From soncu at pacbell.net Sun Jun 2 02:05:02 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:54 2006 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 03:05:02 2002 From: jfgf.consult at mail.telepac.pt (Jorge Figueiredo) Date: Sat Jul 8 08:09:54 2006 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 05:09:02 2002 From: ewc at onetel.net.uk (ewc) Date: Sat Jul 8 08:09:54 2006 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 05:46:02 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Sat Jul 8 08:09:54 2006 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 14:47:02 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:54 2006 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 18:51:01 2002 From: hliu at mindspring.com (Henry C.K. Liu) Date: Sat Jul 8 08:09:54 2006 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 02:54:02 2002 From: cburford at gn.apc.org (Chris Burford) Date: Sat Jul 8 08:09:54 2006 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 02:54:04 2002 From: cburford at gn.apc.org (Chris Burford) Date: Sat Jul 8 08:09:54 2006 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 06:55:03 2002 From: sherrynstan at igc.org (Sherry & Stan Goff) Date: Sat Jul 8 08:09:54 2006 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 12:10:02 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:54 2006 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 $29.96. Potential buyers of the world's fifth largest drugmaker may reconsider the company as a merger partner because a patent on its cardiovascular drug Plavix expires next year, the Wall Street Journal reported. The Russell 2000 Index of smaller stocks fell 8.72, or 1.8 percent, to 478.75. The Wilshire 5000 Total Market Index, the broadest measure of U.S. shares, dropped 124.03, or 1.2 percent, to 9982.46. From annewilliamson at msn.con Mon Jun 3 12:29:02 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Sat Jul 8 08:09:54 2006 Subject: [A-List] Gold strikes back References: <018601c208de$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 14:37:01 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:54 2006 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 19:58:02 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Sat Jul 8 08:09:54 2006 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 20:00:02 2002 From: durable at earthlink.net (Barry Brooks) Date: Sat Jul 8 08:09:54 2006 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 21:11:01 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:54 2006 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 22:29:02 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:54 2006 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 jfgf.consult at mail.telepac.pt Tue Jun 4 04:23:02 2002 From: jfgf.consult at mail.telepac.pt (Jorge Figueiredo) Date: Sat Jul 8 08:09:54 2006 Subject: [A-List] capital overhang translation Message-ID: <5.1.0.14.0.20020522233013.02a82e38@mail.telepac.pt> Could someone tell me a good translation for Portuguese or for Spanish of expression "capital overhang"? Below a text with the expression Thanks for attention J. Figueiredo At some point the growth of demand fails to meet projections, leaving corporations with massive amounts of unused capacity and unsold inventory. Further investment is then impeded because corporations are reluctant to invest in the face of substantial excess capacity?sometimes referred to as a ?capital overhang.? As stated in The Economic Report of the President, 2002, authored by the president?s Council of Economic Advisers: ?A capital overhang develops when the amount of capital in the economy exceeds the amount that businesses desire for the production of goods and services. The emergence of such an overhang complicates both business planning and policymaking. Businesses often have to alter their capital spending plans and curtail their investment spending?sometimes quite abruptly? (p. 39). Visite http://resistir.info -------------- next part -------------- A non-text attachment was scrubbed... Name: not available Type: text/html Size: 1394 bytes Desc: not available Url : http://lists.econ.utah.edu/pipermail/a-list/attachments/20020604/e0ba6f2c/attachment.txt From nestorgoro at fibertel.com.ar Tue Jun 4 04:23:04 2002 From: nestorgoro at fibertel.com.ar (Nestor Gorojovsky) Date: Sat Jul 8 08:09:54 2006 Subject: [A-List] El FMI en la Argentina: un racconto para no olvidar Message-ID: <3CEE1FBC.27707.435C8@localhost> En un despacho de la agencia PSI, un muy interesante informe sobre el FMI en nuestro pa?s. Demuestra que el rechazo instintivo a su accionar responde a muy s?lidas razones. ---------------------------------------------------------------------- BUENOS AIRES, ARGENTINA, 24(PSI).- EL ACCIONAR DEL FMI EN LA ARGENTINA. (por Na?m Minsburg (*)). Las ?ltimas encuestas realizadas por varias consultoras est?n demostrando lo que se sab?a emp?ricamente, la gente rechaza los acuerdos que se est?n intentando materializar con el F.M.I. Por estas circunstancias es conveniente analizar, aunque sea muy brevemente, la historia de las relaciones del FMI (creado en 1944), comienza con el gobierno de la llamada "revoluci?n libertadora" y el primer cr?dito obtenido fue en 1958, bajo el gobierno del Dr. Arturo Frondizi. Desde ese entonces la influencia del Fondo y de su "brazo derecho" el Banco Mundial, sobre la evoluci?n econ?mico social de nuestro pa?s ha sido de fundamental importancia. Condicionando y supeditando nuestro desarrollo a las conveniencias e intereses de las grandes potencias mundiales, fundamentalmente de los Estados Unidos. Pero pecar?amos de unilateralidad si no vi?ramos detr?s de las condicionalidades del Fondo una clara connivencia con los intereses de los grandes capitales locales y de las filiales de las corporaciones transnacionales, a los que posteriormente se a?adir?an el accionar del capital financiero internacional. No es el prop?sito de un art?culo period?stico realizar un an?lisis hist?rico y pormenorizado. Deteng?monos simplemente en lo ?ltimos meses. Para poder mantener el modelo "menemista - cavallista - delarru?sta" que se ca?a a pedazos, cuyos resultados est?n a la vista, y poder facilitar la colosal fuga de capitales que posteriormente se efectuar?a, Cavallo contrat? para presidir al Banco Central a un alumno educado escrupulosamente por el Fondo, el se?or Mario Blejer. El FMI para conceder su "ayuda", comenz? exigiendo un "plan econ?mico sustentable" y que hasta que dicho plan no estuviera efectivizado, la comunidad financiera internacional no brindar?a su apoyo a nuestro pa?s. Una suerte de bloqueo incre?ble en los tiempos actuales. Luego de inn?meras misiones, la ?ltima dirigida por el hind? Anoop Singh (el mismo que junto a Mario Blejer fueron los autores del desastre de Indonesia) que impuso a los gobernadores la firma del documento de "los 14 puntos" cuya esencia est? constituida por el ajuste eterno. Es sabido que en una crisis econ?mica, el ajuste o la reducci?n del gasto s?lo empeora la coyuntura puesto que cae la recaudaci?n impositiva, el desempleo adquiere caracter?sticas grav?simas, m?s de la mitad de la poblaci?n en pobreza cr?tica, se produce la destrucci?n de gran parte del aparato productivo etc?tera, la crisis se convierte en un c?rculo vicioso infernal. As? estamos. El 5 de enero, a muy pocos d?as de haber asumido Eduardo Duhalde, el fiel disc?pulo del "cavallismo" Jorge Remes Lenicov y el ministro de la "producci?n"(??) Ignacio de Mendiguren, producen la devaluaci?n de nuestra moneda que en muy breve tiempo se transforma en una megadevaluaci?n, de tal magnitud que no se produjo ni en Rusia, Turqu?a ni en los pa?ses asi?ticos. El pretexto esgrimido para tama?o dislate -producido no solamente por la inepcia de los que lo impulsaron - era tornar m?s competitiva la econom?a nacional para incrementar verticalmente las exportaciones. Como si la competitividad fuera un tipo de cambio desproporcionado y no mediaran otros elementos como la calidad, la incorporaci?n de tecnolog?a, la seriedad en el cumplimiento de lo convenido, en el respeto de los compromisos. Omitieron dichos funcionarios que gran parte de la producci?n nacional por culpa del "cavallismo" tienen una gran proporci?n de insumos importados lo cual influye negativamente en el costo final. Pero la megadevaluaci?n ha pulverizado los sueldos y salarios, la inflaci?n se ha instalado y comienza a perfilarse el peligro de la hiperinflaci?n. ? Y el FMI exige que la flotaci?n del d?lar sea libre! En las ?ltimas semanas el FMI impone como condici?n suprema la derogaci?n de dos leyes de trascendental importancia: la ley de quiebras y la de subversi?n econ?mica. La modificaci?n de la ley de quiebras posibilitar? que muchas empresas nacionales puedan ser adquiridas por acreedores externos por valores insignificantes, profundizando el grave proceso de extranjerizaci?n de nuestra econom?a. La derogaci?n de la ley de subversi?n econ?mica, tiene el prop?sito exclusivo de proteger de eventuales juicios condenatorios a los directorios de los bancos que actuaron y act?an en lo que hemos denominado como "la mayor estafa de la historia". Esto es el despojo de millones de ahorristas que han sido atrapados en el "corral?n infernal". Y que al mismo tiempo han vaciado al pa?s financieramente, tornando sumamente dif?cil el restablecimiento de un sistema bancario serio y confiable, indispensable para la reactivaci?n de nuestra econom?a.- (*) Economista.- XXX N?stor Miguel Gorojovsky nestorgoro@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 anatlorenzo at yahoo.com Tue Jun 4 04:23:07 2002 From: anatlorenzo at yahoo.com (=?iso-8859-1?q?Ana=20T.=20Lorenzo?=) Date: Sat Jul 8 08:09:54 2006 Subject: [A-List] Per aspera ad astra, un artículo de Teodoro Boot Message-ID: <20020525061214.21974.qmail@web11503.mail.yahoo.com> Est?s recorriendo un extra?o camino, muchacha. Per aspera ad astra Por Teodoro Boot Durante el debate parlamentario por la modificaci?n de la ley de quiebras en el que Alicia Castro llev? la bandera norteamericana hasta los mismos brazos del Presidente de la C?mara, la exposici?n del diputado metal?rgico ?el Barba? Guti?rrez hab?a sido bostezada sin sobresaltos. Guti?rrez advirti?, sino a sus aletargados colegas, al menos al cameraman de Cr?nica TV, sobre el peligro que el proyecto de ley radical-justicialista entra?aba para las empresas cooperativizadas. Desde luego, nadie le prest? la menor atenci?n, pero Guti?rrez alud?a a un sorprendente fen?meno que est? teniendo lugar en el ?mbito econ?mico: como en la alucinaci?n de un anarcosindicalista afecto al mezcal, los medios de producci?n est?n pasando aceleradamente a manos de sus trabajadores. No pasa d?a sin que cierre una empresa y no cierra empresa sin que sus trabajadores se propongan explotarla, que, vale la aclaraci?n, significa exactamente lo opuesto a hacerla explotar.Volc?n, Siam, La Bernalesa, La F?brica (en la que se ha consumado la fantas?a proletaria de rodearse de j?venes burguesas en malla de baile) son unos pocos nombres para una lista que supera ya el centenar y en la que predominan las pertenecientes al rubro metal?rgico y metalmec?nico. Este ?ltimo detalle no debe causar extra?eza, habida cuenta del valor intr?nseco de dichas f?bricas: la desindustrializaci?n llevada a cabo cuando ?ramos primer mundo no supuso el holocausto de la maquinaria sino su simple inactividad y, a lo sumo, su obsolescencia.Cabe reparar en que eso que con cierta liviandad llamamos ?maquinaria? es lo que los expertos denominan bienes de capital y resulta, en la mayor?a de los casos ?si de producci?n hablamos y no de aseguradoras, telecentros o drugstores? el rubro al que se destina el porcentaje mayor de la inversi?n total que requiere cualquier emprendimiento econ?mico. Luego de eso, basta con un peque?o capital operativo, acceso al cr?dito y mercado para colocar los productos, de lo que se desprende que con ser mucho los bienes de capital no lo son todo.La quiebra masiva de f?bricas, en especial textiles y metal?rgicas, tuvo directa relaci?n con la falta de cr?dito (o su alto costo) y la imposibilidad de competir en el mercado con productores externos beneficiados con la estramb?tica apertura econ?mica ideada por el d?o din?mico Menem-Cavallo. El argumento de la obsolescencia tecnol?gica, predilecto de los ?expertos?, es una bober?a: en iguales condiciones que se vieron obligadas a soportar las empresas argentinas, la industria estadounidense no hubiera podido competir ni con la de Ruanda. ?Qu? cambi? desde entonces como para que los trabajadores de una ex f?brica crean posible volver a hacerla productiva y rentable?A primera vista, el tipo de cambio, gracias al que ?al menos por ahora? los productos nacionales resultan competitivos con los importados. Sin embargo, la devaluaci?n permanente (??Revoluci?n? era, Dr. Duhalde!) y los incesantes aumentos de precios internos, adem?s de volver aparente esa ventaja, provocaron la destrucci?n del mercado por la v?a de casi eliminar la capacidad adquisitiva de los trabajadores, a esta altura, una privilegiada minor?a.Viene a cuento resaltar una evidencia de la que los economistas y gur?es se hacen los burros: la estructura productiva de Brasil puede, al menos por un per?odo relativamente largo, soportar la desigualdad y la exclusi?n social. El 10% de privilegiados de Brasil equivale a m?s de 15 millones de consumidores, un mercado. El 10% de los argentinos no son un mercado, son Uruguay. De lo que podr?a deducirse que, lejos de estar ?condenada al ?xito? la Argentina estar?a condenada al pleno empleo y a los altos salarios, por m?s que los del CEMA bufen. Ahora bien, a la desaparici?n del mercado interno se sum? la ausencia de la m?s elemental l?nea de cr?dito, lo que, fuera de tornar dificultosa la producci?n, hace imposible la exportaci?n, que viene a ser la zanahoria que los ide?logos de la devaluaci?n permanente vienen sacudiendo delante de los ?vidos hocicos de trabajadores y empresarios.?Qu? implica todo esto? Que si cambi? algo, fue para peor. Sin embargo, los trabajadores, sin capital, ni cr?dito, ni mercado y con la nueva ley de quiebras pendiendo amenazadoramente sobre sus cabezas, intentan reabrir las f?bricas cerradas de manera que la industria nacional resurja de sus propias cenizas. Presumiblemente, de existir alguna perspectiva de que les fuera posible obtener empleo de modo normal, m?s peque?o-burgu?s y menos contestatario, que como habitualmente se comportan los trabajadores, estos ex obreros que ans?an volver a serlo har?an muy tranquilamente la cola delante de los especialistas en selecci?n de personal contratados al efecto por alg?n repugnante plut?crata. Para decirlo con llaneza: los trabajadores no han perdido la chaveta, ni mucho menos; apenas si hacen lo poco que tienen a la mano y lo que mejor saben, aunque de alguna manera dependen de lo que no saben: como en esos films cat?strofe en que un dentista ciego y jubilado pilotea un Jumbo con medio fuselaje, un cuarto de motor e instrumental hecho pedazos hasta hacerlo posarse a salvo en la pista de aterrizaje, esta nueva especie de trabajadores conf?a en tener ?xito ah? donde el m?s experto empresario fracasar?a miserablemente. Cabe presumir, aunque nadie se atreve siquiera a sugerirlo, que si en peores condiciones conf?an en sacar adelante una empresa quebrada, es que piensan que la principal raz?n del anterior fracaso fue la plusval?a, la libra de carne que el capital extrae al trabajo seg?n corresponde al m?s elemental principio capitalista. En cierto sentido tal vez no anden descaminados en un pa?s en que fue tradici?n la simult?nea existencia de empresas pobres y empresarios ricos, pero, mirando las cosas con objetividad, no cabe la menor duda de que estar?amos en presencia de un creciente fen?meno colectivista. Este progresivo traslado de la propiedad y manejo de los bienes de producci?n a las manos de los trabajadores no es un hecho aislado. Existen suficientes evidencias del abandono, seguramente involuntario, del sistema capitalista por parte de un gran porcentaje de la poblaci?n. Basta observar que la mitad de la poblaci?n econ?micamente activa no trabaja o lo hace espasm?dicamente, que m?s de 12 millones de personas apenas si pueden consumir los bienes b?sicos para su subsistencia y que otros 6 millones ni siquiera alcanzan a ser pobres, sobrellevando un infraconsumo de calor?as y prote?nas al que no se vieron sometidos ni los m?s paup?rrimos grupos de cazadores y recolectores de la prehistoria en medio de la m?s feroz de las sequ?as. No es aventurado suponer que si los pitencantropus hubieran debido padecer las privaciones de los modernos indigentes, la especie humana no habr?a alcanzado a existir. En ese amorfo conglomerado se establecen transacciones comerciales y pseudolaborales completamente heterodoxas, como el alquiler de ni?os para mendigar, y no deber?a causar extra?eza que, al igual que en ciertas partes de Sudam?rica, se comience a especializar tempranamente a las cr?as en la mendicidad mediante el sencillo tr?mite de cegarlas o quebrarles las piernas. Pero en tren de subsistencia no todo es infanticidio ni delito, que viene a ser la forma con que cuentan para sobrevivir los m?s j?venes, fuertes y audaces, los mejores de su clase: en ese mundo informal, de fronteras imprecisas y fluctuantes surgen asociaciones imprevistas, prescindentes de los c?digos jur?dicos y ajenas al control, regulaci?n o protecci?n del Estado, de las que s?lo una de ellas son los clubes del trueque: entre 2 y 4 millones de personas intercambian productos y/o servicios con tal ajenidad respecto al sistema que, no conformes con ?pasar? de muchos de los servicios y de las normas impositivas y legales que regulan el comercio, la industria y el trabajo, hasta poseen su propia moneda. El colectivismo anarquista de los proletarios y el comunismo primitivo por el que parecen haber optado los sumergidos, no completan el inusual panorama argentino. Siendo que en muchas regiones, como la patag?nica, los gobernantes, los Estados mismos y hasta los sindicatos fueron privatizados para convertirse en lenguaraces de las empresas petroleras, en otras regiones es posible verificar un inverso proceso de estatizaci?n. Administraciones provinciales en aut?ntico default se ven s?bitamente obligadas a hacerse cargo de empresas ya quebradas o ya no rentables. La provincia de Entre R?os que debe a cada santo una vela y a los trabajadores estatales tres meses de sueldo, incapaz hasta de pagar sus deudas con la moneda falsa que por su cuenta fabrica, se encuentra de pronto con la red de distribuci?n de gas del noreste, ante el abandono de la misma por parte de sus propietarios. Gas del Estado ha resucitado en el Litoral, curiosamente, donde jam?s hab?a existido antes. Todo indica, por otra parte, que el fen?meno entrerriano no ser? ?nico. Distribuidores y productores de energ?a amenazan con abandonar sus empresas a la buena de Dios para regresar despavoridos al primer mundo, las telef?nicas se han convertido en importantes deudoras de los estados provinciales y, en breve, los municipios peque?os deber?n hacerse cargo de la distribuci?n de la correspondencia, habida cuenta la reducci?n de la rentabilidad que denuncian los irregulares propietarios del ex correo estatal. El tercer movimiento de esta extravagante danza de la Argentina contempor?nea es la estatizaci?n o re-estatizaci?n (a menos) de los servicios p?blicos. El cuarto movimiento, la aut?ntica frutilla del postre, es la muy previsible evoluci?n de la actual crisis del sistema financiero. La retirada, o fuga, del Scotia Bank amenaza con convertirse en estampida luego del abandono de la plaza por parte del Credite Agraire, propietario de los bancos Del Suqu?a, Disel y Bersa, que de la noche a la ma?ana pasaron a ser administrados por el Banco Naci?n. Nos encontramos ante un fen?meno hace un par de a?os impensable: la nacionalizaci?n de la banca, reclamo ya at?vico de los grupos m?s extremistas de la izquierda y el nacionalismo populista. De observar que los bancos extranjeros han recibido pr?stamos del Banco Central por montos superiores a sus capitales, debemos convenir que el costo que el Estado, y por ende el pueblo, est? pagando por la nacionalizaci?n de la banca es demasiado elevado. Esto es, podr?a haberse hecho con menos dinero, as? como no era preciso permitir que las empresas se servicios ganaran una exorbitancia antes de volver a manos estatales ni era estrictamente necesario someter a la poblaci?n a la miseria y la indignidad para promover la colectivizaci?n de los medios de producci?n e instaurar una sociedad de ciudadanos igualmente pobres. Cabe la posibilidad, claro, de que el sorprendente fen?meno no estuviera en la voluntad y objetivo de las autoridades, que todo sea fruto de esos movimientos misteriosos de la historia a los que Hegel intentaba explicarse como fruto de ?la astucia de la Raz?n?, de donde vendr?a a resultar que por obra de un grupo de Pol Pots retardados la Argentina acabe por convertirse en la prolongaci?n americana del anarquismo catal?n de 1936.En fin, que si es cierto eso de que hay Arte en arribar a lo m?s alto por lo m?s escarpado, bien puede tambi?n haberlo en llegar a lo sublime a trav?s de lo rid?culo. ===== ************************************************** "De pensamiento es la guerra mayor que se nos hace: gan?mosla a pensamiento". Jos? Mart?. ************************************************** Saludos cordiales. Ana T. Lorenzo. ************************************************** Cobertura especial de la Copa Mundial de la FIFA Corea-Jap?n 2002, s?lo en Yahoo! Deportes: http://ar.sports.yahoo.com/fifaworldcup/ From franka at fiu.edu Tue Jun 4 04:23:10 2002 From: franka at fiu.edu (Andre Gunder Frank) Date: Sat Jul 8 08:09:54 2006 Subject: [A-List] Kashmir CORRECTERD Message-ID: I may have sent you the wrong version of this piece of mine a moment ago. THIS IS THE RIGHT VERSION many apologies gunder ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ANDRE GUNDER FRANK Senior Fellow Residence World History Center One Longfellow Place Northeastern University Apt. 3411 270 Holmes Hall Boston, MA 02114 USA Boston, MA 02115 USA Tel: 617-948 2315 Tel: 617 - 373 4060 Fax: 617-948 2316 Web-page:csf.colorado.edu/agfrank/ e-mail:franka@fiu.edu ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ---------- Forwarded message ---------- Date: Thu, 30 May 2002 14:57:18 -0400 (EDT) From: Andre Gunder Frank To: franka@fiu.edu Subject: Kashmir (fwd) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ANDRE GUNDER FRANK Senior Fellow Residence World History Center One Longfellow Place Northeastern University Apt. 3411 270 Holmes Hall Boston, MA 02114 USA Boston, MA 02115 USA Tel: 617-948 2315 Tel: 617 - 373 4060 Fax: 617-948 2316 Web-page:csf.colorado.edu/agfrank/ e-mail:franka@fiu.edu ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ---------- Forwarded message ---------- Date: Wed, 29 May 2002 15:19:47 -0700 From: Chalmers Johnson To: Andre Gunder Frank Subject: Kashmir THE THREAT OF INDO-PAK NUCLEAR WAR BLOWBACK & FALLOUT: IRRESPONSIBLE U.S. POLICY HAD AMPLE WARNING not TO PROVOKE IT The present threat of nuclear war between Pakistan and India is the direct responsibility of irresponsible provocation by the Bush Administration. Whatever were the remote and immediate causes of previous Indo-Pakistani wars over Kashmir, the present nuclear threat must be laid at the door of Washington, which did everything it could to provoke it and almost nothing to prevent it. Plenty of warnings were available to abort the US policies that would inevitably lead to the present impasse. The most visible of these policies have been the overt political ones, but they also include the as ever US economic policies that fail to alleviate but further deepen the economic crisis in both Pakistan and India as part of the present world economic crisis. It was US pressure on Pakistani President Musharraf to become a puppet instrument of US rhetorically ''anti-terrorist'' but real world aggressively geo-political economic policy in Afghanistan and Central Asia that defined and limited Musharraf's present options. The Pakistani president was obliged by the Bush administration to turn against and even betray extreme and not so extreme Muslim elements in the American CIA's client ISI Pakistani secret service and military as well as in the socio-political [dis]order in general. That had to deepen the divide and heighten the tension within the Pakistani socio-political/military establishment and society in general. As a result of that US policy, three possible but not mutually exclusive short-run scenarios and their derivatives now present themselves in South Asia: 1A. Musharraf's political options are now reduced and confined to continuing his anti-Muslim clamp-down AND giving at least the appearance of NOT doing so excessively and especially NOT doing so at the behest of the US and even less so of India. That requires a now even more pro-active stance and praxis regarding the ever present Kashmir issue. Moreover, many Taliban and al-Qaeda activists that were previously confined to Afghanistan have now been chased out by the US and spread through Pakistan and probably Kashmir. That is the direct result of irresponsible US policy. 1B. Reduced political room for maneuver in Pakistan in turn increases the political bargaining power and its use by the Government of India. That India is also a victim of economic crisis and has a Hindu nationalist and fundamentalist BJP government in Delhi and an even more so state government in Gujarat, which has responded by deliberately organizing the recent anti-Muslim pogroms with over 1,000 victims, provides the background. Moreover, recent electoral alliance and voter setbacks at home now make patriotic diversions abroad more attractive for the BJP government. A more aggressive Kashmir and anti-Pakistan policy in India and a corresponding response by Pakistan is the immediate result - with 200,000 troops facing each other on the border, 2 million troops behind them, and rattling the nuclear saber by both sides. That is the direct result of US policy. 2A. President Musharraf is assassinated; the US looses its ''man in Islamabad;'' Pakistan looses its present stabilizing force or symbol; and blame is or is shifted onto Muslim ''fundamentalists.'' All Hell Breaks Lose. Although always possible, that is now more likely as a blowback result of US policy. 2B. Supporters of Musharraf try to save the present STATE of affairs by wholesale crack-down on Muslim nationalist/fundamentalists at home - with even more aggressive anti-Indian policies abroad to buy off some of the Muslim opposition at home. The already sufficiently dangerous situation provoked by American irresponsibility becomes even more dangerous. 2C leads to 3. The Pakistani state is split down the middle, with the army divided and most of ISI re-aligned against the pro-Musharraf forces, and general socio-political caos. US policy is not the only, but now is a primary cause of such developments. 3A. Via scenario # 2, or even without it, the present regime is overthrown and replaced by a more militant Muslim/nationalist one - with nuclear arms at its disposal- that escalates the Indo-Pakistani conflict still more -- if that is then still possible. That would also embolden a Hindu nationalist BJP government and its supporters in India still more to go after its own Muslims who number more than those in all of Pakistan and could be cast as its 5th column in India itself. All that would be a direct blowback result of US policy. 3B. The United States implements already existing military exercises to try to '' take out'' the Pakistani nukes, by destroying them or moving them to China or Russia [or Kazakhstan or Uzbekistan]. That IS US policy, but it may not work; and the political consequences may be too horrendous to foresee. Moreover, the participation in this drama of Russia and China are as yet unclear, except as 3C. 3C. Instead of only TWO nuclear states mobilized against each other in South Asia, Eurasia then has FIVE of them actively involved in Eurasia, since Pakistani ally China and Indian ally Russia could also mobilize, as well as the US itself. Is that what US policy wants? Or is it an only ''unintended'' but a certainly foreseeable blowback of irresponsible US policy in Asia. 4. Simultaneous sharpening of other political flash-points that are also the direct result of unconscionable US policy is proceeding certainly in Israel-Palestine, will probably result in the replacement of the US puppet regime in Saudi Arabia and maybe in Egypt, and the insanely aggressive US policy towards Iraq and other Arab states can only aggravate the world political situation. Instead of trying to reduce the sources of political desperation or even taking the wind out of the socio-political support for those who are already desperate, the US continues and aggravates the policies that have already generated and are now escalating terrorism against its interests and citizens. The possible repercussions to any and all of these are incalculable, but ALL ARE THE DIRECT RESULT OF IRRESPONSIBLE US POLICY. #5. Aggravation of the present world economic crisis, now already visible in all parts of the world, may still result in a fundamental change in the world economic position and policy of the United States. For the time being, and ever since the mid 1980s when it changed from being the world's biggest creditor to becoming its biggest debtor and especially during the 'boom' of the 1990s, the United States is till running a global PONZI SCHEME, in which its liquidity and credit depends on the continued giant vacuum cleaner absorbtion of new credit capital to service the ever growing service, not to mention principal, of its accumulated past debts, which now amount to almost double its GDP. These debts are most importantly to foreigners who have bought US treasury certificates from Washington and invested in stocks , or worse their derivatives, in Wall Street. However, US corporate, household and consumer debt have also continued to rise with so far no limit in sight except the always existing and ever greater threat new capital will one day cease to flow into the US, thus making it impossible to re-finance the old debt. And of course, they higher that Ponzi house of cards pyramid continues to be built up, the greater its crash if and when it comes. For then, the cessation of capital inflow must generate a rapid flight capital outflow from the US, as it did from other areas that had 'enjoyed' earlier speculative capital inflows. The ONLY RESPONSE POSSIBLE will be to DEFAULT on much of the debt owed across and within US borders - with disaterous consequences all around. But that can and would be done in a variety of ways or combinations thereof: simple wipe out of stock values, a sharp increase of printed or credit-created US dollars both to meet demand for the same and to devalue the debt by inflating out of it. Or the free-trade and open-market apostle that the US claims to be will impose controls on capital outflow abroad and limitations on capital transfers and the use of bank deposits at home- also following other countries whom US policy has already forced into situations that gave them no other choice, as now spectacularly so in Argentina. All would result in FALL IN THE US DOLLAR'S VALUE. That would also spell the end of the US role as the world's consumer of last resort. Before a dollar confidence and supply crisis becomes that acute, a number of possible measures could pave the way and result already in a decline of the dollar, which then at any moment could turn into an abrupt fall. All of these eventualities should also be considered as potential political economic blowbacks to recent and still current irresponsible US policy. Among them are: - Japan's banking crisis obliges Japanese to withdraw money invested in the US and bring it home to shore up their exposed positions there - China devalues, becomes still more competitive in the world market, and forces other Asian producers into still more precarious financial positions and corresponding defensive policies - Europeans transfer their international currency reserves from the US dollar into the Euro - Others decide to do the same - OPEC decides to re-price its oil exports in Euros instead of dollars, or even in a basket of currencies including both or maybe even the Chinese yen, and/or - OPEC countries individually or collectively decide to place and keep [some of] their earnings in Euros, especially if they are priced in that currency, but even if they are not.But if the dollar exchange becomes costly, te rational thing to do will be to price out of the dollar to begin with. - Somebody/anybody gets upset at yet another outrageous US policy/praxis, and out of fright or spite decides to try to put their money in a safer haven than the US. Depending on who does that when and how, it could trigger a run on the 'US BANK'. To appreciate the seriousness of any and all of these very possible scenarios, it is important to realize that US economic 'strength' really is based on a world wide Ponzi Scheme House of Cards whose essential element is that the US can print US dollar world currency, and nobody else can. However, the opposite side of that dollar coin is that this dollar supply and demand is the ONLY ECONOMIC STRENGTH THE US NOW HAS. The importance of US TNIs, industrial and agricultural productivity, high tech, education and all pale in the shadow of the DOLLAR. The other pillar of US strength is the Pentagon, which claims already to be encumbered by lack of dollars. However, the deployment of Pentagon forces abroad is dependent on having highly valued dollars abroad with which to buy national currencies to defray local costs of bases, supplies, deployments and other military expenses. So the strength of the Pentagon is in part dependent on the strength of the dollar - and vice versa [see A.G. Frank we-page on 'US Economic Overstretch and Hegemonic political military blowback?]. Their hand in hand decline, in the face of present official [and popular?] hubris overconfidence, could spell incalculable political costs at home and abroad. THE BUSH ADMINISTRATION IS DOING ALL IT CAN TO PROMOTE SUCH BLOWBACK DISASTER AT HOME AND ABROAD AND NOTHING TO PROTECT THE SECURITY OF AMERICAN - LET ALONE OTHER COUNTRIES'- CITIZENS. -- Japan Policy Research Institute 2138 Via Tiempo Cardiff, CA 92007 USA Tel (760) 944-3950 Fax (760) 944-9022 Email: chaljohnson@mindspring.com, chaljohnson@jpri.org Web: www.jpri.org From nestorgoro at fibertel.com.ar Tue Jun 4 04:23:13 2002 From: nestorgoro at fibertel.com.ar (Nestor Gorojovsky) Date: Sat Jul 8 08:09:55 2006 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@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 Tue Jun 4 04:23:16 2002 From: mstainsby at tao.ca (Macdonald Stainsby) Date: Sat Jul 8 08:09:55 2006 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 06:58:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:55 2006 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 07:15:04 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:55 2006 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 10:35:02 2002 From: hliu at mindspring.com (Henry C.K. Liu) Date: Sat Jul 8 08:09:55 2006 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 14:57:02 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:55 2006 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 15:39:02 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:55 2006 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 16:32:02 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:55 2006 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 04:38:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:55 2006 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 04:39:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:55 2006 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 04:41:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:55 2006 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 04:43:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:55 2006 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 04:51:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:55 2006 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 04:53:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:55 2006 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 04:56:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:55 2006 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 04:59:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:55 2006 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 05:07:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:55 2006 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 05:08:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:55 2006 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 05:10:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:55 2006 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 05:14:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:55 2006 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 05:16:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:55 2006 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 05:20:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:55 2006 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 10:52:01 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:55 2006 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@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@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 12:44:02 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:55 2006 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 12:58:02 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:55 2006 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 14:19:01 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:55 2006 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 14:54:02 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:55 2006 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 20:11:02 2002 From: hliu at mindspring.com (Henry C.K. Liu) Date: Sat Jul 8 08:09:55 2006 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 23:04:02 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Sat Jul 8 08:09:55 2006 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 23:49:02 2002 From: hliu at mindspring.com (Henry C.K. Liu) Date: Sat Jul 8 08:09:55 2006 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 23:57:02 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:55 2006 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 05:12:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:55 2006 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 05:14:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:55 2006 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 05:17:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:55 2006 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 05:21:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:55 2006 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 05:25:12 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:55 2006 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 05:29:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:56 2006 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 05:31:02 2002 From: ewc at onetel.net.uk (ewc) Date: Sat Jul 8 08:09:56 2006 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 05:34:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:56 2006 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 07:50:03 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Sat Jul 8 08:09:56 2006 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 08:32:02 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Sat Jul 8 08:09:56 2006 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 09:11:02 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Sat Jul 8 08:09:56 2006 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 09:32:02 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Sat Jul 8 08:09:56 2006 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 09:35:02 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Sat Jul 8 08:09:56 2006 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@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 10:33:02 2002 From: hliu at mindspring.com (Henry C.K. Liu) Date: Sat Jul 8 08:09:56 2006 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 10:58:02 2002 From: hliu at mindspring.com (Henry C.K. Liu) Date: Sat Jul 8 08:09:56 2006 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 11:31:01 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:56 2006 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 11:58:02 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:56 2006 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 12:04:02 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Sat Jul 8 08:09:56 2006 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 12:32:02 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Sat Jul 8 08:09:56 2006 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 13:26:02 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:56 2006 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 14:30:02 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:56 2006 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 15:05:03 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:56 2006 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 15:57:01 2002 From: hliu at mindspring.com (Henry C.K. Liu) Date: Sat Jul 8 08:09:56 2006 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 16:05:02 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Sat Jul 8 08:09:56 2006 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 16:39:02 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:56 2006 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 16:53:02 2002 From: hliu at mindspring.com (Henry C.K. Liu) Date: Sat Jul 8 08:09:56 2006 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 17:56:02 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:56 2006 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 18:24:02 2002 From: hliu at mindspring.com (Henry C.K. Liu) Date: Sat Jul 8 08:09:56 2006 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 20:29:02 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:56 2006 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 21:40:02 2002 From: rschaap at iprimus.com.au (Rob Schaap) Date: Sat Jul 8 08:09:56 2006 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 22:36:01 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:56 2006 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 02:42:01 2002 From: mstainsby at tao.ca (Macdonald Stainsby) Date: Sat Jul 8 08:09:56 2006 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 04:19:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:56 2006 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 04:25:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:56 2006 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 04:31:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:56 2006 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 04:34:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:56 2006 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 06:29:03 2002 From: ewc at onetel.net.uk (ewc) Date: Sat Jul 8 08:09:56 2006 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 08:02:29 2002 From: nestorgoro at fibertel.com.ar (Nestor Gorojovsky) Date: Sat Jul 8 08:09:56 2006 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@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 08:35:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:56 2006 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 12:58:02 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:56 2006 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 14:35:02 2002 From: mstainsby at dojo.tao.ca (Macdonald Stainsby) Date: Sat Jul 8 08:09:56 2006 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. > Néstor Miguel Gorojovsky > nestorgoro@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 15:41:01 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:56 2006 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 17:54:01 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:56 2006 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 00:10:03 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:56 2006 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 humil