecen las mismas necesidades. Hugo Canevello, asistente social que trabaja de preceptor en el Centro Provincial de Ense?anza, Media (CPEM) 48 explica que los chicos cada vez piden m?s comida. "Algunos pasan dos d?as sin comer. Los padres son changarines, desocupados o con planes sociales", describe. En esa escuela, a la que asisten 550 alumnos, funciona un servicio de refrigerio. Es lo que hay, pero suficiente para ayudar: una taza de t? o mate cocido, a veces un sandwich o pan con miel. Canevello aclara que en el colegio no hay casos de desnutrici?n, pero cuenta que "los chicos se descomponen y se desmayan". Las madres de esos alumnos a veces cuentan lo dif?cil que es cocinar varios d?as con una bolsa de harina. Enzo De Nardo, docente del CPEM 47, tambi?n explica que en el colegio los chicos se desmayan porque est?n mal alimentados. "Les cuesta reconocerlo por verg?enza", aclara. Pero adem?s, advierte, "tienen fr?o todo el tiempo por la falta de calor?as". Silvana Cinat, regente de la EPET 5, dice que en los tres turnos se ofrece un refrigerio. En la escuela en la que Cinat trabaja, el 25% de los 600 estudiantes concurren a un comedor del barrio San Lorenzo. "La falta de alimentaci?n trae problemas de aprendizaje y a esos chicos les cuesta mantener la atenci?n, en especial en las ?ltimas horas", explic? la docente de la EPET 5. La directora de la Escuela de Enfermer?a, Ana Mar?a Gonz?lez, cuenta una historia similar. El a?o ?ltimo, recuerda, se detectaron casos de chicos que sufrieron desmayos por problemas de alimentaci?n. En ese establecimiento, 100 alumnos reciben comida -los de segundo y tercer a?o-, pero la mitad de toda la poblaci?n -que es de 700- ya pidi? comer en la escuela. En el centro tambi?n hay problemas. Luc?a Di Pietro, docente del CPEM 23, explic? que los alumnos del turno ma?ana no desayunan y los de la tarde no desayunan y tampoco almuerzan. A la escuela concurren 980 alumnos y 390 toman un refrigerio. "La propuesta de extender a los establecimientos de nivel medio y a los de adultos el servicio de refrigerio es una respuesta m?nima que desde el Estado se debe ofrecer", dijo el diputado aliancista Ricardo Villar que est? trabajando sobre este tema. Para Villar el problema no es nuevo. Pero "durante este a?o se ha multiplicado en casos y profundizado en sus consecuencias", sostuvo. Y adem?s, dijo, no es s?lo un fen?meno de la capital sino tambi?n que afecta al interior. Villar tambi?n menciona que no hay estad?sticas que cuantifiquen la dimensi?n del problema "pero los docentes -agrega- son testigos h?biles para certificar la gravedad del problema". El legislador radical sostiene que el aporte, que ?l calcula en dos millones por a?o, representa "una ?nfima cantidad comparada con lo que se gasta en otros rubros de menor trascendencia social". Tambi?n menciona que el refrigerio es una "respuesta r?pida a la coyuntura" y permite crear condiciones para que los alumnos sean "retenidos por el sistema y en las mejores condiciones para asimilar la ense?anza". El titular de Educaci?n, Mario Pilatti, admiti? que en las secundarias hay problemas de alimentaci?n, pero aclar? que la prioridad la tienen los alumnos del nivel inicial y primario. Aunque dijo que el pedido de refrigerio para los alumnos de media se va a analizar, explic? que en la secundaria existe una cobertura "importante" a trav?s del plan de becas. "Estamos pagando 4.500 becas que implican m?s del 10% de la matr?cula en media", dijo el funcionario. La tradici?n en Neuqu?n, como en otros distritos, es reforzar el alimento en la primaria, pero no hab?a planes espec?ficos para secundarios. Los problemas sociales han puesto en discusi?n la asistencia alimentaria. Pilatti record? que de los 300 millones del presupuesto educativo, s?lo 20 quedan disponibles para otros fines que no sea el pago de sueldos del personal. Estim? que para financiar el refrigerio en toda la poblaci?n media har?an falta destinar unos 100 mil pesos por mes. El funcionario, en declaraciones formuladas a la prensa, dijo que es posible analizar ayuda para los casos m?s cr?ticos, pero para eso, continu?, se necesita contar con un trabajo de campo y determinar cu?l es la poblaci?n que necesita este tipo de ayuda. Educaci?n, admiti?, no tiene cifras sobre subalimentaci?n. Se sabe que en primaria se dan 110 mil refrigerios y 27.000 raciones para 100 mil alumnos de inicial y primario. Gestos solidarios. En tiempos de crisis se tejen redes solidarias en todos los ?mbitos y esto tambi?n ocurre en la comunidad educativa, especialmente en las escuelas de la ciudad donde los alumnos est?n sufriendo hambre. Los j?venes m?s golpeados por la crisis econ?mica son los que habitan en la zona oeste de esta capital, y lo manifiestan tanto en los desmayos o descomposturas estomacales que sufren en las aulas, como en su rendimiento acad?mico. A pesar del dram?tico cuadro, los chicos de tres escuelas secundarias, acompa?ados por docentes y preceptores, tomaron la iniciativa de pensar soluciones a la situaci?n por la que atraviesan sus propios compa?eros. En el CPEM 47, los alumnos de un tercer a?o pusieron en marcha un comedor escolar mediante la colecta de alimentos en el barrio y el pedido a diferentes instituciones. Un camino similar pretenden recorrer los j?venes de otro tercer a?o, pero del CPEM 48, quienes est?n iniciando un comedor para los m?s chiquitos del barrio, con la idea de que funcione los d?as s?bados y domingos. "Les vamos a pedir comida a los supermercados y a los pol?ticos", sostuvieron con evidente entusiasmo los chicos a los periodistas. Por su parte, los chicos del CPEM 34, organizaron bolsas de comida que entregan a los padres de sus compa?eros m?s necesitados "a contraturno, para que los chicos no sientan verg?enza", seg?n explicaron. Por su parte, los consejeros escolares reclamaron la implementaci?n de un refrigerio en las escuelas del nivel medio y adulto. Lo mismo solicitaron para los institutos terciarios de la provincia. El reclamo se plante? en el VII Encuentro Provincial de Consejeros Escolares en el que estuvo presente el secretario de Educaci?n, Mario Pilatti. La reuni?n se realiz? en el edificio del Consejo Provincial de Educaci?n y fue en memoria de la docente Silvia Roggetti, la joven que muri? mientras trabajaba en una escuela de esta ciudad que se encontraba en construcci?n. "Desmayos, deficiencias de atenci?n, descompensaci?n, malestares del aparato digestivo, reducci?n de rendimiento intelectual y f?sico, son algunos de los s?ntomas que padecen los estudiantes y que tanto directivos como docentes han denunciado ante los consejeros escolares" dice el texto que fue difundido luego del encuentro y que firma Oscar Virginillo, uno de los participantes de la reuni?n. Pilatti comunic? a los consejeros que la instrumentaci?n de refrigerios en las secundarias se est? analizando e inform? que su aplicaci?n requiere de alrededor de 100 mil pesos al mes. En el encuentro hubo una protesta por "la falta de transparencia" en criterios de selecci?n de los beneficiarios del programa de becas que se distribuyen para alumnos del sistema educativo. Sobre el asunto, Pilatti se comprometi? a sumar a los consejeros escolares a elaborar los criterios de selecci?n del pr?ximo a?o, dijo Virginillo. SALTA.- Entrevista a Mario Angel Grenoville, pediatra. "Los ni?os, una reserva para cuando nos recuperemos". Si no tenemos la capacidad necesaria para cuidar y proteger ahora a nuestra infancia y adolescencia, de aqu? a diez o quince a?os vamos a tener resultados muy lamentables. El profesional se encontraba en la capital provincial al momento de la entrevista, en su doble condici?n de secretario general y cient?fico de la Sociedad Argentina de Pediatr?a y de jefe del Servicio de Neumonolog?a del hospital "Juan P. Garraham". Vino a disertar en unas jornadas de actualizaci?n en enfermedades respiratorias agudas, que cont? con la masiva participaci?n de los pediatras salte?os, muchos del interior. - La actual crisis, ?aumenta los factores de riesgo para la salud infantil? - A todo ni?o que viva en condiciones no favorables -como hacinamiento, sin agua potable, necesidades b?sicas insatisfechas- le aumentan los riesgos para cualquier enfermedad, con la eventualidad de una mala evoluci?n. Esto lo sabemos desde hace mucho tiempo y por ello en medicina los criterios de factores de riesgo se tienen en cuenta cuando uno tiene que decidir, por ejemplo y m?s all? de su problema de salud de base, si a determinado chico tengo o no que internarlo, frente a otro con su misma enfermedad y que veo que va a andar bien con el tratamiento ambulatorio. Ahora, con todo esto que estamos viviendo, se nos viene un terremoto encima. - ?C?mo es eso? - Por el cataclismo que significa una crisis econ?mica y social como la que vivimos, con la mitad de la poblaci?n debajo de la l?nea de pobreza y, por ejemplo, con dificultades para acceder a medicamentos que para cierto nivel de poblaci?n siempre fueron de dif?cil acceso. Y a?n as?, hab?an estructuras sociales m?s s?lidas, esa gente pod?a conseguirlos en los hospitales y centros de salud. Pero en estos momentos est? rota esa cadena de sost?n y muy muchas dificultades para acceder a las medicinas; que adem?s, hoy, implican un costo alt?simo, de 80 a 100 pesos como promedio bajo, que la familia no los tiene. ?Y... qu? hacemos?. - En la sociedad actual, el m?s vulnerable sigue siendo el ni?o... - Por tratarse de una persona en crecimiento, est? sujeto a sufrir enfermedades que en condiciones de crisis, como esta, pueden tener peor evoluci?n. Si lo pensamos de otra manera, en una situaci?n de exclusi?n social como la que se vive, pensemos que si a los ni?os no los protejemos adecuadamente ahora, vamos a estar construyendo excluidos sociales para dentro de 10 a 15 a?os. Esto da un contexto de otra relevancia para la crisis. - ?Qu? otra relevancia? - En la historia de la humanidad, en las situaciones de crisis m?s severas, siempre las voces m?s inteligentes dijeron "ojo" y "cuidemos a los ni?os", porque son la reserva para cuando nos podamos recuperar. Y esto incluye a la adolescencia, no s?lo a los chicos de 2 ? 6 a?os. ?Qu? est? pasando ahora con los que tienen 10 ? 14 a?os? Que abandonan el colegio, no tienen sost?n, la familia est? en crisis, les falta soporte educativo y tampoco tienen posibilidades de insertarse en el mercado laboral, porque no hay trabajo para nadie. En diez a?os m?s, para estos chicos, ?cu?l va a ser el proyecto?, ?hacia d?nde vamos como sociedad? - ?Cu?l es su reflexi?n? - Si no tenemos capacidad de proteger y cuidar ahora a nuestra infancia y adolescencia en momentos de una crisis tan singular, los resultados de esto tan lamentable a?n no los veremos. Los vamos a tener en el futuro. - ?Qu? camino propone? - Esforzarnos, cada uno en lo suyo. Los pediatras seguimos insistiendo en la capacitaci?n, porque hay que continuar form?ndose, estar preparados, acceder a los nuevos conocimientos y facilitar la transmisi?n de nuevas experiencias. La educaci?n continua es un esfuerzo que hace la Sociedad Argentina de Pediatr?a desde hace much?simos a?os. Me conmueve enormemente que en esta ?poca de crisis se junten en Salta m?s de 200 pediatras, venidos de Tartagal, Met?n y otros puntos que est?n bastante lejos. Con mucho esfuerzo llegaron hasta a ac?, pag?ndose ellos, en aras de su compromiso y su vocaci?n. Cada uno de nosotros debe hacer de sost?n, porque as? el pa?s tiene que mejorar y para ello hay que trabajar. En el caso nuestro no es s?lo c?mo se deben tratar las enfermedades; tambi?n, c?mo conseguimos que la acci?n medica sea efectiva. Que le llegue al paciente, al ni?o. La sociedad, tambi?n, tiene que reclamarlo para que en los centros de atenci?n primaria de la salud y en las unidades que atienden ni?os existan los recursos necesarios como que esa funci?n no se caiga. -Es decir, hoy m?s nunca, el pediatra est? al lado del ni?o... - Es un compa?ero, de ?l y de su familia. Un acompa?ante ideal. Argentina tiene la suerte de tener m?s de 12 mil pediatras, en una red acad?mica y solidaria. Cuando la familia tiene un problema, sabe que cuenta con ?l para ayudar a resolverlo. - XXX ------- End of forwarded message ------- N?stor Miguel Gorojovsky nestorgoro at fibertel.com.ar ********************************************************************** * Compa?eros del exercito de los Andes. ...La guerra se la tenemos de hacer del modo que podamos: sino tenemos dinero, carne y un pedazo de tabaco no nos tiene de faltar: cuando se acaben los vestuarios, nos vestiremos con la bayetilla que nos trabajen nuestras mugeres, y sino andaremos en pelota como nuestros paisanos los indios: seamos libres, y lo dem?s no importa nada... Jose de San Mart?n, 27 de julio de 1819. ********************************************************************** * ****** From ewc at onetel.net.uk Tue Jun 11 01:53:39 2002 From: ewc at onetel.net.uk (ewc) Date: Tue, 11 Jun 2002 08:53:39 +0100 Subject: [A-List] Truth about Gold and Braudel References: Message-ID: <000f01c2111d$19b65a20$16754ed5@oemcomputer> Hi Henry You say > "Fernaud Braudel noted that the value of silver increased from > 13th to 16th century until 1550, which he called the age of gold > inflation, which lasted 6 centuries. The truth however is that Fernand Braudel lied if he wrote this - the value of silver collapsed during this period. Dropping at one point to near a third of its original value. (as high as 7.5 : 1 against gold at the end of the 12th century, as low as 21 : 1 by the mid 14th century. It collapsed even though huge quantities of silver were being shipped out of Europe to Islam, and huge quantities of gold shipped into Europe. This clearly cannot be explained by Gresham or any other 'law' of supply and demand) > The gold > inflation was replaced by ilver inflation as the value of silver fell, a > phenonoenon which supported Gresham's Law. "Greshams Law" is one of Braudel's axioms. He invents a past that fits it - a past that has nothing to do with reality, nothing to do with the facts. That way academia and its hangers on can hold worthy sounding debates, fool their students and do no harm to anybody's interests, because what they are debating is a fiction - a glass bead game. Debate on those terms just sinks everybody further into an intellectual quick sand. So long for now Robert From Michael.Keaney at mbs.fi Tue Jun 11 04:06:32 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Tue, 11 Jun 2002 13:06:32 +0300 Subject: [A-List] US imperialism: strategy of tension Message-ID: 'Dirty bomb' is West's worst terror nightmare IAN BRUCE The Herald, 11 June 2002 A "dirty" bomb made up of high-grade radioactive waste from a power station packed around plastic explosives from a quarry is the West's worst terrorist nightmare short of detonation of a custom-built nuclear warhead in downtown Washington or London. A successful attack using a radiological weapon could inflict tens of thousands of civilian casualties, render the heart of a city uninhabitable for centuries through contamination, and produce birth defects and cancers for generations after the blast. The worst-case scenario studied by security services involves a conventional bomb wrapped in deadly plutonium or caesium-137 going off in a van parked on the top floor of a high-rise car park somewhere in a city centre. If the terrorists judged the attack properly for wind speed and direction, they could send a plume of lethal radioactive fragments and contaminated dust and plaster over a cigar-shaped area of a square mile or so of prime real estate. And if they detonated the device at lunchtime or during the rush hour, they could add mass panic and gridlocked streets to the casualty toll from radiation. Police and medical services would be overwhelmed until central government or the military could intervene. The clear-up of streets and buildings coated with isotopes could take years. It might be cheaper to seal off and abandon the contaminated area entirely. Prime targets in the UK would be the concentration of government buildings and departments in Whitehall, or the commercial heart of the City of London and the stock exchange. Terrorists are always drawn to the symbolism of striking high-profile capitalist targets. Estimating how heavy the blow might be depends on how much and what type of radiological material is available, how much explosive is used to disperse it, and whether it rains within hours or days of the explosion. Rain brings fallout rapidly back to earth, limiting the spread of contamination. The location of the Royal Navy's Clyde nuclear submarine base was chosen partially because of the phenomenon know to sailors as "Faslane weather." It rains there more than 300 days a year, a natural safety feature in the event of an accident. The International Atomic Energy Authority has recorded 175 cases of illegal trafficking in nuclear material and 201 cases of selling medical or industrial atomic waste since 1993. Only 18 known instances have involved amounts of highly-enriched uranium or plutonium, the basic components of nuclear weapons. But 13 have happened in the last year, and at least two have involved agents claiming to represent the al Qaeda network. The accidental release of a windblown plume of radioactive particles at Chernobyl in 1986 polluted almost 3000 square miles of the Ukraine and deposited dangerous levels of contamination across most of northern Europe. From Michael.Keaney at mbs.fi Tue Jun 11 04:07:29 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Tue, 11 Jun 2002 13:07:29 +0300 Subject: [A-List] Lockerbie verdict: Mandela intervenes Message-ID: Mandela plea for new Megrahi appeal BILLY BRIGGS The Herald, 11 June 2002 NELSON Mandela called for a new appeal yesterday for the Lockerbie bomber, Abdelbaset Ali Mohmed al Megrahi, after visiting him at Barlinnie prison in Glasgow. Speaking after meeting Megrahi privately for more than an hour, Mr Mandela said he wanted to meet George W Bush and Tony Blair to discuss the case, and called for the Libyan to be transferred to a jail in a Muslim country like Morocco, Tunisia, or Egypt. Perceived as the honest broker and trusted by both western leaders and Muammar Gaddafi, the Libyan leader, Mr Mandela was integral to the process of bringing an acceptable solution to the stalemate between the governments of Libya, Britain, and the US over whether a trial should go ahead. At an extraordinary press conference inside Barlinnie, Mr Mandela described Megrahi's life sentence, effectively in solitary confinement in quarters of his own, dubbed "Gaddafi's cafe", as "psychological persecution". He also said Megrahi was being harassed by other inmates who shouted abuse at him from their windows when he took exercise. "Megrahi is all alone," said Mr Mandela, who served 27 years in a prison during the South African apartheid regime. "He has nobody he can talk to. It is a psychological persecution that a man must stay for a length of his sentence all alone." Mr Mandela, who also met Megrahi's family inside the prison, said consideration should be given to the bomber serving his life term in a Muslim country trusted by the West. "It will make it easier for his family to visit," he said. Mr Mandela said Megrahi was being treated well by the prison authorities but was being verbally abused by a number of prisoners when taking exercise. He said he would return to Scotland in July to meet relatives of victims of the atrocity and that he also hoped to meet the prime minister and the US president to discuss the case. "I am hopeful that these men will have feelings and do not want to be associated with any decision which appears unfair to trained lawyers," he said. During the 30-minute press conference, Mr Mandela described in detail how four judges from the Organisation of African Unity had criticised the basis by which Megrahi came to be convicted. He said they concluded that the judgment violated the general principles of criminal law and the legal basis for the conviction was unsound. Although Mr Mandela was at great pains not to criticise the judgment, he implied it was flawed in answering a question as to whether he regretted becoming involved with the case. "No. Why should I regret?" said Mr Mandela. "I got involved in the Lockerbie trial because there was a deadlock. "I was thinking firstly about the relatives of victims so that they must see justice for themselves, and that justice was done according to the fundamental principles of the law," he said. "It does appear that those fundamental principles were ignored." Mr Mandela also cited a relative of a victim of the Lockerbie bombing who said there had been a cover-up, and in referring to the OAU's verdict, he said: "Let's listen to the judges. They have criticised it fiercely, and it will be a pity if no court reviews the case itself." Megrahi was convicted of murder for smuggling a bomb aboard PanAm flight 103 which exploded over Lockerbie on December 21, 1988, with the loss of 270 lives. Mr Mandela, a lawyer himself, said it had been suggested that the case could go either to the Privy Council or the European Court of Human Rights in Strasbourg and from the point of view of fundamental principles of natural law an appeal would be fair. Mr Mandela - calm, composed and with immense courtesy - set out his views clearly in what must be the most extraordinary press conference ever held in the Victorian-era jail. He had arrived there earlier amid tight security for his meeting with Megrahi, travelling in a people carrier with darkened windows, flanked by police cars and motor cycle outriders. Mr Mandela, who did not have to undergo any security checks, was escorted to Megrahi's living room. Among those who met the former South African president at the prison was Eddie MacKechnie, Megrahi's lawyer, who had earlier told reporters of what he claimed was new information which had not been made available to the trial at the time of Megrahi's conviction. "An $11m payment was made by the government of Iran to the Popular Front for the Liberation of Palestine General Command two days after the atrocity," said Mr MacKechnie. He said the information had come from a former CIA officer who had given details of times, dates and bank accounts, adding: "My concern is not simply that there is evidence of such payment, but whether that information was available to any British authorities." There was also support for Megrahi at Barlinnie yesterday from the Gaddafi Foundation of Libya, which is to pay for his future legal costs and for Megrahi's family to stay in Scotland. Mohamed Ismais, a spokesman, said: "We're confident that he is innocent." However, Mr Mandela's comments were criticised by Susan Cohen, from New Jersey, who lost her 20-year-old daughter, Theodora, in the bombing. "I feel Nelson Mandela's behaviour is disgusting in this case," she said. "He is paying back his old debts, and I think people in Scotland should feel insulted that he has questioned their judicial system. "Megrahi is a mass murderer and to speak about how he is alone is pathetic." Jim Swire, a spokesman for the victims' families in the UK, who is known to be unhappy about Megrahi's conviction, welcomed the visit. "There can't be many people in the world better qualified than Mr Mandela to examine the conditions under which Mr Megrahi is being held," he said. "I have no feelings of vengeance. Personally I would strongly support Mr Mandela's call for a further review of the verdict itself. "I don't think it serves the purposes of humanity to have this man having a desperate time in prison." From Michael.Keaney at mbs.fi Tue Jun 11 04:09:57 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Tue, 11 Jun 2002 13:09:57 +0300 Subject: [A-List] Afghanistan: the blowback continues Message-ID: Chaos delays launch of loya jirga IAN BRUCE The Herald, 11 June 2002 THE opening session of Afghanistan's first grand electoral council meeting for 23 years was postponed amid growing confusion over the status of the former king and the chaotic accreditation of delegates. Afghan officials said the 24-hour delay was owing to "logistical and preparatory problems". Diplomatic sources said it was caused by a bitter row between Pashtun representatives keen to restore the monarchy and powerful Uzbek and Tajik warlords opposed to King Mohammed Zaher Shah, also a Pashtun, playing any role in the new state. Lieutenant-Colonel Helen Wildman, spokeswoman for the international peacekeeping troops in Kabul, said she understood the confusion was down to procedure and not security concerns. More than 2000 delegates turned up demanding entry to the giant German beer-tent set up as the venue for the traditional loya jirga, overwhelming arrangements for the 1500 tribal elders and locally-elected councillors expected by UN and interim government officials. Dozens of men claiming to represent the country's four million refugees and displaced villagers accosted harassed civil servants, waving petitions and insisting on a vote and a voice. A UN spokesman said: "The loya jirga's composition was carefully worked out so that all sections of society would be represented and have a hand in selecting a new administration and drawing up a blueprint for a new constitution. "At least 500 more delegates than we expected have arrived. There is no way to check the legitimacy of most. No-one knows how many Afghans there are in the country, far less where many of them are. Refugees are scattered from Iran to Pakistan. It is chaos on a grand scale." Abdul Salam Rahimi, a spokesman for the organisers, said: "We are drawing up a final list of delegates who can vote." In an effort to resolve the constitutional question, Mohammed Zaher Shah, who only recently returned after decades of exile in Italy, declared he had no intention of restoring the monarchy and endorsed the candidacy of Hamid Karzai, the current interim president, as head of state. However, the warlords, whose Northern Alliance soldiers helped defeat the Taliban last year, suspect a Pashtun plot to dominate a future government. Afghanistan's history is scarred by persecution of ethnic groups by whoever is in power. The majority Pashtuns supported the Taliban and killed Uzbeks, Tajiks, and Hazzaras. The Tajiks took revenge on the Pashtun, and allied with the others to fight them in a five-year civil war. Negotiations were understood to be going on to award the plum interior and foreign ministries to Pashtun candidates if the Tajiks retained defence and the king was out of the equation. From Michael.Keaney at mbs.fi Tue Jun 11 04:20:11 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Tue, 11 Jun 2002 13:20:11 +0300 Subject: [A-List] EU: internal wrangles Message-ID: The continuing effort to streamline decision-making within the EU, very much linked to the efforts of the larger members to exercise a more overt hegemony, is meeting stiff opposition from the smaller countries, not surprisingly. However it will be interesting to see what the European Roundtable of Industrialists and other corporate lobby groups make of all this. The logic points to greater centralisation and rubber-stamping, but national pride is likely to stand in the way, especially at election times. The ideological service performed by neoclassical trade theory is likely to come to the fore, as every step towards greater integration and/or centralisation is justified on "neutral" efficiency grounds. Plan for EU 'super council' runs into wall of opposition By Stephen Castle in Brussels The Independent, 08 June 2002 Plans to form a powerful "super council" to streamline decision-making in the European Union and to slim down the number of committees in Brussels have run into trouble, with three countries pledging their opposition. Proposals to overhaul the EU's creaking procedures have been drafted by Javier Solana, the EU's foreign policy supremo, and will be one of the main subjects to be debated by EU leaders when they meet in Seville later this month. But despite the support of big countries, including Britain, a group of smaller nations, made up of Belgium, the Netherlands and Luxembourg, have attacked the plans, saying they would make matters worse. Mr Solana wants to achieve changes that could be made quickly without altering the EU's treaty. They include a reduction in the number of ministerial meetings taking place in Brussels, with committees such as the Development Council being purged, and a decision to televise some legislative sessions. But the key element of the package is a plan to split the General Affairs Council, where EU foreign ministers meet and which is supposed to take an overview of EU work, into two bodies. One would concentrate on foreign affairs while the other would help to supervise EU business, aiming to clear blockages and reduce the amount of technical discussion, which clogs up summits of EU leaders. Mr Solana has not specified which ministers he thinks should be on the new body, although one possibility is that deputy prime ministers would be nominated. This would prevent difficult issues being referred to summits, allowing EU leaders to focus on the bigger picture. However, a joint paper from Belgium, the Netherlands and Luxembourg stated: "Although we are willing to consider ways of improving matters, we do not see any advantage in creating a new council formation, composed of deputy prime ministers or ministers/state secretaries for European affairs. Furthermore, we see major disadvantages in splitting the General Affairs Council into two separate formations. "Surely such cures are worse than the disease? Such measures are out of proportion to the problems identified, and would mean the EU abandoning the one ministerial forum that can make the crosscutting links needed for a coherent internal and external policy." While the countries were not opposed to some streamlining of Brussels in principle, they said: "European integration benefits from the broadest possible involvement of ministers from the member states." Mr Solana's allies stress they will have to gain agreement on the package but are confident that most of their arguments will be accepted. The Netherlands will be in a weak position to oppose the move because its government is still being formed, and Luxembourg - as a very small state - is unlikely to block. The position of Belgium and Italy, which also has reservations, will be crucial. In countries with coalitions, the powers of the foreign minister tend to be very sensitive because he or she often belongs to a different party from the prime minister. Other changes Mr Solana wants include having a formal agenda for a summit, rather than a letter from the leader of the country that holds the presidency. EU leaders would also take formal decisions rather than reaching conclusions, under his plans. Bigger changes, such as a reform of the EU presidency system, which rotates every six months, will not be discussed in Seville because that would require a change of the EU's governing treaty. Such reforms will have to wait until 2004, when EU leaders are due to re-write the treaty to pave the way for the EU's next expansion. From Michael.Keaney at mbs.fi Tue Jun 11 04:23:48 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Tue, 11 Jun 2002 13:23:48 +0300 Subject: [A-List] North/South split: UN food conference Message-ID: Britain boycotts 'flawed' world summit on hunger By Jessie Grimond in Rome The Independent, 11 June 2002 The Secretary of State for Overseas Development, Clare Short, is boycotting the United Nations World Food Summit, which opened in Rome yesterday, saying it is flawed. She accused the UN of focusing on food production rather than policies to deliver food to starving people. Leaders of developed countries are conspicuous by their absence. The exceptions are the Spanish premier, Jose Maria Aznar and the Italian Prime Minister, Silvio Berlusconi, who is hosting the summit. This has prompted accusations that the West lacks concern for the world's 815 million hungry people and the impending famine in southern Africa. Ms Short said in a statement: "I am not sending a minister because the starting point for this conference is flawed. The [UN food and Agriculture Organisation] FAO's measure of hunger is essentially one of food availability, which cannot tell you who is hungry and why. It needs to be combined with indicators of food consumption and a diagnosis of why so many people remain hungry when food is available, and to put in place policies which deliver food to hungry people not just to produce more food." By contrast, the leaders of dozens of developing countries are leading delegations. The most controversial is the President of Zimbabwe, Robert Mugabe, whose attendance provoked consternation from many. Mr Mugabe is widely accused of being responsible for the plight of 5 million Zimbabweans who are enduring food shortages because of his government's policy of seizing commercial farms and restriction on movements of food aid. The aid is allegedly being kept from opposition strongholds. The European Union imposed a travel ban on Mr Mugabe after he expelled election monitors, but an exception was made for UN summits. At the first World Food Summit in 1996 leaders from 185 nations vowed to cut by half the number of hungry in the world - then at 841 million. The number now stands at 815 million. Charges of empty rhetoric were levelled in speeches yesterday. The director general of the FAO, Jacques Diouf, spoke of words that did not reflect actions. Kofi Annan, the UN secretary general, gave a grim warning of impending famine in southern Africa, saying "the time for making promises is over". He also criticised subsidies for farmers in wealthy nations, saying: "You put yourself in the shoes of a small developing country, which cannot export agricultural products because of restrictions and tariffs, a developing country that cannot export and compete on world markets because its richer partners are heavily subsidised." Among measures proposed to alleviate the situation were vegetarianism, cancelling debt and educating women. A declaration adopted at the outset of the meeting stated that everyone had "the right ... to safe and nutritious food" but the United States continued to oppose the clause, fearing it would leave America open to future legal claims by famine-stricken countries. Member countries agreed to launch a two-year study into the question. A declaration adopted by delegates yesterday also skirted around the sensitive issue of genetically modified crops From Michael.Keaney at mbs.fi Tue Jun 11 04:27:15 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Tue, 11 Jun 2002 13:27:15 +0300 Subject: [A-List] Bofors scandal: technicalities mount Message-ID: I suppose that it's just as well Rajiv Ghandi is not around to answer questions about why, with great reluctance, he agreed to "purchase" Westland W30 helicopters from Britain at the same time as the Hindujas were orchestrating this little number. New delay in Indian court hits 16-year case against Hindujas By Peter Popham in Delhi The Independent, 11 June 2002 The 16-year struggle by prosecutors in India to convict the billionaire Hinduja brothers in the Bofors arms scandal hit another snag yesterday when Delhi's High Court threw out the case on a technicality. Justice R S Sodhi agreed with defence lawyers that the prosecuting agency, the Central Bureau of Investigation (CBI), had blundered when it failed to obtain permission from India's Central Vigilance Commission before launching the prosecution against the British-based businessmen. The judge dismissed the case, but told prosecutors they were free to file again once the error was fixed. He also declined to waive the bail conditions imposed on the brothers last summer. Srichand, Gopichand and Prakash Hinduja were told to submit bonds worth more than 300m rupees (more than ?4m), the highest in Indian legal history. And one of the brothers had to remain in India at all times. Thus the long effort to convict the businessmen of accepting $8.3m in illegal commissions from the Swedish arms manufacturer Bofors AB, now defunct, is set to meander further. A spokesman for the CBI said there had been no error, because "permission from the Central Vigilance Commission is required only in the case of government officials, not private individuals". He said the ruling would be challenged in the Supreme Court. The case dates back to the mid-1980s, when Bofors and the French arms company Sofma competed to supply the Indian Army with 155mm field guns. Sofma appeared to be trouncing Bofors in assessments, when following a meeting between the countries' leaders the positions were reversed. The $2.1bn deal for Bofors to supply the guns was done in record time. A year later Swedish radio broke the story that the contract had been won by Bofors paying massive bribes to senior Indian politicians and defence figures. The charges were denied by India as "false, baseless and mischievous". And in 1988 The Hindu newspaper claimed that a company called Sangma, owned by the Hindujas and registered in the UK, had been one of the conduits for the bribes. Throughout the 1990s the brothers fought in the Swiss courts to prevent the CBI getting access to documents relating to bank accounts. Last July The Independent reported that the case was almost certain to fail: a letter sent to the CBI by Switzerland's Federal Office for Justice claimed that there was no direct evidence linking illegal payments made by Bofors to Hinduja accounts. From Michael.Keaney at mbs.fi Tue Jun 11 04:31:12 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Tue, 11 Jun 2002 13:31:12 +0300 Subject: [A-List] Destructive creation: nuclear power Message-ID: Dangerous waters By shipping plutonium around the world, Britain is courting catastrophe George Monbiot Tuesday June 11, 2002 The Guardian The world now faces two imminent nuclear threats. The first is the stand-off between India and Pakistan, two nuclear powers vacillating on the brink of war. The second arises from a commercial deal between the United Kingdom and Japan. At the end of this week, two British ships will pull into the port of Takahama to collect enough plutonium to make 17 atomic bombs. Although the transport of nuclear material within Japan has been halted during the World Cup, as there are not enough police to guarantee its safety, the power behind this shipment permits no such considerations. The plutonium will be transported 18,000 miles through some of the roughest and most dangerous seas on earth back to Britain, where it will be repacked and returned to Japan. The security of the shipment has been described by the definitive defence briefing, Jane's Foreign Report, as "totally inadequate". Britain and Japan are to launch, in the form of the two freighters carrying the material, a pair of floating dirty bombs, waiting for a detonator. And they are doing so for reasons that have nothing to do with economics and nothing to do with defence, but everything to do with a politics which is as mad and dangerous as their mission. The cargo they will collect is a consignment of mixed plutonium and uranium oxides - Mox for short - which was delivered by British Nuclear Fuels Ltd to Japan, where it was to have been used as reactor fuel. The Japanese discovered that BNFL had falsified its records, and demanded that the company retrieve it. BNFL, which is a state-owned company, must comply if it is not to lose future markets for its Mox fuel. It must defend those markets in order to justify the government's decision in October to allow the Mox plant at Sellafield in Cumbria to open. The Mox plant opened in order to make sense of the reprocessing operations at Sellafield, which extract plutonium and uranium from nuclear waste. The reprocessing was permitted in order to provide a reason for Sellafield's continued existence. Sellafield exists in order to keep the British nuclear power programme running. The British nuclear power programme exists because _ well, it exists because it exists. There may once have been a reason, but if so it has been lost in the mists of time. Britain's nuclear policy, in other words, is like the old woman who swallowed a fly. Every solution is worse than the problem it was supposed to address. Every new justification ratchets up the probability of a major nuclear accident or breach of security. Yet the programme's institutional momentum carries all before it. This programme can sustain itself only until the public grasps the two unavoidable facts of nuclear power. The first is that there is, as yet, no safe means of disposing of the wastes it produces. The second is that even if one were found, the monitoring and safe management of these wastes requires 250,000 years of political and economic stability. No government on earth can guarantee five. It is the British government's attempts to prevent us from grasping these truths which now expose the world to the threat of both nuclear proliferation and nuclear terrorism. Reprocessing has bequeathed to the UK the biggest plutonium stockpile in the world: 60 tonnes of our own, and 10 tonnes of other people's. The entire stock, as the government's security review board discovered in January, is stored at Sellafield in buildings scarcely more robust than garden sheds. Thirteen kilogrammes of plutonium is enough to make an atom bomb. Turning this plutonium into Mox is presented as the solution to proliferation. Unhappily, it introduces four further problems. The first is that the Mox process generates still more nuclear waste. The second is that, like every other aspect of the nuclear industry, it costs far more to produce, when all expenses are taken into account, than it can ever recoup. The third is that hardly anyone wants to buy it, as most nuclear power stations use the safer and much cheaper low-enriched uranium. The fourth is that the only certain market is on the other side of the world. Japan has its own warped institutional reasons for engaging in this trade. Its fast-breeder programme, which was to have used the plutonium extracted from the waste it sent to Sellafield for reprocessing, collapsed after an accident in 1995. But it remains contractually bound to BNFL to reimport its plutonium. So it has asked the company to turn it into Mox, which it can use (at considerable hazard) in its light water reactors. The dirty bombs BNFL is about to launch on the high seas will be, it hopes, among the first of many. To avoid creating the impression that this freight might possibly be dangerous, Japan has insisted that the ships have no military escort. They have weapons on board, but neither the radar-guided anti-missile defences nor the speed required to evade an attack by a fast boat. To spread plutonium across an entire region, terrorists need only send a missile or boat like the one Bin Laden used to attack the USS Cole, equipped with the right explosives, into the side of one of the freighters. The Mox fuel is stored in containers which can resist temperatures of 800C for 30 minutes. Fires on ships, as the Ecologist magazine has pointed out, can burn for 24 hours at 1,000C. Stealing the material is a matter of overwhelming the 26 British policemen on board and blowing the hatches off, a task well within the capabilities of several terrorist groups and all of the world's aspirant nuclear states. The plutonium and uranium can be separated with chemical processes less taxing than the manufacture of designer drugs. So the UK and Japan are investing billions in security, and billions in insecurity. Neither government dares challenge the nuclear monster it has created. Using taxpayers' money to charm, cajole and threaten both the government and the taxpayer, this self-serving, self-reproducing industry, which makes nothing which could not be made more cheaply elsewhere, has secured such resources, such concessions, such flat contradictions of policy that we have ended up sponsoring the major threat to our own security. When power resides with private companies, the British government will nest with them and raise their young. When it resides with a state-owned monster which would not have looked out of place in Brezhnev's Russia, the same government will happily mate with that monster. One moment it will warn of such threats to our security that the police must have access to our email accounts, protesters must be classified as terrorists and Afghanistan must be bombed; the next it will dismiss such concerns as nonsense in order to ship plutonium round the world in civilian freighters. The nuclear industry must be destroyed before it destroys us. We must, in other words, wrench political power away from nuclear power. From Michael.Keaney at mbs.fi Tue Jun 11 04:33:13 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Tue, 11 Jun 2002 13:33:13 +0300 Subject: [A-List] Europe/US rivalry: right wing politics Message-ID: The Tories think the tide is with them. They are wrong Talk of an ideological renaissance for the centre right is so much hot air Hugo Young Tuesday June 11, 2002 The Guardian When I was last in Washington, I took a tour of the rightwing thinktanks and it made a big impression. This came not from the brilliance of the tanky ideas, still less their novelty. Much of what they had to say about economic and foreign policy was familiar attitudinising that's been around for years. What knocked a European out was the confidence of these wonks that they were making the political weather. Gales of belief, cataracts of utter certainty, engulf the city of George Bush in support of the low-tax, small-state, anti-centrist, anti-gun-control dogmas that he and they believe in. There isn't a country in the EU where an undefensive right can begin to match the elan that services American conservatism. For European rightists to visit Washington is therefore therapy. "We owe a huge debt to President Bush for showing us the way," Iain Duncan Smith said yesterday, speaking in that city to a gathering of conservative leaders from 37 countries. The centre right, he suggested, was on the march, smashing the leftists, from Clinton onwards, who were so recently in charge all over the place. This sort of talk must be very comforting. But it overlooks how, outside America, the terms of trade have changed. What any longer is the centre right? Does it even exist as a distinctive ideological position? Is any such trend, in truth, discernible? Take Jacques Chirac and the rightists, for want of a better word, who will be elected to run France next weekend. Chirac, as recent victor, should be the iconic model for the trend. Yet he's not a rightist anyone in the US or even Britain would easily recognise. He's another French statist, as are almost all French politicians. True, he promised a tax cut, but compromised it with the usual contradictory election pledge to raise public spending. Chirac got where he is today not by the power of his ideas, of which he appears to have none, but by an electoral accident that gave the National Front enough support to guarantee his landslide victory, before withdrawing it sufficiently to enable the old left and old right to divide the parliament between them. The reason the left will lose the final carve-up has little to do with leftism. Lionel Jospin's Socialist government had a respectable economic record. It was in surreptitious ways, such as privatisation, less leftist than many people expected. No great contest of ideas preceded its defeat. Quite the contrary. As the presidential campaign unfolded, the efforts of each side to copycat the other rendered it almost meaningless, which helped let in Le Pen. Elsewhere, there have been a few more divides. Denmark and Portugal elected rightist governments with agendas that mark them off from their predecessors. Norway went right and so did Holland, where immigration and identity, the one issue on which some modern rightists dare to be distinctive, swung the vote. In general, however, the pattern seems to have less to do with ideology than incumbency. The main reason why the brief social democratic ascendancy in Europe is vanishing is that the social democrats happened to be in charge when disillusionment with all politicians reached new depths, and the patience of electorates was overtaken by rage or apathy or both. Men and women, in other words, now matter more than manifestos. Few of the measures once central to definitions of left and right any longer disclose much choice or difference. One section of the political class is reluctantly elected to replace another that's been found wanting. The new lot may pay lip service to the reduction of the state, or anti-Brussels sentiment. Herr Stoiber may sound like a better friend of German business than Herr Schr?der as their autumn election struggle unfolds. But when IDS proclaims the rise of a whole new orthodoxy, he's whistling in the wind. People with new labels are chosen to replace people with old labels. The new ones are far removed from a distinctiveness that would change the world. They're prophets as unsure what to think as they are insecure about what others will think of them. No centre rightists show this more clearly than the British Tories. They have no idea where they're going, except towards an election in which they can claim they're not responsible for the mess. They fiddle tentatively with ideas, as long as these don't deviate too sharply from the norms that they claim, exultantly, are being swept away on a centre-right tide. They upbraid the centre left for being preoccupied with image over substance, while being much the same themselves. The government, after all, has to govern: make choices, do things, unavoidably produce some substance. The party of IDS is concerned exclusively with how it looks: is it sufficiently sensitive, is it talking to the vulnerable, has it shed the images that engendered so much hatred? That's what obsesses Tory managers. Accused yesterday of getting nowhere on policy, IDS rejected the complaint partly on the grounds that he needed time to look around for ideas, but also because he's truly comfortable only when mobilising the voters' infinite capacity for complaining that public services aren't good enough. That's about the size of centre rightism, in Britain as in mainland Europe. The legend it's purloining, to draw strength from what the great Mr Bush is doing, is compassionate conservatism. This phrase is IDS's equivalent to Blair's third way, as vapidly reassuring, though decidedly more oxymoronic. It survives in Bush's rhetoric, a front for some of the least compassionate social strategies of any US government since Herbert Hoover's. Only in education could it seriously be claimed that Bush has shown a priority that might be termed compassionate - if a word so dripping with condescension is appropriate for so elementary a service. Otherwise, Bush's trillion-dollar tax cut for the wealthy says all there is to say about his version of conservatism. This was deplored in the Washington thinktanks, however, for not being enough. That couldn't happen anywhere in Europe, including Britain. That's the difference between rightism, which means something, and centre rightism, which has come to mean little more than the faction that's opposed, out of convenience and ambition, to the centre left. There are people in the British Tory party who would like it to be a party of the right. It used to be thought that Duncan Smith was one of them, and there's much evidence in his record to that effect. But now, even while invoking his hero Bush, he has changed, moving on to the soggy, uncertain ground where Europe and America simply do not coexist, knowing it's the only way he stands a chance of being elected. We should be glad of this. Ironically, Europe's most pro-American party shows us how deep, at certain points, is the gulf between us. But let's hear no more talk of tides and revolutions. One lot of struggling pragmatists vies with another, to keep the home-grown fascists at bay. From Michael.Keaney at mbs.fi Tue Jun 11 04:35:32 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Tue, 11 Jun 2002 13:35:32 +0300 Subject: [A-List] UK: New Labour as unabashed Thatcherism Message-ID: Mandelson: we are all Thatcherites now Matthew Tempest, political correspondent Guardian Unlimited Monday June 10, 2002 Peter Mandelson has re-entered the political fray with a provocative declaration that "we are all Thatcherites now" in an article in today's Times. In a wide-ranging defence of New Labour and a routemap for Europe centre-left parties, Mr Mandelson calls on social democrats to seize the ground on controversial issues such as crime and immigration and "not vacate space to be occupied by the right". The Hartlepool MP's defence of the "third way" - he mentions the term six times in his article, after pundits had detected a slight embarrassment at the phrase in recent years - comes after the weekend-long policy brainstorming session attended by Bill Clinton; the prime minister, Tony Blair, the chancellor, Gordon Brown, and others. Ahead of this week's French parliamentary elections, Mr Mandelson analyses the failure of Lionel Jospin and declares that: "No serious challenge on the left exists to third way thinking anywhere in the world." However, in his most deliberately contentious passage, Mr Mandelson, who is a director of the Policy Network, says: "Globalisation punishes hard any country that tries to run its economy by ignoring the realities of the market or prudent public finances. In this strictly narrow sense, and in the urgent need to remove rigidities and incorporate flexibility in capital, product and labour markets, we are all Thatcherites now." As a former director of media relations for the Labour party, Mr Mandelson will be well aware how vehemently many on the Labour backbenches will disagree with that sentiment. Within hours of the publication of the article, Labour ministers had rejected the Thatcherite claim. Work minister Malcolm Wicks told BBC Radio 4's Today programme: "I'm not a Thatcherite now. It's not language I would use. "If he is saying Mrs Thatcher put emphasis on strong economic policy, then yes, of course we are agreeing to that. "But remember the Thatcher era. There were three to four million people unemployed. What we are talking about today is moving back towards full employment." The criticism was joined by the Conservative leader, Iain Duncan Smith, in Washington for a meeting of right-wing political leaders. He told the BBC: "The third way was ultimately only a process for getting into power by saying that they weren't old Labour and they weren't the Conservatives, so somehow they must be all right. In fact, they haven't delivered. Things have got worse." Also in the article, Mr Mandelson singles out the failure of the left in France to deal with "crime and anti-social behaviour and immigration without integration", and argues that there are similar dilemmas for social democrats in Italy, Denmark and Norway. He notes the symptoms as "staleness among incumbant administrations, weak leadership personalities, failure to project a stronger economic and social purpose and the lack of courage in seeing through necessary reforms", although he sees hope in the recent electoral victories for the left in Hungary and Poland From Michael.Keaney at mbs.fi Tue Jun 11 04:37:44 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Tue, 11 Jun 2002 13:37:44 +0300 Subject: [A-List] UK state and Bofors scandal linkages Message-ID: Commons reopens row over Hinduja passport David Hencke and Luke Harding in New Delhi Guardian Tuesday June 11, 2002 A Commons committee is to re-open the row over the Hinduja passport application by summoning two Whitehall permanent secretaries to answer allegations that they obstructed an investigation by parliament's independent ombudsman, Sir Michael Buckley. The move came as a Delhi court threw out a case accusing the Hinduja brothers of involvement in India's longest-running corruption saga. The Delhi high court ruled that India's main prosecuting body, the central bureau of inquiry, had incorrectly filed charges against them. The brothers - Srichand, Gopichand and Prakash - had been accused of accepting $10m (?7m) in bribes as a reward for securing an arms contract for a Swedish arms manufacturer, Bofors. The bureau said it would appeal to India's supreme court. The Hindujas had been accused of using their influence with the late Indian prime minister Rajiv Gandhi to secure the contract for Bofors in 1986. Their commission was hidden in a series of secret Swiss bank accounts, the prosecutors said. The brothers' lawyer, RK Anand, insisted there was no case against them. The court yesterday refused to alter their bail conditions, which ensure that at least one brother has to remain in India at all times. In London, it emerged that Tony Wright, the Labour chairman of the Commons public administration committee, has summoned John Gieve, permanent secretary at the Home Office, and Mavis MacDonald, permanent secretary at the Cabinet Office, to explain their behaviour in the parliamentary ombudsman's inquiry. The ombudsman issued a highly critical report in which Sir Michael condemned Whitehall and the country's top civil servant, Sir Richard Wilson, for making it impossible for him to carry out his inquiry by denying him papers. The dispute over the passport application led to the resignation of Peter Mandelson, the Northern Ireland secretary, and to Mike O' Brien, then Home Office minister, having to leave the government over what may have been said in a secret telephone conversation between them over a passport application for one of the billionaire brothers. Mr O'Brien was reinstated as foreign office minister for the Middle East and India and Pakistan in the recent cabinet reshuffle. It is understood that both permanent secretaries are reluctant to appear before parliament because they may be questioned about the role of Tony Blair in the affair. The ombudsman was only handed the papers about the passport application - according to Sir Michael's report - when Mr Blair gave his permission. The ombudsman has pointed out that it was not in the gift of Mr Blair to withhold documents - unless they were cabinet papers. The papers involving the Hindujas were never discussed by the cabinet. Sir Michael became involved when a Radio 4 Today producer's "open government" request to get the documents was refused. Whitehall initially refused to cooperate. It then emerged that Mr Mandelson had discovered new documents in his papers which he had handed over to the Cabinet Office. Tony Blair recalled Sir Anthony Hammond to conduct a further inquiry. This still failed to uncover the text of the conversation but did produce documents showing that it was likely it did take place. From Michael.Keaney at mbs.fi Tue Jun 11 04:41:10 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Tue, 11 Jun 2002 13:41:10 +0300 Subject: [A-List] India: neoliberal cheerleader Message-ID: Lion of India In his controversial new book, Gurcharan Das claims that India will soon overtake Europe as a global economic power - and that Britain should have exploited its colony more. He tells Randeep Ramesh why Tuesday June 11, 2002 The Guardian Gurcharan Das is a small man with a big voice. Standing 5ft 3in tall, he is booming away to the Guardian's photographer. "My name is Gurcharan Das, G-U-R-C-H-A-R-A-N-D-A-S. It means the servant of the guru's feet... a name of humility." The smiling Das has nothing to be humble about, and he knows it. His book, India Unbound, is a quiet earthquake that shook faraway shores long before its shockwave reached our own. Britain has become accustomed to Indian authors whose ease with English belies their mother tongue. Das is different insofar as his work is non-fiction, an economic tract embroidered by personal narrative. India Unbound's conclusion is that in the next two decades India will become the third largest economy, after the US and China, with a middle class of 250 million people. He talks of an India where teenage tea-shop assistants work to save money for computer lessons. Where Bill Gates has replaced Gandhi in the hearts of the people and money is the new god in the temple. Where the lifting of the "dead hand of politicians and bureaucrats" means the private sector runs schools and multinationals are free to exploit the country. In this India, Das says, "minds have been decolonised". A manifesto for free trade, free markets and economic reform, the book has made Das an unlikely pin-up for globalisers. Professor Amartya Sen, the Nobel Prize-winner and master of Trinity College, Cambridge, was so impressed he asked Das to start a "secular, rightwing party" modelled on Britain's Tories in India. Citibank, the Wall Street financial house, was so taken with India Unbound that it ordered 1,000 copies. Das even got a six-figure advance for the US edition. In India, there are no plans for a paperback because the hardback is still selling well. Born into a well-to-do middle-class family in pre-independence India, Das spent his youth in Washington after his father, a civil servant, was posted there. He graduated from Harvard with a philosophy degree, and was taught by JK Galbraith, Henry Kissinger and the philosopher John Rawls. It was Rawls who turned Das into an unapologetic capitalist. "His minimax theory did it. Basically, it says that if the poor get rich and a few people get filthy rich, that is better than worrying about the distribution of wealth and no one getting rich." At the age of 21 Das returned to Bombay, discovered a flair for sales and went on to sell more Vicks VapoRub than anyone else in the world. That he did so by relabelling the menthol rub an "ayurvedic" medicine and briefing lawyers to prove that Vicks was really a traditional herbal Indian remedy is a tale that he delights in retelling. Despite rising to the top of the career ladder - ending up with a $1m pay package and directorship at Procter & Gamble in America - Das, aged 50, gave up on business to become a writer. "I got bored, basically. My friends at P&G played golf. I wrote." It is globalisation that has provided Das with the best lines. India nearly went bankrupt in 1991 and thanks to pressure from the International Monetary Fund, its finance minister burned 40 years of red tape in seven hours. That this revolution also saw Hindu nationalism course through the country's veins is "deplorable". But the last decade, says Das, has seen literacy jump from 52% to 65%, population growth slow and 110 million people cross the poverty line. "We had six prime ministers and the most appalling governance. But we had great economic growth." In fact, Das says, it is the west's anti-capitalists who are denying the poor the chance of getting rich, a fact illustrated by the delay in allowing GM crops to be grown in India. "I think it is terrible that the Indian government wasted six years denying its farmers Monsanto's GM cotton." He argues that the US and China have seized the opportunity to turn vast chunks of farmland over to GM cotton, which not only produces more crop per acre than its natural equivalent, but is also resistant to insect attack. "Thanks to the Greenpeace-funded lunatics, nobody points this out. If Monsanto gets rich and at the same time the Indian farmer gets rich beyond his wildest dreams, then what is wrong with that?" For Das, two industries, information technology and agriculture, will lift India out of poverty. It was after all the subcontinent's computer scientists who helped inflate the internet bubble - but now that has been pricked, is the argument not redundant? "No. Indian IT companies grew by 32% last year, and that was in a recession." With farming, the reasoning is simpler. Within India's borders lies half of all the arable land in Asia. India should, therefore, be able "to feed and clothe the world". "China's industrial products are on every high street in the world. Why is India's produce not there too?" For a British reader, the eyebrow-arching passages in India Unbound are those that claim that India and China, growing at more than 6% a year, will overtake Europe but not America. The reason he gives is that America's economy is as vigorous as its more populous rivals, but the old world's is not. "Europe has chosen the good life. A short working week, long vacations, beauty, museums, art. As an aesthete I love Europe's traditions. But they do not create wealth." The problem with Europe is not just its history, but its demographics. Not only, says Das, does Europe have an ageing population, but it cannot seem to absorb immigrants. Even Britain, says Das, will not wake up before it sleepwalks into economic insignificance. "I think, when the chips are down, the UK is part of Europe, not part of America. Economically you would gain from being part of America. Culturally you would lose. You don't want to become McWorld." Das admits that nuclear war casts a large shadow over the subcontinent, but frowns on his country's obsession with its neighbour. "Even when there is no sign of conflict, for every mention of China in our papers there are eight mentions of Pakistan. We should be following every move in China, not Pakistan." A columnist for the Times of India, Das enjoys controversy. He believes that colonialism did not go far enough, that Britain should have exploited India more. That Arundhati Roy, another author-turned-activist (albeit for the other side), is a "sadly misguided thing who does not understand economics". That India's disease was socialism, which saw it export less than Hong Kong and become addicted to foreign aid. That the only cure is a form of shock therapy, which he regrets is only being administered slowly. Big political players on the subcontinent sense that the ground beneath them is shifting and that Das might know in which direction. Both opposition and government court him, although he loathes the resurgent Hindu nationalist cause. But despite the endorsement of Amartya Sen, Das says democracy is better off with him outside shooting in. "There are not enough people like me in India, but there will be. That is the story of India Unbound." From Michael.Keaney at mbs.fi Tue Jun 11 04:59:43 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Tue, 11 Jun 2002 13:59:43 +0300 Subject: [A-List] Third Way shock: "we need a new politics" Message-ID: Angry young threat for New Labour By John Lloyd Financial Times: June 10 2002 New Labour has come to the end of a road. From the prime minister down, party leaders and thinkers are seeking to understand seismic movements in electorates in the UK and continental Europe. Of immediate concern is a movement in society dramatised by the re-emergence of a figure not seen since the 1950s: the Angry Young Man. But these are no longer bourgeois radicals kicking out against Britishness; these are working-class lads who wrap Britishness round themselves and feel that their politicians have abandoned them. Philip Gould, New Labour's pollster and for a decade Tony Blair's closest adviser on election strategy, has taken soundings of the nation's electorate. He has seen the anger of the young men and of others and he has come back to warn of a great danger. He believes that Britain for the first time has more in common with continental Europe than with the US. Mr Gould gave his findings at a Buckingham hotel over the weekend, to a group of Third Way strategists. The meeting, attended mainly by senior members of the Labour party and the US Democratic party, included talks by Tony Blair and Bill Clinton, with the former US president taking a seminar on "progressive internationalism". Mr Gould was blunt to his distinguished audience. The danger of a defection of the left's core supporters to the extremes of politics was, he felt, real and growing. New Labour, he said, had modernised later than other social democratic parties but had done so more completely than others. It had kept its heartland working-class voters, even as it had acquired middle-class supporters. Its ratings on traditionally Tory issues - handling the economy, law and order, taxation - had surpassed those of the Conservative party. But the future is dark. In polling and in focus groups over the past few months, Mr Gould and New Labour have suffered a severe jolt. The continental European pattern of a surge of support among the working class for rightwing populist parties, built on fears about crime and immigration, is a real concern for Britain. "It can happen here," warned Mr Gould. Much of the electorate has taken economic buoyancy for granted and, as one senior New Labour strategist noted, no longer thanks any government for it. Besides, though all have enjoyed benefits from growth, New Labour has not increased relative chances for those at the bottom of the socioeconomic pile. As David Miliband, the new schools minister, told the conference: "We have something called a tri-lemma. We want to keep employment high, be fiscally responsible and get greater equality. We have been good at the first two but have to bind in the last." Mr Gould has met, in his polling and focus groups, "angry, young, working-class men who feel disengaged from politics and feel abandoned by politicians". These voters feel strongly British, not European. They resent rises in crime and they are hostile to asylum-seekers and to immigration. "They are," said Mr Gould, "in the mood for radical change." He described the danger facing all left-of-centre parties as that of "post-socialist populism" parties. Such parties, often with a charismatic leader, position themselves as close to the people, in touch with their concerns and neither left nor right in the traditional senses. Further, these parties are being taken into coalitions with right-of-centre parties, such as in Italy, Denmark, the Netherlands and Norway. They are becoming part of coalitions that retain the largely middle-class, right-of-centre vote and build in a rightwing, working-class vote as well. Such coalitions, said Mr Gould, could dominate politics for years to come, denying the left a space. His antidote to these problems is for parties to change fundamentally - a change he describes as a "revolution". He believes that the 2001 general election in the UK, which Labour fought successfully on its economic achievements, was the last to be held on the "old rules". In future, parties must campaign more on values and especially on those of trust, honesty and fairness, which are held most highly by voters polled. The central feature will be that of community. Campaigns must be fought "from the bottom up", with candidates validated by their ability to engage and to listen, and able to acquire positive reputations through word of mouth rather than by tele- vision advertising. "We need a new model," said Mr Gould. "We need a new progressive agenda, a new politics. We can do it. But if we don't do it, many working-class voters will stay away, which is bad, or start voting for the far right, which is terrible." Continental Europeans present at the weekend retreat, including delegates from Germany, Sweden, France and Italy, tended to underscore Mr Gould's gloom. One said: "We became the elite, lecturing people on how to think and react." Britain's governing class has joined the continental parties in facing the spectre of a working class rendered volatile and uncertain by globalisation's real or imagined insecurities. The difference, the New Labour strategists believe, is that they can see it coming and avoid it. But they have not done so yet. And for all of their domination of the political centre and of the polls, they can feel as insecure as the heartlands whose votes they fear to lose. From rschaap at iprimus.com.au Tue Jun 11 08:51:50 2002 From: rschaap at iprimus.com.au (Rob Schaap) Date: Wed, 12 Jun 2002 00:51:50 +1000 Subject: [A-List] Destructive creation:US economy's internals References: <3CE6260B.ED32F22A@iprimus.com.au> Message-ID: <3D060E86.894D87B5@iprimus.com.au> G'day again, Good spincraft here - making the best of a bad lot is the right PR strategy for the job at hand. It's just that it doesn't quite fit together as neatly as its final casual affirmation would have us think. Waddyathink? Cheers, Rob. http://www.washingtonpost.com/wp-dyn/articles/A22567-2002Jun9.html A Worm at the Core of Capitalism By Sebastian Mallaby Monday, June 10, 2002; Page A21 In the 2000 campaign, Al Gore tried to spice up his roadshow by lashing out against big business. He was laughed off the stage because the 1990s boom had made populist rants sound hollow. At about the same time, say 1999-2001, anti-globalization protests vilified big business too. The movement petered out because its leaders were so muddled. Now, however, things have changed. Enron has created a natural moment for a smart assault on capitalist excess. The wonder is that political leaders and social activists alike do not seem to have seized it. The assault starts with the myth that Internet-era plutocrats were nicer than their predecessors. In the popular imagination, the typical billionaire of the 1990s was a pony-tailed geek on a mountain bike, not a top-hatted baron of the Gilded Age or a besuited 1980s Wall Streeter. Kevin Phillips's new history of the rich recalls the excesses of past plutocrats: They said things like "greed is good" (Ivan Boesky) and "Only the little people pay taxes" (Leona Helmsley); they reserved two seats on the Concorde to fly a birthday cake to Paris (Mrs. John Gutfreund). In contrast, 1990s wealth was informal and discreet. It was tinged with environmentalism and social consciousness. It was virtuous and honest. This stereotype overlooked the philanthropy of past barons -- the endowments created by Carnegie and Rockefeller and, more recently, by popular villains such as Michael Milken. But it also painted the 1990s in too soft a light. Bill Gates has endowed a terrific charity, but his appetite for monopoly profit matches that of the oil and railroad trusts, circa 1900. Larry Ellison, the second richest cyberbaron, collects yachts and sports cars and wives; he is as modest as Madonna. The past few months have given us Ken Lay, the Enron chief who urged employees to buy doomed company stock while he was dumping it. They have given us John Rigas, the founder of Adelphia, who helped himself to billions of shareholders' cash to buy goodies for his family. And they have given us Dennis Kozlowski, the departed boss of Tyco, who seems to have used company funds to buy himself an $18 million apartment and $13 million worth of paintings. But the new attack on business is not just about plutocratic greed. It is about the core principles of capitalism. Our system is supposed to reward people for producing stuff that others want. Enron and Adelphia and Tyco poison this system of meritocratic reward: Their bosses did well not because they served consumer needs, but because accountants lied about their records. When firms cheat like this, capitalism forfeits both efficiency and morality. What's more, the corporate culture of cheating extends beyond accounting. Last week a study in the Journal of the American Medical Association found that published statistics on new drugs are often little better than Enron's accounting. In one egregious example, first reported by Susan Okie in The Post last year, Pharmacia Corp. funded a study to show that a medicine called Celebrex works better than cheap alternatives such as ibuprofen. The study collected 12 months of data, which suggested no Celebrex advantage. So the authors selectively published the first six months of results, which purported to show that Celebrex had fewer side effects. In 2001 alone, this Arthur Andersen-type trick caused patients to spend $3 billion unnecessarily. The pattern here should be politically explosive. A firm's stock price is supposed to go up when it has produced something people want, not because its accounts are fraudulent. A drug firm is supposed to reap $3 billion when it makes something wonderful, not when it rigs scientific data. Yet cheating goes on far too much. Last week a survey found that in the past five years 993 companies have been forced to restate their results after misrepresenting them the first time around. A week earlier another study showed that two-thirds of the "new" drugs granted patents between 1989 and 2000 were old drugs with a minor twist and a major marketing budget. Put this together with other corporate scams, and you've got a campaign message. Companies are fleeing to offshore havens, forcing you to pay more tax. They lobby for useless weapons, farm subsidies and other corporate welfare, so that your tax dollars get wasted. And look at Enron and Adelphia and those pharmaceutical firms: They are wrecking your retirement funds with accounting tricks, jeopardizing your job security by siphoning cash out of your firm and bankrupting your grandma with sky-high drug prices. Forget the dumb attacks on globalization and free markets. The real injustice is that firms are rewarded for lies and lobbying clout, rather than for producing honest goods and services. The scandal isn't capitalism, in other words. It's that capitalism has been corrupted. ? 2002 The Washington Post Company From soncu at pacbell.net Tue Jun 11 11:19:01 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Tue, 11 Jun 2002 10:19:01 -0700 Subject: [A-List] US: The central state in construction Message-ID: One of the existing agencies to be moved under the Homeland Security Department in construction that the below article does not mention is Federal Emergency Management Agency or FEMA. Their strategic plan for 2002-2008 is at: http://www.fema.gov/library/fy2002_draft.pdf According to this document, their mission is "Lead America to prepare for, prevent, respond to, and recover from disasters". Their definition of "disasters" include not only natural but also "man-made" disasters. When "disaster" strikes and the President "grants" a disaster declaration, FEMA coordinates the response, as the document indicates. Here is what they say in a box with the heading, "A Nation Prepared": "To achieve this vision, FEMA will work to prepare the Nation for disasters, by encouraging individuals, governmental entities, and public and private groups at all levels to become aware of the risks they face, make decisions that help keep people, property and institutions out of harm's way and possess the capability and knowledge needed to act when disasters occur." Sabri +++++++++++++ House Panel Opens Security Hearings Tue Jun 11,11:01 AM ET By CURT ANDERSON, Associated Press Writer WASHINGTON (AP) - Six lawmakers who have been pushing creation of a Homeland Security Department for months praised the thrust of President Bush ( news - web sites)'s new proposal at a hearing Tuesday, even as they added to a growing list of questions about the plan. At the initial House committee hearing since Bush released his plan last week, there was bipartisan agreement that creation of the new Cabinet-level department out of 100 existing federal entities should be the top congressional priority for the rest of this year. "Delay in passing this bill helps the terrorists because it means were are unprepared that much longer," Rep. Mac Thornberry, R-Texas, told the House Government Reform subcommittee on national security. Sens. Joseph Lieberman, D-Conn., and Arlen Specter, R-Pa., each mentioned the arrest of dirty bomb suspect Jose Padilla as evidence that America remains at risk of attack. Lieberman, lead sponsor of a Senate homeland security agency bill, said rapid passage could avert future terrorist disasters. "I, for one, do not accept as inevitable that there will be another Sept. 11-type attack," Lieberman said. Yet Lieberman raised a new question about Bush's plan, suggesting that federal employee unions were concerned about language they believed could undermine their collective bargaining authority. And Specter said it's not clear that Bush's proposal would be strong enough on coordinating information from the intelligence agencies ? and addressing their problems. "There's going to have to be a real authority to dig down and find out what is going on," Specter said. Those questions followed a list asked by senior House staffers at a private briefing Monday by White House Chief of Staff Andrew Card. Card acknowledged there would be short-term costs arising from the security consolidation, but he insisted there would not be significant longer-term increases in spending or personnel, according to a participant in the meeting. Card also repeatedly urged lawmakers to move the plan quickly, said the source, speaking on condition of anonymity. + Democrats on the House Appropriations Committee said the White House does not plan to request money for the new agency until fiscal year 2004 ? which begins on Oct. 1, 2003. A statement from Rep. David Obey ( news, bio, voting record), D-Wis., said that could stall implementation of the plan. Questions are also being raised by some Republicans and Democratic lawmakers about plans to have the new department sift through intelligence gathered by the CIA ( news - web sites), FBI ( news - web sites), National Security Agency and others. Intelligence analysis will not improve unless the new department has more direct authority over these agencies, they said. Seeking to allay these concerns, Director of Homeland Security Tom Ridge said Monday that the new department would provide a critical missing piece by synthesizing all the intelligence, checking it for threats and then acting on those threats. "Basically, the department will be able to put together all of the pieces of the puzzle," Ridge told a National Association of Broadcasters meeting. The House and Senate intelligence committees, meanwhile, were meeting behind closed doors again Tuesday to look into lapses in intelligence sharing by U.S. officials prior to Sept. 11. They were to hear from their first outside witness, Richard A. Clarke, President Bush's adviser on cyberspace security. Clarke was President Clinton ( news - web sites)'s coordinator of anti-terrorism efforts. Another flash point over Bush's Homeland Security Department plan is his proposal to move the Immigration and Naturalization Service to the new agency from the Justice Department ( news - web sites). Some lawmakers object to combining the agency's duty to process legitimate immigrant visas with the job of border control under "homeland security," Thornberry said, adding that "it could send the wrong message, that it's anti-immigrant or something." Plans to move the Secret Service ( news - web sites) out of the Treasury Department ( news - web sites) present more problems. The agency is best known for protecting the president and other top administration officials, but it also investigates counterfeiting, credit card fraud and Internet fraud ( news - web sites). Other differences between Bush's proposal and bills already before the House and Senate: -Several bills would create a White House anti-terrorism office with an overall job of coordinating intelligence, defense and law enforcement for the president. Bush would keep the office occupied by Ridge as it is. -The president envisions an entire division devoted to chemical, biological, radiological and nuclear countermeasures with elements drawn from national laboratories, health agencies and others. The congressional measures do not have this division. -Under Bush's proposal, the new department would include the just-created Transportation Security Administration, which handles most air travel security issues. ___ The House and Senate bills are H.R. 4660 and S. 2452. On the Net: Congress: http://thomas.loc.gov Full at: http://story.news.yahoo.com/news?tmpl=story&u=/ap/20020611/ap_wo_ en_po/us_homeland_security_5 From soncu at pacbell.net Tue Jun 11 19:49:28 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Tue, 11 Jun 2002 18:49:28 -0700 Subject: [A-List] Turkey: Turbulence continues Message-ID: By the way, below is old news from yesterday. Today, 1 US dolar is 1,510,550 Turkish liras and the stanbul Stock Exchange national 100 index is at 9721 points. Sabri +++++++++++++++++++ Ankara - Turkish Daily News June 11, 2002 Politics casts shadow on good economic news Despite an appearance on Sunday by Prime Minister Bulent Ecevit in front of cameras, in response to the apparent conflict within the government, Turkish financial markets remain turbulent. The Istanbul Stock Exchange national 100 index dives 2.80 percent to end the day at 9,866 points below a psychological threshold of 10,000 points. The dollar exchange rate reaches TL 1,478,000 in the interbank market During the one month that has passed since the hospitalization of Ecevit, good news on the economic front have been overshadowed by scenarios over the prime minister's prospects to remain at the head of the government and what would happen in the case of a sudden resignation. Markets have kept their fingers crossed hoping to see the prime minister getting back to work ----------- By Elif Kelebek Political uncertainty will likely continue clouding the outlook for Turkish markets for sometime at least, as nervous investors keep an eye on the health of Prime Minister Bulent Ecevit and on intra-coalition differences over European Union reforms. During the one month that has passed since the hospitalization of Ecevit, good news on the economic front have been overshadowed by scenarios over the prime minister's prospects to remain at the head of the government and what would happen in the case of a sudden resignation. Markets have kept their fingers crossed hoping to see the prime minister getting back to work. But it is now clear that Ecevit will be absent at least until July, while the integrity of the coalition seems at risk after Deputy Prime Minister and Nationalist Movement Party leader Devlet Bahceli's announcements on Friday. "There's little doubt that we have entered a much more uncertain political environment, specifically EU relations are at a difficult juncture, which is creating tensions within the government," Austrian investment bank CA-IB said in a recent research note, predicting that political uncertainty will continue to overshadow Turkish equities in the short term. The Istanbul Stock Exchange national-100 index has lost about 3 percent in U.S. dollar terms over the last three months with an average daily trading volume of around $317 million since the beginning of the year. Turkish financial markets were turbulent yesterday as well in response to the apparent conflict within the government, despite an appearance on Sunday by Prime Minister Bulent Ecevit in front of cameras. The Istanbul Stock Exchange (IMKB) national 100 index dived 2.80 percent to end the day at 9,866 points below a psychological threshold of 10,000 points. Over the past 60 days, the IMKB national 100 index declined around 20 percent. The depreciation in the value of the TL against the American greenback was comparably moderate. The lira against the dollar over the past 60 days weakened from 1,298,000 to 1,478,000. Market outlook remains dull despite the improvement in economic fundamentals. A surprisingly low inflation reading for May, for instance, which confirmed expectations that the year-end 35 percent inflation target is within comfortable reach, has caused only limited joy due to Ecevit's ill-health. "The 0.4 percent month-on-month rise in the wholesale prices index (WPI) and the 0.6 percent rise in the consumer prices index (CPI) were the lowest May figures since 1970. In fact, were it not for the rise in oil prices, the May WPI would have been flat," said economist Yarkin Cebeci of JP Morgan. Industrial production figures for April, which showed a rise for the second consecutive month, arrived just in time to provide further evidence for a turnaround in economic activity. Overall industrial production rose 14.1 percent, on top of an 18.7 percent rise in March, turning up significantly above a consensus market expectation of 7.8 percent. The four-month rise in industrial production amounted to 6.1 percent compared to the same period of last year. Industrial production declined 4 percent in Jan.-Apr. 2001. Both the economic management and analysts are now optimistic that a 3 percent economic growth target can be attained this year on the back of the strong data for industrial output which accounts for approximately 30 percent of gross domestic product. High interest rates would, however, put Turkey's recovery prospects at risk and the yield on Treasury's debt papers have climbed an average 15 percentage points to above 65 percent since Ecevit was hospitalized a month ago. Analysts say rising lira yields once more urged the Treasury to issue foreign currency-denominated debt. The Treasury plans to hold a public offer from June 12-14 to sell one-year euro-denominated papers carrying quarterly coupon payments of 1.6 percent, for a compound yearly interest rate of 6.56 percent. As Economy Minister Kemal Dervis pointed out over the weekend, Turkey is still wrestling with a massive debt problem. Turkey's domestic debt stock is around TL 123,000 trillion and a sharp rise in interest rates could still threaten the debt sustainability in the longer term, in an unnerving reminder of last year's turmoil. But next year there will be no bulk fresh IMF aid to relieve off the pressure. "Debt dynamics are still problematic," Morgan Stanley's Serhan Cevik said in his most recent report. "It's true that the IMF funding reduced the rollover risk. However the system is not stress-tested for political uncertainties." The fact that June is a heavy debt service month is simply bad luck. The Treasury must repay TL 10,435 trillion domestic debt and TL 1,800 trillion external debt in June. "The domestic debt service schedule will remain challenging at least until October. "It's true that the Treasury's cost of borrowing has so far been less than the projected average interest rate for the current year. Coupled with the lira's nominal appreciation, lower interest rates may lower the annual interest burden this year. Nevertheless, given the composition of domestic debt stock, rising political uncertainty may easily increase the interest burden. Furthermore, real interest rates are prohibitively high and highlight the risk of debt unsustainability in the long term," Cevik added. From hliu at mindspring.com Tue Jun 11 21:16:55 2002 From: hliu at mindspring.com (Henry C.K. Liu) Date: Tue, 11 Jun 2002 23:16:55 -0400 Subject: [A-List] India: neoliberal cheerleader References: Message-ID: <3D06BD27.91568561@mindspring.com> India Unbound is a timely product that neoliberals would welcome in the era of global economic collapse caused by neo-liberalism. The author is an intellectual compradore in the tradition of the Bell Curve, a 1994 book written by Charles Murray of the conservative American Enterprise Institute and the late Richard Herrnstein of Harvard, with the central thesis - that there are measurable genetic differences in intelligence levels between races, seeking to make racism intellectually acceptable. The ideas presented in India Unbound are neither new or original, but they are what neo-liberals have been selling for the last decade. The problem with India has nothing to do with socialism which India never actually practised. If anything, India's problem has more to do with an incompetent civil service inherited from the British. The British developed the civil service which excelled under brilliant and daring political leadership. India leaders all suffered from the OxBridge disease of gentlemanly timidity. They have all been poisoned by obsolete, irrelevant and impractical British elitism. Even today, the majority of Indian cannot speak or write the official language (English) well enough to challenge the Indian elite. Adopting English as its official language was a major political error. It condamned India into perpetual voluntary victimization by cultural imperialism. The book admires Bill Gates whose only technical contribution was limited to the development of DOS, which became industry standard when IMB made the greatest strategic error of underestimating the potential of the PC and give the opportunity to Gates. Eveything else Microsoft monopolized after DOs was stolen, from Windows to Words to IE. Microsoft's success was not technical innovation, but financial manipulation. Gates was more like Rockefeller than Edison, not even a Ford. The fixation of creating wealth for a few as the solution to India's problem is mass poverty is obscene. The fact that Citibank ordered 1000 copies of the book is itself telling. Within a decade, some independent minded Indian will write a book entitled: India Can Say No, which had appear first in Japan then in China. Fact: none of the current leaders of Japan or China were educated in the West. Next you know, the author will tell you that what India needs is a few Enrons and Global Crossings. Henry C.K. Liu Keaney Michael wrote: > Lion of India > > In his controversial new book, Gurcharan Das claims that India will soon overtake Europe as a global economic power - and that Britain should have exploited its colony more. He tells Randeep Ramesh why > > Tuesday June 11, 2002 > The Guardian > > Gurcharan Das is a small man with a big voice. Standing 5ft 3in tall, he is booming away to the Guardian's photographer. "My name is Gurcharan Das, G-U-R-C-H-A-R-A-N-D-A-S. It means the servant of the guru's feet... a name of humility." The smiling Das has nothing to be humble about, and he knows it. His book, India Unbound, is a quiet earthquake that shook faraway shores long before its shockwave reached our own. Britain has become accustomed to Indian authors whose ease with English belies their mother tongue. Das is different insofar as his work is non-fiction, an economic tract embroidered by personal narrative. > > India Unbound's conclusion is that in the next two decades India will become the third largest economy, after the US and China, with a middle class of 250 million people. He talks of an India where teenage tea-shop assistants work to save money for computer lessons. Where Bill Gates has replaced Gandhi in the hearts of the people and money is the new god in the temple. Where the lifting of the "dead hand of politicians and bureaucrats" means the private sector runs schools and multinationals are free to exploit the country. In this India, Das says, "minds have been decolonised". > > A manifesto for free trade, free markets and economic reform, the book has made Das an unlikely pin-up for globalisers. Professor Amartya Sen, the Nobel Prize-winner and master of Trinity College, Cambridge, was so impressed he asked Das to start a "secular, rightwing party" modelled on Britain's Tories in India. Citibank, the Wall Street financial house, was so taken with India Unbound that it ordered 1,000 copies. Das even got a six-figure advance for the US edition. In India, there are no plans for a paperback because the hardback is still selling well. > > Born into a well-to-do middle-class family in pre-independence India, Das spent his youth in Washington after his father, a civil servant, was posted there. He graduated from Harvard with a philosophy degree, and was taught by JK Galbraith, Henry Kissinger and the philosopher John Rawls. It was Rawls who turned Das into an unapologetic capitalist. "His minimax theory did it. Basically, it says that if the poor get rich and a few people get filthy rich, that is better than worrying about the distribution of wealth and no one getting rich." > > At the age of 21 Das returned to Bombay, discovered a flair for sales and went on to sell more Vicks VapoRub than anyone else in the world. That he did so by relabelling the menthol rub an "ayurvedic" medicine and briefing lawyers to prove that Vicks was really a traditional herbal Indian remedy is a tale that he delights in retelling. Despite rising to the top of the career ladder - ending up with a $1m pay package and directorship at Procter & Gamble in America - Das, aged 50, gave up on business to become a writer. "I got bored, basically. My friends at P&G played golf. I wrote." > > It is globalisation that has provided Das with the best lines. India nearly went bankrupt in 1991 and thanks to pressure from the International Monetary Fund, its finance minister burned 40 years of red tape in seven hours. That this revolution also saw Hindu nationalism course through the country's veins is "deplorable". But the last decade, says Das, has seen literacy jump from 52% to 65%, population growth slow and 110 million people cross the poverty line. "We had six prime ministers and the most appalling governance. But we had great economic growth." > > In fact, Das says, it is the west's anti-capitalists who are denying the poor the chance of getting rich, a fact illustrated by the delay in allowing GM crops to be grown in India. "I think it is terrible that the Indian government wasted six years denying its farmers Monsanto's GM cotton." He argues that the US and China have seized the opportunity to turn vast chunks of farmland over to GM cotton, which not only produces more crop per acre than its natural equivalent, but is also resistant to insect attack. "Thanks to the Greenpeace-funded lunatics, nobody points this out. If Monsanto gets rich and at the same time the Indian farmer gets rich beyond his wildest dreams, then what is wrong with that?" > > For Das, two industries, information technology and agriculture, will lift India out of poverty. It was after all the subcontinent's computer scientists who helped inflate the internet bubble - but now that has been pricked, is the argument not redundant? "No. Indian IT companies grew by 32% last year, and that was in a recession." > > With farming, the reasoning is simpler. Within India's borders lies half of all the arable land in Asia. India should, therefore, be able "to feed and clothe the world". "China's industrial products are on every high street in the world. Why is India's produce not there too?" > > For a British reader, the eyebrow-arching passages in India Unbound are those that claim that India and China, growing at more than 6% a year, will overtake Europe but not America. The reason he gives is that America's economy is as vigorous as its more populous rivals, but the old world's is not. "Europe has chosen the good life. A short working week, long vacations, beauty, museums, art. As an aesthete I love Europe's traditions. But they do not create wealth." > > The problem with Europe is not just its history, but its demographics. Not only, says Das, does Europe have an ageing population, but it cannot seem to absorb immigrants. Even Britain, says Das, will not wake up before it sleepwalks into economic insignificance. "I think, when the chips are down, the UK is part of Europe, not part of America. Economically you would gain from being part of America. Culturally you would lose. You don't want to become McWorld." > > Das admits that nuclear war casts a large shadow over the subcontinent, but frowns on his country's obsession with its neighbour. "Even when there is no sign of conflict, for every mention of China in our papers there are eight mentions of Pakistan. We should be following every move in China, not Pakistan." > > A columnist for the Times of India, Das enjoys controversy. He believes that colonialism did not go far enough, that Britain should have exploited India more. That Arundhati Roy, another author-turned-activist (albeit for the other side), is a "sadly misguided thing who does not understand economics". That India's disease was socialism, which saw it export less than Hong Kong and become addicted to foreign aid. That the only cure is a form of shock therapy, which he regrets is only being administered slowly. > > Big political players on the subcontinent sense that the ground beneath them is shifting and that Das might know in which direction. Both opposition and government court him, although he loathes the resurgent Hindu nationalist cause. But despite the endorsement of Amartya Sen, Das says democracy is better off with him outside shooting in. "There are not enough people like me in India, but there will be. That is the story of India Unbound." From annewilliamson at msn.con Tue Jun 11 21:43:03 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Tue, 11 Jun 2002 23:43:03 -0400 Subject: [A-List] India: neoliberal cheerleader References: <3D06BD27.91568561@mindspring.com> Message-ID: <007b01c211c3$42b44300$0100a8c0@igrushkii> Some helpful additional information, Henry. Thanks. A question: I understand your point that adopting English as the official language excluded a great swath of the population. It was, however, my understanding that India had a great complexity of languages and distinct dialects, and that the adoption of English allowed them to communicate among themselves. I think I got that unthinkingly from some Alastair Cooke PBS documentary years ago. By your post, I take it that was colonial rational and bunk. But, just curious, was there a single tongue widely spoken? -Anne PS Harvard has an especial talent for its very special mission, i.e. identifying and promoting foreign quislings. Deja vu all over again, said some ballcoach. ----- Original Message ----- From: Henry C.K. Liu To: ; ; Sent: Tuesday, June 11, 2002 11:16 PM Subject: Re: [A-List] India: neoliberal cheerleader > India Unbound is a timely product that neoliberals would welcome in the era of global economic collapse caused by neo-liberalism. The author is an intellectual compradore in the tradition of the Bell Curve, a 1994 book written by Charles Murray of the conservative American Enterprise Institute and the late Richard Herrnstein of Harvard, with the central thesis - that there are measurable genetic differences in intelligence levels between races, seeking to make racism intellectually acceptable. > The ideas presented in India Unbound are neither new or original, but they are what neo-liberals have been selling for the last decade. The problem with India has nothing to do with socialism which India never actually practised. If anything, India's problem has more to do with an incompetent civil service inherited from the British. The British developed the civil service which excelled under brilliant and daring political leadership. India leaders all suffered from the OxBridge disease of gentlemanly timidity. They have all been poisoned by obsolete, irrelevant and impractical British elitism. Even today, the majority of Indian cannot speak or write the official language (English) well enough to > challenge the Indian elite. Adopting English as its official language was a major political error. It condamned India into perpetual voluntary victimization by cultural imperialism. > > The book admires Bill Gates whose only technical contribution was limited to the development of DOS, which became industry standard when IMB made the greatest strategic error of underestimating the potential of the PC and give the opportunity to Gates. Eveything else Microsoft monopolized after DOs was stolen, from Windows to Words to IE. Microsoft's success was not technical innovation, but financial manipulation. Gates was more like Rockefeller than Edison, not even a Ford. > > The fixation of creating wealth for a few as the solution to India's problem is mass poverty is obscene. The fact that Citibank ordered 1000 copies of the book is itself telling. Within a decade, some independent minded Indian will write a book entitled: India Can Say No, which had appear first in Japan then in China. Fact: none of the current leaders of Japan or China were educated in the West. > > Next you know, the author will tell you that what India needs is a few Enrons and Global Crossings. > > Henry C.K. Liu > > Keaney Michael wrote: > > > Lion of India > > > > In his controversial new book, Gurcharan Das claims that India will soon overtake Europe as a global economic power - and that Britain should have exploited its colony more. He tells Randeep Ramesh why > > > > Tuesday June 11, 2002 > > The Guardian > > > > Gurcharan Das is a small man with a big voice. Standing 5ft 3in tall, he is booming away to the Guardian's photographer. "My name is Gurcharan Das, G-U-R-C-H-A-R-A-N-D-A-S. It means the servant of the guru's feet... a name of humility." The smiling Das has nothing to be humble about, and he knows it. His book, India Unbound, is a quiet earthquake that shook faraway shores long before its shockwave reached our own. Britain has become accustomed to Indian authors whose ease with English belies their mother tongue. Das is different insofar as his work is non-fiction, an economic tract embroidered by personal narrative. > > > > India Unbound's conclusion is that in the next two decades India will become the third largest economy, after the US and China, with a middle class of 250 million people. He talks of an India where teenage tea-shop assistants work to save money for computer lessons. Where Bill Gates has replaced Gandhi in the hearts of the people and money is the new god in the temple. Where the lifting of the "dead hand of politicians and bureaucrats" means the private sector runs schools and multinationals are free to exploit the country. In this India, Das says, "minds have been decolonised". > > > > A manifesto for free trade, free markets and economic reform, the book has made Das an unlikely pin-up for globalisers. Professor Amartya Sen, the Nobel Prize-winner and master of Trinity College, Cambridge, was so impressed he asked Das to start a "secular, rightwing party" modelled on Britain's Tories in India. Citibank, the Wall Street financial house, was so taken with India Unbound that it ordered 1,000 copies. Das even got a six-figure advance for the US edition. In India, there are no plans for a paperback because the hardback is still selling well. > > > > Born into a well-to-do middle-class family in pre-independence India, Das spent his youth in Washington after his father, a civil servant, was posted there. He graduated from Harvard with a philosophy degree, and was taught by JK Galbraith, Henry Kissinger and the philosopher John Rawls. It was Rawls who turned Das into an unapologetic capitalist. "His minimax theory did it. Basically, it says that if the poor get rich and a few people get filthy rich, that is better than worrying about the distribution of wealth and no one getting rich." > > > > At the age of 21 Das returned to Bombay, discovered a flair for sales and went on to sell more Vicks VapoRub than anyone else in the world. That he did so by relabelling the menthol rub an "ayurvedic" medicine and briefing lawyers to prove that Vicks was really a traditional herbal Indian remedy is a tale that he delights in retelling. Despite rising to the top of the career ladder - ending up with a $1m pay package and directorship at Procter & Gamble in America - Das, aged 50, gave up on business to become a writer. "I got bored, basically. My friends at P&G played golf. I wrote." > > > > It is globalisation that has provided Das with the best lines. India nearly went bankrupt in 1991 and thanks to pressure from the International Monetary Fund, its finance minister burned 40 years of red tape in seven hours. That this revolution also saw Hindu nationalism course through the country's veins is "deplorable". But the last decade, says Das, has seen literacy jump from 52% to 65%, population growth slow and 110 million people cross the poverty line. "We had six prime ministers and the most appalling governance. But we had great economic growth." > > > > In fact, Das says, it is the west's anti-capitalists who are denying the poor the chance of getting rich, a fact illustrated by the delay in allowing GM crops to be grown in India. "I think it is terrible that the Indian government wasted six years denying its farmers Monsanto's GM cotton." He argues that the US and China have seized the opportunity to turn vast chunks of farmland over to GM cotton, which not only produces more crop per acre than its natural equivalent, but is also resistant to insect attack. "Thanks to the Greenpeace-funded lunatics, nobody points this out. If Monsanto gets rich and at the same time the Indian farmer gets rich beyond his wildest dreams, then what is wrong with that?" > > > > For Das, two industries, information technology and agriculture, will lift India out of poverty. It was after all the subcontinent's computer scientists who helped inflate the internet bubble - but now that has been pricked, is the argument not redundant? "No. Indian IT companies grew by 32% last year, and that was in a recession." > > > > With farming, the reasoning is simpler. Within India's borders lies half of all the arable land in Asia. India should, therefore, be able "to feed and clothe the world". "China's industrial products are on every high street in the world. Why is India's produce not there too?" > > > > For a British reader, the eyebrow-arching passages in India Unbound are those that claim that India and China, growing at more than 6% a year, will overtake Europe but not America. The reason he gives is that America's economy is as vigorous as its more populous rivals, but the old world's is not. "Europe has chosen the good life. A short working week, long vacations, beauty, museums, art. As an aesthete I love Europe's traditions. But they do not create wealth." > > > > The problem with Europe is not just its history, but its demographics. Not only, says Das, does Europe have an ageing population, but it cannot seem to absorb immigrants. Even Britain, says Das, will not wake up before it sleepwalks into economic insignificance. "I think, when the chips are down, the UK is part of Europe, not part of America. Economically you would gain from being part of America. Culturally you would lose. You don't want to become McWorld." > > > > Das admits that nuclear war casts a large shadow over the subcontinent, but frowns on his country's obsession with its neighbour. "Even when there is no sign of conflict, for every mention of China in our papers there are eight mentions of Pakistan. We should be following every move in China, not Pakistan." > > > > A columnist for the Times of India, Das enjoys controversy. He believes that colonialism did not go far enough, that Britain should have exploited India more. That Arundhati Roy, another author-turned-activist (albeit for the other side), is a "sadly misguided thing who does not understand economics". That India's disease was socialism, which saw it export less than Hong Kong and become addicted to foreign aid. That the only cure is a form of shock therapy, which he regrets is only being administered slowly. > > > > Big political players on the subcontinent sense that the ground beneath them is shifting and that Das might know in which direction. Both opposition and government court him, although he loathes the resurgent Hindu nationalist cause. But despite the endorsement of Amartya Sen, Das says democracy is better off with him outside shooting in. "There are not enough people like me in India, but there will be. That is the story of India Unbound." > > > From annewilliamson at msn.con Tue Jun 11 22:19:33 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Wed, 12 Jun 2002 00:19:33 -0400 Subject: [A-List] IMF Mandates Currency Instability References: <3D06BD27.91568561@mindspring.com> <007b01c211c3$42b44300$0100a8c0@igrushkii> Message-ID: <008201c211c8$5baea9e0$0100a8c0@igrushkii> ---------------------------------------------------------------------------- ---- The IMF Mandates Currency Instability By Lawrence Parks June 8, 2002 Our hero in the Congress, the Honorable Dr. Ron Paul, MD, of Texas, has struck another powerful blow for ordinary people worldwide. He has challenged Secretary of the Treasury, the Honorable Paul O'Neill, as well as the Chairman of the Board of Governors of the Federal Reserve, Dr. Alan Greenspan, to explain the public policy justification for the International Monetary Fund's prohibiting member countries from linking their currencies to gold, and only to gold. So far, neither Mr. O'Neill nor Dr. Greenspan has responded. (see: An Open Letter to O'Neill and Greenspan May 31, 2002) Thus, a country such as Argentina, which has had multiple currency collapses in recent memory, and is desperate to have a stable currency may, under the IMF Articles of Agreement, Section 4-2b, link its currency to biscuits or sour pickles, but not to gold. Why this restriction? The true answer, of course, is that the financial elite recognize that gold-as-money is in competition with the fiat (arbitrary) paper-ticket-electronic money that they create out of nothing, and at great profit to themselves, and they want their fiat money to win the competition. At the national level, they have gotten every country to implement legal tender laws, a.k.a. forced tender laws, for which there is absolutely no basis under the Constitution, and, thus, should be void, whereby virtually worthless substances are arbitrarily assigned value as money by being gussied up with signatures and seals, legal tender notification, and the admonition that they are somehow obligations of the issuing authority. At the end of the nineteenth century, Labor, at least, was alert to this injustice and asked the key questions: If our money is good money and would be preferred by the people, then why are legal tender laws necessary? If our money is not good money, and would not be preferred by the people, then why in a democracy should they be forced to use it? The restriction in the IMF Articles of Agreement merely extends this blatant exercise in tyranny to the whole world, thereby using the monetary system to transfer the real wealth of society from those who produce it, mostly ordinary working people, to those who create money out of nothing, the banking system, and to those who get transaction fees for moving it around, the Wall Street community. Dr. Paul deserves great thanks for his heroic quest to help return the U.S. and the rest of the world to an honest monetary system. CONTACT INFORMATION Larry Parks, Executive Director FAME,501(c)(3) Box 625, FDR Station, New York, NY 10150-0625 Phone:212-818-1206 Fax: 212-818-1197 Lparks at FAME.ORG www.fame.org From soncu at pacbell.net Tue Jun 11 23:13:10 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Tue, 11 Jun 2002 22:13:10 -0700 Subject: [A-List] Re: cyber security Message-ID: I found where it came from. From below: http://www.sonic.net/sentinel/ The article I sent can be accessed at the below link: http://www.sonic.net/sentinel/govcontr.html Did not have much chance to review the site and will not have time until tomorrow. If you figure out who these people are, let me know. Best, Sabri From soncu at pacbell.net Wed Jun 12 00:53:20 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Tue, 11 Jun 2002 23:53:20 -0700 Subject: [A-List] Re: cyber security In-Reply-To: Message-ID: Well. I usally send e-mails meant for A-LIST to PEN-L but this time I did the opposite. Please excuse this absent minded scientist. Best, Sabri -----Original Message----- From: Sabri Oncu [mailto:soncu at pacbell.net] Sent: Tuesday, June 11, 2002 10:13 PM To: ALIST Subject: Re: cyber security I found where it came from. From below: http://www.sonic.net/sentinel/ The article I sent can be accessed at the below link: http://www.sonic.net/sentinel/govcontr.html Did not have much chance to review the site and will not have time until tomorrow. If you figure out who these people are, let me know. Best, Sabri From mstainsby at dojo.tao.ca Tue Jun 11 15:35:39 2002 From: mstainsby at dojo.tao.ca (Macdonald Stainsby) Date: Tue, 11 Jun 2002 21:35:39 -0000 Subject: [A-List] Police turning people back at Alberta-BC border (inside Canada) Message-ID: <20020611213539.4DD8717DFA4@dojo.tao.ca> If anyone has any doubts left as to the importance of getting to Calgary, the gauntlet has been dropped further. Let me reiterate: If we are to have any rights, any rights at all, go to Alberta for the demo. This kind of mass harrassment must not be tolerated, and we must answer the call. Your rights are only as good as your ability to use them. Use them now. _________________________________________________________ Check the cbc.ca website. I just heard on the network CBC Radio One in Vancouver, the 3 p.m. national radio news. There was a short item on the G8 and how Albertan police will patrol main highways at the provincial borders and are planning to turn back anyone with gas masks aboard or "other" paraphanalia that may lead them to believe that the vehicle occupants are headed into the province to protest the G8. "Zero Tolerence" seems to be the order of the day, when it comes to legitimate protest. Time to start concocting some "other" stories for the coppers as to why we are travelling into the province. Regards, -tc -- Macdonald Stainsby, External Relations Co-ordinator, Douglas College Students Union. ** In the contradiction lies the hope. --Bertholt Brecht. *** "`Order rules in Berlin.' You stupid lackeys! Your `order' is built on sand. Tomorrow the revolution will rear ahead once more and announce to your horror amid the brass of trumpets: `I was, I am, I always will be!'" -Rosa Luxemburg, 1918. From hliu at mindspring.com Tue Jun 11 18:10:53 2002 From: hliu at mindspring.com (Henry C.K. Liu) Date: Tue, 11 Jun 2002 20:10:53 -0400 Subject: [A-List] Krugman on Rove Message-ID: <3D06918D.D8915FA7@mindspring.com> When economists talk politics, they move from the the obscure to the rediculous. Delong's claim that Clinton went out on a limb to alienate the labor vote was a triumph of principle over politics was pure spin. The calculation in the clinton camp was that labor had no place to go and therefore could be ignored. The driving force in the adminstration re NAFTA was Rubin, who assured Wall Street funding if Clinton supported NAFTA. No doubt many on the Clinton economic team truly believed they were doing the right things as Krugman said, but believing the wrong thing to be right is no merit for any econmists. Krugman wrote: "If Bill Clinton had given the steel industry the tariffs it wanted, Al Gore would probably be living in the White House. But administration officials actually worried about the consequences ? for the nation, and for the world economy ? of giving in to special interests." As I remember, the steel states were not hotly contested states in the last election. Th pivotal state was Florida, where Cuban and Jewish votes were critical. Clinton's second term was bought with considerable political backpedalling, told to a prostitute by his counterpart of Karl Rove. As for Karl Rove, see the following: Karl Rove's Wedges By Harold Meyerson Issue Date: 4.8.02 Print Friendly | Email Article Some doctrinaire conservatives are growing a bit cranky over the ideological impurities of George W. Bush. California Republicans rebelled when he promoted the candidacy of Richard Riordan -- Horrors! An electable moderate! -- for governor. Free-market ideologues blanched when he supported protections for the steel industry. "Steel tariffs are not just anti-market," grumped Sebastian Mallaby in The Washington Post. "They make no sense on their own terms." Actually, they make sense and then some. Karl Rove -- the man behind the curtain in all matters political at the Bush White House -- understands all too well that busting up the Democratic coalition and building an enduring conservative majority in the United States requires the administration to build any number of alliances with its ideological opposites. While the Democrats remain devoid of any strategic direction, Rove is busy developing a whole new series of wedge issues to pick them apart. Much was made during the 2000 campaign of Rove's appreciation of Mark Hanna, the late-nineteenth-century industrialist who, as the political genius of the McKinley operation, remade the Republican Party. Hanna not only persuaded the CEOs of his day to invest mightily in the party, he also dashed the designs of the William Jennings Bryan Democrats to restructure American politics along lines of class. Running against McKinley in 1896, Bryan began with a base of support among farmers and sought to bring industrial workers to his column as well. Hanna's strategy was to align voters not by class but by sector. Industrialists and urban workers both benefited from the tariffs that McKinley championed, though Bryan's farmers most certainly did not. Even though those industrialists paid their workers a miserably low wage, Hanna found common ground between these two conflicting classes -- and there built a Republican coalition that lasted for more than 30 years. Follow the Bush White House over the past few months and it's apparent that Rove grows more Hanna-like by the week. At bottom, the administration remains the pluperfect expression of class politics: crafting a tax cut for the wealthy, bailing out airlines but not their workers, pushing fast track. But Rove knows that an administration devoted solely to the care and feeding of the rich is not politically sustainable. So he's developed a series of discrete policies that appeal to distinct groups in the electorate by sector. The steel tariff is one of these. It runs counter to the administration's overall free-trade policies, but it also stands to erode Democrats' support among unionized industrial workers in such swing states as Ohio, West Virginia, and Pennsylvania. Immigration policy is another of Rove's sectoral opportunities. It's also a necessity: Rove has long been convinced -- rightly -- that absent a successful outreach strategy to the fast-growing Latino electorate, Republicans are doomed. Since the opening days of the administration, Rove has concentrated particularly on liberalizing immigration policy with Mexico -- and not even the clamor for greater border security since September 11 has deterred him from his mission. As with the steel tariff, he's been dealing with a business-labor coalition: businesses in search of more immigrant workers, unions bent on organizing them. As a result not just of September 11 but also the recession, the domestic pressure to increase immigration has waned, but the Republicans are still negotiating with unions and other immigrant advocates for more modest liberalizations. Consequently, Congress is now poised to extend an amnesty covering many thousands of undocumented immigrants, and to make legal immigrant students eligible for Pell Grants. What Rove is doing is coming up with a new generation of wedge issues. Bill Clinton took all the old GOP favorites -- crime and welfare in particular -- off the table. Rove is responding by finding new ways to pick apart the Democratic base -- and with party strength so evenly divided, it doesn't take much to tip the balance one way or the other. Rove's strategic initiatives stand in sharp contrast to the Democrats' torpor. While Rove has shown himself willing and able to deviate from core GOP policy to cut into the Democratic base, the Democrats have been unable even to formulate a core policy, let alone deviate from it. Uncertain whether to stand for fiscal discipline or a real prescription-drug benefit, divided over how and whether to question the president on our expanding and amorphous war, paralyzed by the tax cut that all too many of them voted for, they call to mind Lincoln's description of a Union general in the aftermath of a battlefield defeat. The general, Lincoln said, was wandering around "confused and stunned like a duck hit on the head." That's our Democrats. Alas, that's not Karl Rove. Harold Meyerson The Rove Doctrine By PAUL KRUGMAN ome months ago an academic colleague ? a man with strong Democratic connections ? urged me to write a couple of columns praising the Bush administration. "What should I praise?" I asked. There was a long pause ? funny, isn't it, how "balance" becomes a goal in itself? ? but eventually he came up with something: "How about its commitment to free trade?" Ahem. In fact, George W. Bush has turned out to be quite protectionist. The steel tariff and the farm bill attracted the most attention, but they are part of a broader picture that includes the punitive (and almost completely unjustified) tariff on Canadian softwood lumber and the revocation of Caribbean trade privileges. When it comes to free trade, the Bush administration is all for it ? unless there is some political cost, however small, to honoring its alleged principles. Which brings me to the story that has Washington's political groupies twittering: that Esquire article in which the White House chief of staff, Andy Card, frets that with the moderating influence of Karen Hughes gone, the hard-liner Karl Rove will run the show. If the past 18 months have been what policy looks like with Mr. Rove only partly in control, one shudders to think what comes next. For the most distinctive feature of Mr. Rove's modus operandi is not his conservatism; it's his view that the administration should do whatever gives it a political advantage. This includes, of course, exploiting the war on terrorism ? something Mr. Rove has actually boasted about. But it also includes coddling special interests. One of Bill Clinton's underappreciated virtues was his considerable idealism when it came to economic policy. The Berkeley economist Brad DeLong lauded Mr. Clinton's "record of being willing to take major political risks in order to do what he thinks is right for the country as far as international economic policy is concerned." What he had in mind was the way Mr. Clinton went out on a limb, defying the polls and reaching across party lines, to pass the North American Free Trade Agreement in 1993, and the even bigger risks he took to rescue Mexico from its financial crisis in 1995. Like Mr. DeLong, I know some of the key players in both of those decisions, and I'm sure that they were taken on the merits: the Clintonites really, truly believed they were doing the right thing. That scrupulousness continued to the end. If Bill Clinton had given the steel industry the tariffs it wanted, Al Gore would probably be living in the White House. But administration officials actually worried about the consequences ? for the nation, and for the world economy ? of giving in to special interests. Mr. Rove's administration has no use for such niceties. The deals don't stop with trade and farm subsidies. As analysts at the Cato Institute point out, the Bush-Cheney energy plan may have been conservative in the sense that it was anti-environmentalist, but otherwise it was stuffed full of things free-marketeers are supposed to abhor: expanded government power to seize private land (for transmission lines), large tax incentives for energy sources that don't pay their way at market prices (nuclear power in particular). The energy plan wasn't about principles; it was about payback. And if the administration won't take a stand on principle, who will? I was particularly struck by a story in the newspaper The Hill titled "Unions taking fresh look at G.O.P." It quoted the U.A.W. spokesman saying his union was "looking beyond party labels" to where politicians stand "on certain issues." In other words, his union will go with whoever caters to its special interests. To some extent we've been here before. Paula Stern, the former head of the International Trade Commission, matter-of-factly describes Ronald Reagan as "the most protectionist president since Herbert Hoover," and says that he "legitimized efforts by powerful industries to use political muscle ? not necessarily economic merit or legal criteria" to get what they wanted. So in a way Mr. Bush is following in Mr. Reagan's footsteps. But it seems to me that it's worse this time ? that we are witnessing a race to the bottom in interest-driven politics, taking us to depths not seen since before the New Deal. And if that Esquire story is to be believed, it's about to get even worse. Smoot-Hawley, anyone? -------------- next part -------------- A non-text attachment was scrubbed... Name: not available Type: text/html Size: 11366 bytes Desc: not available URL: -------------- next part -------------- A non-text attachment was scrubbed... Name: C:\WINDOWS\TEMP\nsmail2I.gif Type: image/gif Size: 360 bytes Desc: not available URL: From Michael.Keaney at mbs.fi Wed Jun 12 04:27:03 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 12 Jun 2002 13:27:03 +0300 Subject: [A-List] UK corporate state: PPPs in disarray Message-ID: There seems to be gathering a head of steam as regards the financial soundness of Gordon Brown's much-trumpeted "public private partnerships" (i.e., East India Company in contemporary garb). Though long overdue it is good, and reveals once more the contradictory nature of the state's facilitation and legitimation roles vis a vis capital accumulation. In this case the facilitation is all too apparent and legitimacy is suffering as a result. Watchdog stokes row over private funding Costs of flagship policy questioned TOM GORDON and MURRAY RITCHIE The Herald, 12 June 2002 THE political row over controversial public-private partnership schemes intensified yesterday after the national spending watchdog questioned using them to improve school buildings and urged ministers to give councils a real choice in how they pay for future projects. In its first report on public-private partnerships, the successor to the private finance initiative, the Accounts Commission said PPP/PFI had delivered real benefits to council schools in the past four years, but stressed it must not be the only option. Although it had led to better project management, sounder financial control, and the transfer of risk to the private sector, PPP was also more expensive than public finance, was chosen using subjective and often implausible calculations, and could lead to education cuts in the long-term. "The danger is that decisions in favour of PFI procurement may be driven by stereotypes of poorly performing alternatives rather than good evidence of demonstrable benefit," it said. The Scottish Executive last night acknowledged PPP was not the cheapest option, but argued the extra costs were associated with real benefits, adding it was open to alternative suggestions. The commission's report, which arrived a week after discontent over PPP erupted in two Scottish councils, was pounced upon by the SNP, who claimed it justified its policy of using non-profit trusts for public services. "The PFI bubble is now well and truly burst," said John Swinney, the party's leader, claiming all the PPP projects now under way in Scotland could cost taxpayers an extra ?80m a year for 25 years "just to satisfy profit". He said: "The government's central policy of investment in public services has been fatally weakened as a result of this report. It is time the madness of building schools and hospitals for private profit was ended." With PFI now certain to be a major issue in the Scottish Parliament elections next year, Mr Swinney repeated his call for fiscal autonomy for Scotland and again committed the SNP to removing the private profit element in new projects. Savings to be gained from future non-profit schemes would be switched to school and hospital investment, he promised. Joining in the attack, the Tories taunted the executive for stealing one of their ideas. Brian Monteith, education spokesman, said: "Having introduced the scheme in the first instance, the Scottish Conservatives have long argued that PFI would deliver real and practical benefits to Scotland. "Labour ministers are to be congratulated for performing this humiliating volte face." The commission's report was based on a study of six of the 12 school PPP projects approved in Scotland since 1998, which together involve 80 schools and a lifetime cost of more than ?2bn. Although it praised many of the practical benefits of PPP, it also said those benefits were not unique to PPP. It said the system also involved high set-up costs and advisers' fees, and that financing was twice as expensive as in the public sector. However, because the executive offered incentives to councils to use PPP, while simultaneously restricting traditional borrowing from central government, authorities had little choice but to accept it, even though other options might be better value. Alastair MacNish, chairman of the commission, said: "The evidence is that PFI is delivering real and very practical benefits and the commission welcomes this. "But we believe there is a need for real choice of procurement options for future projects, including PFI and non-PFI options." Andy Kerr, finance minister, said taxpayers were more interested in the delivery of services than procurement tools. "It is important to emphasis that PPP has unique features including contractors not only building modern schools but being responsible for their long-term maintenance, service delivery and all the risk that entails." He said Mr Swinney's remarks were "disappointing and predictable", and said his calculations "didn't stand up". "We are always open to suggestions for schemes which will deliver what we want to deliver, providing they stand up to the rigorous tests that PPP stands up to. I'm not aware of any, but if it's out there then I'm happy to consider it." ----- Value for public money Labour must tighten up the bidding process for PPPs The Herald, 12 June 2002 Editorial Comment A great deal of public money is being invested in building and refurbishing schools in Scotland through the government's preferred public private partnership model. The first generation of PPP school projects has been approved by the Scottish Executive. Nurturing it will cost more than ?2000m over the lifetime of the 12 projects under way for 80 schools (25 to 30 years). On one estimate, the annual PPP contract cost for each pupil place is ?2200. There are other PPPs for hospitals and there will be more for other school projects. For the government, PPPs are the only game in town. Not everyone agrees. A growing body of critics argues that the game should be opened up to other players as the final cost of PPPs to the taxpayer will be much greater than estimated, and the job could be done at a lower price if publicly funded. It would be a sterile debate if a credible system for determining value for money were in place. To listen to the government at Westminster and Holyrood, it is. Clearly it is not. Although applicants for PPPs must prove value for money in their submissions, the early evidence suggests it is a theoretical rather than a practical requirement. That is what the Accounts Commission for Scotland has found in a report, published yesterday, into six of the first-generation projects. These represent 80% of the schools under construction or redevelopment, including the Glasgow project, far and away the biggest and costliest. The report is no snapshot. The commission, the independent watchdog over local government finances, has found the projects under examination are delivering quickly, mainly on time, and without "significant" changes in cost to the client, local government (in effect the taxpayer). But these are early days. Since Labour came to power in 1997 it has approved PPPs worth ?18bn, with more to follow. The government maintains they deliver better schools, hospitals, and other parts of the public infrastructure. The rules state no project should go ahead without being tested by the public-sector comparator, a notional, publicly-funded alternative. The commission has found it wanting: hardly surprising, perhaps, when councils are under such pressure to embrace PPPs. It is almost as if the comparator has been framed as a construct for guaranteeing the success of PPPs. Councils seem to have used them that way (West Dunbartonshire and Falkirk apart, which have walked away from these schemes). Each of the councils investigated by the commission favoured a PPP because it was more economic. But like was not being compared with like between the PPP and publicly-funded options. No council took into account the fact that it could borrow more cheaply than potential private-sector partners, who must borrow on full commercial terms, have shareholders to satisfy, and are at the mercy of interest rates. The commission has estimated that failure to differentiate between financing costs could add some 10% to the total cost of the 12 initial PPPs over 30 years. These projects might well deliver on quality and service. But there is another key measure for evaluating and selecting bids that seems to have been ignored: the whole-life cost, perhaps over 30 years, of the project. So much for the Blair mantra of money always matching results in public services. The commission does not say so, but PPPs, a flagship Labour policy, risk foundering on the rock of rising scepticism. If the policy is to stay on course, Labour will need to demonstrate that each PPP has been properly tested, taking account of the true costs of a publicly-funded alternative. The bidding process should be opened up to include not-for-profit trusts. The process needs genuine diversity because it is more likely to deliver value for money and, ultimately, better public services. The jury is out on PPPs. ----- Looking at the hidden side of PPP TOM GORDON The Herald, 12 June 2002 Glasgow hailed the public private partnership, but was it best value for money? A LITTLE over two years ago, Glasgow's councillors endorsed a bulging business plan for fixing their secondary schools. The authority was one of the first dozen in Scotland to secure a public private partnership (PPP) to turn around its dilapidated classrooms, and for ?26m down, its politicians enthusiastically signed up to ?225m of building work and ?200m of upkeep. True, the total cost of the 30-year deal with the 3Ed consortium was ?1.2bn, but that was how PPP worked: buy now, pay later. Besides, the Scottish Executive was providing "level playing field support" of ?14m a year towards the annual ?40m bill. Two years on, Project 2002, is drawing to a close and some 33,000 pupils are studying in 11 new secondaries, 18 refurbished ones, and a new primary school. Without PPP, it is likely they would have endured many more years of misery and decline. So far, teething problems aside, the Glasgow experience has demonstrated many of the positive qualities picked out by an Accounts Commission report published today: rapid investment, tight financial controls, and the transfer of risk for things such as cost overruns and vandalism to the private sector. However, in light of the commission's findings, about what lies beneath PPP, Glasgow's sweetheart deal is likely to take on a nostalgic feel. The sheen is starting to fade. The commission does not say PPP is dead, but it has urged ministers to vary the menu and rethink how councils can carry out their capital programmes in future - particularly the big "step changes", such as Glasgow's Project 2002, needed to address decades of neglect. At the heart of its report is a dissection of the Public Sector Comparator (PSC). This is the notional cost test applied to each PPP to "prove" the public sector option is more expensive. Even though the chancellor has clamped down on old-style borrowing from the Public Works Loan Board (PWLB), all PPPs are still likened to a raid on the national piggy bank. The commission found two main problems with the PSC. First, councils always find the PSC costs more than PPP. Helping them in their calculations are 11th-hour PSC adjustments to account for "risk" - problems like construction delays or fires which are taken on by the private sector under PPP. The commission found many of these risk calculations were "not easy to accept". The report stops short of saying it outright, but the implication is that the most important cost test at the heart of PPP is a fix. The other problem with the PSC is that it takes no account of the long-term cost of private finance, even though PPPs typically run for 25 to 30 years. For PPP, this is just as well. The report calculates the private financing element accounts for around a fifth of the total value of the current schools PPPs. With private finance costing twice as much as the PWLB, the additional cost of using private finance is thus 10% of the total price, or ?200m. Andy Kerr, the finance minister, was doing his best to keep up the tub-thumping for PPP yesterday, saying the commission had taken a "mistaken" view of the PSC. But the Accounts Commission is hard to bluff, and he has already accepted its recommendations for future projects, including: more options for councils; the current review of the PSC to take account of the true cost of borrowing; and more cost cutting measures. Pros and Cons FOR Substantial, rapid, on-time investment in often dilapidated buildings. A clear focus on service, underpinned by nature of PPP contracts. Innovation and fresh thinking. Improved partnership working. Better risk management. Strong financial control. AGAINST Alternatives may offer better value for money. PPP benefits not unique to PPP. PPP involves extra costs. Private sector finance costs more than public sector yet this is not factored into PSC. PSCs contain "inherent uncertainty" yet largely decide whether PPP goes ahead. Future financial pressures may fall on rest of education services. From Michael.Keaney at mbs.fi Wed Jun 12 04:27:49 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 12 Jun 2002 13:27:49 +0300 Subject: [A-List] US imperialism: strategy of tension Message-ID: Grounded flights saved parliament from al Qaeda strike IAN BRUCE The Herald, 12 June 2002 AN al Qaeda team's plan to hijack two passenger jets at Heathrow on September 11 last year and crash them into the Houses of Parliament and Tower Bridge was thwarted only by quick action by the Civilian Aviation Authority in grounding all flights in the UK, a new book claims. The book, hailed as the most comprehensive study to date on the al Qaeda network, backs claims that a five-man team planned to hijack two Manchester-bound jets at Heathrow on September 11 last year. The plot was designed as a symbolic second wave attack on America's closest ally and was thwarted only when the aviation authority grounded all civilian flights in the aftermath of the strikes on New York's World Trade Centre and the Pentagon. Inside al Qaeda, to be published in the United States this week, is based on interviews with former and current members of Osama bin Laden's terrorist organisation and access to US and Indian intelligence files. According to Rohan Gunaratna, the author, who is a research fellow at St Andrews University, the terrorist team at Heathrow dispersed when it became clear that there were no airliners to use as flying bombs and that security would be stepped up at all British airports. Afroz Mohammed, one of the UK hijack squad, was later arrested by India's RAI intelligence service and confessed the plan under interrogation. He has now retracted, claiming his confession was made under duress. An RAI source said: "We have every reason to believe the man in our custody was part of a major al Qaeda suicide plot targeting Britain's parliament. "The information gained from his interrogation and from our own sources in Afghanistan and elsewhere leaves little room for doubt. He was trained in bin Laden's camps in Afghanistan. He also attended flying schools in Britain and Australia. His funding can be traced back directly to al Qaeda sources." Afroz was arrested in his home city on October 2 last year and charged with sedition and terrorist offences. He was also interviewed by British intelligence officers. British security sources say they doubted his story, believing that it had been extracted under torture. However, they cannot explain how the 27-year-old son of a poor Indian tailor managed to pay for flying lessons at an airfield in Australia, throughout 1997-98. Nor can they account for how he funded two months' instruction, paid in advance, for further training at the ?50,000-a-year Cranfield Airfield flying school in Bedfordshire last year. Mr Gunaratna's book also charts al Qaeda's continuing efforts to obtain nuclear material. He said yesterday: "An organisation which has tried for such a long time will ultimately be successful. If not in the immediate future, then in the medium or long term, al Qaeda will acquire and seek to use radioactive material. "What the CIA and others have failed to appreciate is that this network is prepared to learn by its mistakes before trying again. It is still planning, is still operational, and will not give up." From Michael.Keaney at mbs.fi Wed Jun 12 04:28:31 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 12 Jun 2002 13:28:31 +0300 Subject: [A-List] US imperialism: strategy of tension Message-ID: Surge feared in toxic materials IAN BRUCE The Herald, 12 June 2002 AMERICAN intelligence agencies fear that al Qaeda terrorists might be able to steal or buy radioactive material for a crude "radbomb" inside the United States to avoid trying to smuggle material past the new detectors being rushed into service at ports and airports round the country. The National Intelligence Council says thousands of private companies and universities use highly toxic caesium, strontium, cobalt, and americium isotopes to treat cancer patients, sterilise equipment, irradiate food against harmful bacteria, and inspect welding seams. The quantities range from minute traces of americium in home smoke detectors to foot-long rods of cobalt used in food processing plants. US firms have lost track of almost 1500 radioactive parts since 1996. More than half were never recovered. Most items which might be used to create a "dirty" bomb by spreading contamination in a crowded city are vulnerable to either theft or black market sale, and few hospitals or food plants are secure enough to withstand an attack by armed and determined terrorists. A "significant" quantity of lethal caesium turned up in a scrap metal plant in North Carolina in March after being "accidentally discarded". Three other gauges containing the same isotope were later found in a Maryland dump. Henry Kelly, director of the Federation of American Scientists, says the North Carolina find contained enough caesium "to contaminate a swathe about one-mile long covering an area of 40 city blocks if terrorists milled the caesium into fine particles and dispersed it using 10lb of high explosive". He added that if such a device were detonated in Washington's national art gallery, the zone affected by lethal radiation would include the Capitol, the Supreme Court, and the library of Congress. The buildings "might have to be abandoned for decades". In 1998, thieves stole 19 tubes of medical caesium from a hospital in Greensboro, North Carolina. Despite a police dragnet which included aircraft fitted with radiation sensors, not a single tube has been recovered. The arrest of an American citizen, who was charged two days ago with membership of al Qaeda and planning to build and detonate a "dirty" bomb in the US, has concentrated government thinking about the domestic threat. The Bush administration has ordered three national laboratories to launch crash programmes for the production of detectors capable of picking up emissions from even small quantities of nuclear material at long range. From Michael.Keaney at mbs.fi Wed Jun 12 04:33:13 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 12 Jun 2002 13:33:13 +0300 Subject: [A-List] Europe/US rivalry: strategy of tension Message-ID: British security sources raise doubts over US claims about 'dirty bomber' By Kim Sengupta and Andrew Buncombe in Washington The Independent, 12 June 2002 British and European security officials are highly sceptical of American claims that the alleged "dirty bomb" plotter, Abdullah al-Muhajir, was preparing to unleash a radioactive attack. British sources point out that despite extensive inquiries, no evidence has been produced to show that he had access to the radioactive material needed to build the bomb, or indeed that he had even worked out a time or place to launch the attack. The most that could be said about Mr Muhajir, a former member of a Chicago street gang now allegedly working for al-Qa'ida, is that he had the "intention" of launching such an attack, security sources said. President Bush announced yesterday that a "full-scale manhunt" was under way across the United States for accomplices of Mr Muhajir. "We will run down every lead, every hint. We're in for a long struggle in this war on terror. And there are people that still want to harm America." Before his arrest at Chicago's O'Hare airport on 8 May, Mr Muhajir - who changed his name from Jose Padilla - stopped in Zurich on the way from Pakistan, where he collected $10,500 (?7,000). Despite claims by the Attorney General, John Ashcroft, that the FBI had disrupted a plan to launch a radioactive attack against Washington, other officials conceded yesterday that there was no evidence that any such plot had progressed beyond the most basic stages. British security sources, who believe Mr Muhajir might have been acting as a courier, said the Americans investigated Mr Muhajir's activities and tried to find a terrorist network he may have been involved with inside the US. The highly publicised announcement of the arrest only came after the failure to find anything more incriminating. In Washington there was a growing suspicion that the arrest was seized on by the Bush administration in dramatic fashion for political ends. British and European security agencies do believe, however, that there is still a real threat of a possible attack. ----- Dramatic return of 'war on terror' can only help Bush By Rupert Cornwell in Washington The Independent, 12 June 2002 The arrest of the alleged al-Qa'ida associate and would-be "dirty bomber" Abdullah al-Muhajir may raise as many questions as it answers. But whatever the threat he posed to America's national security, the political benefits to the Bush administration from his capture are clear. For a start, the lurid return of al-Qa'ida to the headlines poses a tactical dilemma for the Democrats as the two parties jockey for position ahead of this autumn's mid-term elections, where control of both Senate and House is on a razor's edge. Once again the "war against terror," in one of its most frightening manifestations, dominates the Washington agenda. Once again the Democrats will think twice before anything which can be construed as criticism of the Administration - and once again the country is likely to close ranks behind a president whose approval rating even now tops 70 per cent, nine months after the attacks of 11 September. Some do publicly wonder about the paucity of information divulged - according to the the CBS television network yesterday, those same anonymous "US officials" who provided much of the background information immediately after news of Mr Mujahir's arrest are now backing away from the initial claim that he was plotting a "dirty" bomb attack. The FBI director, Robert Mueller, and Paul Wolfowitz, the Deputy Secretary of Defence, did note on Monday that any plot was in the very early planning stages, and a specific target may not even have been selected. But those cautions were largely drowned out by Mr Ashcroft's assertion - all the more dramatic in that he chose to make it in Moscow during a trip to Russia on unrelated matters - that the authorities had "disrupted an unfolding terrorist plot to attack the US by exploding a radioactive dirty bomb." For the Bush administration, the more alarmed the public the better as it tries to push through Congress a measure to set up a new Department of Homeland Security and seeks to convince Americans, as the holiday season begins, that the war on terror continues, and that al-Qa'ida remains a potent threat. The arrest, moreover, deflects attention from the deficiencies of the security services - especially the FBI - before 11 September, which are now under a Congressional spotlight. It gives some substance too to the torrent of warnings from the Defence Secretary, Donald Rumsfeld, down, that it was inevitable that terrorists would sooner or later obtain weapons of mass destruction and use them. A dirty bomb, as expert after expert points out, is anything but a WMD, and might initially cause no more than a few dozen casualties. But the longer-term decontamination problem, and alarm at the very mention of the word radioactive, more than compensates. Far from coincidentally, the unnamed "senior officials" who have furnished the background to the arrest have lavishly praised the co-operation between the CIA and the FBI - whose previously frosty relations long bedevilled US intelligence gathering. In other words, according to the White House script, the problems of the past are over. Yesterday Mr Ashcroft used the alleged threat posed by Mr Muhajir to bolster his defences on another front: against the charge that in their pursuit of terrorists the authorities had trampled on the civil rights of detainees. The American Civil Liberties Union and other rights groups have been highly critical of how Mr Mujahir, though a US citizen, is being deemed an "enemy combatant" and has been turned over to the military without access to a lawyer. His treatment comes on top of the continuing detainment of hundreds of individuals taken into custody after 11 September despite the lack of evidence of even indirect involvement with the attacks. But Mr Ashcroft, as he continued his European tour in Hungary yesterday, was unrepentant. It not the Bush administration, but the terrorists themselves, who were endangering civil freedoms, by carrying out the devastating attacks in New York and Washington, and now trying to build radioactive weapons. "It is the terrorist who threatens liberty, freedom, equality, human dignity and even the existence of humanity," the Attorney General declared. * One of nine charges filed against Richard Reid, who is accused of trying to blow up an airliner with explosives in his shoes, was thrown out by a judge in Boston yesterday. The charge of attempting to wreck a mass transportation vehicle was filed under the USA Patriot Act, which was passed by Congress after the 11 September terrorist attacks. But district judge William Young ruled that an aircraft is not a vehicle as defined by the new law. Mr Reid still faces eight charges, including attempted murder and attempted destruction of an aircraft. ----- Mr Bush's titanic war on terror will eventually sink beneath the waves Meantime, all the men who claim to be fighting terror are using this lunatic "war" simply for their own purposes Robert Fisk The Independent, 12 June 2002 First it was to be a crusade. Then it became the "War for Civilisation". Then the "War without End". Then the "War against Terror". And now - believe it or not - President Bush is promising us a "Titanic War on Terror". This gets weirder and weirder. What can come next? Given the latest Bush projections last week - "we know that thousands of trained killers are plotting to attack us" - he must surely have an even more gargantuan clich? up his sleeve. Well, he must have known about the would-be Chicago "dirty" bomber - another little secret he didn't tell the American people about for a month. Until, of course, it served a purpose. We shall hear more about this strange episode - and I'll hazard a guess the story will change in the next few days and weeks. But what could be more titanic than the new and ominously named "Department for Homeland Security", with its 170,000 future employees and its $37.5bn (?26.6bn) budget? It will not, mark you, incorporate the rival CIA and FBI - already at each other's throats over the failure to prevent the crimes against humanity of 11 September - and will thus ensure that the intelligence battle will be triangular: between the CIA, the FBI and the boys from "Homeland Security". This, I suspect, will be the real titanic war. Because the intelligence men of the United States are not going to beat their real enemies like this. Theirs is a mission impossible, because they will not be allowed to do what any crime-fighting organisation does to ensures success - to search for a motive for the crime. They are not going to be allowed to ask the "why" question. Only the "who" and "how". Because if this is a war against evil, against "people who hate democracy", then any attempt to discover the real reasons for this hatred of America - the deaths of tens of thousands of children in Iraq, perhaps, or the Israeli-Palestinian bloodbath, or the presence of thousands of US troops in Saudi Arabia - will touch far too sensitively upon US foreign policy, indeed upon the very relationships that bind America to the Israeli Prime Minister, Ariel Sharon, and to a raft of Arab dictators. Here's just one example of what I mean. New American "security" rules will force hundreds of thousands of Arabs and Muslims from certain countries to be fingerprinted, photographed and interrogated when they enter the US. This will apply, according to the US Attorney General, John Ashcroft, to nearly all visitors from Iran, Iraq, Syria and Sudan, most of whom will not get visas at all. The list is not surprising. Iran and Iraq are part of Mr Bush's infantile "axis of evil". Syria is on the list, presumably because it supports Hamas' war against Israel. It is a political list, constructed around the Bush policy of good-versus-evil. But not a single citizen from Iran, Iraq, Syria or Sudan has been accused of plotting the atrocities of 11 September. The suicide-hijackers came principally from Saudi Arabia, with one from Egypt and another from Lebanon. The men whom the Moroccans have arrested - all supposedly linked to al-Qa'ida - are all Saudis. Yet Saudis - who comprised the vast majority of the September killers - are going to have no problems entering the US under the new security rules. In other words, men and women from the one country whose citizens the Americans have every reason to fear will be exempt from any fingerprinting, or photographing, or interrogation, when they arrive at JFK. Because, of course, Saudi Arabia is one of the good guys, a "friend of America", the land with the greatest oil reserves on earth. Egypt, too, will be exempt, since President Hosni Mubarak is a supporter of the "peace process". Thus America's new security rules are already being framed around Mr Bush's political fantasies rather than the reality of international crime. If this is a war between "the innocent and the guilty" - another Bush bon mot last week - then the land that bred the guilty will have no problems with the lads from the Department of Homeland Security or the US Department of Immigration. But why, for that matter, should any Arabs take Mr Bush seriously right now? The man who vowed to fight a "war without end" against "terror" told Israel to halt its West Bank operations in April - and then sat back while Mr Sharon continued those same operations for another month. On 4 April, Mr Bush demanded that Mr Sharon take "immediate action" to ease the Israeli siege of Palestinian towns; but, two months later, Mr Sharon - a "man of peace", according to Mr Bush - is still tightening those sieges. If Mr Sharon is not frightened of Mr Bush, why should Osama bin Laden be concerned? Last week's appeal by President Mubarak for a calendar for a Palestinian state produced, even by Mr Bush's absurd standards, an extraordinary illogicality. No doubt aware that he would be meeting Mr Sharon two days later, he replied: "We are not ready to lay down a specific calendar except for the fact that we've got to get started quickly, soon, so we can seize the moment." The Bush line therefore goes like this: this matter is so important that we've got to act urgently and with all haste - but not so important that we need bother about when to act. Mr Sharon, of course, doesn't want any such "calendar". Mr Sharon doesn't want a Palestinian state. So Mr Bush - at the one moment that he should have been showing resolve to his friends as well as his enemies - flunked again. After Mr Sharon turned up at the White House, Mr Bush derided the Palestinian leader Yasser Arafat, went along with Mr Sharon's refusal to talk to him and virtually dismissed the Middle East summit that the Palestinians and the world wants this summer but which Mr Sharon, of course, does not. In the meantime, as well as Mr Sharon, all of the men who claim to be fighting terror are using this lunatic "war" for their own purposes. The Egyptians, who allegedly warned the CIA about an attack in America before 11 September, have been busy passing a new law that will so restrict the work of non-governmental organisations that it will be almost impossible for human rights groups to work in Egypt. So no more reports of police torture. The Algerian military, widely believed to have had a hand in the dirty war mass killings of the past 10 years, have just been exercising with Nato ships in the Mediterranean. We'll be seeing more of this. It was almost inevitable, of course, that someone in America would be found to explain the difference between "good terrorists" - the ones we don't bomb, like the IRA, Eta or the old African National Congress - and those we should bomb. Sure enough, Michael Elliott turned up in Time magazine last week to tell us that "not all terrorists are alike". There are, he claimed, "political terrorists" who have "an identifiable goal" and "millenarian terrorists" who have no "political agenda", who "owe their allegiance to a higher authority in heaven". So there you have it. If they'll talk to the Americans, terrorists are OK. If they won't, well then it's everlasting war. So with this twisted morality, who really believes that "Homeland Security" is going to catch the bad guys before they strike again? My guess is that the "Titanic War on Terror" will follow its unsinkable namesake. And we all know what happened to that. From Michael.Keaney at mbs.fi Wed Jun 12 04:36:26 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 12 Jun 2002 13:36:26 +0300 Subject: [A-List] Britain's pathetic labour aristocracy Message-ID: Union official quits in rigged ballot row By Barrie Clement, Labour Editor The Independent, 12 June 2002 A senior supporter of the influential union leader Sir Ken Jackson resigned yesterday because of accusations that he wiped computer records to cover up a voting scam. Roger Maskell, leader of the Amicus-AEEU union in south-east England, allegedly tried to hide the involvement of the organisation's head office in an apparent conspiracy to boost the election candidacy of Sir Ken, New Labour's most loyal union leader. Mr Maskell, who had been suspended over the affair, was accused initially of altering computer records to switch officials from branch to branch so they could nominate Sir Ken more than once. Mr Maskell is said to have deleted the evidence after the double-voting - in one case triple-voting - was exposed by The Independent. The nominating process was an opportunity for candidates to build up a head of steam before next week's election, in which Sir Ken is fighting to retain the general secretary's post against his left-wing opponent Derek Simpson. There is no suggestion that Sir Ken was involved in any electoral irregularities. Sir Ken's critics, however, have condemned the union's decision not to publish the findings of a committee of inquiry into the ballot-rigging until after the election. Meanwhile, Sir Ken's supporters defended the leadership's decision to spend ?2,000 on a video distributed to delegates at the union's conference this week in which the Prime Minister makes several mentions of the Amicus-AEEU general secretary. Left-wingers claim that aides of the present general secretary contacted Mr Blair's advisers to suggest that the Prime Minister made repeated references to Sir Ken to help his election campaign. A union spokesman said the video was simply a fraternal message to the union from Mr Blair. Downing Street is thought to be less than pleased with Sir Ken because of his assertion at the weekend that Gordon Brown, the Chancellor, could take over as Prime Minister "in the medium term". The spokesman for the union confirmed that at least two officials who had admitting voting twice for Sir Ken in nominating meetings were at the conference in Blackpool. Mr Simpson has been refused permission to use his holiday entitlement to canvass at the conference. The spokes-man said no officials of the union were allowed to attend the conference unless they had specific union business there. In response to another criticism from left-wingers, the spokesman said the payment of ?18,000 in 24 instalments to a campaign for the election of Frank Dobson as London mayor had been authorised. He admitted the method of making the payments - in the form of invoices for the use of printing facilities - was "slightly unusual", but they were properly sanctioned. He said the money had come from the political fund and had been authorised by the national political sub-committee rather than the full executive. Allegations that the union had victimised supporters of Mr Simpson on the executive by querying their expense claims for attending the latest meeting of the national executive were denied. The spokesman said that forms submitted by Sir Ken's backers had also been questioned. Mr Simpson, from Derby, is facing disciplinary action instigated by the right-wing leadership of the union. He is accused of ignoring the union's lawyers when giving advice to members during a dispute. From Michael.Keaney at mbs.fi Wed Jun 12 04:39:43 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 12 Jun 2002 13:39:43 +0300 Subject: [A-List] UK corporate state: the new East India Companies Message-ID: As if to underline the increasing crisis of legitimation... Potters Bar maintenance firm makes record profit By Saeed Shah The Independent, 12 June 2002 Jarvis, the maintenance company at the centre of the Potters Bar rail crash investigation, reported a near- doubling of profits yesterday and said its workers could not conceivably be responsible for the accident. The company hit out at "innuendo" that had already blamed a failure of maintenance on the line, which had been contracted out to Jarvis, for the fatal derailment last month. Paris Moayedi, the chief executive of Jarvis, said the company, which has seen its shares plunge by 40 per cent since the accident, had been the victim of "rumourmongering" that had blamed it unfairly. He said that an independent investigation commissioned by Jarvis had shown that the company's employees had followed all the correct procedures, and that multiple interviews with the workers involved had produced a consistent story. Kevin Hyde, the chief operating officer at Jarvis, said: "What was done to these points was the reverse of our procedures. It is inconceivable that our people would be involved." Investigators discovered immediately after the accident that, at the points that caused the derailment, two sets of nuts were missing, while a third set had been tightened too far. Mr Moayedi said: "All the evidence points to the fact that maintenance was carried out correctly ... The findings [of the official investigation] will demonstrate that our people were not to blame." Jarvis announced that its profits for the 12 months to 31 March had jumped to ?45.8m, up from ?24.8m for the same period a year earlier. The engineering giant saw its turnover soar 31 per cent to ?949m, while the dividend payout to shareholders increased from ?14m to ?16m. Profit from rail activities increased from ?24.5m to ?35.4m. The company works almost exclusively for the public sector. As well as its rail operations, Jarvis builds roads, schools and hospitals, mainly under the Private Finance Initiative. Its order book for such work now stands at ?10bn, and it is bidding for a further ?12bn of business. Mr Moayedi admitted that he could not categorically rule out a maintenance failure as the cause of the disaster. "We are not saying what the cause was, but that all the options, including sabotage, should be investigated. We don't believe our people did anything wrong, but we are not judge and jury. It is not for the media or casual observers to say it was this or that." The Railtrack inquiry still has up to 12 weeks to run. Mr Moayedi added that, should the investigation somehow find Jarvis guilty, he would not consider resigning. The company said its legal advice had been that, because all procedures had been followed, it could not face corporate manslaughter charges, even if maintenance were found to be at fault. Jarvis has ?155m of insurance cover, which would pay out even in the event of "gross negligence". As a result of the Potters Bar tragedy, Jarvis said it would be introducing digital cameras to take an electronic record of all its rail work. Mr Moayedi said that Potters Bar differed fundamentally from the two other recent rail disasters at Hatfield and Ladbroke Grove. In those other cases there were "clear decisions" by management to disregard certain defects that had come to light. "That type of accident is totally different to an accident with no prior knowledge of anything wrong." Rail maintenance and track renewal makes up a third of Jarvis' turnover. Mr Moayedi said rail was an "integral" part of the business and the company had no intention of quitting this work. "There are 50,000 people working in the rail industry, under harsh conditions, in the dead of night often. All they get is abuse from people whose motives are not honourable," Mr Moayedi said. "We are pleading to the media, for God's sake, give the industry a chance." Separately, the novelist Nina Bawden, whose husband was killed in the derailment, said that a public inquiry was the "only honest" way to uncover the cause of the Potters Bar rail crash ------ Jarvis rides high on rail industry's gravy train By Barrie Clement, Transport Editor The Independent, 12 June 2002 Jarvis is one of a new corporate breed that makes the lion's share of its profits from the taxpayer. Apart from its interest in rail, which makes up about a third of its billion-pound turnover and comes largely from public subsidy, the company is involved in several other state-financed projects. It does work for the Ministry of Defence, builds roads for the Highways Agency and halls of residence for universities. It has also been heavily involved in the Public Finance Initiative (PFI) to build hospitals for the National Health Service. Dave Prentis, leader of the public service union Unison, believes PFI costs taxpayers more in the long run and only serves to "line the pockets" of shareholders of businesses such as Jarvis. The company's business has expanded rapidly with privatisation and with the new form of public-private partneships (PPPs) favoured by New Labour. It has also mopped up contracts from state enterprises that are increasingly enlisting the services of contractors rather than employing their own engineers and maintenance workers. Jarvis is involved in the controversial PPP to run London Underground. Here, the company stands to make an "obscene" return from the public purse according to Bob Kiley the transport commissioner appointed by Ken Livingstone to run the network. Tube Lines consortium - of which Jarvis is a member - estimates there will be a 15 to 20 per cent return on equity. But Mr Livingstone's Transport for London says there is a guaranteed minimum surplus of 25 per cent, climbing to 45 per cent on a "best case scenario". The biggest single contribution to the company's turnover at the moment, however, comes from the rail industry. Passengers may be forgiven for questioning how a company can increase its profits at a time when its competency is in doubt because of the Potters Bar disaster. The privatisation of British Rail and more particularly the creation of Railtrack, which has sub-contracted work to Jarvis and others, was the least popular sell-off by the Conservatives. It has also proved to be a monumental failure, needing at least ?300m of taxpayers' money to placate shareholders and remove it from the private sector, due to happen this week when Alistair Darling, the Secretary of State for Transport completes the deal to bring it out of administration. The Treasury will also act as a guarantor if Network Rail, the not-for-profit company created by ministers to take over from Railtrack, defaults on its debt. Many regard it as renationalisation by another name - an expensive one. There is another dimension to all this. The blurring of lines between public and private enterprise has led to a flow of officials from government departments to the very companies they dealt with during their time as civil servants. In some cases, the same can be said for politicians. Steve Norris is a director of Jarvis and he was also a transport minister in the Conservative government that privatised British Rail. From Michael.Keaney at mbs.fi Wed Jun 12 04:41:20 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 12 Jun 2002 13:41:20 +0300 Subject: [A-List] Italy: water crisis Message-ID: Italy's water crisis 'to hit mainland' By Jessie Grimond in Rome The Independent, 12 June 2002 A water crisis that has threatened this year's harvest in Sicily could spread to mainland Italy, where the amount of water currently available to farmers may be halved by 2005. New figures presented to a scientific conference in Rome reveal that 30 per cent of Italians do not have a regular or sufficient water supply in their homes, and 20 per cent use water that fails to meet standards recommended by the World Health Organisation. In Sicily yesterday 500 farmers demonstrated in the streets of Partinico, 20 miles from Palermo, against water shortages. Droughts are not unusual on the island, but there have been claims that money destined for water systems has gone to the Mafia. Italy consumes 50 billion cubic metres of water every year - one of the highest per capita rates in the world. Farmers are said to use by far the most water. Scientists warn that the shortages will be much worse by 2005. Poorly-built reservoirs, leaking pipes and faulty aqueducts have added to the problem of lower rainfall levels. One idea is to recycle domestic water for agricultural use. From Michael.Keaney at mbs.fi Wed Jun 12 04:43:27 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 12 Jun 2002 13:43:27 +0300 Subject: [A-List] Afghanistan: the blowback continues Message-ID: Afghans protest over US manipulation of summit influence at loya jirga By Kate Clark in Kabul The Independent, 12 June 2002 The warlords of Afghanistan rallied behind their interim leader, Hamid Karzai, yesterday in a display of unity that came after America engineered a climbdown by the country's former king. Many tribal delegates attending the grand council, or loya jirga, called to pick the members of the new administration, expressed concern at the "outside influence" overshadowing the event. All were aware the American envoy, Zalmay Khalilzad, had been the first to announce the former king would stay out of government, after intense backroom politicking delayed the assembly opening by 24 hours. The king's decision means Mr Karzai has no serious challenger as president. "This is not a democracy," Sima Samar, the women's affairs minister, said yesterday. "This is a rubber stamp. Everything has already been decided by the powerful ones." The Americans wanted to make sure that demands from the assembly floor would not lead to the frail but popular former monarch, 87-year old Mohammed Zahir Shah, becoming head of state, with Mr Karzai as prime minister. Zahir Shah told delegates he had no desire to restore the monarchy, and backed Mr Karzai, a fellow Pashtun, as president. "I am ready to help the people, and Hamid Karzai is my choice of candidate," he said. "I advise delegates to take into consideration the high interests of the people." But the political damage had already been done, because the 1,550 delegates attending the week-long jirga were the last to hear of the king's decision. The minister for finance, Amin Arsala, said: "The king issue is not over. The words used by Hamid Karzai to the king were fine, but I'm not sure if this issue is solved. I'm not sure if this story is over." Mr Karzai, who delivered his long speech with the confidence of a sitting president, piled honours on the former king, saying he would be known as the "father of the nation". The loya jirga is expected to vote today on whether Mr Karzai, widely seen as a US stooge, should be re-elected to head the new government for the next two years until elections are organised. To aid unity in the ethnically divided cabinet and help smooth the way for Mr Karzai, the interior minister, Yunis Qanuni, an ethnic Tajik, offered his resignation. Burhanuddin Rabbani, the president of post- communist Afghan governments, also withdrew his candidacy for head of state and supported Mr Karzai. Some delegates said they would rebel if the loya jirga continued to be dominated by speeches from the leaders, without giving those on the floor a voice. "There will be a backlash if they try to play tricks and games on us, if they don't let us speak," Mohammed Daoud, a Kabul delegate, said. Kate Clark is a correspondent for the BBC From Michael.Keaney at mbs.fi Wed Jun 12 04:46:37 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 12 Jun 2002 13:46:37 +0300 Subject: [A-List] Paul Foot on capitalism Message-ID: Cash for chaos Paul Foot Wednesday June 12, 2002 The Guardian "Is capitalism sick?" inquires a challenging headline in the Sunday Times. The answer, over many paragraphs, is no. Capitalism, the article reveals, is in fine fettle. The only thing wrong with it is the occasional rotten or greedy capitalist. Hank Paulson, chief executive of Goldman Sachs, warned the National Press Club in Washington last week: "Business has never been under such scrutiny. To be blunt, much of it is deserved." The Sunday Times moaned its way through a litany of recent scandals. First there was Enron, whose disgraced chief executive Kenneth Lay is a close friend of President Bush, whose audit committee was chaired by former Tory minister Lord Wakeham, and one of whose more ideological paid advisers, Irwin Stelzer, still has a weekly column in the Sunday Times. Now there is Tyco - presumably short for tycoon - whose former chairman, Dennis Kozlowski, is charged with tax evasion and whose director, Lord Ashcroft, is a former treasurer of the Tory party and a generous donor to British state education. ADT College, named after Ashcroft's company, still teaches children in South London, but perhaps now it should change its name, since ADT was swallowed by Tyco in 1997. Last week there was great news for another great A: Bill Allan, chief executive of a telecoms company ludicrously called Thus. Allan and his fellow directors got bonuses worth 70% of their salaries to mark something called "exceptional business performance", presumably a reference to the 72% fall in the company's share price. Last week, these heroic As were capped by a sensational B - for Bonfield, the knighted former chief executive of ailing British Telecom, which recently wound up its final-salary pension scheme for ordinary workers, but somehow managed to find a few million to "top up" Sir Peter's already vast pension by another ?2,000 a week. Bonfield has a perfectly good job elsewhere, but when he left British Telecom he took a year's salary (?820,000) and a bonus of ?615,000, no doubt as a mark of respect for his record as mastermind of one of the most disastrous privatisations of modern times. These companies and individuals, Paulson argued, are letting down the system. They are giving capitalism a bad name. If only individual capitalists didn't lie, cheat, perjure themselves in libel actions, stuff their pockets with grossly excessive or ill-gotten gains, deceive the taxman by buying expensive paintings with other people's money and then hanging them on their own walls, if only their accountants didn't spend their extremely valuable time thinking up complicated schemes to avoid tax and then shredding the documentary evidence, then the beautiful symmetry of the capitalist system would shine forth. If only the rotten apples could be rooted out of the capitalist barrels, the full glory of the fruit could be properly appreciated. The problem with this argument is that it overlooks the central feature of capitalism: the division of the human race into those who profit from human endeavour and those who don't. This division demands freedom for employers, and discipline for workers; high pay and perks for bosses, low pay for the masses; riches for the few, poverty for the many. Under capitalism the gulf between rich and poor grows wider and wider. The whole point of the system is that it works against equality, against co-operation. It stunts, insults and criminalises the poor; glorifies, cossets and pardons the rich. All human life is corrupted in the process. So even if you could discipline all the offenders, lock up all financial advisers to the US president, ban from public life all former Tory vice-chairmen, even if company directors spent a year in jail for every bonus they steal, there would still be no hiding place from capitalism. The rotten apples are the barrel. Reading last week's sermon from Paulson, I was reminded of a brace of challenging headlines in the Guardian on December 10 1993. These headlines highlighted the difference between a group of 26 million people who shared $2.2bn and another group of only 161 people who shared $2.6bn. The first group was the entire population of Tanzania, the second the partners of Goldman Sachs, the company Paulson heads. And however much he lectures his capitalist colleagues about their individual misdemeanours, he cannot and will not correct the intrinsic flaw in the economic system he represents, so starkly symbolised by the greed of the people who run his bank. Is capitalism sick? Yes, disgustingly so. Its sickness is terminal, and it urgently needs replacing. From Michael.Keaney at mbs.fi Wed Jun 12 04:50:31 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 12 Jun 2002 13:50:31 +0300 Subject: [A-List] UK corporate state: the new East India Companies Message-ID: Profits up 85% at firm accused of crash error Andrew Clark Wednesday June 12, 2002 The Guardian Rail safety campaigners and trade unions expressed fury yesterday at an 85% surge in profits for Jarvis, the maintenance company fighting allegations that shoddy track work caused the Potters Bar train crash last month. The company's annual pretax profits have jumped from ?24.8m to ?45.8m, helped by winning a ?250m five-year contract from Railtrack to maintain the east coast main line, on which the Potters Bar accident took place. The earnings, equivalent to ?125,000 a day, triggered fresh criticism of Railtrack's policy of contracting out track work. Unions and accident survivors complain that the use of private companies risks putting profits ahead of safety. Jarvis is at the centre of an investigation into the crash on May 10, in which seven people died. Many experts believe the accident was caused by nuts on a set of points being incorrectly adjusted. Jarvis claims saboteurs could have been responsible, although investigators consider this unlikely. The award-winning author Nina Bawden, who was seriously injured and whose husband was killed in the crash, became a high-profile campaigner for improvements in the rail system this week when she said: "Poor maintenance, cutting corners, all the sort of things that happen when people do not care for the industry they work in, are what caused the crash. Sabotage? Rubbish." Jarvis's chief executive, Paris Moayedi, yesterday hit out at "innuendo" surrounding the conduct of his staff and said: "We don't believe our people have done anything wrong." He revealed that Jarvis is to give digital cameras to all its maintenance gangs to take "before and after" pictures of their inspections and any work done. It will also create a database monitoring the equipment it looks after, at a cost of more than ?1m. The Transport and General Workers' Union yesterday said it was concerned about the culture of "subcontracting and casualisation", which was endangering maintenance workers as well as passengers. Ms Bawden said the government shared the blame: "New Labour took a gamble on Railtrack because they didn't have the political will to put things right and my husband paid with his life." Jarvis specialises in public-private partnerships and is involved in a consortium which is taking over part of London Underground and also has operations in road maintenance. The company insisted that it put "public safety ahead of monetary reward". Safety standards agency Lloyd's Register has checked and cleared the firm's procedures since the Potters Bar accident. Dozens of Jarvis staff have been interviewed by investigators from the health and safety executive. Mr Moayedi insisted the employees who worked at Potters Bar were highly experienced. Jarvis's shares have fallen by 40% over the past four weeks. Mr Moayedi said: "The case for investment in the railways is not helped by this sort of innuendo." The Rail, Maritime and Transport union said Jarvis's results were the latest example of public subsidies for the railways flowing straight into the profits of private companies. Carol Bell, a survivor of the Southall train crash who now campaigns for rail safety, said the government had only done half the job in putting Railtrack into administration: "Stephen Byers left the industry in limbo - he still allowed these private companies to carry on milking the situation. Somewhere along the line, the government has got to say 'enough is enough'." ----- Jarvis attacked for rail crash sabotage claim Joanna Walters, transport editor Sunday May 19, 2002 The Observer A bitter row has broken out over responsibility for the Potters Bar rail tragedy after the maintenance contractor, Jarvis, presented evidence for its claim that sabotage led to the crash. Senior industry sources attacked Jarvis, arguing that faulty repairs were far more likely to have caused the points failure on 10 May that derailed the train, killing seven people. Tony Thompson, who now coaches police officers in disaster management, having retired as a superintendent in March after 30 years with the British Transport Police, criticised Jarvis for trying to exonerate itself. 'Their stance is very defensive and putting the blame on everyone else. It is appalling the lack of sympathy for what the bereaved and injured are going through.' Thompson said that until the investigationwas completed, Jarvis should be more open-minded rather than trying to 'shore up its share price and reputation'. Jarvis will almost certainly be sacked from its contract to maintain the east coast mainline if its workers are found to have made a mistake, sources close to the investigation told The Observer. But it is understood that whatever the outcome of the investigation, Railtrack bosses want to take responsibility for engineering quality, track inspection and maintenance supervision away from all its contractors to 'close a gap' left by privatisation. The source said: 'We have to get greater control...we want to be in charge of the decision-making over what work is done. Privatisation envisaged that the contractors would do everything - have all the records and make all the decisions - and we do not think that is right.' British Transport Police are still investigating the possibility that the badly-damaged points 2182 outside Potters Bar station were wrecked by a saboteur, most likely a disgruntled railway worker. Police sources said they were examining a gate giving access to the tracks near the points and had collected closed-circuit television film from the adjacent office car park. But they added that if Jarvis's stated belief - that someone deliberately tampered with the nuts and bolts on the points in a murderous act of foul play - was true, such an situation would be 'unprecedented'. Jarvis chief operating officer, Kevin Hyde, suggested on Friday that two pairs of nuts had been deliberately detached from the points, while other nuts had been over-tightened in 'the most dangerous' way in the 24 hours between Jarvis's last inspection and the crash. Hyde said the evidence collected by Jarvis about sabotage and the accounts given to him by 'experienced' employees about their track inspections were 'robust'. But police sources said they believed the points had been fatally misaligned 'for some time' - implying that the Jarvis track worker who inspected them on 9 May may have failed to notice that they were jammed and some nuts were missing. Industry experts will this week carry out tests on a duplicate set of points to see if they can replicate the sequence of events that led to the bars becoming so distorted that they snapped and caused the derailment. From Michael.Keaney at mbs.fi Wed Jun 12 05:17:41 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 12 Jun 2002 14:17:41 +0300 Subject: [A-List] Chile: calling Dr K. Message-ID: Kissinger may face extradition to Chile Judge investigating US role in 1973 coup considers forcing former secretary of state to give evidence Jonathan Franklin in Santiago and Duncan Campbell in Los Angeles Wednesday June 12, 2002 The Guardian Henry Kissinger may face extradition proceedings in connection with the role of the United States in the 1973 military coup in Chile. The former US secretary of state is wanted for questioning as a witness in the investigation into the events surrounding the overthrow of the socialist president, Salvador Allende, by General Augusto Pinochet. It focuses on CIA involvement in the coup, whether US officials passed lists of leftwing Americans in Chile to the military and whether the US embassy failed to assist Americans deemed sympathetic to the deposed government. Chile's Judge Juan Guzman is so frustrated by the lack of cooperation by Mr Kissinger that he is now considering an extradition request to force him to come to Chile and testify in connection with the death of the American film-maker and journalist Charles Horman, who was killed by the military days after the coup. Horman's story was told in the 1982 Costa-Gavras film, Missing, starring Jack Lemmon and Sissy Spacek. Judge Guzman is investigating whether US officials passed the names of suspected leftwing Americans to Chilean military authorities. Declassified documents have now revealed that such a list existed. Sergio Corvalan, a Chilean lawyer, said that he could not divulge the "dozens" of names on the list. At the time of his death, Horman was investigating the murder of Rene Schneider, the chief of staff in the Chilean army whose support for Allende and the constitution was seen as an obstacle to the coup. The CIA had been involved with groups plotting Schneider's murder, providing them with weapons and advice, according to a CIA internal inquiry in 2000. It found that the agency had withdrawn its support for the plotters before the murder but had paid them $35,000 afterwards "to maintain the goodwill of the group". At the time of his murder, Schneider had five young children, who filed suit in a Washington DC court last year against Mr Kissinger and other top officials in the Nixon administration. They are seeking$3m (?2.15m) in damages. Horman's wife, Joyce, suspects that he was targeted because he unwittingly stumbled upon a gathering of US military personnel in Chile in the days before the coup. The American journalist Marc Cooper and the British journalist Christopher Hitchens have been in Santiago during the past month to give evidence in the investigation of America's role. Cooper, who was Allende's translator at the time of the coup and now writes for the Nation and LA Weekly, knew Horman and gave sworn testimony last month. Cooper said: "Guzman says that if the US doesn't act soon on his request to gather testimony from Kissinger and other US officials, he'll have no choice but to file for their extradition to Chile." Cooper, who wrote the book Pinochet and Me about his time in Chile, said that the Nixon government had been more interested in supporting General Pinochet than in investigating the deaths of its citizens at the hands of the Chilean military. This is not the first attempt to interview Mr Kissinger about the turbulent period in Latin America. During a visit to London in April, judges in Spain and France unsuccessfully tried to question him about America's role in Operation Condor, which has been described as a coordinated hit squad organised from Chile and including six South American nations aimed at dealing with leftwing opposition groups. Several declassified documents which have emerged over the past two years have shown an increasingly visible American hand in Operation Condor. Hitchens gave evidence on the Operation Condor case which he researched for his book, The Trial of Henry Kissinger, published last year. In Santiago, Hitchens said: "Today Henry Kissinger is a frightened man. He is very afraid of the exposure that awaits him." Mr Kissinger's lawyer William Rodgers, said that such questions should properly be directed to the US state department and not to Mr Kissinger. From annewilliamson at msn.con Wed Jun 12 06:57:38 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Wed, 12 Jun 2002 08:57:38 -0400 Subject: [A-List] Ron Paul on the Dollar's Woes References: Message-ID: <012001c21210$bbfea640$0100a8c0@igrushkii> The Declining Dollar by Rep. Ron Paul, MD US House of Representatives, June 5, 2002 Mr. Speaker, I have for several years come to the House floor to express my concern for the value of the dollar. It has been, and is, my concern that we in the Congress have not met our responsibility in this regard. The constitutional mandate for Congress should only permit silver and gold to be used as legal tender and has been ignored for decades and has caused much economic pain for many innocent Americans. Instead of maintaining a sound dollar, Congress has by both default and deliberate action promoted a policy that systematically depreciates the dollar. The financial markets are keenly aware of the minute-by-minute fluctuations of all the fiat currencies and look to these swings in value for an investment advantage. This type of anticipation and speculation does not exist in a sound monetary system. But Congress should be interested in the dollar fluctuation not as an investment but because of our responsibility for maintaining a sound and stable currency, a requirement for sustained economic growth. The consensus now is that the dollar is weakening and the hope is that the drop in its value will be neither too much nor occur too quickly; but no matter what the spin is, a depreciating currency, one that is losing its value against goods, services, other currencies and gold, cannot be beneficial and may well be dangerous. A sharply dropping dollar, especially since it is the reserve currency of the world, can play havoc with the entire world economy. Gold is history's oldest and most stable currency. Central bankers and politicians hate gold because it restrains spending and denies them the power to create money and credit out of thin air. Those who promote big government, whether to wage war and promote foreign expansionism or to finance the welfare state here at home, cherish this power. History and economic law are on the side of the gold. Paper money always fails. Unfortunately, though, this occurs only after many innocent people have suffered the consequences of the fraud that paper money represents. Monetary inflation is a hidden tax levied more on the poor and those on fixed incomes than the wealthy, the bankers, or the corporations. In the past 2 years, gold has been the strongest currency throughout the world in spite of persistent central bank selling designed to suppress the gold price in hopes of hiding the evil caused by the inflationary policies that all central bankers follow. This type of depreciation only works for short periods; economic law always rules over the astounding power and influence of central bankers. That is what is starting to happen, and trust in the dollar is being lost. The value of the dollar this year is down 18 percent compared to gold. This drop in value should not be ignored by Congress. We should never have permitted this policy that was deliberately designed to undermine the value of the currency. There are a lot of reasons the market is pushing down the value of the dollar at this time. But only one is foremost. Current world economic and political conditions lead to less trust in the dollar's value. Economic strength here at home is questionable and causes concerns. Our huge foreign debt is more than $2 trillion, and our current account deficit is now 4 percent of GDP and growing. Financing this debt requires borrowing $1.3 billion per day from overseas. But these problems are ancillary to the real reason that the dollar must go down in value. For nearly 7 years the U.S. has had the privilege of creating unlimited amounts of dollars with foreigners only too eager to accept them to satisfy our ravenous appetite for consumer items. The markets have yet to discount most of this monetary inflation. But they are doing so now; and for us to ignore what is happening, we do so at the Nation's peril. Price inflation and much higher interest rates are around the corner. Misplaced confidence in a currency can lead money managers and investors astray, but eventually the piper must be paid. Last year's record interest rate drop by the Federal Reserve was like pouring gasoline on a fire. Now the policy of the past decade is being recognized as being weak for the dollar; and trust and confidence in it is justifiably being questioned. Trust in paper is difficult to measure and anticipate, but long-term value in gold is dependable and more reliably assessed. Printing money and creating artificial credit may temporarily lower interest rates, but it also causes the distortions of malinvestment, overcapacity, excessive debt and speculation. These conditions cause instability, and market forces eventually overrule the intentions of the central bankers. That is when the apparent benefits of the easy money disappear, such as we dramatically have seen with the crash of the dot-coms and the Enrons and many other stocks. Now it is back to reality. This is serious business, and the correction that must come to adjust for the Federal Reserve's mischief of the past 30 years has only begun. Congress must soon consider significant changes in our monetary system. Congress must soon consider significant changes in our monetary system if we hope to preserve a system of sound growth and wealth preservation. Paper money managed by the Federal Reserve System cannot accomplish this. In fact, it does the opposite. Dr. Ron Paul is a Republican member of Congress from Texas. Ron Paul Archives From xxxx at earthlink.net Wed Jun 12 08:04:31 2002 From: xxxx at earthlink.net (xxxx) Date: Wed, 12 Jun 2002 10:04:31 -0400 Subject: [A-List] Ron Paul on the Dollar's Woes References: <012001c21210$bbfea640$0100a8c0@igrushkii> Message-ID: <009f01c2121a$134a95e0$2a063b80@2ct0p01> Hi Anne. Thanks for posting this information. where is it from? can you give the exact citation? is this a speech at the House of Representatives? thanks, --- xxxx Aysen xxxx Ph.D Candidate, ABD Department of Political Science SUNY at Albany Nelson A. Rockefeller College 135 Western Ave.; Milne 102 Albany, NY 12222 ----- Original Message ----- From: "Anne Williamson" To: Sent: Wednesday, June 12, 2002 8:57 AM Subject: Re: [A-List] Ron Paul on the Dollar's Woes > > > The Declining Dollar > > by Rep. Ron Paul, MD > > US House of Representatives, June 5, 2002 > > Mr. Speaker, I have for several years come to the House floor to express my > concern for the value of the dollar. It has been, and is, my concern that we > in the Congress have not met our responsibility in this regard. The > constitutional mandate for Congress should only permit silver and gold to be > used as legal tender and has been ignored for decades and has caused much > economic pain for many innocent Americans. Instead of maintaining a sound > dollar, Congress has by both default and deliberate action promoted a policy > that systematically depreciates the dollar. The financial markets are keenly > aware of the minute-by-minute fluctuations of all the fiat currencies and > look to these swings in value for an investment advantage. This type of > anticipation and speculation does not exist in a sound monetary system. > > But Congress should be interested in the dollar fluctuation not as an > investment but because of our responsibility for maintaining a sound and > stable currency, a requirement for sustained economic growth. > > The consensus now is that the dollar is weakening and the hope is that the > drop in its value will be neither too much nor occur too quickly; but no > matter what the spin is, a depreciating currency, one that is losing its > value against goods, services, other currencies and gold, cannot be > beneficial and may well be dangerous. A sharply dropping dollar, especially > since it is the reserve currency of the world, can play havoc with the > entire world economy. > > Gold is history's oldest and most stable currency. Central bankers and > politicians hate gold because it restrains spending and denies them the > power to create money and credit out of thin air. Those who promote big > government, whether to wage war and promote foreign expansionism or to > finance the welfare state here at home, cherish this power. > > History and economic law are on the side of the gold. Paper money always > fails. Unfortunately, though, this occurs only after many innocent people > have suffered the consequences of the fraud that paper money represents. > Monetary inflation is a hidden tax levied more on the poor and those on > fixed incomes than the wealthy, the bankers, or the corporations. > > In the past 2 years, gold has been the strongest currency throughout the > world in spite of persistent central bank selling designed to suppress the > gold price in hopes of hiding the evil caused by the inflationary policies > that all central bankers follow. This type of depreciation only works for > short periods; economic law always rules over the astounding power and > influence of central bankers. > > That is what is starting to happen, and trust in the dollar is being lost. > The value of the dollar this year is down 18 percent compared to gold. This > drop in value should not be ignored by Congress. We should never have > permitted this policy that was deliberately designed to undermine the value > of the currency. > > There are a lot of reasons the market is pushing down the value of the > dollar at this time. But only one is foremost. Current world economic and > political conditions lead to less trust in the dollar's value. Economic > strength here at home is questionable and causes concerns. Our huge foreign > debt is more than $2 trillion, and our current account deficit is now 4 > percent of GDP and growing. Financing this debt requires borrowing $1.3 > billion per day from overseas. But these problems are ancillary to the real > reason that the dollar must go down in value. For nearly 7 years the U.S. > has had the privilege of creating unlimited amounts of dollars with > foreigners only too eager to accept them to satisfy our ravenous appetite > for consumer items. The markets have yet to discount most of this monetary > inflation. But they are doing so now; and for us to ignore what is > happening, we do so at the Nation's peril. Price inflation and much higher > interest rates are around the corner. > > Misplaced confidence in a currency can lead money managers and investors > astray, but eventually the piper must be paid. Last year's record interest > rate drop by the Federal Reserve was like pouring gasoline on a fire. Now > the policy of the past decade is being recognized as being weak for the > dollar; and trust and confidence in it is justifiably being questioned. > > Trust in paper is difficult to measure and anticipate, but long-term value > in gold is dependable and more reliably assessed. Printing money and > creating artificial credit may temporarily lower interest rates, but it also > causes the distortions of malinvestment, overcapacity, excessive debt and > speculation. These conditions cause instability, and market forces > eventually overrule the intentions of the central bankers. That is when the > apparent benefits of the easy money disappear, such as we dramatically have > seen with the crash of the dot-coms and the Enrons and many other stocks. > > Now it is back to reality. This is serious business, and the correction that > must come to adjust for the Federal Reserve's mischief of the past 30 years > has only begun. Congress must soon consider significant changes in our > monetary system. > > Congress must soon consider significant changes in our monetary system if we > hope to preserve a system of sound growth and wealth preservation. Paper > money managed by the Federal Reserve System cannot accomplish this. In fact, > it does the opposite. > > Dr. Ron Paul is a Republican member of Congress from Texas. > Ron Paul Archives > > > > > > > > > > > From annewilliamson at msn.con Wed Jun 12 08:42:49 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Wed, 12 Jun 2002 10:42:49 -0400 Subject: [A-List] Ron Paul on the Dollar's Woes References: <012001c21210$bbfea640$0100a8c0@igrushkii> <009f01c2121a$134a95e0$2a063b80@2ct0p01> Message-ID: <01ae01c2121f$6d727920$0100a8c0@igrushkii> Yes, Mine, it's a copy of Dr. Paul's address to the Congress on June fifth of this year. I pulled it from www.lewrockwell.com issue posted today. Also, please note earlier posting regarding the letter Larry Parks of the Foundation for the Advancement of Monetary Education (www.fame.org) wrote regarding Dr. Paul's introduction of legislation to change IMF rules to allow for a nation to gold back its currency. Passage of such legislation (unlikely) would pull the rug out from under the IMF's ability to loot foreign nations via lending on behalf of the profits of commercial banksters, and the US's ability to advance its empire with other peoples' money. - Anne ----- Original Message ----- From: xxxx To: Sent: Wednesday, June 12, 2002 10:04 AM Subject: Re: [A-List] Ron Paul on the Dollar's Woes > Hi Anne. Thanks for posting this information. where is it from? can you give > the exact citation? > > is this a speech at the House of Representatives? > > thanks, > --- > xxxx Aysen xxxx > Ph.D Candidate, ABD > Department of Political Science > SUNY at Albany > Nelson A. Rockefeller College > 135 Western Ave.; Milne 102 > Albany, NY 12222 > > ----- Original Message ----- > From: "Anne Williamson" > To: > Sent: Wednesday, June 12, 2002 8:57 AM > Subject: Re: [A-List] Ron Paul on the Dollar's Woes > > > > > > > > The Declining Dollar > > > > by Rep. Ron Paul, MD > > > > US House of Representatives, June 5, 2002 > > > > Mr. Speaker, I have for several years come to the House floor to express > my > > concern for the value of the dollar. It has been, and is, my concern that > we > > in the Congress have not met our responsibility in this regard. The > > constitutional mandate for Congress should only permit silver and gold to > be > > used as legal tender and has been ignored for decades and has caused much > > economic pain for many innocent Americans. Instead of maintaining a sound > > dollar, Congress has by both default and deliberate action promoted a > policy > > that systematically depreciates the dollar. The financial markets are > keenly > > aware of the minute-by-minute fluctuations of all the fiat currencies and > > look to these swings in value for an investment advantage. This type of > > anticipation and speculation does not exist in a sound monetary system. > > > > But Congress should be interested in the dollar fluctuation not as an > > investment but because of our responsibility for maintaining a sound and > > stable currency, a requirement for sustained economic growth. > > > > The consensus now is that the dollar is weakening and the hope is that the > > drop in its value will be neither too much nor occur too quickly; but no > > matter what the spin is, a depreciating currency, one that is losing its > > value against goods, services, other currencies and gold, cannot be > > beneficial and may well be dangerous. A sharply dropping dollar, > especially > > since it is the reserve currency of the world, can play havoc with the > > entire world economy. > > > > Gold is history's oldest and most stable currency. Central bankers and > > politicians hate gold because it restrains spending and denies them the > > power to create money and credit out of thin air. Those who promote big > > government, whether to wage war and promote foreign expansionism or to > > finance the welfare state here at home, cherish this power. > > > > History and economic law are on the side of the gold. Paper money always > > fails. Unfortunately, though, this occurs only after many innocent people > > have suffered the consequences of the fraud that paper money represents. > > Monetary inflation is a hidden tax levied more on the poor and those on > > fixed incomes than the wealthy, the bankers, or the corporations. > > > > In the past 2 years, gold has been the strongest currency throughout the > > world in spite of persistent central bank selling designed to suppress the > > gold price in hopes of hiding the evil caused by the inflationary policies > > that all central bankers follow. This type of depreciation only works for > > short periods; economic law always rules over the astounding power and > > influence of central bankers. > > > > That is what is starting to happen, and trust in the dollar is being lost. > > The value of the dollar this year is down 18 percent compared to gold. > This > > drop in value should not be ignored by Congress. We should never have > > permitted this policy that was deliberately designed to undermine the > value > > of the currency. > > > > There are a lot of reasons the market is pushing down the value of the > > dollar at this time. But only one is foremost. Current world economic and > > political conditions lead to less trust in the dollar's value. Economic > > strength here at home is questionable and causes concerns. Our huge > foreign > > debt is more than $2 trillion, and our current account deficit is now 4 > > percent of GDP and growing. Financing this debt requires borrowing $1.3 > > billion per day from overseas. But these problems are ancillary to the > real > > reason that the dollar must go down in value. For nearly 7 years the U.S. > > has had the privilege of creating unlimited amounts of dollars with > > foreigners only too eager to accept them to satisfy our ravenous appetite > > for consumer items. The markets have yet to discount most of this monetary > > inflation. But they are doing so now; and for us to ignore what is > > happening, we do so at the Nation's peril. Price inflation and much higher > > interest rates are around the corner. > > > > Misplaced confidence in a currency can lead money managers and investors > > astray, but eventually the piper must be paid. Last year's record interest > > rate drop by the Federal Reserve was like pouring gasoline on a fire. Now > > the policy of the past decade is being recognized as being weak for the > > dollar; and trust and confidence in it is justifiably being questioned. > > > > Trust in paper is difficult to measure and anticipate, but long-term value > > in gold is dependable and more reliably assessed. Printing money and > > creating artificial credit may temporarily lower interest rates, but it > also > > causes the distortions of malinvestment, overcapacity, excessive debt and > > speculation. These conditions cause instability, and market forces > > eventually overrule the intentions of the central bankers. That is when > the > > apparent benefits of the easy money disappear, such as we dramatically > have > > seen with the crash of the dot-coms and the Enrons and many other stocks. > > > > Now it is back to reality. This is serious business, and the correction > that > > must come to adjust for the Federal Reserve's mischief of the past 30 > years > > has only begun. Congress must soon consider significant changes in our > > monetary system. > > > > Congress must soon consider significant changes in our monetary system if > we > > hope to preserve a system of sound growth and wealth preservation. Paper > > money managed by the Federal Reserve System cannot accomplish this. In > fact, > > it does the opposite. > > > > Dr. Ron Paul is a Republican member of Congress from Texas. > > Ron Paul Archives > > > > > > > > > > > > > > > > > > > > > > > > > From xxxx at earthlink.net Wed Jun 12 09:41:30 2002 From: xxxx at earthlink.net (xxxx) Date: Wed, 12 Jun 2002 11:41:30 -0400 Subject: [A-List] Ron Paul on the Dollar's Woes References: <012001c21210$bbfea640$0100a8c0@igrushkii> <009f01c2121a$134a95e0$2a063b80@2ct0p01> <01ae01c2121f$6d727920$0100a8c0@igrushkii> Message-ID: <001701c21227$9ffedde0$9d3a3b80@2ct0p01> Thanks Anne for this useful info!! I will check the web-sites.. --- xxxx Aysen xxxx Ph.D Candidate, ABD Department of Political Science SUNY at Albany Nelson A. Rockefeller College 135 Western Ave.; Milne 102 Albany, NY 12222 ----- Original Message ----- From: "Anne Williamson" To: Sent: Wednesday, June 12, 2002 10:42 AM Subject: Re: [A-List] Ron Paul on the Dollar's Woes > Yes, Mine, it's a copy of Dr. Paul's address to the > Congress on June fifth of this year. I pulled it > from www.lewrockwell.com issue posted today. > Also, please note earlier posting regarding the letter > Larry Parks of the Foundation for the Advancement > of Monetary Education (www.fame.org) wrote > regarding Dr. Paul's introduction of legislation to > change IMF rules to allow for a nation to gold back its > currency. Passage of such legislation (unlikely) would > pull the rug out from under the IMF's ability to loot > foreign nations via lending on behalf of the profits of > commercial banksters, and the US's ability to > advance its empire with other peoples' money. - Anne > From annewilliamson at msn.con Wed Jun 12 10:36:14 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Wed, 12 Jun 2002 12:36:14 -0400 Subject: [A-List] The Thoroughly Criminal Greenscam References: <012001c21210$bbfea640$0100a8c0@igrushkii> <009f01c2121a$134a95e0$2a063b80@2ct0p01> Message-ID: <020801c2122f$4592b2c0$0100a8c0@igrushkii> The Golden Age of Things to Write Economics Term Papers About The Mogambo Guru - Greenspan's Fed couldn't contain itself any longer. Total credit - Greenspan's Fed couldn't contain itself any longer. Total credit extended by the Fed jumped $12 billion last week. Twelve billion! Total Fed credit outstanding is now larger than currency in circulation. They managed to hold themselves to the relatively minor fraud of sterilizing a paltry $2.5 billion for the same week. The Treasury jumped in and released another $5 billion in fresh fiat currency. Man, these are exciting times for economists. We are in the epicenter of the bizarre endgame of pandemic central bank corruption, and in the future this will be referred to as the Golden Age of Things to Write Economics Term Papers About. - Thanks to Thomas Donlan of Barron's we know that tax receipts recorded by the Treasury are way down for this fiscal year already, and down about 11% for all of 2001. But spending is up 8%. Making less but spending more. Typical. And the CBO agreed both that the government is going to borrow $55 billion in the next quarter, and that the total deficit for the year will probably hit $150 billion. But everything must be seen as being just peachy, so today the Treasury released an announcement that they were paying down $2 billion in debt. Hahahahaha! Mr. Donlan also provided this pithy quote on the value of the dollar vis a vis the order of magnitude in anticipated raising of the government debt ceiling (now topped out at six trillion smackeroos): "But the United States of America will have taken one more step on the trail blazed by Argentina, Russia and so many other countries that are wealthy in resources and human knowledge, but foolish in the way they handle their finances. The dollar is only money because the world's people believe we won't abuse them." Huh? The world's people trust us not to abuse them? Since when? Hell, the people of THIS country don't believe the government won't abuse them. The dollar is only money, to correct Mr. Donlan's error, because the world's people do not understand the mechanism whereby the ubiquitous dollar, which has been a Rock of Gibraltar for as long as anyone can remember, would lose value. But foreign dollar-holders took a nice whack to the head in the last month, and this is providing them with a real education. The kind that sticks with you for years. - A guy named Wicksell came up with the idea of a "natural" interest rate and a "market" interest rate. The natural rate comes from the idea that there is an interest rate that produces an aggregate savings that is equal to aggregate investment (otherwise, where would the investment money come from?). The market rate is the rate actually charged by banks. When the Fed pounds down the market rate, creating too much money and thus reducing the market rate of money, the two are in disequilibrium. And the upshot is that the divergence between the two will, says Wicksell, cause a change in the value of money. We are seeing this now. And, as evidenced from the first paragraph above, the Fed and the Treasury are continuing to pound down interest rates by committing the overt fraud of sterilizing government debt at an accelerating pace, providing tons of credit to anybody that asks for it (like the IMF and World Bank), and printing up cash, further distorting the gap between the natural rate and the market rate, and thus further decimating the dollar. - The Fed's criminally-stupid behavior is now predicated on the fact that the insurance industry, the retirement plan industry, the Wall Street industry, Federal tax revenues and other vitally interested parties all need to invest in stocks and have stocks move up forever. They want, and need, to pump that sucker back up. Insurance premiums are already inflating at double-digit rates to make up for the fact that claims are increasing and investment performance is awful, producing losses for the underwriters. Corporate retirement plans are a-fixin' to require the companies to put much, much more money into them to make up for the losses. Federal tax revenues are suffering because of the drastic drop in reported gains to be taxed away. Tip o' the day: sell insurance stocks. Massively raising premiums to save your own butt does not mean that you will sell many policies at that high rate. Much better to just temporarily go out of business while there are still a few bucks left to start up again when things are better. - The weak-dollar/strong-dollar argument is still making news. One of the arguments for a continued strong dollar is that the US dollar is a reserve currency of foreign governments. Huh? Is that to imply that there are just so dangity-dang many dollars floating around the world that they are now just another commodity, but somehow immune to the vagaries of market forces? And is that to imply that the dollar is being used for buying and selling foreign products and services between foreign nationals? And is that reserve currency thing implying that those governments will always be happy to intervene in the currency markets to support the dollar by selling their own currency? And is that implying that foreign nationals are a dim-witted lot, always eager to have lots of devaluing money? So how valuable is a currency when the underlying economy is going down, the government is speeding down the highway to socialism, the citizens themselves and every level of government are a bunch of under-educated, self righteous, over-indebted yahoos, and the central bank is actively pursuing policies to devalue the currency and foster inflation? - The 2001 Financial Report of the United States Government had an interesting statement by Treasury Secretary Paul O'Neill. He noted that when the government uses the same accounting method that corporations are required to use, the federal deficit in 2001 was $515 billion. The government, that ignominious cartel of liars and idiots, said the budget had a surplus of $127 billion! The accountants working at the government had to invent a fictitious $17 billion expense ("disappeared down a rat hole line item") to nominally "balance" the books. - Got a call from a guy named Ty who was adamant that the Fed is frantically buying up both equities and government debt to support the market. Well, duh. What was it supposed to do, sit there and let the chips fall where they may? After Greenspan has spent his entire Fed career working feverishly to foster one ridiculous bubble after another, committing one financial fraud after another, one egregious pile of flummery and stupidity on top of another? Now, after all that, he is going to let this bloated and cancerous mountain of preposterous economic glop collapse before he has a chance to retire? Hahahaha! Stop! Stop! I'm laughing myself sick here! And that brings up another interesting point; who is going to replace Greenspan? What congenital idiot would voluntarily walk into that mess, knowing that he or she is going to be blamed, his career and reputation ruined, for forcing childish and greedy Americans to stop eating candy by the literal pound? Not me! Of course, if you just wanted more Greenspanism, just give a retarded monkey the power to create more preposterous credit-creation by waving his little paw in the air. It worked for Greenspan. He became the most powerful man on earth with nothing more on the ball than the awesome power to create money out of thin air! - Gary North penned a nice overview of the large overhang of central bank short positions in gold, measured in the hundreds of tonnes. This came about as these banks loaned out their country's gold at essentially 1% interest to miners who sold it, instead of having to dig the stuff out of the ground. Now the banks still have the gold in their vaults, but it is not theirs anymore. The banks are mere custodians. Now the miners are in the un-envious position of having to repay the gold to the central banks at less than the market price of gold. They lose money on every ounce they dig up. A worrisome prospect, according to Dr. North, is the upheaval that will ensue when the citizens of those countries find out what has happened to their gold. He also had an unflattering remark about University of Chicago economists, with which I totally agree. Today's crop of economists resemble nothing more than the geocentric, Copernicus system of the cosmos, with astrologers wearing pointed hats decorated with half-moons, calculating complicated epi-cycles of the planets. Very entertaining and time-consuming, but completely worthless. - The SP500 is back to where it was in April of 1998. That's four years ago. So now the four-year results of using the trading system of selling short the market when it rises is paying off almost 100%. The only dip that hasn't been covered is the post-WTC September 2001 low. The beauty of this amazing New Theory ("only $39.95 from Whiz-bang Products! As seen on TV!") is that it requires no computers or even thinking. If the market goes up, sell short. When it falls some profitable distance below where you sold it short, buy it back and pocket the money. It has worked every single time (except, temporarily, the one) for more than four years running. The big upside blow off of the SP500 didn't really get started until January 1995, when that index was around 450. That was seven years ago. It peaked in April 2000, with the index standing at around 1,500. At the height, it was quadruple where the index stood in the early 90's. Perhaps coincidentally, that was shortly after Clinton (ugh) and Greenspan (double ugh) took over and had a chance to get up a head of steam, by the way. Now the decline in the SP500 has, on average, wiped out four of the seven years of big, outsized Wall Street profits from owning stocks. Isn't there something in the Old Testament about Seven Fat Years? Then comes seven what? - That some kind of war will be fought, if not actually declared, is a given. With the economic miseries besetting the USA and the rest of the world, a war is almost certain. Scapegoats must be found! The malefactors must, and will, be punished! Hooray for us, we're a-gonna get them rats and string 'em up! And why not a war or threat of war? Didn't our government idiots just spend an entire few decades bribing Arafat and all the other Mideast terrorists to make nice? We played patsy for one expensive, pay-me-off-before-I-kill-again extortion after another for as long as anybody can remember, and now suddenly we're not paying off terrorists anymore? Says who? - I figure that pretty soon somebody in government is going to get the idea to let IRA and 401(k) holders make limited, penalty-free, premature withdrawals from their retirement accounts. The gains tax would still be due, giving the Treasury some needed money, Congress some spending money, lessening the issuance of new debt, and giving the consumer a fistful of money to spend. And nothing really picks up stock prices more than rising demand for output. Even though such an increase in demand is thoroughly bogus, as it is merely more running down of savings. Present consumption at the expense of future consumption, and all that. - Bank lending has stopped. Putting savings in bank accounts has also stopped. - Foreign central banks are doing their part to keep the dollar alive; they have dramatically stepped up their purchase of US government debt. This does double-duty, as they first have to buy dollars (thus keeping the dollar strong) and keeps interest rates low (by buying debt and keeping prices up). This must be part of the "dollar as a reserve currency" argument that is so popular. - The various incarnations of the monetary base have started to go ballistic, as has currency in circulation. However, the M's are not cooperating. - The NYSE Members are still accumulating stocks with both hands, I assume because they anticipate a (another?) intervention by the Fed to funnel money into their pockets. The open interest of SP500 futures is going red-line also, as the end-of-half approaches. God forbid if investors have to open their mailboxes in July only to read that they lost yet another buncha money in the stock market. Ergo, it's time for the Fed to overstep it's bounds again, and engage in another huge scam of deceit, corruption and manipulation. All for "the good of America," you can be sure. - Manufacturing wages were down, for the jillionth month in a row. Service wages were up a little. But government employee wages zoomed. Perfect. The one sector of the economy that produces no wealth at all, but actively destroys wealth, got the biggest boost in income. Gains in spending also, for the jillionth month is a row, outpaced income gains, as Americans continue to rack up more debt on top of the other unbelievable amounts of debt to continue to finance a bizarre and dysfunctional lifestyle. - It was with a laugh that I saw a poll that ninety percent of Americans think that the stock market is too risky a place to be saving for their children's college tuition! Man! This is almost too rich! - David Tice has penned an impressive narrative of the bear case in the semi-annual Prudent Bear Funds report. He particularly takes to task the GSE's, especially Fannie Mae and Freddie Mac, for acting like give-'em-anything jackasses. Perhaps we'll soon see the wisdom of putting Franklin Raines at the head of Fannie Mae; when all else fails, pull out the race card. That ought to keep Congress on a short leash in investigating the housing bubble that has been created by these GSE's. - Many states are sharply raising taxes on tobacco to cover their budget shortfalls. This will not raise any money for them. It will, however, mean an increase in cigarette smuggling, associated crime, more extra-Constitutional powers for government agents, and more taxes and expenses to pay for it all. Ugh. Mogambo Sez: Speculative money must surely be dried up. Not for nothing are federal and state revenues so drastically curtailed. The wealth effect is surely gone, and so where is all the cash for big, lasting rallies going to come from? Go short. [Top] ---------------------------------------------------------------------------- ---- Copyright ? 2001 Agora Publishing, Inc. All rights reserved. From soncu at pacbell.net Wed Jun 12 10:58:47 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Wed, 12 Jun 2002 09:58:47 -0700 Subject: [A-List] Citygroup dismantles its emerging markets business Message-ID: What does this mean for the emerging markets? Is this the beginning of a trend or just an insignificant event that we should ignore as far as the emerging markets are concerned? Sabri ++++++++++ Citigroup shakes up senior management By Gary Silverman in New York Financial Times; Jun 12, 2002 Citigroup, the largest US banking company and one of the biggest foreign banks in Asia, shook up its management yesterday in response to big losses in the Argentine financial crisis. The group is to dismantle its emerging markets business and shift Victor Menezes, its head, to a more strategic role. Deryck Maughan, a vice chairman, will become head of Citigroup International, overseeing the company's five main international regions, including many of the countries that formerly reported to Mr Menezes. The revamp marks the latest in a series of attempts by Sandy Weill, Citigroup's chairman and chief executive, to foster a more entrepreneurial culture in the company. Its top product executives - Bob Willumstad, consumer finance; Michael Carpenter, investment and corporate banking; and Tom Jones, investment management - will be given global responsibilities. Managers overseeing product lines will be given more power, working in partnership with country managers who will spot opportunities and monitor profitability. The Argentine crisis knocked a total of $1.3bn off the company's pre-tax earnings in the last two quarters. Mr Menezes said in April that the crisis went beyond the dangers anticipated by Citigroup's risk models. "It [having a separate emerging markets division] separated it too much from the rest of the company," said Mr Weill, who added that as a result "some things fell between the cracks". Mr Weill signalled his concerns about emerging markets in February, when he named Chuck Prince, chief operating officer of the company, to serve as chief operating officer of emerging markets as well, reporting to Mr Menezes. Mr Prince has frequently played the role of trouble-shooter for Mr Weill. "Chuck was helpful in getting a lot of people involved in the process," Mr Weill said. "I think we have strengthened our ability over the last three or four months to have a more proactive, ongoing, all-the-time, looking-forward approach to the changing risk situation." Mr Menezes is the last veteran of Citicorp - which merged with Mr Weill's Travelers in 1998 - to continue in a senior operational role. His new responsibilities remain important, since he will slide into Mr Maughan's former role overseeing acquisitions, a role of great importance to Mr Weill, who is a keen dealmaker. Mr Prince will take on responsibility for finance, risk management and human resources. Full at: http://search.ft.com/search/article.html?id=020612000498&query=Ci tiGroup&vsc_appId=totalSearch&state=Form From annewilliamson at msn.con Wed Jun 12 11:02:35 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Wed, 12 Jun 2002 13:02:35 -0400 Subject: [A-List] Ron Paul on the Dollar's Woes References: <012001c21210$bbfea640$0100a8c0@igrushkii> <009f01c2121a$134a95e0$2a063b80@2ct0p01> <01ae01c2121f$6d727920$0100a8c0@igrushkii> <001701c21227$9ffedde0$9d3a3b80@2ct0p01> Message-ID: <021b01c21232$f3d6ca80$0100a8c0@igrushkii> All: This email was forwarded to me by Elizabeth Currier of the CMRE (Comm for Monetary Research and Education) with whom I am travelling to Buenos Aries in mid-July. Therefore, I can tell you nothing further about its origin as it was forwarded to her from where-I-don't-know. Nonetheless, this person's report demonstrates the crisis is ratcheting up to gut-churning levels, and I felt the list would be interested. Anne PS Alex Chafuen of the Atlas Economic Research Foundation has arranged for me to address a group regarding the IMF, but I know nothing more - which group, what venue, etc. (Atlas is a laissez-faire group.) I am extremely interested in meeting with any native groups grappling with this issue, and would appreciate references/introductions. And though I am no expert on Argentina (Louis - thank you so much for your earlier postings on the country, and its history.), I do know a good deal about how the IMF works and loots and may have something useful to offer. ----- Original Message ----- From: Nicholas Jackson To: Brian W Casey Sent: Wednesday, June 12, 2002 12:02 PM Subject: Argentina - After Default and the Money Dies. - email chatter Coming to a city near you soon!! Sooner than you think maybe. Argentina. After Default and the Money Dies. - email chatter A friend of mine on another group shared this terrible sequence of events that has happened very recently. he lives west of the big cities but his comments relate not just the banks in his country but the big internationals: "I will share this case in my "just flying to you" lesson, dear EM. And I am even farther inland than Buenos Aires, I am living at 500 miles to the center Mountains, somewhat away from the disaster of the big cities here. In less than year we have dropped from a 14 percent of population under the line of poverty to a growing 50%! And the figure is going up each day. Now, a very curious thing has happen here, I don't know that this peculiar situation is well known abroad, the Banks, all of them-Including all the foreign, Citybank, Boston, Banca Nazionale del Laboro, Societe General from France and the second bank in importance from Germany between all the other, have simply stolen the money of the savings of the people. This is an unprecedent situation in modern poscapitalism, and I am sure that will have -sooner or later- a repercusion in other places. The fact is simply this: you had your money in the Bank, and from Friday to Monday you went to the bank to get some money and every one of them simply said WE DON'T HAVE IT ...can you imagine that? Not only the savings of all people, some very elder ones, lost from night to morning, but also the tremendous loose of faith, of confidence in the intitutions, in the system, etc. And even those of us who did not have savings at all -as is my case- are deep into the crisis, for the simple reason that normal people do not have money, for example, for coming to consultation, the dropping in all the professional offices have been so huge, even the most famous professionals are in dire straits because of the tremendous going down of everything. The people working in jobs, cannot take all the monthly salary, they have restrictions in amounts to get their own monthly earnings! And of course, the loose of confidence and values have produced huge ups in delinquency, kiddnappings, drug abuse, and teenager suicides (the figures are alarming)" Bad events behind the scenes...... Eric From soncu at pacbell.net Wed Jun 12 13:18:00 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Wed, 12 Jun 2002 12:18:00 -0700 Subject: [A-List] Report from Argentina Message-ID: Vicente Balvanera reporting from Buenos Aires (1) June 12, 2002 The forced eviction yesterday of 250 families from their homes in Lomas de Zamora, a working class suburb of Buenos Aires, exemplifies the current situation in Argentina: a pitched battle, fought hand to hand and disputing every inch of ground, fierce, increasingly organized resistance against the direct pillaging of the Argentine working class and people, their resources, land, jobs, education, life savings, public health, at the hands of US and European imperialism. The scene televised nationally all through the day, on a par with World Cup Soccer, was worthy of the West Bank in Palestine, complete with rubber bullets, tear gas, attack dogs and bulldozed dwellings. The TV was forced to show the proud resistance against the eviction, as part of a growing level of organization: many of these settlements are networked around organizations like the Polo Obrero and the Bloque Piquetero Nacional, pooling legal and other resources, organizing mutual solidarity. In the Buenos Aires barrio of Almagro, just a couple of weeks ago, the Neighborhood Assembly voted to stand with the neighbors of Yatay Street against their eviction, in support of a call made by the Polo Obrero. The march and rally, in the framework of the growing and powerful unity of "pots and picketeers", successfully prevented the eviction. An interview with the neighbors of the Yatay Street building will be published here in the next few days. Let no-one be deceived by superficial appearances in Argentina: there may be something of a reflux on the level of street agitation; but the class war bubbles on many fronts every single day, the uprising of December which toppled government after government continues to pose the question of who holds power, while a crumbling, lackey government is truly at the end of the line: it cannot offer any solution to the crisis, nor can it defeat the resistance of the working class and people. Trying to appease an insatiable IMF, Duhalde fumblingly attempts to round out the expropriation of the savings account holders, but knows he cannot implement the new wave of structural adjustment in the provinces, even if the governors, Radicals and Peronists alike, have all lined up to sign the papers. Last night several thousand savings account holders marched through downtown Buenos Aires, shouting "thieves, thieves, give back our money". Today a group is parked outside the house of a banker, giving him no peace in his own home. No-one?s buying the so-called solution of accepting worthless bonds at a fraction of the face value of the expropriated savings accounts, and anger mounts as inflation wears down, and hyperinflation threatens to wipe away, even at that nominal amount. The Buenos Aires newspaper Clarin reports that there were strikes in no fewer than seven Argentine cities yesterday. In northern Jujuy, for example, with six access points to the city blocked, club wielding strikers broke through barriers and marched right into the state legislature, demanding back pay and improvements in health, education and public security. In Cordoba, for example, several public employee unions marched in opposition to wage cuts, and cuts in health, education and welfare. The workers are planning, for example, to take over several public hospitals in protest against cuts in public health, together with doctors, nurses and hospital staff. And the government hasn?t even started attempting to implement the new wave of lay-offs, wage cuts and budget cuts, demanded by the US Treasury and IMF, yet. In subsequent articles, I will be reporting on the real character of the plans of US and European imperialism and their local junior partners (completion of the expropriation of the savings account holders, implementation of the new wave of structural adjustment in the provinces, prostration of the working class in general, and defeat of the revolutionary process opened last December, crowned with a strongman unconditionally pro-imperialist government installed either through "elections" managed by the bosses and their media, or a coup d?etat, expropriation of land and capital assets, etc.); on the way in which the center-left and the democratizing left (supported by the usual chorus of shrill and tiny sectarian groups) fall right into line behind these plans, which include the emergence of a popular front with which to stifle the revolutionary process; on the growing level and forms of struggle, resistence and organization, increasingly coordinated between the picketeers, the neighborhood assemblies and the organized working class; on the up-coming National Assembly of Employed and Unemployed Workers; on the programs and resolutions for action voted, and the manner in which they are carried out; on the perspectives for the emergence of a revolutionary workers party; in short, on the overall prospects for a working class solution to the crisis, already spreading and erupting in neighboring Uruguay, Paraguay, Bolivia and Brazil. Full at (You may need to subscribe to the list): http://groups.yahoo.com/group/Argentina_Solidarity/message/1603 From hliu at mindspring.com Wed Jun 12 14:27:04 2002 From: hliu at mindspring.com (Henry C.K. Liu) Date: Wed, 12 Jun 2002 16:27:04 -0400 Subject: [A-List] The Thoroughly Criminal Greenscam References: <012001c21210$bbfea640$0100a8c0@igrushkii> <009f01c2121a$134a95e0$2a063b80@2ct0p01> <020801c2122f$4592b2c0$0100a8c0@igrushkii> Message-ID: <3D07AE97.4742142A@mindspring.com> This was posted by me to PKT on Oct 3, 2000: The WSJ today (Oct 3 2000 page A2) reports that the Fed is now under the influence of Wicksell on the relationship between interest rates, growth and inflation. The Fed, while expected to leave interest rates unchanged in toady's meeting, has left inflation adjusted real rates historically high. Monetarists who have dominated the Fed throughout its history subscribe to the theory that inflation can only be prevented either by high rates to contain growth, or by high unemployment to depress wages, which are two faces of the same coin. Wicksell argued that monetary policy works best at containing inflation by pegging interest rates to investment returns rather than money supply. That theory provides a needed cover for Greenspan's high interest rate policy. Of course, the Treasury, with the support of the Fed, has repeatedly declared that a strong dollar is in the US national interest. And a strong dollar requires high US interest rates in the current international finance architecture. But now, in addition to national interest justifications, a scientific theory has been resurrected to support Greenspan's policy. Field data have demolished the claim that low unemployment (below 5%) causes inflation. Greenspan calls his high rates "equilibrium interest rates". The Fed, notwithstanding its intellectual pretense, has always been a political institution. The politics of economics repeatedly resurrects from the intellectual wasteland, the theoretical Siberia as it were, new gurus to support its latest ideology. Nobel winners are proponents of theories that explain "scientifically" last year's political expediency. The list includes Hayek (free market), Freidman (monetary theory), Mundell (global capital) etc, etc. Wicksell makes it respectable for Greenspan to abdicated his responsibility as Fed Chairman, by pretending to follow the market, to treat interest rates as prices of money set by market forces, and not as a tool to promote employment or growth. The embarrassing question of why then we need a Federal Reserve is never asked. The fact is that the monetarists at the Fed are fervently intervening in the market, the only difference between them and Keynesians is that they intervene to safeguard the value of capital while Keynesians intervene to protect labor from unemployment and low wages. As Paul Davidson said, everyone has an income policy; they just don't like the other fellow's income policy but claiming their own is "free" market determined. This creates rethinks on Wall Street. Traders and investor may have to reverse their knee-jerk reaction to sell when the Fed raises rates. Unless, of course, corporate profit falls amid rising rates, as they are beginning to show. Wicksell, Johan G. K, (1851-1926) was born in Stockholm, Sweden. His book: Value, Capital and Rent (1893) was not translated until 1954) His Lectures on Political Economy , 2 vols (1901-6,) and Selected Papers on Economic Theory (1958) were read only by professionals. Wicksell did rigorous work on the marginalist theory of price and distribution and on monetary theory. The Lectures on Political Economy has been aptly called a `textbook for professors'. In an unusually chequered career (including a brief spell of imprisonment for exercising his right of free speech) he wrote and lectured tirelessly of radical issues, which did not figure among the qualities that Greenspan admired. He was an advocate of social and economic reforms of various kinds, most notably neo-Malthusian population controls. In his later years he was revered by the new generation of economists who became known as the Stockholm School. They developed his ideas on the cumulative process into a dynamic theory of monetary macroeconomics simultaneously with but independently of the Keynesian revolution. Greenspan's selective use of other people's idea is notorious. His fondness of Schumpetrean "creative destruction" which he cites in every speech, always leaves out the second half of Schumpeter's conclusion: that creative destruction tends to encourage monopolies (a la Microsoft) and accelerates the coming of socialism. To get it directly from Wicksell: http://socserv2.socsci.mcmaster.ca:80/~econ/ugcm/3ll3/wicksell/interest.txt Henry C.K. Liu Anne Williamson wrote: > The Golden Age of Things to Write Economics Term Papers About > The Mogambo Guru > > - Greenspan's Fed couldn't contain itself any longer. Total credit - > Greenspan's Fed couldn't contain itself any longer. Total credit extended by > the Fed jumped $12 billion last week. Twelve billion! Total Fed credit > outstanding is now larger than currency in circulation. They managed to hold > themselves to the relatively minor fraud of sterilizing a paltry $2.5 > billion for the same week. The Treasury jumped in and released another $5 > billion in fresh fiat currency. > > Man, these are exciting times for economists. We are in the epicenter of the > bizarre endgame of pandemic central bank corruption, and in the future this > will be referred to as the Golden Age of Things to Write Economics Term > Papers About. > > - Thanks to Thomas Donlan of Barron's we know that tax receipts recorded by > the Treasury are way down for this fiscal year already, and down about 11% > for all of 2001. But spending is up 8%. Making less but spending more. > Typical. > > And the CBO agreed both that the government is going to borrow $55 billion > in the next quarter, and that the total deficit for the year will probably > hit $150 billion. But everything must be seen as being just peachy, so today > the Treasury released an announcement that they were paying down $2 billion > in debt. Hahahahaha! > > Mr. Donlan also provided this pithy quote on the value of the dollar vis a > vis the order of magnitude in anticipated raising of the government debt > ceiling (now topped out at six trillion smackeroos): "But the United States > of America will have taken one more step on the trail blazed by Argentina, > Russia and so many other countries that are wealthy in resources and human > knowledge, but foolish in the way they handle their finances. The dollar is > only money because the world's people believe we won't abuse them." > > Huh? The world's people trust us not to abuse them? Since when? Hell, the > people of THIS country don't believe the government won't abuse them. The > dollar is only money, to correct Mr. Donlan's error, because the world's > people do not understand the mechanism whereby the ubiquitous dollar, which > has been a Rock of Gibraltar for as long as anyone can remember, would lose > value. > > But foreign dollar-holders took a nice whack to the head in the last month, > and this is providing them with a real education. The kind that sticks with > you for years. > > - A guy named Wicksell came up with the idea of a "natural" interest rate > and a "market" interest rate. The natural rate comes from the idea that > there is an interest rate that produces an aggregate savings that is equal > to aggregate investment (otherwise, where would the investment money come > from?). The market rate is the rate actually charged by banks. When the Fed > pounds down the market rate, creating too much money and thus reducing the > market rate of money, the two are in disequilibrium. And the upshot is that > the divergence between the two will, says Wicksell, cause a change in the > value of money. We are seeing this now. > > And, as evidenced from the first paragraph above, the Fed and the Treasury > are continuing to pound down interest rates by committing the overt fraud of > sterilizing government debt at an accelerating pace, providing tons of > credit to anybody that asks for it (like the IMF and World Bank), and > printing up cash, further distorting the gap between the natural rate and > the market rate, and thus further decimating the dollar. > > - The Fed's criminally-stupid behavior is now predicated on the fact that > the insurance industry, the retirement plan industry, the Wall Street > industry, Federal tax revenues and other vitally interested parties all need > to invest in stocks and have stocks move up forever. They want, and need, to > pump that sucker back up. > > Insurance premiums are already inflating at double-digit rates to make up > for the fact that claims are increasing and investment performance is awful, > producing losses for the underwriters. Corporate retirement plans are > a-fixin' to require the companies to put much, much more money into them to > make up for the losses. Federal tax revenues are suffering because of the > drastic drop in reported gains to be taxed away. Tip o' the day: sell > insurance stocks. Massively raising premiums to save your own butt does not > mean that you will sell many policies at that high rate. Much better to just > temporarily go out of business while there are still a few bucks left to > start up again when things are better. > > - The weak-dollar/strong-dollar argument is still making news. One of the > arguments for a continued strong dollar is that the US dollar is a reserve > currency of foreign governments. Huh? > > Is that to imply that there are just so dangity-dang many dollars floating > around the world that they are now just another commodity, but somehow > immune to the vagaries of market forces? > > And is that to imply that the dollar is being used for buying and selling > foreign products and services between foreign nationals? > > And is that reserve currency thing implying that those governments will > always be happy to intervene in the currency markets to support the dollar > by selling their own currency? > > And is that implying that foreign nationals are a dim-witted lot, always > eager to have lots of devaluing money? So how valuable is a currency when > the underlying economy is going down, the government is speeding down the > highway to socialism, the citizens themselves and every level of government > are a bunch of under-educated, self righteous, over-indebted yahoos, and the > central bank is actively pursuing policies to devalue the currency and > foster inflation? > > - The 2001 Financial Report of the United States Government had an > interesting statement by Treasury Secretary Paul O'Neill. He noted that when > the government uses the same accounting method that corporations are > required to use, the federal deficit in 2001 was $515 billion. The > government, that ignominious cartel of liars and idiots, said the budget had > a surplus of $127 billion! > > The accountants working at the government had to invent a fictitious $17 > billion expense ("disappeared down a rat hole line item") to nominally > "balance" the books. > > - Got a call from a guy named Ty who was adamant that the Fed is frantically > buying up both equities and government debt to support the market. Well, > duh. What was it supposed to do, sit there and let the chips fall where they > may? After Greenspan has spent his entire Fed career working feverishly to > foster one ridiculous bubble after another, committing one financial fraud > after another, one egregious pile of flummery and stupidity on top of > another? Now, after all that, he is going to let this bloated and cancerous > mountain of preposterous economic glop collapse before he has a chance to > retire? Hahahaha! Stop! Stop! I'm laughing myself sick here! > > And that brings up another interesting point; who is going to replace > Greenspan? What congenital idiot would voluntarily walk into that mess, > knowing that he or she is going to be blamed, his career and reputation > ruined, for forcing childish and greedy Americans to stop eating candy by > the literal pound? Not me! > > Of course, if you just wanted more Greenspanism, just give a retarded monkey > the power to create more preposterous credit-creation by waving his little > paw in the air. It worked for Greenspan. He became the most powerful man on > earth with nothing more on the ball than the awesome power to create money > out of thin air! > > - Gary North penned a nice overview of the large overhang of central bank > short positions in gold, measured in the hundreds of tonnes. This came about > as these banks loaned out their country's gold at essentially 1% interest to > miners who sold it, instead of having to dig the stuff out of the ground. > Now the banks still have the gold in their vaults, but it is not theirs > anymore. The banks are mere custodians. Now the miners are in the un-envious > position of having to repay the gold to the central banks at less than the > market price of gold. They lose money on every ounce they dig up. A > worrisome prospect, according to Dr. North, is the upheaval that will ensue > when the citizens of those countries find out what has happened to their > gold. > > He also had an unflattering remark about University of Chicago economists, > with which I totally agree. Today's crop of economists resemble nothing more > than the geocentric, Copernicus system of the cosmos, with astrologers > wearing pointed hats decorated with half-moons, calculating complicated > epi-cycles of the planets. Very entertaining and time-consuming, but > completely worthless. > > - The SP500 is back to where it was in April of 1998. That's four years ago. > So now the four-year results of using the trading system of selling short > the market when it rises is paying off almost 100%. The only dip that hasn't > been covered is the post-WTC September 2001 low. The beauty of this amazing > New Theory ("only $39.95 from Whiz-bang Products! As seen on TV!") is that > it requires no computers or even thinking. If the market goes up, sell > short. When it falls some profitable distance below where you sold it short, > buy it back and pocket the money. It has worked every single time (except, > temporarily, the one) for more than four years running. The big upside blow > off of the SP500 didn't really get started until January 1995, when that > index was around 450. That was seven years ago. > > It peaked in April 2000, with the index standing at around 1,500. At the > height, it was quadruple where the index stood in the early 90's. Perhaps > coincidentally, that was shortly after Clinton (ugh) and Greenspan (double > ugh) took over and had a chance to get up a head of steam, by the way. > > Now the decline in the SP500 has, on average, wiped out four of the seven > years of big, outsized Wall Street profits from owning stocks. Isn't there > something in the Old Testament about Seven Fat Years? Then comes seven what? > > - That some kind of war will be fought, if not actually declared, is a > given. With the economic miseries besetting the USA and the rest of the > world, a war is almost certain. Scapegoats must be found! The malefactors > must, and will, be punished! Hooray for us, we're a-gonna get them rats and > string 'em up! > > And why not a war or threat of war? Didn't our government idiots just spend > an entire few decades bribing Arafat and all the other Mideast terrorists to > make nice? We played patsy for one expensive, pay-me-off-before-I-kill-again > extortion after another for as long as anybody can remember, and now > suddenly we're not paying off terrorists anymore? Says who? > > - I figure that pretty soon somebody in government is going to get the idea > to let IRA and 401(k) holders make limited, penalty-free, premature > withdrawals from their retirement accounts. The gains tax would still be > due, giving the Treasury some needed money, Congress some spending money, > lessening the issuance of new debt, and giving the consumer a fistful of > money to spend. And nothing really picks up stock prices more than rising > demand for output. Even though such an increase in demand is thoroughly > bogus, as it is merely more running down of savings. Present consumption at > the expense of future consumption, and all that. > > - Bank lending has stopped. Putting savings in bank accounts has also > stopped. > > - Foreign central banks are doing their part to keep the dollar alive; they > have dramatically stepped up their purchase of US government debt. This does > double-duty, as they first have to buy dollars (thus keeping the dollar > strong) and keeps interest rates low (by buying debt and keeping prices up). > This must be part of the "dollar as a reserve currency" argument that is so > popular. > > - The various incarnations of the monetary base have started to go > ballistic, as has currency in circulation. However, the M's are not > cooperating. > > - The NYSE Members are still accumulating stocks with both hands, I assume > because they anticipate a (another?) intervention by the Fed to funnel money > into their pockets. The open interest of SP500 futures is going red-line > also, as the end-of-half approaches. God forbid if investors have to open > their mailboxes in July only to read that they lost yet another buncha money > in the stock market. Ergo, it's time for the Fed to overstep it's bounds > again, and engage in another huge scam of deceit, corruption and > manipulation. All for "the good of America," you can be sure. > > - Manufacturing wages were down, for the jillionth month in a row. Service > wages were up a little. But government employee wages zoomed. Perfect. The > one sector of the economy that produces no wealth at all, but actively > destroys wealth, got the biggest boost in income. > > Gains in spending also, for the jillionth month is a row, outpaced income > gains, as Americans continue to rack up more debt on top of the other > unbelievable amounts of debt to continue to finance a bizarre and > dysfunctional lifestyle. > > - It was with a laugh that I saw a poll that ninety percent of Americans > think that the stock market is too risky a place to be saving for their > children's college tuition! Man! This is almost too rich! > > - David Tice has penned an impressive narrative of the bear case in the > semi-annual Prudent Bear Funds report. He particularly takes to task the > GSE's, especially Fannie Mae and Freddie Mac, for acting like > give-'em-anything jackasses. Perhaps we'll soon see the wisdom of putting > Franklin Raines at the head of Fannie Mae; when all else fails, pull out the > race card. That ought to keep Congress on a short leash in investigating the > housing bubble that has been created by these GSE's. > > - Many states are sharply raising taxes on tobacco to cover their budget > shortfalls. This will not raise any money for them. It will, however, mean > an increase in cigarette smuggling, associated crime, more > extra-Constitutional powers for government agents, and more taxes and > expenses to pay for it all. Ugh. > > Mogambo Sez: Speculative money must surely be dried up. Not for nothing are > federal and state revenues so drastically curtailed. The wealth effect is > surely gone, and so where is all the cash for big, lasting rallies going to > come from? Go short. > > [Top] > > ---------------------------------------------------------------------------- > ---- > Copyright ? 2001 Agora Publishing, Inc. All rights reserved. From soncu at pacbell.net Wed Jun 12 17:08:43 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Wed, 12 Jun 2002 16:08:43 -0700 Subject: [A-List] US Imperialism: Turcomen Front in Iraq Message-ID: Turcomen Front: Kirkuk Is A City Of Iraq And A Symbol Of National Identity ANKARA (A.A) - 12.06.2002 - Discussions pertaining to the demands of Northern Iraqi Kurdish groups for establishment of a federation, and inclusion of Kirkuk to this federation, continue. A high-ranking official from Turcomen Front Turkey Representation told the A.A correspondent that the views pointed out in a conference entitled, "Iraqi Kurds: Key of Stability in Iraq", which was held in Global Peace Center in Washington, upset the whole Turks in the world, not only the Turcomens. The official harshly critized the statements of Alan Makovsky, the U.S. Representatives Assembly International Relations Committee consultant, regarding the inclusion of Kirkuk to the Kurdish region in federation structure. The official said they found strange the statement of Makovsky as if Kirkuk had been donated, and asked if someone could come and donate New York to somebody else. Pointing out that at least 1000-year old Turcomen history lied under Kirkuk, and that more than 600,000 Turcomen lived on this territory, the official said Kirkuk was a city of Iraq and a symbol of national identity. The official said Kirkuk was not an issue that is open to discussion or bargaining. The official said Kirkuk has an owner and that nobody has the right to donate the city, stressing that they were ready to die by fighting at the doors of the city rather than being exposed to a massacre. Noting that the agenda of the conference should particularly focus on Iraq and democracy, the official said some plans were underway on Iraq, and pointed out that oil reserves in Kirkuk were the reasons of this. The official said Turkey closely covered the issue, noting that Ankara showed its sensitivity in this respect. The official said they welcomed the statements made on the issue from various diplomatic canals, and noted that they would have contacts in Foreign Ministry today. Turkey, which adopted the policy to preserve Iraq's territorial integrity, made statements in various platforms and said it supported inclusion of all ethnical and religios groups in future of Iraq, and that it would respect to the decision that would be taken by Iraqi people. Meanwhile, it was reported that regional administrator of the party Necirvan Barzani, the nephew of Kurdish Democratic Party (KDP), will pay a visit to Ankara soon. Anadolu Agency 6/12/2002 7:49:02 AM From soncu at pacbell.net Wed Jun 12 22:45:50 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Wed, 12 Jun 2002 21:45:50 -0700 Subject: [A-List] Argentina: Hunger spreads Message-ID: Soup kitchens and Dumpster-diving; hunger spreads in recession-wracked Argentina Wed Jun 12, 3:36 AM ET By BILL CORMIER, Associated Press Writer BUENOS AIRES, Argentina - Jose Perez and his wife Maria have 11 hungry mouths to feed. So they travel each week to Argentina's biggest vegetable market to raid the Dumpsters. Rotten tomatoes, blackened potatoes, rubbery bell peppers ? the throwaways from the central market are all the Perez family will eat today. Oblivious to trucks rumbling into the market with loads of fresh oranges, melons and other produce, they fend off the flies and claw through the mushy debris for anything edible. A four-year-old economic downturn has become the worst recession in Argentine history. The jobless rate has soared to 20 percent, the peso has devalued more than 70 percent against the dollar, and more than one-third of the 36 million people now live in poverty. "My husband hasn't been able to work a decent job in years, and we still have to eat," said Maria, hefting a paring knife in calloused hands as she hacked out black spots in rotting potatoes. Jose, a laid-off electrician, carried a plastic bucket of water to wash the vegetables that often give his family stomach aches. Nearby, a grizzled man in an old army jacket already had a meager pot of potatoes and cabbage bubbling over a smoky fire. "Tell Mr. Bush we still want to pay back the debt, but give us more time," he said with a laugh. He meant the dlrs 141 billion Argentina owes after January's default, when the crisis exploded. Hunger is becoming evident in Argentina ? from the overrun soup kitchens to the streets of the capital where armies of people sift the trash each night for anything to recycle, sell or eat. On March 23 a truck carrying 22 cattle overturned near Rosario, 180 miles (290 kilometers) to the north. As hungry shantytown dwellers gathered around the injured animals, men appeared with butcher's knives and carted away dripping sides of beef. Sociologist Artemio Lopez, at the Equis consulting group, said the price for the government's "basic food basket" of essential goods like bread, rice and eggs soared 47.4 percent in the first five months of the year. "With each passing day there is more hunger in Argentina," said Lopez, who estimates the proportion of the population that cannot afford the basics has nearly doubled to 21 percent in a year. To properly feed a family of four cost 215 pesos in March and 252 pesos in April, government figures show. That's an increase from dlrs 61 to dlrs 72, and salaries haven't risen at all. The cash-strapped government has social programs for the poor, but critics say these can't keep pace with the spreading crisis. On May 17 the government started dispensing 150 pesos (dlrs 42) a month to 1 million unemployed heads of households. The critics say it should be double that amount. Community and religious groups struggle to fill the gap. Genia Skegin is supervising donations of foodstuffs like pasta and flour at a synagogue in northern Buenos Aires. "Every month there are more and more families coming here," she said. "People are losing jobs, it's just terrible." Across town, at a warehouse piled high with bags of pasta and rice, hundreds of women with plastic buckets wait outside a soup kitchen where 300 pounds (135 kilograms) of macaroni are boiling in a steel vat. At a guard's signal, they rush forward, frantically holding out plastic tubs. "Keep in line, one at a time!" the guard shouts. "This is my only meal of the day," said Catalina Pineyro, a 71-year-old grandmother, as she gulped her plate down. The soup kitchen is called Cara Sucias, Spanish for "Dirty Faces," as the homeless are known. The founder, Monica Carranza, said she gets 800 visitors on a big day, more than double that of a year ago. "It's always been hard," she said, "but nothing so bad as now." She said the soup kitchen has registered 95 especially malnourished families, up from 25 a year ago, who get extra food, iron pills for anemia and antibiotics for bronchitis. Those worst off see the soup kitchen's specialist, Dr. Javier Sary. Wearing a white smock, he listened with a stethoscope to the hacking cough of Daniel, not yet 2, his eyes slightly sunken. "Here is a case of malnutrition," the doctor said as Daniel's worried mother looked on. "He lacks the basics and is at risk of bronchitis or pneumonia if he isn't treated." He gave the mother antibiotics and shook his head as she left. "This is certainly not the hunger you see in Africa ... but this is an Argentina that didn't exist before: people going hungry, people malnourished ... If it weren't for the help these people receive, I'm afraid they'd simply die in the streets." Full at: http://story.news.yahoo.com/news?tmpl=story&u=/ap/20020612/ap_wo_ en_po/argentina_s_hungry_2 From rschaap at iprimus.com.au Thu Jun 13 06:34:16 2002 From: rschaap at iprimus.com.au (Rob Schaap) Date: Thu, 13 Jun 2002 22:34:16 +1000 Subject: [A-List] US imperialism: Afghanistan References: Message-ID: <3D089152.6BAB726B@iprimus.com.au> G'day all, Couldn't copy stuff off the enclosed URL, but it's all about a showing of a film called 'Massacre At Mazar' (made by Jamie Doran) to the Reichstag suitstaffel (at the request of PDS bigwig Roland Claus). The film claims thousands of pro-Taliban people were deliberately massacred, and many tortured, as a matter of US military policy - a cleaning-up-their-own-mess sorta exercise of potentially explosive political magnitude. The IOL web site has a fair bit on this line of inquiry, it seems. Anyone know anything about any of this? Seen the film? Is the German media onto the story? Is it true? http://www.iol.co.za/index.php?click_id=3&art_id=qw1023894901416B265&set_id=1 From annewilliamson at msn.con Thu Jun 13 13:28:41 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Thu, 13 Jun 2002 15:28:41 -0400 Subject: [A-List] The Truth About Gold References: <3D089152.6BAB726B@iprimus.com.au> Message-ID: <01b001c21310$87538f40$0100a8c0@igrushkii> Gary North's REALITY CHECK Issue 149 June 14, 2002 MICAWBER'S AGREEMENT Charles Dickens created a character for DAVID COPPERFIELD, Mr. Micawber. And macabre he was! He was a promoter, a blower of bubbles, a schemer, a spinner of dreams. Nothing ever quite worked for him as planned, but he was always hopeful. His philosophy of life has come down to us in his famous phrase, "Something will turn up." In the 1935 movie, W. C. Fields played Micawber. This was an example of flawless casting. Dickens identified the mind-set of the huckster, the man who substitutes schemes on paper for productivity. Dickens was convinced that capitalism is basically little more than a gigantic system of schemes. He saw the system as a bubble. He was wrong about capitalism, but he was correct about the central institution of capitalism, fractional reserve banking. This institution, from the creation of the Bank of England in 1694 until the present, has been the creation of government. It could not exist without The Agreement: "You license our monopoly over money, and we'll guarantee a market for government debt." I call it Micawber's Agreement. The Agreement is at the heart of the modern world's economy. Only one thing has ever proven successful in exposing this agreement as a Micawberesque scheme: a rising price of gold. This is why, above all else, central bankers strive to keep down the price of gold. The price of no other commodity attracts as much attention. The price of no other commodity is the subject of extended editorials in financial publications. Gold is not just another commodity, despite what the gold-haters in the media assure us. If it were, then they would not have to keep writing their articles that assure us that it is. I realize that expert opinion can be awe-inspiring. I fully understand that when Alan Greenspan appears on Capitol Hill, Congressmen, Senators, and WALL STREET JOURNAL columnists are impressed by rhetoric that is matched only by Dwight Eisenhower's and Professor Irwin Corey's. (http://www.professor.irwincorey.com) But, as I listen to his presentations and read them on-line, I keep in mind an image of W. C. Fields. This helps me to put things in their proper perspective. DISHONOR AMONG THIEVES Prior to the outbreak of World War I in 1914, gold coins served as money for the masses of the West. Gold bullion is still money within the closed fraternity known as central banking. It is money for central bankers because they do not trust each other. They expect each other to cheat, to debase their currencies, to defer payment, to lie without embarrassment, and to stiff their brethren if they think they can get away with it on the cheap. They know from experience over centuries that debtors cheat creditors. The modern economy is based on massive debt, and every debt is denominated in a means of payment: a currency. Central bankers want to be able to cheat the public. Cheating the public is the number-one goal of all central banking. The system has always rested on monopoly and deception. At the same time, the number-two goal of central bankers is to avoid being cheated by each other. These goals are always in conflict. That which best protects the central bankers from each other -- a gold coin standard -- also protects the public from central bankers. In 1914, all central banks except the Federal Reserve System stole the gold that three generations of citizens who had dutifully and foolishly handed over to commercial bankers. The only people who were not big losers were those who had not been rich enough to open a bank account. The "best and the brightest" were the biggest losers. After 1914, shell-shocked European depositors trusted the words -- no longer redeemable in gold -- of the commercial bankers' official representatives, central bankers. In 1933, Franklin Roosevelt acted as the agent of the Federal Reserve, and confiscated Americans' gold, hiking its price in 1934 by 75%, after the government was in possession of the stolen goods. The government turns over the stolen gold to the central bank. This is how the system has always worked. This is The Agreement. Central bankers are like most other debtors: they want to be able to escape their creditors if bad times arrive. They want to be able to get out of their obligations. They did this in 1914. The FED did it in 1933. Central bankers cheated millions of depositors, who had naively believed the commercial bankers' original promise: "Invest your gold with us, and we'll pay interest to you. You can get your gold back on demand at any time (you dumb clucks)." Central bankers are also like creditors: they don't want to be cheated by their debtors. They wanted protection. They trusted gold. So, having stolen the public's gold with the politicians' blessing, they created an inter-bank gold standard for themselves: the gold- exchange standard. It began in 1922 (the Genoa agreement). They extended it in 1944 (the Bretton Woods agreement). By these agreements, the Bank of England and the FED promised to pay other central banks -- but not the general public -- gold on demand. By 1944, the Federal Reserve System had most of the world's gold. The FED then persuaded the United States government to extend a promise to other central bankers on its behalf: "Invest your gold with us, the United States government, and we'll pay interest to you. You can get your gold back on demand at any time (you dumb clucks)." It worked like a charm. It always does. The market for U.S. government debt became the largest debt market on earth. On August 15, 1971, President Nixon did to the world's central bankers what all of the central banks and their governments had done in 1914 to their equally naive citizens. Without warning on a Sunday afternoon, he revoked the promise and closed the gold window. "Suckers!" From that time on, the price of gold in relation to any national currency was set by the law of supply and demand. But, then again, it had always been set by supply and demand. The question of the gold value of any currency is always settled by supply and demand. How much currency is coming out of some central bank? How much gold is being made available by suppliers? Will existing monetary policies be continued? LIAR, LIAR The larger the debt, the more tempting the lie. "You're check is in the mail." This is because the present threat of the future costs of defaulting on a loan pale in comparison to the present cost of repaying. Bankruptcy looms. Deferral now looks like a reasonable policy. If the debtor can defer the day of reckoning, he will be sorely tempted to do this. Bankruptcy tomorrow is a greater threat than losing access to the credit markets in a year. Maybe the lie will work. "Something may turn up." If the creditors keep pushing for payment, the debtor's lie become obvious. At that point, the debtor admits the truth: "I can't repay." When the debtor is a sovereign government, nobody can do much about it. What's gone is gone. It was nice while it lasted. Creditors may threaten to cut off future loans, but everyone knows that's also a lie. Latin American governments have been playing the default game with gringo bankers ever since the 1830's. Argentina is only the latest example. Brazil will probably follow. Do foreigners still loan money to the United States government? Of course. Did our government stiff them in 1971? It stiffed their central bankers, but politically speaking, central banking is not a big issue. The public doesn't understand international economics and currency markets, so voters don't toss out governments because their governments have stiffed foreign creditors, including foreign central bankers. If anything, the Senior Liar of the existing government is likely to be re-elected. Nixon was overwhelmingly re-elected in 1972. The public ought to care. It pays for losses sustained by the nation's bankers. Taxes bail out recently stiffed bankers. The central bank says, "If we win, you get to keep more of your money. So do we. If we lose, you will pay for our losses." Nice work if you can get it. The way the public pays is through higher taxes, especially the inflation tax. Consider the year of the great confiscation in the United States: 1933. To match the purchasing power of the dollar of 1933, a person needed over $3 in 1971. That is, the purchasing power of the dollar fell by two-thirds. That's what President Roosevelt's unilateral abolition of the gold standard did to trusting Americans who had naively believed the government's promise to redeem the public's gold at $20.67/oz. This depreciation took 38 years. Suckers! Ever since Nixon's unilateral abolition of the gold- exchange standard in 1971 -- refusing to sell gold at $35/oz to central bankers -- the dollar has fallen in value by almost 80%. It takes $4.44 to buy today what it took $1 to buy in 1971. This depreciation took 31 years. Suckers! See the inflation calculator: http://www.bls.gov The falling value of the dollar is the irrefutable evidence of the effects of government lies. But hardly anyone cares. Everyone thinks he is getting richer. Through politics, the over-65 crowd has gotten a cost-of- living escalator written into the Social Security law. This is why the government uses the standard Consumer Price Index to calculate inflation rather than the more accurate Median CPI, which today indicates that price inflation is three times higher than the CPI says. http://www.clev.frb.org/research/mcpi.txt Sometime in 1980, Dan Ackroyd did a skit on "Saturday Night Live" called "Inflation is our friend." He came on- screen with a Jimmy Carter-like accent, which was pretty good for a Canadian. "Didn't you always want to wear $400 suits and live in a $200,000 home. I know I did. Well, now we can. All it takes is a little ink and some paper." Too bad it's true. THE DEBT RATCHET A major problem with monetary inflation is the level of debt it produces. The debt level ratchets ever upward, never going back. Aggregate debt is never repaid. Or, as King David wrote, "The wicked borroweth, and payeth not again" (Psalm 37:21a). Debt today is the foundation of the world's money system. It is not the debt of a warehouse receipt: a fixed quantity of gold in reserve for a specific number of receipts issued (100% reserves). It is a system based on expectations: "payday someday." We have capitalized debt. We have allowed fractionally reserved central banks to use politicians' promises of future payment (i.e., government bonds) as the foundation of our money system. The only way that the politicians can pay off today's level of government debt is by creating even more government IOU's, some of which will be used as the legal reserve to expand the money supply. Debt will then rise even more, in every niche of the economy except (possibly) the section run by the Amish. Debt is denominated in a currency. Debt locks in everyone's hopes and plans. It also locks in our financial markets. Debt lures us into making decisions based on an assumption regarding money: "There's always more where that came from." And there always is. The Federal Reserve is pumping in new money today, just as it has done since 1933. The St. Louis Federal Reserve's data indicate that the Adjusted Monetary Base has risen by over 10% since May 30, 2001. It has been rising at an 11% rate since early April of this year. http://www.stls.frb.org/docs/publications/usfd/page2.pdf The underlying assumption of every investor is that the government -- meaning the central bank -- will make available enough money for the vast majority of debtors to keep making payments on their loans. Creditors look mainly to next month's payment. If that is secure, they can capitalize this hoped-for stream of income. They can sell the credit instrument to someone else for cash. That's what Fannie Mae and Freddie Mac are all about. Creditors, like debtors, believe that the FED will keep the debt system going, which means keeping the capital markets solvent with credit-based money. They also believe that price inflation will not rise at anything like the rate of increase in the money supply. They believe that they will be repaid in dollars of fairly constant purchasing power. They believe this in the face of massive historical evidence to the contrary, from the day that Roosevelt confiscated the American public's gold. They simply will not learn. Like the poor, the prophets of deflation ever with us, never putting together cause and effect, never learning that prices keep rising because the money supply keeps rising. They even applaud the FED for keeping the money spigots open. Every school of economics except the Austrian School (Mises and Rothbard) believes that a free market in money can't work in theory: Keynesians, monetarists, and supply- siders. They all call for government intervention into money and banking. They all decry "tight money," which they define operationally as monetary growth that allows a recession. The Keynesians and monetarists are consistent. They reject the gold standard in any form. The supply-siders, whose members have yet to produce a single textbook or economic treatise that explains how their system works in theory, sometimes call for a government-run, government- controlled, government-guaranteed gold standard, which somehow will not keep money so tight that an economic depression results. They proclaim a gold standard that somehow will not destroy the number-one assumption of America's capital markets, namely, "There's always more where that came from." Whenever you are told about a gold standard that will enable the present debt system to survive the effects of stable money and the massive level of default that will result when the money spigot is closed, ask for a reference to the chapter in the textbook that describes how this is possible. You will be told, Ackroyd-like, "trust me." If you want Mises' view of why monetary inflation leads to an economic depression after the money spigot is closed, read Chapter 20 of HUMAN ACTION. Or read my on- line e-book, MISES ON MONEY, Part V. http://www.lewrockwell.com/north/mom.html WHOM SHOULD WE TRUST? Members of the fraternity of central bankers know enough not to trust each other. If they see that one of their member banks is cranking up its domestic money supply, they buy gold from that member. They deplete his bank's god reserves. The central banks' gold is stored mostly at the Federal Reserve Bank of New York, at 33 Liberty Street. If you saw "Diehard 3," you know this. (I wonder if a majority of the viewers of that film every understood what they were seeing. Probably not.) In each nation's designated cubbyhole in the underground vault at 33 Liberty Street is stacked a pile of gold ingots. Transactions among central banks are settled daily. Men on electric fork lifts carry gold bars from cubbyhole to cubbyhole. It is clear what the central bankers trust as the final court of appeal: gold. Anyway, that is what they used to trust. I believe this is now changing. In the past, they have trusted the FED not to end the game by confiscating everyone's gold, and telling the world to go fly a kite. So far, this trust has not been violated. America is the world's superpower. It has the largest capital markets. If it were ever to act in the way that a Latin American banana republic acts, the world's central banks would . . . would. . . ? What? I know. I know. They would sell U.S. government debt. (To whom?) They would buy some other nation's debt. (With what?) They would select some other form of debt to back up their own currencies, thereby replacing the dollar. (Like what?) What could they do? They could roll on the ground and hold their breath until they turned blue. They could scream. And then, as central bankers always do, they would lend to the highest bidder. That would probably be the United States. The fact is, the fractional reserve system has sucked in the central bankers. Like depositors who turned in their gold coins in exchange for interest-bearing debt ("deposits'), so have central bankers turned in their gold in exchange for interest-bearing debt ("T-bills"). Like depositors, they can't get their gold back. Nixon ended that right. So, if they want gold, they must buy it in the open market. This would drive up gold's price as denominated in the central bank's currency. This would alert the world that something is wrong with the currency of the nation whose central bank is buying told. No central banker wants to cause that to happen. So, as individual banks, they dare not buy much gold. So, they don't have much use for gold any more. Because Nixon changed the rules, they have been trapped by the logic of the market for gold: supply and demand. Central banks today are selling their gold. They are concealing this through lease contracts, which are in fact permanent sales contracts. The bullion banks that have borrowed the gold, sold it, and invested in government bonds cannot possibly repay with actual gold. ("The wicked borroweth and payeth not again.") The central bankers know this. They do not care. The bullion banks are selling gold to the general public, who in turn use the gold for non-monetary purposes. This keeps down the price of gold. European central bankers have come to the conclusion that they can't sell their holdings of dollars and use these dollars to buy gold from other central bank. They don't dare fly gold home for safe storage in their own vaults. That would panic the world's capital markets. The dollar might collapse, and all of them hold dollars. Like depositors in a bank that is unsound, they dare not withdraw their money for fear of creating a bank run. Gold therefore isn't useful for central bankers any more. They are trapped by the fractional reserve system that their predecessors created. They dare not display distrust in the dollar because the international trade system rests on the maintenance of public trust in the dollar. So, they do not buy gold as a hedge against a fall in the value of the dollar. Instead, they sell gold. This keeps the price of gold low, which creates the illusion that there is not a looming crisis facing all nations: their governments' inability to pay off their retirement- medical programs to an aging population. A massive, worldwide default is looming. There is no way to avoid it. The central bankers all know this. No one knows it better than Peter G. Peterson, an investment banker who heads the Council on Foreign Relations. He has written several books about this. The latest is GRAY DAWN (1999). They know. Their governments will eventually call on them to create enough fiat money to pay off the governments' debts to an aging public. There is only one way that the world's Social Security-Medicare programs can be paid off: with fiat money. Then money will depreciate in value. The central banks are selling gold to the public in order to keep the price of gold from indicating the magnitude of the default- by-inflation that lies ahead. Central bankers are today resorting to the tried and true method used by overextended debtors down throughout the ages. They are gagging the inside stoolie. The inside stoolie is gold. When the price of gold rises, the public is alerted: "Liar, liar." Central bankers are manipulating the gold market by selling off their gold. Like a riverboat gambler with a fat roll of $1 bills, and a few $100 bills around the outside of the roll, spending a few of them for show, central bankers are selling off their gold reserves in order to keep the reality of the looming currency crisis from becoming obvious. They are deferring the day of reckoning. Why? Because they have a dream: "Something may turn up." Central bankers after 1815 trusted gold rather than each other, but they have all quietly agreed to sell off gold officially, a little at a time, and sell lots of it unofficially through the gold leasing program, which hardly anyone notices. They keep the sold gold on their books because they define these sales as loans, payable in kind. It's a short-term tactic, and it appears to be irreversible as central bank policy. They no longer trust gold. Then what will they trust in the future? They will have to trust each other's politicians. That is, they are now trapped, just as the rest of us have been trapped since either 1914 (Europe) or 1933 (the United States). The public prior to 1914 trusted the banks because the banks promised to redeem gold at a fixed price. This promise was backed up by the courts -- contract law. When World War I broke out, the politicians broke the law on behalf of the banks, authorizing the banks' confiscation of the depositors' gold. Then the politicians confiscated this gold on behalf of their respective central banks, turning the gold over to their central banks. In short, the politicians lied. Politicians always lie. Their job is to lie. We pay them to lie. We re-elect them for lying well. The question for each voting bloc is this one: "Which political party's lies seem to favor us?" Politics is about wealth- redistribution by force, and the greatest tool of political wealth-redistribution is the lie. "Everyone will retire in comfort." "We will not break our promise to our senior citizens." "The Social Security trust fund is secure, and the fact that it is filled with IOU's has nothing to do with anything." "Taxes will not go up." "We will not go to war." And so on. All lies. We know they are lies, and we select which lies we will vote for, believe in, and invest in terms of. Nineteenth-century Latin American dictators spotted the willingness of gringo commercial bankers to invest in terms of obvious lies, and they have milked the banking system ever since. It took longer for us gringos to figure out how the system works. But we did eventually learn. The fractional reserve banking system is a gigantic lie. Commercial bankers represent their depositors, who in turn believe in the biggest lie of all: "Deposit your money with this bank, and we will pay you interest on it, and you can get back your money -- your lent-out money -- on demand at any time." This is the lie of fractional reserve banking. This lie is to capital markets what a perpetual motion machine is to physics. When you hear about a perpetual motion machine, you can be sure of two things: (1) the promoter is lying; (2) there is a hidden power cord or battery somewhere in the system. When you hear about an investment that pays interest, but which you can get back at any time, start looking for the hidden power cord. Don't trust sellers of perpetual motion machines. Don't trust the machines, either. Look for the cord. If you get the opportunity, cut it. We live in an era of widespread faith in perpetual motion machines: government benefits for the masses paid for by The Guy Behind the Tree; bank deposits that pay interest on lent-out money that is available on demand; a central bank-run version of the gold standard that has not had redeemable receipts since 1971; the promise of stable prices from a monetary system that rests on government promises to pay. Lies, all lies. And our world is built on them. For now. CONCLUSION Your economic future rests on the fulfillment of promises so brazenly false that no one with an IQ above 90 should believe even one of them. It rests on what most people ought to recognize as lies. Yet in the best universities, in the fattest textbooks, in the highest seats of power in the land, all over the world, these lies are not only believed, they are presented to the public as profound truths -- proof that the world is a new and better place. As for me, I prefer Kipling's version of these new and profound truths. Read "The Gods of the Copybook Headings" (1919). Then plan accordingly. http://www.kipling.org.uk/poems_copybook.htm * * * * * * * * * * * * * * * * * * * * * * * * * * * * From hliu at mindspring.com Wed Jun 12 13:57:25 2002 From: hliu at mindspring.com (Henry C.K. Liu) Date: Wed, 12 Jun 2002 15:57:25 -0400 Subject: [A-List] Citygroup dismantles its emerging markets business References: Message-ID: <3D07A7A5.90345F99@mindspring.com> Citigroup in the Emerging Markets Victor Menezes Chairman and CEO Citibank, N. A. UBS Conference April 22, 2002 http://www.citigroup.com/citigroup/fin/data/p020422.pdf Sabri Oncu wrote: > What does this mean for the emerging markets? Is this the > beginning of a trend or just an insignificant event that we > should ignore as far as the emerging markets are concerned? > > Sabri > > ++++++++++ > > Citigroup shakes up senior management > By Gary Silverman in New York > Financial Times; Jun 12, 2002 > > Citigroup, the largest US banking company and one of the biggest > foreign banks in Asia, shook up its management yesterday in > response to big losses in the Argentine financial crisis. > > The group is to dismantle its emerging markets business and shift > Victor Menezes, its head, to a more strategic role. > > Deryck Maughan, a vice chairman, will become head of Citigroup > International, overseeing the company's five main international > regions, including many of the countries that formerly reported > to Mr Menezes. > > The revamp marks the latest in a series of attempts by Sandy > Weill, Citigroup's chairman and chief executive, to foster a more > entrepreneurial culture in the company. > > Its top product executives - Bob Willumstad, consumer finance; > Michael Carpenter, investment and corporate banking; and Tom > Jones, investment management - will be given global > responsibilities. > > Managers overseeing product lines will be given more power, > working in partnership with country managers who will spot > opportunities and monitor profitability. > > The Argentine crisis knocked a total of $1.3bn off the company's > pre-tax earnings in the last two quarters. Mr Menezes said in > April that the crisis went beyond the dangers anticipated by > Citigroup's risk models. > > "It [having a separate emerging markets division] separated it > too much from the rest of the company," said Mr Weill, who added > that as a result "some things fell between the cracks". > > Mr Weill signalled his concerns about emerging markets in > February, when he named Chuck Prince, chief operating officer of > the company, to serve as chief operating officer of emerging > markets as well, reporting to Mr Menezes. > > Mr Prince has frequently played the role of trouble-shooter for > Mr Weill. > > "Chuck was helpful in getting a lot of people involved in the > process," Mr Weill said. "I think we have strengthened our > ability over the last three or four months to have a more > proactive, ongoing, all-the-time, looking-forward approach to the > changing risk situation." > > Mr Menezes is the last veteran of Citicorp - which merged with Mr > Weill's Travelers in 1998 - to continue in a senior operational > role. > > His new responsibilities remain important, since he will slide > into Mr Maughan's former role overseeing acquisitions, a role of > great importance to Mr Weill, who is a keen dealmaker. > > Mr Prince will take on responsibility for finance, risk > management and human resources. > > Full at: > http://search.ft.com/search/article.html?id=020612000498&query=Ci > tiGroup&vsc_appId=totalSearch&state=Form -------------- next part -------------- A non-text attachment was scrubbed... Name: not available Type: text/html Size: 3497 bytes Desc: not available URL: From nestorgoro at fibertel.com.ar Wed Jun 12 20:28:27 2002 From: nestorgoro at fibertel.com.ar (Nestor Gorojovsky) Date: Wed, 12 Jun 2002 23:28:27 -0300 Subject: [A-List] Adolfo Gilly sobre la brutalidad "antiterrorista" de Bush & Co. Message-ID: <3D07D91B.29004.17796D@localhost> La Jornada M?xico D.F. Martes 11 de junio de 2002 Adolfo Gilly Fidel Castro y George W. Bush Como consecuencia de las crecientes revelaciones acerca de los informes y las advertencias recibidas desde m?ltiples fuentes por el gobierno de Estados Unidos, antes del 11 de septiembre de 2001, sobre la posibilidad de ataques terroristas de envergadura sobre su territorio, una pol?mica ha recrudecido y ha llegado hasta los c?rculos institucionales de ese pa?s. Tres son las preguntas: ?Era posible prestar atenci?n a esas advertencias y prevenir los ataques? ?Fue la incompetencia de los servicios de inteligencia lo que les impidi? procesar e interpretar esa informaci?n o es que no hab?a posibilidad material de hacerlo? ?O, peor todav?a, hubo una conspiraci?n dentro del propio gobierno para permitir que los ataques se produjeran y capitalizar para su pol?tica interna y externa sus traum?ticos efectos sobre la poblaci?n? Las dimensiones que hoy adquiere esta discusi?n en aquel pa?s indican un comienzo de crisis en el apoyo interno ampliamente mayoritario alcanzado por la pol?tica de guerra del presidente Bush despu?s del 11 de septiembre. Fuera de Estados Unidos, esas informaciones no han hecho m?s que acrecentar el recelo, la reticencia o la desconfianza silenciosa de muchos gobiernos de los cinco continentes hacia el curso aventurero de la Casa Blanca y el Pent?gono. Pero muy pocos entre ellos, si es que alguno, han tratado de razonar y explicar con claridad esas percepciones a sus pueblos. Conveniencia, temor o diplom?tica precauci?n dictan tales silencios. "En Washington est?n fuera de si. Esperemos a que se les pase: as? como est?n, son muy peligrosos", ser?a una par?frasis adecuada de los comentarios que circulan en esos medios. Sin embargo, la discusi?n tiene extrema importancia, porque ya ha ido m?s all? de los ambientes opuestos a la pol?tica de Washington y se est? instalando en donde mayor efecto puede tener: en la opini?n p?blica estadounidense. Pues si de alguna parte puede surgir la fuerza que detenga el actual curso hacia nuevas guerras es desde adentro de Estados Unidos. Si ese cambio no llegara a producirse, lo peor ser?a inevitable. En numerosos sectores de la izquierda y del nacionalismo en Am?rica Latina y en otros continentes, la hip?tesis de la conspiraci?n interior como explicaci?n de los atentados del 11 de septiembre tuvo desde el primer momento muchos partidarios. Esa hip?tesis ha ganado adeptos en los actuales debates incluso en Estados Unidos. S?lo conjeturas y deducciones, pero ninguna prueba de hechos se ha presentado hasta ahora en su favor. Lo peligroso es cuando sus defensores saltan, sin mediaciones, de la hip?tesis a la afirmaci?n terminante, con lo cual la discusi?n queda cerrada. El Internet, donde hay de todo, alberga una entera galaxia de esta variante. Me parece mucho m?s veros?mil -y comprobable- la hip?tesis de la incompetencia, la rivalidad y la ineficiencia de los servicios de inteligencia, sobre todo frente a desaf?os que escapan totalmente a su capacidad de razonamiento y discernimiento y convierten al incalculable c?mulo de informaci?n que cada d?a reciben en una mara?a abrumadora e indescifrable para ellos. Las revelaciones en cascada que ahora surgen en la disputa interior del establishment estadounidense fortalecen esta interpretaci?n. Cualquier investigador serio sabe que no es la cantidad de informaci?n sino la capacidad y la percepci?n del investigador para ordenarla, razonarla y comprenderla lo que le concede sentido, coherencia y valor explicativo. No hay maravilla tecnol?gica que pueda reemplazar a esa capacidad humana cuando ?sta se embota o decae por ineptitud intelectual o relajamiento moral en quienes la dirigen. Los redactores de discursos no pueden sustituir la vaciedad del pensamiento. El pasado 8 de junio el gobierno de La Habana, por boca del presidente Fidel Castro, intervino en aquella discusi?n. Despu?s de se?alar el silencio de tantos gobiernos del mundo ante la pol?tica de Washington, el presidente cubano dijo: "Ante tanta cobard?a, muchos pueblos del mundo pondr?n sus mayores esperanzas en el propio pueblo norteamericano. Es el ?nico que puede frenar y poner una camisa de fuerza a los fan?ticos del poder, la arbitrariedad y la guerra". A continuaci?n, Fidel Castro descart? en forma terminante la hip?tesis conspirativa como explicaci?n de los hechos. Cito sus palabras: "No me pasa ni un segundo por la mente que alguien deliberadamente, sea cual fuere su cargo, por ansia de popularidad, poder o cualquier otro objetivo, pudi?ndolo impedir, permitiera el horrendo crimen de las Torres Gemelas". Concentr? su cr?tica, en cambio, en la pol?tica de George W. Bush inmediatamente posterior a los atentados: "Pienso que quien ejerce el cargo de presidente de Estados Unidos ha cometido serios errores en el manejo de la situaci?n posterior al tr?gico hecho". Por la seriedad de dichas apreciaciones, conviene citar textualmente sus t?rminos: "No debi? nunca sembrar el p?nico en el pueblo norteamericano. "No debi? perder la serenidad. "No debi? adoptar decisiones precipitadas sin reflexionar siquiera sobre opciones posibles, quiz?s mucho m?s prometedoras, que habr?an contado con el apoyo un?nime de todos los gobiernos, las m?s influyentes religiones y las corrientes pol?ticas fundamentales de izquierda y derecha. "No debi? declarar enemigos, ni mucho menos terroristas, a m?s de la mitad de los pa?ses del tercer mundo. "No debi? seguir una l?nea que multiplicar? el n?mero de personas fan?ticas y suicidas en el mundo, complicando seriamente la lucha contra el terrorismo. Lo ocurrido en Palestina lo demuestra: por cada palestino asesinado, el n?mero de suicidas se increment? de forma impresionante, lo que condujo el problema a un callej?n sin salida visible. "No debi? ocultar los informes de inteligencia que llegaron a su poder, en especial el del 6 de agosto, lo que da lugar a especulaciones y dudas de todo tipo." A trav?s de su servicio diplom?tico y de otras m?ltiples y a veces insospechadas fuentes, Fidel Castro est? bien informado de los debates y opiniones en curso en los ambientes pol?ticos y de gobierno de otras naciones. Resulta obvio que esos comentarios de su discurso del 8 de junio van dirigidos a esos ambientes, y no en especial a quienes son sus partidarios. Son razonamientos que reflejan o recogen lo que en esos medios se dice en voz baja y en confianza, mirando antes a los costados para que no escuche nadie que despu?s vaya con el cuento a quien todos sabemos. El presidente cubano se hace int?rprete del silencio de los otros y se mete de lleno en la pol?mica. Acosado por el imperio y amenazado por nuevas dificultades econ?micas, habla como en los momentos en que uno no tiene nada que perder, salvo la confianza de la propia gente. No hace falta ser su partidario para darse cuenta de que, en esta precisa cuesti?n, esos razonamientos requieren ser escuchados y debatidos. N?stor Miguel Gorojovsky nestorgoro at fibertel.com.ar ********************************************************************** * Compa?eros del exercito de los Andes. ...La guerra se la tenemos de hacer del modo que podamos: sino tenemos dinero, carne y un pedazo de tabaco no nos tiene de faltar: cuando se acaben los vestuarios, nos vestiremos con la bayetilla que nos trabajen nuestras mugeres, y sino andaremos en pelota como nuestros paisanos los indios: seamos libres, y lo dem?s no importa nada... Jose de San Mart?n, 27 de julio de 1819. ********************************************************************** * ****** From Michael.Keaney at mbs.fi Fri Jun 14 04:41:27 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Fri, 14 Jun 2002 13:41:27 +0300 Subject: [A-List] UK corporate state: PPPs in disarray Message-ID: More on the unfolding backlash against the reincarnations of the East India Company... Prison expert tells executive to bar new private jails ROBBIE DINWOODIE The Herald, 14 June 2002 ONE of Britain's leading experts on prisons yesterday warned the Scottish Executive against creating more private jails and blamed Scottish Prison Service "failings" for forcing policy in that direction. Dr Andrew Coyle, formerly a senior prison governor, said the inability of the Scottish Prison Service board to learn lessons from the private operators was undermining the public sector option. Dr Coyle, who was governor of three Scottish prisons before taking charge at Brixton, has been director of the International Centre for Prison Studies at King's College, University of London, for the past five years. He was also part of the international delegation which oversaw the end of the siege at the Church of the Nativity in Bethlehem. Warning against creating more privately run prisons, he said: "There is increasing evidence that some jurisdictions which started down the road of prison privatisation a few years ago are now beginning to have second thoughts and some are actually returning prisons previously managed by the private sector to the public sector." He added: "It would be unfortunate if Scotland were to embrace the private prison option wholeheartedly just at the point when other jurisdictions were leaving it." His warning comes in his submission to the consultation on the executive's prison estate review, and is damning about the leadership of the SPS. "Having studied the estates review and the consultation paper, one finds it hard to avoid the conclusion that the SPS, not least at board level, still has many lessons to learn." He said it appeared to have no confidence that it could use the experience of the private sector on staffing levels and conditions of service. "The main issue to be dealt with is not why the private sector figures are so low, but why the public sector figures are so high," Dr Coyle said. "One explanation may be that the management of the SPS at national level is not strong enough to introduce the changes which are necessary to achieve radical improvements." He was also critical of a report from the accountants, Price-waterhouse Coopers (PwC), commissioned by the Scottish Executive and used to back up its case that private prisons made financial sense. It was this work which allowed the executive to claim it would be ?700m cheaper to use a public-private partnership or PPPs to modernise or rebuild Scottish prisons than to use the traditional public sector model. However, he claimed PwC's review had ignored work done for prisons south of the border which came out with very different figures. PwC said it did not look at the alternative private build/public operate approach because "no directly comparable market data was available". But Dr Coyle said there were several examples which could have been looked at, particularly in France. The English service had studied this model and was recommending it. Of the criticisms of SPS senior management, a spokesman said: "Ministers have made it perfectly clear that this is an open consultation and the executive has said it will consider all submissions." ----- Wallace still in jail Executive must realise privatisation is not the answer The Herald, 14 June 2002 Editorial comment Try as he might, Jim Wallace just cannot get out of jail over prison privatisation. Dr Andrew Coyle, the highly-respected former governor of Peterhead and Shotts prisons, has become the latest high-profile critic of the Scottish Executive's plans to close Peterhead, with its internationally-renowned sex offenders unit, and build three new jails, constructed, managed, and staffed by the private sector. Despite mounting evidence to the contrary, the executive maintains that full privatisation is the only viable option. Under renewed pressure from MSPs last week, Mr Wallace, the justice minister, said he was keeping an open mind on alternatives to privatisation, recommended in the Scottish Executive-sponsored prison estates review. These included not-for-profit trusts to build and manage the new facilities, and re-examining the option of privately-built, publicly-staffed prisons. The SNP accused him of cynically looking for an escape route from a deeply unpopular policy. If that was the case, Mr Wallace has found his exit strategy closed off, thanks to Dr Coyle. Not-for-profit trusts for the prison service might be discounted for political reasons, as they are championed by the nationalists and challenge public private partnerships, Gordon Brown's article of faith for modernising the public-sector infrastructure. The decision might be wrong because, as the Accounts Commission concluded in its critical report this week on the costs of the first PPP projects for schools, there needs to be diversity in the bidding process if value for money is to be delivered. Dr Coyle has ensured that the privately-built, publicly-staffed option cannot be easily discounted, even a second time. Mr Wallace might have planned to resurrect it for reasons of survival, to lower the political heat while he and the executive fail to make the case for full privatisation. They had already rejected the private-public alternative on cost grounds. Yet Dr Coyle, director of the international centre for prison studies at London University, suggests that the prison estates review, carried out by PricewaterhouseCoopers, failed to do its homework on the private-public option. Contrary to the review's findings, Dr Coyle says there is comparable data for evaluating it. The option seems to work in France. Why, otherwise, would Patrick Carver, a senior figure in the HM Prison Service, recommend that it should be explored as a possible way forward in England (delivering the potential diversity of provision the Accounts Commission has found lacking in Scottish PPPs)? Mr Carver also believed the public sector should be given the chance to show it can run private prisons, something ruled out by the executive. Hardly surprising, perhaps, because the Scottish Prison Service does not seem to believe its officers are up to the job. It said their monopoly on posts had led to ingrained restrictive practices and over-manning. Dr Coyle also disputes this. He wonders whether prison management lacks the will to change working practices and conditions. If it was not up to the job it would not be the failure of the public-sector option but the failure of the SPS board - a matter of grave public concern, as he says. Prison officers deserve the chance to prove they are lean, flexible, and fit enough for the job. They have the experience, commitment, and motivation. Privately-built prisons might be all right, but it is morally wrong for the state to delegate responsibility for the care of prisoners (whom it has incarcerated) to commercial companies. Dr Coyle is not alone in questioning the review's conclusion that the bill for fully-privatised prisons would be ?700m cheaper than the public-sector option. It looks as reliable as the equally questionable finding that the public-private alternative would be costly. Dr Coyle's is the latest, and among the most persuasive, of the many critiques of full prison privatisation. What more can it possibly take to persuade the executive that it is wrong? From Michael.Keaney at mbs.fi Fri Jun 14 04:43:00 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Fri, 14 Jun 2002 13:43:00 +0300 Subject: [A-List] Europe/US rivalry: war on terrorism Message-ID: Germany asks US to hand over September 11 suspect IAN BRUCE The Herald, 14 June 2002 THE German government has asked the United States to hand over a key suspect known to have been involved with the al Qaeda cell in Hamburg which helped organise the September 11 bombings amid claims that he has been kidnapped by American agents. Mohammed Heidar Zammar, a Syrian-born immigrant with German nationality, was under investigation by local police and the German intelligence services when he vanished during a trip to Morocco last October. His family have since filed a missing person report. US sources said yesterday he was not at the terrorist detention centre in Guantanamo Bay, Cuba, nor in the custody of the Moroccan authorities, but declined to say if he is being held elsewhere. Zammar is an associate of Mohammed Atta, a September 11 hijacker, and Mahmoun Darkazanli, who is under investigation for having power of attorney over an al Qaeda bank account in Hamburg. He flew from the north German city on October 27 on a valid one-year passport issued two days earlier for a six-week trip to North Africa. The Moroccan authorities initially told Berlin's foreign ministry that he had been arrested. They then said he had arrived from Mauritania and left for an undisclosed destination. The story subsequently changed to Mr Zammar being arrested at a police checkpoint and expelled to Spain. More recently, the Moroccans said he had been sent to another country, but did not to say which. Sources in the BND, the German intelligence agency, suspect that he is being held incognito and is being questioned at a facility controlled by the US or one of its allies because of his links with all three of the hijackers known to have operated out of Hamburg. Some captured terrorists have been interrogated by the Egyptians or Jordanians under American supervision, a move condemned because of these countries' traditional methods of extracting information by removing fingers or toenails. It is believed Zammar has been kidnapped because the inquiry into his involvement with the September 11 plot is moving too slowly as far as the US is concerned under the stringent rules of evidence required by the German legal system. A German foreign ministry spokesman said: "There is no clear information from the Americans. They tell us he is neither in Guantanamo nor Morocco. They won't say where he is and we don't know. "His wife and six children are concerned about his welfare and, as a German citizen, even one under investigation for possible terrorist offences, he is entitled to consular help and advice." The BND has also been given only limited intelligence on Khalid Shaikh Mohammed, the man the CIA says was al Qaeda's link between Afghanistan and the Hamburg cell and allegedly another key figure in the planning of the suicide attacks on New York and the Pentagon. From Michael.Keaney at mbs.fi Fri Jun 14 05:23:23 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Fri, 14 Jun 2002 14:23:23 +0300 Subject: [A-List] US imperialism: the blowback continues Message-ID: Starbucks the target of Arab boycott for its growing links to Israel By Robert Fisk in Beirut The Independent, 14 June 2002 Across five Arab states a new and closely co-ordinated campaign to boycott American goods is being launched, with Starbucks coffee shops their primary target, but with Nestl?, Coca-Cola, Johnson & Johnson and Burger King outlets also on the list. In Beirut today, activists will be leafleting outside the city's four Starbucks shops, detailing the pro-Israeli sentiments of its chief executive, Howard Shultz, and claiming he is "an active Zionist". In 1998, Mr Shultz was awarded the "Israeli 50th Anniversary Tribute Award" from the Jerusalem Fund of Aish Ha-Torah, which is strongly critical of Yasser Arafat and insists that the occupied Palestinian territories should be described only as "disputed". In a speech to Jewish Americans in Seattle earlier this year - at the height of the Israeli Prime Minister, Ariel Sharon's, reoccupation of West Bank towns - Starbucks' top man condemned Palestinian "inaction" and announced that "the Palestinians aren't doing their job - they're not stopping terrorism". Gideon Meir, an Israeli Foreign Ministry spokesman, complimented Mr Shultz for helping American students to hear "Israeli presentations on the Middle East crisis". Starbucks operates in six other Arab countries - Saudi Arabia, Kuwait, Bahrain, Oman, Qatar and the United Arab Emirates - but the boycott protesters, who include both Palestinians and Muslim groups at Ein Shams University in Egypt and the American University of Cairo, have a much wider list of companies they wish to punishfor allegedly supporting Israel, not only in the Middle East but in the United States itself. They include AOL Time Warner, Disney, Est?e Lauder, Nokia, Revlon, Marks & Spencer, Selfridges and IBM. Students at Dubai University and in the Syrian capital, Damascus, are now also liaising over their boycott plans. "At first, it was very frustrating getting even the four boycott groups in Lebanon to work together," Amira Solh, one of the Lebanese activists, says. "We had difficulty defining whether we should target American goods or those companies that have direct relations with Israel. We really only got going the first time the Israelis laid siege to Arafat's headquarters in Ramallah. Lebanon boycotts all Israeli goods, so we started asking, 'What about those companies which help Israel directly?' "Most Arab countries have fallen into a capitalist world that accepts American companies with close links to Israel. What we are now initiating is an economic war." Burger King incurred Arab anger more than two years ago when it opened an outlet in an illegal Jewish settlement on the occupied West Bank. The company initially decided to close the outlet and then - after pro-Israeli lobby pressure in America - apparently allowed it to reopen under a different franchise. Nestl? has bought a control-ling share in the Israeli firm Osem, allowing Nestl? to sell its products in Israel, including Nescaf?, Perrier, Carnation, Smarties and KitKat. It is a deal which, in the words of one Israeli journalist, "provides Osem with a worldwide distribution and advertising infrastructure". In a recent report to investors, Osem-Nestl? an- nounced a four-monthly profit of $7.5m (?5.1m). In Lebanon, Coca-Cola - which runs a plant in the country - has attempted to deflect Arab criticism by pointing out that it does not manufacture Coca-Cola in Israel and sells only imported bottles of its products, including Fanta and Sprite, in the Jewish state. In what was widely seen as an attempt to soften the mood of protesters, the Coca-Cola company in Lebanon has suddenly embarked on a programme of planting cedar trees - the national emblem - near the town of Jezzine, south of Beirut. Starbucks, which has 4,709 retail locations around the world, has been trying to damp down its pro-Israeli image, telling protesters who have written to the company that its chief executive, Howard Shultz, who is himself Jewish, "does not believe the terrorism (sic) is representative of the Palestinian people". When he spoke recently to his local synagogue, Starbucks says, "Howard was speaking as a private citizen and did not interview with the media regarding this subject". Another Starbucks response says the company "is deeply saddened by the current events (sic) in the Middle East" and quotes a statement by Mr Shultz. "I deeply regret that my speech in Seattle was misinterpreted as anti-Palestinian," he says. "My position has always been pro-peace and for the two nations (sic) to co-exist peacefully." Arab students believe the real fears of American executives are focused not on losses in the Arab world but on the danger that Arab protests will be picked up by Palestinian sympathisers in Europe and even in America itself. Mr Shultz, who does not appear to have condemned the building of illegal Israeli settlements on occupied land, spearheaded Starbucks' entry into the Israeli market last year with its first two coffee shops - built through a joint venture company called Shalom Coffee Ltd - in Tel Aviv. By the end of this year, Starbucks plans to have a total of 20 coffee houses operating throughout Israel. Mr Shultz is a regular visitor to Israel and one of many personalities who have been brought to Jerusalem as a guest of the Theodor Herzl mission, at whose gala dinner is held an award ceremony of the Friends of Zion to honour those "who have played key roles in promoting close alliance between the United States and Israel". Others who have travelled on the Theodor Herzl mission include Baroness Thatcher, Newt Gingrich, the US Speaker of the House, and the former US governor Tom Ridge - now the head of "Homeland Security". From Michael.Keaney at mbs.fi Fri Jun 14 05:26:45 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Fri, 14 Jun 2002 14:26:45 +0300 Subject: [A-List] Italy: the art of privatisation Message-ID: Maverick Italian culture minister resigns over plan to put national treasures in private hands By Jessie Grimond in Rome The Independent, 14 June 2002 A leading figure in the Italian government has given up his job at the Culture Ministry, citing outrage at plans to privatise much of Italy's art and cultural heritage for profit. Vittorio Sgarbi, under-secretary in the Ministry of Culture, said he was "unable to share the methods or destiny of this ministry". The government of Silvio Berlusconi plans to create two companies to manage the state's many assets and properties. In theory, works of art and historical monuments, including the Colosseum in Rome, could be sold. "I cannot accept this - you might be able to sell buildings, but the government cannot sell the contents of the Uffizi in Florence," Mr Sgarbi said. The government's heritage policy has alarmed many in the arts world. In November last year, the directors of 50 museums and galleries, including the National Gallery, the Tate, the British Museum, the Louvre, New York's Museum of Modern Art and the Prado, wrote to the Italian government calling on it to put public interest before profit after the plans were unveiled. Last month there was further outrage as the Bill landed in parliament. In protest environmental organisations, including Greenpeace and WWF, mocked up an auction of the Trevi Fountain. The government has denied it wants to sell Italy's monuments, but the Bill, which puts the management of state assets into the hands of private companies, has no provision to protect national treasures. Mr Sgarbi, a voluble art critic, newspaper columnist and television celebrity turned politician, has often eclipsed his boss, Giuliano Urbani, the Minister for Culture and the Environment. His verbal missiles have provoked a series of national and international incidents since the government took power a year ago. His resignation will be seen as the culmination of long-standing differences between Mr Sgarbi and Mr Urbani. Yet his cited reasons for leaving come as an about-turn. Mr Sgarbi has in the past rigorously defended Mr Urbani's plans to involve the private sector in Italy's heritage. Mr Urbani may be heaving a sigh of relief at Mr Sgarbi's departure, but the Italian media will rue the disappearance of one of the most colourful figures of the Berlusconi administration. On taking up office, he at once lambasted the work of his predecessors, vowing to halt work on a new building commissioned from the American architect Richard Meier to house the Ara Pacis, construction of which was well under way. Last autumn international relations were strained when he threatened to block the loan of masterpieces by the 15th-century painter Masaccio to the National Gallery in protest at Britain's stinginess with its own art works. He claimed the loan would amount to "sexual tourism" involving the abuse of art. Recently he whipped up a storm with his meddling in the organisation of the Venice Biennale contemporary art and film festival. Mr Sgarbi nurses a well-aired contempt for contemporary art, which he has called "shitty" and a "dictatorship". The conflict over who was to take charge highlighted the differences between Mr Sgarbi and Mr Urbani, and between the government and the art world. There was more trouble in Australia in March. When one of Rupert Murdoch's newspapers, The Australian , published a harsh review of an exhibition of Italian masterpieces in Sydney, Mr Sgarbi threatened to sue Mr Murdoch for millions in damages. Mr Sgarbi stirred things up further when he represented Mr Berlusconi at the Paris book fair, shouting "Nazis, Fascists, Communists" at a group of demonstrators in the kind of outburst for which he has become famous. The Italian delegation then withdrew from the festival. Once, awarded a booby prize "Golden Tapir" on television for his role as a consultant for a company accused of selling forged art works on television, he smashed the award over the host's head. Mr Sgarbi infuriated Ethiopia in a long-running dispute over the Obelisk of Axum, looted in Ethiopia in 1937 under Mussolini. Its return was agreed five years ago, but Mr Sgarbi announced that it had become a "naturalised citizen" and would stay. After it was badly chipped by a bolt of lightning a fortnight ago, he relented, saying: "After all, it has already been damaged, so we might as well give it back." From Michael.Keaney at mbs.fi Fri Jun 14 05:29:06 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Fri, 14 Jun 2002 14:29:06 +0300 Subject: [A-List] Destructive creation: laying waste Africa Message-ID: Revealed: how the smoke stacks of America have brought the world's worst drought to Africa By Charles Arthur Technology Editor The Independent, 13 June 2002 To those who live there, it is as if the rich have stolen the rain. For more than 30 years, the Sahel region of Africa has suffered the longest sustained droughts in the world. In some places, rainfall has fallen by between 20 and 50 per cent. As a consequence, crops have failed on a huge scale; in the worst years, between 1972 and 1975 and between 1984 and 1985, up to a million people starved to death. However, for President George Bush, who has only recently accepted that global warming and climate change are the result of human influences - such as the burning of fossil fuels - the idea of a cause involving the developed world is unwelcome. But new research indicates that pollution from factories and power stations, especially in North America and Europe, has exacerbated drought in countries south of the Sahara. Researchers have little doubt that the two are connected and also that the effect of the drought will last long after any clean-up. There are also warnings that growing industrialisation in India and China is likely to create the same problems on the Indian subcontinent - with potentially disastrous effects for millions more people. According to a report in New Scientist magazine today, climate modelling studies by scientists in Australia and Canada have fingered the clouds of sulphur poured out by vehicles and power stations when they burn fossil fuels for pushing the Saharan rain-belt south. The effect is complex, which is why it has only just emerged from the analyses. New Scientist explains that Leon Rotstayn of CSIRO, the national research agency in Australia, and Ulrike Lohmann, of Dalhousie University, in Halifax, Nova Scotia, created a computer model that simulated the interactions between sulphur dioxide emissions from power plants and other sources and cloud. A key element here is that those emissions create huge volumes of "aerosols" - tiny particles about one micrometre across that can remain floating in the atmosphere for days. They are very efficient at scattering light and forming clouds, which reflect sunlight; both effects tend to cool the atmosphere and the Earth below. The vast amount of aerosols produced especially in the 1980s lingered over the northern hemisphere and tended to cool it down, say the researchers. But it is the final step - to the shifting fortunes of the rain clouds that should linger over the Sahel - which is the subtle one. David Roberts, the head of the aerosol modelling group at the Meteorological Office's Hadley Centre for Climate Prediction and Research, said: "It's an effect of the thermal balance between the two hemispheres. There has to be a rough balance between the north and south hemispheres - you can't have spare energy in one place or the other. If the Earth was completely symmetrical, then the point of thermal equilibrium, where the total energy on either side of a line was equal, would be the Equator. But because the Northern hemisphere isn't the same as the south [because of the vast energy reservoir of the Pacific, which retains energy more efficiently than land] we find that the Northern hemisphere is warmer than the South." However, aerosol-driven cooling of the Northern hemisphere pushes that point of thermal equilibrium south - and with it go the rainclouds that people depend on for their crops in the Sahel. The historical evidence tends to back up the findings. One key change that the researchers point to is that in the 1980s, improvements in emission laws meant that sulphur emissions in particular dropped - because they were blamed for acid rain, which was noticed far more keenly in the industrialised countries than droughts in sub-Saharan Africa. Dr Rotstayn and Professor Lohmann said that droughts have become less severe during the past few years. But that does not mean that they have disappeared. Far from it; the whole of southern Africa is facing a "regional food crisis", according to a recent report that notes that a total of six countries in southern Africa have roughly 11 million people who need emergency food assistance. Ironically, the note came from the United States Agency for International Development. But the cleaning of the air in the US and Europe (and the closure through economic failure of many of the worst polluters in eastern Europe) does not mean that the threat is over. If anything, it could get worse. Although Dr Roberts says he is "cautious" about taking the interpretation of the link between aerosols in the northern hemisphere and the weather in the Sahel as gospel, he says that if it is correct, then there are other areas around the globe that could be threatened by a new wave of fossil-fuel burning. "The emissions from China and India are rising," he said yesterday. "And that could affect, for example, the monsoon season in India, which would have an important regional impact. If it weakens the monsoon, then that would be a concern. The subcontinent is very dependent on it; it would be of serious concern to them if that moved. But the aerosols would alter the balance between north and south in the same way." What is unclear is how the world would cope with change like that. In the Sahel, drought is becoming ingrained: without water, vegetation dies, and the the dry land and the dust thrown up from it into the atmosphere both reflect heat, keeping the thermal equilibrium point in its southerly place. And when it does rain, the lack of plant life means that water just runs away. "It's a vicious cycle, a land degradation issue," Habiba Gitay, an ecologist who worked on the Intergovernmental Panel on Climate Change told New Scientist . And the blame for starting the cycle turning appears to lie with the developed world. The problem, though, is that nobody knows quite how to stop it and bring back the rain to the places that need it. Some people think that the first signs of the thermal changes caused by the increasing industrialisation of the developing countries are already being seen. In a worrying echo of the situation in the Sahel, northern China has had unusually dry summers in the past few years, notes New Scientist - while the south has had a notably wet time. The new theory about the connection between aerosols and rainfall also means that the world will have to expand the sophistication of its understanding of climate change. Because aerosols cool the Earth, it had been thought that they might in some way be beneficial in easing the warming caused by carbon dioxide. But now it can be seen that they also contribute to changing weather patterns in ways that are potentially disastrous for millions of people, as surely as rising sea levels caused by simple global warming. From Michael.Keaney at mbs.fi Fri Jun 14 05:31:21 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Fri, 14 Jun 2002 14:31:21 +0300 Subject: [A-List] Sudan: oil, imperialism and slaughter Message-ID: Sudanese rebels jubilant after another hollow victory in Africa's longest war By Declan Walsh in Kapoeta The Independent, 13 June 2002 The veteran rebel Dr John Garang was in jubilant mood. His troops had just captured Kapoeta, a heavily guarded garrison town inside Sudan's southern border with Kenya. Seated under a tree, he flipped an identity card on to the table. It belonged to another man in uniform - the government commander whose bloated remains lay rotting by the town's dirt runway. "This was a great defeat, a massive victory," said the well-spoken, grey-bearded leader. The capture of Kapoeta on Monday will not win the war for Dr Garang's Sudan People's Liberation Army (SPLA). Nevertheless, it represents a small but strategic victory in Africa's longest-running war, a seemingly intractable conflict aggravated this year by a deadly oil rush that Canadian, Chinese and British companies have joined. Driven by the promise of millions of pounds, government troops in helicopter gunships have attacked civilian villages to clear oil-producing areas. In one incident, a gunship crew attacked families queuing for UN food handouts. Last Sunday, the SPLA responded by taking Kapoeta, a town it lost 10 years ago. Rotting corpses still littered the ring of trenches around the town yesterday. Some were decapitated; others had been stripped to their underwear. Although the war is often portrayed as a fight between northern Arabs and southern Africans, many of the fallen government troops were dark-skinned - possibly southerners conscripted or drawn by the lure of a wage. Vultures wheeled overhead as rebel troops rested on captured artillery. There were few civilians - they had fled hours earlier, after a government Antonov plane scattered bombs over the town. There were no casualties. The Catholic church was in ruins, its blackened walls covered in a scrawl of Arabic lettering. By the altar, neatly uniformed rebels were preparing large vats of a porridge-like food. One rebel held a tin of donated cooking oil. The American government, whose flag was on the tin, presumably intended it for a hungry civilian, but skimming and the manipulation of aid have also become part of this war. Dr Garang offered little hope for peace talks, due to resume next Monday. Sudan is blessed - or perhaps blighted - with four separate peace initiatives, variously sponsored by Kenya, Egypt and Libya, Eritrea and America. In addition, Dr Garang says he has a "three-pronged approach" of his own, which combines fighting with talking. "It is a very complex situation," he acknowledged. The shifting sands of rebel politics were also illustrated by the man at his side. Riek Machar was once an SPLA leader, then defected to the government, where he became a warlord notorious for human rights abuses. Now he has switched back to the SPLA again. Although the SPLA claimed to have routed 2,500 troops, it was holding only 24 prisoners of war, including three traders and a trainee doctor. The earnest 26-year-old medic explained that he had been due to return home four days before the attack. Now he is unlikely to return to Khartoum for a long time. From Michael.Keaney at mbs.fi Fri Jun 14 05:33:24 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Fri, 14 Jun 2002 14:33:24 +0300 Subject: [A-List] Financial regulatory crisis: Soros vs. BP Message-ID: Soros wants oil majors called to account By Susie Mesure The Independent, 14 June 2002 George Soros, the billionaire financier and philanthropist, called on stock exchange regulators yesterday to change listing requirements to force greater transparency from companies such as BP and Shell about payments made to national governments to secure oil and gas licences. Mr Soros, supported by pressure groups such as Global Witness and Save the Children, wants to make it mandatory for companies to disclose any payments, such as taxes and royalties, made to governments on a country-by-country basis. The "Publish What You Pay" campaign, launched yesterday in London, calls for financial regulators such as the UK's Financial Services Authority and the US Securities and Exchange Commission to impose rules making it possible to track how developing countries, such as war-torn Angola, used money received for its natural resources. Around $1bn currently disappears from Angola's state budget every year. Mr Soros said history had proved that voluntary compliance did not work. He pointed to BP, which last year was forced to back down from proposals to disclose unilaterally its tax payments to Angola after the country threatened to terminate BP's contracts in favour of less scrupulous competitors. "This proposal is not designed to hurt [these companies]. It would help them in clearing their image and allowing them to live up to their responsibilities," Mr Soros said. The proposals, which come at a time of heightened global interest in corporate governance in the wake of the collapse of Enron, the energy trader, met with a guarded response from companies under the spotlight. Shell said it had "a policy of being open and transparent" but pointed out it was "often bound by contracts that makes this information confidential". BP said the idea was "not new to us" but declined to comment on the feasibility of Mr Soros's plan. While the FSA also gave a guarded response to the proposals, a spokesman said that the City watchdog was open to suggestions of possible changes to the listing rules as part of a fundamental review it would launch in the summer. From Michael.Keaney at mbs.fi Fri Jun 14 05:36:27 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Fri, 14 Jun 2002 14:36:27 +0300 Subject: [A-List] UK pensions crisis, consolidation and privatisation Message-ID: Stock market meltdown threatens to claim scalps of smaller life companies City watchdog puts more insurers on insolvency watch as fear of failures grows By Katherine Griffiths The Independent, 14 June 2002 Life insurance companies have been fighting a particularly nasty virus that has attacked their share prices over the past few months, brought on by poor investment returns and an annoying desire by the Government to intervene by changing the rules governing the industry. While the entire industry is feeling the pain, observers believe that more months of gloom will spell the end of the road for many of its smaller players. The last few years have seen big insurance companies and banks snap up smaller life offices, such as Abbey National's acquisitions of Scottish Provident and Scottish Mutual. This was mainly a response to the unprecedented pressure companies are under to offer products such as stakeholder pensions at rock bottom charges - an objective which is only possible to achieve profitably on a very large scale. But observers believe this wave of mergers will not equip insurers to cope with the ongoing problems of stock markets which continue to fall and potentially costly demands that may come out of Government reviews on a range of subjects that are in their final stages. Times have been tough for the insurance industry as a whole in recent years. Because underwriting frequently makes a loss, insurers historically have relied on investment returns to make money. So falling stock markets have hit hard. The life industry has suffered particularly because its performance is closely tied to equity returns and, in the case of with-profits products, requires large layers of extra capital to underwrite returns to policyholders. Unlike companies offering general insurance such as motor and property cover, life companies were also disadvantaged in the aftermath of 11 September since when they have not been able to hike premiums. The difference is reflected in the direction of insurers' share prices, with non-life companies experiencing a steady rise this year as investors have been keen to benefit from the higher prices general insurance is generating, while life companies have been under a cloud. Despite these obstacles, many small life insurers have so far managed to survive along with their bigger competitors. Roman Cizdyn, an analyst at Commerzbank, points out that the UK life insurance market has seen far less consolidation that its Continental counterparts, saying: "In Britain the biggest companies have a bit more than 10 per cent of the market [each]. On the Continent the number one player alone would have a market share in the 20s." Part of the reason for the slower pace of consolidation in the UK is that its with-profits structure has enabled many small mutually-owned organisations to keep going because they have, over decades, built up reserves known as orphan assets, which they have been able to dip into to underpin current losses in the last few years. But all insurers' reserves invested in equities have been eaten away in the last two-and-a-half years and observers suspect smaller companies are about to reach the bottom of the barrel - leaving them with the options of closing to new business or running out of cash. The former option would not be welcomed, but would be a lot more appetising for companies and for policyholders. Closing to new business would not have a particularly negative effect on policyholders, because companies would have to run their funds for customers until their policies matured. Richard Burden, an analyst at Goldman Sachs, said: "The big will get bigger and the small will get smaller and disappear because of the pressures in the market." The consolidation could take several forms, and is likely to be driven to a degree by giants such as CGNU, Prudential or Standard Life snapping up small businesses that they can squeeze some profits out of. But another likely scenario is that large insurers will not have to bother buying their smaller rivals because sooner rather than later many small funds will have no choice but to close their with-profits funds to new customers and then run off the business over several years. "Bigger companies are already getting more new business proportionately and it looks like they can simply fill the void left by smaller companies by putting more business through independent financial advisers - they won't have to pay the goodwill necessary to actually buy them up," Mr Burden said. Ned Cazalet, an expert in the life insurance industry, says many smaller companies have in fact gone beyond the point of being attractive acquisitions. "A lot are unconsolidatable - they are creaking away, ebbing capital like a large hole in Eliza's bucket," he said. The picture may look bleak, but advocates of the life insurance industry - and in particular their key with-profits products - stress that very few companies have sunk into insolvency yet and predict it would take a substantial further fall in the stock market to force significant numbers of companies to shut up shop. One analyst who is bullish about the market believes that the FTSE 100 index would have to go as low as 3,500 points before serious numbers of life offices were forced to close their doors. "Before that point they could switch equities into bonds, cut bonuses to policyholders, dip into their resilience provisions and still have a number of other options left," the analyst said. But many life companies have already taken these actions. A number have moved into bonds to protect themselves against the stock market and almost all have sliced policyholders' bonuses dramatically this year - though they could clearly cut bonuses further. Others have even closed their with-profits funds, including Royal & SunAlliance, which closed its SunAlliance & London Assurance and Royal & SunAlliance Life and Pensions funds to new customers in December because it did not have enough capital to support substantial increases in with-profits business. Abbey National, plagued by problems in other parts of the bank, is also considering closing its with-profits business, which operates through its Scottish Mutual subsidiary, because it is running out of money. Companies are also well aware that Sir Howard Davies, chairman of the Financial Services Authority, is watching them like a hawk and does not want them to resort to what is known as "financial engineering", such as buying reinsurance contracts to cover liabilities, in order to keep their funds going. The City regulator is keen to prevent panic in the industry and a run on life assurers' already depressed shares. John Tiner, the ambitious head of insurance regulation at the FSA, yesterday dismissed a report that said his organisation viewed 200 insurers as high risk. He said this was "plain wrong". The FSA conceded, as pointed out by the ratings agency Fitch, that 200 insurers fall into its "high impact" category, which it defines as companies which would cause havoc by going bust because they have so many customers. There is no suggestion that many of the companies in this category are in danger of actually being anywhere near to breaching their solvency requirements. In fact only 39 companies - out of an industry with 900 players - are currently in insolvency proceedings. Nevertheless, Sir Howard is particularly sensitive about the ramifications of life assurers going under because he is still clearing up the mess of the demise of Equitable Life - once one of the most celebrated members of the sector. Indeed, Mr Tiner has made it known that he is keen for life offices that are limping along to shut to new business, so that the possibility of another melt-down is avoided. A number of life offices are on a tight rein and are currently being asked to update the regulator about the state of their finances weekly. If the future of the life market is the emergence of ever larger insurance companies in the retail market, commentators also believe that the future will involve the end of all but a very few mutually-owned institutions. This trend has already started - the 10 largest life offices today contains only one mutual, Standard Life, whereas a few years ago it would have included five. In today's tough conditions, mutuals will come under more pressure. Mr Burden of Goldman Sachs said: "Mutuals have less flexibility about what they can do in difficult times because they have less access to capital. This is why Friends Provident joined the market last year - to improve its capital position and its credit rating." Analysts believe that even the mighty Standard Life, which had surplus capital two years ago of ?9bn in place as a buffer to falling markets or other unexpected problems, has seen a considerable amount of that money eaten away and may have to raise money in the markets later this year. The cases of Royal & Sun and Abbey also prompt analysts to think that in the future, big will not just mean being a major financial services company with a sizeable life insurance business. One observer said: "It will mean being able to say you are seriously big in the life market and can pack a big punch. That will mean having something like 20 per cent of the market." From Michael.Keaney at mbs.fi Fri Jun 14 05:43:20 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Fri, 14 Jun 2002 14:43:20 +0300 Subject: [A-List] UK-Tanzania arms for aid scandal Message-ID: Previously filed under "UK exports success", this episode is unlikely to disappear for a little while yet, as even the World Bank is appalled by the brazen corruption and hypocrisy surrounding the "sale" of an air traffic control system to Tanzania. What's particularly interesting about this is the exposure of linkages between the UK state apparatus and Barclays Bank, together with BAE Systems of course. Tanzania aviation deal 'a waste of money' Tanzania air traffic control deal condemned as 'waste of money' David Hencke, Charlotte Denny and Larry Elliott Friday June 14, 2002 The Guardian Tony Blair's personal backing for a sale of a British-made air traffic control system to Tanzania, one of the world's poorest countries, will be condemned by the World Bank in a stinging report which brands the system as a complete waste of money. Independent civil aviation experts, commissioned by the bank, conclude that Tanzania could have bought an off-the-peg system for around a tenth of the ?28m price agreed with BAE Systems. The experts at the International Civil Aviation Organisation (ICAO) describe the air traffic control system as "dated technology" and warn that it is primarily a military design which is not adequate for civilian air traffic control use. Mr Blair intervened personally in a heated cabinet row over the sale to side with those ministers who argued that the 280 British jobs at stake on the Isle of Wight were more important than the government's international anti-poverty goals. The World Bank's report vindicates the line taken by the international development secretary, Clare Short, and the chancellor Gordon Brown, and is certain to reopen the bitter cabinet infighting which marked the decision to grant BAE an export licence late last year. One senior World Bank source described the report as "pretty damning" in its assessment of the system's value for money. Norman Lamb, Liberal Democrat international development spokesman, who has also been investigating the deal, said last night: "I have been told that the International Civil Aviation Organisation report paints a damning picture of this deal. "A modern civilian air traffic control system can cost as little as $5m, about 10% of the cost of the BAE system. It is no surprise that the Tanzanian government have reacted with horror to the report and are delaying its publication. "The DTI, with the apparent support of the prime minister, has colluded with British Aerospace and Barclays Bank in foisting an expensive and unnecessary arms deal on the desperately poor people of Tanzania." The bank is pressing for the full report to be released but is facing strong opposition from the government in Dar es Salaam which is desperate to avoid the humiliating public revelation that it has squandered donor and taxpayers' money on an overpriced and obsolete system. Fearful that the report will lead to the bank suspending its lending programme to his government, Tanzania's president, Benjamin Mkapa, has appealed personally to Mr Blair for help in getting out of the BAE contract. Mr Mkapa believes BAE has sold his grindingly poor country an expensive white elephant. Ms Short who was furious at the cabinet decision, retaliated by suspending Britain's aid to Tanzania, pending the results of the ICAO review. The international development secretary maintained that the purchase of the air traffic control system risked Tanzania's commitment to anti-poverty programmes. Tanzania, which suspended payments to BAE while the civil aviation body prepared its report, is believed to have already handed over more than half of the purchase price. It resumed payments shortly after the British government approved the export licence . The report puts Mr Blair in a difficult position because it undermines the argument used by Downing Street and BAE's supporters, the defence secretary, Geoff Hoon, and the trade secretary, Patricia Hewitt, that the project was a good deal for Tanzania. Aid agencies said the civil aviation organisation's assessment had confirmed their worst fears about the sale. "This system not only reflects misplaced priorities but is a complete waste of money," said Kevin Watkins, senior policy adviser at Oxfam. "Clearly the British government has placed the interests of commercial exporters before the interests of ordinary Tanzanians." Mr Lamb is also pressing Barclays to explain why they agreed to subsidise the deal with a rate of interest below commercial rates. The Guardian understands that the ICAO report will say that the system is more suitable for military purposes and that some of the radars are not even suitable for civilian aircraft. Tanzania does not have an air force. The report also points out that future maintenance requirements could impose a heavy burden on the country. From Michael.Keaney at mbs.fi Fri Jun 14 05:45:22 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Fri, 14 Jun 2002 14:45:22 +0300 Subject: [A-List] UK state: Northern Ireland blowback Message-ID: Collusion 'at heart' of Finucane killing Shadowy army unit accused as web of secrecy leaves solicitor's murder unsolved 13 years on Rosie Cowan and Nick Hopkins Friday June 14, 2002 The Guardian Defence lawyer Pat Finucane was a thorn in the British establishment's side when alive, and the huge controversy surrounding his murder means he remains so, 13 years after his death. Almost from the moment he died, his family was convinced that police officers and British soldiers colluded with the loyalist paramilitaries who carried out the shooting, in a conspiracy they suspect went to the heart of the corridors of power. At the core of the case are accusations about the RUC special branch and the shadowy army force research unit, known as FRU, which it is claimed at best turned a blind eye to loyalist terrorism and at worst, actively encouraged the targeting of certain people. On February 12 1989, the solicitor, his wife, Geraldine, and their three children, were eating dinner in their north Belfast home when members of Ulster Defence Association/Ulster Freedom Fighters loyalist paramilitary group broke down the front door with sledgehammers. Two masked gunmen fired a total of 14 shots from a .38 revolver and a 9mm Browning automatic pistol, all of which hit Finucane. One bullet ricocheted off Geraldine's foot. The killers made their getaway in a stolen taxi, later abandoned on Woodvale Road. The UDA/UFF said they killed the 38-year-old solicitor because he was a high-ranking officer in the IRA, but police at his inquest said they had no evidence to support that. Several members of his family had strong republican links and he represented republicans in many high profile cases, but he had also acted for loyalists. His brother, John, an IRA man, was killed on active service in a car crash in the Falls Road, Belfast, in 1972. Another brother successfully contested attempts to extradite him to Northern Ireland from the Irish Republic, while a third brother was the fiance of Mairead Farrell, one of the IRA trio shot dead by the SAS in Gibraltar in 1988. Pat Finucane's best-known client was the IRA hunger striker, Bobby Sands. He also represented other IRA and INLA hunger strikers who died during the 1981 Maze prison protest, and the widow of Gervaise McKerr, one of three men shot dead by the RUC in a so-called "shoot-to-kill" incident in 1982. Several UDA/UFF members were questioned at length in the weeks after Finucane's murder. No charges were brought, but concerns were multiplying in the family's minds. Three weeks before the shooting, Douglas Hogg, then a junior Home Office minister, had told the House of Commons that certain solicitors in Northern Ireland were unduly sympathetic to the IRA. Indirect threats had been relayed to the solicitor through clients whom police had interrogated at the Castlereagh holding centre. An RUC officer was once reported to have told a client: "You will not be having Mr Finucane as a solicitor much longer." Moreover, there were persistent allegations that detectives suggested the lawyer as a possible target to loyalists they were questioning in connection with terrorist offences. And on the night of the murder, the family said police roadblocks close to their home were lifted before the attack. In 1992, UDA/army double agent Brian Nelson told a BBC Panorama programme that the UDA had asked him to compile a dossier on Finucane's movements. Nelson, who was jailed for 10 years for other terrorist offences but never charged in connection with Finucane, said he told his army handlers about the matter. Sir John Stevens, the Metropolitan police commissioner, who had previously investigated other cases of alleged security force collusion with loyalists, started a second inquiry. The finger was pointed at FRU when his offices in Carrickfergus, Co Antrim, were mysteriously gutted by fire. Throughout the 1990s, Amnesty International, the New York-based Lawyers Committee on Human Rights, and the Committee for the Administration of Justice were among the groups campaigning for an independent inquiry. In 1998, Param Cumaraswamy, a United Nations Human Rights Commission expert on the independence of judges and lawyers, added his voice to inquiry lobby, but the RUC slammed his report as short of objectivity, accuracy and fairness. Meanwhile, another former undercover soldier, known by the pseudonym Martin Ingram, broke ranks to claim that both FRU and special branch knew loyalists had tried to target Finucane on two previous occasions but he was not warned his life was in danger. Ingram also alleged that Tommy "Tucker" Little, head of the UDA brigade behind Finucane's murder, was a special branch informer. Then in 1999, on its third inquiry, the Stevens team arrested a man who had been questioned about the murder in 1990. William Stobie, a self-confessed former UDA quartermaster and RUC informant, had told two journalists that he supplied the weapons for the Finucane murder without knowing who was to be killed. Stobie insisted he told his RUC handlers almost a week before the murder that his UDA commander had asked him to get the guns for a "job" on a "top Provie", but he was amazed when police did nothing, either then or just before the killing, when he alerted them again, or later when he told them the principle murder weapon, a Browning pistol, had been moved from its hiding place. Stobie claimed that special branch tried to set him up by tampering with UDA guns so he would be blamed and, on another occasion, framed him by planting guns in his home. But during his trial for arms possession in 1990, he instructed his solicitor to tell the crown lawyer privately that he would tell all he knew about the Finucane case if he was found guilty. Minutes later, a police witness made an elementary mistake by referring to previous convictions and the judge declared a mistrial. Mentally unfit One of the two journalists to whom Stobie told his story was Ed Moloney, of the Dublin-based Sunday Tribune, who refused to hand over his notes to police. The other, Neil Mulholland, formerly with Belfast paper, Sunday Life, made a statement to the Stevens team. However, the case against Stobie collapsed in December 2001 when Mulholland was deemed mentally unfit to take the witness stand. Less than a fortnight later, Stobie was shot dead outside his north Belfast flat, most probably by members of the UDA, exacting their final retribution for his disloyalty to their organisation. Alan Simpson, the retired detective originally in charge of the Finucane case, was never told by his special branch colleagues that Stobie was an informer and now sees his situation as trying to catch the killers while having one hand tied behind his back. Just after Stobie's murder, Ken Barrett, another UDA member alleged to be one of the gunmen who shot Finucane, and whom special branch also later recruited as an informer for a short time, fled to England, fearing he could be next. Boasted Another retired CID detective, Johnston "Jonty" Brown, told Ulster Television that Barrett had boasted about the murder in a surreptitiously taped conversation with him and a CID colleague in October 1991, during which a special branch officer was also present. Brown said Barrett described details of the murder scene that only someone very close to the killing could have known, such as mockingly calling the victim "Fork Finucane" because he died holding a fork in his hand. But the tape which special branch eventually gave the Stevens inquiry team was recorded a week later and made no mention of the murder. Barrett is believed to have given the Stevens team significant details of the murder, while under their protection in England. Another leading UDA member, William "Mo" Courtney, a close friend of Shankill UFF leader Johnny "Mad Dog" Adair, was arrested on suspicion of killing Finucane, but was freed without charge. And in yet another twist, it recently emerged that police had recovered one of the murder weapons, the Browning pistol, originally stolen from an army barracks, but had amazingly given it back to the army, who replaced the barrel and slide, thus removing vital evidence in a case where the army itself is at the heart of the controversy. To date, no one has been brought to justice in connection with the murder of Pat Finucane. The Stevens team have tried to unravel the many seemingly inexplicable contradictions in the lead-up to the murder, the killing itself and its aftermath, and the government has now appointed an international judge, Peter Cory, from Canada, to re-examine the killing and five other murder inquiries where security force collusion is suspected. But the Finucane family see both as delaying, cover-up tactics, and continue to battle for an independent, public inquiry as the only path to the truth in one of the most contentious and far-reaching cases of the past 30 years in Northern Ireland. ----- Shadowy unit's infiltration role Nick Hopkins and Rosie Cowan Friday June 14, 2002 The Guardian The force research unit was deployed in Northern Ireland in 1980 and given the job of recruiting and handling double agents who could infiltrate loyalist and republican terror groups. With a complement of about 100 soldiers, the FRU was one of three army-sponsored undercover intelligence squads in the province at the time. The others were 14 Company, which specialised in covert surveillance, and 22 Squadron SAS, which undertook "executive actions". "That means they killed people," said an army source. FRU was divided into detachments - north, south, east and west. Headquarters FRU dealt only with material supplied by a republican double agent, known only by the nickname Stakeknife. Gordon Kerr, then a colonel, was in charge of the FRU during the late 1980s and early 90s. It was during his time in command that FRU achieved one of its greatest successes - the infiltration of the loyalist paramilitary Ulster Defence Association, using an agent, Brian Nelson. Nelson was the UDA's senior intelligence officer at the time that Finucane, who had represented republicans, was murdered. It is thought that Nelson was one of up to 20 Northern Ireland-born soldiers who were asked by the army to become agents inside terrorist groups. Kerr, who is in his 50s, must have impressed the MoD during his time in the FRU. Now a brigadier and the British military attache in Beijing, he was awarded a QCVS (Queen's Commendation for Valuable Service) in 1996 for his gallant and distinguished service. Sensitivity about the FRU is acute in the MoD, which has sought injunctions on newspapers that have attempted to reveal details of its operations. The MoD is also extremely nervous about what the Stevens report will reveal, and has hired a firm of top lawyers to represent Kerr. FRU still works in Northern Ireland, though it has changed its name to the joint services group. From Michael.Keaney at mbs.fi Fri Jun 14 05:50:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Fri, 14 Jun 2002 14:50:01 +0300 Subject: [A-List] Destructive creation: US deregulation, GM exploitation Message-ID: Pollution rules for US oil and coal eased Oliver Burkeman in New York and John Vidal Friday June 14, 2002 The Guardian The US government gave the energy industry a big victory yesterday by relaxing the air pollution rules for coal-burning power stations and oil refineries Democrat politicians and environmentalists condemned it as a huge step backwards in the battle against global warming. The environmental protection agency's long-awaited recommendations - the object of years of intense lobbying by the US power industry - give electricity producers greater flexibility in expanding their output without having to install additional emission controls. Its administrator, Christie Todd Whitman, said the reforms were "common sense", and would reduce pollution by increasing efficiency. The US is by far the biggest emitter of fossil fuel gases in the world. The industry has argued for years that regulations inhibited the expansion energy production, a position boosted last year when Vice-President Dick Cheney's energy taskforce recommended that the rules should be re-examined. "The need for reform is clear and has broad-based support," Ms Whitman said. "Our common commitment to environmental protection need not be an obstacle to having the most modern and efficient energy infrastructure in the world." The EPA plans will raise the threshold of expansion that must be reached before power plants are required to introduce additional controls on smog, soot and acid rain. The utilities will also be allowed to choose to use the pollution levels from any 24-month period in the last 10 years to set the baseline above which that threshold will be set. And the currently vague definition of "routine repairs", which do not require additional controls, is to be clarified in ways which campaigners fear will define almost any modification as "routine". Ari Fleischer, the White House spokesman, argued that the new rules would reduce pollution. "Many of these people who are affected have chosen to leave in place old equipment, which pollutes more, rather than replace it and modernise it, which pollutes less," he said. But environmentalists said the measures would produce millions of tons of additional pollution from older, dirtier coal-burning plants: amounting to a dilution of the Clean Air Act. The US has been condemned for refusing to sign the Kyoto protocol, which would force it to reduce carbon emissions. "The Bush administration appears determined to be the most anti-environmental force our nation has ever endured," said Mark Helm of Friends of the Earth USA. "There is an undisputed link between air pollution and premature death. We're moving in the [wrong] direction." Buck Parker, of the Californian group Earthjustice, said the government had "dropped a dirty bomb, and it's going to cost thousands of American lives." Their concern was echoed by the Democratic leader of the Senate, Tom Daschle, who said he was "very, very saddened by the news again today, that once again clean air takes a back seat to the polluters and the special interests that seem to have such power in this administration." ----- GM firms the only winners at food talks summit Rory Carroll in Rome Friday June 14, 2002 The Guardian A world food summit ended in recrimination yesterday when it was branded a waste of time for everyone except the United States, which successfully sold genetically modified crops as a solution to famine. The UN denied that the exercise in the Italian capital had been ineffective, despite the event being snubbed by western governments, complaints from leaders of developing countries and disagreements on strategies to avoid malnutrition and famine. Environmental and agricultural groups accused the US of steamrollering the summit into approving biotechnology, after robust lobbying by Washington. "The US played very hard and succeeded. They now have the moral authority to use genetically modified food for aid purposes," said Fernando Almansa of Oxfam. He hoped the defeat would shock opponents of GM food into mobilising for the UN summit on sustainable development in Johannesburg in August. The US delegation was led by the agriculture secretary, Ann Veneman, and made no secret that its priority was to promote the wider use of biotechnology, an industry dominated by American companies. "Biotechnology has tremendous potential to develop products that can be more suited to areas of the world where there is persistent hunger," Ms Veneman said. "There is no food safety issue whatsoever." Another delegate was more forthright: "We're here to sell biotech, and that's what we've done." Advocates say GM crops with improved yields, resistance to drought and tolerance of salt could ease food shortages in stricken areas. But critics say it could destroy biodiversity and force poor farmers to buy seeds from US corporations. Fred Kalibwani, an ecology activist from a Zimbabwe-based non-governmental organisation, said that the patented GM seeds in effect placed food security in the hands of a few corporations. "This will be tragic for Africa in the next few years," he said. Jacques Diouf, director general of the UN's Food and Agriculture Organisation which hosted the summit, said the event was a success because it reaffirmed the pledge of a 1996 food summit to halve world hunger by 2015. But little headway has been made in the past six years: more than 800 million people are still hungry, famine is looming in southern Africa and a request for an extra ?16bn each year fell flat. Some 181 countries were represented, but of the 74 heads of state or government, only two were from the west. South Africa's president, Thabo Mbeki, accused the west of indifference. Clare Short, Britain's secretary of state for international development, said the summit was a waste of time, and the EU's aid commissioner, Poul Nielson, accused organisers of trying to build an empire rather than tackling the real problem of hunger. Other delegations expressed frustration they were unable to address western leaders about the damage their tariffs inflict on poor farmers. Some UN officials said the ?1.6m cost of the event would have been better spent on grain for the poor. From Michael.Keaney at mbs.fi Fri Jun 14 07:27:47 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Fri, 14 Jun 2002 16:27:47 +0300 Subject: [A-List] FW: tompaine.com Message-ID: Forwarded from Louis Proyect, as part of a continuing and interesting series on well-funded, apparently progressive, web sites: I suppose that most people are aware of tompaine.com, a lavishly funded website that takes out weekly ads on the NY Times op-ed pages promoting one of their feature articles. Today there is an ad calling Times readers to an item about Indian immigrants being kept in near-slavery conditions in Oklahoma. (http://www.tompaine.com/op_ads/opad.cfm/ID/5763) On the other hand, I have noticed articles that tompaine.com that seem somewhat off-kilter. For example, you can find a proposal from a Cato Institute staffer for joining forces between libertarians and progressives. It concludes with the following sentences: "Which brings me full circle. Libertarians and progressives should talk to each other more readily. Leave the Ds and Rs to schmooze each other. For my schmoozing buck, I'd rather talk to someone who's got a compelling ideology." You can also find a rather dopey salute to the ineffably repulsive Clintonista George Stephanopolous: "Stephanopoulos is a logical choice to host "This Week." He has greater inside knowledge of politics than any of the current Sunday morning talk show moderators. He's good on TV. He wrote a much better book about the Clinton White House than people gave him credit for. And he might even get more Americans to watch a show about current affairs. That's something even the press should like." This led me to do a little digging on tompaine.com on guidestar.org (a website that keeps data on nonprofits that they are required to make available to the public) and other websites. It turns out that tompaine.com is a project of the Florence Fund, which is itself an offshoot of the Florence and John Schumann Foundation. Bill Moyers is the president of the Schumann Foundation, while his son John is president of the Florence Fund and runs tompaine.com on a salary exceeding $76,000 per year. Among the other beneficiaries of Schumann Foundation largesse is Robert Kuttner's American Prospect magazine. Last December senior editor Ana Marie Cox was fired after only six weeks. According to the Washington Post: >>"It was the latest in a series of staff purges and defections at the nonprofit magazine, which has received, in addition to other grants, about $10 million from the Florence and John Schumann Foundation, headed by public television icon Bill Moyers. Prospect president and founding editor Robert Kuttner flew here from his Boston headquarters to defenestrate Cox." We hear that Kuttner referred to notes on a legal pad as he told the editor that she was "not being civil" and had improperly changed the copy of senior writers -- i.e., Kuttner -- "without due process." We hear that Kuttner was also angry that last week, during an editorial lunch he did not attend, Cox had jokingly called him "Crazy Bob."<< After Cox was fired, contributing writers Thomas Frank (of Baffler fame) and Ken Silverstein (ex-coeditor of Counterpunch) withdrew their articles from an upcoming issue in protest. Although it is not mentioned anywhere on the tompaine.com website, Robert Kuttner and Charles Peters sit on the editorial board of the Florence Fund. In other words, "Crazy Bob" is one of the main operatives at a website that is making a calculated effort to appear leftish. Charles Peters shares Kuttner's Democratic Leadership Council politics. He founded the Washington Monthly in 1969 in order to promote "neoliberalism", a term that he seemed to have coined all on his own--a dubious distinction to say the least. Using seed money from Warren Buffett, he made the magazine into a megaphone for the rightwing of the Democratic Party. While most people are aware of the "leveling" effect of the Internet that allows nearly anybody to get a hearing as long as they are technically proficient enough (or know how to recruit such a person) to set up a website, there is another aspect that deserves more consideration. Namely, the ability of big capitalists and their foundations to adopt the coloration of "alternative" websites. For example, we learned that despite superficial appearances, the British website www.opendemocracy.net is a platform for libertarians of the Spiked Online variety. Clearly there is useful information on tompaine.com, but I would urge the reader to exercise a little caution considering the background and funding. Louis Proyect Marxism mailing list: http://www.marxmail.org From rschaap at iprimus.com.au Fri Jun 14 07:57:56 2002 From: rschaap at iprimus.com.au (Rob Schaap) Date: Fri, 14 Jun 2002 23:57:56 +1000 Subject: [A-List] FW: tompaine.com References: Message-ID: <3D09F669.7CEABE6A@iprimus.com.au> G'day Michael and Louis, > "Which brings me full circle. Libertarians and progressives should talk > to each other more readily. Leave the Ds and Rs to schmooze each other. > For my schmoozing buck, I'd rather talk to someone who's got a > compelling ideology." I refuse to be shocked. Wouldn't Tom his very self have concurred? Anyway, whilst I'm not quite Anne Williamson when it comes to libertarianism, I'm all for a libertarian shot in my socialist ale. > ... a calculated effort to appear leftish. Let's not get too pipers-payers-and-tunes about this. Lefties have to live and write in this world, and this world runs on money. People have to make history in conditions not of their own choosing, but history they make nonetheless. > Clearly there is useful information on tompaine.com, but I would urge > the reader to exercise a little caution considering the background and > funding. Importantly true in all respects at all times. Cheers, Rob. PS There was nothing wrong with Team USA's first goal, for mine. From annewilliamson at msn.con Fri Jun 14 08:34:38 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Fri, 14 Jun 2002 10:34:38 -0400 Subject: [A-List] The Mafia State References: <3D09F669.7CEABE6A@iprimus.com.au> Message-ID: <036801c213b0$9dd2b980$0100a8c0@igrushkii> http://www.mises.org/fullstory.asp?control=978 The Mafia State by William Anderson [Posted June 14, 2002] With the passing of John Gotti, the former "head" of the Gambino crime family, we have been treated to a series of media stories, some of which condemn the Teflon Don and others versed in a grudging admiration for this character. These stories have managed to miss nearly every lesson this violent man's life had to show us. Gotti was by all accounts a violent man. He was able to parlay his ruthlessness into wealth, albeit temporary, but it also led to his downfall. The world is full of violent men, however, few of whom are wealthy. The reason for Gotti's brief foray into wealth and power--like that of another famous don, Al Capone--ultimately came from the state, that same entity that finally imprisoned and killed him.[i] Reporters breathlessly wrote about Gotti's $3,000 suits, but failed to point out how the man was able to make that kind of money. He did it in two ways: one by providing goods that people wanted yet were prohibited by the state from obtaining, and the other by extracting and extorting money from people who rather would not have paid him. The goods, of course, included drugs, prostitution, and gambling. (By running a lottery, the state of New York deprived Gotti's organization from providing the "numbers" game.) In the days of Al Capone, that group of forbidden things also included alcoholic beverages. At that time, people who made and sold beer looked pretty scary; today, they look like members of the Coors family standing before a backdrop of the Colorado Rockies as they advertise their products. This should tell us something about government prohibition. As for Gotti's extortion rackets, they came in two forms, the first from members of labor unions and the second from business owners who received "protection." That many unions have been bastions of organized crime is hardly surprising. Since most unions are also wards of the state, however, and since they are the source of votes for the political classes, it is hardly surprising that mafiosoi have been able to operate pretty much unmolested on the docks and elsewhere. (I might add that most government employee unions, such as the National Education Association, are pretty much mafia-free. Since those folks produce services that most people would rather not have, it is not surprising that the mafia would have nothing to do with them. Furthermore, government employee unions have their own violent entity doing their dirty work: the state.) Like all other things "provided" by crime organizations, "protection" rackets sprang from a need by small business owners to have their property protected from thieves and robbers. Although there was an implied threat from mafiosoi who offered "protection" for a small sum per week, most gangsters usually kept other predators away. (I am not endorsing this activity, since business owners who refused "protection" soon were provided reasons why they "needed" it in the first place.) However, the reason that gangsters were able to move into neighborhoods and entice people with protection money was that police protection from the state virtually was nonexistent. Given the proclivities of the state, most people came to prefer being protected by swaggering organized crime figures rather than by the bumbling government. While organized crime figures had the reputation for violence, they generally were violent with each other, not the public at large. There have been exceptions, of course. A few months after a neighbor accidentally hit and killed Gotti's 12-year-old son with his car, he was hustled into a van and never seen again, no doubt the murder victim of the vengeful Gotti. This is not to excuse the murder and mayhem that mafiosoi inflicted upon each other, but it needs to be pointed out that violence always accompanies markets that the state has declared illegal. As mentioned earlier, during Prohibition, gangsters like Al Capone were in charge of producing and distributing alcoholic beverages. Today, the producers and distributors generally are mild-mannered and law abiding, and their activities are not accompanied by violence, at least on their part. Or, as one libertarian friend put it to me, one does not see drivers of beer trucks shooting at each other. Gotti achieved folk hero status for another reason: he managed to beat government criminal charges on a number of occasions, that is until the FBI was able to secretly record nearly every word he spoke by bugging his home and business club. Most law-abiding Americans recoil in horror at seeing someone "beat the rap," and in their frustration, they have permitted the political classes to push through laws that supposedly were aimed at "mafia kingpins," but instead have been turned full force on ordinary citizens. Known as anti-drug laws and the Racketeer Influenced Corrupt Organizations Act, or RICO, these laws have eviscerated protections once provided by the U.S. Constitution and have resulted in thousands of innocent people being thrown into federal prisons. Thus, when the government turns its full fury upon people, they rarely can stand up to federal prosecutors. Even wealthy people such as Michael Milken and Leona Helmsley, who commanded large amounts of resources, would fall before what, in essence, were trumped-up charges. Regular middle-class people don't stand a chance. Therefore, when Gotti received "not guilty" verdicts, a large number of folks stood up and cheered. They were not applauding murder and other crimes; they simply understood that few people can withstand the blows of the state, and anyone who can do so is someone special. Finally, we look at the modern state itself, which certainly has many of the worst characteristics--and none of the good ones--of the men of Cosa Nostra. Like John Gotti, the state can extort money from citizens. Unlike Gotti, who never would have dreamed of demanding nearly half of a firm's profits, the state takes more than 40 percent of what a business collects over its costs. Like Gotti, the state takes the lives of individuals. Unlike Gotti, it is rare that a representative of government who has killed someone, even if that killing is not in self-defense, ever faces justice for that homicide. >From the government agents at Waco to the Air Force pilot who fired a missile into a Serbian passenger train and killed 24 innocent men, women, and children, these people either are praised as heroes or excused for causing "collateral damage." For the most part, people realize that the federal government's private war against John Gotti did no good for the rest of us. Yes, Gotti was an unsavory character, a man that few of us would have wanted for a neighbor. Many people rightly feared him. However, the vast majority of us have much more to fear from the Teflon State than we ever did from the Teflon Don. ---------------------------------------------------------------------------- ---- William Anderson, an adjunct scholar of the Mises Institute, teaches economics at Frostburg State University. Send him MAIL. See his Mises.org Articles Archive. ---------------------------------------------------------------------------- ---- [i] While Gotti died of throat cancer, it is likely that had he not been imprisoned, he could have received much better medical care than he got while incarcerated. From annewilliamson at msn.con Fri Jun 14 08:56:06 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Fri, 14 Jun 2002 10:56:06 -0400 Subject: [A-List] Foreign Aid Stick References: <3D09F669.7CEABE6A@iprimus.com.au> <036801c213b0$9dd2b980$0100a8c0@igrushkii> Message-ID: <038601c213b3$9d911540$0100a8c0@igrushkii> UK supports aid to limit immigration G?RAN PERSSON - Swedish prime minister, criticized sharply the idea to link development aid with the repatriation of illegal immigrants; an idea which is supported by the UK, Spain and Denmark. (Photo: www.ue2001.se) British home secretary, David Blunkett, will urge his EU counterparts today to link aid for developing countries to their willingness to take back failed asylum applicants or illegal immigrants. At a justice and interior ministers' meeting in Luxembourg, Mr Blunkett is expected to put forward a detailed set of proposals in order to improve the fight against the illegal immigration. Spanish prime minister Jos? Maria Aznar, president in office of the European Council said on Monday in Vienna the European Union is ready to sanction the lack of cooperation of third countries in the area of immigration. Mr Blunkett will stress that the EU has to solve the illegal immigration problems at all levels, not just on the borders or within the EU. However, he will also call on his counterparts to toughen up the policing of their borders. One of the most important key points in his statement is that aid measures are a vital part of "getting results on a common migration and asylum policy across Europe," reports the Epolitix.com. Today's meeting in Luxembourg will prepare the ground for the EU heads of government meeting in Seville next week, as there the immigration policy will be top of the agenda. Today the ministers will also discuss common visa policy and co-ordination in managing external borders. Nordic EU member states have different views on migration policy The factious spirit over the illegal immigration policy was also discussed in a meeting of the prime ministers of Denmark, Finland and Sweden. At their meeting in Helsinki, the Danish Prime Minister, Anders Fogh Rasmussen, gave his support to the idea of linking the development funding with the obligation to take back illegal immigrants. Mr Rasmussen's point of view was criticized by his Swedish counterpart G?ran Persson, who according to the Helsingin Saonomat, stressed that in a situation where immediate aid is needed, it is not sensible to focus on these issues. Finnish Prime Minister Paavo Lipponen emphasized the importance of the issue, but said that Finland has not taken the final stand yet. Written by Marit Ruuda Edited by Lisbeth Kirk Printet from EUobserver 14.06.2002 Copyright EUobserver 2000, 2001, 2002 The informations may be used for personal and non-commercial use only This article and related links can be found on: http://www.euobserver.com/index.phtml?aid=6605&sid=9 From annewilliamson at msn.con Fri Jun 14 09:20:14 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Fri, 14 Jun 2002 11:20:14 -0400 Subject: [A-List] Argentina: Salvation Lies in an Underground Economy References: <3D09F669.7CEABE6A@iprimus.com.au> Message-ID: <039701c213b6$fc3fa400$0100a8c0@igrushkii> Friday, June 14, 2002 A People's Economic Revolution by Harry Valentine [Posted June 13, 2002] People's revolutions generally have their origins in inappropriate governmental behavior. This behavior may be exploitative, it may be oppressive, tyrannical, or even despotic. In rare instances, the opportunity may present itself whereby the people may rise up and overthrow an otherwise unpopular government. Not all successful uprisings, such as the Bolshevik Revolution or Iran's anti-American revolution, are to the long-term advantage of all citizens. The recent monetary and economic upheavals in Argentina, caused by state behavior in the monetary system, now make that country ripe for a peaceful people's economic revolution. The foundational ideas of such a revolution have been written up in the works of economists such as the late Murray Rothbard. Rothbard argued that an absence of forcible coercion in human relations and freedom of peaceful action would form the basis of a free society as well as a viable free-market economy. The meltdown of Argentina's monetary system leaves the bulk of the population there with little choice but to peacefully take economic control away from their government, through a nationwide informal or underground economy. Ludwig von Mises advised in his writings that people would revert to bartering in the event of monetary destabilization. In recent weeks, large numbers Argentineans have in fact been turning to the underground economy as a means of economic survival. Most of the participants may never even have heard of Mises or Rothbard, yet their ideas offer hope to large masses of people who are willing to peacefully engage in a voluntary exchange of goods and services. In Argentina today, there exists a small number of people who have actually read the works of Mises, Rothbard, and Hayek and are familiar as to how these ideas and theories can apply to a real-world economic environment. The central leadership idea offered implicitly by Rothbard's theories is that a peaceful mass revolt and mass rejection against centralized economic power and centralized economic control is possible through mass underground economic action involving the majority of a nation's population. This implicit idea can put the collective decision making of the masses of individual people who are engaged in peaceful and private economic planning in direct control of Argentina's economic recovery, as well as its future economic evolution. Whereas political opponents may imprison a Mandela or assassinate a Gandhi, a peaceful revolution led by a well-formulated idea presents the opponent with a far more perplexing adversary. A successful nationwide informal economy operating in Argentina, one that benefits large masses of citizens, has the potential to politically embarrass governments of other nations. The tools of production that are available today are far more advanced and far more efficient than their predecessors of bygone eras, when bartering flourished. Far higher individual levels of productivity, involving large numbers of people, are possible today. Modern computer technology enables accurate tracking of credits and debts incurred in local regions by participants in the underground economy. Argentina has a long history of oppressive governmental behavior as well as of state economic misbehavior. Severe state action to combat mass informal economic activity is almost a foregone conclusion, despite the fact that over half of Argentina's 37 million overtaxed citizens live below the poverty line. Argentina's elitists, mercantilists, and statist parasites would inevitable resort to oppressive measures to rob the masses of control of their economic destiny. Foreign assistance to Argentinean governmental forces in this regard is also a foregone conclusion, despite it having the potential of precipitating a return to oppressive state behavior in areas beyond the economic arena. Argentina's elitists are practically guaranteed support from players in Washington and Brussels in this regard. A nationwide informal economy in Argentina not only has the potential to embarrass foreign political leaders, but it also has the potential to illustrate to the citizens of the world that the masses could rise up against statist economic oppression, in a people's economic revolution driven by the ideas of Rothbard, Mises, and Hayek. The well-being of the majority of a nation's economically disenfranchised citizens could be realized without any state control of the nation's money supply or state regulation of peaceful economic activity. It is a lesson that the IMF, the World Bank, and a few national leaders would prefer that it never be illustrated in the real world. It is a lesson that could inspire entire populations of economically disadvantaged citizens living elsewhere in the not-so-free world to wrest control of the economy away from the statist elitists. ---------------------------------------------------------------------------- ---- Harry Valentine, a commentator on economic issues, lives in Canada. Send him MAIL. From rschaap at iprimus.com.au Fri Jun 14 10:45:52 2002 From: rschaap at iprimus.com.au (Rob Schaap) Date: Sat, 15 Jun 2002 02:45:52 +1000 Subject: [A-List] Destructive creation:US economy's internals References: <3CE6260B.ED32F22A@iprimus.com.au> <3D060E86.894D87B5@iprimus.com.au> Message-ID: <3D0A1DC3.834EB162@iprimus.com.au> Absolutely beaut article: June 13, 2002 Financing of US debt not sustainable: report http://business-times.asia1.com.sg/news/story/0,2276,48094,00.html Reversal of capital inflows into US from Asia could precipitate a crisis By Siow Li Sen (SINGAPORE) The United States, by far the largest indebted nation in the world, is being bankrolled by thrifty Asian savers like Japan, China and Singapore. But this is unsustainable and a threat to financial stability, says a report by the New Economics Foundation (NEF), a radical UK think-tank. Savings trends in Asia will decline as its middle classes consume more and a reversal of capital inflows into the US could precipitate a financial crisis or a sudden crash like in Thailand or Mexico. Asian consumers will spend more and borrow more over the next decade, and its savings rates will come down to European or US levels, says the report. It suggests this has already started: in January this year, Japanese investors made their largest net sales of foreign bonds in four years - US$24 billion. One of the NEF's programmes focuses on the debts of the poorest countries and the economic adjustments imposed on them by creditors. Its report - which calls the US a HIPC or 'heavily indebted prosperous country' - was publicised to coincide in April with the International Monetary Fund and World Bank spring meetings in Washington. The US, with a population of 300 million, has accumulated an external debt of US$2.2 trillion, almost the same owed by about five billion people in the whole of the developing world, including India, China and Brazil - US$2.5 trillion. Put another way, every American citizen owes the rest of the world US$7,333 while every citizen of all the developing nations owes only US$500. More disturbingly, the US debt is also financed by the poor countries through capital flight from the latter and the forced holdings of high levels of US dollar reserves, the report says. Poor countries are borrowing at interest rates as high as 18 per cent, while the US borrows through US Treasury bonds at 3 per cent. Continued inflows of capital into the US and UK help to lower interest rates and also inflates the value of their currencies by about 20 per cent. This enables them to buy imports from the rest of the world 20 per cent cheaper than they would otherwise have been able to, the report argues. Poor countries are bled dry through debt service repayments totalling more than US$300 billion a year while the US needs to pay only US$20 billion annually to service an almost equivalent debt. Whether the US deficit is reversed through a sudden crash or a continued decline, 'it is inevitably the poor countries that will bear the highest costs of any correction to the US' unsustainable debts'. The hard-hitting report adds: 'While the growing deficits of rich countries are not understood, are ignored or tolerated by academics, experts and public opinion, the debts of poor countries are the subject of much opprobrium. 'Rich countries are held to be prudent, efficient and competent in managing their economies - and therefore 'deserve' their historically high, extravagant and environmentally unsustainable living standards. In contrast, poor countries are judged as incompetent and corrupt in managing their finances - a fact which is seen to explain the huge 'quantities' of poor country debt.' Another of its controversial claims is that the US deficit is the real driving force behind globalisation. 'Elected representatives of the US and the United Kingdom have actively promoted international financial liberalisation, or 'globalisation', to finance the US deficit,' it states. It argues that globalisation has not been primarily driven by corporations or by development in new technology. Instead, because of the need to finance the steady expansion of the US trade deficit in the 1960s and 70s, the US and UK governments embarked on a deliberate policy to remove statutory controls over the movements of capital. From soncu at pacbell.net Fri Jun 14 16:08:08 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Fri, 14 Jun 2002 15:08:08 -0700 Subject: [A-List] Peru: Privatization protests Message-ID: Peruvians protest government sale of two electricity companies Fri Jun 14, 5:18 PM ET LIMA, Peru - Protests erupted in two cities in southern Peru Friday after the government decided to go ahead with the sale of two state-owned electricity companies in the region. Police fired tear gas to disperse hundreds of protesters who gathered in the colonial plaza of Arequipa, chanting slogans against President Alejandro Toledo and tearing up stone bricks from the cobblestone streets. Demonstrators filled the plaza after officials in Lima announced that the government had sold an electricity-generating company in Arequipa and another in Tacna to Tractebel, a Belgian company, for dlrs 167.4 million. Demonstrations and work stoppages in the two southern cities and in other parts of Peru, including Lima, demanding the government call off the privatization have resulted in weeks of delays for the sale. The protesters fear the privatization will mean layoffs at the two companies and higher utility rates. Television station Channel N broadcast the protests live from Arequipa Friday, a mountain city of 1 million people 465 miles (750 kilometers) southeast of Lima. Dozens of people also marched in the streets of Tacna, 595 miles (960 kilometers) southeast of Lima, Channel N reported. The government hopes revenues from this privatization sale and the sale of at least dlrs 700 million in other state-owned assets this year will help cover budget needs. President Toledo said he would not to bow to protesters' demands. "I will continue managing the economy responsibly," he told a business luncheon Friday after the protests broke out. "I will continue firmly with privatizations and I will stimulate private investment for the creation of jobs," he said. Full at: http://story.news.yahoo.com/news?tmpl=story&u=/ap/20020614/ap_wo_ en_ge/peru_protests_2 From rschaap at iprimus.com.au Sat Jun 15 07:46:31 2002 From: rschaap at iprimus.com.au (Rob Schaap) Date: Sat, 15 Jun 2002 23:46:31 +1000 Subject: [A-List] Badly British Burchill Bites Bastard Blair's Bum References: Message-ID: <3D0B4538.896EC42A@iprimus.com.au> Tony the barbarian Julie Burchill Saturday June 15, 2002 The Guardian They keep telling us we work the longest hours in Europe - how did that happen? One minute we're the sick/lazy man of Europe and the Germans and Scands are walking all over us and even the French think we're slackers - and then the next we're these career-crazed automatons who can't switch off. Why wasn't somebody designated the sensible one to make us stop in the middle? Of course, the probable answer is that they're both lies. I don't believe that in the 1970s we were the most unproductive people in Europe; it's just that the Germans, Italians and French were still embarrassed about dinky little us having to save them from their, um, "Dark Side". Every time they sneered at us, it kissed away a bit of the fact that they'd actually believed that voodoo lunatics such as Hitler, Mussolini and P?tain were pretty cool. But time heals all wounds, and they've got over their embarrassment to the extent that they're thinking about going there one more time. Fascism's like childbirth in that respect; you say "Never again", but after a few years you forget how much it hurts. And lo and behold, Le Pen's holding 18% of the vote. So anyway, now they're happy about themselves again, the big Euro boys don't need to put us down in order to feel good. Or rather, they've decided to put us down from another direction. And so our alleged terminal idleness has mysteriously mutated into an inability to stop and smell the roses while the rest of Europe dawdles life-affirmingly over a cappuccino at a pavement cafe, watching the world go by - even if, in the case of the French, they can't resist slyly sticking out their chicly clad foot and tripping up anyone the wrong side of beige. Now, I'm prepared to believe that the working class of this country - by which I mean the people whose work benefits others more than themselves, be they call-centre sentries, teachers, nurses, firefighters or binmen - is grafting harder than it ever has, because that was obviously going to happen once the trades unions were decimated. Profit is the only logic of capitalism, and brute force the only opponent it ever respected; to take it to task over this is as foolish as blaming a dog for barking. But the idea that the parasite class, which has all the fun, money and power - politicians, lawyers, advertising agency wallahs, public utility directors, etc - has been similarly knocking itself out for scant reward over the past few years is ridiculous. I don't think there's ever been a time when thankless, essential jobs have been so relatively underpaid compared with self-seeking, non-essential ones. And I know what you're thinking, and yes I am overpaid and lazy compared with a nurse (or even a judge, come to think of it!), but journalists do at least act as a thorn in the side of those who seek to exercise power over others. People might moan about David Beckham making ?500,000 a minute or whatever, but the fact remains that no one is forcing the clowns who shell out 60 quid for yet another new doll-size Man U shirt to do so. No one's putting their hand in your wage packet and saying, "Here, Posh needs a new helipad - give us that fiver!" But a huge amount of our tax goes on the salaries of people whose absence we wouldn't notice if they downed tools tomorrow; on administrators, on committee-sitters, pen-pushers, spin-doctors and paper-rustlers. It's surreal, like with actors. You know - George Clooney earns more in a year for pretending to be a doctor than a real doctor gets in a lifetime. But then, we're not paying Clooney's wages out of our taxes; we are paying the man who sits behind a desk and runs the railways into the ground rather than the man who walks the railways and helps them work properly, and we are paying the man from the ad agency who dreams up yet another crap campaign to tell us how good our public services are, rather than giving that money directly to the criminally underpaid nurses and firefighters who struggle ceaselessly to keep them as they are. We are now, under New Labour, in a situation where the teller of the tale is rewarded far more handsomely than the doer of the good deed, where the blarney, the spin, the simulacra are treated with far more esteem than the real life. This is as good a definition as I've heard of a society gone mad. Under this government we have seen a massive over-employment of the mediocre middle class and their useless kiddies, in jobs that the human race has managed perfectly well without until a few years ago. While the public services have seen repeated attempts to "rationalise", "downsize" and "modernise" them, why hasn't the equivalent robust attitude been taken to the legion of white-collar "workers" employed by the government, with our money? Where are the ad men clutching their P45s, the market researchers going home crying to their wives because they can't afford that third holiday per year any more? With the gap between rich and poor greater than it has ever been in recorded history, and social mobility less than it was 20 years ago, when are we going to admit that Blair is a bigger barbarian than Thatcher, Major and Conan rolled together ? At last the Labour party is led by a class warrior! Sadly, it's the destruction of the working class he is obsessed with. And he won't stop until every red cent is out of your pocket, and into theirs. From soncu at pacbell.net Sat Jun 15 18:24:08 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat, 15 Jun 2002 17:24:08 -0700 Subject: [A-List] Thus spoke O'Neill Message-ID: Top Financial News 06/15 13:58 Treasury's O'Neill Sees U.S. Stocks Reversing Decline (Update1) By Brendan Murray Halifax, Nova Scotia, June 15 (Bloomberg) -- U.S. stock markets will reverse a recent slide soon, reflecting the strength of the country's economic recovery, U.S. Treasury Secretary Paul O'Neill said. "Eventually it will go back up, maybe sooner rather than later," O'Neill said in a briefing with reporters after a meeting of finance ministers from the Group of Seven industrial countries. Yesterday, the Dow Jones Industrial Average fell as much as 242 points before closing down 28 points at 9474.2. The Dow is down more than 5 percent on the year. The Treasury secretary said he can't fathom the reasons for such large swings. "How do you explain that kind of movement? It's beyond me," he said. "The important thing is the fundamentals of what's going on in the real economy, which I continue to believe are quite good, and eventually the markets will reflect the underlying strength in the economy." The recent declines indicate there are "more sellers than buyers," O'Neill said. "I don't worry about things I can't do anything about." He suggested the threat of another terrorist attack in the U.S. may be undermining investor and consumer confidence, a possible reason for the drop in equities. "One cloud, and it's not just a cloud for the market, is the cloud over how people feel," O'Neill said. "Something like 80 percent of the American people are concerned about another terrorist event, and that has a weight and it affects how people feel." Arthur Andersen, Trade Asked about the guilty verdict returned today against Arthur Andersen LLP, he said the weakness in investor confidence stemming from the bankruptcy of Enron Corp. probably will be short-lived. Cases of corporate malfeasance "have a weight as well, but part of the weight is over-weighted because I think the specific instances are not the general case," he said. During today's meeting, the G-7 didn't discuss the growing U.S. current account deficit, an imbalance the International Monetary Fund and many European officials have cited as a potential risk to global growth. "No one ever said anything about the current account deficit in the meeting," he said. Nor did U.S. steel tariffs or farm subsidies emerge as a topic during the meeting, he said. Japan, Dollar Although a front-page headline in today's Toronto's Globe and Mail said Canadian Finance Minister John Manley "fired a salvo" at the U.S. over expanded subsidies for U.S. farmers, O'Neill said Manley didn't make a big issue about U.S. farm policy during a meeting yesterday. "He was very gracious and civil about it and I was not surprised that he wanted to talk about those issues," O'Neill said. "It's necessary here in Canada for him to be seen complaining about things that his electorate is concerned about." O'Neill said he was not impressed with the outlook for Japan's economy this year and next. Japan's finance ministry expects zero growth this year in the world's second-biggest economy and 1 percent growth next year, O'Neill said. So far, he said hasn't heard any additional plans that would speed Japan's recovery. "They need to be at 3 percent-plus," he said. "So I'd love it if they would figure out a way to get back on a track that gives them their potential real growth much quicker than they're anticipating." During the press conference, O'Neill said the U.S. policy supporting a strong dollar hasn't changed. "Yes, we have a strong dollar policy and we have no intention of changing it," O'Neill said. "I'm going to get some cards printed" to remind him of the policy, O'Neill told reporters after the press conference. "I can't remember all this litany you all expect me to say." From soncu at pacbell.net Sun Jun 16 04:10:11 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sun, 16 Jun 2002 03:10:11 -0700 Subject: [A-List] Destrucive creation: A supply-and-demand situation Message-ID: East meets West on love's risky cyberhighway By Fred Weir | Special to The Christian Science Monitor June 11, 2002 edition MOSCOW - Alevtina Ivanova and other Russian bachelorettes like her are looking for a few good men ? abroad. "Unfortunately, in our collapsed economy, very few men are able to support a family properly," she says. "Russian men lack confidence, they become fatalistic, they drink, they die young. It's not surprising that Russian women pin their hopes elsewhere." Ms. Ivanova, a veteran of half-a-dozen serious cyberrelationships with European and American men, is among thousands of Russian women turning to the Internet to meet Westerners. The potential suitors are equally frustrated with the dating prospects in their home countries. "American women are too independent, too demanding, too critical," says Chris, a middle-aged US businessman visiting Moscow to meet "several very nice ladies" he contacted over the Web. The visitor, who asked that his last name not be used, cites a joke often repeated here: "A Russian wife wants to keep house for you. An American wife wants to get rid of you, and keep the house." Dozens of Web-based agencies are busy playing match- maker, for fees paid by both the women, who send in their pictures and bios for posting on international websites, and the men, who can obtain contact information for the women who pique their interest. The agencies claim that romance is blossoming all over, and that thousands of happy Russian e-mail order brides head West every year. "We get about 300 applicants every single day, mostly women," says Anna Kuznetsova, manager of Eye-2-Eye, a large, Moscow-based international dating agency. "The technology may be modern, but the process of men meeting women is as ancient as time." Though there are no firm statistics, it is estimated that between 4,000 and 6,000 women from the former USSR marry US citizens each year. One agency currently lists 25,000 women from Russia and other former Soviet republics seeking Western mates; there are dozens more agencies, each offering thousands of would-be brides. Some agencies have branched into travel, translation and other services to profit from what they say is an exploding traffic. While some describe these international e-introductions as offering matches made in heaven, others see nightmares in cyberspace. "People bring their illusions as well as their dreams to this market," says Tatiana Gurko, head of the independent Center for Gender Studies in Moscow. "Like any physical place, the Internet has predators lurking about, and sometimes they may be hard to spot." Western men increasingly report being ripped off by wily Russian women, who write sweet e-mails, send sexy digital photos, hit them up for cash, and then disappear. On the other side, tales filtering back to Russia of Internet marriages gone sour ? including the murder of a Russian mail-order bride in the US ? have put women on their guard. But Ivanova, who now works as an adviser to DiOritz, a large Moscow matchmaking agency, says that, although none of her cyber-relationships have led to marriage, she has had no regrettable experiences. "You can find out everything you need to know about a man in five e-mails," she says breezily. "Men are fairly obvious, you just need to question them properly." To her, the requirements on both sides are clear: "A woman need only be attractive and educated, but a man must have property, means, and a good job." Yelena Khronina, who plans to soon wed "a wonderful Norwegian man" she met via the Internet, says her dream has come true. "It's so hard to be a woman in Russia," Ms. Khronina sighs. "But then you visit this beautiful, orderly, prosperous country, and spend time with a man who treats you with kindness and respect. Why would anyone say no to that?" The potential dangers of dabbling in cyberromance are dramatized in a recent film, Birthday Girl, in which Nicole Kidman plays a mail order bride from Moscow who brings a gang of Russian mafia thugs crashing into the life of her English bank-clerk beau. In real life, the sting is usually more mundane: An unsuspecting Western man falls in love after a few gushing e-mail exchanges with a false identity posted on a Web site ? sometimes the photos are actually of a Russian actress or fashion model ? and is persuaded to wire cash for a ticket to visit him, or to meet some personal emergency. "A woman can string a man along, playing on his emotions and sympathy and, in doing so, trick him into giving her money or expensive items," says Paul O'Brien, a US Web designer who has temporarily given up his search for a Russian wife after being burned by two women who just wanted money from him. Mr. O'Brien says he resorted to the Internet because of America's fast-paced, impersonal and workaholic culture. "A lot of guys I know work many, many hours and do not have time for a social life," he says. "So it seems particularly appealing to them when these agencies offer to help them make contact with beautiful and single women," he says, but warns: "Prospective suitors need to be very wary of the women out there who have no intention of developing a relationship with them." Most of the known scams are now listed on a special website supported by several matchmaking agencies, http://www.russian-scam.org/ Russian women insist it is they who face the greatest hazards. Many have heard about Anastasia Solovyova, a Russian from the former Soviet republic of Kyrgyztan, who was murdered by her American husband two years ago. She had been his second mail- order bride. Experts say there are many more tales of miserable, and sometimes tragic, mismatches. "You come to a strange country, to meet a man you've only corresponded with by e-mail," says Ivanova. "There are issues of language, culture and personal morality. It takes a lot of trust, and for some women it goes badly wrong." After her many encounters, Ivanova says she now advises her clients not to consider men from the US at all. "American men are not cultured, they work too much and think far too much about money," she says. "Western European men are different. When they correspond with a prospective bride, they look upon it as forming a relationship. American men act as if they're buying a wife." In any case, the terrorist attacks of Sept. 11, which brought the Russian and US governments closer together may, paradoxically, have put at least a temporary damper on the love fest. Tamara Babkina, deputy director of Wedding Palace No. 4, which is the only office in Moscow where foreigners can legally marry, says that until last year, Americans were the largest group marrying Russian women. "We had 175 US-Russian weddings in 2001, but since Sept. 11 there has not been a single one," Ms. Babkina says. While no one wants to go on the record criticizing love, some experts argue that the Westward outflow of Russian women must be viewed as a baneful social indicator. "Russia has become the world's leading exporter of wives, and this is a tremendously profitable business," says Ms. Gurko. "It may be a real supply-and-demand situation," she says, "but let's try to remember that this vast supply of terrific women is made up of individuals whose hopes have been crushed in Russia. "It's so sad that, in order to seek a better life, a Russian woman has to leave." Full at: http://www.csmonitor.com/2002/0611/p01s04-wogn.html From jfgf.consult at mail.telepac.pt Sat Jun 15 17:08:28 2002 From: jfgf.consult at mail.telepac.pt (Jorge Figueiredo) Date: Sun, 16 Jun 2002 00:08:28 +0100 Subject: [A-List] resistir.info --- last insertions Message-ID: <5.1.0.14.0.20020616000302.027dda10@mail.telepac.pt> Last articles inserted in resistir.info, a Portuguese web site, http://resistir.info Sustentabilidade no s?culo XXI, por A. M. Samsam Bakhtiari Os herdeiros dos austro-marxistas na batalha ideol?gica , por Miguel Urbano Rodrigues A ocupa??o de terra no Brasil, por Bernardo Man?ano Fernandes A nova face do capitalismo: Crescimento lento, excesso de capital e uma montanha de d?vida, pela Monthly Review Brasil: Governo intensifica persegui??o ao MST, entrevista de Jo?o Pedro St?dile M?xico: A mar? da indigna??o numa sociedade ca?tica, por Miguel Urbano Rodrigues Col?mbia: Um narcoterrorista no pal?cio presidencial?, por Manuel Salgado Tamayo Tornar transparente a amea?a ? humanidade, por Miguel Urbano Rodrigues Os 150 anos de uma obra magistral, por Mario Maestri A curva da estrada, por Jorge Figueiredo O auto-golpe como mecanismo de pol?tica exterior, por Fernando Montiel T. O iminente decl?nio do petr?leo, por Rui Namorado Rosa Jo?o Amazonas, revolucion?rio irrepet?vel, por Miguel Urbano Rodrigues Reforma Agr?ria no Brasil: s? na televis?o, por Jo?o Pedro Stedile e Gerson Teixeira Washington empurra a ?ndia e o Paquist?o para a guerra, por Michel Chossudovsky -------------- next part -------------- A non-text attachment was scrubbed... Name: not available Type: text/html Size: 8031 bytes Desc: not available URL: From julfb at alternativagratis.com.ar Sat Jun 15 21:13:41 2002 From: julfb at alternativagratis.com.ar (Julio Fernández Baraibar) Date: Sun, 16 Jun 2002 00:13:41 -0300 Subject: [A-List] Argentina: Salvation Lies in an Underground Economy (sp) References: <3D09F669.7CEABE6A@iprimus.com.au> <039701c213b6$fc3fa400$0100a8c0@igrushkii> Message-ID: <002501c214e3$fc034680$7d3d3dc8@lenin> ?De donde sali? esta literatura anarcoide que es, ni m?s ni menos, que una vulgar apolog?a del libre mercado y una propuesta para que Argentina pierda toda perspectiva nacional. Si, por ventura, creemos que la vuelta al trueque, es decir la abolici?n precapitalista del dinero, sin abolir la mercader?a, puede significar un avance en nuestras condiciones de vida y en nuestra capacidad para liberarnos del imperialismo, muchachos, estamos sonados. > A nationwide informal economy in Argentina not only has the potential to > embarrass foreign political leaders, but it also has the potential to > illustrate to the citizens of the world that the masses could rise up > against statist economic oppression, in a people's economic revolution > driven by the ideas of Rothbard, Mises, and Hayek. Ignoro si el Hayek citado es el mismo Hayek, el ultraliberal antiestatista austriaco, te?rico de la escuela de Chicago, pero es evidente que el neoliberalismo tiene ap?logos de derecha, que ya conocemos, y de izquierda, que empezamos a conocer. Julio Fern?ndez Baraibar julfb at sinectis.com.ar Julio Fern?ndez Baraibar julfb at sinectis.com.ar ----- Original Message ----- From: "Anne Williamson" To: Sent: Friday, June 14, 2002 12:20 PM Subject: Re: [A-List] Argentina: Salvation Lies in an Underground Economy > Friday, June 14, 2002 > > A People's Economic Revolution > > by Harry Valentine > > [Posted June 13, 2002] > > People's revolutions generally have their origins in inappropriate > governmental behavior. This behavior may be exploitative, it may be > oppressive, tyrannical, or even despotic. In rare instances, the opportunity > may present itself whereby the people may rise up and overthrow an otherwise > unpopular government. Not all successful uprisings, such as the Bolshevik > Revolution or Iran's anti-American revolution, are to the long-term > advantage of all citizens. > > The recent monetary and economic upheavals in Argentina, caused by state > behavior in the monetary system, now make that country ripe for a peaceful > people's economic revolution. The foundational ideas of such a revolution > have been written up in the works of economists such as the late Murray > Rothbard. Rothbard argued that an absence of forcible coercion in human > relations and freedom of peaceful action would form the basis of a free > society as well as a viable free-market economy. > > The meltdown of Argentina's monetary system leaves the bulk of the > population there with little choice but to peacefully take economic control > away from their government, through a nationwide informal or underground > economy. Ludwig von Mises advised in his writings that people would revert > to bartering in the event of monetary destabilization. > > In recent weeks, large numbers Argentineans have in fact been turning to the > underground economy as a means of economic survival. Most of the > participants may never even have heard of Mises or Rothbard, yet their ideas > offer hope to large masses of people who are willing to peacefully engage in > a voluntary exchange of goods and services. > > In Argentina today, there exists a small number of people who have actually > read the works of Mises, Rothbard, and Hayek and are familiar as to how > these ideas and theories can apply to a real-world economic environment. The > central leadership idea offered implicitly by Rothbard's theories is that a > peaceful mass revolt and mass rejection against centralized economic power > and centralized economic control is possible through mass underground > economic action involving the majority of a nation's population. > > This implicit idea can put the collective decision making of the masses of > individual people who are engaged in peaceful and private economic planning > in direct control of Argentina's economic recovery, as well as its future > economic evolution. Whereas political opponents may imprison a Mandela or > assassinate a Gandhi, a peaceful revolution led by a well-formulated idea > presents the opponent with a far more perplexing adversary. > > A successful nationwide informal economy operating in Argentina, one that > benefits large masses of citizens, has the potential to politically > embarrass governments of other nations. The tools of production that are > available today are far more advanced and far more efficient than their > predecessors of bygone eras, when bartering flourished. Far higher > individual levels of productivity, involving large numbers of people, are > possible today. Modern computer technology enables accurate tracking of > credits and debts incurred in local regions by participants in the > underground economy. > > Argentina has a long history of oppressive governmental behavior as well as > of state economic misbehavior. Severe state action to combat mass informal > economic activity is almost a foregone conclusion, despite the fact that > over half of Argentina's 37 million overtaxed citizens live below the > poverty line. > > Argentina's elitists, mercantilists, and statist parasites would inevitable > resort to oppressive measures to rob the masses of control of their economic > destiny. Foreign assistance to Argentinean governmental forces in this > regard is also a foregone conclusion, despite it having the potential of > precipitating a return to oppressive state behavior in areas beyond the > economic arena. Argentina's elitists are practically guaranteed support from > players in Washington and Brussels in this regard. > > A nationwide informal economy in Argentina not only has the potential to > embarrass foreign political leaders, but it also has the potential to > illustrate to the citizens of the world that the masses could rise up > against statist economic oppression, in a people's economic revolution > driven by the ideas of Rothbard, Mises, and Hayek. > > The well-being of the majority of a nation's economically disenfranchised > citizens could be realized without any state control of the nation's money > supply or state regulation of peaceful economic activity. It is a lesson > that the IMF, the World Bank, and a few national leaders would prefer that > it never be illustrated in the real world. It is a lesson that could inspire > entire populations of economically disadvantaged citizens living elsewhere > in the not-so-free world to wrest control of the economy away from the > statist elitists. > > > ---------------------------------------------------------------------- ------ > ---- > > Harry Valentine, a commentator on economic issues, lives in Canada. Send him > MAIL. > > > > From jfgf.consult at mail.telepac.pt Sun Jun 16 02:33:51 2002 From: jfgf.consult at mail.telepac.pt (Jorge Figueiredo) Date: Sun, 16 Jun 2002 09:33:51 +0100 Subject: [A-List] resistir.info --- last insertions Message-ID: <5.1.0.14.0.20020616093307.01c57710@mail.telepac.pt> Last articles inserted in resistir.info, a Portuguese web site, http://resistir.info Sustentabilidade no s?culo XXI, por A. M. Samsam Bakhtiari Os herdeiros dos austro-marxistas na batalha ideol?gica , por Miguel Urbano Rodrigues A ocupa??o de terra no Brasil, por Bernardo Man?ano Fernandes A nova face do capitalismo: Crescimento lento, excesso de capital e uma montanha de d?vida, pela Monthly Review Brasil: Governo intensifica persegui??o ao MST, entrevista de Jo?o Pedro St?dile M?xico: A mar? da indigna??o numa sociedade ca?tica, por Miguel Urbano Rodrigues Col?mbia: Um narcoterrorista no pal?cio presidencial?, por Manuel Salgado Tamayo Tornar transparente a amea?a ? humanidade, por Miguel Urbano Rodrigues Os 150 anos de uma obra magistral, por Mario Maestri A curva da estrada, por Jorge Figueiredo O auto-golpe como mecanismo de pol?tica exterior, por Fernando Montiel T. O iminente decl?nio do petr?leo, por Rui Namorado Rosa Jo?o Amazonas, revolucion?rio irrepet?vel, por Miguel Urbano Rodrigues Reforma Agr?ria no Brasil: s? na televis?o, por Jo?o Pedro Stedile e Gerson Teixeira Washington empurra a ?ndia e o Paquist?o para a guerra, por Michel Chossudovsky http://resistir.info -------------- next part -------------- A non-text attachment was scrubbed... Name: not available Type: text/html Size: 8109 bytes Desc: not available URL: From soncu at pacbell.net Sun Jun 16 18:40:26 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sun, 16 Jun 2002 17:40:26 -0700 Subject: [A-List] Re: Argentina: Salvation Lies in an Underground Economy (sp) (tr) Message-ID: Arkadas, Kusura bakma ama ben Ispanyolca bilmiyorum. Bunu bir de Ingilizce yazman mumkun mu? Ya da bir yerlerden tercume ettirebilir misin? Tesekkurler, Sabri --------------------- =BFDe donde sali=F3 esta literatura anarcoide que es, ni m=E1s ni menos, = que una vulgar apolog=EDa del libre mercado y una propuesta para que Argentin= a pierda toda perspectiva nacional. Si, por ventura, creemos que la vuelta al trueque, es decir la abolici=F3n precapitalista del dinero, sin abolir la mercader=EDa, puede significar un avance en nuestras condiciones de vida y en nuestra capacidad para liberarnos del imperialismo, muchachos, estamos sonados. > A nationwide informal economy in Argentina not only has the potential to > embarrass foreign political leaders, but it also has the potential to > illustrate to the citizens of the world that the masses could rise up > against statist economic oppression, in a people's economic revolution > driven by the ideas of Rothbard, Mises, and Hayek. Ignoro si el Hayek citado es el mismo Hayek, el ultraliberal antiestatista austriaco, te=F3rico de la escuela de Chicago, pero es evidente que el neoliberalismo tiene ap=F3logos de derecha, que ya conocemos, y de izquierda, que empezamos a conocer. Julio Fern=E1ndez Baraibar julfb at sinectis.com.ar From soncu at pacbell.net Sun Jun 16 19:00:38 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sun, 16 Jun 2002 18:00:38 -0700 Subject: [A-List] Venezuela: A second coup? Message-ID: Venezuela's military poised for new coup By Phil Gunson in Caracas The Independent, 16 June 2002 Venezuela's controversial, populist President Hugo Chavez, who was dramatically restored to power two months ago after being briefly ousted by the armed forces, is facing another showdown. A second coup, possibly much bloodier than the first, is likely between now and 5 July, according to experts here and military officers who claim to be part of an "institutionalist" movement. Fearing for his safety, President Chavez has cancelled public appearances. On Friday night the armed forces were on maximum alert, and sources in the presidential palace said they had been warned to expect a coup attempt in the early hours of the morning. Later the tension eased slightly, but there was concern over the outcome of an opposition rally due to bring tens of thousands of people on to the streets of Caracas yesterday. The April coup was triggered by a march on the palace, in which 18 people were shot dead. President Chavez, a former army lieutenant-colonel, himself staged a failed coup in 1992 but was democratically elected in 1998. Since taking power he has reformed the constitution and sought to turn the armed forces into an instrument of his leftist "Bolivarian revolution", named after the Venezuelan-born independence hero, Simon Bolivar. He has also earned the disapproval of the US, which receives up to 15 per cent of its oil supplies from Venezuela. Suspicious of his links with guerrillas in neighbouring Colombia and Cuba, Washington all but welcomed the April coup. Four junior officers who said they were part of a fresh coup plot agreed to talk to The Independent on Sunday on condition of anonymity. Three wore masks and camouflage fatigues, while the fourth ? a national guard lieutenant ? agreed to appear with his face uncovered. "We want to put a stop to an unsustainable situation," said an army captain. "If nothing changes, we're heading for civil war." Claiming to represent as much as 70 per cent of the armed forces, of all ranks, the officers cited specifically military grievances as well as their rejection of what they called the government's "Communist tendencies". They handed over a payslip showing that an ordinary member of the national guard earns as little as US$150 per month after deductions. The armed forces, they claimed, were being deliberately starved of resources while money was diverted to bolster so-called "Bolivarian circles". These civilian groups are seen by the Venezuelan opposition as partly a cover for the creation of militias. Sources close to hard-line members of President Chavez's movement confirmed that automatic weapons had been distributed to civilian groups and that at least "some hotheads" would use them in the event of a coup. The military rebels have threatened to kill anyone who represents a threat to lives or property. "We are prepared for anything," the army captain said. He warned of a "river of blood" if there was resistance by pro-Chavez forces, adding that there were "fanatical military units too" that were willing to die for the government cause. Because of the annual round of military promotions, 5 July is seen as a key date. After that, many dissident officers will have been removed from their posts, and up to several hundred could be expelled from the armed forces. If successful, the rebel officers said, the leaders of their movement planned to install a military-civilian junta and call elections as soon as possible. Full at: http://news.independent.co.uk/world/americas/story.jsp?story=3056 93 From soncu at pacbell.net Sun Jun 16 19:23:23 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sun, 16 Jun 2002 18:23:23 -0700 Subject: [A-List] France: Election confirms swing to right Message-ID: French election confirms swing to right By Robert Graham in Paris Financial Times, June 16 2002 President Jacques Chirac and his rightwing allies on Sunday night won an overwhelming victory in the second round of the French general elections, gaining control of all the levers of power for the next five years. Exit polls gave the mainstream parties of the right 399 of the 577 seats in the national assembly. Against this the Socialists and their allies won only 178 of which 153 went to the Socialists. The crushing defeat of the left follows President Chirac's re-election as head of state last month. He now has an historic opportunity to carry out a liberalisation of the economy, overhaul the public administration and tackle France's costly pensions system which he tried and failed to do during his first term as president. The swing to the right in France also marks a further stage in the rightward shift in European politics. At the same time President Chirac's increased authority at home will allow him to play a bigger role on the European and international stage with him determined to make France's presence felt more. To foreshadow the reinvigorated French role, President Chirac will be meeting premier Jose-Maria Aznar of Spain and Britain's prime minister Tony Blair ahead of this week's EU summit in Seville. As the polls closed the abstention rate stood at a record high of almost 40 per cent among France's 41m electorate - well above the exceptional level in the first round of 35 per cent. The refusal by such a large segment of the electorate to go to the polls underlined French people's weariness with voting after two consecutive rounds of presidential and general elections in two months. The poor turnout helped cause some major upsets in the marginal seats as the sharp swing to the right - witnessed in the first round last Sunday - appeared to have confirmed. Among the first expected casualties were some of the heavyweights in the previous Socialist-led government of premier Lionel Jospin. This was likely to accelerate the debate within the Socialists on their future leadership and direction. Former Socialist labour minister Martine Aubry who introduced the 35 hour week was set to lose her seat in the northern city of Lille, a previous Socialist stronghold. Pierre Moscovici, the former minister for Europe, also was expected to lose his marginal seat in the eastern constituency of Montbeliard. Dominique Voynet, the first Green to gain a cabinet post in France, also was heading for defeat. The mainstream parties of the right were grouped under the banner of the newly formed Union pour la majoritee presidentielle (UMP) for which exit polls gave 375 of the seats. The bulk of the remainder on the right were set to go to Francois Bayrou's centrist UDF which refused to join the UMF but will form part of the right's parliamentary majority. On Monday the premier of the interim government, Jean-Pierre Raffarin, is expected to hand in his resignation, a formality allowing him to enlarge his cabinet to put in place a full team to govern over the coming months. Although support held up reasonably for the Socialists, who led the governing coalition for the past five years, with 153 seats they were well down on their 250 in the outgoing parliament. The Communists did better than expected, expected to pick up 23 seats, sufficient to retain their status as a separate group in the national assembly. Full at: http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/ FullStory&c=StoryFT&cid=1024172259250&p=1012571727088 From soncu at pacbell.net Sun Jun 16 20:36:42 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sun, 16 Jun 2002 19:36:42 -0700 Subject: [A-List] South Korea: Working six-days a week Message-ID: Asia Times June 7, 2002 What, no weekend? South Korea's reactionary employers By Aidan Foster-Carter Whenever South Korea's industrial relations relations are discussed, the spotlight is nearly always on labor - and almost invariably negative. True, some Korean trade unionists have a lot to answer for, and a spot of growing up to do. Shaven heads, red headbands, clenched fists - let alone steel pipes, stones and Molotov cocktails; though those are far rarer nowadays than persistent stereotypes would suggest - and that went out with the 1970s. Leave antics and agitation for the football fans. In a global economy, where footloose firms have the whole planet to play with, this is not the way to win friends and influence people. Seoul's latest slogan is "Dynamic Korea, Hub of Asia". So why put a spoke in it? In reality, militancy is the exception, not the rule. Anyhow, labor is only half the story. And did you ever wonder what bred that militancy in the first place? Decades of repression, that's what. During the dark decades of military dictatorship, Korean employers could and did treat their workers like scum. If any dared raise a whisper against long hours, foul conditions or sexual harassment, then hired thugs - the police or goons, same difference - simply beat them into submission. Some activists burned themselves to death in protest; striking women textile workers had excrement thrown at them. Small wonder that in a culture where grudges (han) run deep, old scars from not so long ago still shape suspicious attitudes. What of the other side? Since democracy arrived in 1987, South Korean employers can no longer rely on the riot squad to do their dirty work. They've had to grant big wage increases - so Korean workers can at last afford to buy the goods their own skilled hands have made. That's not just justice, but sound economics. The ensuing consumer boom has weaned Seoul off its old unhealthy dependence on selling abroad. Last year, exports flagged - but Koreans kept spending, and kept their country out of recession. Yet not everything has changed. South Koreans still put in some of the word's longest hours. Diligence and effort are virtues in theory - but in practice, quantity is bad for quality. As in Japan, subordinates have to hang around doing nothing much until the boss finally heads home. Just great for family life. So is another peculiarity. South Korea is the only Organization for Economic Cooperation and Development (OECD) member state that still works a basic six-day week, rather than five. Result: no weekend, or not much of one. Naturally, foreign firms aren't having that. They almost all operate the same five-day regime as at home. This makes them attractive employers, as does their readiness not just to hire women but to allow them real careers that don't end with marriage. Persistent sexism is another blot on Korean employers - and a stupid waste of half the nation's talents. Now, at last, the six-day week is under attack. The Kim Dae-jung government wants to join the modern world and bring it down to five. This is partly a sop to the unions, who feel (rightly) that they've borne most of the pain of restructuring since the 1997 financial crisis. But it's also a bid to boost an economy whose focus is already shifting away from production to consumption, and from industry to services. Official estimates are that bringing in a proper weekend will boost GNP by 4.7 percent and create 680,000 jobs, especially in leisure and service sectors like tourism, hotels and sport. Already last year Koreans spent 83 trillion won (US$65 billion) on leisure - up fivefold since 1990 - accounting for 15 percent of GNP. By one calculation, each additional 10 minutes of free time creates new spending of 1.7 trillion won. So are bosses rushing to implement this manifestly modern measure? As if. The Korean Employers Federation (KEF) is fighting it tooth and nail: claiming that its members face ruin unless public holidays are reduced to compensate. The Federation of Korean Industries (FKI), which speaks for the chaebol (large conglomerates), says the same. Speaking of ruin, it was FKI stalwarts like Daewoo, Hyundai et al that all but laid low the whole country with their reckless debt-fueled expansion. So far Korean taxpayers have shelled out 156 trillion won to clear up the mess. Few of the actual culprits have had to pay. And yes, these are the same paragons who for years oppressed their workers - and bribed the generals. With that track record, silent assent would be more seemly. Yet the KEF has no shame - and no sense either. On the ground, the troops who can see the writing on the wall are starting to break ranks. Firms are moving to a five-day week, whatever their leaders say. On May 24, a whole sector gave way. Banks will introduce a five-day week from July - for which the KEF roundly attacked them, worrying inter alia how exporters would cope at weekends. Well, if the rest of OECD can do it, then Korea will find a way. It's sad, and strange, that captains of industry should be quite so thick-headed. You'd think the lesson of the post-1987 wage rises would have sunk in by now. They were a challenge - but one that forced firms to cut fat and be more efficient, while creating a home market that massively boosted demand for their products. In the inexorable shift from producer to consumer, goods to services, quantity to quality, a full weekend is the next logical step. Now as before, what employers give up, they will get back: in a harder working, more relaxed, happier, and more efficient work force, and in the growth of new sectors for profitable investment. They should wise up, and get shot of the old feudal attitudes once and for all. Full at: http://atimes.com/koreas/DF07Dg01.html From soncu at pacbell.net Sun Jun 16 22:15:05 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sun, 16 Jun 2002 21:15:05 -0700 Subject: [A-List] Report from Argentina Message-ID: Vicente Balvanera reporting from Buenos Aires (2) June 13, 2002 In front of the Banco Frances in the Buenos Aires barrio of Almagro, there is a sign written in the street, which says "ASAMBLEA, VECINO PARTICIPE, MIERCOLES 20:30 hs" ("Assembly, nieghbor, participate. Wednesday 8:30pm"). To the left of the bank is a side street. At 8:30pm, two sisters put the assembly banner into place about 100 yards from the street entrance, effectively blocking off the space for the weekly assembly meeting. The Almagro Popular Assembly meeting was about to start. Behind the banner "Asamblea Popular de Almagro, todos los miercoles, 20:30" ("Popular Assembly of Almagro, every Wednesday, 8:30 pm") stood the circle of asamble?stas (25 when the meeting started, well over 40 when it ended at 11:30pm), the 4? C temperature keeping the meeting remarkably business-like through most of its three hour duration (Indoor meetings have been militantly and unanimously rejected by this and many other assemblies as a first step towards co-optation and destruction of the spirit of December rebellion.). I was flabbergasted. The Neighborhood Assembly of Almagro has been meeting every week for almost six months now. Originally, the Assembly mobilized every Friday, to participate in the huge "cacerolazos" (pot banging protests), with more than 150 neighborhood assemblies converging in the Plaza de Mayo in front of the Pink House. These multitudinous marches then took place fortnightly, and finally monthly, and have dwindled somewhat in numbers. Three to four thousand used to meet every week-end in Parque Centenario (Centennial Park) for the Interbarrial (Inter-neighborhood Assembly). Now attendance is down to around three to four hundred, showing an undeniable reflux in this sector, as opposed to the spectacular growth in the more combative piqueteros (picketeers) sector, with its preponderance of unemployed working class. Even so, the neighborhood assemblies are far from inactive: they were of fundamental importance recently when, together with left-wing parties, they prevented the Brukman textile factory (occupied by its workers for the last six months, and producing under workers? control) from forced police eviction. Actions like this continue all the time. Just the other week, the Polo Obrero (Workers? Pole) came to the Almagro neighborhood assembly meeting asking for (and receiving) support for an action to impede the forced police eviction of 28 families who have been unable to pay their rent at a neighborhood apartment house. The action, bringing together "pots and picketeers", was successful: the police were unable to carry out the eviction as planned (the standoff resulted in its been postponed for 30 days). And the Intersalud (Public Health coordinating body) is picking up a great deal of steam, mobilizing from one hospital to another, building towards its mega hospitalazo (hospital protest and rally) against the demise of public health services (this will be the subject of a separate note). With the cold winter weather now having hit Buenos Aires with a vengeance, I was simply not expecting the crisp, spirited meeting, which grew steadily in number as neighbors were getting back from work. Although the Assembly once had its focus on mobilization, deeper forms of organization are now being emphasized, giving rise to a whole series of working commissions. Their reports occupied a good half of the meeting time. For example, there was a report by a commission which is setting up a neighborhood school tutoring program; from a coordinating commission which meets with representatives of other nearby neighborhood assemblies; from the InterSalud; from a group which meets once a week at the Brukman Factory to coordinate action between all the occupied factories producing under workers control (there are now several) and many participating popular assemblies; from another commission working on a community warehouse project, to supply the neighborhoods with basic necessities at cost prices. A very emotive moment was when a representative of the 28 renter families working with the Polo Obrero came to give thanks for the prompt and effective support of the Almagro neighborhood assembly in preventing the eviction of the families and to invite the asamble?stas to an anti-eviction pro-popular housing renters encounter and festival, to be held this coming Monday June 17. Considerable time at the meeting was taken up by an interesting discussion (despite the low temperatures) concerning the olla popular (public soup kitchen) to be held the following Friday. The main objective of the olla popular was going to be to try to incorporate a very visible neighborhood work force, the cartoneros (cardboard foragers, a variety of what some call "urban miners"), into the popular assembly process. The practical details of everything necessary to prepare and serve the food were worked out first (M., a blacksmith, and member of the assembly, had wrought a wood burner capable of safely supporting a large pot). Then many members of the assembly wanted to know... what would the meeting, between a largely middle class group and those forced to forage for discarded cardboard to eke out a living, actually be like? What exactly had been the objectives? What were we hoping to achieve the first meeting? Fears about low attendance were allayed immediately, since when M. proudly placed the pot in the middle of the circle at the beginning of the meeting, several cartoneros appeared out of nowhere, thinking that the olla popular was going to be that very night. This made people wonder just how much food was going to be necessary. And while everyone agreed that a hot meal would certainly go a long way towards breaking the ice, some placed the emphasis upon the ecologically positive role of the cardboard foragers (going so far as to describe these workers as "ecological recyclers"), while others energetically rejected such terms, pointing out that it was only the vast dimensions of the crisis which drove so many to this activity, an activity involving exposure to police repression and the super-exploitation of the economic concerns buying up the material. Some at first asked whether the objective was to provide a hot meal, or to organize fellow workers to participate in the struggles the assembly is involved in. The keen debate reflected the wide political divergencies present in all the neighborhood assemblies (ranging from neighborhood members of the Partido Obrero (Workers Party) and other parties of the left, those calling themselves neo-anarchists and Libertarian Socialists, former militants of other parties and those describing themselves as independents, all the way to a small core group whose main focus is to co-opt the assemblies and convert them into docile appendages of the official Buenos Aires City government). The debate led to the conclusion that attending to the very real needs of the most opressed and exploited was part and parcel of the struggles of the assembly. The debate made me realize that every single step forward, and every single action taken, has to be led forward as part of a steep uphill battle against a myriad of forces and pressures striving to destroy the phenomena of Neighborhood Assemblies, and filled me with genuine admiration for the struggle of their vanguard. Full at: http://groups.yahoo.com/group/Argentina_Solidarity/message/1611 From nestorgoro at fibertel.com.ar Sun Jun 16 12:23:17 2002 From: nestorgoro at fibertel.com.ar (Nestor Gorojovsky) Date: Sun, 16 Jun 2002 15:23:17 -0300 Subject: [A-List] (Fr) Kossovo hoy / hoje / today Message-ID: <3D0CAD65.23701.2408E@localhost> ------- Forwarded message follows ------- Que se passe-t-il ? pr?sent au Kosovo ? ----- Original Message ----- From: Michel COLLON To: *BELGIQUE O-R Sent: Wednesday, June 12, 2002 11:32 AM Subject: Que se passe-t-il ? pr?sent au Kosovo ? Que se passe-t-il ? pr?sent au Kosovo ? Un film brise le silence. INTERVIEW : Michel Collon et Vanessa Stojilkovic sur leur nouveau film Les Damn?s du Kosovo Chass?e de son appartement ? Pristina, Maria n?a eu la vie sauve que parce qu?elle parlait albanais. Son neveu, interpr?te pour l?ONU, a ?t? assassin? sauvagement. Le mari de Silvana a ?t? kidnapp?, elle est sans nouvelles depuis deux ans. La maison de Stanimir a ?t? br?l?e. Qu?ont-ils en commun? Ils sont Serbes et vivent, ou plut?t survivent au Kosovo. Pourquoi les m?dias ne parlent-ils plus de cette r?gion occup?e par l?Otan ? Le nouveau film de Michel Collon et Vanessa Stojilkovic brise le silence. Et met en garde tous les peuples menac?s par les guerres de la mondialisation... ANTOINE RENARD Comment est n? ce film ? Michel Collon. J'ai effectu? ce reportage au Kosovo pour me rendre compte sur place de la situation pr?sente des Serbes et des autres minorit?s nationales. Ayant en m?moire cette phrase de Bill Clinton au moment o? il d?clenchait les bombardements sur la Yougoslavie : ?Notre fermet? est le seul espoir pour le peuple du Kosovo de pouvoir vivre dans son propre pays. Imaginez si nous fermions les yeux et si ces gens ?taient massacr?s, ? la porte m?me de l'Otan. Celle-ci serait discr?dit?e.? Clinton parlait des Albanais. Mais aujourd'hui, qu'en ?tait-il des Serbes et des autres minorit?s nationales Roms, Gorans, Turcs, Egyptiens, Musulmans qui vivaient au Kosovo depuis des si?cles? Etaient-ils en s?curit? avec 45.000 soldats de l'Otan dans leur pays? Et qu?avez-vous vu ? Michel Collon. Une accumulation de souffrances qu?on n?imagine pas ici... Mais les m?dias ne nous parlent plus du Kosovo. La situation n?est- elle pas r?gl?e ? Michel Collon. Au contraire ! Ce que j?ai vu, ce sont : attentats ? la bombe, assassinats, destructions des maisons ou expulsions, kidnappings et angoisses des familles, menaces permanentesS Le constat est accablant: une v?ritable purification ethnique a chass? du Kosovo la plupart des non-Albanais et terrorise ceux qui restent. Qu?avez-vous pu montrer concr?tement ? Michel Collon. Une vingtaine d?interviews donnent la parole aux victimes. Leurs t?moignages, dignes mais poignants, m?ont mis les larmes aux yeux. Il fallait absolument faire passer leur message tragique. Briser le silence m?diatique qui entoure ? pr?sent le Kosovo. Leur sort constitue une terrible mise en garde pour tous les peuples : une occupation par les Etats-Unis, ou les puissances de l?Otan, ce n?est aucunement une solution. C?est au contraire l?assurance de terribles souffrances pour tous les ?tres humains de ces r?gions occup?es. La pr?sence des troupes de l?Otan ne freine pas ces violences ? Michel Collon. Non seulement elle ne les freine pas, mais le film apporte plusieurs documents exclusifs qui r?v?lent la complicit? de l?Otan avec leurs auteurs : les milices de l?UCK s?paratiste. Vous n?avez pas eu de probl?mes pour tourner ? Michel Collon. Bien s?r, dans un tel climat de terreur, un cameraman serbe risque sa vie s?il tourne en zone ?non albanaise?. Mais j?ai eu la chance de compter sur une ?quipe de TV serbe tr?s motiv?e. Des gens extr?mement courageux ? qui je dois beaucoup. Vanessa, comment avez-vous rejoint ce projet ? Vanessa Stojilkovic. A 25 ans, j?ai d?j? t?t? divers m?tiers de l?image dont le montage. Apr?s un contact par Internet, Michel Collon m?a propos? de recommencer l??criture et le montage de son film, en panne suite aux probl?mes de sant? du pr?c?dent r?alisateur. J?ai imm?diatement accept?. Parce que vous ?tes Fran?aise d?origine yougoslave ? Vanessa Stojilkovic. Oui et non. Oui parce qu?en effet plusieurs membres de ma famille ont p?ri ou ont endur? de terribles souffrances dans cette guerre. J?en ?tais tr?s fortement ?prouv?e. Alors, ce film m?a permis de r?aliser la promesse que je leur avais faite, l?-bas : dire la v?rit? en Occident. Malheureusement, certains sont d?j? d?c?d?s et d?autres le seront bient?t. Le stress de la guerre et des bombardements a provoqu? d'?normes probl?mes d?hypertension qu'ils n?ont pas les moyens de soigner. Et des cancers croissant ? une allure fulgurante. Les gens meurent dans la souffrance. Le bilan de la guerre, pour toute la Yougoslavie, ce n'est pas seulement des morts, mais aussi l??tat physique et psychologique de ceux qui restent. Et leur manque d?avenir. Michel Collon m'a vraiment fait un cadeau en m'offrant la mati?re premi?re des ces interviews qu?il avait rassembl?es. Et ses analyses pertinentes, qui lient de fa?on claire cette guerre ? la mondialisation. En sculptant et en modelant cette mati?re, j?ai pu faire parler ma souffrance, tenir ma promesse, faire mon deuil. Michel Collon. C?est surtout Vanessa qui m?a fait un merveilleux cadeau. Moi, j?ai travaill? 4 jours de tournage. Elle, 4 mois de montage. Pas facile du tout, car je ne suis pas cin?aste professionnel, et ce que j?ai ramen? s?en ressentait. Gr?ce ? elle, gr?ce ? son engagement remarquable, plein de gens dans le monde pourront d?couvrir une r?alit? tr?s importante. Ce film s?adresse-t-il seulement aux Serbes ? Vanessa Stojilkovic. Pas du tout! Ma motivation principale a surtout ?t? d?ouvrir les yeux aux ?Fran?ais fran?ais?, disons, ou ? tous ceux d?Europe occidentale qu?on a d?sinform?s. Leur faire savoir, par exemple, qu?on prive les non-Albanais de soins de sant? d?cents : les gens meurent parce qu'on n?a pas de quoi les soigner, parce qu?ils sont priv?s des ?quipements m?dicaux n?cessaires. Que les enfants serbes sont priv?s d??coles. Qu?une centaine d??glises ont ?t? d?molies. Et que ?a continue. Est-ce un film ?pro-serbe? ? Michel Collon. Non. D?abord, il donne aussi la parole aux nombreuses minorit?s nationales, elles aussi pers?cut?es, ?nettoy?es?. Les Roms, par exemple, pourchass?s un peu partout en Europe, ces temps-ci. Et martyris?s au Kosovo. Et aussi les Juifs, Gorans, Musulmans, Turcs, Egyptiens... Des minorit?s dont on ne parle jamais. Ensuite, de nombreux Albanais se retrouvent ?galement victimes d?un syst?me maffieux bas? sur la terreur. L?un d?eux a pu t?moigner devant notre cam?ra. Il ?tait pers?cut? parce que mari? ? une Serbe ! En fait, je ne suis ni pro-serbe, ni pro-albanais. Je pense que tous ces peuples se retrouvent victimes de strat?gies cach?es : les Etats-Unis voulaient, comme leurs alli?s, d?truire une Yougoslavie trop ? gauche. Ils voulaient contr?ler les routes du p?trole qui passent pr?cis?ment par l?. Ils voulaient installer leur super-base militaire de Camp Bondsteel. Et ils y ont r?ussi, en utilisant ? non: en excitant eux-m?mes - le conflit entre Serbes et Albanais. Savez-vous qu?? pr?sent, Washington conclut des locations de 99 ans pour les pistes de ses bombardiers ? Quelqu?un peut-il nous expliquer en quoi des bombardiers aideront ? r?soudre les probl?mes des populations du Kosovo ? Un objectif strat?gique plus vaste, alors ? Michel Collon. Exactement. Cette base rapproche les bombardiers US de Moscou et du Caucase. Elle fait partie du grand plan d?encerclement, car Washington ne pense pas que Poutine et sa tendance seront n?cessairement ?ternels. Et surtout, briser la Yougoslavie faisait partie du plan global en envoyant ce message ? tous les peuples du monde : si vous r?sistez ? la mondialisation, vous serez d?truits. Un ?ditorialiste du New York Times l?avait d?j? clairement indiqu?, ? la veille de la guerre: ?Pour que la globalisation marche, l?Am?rique ne doit pas craindre d?agir comme la superpuissance omnipotente qu?elle est. La main invisible du march? ne fonctionnera jamais sans un poing cach?. McDonalds ne peut ?tre prosp?re sans McDonnel Douglas, le constructeur de l?avion F-15. Et le poing cach? qui garantit un monde s?r pour les technologies de la Silicon Valley, ce poing s?appelle arm?e des Etats-Unis, Air Force, Navy et Marines.? Vous avez ?crit plusieurs livres sur ces th?mes. Pourquoi un film ? Michel Collon. J?ai constat? que ce m?dia permet de toucher aussi ceux qui ne lisent pas. Et il est id?al pour susciter un d?bat. Chacun peut facilement offrir une cassette ? un ami, un parent. Ou organiser chez soi une petite projection + discussion. Et c?est urgent car Monsieur Bush annonce qu?il va attaquer de nombreux autres pays. Une bonne raison pour les progressistes de rediscuter ce qui s?est pass? en Yougoslavie. Les r?sultats de l?Otan correspondent-ils ? ses promesses ? Y avait-il d?autres int?r?ts cach?s ? A-t-on manipul? l?opinion par des m?diamensonges ? La Yougoslavie, c?est un avertissement avant l?Irak, la Palestine et bien d?autres ? Michel Collon. Oui. La mondialisation, c?est la guerre, par essence. La politique des multinationales ne fait qu?augmenter l??cart entre riches et pauvres de cette plan?te. La guerre est devenue la m?thode n? 1 pour briser leurs r?sistances. La guerre contre les Palestiniens et les Irakiens, le ?Plan Colombia?, l?agression contre le Congo par arm?es interpos?es, les menaces contre l?Iran, la Syrie, la Cor?e, tout cela fait partie de la m?me guerre globale. Vanessa Stojilkovic. Il faudrait que la jeunesse antimondialisation s?informe plus s?rieusement sur ces guerres. On ne peut laisser un pays qui a utilis? l?arme chimique Agent Orange, des bombes ? l'uranium et autre saloperies nous manipuler et nous faire croire qu'il m?ne la guerre pour la libert? et les droits de l'homme. On ne peut le laisser gouverner le monde et y organiser des guerres dans l'int?r?t financier de ses multinationales. Et je suis en col?re aussi contre les pays europ?ens qui ont ?t? complices et tirent profit de cette guerre. Ce film est une m?moire, un avertissement, un appel au secours. Des peuples du Kosovo et de tous les peuples menac?s. Lorsque l'Otan ou l?Euro-Arm?e s'appr?teront ? bombarder un peuple, il faudra que la population des pays de l'Otan se soul?ve et intervienne massivement contre ses gouvernements. Le film pr?c?dent Sous les bombes de l?Otan a ?t? traduit en diverses langues. Et celui-ci? Vanessa Stojilkovic. Je viens d?en terminer la version en serbo- croate. Et d?autres traductions sont en route. Avec les nouvelles technologies de montage sur ordinateur, on peut facilement remplacer une ?piste? du montage, par exemple celle de la voix off ou celle des sous-titres par une autre version. Des contacts sont d?j? pris pour des traductions en espagnol, italien, russe, n?erlandais, allemand. Nous pensons que l?anglais et arabe seraient ?galement tr?s utiles. Pour tout cela, et pour une diffusion maximum, nous cherchons de l?aide. Parce que le sort inflig? ? la Yougoslavie menace d?autres peuples ? Michel Collon. Exactement. Ce film s?adresse ? tous les peuples du monde. Le Kosovo, c?est un avertissement ? toute la plan?te. Tout peuple qui ne veut pas vivre ? genoux, tout pays qui entend fixer lui- m?me son destin, risque d??tre frapp? par la guerre globale de Mr Bush et ses amis. La seule issue est de cr?er un grand front international de r?sistance ? la guerre. Michel Collon, 68 rue de la caserne, 1000 Bruxelles - Belgique 00 32 (0)2 50 40 140 info at lai-aib.org N?stor Miguel Gorojovsky nestorgoro at fibertel.com.ar ********************************************************************** * Compa?eros del exercito de los Andes. ...La guerra se la tenemos de hacer del modo que podamos: sino tenemos dinero, carne y un pedazo de tabaco no nos tiene de faltar: cuando se acaben los vestuarios, nos vestiremos con la bayetilla que nos trabajen nuestras mugeres, y sino andaremos en pelota como nuestros paisanos los indios: seamos libres, y lo dem?s no importa nada... Jose de San Mart?n, 27 de julio de 1819. ********************************************************************** * ****** From Michael.Keaney at mbs.fi Mon Jun 17 06:30:09 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Mon, 17 Jun 2002 15:30:09 +0300 Subject: [A-List] Israel ups the nuclear ante Message-ID: Israelis arm three subs with nuclear missiles IAN BRUCE The Herald, 17 June 2002 ISRAEL is arming three submarines it bought from Germany with nuclear-armed cruise missiles capable of hitting every Arab country in the Middle East, plus Iran. The move, revealed by Pentagon sources, gives Israel a range of nuclear options that now include ground-launched Jericho missiles, air-dropped bombs, and the new naval weapons. The Israelis have never admitted possessing atomic firepower, but are believed to have anywhere from 120 to 200 warheads developed at their top-secret Dimona reactor research facility in the Negev desert. The Israeli navy test-fired its first working cruise missile over the Indian Ocean near Sri Lanka two years ago and has since moved to full production to equip its diesel-electric submarines with a long-range strike capability against Iraq, Iran, and Syria. The Israel defence forces took delivery of the last of their three Dolphin-class conventional submarines two years ago. The boats were built in German shipyards at Emden and Kiel. IDF commanders have been pushing for a submarine-launched cruise missile force to counter moves by Iran and Iraq to develop their own long-range missiles and nuclear weapons. They fear that Israel's small size - any target is four or five minutes' flight time from the nearest Arab airfields - would make the country's existing strategic arsenal vulnerable to a surgical first strike. With three cruise-armed Dolphin boats, one can be kept constantly on patrol, an invisible and virtually undetectable deterrent while submerged and able to deliver a devastating counter- strike if Israel is subjected to surprise attack. Israel launched a crippling pre-emptive conventional bombing attack on Iraq's French-built Osirak nuclear reactor in 1981 when it was believed that President Saddam Hussein was within months of producing enough weapons-grade plutonium to build his own nuclear weapons. The IDF armed some of its Jericho missiles with atomic warheads in 1973 when a Syrian offensive during the Yom Kippur war threatened to overrun most of northern Israel. It also threatened to use nuclear weapons if Iraq used chemical or biological agents during its Scud missile bombardment of the Jewish state during the 1991 Gulf war. Reuven Pedatzur, director of the Galil Centre for Strategy and National Security and a former Israeli fighter pilot, said yesterday: "Israel's motivation is the need to find deterrent solutions based on the probability that Iran and perhaps Iraq will acquire the nuclear ballistic capability to hit Israeli targets during the next decade. "If the IDF now has nuclear-capable, submarine-launched cruise missiles, that would represent a reliable deterrent. Israel's Arab and Iranian enemies would not be able to locate and destroy submerged submarines. That makes it impossible to avoid a lethal counterstrike and gives them reason to think twice about aggression." The US Carnegie Endowment for International Peace added: "Such a survivable deterrent is perceived as essential because of Israel's unique geopolitical and demographic vulnerability to nuclear attack. "Most of the country's population is concentrated in a few coastal cities. The submarine option is a risk no potential enemy of Israel could ignore." The Dolphin boats have 10 torpedo tubes designed to launch Harpoon cruise missiles. The IDF is understood to have its own version with a 900-mile range. Ariel Sharon, the Israeli prime minister, told his cabinet yesterday that now was not the time for talks on setting up any type of Palestinian state, an option being considered by George W Bush, the US president. After talks with Mr Sharon, Mr Bush has vowed to lay out a vision that would lead to Israelis and Palestinians living side-by-side. He has acknowledged that the setting up of an interim Palestinian state is a real option. From Michael.Keaney at mbs.fi Mon Jun 17 06:31:37 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Mon, 17 Jun 2002 15:31:37 +0300 Subject: [A-List] Afghanistan: the blowback continues Message-ID: Radical groups join forces in jihad IAN BRUCE The Herald, 17 June 2002 AN alliance of radical Islamic groups known as Lashkar-e-Omar was responsible for Friday's car bomb attack on the US consulate in Karachi, US intelligence sources say. The group, which includes members of the outlawed Lashkar-e-Taiba, Jaish-e-Muhammed, and the Sunni Muslim Lashkar-e-Jhangvi, now plans a widespread terror campaign to topple the military government of Pakistan's General Pervez Musharraf. It has also vowed to wage a jihad, or holy war, against all foreigners and non-Muslims in the country. The ranks of the new alliance have been swollen by Taliban fighters fleeing Afghanistan and some Pakistani volunteers from Osama bin Laden's al Qaeda training camps. The CIA and Pakistan's own ISI intelligence agency believe these groups and stragglers from other militant factions have reached an "operational agreement" to pool resources and manpower and launch joint operations. While a previously unknown organisation calling itself al Qanoon (the Law) claimed responsibility for Friday's atrocity, it is understood to be part of the Omar organisation, named after Ahmed Omar Sheikh, the former leader of Jaish-e-Mohammed. The wave of violence is aimed at driving foreigners out of the country and isolating a Pakistani government the extremists see as betraying the jihadi fighters battling to "liberate" Kashmir from Indian control. Under US pressure to defuse the potential nuclear stand-off with India that followed a terrorist attack on the New Delhi parliament last year, General Musharraf rounded up 2000 known militants and recently ordered a halt to cross-border raids into Indian-controlled territory. Despite the fact that all but 200 of those arrested were quietly released and the Kashmiri mujahideen were allowed to empty their bank accounts before they were frozen in the token crackdown, Musharraf has been branded a traitor to Islam for his support of American operations in Afghanistan. Infiltration of guerrilla fighters into Kashmir was only stopped last month when it seemed likely India was about to launch attacks against Pakistan and both sides deployed nuclear-capable aircraft and missiles along their 1800-mile border. The action has enraged the militants, who have now sworn to kill the Pakistani president in revenge. There are an estimated 30,000 jihadi fighters scattered across Pakistan, with thousands of new recruits joining daily from the madrassa religious schools, which provide a breeding ground for Islamic militancy. India believes about 3000 Pakistani "volunteers" and Pakistani-trained Kashmiri guerrillas are already operating on its side of the 400-mile Line of Control which divides Kashmir. More than 35,000 people have died in a 12-year insurrection in the Himalayan province. There are suspicions that al Qaeda, regrouping in the lawless tribal territories that span the Pakistan-Afghanistan frontier, is helping stir unrest against General Musharraf. Much of the common connection between the three main terrorist groups under the Omar umbrella is that their veteran jihadis have either fought in Afghanistan or have been trained there. Meanwhile, travellers crossing into Pakistan from the former Taliban stronghold of Kandahar in Afghanistan say audio cassettes are being distributed around southeastern Afghanistan with a recorded message from fugitive Taliban leader Mullah Mohammad Omar saying he was safe, witnesses said yesterday. Travellers said the cassettes containing messages from the one-eyed Taliban leader and other clerics were placed outside government offices, hotels, and houses on Friday night. However, it was not clear when and where the message was recorded. From Michael.Keaney at mbs.fi Mon Jun 17 06:41:24 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Mon, 17 Jun 2002 15:41:24 +0300 Subject: [A-List] Destructive creation: not a drop to drink Message-ID: Water, water everywhere, but... The shortage of fresh water in the developing world is reaching critical levels. And a new dam in Brazil only serves to highlight the environmental problem. Steve Connor reports The Independent, 17 June 2002 Later this year, the construction of the world's latest dam is due to be finished. As dams go, the one being built at Castanh?o, in Brazil's arid north-eastern state of Cear?, is not the biggest nor the most controversial, and, in many respects, its completion will go largely unnoticed by the millions of Brazilians who stand to benefit from it. Yet the fact that the Castanh?o dam needs to be built at all is testament to the growing worldwide crisis in the supply of fresh water. The latest study by the United Nations Environment Programme, which was published last month in its Global Environment Outlook 3 report, identifies water shortages as one of the most pressing problems facing the developing world. The report points out that one-third of the world's population is currently living in countries of moderate-to-high water shortages. Within the next 25 years, this is due to rise to two-thirds of the human population living in "water-stressed" regions. By 2020, the demand for water is expected to increase by 40 per cent, and 17 per cent more water will be needed to irrigate the crops that will have to be cultivated to feed a growing population. Yet already in the world today, nearly 20 per cent of the world's population do not have ready access to drinking water, while 40 per cent lack adequate sanitation. This is despite the attempts to fulfil one of the main goals of the 1992 Earth Summit in Rio de Janeiro, which identified a long-term aim of guaranteeing access to clean water and sanitation for everyone. Water, and the lack of it, is also on the agenda of the forthcoming World Summit on Sustainable Development in Johannesburg this August. In addition to improved sanitation and pollution control, the summit will inevitably have to confront the need to control even more rivers, using dams such as the one at Castanh?o. In many respects, the Castanh?o dam exemplifies how a dam should be built. It involved detailed planning, and extensive consultation with the people whose homes in the nearby city of Jaguaribara were to be flooded. The planning also involved an assessment of the dam's environmental impact. Preliminary studies were carried out in the early 1980s, and the work itself began at the end of 1995, with the help of funding from the World Bank. The new city of Jaguaribara was built to replace the old one that was flooded. The street plan of Jaguaribara "Nova" precisely matches the layout of the old, flooded city, even down to the position of the local churches. Each of the 12,000 residents was consulted about their new home, and they were given the opportunity to choose whether they would like to live next to their old neighbours - most said they would. Even the dead at the local cemetery were exhumed and reburied in new graves to match the ones that were to be flooded. An ecological park has been set up adjacent to the flood site in order to preserve the native plants and animals, while three seismological stations will monitor any seismic movements related to the build-up of the 4.5 billion cubic metres of water behind the dam's concrete walls. Engineers say that the local rock and soil conditions will ensure that the dam will not silt up in the way that has affected other dams, such as the Aswan dam in Egypt. They insist that every effort has been made in its construction to minimise the dam's environmental impact. Although much of Brazil benefits from heavy rainfall, the state of Cear? in the north-east suffers badly from drought. Flying west by helicopter from Fortaleza, Cear?'s capital city on the Atlantic coast, the effects of the drought quickly become apparent. Although the coastal region is relatively green and lush, the land quickly dries out as you leave the climatic influence of the ocean. After about 15 minutes of flying, you cross the line in the vegetation that marks the point at which the aridity of the hinterland becomes clearly visible. >From here, hundreds of miles inland, the ground is brown and parched. After another hour or so of flying and the arid landscape is broken up by the glistening lake that is already building up behind the new dam built at Castanh?o. Local Brazilians view the dam as vital to the irrigation of vast tracts of potentially fertile farmland in the state of Cear?. Brazilian engineers estimate that the dam will be able to irrigate 43,000 hectares of crops, as well as supply the needs of the two million inhabitants of Fortaleza, with its important tourism industry. The dam will also control the flooding that regularly plagues Cear?'s river basins - about half of the annual rainfall of the state falls in just two months, often in torrential downpours that can sweep away crops and buildings. If Cear? needs anything, say Brazilian officials, it is a regular and reliable water supply. The state typifies the problem with water - the planet's most abundant substance is often not where you need it most. Even when water does arrive in the form of rain, it frequently comes suddenly, causing widespread and destructive flooding. It is somewhat ironic that Brazil, famous for its rainforest, also sits on one of the largest underground water sources on Earth. But the Guarani aquifer system, covering some 1.2 million square kilometres and holding a stupendous 48,000 cubic kilometres of fresh water, is in the south-east of the country, many hundreds of miles from Cear? in the dry north-east. Just extracting 20 per cent of the amount of water that drains into the Guarani aquifer each year would be enough to supply 300 litres of fresh water per day to 360 million people - if only it could be distributed across this vast, continent-sized country. Argentina, Brazil, Paraguay and Uruguay are working together on an integrated approach to developing a sustainable method of extracting water from the Guarani aquifer. The project is being closely watched by various international bodies, including the World Bank, which is helping to fund the initiative. "Success would be an important step towards ensuring long-term availability of freshwater and aquifer resources for people in these countries," says the GEO-3 report of UNEP. The Castanh?o dam and the Guarani aquifer system, along with the truly giant Three Gorges Dam in China, represent the traditional ways of meeting the worldwide water crisis caused by population growth, industrial development and expanding agriculture. But UNEP believes that other approaches to water management will have to be considered in the future. "Planners have always assumed that growing demand would be met by taming more of the hydrological cycle through building more infrastructure," says the UNEP report. "This infrastructure has provided important benefits in the form, for example, of increased food production and hydroelectricity. There have also been major costs. Over the past 50 years, dams have transformed the world's rivers, displacing some 40-80 million people in different parts of the world and causing irreversible changes in many of the ecosystems closely associated with them." As important as dams have been in the past, planners and politicians are now having to think of other ways to meet the problem of water shortages. "Policy makers," the report says, "have now shifted from entirely supply solutions to demand management, highlighting the importance of using a combination of measures to ensure adequate supplies of water for different sectors." Greater water efficiency and better controls on water pollution are two obvious improvements that could result in real benefits. The poor management of water resources - such as over-irrigation - has already resulted in the salinity levels of about 20 per cent of irrigated land rising to a point where agriculture becomes difficult or impossible to sustain. Over the past 30 years, the pollution of groundwater sources has become a significant problem in many parts of the world. Many rivers are now suffering from high nitrate levels, caused by the use of agricultural fertilisers. And even some once-pristine rivers, such as the Amazon and Orinoco, are seeing rising levels of artificial nitrates. For a planet that is mostly water, it may seem ironic that water shortages are becoming such a limiting factor in human development. Yet only 2.5 per cent of the Earth's water is fresh water, and less than 1 per cent of this can actually be used for drinking. Even this limited natural resource is dwindling quickly, as encroaching human settlements contaminate and overexploit newly discovered sources of water. The point may soon come when, even on such a watery planet as Earth, there is water everywhere but not a drop to drink. From Michael.Keaney at mbs.fi Mon Jun 17 06:42:49 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Mon, 17 Jun 2002 15:42:49 +0300 Subject: [A-List] Africa: Libya vs. World Bank Message-ID: Gaddafi 'aims to hijack' African Union organisation By Basildon Peta in Addis Ababa The Independent, 15 June 2002 The Libyan leader, Muammar Gaddafi, is using his country's oil wealth to buy influence across Africa, according to diplomats, in an attempt to dominate the African Union (AU), due to be launched in South Africa next month. Colonel Gaddafi sees the AU, modelled on the European Union, as his brainchild. Officials are saying he wants to use it as a power base to propagate his views on politics. Thabo Mbeki, the President of South Africa, who is keen to preserve the credibility of the AU for Western donors, was in Tripoli yesterday in a diplomatic offensive to stop the Libyan leader from scuppering the Union's launch. Nelson Mandela, Mr Mbeki's predecessor, is also involved. Diplomats say Mr Mandela's decision to visit the Libyan jailed in Scotland for the Lockerbie bombing before Mr Mbeki's trip to Libya was part of the initiative to appease Colonel Gaddafi. Mr Mandela called for the Libyan to be transferred to serve his prison term in a Muslim country. Mr Mbeki fears Colonel Gaddafi's bid to control the AU will derail the New Partnership for African Development (Nepad), which is backed by Tony Blair and other G8 leaders and is due to be an AU project. Under Nepad, countries adhering to democracy and good governance will receive aid from richer countries in addition to other concessions. The Libyan leader has deployed several diplomats to lobby African countries to delay the Durban ceremony because he wants the AU to be launched in Sirte, Libya. That would automatically give him the chairmanship of the AU. Colonel Gaddafi wants the Durban meeting downgraded to an annual summit of OAU leaders pending the launch of the AU in Libya at a later stage. But diplomats attending an OAU-Civil Society summit here say his ambitions will sabotage any programmes intended to help Africa's recovery. "Mbeki knows that any move to put the AU under Gaddafi will immediately kill both the AU and Nepad because no Western country will pour aid into a programme or institution run by Gaddafi," said one diplomat. Another diplomat said: "Gaddafi sees Nepad as Mbeki's project with the West, and if he [Gaddafi] were to assume the reins of power at the AU, then the whole programme is dead and buried." Colonel Gaddafi has been unrelenting in his bid to buy influence and scupper the launch. OAU officials said he has paid off the arrears of about six African countries, enabling them to regain voting powers in the OAU, after they were suspended for non-payment of subscriptions. Other diplomats said he had acted for up to as many as a dozen countries. The Libyan leader's money does not come without strings attached, however. A West African diplomat who refused to have his name or that of his country published said: "We made a deal with Libya whereby we would support and vote for all resolutions proposed by Mr Gaddafi at OAU summits in exchange for his help." From Michael.Keaney at mbs.fi Mon Jun 17 06:43:39 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Mon, 17 Jun 2002 15:43:39 +0300 Subject: [A-List] US imperialism: Iraq Message-ID: Bush 'has authorised CIA to kill Saddam' By Andrew Gumbel The Independent, 17 June 2002 The CIA has launched a covert operation aimed at toppling Saddam Hussein and has been given express permission by the White House to capture the Iraqi leader and, if necessary, kill him. According to a report in yesterday's Washington Post, which was partially confirmed by the Senate majority leader, Tom Daschle, President George Bush signed an order earlier this year directing the CIA to use "all available tools" to overthrow the Iraq leadership. These include the supply of money, weapons, equipment, training and intelligence information to Iraqi opposition groups; greater efforts to collect information from within the Iraqi government, especially its military and security services; and authorisation to deploy special forces teams to take out specific targets. News of the order comes amid reports from defectors that President Saddam has reactivated weapons of mass destruction programmes. It demonstrates that the Bush administration has already put money and resources into realising its controversial "regime change" policy, which has run into resistance from allies such as Britain. But according to the Post article, by Bob Woodward, the CIA director, George Tenet, has told the President he thinks the Iraqi operation has only a 10 to 20 per cent chance of success without accompanying military action and economic and diplomatic pressure. There are concerns, too, about how widely the CIA is stretched already in the "war on terrorism". Some analysts cited by the Post believe the covert operation will be most useful in laying groundwork for military action, which is not expected before the end of this year. Mr Bush, in the wake of the 11 September terror attacks, lifted a 25-year ban on covert assassinations. The order authorises the CIA and special forces teams to kill President Saddam "in self-defence". The report is likely to alarm governments and public opinion in the Middle East, where strong opposition to the prospect of an armed invasion has already been voiced. Domestically, however, the Bush administration appears to enjoy broad congressional support on Iraq, the only questions being about timing and diplomatic handling of the effort to see off President Saddam. Mr Daschle, a Democrat who is the de facto opposition leader, told a television interviewer yesterday that the White House had consulted Congress on the issue several times and had found a large degree of consensus. "I think the timing of all this is very important but we want to work with the administration and try to find the best way and the best time to do this," Mr Daschle said. Despite the Bush order, the administration remains deeply divided on its approach to Iraq. According to US officials, some in the State Department are urging that sanctions-hit Iraq be given a chance to prove its claim that it has dismantled its weapons of mass destruction by allowing UN inspectors to return. Further negotiations between Iraq and the UN, which could lead to the return of the inspectors after a three-and-a-half-year absence, are scheduled for early next month, but Iraq said last night that the sanctions must be lifted before it would allow the inspectors back in. Meanwhile the Post also reported that three suspected al-Qa'ida members held in Morocco had told officials that Osama bin Laden commanded his fighters in December to disperse across the globe to attack "American and Jewish interests". The men, citizens of Saudi Arabia, allegedly told interrogators they escaped Afghanistan and came to Morocco on a mission to use bomb-laden speedboats for suicide attacks on US and British warships in the Strait of Gibraltar. From Michael.Keaney at mbs.fi Mon Jun 17 06:44:52 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Mon, 17 Jun 2002 15:44:52 +0300 Subject: [A-List] Europe/US rivalry: strategy of tension Message-ID: A dirty bomb from Pakistan? Or a dirty trick from Washington? Just as the heat was building on the CIA and FBI over failures of intelligence-gathering, up popped a brand new suspect. Rupert Cornwell smells a rat The Independent on Sunday, 16 June 2002 It sure sent a jolt through the United States. Yet last week's much ballyhooed arrest of the "dirty bomb" suspect Jose Padilla now seems, like other developments in the "war against terror", to have been a political device of the Bush administration - designed to distract attention from US intelligence failures and solidify support behind President Bush. For who, exactly, is Mr Padilla, aka Abdullah al-Muhajir? Is he a highly trained al-Qa'ida operative who was about to explode a radioactive "dirty" bomb in Washington DC, as the US attorney general, John Ashcroft, would have us believe? Or a Chicago street punk of no great danger to anyone? With each passing day, the latter looks more likely. No plot and no accomplices have been discovered, despite Mr Padilla having been in detention for more than a month before his existence was revealed to the nation, which duly panicked. As the New York Times said on Thursday, quoting some of those unnamed "US officials" who abound in the nation's press, he was "an unlikely terrorist, a low-level gang member with no technical knowledge of nuclear materials who was arrested long before he represented a significant terrorist threat". And why, if it was as important as Mr Ashcroft claimed, was his arrest kept secret for five weeks - only for the attorney general to reveal it while in Moscow of all places? Some might claim the venue was oddly apt, though. With his fierce prosecutorial zeal and taste for scary hyperbole, Mr Ashcroft calls to mind Andrei Vyshinsky, the infamous prosecutor at Stalin's show trials, whose prime contribution to 20th-century legal doctrine was the "presumption of guilt" against those unfortunate enough to be in his sights. For "enemy of the people" read "enemy combatant", as Mr Padilla, a US citizen, has now been designated. He sits in a naval prison in South Carolina, presumed guilty but not charged with any criminal offence. Indeed, Donald Rumsfeld, the Defence Secretary, has acknowledged that he may never be charged. Mr Padilla's lawyers responded to that statement with a petition to the courts, saying their client's detention without time limit or the right to counsel should be "a constitutional concern to everyone". No one would dispute the US's right to defend itself against terrorists, nor that this shadowy struggle, "asymmetric" in the jargon of conflict experts, demands exceptional, equally shadowy means. But Mr Padilla's fate is currently shared by hundreds of non-Americans, mostly Arab individuals, swept up in dragnets in the days and weeks following 11 September, and nine months later still in detention on the most minor of charges. The only difference is, no one knows their names. One thinks also of Lotfi Raissi, an Algerian pilot whose one stroke of good luck was to be arrested in Britain, not the US. He was picked up at his home near Heathrow airport on 21 September 2001, and Mr Ashcroft's Justice Department instantly demanded his extradition on the grounds that he had trained some of the 11 September hijackers. But not a shred of evidence was ever forthcoming from Washington, beyond the fact that Mr Raissi was an Arab and had trained at an Arizona flight school at roughly the same time as Hani Hanjour, one of the hijackers of American Airlines Flight 77, which crashed into the Pentagon. In February he was released on bail, and in April his case was thrown out entirely. Had he been in the US, however, he would undoubtedly still be rotting quietly in jail. But the fanfare around Mr Padilla served Mr Bush's purposes perfectly. Forgotten were the host of clues missed by the FBI and the CIA before 11 September. The US was on full nuclear terror alert, ready once more to take the President's word for anything and to support his plans for a new super-ministry for domestic security. Recent "revelations" about Khalid Almidhar, another of the AA77 hijackers, are equally instructive, albeit for different reasons. More unnamed officials told Newsweek magazine that Almidhar was spotted by the CIA at a meeting of al-Qa'ida operatives in Malaysia in January 2000. But the CIA, it seemed, failed to alert other agencies, including the immigration services who might have picked him up on entry into the US. But wait. A few days later, other intelligence sources disclosed, this time to the Washington Post, that the CIA had in fact told the FBI. By now an alert reader will have divined that the disclosures have less to do with the fight against terrorism than with the equally entrenched fight between the FBI and the CIA. And as armistice breaks out between them, in reaction to their having had their heads banged together by the Bush administration, blame is being shifted beyond US shores. Take Khalid Shaikh Mohammed, the al-Qa'ida operative whom other anonymous counter-terrorism officials named early this month as a prime organiser of the 11 September attacks. Those officials claimed he was in Germany before the attacks, liaising with Mohamed Atta, who flew the jet into the north tower of the World Trade Centre. The only problem is, the Germans know nothing about it - and when they ask Washington for further information, none is forthcoming. But that is a secondary consideration. The finger now points to Berlin, not Langley, where the CIA is based, or FBI headquarters in Washington. Increasingly, for the two secretive agencies engaged in the US's "war on terror", anything goes. If the face fits... Lotfi Raissi Arrested: 21 September 2001. Problem: Global coalition in doubt. Polls show America blames FBI and CIA for not stopping al-Qa'ida. Solution: Arrests all over world, including this Algerian in England. Terrorism charges dropped after five months in prison. Khalid Almidhar Revealed: 4 June 2002. Problem: Washington hearings begin, asking who knew what. Solution: Press tipped off that CIA passed name and passport number of this future hijacker to FBI by email in January 2000. Khalid Shaikh Mohammed Reward offered: 5 June 2002. Problem: Global condemnation of decision to photograph and fingerprint visitors from high-risk countries in Middle East. Solution: FBI offers ?18m reward for capture of this 37-year-old Kuwaiti, mastermind of 11 September attacks. Abdullah al-Muhajir "Arrested": 10 June 2002 Problem: Derision for new Department of Homeland Security. Unease about treatment of Arabs grows. Solution: Arrest of this "dirty bomber" announced. But in reality he had been in custody for a month already. From Michael.Keaney at mbs.fi Mon Jun 17 07:06:33 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Mon, 17 Jun 2002 16:06:33 +0300 Subject: [A-List] Marx, capitalism and Verso books Message-ID: I'm wading through Guglielmo Carchedi's "For Another Europe" just now. It's very dense, turgid even, spending an inordinate amount of time on the inadequacies of neoclassical economic theory and the intricacies of value theory, all supposedly in the service of a class analysis of European integration. I'm a third of the way through and I've yet to see much evidence of any analysis, as opposed to abstraction. It's a strange sort of book to be marketing as a trade paperback -- reasonably priced and packaged in order to appeal to the "informed" buyer. The material I've encountered would be more likely suited to the kind of academic monographs that never make it beyond hardback and a price tag of at least 60 pounds sterling. While it may be a little early of me to judge Carchedi's latest, I've attached a review below of Meghnad Desai's contribution to Verso's catalogue, "Marx's Revenge". I've not read it, but I'm sufficiently aware of Desai's sympathies to be not at all surprised at what I've read about it. Desai appears to be mouthing the sort of stuff normally heard from the likes of Jagdish Bhagwati or the contemporary version of UNCTAD -- development via free trade by all means but lets play fair now. The question is, why would Verso choose to publish something like this? This appears to be the left wing of the Third Way -- markets, yes, but let's be damn sure not to forget compassion also, and meanwhile can we please get a dig or two against "statism" -- as if the Third Way were not its apogee. Of course Verso is the imprint of New Left Books, publisher of some very worthy tomes in years gone by, and even today, as John Pilger's "New Rulers of the World" would testify, and even Carchedi might yet qualify. But we are a long way from Poulantzas, Mandel and the Althusser of "Essays on Ideology". Some of these works have been resurrected as "Verso classics" (i.e. seminal, worthy, but that was then), and it's good that they are available (although Essays on Ideology is about the only part of the Althusser canon out of print, unlike his later psychobabble). So what's it all about? If there is anyone here who would care to comment on Desai's book, or Verso's editorial policy (linked to New Left Review's much trumpeted shift to becoming the UCLA house journal), I would very much appreciate it. ------ Can you hear Marx tittering in Highgate? If only socialists had studied Marx properly, they would have known all along that capitalism would triumph. Meghnad Desai gets behind the slogans in Marx's Revenge Faisal Islam Observer Sunday May 19, 2002 Marx's Revenge Meghnad Desai Verso ?19, pp383 Practical jokes, last laughs and vengeance would have been more the sphere of Groucho rather than Karl Marx. But Meghnad Desai argues that the great thinker's most prominent legacy was a huge confidence trick. Capitalism has now triumphed, it is 'the only game in town', statist socialism is 'dead', and, yes, that is what Marx had said would happen all along. Desai, a London School of Economics professor and Labour peer, performs conceptual somersaults to pursue this contention. Most of the evidence comes from Marx's economic writings, ignored by everyone apart from Desai, previously the author of a textbook on the subject. Marx's Revenge is, however, far broader than that, racing through a history of economic thought, which is vital in that it shows what incubates the contemporary consensus in economics. The key to understanding why Marx is tittering in Highgate Cemetery is the difference between the words Marxian and Marxist. The former refers to those who faithfully study all his works, specifically his analytical writings about the dynamics of capitalism; the latter is the reductive Bolshevism that emerged in the last century, shaped by Lenin's pamphlet on imperialism and these days incorporating a wide span of belief, including the fringes of fascism. Marx recognised this trend. On hearing of the establishment of a Marxist party in France, he famously said: 'Je ne suis pas marxiste'. But he was subsequently ignored. Marxism in the twentieth century became defined by interpretations such as Lenin's Imperialism: the highest stage of capitalism. In the 1920s, Das Kapital dropped off the Marxist's must-read list. Imperialism became the key text beside the Communist manifesto. Almost all debates about Marxian economics, particularly on the fall in the rate of profitability over time, were ruled out as 'uninteresting scholasticism'. 'The answers were known, Marx became a bundle of catechisms,' writes Desai. Marx developed some pioneering economics. He was the first economist to incorporate an explanation of boom and bust within his theory. He constructed a simple model to show how profit came from the exploitation of the 'surplus value' of labour. This led to the ups and downs of profitability. But in volume II of Das Kapital Marx calculates a numerical scheme of a capitalist economy which does not run into crisis and enjoys perpetual growth. The later volumes were published after his death, after Engels assembled Marx's notes. The famous words about the tendency to a falling rate of profit giving rise to the end of capitalism is hardly mentioned in volume III, argues Desai, and mentioned only as a possibility in volume I and in the Communist manifesto. So this misconception, misreading, or perhaps highly selective reading, of Marx has led to a vulgar simplificaton of what was a complex and nuanced body of work. Desai's chapter six shows why some Marxists may have skipped the surplus profit exploitation equilibrium models. These technicalities, crucial to Desai's understanding of Marx, do not trip off the tongue as lightly as the 'revolt of the lumpenproletariat'. 'Popular Marxism' took Marx's more prophetic writings on the fate of capitalism, without noting that Marx had not given a timescale. If socialism is destined to usurp capitalism, but the transition period could last many hundreds of years, as the transitions between previous modes of production like feudalism and capitalism had lasted, then the prediction is not entirely helpful. It is the political economy equivalent of Michael Fish telling us to wrap up warm because the Ice Age will return at some point. Rather than get his revenge, Desai's work seems to show Marx hedged his bets. If that is true, why should we care that his more obscure work has been vindicated? In the process of explaining Marx's Revenge, Desai illuminates the work of Smith, Hegel, Popper, Polanyi, Keynes and Samuelson. A similarly revisionist tract would show that Adam Smith was not quite the market fundamentalist he is assumed to be. Economics is more than a social science. It has become the theology of public policy in liberal democracies, justifying how societies are taxed, the ownership of the media and immigration policy. As its norms encroach on many other disciplines, such as politics, sociology, the law, even biology, its base assumptions and its evolution require a mainstream dissemination. Desai refers to this as 'social astronomy' which would be fair if it concerned only descriptive analyses of the structures in society. Unfortunately, Marxists appear to have indulged in too much social astrology. It is an important book because of who it is directed at. Nobody in Wall Street or the City of London will care that Marx is now on their side. But for those who still express moral indignation at pronounced and prolonged inequality and poverty, the market is the most likely rescue route. Whether it is called the market, or capitalism, or neoliberalism, it is a tool that has not yet been harnessed fully for poverty alleviation. As Desai points out, the market is a tool for eliminating scarcity. It is departures from the free market, such as big subsidies for agriculture in rich countries, that are doing most to solidify poverty. Even from a tactical perspective, arguments expressed in the language of the free market are listened to, whereas moral sentimentality about excessive inequality is worthy but ineffective. From lnp3 at panix.com Mon Jun 17 07:55:27 2002 From: lnp3 at panix.com (Louis Proyect) Date: Mon, 17 Jun 2002 09:55:27 -0400 Subject: [A-List] Marx, capitalism and Verso books In-Reply-To: Message-ID: <3.0.1.32.20020617095527.00f32c40@popserver.panix.com> Michael Keany: >>The question is, why would Verso choose to publish something like this? This appears to be the left wing of the Third Way -- markets, yes, but let's be damn sure not to forget compassion also, and meanwhile can we please get a dig or two against "statism" -- as if the Third Way were not its apogee. Of course Verso is the imprint of New Left Books, publisher of some very worthy tomes in years gone by, and even today, as John Pilger's "New Rulers of the World" would testify, and even Carchedi might yet qualify. But we are a long way from Poulantzas, Mandel and the Althusser of "Essays on Ideology". Some of these works have been resurrected as "Verso classics" (i.e. seminal, worthy, but that was then), and it's good that they are available (although Essays on Ideology is about the only part of the Althusser canon out of print, unlike his later psychobabble). So what's it all about?<< I don't find it odd at all. Verso is paying Doug Henwood a part-time wage in its NYC offices, where he is supposedly putting the finishing touches on his New Economy book. I might submit a proposal to them on the cultural significance of the Nehru shirt myself. Henwood has been pushing this line for years now, calling for maquilas in the Mideast and Central Asia in order to keep the natives happy. You can also find a variant on this from all the academics who found inspiration in the Brenner thesis, especially Colin Leys who practically predicted Kenya's entry into the ranks of the G7. This is nothing but a mechanical application of themes found in the Communist Manifesto, which sees capitalism as a system that revolutionizes the means of production everywhere it goes. In Desai's case, you get a new spin on this. Supposedly, v. 2 of Capital indicates that Karl Marx would have welcomed the imperialist domination of the 3rd world. Bullshit, I say. Louis Proyect Marxism mailing list: http://www.marxmail.org From christian11 at mindspring.com Mon Jun 17 08:27:12 2002 From: christian11 at mindspring.com (christian11 at mindspring.com) Date: Mon, 17 Jun 2002 10:27:12 -0400 Subject: [A-List] Marx, capitalism and Verso books Message-ID: On Mon, 17 Jun 2002 16:06:33 +0300 Keaney Michael wrote: I'm wading through Guglielmo Carchedi's "For Another Europe" just now. It's very dense, turgid even, spending an inordinate amount of time on the inadequacies of neoclassical economic theory and the intricacies of value theory, all supposedly in the service of a class analysis of European integration. I'm a third of the way through and I've yet to see much evidence of any analysis, as opposed to abstraction. It's a strange sort of book to be marketing as a trade paperback -- reasonably priced and packaged in order to appeal to the "informed" buyer< I agree. It's fine to complain about neoclassical adherence to the idea of downward sloping demand curves on the grounds that there can be no evidence offered for them. However, the argument wears thin when the value-theory explanation of international trade asserts that the center "gets" its profits from the periphery without passing through evidentiary problems at all. (ie "surface relations", productive processes, money etc.) It's like the political theory and economic theory never meet--and not in the real world, anyway. Until you get to the epilogue, where he spells out a kind of project for the left, whose principles are fine. But, again, the elaboration is pretty weak--I mean, he conjures up Margaret Mead's Arapesh as an example of cooperation and egalitarianism. And his view of the post revolutionary world is basically that of the _German Ideology_, where you can be a hunter in the morning and a literary critic at night, so long as you agree to be a garbage collector at mid-day. I started the Desai book, but put it down. He's not dumb, but he's not a good enough writer to make up for the tendentiousness of his position. You could say Carchedi isn't either, but there's a bit more to work on in that book: at least it's starting with better questions. Christian From Michael.Keaney at mbs.fi Mon Jun 17 08:40:21 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Mon, 17 Jun 2002 17:40:21 +0300 Subject: [A-List] Marx, capitalism and Verso books Message-ID: Lou writes: I don't find it odd at all. Verso is paying Doug Henwood a part-time wage in its NYC offices, where he is supposedly putting the finishing touches on his New Economy book. I might submit a proposal to them on the cultural significance of the Nehru shirt myself. Henwood has been pushing this line for years now, calling for maquilas in the Mideast and Central Asia in order to keep the natives happy. You can also find a variant on this from all the academics who found inspiration in the Brenner thesis, especially Colin Leys who practically predicted Kenya's entry into the ranks of the G7. This is nothing but a mechanical application of themes found in the Communist Manifesto, which sees capitalism as a system that revolutionizes the means of production everywhere it goes. In Desai's case, you get a new spin on this. Supposedly, v. 2 of Capital indicates that Karl Marx would have welcomed the imperialist domination of the 3rd world. Bullshit, I say. ----- What struck me about Faisal Islam's review is the distinction apparently made between "Marxian" and "Marxist". Of course it's hardly new, but again Desai's new spin is breathtaking in its casual arrogance. But this sort of thing is quite par for the course for "Lord" Desai. Many years ago I was one of several youngsters who were treated to an Indian meal with the noble lord at a reasonably good restaurant in Glasgow. When not emphasising the superiority of Gujurat cuisine Desai was explaining that it was quite ok for Michael Heseltine to close down 31 British coal mines with the loss of 30,000 mining jobs -- after all, once gas and oil run out we can simply open up the mines again. There were a few who choked on their nan breads over that one. Is there a "new economy"? For a year or so I've been forwarding articles and commentaries under the thread "new economy bull" to support my hunch that in fact we've been getting a lot of bull from cheerleaders of the "productivity miracle" and other mirages that have helped to stoke the mighty bull run and other excesses of the 1990s -- now looking very 1920s. So much for the newness. What seems to be missing is a class analysis of where we are now, although maybe that's too 1970s. However that was when a lot of work on the "new middle class" was being done and it is instructive to look, for example, at British political developments in this light. The state-orchestrated attack on labour, begun somewhat reluctantly in 1976 at the IMF's behest and ratcheted up throughout the 1980s and 90s under Thatcher and Major reduced what remained of the traditional working class to a rump, if we are to define that class as that which produces value (the Carchedi book must be having its effect). What we saw in the 1980s and flowering subsequently was the growth of the yuppie culture, a manifestation of the privatisation of work and society that political pollsters now refer to in terms of "essex man", "Mondeo Man" or "Worcester woman". Originally termed "floating voters" (a key theme of 1979's election analysis), these supposedly typify the "average citizen" to which successful political parties must appeal. But it is a manifestation of a deeper petty-bourgeoisification of UK political sociology that has resulted in the much-noted widespread apathy, the depoliticisation of politics, and the little Englander nationalism that threatens to derail the British state's intended entry into the eurozone -- an unintended but very serious consequence of its sponsorship of Thatcherism. Punk Thatcherism can be viewed as a contemporary manifestation of poujadism -- petty bourgeois nationalism -- and its grip on British politics remains serious enough for "liberals" like prime-minister-in-waiting Peter Hain to preach on the dangers of immigration in an effort to salvage the European agenda of the New Labour-UK state nexus. Thus the ripples felt when, in his Financial Times interview 10 days ago, Rupert Murdoch revealed that he would use his newspapers to campaign against eurozone membership. Together with Rothermere's Associated Newspapers (Daily Mail, London Evening Standard, Metro daily freesheets) and Conrad Black's Telegraph group that's a large chunk of media opinion to control. And it's quite contrary to the majority view of monopoly capital, domestic and international, that sees eurozone membership as essential to the furtherance of accumulation and related British interests. All of which is to say that the economy is new, but not in the way Greenspan, Castells and other technogurus and economists would have us believe. In falling over themselves to marvel at the wonders of technology they have forgotten, or simply ignored, a lot of earlier work that prefigured much of what we are witnessing today. That, however, was considerably more Marxist -- hence the consignment to history's dustbin, or whatever. My apologies for the above digression, but it's my first chance to put something down in reasonably coherent form on this subject -- one which I intend to be exploring in far greater depth in the very near future. Michael Keaney From nestorgoro at fibertel.com.ar Mon Jun 17 08:48:12 2002 From: nestorgoro at fibertel.com.ar (Nestor Gorojovsky) Date: Mon, 17 Jun 2002 11:48:12 -0300 Subject: [A-List] Non, le massacreur nazi SHARON n'est pas un assassin ... Message-ID: <3D0DCC7C.31863.7EBDFB@localhost> ------- Forwarded message follows ------- Non, le massacreur nazi SHARON n'est pas un assassin ... C' est un "d?mocrate" ! ----- Original Message ----- From: ABoumedienne at europarl.eu.int To: assawra at yahoogroupes.fr Sent: Tuesday, June 11, 2002 10:04 AM Subject: Re: [assawra] Rendez-Vous de la Solidarit? Y a t-il une p?tition qui circule ? ce sujet ? Il faut absolument faire pression pour que les libert?s publiques soient respect?es dans un Etat de droit ! Merci et bien ? vous Latifa A?t-Baala Attach?e parlementaire ***************************************** Alima Boum?diene-Thiery D?put?e au Parlement Europ?en Groupe des Verts Parlement Europ?en, Rue Wiertz B-1047 Bruxelles Tel. +322 284 75 74 - Fax. +322 284 95 74 Strasbourg - Tel. +33 3 881 75574 - Fax. +33 3 881 79774 E-mail: aboumedienne at europarl.eu.int >>> rolland.richa at wanadoo.fr 06/11/02 12:02 >>> ----- Original Message ----- From: "Marc Prunier" Rendez-Vous de la Solidarit? Poursuivi pour avoir ?crit : " Sharon assassin " Un militant de la Ligue Communiste R?volutionnaire (LCR) compara?tra lundi 17 juin devant le Tribunal Correctionnel de Chamb?ry (Savoie), pour avoir ?crit " Sharon assassin ! ", " Un ?tat pour les Palestiniens ", et " Vive l'Intifada ". Ces slogans figuraient sur quelques affiches manuscrites que les militants de la LCR avaient coll?es en ville. Libre exercice du droit d'expression garanti par la Constitution ? chaque citoyen direz-vous ? Pas pour le procureur de la ville, un certain M. Pin. En effet, celui- ci n'a pas h?sit? ? saisir le tribunal, qui poursuit notre camarade pour, tenez-vous bien, " Provocation ? la discrimination, ? la haine et ? la violence ? l'?gard du peuple isra?lien" ! Aux derni?res nouvelles, la LICRA locale, tout en ?tant consciente du caract?re extravagant de l'initiative du magistrat, aurait accept? de se joindre au proc?s, en se portant partie civile. Cette entreprise n'est pas la premi?re du genre ; elle vise ? intimider le mouvement de solidarit? avec le peuple palestinien, en insinuant que toute d?nonciation des crimes de l 'arm?e et du gouvernement isra?liens ?quivaut ? de l'antis?mitisme ou de la haine contre le peuple isra?lien. Et peu importe, dans ces conditions, que les accusations soient d?pourvues du moindre gramme de v?rit?. Nous pensons, pour notre part, qu'il en faudra bien plus pour nous faire taire, et qu'au contraire, le combat pour faire reculer Sharon et ses supp?ts va s'amplifier. L'audience a ?t? fix?e ? 14 heures, le 17 juin, au Palais de Justice de Chamb?ry (Savoie - France). www.aloufok.com Liste de Diffusion " Assawra " S'inscrire : assawra-subscribe at yahoogroupes.fr Envoyer un message : assawra at yahoogroupes.fr (Re)transmis par : Roger ROMAIN a/conseiller communal PCB B6180 COURCELLES Si vous souhaitez vous rendre sur le groupe "paix_socialisme_communisme" et retrouver un message, cliquez sur ce lien (ou copier/coller ce lien dans votre navigateur) : http://www.smartgroups.com/groups/romain http://users.skynet.be/roger.romain/Sommario.html (Sommaire site perso) http://users.skynet.be/roger.romain/biographies1.html (Livre Noir de la Nomenklatura mondiale capitaliste) http://users.skynet.be/roger.romain/pays1.html (documents - textes- analyses - archives) http://users.skynet.be/roger.romain/cc.html (? Courcelles) mail : roger.romain at skynet.be Pour recevoir mes informations quotidiennes, cliquez sur: romain- subscribe at smartgroups.com et exp?diez, svp Pour ne plus recevoir, cliquer ICI et indiquez "unsubscribe", svp. Pour une autre information, redirigez mes messages ? vos ami(e)s, svp ! Une oeuvre collective qui fait le tour du monde, au service des travailleurs, du progr?s, de la Paix, du Socialisme ! ------- End of forwarded message ------- N?stor Miguel Gorojovsky nestorgoro at fibertel.com.ar ********************************************************************** * Compa?eros del exercito de los Andes. ...La guerra se la tenemos de hacer del modo que podamos: sino tenemos dinero, carne y un pedazo de tabaco no nos tiene de faltar: cuando se acaben los vestuarios, nos vestiremos con la bayetilla que nos trabajen nuestras mugeres, y sino andaremos en pelota como nuestros paisanos los indios: seamos libres, y lo dem?s no importa nada... Jose de San Mart?n, 27 de julio de 1819. ********************************************************************** * ****** From annewilliamson at msn.con Mon Jun 17 14:23:21 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Mon, 17 Jun 2002 16:23:21 -0400 Subject: [A-List] Europe/US rivalry: strategy of tension References: Message-ID: <023901c2163c$d42a8380$0100a8c0@igrushkii> Press freedom: it's not trivial by Tessa Mayes Go to: spiked-central spiked-libertiesArticle Article11 April 2002Printer-friendly version The not-so-new imperialism by David Chandler Robert Cooper, policy adviser to UK prime minister Tony Blair, has caused something of a storm with his call for a 'new kind of imperialism'. In the Foreign Policy Centre pamphlet Reordering the World, Cooper argues for 'a new age of empire' - in which Western powers won't have to follow international law in their dealings with other states, will be able to use military force without consulting the United Nations, and will be free to impose protectorates in problematic areas. According to Labour MP Tam Dalyell, Cooper's comments go against the Labour Party's long history of anti-colonialism - while fellow Labour MP Alan Simpson accuses Cooper of offering an intellectual justification for Britain and America's bypassing of the UN. These MPs can't have been paying much attention to international affairs over the past few years - because, in fact, Cooper does not argue for anything new or exceptional. Some Labour MPs seem to have short memories. A number of Britain's colonial wars have been fought while Labour governments were in power: the war with India and the Palestine conflict in the late 1940s, the Northern Ireland 'Troubles' that started in 1969. Long before the terrorist attacks of 11 September, the UK Labour government was at the forefront of downgrading the role of the UN and creating new powers for ad hoc 'coalitions of the willing' to wage war without the sanction of international law. Indeed, Labour has shown scant need for anything as concrete as intellectual justification for bypassing the UN, instead relying on moral support for its new interventionism. The House of Commons' Foreign Affairs Committee concluded that the 1999 bombing of Yugoslavia was justified 'on moral grounds', rather than legal grounds. Lord George Robertson, former Labour defence secretary and now NATO secretary-general, argues that Western leaders have the job of 'balancing.law, morality and the use of force'. Of course, once the law is secondary to what NATO leaders Blair and Bush consider to be morally necessary, there can be no legal limits to intervention across the globe - so long as the cause is right. Robertson explains that 'the only morality is to do what one has to do, when one has to do it'. In this context, the question of whether and when to intervene is purely a matter for powerful leaders' consciences. Claims that Cooper is a 'maniac' only show how out of touch his critics are. The new age of imperialism is already well established. Two years ago, the UK government's Joint Consultative Committee called for the UN to restore the Trusteeship Council for managing the growing number of international protectorates. And Tony Blair recently helped former Liberal Democrat leader Lord Paddy Ashdown get the job of high representative (or colonial administrator) in Bosnia. Cooper's calls for pre-emptive military actions are mild compared to those of M?decins Sans Fronti?res Lord Ashdown now has the power to pass laws by decree and to dismiss Bosnia's elected presidents, prime ministers and parliamentarians if he considers them to be obstructive. The power that had always eluded Ashdown in the UK, by way of the ballot box, has now been granted him by the self-selected Peace Implementation Council - which has 'voluntarily' taken upon itself the duty of running Bosnia for the indefinite future. Those who kicked up a stink about Cooper's 'new imperialism' statement seem to have been more offended by his choice of words than by their political content. Cooper is not alone in calling for an end to the UN framework of international law and respect for state sovereignty. Liberal advocates of ethical human rights policies, like Geoffrey Robertson QC, have long argued that respect for state sovereignty is the UN's 'systemic defect'. And Cooper's critics largely do not oppose his view that Western powers should have the right to intervene militarily in troublesome states. His calls for pre-emptive military actions are mild compared to those of Bernard Kouchner, the founder of Nobel Peace Prize-winning NGO M?decins Sans Fronti?res, later appointed by the UN as governor of Kosovo, who argues that Western powers should have the right to intervene 'to stop wars before they start and stop murderers before they kill'. Cooper's views of 'voluntary' colonial rule under a new imperial bureaucracy are wishy-washy compared to liberal commentator Michael Ignatieff's demand for greater 'imperial ruthlessness' in Iraq, Somalia and Bosnia. Cooper's mistake was to pose these policies in the old-fashioned language of realpolitik and power, rather than relying on the moral rhetoric of the day. Many who agree with his conclusions find his straight-talking presentation of US and European superiority over the non-Western world distasteful. His aside that the new imperialism should be 'compatible with human rights and cosmopolitan values' only demonstrates his failure to grasp the new etiquette of what he terms 'postmodern imperialism'. If Cooper had stressed the 'universally empowering' nature of his project in contrast to the oppressive legalities of state sovereignty, he would have had fewer problems. If he had argued that military action to prevent human rights abuses should be decided by 'international civil society', nobody would have batted an eyelid. If he had said that what look like colonial administrations overriding popular democracy are in fact necessary for 'empowering local voices', he would probably have the support of even his most vocal critics. David Chandler is author of From Kosovo to Kabul: Human Rights and International Intervention, published by Pluto Press (buy this book from Amazon (UK) or Amazon (USA)). Email david at dchandler.freeserve.co.uk. Read on: What is spiked? spiked is a website for those who want to see some change in the real world as well as the virtual one. If you think that the power of the internet could be used for something more than shopping and pseudo-sex, get spiked. Read on... ---------------------------------------------------------------------------- ---- Corrections Terms & Conditions spiked, Signet House, 49-51 Farringdon Road, London, EC1M 3JP Email: info at spiked-online.com ? spiked 2000-2002 All rights reserved. From soncu at pacbell.net Mon Jun 17 20:10:51 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Mon, 17 Jun 2002 19:10:51 -0700 Subject: [A-List] US: At the End of the Tunnel? Message-ID: This comes from PEN-L by way of Jim Devine. That the US economy is heavily based on the service sector has been one of the main reasons of my pessimism about the future of the US economy. The article below is on that topic. My worries are mainly based on my real life experiences in the finance sector over the past eight years, where a large number of the workers had nothing to do except from showing up in the morning and sitting at their desks all they long, if we ignore all the highly "productive" meetings they had to attend. Most of the institutions I worked at can shed more than half of their employees and still function no worse, if not better, than they are doing currently. I hope that the ones at which I have not worked are different. I have doubts though and to see why, watch that movie called "Office Space", a review of which can be found here: http://www.suntimes.com/ebert/ebert_reviews/1999/02/021903.html Sabri +++++++++++ June 16, 2002 LA Times U.S. ECONOMY: No Light at the End of the Tunnel What if continued public spending and large-scale deficits slow the recovery? By DAVID FRIEDMAN, David Friedman, a contributing editor to Opinion, is a senior fellow at the New America Foundation. If the U.S. economy is growing at anything like the 5.6% annual clip reported last quarter, why are U.S. stock markets sagging and economic confidence still shaky? Corporate accounting skulduggery and fear of terrorist attacks are commonly cited reasons. But the real problem is more fundamental: Nobody seems to know how the economy will generate new and sustained wealth. Currently, the most bureaucratic and least productive sectors--government, health-care, social and education services--are driving the economy, while entrepreneurial industries and manufacturing languish. In the absence of at least a plausible fantasy about the "next big thing" that will ignite the private economy, many investors are understandably uncertain about what the public sector's accelerating expansion means for our economic future. During the 1980s and early 1990s, the U.S. economy transformed itself from an aging, uncompetitive has-been into a beehive of industrial ingenuity as large companies split up into more entrepreneurial units. After the recession in the early 1990s, the Internet and the newly emergent "digital age" reinvigorated the industrial transformation. To be sure, new-economy hype and Wall Street excess eventually masked the nation's more fundamental economic development. For years, however, U.S. entrepreneurial creativity and highly effective industrial reorganization were the engines of wealth creation. >From 1994 to 1998, nearly 12 million jobs were created. About 4.6 million of them were in goods-producing sectors--manufacturing, construction, business services and trade. Government, health-care, social and education services added just 2.4 million jobs. Virtually none of these trends, nor any newer, more promising ones, can be discerned in today's economy. Over the last four years, wealth-producing manufacturing, business services, construction and trade industries steadily declined, losing more than 700,000 jobs. Manufacturing employment alone fell by 11%, the sector's second-worst decline since 1939. Business services, which produced 2.3 million jobs from 1994 to 1998, rose by only 800,000 from 1998 to 2002, roughly matching the expansion in education, social services and health care. But wealth-consuming sectors--government, state-supported social and education services, health care--grew even more rapidly from 1998 to 2002 despite the most recent recession. These sectors added more than by 3.2 million jobs, one-third more than from 1994 to 1998, and constituted 60% of U.S. total employment growth. If growth in retail employment is factored in, an astonishing 80% of total U.S. job growth since 1998 has been in wealth-consuming sectors, compared with just 35% from 1994 to 1998. These trends show few signs of abating. In the last quarter, government and related services added 220,000 jobs, while manufacturing, construction and business services shed 300,000. So that first-quarter report of 5.6% annual growth is a bit misleading. Aside from the fact that such reports tend to magnify any one quarter's performance, the nation's seemingly robust growth mainly reflected the continuing expansion of public and closely aligned sectors. All this undercuts more hopeful interpretations of some recent economic developments. The U.S. manufacturing decline, for example, is often downplayed as natural. As countries mature, goes the argument, they shift from making widgets to designing software. This change may inconvenience workers in the doomed sectors, but, over time, they will find more rewarding jobs and benefit from cheap, high-quality imports or products churned out by automated factories. Such beliefs were plausible in 1994-1998, when business-service employment was booming. As millions of jobs in technically demanding work--programming computers, setting up communications systems, for example--were created, business services offset slower growth or job losses in manufacturing. Economists even debated whether such services should be reclassified to reflect their productive role in the economy. But when manufacturing went into a tailspin in the later 1990s, the business-service growth that powered the healthiest phases of the decade's boom slowed too. Rather than supplant manufacturing, business-service enterprises depended on healthy factories, which, after all, were among their biggest clients. Worse still, service-sector expansion began shifting from the private to the public. In 1994-98, engineering, management, film and business services, all of which are private-sector wealth-producing activities, accounted for more than half of the growth in U.S. service employment. During the next four years, however, they generated just one-third of total service growth. Personal services, such as cutting hair, grew more rapidly instead. It's hard to imagine how service-sector expansion can play a role in wealth creation if growth in, say, manicurists exceeds that of engineers. Currently, growth in service jobs appears to be increasingly dependent on government spending, a connection not normally correlated with sustainable wealth creation. The economy is also suffering from nervousness about the public sector's fiscal solvency. The dramatic expansion of state and local government jobs and functions over the last few years has already produced billions of dollars of red ink. The federal budget may soon follow suit, depending on its response to last year's terrorist attacks. Government pump-priming during economic slowdowns is hardly new. But the current government spending spree is unusual in both its scope and longevity. Most states, like California, did little to limit spending even when the stock-market bubble that was financing their budgets had clearly popped. And they continue to create hundreds of thousands of government jobs, most of which are subject to stringent civil-service protections and strong representation by public-employee unions. Today's public-sector expansion may be permanent. Government planners hope that the private economy will soon recover, allowing tax revenues to rise and pay for all this public expansion. But what if it doesn't? What if continued public spending, and possibly large-scale deficits, slow the recovery? There are plenty of examples of public spending burdens crippling highflying economies. Japan's high-growth period, for example, was once the envy of the world but stalled in the early 1990s when the nation's real estate bubble abruptly burst. The Japanese government repeatedly tried to spend its way into a recovery, but only succeeded in amassing a huge public deficit. Remarkably enough, some analysts now worry that Japan, like Argentina and Russia, might even default on its debt. No one has suggested that the U.S. economy is heading toward anything like a similar fiscal meltdown. Yet neither has anyone painted a picture of how growth in the public sector shall lead us into a new era of sustained prosperity when the manufacturing economy is rapidly declining. Most of the potential new sources of economic vitality seem longshots, at best. Biotechnology, for example, seems years from making a significant commercial impact. Older, once-appealing theories of economic expansion are even less compelling. Few, for example, still openly tout, let alone believe in, the wild-eyed claims once made about digital-age prosperity. Until U.S. economic growth is more balanced and its emerging public finance challenge more manageable, it's likely that our economic prospects will fail to fire investors' and consumers' enthusiasm. An expanding public sector may be necessary at a time of global terrorism. We'll soon learn whether it also can choke off the economic development necessary for sustained prosperity. Full at: http://www.latimes.com/news/printedition/opinion/la-000042187jun1 6.story From annewilliamson at msn.con Mon Jun 17 20:30:31 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Mon, 17 Jun 2002 22:30:31 -0400 Subject: [A-List] US: At the End of the Tunnel? References: Message-ID: <02f701c21670$1ed021a0$0100a8c0@igrushkii> Sabri: As the first - and very proud - woman member of the Brotherhood of Locomotive Engineers (D&RGW), I would just comment that from this "hoghead's" seat, it looks like the headlights are narrowing and starting to bounce wildly off the rough hewn rock as we enter the tunnel. -A. SHAREHOLDERS' LETTER FOR SIX MONTHS ENDED 3/31/2002 For the first quarter of 2002 the Prudent Bear Fund No-Load shares returned 9.41% while the S&P 500 gained 0.27% and the NASDAQ lost 5.30%. The fund returned -14.74% for the six months ended March 31, 2002 while the S&P 500 gained 10.99% and the NASDAQ gained 23.33%. Consistent with our investment philosophy, the fund held more short equity positions than long positions throughout the period. While this allocation adversely affected performance during the sharp bear market rally in the fourth quarter of last year, the fund benefited when the bear market resumed early in 2002. As a result, the fund continued to protect investors during the initial stage of the bursting of the U.S. stock market bubble. For example, for the two years ending March 31, 2002, the fund produced an average annual return of 24.38% compared to an annual return of -11.42% for the S&P 500 and -36.37% for the NASDAQ. The Prudent Safe Harbor Fund return was 8.10% for six months ending March 31, 2002 as the U.S. dollar finally retreated and gold prices rose. We continue to believe that global stock prices will decline dramatically, gold stocks will rise and the U.S. dollar will decline. Our two funds are positioned to benefit handsomely as these trends are realized. Our confidence in a continued significant stock market decline is based on a three-pronged analysis: 1) Stock market history and the nature of speculative bubbles. 2) Macroeconomic forces, so ably analyzed by my top strategists Doug Noland and Marshall Auerback, and 3) Continued comprehensive analysis of individual companies in an environment where obtaining financing has become increasingly difficult. In addition, many sectors that we see as vulnerable to unfolding developments have enjoyed significant rallies as tech stocks have faltered. As a result, valuations in virtually all sectors remain extended. In our view a secular bear market is well underway, but far from over. The Japanese experience illustrates that secular bear markets can last far longer than once thought. The Nikkei currently trades in the vicinity of 11,500 after peaking near 39,000 more than a decade ago. Just as Doug Noland predicted, the U.S. economy has proven stronger than many economists projected, thanks to credit excess-induced spending. We do not, however, see this as healthy or the beginning of sustainable recovery. Most of this letter incorporates Doug's analysis, which can be found each week in his Credit Bubble Bulletin at www.PrudentBear.com. Doug works diligently to challenge conventional thinking and go beyond traditional analysis, which we believe is especially valuable in this most extraordinary of environments. If anything, events over the past year have confirmed our view that credit bubble dynamics go far in explaining the genesis and progression of the historical financial and economic developments we are all witnessing. Unfortunately, I am convinced that when this bubble bursts it will lead to the deepest and most protracted recession of the last century. We have positioned the Prudent Bear and Prudent Safe Harbor funds to benefit from the conclusion of the credit bubble and the continued secular bear market for stocks. The Prudent Bear fund continues to have far more short than long exposure, with long positions consisting of gold stocks and small special situations. The Prudent Safe Harbor fund remains primarily invested in foreign government notes with an allocation to gold stocks and gold bullion. THE MARKETS Extraordinary volatility and unusual divergences continue in an acutely unstable stock market. That a virtual collapse in the telecommunications sector can be immediately followed by an 11% one-session gain in the NASDAQ100 is indicative of a seriously impaired marketplace. In the credit market, instability reigns as well. Corporations continue to lose access to the commercial paper market, and the corporate bond market has been closed to many borrowers. At the same time, there has been almost panic buying of Treasury and agency bonds. Today's markets are providing unlimited finance for mortgages and other consumer borrowings, while there seems to be only a trickle available for business investment, again indicating serious marketplace impairment. Only the most die-hard optimist would not recognize how dysfunctional the U.S. financial system has become. The surging gold price and faltering dollar seem to support our view. THE ECONOMY First-quarter GDP growth of 5.8% confirms that there has been a strong resumption of borrowing and spending. Retail spending remained relatively robust; extremely easy credit conditions (a bubble throughout mortgage finance) have created a wildly buoyant national housing market, with California and other markets now in dangerous bubbles. Auto sales remain strong, with monthly auto sales data providing great insight into the nature of distorted consumer spending patterns. Stellar performance of the luxury brands is especially eye opening. April was the strongest month ever for BMW and Mercedes sales, which are running 17% and 8% above last year's records, respectively, as virtually all luxury models performed exceptionally well. With California traditionally the largest market for luxury autos, this boom has tracks of the Golden State real estate bubble written all over it. What we are experiencing is not so much an economic recovery as it is the last gasp of a terribly maladjusted bubble economy. Most of the growth in the economy has come from rebuilding inventories and stoking consumer spending, much of it luxury-oriented, or what can be funded from proceeds from home equity loans and refinancing. The consumer has spent money aggressively because financial markets have made borrowing so easy, especially for extricating home equity from inflating home values. The problem is that the imbalances are growing increasingly problematic, so this is clearly not a case of healthy or sustainable economic growth. There are also troubling signs of heightened risk that inflation may rear its ugly head in goods and services prices. The April ISM (formerly National Association of Purchasing Managers) index showed an 8.4 point jump in "prices paid" to 60.3, the highest level since January 2001. The "prices paid" component rose 18.8 points in two months, and 27.1 points in four months. April's non-manufacturing pricing component jumped from 53 to 59.5. The non-manufacturing "prices" component has surged 21.5 points in four months. While financial flows have flooded into a problematic mortgage finance bubble, the ongoing technology collapse has taken a decided turn for the worse and is having its own very serious repercussions. It should be increasingly clear that the Fed made a momentous error in responding to the bursting of the technology bubble by accommodating further speculative and credit excess. Such policies only created another larger bubble and an even more precariously imbalanced U.S. economy. It's interesting that such notable economists as Bill Dudley of Goldman Sachs and Stephen Roach from Morgan Stanley have discussed the peril of re-igniting a bubble economy. It' s almost as if they've been reading from the script of the "Credit Bubble & Its Aftermath" symposium that we sponsored in September of 1999. Never did we imagine back in 1999 that the credit bubble would still remain so out of control in 2002. REAL ESTATE BUBBLE Let's take a moment to discuss a real estate bubble that many of our policymakers claim does not exist. First of all, first quarter existing home sales were on a record pace, with strong price gains in many markets. In California, April median prices jumped to $305,940, surpassing $300,000 for the first time. Prices were 18.8% higher than last year's level. Sales rose 13.1% from year-ago levels, while the inventory of available homes dropped to a noteworthy 2.3 months (compared to 3.5 months one year ago). The median condominium price of $249,820 is 21.5% higher than last year's level, with the sales volumes rising 38.5%. We believe that the real estate bubble and accommodative mortgage finance have been crucial factors in keeping the economy growing. "Structured finance," or lending related to the government sponsored enterprises ("GSEs" - such as Fannie Mae & Freddie Mac) and mortgage and asset-backed security issuance, has developed into the key monetary transmission mechanism of the real economy. It has, as well, evolved into the key liquidity mechanism for the securities markets. This most unusual of credit mechanisms was largely responsible for last year's uninterrupted flow of easy credit to the mortgage and consumer sectors - providing the true source of the "resiliency" of the U.S. economy in the face of severe financial tumult. The consensus view is that with deregulation and extraordinary innovation, the U.S. financial system has developed into a modern miracle of "efficient" contemporary finance. The efficiency of directing limited savings to their best opportunities has supposedly allowed our economy to post impressive uninterrupted growth for nearly two decades. For good reason, we are quite skeptical of this view and don't believe in financial miracles. Instead, we see endemic credit excess and the evolution of what we see as a new "Monetary Regime." This Regime has sustained dangerous borrowing, spending, and speculative excess, when a traditional monetary system would have long ago been forced into necessary adjustment. This monetary regime involves the structured finance phenomena that we believe is a major accident waiting to happen. We believe that the Fed is typically given too much credit for creating liquidity and accommodating economic growth, while the GSEs and the U.S. financial sector (through the structured finance arena) are not credited enough. The process of contemporary liquidity creation is not well understood. It is not appreciated how when a home mortgage is made to an individual and that mortgage is purchased by Fannie Mae, that Fannie creates liquidity as it issues securities and borrows from money market funds. Fannie also creates liquidity when it borrows and purchases existing mortgage securities in the marketplace. But the very financial sector that has been responsible for keeping the U.S. system awash in liquidity since 1998 has built up unprecedented financial leverage, speculative positions, and fragile debt structures. And while the resulting liquidity has played the major role in accommodating the de-leveraging and derivative-related selling associated with the collapse of the technology bubble, the residual has been an only greater degree of leverage and derivative exposure associated with the explosion of GSE debt, mortgage and asset-backed securities, CDOs (collateralized debt obligations), and convertible securities. Last year, combined credit growth from the GSEs, mortgage-backed, and asset-backed securities surpassed $1 trillion for the first time and was four-fold higher than 1993's level. In fact, the $1.003 trillion borrowed was not only up from 2000's level of $647 billion, but it jumped to 91% of total U.S. non-financial borrowings. This is an amazing statistic. The combined book of business for Freddie Mac and Fannie Mae surged an incredible $471 billion (20%) during the past year to $2.83 trillion. This compares to the $262 billion expansion during the preceding 12 months. During the past 36 months, their combined book of business has jumped $953 billion, or 51%. We know of no comparable episode of credit excess in history. Year-to-date sales of asset-backed securities of $109 billion are now running up 16% from last year's record issuance. Home-equity loan securitizations are 68% above last year's record pace. The auto-backed securitization boom runs unabated, with year-to-date issuance of $31.2 billion up 33% from 2001. While the financial system looks askance at financing business investment, there remains virtually unlimited finance available to fuel consumption. Consequently, our poor trade position is poised to get worse. While it has not been an issue thus far, there is inevitably a problem when foreign finance fuels a consumption-based economic expansion. In the case of the U.S., foreign-sourced financial flows have become an integral aspect of our contemporary monetary regime. After a long series of financial crises elsewhere, and with the Fed and GSE's overly successful efforts to sustain the evolving U.S. "structured finance" regime, U.S. securities markets became the "darling" ("safe haven") of the speculating community. Wild excesses throughout "structured finance" became the key transmission mechanism distorting both financial markets and the economy. Ironically, the fragility of the dysfunctional global financial architecture has only played into the hands of the expanding U.S. consumer-centric Credit Bubble and the evolving "structured finance" Monetary Regime. Each brush with financial crisis the United States has faced over the past decade has only worked to sustain the evolving bubble. The consequence has been greater credit excess, and the development of an unstable monetary regime and bubble economy. As an example, the U.S. financial system suffered a brief liquidity crisis when the system was "seizing up" back in October 1998. But since that time an unrelenting flood of GSE and "structured finance"-induced liquidity has besieged the system. Credit growth exploded, the consumer spent more money, and the economy roared back. However, the response to the 1998 crisis ensured excessive credit growth to business and over liquefied markets generally. This ignited the Internet and telecom bubbles, and a NASDAQ rally where the NASDAQ100 advanced by 86%. Once again, more extreme imbalances were imparted that will now need to now be corrected. Commensurate with worsening imbalances, each correction will require even greater dislocation and pain to work off. The nature of the problem is that destabilizing speculative financial flows are always poised to fund credit excess one way or the other, one sector or another; it is only a case of in what sectors and to what negative consequence. Throughout SE Asia, malinvestment in manufacturing sectors was the most extreme inflationary manifestation emanating from excessive foreign finance. In countries such as Argentina and the U.S., with higher labor costs and generally uncompetitive currencies, the "hot money" played differently with divergent consequences. ARGENTINA'S LESSON Contrary to conventional wisdom, the problem in Argentina was not a short-term break in investor confidence, but rather a collapse assured by enormous speculative financial flows and the resulting maladjustments due to a dysfunctional Monetary Regime. This regime had been adopted specifically to ensure stability, but instead it spawned acutely fragile debt structures and extreme financial and economic imbalances. Because of the gross imbalances, there was no avoiding the disastrous consequences to the real economy. Argentina's economy is well into its fourth year of recession and today is in virtual economic collapse. The banking system has effectively stopped functioning. While the forces and causes involved are numerous and complex, the bottom line is that its once acclaimed Monetary Regime has imploded. Argentina is left today without a functioning credit system and as a result is in financial chaos. Even though many might view a comparison between the U.S. financial system and Argentina's as irrelevant, both experienced fundamental changes to their respective domestic credit systems. These changes, interacting with wildcat global speculative finance, nurtured credit bubbles that then evolved into precarious and untenable Monetary Regimes. The Argentines adopted a monetary regime where they linked their currency to the U.S. dollar. The government debt market provided the key mechanism for channeling liquidity into the financial markets and economy. The economy boomed as a massive credit bubble developed. While nominal GDP expanded by a very healthy 26% over five years, total public debt quietly surged a whopping 79%. What should have been an obvious credit bubble - and could have been made clear by a simple chart of government debt growth - was disguised by "impressive" GDP expansion. On the surface, all looked fine. Although rapid spending and income growth were in reality inflationary manifestations, they were at the same time (as they are today in the U.S.) the key variables identified as evidence of economic well being. These seductive forces imbued perceptions of a healthy expansion that incited additional foreign finance (Remember: credit excess begets credit excess). Plentiful liquidity allowed the government to spend freely and to privatize ("monetize") state assets, while the perception of endless liquidity took firm hold. With ultra-easy credit availability, Argentine governments, households, and corporations borrowed freely in foreign currencies and a bubble economy expanded with all appearances of a sound and sustainable prosperity. Confidence in the new Monetary Regime ran high throughout, with unsustainable borrowing and spending rising accordingly. It was a textbook Credit Bubble fueling a bubble economy and, as is typical, there was a key new "wrinkle" that made it all somehow appear reasonable. As time went on, Argentina was adopted as the favored emerging market, while previous IMF concerns as to the long-term viability of its pegged currency system dissipated. This allowed the country to float large issues of medium and longer maturity debt on world credit markets at comparatively modest spreads over US Treasuries. Against a global backdrop of over liquefied financial markets and intense speculative impulses, Argentina's Monetary Regime (that very effectively constrained domestic inflationary credit creation) had a major unintended consequence of inciting a flood of foreign finance. It should be recognized that new monetary regimes generally perform very well initially. The vaunted features of the system attract foreign finance, while a revived credit mechanism fuels expansion and the positive feedback of changing market perceptions. This initial success naturally foments disregard for longer-term sustainability issues, while discrediting the cautious and more vocal "naysayers." The initial financial players are rewarded handsomely for accepting the risk of the new Regime and - especially in this extraordinary environment - performance-chasing speculative finance arrives in waves. The money simply pours in. Monetary disorder is imparted, and the character and stability of the system is forever altered. Interestingly, like in the U.S., inflationary effects of this foreign-sourced liquidity were not of the traditional pressures on consumer prices. The effects increased asset prices and stimulated commerce. They were thus off the radar screen of policymakers and financial players, as there exists no constituency against asset price inflation. The government was happy to borrow, and global financial players were ecstatic to buy government bonds dominated in dollars with a significant spread to U.S. interest rates. So foreign finance flowed freely, system debt grew rapidly, and financial and economic imbalances escalated exponentially. No one contemplated a reversal of the speculative foreign flows. And the greater the accumulation of foreign liabilities, the more the Monetary Regime became "too big to fail." Total commitment to sustaining an unsustainable system did work to keep the "hot money" in the game a while longer. However, disregard of the obvious is a rather strange dynamic of our time. After all, we have by now seen such processes in action again and again, and it should be very clear to policymakers that attentive speculators are keen to aggressively play above-market yields, various spreads, or any other "trade" made attractive by government policies. It is not rocket science to appreciate that such flows are specifically not sustainable and will, in fact, generally reverse abruptly and problematically at some point. It should be appreciated that - instead of being merely a possibility - financial history tells us clearly that a reversal of foreign flows is inevitable. That which can't go on forever doesn't. Regrettably, the consequence for Argentina of allowing the accumulation of immense foreign liabilities was the cataclysmic effect of the reversal of global flows. It hit especially fragile debt structures and an economy with little wherewithal to generate sufficient cash flows. Yet, only with the reversal of these vital flows and consequent faltering liquidity did it then become a critical issue that there was little economic wealth producing capacity underpinning all the accumulated debt. These are precisely the dynamics that we find most disconcerting in the U.S. today. As was the case throughout SE Asia and Russia beforehand, when the "hot money" headed for the door and the derivative players were forced simultaneously to aggressively sell the underlying currency (dynamic hedging) to hedge exposure on the derivative "protection" they had written, collapse was virtually assured. There is one critical lesson to be taken from the Argentina experience: it is a grievous policy error to adopt a monetary structure that is unsustainable over the longer-term and vulnerable to implosion, no matter how immediately expedient. When it comes to monetary policymaking, conservatism must overrule seductive experimentalism. BACK IN THE U.S.A. We have more conviction than ever that the U.S. is in the midst of an historic monetary experiment run amuck. With similarities to Argentina but on a much grander scale, the U.S. system has developed a monetary structure/"regime" that, while politically expedient, is nonetheless unsustainable. The authorities have repeatedly refused to address underlying problems, choosing instead the short-term monetary fixes necessary to sustain the maladjusted boom. However or wherever credit growth could be stimulated, policy has been to just keep it flowing and worry about the consequences later. In the recent highly unstable character of financial markets and the grossly imbalanced U.S. economy, we see indications that things could soon be coming to a head - we may finally be forced to face the tragic consequences of these choices. For Argentina, the government debt market provided the key mechanism for channeling liquidity into the financial markets and economy, while for the U.S. such processes have been (especially post-tech bubble) increasingly dominated by mortgage and consumer finance. The key is to appreciate that over time these flows impose distinct monetary processes, and any contraction or reversal of this finance can have profound ramifications for the functioning of a liquidity-dependent financial system and economy. In the U.S., financial, political and social forces impart a significant inflationary bias throughout household mortgage finance. The strong American sentiment against federal government deficits is nonexistent when it comes to mortgage debt creation. And, as we have witnessed, these inflationary pressures have only thus far been emboldened by heightened financial fragility. Our greatest concerns with respect to U.S. Credit Bubble developments over the past few years relate to the evolution of an untenable "structured finance" Monetary Regime. For some time, the "de-industrialized" U.S. economy has won the undivided affections of global speculative finance by default and otherwise. A new Monetary Regime was covertly adopted - with the capacity for the GSEs, Wall Street, credit insurance, and derivative markets to produce endless "safe" and liquid top-rated agency debt, unlimited "Triple-A" rated mortgage and asset-backed securities, etc. - that ensured sufficient credit to stimulate spending and the appearance of a stable and resilient economy. The aggressive U.S. financial sector could both create its own liquidity and incite what at times has seemed an insatiable demand for the dollars flooding the global economy. Somewhere along the line, this Regime became much too big to fail, and this fact only emboldened the global financial community that looks confidently to the Federal Reserve and GSEs to guarantee liquidity. The upshot has been an unprecedented explosion of non-productive debt, along with an underlying maladjusted economy with little capacity for generating sufficient cash flows when these speculative flows inevitably reverse. Like Argentina, we see in the U.S. all the necessary ingredients for an inevitable run against U.S. financial claims. Again paralleling Argentina, debt growth has greatly surpassed GDP growth, while consumption and not true economic investment has been driving economic "output." In our case, the greatest excesses have been in financial sector borrowings, primarily with the explosion of credit throughout "structured finance." Over the four years between 1997-2000, nominal GDP expanded by about 26%, while financial credit expanded 70%. Over this period, GSE debt grew by 99%, while outstanding asset-backed securities grew 114%. Unprecedented current account deficits exceeding 4% of GDP have been the most conspicuous manifestation of U.S. consumption-based credit excess. For years, there has been blind faith that the U.S. would always maintain its status as the favored home for global finance. Even today, to question that all this foreign-sourced finance might someday tire of accumulating U.S. financial claims (and may even decide to sell a few) is tantamount to lunacy. We disagree, and this is why we formed the Prudent Safe Harbor Fund. Admittedly, up to this point the Federal Reserve has enjoyed the luxury of a strong dollar and what has seemingly been the markets' insatiable appetite for U.S. securities. We don't expect these luxuries to continue for much longer, and we view the current conviction that the Fed will always maintain control over systemic liquidity as extremely dangerous. In Argentina, while foreign finance was forthcoming, the government bond market had all appearances of sustainable liquidity. This illusion, however, abruptly evaporated into devastating illiquidity and market dislocation. We see a problem commencing with the faltering dollar. Foreign finance, having evolved to play such an instrumental role in funding our economy's growth, appears to be growing increasingly nervous. Recent data indicates that foreigners may now be less willing to finance our enormous current account deficits. The Treasury's monthly report of "Foreign Purchases and Sales of U.S. Long-Term Securities" shows net monthly inflows into U.S. securities averaged $53.6 billion during the fourth quarter and $42 billion for all of 2001. For the first two months of 2002, net flows have ebbed markedly to $14.6 billion. After being net monthly buyers of $12.7 billion in Treasuries during the fourth quarter, foreigners have turned sellers to the tune of $8.5 billion. During 2001, foreign-sourced purchases accounted for a monthly average of $13.8 billion of agency bonds and $19.7 billion of U.S. corporates. So far for 2002, these average monthly inflows have dropped to $5.1 billion and $11.4 billion. Foreigners purchased a net $2.4 billion of stocks each month last year, but have averaged only $638 million so far this year. THE DISAPPEARANCE OF THE GUARDIAN We now expect credit losses to play an increasingly destabilizing role for the U.S. financial sector and dollar. Over many years our contemporary credit mechanism has drifted toward a financial system in which credit has no guardian. This systemic problem finally appears to be coming home to roost, and with interest rates at 1.75% the Fed has little leeway. As the legendary credit authority Henry Kaufman warned: "The integrity of credit is being chipped away by a financial revolution that is helping to lower credit standards and muting the responsibilities of both debtors and creditors. We began moving in this direction when deposit insurance was legislated in the 1930s. This measure, generally laudable when viewed against the financial disaster of that period, removed the disciplining link between the creditor of the financial institution (that is, the depositor) and the institution itself. Increased "securitization" of credit obligations is another development that has had unfortunate consequences, as what was a "private" loan becomes part of a "public" marketable security. This further loosens the link between creditor and borrower. Credit derivatives also accomplish the same loosening. These are complicated instruments that protect a holder from the risk of default and therefore remove that risk from the lender. In a non-marketable relationship, the creditor is tied to the borrower for the life of the loan; of necessity, under these circumstances, credit scrutiny at the inception of a loan or investment is likely to be quite intensive. The same degree of credit investigation is not likely to take place when the relationship between lender and borrower is to be temporary. In a securitized arrangement, many market participants fail to distinguish between the essence of liquidity and marketability. Liquidity means being able to dispose of a financial asset at par, or close to it, while marketability provides the holder an opportunity to sell at some price. The illusion of marketability is that holders believe they will be able to sell their investments before a significant deterioration in credit quality is generally perceived. Thus the initial pressure to be highly circumspect in the creation of the obligation is absent. A world of relatively unrestrained credit growth is also encouraged by the use of credit lines and guarantees. These assurances lead investors to make commitments based on the strength of the guarantor and not on that of the borrower. The heroes of credit markets without a guardian are the daring - those who are ready and willing to exploit financial leverage, risk the loss of credit standing, and revel in the present casino-like atmosphere of the markets." - Henry Kaufman, Interest Rates, the Markets, and the New Financial World (1986). The above insights from Dr. Kaufman are especially pertinent, with the "long-run consequences of market, regulatory, and legislative changes" he warned of in 1986 having finally arrived. Henry Kaufman was indeed ahead of his time. DERIVATIVES In our view, the systemic debt problems we are experiencing are magnified with the addition of derivatives to the equation. Outstanding credit derivatives have increased more than five-fold in just four years. Analyzing this extraordinary macro environment in its simplest terms, credit growth engenders economic expansion. This expansion - in the contemporary financial world of unharnessed credit and extraordinary speculative impulses - sets in motion self-feeding credit and speculative excess. During the boom, derivatives play a critical role in the perception of enhanced risk management, which occasions risk-taking and heightened general credit availability. Derivatives also play a major role in fostering financial sector leveraging and speculative trading, instrumental factors fueling the unsustainable bubble demand for securities, while over time creating acute financial fragility. Derivatives greatly accentuate the boom, only later to play an instrumental role in exacerbating the bust. As was experienced in SE Asia and Russia, it is precisely when the risk of a bursting financial bubble begins to manifest (in their cases with higher interest rates and increased "premiums" for writing credit and currency "insurance) that a booming speculative market takes hold between those looking to off-load risk accumulated during the boom and the captive audience of speculators believing they can profit handsomely by taking the other side of these trades (the hefty premiums available from insuring against risk). It is this final "bundling" of untenable risk in weak hands that sets the stage for eventual collapse. When the "hot money" heads for the door and the derivative players are forced simultaneously to aggressively sell the underlying currency (dynamic hedging) to hedge exposure on the derivative "protection" they have written, collapse is virtually assured. Authorities, hoping to avoid such a scenario at all cost, in actuality nurture dynamics that over time ensure that speculative holdings and corresponding derivative exposure become so enormous that there is simply no avoiding serious market dislocation when the inevitable reversal comes. The unfolding telecom debt collapse is an historic development and, alarmingly, the amount of debt involved dwarfs the Russian debacle. And while it has received virtually no attention in the general or financial media, recent weeks have witnessed what appears to be a major dislocation in the credit derivatives area. In this regard, this is uncomfortably reminiscent of the initial complacent attitude held by U.S. investors to the unfolding SE Asian and Russian crises. At the same time, it appears that currency markets do have a keen appreciation of the seriousness of the unfolding U.S. risk. First of all, there is major problem when an enormous industry (or economy) is comprised of negative cash flow companies. Recently, as credit derivative players have been forced to scramble to sell short telecom bonds to hedge their escalating exposure to industry defaults, already scant liquidity quickly evaporates. Faltering liquidity then occasions the next marginal company losing access to finance, with default then a likely possibility. The domino collapse gains momentum, and it becomes a panic for those that have been merrily pocketing premiums for writing default insurance. With the market for default protection in increasing dislocation, the debt market that is the life-source for the hopelessly cash-flow deficient telecommunications industry quickly grinds to a halt (too many sellers and few buyers). For leveraged players in need of finance, this is the kiss of death. Sinking equity prices are a consequence of industry illiquidity, and it should be appreciated how stock market disarray further augments general industry collapse. Derivative players that were selling default protection for pennies on the dollar (believing their derivative book was diversified, that only a fraction of industry debt would eventually default, and that recoveries from these limited number of bankruptcies would be significant) are now faced with a much different equation: a general industry collapse and the possibility of upwards of a dollar of loss on a dollar of insurance written (as opposed to pennies!). Credit loss models can be thrown out the window as potential losses quickly grow exponentially. The key to recognizing the great risk to U.S. financial markets developing back in 1998 with the Russian collapse was to appreciate the unfolding impairment of the leveraged players - how a vulnerable leveraged speculating community irreparably linked various markets, and that these players had become instrumental to the liquidity position of U.S. securities markets. A serious impairment of the speculators in one market became a problem for all markets, and posed especially acute risk for the dollar and the grossly over leveraged U.S. credit system. We believe this dynamic likely holds true today, although in a somewhat different form. We fear the dangerous leverage (and link) today is not as much gross LTCM-type leveraging in securities markets, but a similarly dangerous "leveraging" of risk in global derivatives markets. Especially post-WTC, there are impaired financial players throughout the global "insurance" industry, and additional losses in credit derivatives hold the clear possibility of pushing some into insolvency (if they are not already there). We see a problematic situation where credit risk has been "bundled" and placed with especially weak (and rapidly weakening) hands. The enormity of the problem immediately raises the issue of counterparty risk, and any time counterparty exposure becomes a major issue it poses a clear and present danger to systemic stability. The ongoing collapse of the telecom/technology bubble will result in unprecedented credit losses. The Fed has responded aggressively to the bursting tech bubble by accommodating a much larger bubble. Importantly, this latest round of Fed and GSE "reliquefication" is directing credit and speculation predominately to consumer and mortgage debt. We'll go on the record as predicting that real estate credit losses - particularly in the precarious California housing bubble - will eventually significantly surpass telecom losses. Regrettably, Fed policies and the resulting market dynamics are ensuring this outcome. With market perceptions that the Fed will hold rates low, speculative finance is providing unlimited cheap credit throughout mortgage finance. As conspicuous as this bubble has become, Wall Street "research" departments are busy creating propaganda arguing against the bubble hypothesis. And with speculative interest and resulting credit excesses in high gear, Wall Street is heartened with the reality that this mortgage finance bubble has room to run. This also buttresses general market complacency. THE KEY ISSUE - DOLLAR RISK So this brings us to the key issue of dollar risk. Our hunch is that this is precisely where the wildness lurks, and recent market action supports this view. We sense that there is not much appreciation for the character of the most recent Fed/GSE "reliquefication" or its ramifications. The post-Russia/LTCM systemic bailout (and Credit Bubble), of course, ushered in an historic technology bubble. This, importantly, acted as a magnet for global speculative financial flows, perversely imparting strength to a dollar that should have been vulnerable in the face of unprecedented and reckless domestic credit excess. Moreover, with lenders and speculators favoring the U.S. consumer over the lowly producer, the prospect of a marked deterioration in the U.S.'s overall trade position appears virtually assured. 2002 is no 1999. The halcyon days of the Fed enjoying the luxury of a strong dollar have ended. The nearer and longer-term risks emanating from Fed policies and U.S. financial sector practices are clearly with the dollar. And while a case can be made that the telecom debt collapse is a global phenomenon and not a U.S. dollar issue, we are not so sure. The Russian collapse was transmitted to the U.S. securities markets through the hedge funds and global speculators. Today, we fear that the transmission mechanism may prove to be through the derivative players comprising the global swaps market. It is certainly our belief that credit derivatives written by offshore financial players have played an instrumental role throughout U.S. structured finance (transforming risky loans into "safe" money and highly-rated securities). It has been demand for these top-rated securities (at least partially financed with foreign-sourced borrowings) that has supported the dollar, and any development that impairs the writers of these derivatives would pose risk to dollar stability. It is not hyperbole to proffer that the derivatives industry is looking increasingly like a potentially cataclysmic accident. In an example of how the complexion of risk has changed of late, the Wall Street firms are now faced with the indefinite prospect of scores of attorneys licking their chops from an ever-lengthening list of misdeeds. Wall Street must now manage its various risks especially carefully. There is also what must be a festering issue of enormous losses lurking out there somewhere in equity derivatives. Adding insult to injury, the gold derivative market has also turned rather inhospitable to any derivative player short bullion or gold stocks. And then there are hints of unfolding tumult and losses in the obscure world of convertible arbitrage. We are witnessing a dysfunctional system having set course for a serious financial accident. The U.S. bubble economy requires continuing credit excess to sustain boom-time demand and to maintain inflated asset prices. The bubble within the credit system depends on significant continued expansion from an increasingly impaired financial sector to sustain liquidity for our securities-based credit system. Our fear is that the great U.S. credit bubble is approaching an historic crossroads. Rampant GSE credit excess has run unabated for three years, imparting only increasingly destabilizing forces including a real estate Bubble. The Fed has similarly largely shot its bullets in the process of fostering only greater financial excesses. So when the final bubble now running rampant throughout consumer and mortgage finance runs its course, we fear major financial and economic dislocations are unavoidable. A vulnerable dollar appears to provide a potential catalyst for an imminent piercing of the credit bubble. In conclusion, we expect the second half of the year to result in extreme disappointment for investors as the credit bubble we have spoken about for several years comes to an end. Warn those you care about to carefully evaluate the "bear case" which we have prepared at www.prudentbear.com. The Prudent Bear Fund no-load shares total return for the 12 months ending March 28, 2002 was 1.70%. Its average annual return for 3 and 5 years ending March 28, 2002 was 9.51% and -6.66% respectively, and -6.91% since inception (December 29, 1995). The Prudent Safe Harbor Fund total return for the 12 months ending March 28, 2002 was 14.84% and 1.62% since inception (February 2, 2002). Performance figures include the reinvestment of all dividends and capital gains. Investment returns will fluctuate, and when redeemed, shares may be worth more or less than their original cost. Past performance does not guarantee future results. From annewilliamson at msn.con Mon Jun 17 20:38:20 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Mon, 17 Jun 2002 22:38:20 -0400 Subject: [A-List] US: At the End of the Tunnel? References: Message-ID: <030201c21671$366e29a0$0100a8c0@igrushkii> Sabri: Another view from the same seat. Funny, but I don't suppose any of the A-List has ever had the experience of riding a runaway on a 2% grade through the Rockies - but I have (courtesy of my own stupidity, inattention, and nascent skills.) Quite a bracing morning as I recall, and by sheer luck and the grace of God, all made it home safe and sound - even the train! But not without some serious thrills. This time around, I have no hopes of a repeat. Thrills and chills the whole ride...... down, until the entire outfit jacknifes and lands in the lake........after having dropped a couple of thousand feet outside of Tunnel 54.......... Anne Gary North's REALITY CHECK Issue 150 June 17, 2002 SHOOT THE MESSENGER, AS USUAL The free market in capital has steadily brought reality back to investing, but the reaction of the politicians is to hamper it even more. They want to blame the system that alerted the public to the fraud and unrealizable dreams that were prevalent in early 2000. The investors' euphoria of 1996-2000 is long gone. The S&P 500 peaked at a little over 1500 in August of 2000. The dot-com mania has been dead for over two years. The NASDAQ's peak was 5040 on March 10, 2000. It rallied from its September, 2001, low of just over 1400 to just under 2100 in January, but most this rally was surrendered. Enron's shares died this year. Arthur Anderson, Enron's watchdog, has been taken to the pound and put to sleep. Now Democrats are moving in for the political kill. It's an election year. They cry out that "another Enron must never happen again." They will see to it. They will create new bureaucratic supervision. But what went wrong with the old system of supervision, which was run under Clinton? Nobody mentions this. The U.S. stock market is slowly surrendering its post- 9/11 euphoria. Just as Osama ben Laden is described by the media, the stock market is looking gaunt. In fact, it is considerably more gaunt than bin Laden. But the pundits describe it as "slimmed down and ready for action." It's lean and mean, not cadaverous. The cheerleaders on CNBC who assured the public last September that American patriotism will surely lead to corporate profits, that the stock market was at a historic buying opportunity after 9/11, were obviously wrong. People should have put their money into gold. It was obvious to me last September that gold, not the stock market, was at an historic buying opportunity on 9/11. But I am not mainstream. For the October issue of my subscription-based newsletter, REMNANT REVIEW, I persuaded America's best North American gold mining share specialist to begin writing a monthly column. Anyone who bought the stocks he discussed is up 100%. Then there is Enron. There must always be a representative company, in good times and bad. Microsoft is the good times company. Enron is the bad times company. The desire of investors to buy "the next Microsoft" led to Enron and the dot-com mania. But the public's desire to avoid the next Enron will lead to more government control over the economy. When the public gets rich, it praises its own collective genius. "Genius is a rising market. -- John Kenneth Galbraith. But when it loses its shirt, it blames corporate greed, not its own greed. It calls for the government to Do Something. Voters honestly believe that the government can protect them from corporate charlatans who get rich -- on paper, for a time -- by lying. Voters expect the government to protect them against their own greed. Enron has become the representative the greed-driven, charlatan- run company in our day. Kenneth Lay, a blowhard optimist right up to the day that Enron shares went to pennies, told everyone "this company can't lose." Now his defense is that he didn't understand what was going on. Another Master of the Universe has bitten the dust, along with investors who believed him. The government holds hearings on how to prevent another Enron. Nothing can prevent another Enron. The only thing that will inhibit another Enron is the capital market, where investors can search out winners and losers, putting up their own money as their means of confirming their findings. What can Congress do? Congress can't even get the Bush Administration to release transcripts of what went on at Cheney's meetings with the Masters of the Universe in the energy field. Bush is as tight-fisted with the evidence of those meetings as Clinton was with respect to Hillary's illegal meetings in 1993 to create socialized medicine in America. That conspiracy against the public interest was exposed mainly because one of the participants, Dr. Jane Orient, was a libertarian physician who got somehow invited to those closed-door meetings, and later went public with what went on behind the closed doors. The organization that she now heads, the American Association of Physicians and Surgeons, brought a law suit against the government to force the release of the files. It will take similar legal pressure on the Bush Administration to get access to whatever files have not been shredded. The stonewalling on Cheney's equally secret meetings will probably backfire politically. The Senate will eventually get this information. The point is, the government isn't our protector; it's the source of the problem. It reacts to protect itself. It does not protect the public. Watch what will happen, and is already happening: the free market is getting the blame. The free market, through the stock market, eventually brought down Enron and exposed the fraud. But the free market is getting blamed. We are being told that there must be more controls on the free market. We are told that we need more of the same -- more of what failed before. It was not the regulatory agencies -- the SEC (stocks), FERC (energy), etc. -- that exposed Enron. Nor was it the company's accounting firm, Arthur Anderson. It was the free market -- specifically, the capital market, which rewards people for discovering the truth and then acting on it. Enron's executives are now gone. They are also in court, where they will spend the remainder of their lives and fortunes. Arthur Anderson is gone, and its representatives are also in court. Enron employees' retirement fund is gone. The stock market has had its say, and it said, "worthless." It is possible to deceive investors who desperately want to be deceived of miracles. They want to believe that it's easy to get rich. They want to believe that they can beat the market consistently. So, they believe the Kenneth Lays of this world. But they eventually pay for their error. WHAT IS THE STOCK MARKET SAYING TODAY? It's saying that the economic recovery is a myth. It's saying that six months from now, the economy will be in worse shape than today. If it isn't saying this, then it's saying that the inflated stock prices of three months ago were based on bad figures, false hopes, and an accounting industry that was not yet facing up to what happened to Arthur Anderson. In other words, if the stock market is not telling us that the real economy is heading lower, then it is telling us that the stock market itself has been the victim of bad accounting practices, conflicts of interest, and a naive public that was willing to invest in a stock market with a P/E ratio of 40-to-one. It has been the victim of Kenneth Lay-like optimism, which says, "We can't lose, and neither can you if you buy our shares." Companies are losing, and so are those investors who bought their shares. What sustains the stock market is the fact that retirement fund managers have only a limited number of legal options for the investors' money. Investors have been moving into stocks rather than bonds. This is hurting stocks. At the same time, the rate of monetary inflation is so high that there is risk to bonds. The only way to play down this risk is to argue, as many market analysts are arguing today, that it's possible to have a 10% per annum increase in the money supply without affecting prices. http://www.stls.frb.org/docs/publications/usfd/page2.pdf That is, there is no relationship any longer between monetary inflation and price inflation. This involves dismissing the median CPI as a statistical error. http://www.clev.frb.org/research/mcpi.txt It also involves the idea that foreign currencies will not appreciate in relation to the dollar, and that import prices will remain low forever. It says that there will not be an inflation premium tacked onto the long-term bond rate and mortgage rates by lenders. The public will have more money to spend as a result of monetary inflation, but this money will go into the stock market or somewhere other than goods and services, so prices will remain low and may even decline. If this is true, then the Federal Reserve System has come up with the equivalent of the perpetual motion machine. It can crank out credit money, but this money will appreciate. The law of supply and demand has therefore been repealed by Alan Greenspan & Co. The price of money rises even though more of it is supplied. The words falsely attributed to Marie Antoinette, "Let them eat cake," have now come true: "Let them eat dollars." Do Americans believe this? They did for a while. They stopped saving because they figured that the stock market would make them rich. The personal savings rate fell from 5% in mid-1998 to 0% late last year. But, in early January, without warning, it moved back up to the 3% range overnight, or so the figures indicate. http://www.ny.frb.org/rmaghome/dirchrts/i-bcd_03.pdf This rate is still very low. It will not make possible the golden years of retirement. But it indicates that Americans are sensing that the boom era has ceased, that they had better save for a rainy day. This has taken place in the face of historically low short-term interest rates (T-bills, CD's, passbook savings) and a falling stock market. The performance of the stock market in recent weeks indicates that investors are moving out of a Kenneth Lay- like confidence in a high-flying stock market. They are moving to an outlook that is more realistic. They have not yet bailed out of stocks. But they are re-thinking the premise that Easy Street is a one-way street, and that tech stocks and conventional stocks are the way to get involved. The volume of the trading days is now high: 1.4 billion shares a day. The market is not just moving sideways; it's moving down. The commentators don't want to admit that this is significant, especially in the face of a reduction of the federal funds rate of over four parentage points, January, 2001, to January, 2002: 6% to 1.75%. We have newer seen such a rapid fall in the FF rate, yet the stock market today is lower than it was in January, 2001. The S&P 500 went from 1300 to 1400 in January, 2001. Today, it's around 1000. The experts in January, 2001, invested in terms of that old role, "Don't fight the FED." That rule has cost S&P 500 investors 21% of their money since the rate cuts began -- 28% since February 1, 2001. This should be front-page news in the financial press. The pundits should be offering detailed explanations for why an unprecedented fall in short-term rates has produced a falling stock market. There should be a center section of THE ECONOMIST called "Fight the FED." The reason why we don't see such stories is that this has happened once before: 1929 to 1932. Then, as now, a fall in short-term rates accompanied a fall in the stock market. The commentators don't like to think about the implications of a financial world in which the old verities of easy money as a stimulator to the economy and therefore to the stock market seem no longer to be true. This was not what they had in mind for the phrase, "new era." We are in a new era. It is an era in which the Federal Reserve System can pump in new credit money at 10% per annum, lower the federal funds rates from 6% to 1.75%, and the stock market falls anyway. The mainstream experts are lying low. They are saying as little as possible. The news does not look good. The investing public is becoming cautious. The recent fall in the stock market may be a typical summer loss. Historically, from May to September, investors should be out of the American stock market. It falls in the late spring and all summer. But high volume indicates that there are a lot of sellers who are not convinced that the recovery is real, that a stock market boom is just around the corner, and that equities are still the wave of the future. THE ACCOUNTANTS' DILEMMA The accounting industry now faces a dilemma. It has rubber-stamped the rosy projections of the companies that have employed them. They have not sounded warnings against stock options that are not dealt with as capitalized expenses. They let the stock market go into a mania phase after 1997 without a word of warning. Those days are gone for the market. Nobody in a Big 4 (formerly Big 5) CPA firm wants to end up like Arthur Anderson. The partners have become millionaires, and they don't want to go to jail. They don't want to sell out for pennies on the dollar to their rivals. They are not going to go along to get along with their corporate employers. They are not going to validate fudged books just to get fat consulting fees. The risk is too great. They can see that Congress is ready to pin the tail on CPA donkeys. I think the market is reflecting this. The announcements regarding earnings indicate that there has been a major setback, not just to consumer demand but also to loose accounting standards. The big CPA firms don't want to admit that they had validated cooked books, 1996-2001. They don't want to admit that Enron is not alone. But they are not willing to continue to play the game. So, I expect to see a reduction in the supply of cooked books. The dance of the decimal points is ending. The CPA firms perceive that the government's regulatory agencies are looking for watchdogs that failed to bark. So are the politicians. The accounting firms are going to start barking. To forestall this, their corporate employers are going to have to accept the reality of lower returns. The stock market has begun to reflect these new reporting conditions. The overinflated earnings are now coming down to earth. The P/E ratio is rising. It's over 43. http://www.spglobal.com/indexmain500_data.html It was slightly under 40 last December. Stock prices are falling, yet P/E is rising. This is because earnings are falling even faster than prices. There will come a time when a P/E ratio of 15 will appear again, as it has over the decades. But it will go below 15 before it rebounds to 15. That will be the bears' long-expected bust phase. Manias up always end in manias down. If it's really different this time, then there should be reasons to account for this difference. They had better be superior reasons to those that were offered to justify the NASDAQ above 3000, let alone 5000. Earnings are the key to any investment in markets that are not mania-driven. When the Greater Fool theory of investing is dominant, most investors ignore earnings. This was why the NASDAQ went ballistic, 1996-2000. But eventually, manias end. Then people buy expected future earnings. The change in legal risk for accounting firms will push down reported earnings. This is a major reason why the stock market is under such selling pressure today. The accounting firms will quietly impose new standards. There will be no industry-wide announcement: "WE played fast and loose with the books before, but we have come to our sense." They will just stop going along with corporations that expect them to validate complete fantasies. I think corporate boards will start pressuring management to stop cooking the books at such high temperatures. So, there will be unexpected bad news on the earnings front from this point on. As the expectation of continuing bad news regarding earnings spreads to investors, they will sell stocks, or at least allocate new investments into other areas of the economy. They will seek a safer rate of return. They will move more heavily into bonds. This is happening now, which is why long-term interest rates are holding steady, despite a rise in the money supply. Eventually, the reality of the FED's policy of monetary inflation will catch up with the bond market. Price inflation will return, which will encourage lenders to charge an inflation premium for long-term loans, which will mean rising interest rates and falling bond prices. Bond investors will lose money. But for the next year, money in bonds will outperform money in stocks. THE DOLLAR The dollar has begun to slip in relation to foreign currencies. I expect this to continue. When it becomes clear to foreign investors that the dollar is going to perform poorly in relation to their currencies, there will be a reduction of foreign investment in the U.S. markets. This will make the present balance of trade unsustainable. Foreign goods will rise in price when the dollar falls. This will raise the rate of price inflation. But because manufacturing is not as large a factor in the U.S. economy as services are, this will not create mass inflation here. But it will place upward pressure on U.S. prices. If you are in a service industry, your number-one goal had better be increasing your output. You must be able to outperform your competition. It's another reason for turning off the TV and starting a home business. The book, THE MILLIONAIRE MIND, is very good on what it takes to be a success in a niche business. If you have zero business experience, start slowly. If you have not shown yourself in possession of a knack at seeing profitable opportunities in obscure places, don't commit everything you own to a new business. Avoid business debt. But the fact is, there will be economic pressure from all sides on your employer. The era of easy profits and "buy and hold" investing has ended. The dollar is headed lower. The Social Security/Medicare Ponzi scheme is not going to survive, here or in any other industrial nation. Payroll taxes will have to be raised again. The FED will have to buy more government debt. Default is inevitable. The only question is this: In which form will the default take place? That is, how will the government disguise the default and blame others? I don't plan to retire. I don't think you should, either. CONCLUSION I recommend that you increase your rate of savings. But the most important area of thrift is time, not money. You must actively seek out future earnings from your spare time. You must reduce the quantity of your spare time. * * * * * * * * * * * * * * * * * * * * * * * * * * * * From soncu at pacbell.net Mon Jun 17 21:43:22 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Mon, 17 Jun 2002 20:43:22 -0700 Subject: [A-List] US: At the End of the Tunnel? Message-ID: > Sabri: > > As the first - and very proud - woman member > of the Brotherhood of Locomotive Engineers (D&RGW), > I would just comment that from this "hoghead's" > seat, it looks like the headlights are narrowing > and starting to bounce wildly off the rough hewn > rock as we enter the tunnel. -A. Well Anne, What can I say? How wonderful it would have been if we had you in our all boys mechanical engineering class back in those good old days. Thanks for these articles. In engineering solidarity, Sabri The mechanical engineer, among other things From soncu at pacbell.net Tue Jun 18 01:32:43 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Tue, 18 Jun 2002 00:32:43 -0700 Subject: [A-List] Asia into the center: China and India Message-ID: Morgan Stanley - Global Economic Forum Jun 17, 2002 Missing Piece(s) to the Global Growth Puzzle Stephen Roach (from Milano) To me, the world economy has always been something of a big puzzle. Especially now. Since the mid-1990s, the United States has been the unquestioned engine of an exceedingly powerful global growth dynamic. But now that engine is sputtering, in danger of going off the tracks. Nor is this likely to be a temporary derailment, in my view. Courtesy of a wrenching post-bubble shakeout, in conjunction with a long overdue current-account adjustment, the US economy could well be headed for several years of subpar growth. The outcome -- what I believe could be a slowing from the heady gains of near 4% in the latter half of the 1990s to around 2.5% over the next 3-5 years. It is in that context that what we have called the search for growth takes on a new urgency. The United States, which accounts for 22% of the level of world GDP (as measured by the purchasing power parity metric of the International Monetary Fund), grew rapidly enough in the late 1990s to have accounted for nearly 40% of the cumulative increase in world GDP in the five years ending in mid-2000. Yet as our global economics team scans the world, we are hard-pressed to come up with a candidate -- or candidates -- to fill the growth void likely to be left by the United States. Japan is unlikely to assume the role as a global growth engine until it bites the bullet on long overdue structural reforms, especially of its beleaguered banking system. Europe has the potential to provide a partial offset, at best -- and, most likely, a very small one at that. The best our Euro team envisions is an acceleration in the region?s potential growth rate from 2.0% in the late 1990s to 2.5% over the next 3-5 years. With Europe?s share in the global economy roughly equal to that of the United States, such a modest acceleration would barely make a dent in the likely deceleration in US economic growth that I fear is in the cards. That leaves the so-called transitional economies and the developing world -- countries that collectively account for 44% of global GDP (on a PPP basis). Within the transitional world, Russia finally seems to be getting its act together, but its 2.6% weight in world GDP underscores its limited potential as a global growth engine for the foreseeable future. Even within the developing world, the candidates for a driver of global growth are few and far between. Latin America hardly seems to be positioning itself to fill the void. The region accounts for only 8% of world GDP, and Brazil and Argentina -- its first and third largest economies -- are not exactly in good enough shape to provide sustained, solid growth that an engineless world now needs. That leaves the developing countries of Asia ex-Japan, a region that accounts for about 23% of world GDP (n.b., the newly industrialized economies of Singapore, Taiwan, Hong Kong, and Korea account for another 3% of world output). This is the only area of the world that I believe has the potential to fill the void left by the United States. But it won?t be easy. That?s because the region is basically lacking in autonomous sources of domestic demand. That?s especially been the case over the past decade, when the pan-regional growth dynamic was largely powered by US-led external demand, especially for information technology products. Externally dependent Asian economies were the major beneficiaries of the sharp IT-induced upsurge in global trade volumes -- average annual gains of 8.2% over the 1994 to 2000 period, nearly 50% faster than the 5.5% pace over the 1984-93 interval. As the US-led global trade cycle now slows, developing Asia will also need to come up with a new recipe for economic growth. China and India do have the potential to fill this void and play the role as the missing piece(s) in the great global growth puzzle. In my opinion, what China?s potential is to global manufacturing, India?s is to tradable services. At present, the US manufacturing sector is three times the size of China?s. Given China?s extraordinary cost advantage, in conjunction with its rapid growth in domestic capacity, Andy Xie believes that the two manufacturing sectors can attain parity within the next decade. India, which has never realized its development aspirations through manufacturing, may have a far better chance with a services-based strategy. Unlike in manufacturing, where infrastructure and regulatory constraints have long been serious impediments to growth, opportunities in services should play more to India?s strengths -- high-quality human capital, entrepreneurial spirit, IT connectivity, and a government that finally seems willing to deregulate and get out of the way. India ?s potential is especially promising in the rapidly growing area of IT-enabled services -- not just relatively low-valued-added call centers but also higher-value-added tradable services such as accounting, logistics tracking, network management, telemarketing, remote-billing subscriber management, and remote e-mail help desks. These activities not only stand a good chance of being the surviving backbone of the New Economy, but, courtesy of the Internet, they are now increasingly tradable. That plays directly into India?s comparative advantage. But the question remains: Even with their vast potential, how quickly can China and India be counted on to fill the void left by the United States? The manufacturing- and service-based development strategies certainly won?t bear fruit overnight -- underscoring the distinct possibility that the global economy may find itself lacking until something else comes along. But, just as some puzzles have hidden pieces, there is an interesting twist to this tale. The PPP global growth measure that serves as our official metric of the world?s growth dynamic is nothing more than a statistical construct. It serves the very useful purpose of taking currency fluctuations and disparities out of the global growth calculus. It is based on the so-called "law of one price" -- attempting to put country-specific GDPs on a comparable basis by estimating the equilibrium (or PP) exchange rate that would allow you to buy the same quantity of goods in a foreign country that you could buy with one dollar in America. Consequently, with India and China having sharply undervalued currencies relative to their respective PPPs, there is a dramatic disparity between their PPP- and dollar-based GDPs. On a PPP basis, these two economies collectively account for fully 66% of developing Asia?s GDP and 17% of world GDP. That?s more than twice Japan?s 7% share and slightly in excess of Euroland?s 16% weight (but a bit shy of the 20% of the broader European Union). By contrast, the two countries account for only 5.3% of dollar-based nominal GDP at current exchange rates. In other words, their PPP weights are about three times their current-dollar weights in the global GDP. Therein lies the catch -- the hidden piece to the global growth puzzle. To the extent that the vastly undervalued currencies of China and India start to appreciate, these two countries could impart a "double whammy" to the global growth dynamic. The first contribution would come from the manufacturing- and service-based development strategies of China and India, respectively. The second from the currency "kicker." This could make a marked difference to the real-world construct of current-dollar GDP growth. If China and India are able to maintain their growth momentum as their currencies appreciate -- and I have every reason to suspect that they would -- then they would both emerge as even more legitimate contenders as global growth engines. The lesson in all this is that there is no fixed recipe for world growth. There never has been. The US-centric global growth dynamic worked exceedingly well for about six years beginning in the mid-1990s. Yet courtesy of America?s outsized current-account deficit, a new recipe is now needed. As we examine the alternatives, China and India emerge as prime candidates to fill the void. But that, of course, poses an even more profound question: If China rises to the fore in manufacturing and India does the same in services, what do the rest of us do? I guess there?s always a missing piece to the great global growth puzzle. Full at: http://www.morganstanley.com/GEFdata/digests/20020617-mon.html From annewilliamson at msn.con Tue Jun 18 06:14:29 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Tue, 18 Jun 2002 08:14:29 -0400 Subject: [A-List] US: At the End of the Tunnel? References: Message-ID: <035301c216c1$b3878ee0$0100a8c0@igrushkii> Hey, Sabri! You may be a Turk, you may be a male, a husband, a father, etc, but I always sensed we shared a certain "commonality"! Who'd have guessed it was engineering? And that we discover this on the A-List? In solidarity (and with a full BLE salute), Anne ----- Original Message ----- From: Sabri Oncu To: ALIST Sent: Monday, June 17, 2002 11:43 PM Subject: [A-List] US: At the End of the Tunnel? > > Sabri: > > > > As the first - and very proud - woman member > > of the Brotherhood of Locomotive Engineers (D&RGW), > > I would just comment that from this "hoghead's" > > seat, it looks like the headlights are narrowing > > and starting to bounce wildly off the rough hewn > > rock as we enter the tunnel. -A. > > Well Anne, > > What can I say? How wonderful it would have been if we had you in > our all boys mechanical engineering class back in those good old > days. Thanks for these articles. > > In engineering solidarity, > > Sabri > > The mechanical engineer, among other things > > > From annewilliamson at msn.con Tue Jun 18 06:33:02 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Tue, 18 Jun 2002 08:33:02 -0400 Subject: [A-List] US: At the End of the Tunnel? References: Message-ID: <035c01c216c4$4a79e9e0$0100a8c0@igrushkii> Paul Craig Roberts' analysis below of the results of our "managed" trade policies (masquarading as "free trade") is spot-on, I say. My question to knowledgeable folks: Is this some kind of weird inversion of Marx? BTW, I've been posting some scary stuff on the A-List regarding the US economy, but I suspect there will be one more dollar/market rally this summer -- and, after that, look out below! October/November should be very interesting. -A **************************************************************************** ***** Importing people, exporting jobs Recent economic reports indicate that the recovery is struggling to move forward. The main barriers are high consumer indebtedness and mediocre corporate earnings. Consequently, neither consumer demand nor business investment is driving the recovery. Interest rates are low, but Federal Reserve easing has not provided the usual stimulus to spending and equity prices. Part of the problem is the reverse wealth effect from the drop in equity values. The wealth effect from the long bull market made consumers comfortable with more debt, which they used to finance second homes and high living. When the market dropped, much wealth disappeared, but the debt remained. Companies, too, made acquisitions that they could not sustain when the boom ended. The stock market decline made the year 2000 a bad one for taxpayers. Managers of mutual funds and investment partnerships, alert to a market decline, realized capital gains early that year. Unfair U.S. tax laws required these gains to be apportioned to fund owners and taxed as capital gains even though the total value of the funds declined dramatically by the end of the year. Taxpayers were forced to pay huge tax bills on these phantom gains, thus depleting their cash just as they were suffering large markdowns in their asset values. Federal regulators stupidly contributed to the economy's debt woes by blocking mergers that were designed to provide a national broadband network, thus frustrating the business plans and causing the failure of many dot.com companies. Considering the damage that government does to our economy, it is amazing that people look to government for solutions. More trouble is brewing. The dollar is weakening and could be headed for a long slide. Strong foreign demand for U.S. assets kept up the dollar's exchange value despite massive U.S. trade deficits. Since 1994, foreign ownership of U.S. assets increased sharply as foreigners used the dollars we paid for their goods to purchase U.S. government and corporate bonds, stocks and companies. According to Bridgewater Associates, foreigners now own 48 percent of the U.S. Treasury bond market, 24 percent of corporate bonds and 22 percent of U.S. corporations. Altogether, foreigners own $8 trillion of our assets -- a sum almost equal to a year's output of our economy. Foreigners are now "overweight on the dollar." This means that they view their investments as too skewed toward the United States. If foreign willingness to hold dollars declines relative to our trade deficit, the dollar will fall in value. A fall in the dollar has bad and good effects. Import prices will rise, driving up inflation measures and, perhaps, confusing the Federal Reserve about policy. Rising import prices will hurt the consumer, already burdened with debt, stagnant wage and salary income, and falling investment income due to low interest rates and poor equity performance. On the other hand, reported earnings of U.S. multinational corporations will rise, as their foreign earnings will be worth more in dollars. This effect could give a boost to the stock market. The growth of American incomes is being held down by two other factors, which are not receiving enough attention. There are fewer well-paying jobs, as U.S. firms shift operations abroad. Simultaneously, a massive inflow of poor immigrants into the United States is holding down construction and low-skill wages. Increasingly, CEOs are compensated according to their company's earnings and stock price. This bottom-line pressure causes management to move as many operations abroad as possible in order to take advantage of low-cost labor. When this process first began, many economists dismissed it as merely the loss of low productivity jobs that the United States didn't want anyway. However, the U.S. taxpayer has helped to educate so many Chinese and Indians that well-paying jobs once held by U.S. engineers and research scientists have left the country, taking the incomes with them. The United States has become a country that imports poor people and exports jobs that provide upward mobility. It is a mistake to see the loss of jobs and income as the workings of free trade. The downward pressure on incomes does not result from an exchange of goods. Something different is occurring. Middle class incomes are being traded away in order to gain larger bonuses for top management, and politicians are pandering to the immigrant vote at the expense of lower income native-born citizens. The longer this process continues, the more explosive it becomes, both socially and politically. From annewilliamson at msn.con Tue Jun 18 08:02:05 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Tue, 18 Jun 2002 10:02:05 -0400 Subject: [A-List] US: At the End of the Tunnel? References: Message-ID: <039201c216d0$bb77e280$0100a8c0@igrushkii> June 17, 2002 PLAIN TALK By DAVE KANSAS Here's some nice WSJ bull on the "new economy." But what would we expect? After all, Wall Street earns about $3billion a year shuffling around the paper chits the Fed prints out of thin air.......and, historically, the Journal played a key but hidden role in the founding of the Fed through Charles Connaught. -A. The New Economy is Ridiculed, But Its Thesis Remains Intact The New Economy isn't dead. It's just resting. That distinction may seem semantic to people holding worthless Internet shares. But the flailing stock market, along with the recession, has clouded a viable New Economy thesis that may still hold treats in store for investors. The New Economy promised strong non-inflationary growth and greater profits through sustained productivity gains. Federal Reserve Chief Alan Greenspan is one who backed the basic concept, saying productivity gains achieved through developments in technology were a boon to the economy and living standards. These days, though, burned investors contend the only thing new about this economy is a massive falloff in corporate profits. But despite the doubters, a strong case can be made that the New Economy remains intact. Its structural gains -- improved productivity -- are in place and are ready to rev. It's just that right now, the New Economy is sitting there like a sleek racecar without oil in the engine. What it needs badly is corporate capital spending, the lubricant that makes the economy go. Once that spending starts to rebound, the New Economy could get a second wind. The New Economy is a much-abused term. During the euphoric days of the Internet Age, some utopians on the fringe started using the term to declare the business cycle dead. But at its heart, the New Economy wasn't about the death of the business cycle. It was a theory that maintained technology had transformed business, creating a new, higher "speed limit" for sustainable and more robust profits without the pricing pressures that lead to inflation. New Economy changes are not limited to the technology business. In fact, it's in other, more mundane industries where the New Economy has had its biggest impact. Take the grocery business. Technology has linked the check-out lane with inventory management to create a more efficient system of stocking the shelves. Managing grocery inventory was once art, but it has now become science. Managers use technology to react more quickly to demand -- or lack of demand -- shifting production, trimming staff, altering product lines. The daily developments are showing in the macro data. In the first quarter, productivity rose 8.6% on an annualized basis after notching a 5.5% gain in the fourth quarter of last year, according to government figures. The continued gains in productivity through the recession contrasted sharply with productivity retreats in the 1970, 1980, 1982 and 1991 downturns. Some contend that the recent gains are coming from squeezing labor. But the strength of productivity gains, outsized since the mid-1990s and sustained through the recession, indicates that more than simple labor-market leveraging is taking place. For the New Economy theory to work, though, these efficiency gains are supposed to mean increased profits. And yet the recent profit recession is the "worst in the post-war era," according to Merrill Lynch. So what gives? Doomsayers point to several issues. Some believe the productivity data are inaccurate -- that the outsized gains are in error. But the consistency of the numbers dispute that. Productivity "accelerations are typical of early-stage recoveries, but putting such robust back-to-back quarterly gains into the longer-term context paints a picture that suggests more than a simple cyclical trend at work," says Mickey Levy, chief economist at Bank of America. Others who accept the data contend that only the consumer has benefited from these gains. While a shoe store, for example, may be far more productive thanks to new technologies, it may be using that advantage to slash prices and win customers rather than increase margins. But there is a third possibility, which is that while the consumer is the first beneficiary of the New Economy, it's not the last. A recent paper, "The New Economy: Post Mortem or Second Wind?" by Martin Neil Baily, a senior fellow at the Institute for International Economics, argues that while the term New Economy may be tarred, the productivity gains recorded since the mid-1990s are not in question. He says the New Economy, after its mid-'90s boost, is close to getting a second wind. Mr. Baily notes that share prices, while lower, have not tumbled in line with the drop in profits. In addition, he says, the dollar's relative strength -- even with its decline this year -- shows that global investors remain confident that the U.S. economy, along with corporate profits, will rebound more sharply than investors may anticipate right now. The reason for this? The structural improvements brought on by the New Economy. So what's the catalyst for profits? Corporate capital spending, he contends. "The only question about the New Economy right now is that what we need to maintain productivity growth is a pick-up in investment," says Mr. Baily in an interview. "A lot of business CEOs are still fairly gloomy, and the lack of investment is one reason profits are still weak. At some point profits will start to turnaround and that will help the virtuous cycle of productivity growth, investment and competitive pressure for innovation to continue." Mr. Baily believes the capital investment picture will start to improve in 2003, which is on the bullish side. Bears are saying 2004. And while neither anticipates a return to the racy capital spending days of the late 1990s, computers are getting old, software programs are becoming dated. Capital spending can only be placed on hold for so long. (For more perspective on the effects of changes in capital spending, see a WSJ.com interview1 with Merrill Lynch's chief technology officer.) When capital spending does start to ramp higher, the New Economy should get a second wind, to the positive surprise of investors. Until then, a dismissive attitude toward New Economy productivity gains can be expected. Skepticism toward data in general tends to emerge when markets go through a sustained downturn. Statistics are called into question, basic assumptions are re-examined. It's a sign of frustration. And that sign of frustration is a good thing. It means that we're starting to get the required pessimism that could mark a turning point for the market. If we're nearing the turning point, a revitalized New Economy could support a reassuringly solid recovery. Write to Dave Kansas at dave.kansas at wsj.com2 URL for this article: http://online.wsj.com/article/0,,SB1024349966726891680.djm,00.html Hyperlinks in this Article: (1) http://online.wsj.com/article/0,,SB1023733710872025640,00.html (2) mailto:dave.kansas at wsj.com (3) mailto:dave.kansas at wsj.com Updated June 17, 2002 11:59 p.m. EDT Copyright 2002 Dow Jones & Company, Inc. All Rights Reserved Printing, distribution, and use of this material is governed by your Subscription agreement and Copyright laws. For information about subscribing go to http://www.wsj.com From rschaap at iprimus.com.au Wed Jun 19 01:48:02 2002 From: rschaap at iprimus.com.au (Rob Schaap) Date: Wed, 19 Jun 2002 17:48:02 +1000 Subject: [A-List] US: At the End of the Tunnel? References: <039201c216d0$bb77e280$0100a8c0@igrushkii> Message-ID: <3D103733.B2847C26@iprimus.com.au> G'day Anne and Henry, Interesting reading below. Does this article need any qualifications or refutations? Cheers, Rob. http://www.russiajournal.com/weekly/article.shtml?ad=6279 Bush war has heart of gold Central banks all over the world have supposedly conspired to maintain furiously high, Enron-type derivative short positions against gold to keep it in an artificial bear market for, oh, say, the last couple of decades. Independent sources say the problem is the value of gold reserves in nearly all the world?s central banks is about even with the derivative shorts held by roughly the same banks, at $320 per ounce. So, theoretically, if a margin call were to come in today, central banks would have to pay out all gold in all their reserves worldwide. According to a recent International Monetary Fund survey, commercial banks in 48 top nations reported holding risky derivative positions on 900 million troy ounces of gold. The actual worldwide gold production is just 50 million troy ounces. With each passing year, the real value of gold becomes increasingly more difficult to suppress artificially and so requires more funds in the derivative market. The game of keeping gold supply artificially high is alleged to serve central banks in keeping their inflated paper currencies artificially valuable, but the buck has to stop somewhere. It doesn?t stop there. Insiders correctly point out there are only three economic means out of such a debacle: to print money, to default or to borrow. Traditionally, banks have chosen to sell debt and delay decisions in similar cases. But the debt market has dried up, along with the bank accounts of would-be investors. For example, some say there is five times as much public and private debt in the United States as total dollars in the money supply, at $35 trillion and $7 trillion, respectively. Printing money to meet debts largely owed to the privately owned foreign banks that make up the U.S. Federal Reserve would be economic and political suicide, obviously, and so would be a default, but there is one long shot reportedly in the works: A highly collusive war that engineers a massive wealth transfer, much like Desert Storm but on a larger scale, might just save our economies. Whoa, wait a minute. Aren?t we at war against terrorists? How did all this get started? The answer is that our world is a dynamic reality where multiple events flow together as streams to a giant river. Unbeknownst to our friends in the mass media, most of our world?s problems can?t be reduced to a single target or personality. Alas, complex issues don?t sell airtime. Global currencies fluctuate against each other based on emotion and backed by psychology, not by assets as they once did. That is why the U.S. Federal Reserve puts psychology before economics every time. And so, the reasons the central banks would gain by keeping gold artificially low becomes more obvious from this perspective. As long as alternative investments to paper currencies are kept artificially unattractive, as in gold?s 22-year bear market, people will hold paper currency, keeping demand high and inflation at bay. The clincher is this: The price of gold useful for industry is said to be valued at $350 by the market today, due to inflationary values that have not been figured into the price of gold for more than two decades. If that is true, and if central banks around the world are now losing their hedge against undervalued gold ? threatening their very existence ? then the price of gold will slingshot up and currencies all over the world will melt to 30-60 percent of their current values. Could we really be at the beginning of a gold boom and concurrent currency meltdown? Can a controlled conflict save us from a certain collapse? Is the possibility of a controlled conflict in the Middle East even possible? And what sensational attack against which political personality will take place when the mass media resume their blame game? These and other questions are being answered by events playing out right now. (Tate Ulsaker is president and founder of Direct INFO.) From annewilliamson at msn.con Wed Jun 19 02:41:39 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Wed, 19 Jun 2002 04:41:39 -0400 Subject: [A-List] US: At the End of the Tunnel? References: <039201c216d0$bb77e280$0100a8c0@igrushkii> <3D103733.B2847C26@iprimus.com.au> Message-ID: <00ab01c2176d$2227c120$0100a8c0@igrushkii> Rob: The article is reflective of the research and analysis of the GATA (www.gata.org) group (Gold Anti-Trust Action Comm), which alleges massive manipulation in the gold market on the part of US Treasury and the Fed through the improper use of the ESF (a pot of money and gold dedicated allegedly to the support of the US dollar which is under the control of the US Treasury Secretary and the President alone). The purpose of the alleged interventions has been to keep the US dollar above par by turning off the "inflation" alarm, i.e. gold - and that is done by keeping the price of gold artificially below market through central bank selling of their gold reserves into any gold rallies. The policy began in earnst under Rubin/Summers with the 1994 Mexican bailout. (In fact, the IMF worldwide bailouts required a low gold price no matter how the price was achieved. The bailouts were no favor to those countries, but rather were a consequence of the West's looting of the Third World through the dollar-based international monetary system which is what the IMF and the World Bank are really all about.) The unfortunate side effect of this policy goes far beyond the market bubble. One consequence has been the slow destruction of the gold mining industry, which has put many tens of thousands of 3rd world miners into the unemployment bin -- which, in turn, has fueled the AIDS mortality rate (the mines are a central point for medical treatment). Another consequence are the wars the US has instigated on behalf of its own interests and for which it doesn't truly have an economy to support -- therefore requiring an inflated dollar which works to draw the world's capital into US capital markets, the hottest game in town. Now this game is ending and a gold bull threatens - the pricking of the bloated dollar will have many economic and political consequences - one of which will be the sight of the naked emperor. The King doesn't like gold, never has, never will. Gold exposes the King's mischief. What is happening today is a repeat - concealed - of the 1960s London gold pool arrangements that so disastrously came apart in the 1970s, the last great gold bull. (The London pool was organized in the open, unlike what our monetary authorities have gotten themselves up to today.) This is a complex argument - I posted some of it earlier this year, but if you'd like to know more and get acquainted with a pretty lively corner of the internet, then go to www.lemetropolecafe.com and take out a 2-week trial membership. Otherwise, the key documents and research can be found at www.gata.org. Bill Murphy, who runs Le Metropole, and one of the Canadian mines are about to open a Chinese language site that will mirror Le Metropole. In the course of this effort, and as the story has slowly leaked to the corporate press (they are now no longer automatically tagged as "conspiracy theorists" though they are not always credited for the research and analysis now creeping into mainstream commentary), the Russians discovered them. Expert is doing a feature on them (don't know publication date, but Murphy wrote in his commentary of last evening that he has seen the article's layout). The article you posted emerged from the Russians' initial contact with GATA. Anne ----- Original Message ----- From: Rob Schaap To: Sent: Wednesday, June 19, 2002 3:48 AM Subject: Re: [A-List] US: At the End of the Tunnel? > G'day Anne and Henry, > > Interesting reading below. Does this article need any qualifications or refutations? > > Cheers, > Rob. > > http://www.russiajournal.com/weekly/article.shtml?ad=6279 > > Bush war has heart of gold > > Central banks all over the world have > supposedly conspired to maintain furiously high, Enron-type derivative > short positions against gold to keep it in an artificial bear market > for, oh, say, the last couple of decades. > > Independent sources say the problem is the > value of gold reserves in nearly all the world's central banks is about > even with the derivative shorts held by roughly the same banks, at $320 > per ounce. So, theoretically, if a margin call were to come in today, > central banks would have to pay out all gold in all their reserves worldwide. > > According to a recent International Monetary > Fund survey, commercial banks in 48 top nations reported holding risky > derivative positions on 900 million troy ounces of gold. The actual > worldwide gold production is just 50 million troy ounces. With each > passing year, the real value of gold becomes increasingly more difficult > to suppress artificially and so requires more funds in the derivative > market. The game of keeping gold supply artificially high is alleged to > serve central banks in keeping their inflated paper currencies > artificially valuable, but the buck has to stop somewhere. > > It doesn't stop there. Insiders correctly > point out there are only three economic means out of such a debacle: to > print money, to default or to borrow. Traditionally, banks have chosen > to sell debt and delay decisions in similar cases. But the debt market > has dried up, along with the bank accounts of would-be investors. > > For example, some say there is five times as > much public and private debt in the United States as total dollars in > the money supply, at $35 trillion and $7 trillion, respectively. > Printing money to meet debts largely owed to the privately owned foreign > banks that make up the U.S. Federal Reserve would be economic and > political suicide, obviously, and so would be a default, but there is > one long shot > reportedly in the works: A highly collusive war that engineers a massive > wealth transfer, much like Desert Storm but on a larger scale, might > just save our economies. > > Whoa, wait a minute. Aren't we at war > against terrorists? How did all this get started? The answer is that our > world is a dynamic reality where multiple events flow together as > streams to a giant river. Unbeknownst to our friends in the mass media, > most of our world's problems can't be reduced to a single target or > personality. Alas, complex issues don't sell airtime. > > Global currencies fluctuate against each > other based on emotion and backed by psychology, not by assets as they > once did. That is why the U.S. Federal Reserve puts psychology before > economics every time. And so, the reasons the central banks would gain > by keeping gold artificially low becomes more obvious from this > perspective. As long as alternative investments to paper currencies are > kept artificially unattractive, as in gold's 22-year bear market, people > will hold paper currency, keeping demand high and inflation at bay. > > The clincher is this: The price of gold > useful for industry is said to be valued at $350 by the market today, > due to inflationary values that have not been figured into the price of > gold for more than two decades. If that is true, and if central banks > around the world are now losing their hedge against undervalued gold - > threatening their very existence - then the price of gold will slingshot > up and currencies all over the world will melt to 30-60 percent of their > current values. > > Could we really be at the beginning of a > gold boom and concurrent currency meltdown? Can a controlled conflict > save us from a certain collapse? Is the possibility of a controlled > conflict in the Middle East even possible? And what sensational attack > against which political personality will take place when the mass media > resume their blame game? These and other questions are being answered by > events playing out right now. > > (Tate Ulsaker is president and founder of Direct INFO.) > > From julfb at alternativagratis.com.ar Mon Jun 17 12:14:37 2002 From: julfb at alternativagratis.com.ar (Julio Fernández Baraibar) Date: Mon, 17 Jun 2002 15:14:37 -0300 Subject: [A-List] Re: Argentina: Salvation Lies in an Underground Economy (sp) (tr) References: Message-ID: <011501c2162c$32ec1520$e0223dc8@lenin> Excuse me. "Ispanyolca" means "spanish" in turkish, doesn't it? Julio Fern?ndez Baraibar julfb at sinectis.com.ar > Arkadas, > > Kusura bakma ama ben Ispanyolca bilmiyorum. Bunu bir de Ingilizce > yazman mumkun mu? Ya da bir yerlerden tercume ettirebilir misin? > > Tesekkurler, > > Sabri > --------------------- > > > =BFDe donde sali=F3 esta literatura anarcoide que es, ni m=E1s ni > menos, = > que > una vulgar apolog=EDa del libre mercado y una propuesta para que > Argentin= > a > pierda toda perspectiva nacional. Si, por ventura, creemos que la > vuelta > al trueque, es decir la abolici=F3n precapitalista del dinero, > sin abolir > la mercader=EDa, puede significar un avance en nuestras From policyresearch at mediamonitors.org Mon Jun 17 14:31:21 2002 From: policyresearch at mediamonitors.org (Policy Research Institute) Date: Mon, 17 Jun 2002 13:31:21 -0700 (PDT) Subject: [A-List] Fwd: CRISIS UPDATE: The September 11th Terrorist Attacks Message-ID: <20020617203121.6B35C36FA@sitemail.everyone.net> An embedded and charset-unspecified text was scrubbed... Name: not available URL: -------------- next part -------------- An embedded message was scrubbed... From: "Institute for Policy Research & Development" Subject: CRISIS UPDATE: The September 11th Terrorist Attacks Date: Mon, 17 Jun 2002 21:19:49 +0100 Size: 18854 URL: From Michael.Keaney at mbs.fi Wed Jun 19 05:01:40 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 19 Jun 2002 14:01:40 +0300 Subject: [A-List] US imperialism: Iraq & Saudi Arabia Message-ID: Cornered Saddam could go for Armageddon, US fears IAN BRUCE The Herald, 19 June 2002 SADDAM Hussein would be likely to unleash his arsenal of chemical and biological weapons against US regional bases and Israeli cities if America begins a build-up for the invasion of Iraq, Pentagon planners say. If the Iraqi dictator thinks a campaign to oust or kill him is under way, he will have no incentive to play by the rules and might choose to take as many of his enemies with him as possible using weapons of mass destruction. The US military is drawing up options to depose Saddam and replace his regime, an aim restated last week by George W Bush, and reinforced by Donald Rumsfeld, his defence secretary. The Pentagon top brass sees a devastating surprise first strike with precision bombs and missiles as the prerequisite for success, but still urge caution over the uncertainty of eliminating all of Saddam's strategic hardware at a single stroke. The US estimates that Saddam has 157 air-dropped bombs and 25 Scud missile warheads capable of delivering germs or lethal VX or sarin nerve gas on ports and airfields in Saudi Arabia and Kuwait, the jumping-off points for a ground invasion. John Warden, a former US air force colonel who helped plan the 1991 Gulf war air campaign, said more attention would have to be paid to harnessing internal opposition in Iraqi army units. "One mistake we made the last time round was seeing the war as a war against Iraq, as opposed to a war against Saddam. We made an enemy of the Iraqi military when it might have been possible to persuade disaffected units to march on Baghdad," he added. "We attacked their formations from the word go, making it impossible for them to do anything, far less stage an internal revolt. Next time we have to play on the discontent we know exists among the officer corps. "Allied with well-planned air strikes targeting Saddam's command and control centres and personal bunkers, his Republican Guard divisions, and his internal security apparatus, there is a good prospect of success." Another Pentagon source said: "The main concern is that Iraq has reasoned out that by sitting still for six months while the allied coalition built up its fighting power in Saudi Arabia before launching Desert Storm in '91, it sowed the seeds of its inevitable battlefield defeat. "Saddam might well be tempted to try to wipe out that combat power as soon as it starts to arrive in theatre late this year or early next. One countermeasure might be to boost strength in phases and spread it around more widely. There are basing options in Turkey, Oman, and other regional countries to spread the load." Elsewhere in the war against terrorism, Saudi Arabia has detained 11 Saudis, a Sudanese, and an Iraqi linked to al Qaeda who were allegedly planning terror attacks in the kingdom. Among them was a Sudanese man suspected of being an al Qaeda cell leader who claimed to have fired a missile at a US warplane at a Saudi air base. It was the first time Saudi Arabia had announced arrests of anyone linked to al Qaeda. All but four of the 19 September 11 suicide hijackers were Saudis. The British and Australian embassies, meanwhile, repeated calls for vigilance after it emerged that an Australian working for British Aerospace in Saudi Arabia escaped unhurt on June 5 after being fired on five times by a sniper near a BAE compound in Tabuk. From Michael.Keaney at mbs.fi Wed Jun 19 05:25:57 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 19 Jun 2002 14:25:57 +0300 Subject: [A-List] JP Morgan and copper trading scandal Message-ID: SUMITOMO SCANDAL: Secret payment link to JP Morgan loan By Mark Killick Financial Times; Jun 14, 2002 The rogue trader who lost $2.6bn trying to rig the world's copper markets may have been able to stay in business because of a secret payment made to a JP Morgan banker, which has been linked to a loan that the US bank advanced to the trader. The loan, agreed in March 1994, involved the payment of an initial premium of $154m to Yasuo Hamanaka, the former head copper trader at Sumitomo Corporation. The money allowed him to continue his illicit trading for a further year and cost his employer hundreds of millions of dollars. Sumitomo alleged, in an application to the New York district court in February 2002, that JP Morgan had structured the loan as a series of copper transactions. One effect of this was that it was much harder for Sumitomo's auditors to identify the new borrowings. Mr Hamanaka's secret trades were eventually uncovered in 1996. The Japanese group's trading loss remains the biggest in corporate history, dwarfing the ?800m ($1.2bn) lost by Nick Leeson, the UK rogue trader who brought down Barings bank. Mr Hamanaka, once dubbed "Mr Five Percent" because of the amount of the world copper market he was said to control, is now serving an eight-year jail sentence for forgery and fraud. On the same day that JP Morgan provided Mr Hamanaka with the $154m advance, a British company involved in the copper markets secretly paid $100,000 to a company owned by a JP Morgan banker and registered in the British Virgin Islands, the Financial Times has discovered. The $100,000 was paid by Winchester Commodities, which had earlier made tens of millions of dollars trading with Mr Hamanaka. The payment was to have been at the centre of a $2bn lawsuit between Sumitomo and JP Morgan , but the US bank settled out of court in April for $125m, without admitting liability, just weeks after information about the deal emerged, saying it was actually cheaper than contesting the case. The JP Morgan banker who received the $100,000 was Kieran Sykes. She had links to Winchester through her previous job at ING, the Dutch banking group, and her friendship with Winchester's owners, Charlie "Copperfingers" Vincent and Ashley Levett. Winchester, which has since been wound up, has been the subject of a number of high-profile investigations into its copper trading activities - including one by the UK Serious Fraud Office - but no charges have ever been brought. Winchester paid the $100,000 to Beachcroft Ltd, an offshore company based in the British Virgin Islands. Documents lodged at the Registry of Companies on Tortola, the largest island, show that it was set up just six weeks before the payment was made. It is normally difficult to trace the beneficial ownership of this type of company, but Ms Sykes admitted to two BBC journalists that it belonged to her. The Financial Times has obtained documents relating to this unorthodox payment. At 10.02am on March 29 1994, Ms Sykes sent a fax from her office at JP Morgan in London to Ashley Levett, co-owner of Winchester, who was staying at the Savoy Hotel. It read: "Good to talk to you today and I'm glad to hear that everything is going well as usual". It then gave the details of Beachcroft's Jersey bank account. The note ends: "Love K". Shortly afterwards, Neil Randall, an account manager at Drummonds Bank in the Strand in London, received a fax from Winchester signed by Mr Levett. It instructed him to transfer $100,000 from Winchester's dollar account to Beachcroft. The money was wired over later the same day. The payment raised serious questions among some at Winchester's headquarters. One senior manager thought it so unusual that he refused to authorise it himself and insisted that Mr Levett sign the instruction to Drummonds Bank. The payment to Ms Sykes had one other bizarre twist to it. Following the uncovering of the Hamanaka scandal, the UK Serious Fraud Office launched an investigation into the copper markets and spent some time studying Winchester's books. It found no reference to Beachcroft whatsoever, but it did identify a $100,000 payment to a company called Blanchecraft. Whether by accident or design, someone had changed the name of the company to which the payment had been made so that there was no longer any reference to it in Winchester's ledgers. When Sumitomo finally heard about the payment, it also became extremely interested in it, not least because of Ms Sykes' previous dealings with both Winchester and Mr Hamanaka. Prior to joining JP Morgan, Ms Sykes had worked as a marketing manager for ING and, in the autumn of 1993, had helped Mr Hamanaka secure a $100m line of credit. This had allowed him to enter into a series of large, unauthorised copper option transactions with Winchester on which Sumitomo again lost millions. But two things had apparently been overlooked when ING initially granted this line of credit. The first was that Winchester, rather than Sumitomo, paid ING's $750,000 banking fees. It is normal practice for the borrower to pay the bank fees, but on this occasion Winchester paid the entire sum. Second, there was no second signature from Sumitomo authorising the borrowing - which may explain why the company remained in the dark for so long about the losses being run up by Mr Hamanaka. ING eventually began to have serious concerns about the loan. When the guarantee came up for renewal, it dispatched a senior banker to Tokyo to ask Mr Hamanaka about it. The banker also took new loan documentation and insisted on a second signature from a Sumitomo main board director before the facility could be renewed. Mr Hamanaka not only refused to get the second signature - he would not even let the ING banker enter the Sumitomo building. Unsurprisingly, ING cancelled the line of credit. Before its case against JP Morgan was settled, Sumitomo made an application to the New York court this February. Its declaration in support of that application shows that Sumitomo was planning to argue that Ms Sykes must have known that Mr Hamanaka faced deep financial trouble, because of her earlier dealings with him when she worked for ING. Sumitomo also believed JP Morgan and Ms Sykes must have suspected that Mr Hamanaka was making huge losses without informing his superiors. This, they claimed, was why the US bank felt able to charge Mr Hamanaka hundreds of basis points more for the new loans than Sumitomo usually paid, and why it had been so willing to disguise the loans as copper option transactions. Before the court case was settled, Sumitomo's lawyers had repeatedly tried to per suade Ms Sykes to answer their questions voluntarily, but she had always refused. They had even approached her counsel in New York, who told them that she would testify only when faced with a court order. Taking this offer at face value, Sumitomo filed a request with the US Southern District Court in New York asking it to contact its counterpart in New South Wales, Australia, where Ms Sykes now lives, and compel her to testify. Ms Sykes had, however, already answered some of these questions in 1998, when two BBC journalists from the Panorama current affairs programme tracked her down. At that time, she repeatedly denied ever receiving any money from Winchester. She did, however, confirm that Beachcroft was her own company and said that it had been set up to buy polo ponies. Now, however, Ms Sykes tells a very different story. In a telephone interview with the Financial Times and faced with the knowledge that documentary evidence of the payment had emerged, she admitted receiving the $100,000 but claimed that there was nothing wrong with it. "It was a totally personal payment that had nothing to do with business," Ms Sykes said. She also denied any suggestion that she was involved in any way with putting together the JP Morgan loan. JP Morgan only became aware of the $100,000 payment this year and refused to comment on it. Mr Levett also says the payment had nothing to do with the JP Morgan loan. According to him, Ms Sykes was a close friend and was financially struggling. The money, he says, was a gift intended to help her out of a difficult situation. JP Morgan's decision to settle with Sumitomo means there is little likelihood of Winchester Commodities' unusual cash payments ever being fully investigated. Whether the $100,000 cash payment was ever connected to the arrangement of the JP Morgan loan will probably never be fully resolved. But it seems unlikely JP Morgan would have paid Sumitomo more than $120m if it had a completely clear conscience. From Michael.Keaney at mbs.fi Wed Jun 19 05:29:56 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 19 Jun 2002 14:29:56 +0300 Subject: [A-List] Germany: arms industry worries Message-ID: Defence needed for German arms industry By Uta Harnischfeger Financial Times; Jun 14, 2002 When the Bundeswehr lacked aircraft capability and used charter aircraft to deploy its troops to Afghanistan earlier this year, the troops became the laughing stock of Nato. What started as a running joke about the German army's outdated technology is gaining a new urgency a few months later. Following the recent sale of Howaldtswerke Deutsche Werft, the world's leading producer of conventional submarines, to a US financial investor, German politicians and industry experts are ringing alarm bells and warning of a sell-off of the German arms industry. The HDW case has highlighted the fear that US companies will take advantage of Germany's depressed and fragmented defence industry to buy its state-of-the art technology. Besides receiving few orders from a financially constrained Bundeswehr, particularly from the infantry, and erratic commitments to the army's long-term projects, the German defence industry faces tight export restrictions. Furthermore, non-US manufacturers are effectively barred from selling into the US defence market - the world's biggest. "If HDW was the litmus test for the Americans, then Krauss-Maffei Wegmann will be the next," says an industry expert. Siemens, the engineering company, has pledged to sell its 49 per cent stake in Krauss-Maffei by the year-end. Although the Bode family holds 51 per cent, some experts fear a US investor might seek to take a stake in Krauss-Maffei to acquire its technology for the Leopard II, a main battle tank. Experts say that the case of HDW could be symbolic for things to come. In March, in a surprise move, Babcock-Borsig, the German industrial group, sold 75 per cent of HDW to One Equity Partners, a unit of Chicago-based Bank One, which has strong links to General Dynamics, the US defence maker. Now there are fears that One Equity is seeking ways to transfer HDW's high-tech submarine technology to a US defence group. One Equity has said outright that it could sell a significant stake in HDW to General Dynamics or Northrop Grumman, which are keen to sell HDW's submarine technology to Taiwan. Last week it emerged that Babcock-Borsig was talking to Northrop Grumman about co-operating in sales and marketing. In a recent letter to Rudolf Scharping, the German defence minister, Ernst Otto Kr?mer, chief executive of Rheinmetall DeTec, a competitor of Krauss-Maffei, reproached the Bundeswehr for "lacking the will to maintain the national defence competency". "Without a turnaround, we will lose our competency in defence technology and, along with that, the basis of our national defence industry," said Mr Kr?mer, who also heads the German Industry Association's defence committee. Rheinmetall DeTec still prides itself on the use of its Fuchs Sp?rpanzer, a high-tech detection tank, during the Gulf War. Already, Germany's defence industry is shrinking fast. A period of rapid consolidation in the 1990s has left the country with a handful of mid-sized defence manufacturers which employ some 90,000 workers. Ten years ago, the industry employed 280,000 and there were more of 20 large defence companies. Besides Rheinmetall DeTec, Krauss-Maffei and Diehl, all of which are arms producers, there is ThyssenKrupp Werften, a military shipyard, and DaimlerChrysler's stake in Eads, the European aerospace group. The German government is growing alarmed. In a recent report, the defence ministry warned that the "German defence know-how is in serious danger". Interestingly, even the Greens, the Social Democrats' junior coalition partner who are fundamentally pacifist, are now calling on the German army to spend more money on research and development. At a recent symposium, Angelika Beer, defence spokeswoman for the Greens, called for an increase in the proportion of R&D in the defence budget from its current 23 per cent to 30 per cent. By comparison, the UK spends 46 per cent of its defence budget on R&D. While the Bundeswehr's military engagement has increased five-fold since 1998/1999, the German defence budget is shrinking as part of overall national spending. In 1990, defence accounted for 15 per cent of the Germany's spending. That has now fallen to 10 per cent. Mrs Beer also criticised Mr Scharping for repeatedly retracting large defence projects as soon as he realised he could not afford them, leaving the defence companies in a state of limbo. For their part, they blame the Green Party for making their lives even more difficult by forbidding exports to countries with dubious human rights records. Although Turkey has signalled that it would like to order Leopard II tanks from Krauss-Maffei, the government is stalling. ----- German defence groups link up By Gerhard Hegmann Financial Times; Jun 17, 2002 Krauss-Maffei Wegmann and Rheinmetall DeTec, Germany's leading defence groups, are to form a joint venture for the development of a new armoured vehicle for the German army, FT Deutschland has learnt. The two groups plan to set up a new company called "Panther System" to develop a successor for the 30-year old "Marder" armoured vehicles. The first Panther vehicles are to be delivered by 2008 to the German army, which estimated its demand at about 400. Industry insiders estimate development costs to be about EUR245m ($232m). The co-operation between KMW and Rheinmetall is the first sign that demands by politicians for consolidation in the German defence industry are being met. The sale of 75 per cent of HDW, the world's leading maker of conventional submarines, to One Equity Partners of the US has alarmed politicians, who fear key military technologies could be lost to foreign companies. Further rapprochement between KMW and Rheinmetall is unlikely, since the two holder families are at odds about leadership. From Michael.Keaney at mbs.fi Wed Jun 19 05:31:11 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 19 Jun 2002 14:31:11 +0300 Subject: [A-List] US imperialism: a Clintonian view Message-ID: Lessons in imperialism By Joseph Nye Financial Times; Jun 17, 2002 As the Bush administration struggles to develop a framework for its foreign policy, some observers are offering the recipe of empire. As the columnist Charles Krauthammer puts it: "People are now coming out of the closet on the word 'empire'." The temptation is obvious. Not since the Roman empire has one country been so large compared with all other nations. America's defence expenditure is equal to the next eight countries combined; our $2,000bn federal budget is bigger than the entire economies of most countries and our pop culture has greater global reach than any other. Nevertheless, the temptation should be resisted. Primacy should not be confused with empire. It is true the US is more powerful compared with other countries than Britain was in its heyday. But the US has less control over what occurs in other countries. I lived in east Africa during the waning days of the British Empire. Uganda's schools, taxes, laws and elections - not to mention external relations - were controlled by British-appointed officials. The US has no such control outside its borders today. Some say not to be too literal. The term "empire" is merely a metaphor. In a global information age, the American empire is virtual. It is the global impact of American culture. But while culture helps create soft or attractive power, its domain is limited and it is not uniquely American. The metaphor implies a control from Washington that is unrealistic and reinforces already strong temptations towards unilateralism. The danger in using the term "empire" is that some Americans may take it too literally. Indeed, it is an irony that the strongest country since Rome cannot achieve many of its goals by acting alone. In the economic arena, international financial stability is important for US prosperity but Americans need the co-operation of others to achieve it. The Bush administration cannot achieve its objective of a new trade round without the co-operation of Europe. Jack Welch, former head of General Electric, was unable to merge his company with Honeywell, another US corporation, because the European Union refused. Moreover, the information revolution and globalisation are creating issues that are inherently multilateral. Global climate change will affect the quality of life in the US but three-quarters of the problem arises outside our borders. Diseases such as Aids and West Nile fever originating in distant parts of the globe penetrate our borders with ease and must be attacked with the assistance of other countries. Terrorism is the most dramatic example. The US military easily toppled the Taliban state sponsors of terror but it destroyed only between a quarter and a third of the al-Qaeda network, which has cells in more than 50 countries. In most of these countries, unilateral military solutions are out of the question. We are not about to bomb Italy, Germany or Malaysia. Success in the war on terrorism requires years of patient co-operation with others in intelligence sharing, police work and tracing of financial flows. The US simply cannot win this war unilaterally with orders from imperial headquarters. Primacy means that the US will often have to take the lead - witness the campaign in Afghanistan. Our preponderance of power will generally be more acceptable and legitimate in the eyes of other countries when we embed our policies in multilateral frameworks that take their views into account. But sometimes the most powerful country must take the lead because it is difficult for others to do so. When this happens, it matters whether we appear to be acting on narrow self-interest or with a broad approach that incorporates the interests of others. Here the US can learn a more useful lesson from the period when Britain held primacy among the global powers in the 19th century. As the leading country, Britain pursued its interests in a manner that provided benefits to many countries outside its empire. This included maintaining regional balances of power, promoting an open inter- national economic system and maintaining open international commons such as freedom of the seas and suppression of piracy. All three translate relatively well to the US situation today. Regional stability, an open international economy and open commons benefit many others at the same time that they benefit us. And suppressing terrorism is to the 21st century what suppressing piracy was to an earlier era. The success of US primacy will depend not just on our military and economic might but also on the soft power of our culture and values and on policies that make others feel they have been consulted and their interests have been taken into account. Talk about empire may dazzle and mislead us into thinking we can go it alone. We should beware of historians bearing such false analogies. The writer is dean of Harvard's Kennedy School of Government From Michael.Keaney at mbs.fi Wed Jun 19 06:31:07 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 19 Jun 2002 15:31:07 +0300 Subject: [A-List] Air travel: low cost, no safety? Message-ID: Do low-cost airlines cut corners on safety as well as sandwiches? The fares are cheap, the service is basic and the margins are tight. But there are sound financial reasons not to compromise safety By Simon Calder, Travel Editor The Independent, 19 June 2002 You can hear the panic in the voice as it crackles from the flight deck of the DC-9. "Five ninety-two needs immediate return to Miami. We're on fire, we're on fire." The date was 11 May 1996; the location, just west of Miami; the aftermath, all 110 passengers and crew died when the plane plunged headlong into the Florida Everglades a few minutes later. ValuJet flight 592 had just taken off from Florida's biggest city, destination Atlanta. It was full of travellers attracted by cheap flights aboard the upstart no-frills airline. In its hold was a consignment of oxygen generators: aircraft parts intended to help keep passengers and crew alive if the cabin depressurises - but potential hazards when not properly transported. They were not properly boxed, and were stored in a hold without a smoke detector or fire extinguisher. The cockpit voice recorder survived. But the damage to the McDonnell Douglas jet was so catastrophic that accident investigators could not tell whether the crash happened because of a mechanical loss of control or because the crew - commanded by the first American female captain to lose her life in an accident - were incapacitated by the fire. ValuJet was blamed for poor maintenance practices and had its licence revoked by the National Transportation Safety Board. The veracity of the old aviation adage - "If you think safety is expensive, try having an accident" - was confirmed once again. When the airline started flying again, it had rebranded itself as AirTran. But some of the American travelling public remain unconvinced by the safety standards of low-cost airlines. With prices so cheap, the argument goes, might not corners be cut on safety as well as sandwiches? Fortunately, evidence to the contrary can easily be found in the skies above the United States. At a typical moment on a typical day, about 200 Boeing 737s are flying the drab colours of Southwest Airlines across America. The orange and brown stripes belong to the safest airline in the world. Hang on, you may be thinking, what about Qantas? Famously, in Barry Levinson's 1988 film Rain Man , Raymond Babbitt (played by Dustin Hoffman) asserts "Qantas never crashed". This piece of dialogue might have helped Levinson win the Oscar for best director and movie, and Hoffman the award for best actor. But it set back the cause of rational discussion of air safety by years. Movie-goers concluded that the Australian carrier was the only airline in the world never to have suffered a crash. In fact, the Australian airline has had plenty of accidents, but thankfully has always managed to crash gently, without loss of life. Many other carriers, from Emirates to Virgin Atlantic - and including all of Europe's no-frills airlines - have never suffered a fatal accident. But none has flown anything near as many missions as Southwest. So confident is the original low-cost airline about its operational integrity that the cabin crew can afford to joke about safety. When my Southwest flight from Seattle to Kansas City touched down, instead of the dreary "Ladies and gentlemen, welcome to Kansas City where the local time is ...", the flight attendant breathed heavily into the microphone. "Phew," gasped Duane Redmond as the aircraft slowed. "Made it." The British air traffic controller who has made allegations about the behaviour of pilots from low-cost airlines is in no mood for humour. He or she is feeling increasingly under pressure. After the downturn caused by 11 September, air traffic to and from Britain is increasing sharply once more, with almost all the growth coming from no-frills airlines. Next week, Ryanair begins flying from Stansted to Klagenfurt in Austria. It will be the 40th new low-cost route from Britain in the first six months of this year. Ryanair makes about ?10 profit from each passenger, largely by being ruthless on costs. Planes and people are worked much harder than on traditional airlines. In particular, the turn-round time - from the moment the pilot of the inbound aircraft applies the parking brake at the gate to the start of the push-back at departure - is typically scheduled to take only 25 minutes. If the arrival is delayed, there is no slack to help to make up time. Naturally, pilots are concerned to avoid hold-ups. But are they cutting corners, literally and figuratively? The assertions made anonymously to the Confidential Human Factors Incident Reporting Programme do not suggest to me that captains are disobeying air traffic control instructions, but that they are questioning those orders much more often. Air traffic control in Britain is an honourable profession, with its roots in the military - a regime where directions are obeyed, not debated. The UK's highly regarded controllers are not used to having decisions challenged. But there is anecdotal evidence that some pilots are getting bolshie rather than complying with instructions. Lots of workers are under pressure to achieve targets in their jobs - improbably though it may seem, sometimes even journalists have been known to take short cuts to meet deadlines. But it is a transgression of a different order for someone responsible for the lives of 150 passengers to risk, say, approaching an airport at too high a speed. All the no-frills airlines reject the suggestion that they would tolerate, let alone encourage, any pilot who sought to overrule air traffic control. But in low-cost aviation, more than almost any other industry, time is money - and a 10-minute delay attributed to air traffic control can easily snowball. The captain of a Ryanair jet waiting on the ground at Biarritz in south-west France, which had been ready for departure for some time, announced pointedly to passengers that "Apparently we have to wait for two Air France aircraft to leave before we are allowed to move". Accusations of favouritism for the "home team" are commonly made by pilots. Controllers in France, Greece, Portugal and Italy, meanwhile, maintain that their only concern is safety. They say this is why they are striking today, in protest against plans for a "single European sky" rather than the present piecemeal arrangement - which they say is safer. For pilots wilfully to disobey instructions is almost unthinkable, but some passengers would be happier if flight crews never argued the toss with the referees of the sky. Controllers do not need the added stress of arguing with pilots over every decision, and many in aviation are privately glad that the issue has been so publicly aired. The airlines are still well short of being shown a yellow card. I would happily fly anywhere on any low-cost carrier this morning, but instead I am planning to do something far more dangerous: to cycle across London. Flying, thank goodness, is amazingly safe. As Duane Redmond, the Southwest flight attendant, says at the start of his safety briefing: "We never anticipate a sudden change in air pressure; if we did, I'd get another job." And so would I. Budget airlines: a booming business Ryanair Ryanair is based in Dublin with its main British centre at Stansted. It started operations in 1985 and operates 76 routes. Last year, it carried 12 million passengers and has ambitious plans for expansion. It is currently Europe's seventh biggest airline. Earlier this month it announced a 44 per cent increase in after-tax profits for the year to nearly ?100m. EasyJet EasyJet is based at London Luton. It started operations in October 1995 and operates 45 routes. In the past 12 months it carried 8.3 million passengers. While not the biggest operator, it has the biggest profile thanks in part to its ebullient outgoing chairman Stelios Haji-Ioannou who started the airline in 1995. By the time it floated in November 2000, it was worth ?770m. Go Go, being taken over by easyJet, is based at London Stansted. A late entrant to the market, it was set up by BA in 1998, to counter the rise of the no-frills airlines but was sold last year to a management buyout for ?100m. It operates 38 routes. Last year, it carried 4.3 million passengers. Bmibaby Bmibaby is part of the British Midland group and is based at East Midlands Airport. It is the newest of the budget airlines,launched in March this year. It operates nine routes and after 11 weeks, it had sold more than 200,000 seats. Buzz Buzz is a wholly-owned subsidiary of KLM and is based at London Stansted. It was launched in January 2000 and operates 21 routes from Stansted and four domestic services in France. Last year it carried 1.4 million passengers but is unprofitable. From Michael.Keaney at mbs.fi Wed Jun 19 06:33:12 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 19 Jun 2002 15:33:12 +0300 Subject: [A-List] EU integration: internal wrangling Message-ID: More on the pitched battle between the European Commission (backed by smaller countries) and the larger countries, especially Britain, France and Germany, which want to centralise power in a more compliant mechanism. Prodi's call for two-tier commission provokes protests By Stephen Castle in Brussels The Independent, 19 June 2002 The pace of reform within the European Union quickened yesterday with the announcement of plans for a team of "super commissioners" in Brussels. Before the Seville summit of EU leaders on Friday, the European Commission president, Romano Prodi, has called for a fundamental shake-up of his existing college of 20 commissioners - he wants to streamline decision making and forge an inner core of decision makers. However, the idea of a two-tier system provoked immediate opposition at a meeting yesterday, where several commissioners warned of the danger of creating internal divisions. Small member states are suspicious, fearing their representatives may be relegated to the second division. Under the plan, expected to come into force in 2004 before the EU's next expansion, a group of European commissioners will be given an enhanced role and co-ordinate the work of a team of colleagues. The Commission president will nominate about 10 of his team to be vice-presidents. They will meet once a week and prepare the ground for formal decisions of the whole college of commissioners. But how the plan works in practice remains to be seen, particularly given the fears expressed by commissioners yesterday that they may be reduced to second-class status. In response to objections, Mr Prodi floated the idea that the inner core might be rotated, and promised that decisions would be taken "on the basis [of the candidate's] qualities and not on their passport". Meanwhile, Downing Street upped the ante over calls for a big shake-up at the Seville summit of the workings of the law-making Council of Ministers, where the representatives of the EU governments meet, saying it was vital if the EU was to recover the respect of the voters. Measures to be put forward by the Spanish presidency, including the televising of some ministerial meetings and the streamlining of committees, are due to be approved at the Seville summit. The package of measures, which would shorten summits and allow leaders to focus on bigger issues, aims to improve efficiency and help reconnect voters who, the British Government says, are increasingly disgruntled with Europe. Yesterday, a Downing Street spokesman argued: "The EU has lost touch: far-right politicians have sought to capitalise on apathy about the EU. There is a real danger this will undermine support for Europe's expansion. The Prime Minister sees Seville as an opportunity to show the way we are taking seriously the concerns about legitimacy of the EU." However, several smaller countries are opposing a push to split the General Affairs Council - where EU foreign ministers meet - into two. At Seville, Mr Prodi will brief EU leaders on his plans to revamp the commission but he has the power to change the team of without the approval of heads of governments. Most member states recognise change is inevitable with enlargement beckoning. Small countries have been unwilling to give up their right to nominate a commissioner for Brussels, making reform vital to prevent the system seizing up. Some commissioners have huge workloads and important portfolios while others have very limited powers and responsibilities. Under the Nice Treaty, every country will be entitled to send a commissioner to Brussels until the EU expands to 27 nations - something that cannot happen in the next enlargement in 2004. From lnp3 at panix.com Wed Jun 19 06:31:37 2002 From: lnp3 at panix.com (Louis Proyect) Date: Wed, 19 Jun 2002 08:31:37 -0400 Subject: [A-List] Air travel: low cost, no safety? In-Reply-To: Message-ID: <3.0.1.32.20020619083137.00fd4d90@popserver.panix.com> >Do low-cost airlines cut corners on safety as well as sandwiches? We should finally say a word or two about safety. One would suspect that the pressures of the marketplace might lead to shortcuts that affect the reliability of air transportation. There is immense pressure to keep pilots flying as many hours as possible. To maximize profits, one would expect the schedule of maintenance to be lengthened and mechanics to receive less expensive training. When you add the heavy traffic in and out of hubs, the prospects are less than optimum. While accidents have generally been on the decrease as airplanes themselves are better engineered, there are undeniably some fatal mishaps that can be attributed to conditions produced by deregulation. On May 11, 1996, a Valujet airplane caught fire and crashed into the Florida Everglades killing all 100 people on board. The fire was nourished by oxygen generators that were not identified or packed properly. Valujet was a typical "no frills" airline spawned by deregulation. The NY Times reported on August 20, 1997: "Most of the technicians who first mishandled the generators, as they were removed from other planes, were not Valujet employees or even employees of Sabretech; they were contractors hired by Sabretech. Two-thirds of them were unlicensed. "Valujet had only one employee to check the work of the technicians, so it hired two other individuals on temporary contracts to help monitor the technicians. A more well-established airline, board experts said, would have had three company employees monitoring each shift." "A single licensed Sabretech mechanic, who probably worked not much more than eight hours a day, signed off on the work of 72 people who worked around the clock, the board's investigators said. One board member suggested that it was not possible for one mechanic to have overseen all such work." On January 31, 2000, an Alaskan Airlines jet crashed, killing all 88 people on board. The airline culture was hostile to "interference" from the beginning but its standards dropped even lower when deregulation set in. Its in-house newsletter touted an executive who ordered 25 bottles of vodka in Siberia to de-ice a plane's wings - something the Federal Aviation Administration would never approve. A July 15, 2000 Montreal Gazette article reported: ''They see themselves as being above any moral or ethical code. 'And they're used to making their own rules.'' So stated Deby Bradford, a 10-year Alaska flight attendant who recently left to become an instructor pilot. An FBI and the National Transportation Safety Board examined whether negligence by Alaska contributed to the crash of flight 261. They discovered, according to the Gazette report: -- "In an emergency nationwide inspection ordered by the FAA in February, Alaska turned up with the highest percentage by far of MD-80s flying with worn stabilizer jackscrews, the part suspected as a cause of the crash. Six of Alaska's 34 planes failed the check (17.6 per cent), while only 16 of the other 1,073 inspected at 20 other carriers (1.5 per cent) failed." -- "In March, 64 Alaska mechanics delivered a letter to Chief Executive Officer John Kelly saying they had been 'pressured, threatened and intimidated' by a supervisor to cut corners on repairs." -- "In April, a veteran, respected Alaska pilot told a company vice president in a widely circulated letter that he was concerned about Alaska's approach to safety and maintenance. 'I feel that at some point our company needs to strive for a higher level than this,' Capt. David Crawley wrote." The total number of dead in these two crashes is 188, which begins to approach the kind of mass murder level of Timothy McVeigh who sits awaiting capital punishment. Of course, it is in the nature of American society not to punish corporate chieftains whose blood on their hands comes as a unintended byproduct of the pursuit of profit. Some day a different kind of society will sit in judgement on them and the punishment will fit the crime. full: http://www.columbia.edu/~lnp3/mydocs/economics/airline_deregulation.htm Louis Proyect Marxism mailing list: http://www.marxmail.org From Michael.Keaney at mbs.fi Wed Jun 19 06:49:13 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 19 Jun 2002 15:49:13 +0300 Subject: [A-List] UK state: Northern Ireland Message-ID: It's a measure of how far things have developed that this sort of programme can be broadcast by the BBC without a major furore in the press. Possible reasons for this relatively relaxed reception for what are very significant charges include the fact that this refers to events under the previous Conservative government's regime, together with internal wrangling within the British secret state over which part of the apparatus should have precedence over the others with respect to which kind of tasks. RUC encouraged us to kill Finucane, claims loyalist By David McKittrick, Ireland Correspondent The Independent, 19 June 2002 Compelling new evidence indicates that the Belfast solicitor Pat Finucane was killed with the involvement of British intelligence and police officers. The new material, which is to be broadcast in a BBC Panorama programme tonight, will heighten demands for a public inquiry into the 1989 murder, which remains one of the murkiest and most dubious incidents of the Troubles. A retired Canadian judge has already been appointed to consider the need for such an inquiry. The Commissioner of the Metropolitan Police, Sir John Stevens, will deliver a report on the case shortly. The Panorama programme features secret filming of a member of the loyalist Ulster Defence Association, Ken Barrett, admitting on camera that police officers had urged his members to attack the solicitor. According to Mr Barrett, a policeman told him that Mr Finucane "was an IRA man, he was dealing with finances and stuff for them, and he was a bad boy and if he was out they would have a lot of trouble replacing him". Mr Barrett added: "To be honest, Finucane would have been alive today if the peelers hadn't interfered. Solicitors were kind of way taboo, you know what I mean? We used a lot of Roman Catholic solicitors ourselves." He said the UDA assassination squad killed Mr Finucane after the officer confirmed that no security force patrols were in the area. The Barrett admissions are in line with previous claims that police suggested the solicitor should be "taken out". In the programme, several members of the Stevens investigating team say they believe that Military Intelligence lied to the inquiry on a number of counts, particularly on the issue of the army agent Brian Nelson. Nelson was recruited by the army to infiltrate the UDA and went on to become the central figure in the terrorist organisation's intelligence gathering. The programme confirms that at one point he took a large quantity of UDA material on suspected republicans to a section of Military Intelligence known as the Force Research Unit (FRU). The unit organised and streamlined the files, then gave them back to Nelson. A former member of the Stevens team says the team concluded that the FRU worked with Nelson in this way to ensure that the UDA shot active republicans rather than uninvolved Catholics. The former detective sergeant Nicky Benwell says: "There was certainly an agreement between his handlers and Nelson that the targeting should concentrate on what they described as 'the right people'." Secret Military Intelligence documents obtained by the reporter John Ware contain the comment that "since 6137 [Nelson] took up his position, the targeting is now more professional". Sir John Stevens describes the Nelson affair as "inexcusable". Members of his team complain that the FRU initially categorically denied running any agents. The former detective chief superintendent Laurie Sherwood describes the FRU's assertion as "a complete lie". A Military Intelligence claim that the FRU did not know that Mr Finucane would be attacked is described by a Stevens team member as not credible. He goes on to say that the FRU "are not telling the truth about Finucane". Although Nelson's telephone calls to his handlers were taped and transcribed, the Stevens team could find no details of four calls Nelson made in connection with the death of a Catholic man killed by the UDA. A Stevens team member says this leads him to believe "that there was something in those telephone calls that they wanted to hide". When the handler involved, a female sergeant, was interviewed about the missing transcripts under caution, she refused to comment. The team also concluded that a mysterious fire at its own headquarters was arson rather than an accident, as police had insisted. Sir John Stevens said he had received "a very vague warning that something like this might happen". In another instance the FRU took no action after Nelson told his handlers that the UDA intended to try to kill Alex Maskey of Sinn Fein, who is now lord mayor of Belfast. The Stevens team also established that Nelson made multiple copies of the files organised for him by the FRU, distributing them to different parts of the UDA and to the other main loyalist group, the Ulster Volunteer Force. In one case Nelson gave information on Mr Maskey and another man to the UVF, which in return gave him explosives. His handlers approved, noting that if this trade was "successful, it will enhance 6137's standing, particularly if the UVF did attack the targets". From sherrynstan at igc.org Wed Jun 19 06:55:43 2002 From: sherrynstan at igc.org (bon moun) Date: Wed, 19 Jun 2002 08:55:43 -0400 Subject: [A-List] US imperialism: Iraq & Saudi Arabia References: Message-ID: <006e01c21790$a05d6540$0300a8c0@earthlink.net> What Ian Bruce either refuses to say, or doesn't understand, is that the whole notion that Iraq even possesses weapons of mass destruction, that might be deliverable during a full scale US attack, is questionable at best. This "fear" that somehow leaks from Pentagon planners, et al, is fear sown with the US public to gain acquiescence, yet again, for an attack against Iraq of massively devastating proportions (to prevent this kamikaze retaliation by the mad dictator, of course), and to innoculate the aggressors from concerns about "collateral damage." The idea that Iraq has any capacity to fight the US during such an attack is, naturally, ridiculous. SG Cornered Saddam could go for Armageddon, US fears IAN BRUCE The Herald, 19 June 2002 SADDAM Hussein would be likely to unleash his arsenal of chemical and biological weapons against US regional bases and Israeli cities if ... From annewilliamson at msn.con Wed Jun 19 07:26:37 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Wed, 19 Jun 2002 09:26:37 -0400 Subject: [A-List] Inflation for everybody! References: Message-ID: <012201c21794$f170dee0$0100a8c0@igrushkii> Inflation for Everybody! The Mogambo Guru - The core rate of the consumer price index in Canada, which excludes some food and energy items, rose 2.2 percent in April from a year ago. This prompted the Canadians to increase interest rates, for the second time this year, to head off this inflation. Whoa! Where did this philosophy of responsibility come from? - The Europeans are considering raising their interest rates, for the same reason; namely, keeping inflation from getting any worse. - The Australians, the leaders in the race to expand the money supply, have now had to raise interest rates twice in a month to keep the resulting inflation under control. The official line is that they are raising rates to cool a red-hot economy. - But here in the USA, we have price inflation that is 50% higher than Canada, higher than Australia, high*er than the Europeans, yet we are not raising interest rates. Instead, Greenspan is keeping them at 40-year lows. Perhaps so that he can get some price-inflation started here, hoping that it will make the prices of things, by which I mean stocks and houses particularly, go up in price. Everybody's making money again! Whee! - Except the poor, of course, who are the ones who ultimately pay the full cost of price-inflation. But better than a price-deflation, eh? In a deflation, it is the rich who pay the full cost by virtue of their assets falling in value. So get them inflation-starters roaring, dude! God forbid there should come a time when the rich were made worse off! What's the point of lobbying and electing compliant legislators if only to lose wealth? So, inflation for everybody! - Price-inflation is how the excessive credit-created money is finally absorbed into an economy. Little by little, things cost more and more money, as the amount of money reaches, for want of a better word, the hypothesized "equilibrium" with the supply and demand for goods and services. When the happy day arrives price inflation falls to zero; the supply and demand for dollars will again match the supply and demand for goods and services in the new societal scale of values. Remember that in a price-inflation, not only does the price of each thing go up, but the RELATIVE values of all things to all other things will have changed, too. Watermelons could be more expensive than diamonds. - If the Fed keeps creating more money, then the loop starts all over again. Which just makes it temporarily seem better, like a mother's kiss on a skinned knee. But with the QED reality of making it much worse down the road, as the germs from the mother's lips cause a huge, gangrenous, green and purple, pus-filled infection on that skinned knee. A normal mother sure wouldn't kiss that disgusting, nauseating knee again, but Alan Greenspan puckers up and plants another big ol' sloppy one right on it, every time. - This is what passes for "monetary policy" at the Greenspan Fed nowadays. And I predict that some of that infection is finally sticking to Mr. Greenspan, and it will fester. - The amazing thing is that the aggregate "somebody" is buying lots and lots of government notes and bonds every day of the week, to lock in these artificially-low rates for extended periods of time. What am I missing here? When gold is rising, when the dollar is falling, when all around you interest rates are rising, commodity and producer price indexes are rising, when we have a trade deficit so huge that it boggles the mind, when the money supply is increasing at double-digit rates (guaranteeing price-inflation soon), when the government literally said that they are going to float, at LEAST, another $155 billion in debt this year, yet you continue to buy government debt so you can lock in THESE miniscule interest rates? KNOWING that those notes and bonds will drop in price when rates inevitably go up? Wow! I must have missed the day when they explained how THAT works! Must be a derivative thing, eh? If there is a lead-pipe cinch besides gold in this world, it would seem that shorting American debt at these preposterous levels would be it. - As mentioned above, the government says that it is on track to have a deficit of around $155 billion this year. So, at a time when the trade/current account deficit is already eating up $36 billion a month, the Treasury is going to compound the problem by ripping another $13 billion a month out of the real economy to spend on the Big Government Economy? So what is that, roughly $50 billion a month? A MONTH? And that assumes that the economic problems will not get any worse, to which I take great exception, as you might have inferred from my hysterical, shrieking tone. - Greenspan also met with the other central bankers of the world, presumably to cook up some secret new plan to make everything work out just perfectly from here to forever. I will let pass the overwhelming philosophical bias I have against un-elected hotshots, armed with a monopoly on monetary power to be wielded at their random discretion, meeting in secret with foreign nationals of their ilk and hatching secret plans that directly affect ME. And especially when I am certain of the deleterious effects that are sure to follow, as they are meeting in secret again to cook up more secret plans to ameliorate the dismal consequences of their previous secret meetings and secret plans. As the supreme example, the US dollar has lost 95% of its value since the advent of the Fed, and all because of ninety years of secret plans and secret actions of the Fed. One of the hatched plans is already apparent, as foreign holdings of government debt at the Fed recently jumped by an incredible $17 billion. They are adding such a special, everything-is-just-wonderful spin on things that Doug Nolan was forced to note, "The question I think we have to ask ourselves is, how is it possible?" - Business is bad, as costs are rising and companies are said to have no "pricing power" to enhance revenue. How the calculus of rising costs and reduced revenue can be seen as anything other than catastrophic is beyond me. Profits going down is somehow good news in the Bizarro-Land of Wall Street cheerleaders and government wonks. So while the landscape looks familiar, the natives are all talking in tongues, where bad is good. Next up, our savvy talking-heads apply their brilliant analytical skills to prove that up is down, black is white, and (my personal favorite) liabilities are really assets. - Housing prices that are rising so dramatically in the current housing bubble are causing assessed values of all the other houses in the neighborhood to be ramped up, too. This gives the local government more ad valorem tax money to spend. So everyone is paying, or will soon be paying, higher property taxes, not just those guys buying the more-expensive houses. This reduces aggregate discretionary income from the get-go. And rents will soon be more per month. This reflects not only the landlord paying higher taxes on his rental property, but also the higher taxes on his own house. And so the landlord has to add that little bit of extra price-inflation juice to the rents, to make up for his loss of buying power. Just absolutely freaking wonderful. - The really bad news is that the local governments are just going to use the extra money to expand their operations, like they always do. There is no end to the list of "critically needed" programs that the local commissars, just like their Congressional commissar counterparts, are just dying to install. This means that in the future, when housing prices come back to some semblance of reality, there is going to be a bigger government to take care of, with more "crucial" spending programs, more "critical" departments, more "pressing needs" to take care of, and more legions of people counting on that government check. The salubrious effect of reducing ad valorem taxes, freeing up discretionary income, would give the economy a real shot in the arm. As it is, the "shot in the arm" of higher government spending, permanently ramping up it's size and cost, is more like a shot in the head. - One of the problems and self-doubts I have always had involves the following question: can money be multiplied without banks? Or, put another way, can only banks, through the magic of fractional-banking, multiply money? When you and I draw up some contract, one of us exchanges ownership of a paid-for asset and the other one exchanges ownership of cash. Equal things are exchanged, as the money and the assets merely change hands. No new money is actually created. But when a bank uses fractional banking, a single dollar of deposits results in almost a hundred dollars of loan-making potential by the banks nowadays. So, a hundred new dollars is added to the money supply when it is lent. Money IS created. Of course, using float temporarily creates a sort of "additional money supply." This is when you write a check, but while the check wends its way through the clearing system to your bank, you keep the same money in an interest-paying asset until just before it clears. By the by, the Federal Reserve calculates that the float is $563 million. Barring that, after all this time, after a lot of head-scratching, almost by the tedious process of elimination, I finally must announce, in print, there-you-are, what the world has been apparently never been waiting for, may I have the envelope please...The Answer! Only banks can really multiply money. Bummer. But there is $110 trillion in derivative debt alone. Just where the hell did all that money come from? Now you know why it seems that there is, there must be, some other, simple, why didn't I see this before, it's so simple once it's explained, Answer. But damned if I know what it is. - Does America really have a positive net worth? The WSJ came out with a chart that showed net worth of citizens and profit-making businesses was $40 trillion. Huh? With the enormous overhang of debt at big, big multiples of that, we have $40 trillion left over after all is said and done? Consumer installment credit alone was up to $1.7 trillion in April. Wow! All in all, to paraphrase Doug Nolan, how is that even possible? - Speaking of debt, Kurt Richebacher notes that "All in all, debts rose more than 10 times faster than income" last year. And commenting on the unbelievable deluge of credit-creation by the Fed, Dr. Richebacher adds, "...for the first time in history, the economy and stock market have slumped against the backdrop of rampant money and credit creation." I know what you are thinking. "My God! Things economic are not responding to free money!" Yes, my children, we have surely reached the climax of the most vainglorious period in history when you can't get rapacious, slavering capitalists to borrow cheap money. - Marshall Auerback, in a June 4 essay, said, "...the Federal Reserve has since the onset of Mr. Greenspan's tenure in reality acted in a manner more befitting a Soviet commissar of the Cold War era." The reason for this unflattering but highly descriptive broadside was the Fed's change of policy on the discount window. No longer, after all these decades, would there be a stigma for ill-managed or unlucky banks going to Daddy Fed, begging for more money to square their books. Getting more credit-creation money is now as easy as just showing up! It is just another example of the Fed underwriting more and more moral hazard. - John Dobosz of Forbes.com asked me if I was screeching angry at the parade of bulls in the media, all touting an impending comeback rally in the markets that will take us all to the Promised Land of riches beyond measurement. Actually, no. I feel sorry for them. They will have to live the rest of their lives knowing that they are incompetent, and there is black-and-white proof of their abysmal incompetence. The trusting investing public, who have lost a lot of money and are getting ready to lose a lot more, will spend the rest of their lives remembering the names, probably showing up as "defendant" in court briefs, of those who led them so wrong for so long, and will never trust them again. My heart goes out to all these poor, silly people. So what's to be angry about? - Service payrolls are up. My question is: if you can make an economy out of services, how come nobody in the entire history of economics, and I mean nobody, has ever advanced that theory? Not one hotshot in the entire literature of economics has even hinted that you can make an economy out of services. The reason is that you cannot have an economy made of services. You can only have an economy based on selling things at a profit. Services are an adjunct to the economic activity of buying and selling things. - The stunning advance in service payrolls is not surprising, once you discard the stupid idea that private citizens in the private economy are voluntarily buying these services. A lot of these "services" are government out-sourcing. The fact that they are hired by private companies does not make them part of the private economy. To find out what they really are, just look at where their money comes from. - And all those people performing services for the government booked that whole income stream as start-up loans, renting of office space, hiring employees, buying desks and computers and cars and carpets, hiring cleaning services and hiring copying services and legal services and tax and accounting and payroll services, buying postage and shipping costs and setting up retirement plans and and and... - I'll tell what "and and and." And all those employees went out and bought houses and cars and vacations and second homes and stocks and jet skis and hired lawn care services and accountants and tax preparation people and got themselves into deep debt all the rest of what is colloquially known as "the good life." - Then what is the multiplier of government spending? About five. All multipliers are about four or five, as it turns out. Each dollar of government spending produces roughly five dollars in economic activity, the same level of multiplier you would get from any constant source of money. But the money that the government borrowed and spent would have been spent by somebody anyway. You spend it or the government spends it. Either way, it is spent. - The crucial difference is on WHAT is it spent? This is how a society is permanently changed in response to government spending and meddling. Especially such HUGE freaking spending and meddling as we have today. Without the government, the economy would be composed of buying and selling things that people want to buy. But when government spending gets really big, like now, the whole market structure is changed to what the GOVERNMENT wants to buy, and forces the people in the economy to spend an increasing fraction of THEIR residual monies on things the government wants them to buy, mostly tariff-protected goods, houses, and tax-advantaged goods. But also many expensive defensive goods and services, such as tax preparation, accounting services, liability insurances against a whole universe of now-actionable personal offenses, and legal services. - And already the combined governments of the USA directly employ more than one out of seven people in the work force directly, for crying out loud! And they spend a fifth of GDP every year to do it. One out of five dollars produced in the whole GDP of the US of A in the buying and selling of goods and services is taxed and spent by the federal government alone! And then the states and locals jump in and bite off another big ol' chunk, crurr-runch, of what's left!! - And now we add in all these "service employees" performing out-sourced government work, and with a multiplier that is obvious by inspection, pretty soon you are talking about the government BEING the US economy. All the rest of the economic activity that is happening is merely supportive of, and parasitic to, the Big Government Economy. And that's my point exactly. - The Russians tried it and it failed. The Cubans tried it and it failed. The Mexicans tried it and it failed. The Chinese tried it and it failed. South America, Africa, and most of the rest of the world is still trying it and is failing. All the way back to the Romans, everybody who has tried it has failed. Every fiat currency has failed, or is failing now. - In fact, one of the few truisms of economics seems to be that anything other than a free market economy and sound money will fail. And ipso facto, the economic system of the USA will fail, also, because it is not a free market economy anymore and it has bad money. It is just another loathsome Big Government Economy. - The slow-motion, year after year declines in the market averages is giving you the time to think up a clever answer to your children's question in the future: "But dad, the market was ridiculously overpriced, and kept going down and down, year after year, and yet you kept on buying overpriced stocks and borrowing us farther and farther into debt. Was it your plan to have us living under a bridge?" Ugh. Mogambo Sez: It's a wait-and-see period. The end-of-half is approaching, and there is activity to get the averages up so that the funds won't have to send out those depressing quarterly statements in which they have to admit that you lost more money, again, and big futures rollover plays to lay on replacement positions. There is a meeting of the world's central bankers conniving the goose in their respective economies. But the prevailing weight of a preposterously-high stock market must be too much to ignore, and so I must again advise to short any rallies. From Michael.Keaney at mbs.fi Wed Jun 19 07:33:59 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 19 Jun 2002 16:33:59 +0300 Subject: [A-List] UK corporate state: PPPs in disarray Message-ID: On 27 February, the Guardian reported: A Labour-controlled select committee is so divided on the issue of private finance that its chairman is in danger of being outvoted by his own party colleagues. The health select committee, chaired by David Hinchliffe, cannot agree on the report which says the private finance initiative represents value for money. Mr Hinchliffe has joked that he is danger of becoming the first committee chairman to produce a minority report of one. He is a well known sceptic about the usefulness of the private sector in health and had hoped the report would challenge theprivate finance initiative. lan Milburn, the health secretary, would regard a positive report as a political step forward. The committee has met five times in an attempt to agree the report - sifting through a mass of evidence, including an array of factual material from the health department about the scale, costs and risks attached to PFI. Mr Hinchliffe's political position on the committee was severely undermined at the outset of the inquiry when it was agreed that Allyson Pollock, a former special adviser to the committee, should not work on the inquiry. Specialist advisers are in practice often vital in leading committees to their conclusions. Professor Pollock, who works at the Health Policy and Health Services Research Unit at University College London, has written a series of articles challenging PFI and was once denounced by Mr Milburn as a third rate leftwing academic. Prof Pollock's studies have attacked PFI as poor value for money and liable to land NHS trusts with large ongoing debts so reducing cash available for clinical care. Prof Pollock, close politically to Mr Hinchcliffe, claims she was not appointed at the suggestion of Labour committee member Julia Drown. See http://lists.econ.utah.edu/pipermail/a-list/2002-February/004706.html ----- Private Eye No. 1055, 31 May - 13 June 2002 Woman in the Eye: Julia Drown Once upon a time there was a keen young hospital finance officer and trade unionist called Julia Drown. She wanted to be an MP, and was very pleased, despite the big Tory majority, to be Labour's candidate in Swindon South. As a hospital finance officer she was shocked by the Tory policy of the private finance initiative (PFI), which she saw as creeping privatisation of the NHS. At the annual conference of her union, UNISON, in 1996, she circulated delegates with a searing attack on PFI. "Profits rather than patients are in danger of becoming the important determining factor in health service plans," she said. "Huge sums are being taken out of the NHS budget to satisfy the whims of private capital." To everyone's surprise the young idealist was elected for Swindon South on a huge anti-Tory swing in 1997. Very soon, though, she noticed that the Tory PFI programme had been adopted wholesale by the "new" Labour government and was being implemented faster than even the Tories would have dared. Julia's enthusiasm for the anti-PFI campaign quickly withered. She became an ardent supporter of the plans to build a new hospital by PFI in Swindon. She also became a passionate opponent of the one academic body in the country to launch a sustained assault on PFI: the Health Policy and Health Services Research Unit at University College London (HPHSRU) under Professor Allyson Pollock. When Julia Drown became a member of the Commons health select committee, she kept up her campaign against Prof Pollock. Another new member of the committee was Dr Richard Taylor, who in last year's general election stood (and won) as an Independent MP for Wyre Forest -- entirely because of his hostility to PFI and its dreadful consequences for hospitals at Worcester and Kidderminster. In November last year the committee took evidence on PFI in the health service from a number of PFI providers and from Allyson Pollock. Julia Drown cross-examined the witnesses keenly, and wrote six paragraphs attacking the HPHRSU as "extreme" and unreliable. She submitted the paragraphs to be included in the Committee's final paragraphs. The committee met on 25 April to consider its report, including the Drown paragraphs. Chairman David Hinchcliffe ("old" Labour) was shocked at both the tone and content of the paragraphs. When he looked round the room, he was surprised to find that only five members of the 11-member committee were present and that three of the nine MPs who had checked in at the committee that very morning had vanished. There was no sign of Simon Burns (Tory), and no sign either of two Labour MPs, John Austin ("old" Labour) whose views on PFI during the hearings had been uniformly hostile; and Andy Burnham ("new" Labour) whose views on the subject had not been clear. Desperately anxious not to publish what he regarded as Drown's spurious "findings", Hinchcliffe moved from the chair that the paragraphs be deleted. The committee divided; and Hinchcliffe himself didn't have a vote unless the result was tied. Julia Drown voted for her paragraphs and was supported by two other "new" Labour trusties, Doug Naysmith (Bristol North West) and Jim Dowd (Lewisham West). Only two MPs -- Dr Taylor and the sole Liberal Democrat, Sandra Gidley -- voted for the chairman's motion. So Julia Drown triumphed and her paragraphs were published as part of the report. Perhaps she is already regretting her stand. First came a withering response from Prof Pollock, who demolished Drown's points one by one, usually by referring to evidence in the health committee report itself. (For instance, Drown wrote that Pollock "confused criticism of capital charges introduced in 1991 with criticisms of PFI". Yet Drown herself had asked in evidence: "Is the problem the capital charges or PFI?" and Pollock had answered: "I think there are two problems.") Again and again in evidence Pollock had insisted that the charges to the hospital trusts from capital charges (6 percent) were taken into a new stratosphere by PFI (up to 20 percent). Then came a stinging statement from Sandra Gidley, who denounced the six paragraphs as "spiteful" and "unnecessary". Then on 21 May Harlech West TV broadcast a special programme on the new Great Western Hospital in Swindon. The theme of the programme was conveyed by its title: BUY NOW, PAY FOREVER. The programme exposed the fact that Swindon's new hospital, built by Carillion (Tarmac) under PFI, which cost ?98m to build (payable back at ?12m a year for 30 years), has had to be subsidised by a top-up from the government amounting to ?74m. Allyson Pollock and Julia Drown appeared on programme, not entirely to the latter's advantage. From Michael.Keaney at mbs.fi Wed Jun 19 08:00:21 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 19 Jun 2002 17:00:21 +0300 Subject: [A-List] UK corporate state: criminal damage Message-ID: Recently there has been gathering a head of steam in the press about the alleged failures of the British criminal justice system, with various senior police officers, judges and politicians commenting on how the system is failing the victims, despite presiding over a record number of prisoners. Even Tony himself has promised to do something about it, if only to distract attention from an insubstantial embarrassment over the management of the Queen Mother's funeral which, in the topsy turvy way of modern politics, threatens careers in ways which illicit arms deals, exploitation of the poor and bombing campaigns cannot, it seems. However, in a recent Private Eye, Paul Foot and co. explain why the system might be failing in reality... Private Eye No. 1055, 31 May - 13 June 2002 In the Back: Prison Works (for some) "I have to say that I am fundamentally opposed both in principle to the privatisation of the prison service and indeed in practice..." ---Tony Blair, shadow home secretary, 1993 Can this be the same Tony Blair who was prime minister has encouraged the creation of a multi-million pound private prisons industry, much of whose profits and dividends go to foreign multinationals like the controversial US Wackenhut Corrections Corporation? Since taking office in 1997 Blair has presided over the opening of eight new (and formerly "morally repugnant") adult jails and three kiddie-jails funded under private finance initiatives (PFIs). Two more institutions are in the pipeline, mainly for women, at Ashford in Middlesex and Peterborough in Cambridgeshire. Five more child jails are planned; an application is in to build a fourth jail on the Isle of Wight; and there are long term plans to sell up to 25 inner-city Victorian jails on lucrative development sites and build bigger replacements. All this because Blair presides over what Lord Bingham, one of our most senior judges, recently described as "one of the most punitive justice regimes in the world." So far the prison population has rocketed by almost 5000 to a record 71,000. Moreover, according to the probation officers' union Napo, 13,000 inmates are unconvicted and on remand; about 8,000 are junkies; two-thirds have mental illness and the average reading age is seven. Among women -- the fastest growing part of the prison population, now numbering around 4,000 -- the reality is even more disturbing. Hardly any are violent or a threat to society; a third are first-time offenders; half have drug problems; one in four has been in care and one in five has been a patient in a psychiatric unit. Numbers are being swollen by the growth in automatic sentences for persistent petty offenders or people who breach probation, the jailing of feckless and hopeless parents and the removal of restrictions to stop courts remanding children in jails. So who, other than the private correction industry, benefits? Not taxpayers. Research by Juliet Lyon at the Prison Reform Trust shows that the recent spree to build 12,000 new cell places is a staggering ?1.28bn. Group 4, which runs Altcourse Prison in Liverpool (the first PFI jail), was even able to refinance the project, securing much more favourable terms and netting an increased ?10.7m return, on top of the built-in ?17.5m profit, for shareholders. Under its contract with the home office, Group 4 and its partner Carillion (formerly Tarmac) didn't have to share its windfall with taxpayers who are ultimately paying for the jail. Since this scandal was exposed, the prison service has ensured that the contracts for the two latest jails in Peterborough and Ashford will now share on a 50-50 basis any refinancing windfall. But PFIs are proliferating elsewhere in the criminal justice system too. According to a report from the Centre for Public Services, called Privatising Justice, Britain now has the most privatised criminal justice system in Europe. As well as jails, police stations, courts, custody centres, probation hostels and offices, computer projects worth more than ?13bn are in the pipeline, despite past examples of spiralling costs and reduced services to the public. More than ?145m has been spent on consultancy fees alone -- equivalent, says the report, to 5,000 new police officers or seven new publicly-funded magistrates' courts. The report concludes that it is PFIs that are now shaping how services are delivered in the criminal justice system and limiting access to local justice. Or as Tony Blair put it in that same 1993 speech: "I think there is a danger that if you build up an industrial vested interest into the penal system, and as part of that interest they are designed obviously to keep the prison population such that it satisfies those commercial interests, then I think there is a risk that distorts the penal policy that otherwise you would introduce." How right he was! ---- NOTE: It's worth bearing in mind the level of detail contained in this article, since it illustrates just what sort of material would be discussed in any GATS negotiations at any trade round. The latter is looking more remote at the moment, given the lukewarm commitment of the Bush administration to the WTO under Supachai Panitchpakdi, together with the glaring evidence of developed countries' protectionism contrary to the free trade rhetoric. But the World Bank is always on hand to inflict such policies upon recipients of its "aid", and the IMF will no doubt observe closely as it seeks to trim excessive state sector budgets in crisis-ridden countries. Thus British companies are poised to capitalise on any first-mover advantages that may accrue to those entering any bidding processes to provide services tendered at the behest of the international financial institutions. Criminal justice indeed. From hliu at mindspring.com Wed Jun 19 14:43:21 2002 From: hliu at mindspring.com (Henry C.K. Liu) Date: Wed, 19 Jun 2002 16:43:21 -0400 Subject: [A-List] Good News From China Message-ID: <3D10ECE9.20964ECE@mindspring.com> China Vows To Grant Allowances To All Urban Poor Xinhua in English 18 June 2002 [FBIS Transcribed Text] Beijing, June 18 (XINHUA) -- The Ministry of Civil Affairs vowed Tuesday to grant minimum living allowances to all urban poor around China by June 30. Of the country's 19.38 million urban poor who exist on a per capita monthly income below the official bottom-line average of 152 yuan (about 18.3 U.S. dollars), some 15.91 million had received the subsidy by June 10. Those urban poor not yet covered by the system make up only 17. 9 percent, 10.2 percent fewer than in April. Wang Zhikun of the ministry said that China was confident of carrying out its promise on schedule. "Only after all those who qualify get their allowances from the government can the country's bottom-line security system live up to its name as the last line of the national social security system," he said. According to Wang, those urban needy still awaiting assistance are mainly scattered across 19 provinces and autonomous regions including Hunan and Qinghai. A total of 12 provinces, municipalities and autonomous regions have already achieved the target of granting allowances to all local urban poor who qualify. They are Beijing, Tianjin, Shanghai, Jiangsu, Zhejiang, Guangdong, Chongqing, Hebei, Jilin, Guangxi, Guizhou and Ningxia. To encourage local governments at all levels to redouble their efforts in granting allowances to all those who qualify as quickly as possible, the ministry is planning to release their statistics every fortnight to news media. Call-free telephones will also be set up nationwide for the urban needy to lodge complaints or ask for legal and technical assistance. On Wednesday, an inspection team comprising officials from the ministries of civil affairs and finance and the General Office of the State Council will fly to Yunnan, Jiangxi and Heilongjiang to check their work in preparing fund for this purpose. China's social security system was long plagued by a shortage of capital. Last month, Beijing allocated a record 4.6 billion yuan (554 million U.S. dollars) from state revenues as a fallback fund for local governments to use for payments to urban poor. "Such a large amount indicates the Chinese government's determination to guarantee basic living for the urban poor and to push local governments to contribute more," he said. In July, a large-scale random survey will be launched among the country's nearly 20 million urban poor to make sure none is being left out. "Once the allowances are granted to all those urban poor," Wang said, "development of the country's basic security system will stabilize. "Our emphasis will then shift to setting up institutions and standardizing management," the ministry official added After a pilot program in Shanghai in 1993, the basic security system for urban dwellers was introduced across China in 1997. [Description of Source: Beijing Xinhua in English -- China's official news service for English-language audiences (New China News Agency)] From soncu at pacbell.net Wed Jun 19 23:37:09 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Wed, 19 Jun 2002 22:37:09 -0700 Subject: [A-List] Greece: Chaos in the streets of Athens Message-ID: I am proud of my neighbors. I hope we can learn some from them. Sabri +++++++++++++++ Kathimerini, June 19, 2002 Transport woes go on Train, ferry, air problems remain after 24-hour strike ends ----- ANA About 6,000 protesters marched to Parliament yesterday in a rally held to mark the beginning of the debate on changes to the social security system. Although the government is offering more benefits and earlier retirement in some cases, unions claim that it does not guarantee higher state funding for the system and will force some privileged groups of workers to retire later. Parliament is to vote on the bill tomorrow. ---- Chaos prevailed in the streets of Athens yesterday as a 24-hour national strike meant that no public transportation (except for taxis) was available, forcing residents to use cars ? which then had to contend with a protest rally that choked off the city center. The strike was held to coincide with the beginning of a parliamentary debate on new legislation aimed at reforming Greece ?s pension system. Although the strike called by the civil servants? federation (ADEDY) and the General Confederation of Greek Labor (GSEE), which covers employees in the private and broader public sector, was for 24 hours, Athenians? woes are set to continue. The Panhellenic Seamen?s Federation (PNO) began a 48-hour strike that paralyzed coastal shipping, demanding higher pensions and protesting at plans for their union to be absorbed by the country ?s largest, the Social Security Foundation (IKA). The federation is to decide today whether it will continue with 48-hour rolling strikes. Faced with the threat of tourism being wiped out over the three-day weekend commemorating the Pentecost, municipalities, hotels and travel agencies on the islands have been sending letters to National Economy and Finance Minister Nikos Christodoulakis demanding that the problem be solved. Today and tomorrow, employees of the Piraeus-Kifissia railway line (ISAP) will be on strike from 1 p.m. to 5 p.m., creating more problems for commuters. Also, Greek air traffic controllers are today joining colleagues in several European countries who are on strike in protest at plans for a centralized European traffic control system. This is likely to affect many flights. Participation in yesterday?s protest rally was limited to about 3,000 people, which organizers blamed on the heat and the fact that the public transport strike prevented people from getting to the city center. When the march toward the Parliament building began, however, another 3,000 demonstrators joined it along the way. Unions claimed that participation in the strike (other than in the transport sector) was as high as 90 percent in some cases, the Federation of Northern Greek Industries, the only one to present figures, placed participation in the strike at 22.3 percent. State banks were, once again, affected to a greater extent than private banks, with 60-percent strike participation at the National Bank and Agricultural Bank in Athens. Parliament is to vote on the pension bill tomorrow. Full at: http://www.ekathimerini.com/4dcgi/_w_articles_politics_100002_19/ 06/2002_17781 From soncu at pacbell.net Wed Jun 19 23:42:11 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Wed, 19 Jun 2002 22:42:11 -0700 Subject: [A-List] Peru: Deepening crisis Message-ID: Peru Minister Quits After Peru Protests Wed Jun 19,11:20 PM ET By Marco Aquino AREQUIPA, Peru (Reuters) - In a sign Peru's government was not out of trouble even after reaching a deal to defuse the worst crisis to hit President Alejandro Toledo, Interior Minister Fernando Rospigliosi quit on Wednesday, citing splits over the handling of protests in the south. Rospigliosi announced his "irrevocable" decision three days after Toledo declared a 30-day state of emergency in Peru's second city, Arequipa. Some 1,700 troops and police were dispatched to quell protests by furious residents fearing layoffs after Toledo reneged on a pledge not to sell two power companies. It was the first change to the Cabinet since Toledo -- at record lows in opinion polls -- took office last July. His announcement came hours after Vice-President Raul Diez Canseco unveiled a deal with local leaders in Arequipa to halt the protests, which was greeted there with jubilation as a climbdown by the unpopular 11-month-old government. "I present my irrevocable resignation ... As you know, I did not agree with the response to the events of the last few days. I told you and all the ministers," Rospigliosi said, reading a resignation letter to Toledo live on television. Local leaders in Arequipa had complained about Rospigliosi, and Justice Minister Fernando Olivera. In a joint declaration agreed with government ministers after two days of talks, they had asked them to make a public apology. Toledo's spokesman said it was not immediately clear who would replace Rospigliosi, but said no one else would quit. Diez Canseco earlier announced the government had decided not to finalize the privatization of electricity companies Egasa and Egesur until a court had ruled whether it was valid. Belgian company Tractebel, which won an auction for the two generating companies last Friday with a $167.4 million bid, said it had suspended the sale paperwork. The company is unit of French utility Suez . Local leaders in Arequipa had challenged the legitimacy of the sale. The government says it will appeal if it is declared invalid, but will respect a final legal ruling. Jeering protesters were replaced by cheering crowds in Arequipa after Diez Canseco announced the deal, which said the state of siege could be lifted "48 hours after the signing of this declaration if public order is restored." One man died, another was brain dead, 200 were injured and there were damages worth $100 million from week-long trouble. Local officials had been insisting that Toledo explain why he backtracked on a written pledge not to sell the companies. "This is the first time a government has had to admit it was wrong and has apologized ... to Arequipa," Mayor Juan Manuel Guillen told thousands waving flags in the main square. HEADACHES MOUNT FOR TOLEDO Political analysts said part of the problem was that Toledo had pushed ahead with the sales ahead of regional elections in November that will devolve more power away from Lima. He is already expected to reshuffle his Cabinet next month. Toledo, who signed a written pledge during campaigning for 2001 elections not to sell Egasa and Egesur, sent a message to Arequipa that fell short of an apology saying a fragile economy had meant he could not fulfill all campaign promises. The protests had sparked a sympathy strike across southern Peru from the border with Chile to the border with Bolivia, including the tourist capital Cusco, on Wednesday, halting public transport and stranding tourists bound for the Inca citadel Machu Picchu or the picturesque Lake Titicaca. Jose Cerritelli, analyst at Bear Stearns in New York, said markets could fret if they thought that other things in the economic plan may also be subject to changes, especially if they involve things that are unpopular." The debacle is a bitter blow for Toledo, who promised privatizations "with a human face" and hopes to raise $800 million this year to plug the budget deficit and fund road, power, health and education projects in this poor nation. Peruvians are already wary of privatizations -- ex-President Alberto Fujimori ( news - web sites), who was fired in a corruption scandal in 2000, raised $9 billion by selling state firms in the 1990s but much of the cash was wasted and some jobs lost. Polls show only one in five Peruvians approve of Toledo -- a former shoeshine boy who took office last July -- amid widespread frustration that he has failed to deliver promised new jobs. Slogans daubed on walls in Arequipa read "Shoeshine boy disguised as president" and "Toledo traitor" while in central Lima, posters appeared saying "We were better off with the Chino," a reference to Fujimori's nickname. Full at: http://story.news.yahoo.com/news?tmpl=story&u=/nm/20020620/wl_nm/ peru_protests_dc_4 From cburford at gn.apc.org Thu Jun 20 00:34:07 2002 From: cburford at gn.apc.org (Chris Burford) Date: Thu, 20 Jun 2002 07:34:07 +0100 Subject: [A-List] Good News From China In-Reply-To: <3D10ECE9.20964ECE@mindspring.com> Message-ID: <4.3.2.7.1.20020620072238.031854b0@pop3.norton.antivirus> At 19/06/02 16:43 -0400, you wrote: >China Vows To Grant Allowances To All Urban Poor >Xinhua in English 18 June 2002 > >[FBIS Transcribed Text] Beijing, June 18 (XINHUA) -- >The Ministry of Civil Affairs vowed Tuesday to grant >minimum living allowances to all urban poor around >China by June 30. > >Of the country's 19.38 million urban poor who exist on >a per capita monthly income below the official >bottom-line average of 152 yuan (about 18.3 U.S. >dollars), some 15.91 million had received the subsidy >by June 10. Are there details of how this is being implemented that would avoid the problem of a benefits trap? Western bourgeois democracies have a significant reserve army of labour who are marginalised by being unable to work? Unless the job is good enough they lose more in benefits than they gain in wages, or the gain is so little as not to be worth it. They become desocialised and demoralised. My technical question is related to whether there is any income tax yet on workers in China. A citizens income has been discussed in the west, as a way of avoiding a benefits trap. It also has the advantage of at least modifying the position of a worker as a wage slave, having nothing to sell but their labour power. It also makes over through the state a portion of the total social product to each individual. I am hoping that in the process of increased commodification of economic activity in China the picture is a little more complicated than that the workers are just becoming wage slaves with a cushion of a benefits system. I fear not. Chris Burford From annewilliamson at msn.con Thu Jun 20 20:18:58 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Thu, 20 Jun 2002 22:18:58 -0400 Subject: [A-List] Betrayal of the Public Trust References: Message-ID: <00cb01c218ca$00ff7fc0$0100a8c0@igrushkii> Gary North's REALITY CHECK Issue 151 June 20, 2002 BETRAYAL OF THE PUBLIC TRUST We are all dependent on each other to some degree. The free market is a gigantic system of interdependence. There are degrees of dependence, of course. But every buyer and every seller has some influence on a particular price. So do our perceptions of what each other might do under slightly different circumstances -- say, a price hike or reduction of 10%. What we personally know about any one tool in our lives is minuscule. Compared to what some primitive hunter knows about his spear or his traps, we know almost nothing about the things that keep us alive. We flip a switch, and a light goes on. We press a button on the channel-flipper, and the McLoughlin Group goes off. What do we really know about how all this works? Practically nothing. Last November, I got sick. I rarely get sick. But, starting around noon, my stomach started to hurt. By 11 p.m., I was in constant pain. I was vomiting green bile. By 2 a.m., I did what I do not recall ever having done: I had my wife drive me to the emergency hospital. They put me on some sort of sedative. By 10 a.m. the next morning, a physician I had only just met removed my gall bladder. Think about this. I allowed a stranger to administer a mind-altering drug. The other stranger inserted a small TV camera inside me. Then he made incisions in my stomach and took out my gall bladder. What is a gall bladder? What does it do? Now that mine is gone, what am I missing? I haven't a clue. When I had a gall bladder, I didn't even know it was there. Now that it's gone, I don't care. He later told me that on the same day that he removed my gall bladder, he did five of these operations. His partner did several more. Given what I paid for mine, nobody will have to hold a fund-raiser for his widow. I don't live in a large city. Here is one man and his partner who run an assembly line for removing gall bladders. These men are specialists in the surgical removal of something the rest of us barely know exists until the pain hits. It's amazing. These people make a good living by doing things that the rest of us are unaware of most for of our lives -- all of our lives, if things go well. The free market brings together buyers and sellers of specialized procedures so obscure that the buyers are completely in the dark. Nevertheless, despite my ignorance, I got well. I spent some money, and I got well. In 90 minutes, the pain ended. Prior to anesthetics (1844), I probably would have died an excruciating death. The alternative would have been an excruciating operation. There were no assembly lines for surgery in 1843. Think of the scene in "Gone With the Wind" at the hospital-in-a- church. They didn't call doctors "sawbones" for nothing. THE MYSTERY OF CENTRAL BANKING Now think about central banking. How many people understand fractional reserve banking? Not many, including most of those who took a money & banking course in college. I have read only one textbook on money and banking that does a good job in explaining the system, Murray Rothbard's THE MYSTERY OF BANKING. Almost no one bothered to read it when it was published in 1983. I actually owned the rights to it from about 1988 to 1996, but I never got around to republishing it. Today, I'm happy to say, you can download a copy for free. http://www.mises.org/mysteryofbanking/mysteryofbanking.pdf Nation by nation, the public is dependent on the wisdom of a group of highly paid experts called central bankers. These people work for private organizations that have been granted sovereign power by their national governments. No other group of profit-seeking private entrepreneurs in the world enjoys an equal measure of autonomy -- autonomy (self-law) from both the government that granted them their monopoly over the money supply and also from consumers in the free market. They impose sanctions, both positive and negative. No sanctions are imposed on them by the likes of us. The public has been taught by the media, including all accredited colleges, that this profit-seeking monopoly is run for the benefit of the people. Public-spirited monopolists over the money supply really have the nation's interests at heart. Because these men, unlike all other monopolists, are simultaneously self-sacrificing yet self- serving, politicians have granted them independence from the government. They also possess independence from the free market's negative sanction: bankruptcy. In fact, the central bank is charged with the task of forestalling widespread bankruptcies, beginning with the institutions that legally own the central banks, private commercial banks. A central bank, unlike any other organization, is praised because no one in civil government controls it. Textbook writers in economics, as well as financial columnists for the major newspapers, praise the central bank for its anti-democratic legal status. The nation's professional opinion-makers assure the literate public that the great benefit of a central bank is that it is independent from politics. Congress cannot tell it what to do. Neither can the President. This is presented as an enormous advantage to the public. The academic economists' theory of monopoly pricing is suspended in this one instance. So is the academic political scientists' discussion of anti-democratic associations. In only one other area of officially democratic policy-making is anything equally schizophrenic: tax-funded education. Here, too, the voters are assured by expert opinion-makers that democracy is a liability, that those who pay the piper are not qualified to call the tune. In these two areas, therefore we find a theory of what used to be called priestly status. Central banking and public education are both run by employees of a government- granted monopoly. Both institutions are both said to be immune -- rightfully immune -- from the wrath of voters and the pressures of free market competition. There are now faint signs of waning faith in both of these priesthoods. Home schools are springing up. So is the price of gold. There is no monopoly more profitable or with more power to ignore the government than a central bank. It has power over the only common link among all participants in the economy: the money supply. The world's national governments have self-consciously transferred power over the central economic institution -- money -- to a group of unelected, profit-seeking, self-screened representatives of the commercial banking system, a system based on fraud. Commercial banks promise to pay depositors interest on money that can be withdrawn by the depositors at any time, yet the banks lend this money long-term to borrowers, who do not have to repay it until a specific date. The system is "borrowed short" and "lent long." Bankers earn a good living, and a few get rich, from contracts that are based on a lie. This promise is believable most of the time because only a handful of depositors can actually withdraw their money at the same time. Whenever a lot of them -- maybe 10% of them -- try to withdraw currency at the same time, we call these events panics or bank runs. These events used to produce bankruptcy (bank + rupture). But then central banks came along, beginning in 1694 in England. They are invested by the State with what has traditionally been explained as the state's sovereign authority: the authority to create money. This ability to create money reduces the threat of bank runs, but it also guarantees the creation of depreciating money. Today, German banks are starting to go bankrupt. It's not a nation-wide panic yet, but it could become one. http://www.businessweek.com/bwdaily/dnflash/jun2002/nf20020619_3511.htm The German central bank, the Deutschebank, will of course intervene at some point to prevent a widespread panic. It will tell depositors not to worry. But deposit insurance is low in Germany, less than 20% of what it is in the United States. Depositors are at much greater risk there. So, this panic could get out of hand. It may take emergency action by the government. There is no doubt what that action will be: to grant more power to the central bank, and to use government money to bail out the system. Japanese depositors are in a similar condition. Their banks are in much worse shape than German banks. Every national currency is depreciating. Compared to the price of goods that the currency would buy 30 years ago -- especially real estate -- consumers around the world are suffering from currencies of declining value. This makes them seekers of long-term debt, especially for real estate. This quest for money to borrow increases demand for the asset leased by banks: money. In other words, the central banks' slow destruction of money creates public demand for the services of commercial banks. This is a classic vicious circle. It is the product of a government-granted monopoly. Banking is not a free market phenomenon. Today, an American commercial bank can borrow money in the federal funds overnight money market at 1.75%. The Federal Reserve System has driven short-term rates this low -- an unprecedented reduction. The commercial bank can then lend this borrowed money to credit card users for up to 24%. Let's see: for every $175 paid out, a bank pulls in $2,400. Not too shabby a deal! Yesterday, I had three offers for new credit cards in the mail. I suspect that there is a relationship between these two rates of interest and the number of credit card solicitations in the mail. Of course, these cards were "low rate" cards. I was asked to pay about 9.9%. I failed to take advantage of this. "THROW A GALLON IN ME, ALAN!" I trusted the physician who cut me open. I was highly motivated. It hurt when I laughed. It hurt when I didn't laugh. "Cut me open, Doc! I'll pay!" Today, 270 million Americans and a whole lot of foreign holders of dollar-denominated assets have basically told Alan Greenspan to put them on the operating table, do whatever is necessary to make the pain go away, and take whatever he wants out of our bank accounts. He tells them: "This may require blood." Everyone tells him to go ahead and cut. What they don't understand is that when he says, "This may require blood," he doesn't mean blood poured in; he means blood taken out. He means more debt: more obligations to repay bankers and other lenders. He means another contract that surrenders an additional percentage of our future productivity. We sign on the dotted line. Even when we don't sign, our elected representatives do. Taxpayers are facing another increase in the on-budget U.S. national debt limit. Congress will sign on the dotted line on our behalf. The last time that Congress resisted was in fiscal 1995. Clinton and the voters put an end to the "Contract with America" at that time. The real contract with America means more debt, more fiat money, and dependence on the U.S. government and the central bank. In every nation, users of money and banking services have told the same thing to their respective central bankers. But Greenspan is the world's most important money doctor. If he and his associates make a mistake, the pain will increase for a billion or more people. We have preferred the drip, drip, drip of debt. This has been accompanied by the drip, drip, drip of price inflation. I keep thinking of Dan Ackroyd's 1980 skit, "Inflation is our friend." "Didn't you always want to wear $400 suits and live in a $200,000 home. I know I did. Well, now we can. All it takes is a little ink and some paper." The public has trusted politicians and central bankers. Voters assume that the promises and assurances of these experts are reliable. They have accepted high-flying theories of why these power-seeking, money-seeking, money- creating people are in fact self-sacrificing servants of the public's good. Voters have trusted their judgment. We have allowed them to indebt our children and our grandchildren. Then, when our children and grandchildren start to vote, they are assured by the same experts that everything is just fine, and besides, the debts will be paid by their children and grandchildren. Every generation wants to defer the day of reckoning. Every generation votes to pass on the old maid card: "account overdrawn." The sad thing is that the average person, in every industrial nation, really believes that official promises are reliable, that a politician's promise regarding the economic future is as good as gold. AS GOOD AS GOLD? NO, BETTER! "As good as gold." This phrase is not in common use any longer. Gold is seen as a losing proposition. For 21 years, it was. But now the tide seems to have turned. The dollar is falling, as well it should. Gold's price is rising. Why? Because a tiny handful of people are catching on to the nature of the lies. Promises that rest on lies eventually are broken. Everyone can't get his money out of the bank at the same time. Everyone who has been promised a comfortable retirement by the government won't enjoy one. Every old person who gets sick won't get well at government expense. Some will. Some have. Most won't. A Ponzi scheme's early investors can make money, although few of them ever do. They stay in the program. They reinvest. Ponzi scheme designers know this will happen. Greed is powerful. It overcomes common sense. Early participants in a Ponzi scheme can make money because most of the money invested by late-comers is handed over to early investors as part of the scam's strategy. The Social Security System is a Ponzi scheme. This one is working, for there have been hundreds of millions of new participants pouring in their money. Also, it is illegal to pull out of the program. But the end is now in sight. The retirees will begin to overwhelm the system's revenues no later than 2011. In Japan and Italy, this will take place within two to three years if the recession continues. Whom should you trust? Politicians who make promises that, statistically, cannot be fulfilled? Commercial bankers who make promises -- "withdraw your money at any time" -- that cannot be fulfilled without a digital printing press to make the promises technically valid? Or should you trust gold, which rises in price when political promises are fulfilled with fiat money instead of tax revenues? The public regards Alan Greenspan as part magician, part guru. This faithful assembly of millions includes some very sophisticated investors. But there is a major problem with investing anyone with guru status and a monopoly over money: he is an old man. Greenspan, like Warren Buffett, will not live forever. The public always seeks out representatives to trust in. They do not really put much trust in bureaucracies. They put their trust in specific individuals. Voters invest these representatives with the aura of infallibility whenever they do not understand what these representatives actually do. This is rational. Voters need to hold someone responsible. It is far easier to hold an individual responsible than a committee. In good times, the recipients of the public's trust rejoice. In bad times, they point the finger of blame elsewhere. Or they retire. The day Greenspan dies or retires, you won't want to be in the stock market. A DELIBERATE MYSTERY Voters do not understand central banking. Most of them could not identify the Federal Reserve System, even if you showed them "Diehard 3." If you were to read the questions that Congressmen -- Ron Paul excepted -- and Senators ask Greenspan, and his answers that they accept as meaningful, you would begin to understand that they have little idea what the Federal Reserve System can do or has done. The public cannot be expected to understand the intricacies of economics. That voters do not understand the Federal Reserve System is understandable. Almost two decades ago, the mainstream book publisher, Praeger, published a book with the provocative title, THE FEDERAL RESERVE SYSTEM: AN INTENTIONAL MYSTERY. The system was designed in 1910 at a secret meeting of bankers and Senator Nelson Aldrich -- Nelson Aldrich Rockefeller's grandfather -- on a first-names-only basis, just in case of courtroom or Congressional testimony under oath later on. It was held on an island off the coast of Georgia, an island owned by J. P. Morgan, William Rockefeller (John D.'s banker brother), and their business associates. The FED was designed to deceive politicians, which it did. Even the anti-gold, anti-bank, anti-Establishment radical Democrat, William Jennings Bryan, was conned into supporting the Federal Reserve Act of 1913, when he was Secretary of State under Wilson. Wilson's son-in-law, Secretary of the Treasury McAdoo, fooled the Great Commoner into thinking the FED was anti-New York banking! All over the industrial world, people have trusted their futures to central bankers and politicians who officially regulate central banking, but who rarely do. People hope for the best. They trust that the experts know what they are doing. Hundreds of millions of people have placed their trust in self-interested men who have been received from national governments a grant of sovereignty, not just an economic monopoly. These men are seen as being wiser than the free market and more honorable in profiting from this unique grant of sovereignty. An elite group of salaried academic economists and monopoly-possessing businessmen, who cannot easily be fired for poor performance, are regarded by the public and the politicians as possessing greater insight into supply and demand than the combined knowledge of the world's capital markets, whose investors have their own money at risk. This is one more example of the truth that most people really don't understand the logic of the free market or how the free market works in practice. This includes people who call themselves free market economists. CONCLUSION When gold's price rises, and when a currency unit falls in relation to gold and other currency units, those who rely on that currency unit for their very lives are tempted to shift their trust elsewhere. This is bad news for politicians and central bankers. In an economic crisis, politicians will not accept any responsibility for failure. They never do. They will eventually blame the Federal Reserve System. They will be correct to do so. People have to decide whom to trust. I trusted that physician. I had little choice. I trust the FED, too. I have no choice. They run the only game in town. I trust the FED's tenured agents to seek profits by not collapsing the economy. But I always place limits on this trust. I do not believe that monopolists are as wise as participants in the capital markets. So, I do not trust the FED with everything I own. I also do not trust Social Security's promises. I do not intend to retire. I believe that a crisis of public trust is brewing. Voters will not know exactly what went wrong with the economy after a payments crisis hits, but they will know that something surely went wrong. They will demand wild, impossible political solutions. They will insist that they get paid. No matter how little the dollar is worth, they will insist on payment. They have bet everything on the flow of funds. I mean everything. If you entrust your economic future to self-interested monopolists who promise prosperity based on statistical falsehoods, you will find it difficult to think straight. Investors in gold today are few and far between. But, as more people's faith in the spinners of statistically impossible dreams begins to wane, there will be a search for other things to trust in, other promises to trust in. Most investors will cling to false promises for too long. But a few will put their money where their dreams are. Put some of your dreams in places that do not rely on the continuing wisdom of tenured bureaucrats with a monopoly over money. * * * * * * * * * * * * * * * * * * * * * * * * * * * * From hliu at mindspring.com Wed Jun 19 15:03:32 2002 From: hliu at mindspring.com (Henry C.K. Liu) Date: Wed, 19 Jun 2002 17:03:32 -0400 Subject: [A-List] Trade, Markets and Development Message-ID: <3D10F1A3.8605B65D@mindspring.com> Trade, development and 'monstrous' markets By Henry C K Liu An economy is a comprehensive and complex entity of which trade is only one sector. Yet nowadays, neoliberal economists and policy-makers tend to view trade as the economy itself, downplaying the importance of the public sector and other non-market social sectors of the economy. Neoliberals promote market fundamentalism as the sole, indispensable path for economic development, despite the fact that data of the past decade have shown that trade tends to distort balanced development in a way that hurts not only the less developed, but the developed economies as well. Currently, in the United States, the mecca of free-market entrepreneurism, the statist sectors - government spending, health care, social and education services and defense - are keeping the economy afloat, while finance, entrepreneurial ventures and high-tech manufacturing languish in extended doldrums. Unregulated markets lead naturally to the emergence of monopolistic enterprises. Thus "free" markets are inherently self-destructive of their own freedom. Free markets depend on enlightened statism to remain free. Unregulated labor markets lead to slavery. For many human social activities, the market has no positive function. Free markets for human relationships, for example, lead to prostitution. Free markets in power breed corruption. Socio-economic Darwinism will eventually deplete the economic food chain: the fittest cannot survive when all the weak that the strong need to exploit in order to survive disappear. Government, from monarchy to democracy, exists solely to protect the weak from the strong. Globalization since the end of the Cold War has been viewed increasingly as neo-imperialism by many even outside of the radical left. This view is amply supported by field data. It has become obvious to many in both developed economies and emerging markets that the undervaluation of labor is indispensable for the creation of surplus value that economists call capital. This capital then must seek new investment opportunities in less developed economies where labor is even cheaper. The investment opportunities of this adventure capital point not to the beneficial development of the less developed economies. This capital seeks higher return than it could get at home for the benefit of its owners by exploiting even cheaper labor overseas. Capital has acquired enormous market power for the suppression of the value of labor both at home and abroad. Neoliberals rationalize that globalization, while undeniably exploitative, nevertheless produces tangible collateral benefits, even to the exploited. The infamous Lawrence Summers World Bank memo, in which he, as chief economist, argued that the export of pollution to poor countries represented "immaculate" economic logic because Third World lives were worth less, is a classic example of warped neoliberal mentality. This neoliberal approach of course was the same argument presented by the defenders of 19th-century imperialism in which moral rationalization was used to justify economic exploitation. Neoliberal values, namely capitalistic democracy and market fundamentalism, become the new smiling mask for economic exploitation not different from the "white man's burden" of 19th-century Eurocentrism. The recurring financial crises associated with financial globalization in the past two decades have revived economic nationalism worldwide with parallels to the political nationalism against imperialism of the previous century. John Atkinson Hobson (1858-1940), an English economist, wrote in 1902 one the most insightful critiques of the economic basis of imperialism. Hobson provided a humanist criticism of classical economics, rejecting exclusively materialistic definitions of value. With A F Mummery, he developed the theory of oversaving that was given a generous tribute by John Maynard Keynes. Hobson's second major contribution was his analysis of capitalism on which Lenin drew freely to formulate the theory of imperialism as the highest stage of capitalism. "Imperialism is capitalism at that stage of development at which the dominance of monopolies and finance capitalism is established; in which the export of capital has acquired pronounced importance; in which the division of the world among the international trusts has begun, in which the division of all territories of the globe among the biggest capitalist powers has been completed." (Vladimir Ilyich Lenin, 1870-1924, Imperialism, the Highest Stage of Capitalism, Chapter 7 - 1916) Thus until the Cold War, practically all anti-imperialist movements were also anti-capitalist. Hobson did not touch on the economics of environmental pollution associated with globalization. For all the evils of 19th-century imperialism, environmental pollution was not one of them. Critics of globalization, from the left to the right, have focused on four issues: 1) labor standards, 2) corporatism, 3) environmental abuse and 4) global financial architecture. A new focus on Hobson's ideas may yield useful insights in the current debate on globalization economics. Specifically, Hobson's view of the economic system from the standpoint of human values is worth discussing. Hobson believed that the contradictions of production and consumption, cost and utility, physical and spiritual welfare, individual and social welfare, all find their likeliest mode of reconciliation and of harmony in the treatment of global society as an organism, and not as a collection of competing economies in the market arena. Karl Polanyi is also worth a revisit in this hour of self-induced imminent collapse of the globalized market economy. The principal theme of his Origins of Our Time: The Great Transformation (1945) was that the world market economy in effect collapsed in the 1930s. Yet this familiar system was of very recent origin and had emerged fully formed only as recently as the 19th century, in conjunction with capitalistic industrialization. The current globalization of markets following the fall of the the Soviet bloc is also of recent post-Cold War origin, in conjunction with the advent of the information age and finance capitalism. Prior to the coming of capitalistic industrialization, the market played only a minor part in the economic life of societies. Even where market places could be seen to be operating, they were peripheral to the main economic organization and activity of society. Polanyi argued that in modern market economies, the needs of the market determined social behavior, whereas in pre-industrial and primitive economies the needs of society determined economic behavior. Polanyi reintroduced the concepts of reciprocity and redistribution in human relationships. Reciprocity implies that people produce the goods and services they are best at producing, and share them with others with joy. This is reciprocated by others who are good at producing other goods and services. There is an unspoken agreement that all would produce that which they could do best and mutually share and share alike, not just sold to the highest bidder. All find their fulfillment in separate productive livelihoods. The motivation to produce and share is not personal profit, but personal fulfillment, and avoidance of social contempt, ostracism, and loss of social prestige and standing. This motivation is still fundamental in finance capitalism, with the emphasis on accumulating the most financial wealth, which is accorded the highest social prestige. The annual report on the world's richest 100 as celebrities by Forbes is a clear evidence of this. The opinion of figures such as Bill Gates and Warren Buffet are regularly sought by the media on matters beyond finance, as if the possession of money itself represents a diploma of wisdom. Edward Luttwak explains in his recent book Turbo Capitalism, "Super-winners are not only respected and admired for what they do but also for what they know, or rather for what it is assumed they must know. They are often asked to pronounce on the great questions of the day, even those far removed from their fields of competence. During 1997, for example, both the champion software marketeer Bill Gates and the champion currency speculator George Soros were constantly and respectfully cited in the American media on a great variety of subjects, including public education and the control of narcotics. Their interviewers assumed as a matter of course that the extent of their wisdom corresponds to the size of their incomes. Far from being condemned for greed, winners are held in the highest regard, and the greatest winners of all have almost an odor of sanctity." Many religions consider the attitude toward money as often more indicative of a person's true worth than the mere possession of it. The same might be even more true for societies. This explains why modern societies, whose members would be obsessed with a single-minded quest for material wealth, would be constantly faced with recurring crises of values. The pursuit of maximization of wealth leads inevitably to the betrayal of human values that would otherwise forbid unconscionable exploitation of and impersonal disregard for others. Maximization breeds abuse. The Confucian doctrine of the Path of the Golden Mean (Zhongyong Zhi Dao), a concept of avoiding excesses, is instructive on this point. More is not necessarily better; most is seldom best, and best is the mortal enemy of good, as Voltaire has insightfully pointed out. A rich man amid masses of poverty will not find himself a paradise on Earth. A society that celebrates only the best will waste the good. The relentless pursuit of absolute beauty will result in ugliness, which explains why the art world is often infested with revolting characters. The fact that the historical record of socialist politics is littered with betrayals of the humane ideals of theoretical socialism should not diminish the valor of those who have placed their hopes on the noble vision, just as the materialistic efficiency of unregulated market capitalism is no testimony on the moral validity of greed. It is telling in the manner neo-classical economics treats the trade-off between return on capital and compensation for labor. An increase in return on capital is viewed as economic growth, while a rise in pay for workers is viewed as non-productive inflation. What moral rules enable the pampered corporate executive to receive a generous bonus for abruptly firing thousands of workers in a recession? Maximization of shareholder value through cost reduction is just a euphemism for robbing workers to enrich the owners. It is a very sick society that views as progress the depreciation of human workers in favor of the maximization of appreciation of material assets. In a money economy, it is a basic truism that only those who have money can pay the bills at the end. If all are to pay their share, ways must be found for all to earn sufficient money to participate constructively on a healthy financial level, without permanent subsidy from the economic order to which the poor have become burdensome wards. In a bountiful world, poverty is seldom caused by someone else's needing more than others. This is particularly true in a society in which both greed and envy are constrained by moral precepts. One does not have to be one of the world's richest men in order to avoid feeling poor. Poverty is the result of underdevelopment in relation to the production and consumption norms in a particular socio-economic order. A case can be made that poverty is a byproduct of the institution of money, with which poverty is often measured. It is the quest for accumulation of money as capital that requires the exploitation of humans at levels that produce poverty. It is only when some singular segment of society fails extensively to receive sufficient economic opportunity, or sufficient value for its labor to maintain its fair share of consumption, as normatively prescribed in the socio-economic order, that poverty is born. Social cohesion will be threatened when poverty is perceived as the result of institutionalized maldistribution of wealth, reflecting unfairness in the sharing of the fruits of co-operative endeavor among different socio-economic groups. Poverty, however, cannot be defined by absolute income levels alone, because poverty is actually a social problem with an economic dimension. It is only because it is most conveniently recognizable in a money-based economy by its financial aspect that poverty is often mistaken as a simple matter of income deficiency. Poverty is in reality a phenomenon of social despair. The habitually unemployed, the unemployable, the underemployed and the working poor in developed countries have higher absolute incomes or public assistance payments than the middle class in other less developed countries, whose members nevertheless do not consider themselves poor because they have not lost hope in themselves or self-respect for their own lot. Poverty is a symptom of economic inefficiency and social dislocation in society. Its existence in an economy hurts the rich as well as the poor, and its pervasiveness in society alienates its members from one another. Aside from being dehumanizing to those suffering from it, it is destructive to the society tolerating it. Poverty becomes a political issue when the poor are structurally excluded from contributing to the economic process at levels that enable its constituents to support a dignified life in a healthy environment consistent with the cultural traditions of their society. While there may always be those who enjoy higher income than others, there is no socio-economic necessity for the poor to exist. Thus when Ronald Reagan, leader of the free world, proclaimed that there would always be poor people, he was defaulting on the responsibility of political leadership. Life without growth will become a zero-sum game in which winners will gain only from the losers. In such a game, eventually all would lose because of the game's self-terminating nature. Wealth redistribution without growth always leads to social conflicts, the final phase of which is generally settled with violence, the organized form of which is war and the unorganized form is terrorism, and the end game is revolution. But growth cannot be defined simply in quantitative terms. Quality of life and the range of available options are often more revealing measures. Chinese society during the early part of the Tang Dynasty (618-907), the golden age of Chinese civilization, was fortunate in that its economy enjoyed long periods of continuous growth. Along with material growth, cultural development and social mobility also accelerated. Poverty in the form of pathological social despair was not prevalent in Tang time. To be sure, there were severe hardship and upheavals caused by war, particularly in the border regions, by policy errors and religious fanaticism, by natural disasters and even by personal misfortune. There were also recurring incidents of governmental abuse and corruption. There were periodic regional famines caused by natural calamities exacerbated by inadequate transportation, despite government-sponsored relief efforts. But these events were generally perceived by people as transient anomalies or force majeure, and not as structural defects of the social system. In other words, such calamities were caused by nature or personal failings of the individuals who ran the system rather than shortcomings of the social order itself. People readily accepted periodic disasters, the prevention of which was beyond the people's expectation of the scope and ability of the political system. However, the occurrences of natural disasters were sometimes interpreted as retribution for the immoral behavior of the ruling sovereign. This connection between the moral image of the sovereign and the fortune of the empire required the ruler to ensure the well-being of the people, not just the efficient operation of the market. The flowering of Tang culture has its roots in the high quality of life enjoyed by all its citizens, regardless of their social positions and income levels, and the high standard of the efforts of their labor, manual or intellectual, regardless of their commercial values. Since money was only one of the determinants of a good life rather than the all-consuming ingredient, the pleasures of life were not denied to those who did not aspire to financial wealth, or those who were unable to achieve it because they did not care to surrender to society's financial rules. The inner peace preached by Taoist and Buddhist precepts were verifiable by the individual's direct personal experience in the socio-economic realm of the Tang era. The rejection of materialistic concerns did not necessarily reduce one to abject poverty, nor earned society's scorn. On the contrary, hermits were respected by society and donations toward their upkeep were considered as enlightened expressions of the donors' own sagacious insight rather than ostentatious acts of charity. The "Selected Biographies" (Lie Zhuan) section of the Old Book on Tang (Jiu Tang Shu), compiled in 945 by court historiographers, contains a chapter on hermits, with 21 entries, prefaced by a statement that the cultivation of hermitage traditionally encourages the virtue of humility and self-restraint while discouraging vulgar trends of competition and greed, although its Confucian authors failed to address the irony that a celebrated hermit is an oxymoron. Generally, an imbalance existed between donors and recipients, the number wishing to give frequently exceeding the number prepared to receive. Whenever a seng (Buddhist monk) or a dao'shi (Taoist priest) or a wandering free spirit should show up in a village, his presence would be celebrated by an spontaneous outpouring of generous giving by the villagers that would resemble an instant festival. Even in modern time, sengs in Southeast Asia still receive daily meals by simply walking through villages, without begging, while the pious lay population awaits their habitual schedule with the finest food in the house ready to give with eagerness, the way bird-lovers feed their ornithic idols. Presumably examples of this kind of non-monetary behavior would be village communities where men made hunting parties and women grew vegetables and tended to children. No money changed hands but all contributed according to their abilities to the common welfare, and all shared according to their needs. The family structure in modern societies, while under constant financial attack, is still precariously based on non-monetary bonds. Families still do not trade their children the way professional sport teams trade valuable players. The widespread bending of free-market regulations and peer pressure to rules of behavior against predatory trading on Wall Street in the days following September 11 also highlighted this motivation. Redistribution is involved where a chief gathers together a harvest into safe storage, then redistributes it to members of his group by holding communal feasts and festivals. This serves both to share the communal wealth fairly, and also to reinforce the social structure, allocation indicating status and importance. These festivals may also be used to reinforce relationships with neighboring tribes, and the store may be used to supply the community's warriors if circumstances require. Polanyi recognized that marketplaces existed in ancient times, and were present in primitive economies, but he argued that they existed within a context of reciprocity. Money was often present, but it was unimportant, and also operated within the context of reciprocity. Often, money was used to settle the difference of value between exchange of goods. These money-using daily markets were merely convenient localized exchange places operating within the broad system of reciprocity. There were also marketplaces for long-distance trade, such as ports. But these were only for items which could not be obtained within the area, and therefore could not be provided within the local system of reciprocity. Ancient and primitive economies had marketplaces but they were not market economies. They were embedded economies. According to Polanyi, a market economy is an economic system controlled by prices, these prices determining how much is produced, and how what is produced is distributed. Social considerations have no part in this system. Money exists, which serves as purchasing power and enables its possessors to acquire goods and services, which are priced in money terms. People are motivated to acquire money with which they can then purchase whatever they want, often including political influence or privileges above the law. Polanyi believed this monetary-based market economy sprang suddenly into existence in the 19th century, thrusting aside the old systems based on reciprocity and redistribution. "The outstanding discovery of recent historical and anthropological research is that man's economy, as a rule, is submerged in his social relationships. He does not act so as to safeguard his individual interests in the possession of material goods; he acts as to safeguard his social standing, his social claims, his social assets. He values material goods only in so far as they serve this end." (Polanyi 1945). Of course, in a culture that celebrates wealth accumulation for its own sake, people will work to accumulate wealth. Napoleon belittled Britain as a nation of shopkeepers. Polanyi challenged Adam Smith, who suggested that the division of labor depended upon the existence of the market, or upon man's "propensity to barter, truck and exchange one thing for another", because the market economy had not appeared to much extent in Smith's time. Even where it had appeared, it was a subordinate feature of economic life. In his Trade and Market in the Early Empires, Polanyi wrote, "What is to be done, though, when it appears that some economies have operated on altogether different principles, showing a widespread use of money, and far-flung trading activities, yet no evidence of markets or gain made on buying or selling? It is then that we must re-examine our notions of the economy." Polanyi wrote on the formal and substantive meanings of the term "economic". This distinguishes the methodology of economics from that of economic anthropology. He argued that economics as we know it depended on "formal" principles. Thus a set of allegedly self-evident assumptions are made, which become premises used as the basis for a sequence of logical deductions to a set of irrefutable conclusions. Thus one can take Smith's statement about man's "propensity to barter, truck and exchange one thing for another" and develop it to show how money and markets came into being, and how they led in turn to specialization of function, and increased productivity. But the method of economic anthropology was "substantive" and depended upon empirical observation from which principles of economic behavior were induced from perceived evidence. Societies are first observed and the principles of their economic activity recognized from their actual behavior. Polanyi's claim is that the empirical observations of the substantivists reveal economic life in archaic and primitive economies to be entirely different from that assumed by the formalists. The McCarthy-era witch-hunt left an intellectual aversion to Marxism in the US that Polanyi conveniently filled because of his broadly socialist perspective. Utilitarian ethics presumes that moral discussion originates from the point of view of the individual ego. It consequently construes all values as personal possessions. Christianity, Islam, Buddhism, Confucianism, Marxism and other similarly comprehensive outlooks believe that utilitarianism is mistaken in this. These outlooks begin by recognizing that individuals do not atomically exist: "The real nature of man is the totality of social relations," as Karl Marx asserts. Hence values are social and cannot be adequately defined by an inventory of personal possessions. Quality of life cannot be measured by a bank account or by similarly assessing personal possessions, including, perhaps, how a person is progressing in his or her self-chosen life purpose. Somehow the public dimension must also be assessed, not as utilitarians would do this - to reduce obstacles to private projects - but in the sense of measuring dedication to a goal, such as justice, or realization of other social values, such as brotherly love. The issue of wages is a serious one in market economics. The suppression of normal wage rises from truly free-market forces is accomplished by government anti-inflation policies based on a "natural" rate of unemployment - what economists call non-accelerating inflation rate of unemployment (NAIRU). American writers such as Henry Demarest Lloyd (Wealth Against Commonwealth), Ida M Tarbell (History of The Standard Oil Company), and Lincoln Stephen (The Shame of The Cities) exposed the inequity to herald the rebirth of American populism in early 20th century. In 1912, a third political party came into existence in the US, known as Progressives. In response, monopolists rallied around Herbert Spencer's Social Darwinism of "survival of the fittest". The problem of Social Darwinism is that all workers will eventually die off and the rich would have to wash their own dishes, a fate the rich avoid by keeping the unfit surviving at subsistence. Social Darwinism went out of fashion in the US in the 1920s, defeated by undeniable socio-economic litters of its failure, but conservatives found a new line of defense against organizing the economy for collective benefits. They argued that while the aim was desirable, the task was beyond human capacity and that even if doable, the direction was alien to American values. The October Revolution gave this line of argument substance. If Russia had it, Americans did not want it, despite the fact that much of the economic planning by the early USSR was copied from highly successful US war planning efforts. During World War I, while money wages increased all around, the lower wages increased more than the cost the living. Labor benefited from full employment. The railroads, shipping and shipbuilding were taken over by government, resulting in huge increases in productivity. The same happened after World War II. The theory of rising wages asserts that employers should understand that rising wages are the only venue of assuring strong demand for their products, supported by the theory of technology-driven productivity increases, and the broad-based ownership of securities to spread wealth. The historical data show that the largest average increases in purchasing power have taken place at recession times when employers and bankers tried their best to keep wages down, but the stickiness of wages made wage deflation slower that price deflation, as in the 1920-22 depression. The result was that when full employment returned in 1923, US workers had higher purchasing power than they had in 1920. But average manufacturing worker's yearly income decreased by $55 between 1923 and 1928, a miner's income by $187. Falling wages amid prosperity was a major structural cause, albeit little noticed, of the 1929 crash. If wages had been higher, equity prices would not have risen as much, thus dampening the speculative fever. Wealth effects from the speculative boom made low wages tolerable and caused a corresponding rise in debt without altering prudential debt to equity ratios. But when the speculative bubble burst, debt-equity ratios skyrocketed and there were insufficient wage levels to sustain consumption. Similar conditions appear to be facing the US economy now. After the 1929 crash, the economic downward spiral was caused mainly by falling wages. Despite all promises of maintaining production, goods could not be sold as fast as they were produced because of a collapse of income due to layoffs and wage reductions. Globalization in the past two decades temporarily kept US purchasing power increasing despite a slow growth of domestic wages. This resulted from still lower wages in the emerging markets. Now the world is awash with overcapacity in relations to low demand caused by insufficient wage levels. For the past three years, China is the only nation that has adopted a wage policy to stimulate domestic demand, which has been largely responsible for China's continued growth in the face of global recession. The failed first Hoover Plan of holding the industrial status quo and injecting "confidence" was built on the theory that nothing much was fundamentally wrong and that what was needed was for everyone to go on as before. When this theory failed to arrest the downward spiral, US president Herbert Hoover shifted to a second phase, admitting that something was amiss, that in mysterious ways the system had gone off track, but the remedy was to let the excesses run their natural course without government interference. The economic system if left alone was deemed a self-compensating mechanism through market forces, and would eventually restore equilibrium. Wages should be allowed to sink, which would reduce costs and profit would return and give incentive for renewed production, which would create jobs, etc. No one asked how falling wages could promote sales and what good were low production costs without sales. This was the forerunner of supply-side economics, which even in the early phase of a boom would accelerate the downturn because it by design leaves demand behind supply - a classic case of increasing speculative risk for production in hope that demand will follow. Production in the absence of ready demand is pure speculative investing. It is suicide as a cure for a recession. Yet current policymakers in many countries subscribe to the same faulty theory, hoping for a "recovery" without having to correct structural defects of the system. The notion that market capitalism is superior as an economic system is only a recent invention. And its success in the past decade has been propped up by complex geopolitical factors. From the 1930s to the 1950s, the US in fact adopted many aspects of the Soviet model of planned economy. In 1931, a book about Russian planning, New Russia's Primer by M Ilin, was one of the more popular monthly choices in the Book of the Month Club. Stuart Chase, an economist at the Massachusetts Institute of Technology (MIT), proposed a Peace Industries Board as a successor of the War Industries Board of 1918 and historian Charles Beard suggested a National Economic Council to organize industrial syndicates regulated under the theory of public-utility control and supplemented by planning agencies for agriculture, public works, foreign trade and the rebuilding of cities. A committee of the National Progressive Conference in 1931 published a memo on "Long Range Planning for the Stabilization of Industry". Schemes for planning by separate autonomous industries according to the principles of trade associations or cartel came from many business sources, from Gerald Swope of GE and even the US Chamber of Commerce. National planning was the mantra of the day. The National Bureau of Economic Research put together the figures that came to be known today as GNP (gross national product), NNI (net national income) and other indices. The growth of US higher education was a centrally planned affair. The Federal Reserve Bulletin on money credit and industrial production was issued for the purpose of planning. The profession of economics itself grew up in the US under the aegis of planning. Hoover was also a planner. He attempted to save capitalism through government planning by abandoning laissez faire and threw government credit into the breach to protect the great capital hoard from the onslaught of deflation, not unlike what US Federal Reserve chairman Alan Greenspan is trying to do to prop up the over-valued equity markets today. Hoover, while in the name of laissez faire vetoing government measures to help the unemployed, was at the same time unleashing government to interfere with the free play of market forces to protect the centers of economic power. The net result was history. Not until president Franklin D Roosevelt adopted Keynesian and many so-called socialist measures of demand management did the US economy stir, and it remains controversial today whether a Keynesian program could have succeeded without World War II. The RFC (Reconstruction Finance Corp) was established at the end of 1931 to prevent pending bankruptcies by lending government guaranteed funds raised from tax-free debentures ($1.5 billion) to banks and business corporations that were frozen out of the credit market - and the loans were even kept secret to protect the credit ratings of the corporate borrowers. Its original two-year temporary life was extended to well beyond the end of World War II, until 1950, financing war expenditure in the interim. The planned economy did not came under attack in the US until well into the final phase of the Cold War, with the rise of supply-side economics in the late 1970s. Warren Nutter made a well-known study in 1962 for the National Bureau of Economic Research: The Growth of Industrial Production in the Soviet Union. It estimated the percentage of planned output achieved by important industries at the end of successive five-year plans, in "value-added" terms. The first five-year plan (1928-32) achieved 75 percent of its target, the second (1932-37), 76 percent. The plan ending in 1950 achieved 94 percent and 1955 achieved 99 percent. The area of trouble in Soviet planning was in agriculture, not so much in the state farms but in the collective farms made of small farmers. The knotty problem of reward and incentive in collective enterprise has yet to be solved by human ingenuity. The same was also true in China. When China abandoned collective farming, the agricultural problem also eased. Even in the US, free-market principles never touched agriculture, which has remained a fortress of government subsidy. The Agenbeguan report, published on July 9, 1965, in the New Statesmen, gave a revealing assessment of the Soviet economy as still backward in industrial production compared with other developed economies, even though Russia had come from a lower base. The USSR had as many machine tools as the US, but some 50 percent of them were in constant repair. Production was siphoned off to maintenance. The report proposed a form of just-in-time inventory (in 1965!). And the agricultural problem had not been solved (and would not be solved by the end of the USSR and is still not solved today). The report focused also on rising unemployment, which had been denied in official figures. The report identified the defense sector as the cause of these problems. It was a direct attack on incompetent management disguised as planning. This is an important point. The US excels in corporate and strategic planning, despite the myth of free enterprise and competition. The Soviets erred by neglecting the science of management and suffered from both excessive centralization and excessive democracy at the operational level. Workers could not be fired or laid off by mangers and were not particularly obliged to carry out instructions, on the ground of political equality. China was faced with the same problem with its copying of the Soviet model, which Chinese planners did not correct until after 1978. In management terms, production increased in the Chinese economy when management was given more autocratic power, not less, despite Western wishful thinking. General Motors was not run by democracy. There is no democracy in the corporate organizational structure or governance, power being vested in the number of shares rather than the corporate population. In fact, the American managers in the GM joint-venture operation in Shanghai repeatedly complained openly about increasing Chinese political liberalization and its damaging effect on productivity. They longed for a return of the good old days when the Communist Party commissar called all the shots and problems could be solved by getting the approval of a few powerful persons rather than endless levels of power centers. The Central Intelligence Agency never predicted the collapse of the USSR, especially from structural economic shortcomings. There is a fundamental relationship between wages and prices. Pricing policies of firms as they are actually practiced in the real world, both by cartels such as the Organization of Petroleum Exporting Countries (OPEC), and by market leaders in pharmaceuticals, software, communication and by commodity producers, have one thing in common. Pricing policies across all these different economic sectors are predicated on the proposition that price is seldom, if ever, set by the intersection of supply and demand, as neo-classical economics textbooks teach. The bottom line is that price determined not by supply and demand but by strategies that aim at optimizing the long-term value of assets and political power. OPEC pricing is a good example. Throughout the history of oil, price has been set by highly complex considerations and supply has always been adjusted to maintain the set price. In pharmaceuticals, price is set neither by cost nor demand. The pricing model of any new drug aims at achieving maximum lifetime value of the drug that has very little to do with current supply and demand. Microsoft's pricing model for Windows has nothing to do with supply and demand, or marginal costs, which are close to zero. Telephone charges are similarly disconnected from supply and demand, or marginal costs. Even in the auto industry, the dinosaur of the old economy, where cost input is high and discounted return on capital low, pricing is based more on complex considerations than demand. With 80 percent of autos financed or leased, subsidy of financing costs is the name of the game, not sticker price. Farm commodities prices are definitely not set by the intersection of supply and demand. They are set artificially high by political considerations by practically all producer governments; and both supply and demand are artificially distorted to maintain the politically set price. The general consensus of mainstream economists on the global steel overcapacity problem is to reduce capacity, not to let prices fall. The Bank of Sweden Prize in Economic Sciences (Nobel Prize) was awarded to Joseph Stiglitz, George Akerlof and A Michael Spence for "their analyses of markets with asymmetric information". In his acceptance press conference, Stiglitz said, "Market economies are characterized by a high degree of imperfections." Price in fact is the most manipulated component in trade. That is the fundamental flaw of market fundamentalism. Friedrich Hayek's rejection of socialist thinking is based on his view that prices are an instrument of communication and guidance, which embodies more information than each market participant individually processes. To Hayek, it is impossible to bring about the same price-based order based on the division of labor by any other means. Similarly, the distribution of incomes based on a vague concept of merit or need is impossible. Prices, including the price of labor, are needed to direct people to go where they can do the most good. The only effective distribution is one derived from market principles. On that basis, Hayek intellectually rejects socialism. The only trouble with this view is that Hayek's notion of price is a romantic illusion and nowhere practiced. That was how the native Americans sold Manhattan to the Dutch for a handful of beads. In Hayek's social philosophy, value and merit are and ought to be two distinctly separate issues. Individuals should be remunerated purely on the basis of value and not in accordance with any concept of justice, whether it be the Puritan ethic or egalitarianism. Hayek went so far as to deny that the concept of social justice had any meaning whatever, on the basis that justice refers to rules of individual conduct. Since no rules of the conduct of individuals can determine how the good things of life should be distributed, the question of justice is moot. Since a free market is the natural outcome of a multitude of individual decisions, how the market decides is amoral. Yet basic human needs such as safe shelter, food, health care and education are not distributional issues. The world's economy can supply every human being with adequate needs, but for the "market". But according to Hayek, a spontaneously working market, where prices act as guides to action, cannot take account of what people need or deserve, because it operates according to a neutral distribution system that nobody has designed. Such a distribution system cannot be just or unjust. And the idea that things ought to be designed in a "just" manner means, in effect, that one must abandon the market and turn to a planned economy in which somebody decides how much each ought to have. And the price for that justice is the complete abolition of personal liberty. So, in the name of liberty, the world is forced to go hungry while economies suffer overcapacity. Hayek's free-market ideas have been applied to much of unregulated globalization in recent decades, and the socio-economic damage is now very visible. Not withstanding Hayek's repugnant social philosophy, even his "scientific" claims on the effectiveness of free markets has not been substantiated by events. A transaction requires a buyer and a seller at a price. It is easier for a camel to go through the eye of a needle than for both buyer and seller to be satisfied with any given price. One side of a "win-win" transaction is always an idiot. All economies are planned. Some are planned through "market" mechanism in order to deny societal values, while others are planned according to societal values. Demand, in the sense neo-classical economists use the term, has to do with untainted market forces. Yet the manipulation of demand against market forces is widely practiced. It is intervention against "free" markets. Free marketeers consider the unseen hand of government as intervention, but the unseen hand of price setters as a cannon of natural laws. What about supply? Neo-classical economists do not propose supply curves for non-competitive markets. However, supply curves in competitive markets are just cost summaries, and every firm has a cost structure. So in that sense, the supply considerations are also completely relevant. Supply and demand are two sides of the same coin and in fact quite inseparable. In pharmaceuticals, demand is related to the illness, not the availability of drugs. Many useless drugs are marketed and sold with proper warnings, often at great profit (a perverse version of Say's law - supply creates its own demand). Addiction to cigarette smoking creates demand that leads to supply in the form of tobacco production, which for centuries received government subsidy in tobacco farming. Smoking causes cancer. The tobacco industry contributes to cancer research on cure but not on prevention, because the hope of a cure for cancer will neutralize the great threat to the future of the tobacco industry, while prevention directly threatens the industry. Now, all that eventually comes out of the wash in cigarette pricing models. Take the case of drugs for AIDS. There is an intense debate going on regarding the pricing and availability of "promising" drugs for human immunodeficiency virus (HIV) infections. And the drugs are not available for those who need them most, nor in areas that need them most to reduce HIV's spread, but to those who most are able to pay for it or who are adequately covered by health insurance. It's time for a fundamental rethink of the theology of supply and demand and the function of price in so-called free markets. To start with, all markets are coercive, participants are seldom, if ever, free to act, but are compelled to act, with very little room to reduce their individual disadvantages. The law governing markets is power, with government, being as institution endowed with the most power, always the most influential participant. Some governments choose to control the market indirectly while other choose to control it directly. All governments reserve the right to set the rules of the market. Some governments subscribe to ideologies that tilt toward equalization in the name of fairness, while others subscribe to ideologies that tilt toward hierarchy in the name of efficiency. These rules predetermine the winners and losers, while the average market participant innocently hangs on to the Horatio Alger myth. Friedrich List, in his National System of Political Economy (1841), asserts that political economy as espoused in England, far from being a valid science universally, was merely British national opinion, suited only to English historical conditions. List's institutional school of economics asserts that the doctrine of free trade was devised to keep England rich and powerful at the expense of its trading partners and it must be fought with protective tariffs and other protective devises of economic nationalism by the weaker countries. Henry Clay's "American system" was a national system of political economy. Market fundamentalism has wrecked economies all around the world. Yet neo-liberals continue to promote the false hope that the market will save the world from the onslaught of a severe depression. It is time to rein in this monstrous institution known as the market and to plan rationally for human development. Henry C K Liu is chairman of the New York-based Liu Investment Group. (?2002 Asia Times Online Co, Ltd. All rights reserved. -------------- next part -------------- A non-text attachment was scrubbed... Name: not available Type: text/html Size: 48228 bytes Desc: not available URL: From rschaap at iprimus.com.au Fri Jun 21 09:33:52 2002 From: rschaap at iprimus.com.au (Rob Schaap) Date: Sat, 22 Jun 2002 01:33:52 +1000 Subject: [A-List] Betrayal of the Public Trust References: <00cb01c218ca$00ff7fc0$0100a8c0@igrushkii> Message-ID: <3D134761.45E446A@iprimus.com.au> G'day all, A coupla updates for Brazil-watchers. It's certainly spreading apace, I'm afraid. So what's the story on this da Silva character? Has he any chance of (a) winning the October election; (b) keeping the currency and interest rates under control if he goes the social welfare / pump-priming route, (c) staying alive? All this and Ronaldinho out of the semi-final, too ... Cheers, Rob. BLOOMBERG 06/20 23:03 Brazil's Companies Face Cash Crunch as Bonds, Currency Tumble By Charles Penty Sao Paulo, June 21 (Bloomberg) -- A credit squeeze in Brazil is forcing Blairo Maggi, president of Amaggi Exportacao e Importacao Ltda, to pay more to finance his next soybean crop. Maggi's predicament got worse yesterday after Brazilian bond yields jumped to a three-year high, underscoring an erosion of investor confidence in the ability of the government and companies to pay their debts. While Maggi said he's protected because of dollar revenue from exports, the market turmoil has left many corporate borrowers in Brazil worried. ``It makes life difficult for the Brazilian businessman,'' said Maggi, nicknamed the ``Soy King,'' whose company is in talks to pay about 0.6 percentage point more for a one-year, $70 million loan from Standard Chartered Plc than it did last year. The exporter that ships beans along the Amazon is one of the lucky ones. Power generator Cia Energetica de Sao Paulo needs to come up with cash to meet investors' demands for early payment on $300 million of bonds next week, analysts said. The company raised $150 million by selling securities in February and plans to sell another 450 million reais ($160.5 million) of bonds. ``The question for Cesp is how are they going to get this money before they have to make this payment?'' said Roberto Kadlec, a corporate debt analyst at Bank of America Securities. Cesp President Guilherme Augusto Cirne de Toledo declined to comment. Argentina Fallout Lenders in Brazil tightened credit after neighboring Argentina stopped paying its debts in December, costing banks and investors billions of dollars of losses. Luiz Inacio Lula da Silva's lead in polls ahead of Brazil's October presidential election also has alarmed many investors, who are concerned the Worker's Party candidate may renegotiate Brazil's debt, increase spending and oppose sales of state assets to private owners. Lula has said his opponents are trying to frighten investors. ``It's a difficult combination with the election year and the most serious crisis of the last 20 years, which was Argentina,'' said Rodolfo Soares, director of the corporate desk at FleetBoston Financial Corp.'s Brazil unit, which has arranged two corporate loans in Brazil this year compared with 18 last year. ``We still don't know the outcome.'' The government has failed to stem a two-month drop in its currency and most actively traded bonds by securing $10 billion from the International Monetary Fund and promising to buy back a third of its debt due in 2003 and 2004. The price on the 8 percent bond due 2014 tumbled to below 60 cents on the dollar yesterday, its lowest level since just after Brazil devalued its currency in January 1999. At yesterday's offer price of 58.5, the bond yielded 20.3 percent, compared with 12 percent two months ago, according to J.P. Morgan Chase & Co. prices. Lending Shrinks Banks are scaling back lending to Brazilian companies by as much as 50 percent this year and charging more for the loans they make, bankers said. Many investors refuse to buy new corporate debt or are demanding early payment on bonds sold several years ago, exacerbating a cash crunch that analysts said threatens to deepen a recession that began in the first quarter. ``I would probably stay out if a Brazilian corporate sold debt,'' said Nicholas Field, who manages about $300 million for WestLB Asset Management in London. Brazilian companies may have as much as $16 billion of debt maturing this year. Companies excluding banks have about $2.8 billion of bonds and commercial paper coming due through December, of which about $500 million is covered, said Soares at FleetBoston. ``Some companies may have granted mandates to banks but not all these deals are necessarily going to get accomplished,'' he said. Banco Bradesco SA, Brazil's third-biggest bank, paid more to refinance only some of its $250 million of bonds that came due this week, in a transaction led by Bayerische Hypo-und Vereinsbank AG. Trade Finance The bank rolled over the trade financing portion -- or $150 million of one-year debt -- at 1.16 percentage points above the annual London interbank offered rate, said Jose Guilherme Lembi de Faria, the bank's international treasury director. The 12-month Libor rate is at about 2.32 percent. The rate on the new loan compares with 0.8 percentage point over Libor that the bank paid when it last refinanced the debt a year ago, de Faria said. Bradesco chose not to roll over the remaining $100 million that it would have lent on to companies because they no longer can afford to pay rates for dollar loans, de Faria said. Newspaper group Estado de S. Paulo, concerned it wouldn't be able to line up new financing to cover a $75 million bond payment, aims to call in the bonds and sell the securities to an international bank, said Finance Manager Raul Gama. ``There was no way we could keep these securities,'' he said. Copene Bonds The majority of holders of a $150 million bond sold by Copene SA, one of Brazil's largest chemical companies, have asked to receive repayment five years ahead of the June 25, 2007 maturity date, said Carlos Augusto de Oliveira Freitas, investor relations manager at the company's Salvador, Brazil headquarters. Investors are taking advantage of the so-called put options to sell bonds that are difficult to trade, and buy government bonds that are higher yielding. Some borrowers prepared themselves for the financing shortage. In May, Ultrapar Participacoes, parent of a heating fuel company, secured a $60 million two-year loan to help cover early payment on bonds sold in 1997, said Chief Financial Officer Fabio Schvartsman. The company is paying annual interest of 7.15 percent on the loan, compared with the 9 percent fixed rate on the original bond. Ultra wouldn't be able to do a similar transaction now, said Lucio de Moura Netto, international division director at Lloyds TSB Group Plc's Brazilian unit, which helped arrange the loan. ``What makes this crisis so difficult in Brazil is the lack of definition about how it's all going to turn out,'' said Cassio Gurjao, director of Standard Chartered Plc's Brazil unit. ``It's a difficult year.'' Reuters Friday, 21 June, 2002, 06:18 GMT 07:18 UK Brazil hit by debt downgrade The real has slumped in recent weeks Confidence in Brazil's economy was dealt a further blow when international credit rating agencies gave it a pessimistic bill of health. Credit rating agency Moody's - which assesses the ability of borrowers to repay their debt - cut its outlook on Brazilian government debt to "negative" and Fitch's downgraded its rating as well. Stocks tumbled and the currency, the real, slumped in value. Both agencies noted that the problem was a matter of sentiment: October elections could gift the presidency to a socialist, Lula da Silva, and that - they believe - could undermine investor confidence in the stability of Brazil's debt. Lower ratings effectively mean that borrowers have to pay higher interest rates - to compensate lenders for the perceived greater risk of default. All in all, the criticism was not the best of news in a fiercely superstitious country less than a day away from a key World Cup clash on Friday morning against England. Sentiment The government, unsurprisingly, played down the doubts. "The Brazilian economy is solid, democracy stable and we live in a climate of economic tranquillity," vice president Marcos Maciel told reporters. And analysts agreed that the country was being caught in the backwash of worries about emerging markets, rather than suffering because of real economic fundamentals. "The sensation is that market dynamics are starting to create credit dynamics, and not the other way around," said Mark Siegel, emerging markets fund manager at DL Babson & Co. "If that's the case, then Brazil's challenge will be harder to manage than most of the market is prepared for." New man Certainly the challenge looked genuine on Thursday, as the Rio stock market slid more than 5%, the worst one-day fall since 13 September. At the same time, the real slipped 7 centavos to close at 2.77, despite massive government intervention. And the yield on Brazil's government bonds - the premium promised buyers to persuade them to invest - shot up 10%. The market worry is that if Lula da Silva gets in October - and current polls show him with twice the 19% garnered by the government's candidate - renegotiation of Brazil's $90bn debt will be high on the agenda. "Renegotiation" is taken in some quarters to mean default, following eight years of heavy spending and a consequently ballooning deficit. From rschaap at iprimus.com.au Fri Jun 21 10:32:43 2002 From: rschaap at iprimus.com.au (Rob Schaap) Date: Sat, 22 Jun 2002 02:32:43 +1000 Subject: [A-List] A little more Cassandration References: <00cb01c218ca$00ff7fc0$0100a8c0@igrushkii> <3D134761.45E446A@iprimus.com.au> Message-ID: <3D13552C.8138DEC9@iprimus.com.au> Hi again, A particularly economistic Marxist might be examining her check-list with relish right now: Concentration of capitals tick Creation of the world market tick Rise on organic composition of capital tick Falling rate of profit tick Excess capacity in capital equipment sector tick Underconsumption tendencies tick Reduced rate of accumulation tick Rise in fictitious capital (share price > capital value) tick Increasing misery of proletariat in 'periphery' tick Increasing unemployment in periphery tick State legitimation crisis in periphery tick Class compromise collapsing in non-Anglo OECD countries tick I'm not nearly that economistic; seeing scared and hurting masses resorting to divisive atavism, seeing no particularly socialising trends to counter the privatisation of the world as yet, and anticipating a US on the economic precipice desperately investing all hope in recovery-by-arms. Nascent barbarism a short-priced favourite in the race with that scrawny socialism nag . We could write ourselves off before water crises and runaway warming do it for us. But mebbe I'm wrong. And mebbe reliable ol' Stephen Roach is, too. Any comments? Cheers, Rob. Global: Global Risks Are Mounting Stephen Roach (New York) Suddenly, the world is tipping again. Geopolitical tensions remain at the boiling point, and recovery in the global economy looks shaky, at best. Meanwhile, financial markets are seizing up in the industrial world, and crisis is the only word to describe conditions in Brazil that are rapidly spreading to other Latin currencies. All this is starting to seem reminiscent of the dark days of late 1998 and early 1999. Yet there?s one key difference: America is not in any position to save the day by administering the tonic of global healing that worked so well three years ago. That puts the global outlook in an exceedingly difficult light. The news flow on the state of the global economy is simply terrible these days. US consumption growth seems to have sagged through the critical 2% threshold in 2Q02 -- underscoring the distinct possibility that the over-extended American consumer may simply be incapable of carrying the global economy for much longer. French consumer spending plunged in May and Italian business confidence sagged appreciably in June. I am just back from nine days in Europe and I can assure you there?s nothing vibrant in Euroland these days -- work stoppages are mounting by the day and intra-EMU squabbling is on the rise. Nor are there any signs in Japan that that the 1Q02 growth pop is sustainable; a 1.5% plunge in its service economy in April (the so-called tertiary index) is painfully consistent with the caution that our Japan team has long expressed on the state of the real economy. Non-Japan Asia is also showing signs of running out of steam. Courtesy of a powerful US inventory dynamic, the region got off to a solid start early this year. But sustainable recovery in this still externally-led region needs more than just a US inventory cycle. The lack of follow-through on the final demand front remains especially worrisome in that regard. The recent cuts we have made in our global trade forecast for 2002-03 underscore those very concerns (see my 21 June Global Economic Forum dispatch, "Lowering Our Sights on Global Trade"). Korea stands largely alone in Asia in shifting its growth dynamic to domestic demand -- although Daniel Lian has stressed similar efforts are under way in Thailand. But as Andy Xie, has argued, Korea?s consumption boom may well have backfired. Household debt has exploded by 33% over the past year and a bubble has emerged in the Seoul property market; at the same time, the Korean trade account swung into deficit in the first 20 days of June -- capping off a long erosion from the 12.7% surplus (as a share of Korean GDP) in 1998. In response, the central bank of Korea has begun to tighten ahead of this fall?s elections -- raising the distinct possibility that the country?s experiment with consumer-led growth is nearing an end. Moreover, borrowing a page out of the script of the early 1990s, trade conditions have also deteriorated elsewhere in Asia -- especially in the Philippines, Thailand, and even Singapore. And so, once again, it all hinges on the ability of the once-proud American growth engine to save the world. That could turn out to be the biggest disappointment of all. That?s because the United States now has the "mother of all" current account deficit problems -- an external imbalance that will inhibit America?s ability to fuel global recovery of a still US-centric world. The just-released 1Q02 US current account data underscores this dilemma. The $112.5 billion deficit -- or $1.25 billion per day -- amounted to 4.3% of US GDP. That?s slightly worse than implied by our baseline forecast (4.2%) and well on a path to pierce the all-important (i.e., ominous) 5% threshold by year-end 2002. At the same time, I note with interest a May US budget deficit of $81 billion, literally three times the shortfall of a year ago. Gone are the days when Federal saving would offset the lack of saving in the private economy. America is as saving short as ever --little wonder it needs foreign capital inflows to fund it. If anything, that suggest pressures on an ever-expanding current-account deficit can only intensify in the months and quarters ahead -- that is, unless the US finally starts to rein in the excesses of its own domestic demand. Therein lies the dilemma for the world. Back in the crisis days of late 1998, America?s current-account deficit was "only" 2.7% of GDP. While most of us thought that was high at the time, in retrospect, there was considerable scope for further expansion as the US stepped up and led the world into a glorious recovery that we dubbed "global healing." That?s right, it wasn?t all that long ago, that we were the out-of-consensus bulls on the global economy. But now the tables have turned. The global healing of 1999 saw America?s current account deficit expand by two full percentage points of GDP over the subsequent two years, hitting an all-time record of 4.6% in the year 2000. A two-percentage point widening from today?s level would push the external imbalance up to 6% of GDP -- requiring financing via capital inflows of close the $2 billion per day. I am not saying that can?t and won?t happen. But it is ludicrous, in my view, to ignore the obvious and important consequences of a sharp further widening of America?s gaping current account deficit -- should it occur. The once-high-flying dollar will bear the brunt of such an imbalance, and that realization now seems to have sunk in with a vengeance in foreign exchange markets. But other US asset markets could also be affected -- a possibility that is hardly being lost on the beleaguered US stock market. But the weakness of the dollar puts the world on notice that the old days of US-centric growth are over. The flip side of that outcome is that the euro- and yen-blocs are going to have to learn to live with stronger currencies. And with these still externally-dependent regions lacking in domestic demand, their life is about to get considerably more difficult. That?s a far cry from the magnanimous climate of global healing of three years ago. This time, as the outbreak of global trade tensions also seems to indicate, it?s every country for itself! It?s crunch time for the old recipe of US-centric global growth. What worked so brilliantly for the past seven years seems unlikely to do the trick this time. Global risks are mounting and there may be no easy way out for world financial markets. From soncu at pacbell.net Fri Jun 21 16:42:12 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Fri, 21 Jun 2002 15:42:12 -0700 Subject: [A-List] Spain: First general strike in eight years Message-ID: Spain's unions stage first general strike in eight years Thu Jun 20, 6:20 PM ET By DANIEL WOOLLS, Associated Press Writer MADRID, Spain - Labor unions said Thursday that Spain's first general strike in eight years was a resounding success, while the government sought to minimize the impact of the work stoppage. Demonstrators around the country clashed with police. Many shops were closed and hundreds of flights were canceled in labor's stiffest challenge to Prime Minister Jose Maria Aznar since he took power in 1996. The unions, which are protesting cuts in unemployment benefits. intended the one-day nationwide strike to embarrass Aznar as he prepares to host a European Union ( news - web sites) summit in Seville beginning Friday. The Interior Ministry said 71 people were arrested for damaging property and trying to keep people from reporting for work. Workers' Commissions, a labor federation, said police in three areas of Madrid rushed demonstrators after skirmishes and heated verbal exchanges. Dolores Moreno, a spokeswoman for Spain's other main labor group, the General Workers Federation, said police in riot gear attacked members leaving the group's Madrid regional office to head toward a picket line at a bus station. One striker was bleeding from the head, she said. The Interior Ministry said police intervened because the union members were trying to block a major thoroughfare. The Spanish government and the unions gave wildly differing versions of the strike's effects. Finance Minister Rodrigo Rato said participation in the strike was minimal and said the stoppage was the opposition Socialist party's biggest defeat in 20 years. The government said in some provinces, only about 17 percent of workers participated. Later Thursday, tens of thousands of workers, union leaders and center-left politicians marched through the center of many Spanish cities, including Madrid and Barcelona. In Barcelona, Spain's second largest city, and Ibiza, riot police had to disperse protesters at the end of the march but no serious injuries were reported. Labor federations called on Aznar to withdraw his unemployment reforms, which was passed by decree last week, avoiding debate in Parliament. The unemployment reforms would eliminate salary payments to Spanish workers who have been fired and are appealing in court. It would also curtail payments to temporary farm workers. The Spanish jobless rate is about 13 percent. "The ball is now in Aznar's court. He must be sensitive to what the majority of workers are demanding, reconsider and withdraw the decree," said Jose Maria Fidalgo, secretary general of Workers' Commissions. In the normally bustling shopping streets around Madrid's Puerta del Sol district, many stores were shuttered. Many stores also closed in Barcelona, where garbage piled up in the streets. Outside a Corte Ingles department store in Madrid, riot police with black helmets and truncheons stood guard to fend off a crowd of whistle-blowing strikers. Spain's last general strike was called in 1994 to protest the overall economic policy of Socialist Prime Minister Felipe Gonzalez. Full at: http://story.news.yahoo.com/news?tmpl=story&u=/ap/20020620/ap_wo_ en_po/spain_strike_14 From soncu at pacbell.net Fri Jun 21 16:42:12 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Fri, 21 Jun 2002 15:42:12 -0700 Subject: [A-List] Italy: Labor on strike Message-ID: What is happening in Europe? Strikes are everywhere, Greece, Spain, Italy, Germany. Don't we have any European friends here who can share with us their insider views? Sabri ++++++++++++++ Thousands of workers, prosecutors and judges stage strike in Italy Thu Jun 20, 3:41 PM ET ROME - From prosecutors and judges to metalworkers, thousands of Italians walked off their jobs Thursday to protest government plans to reform the judiciary system and the labor law. Italian prosecutors and judges staged their first strike in 11 years, claiming that changes to the judiciary system proposed by Premier Silvio Berlusconi's government would curb their independence. In Rome's tribunal, many magistrates showed up but abstained from work, putting up signs in their offices to inform the public about the strike. Some matters, such as the questioning of witnesses who arrived from abroad, were taken care of, the Italian news agency ANSA said. The National Association of Magistrates, the unions gathering the vast majority of Italy's 9,000 prosecutors and judges, said around 80 percent of magistrates went on strike. The Justice Ministry said the figure was 68 percent. The most highly charged aspect of the reform is a provision which would give parliament some power to set the agenda for prosecutors ? something that would interfere with the judiciary's independence, the magistrates say. Berlusconi, who has been battling his own criminal cases for years, maintains the reform is fair and necessary to speed up the country's notoriously slow judicial process. Berlusconi, a billionaire media baron, has accused prosecutors investigating him of pursuing a leftist agenda. A separate, four-hour long walkout was held by workers in two Italian regions: Lombardy, which includes the country's financial capital, Milan, and Campania in the south, which includes Naples. Called by Italy's largest union, the CGIL, the walkout was part of sustained efforts against the government-sponsored reform to the labor law, which would also make it easier to fire workers. Several plants were virtually empty in both regions, with workers holding marches instead, news reports said. While CGIL, which is considering calling another national strike in the fall, keeps up a strong opposition, Italy's two other unions have resumed negotiations with the government over the reform. On Thursday, the government sweetened its offer to the unions, proposing to set aside 700 million euros (dlrs 670 million) to bolster unemployment benefits. CGIL didn't take part in Thursday's talks, but the other two unions said the proposal was a step in the right direction. Berlusconi insists the changes are necessary to inject some flexibility in Italy's rigid labor market From soncu at pacbell.net Sat Jun 22 15:48:02 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat, 22 Jun 2002 14:48:02 -0700 Subject: [A-List] Latin America: Fears of contagion Message-ID: Other noteworthy FT titles on Latin America include: 1)Mexican peso drops to lowest level in 2 years The Mexican peso hit its lowest level in two years, after a comment from Francisco Gil Diaz, the finance minister, that compared Mexico's economy with that of Argentina. 2)Election fears deflate Brazil's markets Brazil's financial markets were battered, with bonds sharply down and the currency nearing an all-time low, on mounting fears of a leftwing victory in October's election. 3)Uruguay floats peso on world markets Uruguay, hard hit by Argentina?s economic crisis, on Thursday stopped defending the value of its currency and allowed it to float freely on international markets. 4)Peru's finance minister denies planning to quit Pedro Pablo Kuczynski, Peru's finance minister, on Friday denied rumours that he was planning to resign after the privatisation chief quit over recent events in the southern city of Arequipa. Violent protests erupted in the city, Peru's second-largest, after the government pushed ahead with the privatisation of two electricity generators serving southern Peru. Both were sold last week to Belgium's Tractebel, the energy division of French utility group Suez, for $167m. 5) Rumours of civil war spread in Venezuela If the enemies of President Hugo Ch?vez make another attempt to overthrow him, Jos? and his family will be ready for the worst: looting, lawlessness and armed raids on his cosy middle-class home by pillaging pro-Ch?vez militias. ++++ Financial Times Argentine bank quits amid fears of contagion By Thomas Cat?n in Buenos Aires FT.com site; Jun 21, 2002 Mario Blejer, Argentina's central bank chief, resigned on Friday, raising fears that the country could be poised for a return to hyperinflation. Central bank officials said he would deliver his letter of resignation to the president next week after clashing repeatedly with Roberto Lavagna, economy minister. Aldo Pignanelli, central bank vice-president, will take over until a successor is named. The relationship between the country's two top economic officials became increasingly strained in recent months, with Mr Blejer complaining economy minister was compromising the independence of the central bank. Mr Lavagna also reportedly opposed a request by Mr Blejer that central bank officials be given some protection from lawsuits before undertaking the difficult task of restructuring Argentina's shattered banking system. Mr Blejer is the third central bank chief to quit in just over a year. Argentina has also seen six economy ministers and three governments over roughly the same period of time. Mr Blejer's departure from the central bank comes at a critical moment in the tortuous negotiations between Argentina and the International Monetary Fund for a new programme to deal with the economic crisis. Before heading up the central bank in Argentina, Mr Blejer had worked for 20 years at the International Monetary Fund, where he was regarded with respect. His exit will raise fears that Argentina's bankrupt government will now fire up the monetary printing presses to quell social unrest, generating a surge in inflation. Analysts say Argentina must reach an agreement with the IMF in around one month if it is to avoid defaulting on loan repayments to multilateral lenders and thus being fully cut off from the global economy. The country already defaulted on debt to private creditors and devalued its currency at the start of the year. However, Argentine and US officials say privately that the two sides remain far apart on the main issues and are increasingly pessimistic that an accord can be reached. A mission from the IMF headed back to Washington yesterday without making any statement. Argentina's renewed economic woes are being felt by its neighbours. Uruguay was yesterday forced let its currency plunge in value after its financial sector was battered by the problems across the River Plate. Yesterday, the Uruguayan central bank said that total bank deposits slipped by another 13 per cent last month. It also had to step in to save a third private bank this year after a run on deposits. In Brazil, fears over the possible victory of the leftwing candidate in October's presidential elections have sent bond prices plummeting and raised fears that it too could default. Full at: http://search.ft.com/search/article.html?id=020621008975&query=co ntagion&vsc_appId=totalSearch&state=Form From soncu at pacbell.net Sat Jun 22 17:04:54 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat, 22 Jun 2002 16:04:54 -0700 Subject: [A-List] Brazil: U.S. to punish Brazilian voters "wrong" choice Message-ID: 06/21 20:30 U.S. Would Oppose More IMF Brazil Aid, O'Neill Says (Update4) By Brendan Murray Washington, June 21 (Bloomberg) -- The U.S. would oppose more International Monetary Fund loans for Brazil, where markets have tumbled on concern the cash-strapped country may default on its debt after October's presidential election, Treasury Secretary Paul O'Neill said. "Throwing the U.S. taxpayers' money at a political uncertainty in Brazil doesn't seem brilliant to me," O'Neill said in an interview. "The situation there is driven by politics. It's not driven by economic conditions." O'Neill later issued a written statement clarifying his comments. "The Brazilian government is implementing the right economic policies to address the current difficulties," O'Neill said in the statement. "Because of these policies, we have consistently supported Brazil, including through its current IMF program launched last summer and last week's $10 billion drawing on that program." "Brazil has not requested any new funds and its economic fundamentals are strong," O'Neill said in the statement. Brazil's currency has lost a fifth of its value and yields on the most actively traded bonds have climbed to 21 percent from 12 percent since mid-April. Many investors said they were unnerved by neighboring Argentina's $95 billion debt default and the popularity of presidential frontrunner Luiz Inacio Lula da Silva, who has suggested Brazil may have to default on its debt. Earlier this week, Brazil gained IMF approval to draw $4.8 billion from its credit line with the lender, making a total of $10 billion available to South America's biggest country. Brazil said it needs the money to restore investor confidence in the government's ability to meet its debt payments. Bigger Line Brazilian officials haven't suggested any need to expand its existing IMF credit line, and fund spokesman Thomas Dawson said earlier this week the lender has no plans to increase aid to South America's biggest economy. The fund has suggested before that Brazil didn't need additional loans, only to lend more. In July 2001, Dawson said a visit to the IMF by Brazilian officials "was not a mission to negotiate a program." Less than two weeks after his comments, the IMF agreed to give Brazil a $15 billion credit line. Brazil borrowed $5 billion from the credit line last year. Some investors and analysts are convinced Brazil will have to ask for additional money. "On the one hand, Brazil has done a lot that the IMF has asked, and on the other hand it hasn't worked," said Christian Stracke, head of emerging markets fixed-income research at Creditsights Inc. in New York. Nervous about the Election O'Neill's remarks suggest that under current conditions, the Bush administration would oppose additional IMF aid. The U.S., as the largest shareholder in the IMF, has effective veto power over IMF loans. Some investors are "nervous about how the election is going to come out," O'Neill said after taping an interview with Bloomberg Radio to be broadcast tomorrow. "I don't think there's an economic antidote for that." O'Neill's views are contrary to those of Lehman Brothers Inc. analyst Joaquin Cottani. "In our view, Brazil's debt problem is more than just political," Cottani said a research report issued today. The conditions required for stability "are, at best, difficult to come by," he said. "Therefore the probability that Brazil will be forced to restructure its public debt in the next two years is very high." Foreign Currency Debt Moody's Investors Service yesterday lowered its outlook and Fitch IBCA downgraded Brazil's foreign currency debt rating after plunges in the country's bonds, stocks, and currency. Brazilian bonds, stocks, and currency fell after O'Neill's comments. Brazil's 8 percent bond maturing in 2014 fell 1.1 cents on the dollar to 56.9 offered, yielding about 21.07 percent from 20.32 percent yesterday, according to J.P. Morgan Chase & Co. The Bovespa stock index dropped almost 5 percent to 10,397.55, its lo west since Oct. 9. The real dropped 1 percent to 2.830 reais per dollar, its lowest since Sept. 21. "I'd like for things to be more stable than they are but the Brazilian situation is really a function of their political process, of their election process," O'Neill said. "It isn't clear to me what one can do about that." From soncu at pacbell.net Sat Jun 22 17:18:35 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat, 22 Jun 2002 16:18:35 -0700 Subject: [A-List] Global Housing Market: The coming turbulence? Message-ID: Hot property By Ed Crooks and Peronet Despeignes Financial Times, June 21 2002 20:08 Henrik Lumholdt is kicking himself. The expatriate Dane, who is chief strategist for Inversis Banco in Madrid, began renting an apartment when he moved to Spain in the early 1990s. The trouble is he never got round to buying. Now he fears he has left it too late. Five years ago, a 150 sq m apartment in Salamanca, a neighbourhood of attractive 19th-century buildings near the Prado museum, could have been bought for about Pta75m (Euro 450,000). Now it would cost twice that. "We were a bit silly," says Mr Lumholdt. "We didn't realise this was going to happen." Spain's housing boom is just one example of a global phenomenon. House prices in Europe, America and parts of Asia have been increasing at rates not seen since the 1980s. These heady rates of growth have allowed many homeowners to feel relatively affluent during the downturn. But they are now proving to be one of the biggest challenges for monetary authorities. A fierce debate is raging between economists over whether the authorities should try to let the air out of the market, risking a global property crash and possibly a world recession, or whether they should let the market continue to expand, which risks creating a bubble that would inevitably burst. Of course, housing markets have not been strong everywhere. In Germany, Japan and Hong Kong, for example, prices have been stagnant or falling. But the hot spots are numerous and spread from Stockholm to Sydney. "Central banks have been printing a lot of money, which has to go somewhere," says Patrick Artus, chief economist of CDC in Paris. "What has been increasing is not so much demand for goods but demand for assets, especially housing. And since supply is sticky, the first effect is on prices." In Europe, the gains have been particularly strong in countries that have experienced a sharp fall in interest rates as a result of joining the euro. In the past year, Spain's house prices have risen 18 per cent; Ireland's 8 per cent. House prices in Britain, where the Bank of England has cut its main interest rate to a 38-year low, were up almost 18 per cent in the year to May. In the year to the first quarter, US house prices rose an average of 6 per cent, with Rhode Island and Washington, DC, recording gains of about 12 per cent. Figures this week showed US housing starts growing at the fastest rate in seven years. In Australia, meanwhile, house prices were up 17 per cent; and even in South Korea they were up 6 per cent. Those buoyant housing markets have helped save the world economy from recession. While equity prices crumbled and business investment collapsed, the strength of the global property market reassured consumers that it was safe to carry on spending. Home ownership is more widely spread than equity ownership and, unlike equities, houses can easily be used as security for consumer borrowing. In Lakeridge, Virginia, a lush, picturesque riverside community about 25 miles south of Washington, DC, residents say the health of the property market has made the past months of economic turmoil much easier to bear. "It does give us a sense of added security," says Catherine Mays, a teacher whose home has gained about $80,000 in value to $320,000 (?214,000) during the past two years. But now many economists, and some policymakers, are beginning to worry. "If inflation in goods and services is under control but inflation in asset prices, fuelled by credit expansion, is proceeding rapidly, that is a danger signal," warned Andrew Crockett, general manager of the Bank for International Settlements, in a recent interview with the journal Central Banking. "During periods of expansion exuberance takes over, asset prices are pushed to high levels and then there is a reversal." For central banks such as the US Federal Reserve, the European Central Bank and the Bank of England, which are - whether de jure or de facto - targeting consumer-price inflation as their prime objective, the housing boom creates a dilemma. Inflation is subdued and apparently set to remain so. But the rise in house prices, if not checked, threatens eventually either to fuel another consumer boom, or to collapse, burying households under a mountain of debt. Should they raise interest rates or not? There is no easy answer. The two outstanding examples of asset price bubbles in recent history - the Japanese equity and property boom of the 1980s and the US equity boom of the 1990s - highlight the risks involved in both approaches. Having allowed Japan's bubble to inflate over many years, the authorities at last decided to puncture it at the end of the 1980s. The result was a stock market and property crash - and more than a decade of economic stagnation. The US Federal Reserve, by contrast, did not stop US stock markets soaring in the 1990s - and was left picking up the pieces when the bubble eventually burst. Alan Greenspan, chairman of the Fed, does not believe such comparisons are helpful. "I don't think we have a bubble in house prices," Alan Greenspan, chairman of the Fed, told a conference in Chicago last month. "The speed and magnitude of price rises and declines often observed in markets for securities are more difficult to create in markets for homes." His views reflect a general tendency among central bankers to play down the significance of houses and other assets. Ben Bernanke, who has been nominated to occupy a seat on the Fed's board, wrote in a recent paper that was widely admired at the Fed: "Inflation-targeting central banks need not respond to asset prices, except insofar as they affect the inflation forecast." The ECB gives the idea similarly short shrift. Otmar Issing, the bank's chief economist and intellectual powerhouse, said in a recent speech: "Central banks are clearly not able to define an appropriate asset price level and should therefore refrain from any kind of targeting of a specific level of asset prices." Indeed, the ECB does not even include house prices in its harmonised measure of European inflation; and there is no official eurozone-wide index of house prices. Yet many economists argue that central banks should take house prices into account. Stephen Cecchetti, professor of economics at Ohio State university and a former research director of the New York Fed, argues that although the Fed cannot be sure there is a housing bubble in the US, it might still want to raise rates modestly to try to take some steam out of the market. "It's hard to identify these misalignments, to know when they're there," he says. "But when the preponderance of evidence points to them, you want to at least think about doing something about them." His argument is echoed in Britain by Charles Goodhart and Sushil Wadhwani, two former members of the Bank of England's rate-setting monetary policy committee. But, like the Fed and the ECB, the Bank's latest quarterly bulletin carries an article from a staff economist rejecting the idea. And Stephen Nickell, a member of the committee, argued in a speech this week: "There is no reason for a special increase in interest rates simply to 'cool the housing market'." Mr Crockett has suggested that if central banks cannot or will not use interest rates to control house prices, further controls on bank lending for property may be the answer. But he warns: "This boom and bust cycle remains an unsolved problem." There is nothing to suggest that worldwide housing markets will suffer an imminent crash - measures such as the ratios of prices to incomes indicate that valuations are stretched only in some of the hottest spots, such as London. But the longer the current rates of increase persist, the greater the risk of a correction. The world economy may have ridden out the turbulence in equity markets of the past two years remarkably well. Turbulence in housing markets could be more difficult to withstand. Full at: http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/ FullStory&c=StoryFT&cid=1024578149621&p=1012571727088 From soncu at pacbell.net Sat Jun 22 17:22:35 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat, 22 Jun 2002 16:22:35 -0700 Subject: [A-List] EU summit: National interests to the fore Message-ID: Chirac dominates gathering of EU leaders By George Parker and Judy Dempsey in Seville Financial Times, June 21 2002 20:23 A newly empowered Jacques Chirac on Friday put a French stamp on the EU summit in Seville, digging in his heels over immigration policy reform and winning extra time for France to bring its budget deficit under control. At a summit where national interests are coming strongly to the fore, President Chirac refused to back a plan by the Spanish presidency to impose sanctions on countries which fail to tackle illegal immigration. Mr Chirac, attending his first summit for five years without an accompanying socialist prime minister, also persuaded EU leaders to let him break his commitment to cut the French budget deficit to zero by 2004. New guidelines to France say that the budget only needs to be "close to balance" in 2004, and France issued a separate declaration making it clear that even that target was dependent on healthy economic growth of 3 per cent. In a separate example of Mr Chirac wielding French clout, he opposed a plan by Tony Blair of Britain and Gerhard Schroder of Germany for some qualified voting at EU summits. The plan, if adopted, would have meant that Mr Chirac could be forced by other countries to fully open France's energy markets. "France does not support this proposal - it does not take the EU further forward," said one official. Mr Chirac's bullish performance came on the first day of the two-day Seville summit, which has been dominated by moves to crackdown on illegal immigration and to forge a new common asylum policy. The 15 EU leaders are expected to agree on Saturday to water down proposals by Britain and Spain for sanctions against countries which fail to cooperate in fighting illegal migration. Instead maximum pressure on countries to stop illegal immigration, but giving much more emphasis on aid and technical assistance to deal with the problem. That was a view strongly pushed by Sweden, which staunchly opposes sanctions of any kind, and France, which fears sanctions could upset its bilateral ties in countries in North Africa and the Middle East, The summit will also try to establish a common asylum policy, possibly within the next 12 months, after three years of stalled talks. However plans to set up an EU-wide border police force have found little backing. The other big theme of the summit - reforming the way in which the EU council of ministers does business - also saw France and other countries vigorously defending their national interests. French European policy has been in the doldrums in recent years, hampered by the cohabitation between Mr Chirac and Lionel Jospin, his socialist prime minister, but many believe that is about to change. Full at: http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/ FullStory&c=StoryFT&cid=1024578149772&p=1012571727102 From soncu at pacbell.net Sat Jun 22 18:34:35 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat, 22 Jun 2002 17:34:35 -0700 Subject: [A-List] Periphery 3 - Core 1 Message-ID: Turkey Halts Senegal With Golden Goal Turkey 1, Senegal 0 (OT) By Camille Powell Washington Post Staff Writer Saturday, June 22, 2002; 12:54 PM OSAKA, Japan, June 22 ? The end of tonight's quarterfinal between Turkey and Senegal came so suddenly and unexpectedly, that the fans inside of Osaka Nagai Stadium seemed shocked. They had watched the two teams battle for more than 90 scoreless minutes, and saw both teams repeatedly waste scoring opportunities. But in the 94th minute, Turkey reserve forward Ilhan Mansiz scored a golden goal on a nice half-volley to send his country into the World Cup semifinals for the first time. The Turkish fans in the crowd of 44,233 went wild, as the players celebrated on the field. "We gave 70 million people happiness and we are very proud," Turkey Coach Sunol Gunes said. "The Turkish team is a mix of mind, belief and patience." Turkey joins four-time champion Brazil, three-time champion Germany, and South Korea, the first semifinal team from Asia, in a completely unexpected group of semifinalists. Turkey will meet Brazil in the semifinals on Wednesday night in Saitama, in an eagerly anticipated rematch of their Group C game. Brazil won that game, 2-1, but the Turkish players and coaches seethed for days over what they perceived to be a poorly refereed match. Two Turkish players were issued red cards, Brazil midfielder Rivaldo was fined for feigning an injury, and Brazil scored the game-winner on a controversial penalty kick. "Brazil is one of the best teams in the tournament; everybody knows that and sees that," Gunes said. "But the first game, we didn't deserve to lose. It was a mistake by the referee and we were very, very upset at the time. But we also showed at other games our strengths. We deserve to be in the semifinals right now." This was the least glamorous of the four quarterfinal matches, and also the most unpredictable. Neither team had any World Cup history of note: Senegal was playing in its first World Cup; while Turkey was playing in its second, its previous appearance coming in 1954. But Senegal set the tone of this unpredictable tournament by upsetting defending champion France, 1-0, in the very first game, and then beat Sweden, 2-1, in extra time in the round of 16. Senegal was trying to become the first African team to advance to the semifinals. "We are disappointed of course to stop here," Senegal forward El Hadji Diouf said. "But we are also happy that we made the quarterfinal. All of Africa is proud of us. Of course we wanted to play against Brazil in the semifinals. This is a dream for everybody, but perhaps it will be next time." Turkey dominated the game, but struggled badly in front of the goal. Time after time, Turkey's midfielders made dangerous crosses that were just out of reach of their forwards' heads and feet. A prime example of Turkey's struggles came in the 26th minute, when Hasan Sas passed the ball to a wide-open Hasan Sukur in front of the goal. Sukur, Turkey's captain and all-time leading scorer, couldn't control the easy pass, and it rolled right under his foot and out of danger. Twelve minutes later, Ergun Penbe's cross from the left side got past Senegal goalkeeper Tony Sylva; Sukur slid but couldn't connect with the ball. Shortly before halftime, Yildiray Basturk's header off of a chip from Sas beat Sylva. But Senegal defender Omar Daf sprinted back toward the goal, stretched, and managed to poke the ball out of bounds, just before it rolled into the net. But in the fourth minute of extra time, midfielder Umit Davala collected a loose ball on the right side and sent yet another nice cross into the box. This time, Mansiz, who replaced Sukur in the 67th minute, connected with a nice half volley, and sent the ball inside the left post. "This has been an example of the World Cup," Gunes said. "Teams with less previous World Cup experience and success have shown a great impact, like Turkey, South Korea, Senegal, and also Japan. Right now, a final of Turkey and South Korea? Why not?" Full at: http://www.washingtonpost.com/wp-dyn/articles/A27753-2002Jun22.ht ml From soncu at pacbell.net Sun Jun 23 16:45:06 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sun, 23 Jun 2002 15:45:06 -0700 Subject: [A-List] Germany: First construction strike since WW II Message-ID: From the June 24, 2002 edition Union strikes jolt Germany Construction workers demand more pay and dig in as the strike enters its second week. By Charles Hawley | Special to The Christian Science Monitor MUNICH, GERMANY - Ernst Lihl, brick mason and member of Germany's striking construction union, is ready for a long struggle. He is angry about illegal construction workers, with construction companies, and especially with Germany's politicians. Sitting at a silent construction site, where, until last Thursday, builders were transforming Munich's old convention center into apartment buildings and shopping centers, Mr. Lihl complains that construction workers like him, from western Germany, are being driven out of the industry. "There are companies who fire their own workers to hire cheaper foreign workers," he says. "And the politicians sit around and do nothing. It doesn't matter how long the strike takes. Four or five weeks ? it doesn't matter to me." With the Sept. 22 election approaching, the expanding strike, currently involving almost 21,000 workers at more than 1,500 building sites across the country, comes at an awkward time for Germany's Chancellor Gerhard Schroder. Polls already show that voters see his opponent, Bavaria's president Edmund Stoiber, more capable of solving Germany's economic woes. In a study conducted earlier this month by the Election Research Center in Berlin, 32 percent of those polled believed Stoiber can better solve Germany's economic problems, while only 15 percent thought Schroder could. The latest strike by the IG Bau union is now the third in a series this spring, following IG Metall's metal workers' strike in early May, and an ongoing strike by the services union Ver.di in the banking sector. Some 6,000 employees who are members of the Ver.di union walked off the job last week. After his unsuccessful efforts to ward off IG Metall's strike, Schroder has so far remained silent on the recent labor unrest. The cumulative nature of these strikes, say analysts, could take a toll on Schroeder's reelection chances and damage the German economy's nascent recovery. "There are a lot of people in the union who are disappointed in the red-green coalition," says Michael Fichter, political science professor at the Free University in Berlin, referring to Germany's current governing partnership, made up of Schroder's Social Democrats and the Green Party. "But given the alternative, they would rather have Schroder. Nevertheless, if this strike continues for a long time, it will really hurt Schroder. And this strike could go on for a while." The strike by the 350,000-member IG Bau union, the first in the German construction industry since World War II, began last Monday with work stoppages in northern German cities such as Hamburg and Berlin following the breakdown in this year's round of wage negotiations early this month. So far, aside from a few scuffles in Hamburg and Munich, the strike has proceeded peacefully, although workers fear that the chances for violence will grow next week as nonunion workers try to continue work at construction sites. "I am afraid because of the strike," says one Croatian union member who asked not to be identified. IG Bau is asking for a 4.5 percent rise in wages, reflecting IG Metall's demands earlier in the year. They also want a single minimum wage for all construction workers in Germany and more money for worker training. They are targeting building sites with tight timetables in an effort to force the industry to give in. The National Building Industry Association considers the demands to be irresponsible. They are offering 3.1 percent and say that's more than they can afford. The current state of Germany's building industry appears to support their claim. Following a postreunification boom in the mid-1990s fed largely by the rebuilding of former East Germany, the building sector has endured a long downward spiral. Since 1995, more than 500,000 German construction workers have lost their jobs, with 100,000 of those losses coming this year. And, say economists, there are still too many companies for too few construction projects. "Building companies are working under very tight deadlines and with very small profit margins," says Hagen Lesch of the Institute for Economic Research in Cologne. "They just don't have the reserves to fill the hole made by the strikers. The strike will likely lead to more job losses. I think the workers are digging their own graves." IG Bau union chief Klaus Wiesehugel, however, insists that they are trying to save jobs and points to the union's secondary demand for an equal minimum wage for workers from eastern and western Germany. Currently, western German workers can count on a minimum wage of $9.41 while eastern workers receive $8.28, a difference negotiated between the union and the construction companies following German reunification in an effort to help the eastern economy become competitive. Now, however, says Mr. Wiesehugel, with the downturn in the building industry, western workers are being forced out by the cheaper eastern labor. In addition, companies are hiring workers from countries in Eastern Europe, such as neighboring Poland or Romania ? workers who are willing to work for as little as $4.85 per hour or less. "We want to raise these wages in the East, but the eastern companies refuse," says Gunther Busch, Bavarian regional secretary for IG Bau. "There is a wage dumping that results, and our workers can't compete. Pretty soon, there will be no more Munich workers on Munich construction sites. Only people from who knows where." Ironically, it is Schroder's earlier cozy relationship with Germany's unions that is, in large part, creating the current labor strife. During the 1998 election, Germany's unions supported Schroder with a campaign effort that was instrumental in his election victory. Unions then complied with his request to keep wage demands modest in order to promote reinvestment and create more jobs. For the most part, unions complied. Until this year. "Unions are saying that this strategy has not brought new jobs," says Mr. Fichter. "Union demands have been modified for the last three years, and real wages have gone down. Now they are demanding higher pay increases." Stoiber has so far failed to use the strike to his advantage. Despite labor's dissatisfaction with the left, workers still consider Schroder the better choice. Following the lead of conservative governments across Europe, Stoiber prefers drawing attention to immigration. At his party's convention in mid-June, he indicated that the issue, along with the economy, was going to be a major focus of his campaign. Full at: http://www.csmonitor.com/2002/0624/p06s01-woeu.html From soncu at pacbell.net Sun Jun 23 17:24:10 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sun, 23 Jun 2002 16:24:10 -0700 Subject: [A-List] Asia into the center: The IT Frontier Message-ID: "Globalization has gone pretty far. Now it's time for regionalization to happen" says John Gantz, a senior vice president at IDC in Framingham, Mass. He is this person: http://www.iplanet.com/sunone/nettalk/IDC_gantz_bio.pdf Sabri ++++++ Far Eastern Economic Review Issue cover-dated June 27, 2002 INTERVIEW: JOHN GANTZ Asia: The IT Frontier As the world looks to Asia's information-technology market for growth, Asians are best positioned to prosper JUST UNDER HALF OF the $450 billion American companies are expected to spend on information technology this year will pay for services, says John Gantz, chief research officer and senior vice-president at computer-research firm IDC. The United States' services segment--from computer training to customer-relationship management--grew about 8% last year even as hardware sales shrank about 10%. Gantz spoke with Tokyo correspondent David Kruger about what Asian economies, until now mostly hardware producers, need to do to make it in services: WHAT IS THE OUTLOOK FOR THE IT MARKET IN THE U.S.? The economic outlook for 2002 is actually very positive in every indicator except the stockmarket . . . We think that will translate into the IT economy with about a one-to-two-quarter lag. Once U.S. companies believe that they can be profitable they will do some of the spending they've been shoving off for a year. There are some data centres getting pretty tapped out, a lot of client systems are getting old and you have a lot of stuff coming off lease and depreciation that was bought for Y2K. So that should help spur spending. AS DEMAND MOVES TOWARD SERVICES FROM HARDWARE, WHAT DO COMPANIES NEED TO DO TO CAPITALIZE ON THE SHIFT? If they are IT vendors and they don't want to just be stuck making personal computers--a dying market--and they want to get more into services, they have to spend some attention on people. Services is a people business. Software is a geniuses business. And hardware is a widget-manufacturing business. They're pretty different businesses. When we look at the successful service firms, they spend an inordinate amount of money and time recruiting, maintaining people, building databases of skills and a lot of things that hardware companies never even think of. If a company says it wants to be in services, there is a lot of people infrastructure that has to be built in order to be successful--including the methodologies of running projects. WHAT WILL ASIAN IT COMPANIES BE FOCUSING ON IN 2007? I think they'll be most active in the simpler things--they'll be making servers, not just PCs, but they'll be making low-end servers, they'll be making appliance servers, they'll be making all the chips . . . I think they'll still be doing that, but at the same time building up indigenous software and services organizations along the way Israel has done. I don't think they'll be exporting intellectual property, exporting a lot of software packages or multinational services firms unless they acquire their way in. But every other geography is looking to Asia to grow . . . it's like the last great frontier for IT vendors and it's the indigenous vendors who have the best shot at taking advantage of that. So I think Asians should be looking at Asia first and Europe or the U.S. second. There's a whole regional second tier that we think is going to build up . . . Globalization has gone pretty far. Now it's time for regionalization to happen. WHAT ROLE WILL CHINA PLAY AS AN IT PRODUCER AND AS A MARKET IN FUTURE? They tend to be the manufacturing centre of the world, not just in computers but anything. If they can upgrade their infrastructure fast enough--roads, highways, telephones--they have a good chance of being a low-cost manufacturer . . . they'll be like Japan 40 years ago. A lot of companies are setting up plants in China and the government has made it possible for them to do that. Also it's a huge market. Asia-Pacific outside Japan will be a bigger market than Japan in about four years and China will be half of that. China's already a bigger market than Canada. It's soon to be a bigger market than Italy and within six years bigger than the U.K. or Germany. So it's becoming a huge consumer of IT . . . If it's going to be the manufacturing centre of the world they are going to have to buy a lot more IT because they don't have much IT content in manufacturing now. Full at: http://www.feer.com/articles/2002/0206_27/p038innov.html From soncu at pacbell.net Mon Jun 24 01:58:10 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Mon, 24 Jun 2002 00:58:10 -0700 Subject: [A-List] EU integration: Problems in consolidating the markets Message-ID: June 24: Consolidation Within Europe Is Far Off ? But Is It The Best Way To Create A Single Market Anyway? Location: Frankfurt Author: Angelique Van Engelen, RiskCenter Correspondent Date: Monday, June 24, 2002 The European Finance Foundation?s conference?s outcome has been a foregone conclusion; the fragmentation in the European market is merely increasing as new technology increases the options for new market players, stretching the time span needed for consolidation to take off. Ironically, Nasdaq?s plans to create, what people think will be certainly an ill-fated venture to compete with Germany?s largest exchange Deutsche Boerse were the most discussed topic during the conference in Venice last week, perhaps in the absence of new headline-worthy news from the EU participants. Their message ?Europe needs consolidation of exchanges and financial initiatives to cut the costs of cross border trading- has been too oft heard and is leading to too little news of substance to make for an interesting story on its own. Developments on the ground simply do not help the policy makers in attaining their goals of creating a single European market within the time they want. Although the idea is that less trading venues cut costs, more platforms sprout up throughout all financial markets, often backed by feisty players. More time is needed to find out who?s going to make it and who is not. The private sector is not letting opportunities go by if they think they are viable simply because they stand in the way of the greater good of a single market. "People first want to really develop their own markets before entering into real consolidation," said Andre Roelants, chief executive of securities settlement house Clearstream, part of Deutsche Boerse. At the moment, the much-desired consolidation of stock exchanges across Europe is simply not taking place at the speed needed for a true single market to take shape by 2005. Some 40 new rules are being imposed to achieve the goals in time, but most of them won? t be very effective in making the single market a reality. Roelants said he believed that the time needed for a fully interactive and cross border market to emerge is at least 15 years. At the moment investors are having difficulties to execute deals abroad due to differing jurisdictions and high fees. But new doubts are being sown about the blessings that consolidation brings anyway. Jean-Claude Trichet of the Bank of France said that consolidation of clearing and settlement houses have had mixed success. The most successful merger on the continent so far has been the joining of the Paris, Brussels and Amsterdam stock exchanges to create Euronext. But there are series of problems with the integration of European clearing and settlement houses, although the total number of around 30 players in this market has been reduced to around 20 during the last few years. The problems that the Europeans are having in creating unilateral rules for mergers and takeovers are another example of the magnitude of the issues that have yet to be tackled before they have reached true harmonization. One problem is that all countries are trying to negotiate the best deal for their own industries. This became painfully obvious last year, when Germany managed to block the takeover code which had been worked on for 11 years because it had a few rules that it thought would harm its businesses. Even in the area of stock market integration ?relatively easy compared to creating unilateral rules for mergers- the issues on the agenda of the decision makers are so politicized that they stand in the way of reaching practical solutions that are cost effective for all. Meanwhile, the clock ticks on as chances to become the world?s strongest economic entity by 2010 ?a goal set last year- are fading. Full at: http://www.riskcenter.com/cgi-bin/article.pl?id=5047 From soncu at pacbell.net Mon Jun 24 02:37:47 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Mon, 24 Jun 2002 01:37:47 -0700 Subject: [A-List] China: Factory democracy Message-ID: Henry, Would you be able to comment on this? Sabri ++++++++++++ People's Daily Online --- http://english.peopledaily.com.cn/ Last updated at: (Beijing Time) Monday, June 24, 2002 China to Promote Democracy in State, Collective-owned Factories State- and collective-owned factories plus those with shares mainly held by state or collective-owned companies should open up their internal affairs to all their staff. The general offices of the Communist Party of China (CPC) Central Committee and the State Council made this call in a joint circular dated June 3, which was made public on Sunday. The document was issued to provincial-level party committees and governments, ministerial-level departments, the General Political Department of the Chinese People's Liberation Army (PLA),and leading non-government groups. Since the 15th Party Congress in 1997, many factories had made remarkable progress in the field of ensuring workers directly exercise their democratic rights, according to the circular. Adoption of factory democracy is to better practise "Three Represents" To adopt factory democracy was a tangible way to practise the "Three Represents" (representing the development trend of China's advanced productive forces, the orientation of China's advanced culture, and the fundamental interests of the overwhelming majority of the people in China) theory of General Secretary Jiang Zemin of the CPC Central Committee, and to further implement the party's principle of depending on the Working Class heart and soul, it said. The opening-up of a factory's internal affairs to its staff should be guided by the late Chinese leader Deng Xiaoping's theory and adhere to the Party's principles, state laws and the unitary leadership of the party committee, it stressed. It said that factory democracy should also be integrated with efforts to adopt modern corporate systems. Under the policy, factory staff should be allowed to join in decision-making on all major issues regarding the development of the enterprise and their own interests, the circular said. Leading officials of these factories must be put under the supervision of all the staff, it said. A workers' congress should be mainly responsible for implementing factory democracy, while the factory's internal affairs at all levels should be open to the staff, according to the circular. Each factory should set up a leading group on factory democracy, composed of top officials from the factory's party committee, administration, discipline supervisory body, and trade union, it said. Meanwhile, a supervisory body comprising representatives of the discipline supervisory body, trade union and ordinary workers should be established to monitor whether factory democracy has been properly adopted, the circular added. Full at: http://english.peopledaily.com.cn/200206/24/eng20020624_98407.sht ml From cburford at gn.apc.org Mon Jun 24 17:07:16 2002 From: cburford at gn.apc.org (Chris Burford) Date: Tue, 25 Jun 2002 00:07:16 +0100 Subject: [A-List] violent fall of dollar Message-ID: <4.3.2.7.1.20020625000205.041c6680@pop3.norton.antivirus> >By Monday afternoon, the dollar was down over 15 per cent from its record >high of $0.8287 to the euro in October 2000, and down over 3 per cent in >the past week. > >Michael Lewis, senior economist at Deutsche Bank, said: "There is a >growing conviction that we are finally seeing the long awaited turn in the >dollar. And when the dollar turns from such an overvalued position it has >tended to be a violent process." FT June 24 From soncu at pacbell.net Mon Jun 24 19:18:01 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Mon, 24 Jun 2002 18:18:01 -0700 Subject: [A-List] Spain: 150,000 march in Seville Message-ID: Social Forum Activists March in Seville Mon Jun 24, 7:00 AM ET Alicia Fraerman,Inter Press Service SEVILLE, Spain, Jun 22 (IPS) - Activists who gathered this weekend in this southern Spanish city in a "counter-summit" to a meeting of European Union ( news - web sites) (EU) leaders culminated their seminars, debates and protests with a peaceful march through the city. The Social Forum of Seville met parallel to a meeting of the European Council, which brought together the heads of state and government of the 15 EU countries and the president of the bloc's executive arm, the European Commission ( news - web sites). The leaders agreed on measures to curb illegal immigration. Around 100 separate protest demonstrations ended Saturday night with a peaceful march through the city by more than 150,000 people, according to the organizers, or 20,000 according to official estimates. Red flags, placards and chants against "a Europe of capital" abounded in the march, which took place amidst a festive atmosphere and a heavy police guard. The only violent incidents that marred the EU summit were car bombs set off by the Basque separatist group ETA, which injured several people. The Social Forum discussed a range of economic, social and cultural problems that the activists saw as inextricably linked to the "neo-liberal" globalization model. The manifesto of the Social Forum called for total cancellation of the external debt of poor countries, an economy at the service of citizens, "genuine" social policies, and a Europe more committed to the environment. Consulta Europea, one of the participating groups, described EU policy as "a religion of the market." The European bloc does not seem to be aware that in its territory "there are three million homeless citizens, or even that there are poor," including "25 percent of the adult population of Portugal, nearly 20 percent of that of Britain, and over 15 percent of that of Spain," the group added. One of the seminars organized by the Social Forum was held at the Pablo Olavide University of Seville, where hundreds of mainly African immigrant farm workers are staging a sit-in, demanding work and residency permits. Members of the international environmental watchdog Greenpeace and the Seville-based Fundaci?n Primero de Mayo took part in a debate on sustainable development at the university. One of the conclusions of the debate was that the "ecological debt" owed by industrialized countries to Third World nations far surpasses the financial debt of developing countries. When the call for the march was issued 10 days ago, the government refused to authorize the route scheduled by the organizers, and instead ordered the protesters to follow the Guadalquivir river that borders the city. But the Social Forum argued that the route assigned by the government ran through a dangerous area, and that only the fish in the river would see the demonstrators. The activists turned to the Supreme Court of Andalusia, the autonomous community in which Seville is located, with no luck. After the organizers decided to hold the march anyway, the government delegates said they would negotiate, and a route was finally agreed. Although a majority of the participants in the Social Forum were from Andalusia and the rest of Spain, some activists also came from other European countries. Around 10,000 people camped out in the Parque del Alamillo, while an undetermined number stayed in private homes "to avoid provocations, by small organizations or the police," one of the organizers told IPS. The organizers warned those who camped out in the park that it was an important ecological center that was home to thousands of birds. They said no one should bathe in the river, which could harm the populations of ducks and fish. Carried at the head of the march were two banners, reading "Against a Europe of Capital and War" and "No Person is Illegal", alluding to the EU agreement that will make it easier to deport undocumented immigrants. Local residents, watching from their balconies, applauded the demonstrators and doused them with buckets of cold water to refresh them in the 40-degree heat. At the end of the demonstration, the marchers headed towards the Torre de Triana to attend a concert by local bands that back the causes championed by the Social Forum, including Tantatrampa, El Puchero del Hortelano, Reincidentes, Boikot, Eskorzo and Banda Hachis. Full at: http://story.news.yahoo.com/news?tmpl=story&u=/oneworld/20020624/ wl_oneworld/1032_1024919701 From soncu at pacbell.net Mon Jun 24 19:27:33 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Mon, 24 Jun 2002 18:27:33 -0700 Subject: [A-List] End of US-centric global economy Message-ID: Morgan Stanley - Global Economic Forum June 24, 2002 The Trees or the Forest? Stephen Roach (New York) Financial markets are supposed to be a huge forward-looking discounting machine. Yet nothing could be further from the truth these days. Our strategists remain focused on whether this is the time to catch that proverbial knife in midair and play a tradable rally in an oversold equity market. Our economists are hard at work in scrutinizing weekly chain store reports and jobless claims in an effort to discern the underlying fundamentals of aggregate demand. Meanwhile, tectonic shifts are occurring in the macro climate. A turn in the dollar, another crisis in Latin America, whiffs of deflation, and increasingly impotent central banks all speak of an engineless global economy that casts financial market risk in a very different light. The forest has never looked more different from the trees. I?ll leave the short-term calls to the traders. But my macro lens continues to see the movie of the 1990s running in reverse. America was the world?s bubble and now it has popped. Equities led on the upside and were the first to go on the downside. And the real economy has followed with predictable lags. The first shoe to fall was the capacity overhang of earnings-battered businesses. Next to come should be the spending excesses of saving-short and overextended consumers. A US economy that drew increasing support from the extremes of financial asset appreciation is now returning to the much tougher basics of income-driven fundamentals. At the same time, a long overdue US current-account adjustment is under way -- a multi-year process that should ultimately force a US-centric world to come up with a new recipe for global growth. Try as they might, policy makers can?t alter the endgame. The new realities of this post-bubble era are likely to remain with us for some time to come. The unwinding of the dollar bubble has equally profound implications. The interplay between currency markets and other asset prices is turning many of the rules of engagement in financial markets inside out. In recent times of turmoil -- for example, the Asian financial crisis, the demise of Long-Term Capital Management, and the popping of the Nasdaq bubble -- dollar strength cushioned the blow in the broader equity and bond markets. It was symptomatic of a Teflon-like US economy that was able to ward off the impact of even the toughest of body blows. Shielded by the ultimate in virtuous circles, a US-centric global economy had little to fear. A weak dollar denies investors the cover they had grown accustomed to. It also unmasks new fault lines in the global economy. That puts today?s rapidly spreading Latin American currency crisis in a very different light. This, of course, was the contagion that was never supposed to happen again. The tragedy of Argentina was widely thought to be a country-specific problem that had little or no bearing on the rest of the region. But now Brazil, the largest economy in the region, has seen a wholesale markdown of its currency and bonds that is every bit as bad as that which occurred in the depths of the crisis three and a half years ago. Nor are other Latin economies being spared this contagion. From Uruguay to Mexico, virtually all of the region?s currencies are now lurching to the downside. Consequently, this year?s 7.9% decline in the trade-weighted value of the dollar (as measured against the broadest basket of America?s trading partners) takes on new meaning. In a post-bubble world, "buy America" is suddenly seen as a risky alternative. In retrospect, this shouldn?t be all that surprising. Just as it was when Nasdaq was rocketing toward 5000, the world has overdone the dollar play. As Joe Quinlan has noted, foreign investors appear to have reached historical saturation points with respect to their holdings of dollar-denominated assets (see his 21 June dispatch, "Saturation of Foreign Holdings of US Assets"). For example, at the end of 1Q02, foreign holdings of US Treasuries totaled $1.25 trillion, close to the previous record of $1.3 trillion hit in 1998; that?s equivalent to 35.7% of outstanding marketable Treasury securities. At the same time, foreign ownership of US equities rose to a near record high of $1.75 trillion in March 2002 -- equivalent to nearly 13% of the value of outstanding corporate stocks. Such saturation, against the backdrop of America?s massive current account deficit, puts an engineless world on notice: Unlike the case in earlier crises, there is no refuge in the once proud safe-haven status of the dollar. A rapidly spreading Latin currency crisis, in conjunction with a weaker dollar and what I believe is an increasingly fragile recovery in the global economy, changes everything for the world? s major central banks. Financial markets had been virtually unanimous at the start of this year in looking for the monetary authorities to take back the extraordinary rate cuts that had been put in place in the immediate aftermath of the terrorist attacks on 11 September. This "recalibration" is standard operating procedure for central banks once the impacts of any shock wear off. Once a post-shock economy is able to stand on its own, a return to pre-shock interest rates is usually in order. It ?s just a question of when. But it may be different this time. That?s because the world is a more deflationary place than it was pre-September 11. US inflation has fallen to a 48-year low of a 0.45% annual rate in the past two quarters (as measured by the broad GDP chain-weighted price index). At the same time, Asian deflationary pressures have intensified. As Andy Xie notes, the newly-industrialized Asian economies (Korea, Taiwan, Singapore, and Hong Kong) have lowered their real export prices by 41% over the past decade. Yet, that?s nothing when compared with the rapidly emerging "China factor" -- the intensification of deflationary pressures from the largest and fastest-growing economy in the region. That?s underscored by the reemergence of outright deflation in China late last year -- a decline that has persisted to this very day, with the Chinese CPI running 1.1% below its year-earlier level through May 2002. At the same time, there is good reason to question the final demand follow-through to the US inventory dynamic. In my opinion, earnings-battered Corporate America remains very much focused on cost cutting, likely to take further actions that would continue to restrain capital spending and hiring. The macro feedback effects of such restraint should intensify pressure on the US economy?s income-generating capacity -- spreading macro vulnerability to the heretofore resilient American consumer. This, of course, underscores the possibility of the double dip or the anemic recovery, either of which would prolong America?s deflationary perils. Against this backdrop, why would central banks tighten at all over the foreseeable future? Recently, our US team pushed out its view of an August Fed tightening. For what it?s worth, as a card-carrying double dipper, I wouldn?t be surprised if the next move of the Federal Reserve was to ease. Indeed, I would currently ascribe as much as a 40% probability to just such a policy adjustment -- roughly consistent with the same probability that I would now pace on the dreaded double dip between now and the end of this year. In my view, the combination of a rapidly spreading Latin currency crisis, heightened geopolitical tensions, and another sharp downdraft in US equity markets reinforces the possibility of such a Fed surprise. For many of the same reasons, but with the added complication of a strengthening euro, I also find it hard to believe that the European Central Bank will tighten in this climate. That conclusion stands in contrast with our official view that still calls for an ECB tightening on 4 July. All this represents a rude awakening for the once proud Federal Reserve. Yet it didn?t have to end this way. Alan Greenspan was well ahead of the curve in December 1996 when he pondered the perils of "irrational exuberance." But by failing to follow through on this warning and then by adding fuel to the mania through his steadfast support of the "new economy," the great moral-hazard play was on with a vengeance. Few could resist -- long-term investors and speculators alike. Sadly, the rest is now history. But it?s a history that could well have more painful lessons to offer -- those of central banks that end up "pushing on a string" in the aftermath of an asset bubble. Just as the Bank of Japan has had to struggle with this painful reality over the past decade, the Fed may find it exceedingly difficult to gain policy traction in the years ahead. And so the era of the omnipotent central banker may have drawn to a close. In the meantime, the state of play in world financial markets is shaping up as the mirror image of the 1990s. The fall of the once mighty dollar and a whiff of deflation have the potential to turn the world inside out. Engaging in hand-to-hand combat over the weekly gyrations in the markets and the economy does this debate a real disservice, in my view. There are far bigger issues to face up to. You can?t tell the new forest by looking at the old trees. Full at: http://www.morganstanley.com/GEFdata/digests/20020624-mon.html From soncu at pacbell.net Mon Jun 24 20:04:29 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Mon, 24 Jun 2002 19:04:29 -0700 Subject: [A-List] Turkey: Playing Russia and Iran against EU Message-ID: Turkey Using Iran, Russia as Leverage Against EU Stratfor, 24 June 2002 Summary After spending years trying to get into the European Union, Turkey has signaled that it may instead be considering closer ties with Russia and Iran. Turkey wants to demonstrate to Europe that it has other options -- but in the process may find the EU courting it with more concessions. Analysis Following a summit meeting early last week, the governments of Turkey and Iran agreed that Iraq's "territorial integrity" should be "guarded" and that any measures against Baghdad should be taken in line with UN regulations, according to an Iranian government spokesman cited by Agence France-Presse June 19. The agreement is not earth-shattering, but it shows that regional rivals Turkey and Iran can come together and work out items of mutual concern. This is extremely important in light of public musings from Ankara about ending its quest to join the European Union and turn instead toward Russia and Iran. There is still much negotiating and positioning to be done, but Turkey is showing Europe that it has other options. The Turkish-Iranian talks come amid the specter of U.S. military action against Iraq. The Turks have strong influences in the northern Kurd-populated area of Iraq, while the Iranians have links to the Shia-dominated south. Basically both sides are agreeing not to make a land grab should the Hussein regime disintegrate. The Turks even threw in a sweetener, saying that their American allies should jump through the necessary hoops to obtain UN approval for military action. Good relations between Ankara and Tehran are noteworthy in light of Turkey's recent statements about the European Union. Gen. Tuncer Kilic, the secretary of Turkey's powerful National Security Council, said last March that his country should abandon its efforts to become a member of the European Union and instead work on political, strategic and economic alignment with Russia and Iran. The general based his argument on the fact that Turkey's EU membership application has gathered dust for 30 years while nations with worse economies (Bulgaria and Romania) and worse human rights records (states formerly in the Soviet bloc) are on the verge of membership. Of course, there are plenty of problems with the idea. The three countries are natural competitors in Central Asia and the Middle East. Iran is a clerical regime; Turkey is a secular democracy. The Turks, who have full NATO membership, spent decades opposing the Soviet Union. More recently, the Turkish government has been accused of aiding Chechen separatists. And neither Iran nor Russia has the capital to invest in Turkey that Europe does. But the notion hasn't come totally out of left field. Russia and Turkey have gotten over much of their Cold War hangover. Iran and Turkey cooperated on a joint pipeline. And the Turks likely would continue to cultivate their relationship with the United States, a major source of capital and diplomatic support. The threat of tighter links between Turkey, Russia and Iran also holds weight with Europe, which enjoys being the only major power that maintains a relationship with Iran. And European leaders already are mumbling about being edged out by Russia as Washington's chief strategic ally -- adding Ankara to the Washington-Moscow link would augment an already formidable arrangement. Kilic's statement provoked a hurried response from Europe. The EU put the Kurdistan Worker's Party, a Turkish militant group, on its list of terrorist organizations -- despite a nearly 3-year-old cease-fire. The British went even farther. Prime Minister Tony Blair did not mention Turkey in a May 22 statement against illegal immigration to Europe, a clear nod to Ankara. And a top Worker's Party official was captured in Britain in early April. These soothing gestures from Europe apparently have encouraged Turkey to continue its approach in hopes of extracting more concessions (and perhaps finally EU membership). But Ankara is showing the union that it has other options to consider. From cburford at gn.apc.org Tue Jun 25 01:09:47 2002 From: cburford at gn.apc.org (Chris Burford) Date: Tue, 25 Jun 2002 08:09:47 +0100 Subject: [A-List] Human use exhausts Earth Message-ID: <4.3.2.7.1.20020625080402.03826d90@pop3.norton.antivirus> This story on the BBC website at http://news.bbc.co.uk/hi/english/sci/tech/newsid_2062000/2062729.stm echoes Mark's emphasis on key finite resources such as oil. As the dollar crashes and the world slides into global deflation as an economic system of exchange value, this article revisists the issue of non-reproducible use-values. The obvious reservation I can see is that human's have been exhausting the natural environment for millenia, as Engels argued. The capitalist system might merely readjust?? Or is this too big to be organised by a system of private ownership of the means of production? Chris Burford London >>>> Monday, 24 June, 2002, 21:43 GMT 22:43 UK Human use exhausts Earth By Alex Kirby BBC News Online environment correspondent Humans are making more demands on the Earth than it can cope with, scientists believe. They say humanity's footprint on the planet has increased by half in under 40 years. Their analysis suggests that by 1999 the human economy was absorbing 120% of the Earth's productive capacity. But while they think the trend will probably intensify, the scientists say solutions already exist which will maintain high living standards. The claim that we are exhausting the planet's resources is made by an international team of authors in the Proceedings of the National Academy of Sciences (PNAS), published in the US. Their paper, Tracking The Ecological Overshoot Of The Human Economy, uses existing data to translate human demand on the environment into the area needed for producing food and other goods, and for absorbing wastes. In 1961, the authors say in their "preliminary and exploratory assessment", humans were using 70% of the capacity of the global biosphere. By 1999, that had risen to 120%. The assessment is based on several assumptions: it is possible to keep track of most of the resources we use and the wastes we generate most of these flows can be measured according to the biologically productive area needed to maintain them the planet can be assessed in terms of "global hectares", representing the average productive hectare on Earth for that particular year the natural supply of ecological services can be measured in the same way. The natural world itself changes year by year, as does the human demand on it. Technology can reduce "the ecological overshoot", and may ultimately eliminate it. The authors compared humanity's demand for the Earth's "natural capital" for each year since 1961. They say: "The calculation provides evidence that human activities have exceeded the biosphere's capacity since the 1980s. "This 20% overshoot means that it would require 1.2 Earths, or one Earth for 1.2 years, to regenerate what humanity used in 1999. "The global average per capita area demand for 1999 adds up to 2.3 global hectares per person. "This is significantly lower than the area demands in industrialised countries such as the US (9.7), or the UK (5.4) and Germany(4.7)." The authors say the Earth must provide an "insurance policy" or buffering system to protect other species and their homes. If 12% of the Earth's "bioproductive area" were set aside to safeguard other species, they say, our activities would have exceeded the planet's carrying capacity a decade earlier, in the early 1970s. They say there is hope of bringing human demands in line with the Earth's ability to regenerate itself. One new technology, known as Factor Four, promises to halve resource use yet maintain service levels in transport and housing. One of the authors is Professor Norman Myers, of Green College, Oxford, UK. He told BBC News Online: "The overshoot will continue to increase if we do nothing, because of rising population and rising living standards. "But we can solve this without austerity or hair shirts, by using technology and avoiding waste." But Julian Morris, of the UK's Institute of Economic Affairs, told BBC News Online that the PNAS paper was flawed. "The study attempts to do too much in too little space with too many assumptions and too little data," he said. "The claim that we have overshot the biosphere's regenerative capacity is a fiction based on inappropriate assumptions and poor data. "The study is of little value either as an assessment of humanity's impact on the environment, or as a guide to action." From farmelantj at juno.com Sun Jun 23 06:00:40 2002 From: farmelantj at juno.com (Jim Farmelant) Date: Sun, 23 Jun 2002 08:00:40 -0400 Subject: [A-List] Israel and Hamas Message-ID: <20020623.080247.-77906375.0.farmelantj@juno.com> Analysis: Hamas history tied to Israel www.upi.com/view.cfm?StoryID=18062002-051845-8272r By Richard Sale UPI Terrorism Correspondent >From the International Desk Published 6/18/2002 8:13 PM View printer-friendly version In the wake of a suicide bomb attack Tuesday on a crowded Jerusalem city bus that killed 19 people and wounded at least 70 more, the Islamic Resistance Movement, Hamas, took credit for the blast. Israeli officials called it the deadliest attack in Jerusalem in six years. Israeli Prime Minister Ariel Sharon immediately vowed to fight "Palestinian terror" and summoned his cabinet to decide on a military response to the organization that Sharon had once described as "the deadliest terrorist group that we have ever had to face." Active in Gaza and the West Bank, Hamas wants to liberate all of Palestine and establish a radical Islamic state in place of Israel. It is has gained notoriety with its assassinations, car bombs and other acts of terrorism. But Sharon left something out. Israel and Hamas may currently be locked in deadly combat, but, according to several current and former U.S. intelligence officials, beginning in the late 1970s, Tel Aviv gave direct and indirect financial aid to Hamas over a period of years. Israel "aided Hamas directly -- the Israelis wanted to use it as a counterbalance to the PLO (Palestinian Liberation Organization)," said Tony Cordesman, Middle East analyst for the Center for Strategic Studies. Israel's support for Hamas "was a direct attempt to divide and dilute support for a strong, secular PLO by using a competing religious alternative," said a former senior CIA official. According to documents United Press International obtained from the Israel-based Institute for Counter Terrorism, Hamas evolved from cells of the Muslim Brotherhood, founded in Egypt in 1928. Islamic movements in Israel and Palestine were "weak and dormant" until after the 1967 Six Day War in which Israel scored a stunning victory over its Arab enemies. After 1967, a great part of the success of the Hamas/Muslim Brotherhood was due to their activities among the refugees of the Gaza Strip. The cornerstone of the Islamic movements success was an impressive social, religious, educational and cultural infrastructure, called Da'wah, that worked to ease the hardship of large numbers of Palestinian refugees, confined to camps, and many who were living on the edge. "Social influence grew into political influence," first in the Gaza Strip, then on the West Bank, said an administration official who spoke on condition of anonymity. According to ICT papers, Hamas was legally registered in Israel in 1978 by Sheikh Ahmed Yassin, the movement's spiritual leader, as an Islamic Association by the name Al-Mujamma al Islami, which widened its base of supporters and sympathizers by religious propaganda and social work. According to U.S. administration officials, funds for the movement came from the oil-producing states and directly and indirectly from Israel. The PLO was secular and leftist and promoted Palestinian nationalism. Hamas wanted to set up a transnational state under the rule of Islam, much like Khomeini's Iran. What took Israeli leaders by surprise was the way the Islamic movements began to surge after the Iranian revolution, after armed resistance to Israel sprang up in southern Lebanon vis-?-vis the Hezbollah, backed by Iran, these sources said. "Nothing provides the energy for imitation as much as success," commented one administration expert. A further factor of Hamas' growth was the fact the PLO moved its base of operations to Beirut in the '80s, leaving the Islamic organization to grow in influence in the Occupied Territories "as the court of last resort," he said. When the intifada began, Israeli leadership was surprised when Islamic groups began to surge in membership and strength. Hamas immediately grew in numbers and violence. The group had always embraced the doctrine of armed struggle, but the doctrine had not been practiced and Islamic groups had not been subjected to suppression the way groups like Fatah had been, according to U.S. government officials. But with the triumph of the Khomeini revolution in Iran, with the birth of Iranian-backed Hezbollah terrorism in Lebanon, Hamas began to gain in strength in Gaza and then in the West Bank, relying on terror to resist the Israeli occupation. Israel was certainly funding the group at that time. One U.S. intelligence source who asked not to be named said that not only was Hamas being funded as a "counterweight" to the PLO, Israeli aid had another purpose: "To help identify and channel towards Israeli agents Hamas members who were dangerous terrorists." In addition, by infiltrating Hamas, Israeli informers could only listen to debates on policy and identify Hamas members who "were dangerous hard-liners," the official said. In the end, as Hamas set up a very comprehensive counter- intelligence system, many collaborators with Israel were weeded out and shot. Violent acts of terrorism became the central tenet, and Hamas, unlike the PLO, was unwilling to compromise in any way with Israel, refusing to acquiesce in its very existence. But even then, some in Israel saw some benefits to be had in trying to continue to give Hamas support: "The thinking on the part of some of the right-wing Israeli establishment was that Hamas and the others, if they gained control, would refuse to have any part of the peace process and would torpedo any agreements put in place," said a U.S. government official who asked not to be named. "Israel would still be the only democracy in the region for the United States to deal with," he said. All of which disgusts some former U.S. intelligence officials. "The thing wrong with so many Israeli operations is that they try to be too sexy," said former CIA official Vincent Cannestraro. According to former State Department counter-terrorism official Larry Johnson, "the Israelis are their own worst enemies when it comes to fighting terrorism." "The Israelis are like a guy who sets fire to his hair and then tries to put it out by hitting it with a hammer." "They do more to incite and sustain terrorism than curb it," he said. Aid to Hamas may have looked clever, "but it was hardly designed to help smooth the waters," he said. "An operation like that gives weight to President George Bush's remark about there being a crisis in education." Cordesman said that a similar attempt by Egyptian intelligence to fund Egypt's fundamentalists had also come to grief because of "misreading of the complexities." An Israeli defense official was asked if Israel had given aid to Hamas said, "I am not able to answer that question. I was in Lebanon commanding a unit at the time, besides it is not my field of interest." Asked to confirm a report by U.S. officials that Brig. Gen. Yithaq Segev, the military governor of Gaza, had told U.S. officials he had helped fund "Islamic movements as a counterweight to the PLO and communists," the official said he could confirm only that he believed Segev had served back in 1986. The Israeli Embassy press office referred UPI to its Web site when asked to comment. Copyright ? 2002 United Press International ________________________________________________________________ GET INTERNET ACCESS FROM JUNO! Juno offers FREE or PREMIUM Internet access for less! Join Juno today! For your FREE software, visit: http://dl.www.juno.com/get/web/. From Michael.Keaney at mbs.fi Tue Jun 25 05:23:24 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Tue, 25 Jun 2002 14:23:24 +0300 Subject: [A-List] France: reactionary prospects Message-ID: Thanks to Sabri for forwarding much of interest, including this: Chirac dominates gathering of EU leaders By George Parker and Judy Dempsey in Seville Financial Times, June 21 2002 20:23 ----- It seems that France is about to resume its "shock therapy" that provoked such protests in 1995 that got Daniel Singer excited in "Whose Millennium". While in many respects these were significant for the reasons outlined by Singer, he missed a crucial point -- actually two: (1) the innate conservatism of French organised labour, with the PCF/CGT basically clinging on to past privileges, including a state-mandated levy paid by Electricit? de France to the CGT (no conflict of interest there? see Lou Proyect's recent writings on financial sources); and, relatedly, (2) the grip of state-centric nationalism on French politics. This was illustrated most graphically in recent years when once serious leftist Jean-Pierre Ch?v?nement (whose works were once quoted by the likes of Poulantzas) resigned from Lionel Jospin's cabinet to form his own "left nationalist" grouping (hardly a movement, as the recent elections confirmed) that was as much about protecting French sovereignty over Corsica as it was protecting any labour rights. Jospin's sin had been to show tolerance of Corsican separatists. Meanwhile the Green Party's original candidate for president, Alain Lipietz, was dropped as soon as he suggested that there should be an amnesty for Corsican separatists. The sorry state of the French left has been highlighted here previously, with references to the PCF's forlorn effort to appeal to the foxhunting lobby and the Socialist Party's pathetic efforts to absolve itself of any blame in its defeat. Most recently Le Monde has been opining on the timidity of Jospin's administration with respect to its lack of enthusiasm for what Le Monde called "social neoliberalism", as exemplified in the person of former finance minister Laurent Fabius. As if to prove the point, the old state-paternalism of the socialists was fundamentally rejected when its supposed personification, Martine Aubry, the "architect" of the 35-hour week, failed to regain her parliamentary seat. How's that for chutzpah? On this reading Jospin emerges with greater credit than ever. Meanwhile PCF leader Robert Hu? managed to follow up his disastrous 3% in the first round of the presidential election by failing to regain his parliamentary seat. So the stage is set once again for a re-run of the Jupp? reforms, except this time there will be no snap election, and Jupp? himself can orchestrate things from the sidelines while Prime Minister Raffarin takes the blame for any unfortunate consequences in what is promising to be a very stormy time ahead for French labour. I don't know enough about the French left to say anything about the nonconformist left and its possible role in all this. Certainly, looking at the votes accumulated by Arlette Arguiller and the other two Trotskyists there is a sizeable group that could adopt something approximating a vanguard role. But it's not clear to me how possible this would be, given the lack of an organisational base comparable to that of the CGT, which remains a very entrenched vested interest and can be expected to put up some resistance to Jupp? Deux. But it's a backward looking resistance and very much compromised by a recent history that has accelerated the decline of the old PCF apparatus to a point where its existence is looking very precarious indeed. Chirac, Jupp? and co. will not find it difficult to ridicule the opposition to "reform" as anachronistic unless the left can pull itself together and engage its constituencies far more effectively than it has been. And until that happens, Chirac is going to be able to strut his stuff at EU conferences, among other events, knowing full well that he is politically unassailable domestically, thanks in large part to the preparations laid by the outgoing Jospin-led coalition. Michael Keaney From Michael.Keaney at mbs.fi Tue Jun 25 05:26:10 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Tue, 25 Jun 2002 14:26:10 +0300 Subject: [A-List] Zimbabwe: Kaunda PR stunt Message-ID: If Patrick Bond or John Enyang or anyone else in the know is around, your comments would be appreciated.... Ex president's PR bid for Mugabe TREVOR GRUNDY and KAY JARDINE The Herald, 25 June 2002 KENNETH Kaunda, the former Zambian president and son of Scottish-based missionaries, will next month mount a paid public relations campaign in Britain on behalf of Robert Mugabe. Dr Kaunda, 77, is to address a series of seminars to coincide with the Manchester-based Commonwealth Games, telling as many Britons as possible that Mr Mugabe is a "great African" who has been seriously misunderstood in the west. Dr Kaunda, who invented the homespun philosophy of "humanism" in 1964 when he became head of state of the former Northern Rhodesia, is understood to be being paid a fee for his trip to the UK, but no more details are available. The PR campaign is being organised by African Strategy, a Harare and London-based PR/political analysis company run by a David Matsanga. Until recently, Mr Matsanga was chief spokesman for the Lord's Resistance Movement (LRM) in Uganda, which has been branded as "terrorists" by the US and UK governments. Mr Matsanga, who claims British as well as Ugandan citizenship (plus a doctorate from an un-named British university), said that Dr Kaunda would talk to African and British scholars to rid them of the impression created in the British media that Robert Mugabe is a monster. Senior executives of the opposition Movement for Democratic Change (MDC) fear that Mr Matsanga is being financed by the Libyans. One highly placed source in Zimbabwe said: "Libya is one of the few countries left which would give money to Mugabe." Mr Mugabe's bankrupt government is presently spending vast sums of money with American and Canadian PR companies. Last year, the government was attacked in Parliament for paying the equivalent of ?750-an-hour to the Washington-based Cohen and Wood lobbyist set-up. In London, Colin Farrington, the director general of the Institute of Public Relations, said that British companies had every right to represent the Zimbabwean government. "But they must give President Mugabe sound advice on how to improve his bad image in Britain. If the president takes good advice, all well and good, but if he fails to respond, no self-respecting PR Company should touch the account," he said. From Michael.Keaney at mbs.fi Tue Jun 25 05:28:05 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Tue, 25 Jun 2002 14:28:05 +0300 Subject: [A-List] UK corporate state: PPPs in disarray Message-ID: Housing transfer policy suffers double setback TOM GORDON The Herald: 25 June 2002 THE Scottish Executive's policy on housing stock transfer suffered a double blow yesterday following problems with both the Glasgow and Shetland Islands schemes. The Glasgow Housing Association (GHA), which plans to take over all the city's 82,000 council homes in November, said its funding prospectus, the financial bible which underpins the ?4bn project, was now two months behind schedule. The document, which must persuade private banks to lend the GHA ?730m, was due by the end of April. The executive also said 22% of Glasgow's local housing organisations, the tenant-run groups which should manage houses on the ground for the GHA, had failed to find their mandatory minimum of seven members. The GHA's daunting training programme is thought to have deterred tenant involvement. A GHA spokesman said the funding prospectus had been delayed by the need for a number of "clarifications" but its emergence was now "imminent". Meanwhile, plans to transfer 2264 council homes and 229 garages to a new landlord in the Shetland Islands are in danger of collapsing over finance. Shetlands Islands Council said its draft proposal to sell the properties to Shetland Homes for ?7000 - just over ?3 a house - had been rejected by the Scottish executive as it did not represent value for money. Valuers had said the properties were worth between ?2m and ?4m, while the executive believed the stock was worth more than ?8m. The council had been prepared to accept ?7000 to allow the new landlord to keep rents low and invest ?80m in repairs. Chris Medley, the council's director of housing services, said "It's disappointing for everyone. The longer it drags on the less interested tenants are in it." Anita Jamieson, Shetland Homes project manager, said it was "perfectly possible" the transfer plan would now collapse, as her board would not agree to a high purchase price which left tenants with high rents and few improvements. From Michael.Keaney at mbs.fi Tue Jun 25 05:30:37 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Tue, 25 Jun 2002 14:30:37 +0300 Subject: [A-List] UK corporate state: PPPs in disarray Message-ID: Anyone following George Monbiot's recent work on PPPs will be aware of his use of the notorious Skye bridge project, which still attracts controversy, as in the following... Toll costs Skye ?5m a year, says university DAVID ROSS The Herald, 25 June 2002 THE economy of Skye would benefit by almost ?4.67m a year in income and by 255 new jobs if the tolls on the Skye bridge were removed altogether, it was claimed yesterday. If they were reduced from the present level (?5.70 each way for a car) to the level of the Forth road bridge (40p for a car) there would be an extra ?4.14m for the economy and 234 jobs, according to a new study of Scotland's first private finance initiative project. The study, by Napier University and commissioned by Highland Council, also said that if tolls were reduced to a ?1 there would still be an extra ?3.54m and 201 jobs. The legality of the toll regime is still the subject of continuing legal challenges by campaigners who claim the bridge has been more than paid for and that the tolls are now only being charged to pay profits of well over ?100m to Skye Bridge Ltd/Bank of America. The council's policy is also to fight for the complete removal of the tolls, but in light of the Napier study councillors are now likely to call on the executive to, at the very least, reduce the tolls to ?1 or, better still, the Forth road bridge level, as a first step. A copy of the research into the economic impact of the toll regime will now be sent to Jack McConnell, first minister, to MSPs and MPs and other national bodies. It will be discussed by Highland Council when it meets in Inverness on Thursday. A report going to councillors from John Rennilson, director of planning and development, summarises the findings. It records that 666,000 vehicles crossed the bridge last year, an expected slight reduction on the previous year, but overall there had been an 8% increase in traffic since the bridge opened in October 1995. Local businesses, however, reported that tourists, particularly short stay visitors and coach parties, had been deterred from crossing the bridge because of the tolls. While there had been benefits, the high level of tolls had considerably reduced the positive impacts. "The Napier study provides sturdy evidence that the economy of Skye is being significantly depressed as a direct consequence of the government's apparent unwillingness to reconsider an unfair toll regime," the report said. From Michael.Keaney at mbs.fi Tue Jun 25 05:33:27 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Tue, 25 Jun 2002 14:33:27 +0300 Subject: [A-List] UK: growing labour unrest Message-ID: Rail union halts Prescott backing By Alan Jones, PA News The Independent, 25 June 2002 Britain's biggest rail union today decided to sack a number of Labour MPs including the Deputy Prime Minister John Prescott and switch financial support to a new group of leading left wingers. The Rail Maritime and Transport Union voted to adopt a new group of Labour MPs including Jeremy Corbyn, Ann Cryer and Diane Abbott. The union's annual conference in Southport decided to stop giving financial support to the constituencies of 13 MPs including Mr Prescott, leader of the House of Commons Robin Cook, Deputy Chief Whip Keith Hill and Transport Select Committee Chairwoman Gwyneth Dunwoody. The MPs, whose constituencies received ?44,000 from the union last year, refused to sign a radical manifesto drawn up by the RMT calling for the renationalisation of the railways and scrapping part privatisation of London Underground. Delegates at the RMT conference lined up to attack Labour for failing to support union policies and there were some calls for the RMT to disaffiliate completely from the Labour Party. The conference is expected later today to cut funds to the Labour Party as a mark of protest. Bob Crow, general secretary of the RMT, said he felt "absolute betrayal" because of Labour's decision to keep the rail industry in the private sector. He also attacked the Government for failing to repeal anti-union legislation which the Tories had introduced and launched an attack against the Government's plans for increased private involvement on London Underground. The RMT wrote to every Labour MP seeking support for its policies and will now back the MPs which replied positively. Mr Crow said he would rather have Labour MPs who were not household names prepared to campaign on behalf of the union than better-known politicians who did "nothing" for the RMT. "Our message should be that we are not disaffiliating from Labour but they cannot take us for granted. "If you accept our money you should represent us." Mr Crow, who is not a member of the Labour Party, said the new group of MPs should be given 12 months to help the union campaign before the issue of disaffiliating from the Labour Party was discussed. London Underground worker Brian Munroe said politicians such as Mr Prescott and Mr Cook should be sacked by the RMT for failing to represent the union's interests. He complained that Mr Prescott had been given time to deal with the country's transport problems adding: "We have seen this Government represent the interests of fatcats and big business. "The new group of MPs will roll up their sleeves and campaign against privatisation of the Tube." Mick Skiggs from Portsmouth said Labour MPs were now in the "last chance saloon" as far as the RMT were concerned. "If they don't deliver we will be back next year and there will be a total split." He argued that the new group of MPs should be given a chance to campaign alongside the union otherwise the RMT should consider severing its links with Labour. Ken Thomas, a delegate from Swansea in South Wales, said the debate was about the "soul" of the Labour Party. He accused the Government of being authoritarian but he said it was the "only show in town" as far as the union movement was concerned. From bond.p at pdm.wits.ac.za Tue Jun 25 05:36:01 2002 From: bond.p at pdm.wits.ac.za (Patrick Bond) Date: Tue, 25 Jun 2002 13:36:01 +0200 Subject: [A-List] Zimbabwe: Kaunda PR stunt Message-ID: Sorry, I have no clue about this particular angle. However, if anyone's in London from 6-8 July, I'll be doing talks (including one on Zimbabwe with the trotskyist MP Munyaradzi Gwisai) at Marxism 2002 and SOAS. One of the things we've put together over the past few weeks, by the way, is a book called "Fanon's Warning: A Civil Society Reader on the New Partnership for Africa's Development" (publishers are Africa World Press and AIDC). It can be previewed at http://www.aidc.org.za and ordered at http://store.yahoo.com/africanworld/1599210090.html I'll be with Zimbabwe grassroots activists this weekend, and will see if they consider this emblematic of anything more serious... Cheers, Patrick >>> Michael.Keaney at mbs.fi 06/25/02 01:26PM >>> If Patrick Bond or John Enyang or anyone else in the know is around, your comments would be appreciated.... Ex president's PR bid for Mugabe TREVOR GRUNDY and KAY JARDINE The Herald, 25 June 2002 KENNETH Kaunda, the former Zambian president and son of Scottish-based missionaries, will next month mount a paid public relations campaign in Britain on behalf of Robert Mugabe. Dr Kaunda, 77, is to address a series of seminars to coincide with the Manchester-based Commonwealth Games, telling as many Britons as possible that Mr Mugabe is a "great African" who has been seriously misunderstood in the west. Dr Kaunda, who invented the homespun philosophy of "humanism" in 1964 when he became head of state of the former Northern Rhodesia, is understood to be being paid a fee for his trip to the UK, but no more details are available. The PR campaign is being organised by African Strategy, a Harare and London-based PR/political analysis company run by a David Matsanga. Until recently, Mr Matsanga was chief spokesman for the Lord's Resistance Movement (LRM) in Uganda, which has been branded as "terrorists" by the US and UK governments. Mr Matsanga, who claims British as well as Ugandan citizenship (plus a doctorate from an un-named British university), said that Dr Kaunda would talk to African and British scholars to rid them of the impression created in the British media that Robert Mugabe is a monster. Senior executives of the opposition Movement for Democratic Change (MDC) fear that Mr Matsanga is being financed by the Libyans. One highly placed source in Zimbabwe said: "Libya is one of the few countries left which would give money to Mugabe." Mr Mugabe's bankrupt government is presently spending vast sums of money with American and Canadian PR companies. Last year, the government was attacked in Parliament for paying the equivalent of ?750-an-hour to the Washington-based Cohen and Wood lobbyist set-up. In London, Colin Farrington, the director general of the Institute of Public Relations, said that British companies had every right to represent the Zimbabwean government. "But they must give President Mugabe sound advice on how to improve his bad image in Britain. If the president takes good advice, all well and good, but if he fails to respond, no self-respecting PR Company should touch the account," he said. From Michael.Keaney at mbs.fi Tue Jun 25 05:34:49 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Tue, 25 Jun 2002 14:34:49 +0300 Subject: [A-List] Unhealthy accumulation: UK GATS preparations Message-ID: Milburn to meet foreign healthcare providers By Lorna Duckworth Health Correspondent The Independent, 25 June 2002 Alan Milburn will push forward plans to cut NHS waiting lists by inviting private healthcare providers from the Continent to build fast-track surgery units in England. Today, the Secretary of State for Health will meet representatives of six companies who hope to win contracts to provide routine operations, such as hip replacements and cataract removals, for NHS patients. Mr Milburn wants foreign companies to become a permanent feature of the NHS by building treatment centres that would be staffed by foreign surgeons and nurses. After today's meeting, he will publish a prospectus outlining how private-sector providers will have to comply with the principles of the NHS. The prospectus will say: "It is an explicit objective of government health policy to shift towards greater plurality and diversity in the delivery of elective surgery services." Among the operators expected to meet Mr Milburn are Germedic and Germanmedicine, both German, and the Swiss-based Opthamology Network Organisation. The onus will be on the companies to provide, manage and operate the centres,. The contractors will also be required to deliver high levels of productivity, provide real increases in clinical staff by bringing in professionals from abroad and provide value for money with costs that are competitive with those in the NHS. * Removing unnecessary red tape could free up about 3.2 million GP appointments in the next two years and improve patients' access to doctors, a report out today says. The Cabinet Office's regulatory impact unit looked at the effect on GPs of removing paperwork for sick notes, repeat prescriptions, housing reports and disability benefit. From Michael.Keaney at mbs.fi Tue Jun 25 05:38:20 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Tue, 25 Jun 2002 14:38:20 +0300 Subject: [A-List] Zimbabwe: Kaunda PR stunt Message-ID: Howdy Pat What about the role of Libya? In the western press of late there has been a rash of uneasy references to Libyan funding or support for this or that project, ranging from the skeptical to the downright hostile (e.g., in its guise as an apparent alternative to the World Bank). Any thoughts? Michael From Michael.Keaney at mbs.fi Tue Jun 25 05:40:17 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Tue, 25 Jun 2002 14:40:17 +0300 Subject: [A-List] UK state: Northern Ireland Message-ID: MI5 and army 'hindered Finucane case' By David McKittrick, Ireland Correspondent The Independent, 24 June 2002 MI5, Military Intelligence and Special Branch all withheld information from investigations into the murder of the Belfast solicitor Pat Finucane, according to a BBC Panorama programme broadcast last night. A former RUC detective-sergeant accused the Special Branch of threatening him, warning him not to investigate and not to speak to the inquiry, which is being led by the Metropolitan Police Commissioner, Sir John Stevens. Military intelligence is accused of failing to pass on to police information about an impending attack on a Belfast Catholic, Gerard Slane, who was shot dead by loyalists. The programme followed an earlier Panorama expos?, which suggested police and Military Intelligence had a hand in the 1989 Finucane killing. The Finucane family and other campaigners are demanding a full public inquiry into the case. A Canadian judge, who has been given the prerogative of establishing such an inquiry, will examine the files but is not expected to give an opinion for well over a year. Panorama said that when Sir John Stevens first investigated the case 12 years ago, MI5 officers signed statements saying they knew virtually nothing about collusion between security elements and loyalist terrorists. In fact, it said, MI5 had direct access to all of the army's secret files. The reporter John Ware said: "MI5 had a crucial piece of intelligence suggesting the police did collude in the murder of Pat Finucane, yet only recently did [it] hand over this vital information to the Stevens inquiry ... It's taken 12 years and three major police enquiries to get this information out of MI5." The former detective-sergeant Nicholas Benwell, a former member of the Stevens team, said the army only handed over files "under duress". He also contradicted a statement to the inquiry by Colonel Gordon Kerr, a former head of a Military Intelligence unit. Colonel Kerr said no one in his unit or in Special Branch knew Gerald Slane had been singled out as a target by Brian Nelson, an army agent within a loyalist terrorist group. But Mr Benwell said: "That's not correct. They knew that Nelson had been targeting Slane." The former RUC Detective-Sergeant Johnston Brown described being warned by a Special Branch officer to stay away from the inquiry. He said he was told: "You walked into the offices of English detectives and you spoke about us, and you think there's no comeback, you think there's no retribution?" ----- British collusion killed our relatives, say Catholics By David McKittrick, Ireland Correspondent The Independent, 25 June 2002 More than 100 people assembled in a Belfast hotel room yesterday to assert their belief that the British authorities killed their relatives, caused them to be killed, or were indifferent to their deaths. The gathering follows two BBC Panorama programmes which put forward evidence that police and army personnel colluded with loyalist terrorists in a series of killings. The issue of collusion has now moved to centre-stage politically, with reports awaited from Sir John Stevens, the Metropolitan Police Commissioner, and a Canadian judge on the cases of the murdered solicitor Pat Finucane and others. But those who organised yesterday's event in the Belfast Europa hotel, while calling for an independent international inquiry, made it clear they needed no more evidence to make up their minds. They displayed the names of hundreds of dead Catholics, labelling each one a victim of state collusion, asserting that all of them had been killed not by loyalist bigotry but by a hidden British hand. "Collusion is all-pervasive and institutionalised," said the meeting's chairman, Mark Thompson of the Relatives for Justice organisation. "It is not the act of renegades or a few bad apples - it has been an integral element in the armoury of the British Army, financed and endorsed by successive British governments." While a clear majority in Northern Ireland regards such a characterisation as propagandist, fanciful and exaggerated, the problem for the authorities is that in the nationalist ghettos the existence of widespread collusion is now seen as an established fact. There have been so many leaks, reports and discoveries of underhand deeds that government and security force denials carry virtually no weight with a substantial section of the population. The authorities point to the fact that thousands of loyalists were locked up during the Troubles. But the stage has been reached, in the ghettos at least, where collusion is almost assumed unless the authorities can prove different. And of course they never can. The other problem for the government is that Panorama and others have produced such strong evidence of security force misbehaviour in a number of cases that those who believe in collusion can very easily argue from the specific to the general. One such case is that of Gerard Slane, who was killed by loyalists in 1988. His son Sean, who was eight at the time, was with him when he died. Sean Slane recalled on Panorama: "I just lay down beside him, asking him to wake up, just crying, asking him to wake up - 'Daddy, wake up, wake up'. "I really did think that it was a dream, that it wasn't real. Thirteen years later I'm still sitting here, hoping for him to wake me up." Gerard Slane's widow, Teresa, was in much distress at yesterday's conference that she could barely get out what she wanted to say. It broke her heart, she said, to watch her son speaking for the first time about his father's death. "It's been really, really hard. We can't go on like this any more. We need to find the truth. We have to find the truth," Mrs Slane said before breaking down in tears. Panorama reported that military intelligence knew that loyalists had singled out Mr Slane, but did not give a clear warning to police. A Metropolitan Police investigator said: "They knew that [army agent Brian] Nelson had been targeting Slane. They also knew that he'd been to his intelligence dump and he'd got a photograph of Slane which he'd handed to one of the most prolific killers in the organisation. That at least should have set the alarm bells ringing and they should have been passed to the RUC." It is evidence such as this that gives the authorities so much explaining to do, and gives the critics so much ammunition. The platform message yesterday was that the 1,000 or so deaths caused by loyalist paramilitary groups must all have involved collusion, no matter how unlikely the circumstances. Those in the hall, who have been heavily politicised by the Troubles in general and by their own life experiences in particular, are very open to such arguments. Although most of the rest of Northern Ireland is not so convinced, even many of the sceptics have been made uneasy by recent revelations. From Michael.Keaney at mbs.fi Tue Jun 25 05:41:36 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Tue, 25 Jun 2002 14:41:36 +0300 Subject: [A-List] UK: rising labour discontent Message-ID: UK air traffic controllers plan summer strikes By Jo Dillon, Political Correspondent The Independent, 23 June 2002 Millions of holidaymakers face the threat of serious disruption at Britain's airports at the height of the holiday season as air traffic control staff call for strike ballots. Ministers fear any walkouts taking place at British airports in late July and August would be disastrous. The Government has privately urged National Air Traffic Services trade unions and management to agree a swift pay deal to avert the threat of disruptive summer strikes. Both sides have been pressed to find a speedy solution ahead of a meeting on Wednesday between Nats and the air traffic controllers' union Prospect. There were "positive signs" of a willingness to do a deal during negotiations last week, David Luxton, the union's aviation officer, said. The union leadership, unwilling to cause unnecessary heartache for travellers, is reluctant to strike if a way forward can be found. But Mr Luxton warned: "While we were encouraged by the more positive tone and I am more optimistic, there is considerable pressure on us from our members wanting us to go straight into an industrial action ballot." Air traffic controllers voted by a margin of four to one to reject the latest Nats pay offer. They said a rise of 2.2 per cent for 2002 was "unreasonable" at a time of unprecedented change to the air traffic system. It was, the union said, a "real blow to morale". "After the considerable upheaval they have been through, it is not an adequate recognition of their pressures," Mr Luxton said. The Government is officially not involved in the negotiations, according to the Department of Transport. But ministers are understood to have made it clear that strike action must be avoided. Minds were concentrated further by the general strike in Spain on Thursday, which caused disruption to around 80,000 Britons planning to travel to or from Spain or the Canary Islands. The heightened pressures on air traffic controllers, now operating from their new centre in Swanwick, Hampshire, were highlighted last week when a full investigation had to be launched into an incident in which two British Airways jets, carrying 300 passengers and crew, missed each other by just 200ft. It appears that a crucial piece of equipment at the new ?623m centre failed. The Government is also seeking to avert strike action in other public services. In a series of private talks with union leaders in Downing Street, Tony Blair has appealed for calm as disputes over pay, privatisation and job cuts threaten to prompt a massive wave of industrial unrest. Postal workers will ballot this week. London Underground workers will start voting the following week on a series of stoppages over safety, and the RMT rail union has set 10 strike dates in the Arriva Trains Northern pay dispute. Firemen are also demanding a new pay deal with the threat that a ballot on strike action might be called. Added to this is the possibility of more than a million local authority staff walking out over pay. The new militancy among public sector workers could spell a difficult summer for the Government - and for the public - if attempts to quell discontent fail. From Michael.Keaney at mbs.fi Tue Jun 25 05:43:56 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Tue, 25 Jun 2002 14:43:56 +0300 Subject: [A-List] France: reactionary developments Message-ID: Chirac 'to sack intelligence chiefs for spying on him' By John Lichfield in Paris The Independent, 24 June 2002 President Jacques Chirac is preparing to settle a personal score with the two main French intelligence services by sacking their top officials. The newly re-elected President, who holds all the levers of power for the first time in five years, suspects the French equivalents of MI5 and MI6 of conspiring with the previous Socialist-led government to investigate his private life and financial dealings. According to the newspaper Le Monde, Mr Chirac will take his revenge in the next few weeks by firing the head of the main French espionage agency, the Direction G?n?rale de La S?curit? Ext?rieure (DGSE) and the principal counter-espionage agency, La Direction de la Surveillance du Territoire (DST). Although it is common for the heads of leading national agencies to be changed by a new government, sources in the Elys?e Palace say that Mr Chirac has personal reasons to want to get rid of Jean-Claude Cousseran, the head of the DGSE, and Jean-Jacques Pascal, the head of the DST. He suspects the DST of re-opening investigations last year into his alleged involvement in the payment of ransoms for the release of French hostages in Lebanon when he was Prime Minister between 1986 and 1988. The French state has always officially denied that money was handed over but it was widely rumoured at the time that a ransom was paid through a third party. There have also been rumours that part of the cash was siphoned off and used for party political purposes by Mr Chirac's party, the RPR. Mr Chirac also reportedly suspects the DGSE of attempting to investigate his financial links with Shoichi Osada, a disgraced Japanese banker who was arrested in 2000 for insider dealing. Elys?e officials also toldLe Journal du Dimanche yesterday that the DST may also have been involved in attempts to investigate Mr Chirac's "private life" - almost certainly a code for extra-marital sexual affairs. Since these have been referred to by his wife, Bernadette Chirac, in her book published last year, it is unclear why a counter-espionage agency should need to investigate. In all cases, Mr Chirac believes that the agencies agreed to dig up dirt for the government of Lionel Jospin that could be used in the presidential election in April and May this year. Senior Socialist figures dismissed the allegations yesterday as a "witch-hunt" intended to justify a progressive "Chiracisation" of the intelligence services and all other leading law agencies. In the Lebanese and Japanese cases, the spy agencies do appear to have mounted an investigation but intelligence sources told the French press that Mr Chirac was not the target. From Michael.Keaney at mbs.fi Tue Jun 25 05:53:49 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Tue, 25 Jun 2002 14:53:49 +0300 Subject: [A-List] Brazil: liberal markets vs. bourgeois democracy Message-ID: What are the payoffs of all this from the point of view of US imperialists that would wish to smother Latin America under a nominal FTAA umbrella that is simply the latest form of colonialism? How coincidental should it be that just at the point the US dollar is looking weaker than it has for a long time, suddenly financial contagion should afflict South America, enabling Paul O'Neill to lecture silly electorates on making poor choices? Financial markets conspire to make Brazil's economic crisis even worse Another emerging markets crisis threatens as Brazil struggles to pay mounting debts By Philip Thornton, Economics Correspondent The Independent, 25 June 2002 When the Brazilian World Cup football team takes to the field tomorrow, its supporters will be praying for a win to take their minds off their domestic economic woes. The countrywide celebrations after Friday's elimination of England certainly took the edge off the collapse of its currency, the real, to an all-time low against the dollar. But there is no hiding from the harsh reality. There are mounting fears the giant Latin American economy is about to follow its neighbour Argentina into default. Not only would this bring misery to the Brazilian people. As the second national financial crisis this year, it could send shockwaves around a recession-hit global economy. "If Brazil went into a major crisis, I don't think you could comfortably say it could be easily ring-fenced," said David Riley, managing director of sovereign ratings at the credit agency Fitch. Last week Fitch cut its ratings on Brazil and slapped a negative outlook warning on its prospects. It was not alone; Moody's Investor Services cut its assessment to negative from stable. Mr Riley said the first countries to feel the impact would be emerging markets, which have already suffered as investors took flight from any risky investments in the wake of the Argentina crisis. Uruguay has already felt the impact. It was forced to abandon its exchange-rate peg last week, and saw its currency fall 10 per cent as a result. One of the casualties could be Turkey, which has been hit by the six-week illness of its Prime Minister Bulent Ecevit. Ironically Turkey is Brazil's opponent in tomorrow's semi-final. "How severe the impact would be on developed markets is difficult to say but it certainly won't help matters in the US," Mr Riley said. For the world's largest economy, a Brazilian crisis would eliminate another potential purchaser of US goods on its doorstep. But more importantly it could further undermine investor confidence. This could start a vicious spiral for the world economy, as it was the collective decision of the financial markets to turn against Brazil that triggered the crisis. Both Fitch and Moody's cited the downturn in investor sentiment in their warnings. "The change in outlook reflects the real and potentially lasting impact on the government debt dynamics that can result from a sharply negative change in investors' sentiment that has emerged in recent weeks," Moody's said. But the curious factor in this change of outlook is that, as Moody's points out, it has taken place against a background of a "sound macroeconomic policy mix". In fact even a few months ago, a crisis in Brazil did not look likely. The economy had withstood the impact of the Argentine collapse, mainly thanks to its decision to devalue its currency some four years before its neighbour was forced to do so. But as investors' mood has shifted, Brazil's huge debt mountain has become more exposed. The nation has overall public debt of $230bn (?160bn), or 53 per cent of its annual GDP, although only 28 per cent of that is internationally traded. However, Brazil has been forced to pay a higher and higher premium to gain or renegotiate loans. The risk spread on its bonds - how much more it has to pay in interest compared with US treasuries - has widened to 1,500 basis points from 750 last year. In other words borrowers are paying a 15 per cent premium at a time when inflation is about 4.5 per cent. In a sign of the important role the markets will play in Brazil's survival, the president of its central bank, Arminio Fraga, will arrive in London tomorrow and meet bankers to try to stem their recent sales of Brazilian bonds, stocks and currency. At the heart of the markets' concern is the upcoming presidential election and the surge in popularity of the Workers' Party and its left-wing leader Luiz In?cio Lula da Silva. But Fitch's Mr Riley said he was more concerned over medium-term issues including high levels of debt, a struggling economy that has grown 0.5 per cent in the past year and the risk that continued low growth would exacerbate poverty and lead to political instability. "In the near term it would not take too much to put Brazil in a vicious cycle where the medium-term issues get crystallised into near-term problems," he said. For pressure groups that are growing increasingly concerned about the fate of Latin American peoples, this would be a great injustice. Ann Pettifor, director of Jubilee Research, said Brazil should serve as a reminder, just a few months after Argentina, of the role played by the financial markets and institutions such as the International Monetary Fund and the World Bank. "This poor little country has been told by the IMF to expose itself to the global financial markets but when it fails they will blame this all on a workers' leader," she said. Rather than be forced to borrow money at rapidly appreciating rates of interest, she said countries such as Brazil that face a potential crisis should be able to call a stand-still on its debts. Jubilee advocates a system similar to Chapter 11 bankruptcy procedures that enable US companies to restructure while keeping creditors at bay. For its part the IMF has already embarked on a major review of how countries at risk of default could be granted a temporary stay on their interest payments. It has been highly supportive of the Brazilian administration, which last week drew about ?7bn of reserves from the IMF at the same time as toughening up its target for the public finances. "The fund is strongly supportive of the Brazilian authorities' efforts," a spokesman said. "They have taken bold moves quickly, not waiting for developments to force them to act - rather, that they have taken the initiative." But the global authorities appeared complacent after their reassurances over Argentina turned out to be misplaced. For this reason, if no other, Brazil will be near the top of the agenda when the leaders of the Group of Eight nations meet in Canada tomorrow - and not just because of an interest in the outcome of its World Cup tie. From Michael.Keaney at mbs.fi Tue Jun 25 05:58:25 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Tue, 25 Jun 2002 14:58:25 +0300 Subject: [A-List] Imperialism: G8 vs. Africa Message-ID: At the seat of empire Africa is forced to take the blame for the devastation inflicted on it by the rich world George Monbiot Tuesday June 25, 2002 The Guardian In the Canadian fastness of Kananaskis this week, the messianic cult of empire will solemnly worship itself. The leaders of the G8 nations will declare that they have come to deliver the world from evil. They will announce that they are sacrificing themselves for the good of lesser nations. They will propose solutions from on high, without acknowledging any responsibility for the problems. It is traditional, when empire celebrates, that its vassal states come to pay tribute and beg for deliverance. This time, the African leaders who will be admitted to the summit on Thursday are prepared to suffer the final humiliation by blaming themselves for the disasters visited upon them by the G8. "Africa," according to the Canadian government, "will remain a central focus of the Kananaskis summit." The discussions will revolve around a plan called the New Partnership for Africa's Development, or Nepad, drafted by the African leaders and enthusiastically endorsed by the G8. The enthusiasm is not entirely surprising, as Nepad places nearly all the blame for Africa's problems and nearly all the responsibility for sorting them out on Africa itself. In the hope that it might win them a few crumbs of aid and extra debt relief, the continent's leaders appear to have told the rich world everything it wants to hear. Nepad accepts that colonialism, the cold war, and "the workings of the international economic system" have contributed to Africa's problems, but the primary responsibility rests with "corruption and economic mismanagement" at home. Few would deny that these have played a significant role, but nowhere in the document on which the plan is based is there any mention of the far more consequential corruption and mismanagement by the nations to whom they are appealing. Africa's underlying problem, as the continent's leaders acknowledge, is debt. Nepad implicitly accepts the rich world's explanation for this debt: that previous African leaders have frittered away their economic independence through poor planning and personal graft. Nowhere is any context given: that Africa's deficit is merely one component of a vast and growing global debt, affecting consumers and nations in the rich world as well as nations in the poor world. The US, for example, owes $2.2 trillion: almost as much as the entire developing world's debt put together. No mention is made of the debt-based banking system which has caused this crisis, and which ensures that the only way debts can be discharged is through the issue of more debt. This problem, as poor nations know but dare not acknowledge, is compounded by the policing system developed by the rich world at Bretton Woods in 1944. Rather than the self-correcting mechanism proposed by John Maynard Keynes, which forced creditors as well as debtors to discharge the debt, the World Bank and International Monetary Fund were introduced as a means of persuading only the debtor nations to act, in the knowledge that this couldn't possibly work. This system granted the rich world complete economic control over the poor world. The power that nations wield within the IMF is a function of their gross domestic product: the richer they are, the more votes they can cast. The World Bank is run entirely by "donor" states. These two bodies, in other words, respond only to the nations in which they do not operate. The consequences for national democracy are devastating. African voters can demand a change of government, but they cannot demand a change of policy. All the important decisions affecting the continent are made in Washington, and they always boil down to the neoliberal demolition of the state's capacity to care for its people. So when the African leaders announce that "Africa undertakes to respect the global standards of democracy", they are accepting a burden they cannot lift. Democracy in Africa is meaningless until its leaders are prepared to challenge the external control of their economies. But far from denouncing the authors of their misfortunes, they appear only to embrace them. "Structural adjustment", the IMF policy which has forced countries to repay their debts instead of investing in healthcare and education, is now almost universally acknowledged as the nemesis of development in Africa. Nepad's fiercest criticism is that it "provided only a partial solution" to poverty. Africa's leaders have pledged to support not only its successor policies (such as the IMF's demand that Malawi privatise its food reserves, with the result that millions of its inhabitants are now at risk of starvation), but also the Africa Growth and Opportunity Act passed by the US Congress. This seeks to complete the job which structural adjustment began: forcing African nations to dismantle state support and privatise their economies in return for minimal concessions on trade and aid. Without addressing any of these obstacles, Nepad blithely promises to eliminate poverty, enrol all children in primary school, reduce child mortality by two-thirds and supply the continent with clean water and effective infrastructure. It will achieve these worthy aims, it claims, largely by means of "public-private partnership", the mechanism which is now failing so spectacularly in the rich world, while being forced on Africa by the G8. Agricultural development depends, Nepad tells us, "on the removal of a number of structural constraints affecting the sector". One might have expected this to mean the dumping of subsidised produce on the African market by Europe and North America, which is widely acknowledged as a crippling impediment to effective farming on the continent. But this is never mentioned. Instead, the plan insists, the "key constraint is climatic uncertainty". Quite how the African leaders intend to "remove" this constraint is not explained, but that objective is arguably just as realistic as any of the others they propose. Apart from a few timid requests for an increase in aid and a little more debt relief, the continent's leaders absolve the G8 nations of all responsibility. Instead, they proudly proclaim that "we will determine our own destiny" and call on the people of Africa "to mobilise themselves in order to put an end to further marginalisation of the continent". Self-determination is an admirable goal, but without control over economic policy it is bombast. Some might say that this self-flagellation is a realistic means of engaging with the imperial powers in Kananaskis: the G8 nations, after all, do not take kindly to being lectured on their responsibilities. Nepad could be viewed as a white lie: the lies of the whites, repeated, with the best intentions, by the leaders of Africa. But development cannot be built on a lie, for development is a matter of reality. So while their plan has admitted them to the imperial court, it merely reinforces the dispensation that ensures Africa stays poor while the G8 stays rich. The continent's leaders will be forced to kneel on the stony ground of Kananaskis. But at least they've brought a Nepad. From Michael.Keaney at mbs.fi Tue Jun 25 06:49:40 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Tue, 25 Jun 2002 15:49:40 +0300 Subject: [A-List] UK corporate state: PPPs in disarray Message-ID: Following on from our previous reportage of PPPs in the NHS (see http://lists.econ.utah.edu/pipermail/a-list/2002-June/006458.html): Private Eye No. 1056, 14-27 June 2002 Loyal Blairite cheerleaders such as Julia Drown MP have been striving valiantly to discredit Professor Allyson Pollock, the leading academic critic of the private finance initiative (PFI), who argues that the government's case for PFI depends on a "value-for-money" assessment which is grotesquely skewed in favour of private finance. Drown even managed to insert a few paragraphs into a recent report from the health select committee loftily asserting that Prof Pollock's claims are "not backed up by evidence" (see last Eye). Now Julia Drown and her patrons in No 10 have a new monster to slay. One Jeremy Colman told the Financial Times last Wednesday that government departments and local authorities are relying too much on "spurious" figures when concocting the "public-sector comparators" which supposedly prove that PFI offers value for money. Some are "pseudo-scientific mumbo-jumbo", others are "utter rubbish" and are reworked so late in the deal that the public-sector comparator ceases to represent a realistic alternative. "There is scope to manipulate the figures," he explained. "People have to prove value for money to get a PFI deal. But because that is wrongly seen to be demonstrated only by the public-sector comparator, it becomes everything. If the answer comes out wrong, you don't get your project. So the answer doesn't come out wrong very often." This seems to bear out what Prof Pollock has been saying. But it may be difficult for the "new" Labour clones to smear Jeremy Colman as another flakey, politically-motivated ignoramus who doesn't understand the arcane mysteries of Whitehall finance. He is deputy controller and auditor general at the government's very own national audit office! From Michael.Keaney at mbs.fi Tue Jun 25 06:55:14 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Tue, 25 Jun 2002 15:55:14 +0300 Subject: [A-List] US imperialism, from A to BB Message-ID: While the Bush administration seeks to further besmirch the reputation of the Clinton presidency by finger-wagging at the excesses of corporate leaders during the great bull run -- men such as ex-Halliburton CEO Dick Cheney -- here's another fascinating piece of information about the mindboggling compromises that capitalists routinely make, jeopardising all-important national security... Private Eye No. 1056, 14-27 June 2002 ABB Clarification In Eye 1052 we noted that US defence secretary Donald Rumsfeld was on the board of the Swedish-Swiss engineering company ABB when it signed contracts to deliver equipment and services for two nuclear power stations in North Korea -- a country identified in George W. Bush's notorious "axis of evil" speech. We suggested that Rumsfeld resigned as a director soon after ABB signed the contract. In fact, ABB announced the North Korean venture in January 2000. In May 2000 ABB's nuclear division was taken over by Westinghouse Electric Company (which is owned by BNFL). And Rumsfeld resigned in February 2001. Apologies for the confusion. From soncu at pacbell.net Tue Jun 25 11:59:27 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Tue, 25 Jun 2002 10:59:27 -0700 Subject: [A-List] Re: Brazil: liberal markets vs. bourgeois democracy Message-ID: Michael asks: > What are the payoffs of all this from the > point of view of US imperialists that would > wish to smother Latin America under a nominal > FTAA umbrella that is simply the latest form > of colonialism? How coincidental should it be > that just at the point the US dollar is > looking weaker than it has for a long time, > suddenly financial contagion should afflict > South America, enabling Paul O'Neill to lecture > silly electorates on making poor choices? I have been asking similar questions myself for quite some time. Indeed, since the beginning of the Argentine crisis and even before. O'Neill started mentioning his opposition to IMF bail-outs from day one in the office. Letting Argentina collapse was a right step in the direction of killing Mercosur but letting Brazil collapse definitely kills Mercosur and then FTAA, that is, US, reigns supreme in South America. I was expecting US to adopt this strategy irrespective of what is happening to the dollar and of Lula's lead in the polls, as Brazil's catching the Argentine cold appeared to me to be just a matter of when, not a matter of if. Brazil's collapse will be very bad for Turkey too. As I am getting ready to watchg the Brazil-Turkey World Cup game tonight, I keep remembering a gladiator-fight scene from the movie Spartacus and I don't know why. Sabri From annewilliamson at msn.con Tue Jun 25 14:05:32 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Tue, 25 Jun 2002 16:05:32 -0400 Subject: [A-List] Re: Brazil: liberal markets vs. bourgeois democracy References: Message-ID: <004501c21c83$ca2c7580$0100a8c0@igrushkii> Michael and Sabri: I believe the game with Argentina is to force them to dollarize -- and this game began under Summers at US Treasury some years ago. Ecuador was just a trial run. Rudi Dornbusch at MIT has taken the lead on the theoretical front, babbling on about how great dollarization would be for Latin America, and Mexico in such venues as the WSJ. If I am correct, then the crisis in Argentina leading to dollarization would work as a lead pipe cinch for the new colonialists' FTAA. This is cleverer than what Europe has attempted to do - one central bank for a slew of quite distinct countries/economies - in that the dollar triumphs against a backdrop of weak and assaulted currencies, leading to a unified commercial space with one currency. The US is in a strong position because most of the Latin American govts have allowed themselves to become dependent on US largesse (private and public) and the US dollar by virtue of having nearly 70% of their central bank reserves in dollars.......and so "my power is their power" will win the day amongst compromised leaders/ shaky governments. The contagion emanating from Argentina, alas, may only serve to inspire a more rapid capitulation. If the US succeeds in this effort, then the American empire will have been given a shot in the arm just when it appeared it was heading for a financial smash-up centered upon a weakening dollar. What a commodity play! Anne ----- Original Message ----- From: Sabri Oncu To: ALIST Sent: Tuesday, June 25, 2002 1:59 PM Subject: [A-List] Re: Brazil: liberal markets vs. bourgeois democracy > Michael asks: > > > What are the payoffs of all this from the > > point of view of US imperialists that would > > wish to smother Latin America under a nominal > > FTAA umbrella that is simply the latest form > > of colonialism? How coincidental should it be > > that just at the point the US dollar is > > looking weaker than it has for a long time, > > suddenly financial contagion should afflict > > South America, enabling Paul O'Neill to lecture > > silly electorates on making poor choices? > > I have been asking similar questions myself for quite some time. > Indeed, since the beginning of the Argentine crisis and even > before. O'Neill started mentioning his opposition to IMF > bail-outs from day one in the office. Letting Argentina collapse > was a right step in the direction of killing Mercosur but letting > Brazil collapse definitely kills Mercosur and then FTAA, that is, > US, reigns supreme in South America. I was expecting US to adopt > this strategy irrespective of what is happening to the dollar and > of Lula's lead in the polls, as Brazil's catching the Argentine > cold appeared to me to be just a matter of when, not a matter of > if. Brazil's collapse will be very bad for Turkey too. As I am > getting ready to watchg the Brazil-Turkey World Cup game tonight, > I keep remembering a gladiator-fight scene from the movie > Spartacus and I don't know why. > > Sabri > > > From soncu at pacbell.net Tue Jun 25 15:38:33 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Tue, 25 Jun 2002 14:38:33 -0700 Subject: [A-List] Re: Brazil: liberal markets vs. bourgeois democracy Message-ID: Anne writes: > I believe the game with Argentina is to force > them to dollarize -- and this game began under > Summers at US Treasury some years ago. Ecuador > was just a trial run. Your arguments sound quite plausible Anne. By the way, what happened in Ecuador in January-February 2000, after they dollarized was very sad. A "failed revolution" took place there as some of you may recall. I believe the failed Ecuadorean "revolution" is another example of what happens if the screwed are not prepared to keep the power they take. They took it for a day or two and then let it go. Could they have held on to it in the then prevailing conditions, I don't know! Maybe not... Sabri ++++++++++ Ecuador govt, Indians restart talks after deaths By Alistair Scrutton QUITO, Ecuador, Feb 6 (Reuters) - Ecuador's government on Tuesday restarted talks with Indian groups to try and defuse a spiraling political crisis after three protesters demanding fuel and transport price cuts were killed in clashes with security forces. The deaths on Monday were the first during two weeks of street protests by Indian groups and resulted in the suspension of negotiations with the government aimed at ending the political impasse. The suspension of the talks was a setback for the one-year-old government of President Gustavo Noboa, who is trying to consolidate political stability in this polarized Andean nation of 12 million people, about the size of Italy. The Indians say they account for about half of Ecuador's population. "(The two sides) are preparing the talks so that finally there may be able to achieve direct talks with the president," talks mediator Auki Tituana, a well-respected municipal leader, told Reuters. Both sides say they are willing to negotiate, but Monday's deaths had dampened hopes that a solution could be found. The Indian protests brought back memories of last year's indigenous marches which, backed by some military officers, eventually toppled then President Jamil Mahuad who was unable to control a flagging economy. Noboa, then vice president, replaced Mahuad and he has less than two years of his presidential term left. Tensions were already running high after Noboa -- Ecuador's fourth president in four years -- on Friday declared a state of emergency, restricting travel and meetings and putting the army on the streets, to combat marches in Quito and major regional cities. No clashes with security forces were reported early Tuesday, according to local media, but it was unclear how successful the talks would be. Indian demonstrators, backed by various student, teacher and trade union groups, have planned a major strike for Wednesday. Mired in economic troubles, with three quarters of its people without full-time jobs, Ecuador has lagged behind other Latin American nations, many of which have made significant strides toward free market economies and democratic stability. It has also become a regional concern. Signs that the war in neighboring Colombia between leftist rebels and the government could spill over into Ecuador are further threatening the country's fragile democracy. Indian protesters, who often dress in traditional highland ponchos while coordinating marches on cell phones, have blocked roads between major cities, cutting the supply of basic goods like fruits and vegetables. The Red Cross said two Indian protesters were found shot dead on Monday in the Amazon province of Napo and a third Indian demonstrator was killed in Andean region of Tungurahua. Indian groups claimed the army had fired on thousands of marchers. The Red Cross and the Ecuadorean armed forces said dozens more protesters had been injured. ANALYSTS SAY ANOTHER COUP IS UNLIKELY Analysts say another coup was unlikely since Noboa has the support of the business community and the military, which frequently acts as a powerbroker. However, the president's support is waning. According to leading pollster Cedatos, Noboa has the support of 28 percent of the popu lation, compared with 43 percent in December. Highways across the nation's highlands have been blocked by protesters for more than a week, making travel and trade nearly impossible and cutting the supply of basic goods like fruits, vegetables and fuel to some of Ecuador's biggest cities. The fuel price hikes prompted some 5,000 Indians to travel to Quito in protest. Many of them are camping at the city's Salesian University campus, which has been surrounded by dozens of policemen. Ecuador, which last year adopted the U.S. dollar as its official currency to combat high inflation and sluggish growth, is struggling through an economic crisis that saw it default on its debt in 1999 and post the highest inflation in Latin America three years running. From annewilliamson at msn.con Tue Jun 25 16:51:08 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Tue, 25 Jun 2002 18:51:08 -0400 Subject: [A-List] Re: Brazil: liberal markets vs. bourgeois democracy References: Message-ID: <006601c21c9a$cc7d4be0$0100a8c0@igrushkii> Sabri: The real corker, I fear, in the Ecuadoran tragedy is that they are on schedule to default once again in approximately 2 years. I am very fearful of the troubles to come throughout all of Latin America, and Mexico (the 94 bailout solved nothing and only worked to increase their overall debt burden.) Economists will be writing about that "Committee to Save the World" (Summers, "Peso Bob" Rubin and Easy Al Greenscam) pictured on the front of Time Magazine after the LTCM fiasco for decades. Anne ----- Original Message ----- From: Sabri Oncu To: ALIST Sent: Tuesday, June 25, 2002 5:38 PM Subject: [A-List] Re: Brazil: liberal markets vs. bourgeois democracy > Anne writes: > > > I believe the game with Argentina is to force > > them to dollarize -- and this game began under > > Summers at US Treasury some years ago. Ecuador > > was just a trial run. > > Your arguments sound quite plausible Anne. By the way, what > happened in Ecuador in January-February 2000, after they > dollarized was very sad. A "failed revolution" took place there > as some of you may recall. I believe the failed Ecuadorean > "revolution" is another example of what happens if the screwed > are not prepared to keep the power they take. They took it for a > day or two and then let it go. Could they have held on to it in > the then prevailing conditions, I don't know! > > Maybe not... > > Sabri > > ++++++++++ > > Ecuador govt, Indians restart talks after deaths > By Alistair Scrutton > > > QUITO, Ecuador, Feb 6 (Reuters) - Ecuador's government on Tuesday > restarted talks with Indian groups to try and defuse a spiraling > political crisis after three protesters demanding fuel and > transport price cuts were killed in clashes with security forces. > > The deaths on Monday were the first during two weeks of street > protests by Indian groups and resulted in the suspension of > negotiations with the government aimed at ending the political > impasse. > > The suspension of the talks was a setback for the one-year-old > government of President Gustavo Noboa, who is trying to > consolidate political stability in this polarized Andean nation > of 12 million people, about the size of Italy. > > The Indians say they account for about half of Ecuador's > population. > > "(The two sides) are preparing the talks so that finally there > may be able to achieve direct talks with the president," talks > mediator Auki Tituana, a well-respected municipal leader, told > Reuters. > > Both sides say they are willing to negotiate, but Monday's deaths > had dampened hopes that a solution could be found. > > The Indian protests brought back memories of last year's > indigenous marches which, backed by some military officers, > eventually toppled then President Jamil Mahuad who was unable to > control a flagging economy. > > Noboa, then vice president, replaced Mahuad and he has less than > two years of his presidential term left. > > Tensions were already running high after Noboa -- Ecuador's > fourth president in four years -- on Friday declared a state of > emergency, restricting travel and meetings and putting the army > on the streets, to combat marches in Quito and major regional > cities. > > No clashes with security forces were reported early Tuesday, > according to local media, but it was unclear how successful the > talks would be. > > Indian demonstrators, backed by various student, teacher and > trade union groups, have planned a major strike for Wednesday. > > Mired in economic troubles, with three quarters of its people > without full-time jobs, Ecuador has lagged behind other Latin > American nations, many of which have made significant strides > toward free market economies and democratic stability. > > It has also become a regional concern. Signs that the war in > neighboring Colombia between leftist rebels and the government > could spill over into Ecuador are further threatening the > country's fragile democracy. > > Indian protesters, who often dress in traditional highland > ponchos while coordinating marches on cell phones, have blocked > roads between major cities, cutting the supply of basic goods > like fruits and vegetables. > > The Red Cross said two Indian protesters were found shot dead on > Monday in the Amazon province of Napo and a third Indian > demonstrator was killed in Andean region of Tungurahua. > > Indian groups claimed the army had fired on thousands of > marchers. > > The Red Cross and the Ecuadorean armed forces said dozens more > protesters had been injured. > > ANALYSTS SAY ANOTHER COUP IS UNLIKELY > > Analysts say another coup was unlikely since Noboa has the > support of the business community and the military, which > frequently acts as a powerbroker. > > However, the president's support is waning. According to leading > pollster Cedatos, Noboa has the support of 28 percent of the popu > lation, compared with 43 percent in December. > > Highways across the nation's highlands have been blocked by > protesters for more than a week, making travel and trade nearly > impossible and cutting the supply of basic goods like fruits, > vegetables and fuel to some of Ecuador's biggest cities. > > The fuel price hikes prompted some 5,000 Indians to travel to > Quito in protest. Many of them are camping at the city's Salesian > University campus, which has been surrounded by dozens of > policemen. > > Ecuador, which last year adopted the U.S. dollar as its official > currency to combat high inflation and sluggish growth, is > struggling through an economic crisis that saw it default on its > debt in 1999 and post the highest inflation > in Latin America three years running. > > > From ssandron at hotmail.com Tue Jun 25 21:51:14 2002 From: ssandron at hotmail.com (Seth Sandronsky) Date: Wed, 26 Jun 2002 03:51:14 +0000 Subject: [A-List] Sharon, the failed kingmaker: Before he tries to replace Arafat, he should remem Message-ID: Sharon, the failed kingmaker: Before he tries to replace Arafat, he should remember Lebanon By Charles Glass The Guardian June 25, 2002 Powerful voices in Israel, effectively backed last night by President Bush, are calling on Ariel Sharon to crown his reconquista of the West Bank by naming a new Palestinian leader. If he does so, it will be his second exercise in Arab kingmaking. The first was 20 years ago in Lebanon. Eighteen years and thousands of dead later, Israelis were as happy to leave as the Lebanese were to see them go. The parallels between the invasions of Lebanon and of the Palestinian Authority zones are too many to ignore. Sharon holds Arafat responsible for Palestinian violence in exactly the way Israeli leaders used to blame Lebanon. The Lebanese government, like Arafat, was too weak to stop a war whose roots go far deeper than whoever happens to be in nominal charge. Following the 1967 Arab- Israeli war, the Palestinian commando movement came into being. And Israel hit Lebanon after every Palestinian raid organised in Beirut, waging a steady war on Lebanon's cities, villages and infrastructure. In 1968, Israel destroyed 13 civilian aeroplanes of Lebanon's airline at Beirut airport, just as this year it destroyed the Palestinian airport in Gaza. Israel's raids strengthened the PLO in Lebanon then; Sharon's destruction of Arafat's Ramallah headquarters has restored some of the latter's popularity now. In Lebanon, the Israel-PLO battles sparked a war that destroyed the Lebanese state. Israeli actions in the West Bank have crippled the PA. When Israel failed both to control the PLO in Lebanon and destroy its popularity in the occupied territories, it invaded Lebanon twice, in 1978 and in 1982. In 1982, the defence minister, Ariel Sharon, played Lebanese kingmaker. After expelling 14,000 PLO fighters from Beirut, he forced the Lebanese parliament to choose as president the Christian militia commander Bashir Gemayel. Sharon and Gemayel then plotted an assault on the Palestinian refugee camps in west Beirut that bears an uncanny similarity to Israel's operations in the West Bank since March. The Israeli army would seize key buildings and roads. Gemayel's militiamen would be transported to the refugee camps to root out "terrorists", in violation of Israeli undertakings to the US to leave west Beirut unmolested. The Israeli historian Benny Morris wrote that the plan called for Gemayel's Phalange to "do the dirty work in the refugee camps, carrying out arrests, interrogations, and demolition of buildings". When a Syrian agent assassinated Gemayel, Sharon put the plan into action. He told Gemayel's lieutenant Elie Hobeika, as Israel's Kahan commission discovered: "I don't want a single one of them left." Sharon said he meant "terrorists", but there were no armed fighters in Sabra and Shatila refugee camps. Hobeika, whose men slaughtered civilians for 30 hours under the light of Israeli flares, took him to mean Palestinians. The distinction was lost, as it sometimes has been in recent Israeli attacks in the West Bank. Hobeika was due to testify earlier this year against Sharon in a Belgian court examining the Sabra and Shatila massacres, but he was assassinated. Israel's justice ministry, meanwhile, announced that Israel would not ratify the international criminal court treaty because the tribunal "could consider the settling of Israelis in the territories as a war crime". For Sharon to assassinate or remove Arafat and appoint a tame Palestinian in his place would repeat the mistakes of Lebanon. Israel occupied Lebanon and helped destroy the Lebanese state. Twenty years later, Sharon is reoccupying West Bank cities and dismantling the Palestine Authority infrastructure. Sharon named Lebanon's president, as some in his cabinet want to choose a new Palestinian leader. He further demands that the next PA president do Israel's bidding, as he and Menachem Begin ordered Gemayel to do theirs. The first policy was a catastrophe for Israel and Lebanon. It led to the creation of Hizbullah, Muslim fundamentalists who became the first guerrillas to drive Israel out of territory it had occupied. If Sharon disposes of Arafat and finds a quisling, what reason is there to suppose he will succeed with a policy that failed before? The other question is what, in Sharon's reckoning, would constitute the success of this week's Operation Determined Path? If it is to assume military control and leave a Palestinian administration to collect the rubbish, he may succeed. If it is to increase the area of West Bank land under settler control from 42% and integrate it into Israel, he may succeed in that as well. But Palestinians will go on dying to oppose him, because such action negates their survival as a people. If the Determined Path is intended to achieve a peace for Israelis and Palestinians to live beside each other in dignity, failure is etched into its very bones. _________________________________________________________________ Send and receive Hotmail on your mobile device: http://mobile.msn.com From soncu at pacbell.net Tue Jun 25 22:42:44 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Tue, 25 Jun 2002 21:42:44 -0700 Subject: [A-List] Most of the time, we backed Brazil Message-ID: Hardly a serious football fan, I found this article from Los Angeles Times very interesting. In my view, this article is not about football and the midfielder Umit Davala's words below prove my point: "In previous World Cups, we used to pray that the teams we felt closest to, teams from America, Africa, even Asia, would take our revenge on the European sides that had knocked us out of qualification," Davala wrote. "Most of the time, we backed Brazil." Sabri ++++++ Turkey is gaining a foothold By Mike Penner Los Angeles Times staff writer June 25, 2002 SAITAMA, Japan -- It's not as if the Turks didn't warn us. For years, fans of Turkey's national soccer team have announced their arrival at stadiums across Europe by loudly stamping their feet and raising their voices: "Europe! Europe! "Hear our voice! "This is the sound of Turkish feet!" At this World Cup, the sound of Turkish feet has been deafening. Already, the Turks have given the boot to co-host Japan and everyone's second-favorite team here, Senegal, during their defiant journey to the semifinals. And in Turkey's tournament opener, those feet ran Brazil ragged in a less-than-convincing 2-1 Brazilian victory aided by a controversial penalty and the ejection of two Turkish players. The teams meet again Wednesday at Saitama Stadium with a berth in the World Cup final at stake. For Brazil, the World Cup final four is home, sweet home--Brazil has won the tournament an unequaled four times, most recently in 1994, and played in the final game four years ago at Paris. But Turkey, which last appeared in the World Cup 48 years ago, has outstripped even the most optimistic ambitions of its players and coaches by landing in the semifinals. Before the tournament, Coach Senol Gunes, a former goalkeeper for Turkey's national team, set the quarterfinals as the target for his squad. "No one, [including] our coach and our team, expected that we could come this far," midfielder Umit Davala said after Turkey's 1-0 overtime victory over Senegal at Osaka, Japan. "But now, I would like to tell the world to see what we are going to achieve." Once, Turkey was the laughingstock of European soccer. The Turks not only failed to qualify for the 1982, 1986 and 1990 World Cups, they failed to win even one qualification match, going 0-15-1. Their lowest ebb was an 8-0 defeat by England in a 1987 European Championships qualifier. It wasn't until the late 1990s that the mass migration of Turks to Germany in the 1960s and '70s began to show on the soccer field. Coaches trained in the German tradition returned to Turkey to pass along the knowledge to a new generation of Turkish players. Several current Turkish players, among them Davala and Yildiray Basturk, were born and trained in Germany. In 1996, the Turkish club Fenerbahce defeated one of Europe's top teams, Manchester United, at Manchester, England. Four years later, Fenerbahce's Istanbul rival, Galatasaray, upset Arsenal, another English club, in winning the UEFA Cup championship. Those were signal flares to the rest of the sport, as bright as those that light up the stands inside Istanbul's Ali Sami Yen Stadium, where visiting teams are regularly greeted by rabid fans hoisting banners reading, "Welcome to Hell." Yet, few in the sport acknowledged the warning signs until it was too late. By then, Japan and Senegal were out of the World Cup. "We have shown the strength of our football," Gunes said after his team's elimination of Senegal in the quarterfinals. "We don't fear anyone, and at this World Cup, our players have proved they deserve recognition." It hasn't been pretty to watch. Turkey has advanced this far without a single goal from its struggling star forward, Hakan Suker, forcing Gunes to find other ways to squeeze out results. Against Senegal, for instance, he overloaded his defense in front of goalkeeper Rustu Recber, who has been one of the best shot stoppers in this World Cup, and waited for a counterattack goal, which took 94 minutes, substitute Ilhan Mansiz finally breaking through . Turkey's progression through the tournament has been so grim, the Turkish media has responded in kind, hammering Gunes and his players, especially during the early rounds. After the victory over Senegal, Turkish players took to their individual Web sites--everyone on the roster seems to have one--to lash back. "The camps, the training, the changing weather, the news of criticism from Turkey ... all these caused us problems, but we are a team for hard times," wrote defender Alpay Ozalan. "My wish from you is that you do not pay attention to [the media]. The quality and strength of everyone on this team is there to see." On his Web site, Mansiz told fans, "If we had stated our aims openly when coming here, they would have called us charlatans. Those who would have called us charlatans then will now slam us if we return home without the cup." And on his site, Davala noted the irony of this semifinal matchup with Brazil, a team long admired from afar by Turkey's players. "In previous World Cups, we used to pray that the teams we felt closest to, teams from America, Africa, even Asia, would take our revenge on the European sides that had knocked us out of qualification," Davala wrote. "Most of the time, we backed Brazil." "Look at how fate works. The samba players we supported for years in the World Cup are now our biggest rival on the road to our goal." Having barely weathered 90 minutes of Turkish fury in their opener, the samba players now brace warily for the rematch. "I think the semifinal will be more difficult to get through than the final," Brazilian defender Roberto Carlos said. "The first game against Turkey was the toughest battle we have had here and we know we will have to be very, very careful if we are to get past them again. The room for error will be minimal, if not nonexistent." Rivaldo acknowledged that "Turkey is capable of beating us." He said it is "obvious that this match will be difficult but we will be ready.... We will be doing everything we can to reach the final." From Michael.Keaney at mbs.fi Wed Jun 26 03:00:08 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 26 Jun 2002 12:00:08 +0300 Subject: [A-List] US imperialism: Palestine Message-ID: And what about the "easily-led masses" who are expected to swallow this stuff whole? Bush demand could rally Arab nations behind Arafat IAN BRUCE: Analysis The Herald, 26 June 2002 FORCING Yasser Arafat to relinquish power by White House decree will unite even his bitterest Palestinian critics in an anti-American alliance of convenience, Arab-watchers across the globe agreed yesterday. While most educated Arabs view the Palestinian chairman as corrupt, inefficient, and self-serving, George W Bush's presidential decree that he must go before a Palestinian state becomes a reality shows a stunning lack of understanding of regional and ethnic loyalties. It will also confirm the suspicion in the collective mind of the Arab "street" - the easily-led masses of Egypt, Syria, Jordan and even Saudi Arabia - that the US has embarked on a unilateral crusade against Islam in the name of combating terror. Imad Sheibi, a political science professor at Damascus University, said yesterday: "This is an intelligence service style of politics. It seeks a Palestinian coup and the appointment of leaders who will say yes to American demands. It is a cross-eyed vision which will undermine the war against terrorism." Michael Young, a Lebanese political commentator, dismissed President Bush's demands as "a victory for the pro-Israel lobby in Washington" and said America had switched its priority from ending violence to changing the Palestinian regime. "You cannot change leadership by diktat. The US wants Arafat to halt the violence while doing everything possible to undermine him. The US agenda is now the same as the Israeli agenda," he added. Khalil Shikaki, a Palestinian political analyst based in Nablus, on the West Bank, said there was some merit in Bush's proposal if his reference to a "provisional state" meant early statehood for Palestinians without setting final borders. "If that is the case, it is a breakthrough. But the Palestinians would need to be given more land even at the early stages to allow the drawing of a contiguous border around the dozens of islands of towns and villages currently administered by the Palestinian Authority," he said. "That idea would be resisted by many Israelis. The US should also beware of uniting Palestinian public opinion for the wrong reasons. Arabs like a strong leader to represent them against powerful outside forces. They are willing to overlook other failings and forego even democracy if such a leader stands up to pressure." But Uzi Arad, a former top official in Israel's Mossad intelligence agency and now a security analyst, said the US has been left with little choice but to call for Arafat's demise. "The American president would not for a moment like to give terrorism a prize, because he would be undercutting his own efforts to stymie that terrorism. The consequence of allowing Arafat to continue condoning if not authorising atrocities can only be more acts of terrorism." Mohammed el-Sayed Said, the Washington bureau chief for the Egyptian daily newspaper Al-Ahram, said the Bush speech left many key questions unanswered. "One of the first things the Palestinians are going to ask is whether they are going to be punished, economically or militarily, if they re-elect Arafat." Joschka Fischer, the German foreign minister, welcomed US support for a Palestinian state, but stressed "the Palestinians alone must decide who will lead them". Arafat himself issued a series of statements yesterday welcoming "a serious effort to push the peace process forward", but said he would not be resigning. And Ahmed Abdul Rahman, the Palestinian cabinet secretary, said that attacks on Israel should be viewed as resistance rather than terrorism. Rise of a leader 1948 - Arafat takes part in Arab-Jewish fighting as Britain withdraws from Palestine. Hundreds of thousands of Palestinians become refugees. 1952 - As engineering student in Cairo, Arafat takes over the Palestinian Students' League just after Egyptian Colonel Nasser seizes power in an army coup. 1964 - The Palestine Liberation Organisation (PLO) is established. June 1967 - Israel captures the West Bank, East Jerusalem, Gaza Strip, Sinai and the Golan Heights in a six-day war. 1969 - Arafat is elected chairman of the PLO. 1974 - PLO wins Arab recognition as the "sole legitimate representative of the Palestinian people". 1982 - Israel invades Lebanon. 1987 - Palestinians in the West Bank and Gaza launch a mass uprising, or intifada, against Israeli occupation. 1993 - At the White House, Arafat and Israeli Prime Minister Yitzhak Rabin trade historic handshake, sealing outline for limited Palestinian self-rule. 1994 - Arafat returns to Gaza after 27 years of Israeli occupation and takes over as head of the Palestinian Authority. 1995 - Arafat and Rabin sign interim agreement setting the stage for Israeli redeployment from Palestinian cities in the West Bank. Rabin assassinated. 1996 - Arafat is elected Palestinian Authority president. Right-winger Benjamin Netanyahu is elected Israeli prime minister. 1999 - Israeli Prime Minister Ehud Barak and Arafat sign a deal in Egypt, dubbed Wye Two. Israeli and Palestinian cabinets approve it. 2000 - After 15 days Barak and Arafat fail to reach agreement over Middle East peace in talks at Camp David. 2001 - Ariel Sharon elected prime minister. 2002 - Islamic Jihad says it is scrapping a deal with Arafat not to attack Israel. From Michael.Keaney at mbs.fi Wed Jun 26 03:01:43 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 26 Jun 2002 12:01:43 +0300 Subject: [A-List] China: military build-up Message-ID: China's submarine deal could tip power balance IAN BRUCE The Herald, 26 June 2002 CHINA is negotiating with Russia to buy eight submarines equipped with long-range anti-ship missiles in a move which would enable it to blockade the Taiwan Straits in a crisis and pose a major threat to US naval power in the region. The White House sent two carrier battlegroups into the area in 1996 to forestall a Chinese invasion of Taiwan after the island's government toyed with the idea of formalising its independence from the mainland and Beijing responded with a military build-up. The presence of the battlegroups forced China to back down, since its own largely coastal navy was outgunned and its air force, although strong in numbers, could not compete with the high-tech US fighters guarding the carriers. Beijing immediately launched a modernisation programme for its armed forces and already has four Kilo-class Russian diesel-electric boats, two of which are missile-capable. Its twin-track approach is to produce an amphibious force able to recover Taiwan by force if necessary and a navy which could make a US president think twice about the cost of defending Taiwanese sovereignty. Bernard Cole, an expert on the Chinese navy at Washington's national war college, said yesterday: "Acquiring eight more submarines would very significantly enhance China's ability to influence events in the east China sea. "If Beijing decides to enforce a blockade of Taiwan, that number of quiet, difficult-to-detect submarines with long-range missiles would pose a serious problem for opposing naval forces trying to operate in the area." The contract for the submarines is part of ?3bn order which includes two Russian-designed missile destroyers, a batch of S300 long-range anti-aircraft missile batteries, and 40 Sukhoi-30 fighter-bombers. A Pentagon spokesman said yesterday: "China still cannot find ships at sea. Over-the-horizon targeting escapes them. "It would take several years after delivery for the new submarines to become fully operational, and without third-party help in locating targets, they would pose little more than a localised threat to something like a modern carrier battlegroup." From Michael.Keaney at mbs.fi Wed Jun 26 03:25:31 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 26 Jun 2002 12:25:31 +0300 Subject: [A-List] Financial regulatory crisis: now Worldcom Message-ID: While it's mildly satisfying to see formerly lionised corporate titans like Bernie Ebbers get their come-uppance (reputation-wise, at least), how long before it begins to sink in just how much our wonderful system depends upon intricate tricks with smoke and mirrors washed down with a good dose of snake oil? States will have to reassert their regulatory powers in order to save the system from itself, but to what extent? What of Bush's wish to part-privatise US social security? What of Germany's "Riester pensions", and "New Labour's" efforts to encourage "stakeholder pensions" -- and all just at the point of the much-hyped demographic timebomb taking effect. Obviously what is required is more immigration. Whoops! WorldCom uncovers ?2.5bn accounting fraud FTSE 100 index falls 135 points in opening two minutes after US telecom giant's shock AP The Independent, 26 June 2002 An investigation by WorldCom's board of directors uncovered nearly 3.8 billion US dollars (?2.5 billion) in improperly booked expenses, the US telecommunications giant said, revealing what appears to be among the largest cases ever of accounting fraud. In the wake of the Enron scandal, the fraud is bound to unsettle stock markets on both sides of the Atlantic. In London, the FTSE 100 index fell 135 points in the opening two minutes and carried on towards a fall of 200 within the hour. WorldCom's chief financial officer, Scott Sullivan, who is also a director, has been sacked, the company said yesterday. More than 3 billion dollars (?1.9 billion) of expenses in 2001 and 797 million dollars (?530 million) for the first quarter of 2002 were wrongly listed on company books as capital expenditures, the company said, and thus not reflected in its earnings results. It will restate earnings for all of 2001 and the first quarter of 2002. "Our senior management team is shocked by these discoveries," John Sidgmore, who was appointed WorldCom's chief executive officer on April 29, said. "We are committed to operating WorldCom in accordance with the highest ethical standards." Mr Sidgmore replaced former president and CEO Bernie Ebbers, who resigned amid questions about the company's growth and its finances. WorldCom grew from a small long-distance company into a telecommunications force through more than 60 acquisitions in the past 15 years. The rapid-fire growth was stopped dead in its tracks in 2000 when federal and European regulators blocked WorldCom's proposed merger with Sprint, citing competition concerns. The revelation adds Worldcom to a growing list of companies struck by accounting scandals, led by Enron, that have shaken public faith in business and Wall Street and created a flood of shareholder lawsuits. WorldCom said it will also begin cutting its work force by 17,000 jobs starting on Friday. WorldCom, the US's second biggest long-distance provider, said it notified its auditors, KPMG, and asked it to conduct a comprehensive audit of the company's financial statements for 2001 and 2002. The company said it notified Arthur Andersen, which had audited the company's financial statements for 2001 and for first quarter of 2002. Andersen, convicted of obstruction of justice recently in the Enron scandal, said its work for WorldCom was in compliance with SEC standards. "It is of great concern that important information about line costs was withheld from Andersen auditors by the chief financial officer of WorldCom. The WorldCom CFO did not tell Andersen about the line cost transfers nor did he consult with Andersen about the accounting treatment," the company said. Andersen said it told WorldCom that the company's 2001 financial statement "should not be relied upon". The news could be a body blow to WorldCom, which is reeling from a low stock price, a crumbling telecoms market and an ongoing Securities and Exchange Commission investigation. From Michael.Keaney at mbs.fi Wed Jun 26 03:29:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 26 Jun 2002 12:29:01 +0300 Subject: [A-List] Robert Fisk on Palestine Message-ID: Robert Fisk: I wonder why Bush doesn't let Sharon run his press office The Independent, 26 June 2002 Put your flak jackets on, President George Bush has spoken. He wants a regime change in Palestine, just as he wants a regime change in Iraq. He reads the Israeli government press handouts and accurately quotes them to his American people. Ariel Sharon, wants the destruction/ liquidation/ resignation of Yasser Arafat. So does Mr Bush. "Peace requires a new and different Palestinian leadership so a Palestinian state can be born," Bush told the fearful American people, waiting for the next apocalypse, be it on 4 July or after. So, no Palestinian state unless Arafat goes. There were no Bush conditions for Israel. He did not secure an end to the continuing building of Jewish settlements for Jews and Jews only on Arab (that is somebody else's) land. Nor did he secure a halt to continuing Israeli military "incursions" ? how I love that word "incursions". Mr Sharon, in his highly mendacious demand for Palestinian "'transparency", has demanded Palestinian reform must be neither cosmetic nor an attempt to preserve Arafat. And what does Mr Bush say? Why, that Palestinian reform "must be more than cosmetic changes or a veiled attempt to preserve the status quo". Why, I wonder, doesn't Mr Bush let Ariel Sharon run the White House press bureau? Not only would it be more honest ? we would at least be hearing the voice of Israel at first hand ? but it would spare the American President the ignominy of parroting everything he is told by the Israelis. All that he offers to the Palestinians is a ghastly mockery of what the Palestinians are told to do by the Israelis. There never has been an "interim" state, let alone a "provisional" state. These are fantasies of the Israelis and Mr Bush. White House "officials" ? we can guess who they are ? believe a Palestinian state can be "achieved" within 18 months. Let's forget international law provides for no such entity. Let's go over again that most crucial ? and most dishonest ? part of the Bush statement. "When the Palestinian people have new leaders, new institutions and new security arrangements with their neighbours," he told us, "the United States of America will support the creation of a Palestinian state, whose border and certain aspects of its sovereignty will be provisional until resolved as part of a final settlement in the Middle East." Let's see what this means: when the Palestinians have elected a leader whom the Israelis want ? a condition that could go on to the crack of doom ? the Americans will support a Palestinian state whose very existence will mean nothing unless Israel approves what that state wants to do. In other words, the United States will be Israel's spokesman in any negotiations. A growing number of Americans know they are being suckered by their own government and their own press, that their country's foreign policy is being manipulated to give maximum support to one ? and only one ? country in the Middle East. So will "certain aspects of its sovereignty". Note these weighty words. "Certain aspects" of its sovereignty. What, I wonder, does this mean? Do these "certain aspects" include the continuation of illegal Jewish settlement building? Or the absence of any international guarantees for this interim/provisional state? Or perhaps a get-out clause for the United States to wash its hands of the whole shebang if Israel decides to annex the entire West Bank? Note, again, the weasel words. Palestine's borders will be "provisional ... until resolved as part of a final settlement in the Middle East". Yet never before has an occupied people been led by so pathetic a person as Yasser Arafat. Nineteen years ago, this same Yasser Arafat swore to me ? on a hilltop above the Lebanese city of Tripoli ? that his "Palestine" would be "a democracy among the guns". His Palestine, he told me, would be unlike any other Arab state. There would be no secret policemen, no "regime", no cronyism, no corruption. Fast forward to the spring of 1998. I am listening to a French diplomat who has returned from Gaza. He and his delegation carried a personal letter to Arafat from President Chirac. Again and again, Arafat disregarded the letter, only interested in when the new French school in Gaza will open. The diplomats understand. One of Arafat's relatives will be the headmistress of this school. Family before nation. The Chirac letter stays unopened. Yes, as Nabil Shaath, one of the most loyal ? and most obsequious ? of Arafat's ministers, says, "a state is a state, and you cannot be provisionally pregnant and you cannot have a provisional state". It might have been wiser ? and more honest ? if he had reminded us that the CIA trained the gunmen and intelligence thugs who worked for Arafat; if he had outlined the imprisonment and torture that Arafat inflicted on his Palestinian opponents with the complicity of those who supported the "peace process". For it is becoming ever more obvious that Arafat did not fail in his duties as Palestinian leader. He failed in his duties as Israel's ? and thus America's ? proxy colonial apparatchik in the West Bank and Gaza. The fact he is a corrupt little despot does not change this. He was given time to prove his loyalty to the West, to America, to Israel. He was supposed to have made Israel's settlements both safe and sacred. Now, when he can no longer control the people he was supposed to control ? remember the BBC's repeated question: "Can he control his own people?" ? his usefulness is at an end. He must go, to be replaced by our choice of leader ? forget elections ? who will be as democratic as the new Afghan "interim" government. George Bush insulted the Palestinians and enraged the leadership of the Arab world. Who cares about the latter? Most of them were appointed by us. But I have a feeling that the Palestinians will not accept this nonsense. Which is why they will be condemned ? as never before ? as "terrorists". From Michael.Keaney at mbs.fi Wed Jun 26 03:45:03 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 26 Jun 2002 12:45:03 +0300 Subject: [A-List] Britain/US split: Palestine Message-ID: While of course the press and other news media will play up any sign of a split between Blair and Bush, just as they would any apparent difference between cabinet ministers, for example, this does look significant. The Independent is, in the interests of maintaining a broad readership, covering all bases and publishing other views. But its main writers are adopting a very critical line on the Bush speech, and while it might be easy to dismiss Robert Fisk as someone who "went native" years ago (all those years in Lebanon can't be good for anyone, etc.), the article below by David Aaronovitch is telling. Aaronovitch has crossed our paths before, as a longtime close friend of Peter Mandelson, who was recently appointed to the "international advisory board" of Independent newspapers (prop. "Sir" Tony O'Reilly). Aaronovitch linked up with Mandelson in the Communist Party, and stayed with him when both worked for "Lord" John Birt at London Weekend Television during the 1980s. See http://archives.econ.utah.edu/archives/a-list/2001/msg06071.htm. Thus Aaronovitch's intervention here looks indicative of mainstream "New Labour" opinion. Blair in rift with Bush over Israel By Paul Waugh, Phil Reeves and Stephen Castle The Independent, 26 June 2002 George Bush was facing his first serious rift with Tony Blair last night after Britain joined the European Union and the United Nations in rejecting American calls for Yasser Arafat to be ousted as leader of the Palestinian authority. In a sharp rebuff to President Bush, Downing Street and Jack Straw, the Foreign Secretary, said it was up to the Palestinian people to decide their leader. President Bush's speech delighted the Israeli government, but was greeted with anger and despair in the Arab world, bringing protests that the US is trying to dictate to the Palestinians who should be their leader. Buoyed by the presidential message, Israeli troops raided the Palestinian Authority's security headquarters in Hebron and killed four policemen, including a senior intelligence officer, in an exchange of gunfire. Mr Bush's call for a new Palestinian leadership was rejected not only by the Palestinian Authority but by a wide range of world leaders. Kofi Annan, secretary general of the UN, warned last night that President Bush's call for the removal of Mr Arafat could backfire if a more hardline leader was elected. The former US senator George Mitchell, who tried last year to broker a Middle East peace deal, expressed similar worries that Islamic Jihad or Hamas could take over from the PLO leader. The British Government's stance echoed that of the EU and foreshadowed similar conflict with the US over Third World debt and trade tariffs that could dominate the G8 summit that begins today in Canada. Mr Blair tried to play down differences with the Americans, welcoming the broad thrust of President Bush's strategy, setting out a timetable for Palestinian statehood within three years. But the refusal of both Downing Street and the Foreign Office to endorse the removal of Mr Arafat made it clear that this was the biggest foreign policy clash between America and Britain since 11 September. Mr Blair's official spokesman said that although the Prime Minister believed Mr Arafat should do much more to bear down on suicide bombers, Palestinians had the final say. "In terms of Chairman Arafat, we have always said that it is for the Palestinian people to choose their own leader," the spokesman said. "The British Government uses its words. The American administration uses its words," he added. In the Commons, Mr Straw went further. "Our view has never been in doubt. We deal with the leaders who are elected as we find them. If President Arafat were re-elected by the Palestinian authority, we will deal with him." Mr Straw's aides pointed out that the Foreign Secretary made plain last month he was "relaxed about differences" between the UK and US on the Middle East, the Kyoto protocol on climate change and steel tariffs precisely because the two countries agreed on many other issues. Mr Bush has always refused to meet the Palestinian leader but Mr Blair has received him in Downing Street as well as meeting him in Gaza. On the flight to Canada, Mr Blair tried to smooth over the differences, but he also acknowledged that the Palestinians would "elect who they want to elect", while emphasising the importance of finding a leadership "prepared to make a deal". ----- The President's proposals make peace in the Middle East impossible If I were a careerist in Ramallah, I'd start organising the Palestinian version of the early Sinn Fein right now David Aaronovitch The Independent, 26 June 2002 The speech itself was not so much White House as Little House on the Prairie. All, said George Bush, that had to happen for there to be a Palestinian state (which, of course, we all want) was for the Palestinians democratically to kick out their horrid old leadership and replace it with a nice, new, peace-minded leadership. This new dispensation - plus major reforms - would clear the way for talks which, in the fullness of time, might or might not settle a few other tricky little matters, such as how big a Palestinian state might be, whether part of Jerusalem would be in it and whether Israeli settlements built in violation of United Nations resolutions would be dismantled. We'd have to see about that. So it's all knitted samplers and best bonnets. As the President argued, the present situation is hopeless. "It is untenable," he said on Monday, "for Israeli citizens to live in terror. It is untenable for Palestinians to live in squalor and occupation". And you can't say fairer than that. It was the same belief that drove his predecessor, Bill Clinton, to his hunt for a peace plan, which just eluded him, first at Camp David and then at Taba on the Israeli-Egyptian border. It's worth recapping on that process. There was, for a moment at the end of 2000 and the beginning of 2001, a deal possible in which the Palestinians ended up with almost all of the West Bank, with part of Jerusalem and with a territory that was contiguous. But the Israelis had done too little to build Palestinian confidence in the period following Oslo, and Arafat lacked the courage or vision to seize the moment. A new intifada began, that was met by tanks, the number of terrorist attacks increased and Israel reoccupied much of the West Bank. Now, so far have the prospects for peace receded, that even exchanges between participants - conducted in the almost scholarly pages of the New York Review of Books - sound as though they can only be resolved by violence. So what is George Bush's Ingredient X, the thing which, when added to the punch, makes agreement possible? It is, apparently, that Yasser and his mates sling their hooks and make way for a new generation of leaders. "Peace," says the President, "requires a new and different Palestinian leadership, so that a Palestinian state can be born. I call on the Palestinian people to elect new leaders, leaders not compromised by terror." If they do this, then Ariel Sharon and the Israelis will presumably be cajoled by the United States into reviving the Taba agreement (or something like it). Well Amen to that. I don't actually possess (nor have I seen) the evidence that Arafat has been organisationally involved in the suicide bombings, but I do know that - Janus-like - he has said one thing to the Western media while talking the easy language of martyrdom to his own constituency. But I find myself asking why it is that his constituency requires the language of martyrdom to be spoken to it in the first place. Surely that's the reality that must be dealt with. OK, I'm getting ahead of myself, so lets take a rain-check on reality for a moment and go back to George W. Who continues: "Leaders who want to be included in the peace process must show this by their deeds and undivided support for peace." Never mind the Palestinians, how should we apply such a sentiment to Ariel Sharon and his Likud party? Let alone to the vulture figure of Binyamin Netanyahu and those cabinet ministers who support the forcible transportation of the Arab populations of the West Bank and Gaza? Should we wish them all away, blow on them, like dandelion heads in the summer? It is not even a matter of democracy. After all, was not Arafat himself elected back in 1996, in a process overseen by, amongst others, ex-President Carter? And when Bush adds, "If Palestinians embrace democracy, confront corruption, and firmly reject terror, they can count on America's support for creation of a provisional state of Palestine", one wonders what would happen to other nations were their statehood only to be recognised under the same conditions. No wonder that, according to a Likud minister, Danny Naveh, Bush's address is to be remembered as "the end of Arafat speech". Even so, if any of this were likely - for one single moment - to work, then many people would be prepared to ignore its na?vet? and asymmetry. But it can't. It is, uniquely, the peace plan that makes peace impossible. Successful peace processes depend upon narrowing the number of people and situations that can, in effect, place a veto on progress. They operate by allowing the accumulation of small confidences, and binding their results into a bigger picture. This is the opposite. It offers just about anyone a veto who wants one. Cherie Blair's mistake, when she gave her short impromptu answer to that journalist the other day, was to seem to assume that desperation alone leads to suicide terrorism. It is probably the case that desperation causes more young people to volunteer for such missions, but the organisations and ideologies behind the murders are not motivated by temporary anger. Their objective is the destruction of a peace process that they see as being the end to their hopes of eventual victory. For the lover of peace they have no redeeming moral features whatsoever. They are the enemy. It follows that if you allow acts of terror to disrupt the process of peace, then you allow the suicide bombers an effective veto. You give them what they want. There are brave Palestinians who oppose the suicide bomb obscenity. Two thousand academics and intellectuals have signed a petition calling for an end to this form of terrorism. These, presumably, would be the type of people whom we would want to encourage and to strengthen, who would become the partners for peace. In the elections already scheduled for next year, these are the forces who we might hope will come forward. Just as we might have hoped that Sharon, with his grim history, would never lead the state of Israel. If I were a careerist in Ramallah I'd start organising the Palestinian version of the early Sinn Fein right now. In any case, imagine the results of the Palestinian election. "Him?" says an Israeli spokesman, justifying a refusal to negotiate. "He was once a member of an organisation whose armed wing was behind a bombing in Haifa 10 years ago. "Her? She was a journalist on a station which broadcast a eulogy to a bomber." On the other side, any Palestinian opposed to peace only has to reject the seeming attempt to impose a leadership on his or her people. I have my own ideas about what can work, but this cannot. You cannot make peace by dictating who represents the people you are dealing with. Especially since the voters who will have to find and elect these negotiators have no guarantee even that there will be negotiations. Colin Powell's original plan was to recognise a provisional Palestinian state, and to move gradually on from there. Then someone in the White House got to mess with it. Someone stupid. From Michael.Keaney at mbs.fi Wed Jun 26 03:49:28 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 26 Jun 2002 12:49:28 +0300 Subject: [A-List] New economy bull: productivity miracle explained Message-ID: Wal-Mart accused of forcing staff to work unpaid overtime By Andrew Buncombe The Independent, 26 June 2002 Wal-Mart, the American retail giant that owns the British supermarket Asda, is facing legal actions over claims that it routinely demands staff perform unpaid work "off-the-clock". Hundreds of thousands of workers in 28 American states are involved in lawsuits that allege Wal-Mart managers forced staff to work unpaid overtime as part of a de facto policy created by the company's intense focus on cost-cutting. In one recent class-action in Texas, lawyers say 200,000 present and former employees were underpaid by $150m (?100m) over four years by making them work during their daily 15-minute breaks. Wal-Mart - which took over Asda in 1999 - contests the claims, though it admits that two years ago it settled a class-action in Colorado that alleged 69,000 workers had worked "off-the-clock". It denied the settlement totalled $50m. A company spokesman, Bill Wertz, said: "Off-the-clock work is an infrequent and isolated problem which we correct when we become aware of it. It is Wal-Mart's policy to pay its employees properly for the hours they work. "These are isolated incidents. Fortune magazine recently listed us as one of the top 100 companies to work for as voted by the employees. They would not have done that if these allegations were true." Many Wal-Mart workers dispute this. In interviews with The New York Times, workers from stores in about 20 states say unpaid work has become part of the company's culture. Liberty Morales, 28, who used to work at an in-store restaurant in Houston, Texas, said she was regularly made to work one or two unpaid hours because no other staff was available. "They would call me and say, 'You need to clock out'," she said. "I knew I had to go back and work after clocking out. There was no way the grill could continue operating with no one there to run it." Other plaintiffs have said staff were routinely forced to stay behind, having already "clocked-off", and tidy up the stores. Often the doors would be locked until the work was completed, they say. From Michael.Keaney at mbs.fi Wed Jun 26 03:53:36 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 26 Jun 2002 12:53:36 +0300 Subject: [A-List] Paul Foot on Lockerbie verdict Message-ID: Listen to Mandela Paul Foot Wednesday June 26, 2002 The Guardian Why did Nelson Mandela, former president of South Africa, take so much time and trouble to visit Abdel Baset al-Megrahi in Barlinnie prison, Glasgow? Why would he announce after the visit that he was impressed with Mr Megrahi and unimpressed by his solitary confinement? Why did he go on to argue that Mr Megrahi deserves further hearings at the European court of human rights? After all, Mr Megrahi stands convicted by a Scottish court of the biggest mass murder in British history. According to three Scottish judges at his trial, and another five on appeal, he planted a bomb in a suitcase on a plane in Malta which ended up exploding on a Pan Am airliner over Lockerbie in Scotland, killing 270 people. Hundreds of friends and relatives are still grieving over their loss. Nelson Mandela is a compassionate man. So why should he compound all that grief by visiting the mass murderer in his cell, and pleading on his behalf for better conditions and yet another appeal? The only conceivable answer is that Mr Mandela believes that Mr Megrahi did not put the bomb on the plane, that he is innocent of the Lockerbie bombing and that the Scottish judges who convicted him made a terrible mistake. Such a shocking conclusion can be justified quite quickly. The case against Mr Megrahi rested on the theory that the Lockerbie bomb was placed on a flight from Malta - a theory for which, as the judges noticed, there was not a vestige of proof. On the contrary. The evidence was that all the suitcases on the Maltese flight were accounted for when it got to Frankfurt. The only evidence connecting Megrahi to the bomb suitcase was his identification by a Maltese shopkeeper as the man who bought clothes that ended up in the same suitcase as the bomb. This identification was not made until 11 years after the event. The shopkeeper had originally described a man much bigger and older than Megrahi. And there was also substantial evidence to suggest that Mr Megrahi was not even in Malta on the day the clothes were bought. The case against Megrahi was also tainted by the fact that his co-accused, Al-Amin Khalifah Fhimah, originally charged with conspiracy to murder, was acquitted after a "star" witness provided by the CIA turned out to be a fantasist and a liar, solely motivated by a desire to live the rest of his life at the expense of the American taxpayer. With the honourable exception of the redoubtable Labour MP for Linlithgow, Tam Dalyell, the Scottish people have been slow to respond to this monstrous injustice in their midst. Perhaps more of them will be alerted to it by the bold initiative of Mr Mandela, who knows a thing or two about long prison sentences after wrongful imprisonment. From Michael.Keaney at mbs.fi Wed Jun 26 03:56:10 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 26 Jun 2002 12:56:10 +0300 Subject: [A-List] Unhealthy accumulation: UK GATS preparations Message-ID: Milburn woos foreign health firms to UK John Carvel, social affairs editor Wednesday June 26, 2002 The Guardian Alan Milburn, the health secretary, yesterday offered overseas healthcare companies a permanent foothold in the UK market with the promise of profitable long term contracts to treat NHS patients. After talks in London with representatives of five of the firms, he said that the government was determined to develop a "new sector" that would be radically different from indigenous private health companies. The core UK business of the foreign firms would be providing free treatment for NHS patients under long term contracts with the NHS, using foreign doctors and nurses to avoid putting pressure on the UK hospital labour market. Mr Milburn issued a prospectus inviting overseas companies to bid to carry out operations for the NHS. Most of the early work will be done in south-east England where the waiting lists are longest. The first contracts are likely to be for cataract surgery and orthopaedic work. The prospectus said: "It is an explicit objective or government health policy to shift towards a greater plurality and diversity in the delivery of elective services ... The NHS will remain the public purchaser of health care, but services will no longer be provided only by traditional public sector NHS providers and will increasingly be driven by patient choice." The first contracts might run for three years initially. Mr Milburn told the five representatives of groups based in France, Sweden and Germany, that he wanted trail-blazing standards of patient care, use of overseas staff without any poaching from the NHS, and good value for money. Karen Jennings, Unison national secretary, said: "It is about bringing a market into the NHS which this government said it wanted to end when it was first elected in 1997. Recruiting health teams from other EU member states is unethical." From Michael.Keaney at mbs.fi Wed Jun 26 03:59:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 26 Jun 2002 12:59:02 +0300 Subject: [A-List] UK pensions crisis Message-ID: Retiring in 20 years? You'll be poorer than your parents The great middle class pensions panic has begun, and it's unlikely to go away quietly Patrick Collinson Wednesday June 26, 2002 The Guardian Colin O'Callaghan knows he is one of the lucky ones. He joined BT before it shut its traditional pension scheme 14 months ago and is in line for a generous retirement income. Many others - including all new workers joining the telecommunications group - may be lucky to pick up a pension worth 25% of their final salary. Pensions in Britain are in crisis. While today's pensioners hardly live in clover, the prospects for today's thirty and fortysomethings is much bleaker. The main cause of this dire outlook is the decision by UK business to jettison decades of paternalistic pension provision, which sought to guarantee a decent standard of living to loyal employees, in favour of an approach which puts the onus on individuals. BT, the former telephone monopoly, provides a good example of this. A union rep at the group, Mr O'Callaghan revealed to the annual conference of the Communications Workers Union yesterday how the axing of schemes is hitting new employees. His figures make grim reading, not just for new BT employees but for a generation of workers being denied the chance of joining final salary schemes. Around 3,000 workers have joined BT over the past 14 months. Instead of the promise of a guaranteed income in retirement, they have been asked to make contributions to the money purchase scheme, which will then be matched by BT and invested in the stock market. The minimum contribution from an employee is 4% of salary, the maximum 10%. Given such a choice new employees, often carrying the financial burden of a mortgage and bringing up a family, are opting to pay the minimum. Mr O'Callaghan says the average contributions from the new joiners has been just 4.7% of salary, matched in turn by 4.7% from BT. These percentages will mean little to employees not retiring for another 20 or 30 years. But pension experts say the minimum total contribution needed to equal the benefits enjoyed under a final salary scheme is 18% to 20% of salary, every year. New entrants to the BT scheme are contributing a total of 9.4%, less than half the amount needed. This contribution represents a huge cost saving to BT, and is likely to be matched at other big companies which have dumped their final salary schemes over the past year, including Sainsbury's, Marks & Spencer's, Barclays and Abbey National. Wake-up call During the last few years of the final salary scheme, BT was paying in contributions averaging 11.6% of each worker's salary. In just one year this contribution has fallen by nearly two thirds to 4.7%. Because pensions are, in effect, just another part of workers' pay, BT has put through a 7% pay cut for new workers, who have barely noticed. Until now. "We used to have one resolution about pensions passed at the union conference every couple of years, and more often than not it was put forward by the executive. This year we have 10 resolutions, all put forward by members. Complacency has gone, people are now very, very worried," Mr O'Callaghan said. Most fearful are the BT staff still in the final salary scheme. Their concern is that BT secretly wants to close its final salary scheme and eject all of them into a money purchase scheme, but this time they won't accept change so meekly. The CWU conference this week voted to take industrial action if BT does this. Mr O'Callaghan will also lead a fight to make BT increase the level of contributions it makes to the pension scheme, asking the company to put in 2% contributions for every 1% of salary paid in by employees. BT spokesman Mike Bartlett said: "Perhaps employees should be finding ways to put more money into the scheme. If they put in 10%, BT will match it. Perhaps we need more education about the amounts that people need to pay in." Some 10m workers - 46% of all employees - are members of an occupational pension scheme. The TUC says the average employer contribution into a final salary scheme is 15.4%, but for a money purchase scheme it is just 6%. A recent survey by finance and banking union Amicus found that 80% of members are prepared to strike to defend pensions. But the fight to restore quality company pension schemes will be tough. The root of the problem is the fall in the stock market by a third since its high in early 2000. But even if it recovers strongly - and few pundits are predicting that - there is little likelihood the problem will melt away. Improvements in longevity mean that companies are finding the burden of paying pensions stretching over 20 or 30 years of retirement hugely expensive. BT, like other big British companies, has long enjoyed a reputation as a paternalistic employer. When introducing the money purchase scheme, it claimed it would yield benefits to employees such as greater flexibility. Critics add that it had little choice when faced with a burgeoning shortfall in the fund when its core business was laden with ?30bn of debt. Last year it identified a ?3bn hole in its ?25bn final salary pension fund. Such funds have been the biggest losers of the stock market declines of the past two years. Other big companies are also discovering similar sized gaps which escalate with every fresh fall in the stock market. Corporate accounts put the size of the deficit at Rolls Royce at ?392m, ICI ?453m, Astra Zeneca ?463m, BAE Systems ?776m and HSBC ?620m. More recent estimates, taking into account the recent fall in the FTSE, suggest that Marks & Spencer's deficit may have ballooned to ?600m, with Rolls Royce at ?850m. The impact of the shortfalls has been made worse by the implementation of a new accounting standard, FRS17, which obliges firms to make an annual review of their scheme's assets and liabilities and declare the results in their annual report and accounts. Pensions consultant William Mercer said that the accounting standard will show that half of the UK's top 500 companies will have pension liabilities that exceed their assets. The inclusion of this shortfall in reports and accounts has spooked the stock market, compounding the problem of falling equities. Faced with this ever-decreasing circle, company managements are under ever greater pressure to close expensive final salary schemes. A survey of 3,000 companies by the Association of Consulting Actuaries this month found that half of all the remaining final salary-based company pension schemes are expected to close to new staff in the next few years. The association said the speed of collapse of the schemes was startling. "These statistics suggest that within a few short years we are likely to see the numbers covered falling away rapidly," said ACA chairman Gordon Pollock. The survey found that 47% of companies are contemplating shutting final salary schemes. But adding to the anger is the fact that while managements are telling workers that the company can no longer afford the final salary scheme, the same directors are keeping their own "executive" final salary schemes, and in some cases even improving them. Research by The Guardian last year found that while only 44% of FTSE 100 companies had final salary schemes open to all staff, 76% had schemes in place for directors. Directors' cuts Only yesterday, Yell, BT's former Yellow Pages directories business, said that new staff will have to take their chances with a money purchase scheme. Existing employees stay in the final salary scheme. Chief financial officer John Davis, meanwhile, will be entitled to a full pension of two-thirds final salary after 30 years' service, instead of the usual 40. Chief executive John Condron was given a boost to his pension, adding two and a half year's service which will award him a pension of ?146,000 a year plus a lump sum of ?439,000. Fat cat pensions are now under the political spotlight and MP Jim Cousins, a treasury select committee member, said yesterday: "I hope the government will look at the issue of different employees accumulating the pension at different accrual rates." While there is anger about such dis crepancies, today's ICM poll for the Guardian shows victims of the pension crisis do not know who to blame for the feared shortfall - their company, the stock market or themselves. The Conservatives are moving swiftly into gear to exploit the anger. Tomorrow they will hold a "crisis summit" to highlight the government's failures on pensions. Shadow work and pensions minister David Willetts is expected to point the finger of blame at one of Labour's earliest "stealth tax" rises, the removal of advance corporation tax credits from pension schemes in 1997, which raised ?5bn in tax but was disguised for several years by benign stock markets. The TUC is calling on the government to force employers to contribute to people's company pensions at a rate of ?2 for every ?1 paid in by an employee. For the average employee paying in 6%, this will take their total pension pot to 18% of salary a year, going a long way to plug the funding gap. But the CBI responded that the TUC's proposals will accelerate the closure of company schemes. It says a better solution would be to simplify pension regulations, improve the tax treatment and review FRS17. Then there is the thorny issue of longevity. In 1909, the state pension age was 70. In 1925, it was reduced to 65 for men and has remained there since. Now there are calls to raise it to 67 - as suggested by the Institute for Public Policy Research - and 70 - the National Association of Pension Funds. Once the state pension age is raised, it is expected that the date for retirement benefits in company schemes will also rise. When Andrew Smith became the new work and pensions secretary in the post- Stephen Byers cabinet reshuffle, media attention focused on how incoming transport secretary Alistair Darling would grapple with Britain's crumbling rail and road infrastructure. But it is Mr Smith who now finds himself at the centre of a growing political storm. His first speech indicated a coolness towards compulsory company contributions, flagging up instead the government's preference for extending retirement ages. In spite of this coolness, there is believed to be more support for compulsion at the Treasury. Either way, little is expected to emerge officially until the publication in July of a report by Alan Pickering, the former head of the NAPF, originally commissioned by Alistair Darling. Meanwhile, employees now receiving dismal pension projections from their companies face tough times. Most can pay in more to their schemes, although in falling stock markets there is little appetite for throwing more money into shares. Economic growth is supposed to deliver higher living standards all round, but what today's generation of 30 and 40-year-olds may find is that they are the first to suffer lower incomes in retirement than their parents. The great middle class pensions panic has begun, and it's not going to go away quietly. From Michael.Keaney at mbs.fi Wed Jun 26 04:02:46 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 26 Jun 2002 13:02:46 +0300 Subject: [A-List] EU: internal struggles Message-ID: Business chiefs seek stronger EU executive By Paul Betts in Paris Financial Times: June 26 2002 Leading European industrialists on Tuesday added their influential voice to the growing battle over who should run the European Union by calling for a reinforcement of the powers of the Commission. The European Round Table of Industrialists (ERT) told members of the convention on the future of Europe, including its head, former French president Valery Giscard d'Estaing, that a stronger Commission was "vital" if Europe was to be more competitive. Grouping the heads of 44 of Europe's largest industrial groups and multinationals, the ERT told the convention that the Commission was "the genuinely Europe-focused institution and the one most capable of articulating the common European interest above national and regional interests". It also argued the Commission would be stronger if it were to become more focused, concentrating on its core economic business. Business leaders, ranging from the heads of British Petroleum and Royal Dutch Shell to Siemens, Unilever, Saint-Gobain, Thyssen-Krupp, Vodafone, Nestl?, Nokia and Investor, were also worried by the erosion of the Commission's powers in economic affairs by transferring them to EU member states or to a system of "shared responsibility". This complicated and slowed down decision-making, reduced transparency and seriously risked handicapping the ability of European business to compete in international markets. By throwing its weight behind the Commission, the ERT is siding with smaller EU countries, which believe their interests would be best served by a strong Commission. In contrast, larger countries such as Britain and France want the powers of the EU Council of Ministers strengthened. Business leaders also want the powers of the Commission president reinforced to give him greater influence in selecting commissioners and managing the college of commissioners. To enhance his authority, the president would have to be nominated by a more direct and democratic system. Morris Tabaksblat, chairman of Reed Elsevier, the Anglo-Dutch publishing group, and head of the ERT working group on the governance of Europe, said enlargement raised concerns over the size of the Commission. A college of 27 commissioners could result in even more cumbersome decision-making and infighting. The proposal of Romano Prodi, the Commission president, to create an inner cabinet made sense. Mr Tabaksblat, also a former chairman of Unilever, said ERT members felt the Commission had done a "good job" in getting the single market on its feet and introducing the euro. But its role was "slipping". Europe was failing to deliver a Community patent, a takeover directive, and the commitment made at the Lisbon summit two years ago to make Europe "the most competitive knowledge-based society" by 2010. "The vision of Lisbon is now slipping as fast as it was decided and the commitment is no longer there. That is the most worrying part of the problem," he said. From Michael.Keaney at mbs.fi Wed Jun 26 04:38:18 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 26 Jun 2002 13:38:18 +0300 Subject: [A-List] EU: internal struggles Message-ID: Romano Prodi's unlikely allies By Paul Betts Financial Times: June 26 2002 Europe's biggest companies have long mastered the art of thwarting hostile takeovers. Now they are rushing to defend and strengthen the role of the European Commission in a power struggle over the future shape and control of an enlarged European Union. "As big multinationals, we have thrown our lot in [with] European development and in creating European business structures and we feel current criticisms against the Commission are damaging and risk hindering Europe's efforts to become more competitive," says Morris Tabaksblat, a former chairman of the European Round Table of Industrialists (ERT), which represents 44 of Europe's business leaders. Mr Tabaksblat, chairman of Reed Elsevier, the Anglo-Dutch publishing group, and a former chairman of Unilever, the consumer products multi- national, was in Brussels yesterday to add the ERT's voice to the corporate governance debate. His message to members of the Convention on the Future of Europe, headed by Val?ry Giscard d'Estaing, former French president, was simple, if perhaps un- expected. ERT members - including the heads of companies such as Royal Dutch Shell, Siemens, BP, Renault, Philips, British American Tobacco, Vodafone, ThyssenKrupp, Nestl? and Saint-Gobain - are unanimous in backing the Commission against efforts to water down its powers by transferring them to EU member states or to a system of shared responsibility. The ERT supports Germany and most of the smaller EU countries, which feel their interests would be best protected by a strong Commission in a federal Europe. In contrast, Britain, France and Spain want a Europe of nation states, with power firmly in the hands of elected ministers in the shape of the EU Council of Ministers. Business, says Mr Tabaksblat, wants a growth-oriented and predictable economic environment, which is increasingly being undermined by the absence of a clear and consistent decision- making process in Europe. "The European Council's commitment in Lisbon two years ago to turn Europe into the most competitive society is certainly not being helped by a cumbersome decision-making process [and] threats to make it even more cumbersome," he argues. The ERT business leaders feel the Commission has done a "good job" overall in putting the single market on its feet and in introducing the euro. "If anything, the Commission should be treated with more and more confidence and trust rather than suspicion," says Mr Tabaksblat, who also chairs the ERT's working group on European governance. But they fear there is a drift to "re- nationalise" certain Commission competences. The ERT has been described as a shadowy lobby group that has for the past 20 years exerted a strong grip on policymaking in Brussels. Nonetheless, it can claim much of the credit for providing the initial impetus that led to the European single market in 1992. It also persuaded European leaders to adopt the familiar business practice of benchmarking for guiding EU policies. And the Lisbon strategy, billed as a way to turn the EU into "the most competitive and dynamic knowledge-based economy in the world by 2010", drew largely on ERT recommendations. The centre-piece of the ERT's latest recommendations is a strengthening and refocusing of the Commission on its core business of promoting and acting as a guardian of the single market and boosting the economic interests of the EU. "We believe the Commission should be strengthened in the economic field and less concerned outside the economic field," says Mr Tabaksblat. The trouble is that its role has been steadily eroded. The result has been a depressing inability to push through Europe's decision-making maze a series of reforms and initiatives, such as a community patent, a take-over directive, improved labour market flexibility and a common policy to deal with economic shocks. What the ERT does not say is that this decision-making sclerosis has also prevented the enforcement of an initiative that is particularly distasteful to business: the French-sponsored social agenda protecting the rights of workers across the EU. "Everything is stalled," says Mr Tabaksblat. "Countries are not delivering on social and economic reforms. The Lisbon commitments are petering out as fast as they were embraced. And we are now telling policymakers: 'You asked us to be European, we are European, now please deal with us as Europeans rather than sending us back to national governments.' " In short, the core economic powers of the Commission should not be impaired because business believes the it to be the European institution most capable of articulating the common European interest above national and regional interests. The ERT also wants to see a strengthening of the position of the Commission president, with powers to influence the selection of individual commissioners. To enhance the president's authority with the Council of Ministers and the European parliament, the ERT recommends a more direct and democratic nomination process instead of the current system, whereby the president is chosen by EU governments and subsequently approved by the European parliament. The big business lobby also endorses in part recent proposals by Romano Prodi, Commission president, to reform and streamline the Commission by creating an inner cabinet to give him greater authority as well as a more manageable decision-making vehicle to cope with the enlargement of the EU in 2004. The business leaders say they, too, are worried by the future size of the Commission. "A college of 27 commissioners, or perhaps even more, could well result in cumbersome decision-making, ineffectiveness and infighting," the ERT warns in a paper on EU governance. It recommends new methods of organisation and forms of management to deal with the growing number of commissioners. But the business leaders do not want to see the Commission extending its influence in fields such a security, immigration, and foreign and home affairs. "These areas should have different decision-making structures since they are not the Commission's core single market business," says Mr Tabaksblat. As for the European Council, its prime purpose is giving overall guidance and setting priorities and strategy, the ERT says. But the business leaders say the Council is increasingly burdened with specific and sometimes trivial issues that should be resolved at a lower level. Without reform, they argue, the situation will only deteriorate after enlargement. The six-month rotating presidency of the Council of Ministers is a further source of frustration and confusion. Each presidency attempts to set its own priorities, hindering the ongoing flow of discussion and legislative work in the Councils, the ERT says. But Mr Tabaksblat does not join Tony Blair, the UK prime minister, in advocating the appointment of a president of the Council for an extended three-to-five-year term to ensure continuity. Such a proposal would undermine the authority of the Commission and its president, the ERT argues. "What we can do is establish common platforms from one presidency to another. Establishing strategic priorities and targets and pursuing these consistently over time should not be too difficult," Mr Tabaksblat says. After monetary union, the single market and the introduction of the euro, the next big step in the construction of Europe for business leaders was the vision of Lisbon on making Europe more competitive. Mr Tabaksblat says the ERT would like European governments to restate as a priority the commitments they made at Lisbon. "After all, we were also going through difficult economic times when the single market was established in 1992." From Michael.Keaney at mbs.fi Wed Jun 26 04:40:22 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 26 Jun 2002 13:40:22 +0300 Subject: [A-List] China: Korean inward investment Message-ID: South Koreans take a shine to China By Richard McGregor and Andrew Ward Financial Times; Jun 20, 2002 There is a new name on the map of China. A small town in Liaoning province, in the country's north east, has been renamed LG Color TV Village. The region also has an LG Street and a school called LG Hope Primary. The spread of LG's brand name reflects the growing presence in China of South Korea's second-largest business group, which has invested $1.5bn in its 39 Chinese businesses, employing 25,000 people. LG , a manufacturer of electronics and chemicals, expects China to soon become its second-biggest market and number-one production base. "In some areas of our business, LG is becoming a Chinese company," says Lee Hee-gook, president of LG Electronics' research arm. LG 's expansion is part of a wave of investment in China by South Korean companies, which say they are ideally placed to benefit from their close neighbour's rapid growth and globalisation. Samsung Electronics and Posco, the steelmaker, are among others that have begun manufacturing and selling goods in China, exploiting the country's low cost base and growing domestic market. South Korean companies believe their geographical proximity with China and their shared Confucian culture gives them a lead over other foreigners vying for business on the mainland. "Korea and China are very close historically and that can be an advantage compared with western companies," says Kim Soo-bong, Samsung Electronics' vice-president of global marketing. The bond is enhanced by a shared antipathy towards the slipping regional heavyweight, Japan, which brutally reigned in both countries as a colonial power. By exploiting business opportunities in China, South Korean companies maintain they have turned on its head the long-standing fear that they were threatened by competition from the mainland. Instead, South Korean companies claim they are turning the threat into an opportunity by taking advantage of the cheap labour and expanding market on its doorstep. LG 's 39 Chinese businesses range from several vast electronics and petrochemicals factories to smaller-scale production of toothpaste and stuffed toys. LG Electronics (LGE) is China's biggest exporter of television sets. However, LG 's interest in China runs deeper than using it as a giant sweat shop to produce export goods. "The majority of what we produce in China is consumed in China," says Mr Lee. With top-10 positions in China for microwave ovens, monitors, washing machines and air-conditioners, the company's mainland revenues have climbed from $2.5bn in 2000 to an estimated $3.7bn last year. Samsung Electronics, which makes 11 per cent of sales in China, admits it made mistakes after it first entered the country in 1993. "We did not understand China. We expected too much, too soon. We lost a substantial amount of money, but also learned a lot," says Mr Kim. "We stopped looking at China as a single country and started targeting specific markets, according to demographics, geography and products. China has many faces," he adds. "There are 1.3bn people but among them are lots of different kinds." Samsung, which has eight factories in China, reversed its policy of striking 50-50 joint ventures with local partners because it had too little control. Now it retains 100 per cent of operations. The company has been profitable in China since 1999 and last year paid off all the losses incurred since 1993. However, the corporate sector's embrace of China does not please all South Koreans. Unions protest about the flow of jobs across the Yellow Sea and politicians worry that transfer of skills is increasing China's competitiveness. Some doubt Korean claims that they can avoid the kind of hollowing out, and loss of jobs, now taking place in Japan as companies shift to China. Andy Xie, of Morgan Stanley in Hong Kong, cites a recent survey by the Korea Chamber of Commerce, which found that local labour costs were eight times as high as China, but productivity about the same. Tough management practices and alleged mistreatment of workers during the early days of Korean investment once earned their companies a poor reputation in China and sparked numerous labour disputes. The main problem now is quite different - for Korean industries to maintain their lead over fast-advancing Chinese rivals by fostering high technology businesses and products. LG and Samsung have pledged to concentrate their research and development activities in South Korea, while moving much of their volume manufacturing to China. "We cannot afford to do all our production in Korea so there is a shift towards China. Korean people don't like it but that's reality," says Mr Lee. From Michael.Keaney at mbs.fi Wed Jun 26 04:57:45 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 26 Jun 2002 13:57:45 +0300 Subject: [A-List] Re: Brazil: liberal markets vs. bourgeois democracy Message-ID: Anne writes: This is cleverer than what Europe has attempted to do - one central bank for a slew of quite distinct countries/economies - in that the dollar triumphs against a backdrop of weak and assaulted currencies, leading to a unified commercial space with one currency. The US is in a strong position because most of the Latin American govts have allowed themselves to become dependent on US largesse (private and public) and the US dollar by virtue of having nearly 70% of their central bank reserves in dollars.......and so "my power is their power" will win the day amongst compromised leaders/ shaky governments. The contagion emanating from Argentina, alas, may only serve to inspire a more rapid capitulation. ===== Europe starts from behind in this as in other matters, but it is no less likely, in the long term, and barring concerted efforts by the US and/or Russia, to overwhelm the former Soviet bloc, whether by EU expansion or de facto economic annexation. The latter has already begun, as German investment capital has flooded into Poland, for example. Another development worthy of note is the quick acceptance of the euro. My evidence is anecdotal, of course, but, while visiting Estonia last weekend I noticed how quickly traders had produced price schedules with euros, using an exchange rate that made it cheaper to buy goods using euros rather than Estonian crowns. Meanwhile the previous thirst for dollars was very much reduced. This suggests that the Baltic states, having just acquired their own currencies, are now in the process of relinquishing them again. And many former communist states are in a dependency relationship with the EU. As for the ECB, it will take some time, but I anticipate the death of the growth and stability pact (i.e., its monetarist constitution) and its replacement with something more akin to the model adopted in Sweden, Britain and now Germany, in which the central bank has responsibility for setting interest rates within a pre-set inflation target range, whilst financial regulation is administered by member states and/or the European Commission, which is suddenly looking much stronger in the internal struggle over the future development of EU integration, given the outspoken backing of the ERT. There remains, of course, the position of the US in all this, but at the moment it's looking much more like regionalisation than globalisation. Michael Keaney From annewilliamson at msn.con Wed Jun 26 04:54:52 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Wed, 26 Jun 2002 06:54:52 -0400 Subject: [A-List] New economy bull: productivity miracle explained References: Message-ID: <00f501c21cff$e81dcae0$0100a8c0@igrushkii> The entire world is getting screwed, and fiat money is the tool that our magnificent states employ......without fiat, none of this wholesale destruction would be possible except on a military - not a financial - basis. -A. Pat Buchanan June 26, 2002 Will Bush follow Bill to bailout city? "When sorrows come, they come not single spies, But in battalions," said Hamlet. If President Bush has time left over from defusing a war between India and Pakistan, and preparing a plan for Mideast peace, he best take a quick glance south. From Tijuana to Tierra del Fuego, democratic capitalism is in deepening peril. Some 500 maquiladora plants in Mexico have moved to Asia, taking 250,000 of Mexico's best jobs, in search of 25-cents-an-hour Chinese labor. The global race to the bottom is on. Mexico's stock market has lost one-seventh of its value in three months, and the peso has lost 10 percent of its value against the dollar. Finance Minister Francisco Gil Diaz compares Mexico to Argentina. While it has been selling off national assets to cover budget deficits, you can only sell the family silver once. "At some point, we are not going to have anything more to sell," said Gil. In Colombia, the war with the narco-guerrillas goes on and on, as Venezuela seems headed for another coup. In Peru, President Toledo's popularity has plummeted to below Nixon-at-Watergate levels; two cabinet ministers resigned last week, and riots erupted in Arequippa to protest plans to privatize two electric generators. Last Friday, Uruguay let its peso float and it lost almost 30 percent on local markets, as the IMF rushed in $1.5 billion. Uruguay is in its fourth year of recession, with GDP down 17 percent -- a depression. But it is in South America's giants where the crisis is deepest. On Friday, Brazil's currency fell to a record low against the dollar. Second only to Argentina, Brazil is the riskiest place on earth to invest. The spread between Brazilian and U.S. bonds is similar to that between Russian and U.S. bonds before Moscow's default. Fears that Brazil may follow Argentina into default have soared as the old radical Luis Ignacio Lula da Silva is running 2-to-1 ahead of the incumbent party's candidate for president in the October election. Argentina, once the most promising nation in Latin America, is becoming a failed state. Last year, an Argentine peso was worth a dollar. Today, it is closer to four to the dollar. By tens of thousands, Argentine professionals are fleeing their country, and First World companies are following. Wendy's, Home Depot and Sky TV are gone. Airlines have cut back on flights to Europe and America. Foreign newspapers and magazines are disappearing from newsstands. On Friday, Argentina's central banker, Mario Blejer, resigned. With spreading social unrest and a dead economy, Buenos Aires may resort -- as Berlin did in 1923 -- to printing-press money. If Argentina does not get another bailout from the IMF in June, it may be forced to default on its old loans to the IMF. Then the rot in the Global Economy will be visible to all. Many factors make this crisis in Latin America more serious than 1998. Most Latin countries have already sold off their prized national assets -- telephone and utility companies, banks, major state enterprises. There is little left to be pawned at the Casbah of Global Capitalism. Some Latin nations are so mired in debt it is ridiculous to ship them new IMF loans, so they can make payment on the old IMF loans. And unlike 1998, the U.S. economy is not robust -- the U.S. merchandise trade deficit is running at $480 billion a year. Our manufacturing base has been gutted, and our current account deficit is near 5 percent of GDP. Even the free-trade-uber-alles boy are moving to protect America's farms and factories from floods of cheap foreign imports. Economic nationalism is on the way back. Across Latin America, leftist politicians are demanding an end to U.S.-style "neo-liberal" economics, and Latin peoples are searching for someone to lynch for having robbed them. There is little doubt at whom corrupt and incompetent Latin politicians will point the finger: the Big Banks, the IMF, the transnational companies that bought up their national assets for a song -- and the Bush administration, for playing Dutch Uncle to their desperately demanded new IMF loans. Three things keep the great fraud of the Global Economy going. Endless U.S. taxpayer bailouts of bankrupt regimes through the IMF and World Bank, a $480 billion U.S. merchandise trade deficit that sells off America's manufacturing base to pay for consumer and capital goods not made in the U.S.A., and foreign aid forever. The day this triple-looting of America ends, the house of cards comes down. Until then, a prediction: President Bush and Treasury Secretary Paul O'Neill will emulate Bill Clinton and Bob Rubin, and get into the bailout business, big-time -- as Dick Cheney would say -- because no one wants to be the one left standing there when the music stops. From Michael.Keaney at mbs.fi Wed Jun 26 05:09:27 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 26 Jun 2002 14:09:27 +0300 Subject: [A-List] New economy bull: productivity miracle explained Message-ID: Anne writes: The entire world is getting screwed, and fiat money is the tool that our magnificent states employ......without fiat, none of this wholesale destruction would be possible except on a military - not a financial - basis. -A. Pat Buchanan June 26, 2002 Will Bush follow Bill to bailout city? ===== It's an achievement of sorts that we should be swapping articles by Paul Foot and Pat Buchanan on the same list, but I won't crow about it too publicly. More to the point, the wholesale destruction is being given military backing, as with the latest moves to legitimate pre-emptive strikes as a tool of US foreign policy. This is a logical development of the previous emphasis on "humanitarian intervention" and both complement one another very well. The value of the dollar (and pounds sterling) depend in good part upon the perceived willingness of the US and British states to resort to the military option when advancing or protecting perceived interests. For the time being at least, the European single currency has no such military backing. Michael Keaney From annewilliamson at msn.con Wed Jun 26 05:08:42 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Wed, 26 Jun 2002 07:08:42 -0400 Subject: [A-List] New economy bull: productivity miracle explained References: Message-ID: <011001c21d01$d85c5de0$0100a8c0@igrushkii> The King Report M. Ramsey King Securities, Inc. Wednesday June 26, 2002 - Issue 2447 "Independent View of the News" Globex SPUs [at press] 950.50, -24.00; USUs 105.12, +2.06 $=120.30yen; euro = .9871 Gold is +$4.30 Enter The Pain After the close, GE announced they would hold a conference call on July 18 and reaffirm earnings guidance for this quarter. That's ridiculous - GE already made the announcement. It's a transparent ploy to produce a perceived double benefit for GE stock, which is in steep descent. SPUs rallied after the ploy. But the surprises are negative in a bear market, and this is a super/secular bear. Yesterday's session had the smell of bankruptcy anxiety in the air. WCOM, Amtrak, US Air, UAL, LU were cascading on fear debt would sink them. After GE's gambit, CNBC reported that according to WCOM insiders, the company had cooked earnings the last 5 quarters. The stock fell to .35 in after-hour trading. WCOM faces the abyss. Will it take LU, TLAB, and others with it? What about the bankers and debt holders? Two large JPM blocks traded after the news; SPUs and NDUs fell precipitous...Micron's after-the-close report of a 4-cent loss also is contributing to after-hour and overnight trading distress. The due bill has arrived for Easy Al and others' duplicity and malfeasance. As we keep harping, that's what happens after a busted bubble. Monetary policy is ineffective, except for a brief rally that allows insiders and the astute to exit. More money is lost on the resultant 'death march' decline than on the initial bubble burst. The financial violence worsens. Debt keeps growing; its unserviceability crushes the economy. The panicky liquidity cannot get into the economy efficiently. A daisy chain of bankruptcies ensues; a debt deflation spiral occurs. It takes years to remedy the excess debt and capacity. The hellish consequences of Easy Al and Slick's '90s bubble are arriving with increasing frequency and intensity. Long-time readers know we constantly lambasted the corruption, fraud, and chicanery of the late '90s. Bubbles don't occur by accident. The bubble was partly designed to keep Slick out of jail. Many people thought our continual bashing of Slick was solely political, but as we tried to articulate, we were disgusted at the massive corruption that permeated virtually every facet of US society. We often mentioned that the US would pay dearly for the venality of the '90s. That is now transpiring in the military, intelligence agencies, Justice, corporate America, the Church, stocks, etc. Slick posted a for-sale sign on the US, and every insider and wise guy knew it. Everything was for sale, and ethics were discarded for quick profits. Non-financial profits peaked in 1997, but accounting chicanery kept the game going. The government manipulated economic data. Fraud was ubiquitous. It was obvious; and the consequences weren't a forecast; they were a certainty. As bankruptcies proliferate, Congress and Bush will be pressured to act. They will select winners and losers, since everyone can't be saved. What telecom, techs, etc. will be given Chrysler-like sustenance? US banks will resemble Japanese banks. Soon, politicians, academicians, media, etal can issue the same bromides to US banks that they arrogantly hurled at the Japanese. In overnight trading, bonds are up a deuce, stocks futures are cascading, gold is up $4, and the dollar is tanking. Today will be coyote ugly. Critical technical support levels will be obliterated. As we kept warning, stocks were sick, but misguided traders kept usurping the necessary purging. We also stated that market action implied that something or someone was 'in trouble'. The news that WCOM's CFO was fired 48 hours ago is just one factor that has emerged. They are undoubtedly many othe...There will be various and sundry rumors as to who 'is in trouble'; some will be true. The obligatory purging is commencing. And as we warned, the final stage is vicious; prices decline to unfathomable levels due to forced liquidation. When or will the Plunge Protection Team surface? Euros are up sharply overnight. The market is starting to price in a rate cut. This is extremely bad news as the rate cuts are innocuous for both the economy and stock market, but are anathema to the dollar. Federal Express cut next quarter guidance, triggering a collapse in rails. The rails had been huge post-9/11 winners as the obvious alternative to airlines and as a key beneficiary of the widely heralded economic rebound. FDX's pronouncement is a more prescient economic forecast than an econometric model. So much for the LEI and other overly dependent-on-monetary-policy indicators. Treasury's announced cancellation of the 2-year auction, due to Congressional inaction on raising the debt ceiling, boosted bonds and crippled stocks. Please disregard talk about how sentiment is so negative it signals a massive rally. Just as bullish sentiment goes and stays at extremes in bubbles, the reciprocal occurs in bear markets. But most importantly, as we keep saying, valuations are the true indicator of sentiment. When tech stocks still trade at 60 to 80 PEs and major market indices sport historically high PEs, sentiment is still extremely bullish. CNET reports, "Apple Computer, which initially could not meet demand for its new flat-panel iMac, now appears to have the opposite problem. Retailers and distributors who had to wait weeks after the product's January introduction to get their hands on the desk lamp-shaped desktops now find the machines piling up as the consumer PC market slows to a crawl." The Chicago Tribune, citing the Illinois Association of Realtors, says housing prices are up 15.1% in Q1 for the Chicago area. Some areas, like Oak Park are up 27.3%. But that won't show in CPI. You know that housing price surge? Well if LU goes, parts of New Jersey and Chicago western suburbs won't have to worry about the housing bubble. This will be repeated throughout the US - where ever teetering corporations and depended entities are domiciled. For the past 20 years, Wall Street and others bragged that 'just in time' inventory management made US business and the economy more efficient. Yesterday, the WSJ had a front-page article blaming the erstwhile-trumpeted practice for retarding the recovery. There will be even more Congressional hearings into the ways and means of the financial fraud and carnage that is still unfolding. But when will hearings into Congressional and Executive fraud occur? We said it many times over the past several years, and we'll say it again. "The level of speculation in a society is directly proportional to the level of corruption." We don't recall the quote's originator. From Michael.Keaney at mbs.fi Wed Jun 26 05:17:59 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 26 Jun 2002 14:17:59 +0300 Subject: [A-List] Destructive creation: depleted uranium Message-ID: Private Eye No. 1056, 14-27 June 2002 In the Back DU: A Burning Issue Last month's crash of a China Air Boeing 747 is a timely reminder of the presence of depleted uranium (DU) on board big jets. TriStars, DC10s and all jumbos made before 1993 carry built-in bars of DU as counterweights in the tail of the aircraft. Intact, DU presents no danger other than a minor emission of radioactive alpha particles. But when burnt, it releases deadly uranium oxide particles into the atmosphere that are know to travel on the wind for many miles. According to the US Institute for Molecular Medicine: "If even one particle of uranium oxide, of less than five micrometers, is trapped in the pulmonary system, the lungs and surrounding tissues can be exposed over a year up to 272 times the annual radiation dosage permitted radiation workers by US regulations." After two jumbos collided in a fireball on the runway at Tenerife airport in the mid-1970s, a Spanish policeman died from effects through to be related to DU poisoning. In Britain the problem was highlighted by the Lockerbie disaster. A policeman arrived at the hangar where the wreckage was being collected with a piece of metal shaped like a large bar of Toblerone, which was too heavy to carry. So he dragged it across the concrete floor, making the bar spark. It was a DU counterweight. Two of the 18 bars of DU from that aircraft are still missing. No problem according to the authorities -- they probably fell into the Keilder reservoir. In October 1992, an El-Al 747 freighter crashed into a block of flats in Amsterdam, killing 43 people. Of the 390kg of DU used as counterweights in that aircraft, only 130kg were ever recovered. DU particles were found both at the crash site and in the crash hangar. A Dutch parliamentary commission was ordered and concluded that: "In all probability the particles had been inhaled by rescue workers and citizens." That warning that rescue services were vulnerable to uranium oxide was not taken seriously enough here in Britain. In December 1999 a Korean Airlines cargo 747 crashed on take-off from Stansted. Firemen fought and finally subdued the huge blaze resulting from the crash. Four bars of DU are still missing and are believed to have burnt and oxidised. While firemen closest to the blaze were using breathing apparatus, other firemen, police and ambulance workers had no protection. Nor were they warned of any dangers due to uranium oxide. Malcolm Hooper, professor emeritus of the medicinal chemistry department of Sunderland University, is sure those dangers are very real. "I can't see any way you could have a significant fire in a crash like this without producing the conditions that would allow a potentially hazardous release of DU," he says. "If no precautions were taken at the scene, people would have been exposed to hazards that could prove fatal." DU is the by-product created when uranium ore is enriched for use in nuclear weapons or nuclear power stations. For every ton of enriched uranium, 143 tons of DU are produced. It is readily available, cheap and is used in yacht keels, the tips of helicopter rotors, medical instruments, and enamel jewellery. From Michael.Keaney at mbs.fi Wed Jun 26 05:41:24 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 26 Jun 2002 14:41:24 +0300 Subject: [A-List] H-AcademicPimps: unhealthy accumulation Message-ID: Private Eye No. 1056, 14-27 June 2002 Kaiser Bill! Nothing annoys the private health industry more than the statement in the government's NHS plan for 2000 that "the NHS gets more and fairer health care for every pound invested than most other health care systems". In the new and reinvigorated offensive against the NHS from private health organisations, academics and the companies that finance them have been making strenuous efforts to cast doubt on this palpable truth. The latest in a long line of such assaults was published in January in the British Medical Journal. Its authors were Richard Feacham, director of something called the Institute for Global Health at the University of California, and two other California academics. In a seven-page paper, Mr Feacham and colleagues tired to compare the costs and performance in the NHS with those of an "integrated system for financing and delivery of health services" in California, set up by a private profitable organisation with the seductive name of Kaiser Permanente. The academics came to the arresting conclusion that "Kaiser achieved better performance at roughly the same cost as the NHS" and attributed part of that to "the benefits of competition". The paper suggested this was a fair comparison since "in many ways Kaiser Permanente is, like the NHS, providing a similar range of services for a population similar to that of a small country." Publication of the Feacham report led to a storm of protest. Some of it came from ordinary citizens like Susan Williams, a state registered British nurse working in California, who wrote: "I was appalled by your article, and wish to state that the overall quality of hospital and nursing care is infinitely better in the NHS." Nigel Edwards, policy director of the NHS Confederation, complained that the adjustments made to bring Kaiser's costs in line with those of the NHS were "completely illegitimate". He exposed "a number of other flaws in the economic analysis which are also close to fatal." Clive Smee, chief economic adviser to the health department, was also unimpressed by the Feacham paper. "Kaiser is indisputably much more expensive than the NHS, per capita," he wrote. The per capita cost of the NHS is barely 60 per cent of Kaiser, $1,161 compared with $1,951." He concluded: "From the data in this paper there can be no doubt at all that in terms of total costs per capita, Kaiser is far more expensive than the NHS." How, then, did Feacham and Co arrive at their conclusions? By fiddling the figures. For instance, Feacham's claim that Kaiser's members in California are representative of the US population as a whole is demonstrably false. Only 3.8 per cent of Kaiser's members are "low income or indigent" compared with 13.8 percent of California's population as a whole. Kaiser also excludes the fifth of California's population that are not insured for health purposes. The whole point of the National Health Service, by contrast, is that it excludes no one. All the adjustments made by the authors have the effect of distorting the comparison between Kaiser and the NHS to the gross disadvantage of the latter. The sustained assault on the Feacham paper even from the department of health's econmoic adviser does not seem to have influenced the government, however, whose spokespeople are keen to promote the argument for Kaiser. The Wanless report in April by the treasury trends review team, Securing Our Future Health: Taking a Long-Term View, has a warm reference to Kaiser, as does the recent department of health report, Delivering the NHS Plan. While pretty well everyone who has read and understood the Feacham puff for Kaiser rejects it as a load of hooey, the increasingly confident health privateers in high places continue to praise it. PS: Not everything about Kaiser Permanente is wonderful. In the last three years it has notched up 64 percent of all fines for medical malpractice in California. Kaiser's total fines in the period came to $1,635,000, while all the other medical fines in the state of California came to $925,000. State and federal investigations into Kaiser in Texas and California are proceeding. These follow sweeping efforts by Kaiser to cut costs. Reggie James, southwest regional director of the US Consumers Union, says: "In an effort to be more competitive and cut costs, they are cutting services." No wonder the new privateers of the NHS are so impressed! ----- NOTE: Foot and co. neglect to mention that "Kaiser Permanente, the California-based not-for-profit health maintenance organisation, which has pioneered cost-effective methods of using high-technology care, is to be invited in to partner NHS purchasers in setting up a similar systems in the UK. The Kaiser approach has cut waiting times, reduced costly hospital stays and improved the quality of care. Kaiser and others with similar experience will be invited to provide the management to introduce that in the UK." So reported the Financial Times on April 19. See http://archives.econ.utah.edu/archives/a-list/2001/msg05661.htm From annewilliamson at msn.con Wed Jun 26 05:38:07 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Wed, 26 Jun 2002 07:38:07 -0400 Subject: [A-List] Re: Brazil: liberal markets vs. bourgeois democracy References: Message-ID: <015801c21d05$f5e0fd40$0100a8c0@igrushkii> I agree that regionalization is overtaking globalisation in the zeitgist....however, I see an eventual return to economic nationalism. But then I also believe the EU to be an untenable arrangement which will collapse; pretty slips of paper will not and can not do the job at which Charlemagne, Napoleon and Hitler all failed - so there's my bias, which is held with neither joy nor rancor over the idea of a unified Europe. -A. ----- Original Message ----- From: Keaney Michael To: Sent: Wednesday, June 26, 2002 6:57 AM Subject: RE: [A-List] Re: Brazil: liberal markets vs. bourgeois democracy Anne writes: This is cleverer than what Europe has attempted to do - one central bank for a slew of quite distinct countries/economies - in that the dollar triumphs against a backdrop of weak and assaulted currencies, leading to a unified commercial space with one currency. The US is in a strong position because most of the Latin American govts have allowed themselves to become dependent on US largesse (private and public) and the US dollar by virtue of having nearly 70% of their central bank reserves in dollars.......and so "my power is their power" will win the day amongst compromised leaders/ shaky governments. The contagion emanating from Argentina, alas, may only serve to inspire a more rapid capitulation. ===== Europe starts from behind in this as in other matters, but it is no less likely, in the long term, and barring concerted efforts by the US and/or Russia, to overwhelm the former Soviet bloc, whether by EU expansion or de facto economic annexation. The latter has already begun, as German investment capital has flooded into Poland, for example. Another development worthy of note is the quick acceptance of the euro. My evidence is anecdotal, of course, but, while visiting Estonia last weekend I noticed how quickly traders had produced price schedules with euros, using an exchange rate that made it cheaper to buy goods using euros rather than Estonian crowns. Meanwhile the previous thirst for dollars was very much reduced. This suggests that the Baltic states, having just acquired their own currencies, are now in the process of relinquishing them again. And many former communist states are in a dependency relationship with the EU. As for the ECB, it will take some time, but I anticipate the death of the growth and stability pact (i.e., its monetarist constitution) and its replacement with something more akin to the model adopted in Sweden, Britain and now Germany, in which the central bank has responsibility for setting interest rates within a pre-set inflation target range, whilst financial regulation is administered by member states and/or the European Commission, which is suddenly looking much stronger in the internal struggle over the future development of EU integration, given the outspoken backing of the ERT. There remains, of course, the position of the US in all this, but at the moment it's looking much more like regionalisation than globalisation. Michael Keaney From annewilliamson at msn.con Wed Jun 26 05:49:57 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Wed, 26 Jun 2002 07:49:57 -0400 Subject: [A-List] New economy bull: productivity miracle explained References: Message-ID: <015d01c21d07$99b5cbc0$0100a8c0@igrushkii> Michael writes: The value of the dollar (and pounds sterling) depend in good part upon the perceived willingness of the US and British states to resort to the military option when advancing or protecting perceived interests. I agree 1000%, dollars and/or soldiers, bribes and/or bombs - US foreign policy in a nutshell. ("A carpet of gold or a carpet of bombs," said Bushkin to the Taliban.) But how do you pay those soldiers and purchase their equipment and transport them without a money monopoly? Only by obtaining the approval of the electorate in that they agree to be taxed for the effort. The American people have not agreed to a "war" effort for decades. No has one asked them. No one had to ask them, thanks to the "miracle" of the Federal Reserve. This is why Congress can betray our Constitution and finance military adventures without a Declaration of War. The people lost the power of the purse in 1913, and therefore their ability to discipline and hold accountable their government and it is they who shall pay the greatest price in time. -A. ----- Original Message ----- From: Keaney Michael To: Sent: Wednesday, June 26, 2002 7:09 AM Subject: RE: [A-List] New economy bull: productivity miracle explained Anne writes: The entire world is getting screwed, and fiat money is the tool that our magnificent states employ......without fiat, none of this wholesale destruction would be possible except on a military - not a financial - basis. -A. Pat Buchanan June 26, 2002 Will Bush follow Bill to bailout city? ===== It's an achievement of sorts that we should be swapping articles by Paul Foot and Pat Buchanan on the same list, but I won't crow about it too publicly. More to the point, the wholesale destruction is being given military backing, as with the latest moves to legitimate pre-emptive strikes as a tool of US foreign policy. This is a logical development of the previous emphasis on "humanitarian intervention" and both complement one another very well. The value of the dollar (and pounds sterling) depend in good part upon the perceived willingness of the US and British states to resort to the military option when advancing or protecting perceived interests. For the time being at least, the European single currency has no such military backing. Michael Keaney From Michael.Keaney at mbs.fi Wed Jun 26 06:20:27 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Wed, 26 Jun 2002 15:20:27 +0300 Subject: [A-List] US: rising cost of health care Message-ID: Here's a fairly subtle allusion to what promises to become, if it has not already done so, a major source of discontent if not unrest in the US. Rising health care costs and pension commitments (relative to freefalling equity investments) are "forcing" companies to offload their liabilities onto those who bought into the "social partnership". Out in front but carrying a heavy load By Jeremy Grant and Tim Burt in Detroit Financial Times; Jun 20, 2002 When General Motors last week moved ahead of its arch-rival Ford in an annual survey of productivity in North America, it was a sign that the world's largest motor manufacturer is rolling vehicles off the assembly line in record time. But there is much more to GM's latest achievement than the satisfaction of topping the industry rankings. The Detroit-based motor manufacturer is engaged in a battle to bolster its balance sheet, which has been seriously weakened as sagging equity markets have left its huge pension and healthcare liabilities significantly underfunded. That battle involves cranking up vehicle production to unprecedented levels, while making maximum possible use of idle capacity at plants across North America. For Rick Wagoner, chief executive, it is the single biggest challenge facing the company. "Our assignment's pretty simple: generate positive cash and use that to help build up the balance sheet. Frankly, the negative returns of US equity markets in 2001 really put the pressure on the pension fund. And healthcare costs in the US continue to move at what we think are just unsupportable rates," he said in an interview. GM's problem stems from its obligations to fund the pensions and healthcare costs of thousands of existing and retired employees. GM employs 48,000 people in the US, Canada and Mexico. Although Ford and DaimlerChrysler face similar problems - Ford's liabilities are estimated to be $3.3bn by 2005 - GM's are worse thanks to a legacy of high headcounts, more early retirements and the fact that over the past 10 years the average age of GM employees has been slightly higher than at its rivals. While GM recently has been getting good reports from Wall Street analysts as it outperforms its neighbours on the sales front, there is a persistent worry that any sustained downturn in the equity markets could prompt a balance sheet crisis. Indeed, industry analysts calculate that if GM's return on pension fund assets is 8 per cent - as opposed to its own assumed return of 10 per cent - the size of its pension shortfall could increase by almost $8bn. Its balance sheet could be further weakened by healthcare obligations, which are forecast by Goldman Sachs to increase by $3.8bn by 2005. Mr Wagoner acknowledges that there is a threat if markets turn against the company's assumptions, but says it is hard to make concrete predictions. "We were $20bn underfunded against a much smaller base in our pension fund in the early 1990s. We were able to get that fully-and over-funded more quickly than we thought we could, because we generated some good cash in the business and we took advantage of some of the assets we had." Some analysts have started to question how long GM can maintain its aggressive sales drive, powered largely by generous cash-back and zero financing incentives. Incentives are at some of their highest levels, in relative terms, since the concept was introduced in the US to help shift vehicles in the 1950s. Mr Wagoner said that GM would "continue to be competitive", particularly in the mid-sized car sector. "With mid cars it's going to be very aggressive and we're going to have to stay aggressive because that's a category of market where the capacity is in excess of demand." Improvements to the balance sheet would come, he predicted, if the company's sale of Hughes, its communications and satellite TV arm, to US media group EchoStar is approved by the US Department of Justice and Federal Trade Commission. That deal, announced last year, is expected to result in a near-$14bn gain for GM. But Mr Wagoner added GM would consider other options if the deal was blocked. Although strong sales had helped the group's US position, GM Europe had still to see the main benefits of cost-cutting, while South America - normally fairly cash-generative when economic times are good - had become more problematic. In Asia, the picture was mixed, he said. "It'd be nice to see the Asian economies achieve the growth that we're now forecasting throughout that region. It would help take a little bit of pressure off the US/Canadian economies on the growth side." From soncu at pacbell.net Wed Jun 26 18:20:15 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Wed, 26 Jun 2002 17:20:15 -0700 Subject: [A-List] Re: H-AcademicPimps: unhealthy accumulation Message-ID: >From the article Michael sent: > Its authors were Richard Feacham, director of > something called the Institute for Global Health > at the University of California, and two other > California academics. Michael, Is there any way we can learn who these academics are? Maybe we can dig into this more. I happen to know a few Health Care economists at the University of California. They are "nice" people by the way. I don't blame the players as much as I blame the rules of game. Sabri From soncu at pacbell.net Wed Jun 26 18:25:04 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Wed, 26 Jun 2002 17:25:04 -0700 Subject: [A-List] Further turbulence in Turkey Message-ID: Friends, Add Turkey to the list of countries to watch closely in these days. Prime Minister Bulent Ecevit had his medical check up today and the Istanbul Stock Exchange 100 Index fell by about 5%. Turkish lira also got smashed: US dollar increased 3.2% whereas Euro increased 5.2% against the Turkish Lira in one day. Sabri +++++ New minimum wage announced Both the stock market and the lira take a beating on Wednesday June 26? Turkey?s Minimum Wage Fixing Commission has set the new base salary for Turkish workers, which is to come into force on July 1, 2002. The new gross minimum wage, which will be effective until the end of year will be Tl 250,875,000 million, the equivalent of $154. However, actual take home pay will be Tl 184,251,000, which equates to $113, the same as it was six months ago. On the same day that the new minimum wage was announced, Turkey?s economic woes increased, with both the stock market and the lira hitting year lows. The Istanbul Stock Exchange 100 Index fell by 467.35 to close at 8,627.42 while the lira was being quoted by the Central Bank at 1,628,086 to the US dollar and 1,612,620 to the euro. Full: http://www.ntvmsnbc.com/news/160498.asp From Michael.Keaney at mbs.fi Thu Jun 27 02:40:59 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Thu, 27 Jun 2002 11:40:59 +0300 Subject: [A-List] H-AcademicPimps: unhealthy accumulation Message-ID: Sabri on health economists: They are "nice" people by the way. I don't blame the players as much as I blame the rules of game. ----- A few years ago I was employed in health services policy and research, and saw applied economics in action. (My academic background lies in economics, although I disowned it long ago, preferring to mine the rich seams in the regions academics would call political economy and political sociology.) It is quite grotesque, and one of the clearest applications of pseudo-science in the service of ideology that could ever be used to exemplify the corruption of non-pecuniary institutions the world over. I have devoted some time to studying this and writing about it, although my efforts are miniscule in comparison with the amount of work that is required to be done. Plus, it's been three years since I waved that post goodbye, so my health care connections are becoming ever more tenuous, although I still try to keep an oar in. Career-wise, however, I was faced with the sort of choices that Feacham and co. would have encountered, and as a result I am not a director of any institute at any reputable academic institution. Not that I would wish to be either. But these guys are probably just as "nice" as all the Brad DeLongs and John Taylors and Stanley Fischers and Anne Kruegers (but not Larry Summers) who play the rules so well that they end up setting them. By adding to the mountain of garbage published in the name of health economics, Feacham and co. not only perpetuate it but legitimate it. Michael Keaney From Michael.Keaney at mbs.fi Thu Jun 27 02:45:29 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Thu, 27 Jun 2002 11:45:29 +0300 Subject: [A-List] Financial regulatory crisis Message-ID: Faith in market system tested to limit US telecoms group books place in corporate infamy and sends shockwaves around the global economy ALF YOUNG Analysis The Herald, 27 June 2002 DESPITE the global pretensions encapsulated in its name, before yesterday morning millions of Europeans had never heard of WorldCom. But like Enron before it, the American telecoms group has now booked its place in the annals of corporate infamy. Fraudulent accounting on a breathtaking scale at the group based in Clinton, Mississippi, has sent another spasm of panic through global equity and currency markets. The hugely indebted WorldCon, as it will doubtless come to be known, now faces bankruptcy and break-up. Some of its executives will almost certainly face criminal charges. More importantly, the whole world's faith in market capitalism's ability to deliver ever-rising levels of prosperity has, yet again, been sorely tested. At issue is the question of trust. If investors cannot trust what companies are saying about their earnings or rely on those (like the doomed Andersen) which audit company books to deliver a true and fair view of what their clients are up to, the whole market system begins to crumble around our ears. And if the steep falls we have seen recently in global equity markets deepen into a long-running investment slump, the consequences will be disastrous on many fronts. They will be disastrous for the ability of even honest companies to invest in their businesses and grow their markets. And that, in turn, will be disastrous for whole economies trying to grow again after the shocks of September 11. They will be disastrous for everyone with a pension plan or other long-term savings dependent on equities continuing to grow in value. And that, in turn, will be disastrous for how much we all choose to consume, the one thing that has kept whole economies afloat since terrorists slammed those planes into New York's world trade centre. Panic breeds on uncertainty. And no-one knows just how many more Enrons and WorldComs are lurking out there in the corporate woodwork. According to last week's Economist, nearly 1000 US companies have now restated their earnings since 1997. Days before WorldCom dropped its bombshell, four executives of Rite Aid, an American drugstore chain, were convicted of securities and accounting fraud. We know there's a lot of it about, particularly on the other side of the Atlantic. We simply don't know how much or to what extent this corporate cancer may have spread to Europe. Concerns have been expressed about the accounting policies of some major European companies, like Cable & Wireless here and the Irish pharmaceuticals group Elan. There again, accounting for a company's financial performance is such an elastic art there is plenty of scope for concern short of uncovering outright fraud. WorldCom was a brash child of the late 1990s technology bubble. It was created by a cowboy-booted former basketball coach and milkman, Bernie Ebbers, a Canadian who dazzled investors with more than 70 different rapid-fire acquisitions which took it into 65 countries and hiked its payroll above 80,000. Its website still burbles on about serving generation d, those for whom digital technology represents a second nervous system. "Generation d is about how every business is an e-business, how digital networks are radically transforming the way we live, work and think," it postures. "It's about a state of mind that is progressive, vibrant, confident, comfortable, approachable." In 1998, Ebbers destroyed BT's global ambitions by snatching long-distance communications group MCI from under its nose. WorldCom had also bought UUnet Technologies, which controls a large slice of the internet's backbone. But this frenzied acquisition programme, and the fancy price tags attached, was racking up massive debts, currently standing at some $30bn. The only way to keep up the momentum was to keep on pulling off ever-larger deals. Three years ago, with WorldCom shares trading at up to $60, Ebbers announced plans to acquire yet another major US player, Sprint. A year later, the authorities blocked the deal on antitrust grounds. Then the tech bubble began its spectacular burst and WorldCom's inflated share price headed south. To stop its boardroom inspiration going bust personally, the company lent Ebbers $408m at privileged rates. But the share price kept on diving. The Securities and Exchange Commission started probing that dubious loan and how WorldCom had accounted for its five-year acquisition spree. This April angry shareholders finally forced Ebbers out, although he still has his loan, a massive ranch in Canada and a luxury yacht called Aquasitions. The new executive team went through the books and has now blown the whistle. We now know that in the five quarters leading up to Ebbers's abrupt departure, WorldCom artificially inflated profits by booking $3852m of everyday business expenses as capital charges whose impact could be spread over many years. The fraud was doubtless designed to slow WorldCom's share price slide. Its exposure has rendered the group's stock virtually worthless. That's tough on WorldCom investors and the 17,000 WorldCom staff about to lose their jobs. However, the pain won't stop there. WorldCom proves Enron was not a one-off. It proves that external audit and other regulatory controls cannot stop determined corporate egos massaging the numbers to delude the markets. It scares millions and millions of people around the world, already worried about their mortgages, pensions and savings. And it poses a massive threat to a stuttering global economic recovery. Trust in corporate America is unravelling before our eyes. But even if that's where the worst excesses and abuses are concentrated, that unravelling, unless addressed, will not stop at America's borders. If authorities on both sides of the Atlantic are to restore some semblance of confidence to markets and investors and shore up the prospects for sustained economic recovery, they need to do three main things. A concerted effort is needed to quantify precisely how widespread fraudulent financial reporting has become. Legislators need to revisit how responsibilities are allocated within companies and the penalties facing those who cook the books. And institutional investors, governments and regulatory bodies need to re-examine, as a matter of urgency, how companies are required to account for their financial performance and how they reward their most senior executives. The rot has spread far enough for us to conclude that leaving things as they are is not an option. From Michael.Keaney at mbs.fi Thu Jun 27 02:47:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Thu, 27 Jun 2002 11:47:02 +0300 Subject: [A-List] Afghanistan: the blowback continues Message-ID: Pakistan soldiers killed in ambush Al Qaeda fugitives flee into mountains after gunbattle IAN BRUCE The Herald, 27 June 2002 TEN Pakistani soldiers were ambushed and killed in a four-hour gunbattle early yesterday as they raided a remote village in the North-West Frontier province suspected of harbouring al Qaeda fugitives. They were the first Pakistani soldiers to die in a border raid since the US launched its attack on terrorist bases last year. Their patrol was pinned down by heavy fire as it followed up an FBI tip that key terrorist figures from its "most wanted" list were being given safe haven by sympathetic tribesmen in Wana, 190 miles west of Islamabad. The survivors, who claim they killed at least two enemy gunmen in the ensuing firefight, were rescued when reinforcements arrived and the attackers retreated into the mountains. A spokesman for the Pakistani army, which has 12,000 men on its border with Afghanistan as a cordon to help prevent the escape of al Qaeda fighters, said up to 500 frontier scouts were conducting an intensive sweep to find the assailants. A number of Pakistani soldiers wounded in the attack had been evacuated to nearby hospitals. He refused to confirm whether US special forces troopers or FBI agents were involved in the incident, but said local tribal leaders had agreed to assist Pakistani authorities in hunting the killers. The village lies in territory controlled by local chiefs, where clan loyalty far outweighs allegiance to a central government. Fearful of an Islamic backlash, Islamabad has officially denied US and British forces the right of hot pursuit over the border from Afghanistan, but locals say most Pakistani raiding parties are accompanied by US "advisers". US central command said it has reliable intelligence indicting that up to 1000 al Qaeda fighters, including many Arabs and Chechens, are regrouping in the tribal territories. They also believe that Osama bin Laden and most of his key lieutenants are lying low in the tribal lands of Waziristan. US commanders believe most al Qaeda and Taliban "hold-outs" still in Afghanistan are in mountain strongholds in Konar province, north of Jalalabad. The UK's 1700-strong Royal Marines battlegroup, about to be withdrawn from Afghanistan, conducted three textbook sweeps of the area without encountering a single enemy fighter, although they did find and destroy several weapons caches. The focus has now shifted, according to General Richard Myers, chairman of the US joint chiefs of staff. "People of interest may be in Konar province. More things are pointing in that direction," he said yesterday. A US special forces reconnaissance team came under mortar or rocket fire in Konar on Tuesday, the first real military contact since the end of Operation Anaconda in March. The Americans returned mortar fire and called in two fighter-bombers to attack the area. Local tribesmen have guided US forces to three arms caches south of Khost this week. The Queen paid tribute to Britain's armed forces yesterday, particularly those on anti-terror missions in Afghanistan. She said threats to national and world security had been transformed in the last 50 years, but conflict and the threat of conflict remained. In Washington, a damning congressional report says US efforts to control the smuggling of nuclear material abroad are poorly co-ordinated and haphazardly administered, but still better than many of the safeguards on America's domestic borders. A UN report this week said more than 100 countries worldwide have inadequate safeguards against the theft of radioactive materials which could be used in a terrorist "dirty bomb". In London, a financial company which lost hundreds of its employees in the September 11 attacks is claiming its rivals plotted to poach leading brokers. Cantor Fitzgerald is seeking damages at the High Court from Icap, claiming its competitors were trying to exploit the tragedy. Three key brokers left Cantor for Icap in April. Andrew Hillier QC said Cantor wanted damages for them breaking contracts. * Thousands of New York children may have serious but unnoticed psychiatric disorders. Christina Hoven, a professor of child psychiatry, said: "Our research suggests that 200,000 children have a mental health disorder following September 11, only a minority of whom are being recognised as having mental health problems." From Michael.Keaney at mbs.fi Thu Jun 27 02:58:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Thu, 27 Jun 2002 11:58:01 +0300 Subject: [A-List] Spain: authoritarian state Message-ID: Aznar, together with his predecessor Gonzales, supported the coup against Hugo Chavez. They were also, together, highly involved in efforts to minimise the damage done to Spanish business interests by the Argentine collapse last December. Aznar has been itching to clamp down on trade unions, hence his well-publicised political alliance with Blair and Berlusconi within the EU. But it seems that, in addition to strikes, Aznar's policies are provoking less intended consequences, alienating those who should be natural allies. Portugal and Spain at loggerheads as police beat up MPs By Elizabeth Nash in Madrid The Independent, 27 June 2002 Strained relations between Spain and Portugal have deteriorated sharply after two Portuguese MPs heading for an anti-globalisation demonstration in Seville said they were beaten and manhandled by Spanish police who refused them entry into the country. The president of the Portuguese parliament, Mota Amaral, cancelled a planned visit to the neighbouring country because of what he called "a lamentable incident". Spain said it "regretted any inconvenience caused". But opposition socialists prodded Portugal's conservative Prime Minister, Jose Manuel Durao Barroso, to demand a full explanation and apology for police violence at the border town of Vila Verde de Ficalho in the Alentejo region. Saturday's television images of the left-wing MP Francisco Louca, and his fellow Left Block leader, Miguel Portas, being beaten with truncheons and grabbed round the throat by Spanish civil guardsmen have prompted outrage and incredulity in Portugal. Lisbon's Publico newspaper condemned what it called an "unacceptable episode" that "revived old ghosts between the two peoples that should long have been laid to rest". The reference was to Spanish kings' cruel and insensitive rule of Portugal between 1581 and 1640, a disastrous period that ruined its trading economy. The two politicians were among 10 busloads of demonstrators heading to Seville. Civil guardsmen ordered everyone off the buses at rifle point, saying they had orders from Madrid not to allow them across the border, Mr Louca told the Portuguese press. Once the paramilitaries realised Mr Louca was an MP they said he and Mr Portas - the brother of Portugal's right-wing Defence Minister, Paolo Portas - could pass. "I don't want preferential treatment, I want your name and rank," Mr Louca replied, at which point the police "completely lost their heads". He said 12 of them rained punches and baton blows upon the two until they climbed back on the bus. Angelo Alves, a Portuguese Communist Party leader, had film ripped from his camera and was frogmarched back on the bus after he asked Spanish police for a document giving reasons for the unprecedented border closure. In preparation for last weekend's EU summit in Seville, Spain activated an article of the Schengen Agreement on a frontier-free Europe, allowing it to reimpose border controls temporarily to prevent the entry of anyone suspected of provoking disruption. Similar measures were taken before the Barcelona summit in March when protesters sought to cross the French border. But southern Portuguese frontier posts have seen nothing like this since the days of the dictators Franco and Salazar a generation ago. Publico said: "This approaches the violation of rights and liberties: with the argument of maintaining public order, they can exchange information about people and groups, their political affiliations and means of transport, and monitor their movements and whereabouts." The newspaper also referred to the sinister operations of the hated Pide secret police before Portugal's 1974 Carnation Revolution. From Michael.Keaney at mbs.fi Thu Jun 27 03:00:29 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Thu, 27 Jun 2002 12:00:29 +0300 Subject: [A-List] US imperialism: home front contradictions Message-ID: America's pledge of allegiance in schools ruled out By Andrew Buncombe in Washington The Independent, 27 June 2002 A federal court sparked a massive debate across the United States yesterday by ruling that to ask schoolchildren to recite the pledge of allegiance swearing loyalty to "one nation under God" was unconstitutional. The 9th Circuit Court of Appeals in California said asking children to swear such a pledge was the same as asking them to swear allegiance to a nation "under Zeus" or "under Vishnu". The 2-1 decision said it undermined the basic tenet of the constitution that demands a separation of church and state. Judge Alfred Goodwin said: "The text of the official pledge, codified in federal law, impermissibly takes a position with respect to the purely religious question of the existence and identity of God." The ruling provoked fierce protests from Republicans and Democrats. George Bush's spokesman said the President considered the ruling ridiculous, and he added: "The Justice Department is looking how to seek redress." The pledge, written in 1892, was first codified by Congress in 1942 as a patriotic statement that has been recited by generations of US schoolchildren as the first act of the school day. In 1954, Congress amended the official version of the pledge to add the words "under God". Yesterday's ruling came as the appeal court overturned a lower court decision that dismissed a case against the pledge brought by the father of a schoolgirl from Sacramento. Michael Newdow, an atheist, said that while his daughter was not required to join classmates in reciting the pledge, she was nevertheless hurt by being compelled to "watch and listen as her state-employed teacher in her state-run school leads her classmates in a ritual proclaiming that there is a God". Professor Vikram Amar, of the University of California's Hastings College of Law, said: "If [the ruling] survives and really does mean what it says, then arguably it could call into question a lot of other practices that we take for granted. I think there is a very good chance that the Supreme Court will be interested in this one." From Michael.Keaney at mbs.fi Thu Jun 27 03:03:00 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Thu, 27 Jun 2002 12:03:00 +0300 Subject: [A-List] Financial regulatory crisis: sinking US$ Message-ID: Outlook: WorldCom deals another body blow to US triumphalism Jeremy Warner The Independent, 27 June 2002 Stock markets have been signalling some great disaster to come for months now and with WorldCom's admission to what the SEC described yesterday as an accounting scandal of "unprecedented magnitude", they seem to have been proved wholly correct. On one level, WorldCom's now certain collapse shouldn't come as much of a surprise. It always did look like a house of cards, from the moment Bernie Ebbers, with the backing of Salomon Smith Barney, began his fast fire series of acquisitions. Even before yesterday's revelations WorldCom was subject to any number of investigations for dodgy accounting, loans to directors, Wall Street boosterism and much else besides. It was also audited by Andersen, so what do you expect. None the less, the sheer enormity of what was announced yesterday has shaken financial markets to the core and understandably so. To charge operational expenses as capital spending is one of the oldest accounting fiddles in the book. In most companies there will be an argument of some sort about how to categorise such spending, and it is by no means a black and white debate. But in this case the evidence seems unambiguous. A deliberate attempt was made to deceive, and on a quite massive scale. All the questions raised over Enron have been amplified a hundred fold. US standards of corporate probity and disclosure seem to have hit rock bottom. Already disillusioned investors hardly needed another reason to steer clear of equity markets. They've just been given it in spades. Trust and confidence has evaporated. In time, WorldCom and Enron will come to be seen as a cathartic experience for corporate America. Those responsible will be punished, standards will be tightened, the system strengthened and the economic model reinvented. In that sense, the WorldCom scandal may mark the bottom of the cycle. But it is going to take some years to get from here to there and for the time being things seem more likely to get worse than better. Again, the accounting scandals that have so far come to light are largely confined to the acquisition hungry creations of the New Economy. These always were little more than castles made of sand. Companies like Coca-Cola, Microsoft, General Motors and other backbone constituents of the US economy, look as rock solid as ever. None the less, the damage to confidence is deep and serious. America's claim to economic and corporate supremacy has been badly dented, and the great capital inflows that have sustained US growth and consumption over the past 10 years threaten to dry up and go into reverse. No one wants or trusts US assets any longer, and you only have to look at WorldCom and Enron to see why. From Michael.Keaney at mbs.fi Thu Jun 27 03:08:32 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Thu, 27 Jun 2002 12:08:32 +0300 Subject: [A-List] Financial regulatory crisis: British worries Message-ID: Questions raised in City over reliability of leading British companies' accounts By Nigel Cope, City Editor The Independent, 27 June 2002 Although the recent spate of corporate scandals has predominantly involved American companies, it has left hanging one nagging question: "Could it happen here?" Queries have been raised about certain accounting practices at UK companies ? Cable & Wireless and Boots are two examples ? though no fraud was involved in either case. But more serious questions have been raised in the City about the quality and reliability of the accounts of other British companies, though for legal reasons they cannot be named here. An auditors' report is supposed to certify that the company's accounts represent a true and fair view of its profits and financial position. It is also supposed to highlight failings. But auditors cannot protect investors if they themselves are misled by a company. Last summer the Serious Fraud Office launched an investigation into Independent Insurance. The company, headed by Michael Bright, had collapsed after admitting it faced unquantifiable losses because claims had allegedly not been entered into its accounting system. The inquiry could take up to three years. In the United States, there have been concerns that company accounts are not as clear, or transparent, as they should be. There have been complaints ? also expressed in Britain ? that corporations are resorting to financial jiggery-pokery to present a constantly improving profit line. Some accountancy experts believe the WorldCom fraud should provide "a wake-up call" to Britain. The Association of Chartered Certified Accountants said: "Suggestions that this is a US problem which cannot be repeated in the UK are unfounded and complacent." The association said conditions which encouraged "aggressive earnings management" at WorldCom ? complex accounting, overhyped market expectations and management remuneration based on short-term performance ? can happen anywhere. But other professionals believe Britain has some protection from the worst kind of corporate excesses because of its stricter accounting standards and more robust guidelines on boardroom structures. Peter Wyman, president of the Institute of Chartered Accountants, said: "It is highly unlikely this could happen here but you have to accept that the UK is not immune from fraud." He added that Britain suffered its share of corporate scandals in the late Eighties and early Nineties with the Maxwell affair and the failure of BCCI and Polly Peck. Rules and regulations were tightened. The Cadbury report on corporate governance recommended the separation of the roles of chairman and chief executive to avoid power being concentrated in one person, as happened at WorldCom. It also recommended a mixture of executive directors and genuinely independent non-executives to ensure proper scrutiny. In the US, the roles of chairman and chief executive officer are frequently combined. Accounting standards also differ internationally. The United States has a complex, rule-based approach, which can provide "a road map to abuse" and encourages rogue executives to demand of their auditors "show me where it says I can't do it". Britain adopts a more "substance-based" approach where auditors are required to look beyond the letter of the law. For example, Britain has an accounting rule called FRS5 that would have barred the unorthodox debt manoeuvre which proved the undoing of the collapsed energy trading group Enron. There are moves to harmonise international accounting standards. The United States has dragged its feet about adopting the international standards which operate in Britain. But that case looks weaker as each fresh scandal is unearthed. Mr Wyman said: "I have been asked to go to the US twice in the past few months to see the Securities and Exchange Commission, the US regulator, and congressional committees. They are saying, 'We need to follow what you've done in the UK. Explain to us how it all works'." In Britain, the Government is trying to do its bit. The Department of Trade and Industry and the Treasury are reviewing British auditing practices. It is also involved with the Financial Stability Forum which is working with American investigators to establish what lessons can be learnt from Enron. The British system still has weaknesses. It is common practice for large companies to recruit the head of their audit team as their finance director. The same auditors are then expected to remain independent of their former boss. And accountancy firms offer audit work to clients for low fees so they can gain lucrative consultancy work. From Michael.Keaney at mbs.fi Thu Jun 27 03:10:51 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Thu, 27 Jun 2002 12:10:51 +0300 Subject: [A-List] Financial regulatory crisis: value free zone Message-ID: Sold out Another week, another financial scandal from across the Atlantic - only this time even bigger. So is there something rotten at the heart of US capitalism? Edward Chancellor on why corporate America's obsession with share prices was always going to end in tears Thursday June 27, 2002 The Guardian In May 1998, the American business magazine Fortune warned its readers of the perils of investing in south-east Asia: "You can't trust the companies, you can't trust the governments, you can't trust the analysts, you can't even trust the mutual fund managers." After the revelation of a ?2.5bn accounting scam at US telecoms giant WorldCom, which comes in the wake of the collapse of Enron and a number of scandals involving the leading Wall Street investment banks, the same words might just as accurately be applied to the American business scene. For many years, the US financial and political establishment has lectured the rest of the world on how to conduct its business affairs.Now the once-vaunted Anglo-Saxon way of capitalism is looking distinctly less appealing. Large corporations are disappearing under the weight of excessive debt or collapsing under suspicion of accounting fraud. The supposed gatekeepers of the system - the auditors, stock-market regulators, company analysts, professional fund managers and investment banks, as well as the business media - have failed, with a few honourable exceptions, in their policing duty. The continued decline in the stock market reflects a new distrust of the American way of business. Stock-market bubbles are normally accompanied by nationalistic hubris. One thinks of the "bubble economy" of the 1980s, when it was argued that Japanese business success could be explained by its corporate and bureaucratic structures and the innate superiority of its workforce. A decade's recession in Japan and the more than two-thirds decline of the Nikkei stock market from its 1989 peak have put an end to such talk. The American bubble of the late 1990s was also rationalised on the basis of the superior flexibility and innovation of the US business world. With their ability to harness new technology and exploit new markets, companies such as Enron and WorldCom were seen as paragons of the US business model. Foreign countries were implored to follow this model. This meant following the dictates of "shareholder value". Companies were to be run for the exclusive benefit of their shareholders, regardless of the interests of their employees and customers and the localities where they operated. Management was to be incentivised through bonus payments linked to the share price, normally in the form of stock options. Companies which failed to deliver shareholder value risked being taken over by their more successful competitors. Management consultants were brought in bearing faddish analytical tools with names such as "market-valued added", "total shareholder return" and "enterprise value added". The shareholder-value philosophy was spread throughout Europe and beyond by the cartel of US investment banks, which during the 1990s established an unparalleled dominance in the global financial marketplace. Their analysts uncritically lauded companies that were able to grow their earnings in line with market expectations. They hyped the prospects of new-economy businesses, which the investment banks floated on the eager stock markets. At the same time, the mergers and acquisitions departments of the investment banks egged their corporate clients on to ever larger deals. In 1999, these banks advised on takeovers worth more than $1 trillion in Europe and the United States. Now the bubble has burst, we can see the consequences of the unfettered pursuit of shareholder value. According to a study by KPMG Consulting, more than a third of the largest takeovers of the bubble period are now being unwound. Vodafone, the UK mobile operator, which took over its rival Mannesmann in 1999, has lost more than three-quarters of its value. Vodafone's boss, Sir Christopher Gent, is vilified for the ?10m bonus he received for completing the Mannesmann deal. Vivendi Universal, the French media company which acquired a Hollywood studio in 2000, is now floundering under debt. Its deal-making chief executive, Jean-Marie Messier, once praised for his vision of the convergence of media and telecommunications in the new economy clings desperately to his post. France Telecom, another acquisitive company of the bubble period, appears close to bankruptcy. The deep-rooted failure of the shareholder- value philosophy, however, is not captured by these high-profile failures alone. Rather, it lies in the notion that a company's share price is an accurate reflection of its true worth and that management should be paid in relation to their ability to boost the share price. Warren Buffett, America's best-known investor, is fond of citing the words of his mentor, Benjamin Graham, that "the market in the short run is a voting machine, but in the long run it is a weighing machine". What he means is that over the long- run, market price will come to approximate intrinsic value, but in the short-run, sentiment may cause shares to be overvalued. In retrospect, we can all agree that market sentiment was distinctly overenthusiastic about the prospects of new-economy firms at the time of the millennium (ie the market was then operating as a voting machine). Without exception, the formerly favoured growth companies have sunk back to earth (ie the market is now operating as a weighing machine). Shareholder value, however, takes no account of the discrepancy between market price and true value. On the contrary, it demands that management pursue the business strategy dictated by its share price. For instance, the European telecoms companies paid out more than EUR100bn for their "third-generation" (3G) mobile-phone licences - an untried technology with uncertain demand - in the spring and summer of 2000, not because the managers believed they were worth this sum, but because the exalted share prices of their companies required them to do so. Only a few months after the 3G auctions, the market had changed its mind and the shares of the successful licence-holders began to plummet. Such is the fate that befalls those who would pursue the shareholder-value grail. The pursuit of shareholder value is synonymous with the granting of equity-linked incentives to senior managers. This has resulted in a huge inflation of chief executive pay over the past decade. Leaving aside whether the enormous pay disparities between CEOs and their employees are healthy for society, we can question whether linking pay to share price is good for businesses, investors, or the economy in general. Stock options as a means of compensation suffer from several flaws. As with all aspects of shareholder value, they involve a confusion of market price and intrinsic value. Why should an executive receive a huge bonus simply because his company's shares are in demand? Does this reflect a genuine contribution to shareholder value or simply the fad of the market? Equity-linked bonus schemes provide a clear incentive for management to fix the numbers. During the bubble period, the market tended to reward companies which managed to supply annual per-share earnings growth of 15% - a magic number chosen, it would seem, because it implied profits would double over five years. In the real world, in a period of low inflation, this was an absurd target. Nevertheless, it became commonplace. Earnings-growth targets were achieved through a number of ways. First, it became common to report to investors unofficial and unaudited earnings figures - known as "pro forma" - which ignored certain costs such as depreciation charges. Second, growth in earnings per share was frequently boosted by taking on debt to repurchase shares. Third, some companies looked to reduce normal business expenses, such as investment in research and development or marketing, in order to create the illusion of sustainable earnings growth. Fourthly, many companies - such as the conglomerates General Electric and Tyco - bolstered their earnings by acquiring other companies, whose shares were less highly valued. In addition, a number of more dubious techniques have been employed to enhance profits. Enron is just one of several companies to have used off-balance-sheet entities and derivatives to hide debts and exaggerate profits. Sunbeam, the consumer appliance business run by Sir James Goldsmith's former hench man, Al "Chainsaw" Dunlap, increased its turnover and profits by booking sales from future quarters - a practice known as "bill and hold", since the customers never took delivery of the goods. Many US and European telecoms companies artificially inflated sales by swapping capacity on each other's networks. As the telecoms bubble imploded, WorldCom, it would appear, went even further by reporting certain expenses as capital outlays. Company analysts and auditors might have been expected to anticipate some of these failures. However, their employers - the investment banks and accountancy firms - were eagerly receiving advisory and consultancy fees from corporate clients at the time. Options-laden chief executives brooked no criticism from their professional advisers. Unsurprisingly, they received little. In the past 12 months, the shareholder-value obsession has produced the world's largest bankruptcy (Enron) and the world's greatest accounting fraud (WorldCom). The two largest acquisitions in history (Vodafone/Mannesmann and AOL/Time Warner) have destroyed hundreds of billions of dollars of shareholders' funds. When the stock market was climbing ever higher, few seemed to care about the excesses of shareholder value - the dubious accounting practices, the reckless corporate strategies, and the excessive corporate pay. The US and European markets have now been in decline for more than two years. Investors are finally waking up to the follies and frauds of the shareholder-value fad. The scandal at WorldCom is hastening the approach of a genuine new era, one quite different to that hyped by the bubble technocrats. It is a new era in which the probity and prudence of management is stressed above its entrepreneurial ability. The pursuit of long-term corporate goals replaces an emphasis on short-term share-price appreciation. The shareholders' position in the corporate hierarchy is diminished and that of employees and customers enhanced. Americans may feel humbled by the apparent failure of their brand of capitalism, as the Japanese have been in recent years. The United States found itself in a similar position in the 1930s, when corporate and Wall Street scandals ushered in a period of reform, including the separation of investment banking from commercial banking and the establishment of the Securities and Exchange Commission. To date, the Bush administration has recommended only cosmetic changes, hoping that the economy and stock market would recover and the scandals would soon be forgotten. However, there is a need for more significant reforms - such as the separation of research departments from their investment banks, and consultancy from auditing firms. In addition, there should be tighter restrictions on the use of corporate stock options. The American system could easily adapt to these changes, and would emerge the stronger for them. ? Edward Chancellor is author of Devil Take the Hindmost, a history of financial speculation. From Michael.Keaney at mbs.fi Thu Jun 27 03:12:40 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Thu, 27 Jun 2002 12:12:40 +0300 Subject: [A-List] Imperialism: G8 vs. WorldCom Message-ID: The virtual reality G8 summit Our leaders indulge in denial as WorldCom's timebomb explodes Larry Elliott Thursday June 27, 2002 The Guardian T he timing was perfect. As the jets bringing the leaders of the G8 to their annual powwow were landing in Calgary, news was breaking that WorldCom was on the edge of bankruptcy following the discovery of the biggest accounting fraud in history. WorldCom is no one-off. A corporate cancer is spreading through America, bringing share prices and the dollar tumbling as investors take a long, hard look at the balance sheets of the one-time darlings of Wall Street. What they are uncovering is a combination of accounting fiddles, deceit and outright criminality designed to inflate short-term share prices by vastly over-stating profits, and maximise the value of stock options granted to executives. American capitalism, exported ruthlessly in the 1990s as the only way to do business, is sick. But if the US totters, the linkages of the global economy are now such that the rest of the world could come down with it. The financial instability that has marked the past decade has worked its way to the core of the capitalist system. A chance, you might think, for the G8 - the rich man's club (plus Russia) to show leadership. And one that they will almost certainly spurn. Stuck away in their Rocky Mountain retreat, the G8 will have plenty to say about terrorism, the failings of Arafat and the need for Africa to pull its socks up, but little to say about the defects in their own economies. This is the virtual reality summit. Seasoned G8 watchers know what to expect. On past form the summit will conclude that "economic prospects remain good" (Birmingham 1998); "progress has been made in addressing the crisis and laying the foundations for recovery" (Cologne 1999);"the world economy will grow strongly" (Okinawa 2000); "the most effective poverty reduction strategy is to maintain a strong, dynamic, open and growing economy" (Genoa). N one of this was remotely true. Within two months of the Birmingham summit, the Russians had defaulted on their debt, the hedge fund Long Term Capital Management had gone belly up, and Bill Clinton said that the global economy faced its biggest threat since the Great Depression. In the six months following Cologne, foundations were laid for a colossal stock market bubble, the full ramifications of which are only now becoming evident at Enron and WorldCom. The world economy did not grow strongly in the year after Okinawa; it slid towards the first synchronised recession in the big three economies of the US, Japan and Germany in a quarter of a century. And whatever happened to that strong, open and growing economy we were promised amid the tear gas cannisters of Genoa? Anyone for some steel tariffs? Originally, when Giscard d'Estaing came up with the idea for this annual shindig, it was a world economic summit. But the economic bit was downgraded years ago, and now that finance ministers are no longer invited it has all but disappeared. These days, the emphasis is on fighting terrorism, curbing the trade in drugs (but not arms) and sorting out the developing world. These are important issues, fully deserving of attention. But you would be right if you thought the G8 was missing something. This is a more accurate account of the current state of affairs: The market reaction to the biggest fraud in history at WorldCom is a wake-up call. The global economy is stumbling from crisis to crisis. Our biggest member, the US, foists painful policies on indebted developing nations but is the world's biggest debtor itself. Correcting the record trade deficit will hurt, and it will hurt not only America but Europe, Japan and the rest of Asia who have become far too economically dependent on feeding the US's consumption habit. We need to think very hard about whether deregulating financial mar kets with so much gusto in the 1970s and 1980s was such a good idea. It has helped create the conditions for the stock market bubble and the distortion of corporate values at home, and put immature economies at risk abroad. We are making a mistake in forcing the people of Argentina to adopt austerity policies that we would never foist on our own people. It is true that Argentina has been woefully mismanaged, but have we really got much room to talk ourselves? Unless we address these steps, there is not much hope that things will be better in a year's time. Each short-term recovery seems to be a bit weaker and a bit shorter than the last. Argentina's contagion is spreading to Brazil; the export-led recovery in Japan and Europe will not last if the US sags. We need intervention to manage currency instability, reforms of corporate governance, the restoration of the division between consumer and investment banking. When we've put our house in order, then and only then should we start dispensing advice to the rest of the world. Don't expect any of that to come out of Kananaskis. Repeat after me: the fundamentals of the global economy are sound. They are sound. From Michael.Keaney at mbs.fi Thu Jun 27 03:15:34 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Thu, 27 Jun 2002 12:15:34 +0300 Subject: [A-List] Britain/US split: Palestine Message-ID: Here's New Labour insider Hugo Young letting us know some of the reasoning behind Blair's reluctance to fall into line behind Bush as regards Arafat. We've missed the point of Bush's Middle East policy Obsessed with war on terrorism, the president is prepared to go it alone Hugo Young Thursday June 27, 2002 The Guardian It's usually a mistake to assume that a world leader is off his head. Even Boris Yeltsin, though drunk in charge of Russia, had a sense of strategy. Another chump, Ronald Reagan, seemed barely to know in detail what he was doing at any given time, and once, talking to Gorbachev in Reykjavik, came close to handing over America's nuclear store. But Reagan wasn't mad. He clung to a big idea about how to make the world a better place. George Bush is no exception to this rule. His first solemn shot at bringing peace to the Middle East is so one-sided, so absurdly unreal, that it's tempting to dismiss it as the casual folly of a president who can't be serious. But presidents need the benefit of the doubt about their seriousness. We owe them, and ourselves, nothing less. Certainly Bush proves he's nowhere near being a multilateralist. The long-promised speech was the result of little consultation. The explicit demand that Arafat must go was added to it only hours before delivery. According to the New York Times this grew out of an intelligence report - can it really have been new? - that Arafat had financed yet another suicide bomber. That was enough to rouse Bush's gut instinct to side with his Pentagon people against Colin Powell, and thus impose the undeliverable demand that, before anything else happens, the Palestinians must withdraw their mandate from the only leader to whom they've ever given one. Some allies have tried to make the best of it. Mubarak of Egypt denied the speech meant anything about ousting Arafat. The Jordanian foreign minister said it marked the beginning of the end of the Arab-Israeli conflict. The steer from the British Foreign Office was that Bush's approach would never work, but Tony Blair was on hand, as ever, to smooth the waters and explain the inner meaning of what his friend was really trying to say, which was, of course, only helpful and constructive. If you were an optimist, like Blair, you might also say the speech, however blatant its bias, constituted at last a serious US intervention. Europeans and others have been urging for months that unless Washington re-committed to a process there would be no advance from the suicides and the settlements. Surely Monday's initiative is proof that Bush has got the message? How have Europeans got the nerve to complain? This is, after all, only a beginning. The text that could have been written by Ariel Sharon will be followed, if the Palestinians respond, by equivalent pressure on Israel. There may be something in this. The European attitude to US intervention almost anywhere has often been paradoxical, not to say contradictory. But another rationale for Bush's sanity is more convincing. This is that he cares more about the war against terror than bringing a just peace to Israel/Palestine. That's why he was prepared to be impossibly one-sided. Palestinian terrorism stimulates his gut instinct more thrillingly than the elusive obscurities of a Middle East peace. It links to the global campaign to which he has dedicated both this presidency and many that might follow. The anti-terror priority is set to be the sine qua non of every aspect of security and foreign policy for the indefinite future. Read through Bush's recent speeches and this becomes ever clearer. He and his intimates, especially Defence Secretary Rumsfeld, return to it again and again. Nearly 10 months on from 9/11, that's something most Europeans still do not understand. For Americans, in the political class and a long way beyond, the war against terrorism is directed at an enemy that looms as large as the Soviet Union once did, and has made itself felt much closer to home. Everything, including Israel/Palestine, is subordinate to that. Telling Yasser Arafat he must go, and laying his terroristic guilt ineradicably on the line, far exceeds in relevance the pettifogging democratic details about how his departure will happen and who might replace him. Europeans, by contrast, still live in the old world where change occurs, nominally at any rate, through more familiar modalities. Political process rather than licensed Israeli militarism continues, in this quarter, to be the way forward in the Middle East; and here Mr Blair, for all his bridge-building reassurance, has to be a European not an American. Europeans have not absorbed The Shield of Achilles, the key text by Philip Bobbitt, a security intellectual and former Clinton intelligence chief, which describes at prescient length the new dealing-room of international relations and the brutal terms of trade that America will dictate there as a matter of survival. In this room, the keynote is not legality but pre-emption. The right to take pre-emptive action, before the stateless enemy strikes first, is a declared Bush doctrine swiftly making its way into axiomatic custom and practice if not law. In the case of Iraq, the prime object of such pre-emptive doctrine-building, the legalities would doubtless be observed. Saddam Hussein will one day be told to comply with the UN resolutions requiring him to let in inspectors to prove he has no arsenals of mass destruction. But failing that, intervention is being prepared. Europeans find this hard to believe. The case against it seems on regional, diplomatic and many practical counts so obvious. But the other day the Democratic leadership in Congress wheeled into line, offering support for whatever the president chooses to do in his avowed and formal policy of removing the Saddam regime. That illustrates the gulf between us. There's hardly an American front-line politician who has come out against attacking Saddam, and hardly a European who favours it. This grows from differences of history, of culture and even - to American incomprehension - of geography. Those closest to the seat of terror evidently do not understand the threat it poses to them. They are ignorantly sanguine. They do not want to know. Can't they see, says an exasperated Bush, that terror is the global enemy, and Palestinian terror, as the most conspicuous daily version of it, the terror that must be eradicated before anyone talks about Middle East peace? Europeans, for their part, think Bush exaggerates. And even if he doesn't, they think his answers, whether in Israel or Iraq, are counter-productive. That may be so. But there's one thing he is not. He is not crazy but, by his own lights, quite rational. He and his people have their eye on a purpose. The danger they run is that they think they can achieve it, if necessary, alone. They're the most grudging of multilateralists, the stance that most distinguishes them from Clinton. But they take a harsher, more apocalyptic view than Europeans, including the British, of the possibilities ahead, and no one can say for sure they are mistaken. That view does not allow for equal treatment as between Israel and unreformed Palestine. In reality it does not give prime place to a Middle East peace process at all. Instead it says that the prime enemy is terror - and it doesn't much care whether anyone else agrees. From Michael.Keaney at mbs.fi Thu Jun 27 04:09:18 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Thu, 27 Jun 2002 13:09:18 +0300 Subject: [A-List] EU: hot air special Message-ID: How's this for chutzpah? The former CEO of British Airways who was unceremoniously dumped for having overseen the demise of BA's profitability returns to lecture us all on the inherent efficiency of the private sector with respect to air traffic control. "Bob" is one of Tony's best business chums, and served on the board set up to manage the disastrous millennium dome. So the appearance of this article at this time by this author may be more significant than its comic potential would suggest. Europe's troubled skies By Robert Ayling Financial Times: June 27 2002 French air traffic controllers spread turmoil throughout Europe last week when they held a one-day strike and closed French airspace. They said their action was to protect passengers from the unsafe effects of a privatised European air traffic control system. The sad truth is that they were pursuing their own, narrow interests. Europe's citizens want safe air travel and air traffic systems that do not cause delays. Yet they have been fed such a poisonous diet of old garbage by those who have an interest in the existing system that it has become difficult to see how to improve it. The present system is inefficient. More than 20 national authorities regulate airspace, a job that could be handled by just three or four. This causes bottlenecks, overlaps and delays. The national authorities that own or control the existing arrangements fail to make appropriate investment in systems that would increase capacity. Supply always lags behind demand and always underestimates it. The idea that Europe's skies are crowded is only true in the sense that Europe cannot manage what it should be able to manage. America's system safely handles many times more aircraft. Europe's inability to handle greater volumes of traffic prolongs the turnround time of aircraft with the result that airlines need more aircraft to operate their daily flights. That costs money and passengers end up paying for it. Loyola de Palacio, the European transport commissioner, has modestly proposed that a European system should control the movement of aircraft at and above 28,000ft and that European Union member states should control everything below that. French controllers fear this will reduce the number of French air traffic control jobs and increase the likelihood of those jobs being privatised. My fear is that there is very little for the French controllers to be afraid of. The EU's record on liberalising air transport is abject. What Europe needs is a set of guidelines at the European level for a system to control aircraft in the higher airspace. This could then be put out to tender and managed on Europe's behalf by the best private-sector company available. That would lead to new investment, while capacity would anticipate demand. Costs would tumble and delays would disappear. Yet that is unlikely to happen under the present proposals. Instead, we would end up with a transfer of functions from the national level to a European authority with Kafkaesque qualities or to the existing Eurocontrol, an obese Brussels-based monster. Europe would end up with a monopoly provided by controllers who would be capable of closing Europe's skies. The New Labour government sensibly put air traffic control on the "not to be done by government" list and got scragged by Old Labour and the controllers' union. The result was the most botched privatisation since the Tories sold off the railways. Insufficient equity was built into the balance sheet for the business to withstand demand downturns. Furthermore, the government has retained ownership of the biggest shareholding, which makes it hopelessly compromised in the conflict between ownership and the public interest as customer. The airlines must also be wondering how they came to invest in a capital-intensive business that has the same risk cycle as their existing core businesses and where their interest as airline customers is in direct conflict with their interests as owners of the air traffic control system. The reasons are clear. The political conflicts surrounding the privatisation were resolved with a bad compromise. As a result, Britain has an air traffic control organisation that is in the private sector and yet its securities are not freely marketable. It is in the public sector and it is not subject to controls governing the public-sector borrowing requirement. During his recent visit to London, Sir Roger Douglas, the renowned and radical Labour finance minister from New Zealand, asked, for rhetorical effect, why the gap in output and performance of the manufacturing and service sectors of the US and Russia was so wide but the gap in education was so much narrower. Could it be, he answered, because education was basically organised in the same way in both countries - central management controls with lots of monopoly power and no competition? I might point to the success of the London Eye (a private-sector millennium project with no subsidy) and the failure of the Dome (a public-sector millennium project with public sector controls and management systems). Air traffic control is a relatively simple - but vital - business. It is also an important example of how a public need could be radically improved if the private sector were brought in to increase efficiency. If only governments and European institutions did what they are good at and stopped doing what they are bad at. The writer is a former chief executive of British Airways and advised one of the underbidders in the privatisation of Nats From Michael.Keaney at mbs.fi Thu Jun 27 05:02:49 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Thu, 27 Jun 2002 14:02:49 +0300 Subject: [A-List] EU imperialism: Poland Message-ID: I thought I would include this article not only for its useful background on the current political climate in Poland but also because of a wonderful quotation... CAP doesn't fit for Poland EU delay on accession talks is reinforcing the fears of farmers, says Stefan Wagstyl Financial Times, 13 June 2002 As far as 66-year-old Czeslaw Wrobel is cocnerned life has been deteriorating for Polish farmers for more than two decades and can only get worse once the country joins the European Union. Leaning on his wicket fence in the village of Pezino in north-west Poland, the retired farmer says: "Things were best under Gierek [the Communist leader of the 1970s]. That idiot electrician Walesa came along and wrecked everything. How can Brussels come and save us?" It is a common refrain in the Polish countryside. Eurosceptic populist leaders, headed by Andrzej Lepper, chief of the rural Self Defence grouping, are trying to capitalise on this despair, making life difficult for a government committed to EU accession. This week's news that the EU is delaying making decisions on accession talks will only reinforce the fears of farmers. Negotiations between the EU and candidate states over agriculture will probably not now begin until November, leaving only a few weeks to their planned end in December. Unfortunately for the negotiators, the EU's Common Agricultural Policy (CAP) is badly suited to the needs of Polish farming. Polish agriculture is a patchwork of peasant small-holdings, medium-scale commercial enterprises, and some big farms of 1,000 hectares and more. With some exceptions, it is characterised by low productivity and needs sustained investment, consolidation and the creation of alternative employment for at least 1m of the 2.6m people now working on the land. With one of the largest acreages of agricultural land in Europe, Polish farmers think they have great potential, notably in cereals, milk, pigmeat and fruits. However, the CAP's economic purpose is less to encourage change than to maintain the status quo by limiting competition, setting quotas and paying subsidies. The commercial farmers who dominate the Polish farm lobby argue that the best way of establishing the EU regime is to introduce EU-level subsidies and set high production limits, to give farmers the means and the room to grow. European Commission officials claim this approach over-estimates the scope for output growth. They say it pays too little attention to the numerous small farmers. Half of Poland's 2m farms produce little for the market. And rich farmers may not create jobs for so many of their poorer neighbours. Above all, there is no political will in the current union to pay full CAP benefits to Polish farmers. The Commission put forward an outline plan this year. This envisages setting quotas in the three principal controlled sectors -- beef, milk and cereals -- at levels based on current production. Direct payments (the main means of agricultural support) would be paid to Polish farmers at 25 per cent of EU levels, rising to 100 per cent over 10 years. Small-scale farmers, producing maily for their families, could be paid 750 euros a year to help create new businesses and, as elsewhere in the EU, there would be a big rural development programme, including roads. Polish farm ministry officials have welcomed parts of the plan, including rural development, that the EU would largely finance, and the support for small farms. But they have criticised the key proposals for quotas and direct payments. They oppose quotas at current output levels because Polish agriculture was until recently still hit by the collapse of Communism, flood, drought and falling exports. In milk, for example, the Commission proposes an annual production limit of 8.9bn litres, compared with current output of 12.5bn. Poland has asked for 11.2bn rising to 13.7bn. Commission officials say this is misleading because the current output figure includes about 3bn litres produced for family consumption. This milk would not be sold on the market and would not be covered by quotas but would continue being produced. Subsidy arguments are even tougher. Jaroslaw Kalinowski, farm minister, says if the union wants low-subsidy, low-intensity farming it must encourage it across the EU not just in the east. The EU will not now publish its position until the autumn, leaving Poland even less time than before to settle its differences before December. From Michael.Keaney at mbs.fi Thu Jun 27 05:31:13 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Thu, 27 Jun 2002 14:31:13 +0300 Subject: [A-List] France: left in disarray Message-ID: For anyone who remains unconvinced of the parlous state in which the French left finds itself, a look at the May 2002 edition of Le Monde Diplomatique is instructive. In an article entitled "Fascism isn't what it used to be", Jean-Yves Camus attempts to explain the significance of the recent rightwing resurgence in Europe and what should be done about it. I don't know who Camus is, or which grouping he might represent, or how representative of LMD/Attac Camus might be. LMD is a fairly broad church, although it is centred on Attac and adopts a strong anti-capitalist rhetoric. However, LMD's strengths are undermined by its weaknesses and often its contributors get it wrong. For example, LMD has consistently advanced the line that Pervez Musharraf is the effective reincarnation of General Zia ul-Haq, which is palpable nonsense to anyone remotely aware of events in Pakistan. Far from being an agent of Islamism, Musharraf is the last gasp of the modern, secular Pakistani state. Also, LMD often veers into "anti-Americanism" as distinct from "anti-capitalism", which reflects a nationalistic malaise exemplified by the career of Jean-Pierre Ch?v?nement. Camus's article suffers from this problem, and the fact that LMD has chosen to publish it at all, devoting a page and a quarter to it, does not reflect so well on its editorial policy. Of course alliance building is a necessary part of political struggle, but the elision from socialism to nationalism appears to be rather too easy for many in the French anti-capitalist movement -- and of course Ch?v?nement. Camus begins by sketching the recent electoral successes of far right groups in Europe. Le Front Nationale is to be regarded as the most important of these, and Camus spends some time detailing the "ultraliberal" policies of the FN, which are sold to native French voters on grounds that national preference would prevail in employment, housing and training. Presumably the dismantling of state welfare mechanisms would result in a sort of musical chairs, in which non-French natives are stripped of any social protection and cleared out of the state apparatus, while the vacant spaces are filled by French natives. With no welfare system to support them, non-natives would be welcome to leave. After detailing the differences between the various nationalist movements within the EU, and the clear differences between these and their fascist forebears of the 1930s, Camus concludes with the following: "All this raises a question. Is it still possible to speak of fascist parties, and should current far-right groupings be seen as continuations of earlier right-wing radicalism? No. It seems clear that they must be seen as breaking with historical precedents. The new extremists are reactionaries who denounce the traditional left and right's mutual embrace of ultraliberalism and globalisation. The left must bear some of the blame for the far right's success, since it has distanced itself from its working-class roots, while its self-perpetuating elites are addicted to technocratic and management mumbo-jumbo. The rise of the European far right will only be curbed with the restoration of traditional left and right divisions and the adoption of policies that place the state at the centre of civil society." Eh? This sounds like classic conservatism, in which there is a place for everyone and everyone in their place. Social cohesion and order is to be overseen by the state, which incorporates two basic political groupings that are organically connected to their constituencies, thereby securing the unity of the state -- "at the centre of civil society". In other words, Ch?v?nement's politics. Vive la France indeed. Michael Keaney From nestorgoro at fibertel.com.ar Thu Jun 27 06:00:16 2002 From: nestorgoro at fibertel.com.ar (Nestor Gorojovsky) Date: Thu, 27 Jun 2002 09:00:16 -0300 Subject: [A-List] Argentina: Late night news and comments Message-ID: <3D1AD420.21607.145F46@localhost> Sorry for delay in sending this, my fault. Resending now, at 8:47 AM B.A. time. ------- Forwarded message follows ------- Subject: Argentina: Late night news and comments Date sent: Thu, 27 Jun 2002 01:17:45 -0300 Dear cdes., I have ended a very long day's work. Before I go to have some rest (tomorrow the routine will be a couple of hours at the office, later on we shall see what happens on the streets), I would like to send you my last impressions of this day. It is only fair that I take some minutes of my sleep to carry you some word of tranquility. First of all: what seems to have actually happened. During the whole week before June 26th, the govm"t had been warning that it would not accept road blocks any more. This was, of course, somehow a provocation, but what else could be expected from a govm"t which did not know what to do in order to regain some "normalcy" in social relations while "striving to find a way out of the disaster". Moreover, a month or so ago, the IMF had begun to press on the govm"t the new imposition that the wave of unrest had to be curtailed and finished for good. As stupidly as if advised by some loyal disciple of Radcliffe Brown, the govm"t tried then to foster the conservative feelings of the petty bourgeoisie and the "established" -working- workers against the constant mood of mobilization and unrest by the piqueteros and the jobless. Most of these understood that it was the time to slow down and to resort to different methods. Some did not. Among them the cdes. in the Coordinadora An?bal Ver?n. Of course, this is hardly the moment and place to debate tactics. There are two more dead now, and whatever differences within the people's camp, these dead are _ours_. The govm"t tried to combine the big stick with some alluring promises of "reasonable" wage rises: Strong repression had been attempted (but with no wounded or dead) in the towns of Salta and Tucum?n during the last days. A very small wage rise -Argentine $100, something around US$ 25 at today's exchange rate- for the formal workers in the private sector was announced (as an agreement between the bosses and the workers, _with no intervention from the state_, something that the Min. of Economy had praised). State employees might expect to be returned the last 13% wage cut that was imposed by Cavallo months ago, at some moment in the near future. The commercial press began to bang heavily the drum of "social unrest", while the banging of another, still stronger drum, spoke through various mouthpieces, including many of the heads of the Cabinet, informing the population that unrest would begin to meet an answer from above. As a beautiful touch of humanity in this whole circus, some Police officials began to explain that the only way to solve the problems of insecurity lay in turning the shantytowns into enclosed enclaves (preferably with barbed wire, I suppose), while others -the topmost cherry of the cake- explained that civil divorce (which began in Argentina only in 1983, though there was a time during the early 50s when Peronism imposed a law of divorce which lasted until 1955) was the origin of all this social sickness. The stage was set for a provocation. The provocation took place today. As I stated above, this isnot the moment nor the place to debate the responsibilities of the organizers of today's blocking of Pueyrred?n bridge (which acts in Buenos Aires as some kind of Hudson Tunnels in New York), but the fact is that they swallowed hook and line. The policemen answered to a very angry mass of demonstrators with ruber bullets, tear gas and the usual clubbing, but from some still unidentified point in a railway station where a portion of the demonstrators had chosen to take refuge against brutality, two very precise shots (with metal bullets, not rubber bullets) hit two young demonstrators (one of them straight in the head, the other one - Dar?o Santill?n- was leaning to help a wounded boy and was caught by the bullet at the bottom of his spine) and killed them instantly. Four more demonstrators were seriously wounded, around 90 injured or wounded, and more than 100 imprisoned. Later on, during the afternoon, the visitors who went to Fiorito Hospital to ask about their relatives were either dispersed or also imprisoned. A bus driver denounced on the TV news that during the events a man with an Ithaka gun boarded the bus and forced everybody down. Afterwards, the bus was put to fire. As you all may guess, it is not the unemployed who can afford to own a brand new anti-mutiny gun in Argentina... My impression, at first, is that it might have been somebody else, not the Police, who shot the two boys (Dar?o a much beloved friend of cdes. of a brother group to mine). Maybe our own "intelligence", maybe the CIA? Although his declarations should be taken with some skepticism, the fact is that the chief of the local police, who was at command of the troops, insisted in that his people had rubber ammo and that by no means could they have shot the two boys so precisely, something I tend to believe since he did not say anything to dismiss the accusation that those same troops had invaded private homes and a local Communist Party branch in search of road blockers. So that who knows. It would be silly to blame Duhalde for this. Of course, the political course he adopted, particularly after the 14 Points Agreement, takes to the road of repression and bloodshed. But this time he also is, in a sense, the first political victim of the whole drama. His responsibility stems from his idiotic cowardice, but the fact is that a few hours after the events, all those who were in prison were immediately released, and the Minister of Government of the Province of Buenos Aires (it was PBA policemen who "enforced order" in such a sympathetic way) was summoned to the National House of Government. Ra?l Castells, the piquetero leader, delivered a speech at a press conference from his home (where he is living under arrest) where he said that this "has been the political death of Duhalde", which sounds very reasonable to my ears. Tomorrow we shall have a demonstration which I guess that will be peaceful and will not be harassed. The wave of indignation that flowed all around the city (and most probably the country over) demonstrates that if Duhalde decides to follow the road which takes to another December 20th, his future may be even bleaker than the future of De La R?a. Duhalde will probably think it twice before he tries to divide the popular camp around the piquetero (road blockers) issue again. Who is to benefit, then? Lou Pr., quoting the NYT on the Marxmail list, has offered an explanation: those who support the model , Duhalde included. It is not _exactly_ so. In fact, Duhalde's Minister of Economy, Lavagna, is waging some kind of distorted but actual struggle with the monetarist gang, particularly entrenched in the Central Bank. This is the reason why Blejer left (tomorrow, a request will be presented by A. Rodr?guez Sa? at court, requesting that Blejer be not allowed to leave the country and to put him to trial for treason: he simply allowed 15 billion dollars of the Argentinean reserves to evaporate, keeping with IMF orders, which brought Arg. reserves from 25 bn to 10 bn in a few weeks). Lavagna is trying to put reins on the Central Bank by means of Piganelli (the new President of the Bank) and of Camarassa, a bourgeois economist who is frontally against monetarists, whose appointment at the Bank's board of directors came through direct pressure from Lavagna. He is trying to negotiate with the IMF, but trying to have some control of at least the main financial institution of Argentina. So that, who would win most with chaos? The IMF, of course, and behind the IMF that arch-son-of-a-bitch Menem. Duhalde is the great loser today, but he has killed himself long ago, so that it is not his death which I will mourn. We have more dignified deaths to mourn here today... Well, I am so tired that I really need a good night's sleep. ------- End of forwarded message ------- N?stor Miguel Gorojovsky nestorgoro at fibertel.com.ar ********************************************************************** * Compa?eros del exercito de los Andes. ...La guerra se la tenemos de hacer del modo que podamos: sino tenemos dinero, carne y un pedazo de tabaco no nos tiene de faltar: cuando se acaben los vestuarios, nos vestiremos con la bayetilla que nos trabajen nuestras mugeres, y sino andaremos en pelota como nuestros paisanos los indios: seamos libres, y lo dem?s no importa nada... Jose de San Mart?n, 27 de julio de 1819. ********************************************************************** * ****** From magellan at west.com.br Thu Jun 27 18:26:47 2002 From: magellan at west.com.br (magellan) Date: Thu, 27 Jun 2002 21:26:47 -0300 Subject: [A-List] The verge of a picketeers mov. throughout Latin America In-Reply-To: Message-ID: <3.0.1.32.20020627212647.00740cfc@pop3.west.com.br> "..... there is a great crisis of power, the central point in debate is who is to govern? Whether to keep things as they are or change them fundamentally. We have shown that we don?t need the bosses to run the factories. Dual power is to be found again and again in the factories occupied by their workers and in the picketeers actions. There is only one class which should govern, the working class. We are on the verge of a picketeers movement arising throughout Latin America. We are in the presence of an international revolutionary process, what is required is the necessary political organization in order to take power, no to business as usual and the regular electoral process, organize from the bottom up to take power, organize the necessary political tools." So God wants, be it not a wishful thinking... Of course our Argentinian comrades are the best fitted to comment upon the text that follows ahead. In two points it is unhappily broken. Since 1950 at least, Brazil has increasingly shown a propensity to be hit by the Argentinian political contagion. There is even an old joke about the contagion, that calls it "the Orloff effect". It is based on a TV advertisement of a certain vodka (Orloff) in which the same guy in the present says to himself in the future: "I'm today what you'll be tomorrow." Of course, if he drinks today any vodka other than Orloff he will wake up in a very bad shape. The endless actions of MST (the Landless Workers Movement) in Brazil, both in the fields and in the cities, which go far from the specific interests of peasants and little farmers, are analogous to the Argentinian picketeers' ones, at the exception of national assemblies. Two nationwide public reasearch pools in 2000 and 2002 that were sponsored by CNI -- the powerful association of industry bosses -- have consistently shown a growing and deep refusal of Brazilians to capitalism. When Fidel Castro comes to Brazil he gathers multitudes everywhere and, as in Cuba, he talks collectively with the people during his long speeches. Furthermore, some years ago another public reasearch pool showed that Fidel would have good chances to be elected President of Brazil if he could run to the office. Only the Pope is so popular as Fidel, but the common people often ignore the reactionary role of John Paul II, that has been fought as a silent velvet war within the structures of the Roman Catholic Church, including progressive lay activists. These hints must suffice. Workers-runned factories are known in Brazil since 1982, though they are not widespread at all. They operate in a capitalist frame since there is no way out, of course. The initiative is not revolutionary in itself (but in Argentina now it seems to be) and it has occasionally been taken only in the case of important concerns that went broken, with financial support from local governments to the organized workers, including rescheduling of tax debts. The concept of the Brazilian Law on the so called "social function of the enterprise" may works against capitalism, as some well known jurists say. Cheers, Roberto ######################################################## To: Argentina_Solidarity From: Vicente Balvanera Date: Wed, 26 Jun 2002 Subject: [Arg_Solid] Vicente Balvanera reporting from Buenos Aires (5), June 24, 2002 [Vicente Balvanera reporting from Buenos Aires (5), June 24, 2002] The National Assembly of Workers is a major step forward in working class consciousness and organization With the bourgeois press trying to give the impression that "the worst of the crisis has passed", and yet again trying to fool the savings account holders into thinking they will be receiving their money soon (they are not fooled, and continue their daily protests, merging increasingly with those of the workers, picketeers and popular assemblies), what Duhalde has been doing in the last few days is carrying out a series of hurried meetings with the forces of repression to check whether the situation has any chance of not "going out of control". Because everything points to the question of power. Take last night?s free tropical music concert in the downtown Luna Park stadium, for example (Monday, June 25). Mainstream people flocked from the working class suburbs to attend the concert (you had to bring a bag of rice or some kind of non-perishable food to get in), commemorating the anniversary of the death by automobile accident of tropical music superstar Rodrigo. Long lines formed hours before the concert. And the thousands of people who thought that they would be able to get some relief from the everyday torture of making it through another day in present Argentine conditions of hunger and misery, were brutally attacked by police armed with clubs. They couldn?t believe it. One young man, interviewed by the TV, said "There?s something fundamentally wrong when the police just go and attack people, including women and children, trying to get into a concert the authorities must have known would attract crowds." The bourgeoisie is incapable of putting on a free concert. What?s fundamentally wrong is that "the authorities" are shitting in their pants. With the crisis spreading to Brazil (risk index galloping, Brazil second to only Argentina, higher than 3rd ranked Nigeria), Uruguay (structural adjustment plans, strikes planned, US dollar exchange rate climbing high into the sky, price increase of 20% in the last few days), Paraguay (new uprising), Peru (partially successful uprising against privatization) and now Chile (dollar exchange rate also skyrocketing), and it looks like Mexico too (despite Vicente Fox?s hurried denials) the reason for the joint US and Latin American military exercises in Salta a year ago against sham "NGO and anti-globalization" organized protestors becomes increasingly clear, especially in the context of Plan Colombia and the attempt at a coup in Venezuela. What?s fundamentally wrong from the point of view of US and European imperialism and the bourgeoisie, is that one of the many facets of the program and plan of struggle voted by more than 1000 delegates from over 15 provinces this last week-end in the National Workers? Assembly, including picketeers, shop committees, anti-bureaucratic unions and union activists, delegates from factories and cooperatives occupied by the workers, like Brukman and the Junin Clinic of Cordoba, included, for example, a call for a national day of roadblocks and struggle against the IMF and the war against the working class... to be coordinated, as much as possible, all over Latin America!!! With the collapse of the bosses parties (Menem hooted at even in his home province La Rioja yesterday, where police refused to allow olive producers to raise protest signs, and Alfons?n now threatening to resign his seat in the midst of a crisis of the Radical Party), the Second National Assembly of Employed and Unemployed Workers, covered even in the bourgeois press and TV, emerges with a set of voted political resolutions, program and plan of struggle which clearly projects a whole new level of organization and coordination on the part of the working class and its response to the plans of the US Treasury, the IMF, the bankers and their local stooges, which the government knows it will have to try to implement with force of arms. The national day of struggle is all set for this Wednesday, June 26, fully ratified by the National Assembly (under the slogan "All of them must go, none of them should be left"), including the cutting of access to major cities by bridges and highways, and the reinforcement of currently occupied factories, municipalities, school boards and other local institutions, and will be carried out jointly with the Anibal Ver?n and Barrios de Pie (militant picketeers organization still fighting within the CTA), as well as by members of the popular assemblies and students. The government, through Cabinet Chief Alfredo Atanasof, announced yesterday that they will use "all of the mechanisms in order to keep law and order" and that they "will not permit" roadblocks and pickets. This will be a decisive test. Even the bourgeois radio continually announces "the count-down to the great picketazo (picketeer strike action). At a press conference yesterday, also covered by bourgeois press like La Naci?n and Clar?n, the convening organizations stated that the protest is aimed at a government which "only knows how to aim threats at the working class" and which is "negotiating the lives of the Argentines" with the IMF, the following of whose dictates has been the sole concern of the Duhalde government throughout its six months existence. "We hold the government responsible for the threats of possible repression against the roadblocks, we hold it responsible and we say that nothing will stop this people and movement of unemployed, because the there is no going back on the road taken the 19th-20th." The declaration added that "no challenge is impossible for the workers while the power of mobilization exists as well as the desire to survive", and that the protest forms part of "a new institutionality" which the working class has begun to construct beginning with the rebellion of last December 19th-20th. In this sense, workers are called upon to collaborate as if this were a general strike, and students and professionals, and the Argentine people in general, are called upon to lend their active support. The protest, apart from defending education and public health, issuing a demand that the workers occupying the Zanon factory and producing under their own control not be forcibly evicted, supporting the more than 1200 establishments now occupied by workers, and demanding the release of Raul Castells and all fighters, and the dropping of charges against all who struggle, will demand increases in the Work Plans (both in the number now distributed and in the monthly wage, now at a miserable 150 Argentine pesos), their effective payment (half are not even paid), that their administration be taken out of the hands of the Peronist politicos and placed into the hands of the picketeers themselves, through their own organizations, and that the government, apart from providing some immediate solution to alleviate the suffering of hunger among the people, must all leave. Alluding to the CGT?s, the CCC and CTA-FTV, a call is also issued to "all working class and picketeer organizations to join in a common plan of struggle, to end all forms of truce with this government, because this government, and the IMF, and the privatizers give no truce to the workers." This is what is meant by the transitional character of even the most elementary of demands, leading, in the current context of capitalist crisis, to the immediate and inevitable raising of the question of power. This is just the first step of the plan of struggle voted in the National Assembly. The second will be a multitudinous march and rally in Plaza de Mayo on July 9th, day of national independence, followed by a tent city to be erected in the Plaza on July 15th, to continue until "all demands are met." The National Assembly itself sessioned over a two day period, and was an awesome experience. It sessioned in the Gatica Stadium in Avellaneda, ceded by the Municipal Workers there who are on an indefinite general strike for back pay. (The Assembly opened with a huge applause for these compa?eros). A huge number of organizations attended, with over 1,000 delegates from more than 15 provinces, including delegates from 36 popular assemblies and from the savings account holders? movement (ahoristas). Convened as the Second National Assembly of Employed and Unemployed Workers (the first was in February, see relevant postings from the time) by the Bloque Piquetero Nacional and by the MIJP (Castells), the presiding table was occupied by several members of the organization CUBA, representatives of the Frente de Trabajadores Combativos (MAS), representatives of the MIJP, representatives of the MTL (CP), MTR (Movimiento Teresa Rodriguez), the Polo Obrero and other representatives of the Bloque Piquetero, reflecting these organizations branches all over the country, and including delegates from combative, anti-bureaucratic trade unions, as well as a representative from the Brukman factory. The Assembly spent the whole first day broken down into three commissions: Political resolutions, Program and Plan of Struggle. Each commission was to consider the proposals from the various participating sources, debate them (by breaking down into sub-commissions where necessary), and by the end of the day come up with a voted document (minority positions were allowed and were actually presented at the plenary session on some points), to be submitted for debate and voting by the plenary session. Each commission was to be presided by 6 coordinators from the various participating organizations. I participated as observer at the Program Commission session. It was really, without exaggeration, a great exercise of workers democracy. Everyone who wished to could participate, whoever wanted to speak was able to speak. There were three written proposals, one from the Polo Obrero, one from the Brukman factory, and a specialized extension of the point on public education, presented by the teachers union (they are on strike in the Province of Buenos Aires in defense of their contracts, and are occupying several local school boards). The program was quite complete, along the lines of the February program, but brought up to date (it will be published in final form some time this week, and I will translate it to English). A couple of debates are worthy of mention. The Morenoist MAS, through their delegates in the FTC (Frente de Trabajadores Combativos ? Front of Combative Workers), was of the opinion that there has been a general reflux in the struggle (opinion not shared by the majority), that the question of power was not central to the moment because there were absolutely no organs of dual power, and that the great need was to reach out to the millions of workers not now in the National Assembly, to create a massive revolutionary class struggle, anti-imperialist and anti-capitalist movement or party. The MIJP called for a government of popular unity, and the MTL called for a "central coordinating body to include all sectors in struggle). The sect calling itself Democracia Obrera intervened several times, saying they didn?t care what program was adopted at all, the question was how the incipient bureaucracy of the movement of the unemployed could be held to accountability; he also charged that there had been a reflux because the "left of the regime" had divided the picketeers movement. A totally unfounded, disproved, minority position. Pepe Barraza of Salta (PO) brilliantly posed the position that was eventually adopted by the majority: That there is a great crisis of power, the central point in debate is who is to govern? Whether to keep things as they are or change them fundamentally. We have shown that we don?t need the bosses to run the factories. Dual power is to be found again and again in the factories occupied by their workers and in the picketeers actions. There is only one class which should govern, the working class. We are on the verge of a picketeers movement arising throughout Latin America. We are in the presence of an international revolutionary process, what is required is the necessary political organization in order to take power, no to business as usual and the regular electoral process, organize from the bottom up to take power, organize the necessary political tools. There is no revolution possible wi It is significant that Pepe Barraza, and others, argued against the proposal of the MTL for a "central coordinating body including all the sectors in struggle", exposing it for what it was, a disguised form of the popular front. He explained that in opposition to what several had said, program was of the utmost importance, since it joined all of us together in a common working class struggle, and made it possible for us to not allow those sectors who are in direct opposition to our program, like the small businesses and other national bourgeois sectors, to divert us from our objectives. He explained that workers cannot have confidence in those very sectors who struggle to defeat their program and objectives, whose class interests cannot but betray the cause of the working class. What was fascinating, both in this commission debate, and in the general plenary session the following day, is that the bolshevik-leninist positions by far won the majority position, the Stalinist and Castroist class collaboration policies (like the MTL proposal for a "central coordinating body of unity with all the sectors of the popular camp") were roundly defeated at every turn, all without breaking the united front, or weakening its resolve in the slightest to march separately and strike together as one solid fist. The very advanced and revolutionary workers program which was finally adopted by the commission, and with some changes, by the plenary session will be dealt with as soon as it is published in full, together with the equally advanced political resolutions and program of action. The plenary session of the next day, which after 3pm was opened to the general public, was also a model of workers? democracy. It was wonderful to be able to presence, it was an important, historic event. By far the general feeling, reflected in the voting, was that this was by no means a National Assembly, either of the Polo Obrero alone, or the Bloque Piquetero alone, but rather a class struggle united front National Assembly, capable of leading in this stage of the class struggle. ######################################### To: Argentina_Solidarity at yahoogroups.com From: "sf_adam.rm" Date: Thu, 27 Jun 2002 Subject: [Arg_Solid] Urgent updates from Argentina Solidarity (Britain) Dear everyone, Here is news from Argentina. In an ideal world, these would be on our website, but at the moment both our website-inputters [is there a better word?] are on holiday abroad.: 1. Two piqueteros killed; brutal police repression.................... 1. Two piqueteros (unemployed workers) were killed by police bullets yesterday. There were also dozens of casualties, many of them serious, and 188 arrests. The text of a leaflet put out by the Partido de Trabajadores por el Socialismo, in Spanish, is at the end of this email [I was unable to keep the formatting when trying to transfer the Attachment onto my hard disk; sorry] From Michael.Keaney at mbs.fi Fri Jun 28 03:30:38 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Fri, 28 Jun 2002 12:30:38 +0300 Subject: [A-List] Britain/US split: Yugoslavia Message-ID: If you walk into a bookshop in Britain just now you are likely to see, prominently displayed with the latest non-fiction, a book authored by Brendan Simms entitled "Unfinest Hour: Britain and the Destruction of Bosnia". Simms details the policies of John Major's government towards the former Yugoslavia, most especially concerning the Bosnian war. Key players include Douglas Hurd, Tory mandarin and foreign secretary, who resigned to become an investment banker with National Westminster Bank. He was replaced by Malcolm Rifkind, another mandarin and previously defence secretary, in which post he was advised by the shadowy David Hart (who stayed to advise his successor, Michael Portillo). Rifkind carried on Hurd's pro-Serbian policy while Hurd cut deals with the Milosevic regime. All in all a rather grubby mess and one from which Hurd, in particular, has had difficulty extricating himself, although the Financial Times gives him plenty of space to opine on the complexities of contemporary foreign policy. Among the remarkable aspects of this publishing event is the fact that Simms is a lecturer in history and fellow of Peterhouse, Cambridge, home for many years to the reactionary historical views of Maurice Cowling, mentor of Portillo. It seems that while Portillo, in getting his hands dirty with the reins of power, had to bend, the Peterhouse lobby has stuck steadfast to the notion of the rights of the free nation state (an important theoretical basis for punk Thatcherism). However, the manner in which this theory is applied to Bosnia is peculiar, and rests on a treatment of the nation state as defined by geographical/political boundaries, as opposed to culture or ethnicity. (In saying that, however, remember the theoretical and logical somersaults that must be performed by Peterhouse types to justify the "glorious union" that is the United Kingdom.) But aside from all the blether about "betrayal" that Simms levels at those Conservatives quite coincidentally seen to have betrayed Thatcherism in other respects, perhaps the most significant outcome of the book's publication is the light it sheds on the complex relationship between Britain and the United States during the 1990s, and what an understanding of that might tell us about what to expect now and in the future. Margaret Thatcher had been deposed as Prime Minister in a party/state-orchestrated putsch in 1990. She was replaced by John Major, who was seen by her as the most "dependable" of the candidates (the others being Michael Heseltine, who had precipitated her downfall, and Douglas Hurd). Major was thought to have a healthy scepticism concerning further European integration, which Thatcher had developed very suddenly in the wake of German reunification. That faith was misplaced, however, as Major was far better connected with those business interests desperate to overcome the increasingly irrational stance adopted by Thatcher and her allies towards Europe. Hurd and Heseltine were (and are) ardent Europhiles, and therefore completely beyond the pale. Nevertheless they and various other elder statesmen helped to shore up the Major regime until its utter collapse in 1997. With Thatcher having supposedly given President George Bush the necessary backbone to tackle Saddam Hussein following the Iraqi invasion of Kuwait ("you must stand up to dictators"), Bush found in Major a much more congenial ally who knew his place in the international pecking order. Major was a faithful friend to the Bush administration, which was riding high on the optimism of Fukuyama's "End of History" thesis following the collapse of the Soviet bloc. Promising a new world order, Bush and his team looked forward to the globalisation of their vision of US capitalism, reinforced by deeper European integration and NATO expansion, together with the transformation of the former Soviet bloc via "shock therapy" as textbook economic theories were applied to the "reform" of communist institutions. However Bush's supposed foreign policy success did not translate so well at home, where a recession had enabled "New Democrats" to put forward a strong challenge to the Republican White House hegemony. Major's mistake in all this was to sanction Conservative Party assistance for the Bush election campaign. Having scraped to victory in 1992, following one of the dirtiest campaigns ever fought, Major's team was highly regarded and so went to work on Bill Clinton, helping to rake much muck as with Gennifer Flowers and assorted other Clintonian errors. Bush still lost, however, and the result was that for four years Major found himself regarded very coolly by a White House that was now seen to be more interested in moving beyond the "special relationship" and dealing directly with Germany, especially. If you look in the British press at this time you will find periodic reference to the end of the special relationship and the apparent eclipse of Britain by Germany. With the die so cast, Major and co. had little choice but to continue to pursue a European course, albeit constrained by the grassroots of the Conservative Party and the press barons Rupert Murdoch, "Lord" Rothermere and Conrad Black. Within the British state there has always been a strong, vociferous Serb lobby, bolstered by the experience of the Second World War and the Cold War, during which Tito was publicly admired for having struck a path independent of Moscow. (So, too, was Nicolae Ceaucescu of Romania, who was awarded an honorary knighthood by foreign secretary David Owen in 1978). Thus the breakup of Yugoslavia was not seen primarily as an opportunity for capitalist expansion (as it was in the globalising US under Clinton/Rubin/Summers), but rather as an opportunity to engineer a solution profitable to British interests and in keeping with the prevailing sentiments of the UK foreign office and state apparatus more generally. These sentiments also included anti-Islamic bias, together with a mistrust of the Croatians -- allies of Germany in the Second World War. The Bosnian war also offered a chance for a different kind of European integration than the economic and monetary union being negotiated in Maastricht by Major in 1991. Hurd and Rifkind were behind proposals to reactivate the moribund Western European Union, the military arm of the European Union, in order to impose a solution on Bosnia that would also serve EU interests internally, bypassing a suddenly irrelevant NATO and thereby also the US. Of course the enterprise was far-fetched. Getting the various EU power-players to agree to something as fundamental as military cooperation was always going to be difficult especially when neither the administrative structures nor the physical logistics were in place to see it through. Meanwhile Helmut Kohl had unilaterally recognised the independent state of Croatia, headed by the quasi-fascist and anti-semitic Franjo Tudjman (this makes me wonder whether Thatcher's policy towards Bosnia would have been so different, given her Germanophobia). Thus the United Nations became the instrument of international intervention, and a very ineffective one at that. The reasons for its ineffectiveness are ones that have now become very familiar to seasoned watchers of the development of US foreign policy under Clinton, and now George W. Bush (the continuities are indeed strong, all appearances to the contrary). Clinton and his advisers were eager to push the last bastion of socialism (however tarnished and warped) into the dustbin of history, and the IMF had already begun this process by applying strict lending conditions to the Milosevic regime. These arguably contributed to the unravelling of Yugoslavia as the secession of relatively affluent Slovenia was attributable to the unwillingness of local elites to finance redistribution within the former Yugoslavia. Interestingly Slovenia and the other newly independent states were given very generous debt forgiveness while the Belgrade regime was expected to adhere to the original terms. The team around Clinton, unlike that of Bush Sr., was vigorously anti-Belgrade. Having already cooled towards Major for his having helped Bush against him, Clinton was further disposed to circumvent the "special relationship" due to what Ivo Daalder, a member of his national security team, called "the appeasement of the Serbs". This, for Daalder and others, "really hurt the image of Britain". Simms sees this as crucial to the supposed carelessness of Major's policy, that he would threaten the special relationship by cosying up to Milosevic. Of course the damage had been done already, and the "appeasement" was merely the icing on the cake. Thus Clinton's team began to undermine the UN operation, including conspiring to ensure the blackening of the Bosnian Serbs by enabling the massacre at Srebrenica to occur by denying air support to the Dutch soldiers stationed there, despite having full knowledge of the Serb advance. In other words, war crimes were more or less permitted to happen in order that key individuals that British officials had been dealing with were suddenly facing indictments, thereby tearing the British position to shreds. The by-now "Lord" David Owen (who formed a close political relationship with Major) was partnered with Cyrus Vance to try and broker a peace deal, before Vance gave up. Owen was eventually replaced by Richard Holbrooke, after the UN had taken the rap for Srebrenica and NATO was being primed to take over as the instrument of choice for US interests. But then, in 1997, Major lost an election to Tony Blair's New Labour, by a landslide. Blair hardly reversed any of Major's economic and social policies (beyond cosmetic manoeuvres like signing the "Social Chapter" of the Maastricht Treaty and introducing an anodyne minimum wage). However in foreign policy Blair switched to steadfast support of Clinton's policies, and became his cheerleader in chief when the bombs started falling on Yugoslavia in 1999. Even after Clinton's departure Blair has stayed faithful to the more overtly unilateralist Bush, Jr. administration. At least until the present fracas over Palestine, that is. Does this mean that the transatlantic split is no more? Hardly. It was under the Clinton administration that the Cold War consensus governing US policy towards EU integration (supportive) began to crack, as the EU was now no longer a bulwark against Soviet advance but rather an emergent capitalist rival, as the increasingly fractious trade disputes of the 1990s showed. The irony of Blair's election in 1997 is that in getting a much more congenial and loyal foreign policy partner, Clinton also got the most enthusiastic pro-EU British leadership since Edward Heath in the early 1970s. Blair and Brown have been savvy enough to play a very delicate game of brinkmanship, in which slavish support of US prerogatives (re Iraq, Kosovo, Afghanistan) has been used to avoid the catastrophe of 1976 when an economic crisis was engineered in order that the IMF could be used to impose tighter conditions on the British state and economy by the US. Thus Britain plays a more active, decisive role in EU developments than ever before whilst remaining committed, in name at least, to the "special relationship". How long this will last is anyone's guess, although it is not clear that the unilateralist Bush administration cares for the delicacies of keeping one's European allies in line, since Blair is regarded by some as an unreconstructed socialist (!) owing to his leadership of something called "the Labour Party" and his efforts to justify "state intervention" via something called the "Third Way". Not to mention his friendship with that scoundrel Clinton. The divergence over Arafat may be the pretext for the formal breaking of the "special relationship" that has, in fact, been somewhat ragged ever since Ronald Reagan left the White House in 1989. But Yugoslavia was the litmus test of Britain's reliability as a US ally for many within the Clinton administration, and Blair bought enough time by his total commitment to the new doctrine of "humanitarian intervention" (all the while ignoring the simultaneous developments in East Timor, of course). It would have been better for Blair's purposes if Gore had won the 2000 election and not Bush. But Blair has been able to assert British interests in the process of European integration to the point that he has achieved an irreversible shift away from the US towards Europe in the trajectory of British state policy. Not that Simms has anything to say about this. He is from the academic wing of the dwindling punk Thatcherite tendency that is still pursuing those whom it regards as "betraying" the legacy of Margaret. All of which suits Blair just fine, since Major, his immediate predecessor, is the target, and not him. And the second irony of this involves the use of the views of the Clinton administration as the test of virtuous policy. This, from a punk Thatcherite, supposedly allied to the Rumsfeld Republicans in the US! Not even the most ardent supporters of the US understand how lowly is the esteem in which they are held by those they most admire. Michael Keaney From Michael.Keaney at mbs.fi Fri Jun 28 06:46:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Fri, 28 Jun 2002 15:46:01 +0300 Subject: [A-List] UK imperialism: exporting PPPs Message-ID: Unbelievable as it may sound, given the disasters that have been characteristic of the UK experience, Tony and co. are busy selling the virtues of public private partnerships to other regimes. Any contracts falling the way of British companies would be purely coincidental, of course. And nice to see that Tony is helping the corrupt Japanese political system to avoid any fiascos like the Millennium Dome: the result of a system in which "government projects are awarded to preferred contractors in areas that will boost the standing of a particular politician, rather than because of the efficacy of a project or its contribution to improved productivity." And with the help of no less than "Lord" Leon Brittan. Koizumi keen to step up pace of privatisation Supporters of the premier's strategy claim Japan can learn from the British experience of selling state assets, writes Bayan Rahman Financial Times, March 8 2002 The earthquake that shook Kobe in western Japan in 1995 took with it Mount Maya's cable cars and its government-run hotel offering Japanese-style accommodation and a restaurant serving nabe or hot-pot. In a moment, Mount Maya went from being one of the charms of the city to an inaccessible ruin. The cable cars have since been restored and a new hotel -- Hotel de Maya -- was opened in July. Occupancy rates are up and the number of visitors to the area has almost doubled to just short of 0.5m. The hotel is one of many symbols of Kobe's recovery from the earthquake, which killed more than 6,000 people. It is also a pioneer of Japanese private finance initiative (PFI) projects, a privatisation formula imported from the UK and one that is set to be emulated in 40 other local government projects. PFI involves private sector investment in public sector projects. Britain hosted a seminar on privatisation in Tokyo last week and some in Japan believe that the conutry has much to learn from the British experience. Junichiro Koizumi, the prime minister, has named structural reform a priority for revitalising the economy. "It would be a mistake to try to translate things directly from Britain to Japan, but there's no doubt that the UK experience has been overwhelmingly positive," said Lord Brittan, who held various cabinet posts in the Thatcher government that introduced privatisation on a large scale. "Japan would benefit in the middle and long term because the industries privatised would become efficient and give better choice to consumers. In the short term, the government would benefit in terms of proceeds from asset sales, which is important in Japan's current situation," he added. Reform efforts were already under way before Koizumi took office last year but the prime minister is eager to hurry the pace. Mr Koizumi has called for the privatisation of postal services, a politically sensitive issue, and in December he announced plans to abolish or merge 17 state-backed institutions and privatise 45 others, as part of his attempt to dismantle Japan's "iron triangle." The triangle -- the bureaucracy, the ruling Liberal Democratic party and industry -- ensures that government projects are awarded to preferred contractors in areas that will boost the standing of a particular politician, rather than because of the efficacy of a project or its contribution to improved productivity. By highlighting public sector giants, such as the Japan Highway Public Corporation, Mr Koizumi has sent a clear message that he means business but he has also provoked fierce opposition and has had to postpone some decisions. However, Mr Koizumi is pressing ahead with his road plans by establishing a panel that will promote the privatisation of road-related public entities. Yumiko Noda, partner at PwC, which advises Japan on privatisation, suggested that starting with smaller privatisation projects, such as the airports, might ease the way for the bigger and politically sensitive ones. She also said that PFI and public-private partnerships might be the solution for much of Japan's public sector, which carries heavy debts. PwC says that in Britain, PFI projects achieved cost reductions of between 5 and 45 per cent. Mr Koizumi can also take solace from Britain where privatisation met with hostility in the 1980s but has gradually been accepted by many, including the Labour party, in spite of some spectacular failures, such as that of Britain's railway infrastructure. Paul Boateng, financial secretary to the UK Treasury, said Japan could learn from some of the pitfalls Britain experienced. "The lessons are to make clear from the outset what one wants from the privatisation and what the benefits could be for the economy as a whole." From jenyan1 at uic.edu Fri Jun 28 11:19:05 2002 From: jenyan1 at uic.edu (jenyan1) Date: Fri, 28 Jun 2002 12:19:05 -0500 (CDT) Subject: [A-List] Zimbabwe: Kaunda PR stunt In-Reply-To: Message-ID: Michael, This is the first I've heard of this. But I don't know whether its more than one member of the old guard doing a political favour for another. Kaunda has had some considerable trouble with the Zambian state since his replacement by Chiluba and in these circumstances, he probably finds it prudent to remind the head of a neigbouring state of their "old friendship". J.Enyang On Tue, 25 Jun 2002, Keaney Michael wrote: > If Patrick Bond or John Enyang or anyone else in the know is around, your comments would be appreciated.... > > > Ex president's PR bid for Mugabe > TREVOR GRUNDY and KAY JARDINE > The Herald, 25 June 2002 > > KENNETH Kaunda, the former Zambian president and son of Scottish-based missionaries, will next month mount a paid public relations campaign in Britain on behalf of Robert Mugabe. > > Dr Kaunda, 77, is to address a series of seminars to coincide with the Manchester-based Commonwealth Games, telling as many Britons as possible that Mr Mugabe is a "great African" who has been seriously misunderstood in the west. > From soncu at pacbell.net Fri Jun 28 18:33:35 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Fri, 28 Jun 2002 17:33:35 -0700 Subject: [A-List] H-AcademicPimps: unhealthy accumulation Message-ID: Michael wrote: > But these guys are probably just as "nice" as > all the Brad DeLongs and John Taylors and Stanley > Fischers and Anne Kruegers (but not Larry Summers) > who play the rules so well that they end up setting > them. I agree with this wholeheartedly. The day some of them realize that they are the ones who set the rules, we may have some hope of a turn of events in the academic world. Until that happens we better keep criticizing them. It is my view that they are not going to realize it by themselves unless there is a major "shock" to the system and if that "shock" happens, their first reaction will most likely be defensive. But I know second-hand that there are many unhappy souls with many questions in the academic world and some of these souls are quite high in the academic hierarchy with star status. Sabri From soncu at pacbell.net Fri Jun 28 18:48:53 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Fri, 28 Jun 2002 17:48:53 -0700 Subject: [A-List] Chinese Dollar? Message-ID: This is an interesting analysis from Stratfor. Does anyone know anything about "Chinese Dollar"? Maybe Henry? Sabri +++++++++++++ Common "Chinese Dollar" -- Serious Proposal or Political Rhetoric? Stratfor, 28 June 2002 Summary A series of statements about currency is emanating from China -- from the suggestion of a common currency for the mainland and Taiwan to floating the yuan to creating an Asian currency system centered on the Chinese currency. With many of these appearing little more than wishful thinking, it raises the question of whether Beijing's rhetoric is simply that of a government nearing a highly sensitive political transition or if these reveal the unfolding of a new Chinese policy -- one that could spell the end of centralized, one-party rule. Analysis China floated a trial balloon June 28 positing a common Chinese currency for the mainland, Taiwan, Hong Kong and Macao that eventually could evolve into the core of an Asian common currency. An article in the official People's Daily suggested the formation of a "Chinese dollar" following the pattern of Europe's common currency, the euro. The optimistic 10-year plan could lead to the creation of an "Asian dollar," which could protect the region against currency fluctuations and economic crises, according to the report. China's common currency proposal is obviously a non-starter, given that Taiwan would lose all economic independence if it acceded to the plan. Yet in some respects, it is a logical extension of a dual-track Chinese policy intended to bring about the peaceful integration of China and Taiwan and to reassure its Asian neighbors that China's economic growth is not a cause for alarm but a force for regional stability. With China heading for one of its biggest leadership shakeups in the five-decade history of the People's Republic, the question that arises is whether the statements reflect simple posturing or in fact reveal new and unfolding economic and political policy. In the People's Daily article, four benefits were put forward for the formation of an integrated Chinese currency. First, China's financial reforms could be guided by experts from Hong Kong and Taiwan, stabilizing the Chinese economy and strengthening the common system. Second, Hong Kong would gain a much broader market for its products and services. Third, Macao's vital tourist industry would be boosted by the more convenient single currency. The fourth and final benefit would be for Taiwan, which would be able to use the scale of China's economy to resist "external financial attack." Although on some level, these are logical arguments, they overlook the central issue: that of Taiwan's political autonomy. Despite rapidly growing economic ties between Taiwan and the mainland, Taipei is still intent on remaining at least de facto independent of Beijing. The same argument seems to supersede another mainland proposal for economic ties with Taiwan. A spokesman for China's Taiwan Affairs Office said earlier this week that Beijing is ready to open the so-called three direct links with Taiwan -- as long as they are treated as domestic business affairs. The three direct links are mail, trade, and air and shipping services directly between Taiwan and China rather than through Hong Kong or other nations. The spokesman said the key reason for the "domestic" label would be to avoid allowing foreigners to take over the shipping routes, as even with Taiwan and China's WTO entry, the United Nations allows countries to retain the rights to coastal transportation, fishing and commerce for its own business. Like the proposal for an integrated currency, this too avoids the question of Taiwan's sovereignty -- or rather it automatically assumes Taiwan is part of one China, something Taipei is steadily moving away from. Beyond Taiwan, however, China is trying to project an image of economic magnanimity to all of Asia. Beijing has been campaigning hard to convince its Asian neighbors that China's economic growth does not challenge their economies. By floating the idea of a giant Chinese economy anchoring Asia amid a sea of financial instability and foreign pirates bent on "financial attack," Beijing seeks reshape the perception of China as an unscrupulous giant bent on economic conquest. Building on this, China has taken the initiative in promoting the formation of a free trade zone with the Association of Southeast Asian Nations (ASEAN), basically suggesting to it that since China's growth is inevitable (if not unstoppable), they may as well come along for the ride. More tactically, Beijing is footing much of the bill for linking peninsular Southeast Asia into China via rail -- opening up the trade flows and giving ASEAN physically easier access to China's markets. China's attempts to soften its image among its neighbors, however, are proving only minimally effective. Beijing sees itself as one of the last standard-bearers for the creation of a multi-polar world, one that allows China to set its own domestic political and economic policies without concern for what Washington may say or do. Yet the United States is by far the more economically, politically and militarily dominant power. And everything China does to narrow the gap -- be it through economic restructuring or buying Russian submarines -- only leads China's near neighbors to be more certain that Beijing harbors regional aspirations of glory and power. Beijing's recent statements, then, raise an important question. Is China simply tossing out rhetoric during the run-up to the leadership change, or is it seriously preparing for a major shift in economic and political policy? There are other actions Beijing is taking that appear to be a continued move toward liberalizing the economy, which in turn means less centralized control for Beijing or the Communist Party. China is opening foreign-exchange rights to domestic and some select foreign banks and is considering changing investment rules to allow foreign firms to invest in China in yuan, rather than foreign currencies. At the same time, financial officials repeatedly have suggested that the yuan is moving toward convertibility. Allowing the yuan to float free, or even within a broader band, would erode Beijing's control over national economic policies. This in turn could have drastic consequences for Beijing's ability to control social instability, particularly if market forces trigger even more rapid rises in unemployment or drastic fluctuations in China's currency. But if the fluctuations failed to materialize, Beijing could move the yuan toward a more regional and even international currency -- giving China much greater political leverage and an ability to counter the United States. This would of course require the continuation of China's phenomenal (if not entirely believable) growth rates -- something Beijing would have to be very sure about to risk the internal destabilization should they miscalculate. If China's leaders truly believe that Beijing is on an unstoppable climb up the global economic ladder, then the short-term risks to stability can be countered by the long-term gains in international political and economic influence -- and by the ability to establish China as the other pole of the global system. With the transition of power near, however, the current round of rhetoric, and some of China's actions, may fade away as the new leaders begin consolidating power in 2003. From soncu at pacbell.net Fri Jun 28 19:17:07 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Fri, 28 Jun 2002 18:17:07 -0700 Subject: [A-List] What is happening to Roach? Message-ID: Maybe, he realized that he went too far. Or maybe, someone told him that he did. Who knows? Sabri +++++++++ Morgan Stanley - Global Economic Forum June 28, 2002 In Defense of America Stephen Roach (New York) Enough is enough -- even I have my limits. Sitting on my desk was a note from our own Serhan Cevik, concluding that the Israeli economy was mired in its worst contraction in 50 years (see his 27 June dispatch, "Just Pain, No Gain [for the Time Being]"). No sooner had I put the piece down when, out of the corner of my eye, I saw a rather remarkable headline flash by on Bloomberg -- the Israeli shekel had apparently strengthened to a one-month high against the dollar. The distaste for dollar-denominated assets had clearly taken on a life of its own. Yet America is far from over. To the contrary, I would argue that our free enterprise system has never been more vibrant and effective in taking matters into its own hands. The sad litany of corporate transgressions has been met by a quick and painful response in the marketplace. The destruction of wealth has been astonishing. For just the "gang of five" -- WorldCom, Tyco, Qwest, Enron, and Computer Associates -- there has been a $460 billion loss in market capitalization (estimated by our strategy group as a loss in market cap relative to recent peaks in respective share prices). Need I say more? The Schumpeterian principle of "creative destruction" is alive and well. Once unmasked, dishonest accounting and other forms of corporate chicanery have been dealt with in a brutally expeditious fashion. I know of no other system that renders such painful verdicts so quickly. None of this alters my basic conclusion that any recovery in the US economy remains fragile, at best. Nor does it dissuade me from the view that America is in the early stages of a multi-year growth slowdown. In my view, the equity bubble of the late 1990s gave rise to excesses that must now be purged. And that?s exactly what?s now going on. It may well be that the corporate governance shock of 2002 could go down in history as the decisive spark to this purging process. In the end, that could be the real silver lining of the current environment. Just as the wrenching process of creative destruction served a flexible US economy well in times of difficulty in the past, I remain convinced it should do the same going forward. That?s always been at the heart of America?s economic defense. Full at: http://www.morganstanley.com/GEFdata/digests/20020628-fri.html From soncu at pacbell.net Fri Jun 28 19:46:31 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Fri, 28 Jun 2002 18:46:31 -0700 Subject: [A-List] The verge of a picketeers mov. throughout Latin America (reformatted) Message-ID: I reformatted this to read it comfortably. I might as well share it with you. Sabri +++++ "..... there is a great crisis of power, the central point in debate is who is to govern? Whether to keep things as they are or change them fundamentally. We have shown that we don' t need the bosses to run the factories. Dual power is to be found again and again in the factories occupied by their workers and in the picketeers actions. There is only one class which should govern, the working class. We are on the verge of a picketeers movement arising throughout Latin America. We are in the presence of an international revolutionary process, what is required is the necessary political organization in order to take power, no to business as usual and the regular electoral process, organize from the bottom up to take power, organize the necessary political tools." So God wants, be it not a wishful thinking ... Of course our Argentinian comrades are the best fitted to comment upon the text that follows ahead. In two points it is unhappily broken. Since 1950 at least, Brazil has increasingly shown a propensity to be hit by the Argentinian political contagion. There is even an old joke about the contagion, that calls it "the Orloff effect". It is based on a TV advertisement of a certain vodka (Orloff) in which the same guy in the present says to himself in the future: "I'm today what you'll be tomorrow." Of course, if he drinks today any vodka other than Orloff he will wake up in a very bad shape. The endless actions of MST (the Landless Workers Movement) in Brazil, both in the fields and in the cities, which go far from the specific interests of peasants and little farmers, are analogous to the Argentinian picketeers' ones, at the exception of national assemblies. Two nationwide public reasearch pools in 2000 and 2002 that were sponsored by CNI -- the powerful association of industry bosses -- have consistently shown a growing and deep refusal of Brazilians to capitalism. When Fidel Castro comes to Brazil he gathers multitudes everywhere and, as in Cuba, he talks collectively with the people during his long speeches. Furthermore, some years ago another public reasearch pool showed that Fidel would have good chances to be elected President of Brazil if he could run to the office. Only the Pope is so popular as Fidel, but the common people often ignore the reactionary role of John Paul II, that has been fought as a silent velvet war within the structures of the Roman Catholic Church, including progressive lay activists. These hints must suffice. Workers-runned factories are known in Brazil since 1982, though they are not widespread at all. They operate in a capitalist frame since there is no way out, of course. The initiative is not revolutionary in itself (but in Argentina now it seems to be) and it has occasionally been taken only in the case of important concerns that went broken, with financial support from local governments to the organized workers, including rescheduling of tax debts. The concept of the Brazilian Law on the so called "social function of the enterprise" may works against capitalism, as some well known jurists say. Cheers, Roberto ######################################################## To: Argentina_Solidarity From: Vicente Balvanera Date: Wed, 26 Jun 2002=20 Subject: [Arg_Solid] Vicente Balvanera reporting from Buenos Aires (5), June 24, 2002 [Vicente Balvanera reporting from Buenos Aires (5), June 24, 2002] The National Assembly of Workers is a major step forward in working class consciousness and organization With the bourgeois press trying to give the impression that "the worst of the crisis has passed", and yet again trying to fool the savings account holders into thinking they will be receiving their money soon (they are not fooled, and continue their daily protests, merging increasingly with those of the workers, picketeers and popular assemblies), what Duhalde has been doing in the last few days is carrying out a series of hurried meetings with the forces of repression to check whether the situation has any chance of not "going out of control". Because everything points to the question of power. Take last night?s free tropical music concert in the downtown Luna Park stadium, for example (Monday, June 25). Mainstream people flocked from the working class suburbs to attend the concert (you had to bring a bag of rice or some kind of non-perishable food to get in), commemorating the anniversary of the death by automobile accident of tropical music superstar Rodrigo. Long lines formed hours before the concert. And the thousands of people who thought that they would be able to get some relief from the everyday torture of making it through another day in present Argentine conditions of hunger and misery, were brutally attacked by police armed with clubs. They couldn?t believe it. One young man, interviewed by the TV, said "There?s something fundamentally wrong when the police just go and attack people, including women and children, trying to get into a concert the authorities must have known would attract crowds." The bourgeoisie is incapable of putting on a free concert. What?s fundamentally wrong is that "the authorities" are shitting in their pants. With the crisis spreading to Brazil (risk index galloping, Brazil second to only Argentina, higher than 3rd ranked Nigeria), Uruguay (structural adjustment plans, strikes planned, US dollar exchange rate climbing high into the sky, price increase of 20% in the last few days), Paraguay (new uprising), Peru (partially successful uprising against privatization) and now Chile (dollar exchange rate also skyrocketing), and it looks like Mexico too (despite Vicente Fox? s hurried denials) the reason for the joint US and Latin American military exercises in Salta a year ago against sham "NGO and anti-globalization" organized protestors becomes increasingly clear, especially in the context of Plan Colombia and the attempt at a coup in Venezuela. What?s fundamentally wrong from the point of view of US and European imperialism and the bourgeoisie, is that one of the many facets of the program and plan of struggle voted by more than 1000 delegates from over 15 provinces this last week-end in the National Workers? Assembly, including picketeers, shop committees, anti-bureaucratic unions and union activists, delegates from factories and cooperatives occupied by the workers, like Brukman and the Junin Clinic of Cordoba, included, for example, a call for a national day of roadblocks and struggle against the IMF and the war against the working class... to be coordinated, as much as possible, all over Latin America!!! With the collapse of the bosses parties (Menem hooted at even in his home province La Rioja yesterday, where police refused to allow olive producers to raise protest signs, and Alfons?n now threatening to resign his seat in the midst of a crisis of the Radical Party), the Second National Assembly of Employed and Unemployed Workers, covered even in the bourgeois press and TV, emerges with a set of voted political resolutions, program and plan of struggle which clearly projects a whole new level of organization and coordination on the part of the working class and its response to the plans of the US Treasury, the IMF, the bankers and their local stooges, which the government knows it will have to try to implement with force of arms. The national day of struggle is all set for this Wednesday, June 26, fully ratified by the National Assembly (under the slogan "All of them must go, none of them should be left"), including the cutting of access to major cities by bridges and highways, and the reinforcement of currently occupied factories, municipalities, school boards and other local institutions, and will be carried out jointly with the Anibal Ver?n and Barrios de Pie (militant picketeers organization still fighting within the CTA), as well as by members of the popular assemblies and students. The government, through Cabinet Chief Alfredo Atanasof, announced yesterday that they will use "all of the mechanisms in order to keep law and order" and that they "will not permit" roadblocks and pickets. This will be a decisive test. Even the bourgeois radio continually announces "the count-down to the great picketazo (picketeer strike action). At a press conference yesterday, also covered by bourgeois press like La Naci?n and Clar?n, the convening organizations stated that the protest is aimed at a government which "only knows how to aim threats at the working class" and which is "negotiating the lives of the Argentines" with the IMF, the following of whose dictates has been the sole concern of the Duhalde government throughout its six months existence. "We hold the government responsible for the threats of possible repression against the roadblocks, we hold it responsible and we say that nothing will stop this people and movement of unemployed, because the there is no going back on the road taken the 19th-20th." The declaration added that "no challenge is impossible for the workers while the power of mobilization exists as well as the desire to survive", and that the protest forms part of "a new institutionality" which the working class has begun to construct beginning with the rebellion of last December 19th-20th. In this sense, workers are called upon to collaborate as if this were a general strike, and students and professionals, and the Argentine people in general, are called upon to lend their active support. The protest, apart from defending education and public health, issuing a demand that the workers occupying the Zanon factory and producing under their own control not be forcibly evicted, supporting the more than 1200 establishments now occupied by workers, and demanding the release of Raul Castells and all fighters, and the dropping of charges against all who struggle, will demand increases in the Work Plans (both in the number now distributed and in the monthly wage, now at a miserable 150 Argentine pesos), their effective payment (half are not even paid), that their administration be taken out of the hands of the Peronist politicos and placed into the hands of the picketeers themselves, through their own organizations, and that the government, apart from providing some immediate solution to alleviate the suffering of hunger among the people, must all leave. Alluding to the CGT?s, the CCC and CTA-FTV, a call is also issued to "all working class and picketeer organizations to join in a common plan of struggle, to end all forms of truce with this government, because this government, and the IMF, and the privatizers give no truce to the workers." This is what is meant by the transitional character of even the most elementary of demands, leading, in the current context of capitalist crisis, to the immediate and inevitable raising of the question of power. This is just the first step of the plan of struggle voted in the National Assembly. The second will be a multitudinous march and rally in Plaza de Mayo on July 9th, day of national independence, followed by a tent city to be erected in the Plaza on July 15th, to continue until "all demands are met." The National Assembly itself sessioned over a two day period, and was an awesome experience. It sessioned in the Gatica Stadium in Avellaneda, ceded by the Municipal Workers there who are on an indefinite general strike for back pay. (The Assembly opened with a huge applause for these compa?eros). A huge number of organizations attended, with over 1,000 delegates from more than 15 provinces, including delegates from 36 popular assemblies and from the savings account holders? movement (ahoristas). Convened as the Second National Assembly of Employed and Unemployed Workers (the first was in February, see relevant postings from the time) by the Bloque Piquetero Nacional and by the MIJP (Castells), the presiding table was occupied by several members of the organization CUBA, representatives of the Frente de Trabajadores Combativos (MAS), representatives of the MIJP, representatives of the MTL (CP), MTR (Movimiento Teresa Rodriguez), the Polo Obrero and other representatives of the Bloque Piquetero, reflecting these organizations branches all over the country, and including delegates from combative, anti-bureaucratic trade unions, as well as a representative from the Brukman factory. The Assembly spent the whole first day broken down into three commissions: Political resolutions, Program and Plan of Struggle. Each commission was to consider the proposals from the various participating sources, debate them (by breaking down into sub-commissions where necessary), and by the end of the day come up with a voted document (minority positions were allowed and were actually presented at the plenary session on some points), to be submitted for debate and voting by the plenary session. Each commission was to be presided by 6 coordinators from the various participating organizations. I participated as observer at the Program Commission session. It was really, without exaggeration, a great exercise of workers democracy. Everyone who wished to could participate, whoever wanted to speak was able to speak. There were three written proposals, one from the Polo Obrero, one from the Brukman factory, and a specialized extension of the point on public education, presented by the teachers union (they are on strike in the Province of Buenos Aires in defense of their contracts, and are occupying several local school boards). The program was quite complete, along the lines of the February program, but brought up to date (it will be published in final form some time this week, and I will translate it to English). A couple of debates are worthy of mention. The Morenoist MAS, through their delegates in the FTC (Frente de Trabajadores Combativos ? Front of Combative Workers), was of the opinion that there has been a general reflux in the struggle (opinion not shared by the majority), that the question of power was not central to the moment because there were absolutely no organs of dual power, and that the great need was to reach out to the millions of workers not now in the National Assembly, to create a massive revolutionary class struggle, anti-imperialist and anti-capitalist movement or party. The MIJP called for a government of popular unity, and the MTL called for a "central coordinating body to include all sectors in struggle). The sect calling itself Democracia Obrera intervened several times, saying they didn?t care what program was adopted at all, the question was how the incipient bureaucracy of the movement of the unemployed could be held to accountability; he also charged that there had been a reflux because the "left of the regime" had divided the picketeers movement. A totally unfounded, disproved, minority position. Pepe Barraza of Salta (PO) brilliantly posed the position that was eventually adopted by the majority: That there is a great crisis of power, the central point in debate is who is to govern? Whether to keep things as they are or change them fundamentally. We have shown that we don?t need the bosses to run the factories. Dual power is to be found again and again in the factories occupied by their workers and in the picketeers actions. There is only one class which should govern, the working class. We are on the verge of a picketeers movement arising throughout Latin America. We are in the presence of an international revolutionary process, what is required is the necessary political organization in order to take power, no to business as usual and the regular electoral process, organize from the bottom up to take power, organize the necessary political tools. There is no revolution possible without the workers taking power. It is significant that Pepe Barraza, and others, argued against the proposal of the MTL for a "central coordinating body including all the sectors in struggle", exposing it for what it was, a disguised form of the popular front. He explained that in opposition to what several had said, program was of the utmost importance, since it joined all of us together in a common working class struggle, and made it possible for us to not allow those sectors who are in direct opposition to our program, like the small businesses and other national bourgeois sectors, to divert us from our objectives. He explained that workers cannot have confidence in those very sectors who struggle to defeat their program and objectives, whose class interests cannot but betray the cause of the working class. What was fascinating, both in this commission debate, and in the general plenary session the following day, is that the bolshevik-leninist positions by far won the majority position, the Stalinist and Castroist class collaboration policies (like the MTL proposal for a "central coordinating body of unity with all the sectors of the popular camp") were roundly defeated at every turn, all without breaking the united front, or weakening its resolve in the slightest to march separately and strike together as one solid fist. The very advanced and revolutionary workers program which was finally adopted by the commission, and with some changes, by the plenary session will be dealt with as soon as it is published in full, together with the equally advanced political resolutions and program of action. The plenary session of the next day, which after 3pm was opened to the general public, was also a model of workers? democracy. It was wonderful to be able to presence, it was an important, historic event. By far the general feeling, reflected in the voting, was that this was by no means a National Assembly, either of the Polo Obrero alone, or the Bloque Piquetero alone, but rather a class struggle united front National Assembly, capable of leading in this stage of the class struggle. ######################################### To: Argentina_Solidarity at yahoogroups.com From: "sf_adam.rm" Date: Thu, 27 Jun 2002=20 Subject: [Arg_Solid] Urgent updates from Argentina Solidarity (Britain) Dear everyone, Here is news from Argentina. In an ideal world, these would be on our website, but at the moment both our website-inputters [is there a better word?] are on holiday abroad.: 1. Two piqueteros killed; brutal police repression.................... 2. Update on Argentina by Stuart King .. 3. Article on Cordoba strikes etc. by Michael Gatter******************* 1. Two piqueteros (unemployed workers) were killed by police bullets yesterday. There were also dozens of casualties, many of them serious, and 188 arrests. The text of a leaflet put out by the Partido de Trabajadores por el Socialismo, in Spanish, is at the end of this email [I was unable to keep the formatting when trying to transfer the Attachment onto my hard disk; sorry] From soncu at pacbell.net Fri Jun 28 20:09:37 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Fri, 28 Jun 2002 19:09:37 -0700 Subject: [A-List] Argentina: Late night news and comments (reformatted) Message-ID: I reformatted Nestor's post too. Is it not amazing that this medium can bring together an Argentine, Brazilian and Turk together and we all are in serious trouble? Best, Sabri ++++++ Sorry for delay in sending this, my fault. Resending now, at 8:47 AM B.A. time. ------- Forwarded message follows ------- Subject: Argentina: Late night news and comments Date sent: Thu, 27 Jun 2002 01:17:45 -0300 Dear cdes., I have ended a very long day's work. Before I go to have some rest (tomorrow the routine will be a couple of hours at the office, later on we shall see what happens on the streets), I would like to send you my last impressions of this day. It is only fair that I take some minutes of my sleep to carry you some word of tranquility. First of all: what seems to have actually happened. During the whole week before June 26th, the govm"t had been warning that it would not accept road blocks any more. This was, of course, somehow a provocation, but what else could be expected from a govm"t which did not know what to do in order to regain some "normalcy" in social relations while "striving to find a way out of the disaster". Moreover, a month or so ago, the IMF had begun to press on the govm"t the new imposition that the wave of unrest had to be curtailed and finished for good. As stupidly as if advised by some loyal disciple of Radcliffe Brown, the govm"t tried then to foster the conservative feelings of the petty bourgeoisie and the "established" -working- workers against the constant mood of mobilization and unrest by the piqueteros and the jobless. Most of these understood that it was the time to slow down and to resort to different methods. Some did not. Among them the cdes. in the Coordinadora Anibal Veron course, this is hardly the moment and place to debate tactics. There are two more dead now, and whatever differences within the people's camp, these dead are _ours_. The govm"t tried to combine the big stick with some alluring promises of "reasonable" wage rises: Strong repression had been attempted (but with no wounded or dead) in the towns of Salta and Tucuman during the last days. A very small wage rise -Argentine $100, something around US$ 25 at today's exchange rate- for the formal workers in the private sector was announced (as an agreement between the bosses and the workers, _with no intervention from the state_, something that the Min. of Economy had praised). State employees might expect to be returned the last 13% wage cut that was imposed by Cavallo months ago, at some moment in the near future. The commercial press began to bang heavily the drum of "social unrest", while the banging of another, still stronger drum, spoke through various mouthpieces, including many of the heads of the Cabinet, informing the population that unrest would begin to meet an answer from above. As a beautiful touch of humanity in this whole circus, some Police officials began to explain that the only way to solve the problems of insecurity lay in turning the shantytowns into enclosed enclaves (preferably with barbed wire, I suppose), while others -the topmost cherry of the cake- explained that civil divorce (which began in Argentina only in 1983, though there was a time during the early 50s when Peronism imposed a law of divorce which lasted until 1955) was the origin of all this social sickness. The stage was set for a provocation. The provocation took place today. As I stated above, this isnot the moment nor the place to debate the responsibilities of the organizers of today's blocking of Pueyrredon bridge (which acts in Buenos Aires as some kind of Hudson Tunnels in New York), but the fact is that they swallowed hook and line. The policemen answered to a very angry mass of demonstrators with ruber bullets, tear gas and the usual clubbing, but from some still unidentified point in a railway station where a portion of the demonstrators had chosen to take refuge against brutality, two very precise shots (with metal bullets, not rubber bullets) hit two young demonstrators (one of them straight in the head, the other one - Dario Santillan- was leaning to help a wounded boy and was caught by the bullet at the bottom of his spine) and killed them instantly. Four more demonstrators were seriously wounded, around 90 injured or wounded, and more than 100 imprisoned. Later on, during the afternoon, the visitors who went to Fiorito Hospital to ask about their relatives were either dispersed or also imprisoned. A bus driver denounced on the TV news that during the events a man with an Ithaka gun boarded the bus and forced everybody down. Afterwards, the bus was put to fire. As you all may guess, it is not the unemployed who can afford to own a brand new anti-mutiny gun in Argentina... My impression, at first, is that it might have been somebody else, not the Police, who shot the two boys (Dario a much beloved friend of cdes. of a brother group to mine). Maybe our own "intelligence", maybe the CIA? Although his declarations should be taken with some skepticism, the fact is that the chief of the local police, who was at command of the troops, insisted in that his people had rubber ammo and that by no means could they have shot the two boys so precisely, something I tend to believe since he did not say anything to dismiss the accusation that those same troops had invaded private homes and a local Communist Party branch in search of road blockers. So that who knows. It would be silly to blame Duhalde for this. Of course, the political course he adopted, particularly after the 14 Points Agreement, takes to the road of repression and bloodshed. But this time he also is, in a sense, the first political victim of the whole drama. His responsibility stems from his idiotic cowardice, but the fact is that a few hours after the events, all those who were in prison were immediately released, and the Minister of Government of the Province of Buenos Aires (it was PBA policemen who "enforced order" in such a sympathetic way) was summoned to the National House of Government. Raul Castells, the piquetero leader, delivered a speech at a press conference from his home (where he is living under arrest) where he said that this "has been the political death of Duhalde", which sounds very reasonable to my ears. Tomorrow we shall have a demonstration which I guess that will be peaceful and will not be harassed. The wave of indignation that flowed all around the city= (and most probably the country over) demonstrates that if Duhalde decides to follow the road which takes to another December 20th, his future may be even bleaker than the future of De La R=FAa. Duhalde will probably think it twice before he tries to divide the popular camp around the piquetero (road blockers) issue again. Who is to benefit, then? Lou Pr., quoting the NYT on the Marxmail list, has offered an explanation: those who support the model , Duhalde included. It is not _exactly_ so. In fact, Duhalde's Minister of Economy, Lavagna, is waging some kind of distorted but actual struggle with the monetarist gang, particularly entrenched in the Central Bank. This is the reason why Blejer left (tomorrow, a request will be presented by A. Rodriguez Saa at court, requesting that Blejer be not allowed to leave the country and to put him to trial for treason: he simply allowed 15 billion dollars of the Argentinean reserves to evaporate, keeping with IMF orders, which brought Arg. reserves from 25 bn to 10 bn in a few weeks). Lavagna is trying to put reins on the Central Bank by means of Piganelli (the new President of the Bank) and of Camarassa, a bourgeois economist who is frontally against monetarists, whose appointment at the Bank's board of directors came through direct pressure from Lavagna. He is trying to negotiate with the IMF, but trying to have some control of at least the main financial institution of Argentina. So that, who would win most with chaos? The IMF, of course, and behind the IMF that arch-son-of-a-bitch Menem. Duhalde is the great loser today, but he has killed himself long ago, so that it is not his death which I will mourn. We have more dignified deaths to mourn here today... Well, I am so tired that I really need a good night's sleep. From soncu at pacbell.net Fri Jun 28 20:37:54 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Fri, 28 Jun 2002 19:37:54 -0700 Subject: [A-List] South Korea: Korean Football Team is Not the Only One Rising Message-ID: International Day of Action in Solidarity with Korean Workers June 27, 2002 Global Trade Union Movement Ready to Score a Goal for the Release of Imprisoned Korean Trade Unionists Let Us Know What You Are Doing so that it has an impact on the Korean Government The preparation for the June 27 International Day of Action for the Release of Imprisoned Trade Unionists in Korea, jointly proposed by the International Metalworkers Federation (IMF) and the Public Services International (PSI), endorsed by the International Confederation of Free Trade Unions (ICFTU), and supported by the Global Unions, is fully underway. Other Global Union Federations, such as, the International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers' Associations (IUF) and International Federation of Building and Wood Workers (IFBWW) have joined in the campaign, calling on their affiliates to take part in the action. IMF: www.imfmetal.org PSI: http://www.world-psi.org/psi.nsf/07545e68a11263c0c1256873002db34e /fb123318fd67e870c1256bc6004e7ff2!OpenDocument ICFTU: http://www.icftu.org/displaydocument.asp?Index=991215386&Language =EN Global Unions: http://www.global-unions.org and http://www.global-unions.org/korea2002 IUF: http://www.iuf.org.uk/cgi-bin/dbman/db.cgi?db=default&uid=default &ID=329&view_records=1&ww=1&en=1 The KCTU requests all the unions and other groups organising any kind of action, ranging from protest rallies to letter writing, on June 27 as a part of the International Day of Action to inform it of the planned action so that they can be included in its press release, to have the maximum desired impact on the Korean government. The International Metalworkers Federation has already reported that its affiliates in 20 countries (other than Korea) are taking action. They are: Australia, Germany, India, South Africa, Sweden, USA, Mauritius, Belgium, Japan, France, Mozambique, Bangladesh, Malaysia, Denmark, Switzerland, Ukraine, Russia, Estonia, Latvia, Austria. IMF affiliates in Lithuania is organising protest letter to the Korean government, while unions in Indonesia and Brazil are staging protest action outside South Korean embassy and manifestations. Manifestation Public Services International has noted that actions are being organised in India, Nepal, Bangladesh, and Japan. The Alliance of Progressive Labor (APL) in the Philippines has announced that it will picket the South Korean embassy in Manila on June 27 at 9:00 AM to protest the continuing trade union repression. The Australian Manufacturing Workers Union (AMWU) produced thousands of leaflets and posters about the trade union repression in Korea and the June 27 international day of action. It distributed them to workplaces around the country. AMWU is organising demonstrations in the major cities from Perth to Sydney on June 27. Together with other groups, it will also hold a demonstration at the Korean consulate in Sydney, while the demonstrations elsewhere will be at major Daewoo or Hyundai dealerships. The union has also produced a special leaflet for the Korean community with a plan to distribute at the main hotel where Koreans are expected to gather to watch the World Cup semi-final between Korea and Germany in the June 25 evening. AMWU plans to present a major petition to the consulate which it has gathered from workshops around the country. The Dutch PSI affiliate, the FNV-ABVAKABO, is known to have sent a letter to Guus Hiddink, the Dutch football coach, who is adopted as a national hero by Koreans as a result of his achievement with the Korean national football team in the World Cup football competition, to raise the issue of imprisonment of trade unionists in his public appearances. Workers' World Cup Campaign The June 27 International Day of Action brings to a culmination the World Cup campaign for the release of imprisoned Korean trade unionists launched on May 30 by the Global Unions at the initiative of the International Confederation of Free Trade Unions. The ICFTU issued a press release announcing the Global Unions' "internet-based awareness campaign highlighting the reality of modern South Korea. As part of a wide-ranging Global Unions campaign (www.global-unions.org/korea2002), unions around the world will be voicing their discontent about the unionists behind bars who most certainly won't be at the world cup. A day of action will take place on June 27th, when member unions of Public Services International (PSI) and the International Metalworkers' Federation (IMF) across the globe will protest outside their respective Korean embassies and send letters of protest to Korean President, Kim Dae-jung." The ICFTU produced "Our Team Won't at the World Cup" poster is now available in 15 different languages. The poster has been adopted by a considerable number of union websites, as banners or "pop-up". The site was chosen as the "labour website of the week" by the LabourStart (www.labourstart.org): "Three of the largest and most powerful international trade union organisations have teamed with the national trade union centres in South Korea to launch this one month long campaign which coincides with the football World Cup. (full citation here)" ICFTU page for "Our Team" is reported to have attracted 20,000 clicks. Action in Korea In Korea, the KCTU and its member federations, including the IMF-affiliated KMWF and the PSI affiliated Korean Government Employees Union (KGEU, declared illegal by the Korean government), will join in the global action with a series of programmes starting with a solidarity vigil on the eve of the international day of action. On the eve of the international day of action, KCTU, KGEU, and the People's Alliance (a broad coalition of people's organisations) will jointly hold a cultural vigil at the Myongdong Cathedral in solidarity with the imprisoned trade unionists. The KCTU will announce the details of the global day of action to the media at a special press conference in the morning of June 27. At 2 p.m., KCTU will join the Family Council for Democratisation (an organisation of the parents and family members of political prisoners) in its Thursday Rally for the Release of Prisoners of Conscience. The main rally will take place at 3 p.m., June 27, at the Jongmyo Park, downtown Seoul. It will be followed by a march through the main streets of Seoul to the Myongdong Cathedral. Similar rallies will be held in six other cities across the country. Korean Football Team is Not the Only One Rising The rise of the Korean national football team in the World Cup competition is more than matched by the increase in the number of imprisoned trade unionists. The 32 trade unionists held in jail at the time of the launching of the Global Unions' "Our Team Won't Be at the World Cup" campaign has increased to 52 (as of June 26). The number will continue to increase as 70 other unionists are waiting at the sidelines wanted for arrest. While unionists currently held in prison stands at 52, the total number of unionists arrested imprisoned this year is nearing the century mark, standing at 92. The latest arrest, that of Ms. Lee Mi-ja, the secretary of Ulsan Hospital Branch of the Korean Medical and Health Industry Workers Union, on June 2, brings the total number of unionists imprisoned under the Nobel Peace Prize laureate President Kim Dae Jung to 778. Korean unionists sidelined in prisons: Dan Byung-ho, KCTU president Jeong Yong-cheon, chairperson, Korean Government Employees Union (KGEU) - Central government branch Lee Kyung-soo, chairperson, KCTU Choongnam Regional Council Bang Hyo-hoon, organising director, KCTU Choongnam Regional Council Lee Seok-haeng, former vice-president, Korean Metal Workers Federation (KMWF) Han Seok-ho, organising director, KMWF Kim Seong-gahp, Daewoo Motors, KMWF Kim Il-seup, president, Daewoo Motors, KMWF Kim Jeong-gohn, president Daewoo Shipyard, KMWF Oh Se-wook, Daewoo Shipyard, KMWF Kang Bong-woo, Daewoo Shipyard, KMWF Jeong Byung-kwon, Daewoo Shipyard, KMWF Lee Min-hyung, Daewoo Shipyard, KMWF In Young-soo, KMWF Choongnam Branch Yoon Min-reh, Signetics, KMWF Im Young-sook, Signetics, KMWF Lee Jin-seong, Daewoo Motors, KMWF Yoo Hee-yong, KMWF Choongnam Branch Kim Jeong-bae, Doosan Electronics, KMWF Kim Joon-ho, Doosan Electronics, KMWF Jeong Cheol-woo, Doosan Electronics, KMWF Noh Yong-joon, Hanjin Heavy Industry, KMWF Lee Jae-ho, Daewoo Car Sales, KMWF Han Sang-dae, KT-Contingent Workers Union, Korean Federation of Transportation, Public & Social Service Workers Unions (KPSU) Shin Tae-bong, National Social Insurance Workers Union, KPSU Kim Young-joon, National Social Insurance Workers Union, KPSU Kim Woon-yong, National Social Insurance Workers Union, KPSU Im Seung-joo, Korean Power Plant Industry Union, KPSU Oh Seung-soo, Korean Power Plant Industry Union, KPSU Jeong Yoon-ji, Korean Power Plant Industry Union, KPSU Cho Joon-seong, Korean Power Plant Industry Union, KPSU Lee Young-woo, Korean Power Plant Industry Union, KPSU Kim Soon-seup, Korean Power Plant Industry Union, KPSU Lee Ho-dong, Korean Power Plant Industry Union, KPSU Kim Jin-young, Korean Power Plant Industry Union, KPSU Im Seung-kyu, Seoul Subway Workers Union, KPSU Yeum Ki-yong, Korean Health and Medical Industry Union-Ulsan Branch, Korean Federation of Hospital Workers Unions (KHMU-KFHWU) Lee Mi-ja, KHMU Ulsan Branch, KFHWU Chang Young-jin, Korean Federation of Taxi Workers Union (KFTWU) Kim Yeun-kyung, KFTWU Kim Ho-gohn, KFTWU Choi Choong-koo, KFTWU Kim Jeong-hee, KFTWU Min Byung-mo, KFTWU Jeong Bong-seok, KFTWU Park Sang-yong, KFTWU Moon Sang-min, Seoul Clerical Workers Union, Korean Federation of Clerical and Financial Workers Labour Unions (KCFLU) Kim Kyung-hwan, National Union of Mediaworkers (NUM) Kim Byung-hak, Taekwang, Korean Chemical and Textile Workers Federation (KCTF) Kang Seong-cheol, KCTU Dismissed Workers Struggle Committee Nam Kyu-won, KCTU Dismissed Workers Struggle Committee Song Soo-keun, KCTU Dimissed Workers Struggle Committee Some notable unionists wanted for arrest: Cha Bong-cheon, president, KGEU Lee Yong-han, general secretary, KGEU Cha Soo-ryeun, president, KHMU-KFHWU Kim Chang-keun, president, Korean Metal Workers Union, KMWF Lee Dong-ik, KCTF Ulsan branch Imprisonment is only the tip of the ice-berg: Thousands of other unionists are subjected to other forms of legal action, apart from imprisonment and being wanted for arrest. 1,797 unionists are subject to legal action, summoned to appear before the police for questioning. Some of these unionists may also be issued with warrants of arrest, leading, eventually to imprisonment. Employers have taken court action for damage claims amounting to 125,427,800,000 won for industrial disputes at 32 enterprises. As a result, bank accounts of unions have been frozen by court orders while bank accounts, assets, and wages of individual union leaders and activists have come under court control. A total of 2,560 workers have been subjected to disciplinary action by their employers, ranging from warnings and suspensions to dismissals. 6 leaders of the newly formed Korean Government Employees Union have been served with dismissal orders for their role in the formation of the union. 26 leaders of the Korean Teachers Union are currently dismissed for the various collective action undertaken by their organisation. Solidarity message from the ICFTU General Secretary Dear friends, At a time when the world's eyes are on Korea, it is important that we make known, throughout the world, the repressive treatment suffered by Korean trade unionists. Over the last month, we, along with our affiliates, and our Global Unions partners, have worked hard to raise awareness of your situation. The world's eyes have been focused not only on the football, but also on the Korean government's repressive policies towards trade unions. In spite of this, the Korean government has continued to violate the basic human rights of workers, pushing the number of jailed trade union leaders up to over 50! On this international action day, we offer you our solidarity. Today unions are demonstrating outside Korean embassies and missions all around the world, and the ICFTU is playing its part by sending an international union delegation to join the protest alongside local Belgian unions outside the Korean embassy in Brussels. We join you in calling for the release of jailed trade unionists. We appeal to the Korean government to start respecting the fundamental rights of workers to engage in legitimate trade union activity. The international trade union movement stands with you in your struggle. In solidarity, Guy Ryder General Secretary International Confederation of Free Trade Unions Full at: http://www.kctu.org/action%20alert/june27action.htm From soncu at pacbell.net Sat Jun 29 00:59:33 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Fri, 28 Jun 2002 23:59:33 -0700 Subject: [A-List] Bush: 'Don't fudge the numbers' Message-ID: BBC News, Friday, 28 June, 2002 Bush: 'Don't fudge the numbers' US President George W Bush has warned that big companies cannot "fudge the numbers" and hope to get away with it. In an appeal for boardroom honesty, he pledged that his Justice Department would hold accountable any firms engaging in corruption and deceit. "Corporate America has got to understand there is a higher calling than trying to fudge the numbers, trying to slip a billion here and a billion here and... hope nobody notices," he said. Mr Bush, who was speaking at a Republican Party fund-raiser, did not mention by name the WorldCom case which rocked the international business world this week. WorldCom, the US telecommunications giant, revealed $3.8bn in accounting irregularities and office equipment giant Xerox disclosed an accounting black hole of nearly $2bn. The BBC's Justin Webb in Washington says that it was President Bush's strongest attack yet on America's corporate bosses. Aware his administration is seen as a friend of big business, he is working hard to try to distance himself from what is happening in American boardrooms. Fundamentals 'very strong' Friday is the third day in a row that Mr Bush has promised to crack down on business mismanagement. "I'm not concerned about the fundamentals of our economy. I think they are very strong," Mr Bush said. "People are concerned, however, about whether or not the balance sheets of corporate America are open, whether or not the numbers are real." Mr Bush will devote his Saturday radio address to the subject of corporate responsibility and will visit New York on 9 July to urge US businesses to adopt better management practices. Our correspondent says Mr Bush is likely to back moves to tighten up on accountancy practices in the US, including the establishment of a new regulatory authority to oversee the scandal-tainted sector. On Wednesday Mr Bush condemned the WorldCom fraud as "outrageous". WorldCom said its chief financial officer Scott Sullivan improperly booked expenses as investment in order to make the company look much healthier than it actually was. Bankruptcy now looks like a serious possibility for the telecoms firm as its refinancing talks are likely to be thrown into disarray. Full at: http://news.bbc.co.uk/hi/english/business/newsid_2073000/2073168. stm From cburford at gn.apc.org Sat Jun 29 00:55:18 2002 From: cburford at gn.apc.org (Chris Burford) Date: Sat, 29 Jun 2002 07:55:18 +0100 Subject: [A-List] Britain/US split: Yugoslavia In-Reply-To: Message-ID: <4.3.2.7.1.20020629075401.03260d20@pop3.norton.antivirus> I agree with many of the perspectives in this article. I think there were two wings of an imperialist bourgeoisie in Britain, interacting with different wings of an imperialist bourgeosie in the USA. Chris Burford From cburford at gn.apc.org Sat Jun 29 01:00:22 2002 From: cburford at gn.apc.org (Chris Burford) Date: Sat, 29 Jun 2002 08:00:22 +0100 Subject: [A-List] Britain/US split: Palestine In-Reply-To: Message-ID: <4.3.2.7.1.20020629075532.03262860@pop3.norton.antivirus> At 27/06/02 12:15 +0300, you wrote: >Here's New Labour insider Hugo Young letting us know some of the reasoning >behind Blair's reluctance to fall into line behind Bush as regards Arafat. >In this room, the keynote is not legality but pre-emption. The right to >take pre-emptive action, before the stateless enemy strikes first, is a >declared Bush doctrine swiftly making its way into axiomatic custom and >practice if not law. In the case of Iraq, the prime object of such >pre-emptive doctrine-building, the legalities would doubtless be observed. >Saddam Hussein will one day be told to comply with the UN resolutions >requiring him to let in inspectors to prove he has no arsenals of mass >destruction. But failing that, intervention is being prepared. Europeans >find this hard to believe. The case against it seems on regional, >diplomatic and many practical counts so obvious. But the other day the >Democratic leadership in Congress wheeled into line, offering support for >whatever the president chooses to do in his avowed and formal policy of >removing the Saddam regime. > >That illustrates the gulf between us. There's hardly an American >front-line politician who has come out against attacking Saddam, and >hardly a European who favours it. This grows from differences of history, >of culture and even - to American incomprehension - of geography. Those >closest to the seat of terror evidently do not understand the threat it >poses to them. They are ignorantly sanguine. They do not want to know. >Can't they see, says an exasperated Bush, that terror is the global enemy, >and Palestinian terror, as the most conspicuous daily version of it, the >terror that must be eradicated before anyone talks about Middle East peace? > >Europeans, for their part, think Bush exaggerates. And even if he doesn't, >they think his answers, whether in Israel or Iraq, are counter-productive. That is a pretty big gap. Behind it there are contradictions in the economic interests of the USA and Europe. Chris Burford London From soncu at pacbell.net Sat Jun 29 02:07:28 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat, 29 Jun 2002 01:07:28 -0700 Subject: [A-List] Asia into the center: China Message-ID: New York Times China Races to Replace U.S. as Economic Power in Asia By JANE PERLEZ JAKARTA, Indonesia, June 27 ? From South Korea to Indonesia, China is rapidly strengthening its economic presence across Asia, gobbling up foreign investment and chipping away at the United States' position as the region's economic engine. As it buys up goods, parts and raw materials from its neighbors as never before, China has accompanied its new heft with diplomatic efforts to assure them that it wants to offer cooperation, not competition. Many have rushed to China's embrace and are nimbly shifting their economic alliances, particularly as the United States makes its way through only a tentative economic recovery. "For all these countries in Asia, China is such a large force, the only rational response is to figure out how to work with it," said Nicholas R. Lardy of the Brookings Institution. "It can't be stopped." The United States still remains an essential trading partner for Asian countries but is becoming somewhat less important in the face of China's rise, analysts say. Some see China's economic thrust, more apparent now under its newly minted membership in the World Trade Organization, as the beginning of an inescapable process of China replacing the United States as the dominant power in Asia. Inevitably, said James Castle, a longtime American businessman in Indonesia and until recently the leader of the American Chamber of Commerce here, "the policy leverage of the United States as the great market is sure to decline." China is already an economic and political threat to Japan, the prime ally of the United States in the region, these analysts say. Mr. Lardy says China's trade is now growing at a faster rate than Japan's growth during its boom years in the 1960's and 1970's. Asian exports are rebounding on the strength of this rapid expansion as China buys more and more from its Asian neighbors. Here in Indonesia, President Megawati Sukarnoputri has buried age-old hostilities as she woos the Chinese government, hoping that it will award Indonesia a $9 billion liquid natural gas contract to power the industries of southern China. At the same time, China is grabbing much of the new foreign investment in Asia, leaving its once-glittering neighbors ? Thailand, South Korea, Singapore ? with crumbs compared with the record $50 billion China is expected to gain this year. China ? a hungry importer, a siphon of other nations' foreign investment and a surging exporter of cheap manufactured goods ? is forcing its Asian neighbors to adjust. Some, looking to stave off China for as long as possible and in an effort to ensure a future balance in the region, have tried to hedge their position with the United States. Singapore, for example, is in the final stages of negotiating a free trade agreement with Washington, trying to guarantee that its solid ties with the United States will continue. So far, the Bush administration has been loath to talk publicly about China as an economic challenger in Asia. But on a recent tour through Southeast Asia, the United States trade representative, Robert B. Zoellick, dispensed advice to allies on the subject: he told the 10-member Association of South East Asian Nations, or Asean, usually a group of bickering competitors, that they had a better chance of surviving Chinese dominance as cohesive trading partners than as individual competitors. While deep concerns about being left in the shadow of China endure, Asian leaders are choosing to praise China's rapid development as a benefit to their economies. Singapore's exports to China surged by 69 percent in April, over the previous April, mainly because of petrochemical and pharmaceutical sales. Malaysia's exports to China have increased by more than 30 percent in the last three months, driven mostly by electronic products. In a sign of the new realism about China, Asean, yet to agree on a free trade zone among its members, agreed last November to trade talks with China. The idea for the trade zone came from China, acting to alleviate resentment in the region over its new membership in the World Trade Organization. Now a mutual courtship has emerged between China and its neighbors. "I look at China as a friendly force," said Indonesia's minister of trade and industry, Rini Soewandi. "It is a potential market for us and China sees Asean as a potential market for them." President Megawati, who is taking a more independent stance regarding the United States than her predecessors, has visited China twice since becoming president less than a year ago. Until recently, Indonesia had viewed China as a hostile power. Prime Minister Mahathir Mohamad of Malaysia told his fellow leaders they should stop looking at China as a "black hole" that sucked foreign investment from its neighbors. Dell Computer decided recently to move some of its computer-making facilities from Kuala Lumpur to China. But, said Dr. Mahathir, "We want to live with the fact that there is a China there and it is going to be a very prosperous, very big and economically powerful China." At China's embassies in the region, diplomats are open to talk of new cooperation. "Economically we are more complementary with Southeast Asia than Europe is with the United States," said Tan Weiwen, the minister counselor for economics and commerce at the Chinese Embassy in Jakarta as he repeated the government mantra. "Everybody is comfortable with each other." The sudden economic influence of China on the region is evident almost daily. New statistics from Singapore show that the country lost more than 42,000 jobs in the last five years, most of them to China. With the property market stuck in the doldrums, Singapore developers are moving to Shanghai to grab a corner of the boom in what is commonly regarded as Asia's most vibrant city. "Singapore has to do things that the Chinese can't do," said Andy Xie, the chief economist for Asia and the Pacific at Morgan Stanley in Hong Kong, who believes that Southeast Asian countries will survive best by creating niche markets for themselves in China. "Singapore stands for business integrity so when a Singapore company builds property in Shanghai, it sells well," Mr. Xie said. Chinese tourists have become the fastest growing business opportunity for Asian countries. They peer at sites in Thailand and Malaysia that used to be the preserves of American and Japanese travelers. Chinese products are also appearing from Taipei to Jakarta. Cheap Chinese motorcycles, made at a joint venture plant, are flooding the urban centers of Indonesia, for instance. As part of what China is calling its "go global" strategy, the Bank of China has opened branches in Thailand, Malaysia and Singapore and will soon reopen one in Jakarta. But the key for China's neighbors, say analysts, will be how each one fashions its response to a growing China. South Korea, Taiwan and Singapore have recorded strong gains in exports to China in recent months. But Mr. Xie said the strong exports by South Korea and Taiwan to China could prove to be a fleeting success. "The export story for South Korea and Taiwan may not be so good because the components and parts factories will shift to China," he said. "Anything with volume is likely to end up in China." South Korea and Taiwan, as well as Malaysia and Singapore, will have to adapt cleverly by going further upscale, he said. For example, with its well-educated work force, Singapore plans to spend billions of dollars to reinvent itself as the biomedical center of Asia. Indonesia, a major producer of oil and gas, appeared to be in a strong longer-term position as China looks to invest there to double its oil consumption in the next decade, he said. In January, the Chinese state-owned offshore oil company CNOOC bought the lucrative Indonesian oil and gas fields owned by the Spanish company Repsol-YPF for $585 million. Last month, the PetroChina Company outbid four rivals to buy the Indonesian assets of the Devon Energy Corporation for $262 million. Some Asian officials say they fear that Southeast Asia will be relegated to the role of supplier of food and raw materials to China in exchange for cheap manufactured goods that will, in turn, harm their own businesses. But for now, China's need for imported energy combined with its desire to diversify its supplies, from the Middle East primarily, is making Indonesia, at least, feel confident. President Megawati's chief economic adviser, Laksamana Sukardi, arrived for breakfast with reporters recently carrying a Chinese-language book under his arm. "The future," he said. Full at: http://www.nytimes.com/2002/06/28/international/asia/28ASIA.html? ex=1026229791&ei=1&en=6ce933057b19bdbe From lnp3 at panix.com Sat Jun 29 07:52:45 2002 From: lnp3 at panix.com (Louis Proyect) Date: Sat, 29 Jun 2002 09:52:45 -0400 Subject: [A-List] Marx the Opportunist In-Reply-To: <002401cd56c6$2d9ba1e0$bbff869f@beprepared> Message-ID: <5.1.0.14.0.20020629095233.00a1e440@pop.panix.com> This stuff doesn't belong on a-list. At 02:42 PM 6/30/2012 +0100, you wrote: >Although Karl Marx was one of the foremost pioneers of the interests of the >working class on a number of levels a serious re-examination of his theory >and politics is an indispensable task facing communists. To some degree this >task has been begun. However it is still at its initial stages. > >Marx's role in relation to the First International is one that needs to be >looked at with the cold eye of objectivity. In the first place his >acceptance of a leading position in the leadership has to be questioned. In >many ways the International had more of the character of a Popular Front >rather than a United Front. Evidence of this is the failure of Marx to >seriously subject the trade union leadership on the International to >criticism. He concentrated his fire on what were called sects by some --the >Bakunists-- while going easy on other elements actively present in the >International. Even the entire purpose, structure and character of the First >International makes the role of Marx in relation to it questionable. > >Much of the later opportunism and perhaps even revisionism within the >Marxist movement can be traced back to the First International. Even the way >in which the International was effectively dissolved by Marx and Engels >smacks of crass. Marx and Engels stand guilty, together with Lenin and many >others, in generating a myth about the significance of the First >International. Lets stick to the facts. > >Karl Carlile >To join the Communism List click following: >http://homepage.eircom.net/~kampf/ Louis Proyect, Marxism mailing list: http://www.marxmail.org From soncu at pacbell.net Sat Jun 29 17:48:28 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat, 29 Jun 2002 16:48:28 -0700 Subject: [A-List] Convertible Bonds Message-ID: As it appears, convertible bonds may be worth paying attention to in these days too. This market is growing very fast. Moreover, many hedge funds are loaded with convertibles. I don't follow the convertibles market that closely but recall that there was some talk of a convertibles melt-down a while ago, although did not know about the arguments, for or against. I don't get hear it anymore but who knows what is cooking. Below is an interesting article on convertible bonds or, converts, as the business lingo goes. I found the part on the negative coupon convert issued by Warrent Buffet particularly interesting. This is a first-ever negative coupon security as far as I know. The lender pays the borrower to lend money. Never thought that I would see something like that one day, although I cannot say I am surprised. One learns not to get surprised at the mind boggling creativity of the financial "innovators" after a while, especially if you played with a tone of "screw-you" collateralized mortgage obligation deals or some exotic options. On the quantitative side I mean, not on the trading side. Sabri ++++ June 28: Despite Risky Financial Markets, Convertible Bond Traders Are In Demand Location: New York Author: Tim Jones, RiskCenter Correspondent Date: Friday, June 28, 2002 Although firms on Wall Street have fired 40,000 workers in the past two years, due to risky financial markets, convertible bond specialists are prized. "Nobody in converts is getting laid off," says Harris, who left Morgan Stanley Dean Witter in September to run Deutsche's convertible bond underwriting business. As an example, Deutsche Bank AG's head of equity-linked capital markets, Brooks Harris, has been hiring bankers for his New York-based team, oblivious to risks in the financial sector. US sales of convertible bonds rose 69 percent last year to $117.5 billion. In the first five months of this year, sales totaled $40.9 billion compared with about $38 billion a year earlier. The continued fast pace is a surprise for even the most optimistic of bankers, who had expected issuance to taper off. Convertibles are growing for a number of reasons. With the Standard & Poor's 500 Index down 33 percent on June 10 from its high in March 2000, many companies are reluctant to issue stock to raise money. Convertible bonds offer an attractive alternative to many issuers. The securities, which pay interest like bonds, can be converted to stock at a set price above the current stock price. That means companies are effectively selling their stock at a premium. With the Federal Reserve's target for overnight interest rates near 40-year lows, convertible bonds are also a relatively inexpensive way to raise money. And volatile stock prices have boosted convertibles' appeal. When the volatility of a stock increases, the value of the option portion of the convertible climbs with it, because it becomes more likely the conversion price will be reached. That enables a company to set a conversion price at a higher premium to the stock's current price. Among the biggest buyers of convertibles are hedge funds, which account for more than two-thirds of the market, according to analysts. "People found they could basically buy convertibles, short the common stock on favorable terms and earn returns from the cash flow with very little, if any risk," says John Siebel, who helps run a convertible arbitrage fund at Silverado Capital Partners in Saddle Brook, New Jersey, and owns bonds from Agilent Technologies Inc., Gap Inc. and L-3 Communications Holdings Inc. An increasing number of companies are opting to sell convertible preferred stock issues, which are preferred shares that convert into ordinary shares, thus letting the borrower book the issue as equity rather than debt. Ford Motor Co., the world's second-largest automaker, in January sold a record $5 billion of convertible preferred stock, underwritten by Goldman, Sachs & Co. Ford's issue of so-called mandatory convertibles, which must be exchanged for common stock, helped bolster the equity on its balance sheet and pleased ratings companies that were concerned about the automaker's high level of debt. Partly because stock sales are shrinking, convertibles are becoming an increasingly important part of the equity underwriting business. In 2000, they represented 23 percent of all equity offerings, growing to a third of all offerings last year. In the first five months of this year, they accounted for 51 percent of the $88 billion in total sales. "There's a lot of deal flow and a lot of profitability right now," says Deutsche's Harris, whose team managed sales for such companies as Waste Connections Inc. and GenCorp Inc. this year. Convertible bonds are less profitable, though. Fees average only about 2 percent compared with an average of 4.5 percent to as much as 7 percent for an initial public offering. Based on the average fee of 2 percent, convertible sales in the first five months of this year yielded about $900 million in fees for Wall Street firms. In contrast, $16.2 billion of IPOs -- less than half the amount of convertibles --generated revenue of about $729 million, based on the 4.5 percent average fee. To boost their fees, investment banks are increasingly seeking -- and winning -- mandates to manage convertible offerings alone. Goldman Sachs, the second-ranked convertibles underwriter, made about $100 million for being the sole manager of Ford's $5 billion offering in January. The market leader, Merrill Lynch & Co., sold about $11.4 billion of the bonds for 21 different issuers in the first five months of the year -- a 26 percent market share. The sales included $2.8 billion for biotechnology company Amgen Inc. and $218 million for Duane Reade Inc., a New York drugstore chain. Merrill also handled a $2 billion offering for itself, for the first time selling a convertible bond with a floating interest rate. Like Merrill, No. 3 Salomon Smith Barney underwrote an issue for itself this year. The Citigroup Inc. unit has managed 22 offerings worth $7.3 billion, including an $893 million deal for Travelers Property Casualty Corp., a unit of Citigroup that held the offering to coincide with Travelers' IPO. Perhaps the most innovative new product in convertibles is one sold by billionaire Warren Buffett's Berkshire Hathaway Inc. in May. Berkshire sold the first-ever securities that held a negative coupon: Essentially, buyers paid to lend Buffett's company money. The bonds, underwritten by Goldman Sachs, consist of a debt portion that pays 3 percent interest plus warrants to buy Berkshire stock. Holders of the warrants owe Berkshire 3.75 percent installment payments. "The market has proven to offer something to everyone," says Goldman's David C. Ryan, head of equity- linked capital markets. Even, apparently, investors who want to pay for a chance to lend Buffett money. The negative-coupon issue was increased to $400 million from $250 million to meet demand. Full at: http://www.riskcenter.com/cgi-bin/article.pl?id=5071 From dagda at eircom.net Sun Jun 30 01:47:23 2002 From: dagda at eircom.net (Karl Carlile) Date: Sun, 30 Jun 2002 01:47:23 -0600 Subject: [A-List] =?iso-8859-1?Q?Every_Briton_will_pay_=A3200_for_war_?= Message-ID: <000201cd575d$eda37520$51ff869f@beprepared> Every Briton will pay ?200 for war Anthony Browne, Kamal Ahmed, Sarah Ryle and Gaby Hinsliff Sunday October 21, 2001 The Observer The war against terrorism is expected to cost Britain ?13 billion, with the loss of more than 100,000 British jobs before Christmas. The conflict will be far more expensive than previous wars against Iraq, Serbia and Argentina, economists say. They estimate that it will cost every man, woman and child ?200, and could blow an ?8bn hole in the Chancellor's finances. The nervous outlook for the British economy will be highlighted by two reports out this week, predicting a severe slowdown in manufacturing and household earnings. An Observer analysis has shown that 36,000 jobs have been lost since 11 September, including high-profile redundancies at Rolls-Royce and BT. Airlines, hotels, insurance companies, newspapers and advertising agencies have all had to lay people off, with 12,000 jobs cut in one day last week. The British Tourist Authority predicts that another 75,000 jobs will be shed in the tourism industry alone in the next few months, with ?1bn in lost spending from foreign visitors now too frightened to travel. Consumer confidence is also finally taking a severe hit. In the first weeks of October, the number of people visiting the top 50 retail centres in the UK - from Bluewater in Kent to the Thistles centre in Stirling - has fallen sharply. The British Retail Consortium says that although sales held up last month, they have now started to fall. There are also signs that the housing market is finally taking a hit from the loss of jobs and confidence. Simon Rubinsohn, chief economist at City firm Gerrard, said: 'Estate agents are saying that volumes are falling sharply, and people do most of their spending when they move house. People may still be remortgaging, but the difference now is that they are changing their lenders in order to cut their repayments rather than to spend on other things.' The Centre for Economic and Business Research has predicted that 11 September and its aftermath will reduce growth in the UK economy by 1.2 per cent, costing Britain ?12.6bn - or over ?200 per person. However, it predicts the actual direct cost of the war in Afghanistan will be relatively modest, at about ?1.5bn, or half the cost of the Gulf war. Doug McWilliams, chief executive of the CEBR, said: 'The real cost is terrorism and the effect it has on confidence and a range of industries, rather than the war itself. The cost of the military action is not that great.' Ian McCafferty, chief economist of the CBI, said: 'The uncertainty is very important, because it causes people to postpone decision-making. People are putting all investment on hold. If it goes on too long, they may cancel it altogether.' The Item report by accountants Ernst and Young, published tomorrow, also says that household wealth - the amount of money families have to spend after they have paid mortgages or rent - will fall to its lowest level for nearly five years. McWilliams predicts the war will cost the Chancellor about ?8bn, mostly in lost tax revenues because of the slowdown. The Chancellor had also pencilled in sharp cuts in defence spending over the next two years. Overall, McWilliams puts the cost to the global economy at ?470bn, making it by far the most expensive terrorist action in history. Guardian Unlimited ? Guardian Newspapers Limited 2002 Karl Carlile To join the Communism List click following: http://homepage.eircom.net/~beprepared/ From rschaap at iprimus.com.au Sun Jun 30 06:10:52 2002 From: rschaap at iprimus.com.au (Rob Schaap) Date: Sun, 30 Jun 2002 22:10:52 +1000 Subject: [A-List] SocDem Crisis: Time to rethink rethink? References: Message-ID: <3D1EF552.5208EE26@iprimus.com.au> Undercurrents By Ray Cassin June 30 2002 http://www.theage.com.au/articles/2002/06/29/1023864668513.html Remember socialism? The system of public ownership that some countries actually had, in the days of the Soviet empire? And the more benign form that some political parties in countries such as Australia aspired to introduce? On paper, at least, the aspiration has never gone away. Labor and the Coalition may now be virtually indistinguishable on broad economic policy, and political debate in Australia and other comparable democracies may be confined within the extremely narrow frame imposed by the dominant neoliberal ideology. But, in its constitution, the ALP continues to declare, as it has for more than 80 years, that its objective is "the democratic socialisation of industry, production, distribution and exchange, to the extent necessary to eliminate exploitation and other anti-social features in these fields". With the significant exception of the Chifley government's failed attempt to nationalise the banks, this objective has not shaped Labor's policymaking, and only rarely has it coloured Labor's electoral rhetoric. The typical stance of Labor governments has been that evoked by the title of Bede Nairn's classic history of the colonial labour movement, Civilising Capitalism. When socialism has got a mention at all, the word has usually been uttered by Labor's opponents in the hope of scaring voters. Peter Costello resorted to this tactic again in parliament last week. No one took any notice. The Treasurer was, after all, speaking about a party that had presided over the deregulation of the financial system, the abolition of centralised wage-fixing, the withdrawal of protection for Australian industry and the reintroduction of tertiary education fees. The conventional wisdom is that socialism is a relic of Labor's past that the party will eventually abandon in principle, as it has evidently already done in fact. The conventional wisdom ignores, however, that dropping the s-word from the party's objectives has been tried before, without success. Each time the issue comes up at a party conference, the usual result is that the list of objectives is increased, so that the commitment to socialism is qualified in various ways. This happened when the objective was first adopted in 1921, with the insertion of the words "to the extent necessary to eliminate exploitation and other anti-social features" in its phrasing. Some would say that the extended list of objectives, which, among other things, now includes recognition of the right to own private property, has so qualified the original objective as to render it incoherent. The Labor frontbencher Kevin Rudd is the latest to argue that the s-word has has passed its use-by date. In a submission to the review of the ALP being undertaken by Bob Hawke and Neville Wran, Rudd calls for the party to abolish the socialist objective and restate its traditional values in contemporary language. He has attempted such a translation, and here is part of it: "Labor believes in a creative, competitive and prosperous Australia - prosperity made possible by both private initiative and by public goods, a prosperity that is the prosperity of the many, not the few." As aspirational language goes, this is better than, say, John Howard's attempt to write a preamble to the constitution. But then almost anything is. Rudd has run up against the obstacle on which all previous attempts to jettison the s-word have foundered. Socialism, understood in however qualified a form, held out an ethical vision of a better world in which the worth of human lives would no longer be measured by the exchange values of the market. Labor's traditions were nurtured and unified by that vision, however dimly it was reflected in the practice of Labor governments. Socialism was something people could devote their lives to building, and might even be prepared to die for. Would anyone put their life on the line for "a creative, competitive and prosperous Australia"? Take the unifying thread of a moral and intellectual tradition away, and the tradition begins to dissolve. Try to say what the tradition means once this is happening, and your words will seem bland and hollow, for they no longer have a clear referent. Rudd derides the desire to retain the s-word as nostalgia, but what he offers as an alternative is pollie waffle. It is not that Rudd is unaware of the difficulty of revising the language that evokes a tradition without thereby undermining the tradition itself. "With the collapse of organised religion and traditional forms of social engagement," he writes, "there is a growing (community) appetite for constant values that resonate with the demands of the changing world in which we live." The comparison with organised religion is instructive. For more than two centuries the churches have intermittently engaged in attempts to restate the tenets of Christianity in ways that "resonate with the demands of the changing world". They have had varying degrees of success, but the risk in the project of translation has always been that what is being translated may disappear in the process. Those who seek to renew the social-democratic tradition face a similar challenge. Will they choose language that implicitly endorses Labor's capture by an individualist ideology inimical to its very reason for existence? Or will they choose language that proclaims that markets, far from being allowed to usurp the prerogatives of democratic governments, should themselves be subject to democratic control? Ray Cassin is a staff writer. Email: rcassin at theage.com.au From soncu at pacbell.net Sun Jun 30 14:24:41 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sun, 30 Jun 2002 13:24:41 -0700 Subject: [A-List] Good news: World's Economies to Keep Expanding, Bolstering Confidence, Executives Say Message-ID: Top Financial News 06/30 00:03 Economies Around World to Keep Expanding, Bolstering Confidence By Michael McKee Washington, June 30 (Bloomberg) -- The economic recoveries under way in the U.S., Europe and Japan will be strong enough to overcome damage to consumer and investor confidence from falling stocks and corporate accounting irregularities, many economists and executives say. The pace of expansion in Europe is picking up, U.S. first- quarter growth was the fastest in two years and Japan grew for the first time in 20 months. At the same time, U.S. stocks had their biggest first-half loss since the 1970s in the wake of the WorldCom Inc. and Enron Corp. accounting scandals. U.S. and European companies lost a combined $2.5 trillion of market value. "This makes little sense, and it will not continue," said Charles Lieberman, investment strategist and chief economist at Advisors Financial Center in Suffern, New York. "As the economic recovery takes hold, sentiment will improve." Recent data show signs the U.S. economy is recovering from a recession that began in March 2001. Sales of new and existing homes are at record levels, Ford Motor Co. and General Motors Corp. have been boosting production to keep up with demand for cars and trucks, and manufacturing has expanded for five straight months. After slowing in May, retail sales are expected to rebound in June, economists say. Wal-Mart Stores Inc., the world's largest retailer, said same-store sales are near the top of its forecast for the month. Wal-Mart had forecast an increase of between 5 percent and 7 percent. Business Investment More important, from the Fed's standpoint, is that business investment on new plants and equipment is increasing. Capital equipment orders have risen for the past two months. The semiconductor book-to-bill ratio, which measures demand for computer chips, rose for a third month in May. "I think we've seen the worst, and we're definitely in a recovery mode," said Paul Folino, chief executive officer of Emulex Corp. The data-storage equipment company's customers include International Business Machines Corp. The Commerce Department reported Thursday that corporate profits from current production, a gauge that economists follow, rose 5.8 percent in the first quarter, suggesting business is improving and will continue to do so. "Profits are being supported by strong productivity gains, consequently muted unit labor costs and growing output, all of which ought to persist in coming quarters," said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez in New York. Slowing Growth The U.S. economy probably expanded at a 2.7 percent annual pace in the second quarter, according to a Bloomberg News survey of economists. While that's less than half the 6.1 percent first quarter rate, growth is expected to pick up in the second half of the year, reaching 3.5 percent by the fourth quarter. In leaving the benchmark U.S. interest rate unchanged at 1.75 percent last week, Federal Reserve policy makers said that "economic activity is continuing to increase," although "the degree of strengthening remains uncertain." The Bank of Japan recently upgraded its economic assessment for a fourth straight month, saying rising exports and industrial production may boost company profits and domestic demand. The Japanese economy expanded at a 5.7 percent annual rate in the first quarter. Exports climbed 5.7 percent in May from April, the biggest gain since January, signaling Japan's strategy of exporting its way out of recession may be paying off. "The economy shows signs of stabilizing, though domestic demand, such as business investment, remains weak," central bank Governor Masaru Hayami said. Japanese Exports The bank tempered economic optimism by saying export gains probably will slow. The yen's 11 percent gain against the dollar this quarter also poses a renewed threat to exports, which had helped offset falling business investment. Even so, any sign of progress is good news after 20 months of recession, economists and executives said. "The Japanese economy has finally shown signs of turning around," said Akira Chihaya, president of Nippon Steel Corp. That should give a lift to Japanese stocks. The Nikkei 225 index, which is up 0.8 percent for the year, is the best performing index in the three major economies. "Some 50 percent of the Japanese companies are forecasting to post profit and that's likely to give a positive spin to their share prices," said Muneyuki Tsuji, who manages 15 billion yen ($125 million) in stocks at Japan Investment Trust Management Co. European Growth European growth lags the other two regions. The economy of the 12 nations that share the euro expanded at a 0.9 percent annual rate in the first quarter after shrinking in the final three months of 2001. The European Central Bank kept borrowing costs unchanged this month as Europe's economies barely recover from last year's slump. The ECB, which sets interest rates for countries from Finland to Portugal, left its main lending rate at 3.25 percent. "It's still too early for a rate increase," said Klaus Weisshaar, acting chief executive of Burgbad AG, a maker of bathroom fixtures based near the German city of Cologne which said yesterday it expects to return to profit this year. "Many small companies still depend on affordable loans." Policy makers probably want to avoid damping recovery by raising rates too soon, economists said. While business and consumer confidence grew in May, unemployment also rose in April as manufacturers including Siemens AG shed jobs. The European Commission cut its growth forecast for the second time in a month last week. From soncu at pacbell.net Sun Jun 30 19:13:30 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sun, 30 Jun 2002 18:13:30 -0700 Subject: [A-List] Turkey: Going down and down Message-ID: Sickly Turkey gives way to despair With the economy in tatters and their veteran leader dying, the Turks' fate seems to lie either with Islamists or the far right The Europe pages - Observer special Johnny Dymond in Istanbul Observer Sunday June 30, 2002 Turkey's political and economic elite is so fearful of what the future might hold that it is praying that the dying 77-year-old Prime Minister, Bulent Ecevit, can somehow hold on. He has been away from his office for almost two months, with spinal problems, stomach problems and a neurological disease that leaves him looking shaken and confused. Pale and frail, Ecevit faced MPs from his left-of-centre party three days ago. He had travelled from his home to the parliament in Ankara to show he was still in control. He could, he said, see early elections 'on the horizon'. Deputies should return to their districts and listen to the people in preparation for a campaign. It was what many had been saying ever since his long absence from official duties began. The financial markets shuddered. An hour later came a correction; a written statement from his office said he had made a mistake; there were no plans for early elections; the government would serve out its full term. Even for a Prime Minister renowned for his corrections and clarifications, this was an impressive volte-face. Turkey is now the International Monetary Fund's biggest single debtor. Partly because the markets are suspicious of the intentions of opposition parties when it comes to carrying out the IMF's plans, the Turkish lire has lost more than 20 per cent of its value since the Prime Minister's illness began (there are almost 2.5 million lire to the pound); interest rates have climbed by 15 per cent. One of the larger banks was taken into receivership this month; the shares of its sister bank, the second largest in Turkey, halved in value. Turkey, a key Nato member, 65 million people strong, is at the edge of a political and economic precipice. Ecevit is almost certainly the only man who can hold the governing coalition together. Opinion polls suggest that the coalition would be swept from power in fresh elections. The most popular group in parliament is the Islamist Justice and Development Party; the most energetic member of the coalition is the far-right Nationalist Action Party. Things have been bad before; but things have rarely been so bad for so long. In a sports club in an upmarket part of Istanbul a group of young professionals play a long, hard game of volleyball until the sun has gone. Sitting down for orange juice and coffee afterwards, none is positive about the future. The contempt for the politicians of all colours spills out. 'Some of the politicians are illiterate,' says Haki Yigit, 41, a credit officer with the bank ABN Amro. 'One of them didn't finish primary school! Some of them can't talk properly, and one of them has got, is it two or three wives?' 'Something has to change in the way that politicians affect the economy,' chips in Nesli Hanaker, a 29-year-old woman who works in exports. 'There is something wrong with the politicians. If you don't have money you can't be elected.' It is the threat of the Islamists, led by Tayip Erdogan, that inspires most comment rather than the far-right Devlet Bahceli, whose party has links with the Grey Wolves, a neo-fascist organisation that spread terror in the 1970s with assassinations and assaults on the Left. 'The Islamists were clever,' says Yigit. 'They changed the education system with their religious schools. Then when they came to power in 1997 they changed the people working for the state-owned companies so that it became their system.' It is perhaps not surprising that the Islamists arouse their ire; the newspapers, owned by people who like to stay close to the government of the day, have been pouring scorn and scandal on Erdogan ever since he emerged as an electoral threat. One paper which does not follow that line is the weekly cartoon paper LeMan; there is a lot of scatological humour, but there is a big dollop of politics too. For Turkey, still under the grip of the censor, it is close-to the-bone stuff. The editor, Tuncay Akgun, sits in a small third-floor office in central Istanbul. Cartoons with grotesque caricatures of the Prime Minister sit on his desk. But he says he is stumped by Erdogan and Bahceli. 'Both of them have few of the gestures that a human should have and they are irritatingly aloof. Their politics are transparent - you can't see what they stand for. It's very hard to feel them, so they are not good cartoon characters,' he says. 'When these two take power we'll even miss Ecevit. But our pens will be much sharper this time,' he adds, making a stabbing motion, 'We will stick our pens straight into their hearts.' Turkey often feels ignored by the outside world; foreigners who live here do not understand why there is so little interest in such a large and complex country. But that may have to change; an unstable Turkey on Europe's edge will set alarms ringing up and down the Foreign Ministries of Western Europe. Among those who work on, watching their politicians manoeuvre as the economy plunges, there is not much hope. One volleyball player stayed silent throughout the conversation at the cafe. The bank Dilek Akan works for was announcing redundancies the next day; half the staff were to be dismissed. 'The politicians don't want to deal with the problems of Turkey,' he spat, 'they just want to earn money. As for the future, it won't be good for us; I think we are going down and down.' Full: http://www.guardian.co.uk/Archive/Article/0,4273,4451371,00.html