From Michael.Keaney at mbs.fi Fri Mar 1 01:19:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:09 2006 Subject: [A-List] Russia/US developments (was Thinking The Unthinkable) Message-ID: Frankfurter Allgemeine Zeitung 27. Feb. 2002 It would be most awkward for the Europeans if they were suddenly to discover that Washington found it easier to agree with Russia than with its traditional allies on the big issues -- such as weapons of mass destruction, "rogue states," and energy resources. That would mean Europe was more marginalized than ever. ====== Mark Jones raised this scenario several months ago. There are still major differences separating the Pentagon and the Russian military, however, if recent reports re the Blair-backed "North Atlantic Council" proposals are anything to go by. And then there is the continuing development of US strategic penetration of Central Asia, which is raising some alarm within the Kremlin: Russia sees red at US forces plan for Georgia By Rupert Cornwell in Washington The Independent, 28 February 2002 Russia took sharp issue yesterday with US plans to send special forces units to Georgia - a move that would bring Washington's campaign against terrorism into the very heart of what Moscow considers to be its direct sphere of influence. Igor Ivanov, the Russian foreign minister, warned that the US risked worsening the already fraught security situation in the Caucasus after reports suggested the Pentagon may send between 100 and 200 men to train Georgia's army to combat terrorism. The aim of the exercise is to tackle the dozens of al-Qa'ida fighters who Washington believes to be in the Pankisi Gorge region of northern Georgia close to Chechnya, where Russia has been fighting a bloody war with separatist rebels for most of the past decade. Moscow has long maintained the Chechen war is largely fuelled by Islamic extremists, some of them Afghanistan-trained al-Qa'ida operatives. But at this point the US-Russian anti-terror partnership begins to unravel. Russia is already worried about America's increased military presence in central Asia. It wants a joint Russian/Georgian operation to tackle the problem. But Georgia's fragile government is deeply suspicious of Russia, while its President, Eduard Shevardnadze, is America's strongest friend in the region. Full article at: http://news.independent.co.uk/world/russia/story.jsp?story=212428 From Michael.Keaney at mbs.fi Fri Mar 1 01:24:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:09 2006 Subject: [A-List] BP watch Message-ID: BP stops paying political parties 'Blair Petroleum' denies Enron influenced decision Terry Macalister and Michael White Friday March 1, 2002 The Guardian BP, Britain's biggest company, is to scrap all political donations worldwide as criticism mounts about corporate influence on government policy, following the Enron collapse in the US and the "Garbagegate" row in Britain. The world's third-largest private sector oil group donated $840,000 (?600,000) in the US last year. Its close relations with the British government - with key executives moving between the two - have left it dubbed "Blair Petroleum", athough it has made no political donations in Britain for a decade. Lord Browne, BP's chief executive, told a meeting of the Royal Institute of International Affairs at Chatham House in London that large multinationals must tread warily from now on. " "We must be particularly careful about the political process because the legitimacy of that process is crucial both for society and for us, a company working in that society. "That is why we've decided, as a global policy, that from now on we will make no political contributions from corporate funds anywhere in the world. We'll engage in the policy debate, stating our views and encouraging the development of ideas, but we won't fund any political activity or any political party." Company officials denied the Enron affair had influenced its judgment and made clear it would not halt its lobbying of governments. The move comes at a sensitive time for Downing Street. This month Tony Blair was accused of helping a party donor, Indian billionaire Lakshmi Mittal, with a Romanian steel deal - and yesterday the Guardian revealed that another business donor, Uri David, is under investigation for helping to launder money in Switzerland. Last night the issue prompted a call for a "mature debate" on the problems of party finances from the leader of the Commons, Robin Cook, a long-time supporter of state funding for political parties. "We cannot simultaneously say the Labour party cannot be funded by trade unions, that no party should be funded by business and at the same time say "you're not going to get taxpayers' money". Political parties have to be funded by someone," Mr Cook told reporters at Westminster. BP and rival Shell were regarded by some government ministers in the past as arms of the foreign office and close ties remain. The prime minister's right-hand woman Anji Hunter recently moved over to become director of communications at BP. Company director David Simon - now Lord Simon of Highbury - moved the other way, becoming a minister for competitiveness in Europe. Among other users of the revolving door between Whitehall and BP is Byron Groat, head of chemicals at BP, who has been helping the Department of Trade and Industry on competitiveness issues, while Bryan Sanderson, a former head of BP's chemicals division stepped down and became chairman of the government-backed Learning and Skills Council. Full article at: http://politics.guardian.co.uk/labour/story/0,9061,659930,00.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Fri Mar 1 01:27:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:09 2006 Subject: [A-List] US corporate state: legal setback Message-ID: Cheney confounded over energy secrets Julian Borger in Washington Friday March 1, 2002 The Guardian Environmentalists claimed a significant victory over the Bush administration yesterday after a federal judge ordered the release of documents on secret contacts between a government taskforce on energy policy and industry officials. The judge, Gladys Kessler, ruled that the release of the 7,500 pages of potentially embarrassing documents was in the "extraordinary public interest" - overriding the ruling of Vice President Dick Cheney, who led the taskforce, that disclosure would infringe on "executive privilege". She told the energy department to hand over the files by March 25. The ruling in the US district court in Washington represented a victory for the Natural Resources Defence Council, an environmental pressure group which had gone to court to demand the documents' release. The NRDC had first requested the documents from the energy department under the Freedom of Information Act, but had not received a response. Judge Kessler ruled that "there can be little question that the department of energy has been woefully tardy" in its treatment of the request. The auditing arm of Congress, the general accounting office (GAO), is pursuing a parallel lawsuit to force Mr Cheney to release details of which companies his taskforce had consulted before drawing up a comprehensive energy plan. That plan is currently being considered in the Senate, where Democrat majority leaders have taken a stand against it, denouncing it as soft on the nation's worst polluters. Democrats and environmentalists have accused the Bush White House of allowing the energy industry - including the disgraced and now bankrupt Enron corporation - disproportionate influence over the drafting of policy, as a reward for substantial campaign contributions to Republican candidates in the 2000 elections. Energy departments said they would hand over the papers. "We've always said we would comply and have worked diligently to do so," a spokeswoman said. The ruling only affects meetings and correspondence involving energy department employees who were seconded to the Cheney taskforce in the first few months of the year. The parallel GAO case covers all administration officials, including those from the White House. An NRDC lawyer, Sharon Buccino, told the Washington Post: "Justice is finally served - This is going to expose the Bush energy plan for what it is: payback for polluters." Full article at: http://www.guardian.co.uk/international/story/0,3604,659773,00.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Fri Mar 1 01:31:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:09 2006 Subject: [A-List] Australian imperialism Message-ID: Plea as nation sinks below waves Patrick Barkham in Sydney Friday March 1, 2002 The Guardian The tiny Pacific island nation of Tuvalu will use its maiden speech to the Commonwealth heads of government meeting this weekend to call for action on global warming before it disappears under rising seas. The new member's speech reflects anger among impoverished, low-lying Commonwealth countries, which fear that discussion at the Brisbane summit - which will be attended by Queen and Tony Blair - has been gagged. Environmentalists yesterday accused Australia of trying to keep climate change off the agenda at the meeting of the 54 Commonwealth nations. "Australia has worked diplomatically very hard and very brutally to keep the issue out of all official communications," said Clive Hamilton, who heads the Australia Institute thinktank. "Any mention of climate change is embarrassing for the Australian government, given the appalling position it takes on the Kyoto protocol." Australia is the world's second-highest per-capita emitter of greenhouse gases. It signed an agreement with the US on Wednesday to cement opposition to the Kyoto treaty. Tuvalu is expected to announce that both nations could be targeted by the island - predicted to be the first country rendered uninhabitable by global warming - in future possible legal action . Fiji has also expressed concern that climate change is not on the heads of government meeting's agenda. The Australian government last night said that accusations that it had suppressed debate were "wide of the mark". It expected that the issue would be raised in formal sessions. Four of the five islands most vulnerable to climate change - Tuvalu, Kiribati, the Maldives and Tokelau - are now part of the Commonwealth. Some of Tuvalu's 10 sq miles of islands have begun to slip into the sea, and much of its main atoll was swamped by its highest ever tide last year. Millions of people in Bangladesh, another Commonwealth country, would be displaced if seas rise by a metre in the next century - the upper end of predictions made by the intergovernmental panel on climate change. "Climate change is a basic survival issue," said Patrina Dumaru of Fiji's Pacific Concerns Resource Centre. "If the Commonwealth sidelines this issue, they are violating some of the fundamental principles which they promote - of justice, good governance and democracy." Full article at: http://www.guardian.co.uk/international/story/0,3604,659757,00.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Fri Mar 1 01:33:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:09 2006 Subject: [A-List] Financial regulatory crisis: Arthur Andersen woes Message-ID: New attack on Andersen Lawsuit alleges 'lapdog' role at Global Crossing David Teather in New York Friday March 1, 2002 The Guardian Accountancy firm Arthur Andersen was embroiled in further controversy yesterday, accused of being bullied into approving murky accounting at Global Crossing, the failed telecoms company. A lawsuit filed by a former Global Crossing executive against directors of the company alleges that Andersen signed off on a series of "misleading transactions and accounting methods" because of pressure applied by the firm. "Rather than being Global Crossing's corporate 'watchdog'", the filing says, Andersen behaved "more like a lapdog". The lawsuit has been filed by Roy Olofson, who worked at Global Crossing for nearly four years before losing his job in December. He claims to have been fired for raising concerns that Global Crossing was manipulating its finances to prop up the share price. He alleges that Andersen was compromised because the executive vice-president of finance at Global Crossing, Joseph Perrone, had been a partner at the accountancy firm. He was chief audit officer at Andersen on the Global Crossing account before joining the latter in May 2000. "Andersen signed off on some or all of these transactions and irregularities due, in part, to the pressure Perrone brought to bear upon Andersen and his former colleagues," the filing claims. "As a result ... Andersen failed in its role as an independent auditor." Andersen has been hit by a wave of lawsuits related to the collapse of energy firm Enron, where it was in charge of auditing. The firm has reportedly made an offer of $750m to settle the outstanding suits. Mr Olofson alleges that a series of capacity swaps with other telecoms companies were incorrectly accounted for as revenue to meet the expectations of Wall Street. He details transactions with a series of companies including one with Cable & Wireless. The allegations were made formally in a letter to the company's ethics officer last August and made public last month. They have formed the basis for investigations by, the securities and exchange commission, and the US attorney's office in California. Global Crossing said the concerns raised by Mr Olofson have been fully investigated and found to be without merit. But a spokeswoman said the company had not yet had a chance to review the lawsuit. A spokesman for Andersen also said the accusations were without merit. "Andersen conducted its audits with independence and complied with all SEC and the profession's audit guidelines at all times." Full article at: http://www.guardian.co.uk/business/story/0,3604,660034,00.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Fri Mar 1 01:38:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:09 2006 Subject: [A-List] EU integration Message-ID: Approaching a constitution for Europe By Larry Siedentop Financial Times: February 28 2002 The European Union is at last searching for greater democratic legitimacy. Partly this is to prepare for enlargement. But it is also a tacit admission that the construction of Europe has neglected an important range of issues - issues that can only be called constitutional. Constitutional questions are sometimes dismissed as not being bread-and-butter issues. Nor are they. But they are just as important. For better or worse, they shape a citizen's identity. If Europe is ever to have a demos - a coherent citizenry that does not supplant but, rather, supplements the demos of each member state - it can no longer evade constitutional issues. As the Convention on the Future of Europe begins, under former French president Valery Giscard d'Estaing, let me suggest three tests for any successful democratic political system. (I avoid the word "state" - even the most hardened Eurosceptics can hardly deny that the European Union is a political system of some sort.) First, it must be readily intelligible. Second, it must be able to mobilise and shape opinion: to educate. And, third, it must be able to entertain, providing public theatre. By these tests the EU has not been a success. That is why its very real achievements are sometimes discounted by opinion in member states, where the EU is associated with opaque decision-making, unaccountable elites, bureaucracy and maladministration. By avoiding constitutional issues, the EU has been unable to identify itself with the cause of self-government in Europe. But that is what matters most. Eurosceptics will probably deplore even the exploratory constitutional process now under way. They may interpret it as the death-knell of national autonomy. Yet, curiously, their own emphasis on encroachments by Brussels, on the centralising of power, reveals how ineffective the nation states have been in the past 15 years in defending their autonomy. An incremental approach to European integration, especially since Maastricht, has not provided effective limits on centralisation. That is why it is important to distinguish between federal structures and centralisation. Invoking a federal super-state is a misnomer. The point of a federal structure is to limit the centralising of power. By beginning to define spheres of authority - who decides what - the convention offers hope of more effective checks on the growth of a central bureaucracy. It should be seen as a way gradually to create a European demos over a small range of issues - a public opinion that, by setting limits to the common enterprise in Europe, reinforces national identities. The goal should not be so much to write a constitution rapidly for Europe but to begin to create a constitutional sense - which may one day make possible a written constitution. It was the existence of such a constitutional sense in America that made possible the writing of the US constitution. To create such a constitutional sense in Europe, institutions and principles must be joined together more clearly. The council system must be reformed and its deliberations made subject to the principle of public scrutiny. A European senate of leading national politicians should be created in order to reconnect national political classes with the European project and give the subsidiarity principle sharper teeth. Such a senate could slowly define a frontier between Brussels and the nation states on the basis of case law. It might also review existing legislation in order to restore some functions to member states - and in that way combat fatalism about the direction of change in Europe. The convention - which of course invites comparison with the Philadelphia Convention of 1787 - has an awesome responsibility. Will Mr Giscard d'Estaing prove to be the James Madison of our day? The odds against success are greater than they were in Philadelphia in 1787. It is not only that political cultures shaped by different forms of the state have to be reconciled - and, with enlargement, that means some states with limited experience of representative democracy. It is also that, despite extraordinary changes in European civil society with the progress of integration, the informal conditions that contributed to the success of American federalism - for example, consensus about the role of the state and the mobility of labour - cannot yet be matched in Europe. It is good that a Frenchman will preside over the convention. For it is France that is chiefly responsible for the achievements of the EU and for its present constitutional quandary. Yet the most important development in Europe latterly is that for the first time since 1958 the French are not sure what they want for Europe. And that development is no accident. French uncertainty is the result of at least three things. First is the project of enlargement. Enlargement has always made the French equivocal, at best. For it puts at risk the model of deep integration which the French champion and apparently favours something more like the free trade area long supported by Britain. The second is the growing reaction in nation states to the rapid acceleration of integration since the later 1980s - an acceleration that the French promoted as the price of accepting German unification. The Mitterrand/Delors project for Europe, which included monetary union, involved a considerable transfer of powers from the nation states. A nationalist reaction to such transfers did not develop overnight. But it is now observable in many nations: with the Danish and Irish referendums, the rhetoric of rightwing governments in Austria and Italy, Edmund Stoiber's bid for the chancellorshipin Germany and Jean-Pierre Chevenement's appeal to an intransigent French republican ideal, dirigiste and protectionist. The third source of French uncertainty about European development goes deeper. Some French are tempted to cite the problems of cohabitation. In fact, it is the nature of the French state tradition. All European nations with unitary forms of the state have some difficulty understanding the workings of a federal system - and indeed sympathising with the delays, muddles and conflicts of jurisdiction that federalism can display. A recent example of that difficulty was the reaction to the election of President George W. Bush, when it seemed to many Europeans that the majority principle was being flouted. By and large, Americans worried less about that, because federalist tradition leads them to accept that at times a territorial principle will constrain the majority principle. Of all European states, the French state tradition is furthest from a federalist mind-set. The ideal of the one and indivisible republic - with a sovereign will invested de facto in the majority - traditionally makes the dispersal of authority unpalatable to the French. Since 1981 decentralisation in France has begun to nibble away at those traditional republican attitudes, as has a more activist Constitutional Council. But the residual strength of unitary French ideas should never be underestimated. They can be seen in the furore that Lionel Jospin's proposal for limited legislative devolution to Corsica has aroused in France. The dilemma facing the EU today is that French initiatives have brought Europe to the point where constitutional issues have become unavoidable. But, the French republican tradition is singularly ill-equipped to deal with the problem of dispersing authority in order to limit the centralising of power in Europe. So the French draw back from the federalist implications of their own project. The instincts of the French enarques are bureaucratic rather than constitutional - putting a premium on coherence and efficiency rather than the checks and balances of a constitutional order. This is the dilemma that the commission must now confront. Fortunately, Mr Giscard d'Estaing is one of the most intelligent politicians active in Europe since 1945. His past pronouncements on the development of the EU suggest that he is sensitive to the drawbacks of a bureaucratic tradition - after all, some of its subtlest critics have been French liberals such as Montesquieu and de Tocqueville. Yet the process of constitutional inquiry may be especially painful for France. Because France has been the source of most constructive proposals for Europe, it has until recently dominated the affairs of the EU. But the consequence is that France has not had to separate sharply its own national interests from European interests. That phase of postwar history is now over. The things that have created France's current uncertainty will not go away. The writer is the author of Democracy in Europe (Penguin, 2001) and fellow of Keble College, Oxford university Full article at: http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3IKTGK7YC &live=true Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Fri Mar 1 01:41:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:09 2006 Subject: [A-List] New economy bull Message-ID: A true and fair view of productivity Alan Greenspan has endorsed an overstatement of US economic performance comparable to Enron's accounting methods, says John Kay Financial Times: March 1 2002 The collapse of Enron has shaken markets because it has reminded everyone that corporate accounts are interpretations, not facts. Even the most conservative of accountants has been under pressure to find statistical confirmation of the stories of heroic leadership, organisation transformation and technological revolution. Everyone knew these things were true, even if data were sometimes slow to reveal it. This hubris distorted perceptions not only of the performance of US companies but also of the performance of the US economy itself. We talk about economic growth as if it were objective fact, like population growth or temperature. But national income accounting is every bit as much a subjective enterprise as the private- sector accounting on which it ultimately depends. When politicians and pundits talk about economic growth they are referring to movements in the level of gross domestic product at constant prices. This concept is measured gross - no account is taken of asset depreciation or obsolescence. And GDP is deflated by a price index so that it represents the volume, rather than the value, of output. Such deflation was easy when output was mostly steel but is much harder in the knowledge economy. A bar of steel is - more or less - a bar of steel: the volume of computers is an elusive concept. As computer prices have fallen, people have got more computer for their money. But how much more? Statisticians use two main techniques. One is to track the falling price of the same computer. The other is a technique known as hedonic price measurement, which allows for changes in the quality of goods. Depending on how you do the sums, the fall in computer prices in the past five years ranges from 30 per cent to 75 per cent. Britain is relatively conservative while the US is very aggressive. This makes a big difference. Real expenditure on computers in 2000 in Britain was about ?10bn. The UK's Office for National Statistics estimates that computers that cost ?10bn in 2000 would have cost ?18bn in 1995. But if US price indices were used, the figure would be ?37bn. The difference amounts to 2 per cent of British GDP. Over the five years, Britain's reported growth rate would have been almost ? per cent a year higher if UK statisticians had used US price indices. So what is the right answer? We are not trying to measure the benefits of computers. These may well be much larger than ?18bn, or even ?37bn, but such effects are already included in the output of the industries that use computers. The ?18bn figure is an attempt to answer a different question. What part of business spending on computers should be capitalised, rather than treated as a cost against current output, because it contributes to future rather than current output? General accounting practice allows you to avoid charging such expenditures against profits, with two qualifications. You must capitalise it at its actual cost, not at some hypothetical measure of what it might have cost in the past or be worth in the future. And you must write off capitalised expenditure over the lifetime of the asset. The rules for measuring GDP do not impose either of these conditions. They allow extravagant revaluation. And they do not require depreciation of the capitalised expenditure. Under standard accounting principles, the maximum expenditure you could capitalise would be the whole of real spending on computers in 2000: ?10bn or so. And you could justify this only if you could argue there was no need for any write-down of previous expenditure on computers as a result of scrapping or technological obsolescence. My estimate is that the replacement cost of the stock of computers in Britain in 2000 was probably about ?20bn. Available computing power probably rose in 2001 by 20 per cent or so as a result of net new investment, minus depreciation and scrapping. Because of the falling price of computers, this larger stock of computing power was probably not worth any more at the end of the year than the smaller stock was worth at the beginning. A kindly auditor, such as the Andersen folk down in Houston, might allow you to treat ?5bn or so of computer expenditure as capitalised. If a commercial company seriously proposed to credit ?37bn to its profit and loss - on the grounds that this is what it might have had to pay if it had not bought them so cheaply - its directors would certainly face a congressional committee and probably end up in jail. The bottom line of all this is that published data on GDP probably overstate output growth in the UK over the past five years - but by less than 1 per cent. Economists have known for years that constant price GDP was a flawed measure of output. But until the information and communications technology (ICT) revolution, errors were small and were offset by the advantages of data series that were comparable over time and between countries. US statisticians were quick to see the difficulties falling computer prices might pose and adopted a procedure called chain linking to reduce the distortions. Britain's ONS will follow but has not yet done so. The problems of interpreting US accounts are both complicated and reduced by chain linking. But the aggressive US assumptions about ICT price falls mean that the difference between GDP growth and output growth is larger in the US than in Europe. Over the period 1996-2000, ICT investment contributed almost 1 per cent a year to reported US growth. Simply substituting net investment at cost for gross investment at revalued prices reduces this by about half. The effect is that reported US GDP growth overstates the real growth of US output by about ? per cent a year over the period. This accounting difference is equivalent to the main part of the productivity miracle that still enthuses believers in the new economy. It is not just US companies whose figures are now in question. USA Corp capitalised much of its software expenditure, revalued that expenditure at the highest price it might ever have paid, calculated its profits without any depreciation of revalued assets and announced stunning results to its investors on the basis of these assumptions. Who were its officers at the time? Bill Clinton, the former chief executive, may be spending more time with his family. But Alan Greenspan, who has repeatedly argued that US economic statistics should be more consistent with the optimistic reports of US business people, is still the chief financial officer. Full article at: http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3WU4TZ8YC &live=true Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Fri Mar 1 01:45:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:09 2006 Subject: [A-List] Russia/US developments Message-ID: Nato's rocky road to Moscow By Judy Dempsey in Brussels Financial Times: March 1 2002 Nato has thrown down the gauntlet to Russia. But Vladimir Putin, Russian president, has plenty of time to decide if he will pick it up. The challenge on offer, when top diplomats from the US-led alliance visit Moscow next week, is a new relationship between the two sides. But if Nato believes it is going to be plain sailing, it is in for a big surprise. In some ways, Mr Putin has put Nato exactly where he wants it. Most of the European members of the alliance want a much closer relationship with Russia. But across the Atlantic in Washington, the Republicans, and for that matter, the Pentagon, are far less enthusiastic. Yet the last thing Nato wants is a rift between the US and its European allies. If negotiations for this new relationship are managed badly, Mr Putin will have achieved something that has escaped every previous Russian leader: creating a rift between the Europeans and the US. The alliance has not had the best experience in trying to forge new ties with Russia. Lord Robertson, Nato secretary general, got his fingers burned pretty badly last November when he visited Moscow. That visit took place just after Tony Blair, UK prime minister, had sent a letter to Mr Putin offering the Russian leader a new relationship with Nato. Mr Robertson told Moscow he had the full backing of the alliance to explore the Blair initiative. The US thought otherwise. It pulled the plug on the idea just days before a meeting of Nato foreign ministers in Brussels last December. The Pentagon thought Britain was going too fast and too far. It was much too early to offer Russia anything that would get possibly close to a veto over decision-making. In any event, Nato has now decided it will try to have something in place in time for the next meeting of foreign ministers in Reykjavik, in May. Hence the visit by Gunter Altenburg, one of Lord Robertson's top advisers, to Moscow next week. The proposal on the table in the Kremlin would involve a new forum bringing together the 19 Nato ambassadors already grouped in the North Atlantic Council (NAC) - the alliance's political decision-making body - and Russia. There would be lots of things to debate, including peace keeping forces and intelligence sharing on weapons of mass destruction, among others. More importantly, Russia would have equal status with the other 19 Nato members - effectively giving it the right of veto in an organisation that has always reached decisions through consensus. There are exceptions. Anything to do with military decisions would be out of bounds. And if Russia became a bit difficult even on the chosen topics for frank discussion, or if any country believed its interests were threatened by Russia, Nato is proposing a safeguard mechanism via which it could retrieve a topic from the "20" and bring it back into the safe confines of the NAC. If Russia accepts these new arrangements, the old Permanent Joint Council - essentially a regular meeting of the 19 Nato ambassadors plus the Russian ambassador - will be scrapped. The PJC was pretty useless anyway. Nato pre-cooked the agenda and pre-cooked the decisions. Russia was invited to sit there without having any real voice. In retrospect, it is surprising Mr Putin put up with the arrangement for so long. In some ways, it makes sense for Russia to accept these new arrangements. Since it failed to change Nato from outside, it may have a chance to turn the military alliance into a much more political and security organisation if it can work from within. That is exactly what some US Republicans would fear. Nato is one of the few multinational organisations that the US formally dominates. If, as Russia seems to want, Nato was to become the security arm of the broad Organisation of Security and Co-operation in Europe, the US's influence would be greatly diminished. Hence Mr Putin's ability, for the moment, to choose when, if at all, to run with Nato - and under what terms Full article at: http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3W37VR8YC &live=true Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Fri Mar 1 02:03:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:09 2006 Subject: [A-List] The Policy Network Message-ID: Socialist Campaign Group News No. 173, February 2002 Tel's Tales: "Hub Caps" Like Militant, the Blairites are always setting up front organisations. We have had "Progress", the Labour Renewal Network, the New Politics Network, the New Local Government Network, and the New Health Network. Now we have yet another talking shop, which goes by the bizarre name of "The Hub". Apparently many Blairites have noticed that the government is running out of steam and The Hub's job is to sort this out. Proportional representation is top of their agenda. Prominent are Tony Robinson, David Marquand, who defected to the SDP and the ubiquitous Matthew Taylor, formerly Labour's AGS and now director of a right of centre "think tank". ===== NOTE: Marquand's recent scribblings include a piece in New Left Review 3 comparing Blair favourably to Stanley Baldwin, Conservative prime minister during the 20s and 30s (and is a further reflection on Perry Anderson's editorial line). Meanwhile Matthew Taylor is director of the Institute for Public Policy Research, a key plank of New Labour's ascendancy and a forceful advocate of the the privatisation agenda still gripping UK government policy, as it prepares to take advantage of a revised GATS in the wake of the Doha trade round. More on that to follow. Taylor himself, on the IPPR website, claims to have expertise in something called "public sector modernisation". See http://www.ippr.org/about/index.php?current=staff The trustees of the IPPR include a number of interesting individuals. The Gaitskellite/SDP/New Labour bloc is dominant, as you would expect: Anthony Giddens, Neil Kinnock, David Marquand, "Lord" Gavron (husband of London deputy mayor Nicky), "Lord" David Puttnam, Richard Lambert (recently departed editor of the Financial Times), and Shirley Williams. However, given the IPPR's vanguard ideological role concerning "public private partnerships", it is a little surprising to find GMB union general secretary John Edmonds there. Edmonds has been causing considerable concern to Tony et al. re his union's opposition to PPPs and a consequent reduction in GMB funding of the Labour Party, itself seriously in debt. What can this all mean? Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Fri Mar 1 03:59:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:09 2006 Subject: [A-List] New economy bull Message-ID: The siren plea for uncreative destruction: Silly incentives, lousy takeovers Financial Times; Feb 25, 2002 By JOHN PLENDER Goodwill seems a rather odd word to describe the thing that companies are writing off with such monotonous regularity after the 1990s acquisition spree. Hot air might be a better description. A new survey by KPMG Consulting suggests that many cross-border takeovers launched in the bull market have been disastrous, which is just what readers of most other surveys would have expected. It has been fashionable to regard takeovers as an instrument of creative destruction . Yet the market in corporate control has been a veritable graveyard for the aspirations of US and British managers - witness Marconi, Tyco, ICI et al. Accounting apart, nothing very creative was going on in the late 1990s, while a great deal of shareholder value was being destroyed as managers overpaid for acquisitions. Now that the extent of this corporate catastrophe is becoming clear, will there be an end to further value destruction ? Only in the short term. Whitehall seems to think a market in corporate control constitutes some kind of systemic advantage and that the loss of the European takeover directive is a disaster for the European Union. The vested interests at the top end of the City food chain in favour of frenetic takeovers are also very powerful. Meantime, the capital market incentives ensure that managers are anxious to keep the City in fees. Former investment banker Tony Golding perfectly captures the psychology in a recent book * where he explains how investment institutions and analysts over-identify companies with their chief executives and then make exorbitant demands of them. A new manager confronting a difficult situation is usually given a grace period of 18 months before hard evidence of improvement is expected. The maximum time horizon, adds Golding, is three years. Most large businesses are too complex to be turned round in that time. So who can blame managers, heavily laden with stock options, from heeding the siren call of the investment bankers who propose a "transforming" takeover? Even if it wrecks the balance sheet, the manager still receives a reward for failure. The problem is not with the principle of a takeover market - merely that the incentive structure is so warped that takeovers have become a serious hazard. Shame the institutional shareholders are not more exercised about it. What a way to invest our pensions. *The City: Inside The Great Expectation Machine, Financial Times-Prentice Hall, 2001. Full article at: http://globalarchive.ft.com/globalarchive/article.html?id=020225001276&q uery=The+siren+for+uncreative+destruction Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Fri Mar 1 04:06:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:09 2006 Subject: [A-List] Japan crisis: UK steps in Message-ID: Japan urged to adopt British-style economic reforms Financial Times; Feb 27, 2002 By ED CROOKS The British government will today urge Japan to press ahead with privatisation and other structural reforms as the best way to pull the country out of its deepening economic crisis. Paul Boateng, the financial secretary to the Treasury, will address a seminar in Tokyo to offer the benefits of Britain's experience, "for good and ill", with privatisation and public-private partnerships. Speaking to the Financial Times before he left for Japan yesterday, Mr Boateng said: "It is important for them that they do press ahead with that programme of reform, even though the external environment is not a particularly supportive one: all the more reason why they need to grapple with the challenges that they face." He added: "Our economic interest is very much in the success of Japanese economic reform," - in part because Britain was the most popular location for Japanese investment into the European Union. In 1999-2000 there were 58 new Japanese inward investment projects in Britain, and in 2000-01 there were 51. The figure for the current financial year seems likely to be lower again. The US and many European governments have become increasingly frustrated with the slow pace of reform in Japan, after Junichiro Koizumi's election as prime minister last April raised hopes the government would at last get to grips with its inefficient industries and shaky financial system. Japan's macroeconomic policies, including the value of the yen, have also been the source of international tension, but Mr Boateng decline to express an opinion on them. "We don't comment on other countries' exchange rates," he said. "Our view is that exchange rates are a function of the relative strength of an economy's fundamentals and its macroeconomic policy settings, and that is a matter for Japan." Mr Boateng admitted that Britain's experience of privatisation was not an unblemished record of success, although he blamed the failures on the Conservatives, including regulation that was "not always up to it", the failure to create sufficient competition, and the lack of incentives for the private sector to invest. He said he and the private-sector advisers, including lawyers, bankers and accountants, who have travelled with him to Tokyo could tell the Japanese: "These are some of the things you need to look out for." Another issue that Mr Boateng plans to raise with Japan is its contribution to international development assistance, which has come under pressure because of the government's plans to control its spending. "Our message is that this isn't a time for retrenchment and inward looking . . . We need to take steps to ensure that, post-September 11 in particular, the global downturn is not allowed to contribute to a spiralling decline on the part of the developing world," he said. Full article at: Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Fri Mar 1 04:15:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:09 2006 Subject: [A-List] UK corporate state: GATS preparations Message-ID: Highways Agency seeks allies on road to change: Getting private companies to run core network is called a partnership rather than privatisation, writes Juliette Jowit Financial Times; Feb 22, 2002 By JULIETTE JOWIT The Highways Agency calls its decision to get private companies to run the core road network a "partnership". Others would call it privatisation. What is a "privatisation" has been muddied by often pejorative connotations; so long-term rail operating franchises are "privatised", but government claims longer Tube infrastructure contracts are not. Either way, the government's strategic roads agency recognises the similarities and says they have learned from mistakes. A lot of thinking has "matured", said Steve Rowsell, the agency's procurement director - especially on tricky subjects of how much risk the private sector takes, and how much control the public sector retains. He said: "What we have to do is develop the details of the process and precise forms of contract to support it. There's a number of issues involved and developing the actual contract and appropriate incentives in the contract." The Highways Agency's 9,400km network of motorways and other main routes is to be consolidated from 20 to 14 maintenance areas. The agency, with outside contractors, is responsible for planning and management of the maintenance programme, and the work is let on seven-year contracts to separate companies. The plan is to merge those two functions and to allow longer franchises of 30 years. Contractors would plan long-term maintenance, manage and inspect the work programme, and run other services where appropriate, such as emergency rescue, video surveillance and supply information on congestion to the national traffic management centre. They would be paid for the basic work, and could earn bonuses if they kept traffic flowing and improved safety. If they perform badly "the penalty is in the form of a lack of payment", said Mr Rowsell. The companies could finance up-front investment, considered important to reduce future costs, and procure projects such as road widening or bypasses on behalf of the agency. Targets and costs could be reviewed annually to account for factors such as traffic growth. The first pilot is likely to be put out to tender in 2004. If successful, it was expected to be rolled out across the country, said Mr Rowsell. "We'll have to see what the response is," he said. The scheme follows a similar change in Scotland last year, where private companies bid for and won four five-year contracts to run strategic road maintenance. There, the experiment has been highly controversial: critics claim gritting is done with a less-effective salt substitute, maintenance is ignored in rural areas, and the companies cannot keep up with cutting grass verges. Opponents blame the Scottish executive's boast that it saved Pounds 75m over the five years. "There's nobody doing gritting, nobody doing maintenance, that's why they are saving money," said the Scottish National party. The Highways Agency said it consulted the Scottish executive about their scheme, but there were important differences. The contracts were not about cutting quality, and money or jobs freed up would be spent on other parts of the network, said an official. Full article at: http://globalarchive.ft.com/globalarchive/article.html?id=020222001303&q uery=motorway+network Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From dch at gcal.ac.uk Fri Mar 1 05:56:02 2002 From: dch at gcal.ac.uk (Douglas Chalmers) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] Sound familiar? In-Reply-To: <200202222219.RAA20837@kachifo.cc.columbia.edu> Message-ID: On 22/2/02 10:20 pm, "Louis Proyect" wrote: > "a party of great vested interests, banded together in a formidable > confederation, corruption at home, aggression to cover it up > abroad...sentiment by the bucketful, patriotism by the imperial pint, > the open hand at the public exchequer, the open door at the > public-house, dear food for the millions, cheap labour for the > millionaire." > > Winston Churchill describing 1904 England; cited by Lewis Lapham in > the March 2002 Harper's > Actually Winston Churchill (at that time a Liberal MP, having left the Tory Party), was describing the Tory Party itself. He later re-joined the Tory Party and when questioned said something to the effect that any rat can leave a sinking ship, but it takes a special type of rat to do it twice. -- Douglas Chalmers Division of Economics and Enterprise Glasgow Caledonian University 70 Cowcaddens Road Glasgow G4 OBA Tel: 331 3350 E.mail: d.chalmers@gcal.ac.uk WebPage: http://cbs3.gcal.ac.uk/eco/WebAccounts/~dch/dch.htm "hypertext is greater than the sword" From Michael.Keaney at mbs.fi Fri Mar 1 05:59:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] Financial regulatory crisis: plus ca change Message-ID: A setback for the one-stop shop: MULTIDISCIPLINARY PARTNERSHIPS: A European court has stirred the 'conflict of interest' debate over links between lawyers and accountants, write Nikki Tait and Michael Mann Financial Times; Feb 25, 2002 By MICHAEL MANN and NIKKI TAIT In a post-Enron world, mere mention of the phrase "conflict of interest" ought to send shud ders through any accountancy practice. So, at face value, last week's ruling by the European Court of Justice on efforts by two of the Big Five accountancy firms - PwC and Andersen - to incorporate two Dutch law practices, as part of their strategies to create multi-disciplinary partnerships (MDPs), was hardly encouraging. The court found that the Dutch Bar was justified in considering that its members "might no longer be in a position to advise and represent their clients independently and in the observance of strict professional secrecy" if they belonged to an organisation that also audited the financial results of transactions in which their legal services had been involved. This, the court added, was in spite of the fact that the prohibition of MDPs could restrict competition for legal services and deny potential users access to "one-stop shop" offerings. The court, it should be stressed, made no reference to the Enron scandal - where Andersen has been under the spotlight because it provided both auditing and consulting services to the now-bankrupt energy company. The Dutch arrangements that Andersen and PwC were proposing - with Wouters Advocaten & Notarissen and with an association of lawyers headed by Mr J.W. Savelbergh - dated back to 1995 or earlier, long before the Enron debacle. Nevertheless, observers were quick to draw some parallels. "The prohibition (of MDPs) may be justified on the basis that the Bar wants to avoid conflicts of interest. In the light of what happened with Enron, this makes a lot of sense," said Romano Subiotto, a Brussels- based partner at Cleary Gottlieb, the US law firm. "The Enron affair is comforting to the judges in their decision." Ian Forrester QC, a partner at White & Case, the law firm, had much the same response. "The court said that when a professional body acts in a way to defend the interests of its members according to standards which can be articulated, it is allowed to do so even if that restricts competition to some extent," he said. "This ruling is probably perfectly in harmony with the world post- Enron." So does the European Court of Justice ruling mean that the big accountancy firms will have to rethink their MDP strategies? These, after all, have become pretty significant for some of the Big Five . In the UK, for example, only Deloitte & Touche lacks a law firm of its own. Meanwhile, on a global basis, Andersen Legal was clocking up fee income of about Dollars 590m (Pounds 414m) worldwide by mid-2001, thanks to a professional staff of almost 2,900. Landwell, the legal unit linked to PwC, was only slightly smaller, with a staff of 2,700 and estimated fee income of Dollars 420m. But Andersen and PwC do not seem unduly worried. For a start, from a procedural standpoint the court ruling is not quite the end of the story. The matter now returns to the Dutch courts, where Andersen, at least, says it will "continue to press our arguments". That may not prove fruitful. However, at a more political level, Jos Wouters, one of the Dutch lawyers involved in the thwarted Andersen arrangement, notes that the ruling has coincided with publication of some draft rules from the Dutch association of notaries. In contrast to the attitude of the Dutch Bar, these are aimed at allowing members to enter MDPs. "There is an inconsistency in that, I would think," says Mr Wouters, suggesting that this is a subject that should at least be aired. Second, the ruling left open the question of what standards individual Bar associations should, or might want, to adopt. As Mr Subiotto puts it: "This judgment leaves countries or Bars completely free to decide if they can live with such conflicts of interests." Legal traditions are, indeed, very diverse. For example, the Law Society of England and Wales was quick to note that English case law has established that it has a duty to act "in the public interest", rather than that of its members alone. If that is the case, runs the argument, there may be grounds to give the competitive advantages of MDPs (which the European Court of Justice acknowledged) more weight. Certainly, the Law Society appeared to think so last week: "We support the principle of MDPs as part of our commitment to improve access to legal services and choice for consumers," it said in response to the court ruling. Third, it seems likely that accountancy firms will now take a close look at the way in which they structure their relations with associated legal practices - the aim being to gain the claimed advantages of MDPs without running foul of any "conflict of interest" strictures. PwC has already gone down this track. Indeed, it quickly implied that last week's judgment was somewhat academic since the Dutch Bar had subsequently "blessed" a looser, less integrated relationship between Landwell and PwC. In essence, Landwell, which was set up as PwC's legal arm three years ago, is said to be organised through a separate Swiss co-operative structure. The main link with PwC is "a co-ordinating board", which aims to align the two organisation's strategies, although costs and facilities are sometimes shared where this is permitted by individual Bar rules. There may also be specific service agreements between the two functions. Even so, there is still the question of whether the weight given by the European court to the Dutch Bar's worries will deter other legal firms from embracing the MDP approach - particularly in the post-Enron climate. On this aspect, there is no easy answer. But Andersen, at least, was maintaining last week that past evidence does not suggest a problem. "We've lived for the past 10 years with this (Dutch) litigation on the go and we've been very successful in bringing people into Andersen Legal," said the firm's Chris Hinze. Full article at: http://globalarchive.ft.com/globalarchive/article.html?id=020225001241&q uery=%22Big+Five%22 Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Fri Mar 1 06:05:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] NATO/US split Message-ID: Washington 'must bridge gap with Nato allies' MILITARY TECHNOLOGY: LORD ROBERTSON URGES WASHINGTON TO EASE RESTRICTIONS ON DEFENCE TRANSFERS AND EXPORTS: Financial Times; Feb 19, 2002 By QUENTIN PEEL The gap in defence technology between the US and its Nato allies will become "unbridgeable" if Washington does not ease restrictions on technology transfer and relax export controls, Lord Robertson, the Nato secretary-general, warned yesterday. "If the US does not act, the huge additional investment it is making in defence will make practical inter-operability with allies, in Nato or in coalitions, impossible," he said, referring to the Dollars 48bn increase in defence spending recently announced by President George W. Bush. Acknowledging Lord Robertson's concerns, a senior US official yesterday announced plans to overhaul the present defence export licensing system in the US State Department. The department is also lobbying for a comprehensive review of defence technology restrictions within the US administration, Lincoln Bloomfield, assistant secretary of state for political military affairs, told the FT. Lord Robertson's warning was made at a high-level conference on US-European defence relations at Chatham House in London. Warning that the choice for Europeans and Canada in the Nato alliance was "modernisation or marginalisation", he urged them to focus on a small number of "absolutely critical capabilities". At the same time, he said, "for Washington , the choice could become: act alone, or not at all". The US must do "much more", he said, "in facilitating the process of European defence modernisation". "By easing unnecessary restrictions on technology transfer and industrial co-operation, and by liberalising its export policies, Washington can improve the quality of capabilities available, and diminish any problems our forces have in working together." Mr Bloomfield said he had ordered a "comprehensive re-engineering" of defence export licensing in the State Department to identify bottlenecks and ensure accountability. A new fully computerised licensing system would also be introduced. The department processes some 47,000 applications a year. The system has been sharply criticised by the defence industry and by a series of auditors reports. An investigation by the Centre for Strategic and International Studies concluded the current export control system "expends enormous resources on trivial and unimportant security risks". Mr Bloomfield said a wider policy review should seek to focus controls on "higher sensitivity items going to countries of greater concern" and spend less time on "low sensitivity" items being sold to close allies. He suggested that unmanned aerial vehicles, widely used in the Afghan campaign, might be sold more freely to US allies as a result. The proposal for an inter-agency review would be submitted to the National Security Agency in the White House, in order to co-ordinate policy between the Departments of State, Commerce and Defence. A separate plan under consideration at the State Department is to award a "global project authorisation" to key defence exports, providing a single licence to cover many components and services. The Lockheed Martin F-35 Joint Strike Fighter could be the first to receive such authorisation, according to Defense News, the industry journal. Full article at: http://globalarchive.ft.com/globalarchive/article.html?id=020219001028&q uery=Washington+Nato Republicans hit out at Nato expansion Financial Times; Mar 1, 2002 By RICHARD WOLFFE Senior Republican senators yesterday challenged the planned expansion of the North Atlantic Treaty Organisation to include several former Soviet bloc countries, suggesting that Nato enlargement would leave the transatlantic alliance over-stretched and under-funded. Republican opposition to Nato expansion represents a stark contrast to the Bush administration's strong support for enlargement to include potential new members such as the Baltic states of Latvia, Lithuania and Estonia. President George W. Bush is determined to extend Nato membership to "all of Europe's new democracies," declaring last year that the US would press ahead with Nato expansion at the Prague summit in November. However, Republican senators suggested yesterday that Nato enlargement would make the alliance cumbersome and would extend US military commitments to countries which had little support in Washington. John Warner, the senior Republican on the Senate armed services committee, asked: "Are the people willing to risk US military troops and expend significant taxpayer dollars to defend the nine additional nations seeking Nato membership? "If Nato expands beyond its current 19 members, some fear - and I share that fear - that the alliance will become increasingly inefficient, indecisive and just about a mini-United Nations for Europe." Mr Warner suggested it was time to "consider proudly retiring the colours of Nato and start over again". James Inhofe, the Oklahoma Republican senator, argued that Nato expansion would also divert US military resources away from operations to defend the US. However, administration officials told senators yesterday that they were more concerned at the growing divergence between the US and its Nato allies in terms of military technologies and capabilities. US officials have repeatedly echoed the concerns of Lord Robertson, Nato 's secretary-general, that European allies were failing to spend enough on upgrading their armed forces to engage in fast-paced, technologically-driven operations. But they insisted yesterday that the administration remained committed to extending Nato membership to former Warsaw pact countries. Douglas Feith, undersecretary of defence for policy, said the concerns about diluting Nato's military capabilities were "informing the administration's enlargement strategy". "The transformation of Nato's capabilities can and should proceed hand in hand with its enlargement," he said. The administration won support from Democratic senators, led by Carl Levin and Joe Lieberman. Mr Lieberman said Nato expansion to former Warsaw pact nations represented a way to sustain "the historic victory of American ideals that we won in the cold war". Full article at: http://globalarchive.ft.com/globalarchive/article.html?id=020301001840&q uery=Washington+Nato Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Fri Mar 1 06:08:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] Financial regulatory crisis: pensions accounting Message-ID: The mighty bean-counter New standards for pensions accounting will transform Europe's financial landscape, writes John Plender Financial Times: Feb 20 2002 Power is not something people normally associate with accountants. Yet the European Union's financial services action plan has given them a great deal of it by requiring EU-listed companies to use international accounting standards by 2005. Among other things this means that companies may have to adopt IAS 19, an international version of the British standard FRS 17, which will require UK companies to incorporate pension fund surpluses and deficits fully in their accounts. A notable consequence is that the accountancy profession will now have a profound influence in shaping Europe's financial structure. The explanation for this seemingly extravagant claim lies in eurozone governments' response to changing demographics. The ageing of the population ensures that the return on continental Europe's mainly pay-as-you-go state pension schemes will be dismal for today's young people. Governments also know that the fiscal burden of supporting a growing population of elderly folk will increase alarmingly between now and 2050. So greater reliance will be placed on pre-funded pensions, whereby the workforce puts aside money in advance for retirement. Optimists in the Anglo-American financial community believe the shift to funding will encourage Europe's fledgling equity culture and provide fund managers with a bonanza. Thanks to the accountants, they are almost certainly mistaken. According to Graham Bishop, an adviser to Schroder Salomon Smith Barney, the threat of IAS 19 will ensure that few continental companies will adopt defined benefit pension schemes, in which retirement incomes are related to final pay and length of service. The risks in having to mark pension funds to market values are simply too great. So the big continental European economies will leapfrog the US and the UK and invest from a low base in a defined contribution model, where workers, not companies, will shoulder the investment risk. Mr Bishop forecasts a fivefold increase in eurozone pension assets with a bias towards bonds. In the US, where a shift to defined contribution has gone further than in the UK, the workers are more inclined to invest in bonds than are the trustees of defined benefit schemes. Actuaries argue that a culture of reckless caution may be replacing the equity culture there. And it is certainly true that defined contribution pensions lend themselves less readily to unquoted investments such as venture capital or property. Note, in passing, that Gordon Brown, the chancellor, worries about inadequate pension fund investment in venture capital. Yet the shift to defined contribution exacerbates the problem. If continental Europeans did expose themselves heavily to equities, the outcome might not be very rewarding. Despite the bear market, yields on equities in Germany, France and Italy respectively are low at 2.0 per cent, 2.7 per cent and 2.8 per cent. On that basis, management costs will absorb most or all of the funds' income unless governments restrict charges, as the UK has done with stakeholder pensions. So unless equity yields rise, pensioners will forgo the magic that compound arithmetic works on dividends and be largely dependent on capital gains. It might make more sense for eurozone governments to devote less effort to boosting funded pensions than to raising retirement ages and increasing workforce participation rates. In the UK, which is only now following the US in pensions accounting, companies are closing defined benefit schemes not only to new entrants but also for existing members. The reason, once again, is the financial risk, which is exacerbated by having to incorporate pension fund deficits in the balance sheet. As John Ralfe, head of corporate finance at the UK retail group Boots, has argued in these pages, investing in equities is a form of double leverage for pension funds. It is the equivalent of a company issuing a long-term bond and investing the proceeds in other companies' shares - the formula that has torpedoed Japan's banks. The impact that this accounting change will have on the debt-equity ratio of UK plc scarcely bears thinking about. Many pension funds are over-exposed to equities in that their assets and liabilities are mismatched. According to PwC, the consultants, 41 per cent of UK pension fund liabilities relate to current employees, while 59 per cent relate to pensioners, for whom bonds are regarded as the appropriate matching asset. Yet 77 per cent of pension fund assets are still in more risky equities. Where pension funds are large in relation to the sponsoring companies' market capitalisation, the whole nature of the company may need rethinking because of the accounting standard. In an extreme case such as British Airways, with a ?10bn-plus pension fund and a market capitalisation of ?2.2bn, the company has been transformed at the stroke of an accountant's pen into a highly leveraged investment trust with a problematic sideline in air travel. Call it the bean-counters' revenge. Full article at: http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3WQN92WXC &live=true&useoverridetemplate=FTD1OUN2DNC&tagid=FTDNE3BOBNC&SectionTag= na/column&PageTag=2cojopl&imgID=FT3L57JCCWC&useoverridetemplate=FTD1OUN2 DNC&SectionTag=na/column&PageTag=2cojopl&imgID=FT3L57JCCWC Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Fri Mar 1 06:10:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] Europe/US rivalry: R&D Message-ID: Seeking to bridge the science gap: RESEARCH AND DEVELOPMENT: Europe's spending on R&D is lagging far behind that of the US. Brussels has called for state and private invest 60 per cent over the next eight years but companies may not rush to meet the challenge, say Francesco Guerrera and Clive Cookson: Financial Times; Feb 25, 2002 By FRANCESCO GUERRERA Aknowledge gap hasopened up over the Atlantic in research and development - one of the key motors of innovation and economic growth. Europe has fallen well behind the US, as governments and businesses in the 15 countries of the European Union fail to keep pace with the expenditure on science and technology of their US counterparts. Between 1995 and 1999, the latest period for which figures are available, the difference between US and European R&D investment more than trebled. By the end of the period, European innovators in industry and government were spending Euros 76bn a year less than their US colleagues. The result is that companies and economies in the EU have fewer, and less sophisticated, tools to go head to head with their rivals on the other side of the Atlantic. Many in Europe fear that achievements such as last year's sequencing of the human genome, where European scientists made a huge contribution to the work of their US counterparts, could become ever rarer. "(Lower R&D investment) has eroded our competitiveness and deteriorated our industrial and trade performance compared to the US. Taking action to reverse these trends is imperative," says Philippe Busquin, who, as European commissioner for research, is charged with bridging the transatlantic knowledge gap. After years of warm words and few actions, the European authorities seem to have woken up to the fact that something radical needs to be done to turn the tide. Last month, Mr Busquin made an almost unnoticed addition to the so-called "Lisbon agenda" - the ambitious set of targets to make Europe the most competitive economy in the world by 2010, which was agreed in the Portuguese capital nearly two years ago. The amendment could have sweeping implications for businesses and governments across the region. In a document outlining the priorities for next month's summit of heads of state in Barcelona, the EU pledged to increase Europe's state and private investment in R&D by nearly 60 per cent - from the current 1.9 per cent of gross domestic product to 3 per cent within eight years. Such a rise would bring Europe in line with the US, where R&D investment is 2.6 per cent of GDP and rising fast, and Japan, which already spends 2.9 per cent of its national wealth on research. Will the EU make it? Many in industry, academia and national governments believe such a rapid increase is not as realistic as Mr Busquin believes. They warn that practical problems, such as recruiting trained scientists and engineers or building and equipping enough laboratory space, could make it impossible to achieve the goal, even if companies try their best. The UK Treasury, for example, says it shares Brussels' vision, which was openly supported by Tony Blair, the prime minister, in a joint letter with Wim Kok, his Dutch counterpart, last week, but it casts doubt over the 3 per cent target. "We are not sure that it is right to have an explicit target. What matters is that we have an innovation performance that will drive growth," says a Treasury official. The EU is limited in what it can do directly to promote research. Its next R&D programme, known as Framework Six, will distribute Euros 17.5bn (Pounds 11bn) worth of grants to companies and universities over four years from 2003 - only 5 per cent of what national governments will spend on R&D over the period. At the same time, Mr Busquin is trying to remove the obstacles, such as national restrictions on research grants, which prevent scientists moving freely around Europe. But the Belgian-born commissioner believes prime responsibility for the knowledge gap lies with businesses rather than governments. A recent study by the European Commission showed that businesses' expenditure on R&D in the US is 73 per cent higher than in the EU and grew nearly three times as fast between 1995 and 1999. Such a lag in EU businesses' investments accounts for the vast majority of the Euros 76bn R&D difference between the US and Europe. "On current trends, the EU will fall further behind, compromising any chance of reaching the objective agreed at Lisbon," the study concludes. Getting businesses to spend more on R&D at a time of an economic downturn and uncertain stock market conditions is not going to be easy. The Brussels authorities believe national governments should play their part by making investment in R&D more attractive to the private sector through four main instruments. The first, and most direct, way of getting business people's minds focused on innovation is to pay them to innovate. For years, state subsidies have been Europe's traditional route to foster private R&D investment. Last year, EU governments dispensed about Euros 4bn in state aid for R&D by means of various programmes. However, this policy is being threatened by external and internal factors. Externally, the economic slowdown is putting pressure on governments to curb expenditure - R&D, with its promises of returns in the distant future, is an obvious target. Internally, Mario Monti, the EU competition commissioner, is a sworn enemy of all forms of state aid. In its latest report on state aid, Mr Monti's department noted that countries with high state aid for R&D did not produce more patents or a more efficient labour force - remarks that did not go down well with Mr Busquin's experts. But even if Mr Monti does not intervene, state aid will not make up the entire shortfall and indirect interventions, such as tax breaks, could play an important part in plugging the knowledge gap. A number of EU countries already operate such schemes. In Sweden, for example, a quarter of the income of foreign researchers is tax free, while in the UK small and medium-sized companies have a credit of 150 per cent on R&D expenditure. The British government is now consulting on the final details of a new tax incentive that would apply to all companies. Mr Busquin's study concludes that fiscal incentives "could and should be applied in a more intensive way across the EU". Experts fear the commissioner's call could fall on deaf ears. Georges Haour, professor of technology management at IMD, the inter-national business school in Lausanne, Switzerland, warns that governments "will be reluctant to see their income decrease at a time when they have exploding costs in healthcare, retirement benefits and so on". Tim Bradshaw, senior policy adviser for technology and innovation at the Confederation of British Industry, notes that tax break schemes and state aid are linked, as some fiscal incentives could incur Mr Monti's wrath and be classified as illegal subsidies. "The EU may need to make changes to its rules restricting state aid to industry if governments are to give effective tax incentives for companies to increase R&D spending," he says. Mr Busquin's third option is the use of so-called guarantee schemes - government guarantees to equity and loans provided by private sector banks for companies' investment in R&D. But, although there are several such schemes across Europe, very few are used for research. "This form of public support is clearly under-exploited and should be used far more extensively," the study says. Some within the Commission argue that to catch up with the US something stronger is needed: Europe, they argue, should go the American way and build a large venture capital industry. Across the Atlantic, risk capital has become a vital funding source for technology-based start-ups, while in Europe it accounts for a mere 0.04 per cent of EU GDP. The Commission wants governments to set up schemes to attract venture capital for start-ups. But that is going to take time and even if the funds were flowing in, R&D start-ups would still be faced with a bureaucratic nightmare to protect their discoveries. The Commission has drawn up plans for an EU-wide patent, which would reduce costs and red tape, but these have been stalled by a wrangle over which language to adopt in the document and which courts should be responsible for enforcement. For Philippe de Buck, secretary-general of Unice, the European employers' federation, a common patent would be a big incentive for businesses to invest in R&D. "We have to ask ourselves, why aren't businesses investing enough in R&D? There are a number of difficult conditions. A competitive, enforceable and cheap patent would remove one of them." Full article at: http://globalarchive.ft.com/globalarchive/article.html?id=020225001227&q uery=science+gap Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Fri Mar 1 11:04:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] UK corporate state & Arthur Andersen Message-ID: Private Eye No. 1048, 22 February - 7 March 2002 News Two interesting facts emerged in Parliament on 12 February thanks to Liberal Democrat pressure. First, the huge DTI-sponsored study of the competitive position of the UK in international markets, which has been going on since July 2000 and is due to be completed next month, has been conducted by none other than the Labour-friendly and highly competitive Arthur Andersen. The second was the amount of taxpayers' money shelled out by the ministry of work and pensions to the top five accounting firms for consultancy services in the first three years of the Labour government. In 1997-98 the four firms got ?6.1m; Andersen Consulting ?18.4m. In 1998-99, the four other firms got ?7.3m; Andersen ?21.3m. And in 1999-2000 the four other firms got ?7m; Andersen ?9m. Most of these handouts can be attributed to the notorious NIRS2 computer system which continues to be at least as wasteful of public money as the computer system installed by the Wessex regional health authority more than 10 years ago. The authority's adviser at that time was Andersen Consulting, whose experts, after close and competitive consideration, came up with a startling recommendation for a suitable contractor: Andersen Consulting. The authority agreed at once. Andersen got the business and the disastrous system it installed lost the NHS ?20m. PS: Arthur Andersen audited Enron, the biggest-ever bankruptcy in America. So who audited insurance giant HIH, the biggest ever bankruptcy in Australia? Er, Arthur Andersen. Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Sun Mar 3 23:42:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] The end of NATO? Message-ID: As NATO expands, it becomes more cumbersome, and its use to the US as a more effective and quick means of enforcing US political will is reduced. This helps to explain Dubya's unilateralism in general, and the complete sidestepping of NATO's invocation of Article 5 in the wake of September 11 in particular. Last week's botched attempt to arrest Karadzic seems to be part of the latest effort to discredit NATO's administrative prowess. Or at least that is what Ian Bruce's unimpeachable sources are telling him... Nato probes delay in hunt for Karadzic IAN BRUCE The Herald, 4 March 2002 NATO has launched an internal inquiry into the embarrassing failure of two US-led raids in Bosnia last week to capture Radovan Karadzic, the number one target on the Balkans war crimes list. German commandos from GSG-9, the special forces unit modelled on Britain's SAS, have been deployed to patrol the mountain tracks which connect the fugitive's suspected hiding place with neighbouring Montenegro and Serbia. Allied officers are furious that the Americans waited more than two days from the time they received an intelligence tip-off on Karadzic's location before launching a high-profile search mission to the hilltop village of Celebici. The US commanders also insisted that their troops should spearhead the operation while German, Italian and French units familiar with the area were relegated to blocking roads to the village. Local Bosnian Serbs watched with amusement as black-clad American teams arrived by helicopter on Thursday morning, blew in the doors of houses, and herded children at gunpoint into a schoolhouse, before searching homes and outbuildings. A second pre-dawn raid the next day, this time involving other Nato contingents, turned up weapons caches, but no sign of Karadzic and his bodyguards. Armoured vehicles moving in to cordon off escape routes were visible for miles on the winding mountain roads, and the US helicopters used for the raid were observed taking off from their base, giving ample warning time for the suspects to slip away. Karadzic, the former Bosnian Serb president charged with inciting genocide during the 1992-95 civil war, is reported to have been in Celebici with a heavily-armed escort party on Tuesday night. It was Thursday morning before the US troops swooped on the village. Karadzic seldom stays more than one night in any location, moving constantly through the mountainous triangle which gives him a choice of bolt-holes in Montenegro, where his mother lives, or Serbia. Both are no-go areas for Nato. A Nato source in Sarajevo said yesterday: "The Americans were glory-hunting. But they were too slow to react. They also failed to use European troops familiar with the terrain. This was to be a US coup. Now they have egg on their faces and no-one at S-for (the Nato stabilisation force) headquarters is tremendously sympathetic." The latest debacle in the hunt for Karadzic and his military commander, General Ratko Mladic, is only one in a series of botched or aborted arrest attempts since 1996. President Bill Clinton vetoed Operation Amber Star six years ago, only hours before snatch squads were about to seize Karadzic in Foca, a Bosnian Serb town where he moved freely under the gaze of French peacekeepers. Britain's SAS, who were not involved in last week's raids, have arrested more than half of the 23 war crimes suspects brought before the tribunal in The Hague. Full article at: http://www.theherald.co.uk/news/archive/4-3-19102-0-58-23.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Mon Mar 4 00:59:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] UK imperialism: crisis management Message-ID: Blair defends Bush plan for attack on Saddam By Andrew Grice, Political Editor The Independent, 04 March 2002 Tony Blair has defended President George Bush's plans to destroy the weapons of mass destruction built up by Iraq and denied the United States was isolated on the issue. The Prime Minister continued his drive to prepare British public and political opinion for possible military action against Saddam Hussein's regime by giving his strongest support yet for Washington. He told Channel 9 TV yesterday during his visit to Australia for the Commonwealth summit: "George Bush is absolutely right to say weapons of mass destruction are a real danger in the world." Mr Blair said he would discuss the precise action to be taken over Iraq with the President when he visits Washington in a few weeks. In another sign that action is imminent, Downing Street said the Prime Minister wanted to discuss the issue face-to-face rather than in one of his regular telephone conversations with Mr Bush. Although some European countries have severe doubts about taking on Iraq, Mr Blair insisted it was not just America which was determined to act. He recalled that he had outlined the need to tackle chemical, biological and nuclear weapons two days after the 11 September terrorist attacks. "It is clear that we need to deal with this issue," he said yesterday. "Iraq is in breach of all the United Nations resolutions on weapons inspectors. "If these weapons fall into their [Iraqi and terrorist] hands and we know they have both the capability and the intention to use them then, I think, we have got to act on it because, if we don't act, we will find out too late the potential for destruction." Iraq's most influential newspaper called Mr Blair "a liar" for accusing Iraq of acquiring weapons of mass destruction. Babel, the newspaper of President Saddam's eldest son, Uday, claimed in a front-page editorial that Mr Blair had refused to accept an Iraqi challenge to send in a team of British arms inspectors. Meanwhile, the British Government is resisting plans for the first mission by the European Union's new rapid reaction force to be in Macedonia, where Nato's operation is due to end in June. Jack Straw, the Foreign Secretary, has told Downing Street in a leaked letter that there is "growing pressure" for the EU to take over Nato's work and that the "political case" for British troops being involved would be "strong". But Geoff Hoon, the Secretary of State for Defence, has warned Number 10 that an EU-led operation would be "premature" and wrong and would risk stability in the Balkans. The EU force was "not ready to undertake an operation of this magnitude and risk", he said. Downing Street denied the Cabinet was split, pointing out that Mr Straw agreed there were "strong arguments" against an EU force and that Britain should persist with its effort to build support for a continued Nato mission. Full article at: http://news.independent.co.uk/uk/politics/story.jsp?story=251203 Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Mon Mar 4 01:05:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] UK state: "modernisation" Message-ID: On 26 February I wrote: The current fracas featuring the hapless Stephen Byers is part of a much longer dispute brewing over Civil Service reform, now coming to a head. We've already had The Guardian softening us up on this -- a sure sign if ever there were, that something's coming. ===== Government plans law to curb power of spin doctors By Andrew Grice, Political Editor The Independent, 04 March 2002 Laws are to be brought in by the Government to control special advisers to ministers, in an attempt to prevent a repeat of the Whitehall war between Jo Moore and civil servants working for Stephen Byers, the embattled Transport Secretary. A new Civil Service Bill, which could be included in the Queen's Speech in November, would prevent party political advisers in government departments giving orders to civil servants. Ms Moore, who was accused of "bullying" officials, resigned last month after a campaign to force her out by civil servants at the Department for Transport, Local Government and the Regions (DTLR). The legislation will set out strict boundaries between civil servants, who are meant to be impartial, and political advisers, such as Ms Moore. The existing code of conduct for advisers, which says they must respect the neutral stance of the Civil Service, will be beefed up and given statutory force. Ministers are also expected to bow to pressure to put a ceiling on the number of special advisers, whose numbers have increased from 38 to 81 since Labour came to power in 1997. Cabinet ministers admit that a law might not have prevented the "personality clashes" at the DTLR. But they hope a Civil Service Act will "change the climate" in Whitehall and improve the relationship between political and neutral officials. The Cabinet is expected to discuss the lessons to be learnt from the DTLR crisis and the row over Lakshmi Mittal, the Indian tycoon at the centre of the "cash for favours" row over his ?125,000 donation to Labour, when it gathers at Chequers on Friday for an "away day" strategy session. It will also examine how to ensure a more coherent approach to public-sector reforms, amid concern that there are too many "mixed messages". Officials have long been pushing for a new Civil Service Act. Ministers have been accused of foot-dragging but conceded privately yesterday that the Moore affair had made action inevitable. The drive for new legislation will be launched in aspeech next week by Sir Richard Wilson, the Cabinet Secretary, who is determined to see some progress before he retires this summer. He is expected to argue that special advisers have an important role to play and can safeguard the neutrality of Whitehall by ensuring that civil servants do not fulfil party political functions. But he will support a legally backed code to ensure the advisers do not overstep the mark, while insisting that aggrieved officials use proper procedures rather than leak damaging material. The new law may also put the code of conduct for ministers on a statutory footing. To answer criticism that Tony Blair has been "judge and jury" over whether former ministers such as Keith Vaz have breached the code, an independent commissioner may be appointed to police it. Mr Blair hopes the new moves will finally enable the Government to draw a line under the controversy that has engulfed Mr Byers. But yesterday the Transport Secretary faced renewed claims that he misled the Commons last week in his statement on the affair. An 18,000-word dossier by Martin Sixsmith, the outgoing director of communications at the DTLR, claimed that Mr Byers blocked a compromise plan for him to move to another Whitehall department. Downing Street dismissed the dossier, extracts of which were published in The Sunday Times, as a "partial account" and a "retread" of a front-page article in The Independent last Thursday. Tim Collins, the shadow Cabinet Office Minister, said the Government must answer the allegations. If it was unable to, he said, "it will be unarguable that Mr Byers misled Parliament and should bring his time in office to an end". Last night Tam Dalyell, the longest-serving MP, told BBC Radio 4's The Westminster Hour programme that Mr Byers should have resigned and that Mr Blair should now be a "good butcher" and sack him. "Certainly the Labour Party and the Labour Government, to my dismay, are getting a reputation for not being quite straight, and it's very damaging," he said. Writing in The Independent, Sir Robin Mountfield, former permanent secretary at the Cabinet Office, accuses Labour of sidelining the Civil Service and says: "The sooner an Act on these lines is brought forward, the better." The Committee on Standards in Public Life will launch an inquiry today into the relationship between civil servants and special advisers. Sir Nigel Wicks, its chairman, said: "There is a case for a Civil Service Act. Most other public organisations are under the control of Parliament ... but not the Civil Service." * Lakshmi Mittal has been asked to appear before a Belgian inquiry looking into alleged back-handers to secure major Eastern European infrastructure projects, it was reported last night. Full article at: http://news.independent.co.uk/uk/politics/story.jsp?story=251208 Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Mon Mar 4 01:50:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] UK corporate state & Andersen Message-ID: Jason Niss?: Let's admit it, Patricia: the deadliest sin at Enron was executive greed Independent on Sunday, 03 March 2002 It is perhaps the ultimate irony that Patricia Hewitt should decide that corporate Britain needs a review of the role of its auditors and non-executive directors as a result of a bankruptcy in America. Our accounting systems, our way of recruiting and treating non-executive directors and, maybe most importantly, our reward systems are substantially different on this side of the pond. And anyway, we had our own Enron, or flock of them, between 1990 and 1992, with Polly Peck, British & Commonwealth and the Maxwell empire. Call me cynical, but I wonder if this review is prompted by Labour's embarrassment over donations from Enron and the help it obtained from Arthur Andersen. Had a Texan energy group collapsed without those connections, would it have made much of a ripple in Whitehall? The Sainsbury's boss Sir Peter Davis has been tipped to lead this review. Ms Hewitt says he is one of five on a shortlist, no doubt trying to cover herself should she suffer from Girolami syndrome, which afflicted Stephen Byers when it slipped out that he wanted the BG boss to sort out the railways. Sir Richard, wisely, declined. Sir Peter is a good candidate in many ways. He knows how irritating non-execs can be. When he was at Reed International, the part-time directors made him sell the group's stake in BSkyB at the wrong time, losing the company about ?500m. He is also a keen student of the interface of business and politics. His old friend and colleague Derek Higgs not only chairs Partnerships UK but also sits on the board of Coventry City with the former Paymaster-General (and associate of Robert Maxwell) Geoffrey Robinson. Sir Peter was also the chairman of the New Deal Task Force, a joint Gordon Brown/David Blunkett initiative. And it doesn't get much more political than that. So what should Sir Peter - or whoever gets the job - look at? On auditors, the lobbying against rotation has already started. The Institute of Chartered Accountants points out that the only major economy to rotate auditors is Italy ... and I'm sure you can fill in the thoughts after that. They claim auditors are adequately regulated as they are, although I'm not sure I buy this, as auditing is one of the few areas of the City still clinging on to self-regulation. Giving the Financial Services Authority responsibility for auditing would be a move forward, and I fancy it is something Sir Howard Davies will be pressing for in his own review of auditing for public companies. But what the Government really needs to do is what it clearly will not do - which is support Andersen. The prospect of the fifth force in auditing disappearing will leave companies with less choice; remember only a few years ago there was a "big eight" among accountants. As for non-executive directors, clearly they need to spend more time understanding the companies where they are working. This means fewer appointments and higher fees. They also need to be more accountable. All directors should be re-elected every year. But again there is an issue that will not be addressed by this review: executive pay. It was revealed on Friday that senior Enron executives received $320m in bonus payments last year, with Ken Lay getting more than $10m. Given those incentives to succeed, it is no surprise that people hid the bad stuff under the carpet. In the US, executive pay is excessive. Carly Fiorina, Hewlett-Packard's boss, was last week said to be underpaid by $1m a year, and is to get nearly $70m over two years if the group merges with Compaq. Over here, the pressure is to follow the US route. But this is a flawed argument. The way to succeed these days is to ally the chief executives' goals with those of the employees. Incentive packages need to be company-wide and reflect the more democratic management structures that now exist in successful companies. The lesson of Enron is that greed is bad. But I fear the review Patricia Hewitt has launched will not conclude this. Full article at: http://news.independent.co.uk/business/comment/story.jsp?story=250646 NOTE: According to Private Eye, up to now the New Labour government has been supporting Andersen, and very generously, it seems. More to follow. Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Mon Mar 4 02:02:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] Europe/US rivalry: trade wars Message-ID: EU threatens trade war over steel Charlotte Denny Monday March 4, 2002 The Guardian Europe's top trade official has renewed his warning to the US that the European Union will hit back if Washington announces swingeing tariffs on foreign steel producers this week. President Bush is due to decide on Wednesday whether to impose duties of up to 40% on imports to protect America's ailing steel industry. Pascal Lamy, the EU's trade commissioner, said that Brussels will challenge any tariffs at the World Trade Organisation and impose similar curbs on American steel exports in retaliation. "If the US were to erect undue barriers and this had as a consequence a flow back of steel to the EU, we are entitled to safeguard clauses under WTO rules and we will consider using that," Mr Lamy said. Trade and Industry secretary Patricia Hewitt will today throw her weight behind Mr Lamy, warning the US that the EU and Britain cannot risk being swamped by steel pushed out of US markets. "We defend our right to consider options to prevent serious injury to the industry," she will say. The bust-up will be embarrassing for the British government as a US company owned by the Indian businessman at the centre of the "garbagegate" row, Lakshmi Mittal, has been among those lobbying for tariffs. US producers have piled pressure on Washington to rescue them from the combined impact of a global glut of steel and the cost of generous pension schemes for hundreds of thousands of retired workers, which have already pushed 31 companies into bankruptcy. The issue is particularly sensitive for the Bush administration as the plants are concentrated in the battleground states of Ohio, West Virginia and Pennsylvania, which the Republicans hope to win in this year's Congressional elections. Last week, union leaders organised thousands of workers to descend on Washington in support of tariffs. Industry lobbyists have urged Mr Bush to impose a 40% across-the-board tariff on foreign steel for four years to give them a breathing space. However, most analysts think that Washington will impose tariffs of no more than 20% for two years at most, as higher tariffs would harm other parts of industry which depend on cheap steel imports. Even if the administration goes for a lower figure, the EU has signalled that it will retaliate in kind, as have other big steel producers such as Japan and Korea. Mr Lamy's counterpart, US trade representative Robert Zoellick, sought to deflect EU criticism on Friday, reminding Brussels that it had a long history of bailing out its own inefficient producers with subsidies. The row over steel will make it more difficult for Mr Lamy and Mr Zoellick to resolve other bitter transatlantic battles, including Europe's ban on imports of American hormone-treated beef, and Washington's special tax breaks for its big exporters. Full article at: http://www.guardian.co.uk/business/story/0,3604,661276,00.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Mon Mar 4 02:09:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] Enron: US credibility "enhanced" Message-ID: The creative destruction of Enron The US has demonstrated its strength by refusing to follow the example of Japan when faced with a trouble company, writes Mois?s Na?m Financial Times: March 4 2002 What country, other than the US, allows an Enron-class company to go under? An Enron-class company is a dominant and innovative global player in a highly sensitive market and is funded by influential blue-chip banks and by thousands of small investors. More importantly, an Enron-class company is a political powerhouse whose influence runs deep and wide, with close allies in the executive, legislative and judiciary branches of government and a network of well fed supporters in the ranks of academia, journalism, interest groups, sports clubs and myriad charities. Every country has Enron-class companies. But only a few countries seem to have what it takes to allow such a company to go out of business without politicians trying to bail it out. Japan is not one of these, of course. A few days after Enron collapsed, Junichiro Koizumi, the most reform-minded Japanese prime minister in decades, explained that the bail-out of Daiei, a large supermarket chain, was necessary because "the collapse of Daiei will have a very big impact". Indeed. Such reasoning has allowed a new category of companies to emerge in the last decade in Japan - "zombie companies", kept alive through the largesse of Japanese banks acting in cahoots with the government and at the behest of politicians. Japan is not alone. In most countries the government is too weak or too corrupt to pull the plug on big, politically influential companies. Most of South Korea's large conglomerates, the chaebol, survived that country's financial crisis without crashing. The International Monetary Fund's attempts to link its aid to improved corporate governance was undermined by an economic recovery that came very quickly and gave the patient the strength to ignore much of the Fund's recommended treatment. In many emerging markets, off-balance sheet transactions, quasi-fraudulent deals that benefit controlling investors and top management and other forms of Enron-like corporate plunder are common. Moreover, the government not only tolerates the plunder but is often seduced into contributing taxpayers' money to the booty once there is nothing left to steal and the company is verging onbankruptcy. In continental Europe, Mario Monti, the tough commissioner for competition policy - who is also entrusted with supervising state aid - does not believe that troubled companies should be automatically rescued. But like Mr Koizumi, he is flexible. "There can be situations where the destructiveness of liquidation, and the prospects of future viability outweigh the temporary distortions caused by rescuing companies in difficulty with public money," he says. Gerhard Schroder, the German chancellor, agrees. In late 1999, for example, he championed a DM3bn ($1.4bn) rescue package of Philip Holzmann, a giant construction company. In the current manoeuvring to salvage Kirch Gruppe, Germany's debt-laden media group, the role of politicians seems to be as crucial as that of bankers or investors. Political attitudes and governmental practices in cases of corporate rescue are fickle. Just a few months after Holzmann's bailout, several European airlines were allowed to go under. At the same time, the Bush administration launched a massive bailout of US airlines, which had been hurting long before September 11 and continue to be in bad shape even after $15bn of taxpayers' money. Mr Bush's critics note that allowing Enron to go under was a decision based not on economic discipline but sheer political survival. Enron overdosed on political influence and became untouchable by politicians when it most needed them. Bailing out Enron was not an option for the Bush administration precisely because so many of its most prominent members had taken money from it. The critics also argue that the administration did not bail out Enron because there was nothing to bail out. The company had become an empty shell with no possibility of survival. True on both counts. But it is equally true that in most countries these two arguments have often failed to stop the government from rescuing well-connected companies. In the banking crises common in the last two decades, large banks were bailed out by politicians and government officials who figured prominently in these banks' lists of debtors. Replenishing the empty coffers of failed companies with public funds is also a common practice. Remember Credit Lyonnais? >From this more comparative perspective, Enron's debacle acquires a different hue. It is, undoubtedly, a tragedy. Workers who lost their pensions while the company's top management cashed out may have no patience for the argument that letting Enron go under is a strength and not a weakness of the American system. Others will argue that the correct focus is not the propensity of most governments in the world to bail out big, political companies but the systemic failures and the corruption that allowed Enron to happen. As Arthur Levitt, the former chairman of the Securities and Exchange Commission, told the US Congress, among US corporations "financial statements often are not an accurate reflection of corporate performance but a Potemkin village of deceit . . ." But it is important not to lose sight of the likely positive consequences of Enron's demise. As a result of Enron's crash and the ensuing outrage, the US corporate system will emerge stronger and more effective than it was. Auditors will probably be regulated and their conflict of interests when also acting as consultants will be curbed. Accounting standards will be strengthened and made more transparent. In listed companies, executive compensation schemes that yield obscene, Fastow-like arrangements will be scrutinised out of existence. The proportion of employees' pensions that can be invested in their employers shares will be restricted as will the contributions corporations can make to politicians and their electoral machines. In general, and thanks to Enron's catastrophe, corporate governance in the US will be better. It may well end up being an American victory. The writer is editor of Foreign Policy magazine Full article at: http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3OE0P9DYC &live=true Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Mon Mar 4 05:55:03 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] Enron: European angle Message-ID: Private Eye No. 1048, 22 February - 7 March 2002 In the City Investigation of the wreckage left by the collapse of Enron Europe has confirmed just how much the London company was, as suggested in Eye 1046, a microcosm of the policies and practices in Houston that brought down the one-time pipeline operator that became the world's largest energy trader and possibly biggest ever Ponzi scheme fraud. Information from senior former Enron Europe executives discloses the accounting tricks that should have been spotted and stopped by regulators and auditor Arthur Andersen, and which were pioneered in Enron's overseas operations where London was the key. Former Enron chief executive officer Jeffrey Skilling -- the man who wasn't there, to believe his version (which few, including his own mother, do) -- was a one-time Enron Europe director. So too was Enron treasurer now chief financial officer Jeffrey McMahon. Both played key roles in constructing the off balance sheet partnerships and special purpose vehicles which enabled Enron to show ever rising profits while hiding ever increasing debt and losses. According to Enron Europe insiders, the company tested many of the dubious creative accounting techniques which were responsible for its spectacular collapse on deals linked to the Teesside and Sutton Bridge power stations. These included: >The use of "total return swaps" to create "virtual assets" -- even virtual power stations -- which were then used to raise money offshore and off balance sheet but with loans that were ultimately dependent on an Enron guarantee and therefore very much on balance sheet. >Ever more exotic securitisation or monetisation of unusual supposed income streams such as the Teesside maintenance contract, the "cushion gas" reserves kept in North Sea fields as a safety measure or even the accrual book of deferred but not guaranteed future revenues. >A bonus system for top executives which gave them undeclared percentages of power station contracts and allowed them to calculate the "net present values" upon which these bonuses were based resulting in a handful of Enron American executives sharing a $10m from the Teesside contract. >The crediting of unrealised profits to fatten earnings and so keep up Enron's remarkable and giveaway unbroken record of ever rising numbers. >The consistent failure of Enron Europe to produce cash flow accounts, relying on an accounting loophole, which would have revealed just how little real cash was being generated. The liquidators have discovered that Houston swept up all but ?10m from London every day despite the company having a ?150m wage bill and liabilities in billions. >The failure of the Securities & Futures Authority to confirm that Enron Europe had sufficient capital to engage in multi-billion deals in the energy market because it considered energy trading of no significance because there was no public exposure. Tell that to Enron shareholders, employees and creditors. To get around this problem Enron ensured that it only acted as an "arranger" of the trades, thereby avoiding onerous capitalisation rules, leaving the all-important profits from derivatives to be made offshore by a "dealer" who was outside SFA regulation or inspection. This also ensured that all the profits were booked tax free, leaving Enron Europe to book ever growing losses -- ?556m in three years when revenues rose from ?309m to ?2.3bn on which Enron paid total UK tax of just ?60m. >The acceptance by Andersen of all of the above without forcing disclosure, plus compliance in ignoring the need for provisions against losses on gas contracts that ultimately cost ?268m and pipeline contracts that cost ?90m while agreeing to divvy up a ?50m profit so it could be credited in different quarters and as different types of revenue to keep Wall Street happy. But then from 1993 Enron insiders suggest the energy giant had become Andersen's biggest client. In the UK from 1994 Andersen earned ?8.75m from Enron, virtually equally split between audit and consultancy, i.e., tax, work. These fees no doubt helped ensure Enron achieved what one former senior executive terms its main objectives: to avoid tax and operate off balance sheet. First Goldman Sachs and then J.P. Morgan advised Enron Europe on its ever more complex financings. The stake in the Teesside power plant was sold to a special purpose vehicle Thornbeam, which in turn sold it on to a Dutch company, Strategic Money Management, which then issued collateralised notes to a leading bank. This device gave Enron -- not a triple A risk -- access to triple A money. This ?50m deal enabled Enron to securitise its income stream from the Teesside plant in such a way as to boost its earnings during 1996. But the notes issued by Strategic Money Management, a Morgan-linked company, depended on a guarantee from Enron Houston so were far from off balance sheet. This deal also involved the use of offshore charitable trusts -- going rate ?100,000 a deal -- as cut-outs to obscure the real ownership. A similar trust was used in the multi-billion Mahonia oil and gas deals set up by Morgan and its merger partner Chase Manhattan in Jersey which are now the subject of litigation from the banks who lent against the securitised energy deals. This ?50m was then split between two different quarters and non-recurring and operational profits so enhancing the picture presented to the only people Skilling cared about -- Wall Street bankers, brokers and analysts. Skilling was reportedly very angry and determined to avoid a repeat blip in the earnings caused by having to provide in 1997 for the ?268m ($440m) payment on the J Block gas contracts in the North Sea. Although gas prices fell from 1994 through 1996, Andersen accepted there was no need to make a provision against profits because Enron was contesting the contract in court. The first shareholders learned of this disaster therefore was when Enron settled just before trial and revealed a ?100m loss. Skilling was also instrumental in the Sutton Bridge power station deal which saw Enron build the Lincolnshire plant and then sell it as a "virtual power station" to Eastern Electricity leaving it with an income stream and the ability to operate the plant as it wished. The sale and repurchase of interests in Sutton Bridge, which included Cayman Island Financing, to unidentified "third part investors" first enabled Enron to book profits of ?61m in 1997 by the simple device of revaluation and consolidating the "paper" profit. But in 1998 a buyback of shares created a "paper" loss of almost ?14m while a similar reshuffle of the Teesside interest booked a loss of ?10m. The Enrici Power Marketing partnership between Enron and ICI enabled Enron to securitise up front another virtual power station with the aid of US investors in the two partnerships. This ultimately cost Enron Europe ?170m, mostly undisclosed until 2000. The securitisation deals linked to Teesside and Sutton Bridge helped Enron to ensure it made the profit numbers Wall Street expected thereby driving up the share price so enriching those Enron executives such as Skilling and chairman Ken Lay who were able to cash in big time. They also mean there will be nothing for creditors from the Teesside stake. The others who cashed in were the group of Enron executives who had joined Lay in the 80s and whose faces increasingly failed to fit in the 90s. They had been given extravagant contracts which it was too expensive and embarrassing to pay out. These "developers" were entitled to a bonus on any foreign power project that was completed on which they could claim involvement. This included projects in India (a disaster), Poland, Sardinia and Turkey as well as Teesside. The "developers" shared 8 percent of the net value of Teesside worth an estimated $10m split five ways. Among the beneficiaries are said to have been former senior executives John Wing -- who had a similar deal on the plant in Turkey on $5.6m -- and Wessex Water boss Rebecca Mark who had a piece of the Indian project. Judging from the increased information contained in the Enron Europe accounts for the year to June 2000, even Andersen was starting to choke on the off balance sheet diet and producing ever more impenetrable accounts -- an Enron trademark. But it was too late. By the time these accounts were finalised last July, Enron was already going under and could well take Andersen with it. Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Mon Mar 4 06:03:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] UK state: preparing for GATS Message-ID: Private Eye No. 1048, 22 February - 7 March 2002 In the Back: The Cheque is in the Post How to explain the schizophrenic approach of the company that runs the post office, Consignia, to the mounting threat of privatisation? On the one hand it condemns privatisation, saying it will allow private operators to "cherry pick" business mail, leaving a second class service for the rest of us. On the other hand it is working on its own schemes to promote "business post" with all kinds of "premium" services (like paying extra to have letters delivered on time). Perhaps the contradiction has something to do with Consignia's choice of consultant. For it has hired PricewaterhouseCoopers (PwC) to advise on "future strategy" -- the same PwC that is playing a leading part in the lobby to break up postal services worldwide through the international trade treaty known as GATS. GATS (the general agreement on trade in services) obliges signatory countries to "trade in services". Among the many public services it opens up to multinationals are the postal ones; and firms like DHL, UPS and TNT are actively lobbying to use the GATS treaty to win work from formerly publicly-owned post offices. Sam Piazza, global chief executive officer of PwC, is a founder member of the "European Services Forum", one of the many business lobbies that fights for GATS. He sits on the forum's board alongside Uwe Dorken, chairman and chief executive of DHL. Also on the board are Jaap Mulders and Russell Patten, chairman and secretary-general of the "European Express Association", the trade body representing big private post operators like DHL, Federal Express, TNT and UPS. The forum began its fight for postal services in 2000 with a conference on "GATS and postal and express delivery". PwC staff were much in evidence, and delegates agreed that "premium" and "express" services to business must be promoted over humdrum "universal" services for the great unwashed. The Eye asked Consignia how much public money it paid PwC. We were told the information was "not available." Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From lnp3 at panix.com Mon Mar 4 08:05:03 2002 From: lnp3 at panix.com (Louis Proyect) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] Stocks still overpriced In-Reply-To: Message-ID: <3.0.1.32.20020304100320.011133d8@popserver.panix.com> NY Times op-ed, March 4, 2002 Bargains Everywhere but on Wall Street By JAMES GRANT On 1962, the late Sam Walton opened the first Wal-Mart store in Rogers, Ark. Forty years later ? just the other day ? Wal-Mart overtook Exxon Mobil Corp. to become the world's biggest corporation as measured by sales. A Wal-Mart spokesman attributed this triumph to an "emphasis on value shopping." Reaching into their wallets, consumers demand value. Investing other people's money, professional money managers are less discriminating. The great and growing anomaly of American capitalism is the detachment of individual investors from their own investment dollars. Enron is only the most visible consequence of this estrangement. You would expect that, by now, Wall Street, like Wal-Mart, would have slashed prices. A recession began a year ago, and though some optimists claim it has already ended, economic growth remains anemic. The stock market peaked two years ago. Yet the investment merchandise remains prohibitively expensive. Of course, there is no one conclusive measure of business value. It's harder to appraise a share of stock than a tube of toothpaste. Is the price of a share reasonable in relation to the earnings of the underlying enterprise? In relation to its dividend (i.e., that portion of the earnings actually distributed to the owners)? In relation to what the stockholders own (i.e., the corporation's net assets)? In relation to interest rates? By none of these measures are the prices quoted for America's biggest companies anything but stupendously high. Big companies are especially overvalued because the stewards of other people's money have hundreds of billions of dollars they must invest. If Microsoft, Coca-Cola and, yes, Wal-Mart, didn't exist, the Janus and Alliance and Fidelity funds of the world would almost have to invent them. It is the iconic American corporations that constitute the familiar market indices, and it is those indices that define professional investment success. The Leuthold Group, a Minneapolis- based research firm, computes a valuation measure that weighs share prices against earnings, both historical and estimated. What it finds is that, even now, during what many on Wall Street contend is a savage bear market, the Standard & Poor's 500 index changes hands at about 25 times earnings. It would have to fall by 41 percent to reach the median valuation prevailing since 1957. If Wal-Mart sold common stocks, it wouldn't be selling Yahoo! (at 277 times earnings), nor would it be selling its own (at 42 times earnings). The mantra that common stocks are the best investment is neither true nor false. Unless modified by three little words ? "at a price" ? it is meaningless. In general, when purchased at Wal-Mart prices, common stocks deliver excellent returns over time. At Tiffany prices, they tend to disappoint. Fifty years ago, the business of professional money management hardly existed. According to Federal Reserve data, American individuals owned 97 percent of their shares outright. Today, they directly hold a little less than half. The proportion of investment decisions made by mutual funds, pension funds and the like has drastically increased. No doubt, many fiduciaries care deeply about the funds entrusted to them. They feel almost as if the money were their own. However, empathetic as they might be, their interests are not the same as those of their clients. As a successful investor once told me, the primary objective of most money managers is not to make money for the client. It is to keep the client. And the way to do that, of course, is to look good. Thus has professional investing become a kind of performance art. A mutual-fund manager looks good by outperforming his or her relevant "benchmark" ? for instance, the S&P 500. To compete successfully, a contestant must run with the market wherever it goes, even over a cliff. Are stocks overvalued? In professional circles, the question is not so much inadmissable as it is irrelevant. On Wall Street, simply avoiding loss is not success. What makes a career in a time like this is losing a little less than the competition. Concluding his inquest into the crash of 1929, Ferdinand Pecora, counsel to the Senate Banking Committee, prescribed the remedy of full disclosure. Give investors the facts, he reasoned, and they would make informed decisions. What Mr. Pecora did not anticipate was that the investors would not bother to read the annual reports. The great bull market of the 1990's, preceded by the great bull market of the 1980's, annihilated skepticism on Wall Street. In keeping with the letter of the Depression-era securities laws, companies disclosed the facts (or, at any rate, most of them). However, Wall Street didn't want the facts so much as the earnings, insubstantial and revision-prone as they might be. Corporate America obligingly produced them ? eagerly, in fact, as more and more executives got rich on stock options. It is understandable that amateurs would fail to notice the alarming divergence between the fundamental value of American businesses on the one hand, and the prices assigned to the pieces of paper conferring ownership of those businesses on the other. What is reprehensible is that the professionals did not. Alfred Harrison, vice chairman of Alliance Capital Management and manager of the $11 billion Alliance Premier Growth Fund, spoke for many when he confessed in December that "nobody really dug into footnotes" of the Enron financial statements. Mr. Harrison's firm, as of Sept. 30, owned 43 million Enron shares, which raises a question. If a 43-million share investment wasn't enough to command the attention of our leading fiduciaries, what would have been? In the boom, investing was made to seem effortless. The Beardstown Ladies, meeting once a month, on Thursdays, became best-selling authors by explaining how their investment club had supposedly beat the tar out of the S&P 500. In fact, they did no such thing. (A settlement of litigation over claims to the contrary was disclosed last week.) There is one way to succeed on Wall Street. It is, in fact, the way Warren Buffett got rich. Pay low prices for the shares of good businesses. Buy them when the rest of the world wants to sell them. Keep your wits about you. Have the courage of your convictions. Sound easy? James Grant is the editor of Grant's Interest Rate Observer. Louis Proyect Marxism mailing list: http://www.marxmail.org From citizen at americanresurrection.com Mon Mar 4 08:06:02 2002 From: citizen at americanresurrection.com (AmericanResurrection) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] God Save the FCC Message-ID: <00ac01c1c38d$fe44a080$2af3a4ac@hppav> Freedom and Democracy Are Under Attack! The War on Communication Crazed fundamentalists who hate freedom and democracy have just executed a severe assault on America's Freedom of the Press. In a grotesque ruling that reeks of yet another quid pro quo corporate corruption case, a federal court, at behest of Fox News Corp, AOL Time Warner, GE, and Viacom, has issued a decision that could remove the last remaining regulations that prevent corporate conglomerates from monopolizing the American media and communication landscape. In an attack that began with the 1996 Telecommunications Act, corporate elites and lobbyists have been aggressively dismantling all regulations and laws that have been put into place to protect and guarantee a diversity of viewpoints and the free flow of information throughout the media. What has become known as the "Communications Cartel" has bought off and influenced politicians and the Federal Communications Commission, and has been casting aside media ownership rules. This latest ruling will further the already dangerous concentration of power within our communication and information system. As if it is not completely absurd already that a handful of interrelated corporations presently dominate the mass media, we are now on the threshold of what, in essence, will be a complete annihilation of the very foundation of American Democracy - the Freedom of the Press. In a land of 300 million people - in the most diverse population in the history of civilization - we are going to have perhaps five, or even as little as two or three, corporate conglomerates controlling what we hear and see through the mass media. And this is the Information Age? Who should we turn to in a situation like this? Who is going to protect our democracy and the public interest? Well, our government has a body designed to regulate and prevent the monopolization of communication. Yes, the FCC. Let's quickly take a look at the FCC and their Chairman Mike Powell. One of Mike's first moves as a Commissioner was to support the largest merger in telecommunications history - between AOL and Time Warner - creating the most powerful media empire humanity has ever known. Oh, and coincidently, Mike Powell is the son of current Secretary of State and AOL Time Warner's good old board member, Colin Powell - who owns $13.3 million worth of AOL stock! No corruption or conflict of interest there. But hey, he doesn't just hook up his Dad, he pays respect to many in the good old boy cartel - as Chairman he has approved mergers as rules were shoved aside to allow Viacom to purchase CBS and Fox News Corp to buy Chris Craft Industries. And this is the man appointed to be the protector of public interest! To make matters worse, Michael Powell has stated on record that he has no concept of "the public interest." As far as he can tell, there is no such thing. He has arrogantly declared himself to be a market fundamentalist by stating "The Market Is My Religion." He also went on to say the following, mocking the American public, freedom, and democracy: "The night after I was sworn in, I waited for a visit from the angel of the public interest. I waited all night, but she did not come." Mike later added, "I still have had no divine awakening and no one has issued me my public interest crystal ball." He has even called laws that prevent all out media domination "the oppressor." In the land of the absurd, truth is most absurd . . . you couldn't make this stuff up. Have these power-addicted tycoons become so greedy and shortsighted as to think that the American public is just going to sit back and accept this? Have they become so arrogant in their power that they assume hard working American's are not even going to notice as this is all executed behind closed doors, away from the mass media spotlight that they are already dominating? Well, if they think that they can pull this off, they are headed for a "divine awakening." Enough of all this talk, it is time for some ACTION! On March 22nd our first counter move will take place. Mr. Powell did not see the "Public Interest Angel" the night he was sworn in, but on March 22nd the Angels of Public Interest will descend upon him in droves! We suggest you question your mortality. Maybe you are an Angel after all? A DIVERSE group of activists and media advocates will gather at the FCC in Washington, D.C. to demonstrate to Powell, Congress, and the Communications Cartel, that there IS such thing as the public interest. And, more than that, there is an interested public that will not let big corporate media devour democracy, journalism, culture, the open Internet, and the possibilities of new communication and information technology. If we believe in informed democracy, civil rights, community empowerment, free speech, social justice and a diverse, representative, creative and independent media culture, we must TAKE ACTION NOW. Please join us and show your support! Spread this call to action to all of your networks, colleagues, constituents, friends, students, and neighbors. Please give your name to endorse this march, and bring a crowd with you. Democracy is at stake! For more information please visit: www.AmericanResurrection.com **************** If you cannot make it to Washington D.C. on March 22nd, please consider donating a few dollars to help us in our fight. Every dollar equals 1 less brick in the wall! Donations here: www.AmericanResurrection.com/Donate.html **************** Thank you for your time. David DeGraw www.AmericanResurrection.com -------------- next part -------------- A non-text attachment was scrubbed... Name: not available Type: text/html Size: 6728 bytes Desc: not available Url : http://lists.econ.utah.edu/pipermail/a-list/attachments/20020304/38f0a821/attachment.txt From Michael.Keaney at mbs.fi Mon Mar 4 08:39:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] US imperialism, religion & market fundamentalism Message-ID: Let's quickly take a look at the FCC and their Chairman Mike Powell. To make matters worse, Michael Powell has stated on record that he has no concept of "the public interest." As far as he can tell, there is no such thing. He has arrogantly declared himself to be a market fundamentalist by stating "The Market Is My Religion." He also went on to say the following, mocking the American public, freedom, and democracy: "The night after I was sworn in, I waited for a visit from the angel of the public interest. I waited all night, but she did not come." Mike later added, "I still have had no divine awakening and no one has issued me my public interest crystal ball." He has even called laws that prevent all out media domination "the oppressor." ===== Thomas Frank has a piece in the latest Le Monde Diplomatique in which he quotes Kenneth Lay's dual belief in Jesus and free markets. Indeed, theologian Lay said that Jesus wanted people to have choices. Meanwhile Jeffrey Skilling declared, shortly before resigning as Enron CEO, that "we're on the side of the angels". What happened to the Jesus who made it plain that one cannot serve both God and mammon? It appears that Dubya has not been a success during his visit to China. Apparently he could not wow the crowds as did Clinton a few years back. According to newspaper reports Clinton supposedly had the students spellbound on the subject of democracy (or was it that cigar?). Meanwhile Bush alienated his audience, including Jiang Zemin, by declaring that the US is a "nation based on faith". Believing in his ability to make things better for all would certainly require a lot of that, but there is a nasty sub-text to all this pious piffle that seems to emanate more freely from the White House and other US organs of state these days. Billy Graham's son, Franklin, happens to have a well-financed mission established in the south of Sudan, where, surprise surprise, oil reserves just happen to be attracting US corporate interests. The Bush administration marked its interests there very early when Colin Powell stated the US's interest in "bringing peace" to that country. The federal government is channelling money into "faith-based initiatives" that serve related ends under a cloak of charitable "good works." In many ways it's an extension of the pentecostalism that was imported to Latin America during the 1980s as a means of dislodging troublesome liberation theologians and their priestly advocates, as well as privatising social discontent by making it a matter of personal morality. Deeper analysis of the employment of a particular variant of Christianity by the US state and its corporate backers would be useful. Clearly, there are potential fissures in any such coalition, as with the struggle over stem cell research legislation. But when it comes to "civilising" the "barbarians" (and thereby acquiring their assets on the cheap), it certainly serves its purpose. Michael From ssandron at hotmail.com Mon Mar 4 19:48:02 2002 From: ssandron at hotmail.com (Seth Sandronsky) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] US imperialism, religion & market fundamentalism Message-ID: Michael, An American author, Sara Diamond, has written extensively about Christianity in U.S. politics. I've read her Roads to Dominion: Right-Wing Movementns and Political Power in the United States (1995, The Guilford Press, ISBN 0-89862-862-8), and recommend it to you and the A-List. While not a Marxist, Diamond offers useful analysis of the U.S., with a special focus on the racist right, Christian Right and neo-conservatives generally. Seth Sandronsky From: "Keaney Michael" Reply-To: a-list@lists.econ.utah.edu To: Subject: [A-List] US imperialism, religion & market fundamentalism Date: Mon, 4 Mar 2002 17:37:36 +0200 Let's quickly take a look at the FCC and their Chairman Mike Powell. To make matters worse, Michael Powell has stated on record that he has no concept of "the public interest." As far as he can tell, there is no such thing. He has arrogantly declared himself to be a market fundamentalist by stating "The Market Is My Religion." He also went on to say the following, mocking the American public, freedom, and democracy: "The night after I was sworn in, I waited for a visit from the angel of the public interest. I waited all night, but she did not come." Mike later added, "I still have had no divine awakening and no one has issued me my public interest crystal ball." He has even called laws that prevent all out media domination "the oppressor." ===== Thomas Frank has a piece in the latest Le Monde Diplomatique in which he quotes Kenneth Lay's dual belief in Jesus and free markets. Indeed, theologian Lay said that Jesus wanted people to have choices. Meanwhile Jeffrey Skilling declared, shortly before resigning as Enron CEO, that "we're on the side of the angels". What happened to the Jesus who made it plain that one cannot serve both God and mammon? It appears that Dubya has not been a success during his visit to China. Apparently he could not wow the crowds as did Clinton a few years back. According to newspaper reports Clinton supposedly had the students spellbound on the subject of democracy (or was it that cigar?). Meanwhile Bush alienated his audience, including Jiang Zemin, by declaring that the US is a "nation based on faith". Believing in his ability to make things better for all would certainly require a lot of that, but there is a nasty sub-text to all this pious piffle that seems to emanate more freely from the White House and other US organs of state these days. Billy Graham's son, Franklin, happens to have a well-financed mission established in the south of Sudan, where, surprise surprise, oil reserves just happen to be attracting US corporate interests. The Bush administration marked its interests there very early when Colin Powell stated the US's interest in "bringing peace" to that country. The federal government is channelling money into "faith-based initiatives" that serve related ends under a cloak of charitable "good works." In many ways it's an extension of the pentecostalism that was imported to Latin America during the 1980s as a means of dislodging troublesome liberation theologians and their priestly advocates, as well as privatising social discontent by making it a matter of personal morality. Deeper analysis of the employment of a particular variant of Christianity by the US state and its corporate backers would be useful. Clearly, there are potential fissures in any such coalition, as with the struggle over stem cell research legislation. But when it comes to "civilising" the "barbarians" (and thereby acquiring their assets on the cheap), it certainly serves its purpose. Michael Seth Sandronsky _________________________________________________________________ Join the world’s largest e-mail service with MSN Hotmail. http://www.hotmail.com From annewilliamson at msn.con Mon Mar 4 23:27:02 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] Stocks still overpriced References: <3.0.1.32.20020304100320.011133d8@popserver.panix.com> Message-ID: <00ce01c1c392$6be38940$0100a8c0@igrushkii> Thanks for posting James Grant's sober-minded analysis and advice. Mr. Grant is, of course, a sound money man of the Austrian School. His Grant's Interest Rate Observer is one of the few financial publications that holds the Feds' and corporate America's feet to the fire. He was much-mocked during the Bubble as a sort of party pooper, a hopeless doom and gloomer bound to lose out in the great wealth creating share market for which most addled investors mistook Wall Street's giant Ponzi Scheme. Looks pretty smart today, doesn't he? Anne ----- Original Message ----- From: Louis Proyect To: Sent: Monday, March 04, 2002 10:03 AM Subject: [A-List] Stocks still overpriced NY Times op-ed, March 4, 2002 Bargains Everywhere but on Wall Street By JAMES GRANT On 1962, the late Sam Walton opened the first Wal-Mart store in Rogers, Ark. Forty years later - just the other day - Wal-Mart overtook Exxon Mobil Corp. to become the world's biggest corporation as measured by sales. A Wal-Mart spokesman attributed this triumph to an "emphasis on value shopping." Reaching into their wallets, consumers demand value. Investing other people's money, professional money managers are less discriminating. The great and growing anomaly of American capitalism is the detachment of individual investors from their own investment dollars. Enron is only the most visible consequence of this estrangement. You would expect that, by now, Wall Street, like Wal-Mart, would have slashed prices. A recession began a year ago, and though some optimists claim it has already ended, economic growth remains anemic. The stock market peaked two years ago. Yet the investment merchandise remains prohibitively expensive. Of course, there is no one conclusive measure of business value. It's harder to appraise a share of stock than a tube of toothpaste. Is the price of a share reasonable in relation to the earnings of the underlying enterprise? In relation to its dividend (i.e., that portion of the earnings actually distributed to the owners)? In relation to what the stockholders own (i.e., the corporation's net assets)? In relation to interest rates? By none of these measures are the prices quoted for America's biggest companies anything but stupendously high. Big companies are especially overvalued because the stewards of other people's money have hundreds of billions of dollars they must invest. If Microsoft, Coca-Cola and, yes, Wal-Mart, didn't exist, the Janus and Alliance and Fidelity funds of the world would almost have to invent them. It is the iconic American corporations that constitute the familiar market indices, and it is those indices that define professional investment success. The Leuthold Group, a Minneapolis- based research firm, computes a valuation measure that weighs share prices against earnings, both historical and estimated. What it finds is that, even now, during what many on Wall Street contend is a savage bear market, the Standard & Poor's 500 index changes hands at about 25 times earnings. It would have to fall by 41 percent to reach the median valuation prevailing since 1957. If Wal-Mart sold common stocks, it wouldn't be selling Yahoo! (at 277 times earnings), nor would it be selling its own (at 42 times earnings). The mantra that common stocks are the best investment is neither true nor false. Unless modified by three little words - "at a price" - it is meaningless. In general, when purchased at Wal-Mart prices, common stocks deliver excellent returns over time. At Tiffany prices, they tend to disappoint. Fifty years ago, the business of professional money management hardly existed. According to Federal Reserve data, American individuals owned 97 percent of their shares outright. Today, they directly hold a little less than half. The proportion of investment decisions made by mutual funds, pension funds and the like has drastically increased. No doubt, many fiduciaries care deeply about the funds entrusted to them. They feel almost as if the money were their own. However, empathetic as they might be, their interests are not the same as those of their clients. As a successful investor once told me, the primary objective of most money managers is not to make money for the client. It is to keep the client. And the way to do that, of course, is to look good. Thus has professional investing become a kind of performance art. A mutual-fund manager looks good by outperforming his or her relevant "benchmark" - for instance, the S&P 500. To compete successfully, a contestant must run with the market wherever it goes, even over a cliff. Are stocks overvalued? In professional circles, the question is not so much inadmissable as it is irrelevant. On Wall Street, simply avoiding loss is not success. What makes a career in a time like this is losing a little less than the competition. Concluding his inquest into the crash of 1929, Ferdinand Pecora, counsel to the Senate Banking Committee, prescribed the remedy of full disclosure. Give investors the facts, he reasoned, and they would make informed decisions. What Mr. Pecora did not anticipate was that the investors would not bother to read the annual reports. The great bull market of the 1990's, preceded by the great bull market of the 1980's, annihilated skepticism on Wall Street. In keeping with the letter of the Depression-era securities laws, companies disclosed the facts (or, at any rate, most of them). However, Wall Street didn't want the facts so much as the earnings, insubstantial and revision-prone as they might be. Corporate America obligingly produced them - eagerly, in fact, as more and more executives got rich on stock options. It is understandable that amateurs would fail to notice the alarming divergence between the fundamental value of American businesses on the one hand, and the prices assigned to the pieces of paper conferring ownership of those businesses on the other. What is reprehensible is that the professionals did not. Alfred Harrison, vice chairman of Alliance Capital Management and manager of the $11 billion Alliance Premier Growth Fund, spoke for many when he confessed in December that "nobody really dug into footnotes" of the Enron financial statements. Mr. Harrison's firm, as of Sept. 30, owned 43 million Enron shares, which raises a question. If a 43-million share investment wasn't enough to command the attention of our leading fiduciaries, what would have been? In the boom, investing was made to seem effortless. The Beardstown Ladies, meeting once a month, on Thursdays, became best-selling authors by explaining how their investment club had supposedly beat the tar out of the S&P 500. In fact, they did no such thing. (A settlement of litigation over claims to the contrary was disclosed last week.) There is one way to succeed on Wall Street. It is, in fact, the way Warren Buffett got rich. Pay low prices for the shares of good businesses. Buy them when the rest of the world wants to sell them. Keep your wits about you. Have the courage of your convictions. Sound easy? James Grant is the editor of Grant's Interest Rate Observer. Louis Proyect Marxism mailing list: http://www.marxmail.org From annewilliamson at msn.con Mon Mar 4 23:27:05 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] US imperialism, religion & market fundamentalism References: Message-ID: <005f01c1c3f1$4af21bc0$0100a8c0@igrushkii> Seth: Does Sarah DIAMOND write about Israeli fascists too? Or just neocon creeps like Bill KRISTOL? Or the Israeli lobby that buys our Congress with the US taxpayer money the same Congress pumps to Israel annually? Course the Israelis are smart - they spread $100-$200 million of the billions in US taxpayer funds they receive annually around K Street, into the pockets of lawyers, lobbyists and ALL pols on international and aid committees. And does she comment on the Scofield Bible? Just curious - A. ----- Original Message ----- From: Seth Sandronsky To: Sent: Tuesday, March 05, 2002 2:47 AM Subject: Re: [A-List] US imperialism, religion & market fundamentalism > Michael, > > An American author, Sara Diamond, has written extensively about Christianity > in U.S. politics. I've read her Roads to Dominion: Right-Wing Movementns and > Political Power in the United States (1995, The Guilford Press, ISBN > 0-89862-862-8), and recommend it to you and the A-List. While not a > Marxist, Diamond offers useful analysis of the U.S., with a special focus on > the racist right, Christian Right and neo-conservatives generally. > > Seth Sandronsky > > From: "Keaney Michael" > Reply-To: a-list@lists.econ.utah.edu > To: > Subject: [A-List] US imperialism, religion & market fundamentalism > Date: Mon, 4 Mar 2002 17:37:36 +0200 > > Let's quickly take a look at the FCC and their Chairman Mike Powell. > > > > To make matters worse, Michael Powell has stated on record that he has > no concept of "the public interest." As far as he can tell, there is no > such thing. He has arrogantly declared himself to be a market > fundamentalist by stating "The Market Is My Religion." He also went on > to say the following, mocking the American public, freedom, and > democracy: "The night after I was sworn in, I waited for a visit from > the angel of the public interest. I waited all night, but she did not > come." Mike later added, "I still have had no divine awakening and no > one has issued me my public interest crystal ball." He has even called > laws that prevent all out media domination "the oppressor." > > ===== > > Thomas Frank has a piece in the latest Le Monde Diplomatique in which he > quotes Kenneth Lay's dual belief in Jesus and free markets. Indeed, > theologian Lay said that Jesus wanted people to have choices. Meanwhile > Jeffrey Skilling declared, shortly before resigning as Enron CEO, that > "we're on the side of the angels". > > What happened to the Jesus who made it plain that one cannot serve both > God and mammon? > > It appears that Dubya has not been a success during his visit to China. > Apparently he could not wow the crowds as did Clinton a few years back. > According to newspaper reports Clinton supposedly had the students > spellbound on the subject of democracy (or was it that cigar?). > Meanwhile Bush alienated his audience, including Jiang Zemin, by > declaring that the US is a "nation based on faith". Believing in his > ability to make things better for all would certainly require a lot of > that, but there is a nasty sub-text to all this pious piffle that seems > to emanate more freely from the White House and other US organs of state > these days. Billy Graham's son, Franklin, happens to have a > well-financed mission established in the south of Sudan, where, surprise > surprise, oil reserves just happen to be attracting US corporate > interests. The Bush administration marked its interests there very early > when Colin Powell stated the US's interest in "bringing peace" to that > country. The federal government is channelling money into "faith-based > initiatives" that serve related ends under a cloak of charitable "good > works." In many ways it's an extension of the pentecostalism that was > imported to Latin America during the 1980s as a means of dislodging > troublesome liberation theologians and their priestly advocates, as well > as privatising social discontent by making it a matter of personal > morality. > > Deeper analysis of the employment of a particular variant of > Christianity by the US state and its corporate backers would be useful. > Clearly, there are potential fissures in any such coalition, as with the > struggle over stem cell research legislation. But when it comes to > "civilising" the "barbarians" (and thereby acquiring their assets on the > cheap), it certainly serves its purpose. > > Michael > > > > > > Seth Sandronsky > > > _________________________________________________________________ > Join the world's largest e-mail service with MSN Hotmail. > http://www.hotmail.com > > > From Michael.Keaney at mbs.fi Mon Mar 4 23:29:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] Afghanistan: the quagmire continues Message-ID: Pentagon forced to bolster US force IAN BRUCE: ANALYSIS The Herald, 5 March 2002 THE deployment of more than 600 US combat troops to the battle around Gardez represents a shift in strategy and an unspoken admission that Afghan militias cannot be relied upon to prevent the flight of Taliban and al Qaeda fighters. Hundreds of wanted men escaped from the Tora Bora cave complex three months ago because of the reluctance of US commanders to risk American lives on remote mountain tracks. Proxy Afghan forces, some of whom were related to the troops they were supposed to be fighting, reputedly accepted bribes of up to ?3000 a time to turn a blind eye to armed fugitives crossing to safety in Pakistan across well-known smuggling routes. Stung by criticism that the containment of the battle zone had not been conducted in a professional military manner, US commanders have now committed soldiers from the 10th Mountain Division and the 101st Airborne, the fabled "Screamin' Eagles", to blocking the high passes. Even the name of the operation, Anaconda, is an indication that the trapped guerrilla force is to be encircled and squeezed into submission or destruction. The tacit admission is that the risk of American casualties is acceptable if the enemy can be defeated and prevented from escaping to fight another day. Allied contingents serving in Afghanistan have been surprised by American reluctance to use the overwhelming tactical advantage of their helicopter fleet to move troops into key locations in response to changes on the ground. Despite Pentagon statements of determination to root out the last pockets of resistance in Afghanistan, the military and the White House still fear the political impact of the bodybag factor on public enthusiasm for the war. With Iraq, Yemen, and the Philippines already firmly in their sights, George W Bush's administration is concerned that casualties should not interfere with future plans. It took the deaths of just 18 Rangers and Delta Force commandos in Somalia in 1993 to force America to withdraw from peacekeeping operations in Africa. However, with criticism growing over the failure to capture or kill Osama bin Laden, the world's most wanted man, and Mullah Mohammed Omar, leader of the deposed Taliban regime, keeping US troops out of harm's way is no longer an option. In northern Afghanistan, at least 100 people were killed when a powerful earthquake sent a cliff tumbling on to a village. Sunday's 7.2 quake killed one person in Kabul, injured dozens in Afghanistan and Pakistan, and rattled buildings across six countries of central and south Asia, but word of the valley disaster emerged only yesterday when UN World Food Programme workers reached the region. * A British student mistaken for a terrorist in an airline security scare last week is considering legal action against the FBI. Adeel Akhtar, 21, a law student, was led off a jet in handcuffs at New York and says he felt singled out because he is not white and has a Muslim name. Full article at: http://www.theherald.co.uk/news/archive/5-3-19102-0-31-0.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Mon Mar 4 23:46:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] CIA: the Baer necessities Message-ID: Ex-CIA agent Robert Baer appeared on BBC World yesterday, being interviewed by veteran journalist Tim Sebastian in the "Hardtalk" programme. When Baer could get a word in (Sebastian seems to think gritty interviewing involves cutting off your interviewees and haranguing them periodically) he had some very interesting things to say, most of which are recapitulated below in Henry Porter's review of Baer's book and their lunch together. Has anyone stateside been following this guy? At first I thought he was going to be a standard libertarian, as he decried the incompetence of the federal bureaucracy as a whole, using the CIA as a case study of stupidity. But when Sebastian suggested that it was the Clinton administration's fault, obviously expecting another tirade about the idiocies of the Christopher/Albright/Berger foreign policy era, Baer instead first went to the Bay of Pigs fiasco, blaming the Kennedys for that, and then said the worst of all was Reagan, whose point man, William Casey, got the agency involved in all kinds of shenanigans in Central America. This detracted from the primary task of gathering intelligence. Baer's argument seems to be that covert ops, black ops, etc., are all mistaken and very counterproductive because the job of an intelligence agent is, first and foremost, to "find the truth". It was very heartwarming to see this exponent of professionalism bemoaning the dumbing down of his honourable trade, but in the process he also shed light on various aspects of his profession, including the ease with which contacts in the news media can be used to spread messages and disseminate rumours. Perhaps Ian Bruce is in touch with this guy. Baer is not quite espousing a Chalmers Johnson-type "blowback" line, but he comes close. His points about Iraq now echo those made ten years ago by Kissinger and co., who warned Bush Sr. against splitting Iraq and destabilising the whole region. And Johnson's points about North Korean defensiveness are paralleled by Baer, whose analysis of Iraq seems much more reliable than Porter's toadying to the official Blairite line. Any further info on this guy much appreciated. 'Bombing Saddam is ignorance' Robert Baer, the ex-CIA man in Iraq during the failed uprising in 1995, says the US is not in a position to strike against Iraq because it does not understand anything about the country Terrorism crisis - Observer special Henry Porter Sunday March 3, 2002 The Observer Robert Baer's objections to an attack on Iraq could hardly be principled. As the CIA's point man in Iraq during the failed uprising in 1995, he encouraged dissident groups to believe that the United States wanted the overthrow and death of Saddam Hussein. Yet Baer, whose memoir of life in the CIA, See No Evil, is published in Britain tomorrow, is appalled at the idea of a US strike against Iraq today. 'If the US is to bomb Saddam and his army until there is no army, what comes after that? No one is discussing the ethnic composition of Iraq or what Iran is likely to do.' Few in America appreciate the tribal ethnic and religious faultlines that run through the Middle East as Baer does. Iraq is particularly divided. In the south there is a Shia majority which now looks to Iran for support. Occupying the geographical and political centre of the country are the followers of the Sunni sect, which includes Saddam's tribe, and in the north are the Kurds, who are split into two warring parties, the PUK and the KDU. 'The US is in no position to rejigger this because we don't understand anything about the country. If I were the Iranians, for instance, I would try to set up a state in southern Iraq and add three million barrels a day to my account. That could begin to rival Saudi Arabia. Of course, I don't know this is going to happen, but the US government doesn't know either. The heart of the debate is about taking out all Saddam's tanks in a couple of weeks.' Baer worked for the CIA's Directorate of Operations for 25 years, with postings in Sudan, Lebanon, Iraq, Tajikistan, India and Europe. His devastating portrait of the agency's decline adds much to the understanding of why America was caught off guard on 11 September, but as important is what he has to say about American sluggishness when it comes to institutional reform. Towards the end of his time, he searched CIA computer for files on subjects that interested him, for example, the Pasdaran (the Iranian Intelligence service), the Saudi royal family and Syria. 'You know what? There was nothing there. Nothing. They didn't have anything. That's America now, you know. It can't reform.' After a quarter of century abroad, Baer hardly recognises the States and is appalled at the level of public ignorance. 'There is no debate,' he says. 'People will not address the question of Palestine in the context of the World Trade Centre attacks. It's not in the terms of the discussion. They simply believe that Israel has the right to defend its democracy like the US does. They don't understand that Israel gives no democratic rights to the Palestinians whatsoever. They don't see that it's not a democracy.' An affable but watchful man in his late forties, Baer is aware that the CIA is mightily displeased with his first literary effort. It can't help that the book has been on the New York Times ' bestseller list for four weeks in a row; that Warner Brothers bought an option and hope to develop the project with the team that made Traffic ; and that Baer is never off US television, often doing three national shows in an evening. He seems to have few regrets about leaving the CIA. 'I would rather drive a taxi than serve in the CIA,' he says convincingly over lunch at the Alistair Little restaurant in West London. 'Don't ask me how it happened, but the people who work in it just don't match up to the people who got to Silicon Valley or the people who make cruise missiles or design derivatives.' It's in the innocuous detail that Baer's book is telling. At one point he remembers taking over from a female officer in the Paris station and being handed her list of contacts and agents. When he followed them up, he found that instead of using them to gather intelligence she had been trying to recruit them to a religious sect. The serving US ambassador to France was also involved in the sect. When the two of them were observed handing out leaflets in the street, the French security service thought some kind of operation was in progress. With good reason he is a pessimist about the CIA and US foreign policymaking. Examples of incompetence abound in See No Evil . In 1986, he was contacted in Germany by the Syrian Muslim Brotherhood who wanted a meeting. He went to Dortmund and listened to Syrian con tacts propose an intelligence alliance against President Assad. He wrote up a report (on a typewriter, whose ribbon he destroyed afterwards) and sent it to the US embassy in Bonn. A message came back that they weren't interested. But that was not the last he heard of it. In the wake of 11 September, 16 years later, the FBI contacted Baer to say that associates of the Syrian contacts had been involved in al-Qaeda. That channel, closed down so peremptorily, might have led them to Mohamed Atta. Over lunch we circled the problem of Iraq. He mentioned that it is easily within Saddam's power to forestall the long-announced air attacks from US bases in Diego Garcia. He could, says Baer, 'simply move his tanks into Syria and proclaim that he was going to liberate the Palestinians', thus pitching Israel into a war with an Arab state. If there is a fault in Baer's analysis of the Iraqi problem, it is that while he acknowledges Saddam's willingness to use force against civilians he does not believe that the accumulation of weapons of mass destruction is anything but defensive. Baer says we should look at it through Saddam's regional mentality and that his chief concern is, as it always has been, Iran. ?See No Evil, by Robert Baer, Crown Publications ?12.99. Full article at: http://www.observer.co.uk/international/story/0,6903,660931,00.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Tue Mar 5 01:56:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] UK state "modernisation", turf wars Message-ID: This makes great copy but in reality it's a very mild warning shot across the bows. Tony does need to pay more attention to his parliamentary constituency which, for all its ornamental functionality, can still pose problems should his presidential style become too overbearing. Mind you, transferring discontent onto the shoulders of "Lord" John Birt is a good way to capitalise on what is a very easy target indeed. Meanwhile the pomposity of those decrying the lack of "accountability to Parliament" ignores the volumes of infringements of that sovereignty that have taken place with the connivance of MPs eager to feed on the trough of patronage that becomes ever more deep under the UK's evolving elective dictatorship. Meddling apparatchiks thrive in Whitehall, say MPs Patrick Wintour, chief political correspondent Tuesday March 5, 2002 The Guardian Tony Blair has overseen the growth of unaccountable and meddling apparatchiks in Downing Street unparalleled in peacetime, a scathing report by a Labour-controlled committee of MPs claimed yesterday. The MPs accused Mr Blair of deliberately undermining the Commons select committee system by preventing Lord Birt, the prime minister's transport adviser, from giving evidence to the committee. The reasons for Lord Birt's refusal to attend were "frankly incredible" and designed to disguise his ignorance of transport issues, the transport, local government and regions select committee, chaired by Gwyneth Dunwoody, said. Lord Birt, the former BBC director general, is responsible for "blue skies thinking" in transport beyond the 10-year transport plan, still the responsibility of Stephen Byers, the transport secretary. The report is likely to lead to fresh calls for the prime minister to give evidence to select committees if he will not let his advisers attend. The MPs condemned No 10 for undermining the government's original anti-roads policy, being over-susceptible to business lobbyists and prone to despise departmental civil servants. The report also raises fresh questions about the "new government centre" set up by Downing Street after the election, its relationship with policy departments and its accountability to parliament. Mr Blair reorganised Downing Street after the election, setting up a forward strategies unit, a delivery unit and an office for public service reform. A senior Blair adviser defended the reform as "replacing feudal baronies with a more Napoleonic system". But the MPs' report says: "Never in peacetime has a prime minister gathered about himself such an assemblage of apparatchiks unaccountable to parliament. "As the central unit becomes ever more powerful, it is ever less acceptable that its work is secret. It is bad in practice because the basic assumptions are unchallenged. It is unac ceptable in principle that they should not be accountable, and that they refuse to be questioned by parliament". The MPs add: "It is far from clear the proliferation of advisers and units is a force for good," since it generates an irresistible urge to meddle. "Both in policy analysis and its implementation, the central unit can be part of the problem, not the solution. A small number of people - often like Lord Birt, with few relevant qualifications beyond the ear of the prime minister - sec ond-guess the work of experienced civil servants. "We have noted a tendency to despise what is seen as as the blinkered old-fashioned thinking of departmental civil servants, which is thought to prevent them from finding quick solutions. Allied to this, powerful business interests make use of the central unit to push their own views in a more favourable environment than they might receive from officials in their department." Lord Birt has managed to avoid questioning as he is a member of the House of Lords and cannot be summoned by a Commons select committee. Downing Street defended his non-appearance, saying that it was long-standing policy for ministers or the appropriate civil servants to give evidence. Lord Birt had no executive role and was not responsible for the 10-year plan, the subject of the MPs' inquiry, it said. However Ms Dunwoody, who was nearly removed by Labour whips as the select committee's chairwoman, accused Mr Blair and the central unit of hiding behind ancient conventions. The MPs said "advisers and special advisers, and others from the prime ministers' central unit should no longer conduct their reviews in secret, but should be accountable to parliament for work relating to the policy of individual departments". In the case of Lord Birt, the committee observed: "The only conclusion that can reasonably be reached is that the prime minister or his most senior advisers refused to allow Lord Birt to appear before us because his performance would be an embarrassment." Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Tue Mar 5 01:58:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] UK labour movement Message-ID: Union pressed to cut Labour cash Patrick Wintour, chief political correspondent Tuesday March 5, 2002 The Guardian The leadership of the public service union Unison is facing rank and file pressure to divert millions from its political funds to a new fund set up to back non-Labour candidates, in a test case on future union-Labour links. The union's executive is battling to block the change, arguing Labour's rules may prevent a union affiliated to the party simultaneously giving cash to a rival party. A report to the Unison executive also claims there would be "a political and moral imperative" to hold a membership ballot before making any change. A new political fund linked to non-Labour candidates could divert millions from the already depleted coffers of Millbank. Leftwing union branches, opposed to Labour's approach to the public services, have already submitted resolutions demanding the union establish a new fund to which members could contribute to back candidates opposed to Labour. The motion from the Bromley branch is due to be debated at the union's conference in June. The Unison leadership was forced into reconsidering its financial links with Labour after its annual conference unexpectedly voted for a motion demanding the review and condemning New Labour for attacking the wages, conditions and jobs of Unison members. The move is part of a wider campaign to free the union from the link with Labour. Unison - as the largest public sector union - is seen as the test case that could transform the union-party link. Although the leadership is critical of Tony Blair, the report to the executive is designed to stress the pitfalls of losening ties with Labour. Glen Kelly, Bromley branch secretary, described the report as "completely biased". Unison is facing three options: disaffiliating from Labour, the establishment of an additional fund to help non-Labour candidates, or maintenance of the status quo. The report to the union's executive, prepared by a working party, warns that any decision to disaffiliate from Labour "could lead to haemorrhage of members to other unions, as well as raising major questions about Labour's role as a trade union party." The report claims that if an additional fund was established and cash given to other parties, "such a payment could be in breach of contract between the party and the union, and could have difficulties for the union's continued relationship with the party". Unison currently has two political funds, one deployed to fund general political campaigns, such as the anti-debt campaign Jubilee 2000, and the other specifically linked to the Labour party. Full article at: http://www.guardian.co.uk/uk_news/story/0,3604,661877,00.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Tue Mar 5 02:00:03 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] Europe/US rivalry: Kyoto protocol Message-ID: EU votes for Kyoto and increases pressure on Bush Ian Black in Brussels Tuesday March 5, 2002 The Guardian Hailing a step forward in attempts to save the planet, the EU yesterday reaffirmed its commitment to the Kyoto treaty on global warming - and told the US that it should make the same commitment. EU environment ministers meeting in Brussels gave their formal blessing to the decision, which means that the EU will now complete ratification of the treaty by June 1. Kyoto commits the EU to reduce its emissions of greenhouse gases to eight per cent below 1990 levels during the five years from 2008 to 2012. Greenpeace called it a "historic" move that would allow the treaty to come into force by the time of the world summit on sustainable development in August - the 10th anniversary of the first Earth Summit in Rio. But the impact of the announcement was marred when EU member governments failed to set their own emission levels to meet Kyoto targets. Individual targets will now be decided by the European Commission. Nevertheless, the decision increases pressure on the US president, George Bush, who angered many countries during his first months in office by unilaterally pulling out of the pact, arguing that it would damage the US economy. EU member states have also been sharply critical of the US climate change strategy announced last month, which aims to encourage industries to cut emissions without setting mandatory targets. "By taking this decision, the EU has reaffirmed its commitment to pursuing multilateral solutions to issues of global concern," the commission said. "The EU continues to call for the United States to participate in the global framework for addressing climate change." Romano Prodi, the president of the commission, said: "We can only tackle climate change effectively through a multilateral process." Since the US withdrawal, the EU has taken the initiative in global warming talks in Germany and Morocco, and led efforts to ensure that big industrial countries like Russia, Japan and Canada stick with Kyoto. The treaty will only become legally binding when it has been ratified by 55 of the signatories, who between them must have accounted for at least 55% of developed countries' 1990 emissions. The US produced one third of those emissions and the EU a quarter. Without the US, almost all other developed countries must ratify the treaty if it is to come into force. Greenpeace said Washington should now see the flaws in its strategy, which it suggested was meant to help the oil industry. "After President Bush slammed the door on the Kyoto protocol in March 2001 - and the very bad joke of the Bush-Exxon climate plan last month - it is now time for the USA to come back to the Kyoto protocol," it said. "We should all remember that the Kyoto targets are a very small but crucial first step towards protecting the earth's climate. Industrialised countries must actually reduce their emissions by 80% by 2050 if ministers really want to protect the life of our children and grandchildren. There is no time to waste." Full article at: http://www.guardian.co.uk/international/story/0,3604,661888,00.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Tue Mar 5 02:02:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] Afghanistan: the blowback continues Message-ID: Afghan recruits paid ?140 a month by US troops 600 Pashtuns join attack on Taliban stronghold Rory McCarthy in Zurmad Tuesday March 5, 2002 The Guardian Afghan soldiers involved in a new campaign against a Taliban and al-Qaida stronghold in the mountains of eastern Afghanistan are being trained and paid directly by American troops, it emerged last night. American B52s yesterday rained more bombs on targets at Shah-e-Kot, near the village of Zurmad in the mountains of Paktia. One senior Afghan commander said at least 2,000 al-Qaida fighters, including Arabs, Chechens and Pakistanis, along with Taliban soldiers, were holed up in an underground base. Planning for the attack began at least a month ago when 600 local Afghan men, many of them unemployed, were recruited into a new military force and trained by US troops. Each recruit is being paid $200 (?140) a month in cash by the American soldiers. In addition, every man was given a $50 (?35) gift for the Muslim festival of Eid last month. Khail Mohammad, 22, told the Guardian how he joined the force a month ago, attracted by the money and the promise of proper military training. He was immediately given American-made clothes and boots as well as a Kalashnikov rifle. "We are given $200 a month. They didn't give the money to our commanders but straight to us," said Mr Mohammad, who comes from Maidan in Paktia. The money represents a considerable salary in Afghanistan, where the average monthly wage is closer to $40 (?28). "It was a very good opportunity for us. The Americans are very friendly but they are very serious when they are training." All the recruits were Pashtun, the ethnic group which dominates southern Afghanistan and from which the Taliban emerged eight years ago. For three weeks Mr Mohammad and the other recruits were given basic military training, which included being taught guard duty, how to surround an enemy and elementary first aid. Two local Pashtun commanders, Haji Khaishkyar and Commander Zia, were present during the training, which took place about two miles from the provincial capital, Gardez, at a base in Ghor Gharai. "For most people there it was the first time we were soldiers," he said. "I joined them because I want to help my country. I want to see a good future for Afghanistan and I want to be a soldier." After the first three weeks the men were given four days' intensive weapons training. Each man was offered lessons in one weapon: Kalashnikov assault rifles, rocket-propelled grenades or machine guns. Following the weapons training they began a four-day exercise to prepare for the attack on Shah-e-Kot. On the fifth day, Saturday, the attack began. Although the operation at Shah-e-Kot appears better planned than earlier campaigns against al-Qaida bases at Tora Bora and Zhawara, also in eastern Afghanistan, the attack launched on Saturday quickly ran into trouble when one American soldier and three Afghans were killed by mortar fire. Two other US soldiers and four Afghans were injured. The injured Afghans included Mr Mohammad, who was being treated at the hospital in Gardez after the pick-up truck he was travelling in overturned late on Saturday night. Much of the area around Zurmad is still regarded as sympathetic to the Taliban. A Canadian journalist was seriously injured yesterday when the car she was travelling in was attacked as she drove back from Zurmad to Gardez, an hour-long drive on a rutted dirt track. The woman was travelling with two other journalists and an Afghan driver when another car approached from the opposite direction. A man in the car appeared either to fire a gun or throw a grenade at the right-hand side of the journalists' jeep. Other journalists took the woman to hospital in Gardez where she was being treated last night. Her injuries did not appear to be life threatening. Before the attack began, Mr Mohammad said the Afghan commanders had asked the Taliban and al-Qaida fighters to surrender. "But they answered they would continue fighting as long as they were alive," he said. When the attack began on Saturday the 600 Afghans, together with a number of American soldiers, moved in on Shah-e-Kot, getting within hundreds of metres of the village. But they quickly encountered heavy resistance. "Before we could start attacking they started fighting against us," he said. "They were firing mortars, rockets and machine guns." One of the senior Afghan commanders involved in the attack said last night that Shah-e-Kot was surrounded but the area around Gardez was still dangerous. "There was heavy American bombing today," Abdul Matin Hassan Khiel said. "They are completely surrounded but we don't know how long it will take. It could take one or two days, it could take longer." Full article at: http://www.guardian.co.uk/international/story/0,3604,661966,00.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Tue Mar 5 02:07:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] Britain/US split: Iraq Message-ID: Why is Blair banging the drum for an attack on Iraq? The PM is talking up the case for action when he should be sceptical Hugo Young Tuesday March 5, 2002 The Guardian Listening to the right in Washington and the left in London, you might think an American invasion of Iraq this year is certain to happen. It is not. The question remains moot, for the compelling reason, sensed in Washington as keenly as anywhere, that an invasion would be very risky. The Foreign Office hopes it will not happen. So does the Ministry of Defence. So, according to all available intelligence, does Tony Blair. So another question presents itself. Why is Mr Blair going round the world softening up opinion for a war that may not happen, and which he would prefer not to see? An Iraqi war would be difficult, first of all, militarily. Iraq is not Afghanistan, and Afghanistan is hard enough. American troops have been bogged down there, not just destroying the Taliban but trying to stop factions disintegrating into civil war, much longer than the Pentagon wanted. Battle scenarios in Iraq contemplate at least 200,000 US troops on the ground, whatever the result of an air assault. This is very big stuff, involving armies that may not be easily extricated from what they're doing, let alone smoothly assembled. The generals may not want to do it. The rationale is as troubling as the battle plan. Unlike Afghanistan, Iraq will lack the pretext that fitted it for urgent coalition-building and attack. The most ferocious Washington warriors have failed to find an al-Qaida connection. The continuity between Afghanistan and Iraq is one of timing alone. This could be the convenient moment to move on from global terrorism to the recalcitrant enemy. That may make sense to Pentagon hardliners, but would mean an Iraqi war conducted in much more fragmented political conditions than the war against Osama bin Laden. Quite forbidding. Most of the Arab world would like to see Saddam Hussein destroyed. But how many regional leaders will talk and act accordingly? On past evidence, they'll wait to see who's winning. Vice-President Cheney's coming tour is designed to shore up the coalition for all eventualities. It will not be easy. In Afghanistan, the neighbour whose support was crucial, and fiercely fought for, was Pakistan. In Iraq, an entire region will be in play as the US military seeks a swift success that must include the visible departure from this life of Mr Saddam. Hard to plot with certainty. Another pragmatic flaw in the brutalist world-view of Richard Perle. So, compared with the instant response to September 11, the slow build-up to an Iraqi war has problems on every front. I have touched on only a handful. Even if the UN procedures are gone through, with weapons inspectors once again proposed and rejected, the world's will for American action will be deeply splintered. Louring over everything is the gamble on success. The domestic politics of war might play well in the autumn, during mid-term elections the Republicans are in danger of losing. But the politics of mili tary failure would play catastrophically in 2004 when Mr Bush is up for re-election. Outsiders might be seized of another thing. Added to these reasons that might yet make Bush hesitate is the prospect of international chaos, as one nation unilaterally decides to exert its powerful will to revolutionise another. All in all, a shocking price to pay, justifiable, a sceptic might think, only in the event of clear and present global danger, together with the certainty that such action could eliminate it. But Tony Blair is doing everything he can to sound unsceptical. He seems to have launched himself on another of his missions. His words are as calculated as they are gratuitous. He makes the Bush argument about weapons of mass destruction if not the axis of evil, and offers no doubt about the need to go after them. He is making himself part of the propaganda build-up to normalise the necessity of invasion. Into a scepticism that extends even to parts of Washington, let alone his other friend Vladimir Putin, he drops statements that solidify the case the hawks are making, and incidentally assure Bush that anything he does will not be unilateralist: he will always have a friend in Downing Street. Yet here, too, Iraq is not quite like Afghanistan. Whereas the war against al-Qaida drew little dissent that mattered, war in Iraq is another matter. The cabinet might at last have something to say. Mr Blair talks as if his is the only British voice that counts. But foreign policy here is not, as in France, a presidential fief. Decisions like this one surely need proper collective endorsement. As we will see when the Commons debates it tomorrow, the Labour backbenches are seriously divided. They're the open face, I believe, of covert anxieties about the Iraqi option that are starting to grow across the cabinet. It's possible, I'm prepared to concede, that the objective doubts anyone ought to have about an invasion may begin to fall away. Saddam Hussein is an international criminal, brutal to his own people and an unrepentant enemy of any world order the UN attempts to invigilate. Maybe the indigenous forces vital to his overthrow can be fashioned by the US into a credible replacement. Maybe a military plan can be shaped in Washington and Tampa that makes watertight sense. Maybe the neighbours can be persuaded, by whatever furtive means, not to oppose America outright. Maybe - perhaps it's more than maybe - other major nations of the EU will not, if it comes to the point of war, publicly oppose the US. Britain, we know, would fall into that unresisting camp. But does this have to happen so brazenly before the question is even asked? Does our leader need to go round not only talking up the weapons of mass destruction, but implying that just about any action will be legitimate to attack them? When strategy and tactics are, for the best of reasons, disputed, why does he choose to put his weight behind the hawks and not the doves, especially when the entire British and EU political establishment, except the Duncan Smith fraction, is more conscious of the hazards than the necessity of an Iraqi war? Pushed on this, Mr Blair would say his influence lies behind closed doors. He talks an American game in public to play a European one in private. If that was ever true, it's now plainly a fantasy. His stance is American in private as well as public: reassuring, cosy, intimate, trusted, enlisted, carved-up. There is another way. Last month, the German foreign minister, Joschka Fischer, was asked about an Iraqi invasion. He said calmly, "There is a debate that is getting more intense and that we view with concern." Such quiet scepticism probably reflects British public opinion. Consider it in Blair's mouth, and you reach the heart of the British predicament. It would sound like mutiny. Yet that is the barrier Britain needs to cross. If the mere expression of concern is a price loyalty declines to pay to independence, then the relationship really has become a curse. Full article at: http://www.guardian.co.uk/comment/story/0,3604,661984,00.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Tue Mar 5 02:18:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] Paul Foot on Palestine Message-ID: Anne Williamson writes: Course the Israelis are smart - they spread $100-$200 million of the billions in US taxpayer funds they receive annually around K Street, into the pockets of lawyers, lobbyists and ALL pols on international and aid committees. ===== In defence of oppression Paul Foot Tuesday March 5, 2002 The Guardian The cycle of death goes on and on. Nearly 50 Palestinians dead in the Israeli army attacks on refugee camps over the past couple of days; 10 Israeli soldiers dead at an army checkpoint near Ramallah. In the west there is a universal shaking of sophisticated heads and a weary, liberal sigh. Tut tut, there they go again. Two enemy peoples in a far-off land, caught up in an age-old conflict, swapping atrocity for atrocity, and endlessly killing each other out of some primeval hatred. There is nothing civilised and humane observers can do about it, apparently, except perhaps to hope that sooner or later one side (the strong) will annihilate the other (the weak). The beauty of this approach is that it requires no intellectual effort, no analysis, no history, above all no need to distinguish between the violence of the oppressed and the violence of the oppressor. Nothing could be clearer from the conflict over Palestine than that the Israelis are the oppressors and the Palestinians the oppressed. The refugee camps invaded by Israeli troops last week are inhabited by people whose parents or grandparents were flung out of their homes and their lands more than half a century ago and have had to watch those lands being occupied and confiscated by Israelis. The reason Israeli troops have the audacity to invade those camps today is that their predecessors, by means of entirely illegal military invasions, conquered the West Bank of Jordan, divided it up into cantons or bantustans and imposed on them equally illegal and ludicrously privileged "settlements". The violence of the Israeli army and police in those regions is the violence of the oppressor, and the consequent violence of the Palestinians is the resistance of the oppressed. Anyone who favours the Israeli occupation of the areas, or the settlements, or who denies the right of violent resistance to the Palestinians is siding unequivocally with the oppressor against the oppressed. Assuming a "plague on both your houses" approach is not just a travesty of the facts. It shuts out all prospect of a solution. If one side is as bad as the other, then any settlement is out of the question since both sides will go on killing each other in any event. A rational assessment of the roles of oppressed and oppressor, on the other hand, tells us not only why people are killing each other, but also how they can be stopped from doing so. If the reason for the violence is the illegal occupation of Palestinian territory, then the obvious solution is for the Israelis to get out of that territory and disband the settlements. If the Israeli government just won't budge on either withdrawal or the settlements, then the obvious answer is for the west to impose sanctions - to cut off the massive economic subsidies and arms shipments that have built up the Israeli economy and its military machine. Remember the indignant hullabaloo when a shipment of arms, bound apparently for the Palestinians, was intercepted. Whoever complains about arms shipments a hundred times greater that pour regularly from our factories and those of the US into Israel? Anyone in the United States or Britain who opposes such sanctions is taking up an unequivocal stand on the side of illegal occupation, military conquest and economic oppression. Especially pathetic on the part of our apologists for Israeli oppression is their bleating about anti-semitism. For the sort of oppression they favour is the seed from which all racialism, including anti-semitism, grows. There is a solution to the Palestine conflict. It depends on the withdrawal of Israeli forces and the disbandment of the settlements. Such a solution is easily within the grasp of western diplomacy, and would stop the killing. Full article at: http://www.guardian.co.uk/comment/story/0,3604,661939,00.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Tue Mar 5 02:21:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] Financial regulatory crisis Message-ID: Putting a finger on corporate intangibles New US rules about disclosing assets such as brands, customer lists and technology could benefit investors. But managers have some reservations, writes Simon London Financial Times: March 5 2002 US financial reporting has crossed the Rubicon. The Financial Accounting Standards Board is working on rules that will require US companies to disclose, for the first time, information regarding intangible assets such as brands, customer lists and technology. In normal times the announcement would have caused a stir in accounting and investment circles and among corporations. But times are far from normal: shock waves from the collapse of Enron meant that FASB's announcement passed almost unnoticed. Do not be fooled. Regulations that make companies reveal more about their investment in intangible assets could have a greater impact, in the long run, than anything likely to emerge from the Enron saga. First, giving investors information about intangibles should help them value companies more accurately. This applies to companies in "old" industries such as chemicals and engineering as well as software and services companies. Second, according to the old adage that management follows measurement, disclosure could start to change the way companies are run. Moreover, this may start to be felt sooner rather than later. FASB says it hopes to have an exposure draft ready for publication by the autumn. A new accounting standard could be in force by this time next year. But the standard-setters are likely to proceed in small steps. Do not expect companies to be required soon to value brands, customer relationships or other intangibles on the balance sheet. More likely, FASB will call for disclosure in the notes to the accounts of metrics and ratios from which investors can draw their own conclusions. It is no secret that the conventional balance sheet gives investors very little useful information about intangibles. While investment in tangible assets - the physical plant and machinery employed in a business - is capitalised on the balance sheet, investment in intangibles is treated as an expense against revenue. US companies are required to reveal how much they spend on research and development. So there is nothing to stop investors recasting the accounts to count this as an investment. But other intangibles - advertising, marketing, training, etc - are usually lumped together under the heading of "selling, general and administrative expenses". They are not broken down. Yet academic studies have found consistent correlations between investment in intangibles and future profits. "Spending on advertising and [research and development] can be viewed as a form of investment in intangible assets with predictably positive effects on future cash flows," concluded a recent paper in Financial Management, the academic journal. On this view, the distinction between tangible and intangible assets makes no sense: both represent future eco nomic benefits for a company, based on past transactions or events. Both deserve a place on the balance sheet. The problem for the accounting profession is that intangible assets are very difficult - impossible, say traditionalists - to measure with any accuracy. "There is always a tension between relevance and reliability. We all know that intangibles are relevant but the argument has always been that they can't be measured reliably," says Mary Barth, accounting professor at Stanford Business School. Now FASB is edging away from that position. Its new project marks a recognition that intangible assets can no longer be ignored. More information is required. How will companies respond? Many will be fearful. "Anything you reveal to shareholders you also reveal to competitors. I expect many companies to push hard to keep disclosure to a minimum," says Gordon Petrash, a senior executive at Delphion, which produces software to help companies manage their intellectual property. For example, disclosure of marketing spending and gross margins for every brand would help investors better to understand Procter & Gamble. But this information could also be useful to competitors. Fear of being sued is another factor. The Securities and Exchange Commission, the top US regulator, last year set up a task force on intangibles led by Jeffrey Garten, dean of Yale School of Management. It called for legislation to make it more difficult for investors to sue over allegedly inaccurate information. This was necessary, it argued, before companies would willingly disclose more about their intangibles. Companies hoping to place large valuations on the skills of their workforce or similar fuzzy assets will also be disappointed. Halsey Bullen, project manager at FASB, says any new standard is likely to stick to the narrow definition of intangibles contained in its standards on mergers and acquisitions (see box). This will rule out "employees" as an intangible because they are not controlled by the company. FASB will spend the next few months trying to reconcile these conflicting pressures. Prof Barth points out that the standards-setter will find it hard to follow the detailed, prescriptive approach for which US accounting standards are renowned. The metrics that investors may find useful will vary enormously between industries. "It is difficult to see how FASB will be able to say: 'these are the two or three ratios we think are important for your company'. The board will have to take a more general approach," she says. Baruch Lev, accounting professor at the Stern School of Business at New York University, says the FASB should ask companies to disclose detailed information about everything from staff training and turnover to investment in information technology. He wants to see disclosure of both inputs - the amount of money spent on training, for example - and outputs, such as staff turnover. Such metrics would be revealing. When a company downsizes, for example, it usually takes a one-time charge and promises annualised cost savings. But investors are left in the dark about the potential impact on staff morale, customer loyalty and other intangibles. It is unlikely that FASB will go this far. It has every incentive to proceed with caution. But now the standard-setter has recognised that intangible assets have a legitimate place in the accounts, there is no turning back. Full article at: http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3LY3XLEYC &live=true Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Tue Mar 5 02:25:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] Enron: Wall Street connections Message-ID: Enron's alchemy turns to lead for bankers: * ENERGY GROUP SAID TO HAVE PRESSURED INVESTMENT BANKERS: * ANDERSEN AND LITIGANTS REMAIN Dollars 2bn APART: * AUDITOR TO BE QUESTIONED ON DOCUMENTS: * FRENCH WRITE-OFFS: Wall Street's links with Enron, now the focus of Congressional investigation, were complex, intimate, often antagonistic, but above all, lucrative, write Joshua Chaffin and Stephen Fidler: Financial Times; Mar 1, 2002 By JOSHUA CHAFFIN and STEPHEN FIDLER In Enron's heyday, Wall Street's bankers would beat a path to the company's Houston headquarters, lured by the promise of enormous fees from acquisitions business and heavy financing needs. Among other things, the bankers helped to engineer the controversial partnerships that eventually led to Enron's demise. Partly as a result, they are now the subject of growing attention from Congress and lawyers acting for shareholders. The House energy and commerce committee, which has made much of the running in the Congressional investigation, is preparing letters requesting documents from Wall Street firms that will focus in part on the pressure Enron is said to have placed on bankers to invest in the partnerships. Lawyers acting for investors are also looking to Wall Street as a possible target for lawsuits. "We have been looking very hard at issues involving conflicts of interest with various Wall Street firms assisting Enron," says Andrew Entwistle, a lawyer representing New York and Florida pension funds. Enron's relationships with Wall Street were managed attentively and aggressively by Andrew Fastow, the company's former chief financial officer who was ousted in October, and the global finance group he ran. Wall Street's links with Enron were complex, intimate, often antagonistic, but above all, lucrative. In 2000 alone, Enron paid more than Dollars 250m in fees to banks, six of which - Merrill Lynch, Credit Suisse First Boston, Donaldson Lufkin & Jenrette (before its November 2000 merger with CSFB), Citigroup, Chase and JP Morgan - received more than Dollars 20m each. "They were the golden goose," says one banker who called on Enron. "Every once in a while in a heated market, there's someone who has the magic touch and everyone wants to do business with them. They were a deal shop." Enron kept track of how much it paid each bank, and was careful to spread the work around, especially its underwriting assignments. But not all banks were equal. According to former Enron employees, Citigroup and Chase, for example, used their massive balance sheets to put up big loans. These were large numbers, but the work was regarded inside Enron as pretty simple. At the other end of the spectrum was a group of more specialised bankers, which Enron relied on to engineer its complex off-balance sheet deals. First among these was DLJ. "Chase and Citi both underwrote a lot, but the advisory work and the real brains behind (the partnerships) was from CSFB and DLJ," says a former Enron employee. As a result, they were well rewarded. CSFB and DLJ were the leading underwriters of Enron securities, managing Dollars 7.4bn of the Dollars 25bn of stocks and bonds it issued, according to data from Bloomberg News. This included a Dollars 700m equity offering in February 1999, on which they served as joint bookrunners. Bloomberg data also show they followed Salomon Brothers as the number two recipient of mandates to advise on mergers and acquisitions. This preference grew over time. CSFB was tapped to lead Enron's Dollars 1.8bn divestiture of Portland General, announced in August, and handled the sale last year of some Enron power plants and Enron Wind. Late last year, it was awarded the mandate to liquidate Enron's troubled international asset portfolio with a value estimated at Dollars 4bn to Dollars 7bn and the potential to generate millions of dollars in fees. Enron employees say they came under pressure from senior executives to use CSFB in M&A transactions. An important reason for the closeness of the relationship was CSFB's structured products group, a team of about 10 bankers hired by DLJ from Citibank in 1998. Led by Laurence Nath, a managing director, the group provided solutions to Enron's biggest financial headache: the large part of its asset portfolio that was not generating much cash. Enron did not want to finance underperforming assets, including foreign projects that had soured, by raising straight debt in the bond market, because that would damage its credit rating and thereby jeopardise the company's key trading business. Instead, it began moving assets off-balance sheet into partnerships, of which it eventually created some 3,500, with names such as Marlin and Firefly. The assets were often sold at prices that Enron would never have achieved on the open market. Not only did the partnerships hide debt, but they also made Enron appear to be generating cash from operations rather than from its financing activities. Within DLJ and CSFB, Mr Nath's group had a reputation for being on the leading edge. "People heard the name 'structured products' and immediately thought that they were doing things that no one else could possibly understand," says one former CSFB banker. Mr Nath, described as very bright and ethical by a former colleague, worked very closely with Enron lawyers and accountants on their transactions, according to Enron employees. "Monetise. That was the buzzword. Everyone was always saying: 'We have to monetise this.' The quick-fix solution was: 'We'll sell it to LJM, or to Raptor, or to whatever the partnership of the month was,' " says one person in Houston. "They'd pick up the phone and Larry Nath would come down to Houston for a week or two and sit down with the (Enron) accountants and come up with something." He would gather with a group from the treasury and global finance departments known inside the company as "Fastow's field marshals". This group often included Jeffrey McMahon, Enron's former treasurer and now its president, and Ben Glisan, who took over from Mr McMahon as treasurer and who was dismissed in November. (As the FT reported on February 13, the Justice Department is now seeking a deal with Mr Glisan to secure his testimony against former colleagues.) Together, the teams would thrash out financial structures that satisfied the letter of the law and of accounting standards, if not its spirit. "All they were doing was looking at GAAP and FASB documents and saying, 'Well, this is what it says,' and then finding the most byzantine way to get around the law so that it's still legal but violating the spirit." When a deal was fixed, Enron's internal accountants, also known as the 'transactions support group', would support it in their liaison with Andersen, Enron's former accountancy firm. In practice, former employees say, they often bullied Andersen into accepting their treatments. This was sometimes done, according to two Enron employees, at the behest of Rich Causey, Enron's former chief accountant. "He would lean so hard on the internal people, and then they would lean on Andersen," says one. Mr Causey's lawyer, Reid Wein garten, declined comment. Some of the vehicles that emerged from the brainstorming contained an unusual feature pioneered by Mr Nath: they held Enron stock in order to comfort lenders and secure an investment grade rating, and required Enron to inject more shares into the vehicles if the share price fell to certain "trigger points". They could also force their liquidation if Enron was downgraded. Some CSFB bankers say the partnerships had been "fully baked" by Enron's finance team, and that the former DLJ bankers were merely brought in to execute them. Indeed, Mr Fastow claimed in 1999 that Enron had been responsible for Marlin, created to help finance its purchase of Wessex Water, the UK utility. Several banks not involved in the transaction "came back and marketed it to us" as their own creation, he told CFO Magazine. But to CSFB's competitors, at least, the partnerships bore the stamp of Mr Nath and his team. "When the Marlin and Osprey deals first came to light, they were known as a DLJ product. They dominated the market for them," says one banker familiar with the deals. Mr Nath and his team did similar deals for a group of other companies, including energy groups El Paso and Williams. Other Wall Street banks tried to re-engineer the partnerships, based on their documentation, and sell them to other clients. Although these structures were scattered throughout corporate America, Enron appears to have set itself apart by the volume of such deals and the amount of debt moved off balance sheet. While each individual deal may have been manageable, bankers say, the sum of them posed an enormous risk for Enron. "What I can't believe is that anyone ever got comfortable when you put all of this stuff together. Taken in combination, these partnerships clearly posed a material risk for the company," says one banker. The trigger points inside some partnerships, some of which would be breached if Enron's stock price fell to the high Dollars 40s and again into the low Dollars 20s, were also a time bomb. "There's no question that senior people at CSFB knew what was going on and that it was a house of cards," says one Enron insider. The triggers were discussed by senior Enron executives and senior bankers at a meeting in July 2001, when Enron's stock was in the Dollars 40s, according to one person who was present. While declining to say who attended the meeting, this person says neither Jeffrey Skilling, Enron president, nor anyone from the office of the chairman, Kenneth Lay, was present. "They (the CSFB bankers) said: 'If this thing hits Dollars 20, you better run for the hills.' There was no question that they knew exactly what lay inside the structures, when the triggers went off - everything. You could almost say they knew more about the company than people in Enron did." A CSFB spokesman said: "Enron knew and understood the partnership structures we worked on. The credit and stock price triggers were widely known." He provided copies of public documents indicating that special purpose vehicles such as Marlin and Osprey, structured by DLJ, had been approved and described by ratings agencies and that the equity triggers were discussed in Enron's annual reports. Indeed, Enron insiders say such knowledge should have been fairly widespread elsewhere on Wall Street - at least among investors in the partnerships, to whom these triggers were also disclosed. Yet almost every brokerage on Wall Street rated Enron stock a "strong buy" at the time. Among the last to change his mind was Curt Launer of CSFB. He did not back off from his "strong buy" recommendation until November 29, three days before Enron's bankruptcy declaration. Only two other brokers - Sanford Bernstein and Lehman Brothers - moved later. Mr Launer told a Senate hearing on Wednesday that he had no proprietary knowledge of the Enron partnerships. He and other analysts highlighted the "Chinese Walls" within banks, separating investment banking and brokerage activities. "Without accurate and complete financial reporting from a company, I simply do not have the proper tools to do my job," Mr Launer said. But, according to investment bankers, it was an open secret on Wall Street that firms whose analysts had negative ratings on Enron would not win business. "It's not coincidental that the same firms that were recommending Enron shares were the same ones who were involved in these transactions," says Mr Entwistle, the lawyer representing shareholders. This was just one area where Enron, over whose financial operations stood the formidable and irascible Mr Fastow, was able to put pressure on its bankers. One method, according to Enron executives, was for Mr Fastow to link Enron business to investment in partnerships supposedly independent of Enron, including one called LJM2 Co-Investment. Mr McMahon, now Enron president, said two bankers - Paul Riddle of First Union Bank and Mark DeVito of Merrill Lynch - had said they had been promised debt underwriting business by Mr Fastow in exchange for investing in LJM2. Other bankers, he told company lawyers preparing an internal report last autumn on accounting concerns at Enron, had inferred a link between investing in LJM and other business. He said Deutsche Bank and Chase thought a linkage existed, and that Deutsche Bank thought it improper. Mr McMahon told the lawyers that, as far as he was concerned, there was no such linkage, according to memos prepared by the law firm, Vinson & Elkins, released by the House energy and commerce committee. But he said it was Mr Fastow - who earned Dollars 30m from his position at LJM, according to an Enron internal investigation - who had the final say on who won Enron business. Mr Fastow's spokesman, Gordon Andrew, declined comment. Sherron Watkins, the Enron whistleblower who warned Kenneth Lay last August about her concerns over the special purpose entities Mr Fastow had created, told a House panel that friends at Chase, Credit Suisse and Bank of America had complained that Mr Fastow had threatened the institutions, telling them "that if you didn't invest in LJM, Enron would not use you as a banker or an investment banker again". Merrill Lynch handled the sales pitch for LJM2, raising Dollars 390m. Investors included Citigroup, JP Morgan Chase, CIBC, Deutsche Bank, First Union and Dresdner Bank. Merrill contributed Dollars 5m of its own money, while senior Merrill bankers added Dollars 16m. Merrill bankers who invested included Thomas Davis, vice-chairman; Daniel Bayly, investment banking chief; and Schuyler Tilney, head of energy investment banking. Mr Tilney had another, intimate connection to Enron: his wife, Elizabeth, was a senior executive on Enron's management committee and senior vice-president for advertising, communications and organisation development. Mrs Tilney received a copy of Ms Watkins' now-famous whistleblower memo in October as Ms Watkins tried to arrange a meeting to discuss ways of minimising the fall-out from the questionable accounting. Full article at: http://globalarchive.ft.com/globalarchive/article.html?id=020301001761&q uery=Stephen+Fidler Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Tue Mar 5 02:29:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:10 2006 Subject: [A-List] UK corporate state: arms industry Message-ID: The mercantilist fallacy that traps Tony Blair The difficulties over Mittal Steel suggest that governments should adopt an arm's length approach to business, writes Samuel Brittan Financial Times : Feb 28 2002 Tony Blair, UK prime minister, has christened the controversy over his support for the Mittal bid to take over a Romanian steelworks "Garbagegate". But anyone who thinks that the affair has been forgotten in the current fuss over Stephen Byers, the transport secretary, knows little of the ways of Whitehall. Every nerve is being strained to avoid similar episodes of either kind. Cynics may laugh but top officials have always believed that the conduct of government should - like Caesar's wife - be beyond suspicion. Of the two, Garbagegate raises the wider issues. All sides agree that the main questions at issue are whether Mittal Steel is a truly British company - which clearly it is not - and whether Mr Mittal's donation to Labour affected the government's attitude. All sides are wrong. The true issue is whether it is the government's job to promote national businesses; or whether it should adopt a more arm's length approach. There are always going to be alleged scandals and conflicts of interest so long as the business promotion view prevails. Tony Blair has been described by Robin Cook, one of his own ministers, as "a broad river that runs shallow". Whether or not he is shallow, he is deeply conventional. Because previous prime ministers and heads of other governments have wasted their time promoting national corporate champions, he thinks he has to do the same. And in the course of this pursuit Labour's original and excellent aim of "a foreign policy with an ethical element" has been, not so quietly, cast aside. Behind all the salesmanship on behalf of British business is the mercantilist fallacy that jobs in Britain depend on the government promoting specific commercial projects and products. Usually government support for business takes the form of trying to encourage overseas purchases of British products. The Mittal affair differs in that the government was supporting an attempt not to sell, but to buy, an overseas steelworks. Being as charitable as one can, the line of thinking must be that anything that strengthens a supposedly British company increases its ability to provide UK jobs in future. Adam Smith might have lived in vain. One of the key ideas of economics is that of the circular flow of income. There is a circular continuing flow between purchasers who desire to buy products, the income received from supplying their needs and still further purchases. Unfortunately public discussion is dominated by the opposite idea, the myth of irreplaceable sectors. It is assumed that if Britain loses, say, an arms order, the displaced workers will simply waste away. It is not asked whether there will be other sales at home or abroad to make up the difference. The argument that jobs derived from exporting weapons cannot be replaced is akin to that for keeping open uneconomic coalmines. Such arguments assume that there is a "lump of labour" engaged in making specific products. Then, it is supposed, if orders or output are lost in one area, they cannot be regained anywhere else. Yet people change jobs constantly. Three million leave the UK unemployment register every year. At a guess, officially sponsored exports may amount to ?10bn ($14bn) a year, or 1 per cent of UK gross domestic product. What would happen if this support were withdrawn? Assuming no change in capital inflows into the UK, other exports would have to increase by that amount, involving perhaps some job changes. At worst, a small depreciation of sterling would be required to unload these substitute products on to the international markets. Such a depreciation would now be more than welcome in Whitehall; but even if sterling were at an equilibrium, all that would be involved would be a small terms of trade loss, also around 1 per cent of GDP. This is a long way removed from political fears that, without official export promotion, the economy would collapse and hundreds of thousands of jobs would be lost for ever. Indeed, it would be a small price to pay for cleansing the Augean stables. Another moral is that we should ponder a long time before giving up the blessing of a floating exchange rate. In fact government support for the arms trade was recently investigated by a group including the chief economist of the Ministry of Defence. Beforehand the ministry was touting its report. Yet, in spite of a methodology that probably understated the subsidy provided by the Export Credit Guarantee Department, the group concluded that the economic effects of halving UK arms sales would be negligible. A halving of defence exports from recent levels would, it estimated, result in the loss of nearly 49,000 jobs in the defence sector and their replacement over five years by about 67,000 new jobs, at somewhat lower wages, in civilian employment. It therefore suggested that "the balance of argument about defence exports should depend mainly on non- economic considerations". When it saw how the report was shaping, the MoD ran a mile. In the end it was published as a research paper by the University of York.* The government left its response to the Defence Export Sales Organisation, which cherry-picked among the findings to justify continuing arms promotion. Much worse than anything to do with Garbagegate has been the recent push to sell Hawk aircraft to India - following the doubling of arms sales to Africa over two years. But even if it could not have brought itself to stop the sale of these aircraft - previously supplied to Indonesia and Zimbabwe - the government could at least have left BAE Systems on its own. If we cannot have an ethical foreign policy, let us have a neutral rather than a pernicious one. *The Economic Costs and Benefits of UK Defence Exports, November 2001 Full article at: http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT35TS1K7YC &live=true&useoverridetemplate=FTD1OUN2DNC&tagid=FTDNE3BOBNC&SectionTag= na/column&PageTag=2cosabr&imgID=FTDMHXWBONC&useoverridetemplate=FTD1OUN2 DNC&SectionTag=na/column&PageTag=2cosabr&imgID=FTDMHXWBONC Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Tue Mar 5 02:36:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:11 2006 Subject: [A-List] UK state: "modernisation" Message-ID: More from the ongoing battle involving the reconfiguration of British state institutions centred on the Civil Service. The Tory traditionalist Vernon Bogdanor peddles the "impartiality" line that still retains a lot of kudos even among, perhaps especially among, the ranks of the Labour Party and trade unions, and, it seems, old-style conservatives. Bogdanor's intervention is interesting, however, because he suggests a way in which New Labour's presidential-style administration can complement an older model of the Civil Service, rather than undermine it. That, he suggests, was achieved by the punk Thatcherite market fundamentalism that eroded the ethos of public administration via its basic distaste for all things "state" and worship of all things "business". That has been inherited, at least to some extent, by New Labour. It is possible the current crisis will lead to the kind of solution suggested by Bogdanor, who is clearly setting himself up as some kind of consultant for hire should any such solution be deemed potentially suitable by those currently responsible for sorting out the turf wars that are going on inside the UK state. Impartiality under threat Good government is at less risk from spin-doctors that from the serious erosion of the career civil service, says Vernon Bogdanor Financial Times: Mar 05 2002 The idea of a neutral career civil service was, the early 20th-century sociologist Graham Wallas believed, "the one great political invention in 19th-century England". Does such a civil service still exist, or has it been irredeemably politicised by Tony Blair? The Blair administration has been marked by a big increase in the number of special advisers - from about 35 under John Major to about 80 today. Yet this, paradoxically, helps to re-inforce, rather than undermine, the demarcation between career civil servants and political appointees by distinguishing political advice and support from official advice and support. Thus, Jo Moore worked for the Labour party but was paid from public funds, while Martin Sixsmith worked for the government - and could have been required to do similar work for a Conservative government. There are three roles for special advisers. The first is to provide collective advice to ministers on matters going beyond their departmental remit. The health secretary, for example, will be superbly advised on health matters but will not be advised on other matters that need to be decided collectively by the cabinet. This is important. Without advice on collective matters, cabinet government would be in danger of degenerating into what it all too frequently becomes: government by a federation of departments. Second, special advisers may be brought in to complement the skills of the permanent civil service. That was the case with Michael Barber, special adviser to David Blunkett, education secretary in the last parliament. In earlier years, experts such as Brian Abel-Smith were brought in to advise on health matters, and Nicholas Kaldor to advise on the economy. The career civil service had no problem in accommodating itself to either of the first two types of special adviser. The third role for the special adviser is that of the spin-doctor, who seeks to present government policy more aggressively and also more politically than a career civil servant could be expected to do. Such activity, however, is often counter-productive. The public is well aware that the increase in the number of spin-doctors does not correlate with real improvements in government efficiency and performance. Even so, as Sir Richard Wilson, the cabinet secretary, told the Neill Committee on Standards in Public Life, in 1999, "I do not think that the senior civil service of 3,700 people is in danger of being swamped by 70 special advisers. That is not what is happening and I do not see it as creeping politicisation." The real danger lies less with the special advisers than in the radical and unnoticed changes that have occurred in the career civil service. Indeed, with more and more posts being open to outsiders, the very idea of a career civil service may be outmoded. Yet a threat to it would be a threat also to its impartiality. A career civil service emphasises impartiality, since it is likely to have to serve governments of different political colours. He will be unlikely to be a successful civil servant, therefore, unless he is politically neutral. Outsiders, by contrast, arrive with political baggage and policy commitments. They will, in addition, lack the traditional pattern of experience derived from having served in a minister's private office, something that helps to socialise civil servants as impartial advisers. Moreover, senior civil servants, in particular chief executives of agencies, are no longer anonymous Sir Humphreys. Those in sensitive positions, such as the chief executives of the Child Support Agency and the Prison Service, are expected to answer criticisms of their agencies, rather than leaving it to their ministers. They have thus become public figures in their own right rather than, as constitutional theory would suggest, the mere alter egos of their ministers. Finally, the idea of "joined-up" or holistic government, much championed by the Blair administration, cuts across the managerial reforms of a previous era. Holistic government implies that civil servants should work collectively across Whitehall departments and with local authorities and other local agencies. There is a profound conflict between this idea and the managerial ethos of breaking down government into discrete and accountable units. Holistic government implies interdependence, not independence. A civil service act has become essential to help restore proper relationships between ministers, officials and special advisers. But, in addition, parliament should monitor changing developments more closely and regularly than it has done. The House of Lords is particularly well placed to do this since it is less committed to the party battle than the Commons. It should now establish a select committee on the public service on a permanent basis. That would ensure that we do not, in a fit of absence of mind, lose our politically impartial civil service, which has served us so well. The writer is professor of government at Oxford university Full article at: http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT38M2BPEYC &live=true&useoverridetemplate=FTD1OUN2DNC&tagid=FTDNE3BOBNC Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From ssandron at hotmail.com Tue Mar 5 06:02:01 2002 From: ssandron at hotmail.com (Seth Sandronsky) Date: Sat Jul 8 08:09:11 2006 Subject: [A-List] US imperialism, religion & market fundamentalism Message-ID: Anne: Hi. In the SD book Roads to Dominion: Right-Wing Movements and Political Power in the United States, the answer is yes to Israel, no to the other two in the index. Irving Kristol is listed in the index. What's the Scofield Bible? There's no doubt about your last point The U.S. Congress is occupied territory--occupied by the The American Israel Public Affairs Committee that facilitates endless U.S. military aid to Israel. Best, Seth From: "Anne Williamson" Reply-To: a-list@lists.econ.utah.edu To: Subject: Re: [A-List] US imperialism, religion & market fundamentalism Date: Mon, 4 Mar 2002 21:56:03 -0500 Seth: Does Sarah DIAMOND write about Israeli fascists too? Or just neocon creeps like Bill KRISTOL? Or the Israeli lobby that buys our Congress with the US taxpayer money the same Congress pumps to Israel annually? Course the Israelis are smart - they spread $100-$200 million of the billions in US taxpayer funds they receive annually around K Street, into the pockets of lawyers, lobbyists and ALL pols on international and aid committees. And does she comment on the Scofield Bible? Just curious - A. ----- Original Message ----- From: Seth Sandronsky To: Sent: Tuesday, March 05, 2002 2:47 AM Subject: Re: [A-List] US imperialism, religion & market fundamentalism > Michael, > > An American author, Sara Diamond, has written extensively about Christianity > in U.S. politics. I've read her Roads to Dominion: Right-Wing Movementns and > Political Power in the United States (1995, The Guilford Press, ISBN > 0-89862-862-8), and recommend it to you and the A-List. While not a > Marxist, Diamond offers useful analysis of the U.S., with a special focus on > the racist right, Christian Right and neo-conservatives generally. > > Seth Sandronsky > > From: "Keaney Michael" > Reply-To: a-list@lists.econ.utah.edu > To: > Subject: [A-List] US imperialism, religion & market fundamentalism > Date: Mon, 4 Mar 2002 17:37:36 +0200 > > Let's quickly take a look at the FCC and their Chairman Mike Powell. > > > > To make matters worse, Michael Powell has stated on record that he has > no concept of "the public interest." As far as he can tell, there is no > such thing. He has arrogantly declared himself to be a market > fundamentalist by stating "The Market Is My Religion." He also went on > to say the following, mocking the American public, freedom, and > democracy: "The night after I was sworn in, I waited for a visit from > the angel of the public interest. I waited all night, but she did not > come." Mike later added, "I still have had no divine awakening and no > one has issued me my public interest crystal ball." He has even called > laws that prevent all out media domination "the oppressor." > > ===== > > Thomas Frank has a piece in the latest Le Monde Diplomatique in which he > quotes Kenneth Lay's dual belief in Jesus and free markets. Indeed, > theologian Lay said that Jesus wanted people to have choices. Meanwhile > Jeffrey Skilling declared, shortly before resigning as Enron CEO, that > "we're on the side of the angels". > > What happened to the Jesus who made it plain that one cannot serve both > God and mammon? > > It appears that Dubya has not been a success during his visit to China. > Apparently he could not wow the crowds as did Clinton a few years back. > According to newspaper reports Clinton supposedly had the students > spellbound on the subject of democracy (or was it that cigar?). > Meanwhile Bush alienated his audience, including Jiang Zemin, by > declaring that the US is a "nation based on faith". Believing in his > ability to make things better for all would certainly require a lot of > that, but there is a nasty sub-text to all this pious piffle that seems > to emanate more freely from the White House and other US organs of state > these days. Billy Graham's son, Franklin, happens to have a > well-financed mission established in the south of Sudan, where, surprise > surprise, oil reserves just happen to be attracting US corporate > interests. The Bush administration marked its interests there very early > when Colin Powell stated the US's interest in "bringing peace" to that > country. The federal government is channelling money into "faith-based > initiatives" that serve related ends under a cloak of charitable "good > works." In many ways it's an extension of the pentecostalism that was > imported to Latin America during the 1980s as a means of dislodging > troublesome liberation theologians and their priestly advocates, as well > as privatising social discontent by making it a matter of personal > morality. > > Deeper analysis of the employment of a particular variant of > Christianity by the US state and its corporate backers would be useful. > Clearly, there are potential fissures in any such coalition, as with the > struggle over stem cell research legislation. But when it comes to > "civilising" the "barbarians" (and thereby acquiring their assets on the > cheap), it certainly serves its purpose. > > Michael > > > > > > Seth Sandronsky > > > _________________________________________________________________ > Join the world's largest e-mail service with MSN Hotmail. > http://www.hotmail.com > > > Seth Sandronsky _________________________________________________________________ Join the world’s largest e-mail service with MSN Hotmail. http://www.hotmail.com From Michael.Keaney at mbs.fi Tue Mar 5 06:35:03 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:11 2006 Subject: [A-List] Afghanistan: the blowback continues Message-ID: A whole new war game in Afghanistan By Syed Saleem Shahzad Asia Times, March 6, 2002 KARACHI - The past few days have seen surprise ambushes, raids and resistance by Taliban and al-Qaeda fighters in most parts of eastern Afghanistan, and in some areas in the south, with the United States and its allied troops sustaining more losses than they had expected. Since Saturday, when heavy ground and air fighting began in eastern Afghanistan, US forces have encountered their fiercest opposition since stepping into the country toward the end of last year. Indeed, they helped push the Taliban from control of the country in less than two months, watching almost as bystanders as major towns fell with hardly a fight. As previously reported in Asia Times Online, the reason for this was simple. The Taliban and al-Qaeda fighters were saving themselves for another day, and that day has now arrived. After retreating from Kabul, Kandahar, Jalalabad and so on, the top Taliban leaders either fled to the border tribal areas of Pakistan or took refuge in remote and isolated areas in Afghanistan, while middle and lower-rank Taliban easily melted into the local population, from where many of them had come in the first place. Some local commanders who had sided with the Taliban when they took power in 1996 returned to their pre-Taliban party disciplines, such as the Jamiat-i-Islami, the Ittehad-i-Islami and the Hizb-i-Islami. Here they were accepted without question, and they were given protection. These Taliban remained in close contact with one another, waiting for the weather to warm up toward the end of March, at which time they had planned a major guerrilla campaign in the country. In anticipation of this, United States forces, with the support of soldiers from a number of other countries as well as Afghans loyal to the administration of interim Prime Minister Hamid Karzai, began a major offensive in the rugged terrain around Gardez in Paktia province on suspected Taliban and al-Qaeda strongholds. Their target in this operation, code-named Anaconda, was Mullah Saifur Rehman Mansoor and his troops, who had become active with sniping raids on US positions in the area. But unlike previously, this time around the US has found a very determined and deadly opponent. Previously, the boundaries between the Taliban and their opponents were clearly defined. As a result, the Taliban were easy to point out and easy to target by US planes. But now there are no clear boundaries. In addition to Saturday's clashes near Gardez, when US forces and the Taliban squared off, US-led forces also faced assaults in regions controlled by pro-Karzai forces. According to Taliban sources, the Taliban have established small pockets across the country, particularly in eastern areas. And given the mountainous terrain, it is nearly impossible to locate bands of 10-15 people, even with the help of the local population. And passing helicopters or military convoys become easily targets in such conditions. Apart from this guerrilla strategy, information this correspondent has acquired from Afghanistan appears to be in contrast to what is being projected in the US media. According to sources, the war has now begun on all fronts in Paktia and Khost provinces, with US military installations coming under attack from the small bands of Taliban and al-Qaeda fighters that had been in hiding around them. By Tuesday the US had reported seven of its soldiers killed and more than 40 wounded, although the figures could be higher. On Monday, the first US helicopter in the five-month-old war was shot down in Zarmat, a second was destroyed between Sata Kundao and Mata Chena (Khost), while two more helicopters were destroyed during a raid at Khost Airport. Taliban sources claim that about 160 US, Afghan and allied soldiers have killed in these incidents. Taliban and al-Qaeda fatalities are believed to run into hundreds. Fierce fighting has erupted in Logar province adjacent to Kabul. Different group of fighters from the Taliban, the Hizb-i-Islami and other factions have banded together to take control of many areas. According to sources, US planes had to come to the rescue of the pro-Karzai administration in Logar, but the million-dollar question now is where to drop the bombs as it is impossible to tell who is friend and who is foe. Similarly, the Taliban have taken positions in Orguzan and Himand provinces in the south, but the administration of Kandahar, previously the Taliban headquarters, is reluctant to take action against them because once the fighting begins in earnest in southern Afghanistan, pockets of resistance are likely to mushroom all over Kandahar and create havoc. Sources in the Taliban say that the next fighting is likely to be in eastern Wardaz province, from where they will strive to take control of Kunhar from the pro-Karzai administration that is currently in place. Full article at: http://www.atimes.com/c-asia/DC06Ag04.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Tue Mar 5 06:37:03 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:11 2006 Subject: [A-List] Afghanistan: the blowback continues Message-ID: The message is clear: The Taliban are back By Syed Saleem Shahzad Asia Times, March 5, 2002 KARACHI - Just two weeks before the snow is normally due to start melting in Afghanistan, Taliban and al-Qaeda forces have regrouped in preparation for widespread guerrilla strikes across the country. And in another development, the hard-line Pashtun warlord Gulbuddin Hekmatyar has arrived in the western Afghan city of Herat from exile in Iran, and along with the Tajik governor there, Ismail Khan, is likely to try and manipulate the delicate situation in Kabul. Asia Times Online reported in October of last year, when the US first attacked Afghanistan in reprisal for the September 11 attacks and in search of Osama bin Laden, that the Taliban would store their weapons in the eastern provinces of Paktia, Khost and Logar after retreating (as per their strategy) from Kabul. At these selected places in the east, they would lay low in the winter before activating a guerrilla campaign in late March. This is exactly what is happening now, and why the United States and its allies are once again involved in heavy military action in the country. A 1,500-strong ground force backed by fighter bombers began an assault on Taliban positions on Saturday, when three deaths, including one American and two Afghans, were reported. Heavy carpet-bombing continued on Monday. According to fresh information received from Gardez, the capital of Paktia province, after the US ground attack first began, Mullah Saifur Rehman Mansoor of the Taliban, along with local Hizb-i-Islami members and smaller groups, hit back at the positions of the US and the Afghan militia. According to reports, the Taliban fighters are fully equipped with heavy weapons. A US military spokesman, Major Ralph Mills, said that several hundred militants were concentrated in the Shah-e-Kot mountains, 30 kilometers south of Gardez. The latest assault is believed to be the largest joint US-Afghan military operation of the five-month-old war in Afghanistan. US heavy bombers and AC-130 gunships have been targeting the militants' vehicles, mortar positions and caves, Mills said. US military officials said that there had been "intense" clashes when the US-led force from the army's 101st Airborne Assault Force encountered artillery, mortar and heavy machine-gun fire. Saturday's ground attack - in snow-covered mountains rising to 3,480 meters (11,600 feet) above sea level - failed to dislodge the militants. US Chinook helicopters ferried in supplies to the US troops and French Mirage 2000-D jets were reported to be flying in support of the US aircraft. Bombing was also reported on the Kharwar mountain range in neighboring Logar province, where pro-US Afghan forces were said to be battling Taliban and al-Qaeda fighters. In Khost, 70 kilometers east of Gardez, US troops stationed at an airport were attacked by rockets and small arms fire early on Monday. A spokesman for the Khost shura (council) said that the US forces had returned fire and air strikes had been called in, but there were no immediate details of casualties. The mountains around Gardez have been a hiding place for Afghan warriors since guerrillas used them as a base for their fight against invading Soviet troops in the 1980s. According to Taliban sources, attacks were also launched on Sunday at Kandahar airport in the south in which three US soldiers were killed. This was the third attack on the airport since US forces started moving to Bagram airport near Kabul, which they are making the hub of their activities. And according to reports, secret night messages (sab namey) are again being distributed in the streets of southern Afghan towns and villages. These pamphlets bear the photograph of bin Laden and warn tribal chiefs to realign their loyalties with the Taliban as the former rulers have restarted their activities in Afghanistan. Such night messages were used by the mujahideen during the Soviet invasion of Afghanistan in the 1980s. Sources said that with the Taliban starting activities in Afghanistan, their strategic map can be easily defined. In the south, the Taliban, along with Hizb-i-Islami commanders, are stationed in Hilmand province. This is the center of their activities besides Orguzan province, the birth place of Taliban leader Mullah Omar, who is said to be holed up there. In Khost, former Taliban minister and a former guerrilla commander during the Soviet invasion, Maulana Jalaluddin Haqqani, has regrouped his forces and is set to launch attacks. Haqqani's strategic points are likely to feed Taliban rebels in Nagarhar province. Sources say that the presence of Gulbuddin Hekmatyar in Herat represents a great threat to the stability of the interim government of Hamid Karzai. Hekmatyar was responsible for destroying much of Kabul in post-Soviet occupation civil war, but he still commands a strong following and has a good understanding with Uzbek warlord Abdul Rasheed Dostum - in control of Kandahar - and Ismail Khan in Herat. Sources say that he also is in agreement with interim Afghan Defense Minister Mohammed Fahim - former military leader of the Northern Alliance - in opposing the presence of foreign troops in Afghanistan. So with Gulbuddin Hekmatyar throwing his weight about, and the Taliban re-emerging, the pro-US Hamid Karzai and US interests in Afghanistan face a renewed and deadly challenge. Full article at: http://www.atimes.com/c-asia/DC05Ag03.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From a.singleton at wsel.lu Tue Mar 5 06:51:03 2002 From: a.singleton at wsel.lu (Ann Singleton) Date: Sat Jul 8 08:09:11 2006 Subject: [A-List] Afghanistan: the blowback continues Message-ID: <01C1C457.7D3BE280.a.singleton@wsel.lu> Hello Michael, Thanks for all the messages and for keeping us up-to-date with what's going on. Is it tomorrow in Karachi already ? Ann -----Original Message----- From: Keaney Michael [SMTP:Michael.Keaney@mbs.fi] Sent: Tuesday, March 05, 2002 2:34 PM To: A-List (E-mail) Subject: [A-List] Afghanistan: the blowback continues A whole new war game in Afghanistan By Syed Saleem Shahzad Asia Times, March 6, 2002 KARACHI - The past few days have seen surprise ambushes, raids and resistance by Taliban and al-Qaeda fighters in most parts of eastern Afghanistan, and in some areas in the south, with the United States and its allied troops sustaining more losses than they had expected. Since Saturday, when heavy ground and air fighting began in eastern Afghanistan, US forces have encountered their fiercest opposition since stepping into the country toward the end of last year. Indeed, they helped push the Taliban from control of the country in less than two months, watching almost as bystanders as major towns fell with hardly a fight. As previously reported in Asia Times Online, the reason for this was simple. The Taliban and al-Qaeda fighters were saving themselves for another day, and that day has now arrived. After retreating from Kabul, Kandahar, Jalalabad and so on, the top Taliban leaders either fled to the border tribal areas of Pakistan or took refuge in remote and isolated areas in Afghanistan, while middle and lower-rank Taliban easily melted into the local population, from where many of them had come in the first place. Some local commanders who had sided with the Taliban when they took power in 1996 returned to their pre-Taliban party disciplines, such as the Jamiat-i-Islami, the Ittehad-i-Islami and the Hizb-i-Islami. Here they were accepted without question, and they were given protection. These Taliban remained in close contact with one another, waiting for the weather to warm up toward the end of March, at which time they had planned a major guerrilla campaign in the country. In anticipation of this, United States forces, with the support of soldiers from a number of other countries as well as Afghans loyal to the administration of interim Prime Minister Hamid Karzai, began a major offensive in the rugged terrain around Gardez in Paktia province on suspected Taliban and al-Qaeda strongholds. Their target in this operation, code-named Anaconda, was Mullah Saifur Rehman Mansoor and his troops, who had become active with sniping raids on US positions in the area. But unlike previously, this time around the US has found a very determined and deadly opponent. Previously, the boundaries between the Taliban and their opponents were clearly defined. As a result, the Taliban were easy to point out and easy to target by US planes. But now there are no clear boundaries. In addition to Saturday's clashes near Gardez, when US forces and the Taliban squared off, US-led forces also faced assaults in regions controlled by pro-Karzai forces. According to Taliban sources, the Taliban have established small pockets across the country, particularly in eastern areas. And given the mountainous terrain, it is nearly impossible to locate bands of 10-15 people, even with the help of the local population. And passing helicopters or military convoys become easily targets in such conditions. Apart from this guerrilla strategy, information this correspondent has acquired from Afghanistan appears to be in contrast to what is being projected in the US media. According to sources, the war has now begun on all fronts in Paktia and Khost provinces, with US military installations coming under attack from the small bands of Taliban and al-Qaeda fighters that had been in hiding around them. By Tuesday the US had reported seven of its soldiers killed and more than 40 wounded, although the figures could be higher. On Monday, the first US helicopter in the five-month-old war was shot down in Zarmat, a second was destroyed between Sata Kundao and Mata Chena (Khost), while two more helicopters were destroyed during a raid at Khost Airport. Taliban sources claim that about 160 US, Afghan and allied soldiers have killed in these incidents. Taliban and al-Qaeda fatalities are believed to run into hundreds. Fierce fighting has erupted in Logar province adjacent to Kabul. Different group of fighters from the Taliban, the Hizb-i-Islami and other factions have banded together to take control of many areas. According to sources, US planes had to come to the rescue of the pro-Karzai administration in Logar, but the million-dollar question now is where to drop the bombs as it is impossible to tell who is friend and who is foe. Similarly, the Taliban have taken positions in Orguzan and Himand provinces in the south, but the administration of Kandahar, previously the Taliban headquarters, is reluctant to take action against them because once the fighting begins in earnest in southern Afghanistan, pockets of resistance are likely to mushroom all over Kandahar and create havoc. Sources in the Taliban say that the next fighting is likely to be in eastern Wardaz province, from where they will strive to take control of Kunhar from the pro-Karzai administration that is currently in place. Full article at: http://www.atimes.com/c-asia/DC06Ag04.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From soncu at pacbell.net Tue Mar 5 16:26:02 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:11 2006 Subject: [A-List] S. Korea reaffirms privatizations despite strikes Message-ID: From: www.thedeal.com Updated 01:30 PM EST, Mar-4-2002 S. Korea reaffirms privatizations despite strikes by Gina Chon Posted 11:48 AM EST, Mar-4-2002 SEOUL ? Despite days of labor protests, the South Korean government said March 4 it must move forward with restructuring plans for the public sector, which includes privatizing certain banks, Korea Gas Corp. and Korean National Railway Corp. The government's statement came as 47 workers of state-run Korea Electric Power Corp. received notice Monday that they have been fired, as their strike against the government's privatization plans for utilities entered its eighth day. Kepco also plans to file a compensation claim against the electricity union for losses caused by the strike, which began Feb. 25. Negotiations over the weekend among Kepco officials, the government and union members failed to produce an agreement. Some new staff members have been hired to replace the several thousand striking workers, who are protesting because they fear job losses due to the government's privatization plans. In South Korea, it is illegal for public sector workers to strike. The government said it will use every possible measure to resolve the dispute and added, "the demand by the power industry labor union [to cancel privatization plans] must be withdrawn as it has no justification," according to a statement by Prime Minister Han Dong Lee's office. Workers of Kogas and the railway service originally joined the strike, and tens of thousands of employees at South Korea's top two automakers, Hyundai Motor Co. and its affiliate Kia Motors Corp. engaged in a "sympathy strike" that lasted four hours Feb. 26. But workers of Kogas and the railway quickly managed to come to an agreement with management and returned to work Feb. 25 and Feb. 27, respectively. Management agreed to inform the Kogas union and the railway union of privatization plans and to include their input in the efforts. However, restructuring of both groups has made little progress and plans may not be implemented this year, as hoped. Kepco, however, has made progress in its privatization plans and wants to sell the first of five power-generation units in the second half of this year. Atlanta-based Mirant Corp., Belgium's Tractebel Electricity and Gas International and Singapore Power International have all expressed interest in the units, which Kepco estimates to be worth $2.3 billion each. Despite government threats of legal action and the dismissal of employees, Kepco union spokesman Hyun Jin Kim said workers will continue to protest until the government decides to include more labor input into the restructuring process. "We have to fight for our rights," Kim said. From Michael.Keaney at mbs.fi Wed Mar 6 01:09:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:11 2006 Subject: [A-List] Afghanistan: the blowback continues Message-ID: A nice illustration of some of the ideological continuities that inform the US power elite's treatment of those it deems "the enemy"... Fanatical resistance recalls Geronimo's Apache braves IAN BRUCE Analysis The Herald, 6 March 2002 MOST of the hardcore al Qaeda fighters who have killed or wounded one in 18 of the US troops ranged against them in the past three days are Arabs, Uzbeks, and Chechens with nowhere to go and nothing left to lose by staging a fanatical last stand. Pentagon sources say the fierce resistance, which has inflicted eight fatalities, downed two special forces' helicopters, and injured 40 of the 900 American soldiers committed to ground action, indicates the presence of Osama bin Laden's combat-experienced "Arab Legion" veterans rather than native Afghan mujahideen conscripts. Al Qaeda trained more than 15,000 Saudi, Somali, Yemeni, Pakistani, Uzbek, Algerian, and Chechen recruits in its Afghan camps between 1996 and last year. A brigade of the disciplined force formed the spearhead for Taliban offensives against the Northern Alliance opposition. Chechen Islamic guerrillas fleeing the four-year attempt by Russia to crush opposition in the breakaway province also found refuge and support in Afghanistan and brought with them the practical lessons of tackling an enemy equipped with helicopter gunships and fighter-bombers. Despite the presence of up to 100,000 Russian troops, Chechen resistance remains a running sore on Moscow's southern flank. Nightly ambushes and attacks kill several dozen Russian soldiers every week in a never-ending war of attrition. Hundreds and perhaps thousands of the Arab Legion fighters managed to evade the net after the fall of the Taliban and escape into Pakistan. But many simply retreated into the warren of mountain caves and natural strongholds along Afghanistan's eastern border. A Pentagon spokesman said yesterday: "We got a taste of al Qaeda's capacity for resistance verging on the suicidal during the prison uprising at Mazar-e-Sharif in November. Captives who overwhelmed their Afghan guards and killed a CIA agent fought to the death in a hopeless position in a battle they could not hope to win. "We believe many of those fighting in the Shahi Kot mountains south of Gardez are similarly motivated, foreigner veterans with no way home, determined to inflict losses and unwilling to submit to captivity. "They are formidable fighters. People here in the Pentagon have compared them to Geronimo's Apache warriors, who held out against hopeless odds in the American south-west in the late 1800s. Like the Apache, al Qaeda war parties seem to come in all sizes from a handful of men to groups of several hundred." The Shahi Kot area boasts some of Afghanistan's most formidable defensive terrain. The snow-capped mountains rise to between 8000 and 12,000 feet and the current battleground may have been chosen deliberately to limit the use of US helicopters. The special forces' Chinooks used by the "Nightstalkers" squadron supporting the US operation suffer from icing on their rotor blades, and the thin oxygen at high altitude affects engine performance. Locals who have sold food supplies to the besieged al Qaeda force in recent weeks confirmed that most were "Arabs", the catch-all description for non-Afghans. They also claim that many have wives and children with them in the mountain redoubt. Full article at: http://www.theherald.co.uk/news/archive/6-3-19102-0-24-53.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From soncu at pacbell.net Wed Mar 6 01:10:03 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:11 2006 Subject: [A-List] Letter from Prisoner Number 77 Message-ID: January 28, 2002 ----------------------------------------------------------------- --------------- Letter from Seoul Prison, Dan Byung-ho, Prisoner Number 77 Dear brothers and sisters across the world, I am deeply moved by your action. Your solidarity has burned through the cold cement walls of the prisons all over Korea. It has warmed the winter air and gave fresh strength to all those trade union leaders locked away in them. I can promise you on behalf of nearly 50 trade union leaders in jail in Korea that we will emerge from these walls stronger than ever, more confident in our spirit and commitment than ever, knowing that you are with us, and that we are together as one in our common struggle. Your actions have enabled me to glimpse the significance of the much repeated slogan: "workers of the world, unite!" It has prompted me to reflect, that we must begin to act to bring this slogan into life and a living experience for all workers of the world. We must consciously organise it. Thank you for all your solidarity and the glimpse of promise and possibility your actions has revealed to all of us. On January 21, 2002, the day of KCTU president Dan Byung-ho's fifth trial hearing, on the eve of January 22 "international day of action in solidarity with imprisoned Korean workers", over one hundred KCTU members gathered before the court house to hold a protest rally before joining President Dan in the court. OH Jong-soae, vice-president of the KCTU-KMWF, made a report of the confirmed actions in some 20 countries. He listed the names of the countries where action was planned. He paused as he called out India, Sri Lanka, Bangladesh, Brazil, South Africa, Kenya, Latvia, and other, non-advanced industrialised countries. Vice President Oh challenged the gathered KCTU members if they knew of the barbaric treatment of workers in some of these countries by Korean companies - or about the plight of migrant workers in Korea. He asked if they knew that thousands of workers are being killed every year for trade union activities across the world. "As we hope to be strengthened by the joint action by thousands of workers across the world tomorrow, we must commit ourselves to struggle with those workers in hundreds of Korean companies abroad, to take action in support of unionists imprisoned in other countries, to struggle as one against the common enemy that aims to destroy us by pitting workers against each other." http://www.kctu.org/solidarity/dan-thanks.htm From Michael.Keaney at mbs.fi Wed Mar 6 01:12:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:11 2006 Subject: [A-List] UK corporate state: public private struggles Message-ID: Railtrack affair has 'damaged City's trust in Labour' By Ben Russell, Political Correspondent The Independent, 06 March 2002 A group of senior City financiers dealt a blow to proposals to use private money to pay for investment in public services last night, warning that the Railtrack affair had dented confidence in deals with the Government. More than 20 senior fund managers have written to the Chancellor, Gordon Brown, warning that the way Railtrack was taken into administration by Stephen Byers, the embattled Transport Secretary, has undermined confidence in future deals with the private sector. They warned that the affair had inflicted "considerable damage to the relationship between the Government and the whole of the business sector, in particular the City". The letter, by senior figures from some of the City's largest institutional investors, represents a major blow to Labour's attempts to use private finance to fund improvements in transport, health and education. The letter said the crisis would mean the interest rates on future schemes would rise to cover "political risk" and "will increase the cost to the taxpayer". It said: "We believe that many of our colleagues in the private sector will now be wary of entering into such relationships and that damage has been caused to the trust that had previously existed between the Government and the City." Projects reliant on private finance include the controversial public-private partnership for the London Underground and the project to upgrade the east coast main line. The letter echoes repeated Conservative claims, all denied by Mr Byers, that the Railtrack affair will damage the chances of securing future private investment for the rail network. Railtrack shareholders have been pressing for compensation after losing their entire investments when the company was put into administration on 7 October. Full article at: http://news.independent.co.uk/uk/politics/story.jsp?story=271389 Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Wed Mar 6 01:15:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:11 2006 Subject: [A-List] Europe/US rivalry & Mittal scandal Message-ID: Powerful lobby found friend in the White House By Ben Russell, Political Correspondent The Independent, 06 March 2002 A donation worth $600,000 to fund lobbyists pressing for American trade sanctions on steel imports is at the centre of the latest row surrounding Tony Blair's links with the billionaire industrialist Lakshmi Mittal, who gave ?125,000 to Labour before the 2001 election. Ispat Inland, part of Mr Mittal's international LNM Group, gave the sum to Stand up for Steel, a pressure group urging President George Bush to impose tariffs of 40 per cent on all steel imports to the United States. Steel industry figures fear that the imposition of tariffs in the United States will block exports from British steelmakers such as Corus and divert cheap imports into the European market, putting further pressure on the UK steel industry. Mr Mittal's Chicago-based company, America's sixth biggest steel producer, has donated heavily to both the Democrat and Republican parties. The LNM Group, which has 60,000 employees worldwide but only 100 in Britain, insists that each part of its global empire lobbies for its own interests. But the company's actions are in direct opposition to the British Government and the European Union. Mr Blair was criticised last month for backing Mr Mittal's bid to buy the state-owned Sidex steel works in Romania. Downing Street rejected suggestions that the plant would compete with Corus, formerly British Steel. But Mr Mittal's support for US tariffs challenges Mr Blair's claims that support for Mr Mittal was in Britain's interests. The Stand up for Steel coalition dates from 1998 when steel workers in the Ohio Valley started challenging imports of cheaper foreign steel from South Korea, which they believe posed a threat to the survival of domestic production. They warned of a "silent but deadly threat" from foreign imports. The campaign gathered momentum and took on a national scope. There were petitions and letters asking for help sent to the former President Bill Clinton. The powerful steel lobby found a friend in President George Bush, who last year launched a trade investigation aimed at stifling import competition, something Bill Clinton had refused to do. Last month, the Stand up for Steel coalition called 25,000 steel workers and their families on to the streets of Washington to step up pressure on the president. Some special interest groups inside America are furious that President Bush has been railroaded by the steel lobby into a move that could affect millions working in industries ranging from car production to heavy engineering. But the lobbying cry is popular in many parts of America. Mid-term elections are due in November, when the votes of steel-making states, such as Pennsylvania and Ohio, may prove crucial. But the power that has made the lobbying group influential in Washington has caused a severe headache for Mr Blair, who is faced with claims that he has supported a businessman who backed lobbyists campaigning against British and European trade. Full article at: http://news.independent.co.uk/world/americas/story.jsp?story=271353 Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Wed Mar 6 01:17:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:11 2006 Subject: [A-List] Russian intrigues Message-ID: Putin opponent urges inquiry into bombings By Anne Penketh and Patrick Cockburn in Moscow The Independent, 06 March 2002 The Russian media magnate Boris Berezovsky has accused Russian special services of a series of apartment-block bombings in 1999 to justify a crackdown on Chechnya that led to the election of Vladimir Putin as President. Mr Berezovsky, speaking at a news conference in London, produced what he said was "real proof" of the claim, and called for the European Union to investigate the September 1999 bombings that left 300 dead. The details released yesterday were circumstantial and the likelihood is that the murky events that propelled Mr Putin into the Kremlin will never be fully explained. But Mr Berezovsky, who at first supported Mr Putin before becoming his political opponent, is the most powerful Russian to make the allegation and his claims will revive suspicions about how Mr Putin came to power. Mr Berezovsky said that while there was no evidence that Mr Putin himself had given the order for the 1999 terrorist attacks, he was guilty of failing to prevent them or being "passive". Mr Putin was head of the domestic successor of the KGB, the FSB, from 1998 until August 1999, when he became Boris Yeltsin's Prime Minister. His decision to reignite the war with Chechnya in reaction to the bombings in three Russian cities, which were immediately blamed on Chechen rebels, was widely seen as ensuring his successful election as president the following March. The attacks "had no equivalent or precedent in Russia", Mr Berezovsky said. "Two and a half years later, no one can say the people who did it are in jail, nor can we really say who did it." The Independent was the first newspaper to report in January 2000 the allegations that the FSB was behind the apartment-block bombings, and investigated a further case in the Russian city of Ryazan where residents had suspicions that they escaped a similar attack. The FSB's director, Nikolai Patrushev, has said that the Ryazan incident, in which four sacks of the explosive material hexogen were reportedly found with a detonator on 22 September 1999, was a "training exercise". According to the FSB, the explosiveswere in fact bags of sugar. Nikita Chekulin, a former acting director of the Russian Scientific Research Institute who was recruited by the FSB in 2000, said yesterday that he had documentary evidence to show that tons of hexogen had been bought by the special services in 1999 and 2000. "Tons of this material with false markings were transferred to various cover organisations in Russian regions," Mr Chekulin said, adding that there had been a cover-up at a senior level. A 10-minute extract of a French documentary was also shown which, according to Mr Berezovsky, proved that the FSB was behind the bombings and the foiled Ryazan attack. The film highlights similarities in the type of explosives reportedly found at Ryazan and in the explosions in the cities of Moscow, Buinaksk and Volgodonsk. The film concludes: "Why doesn't Putin open an enquiry? The answer would appear to be obvious. The risk for the Kremlin is too great. If the inquiry was to establish that the FSB is responsible for the 1999 attacks, the legitimacy of all those in power would be called into question." According to Mr Berezovsky, the attacks were launched because "the FSB thought that Putin would not be able to come to power using democratic means". Mr Berezovsky dismissed suggestions that he might have his own political motivations, prompted by the closure of his independent television station TV6 by Mr Putin. Mr Berezovsky, who lives in self-exile in London to avoid Russian corruption charges, had threatened to reveal documentary evidence of his claims ever since his television station was shut down in January. In a counter-attack against Mr Berezovsky coinciding with his public appearance in London, the Russian Prosecutor General's office said that he might be declared a wanted man on the ground that he was "a financial sponsor of international terrorists". The accusations concern his alleged connections with Chechen criminals in both Chechnya and Moscow. The Prosecutor General claims that Mr Berezovsky spent $10m financing the raid by Chechen militants into Dagestan in 1999. Pavel Barkovsky, the deputy head of the special investigations unit in the Prosecutor's Office, claimed that Mr Berezovsky had been involved in a number of high-profile crimes in Chechnya, including the abduction of the Russian Interior Ministry envoy Gennady Shpigun, who was later murdered. Full article at: http://news.independent.co.uk/world/russia/story.jsp?story=271340 Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Wed Mar 6 01:26:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:11 2006 Subject: [A-List] UK state: political smears Message-ID: It looks like the punk Thatcherite Conservatives are getting serious about the make or break next election. Together with some astute repackaging by leader Iain Duncan Smith (toning down the Europhobia, emphasising better public services), going after New Labour sleaze is tactically clever, since there will be no shortage of it to dig up. Mandelson particularly is so arrogant as to assume that he walks on water, and his lack of care in his dealings is telling. Still, he can be, has been, exported to Europe as part of the New Labour/British state plan to orchestrate a takeover of the process of European integration to suit British interests. Meanwhile, tarring the rival Liberal Democrats, the potential official opposition after the next election, shows just how seriously a threat they are considered to be. Question is, will Tony's "big tent" strategy be sufficient to neutralise any serious threats to his hegemony? Mandelson accused of failing to declare benefit David Hencke, Westminster correspondent Wednesday March 6, 2002 The Guardian Former cabinet minister Peter Mandelson was last night facing a second investigation into failing to declare benefits - this time for a rent free stay in a ?6.75m London town house owned by fellow Labour MP Shaun Woodward. The ex-minister who had to resign for failing to declare a ?373,000 cheap interest loan from ministerial colleague Geoffrey Robinson to buy his home in Notting Hill, west London, is now the subject of the first complaint to Philip Mawer, the new parliamentary standards commissioner. The complaint from the former Tory MP for Dorset South Ian Bruce, also alleges that Mr Mandelson has not made a full declaration of his income from outside speech engagements made as an MP. Mr Bruce has written to Mr Mawer saying: "Mr Woodward does not declare that he was receiving rent for premises in Queen Anne's Gate and, assuming his declaration is correct, then Mr Mandelson was receiving an undeclared benefit in kind. "I believe that members of the Labour party might believe the finding of a safe Labour seat for Mr Woodward would have put Mr Woodward in the debt of whoever organised that for him. As you may know, Mr Mandelson was in charge of Labour's campaign at the last election and may well have been that person." Mr Bruce said it was important the concerns were investigated, as "Mr Mandelson continues to have daily access to the prime minister and ap pears to be trying to rehabilitate his reputation in advance of being offered some new public position". Mr Mandelson said last night: "This is clearly a baseless and politically motivated complaint dreamt up by a former Tory MP." But he declined to discuss whether he had paid rent or stayed free at the London home of Mr Woodward who has now sold the property. Mr Bruce has also tabled a complaint against the Liberal Democrat leader, Charles Kennedy, after finding that he recorded donations of ?15,000 from CA Church Ltd and ?20,000 from its director, Lynda Partridge, in the register of members' interests. He wrote: "I believe that Mr Kennedy should provide more information about why such a company and one of its directors is providing ?35,000 which is equivalent to 50% of the company's net profit." The shareholders are a Spanish resident, named as PA Church, and the British Virgin Islands-based Omdium Group, said Mr Bruce. "I understand that these donations do not fall foul of the prohibition of overseas donations because they are routed through a UK-registered company and a UK resident. I think the public require a better explanation of why such an arrangement has been made and whether they comply with the spirit of that legislation." Mr Kennedy said: "I am mystified by this bizarre complaint. These were perfectly legal donations registered in the proper manner from long-standing party supporters." Full article at: http://politics.guardian.co.uk/labour/story/0,9061,662610,00.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Wed Mar 6 01:28:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:11 2006 Subject: [A-List] UK imperialism: crisis management Message-ID: Britain and US prepare public for Iraq strikes Richard Norton-Taylor and Julian Borger in Washington Wednesday March 6, 2002 The Guardian Britain and the US are engaged in a joint strategy designed to apply pressure on Saddam Hussein to allow UN weapons inspectors into Iraq while preparing public opinion for military action against the country. This was made clear by Foreign Office and western intelligence sources as the US prepared to present the UN today with material purporting to show Iraq has converted trucks imported through the UN's humanitarian programme into mobile rocket launchers and military vehicles. A diplomat at the UN who has seen the evidence described it as "pretty clear". Charles Duelfer, former deputy head of the Unscom weapons inspection team, said Iraq had displayed new mobile launchers for an upgraded medium-range missile, the alSamoud, at an army day parade in April. "They have the capability to modify a vehicle like this, but not build it from scratch," he said. Mr Duelfer, now an analyst at the Centre for Strategic and International Studies in Washington, speculated that the US might have photographs of the al-Samoud launchers from the parade. Foreign Office sources insist that no decision has been made on military action against Iraq. However, a source said: "If there is no progress on the UN front, we will look at other options. We are preparing people for that". The sources said the focus was still on the UN where America and Britain are pushing for "smart sanctions" - essentially allowing Iraq to import more civilian goods while tightening controls over military related equipment - due to be implemented on May 30. Jack Straw, the foreign secretary, yesterday stepped up the campaign saying that the Iraqi regime was rebuilding its nuclear, chemical, and biological, weapons programme. In an article in the Times based on information provided by the intelligence agencies, he said Iraq was developing ballistic missiles capable of delivering chemical and biological weapons to targets beyond the 150km limit imposed by the UN. "This would allow Iraq to hit countries as far away as the United Arab Emirates and Israel", he said. Mr Straw also said there was evidence that Iraq was making increased efforts to procure "nuclear-related material and technology". The foreign secretary pointedly added that many of the weapons facilities damaged by the US and Britain in the Operation Desert Fox bombing in 1998 had been repaired. The British government is planning to release a dossier, based on intelligence information, on Iraq's attempts to produce weapons of mass destruction and develop long-range missiles. The Iraqis are sending a high-level delegation to today's UN sanctions committee, led by the foreign minister, Naji Sabri al-Hadeithi, and including General Hussam Amin, who as head of the Iraqi na tional monitoring directorate represented Baghdad in its daily tussles with Unscom. Hans Blix, who would lead any new UN inspections regime, will also attend the meeting, diplomats said. Mr Blix is the head of Unscom's successor, Unmovic (the UN monitoring, verification and inspection commission). But diplomats at the UN said he would have little discretion to bargain with the Iraqis over what form of inspections would be acceptable. "That decision is a matter for the security council," said a western diplomat. Iraq has repeatedly said it will not cooperate with UN inspectors. If Saddam continues to refuse to accept them, Whitehall sources say, it would make life easier for Washington. The suggestion is that this would give the Bush administration more excuse to take military action. Mr Straw's intervention follows remarks by Tony Blair to Australian television last week during the Commonwealth prime ministers' summit. They represent a significant shift away from the cautious approach towards Iraq by British ministers earlier this year. Backing President Bush's reference to the "axis of evil" of Iraq, Iran and North Korea, the prime minister said: "We have got to act on it because if we don't act we may find out too late the potential for destruction." Mr Blair plans to meet president Bush in Washington next month to discuss what action they should take against Saddam's regime. Full article at: http://www.guardian.co.uk/uk_news/story/0,3604,662649,00.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Wed Mar 6 01:37:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:11 2006 Subject: [A-List] UK state: Mittal scandal Message-ID: Yeah, something fishy about this alright. Why would Tony be pitching for someone whose interests are not at all clearly aligned with Britain or Europe, but are more closely tied to protectionist interests in the US? One possible reason is that by assisting in the privatisation of state assets in Romania Blair is paving the way for eventual accession into the EU of Romania, as its most lucrative asset chunks are appropriated in the manner facilitated in East Germany by the Treuhandstaldt. But now we discover that Mittal has activities in Kazakhstan, highlighted by "Lord" George Robertson last year as being an important player in the "war on drugs" which, prior to Sept 11, was NATO's main hope of a leading international role. Now western interests are piling into Central Asia to take advantage of this window of opportunity -- are we witnessing inter-imperialist rivalry between the US and Europe as regards the assets of that region? Certainly, Britain has been a key player in trying to "open" up Iran, getting in before the US. What's happening in Kazakhstan that has a bearing on Tony's seemingly irrational lobbying -- unless of course you buy the line that Mittal "bought" Tony for ?125,000 five years ago. There's a lot more to this than meets the eye. Mittal's empire 'could crumble' Steel mill tycoon's fortunes slip but he stays in first place in list of Britain's 275 richest Asians Vikram Dodd Wednesday March 6, 2002 The Guardian Lakshmi Mittal's worldwide steel empire could collapse within the next year, an expert who examined his finances warned yesterday. The businessman continued to top the list of the richest Asians in Britain, released yesterday, with a personal fortune of ?900m - but the sum was down from $1bn last year. Mr Mittal was embroiled in scandal after it was revealed that he received a letter from the prime minister supporting his bid for a Romanian steel mill, weeks after he made a ?125,000 donation to the Labour party. Philip Beresford, who trawled through the tycoon's finances to assess his wealth for the Asian Xpress newspaper, said there was a "20-30% chance" that Mr Mittal's worldwide steel empire could fall apart. Mr Mittal is involved in investments in Kazakhstan that could massively increase his wealth, but coupled with other problems faced by his LNM group, such as high debts, his business empire could crash, warned Mr Beresford. "He's a very skilful juggler. If he can keep all the balls in the air, he'll come out even richer. If things go wrong in Kazakhstan and he can't turn around the Romanian operation, if the banks start getting restless because of a low share price, if loan repayments can't be met, then it could could all fall apart." The list suggests that for other super rich Asians giving money to Labour and its pet projects reaps little financial reward. The other British Asian big donor to Labour, Lord Paul, saw his personal wealth fall from ?330m last year to ?280m. The Hinduja brothers, who gave money to the Millennium Dome project, are estimated be worth ?800m, a ?100m increase from last year. The rich lists compilers say the rise was not because the brothers' wealth has increased but because the figure they calculated last year was mistakenly too low. The list of the 275 richest Asians estimates their combined wealth at ?9.5bn, up ?1bn in the past year despite an economic slowdown. There is no evidence to suggest Asians are more likely than other ethnic groups to be millionaires. Official statistics show that British Asians are more likely to be unemployed compared to white people. While 4% of white people have never worked or are unemployed, 7% of Asians have had no jobs. All Asian groups are more likely to be unemployed than white people, though British Asian Muslims are doing worst of all, mainly because of poorer educational opportunities and discrimination. Tony Blair has asked his personal policy unit to investigate why the income gap between white people and Asians is growing. Mr Beresford, who also compiles the Sunday Times rich list, said that compared to white multi-millionaires, Asians were less likely to have inherited their wealth. Of the top 10 richest Asians based in Britain, five had mostly made their fortunes from overseas business activities. Sarwar Ahmed, managing director of Asian Xpress, said the rise in the total wealth of those on the rich list was because British Asians tended to shun risky sectors like the internet, opting for safer ones: "Asians are in fashion and food, and those have proved stable. They are more likely to be entrepreneurs and own their own businesses. The community has overcome the odds to thrive in Britain." The Jatania family appears to enjoy the biggest increase in fortunes; their cosmetics and beauty products empire has helped push their wealth from ?300m to ?548m. Full article at: http://politics.guardian.co.uk/labour/story/0,9061,662637,00.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Wed Mar 6 03:08:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:11 2006 Subject: [A-List] German assertiveness: Afganistan Message-ID: Gerhard Schr?der has "modernised" Germany to the extent that it now punches its weight more fully in foreign and security policy. Schr?der, for example, upset the French very early on by not playing the obedient partner in the Franco-German axis that had driven EU integration. He also pointedly refused to accept a French replacement for Michel Lamfalussy as IMF director. After some serious wrangling with the Clinton administration, who rejected Schr?der's first proposal, it was settled that Horst K?hler, from the European Bank for Reconstruction and Development, should take over. Last week it was reported that Schr?der is engaging in some European Commission-bashing as part of his electoral strategy for winning voters for September's elections. But there is also a longer term strategy of bending the Commission to German will, which, for a time, will ensure the support and cooperation of Britain, which is also keen to reduce the power of that institution, for long a repository of French interests. Another taboo broken very pointedly by Schr?der is the use of German troops abroad, which is costing his Green Party coalition allies a lot of support, despite Joschka Fischer supposedly being Germany's "most popular politician." He is looking forward to electoral meltdown, as the Greens' political base shrinks. It's worth keeping an eye on these developments for future clues concerning rivalries within the EU and the nature of the EU's positions vis a vis Russia, the US and military coordination, to name only three important issues. Germans in mission creep John Hooper in Berlin Wednesday March 6, 2002 The Guardian The involvement of German special forces in the latest battle in Afghanistan has cast a spotlight on the way in which Gerhard Schr?der is - almost stealthily - edging his country into accepting a much more active military role overseas. It is now known that 92 members of Germany's version of the SAS, the KSK, are taking part in the offensive in eastern Afghanistan. The defence minister, Rudolf Scharping, insists that their only role is to provide medical support, but few in the German media believe that. The KSK's presence on the ground in Afghanistan only came out through a newspaper report nine days ago, prompting opposition protests that parliament should have been told first. Similar objections were aired this week after the US said German troops were taking part in the Gardez campaign. Mr Scharping insisted that the secrecy was to protect them and their families. His officials, meanwhile, have tried to play down a role to be assumed by German troops in Kabul. When Britain hands over its "lead nation" status in the international security force, the main burden will fall to Germany. Full article at: http://www.guardian.co.uk/international/story/0,3604,662472,00.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Wed Mar 6 03:35:03 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:11 2006 Subject: [A-List] Afghanistan: the blowback continues Message-ID: Friends and foes The failure of a US-led assault on al-Qaeda fighters in Afghanistan demonstrates its lack of understanding of power struggles among warlords, says Charles Clover and Richard Wolffe Financial Times: March 6 2002 Commander Abdul Mateen Hassankheil sips from a glass of green tea and smiles wryly behind his mirrored sunglasses. "There is a typical Afghan tradition," he says. "Afghanistan is a country where your best friend can become your worst enemy. And vice versa. This is our Afghan tradition." He is well placed to understand. Ten years ago, he, Padshah Khan and Saifurahman - three army division commanders in Gardez, Afghanistan - visited each other often as colleagues. Today, Mr Hassankheil sits in Saifurahman's former office, while the latter, one of the last remaining Taliban commanders, is 30km away in the Shahi-kot mountains, battling against Mr Hassankheil's troops and their US allies. Eight American servicemen have lost their lives there, most of them dying when a Chinook helicopter was hit by a rocket-propelled grenade as it attempted to set down a reconnaissance team this week. Afghan government forces are estimated to have lost seven men. Commander Hassankheil thinks that he knows why: bad intelligence, bad co-ordination and reliance on untrustworthy local commanders. In all, he says, "the US does not understand our local politics. It does not know whom to trust, and trusts the wrong people." The battle for Shahi-kot looks like a turning point in the Afghan conflict, as critical as the initial battle for the northern town of Mazar-e-Sharif, which led to the collapse of the Taliban regime last year. Depending on its outcome, the deadly firefight will either encourage other al-Qaeda fighters to mount guerrilla assaults or break the back of the foreign fighters and help to establish the authority of Kabul's new government. Operation Anaconda - involving more than 1,000 US and coalition troops alongside a similar number of Afghan fighters - has already proved the biggest and bloodiest Afghan ground assault led by US forces to date. Their enemies are up to 1,000 al-Qaeda and Taliban fighters fighting to the death in one of Afghanistan's notorious cave and tunnel complexes in a region close to the Pakistani border that has not been secured. The perilous assault underscores how the politics and military tactics have shifted in Afghanistan. Planned for several weeks, the operation's reliance on such large numbers of American lives reflects the realisation that the combination of US air strikes and Afghan ground troops is not enough to clear the remaining enemy fighters. But it is also a recognition that the enemies at Shahi-kot are mounting a challenge to the new government in Kabul, led by Hamid Karzai, whom the US and its allies are determined to defend. Abdullah Abdullah, the Afghan foreign minister, said on CBS television yesterday that the goal of the al-Qaeda and Taliban fighters at Shahi-kot was simple. "It is to destabilise the interim government and to create hopes for smaller pockets of al-Qaeda and Taliban which are in the other parts of the country, that they can resist." Faulty intelligence has already proved deadly in Afghanistan. US forces killed at least 16 fighters loyal to the new government in the village of Hazar Qadam, north of Kandahar, in January. While the Pentagon insists that the US forces were merely returning hostile fire, Afghan officials have suggested the US was duped by local warlords. As the Pentagon investigates what went wrong in Shahi-kot this week, Mr Hassankheil says Padshah Khan, his former military ally, is to blame. It all began a few weeks ago, when Saifurahman, the fearsome Taliban commander, and his men moved into some villages near Shahi-kot, according to Taj Mohammed, the provincial governor. Saifurahman was paralysed in both hands as a result of an injury, and told the governor that his men could not go back to their village because they were fugitives. He had promised the governor, through an emissary, that his men meant no harm. "I wish now that the bullet had hit his heart and not his hands," the governor said on Monday. A short time before, the US military had become aware that some 1,000 al-Qaeda troops were massing in the area. On Friday, the coaliation force, led by 60 American troops, a mix of special forces and the 101st Airborne Division, and the Afghan troops, moved into the area. Khyal Mohammed, a 22-year-old who started working for the Americans a month ago for $200 a month, was one of Afghan soldiers who set out at 11pm on Friday night in trucks, snaking up the treacherous mountain roads towards Shahi-kot with their lights off. "They didn't tell us anything about what we would be doing," he said from his hospital bed in Gardez. Before the assault even started, the truck Mr Mohammed was in overturned and he and three others were taken to a local hospital for injuries. Later on Saturday, three other members of his unit were brought in with shrapnel wounds and told the story. They had been ambushed and beaten back. One American was killed, another injured. They had all fled for their lives, says Mr Mohammed. Based on a number of interviews on the ground in Gardez and Kabul, it appears that the US may have fallen into a trap of relying for information on a few local militia commanders, who led them astray. According to Mr Hassankheil, this information on Saifurahman's whereabouts and numbers was provided to the US by his old friend, Mr Khan. He says Mr Khan had told the Americans that his forces had already attacked Saifurahman's, and the US-led contingent was to move up a different mountain pass, in a flanking movement. This would explain the lack of bombing by the US. In reality, he says, Mr Khan's troops were not even in the area. Taliban and Al-Qaeda forces, led by Saifurahman, ambushed them. Saifurahman and his men number perhaps double the original estimate of 400-500, according to most of the Afghans who have been at the front. US officials say they are well dug into a network of natural and artificial caves. The US and its Afghan allies have surrounded the area, and aircraft have been hammering Shahi-kot since Saturday with a variety of bunker-busting bombs. Yesterday the US-led force appeared to be regrouping, as hundreds of soldiers were moved back from the front and pick-up trucks full of reinforcements arrived from the town of Joji. Commander Hassankheil's former friend, Mr Khan, previously provided misleading information to the US, according to many people in Gardez, including the new Kabul-appointed governor Taj Mohammed. "The US used to rely on Padshah Khan for information," he said. "But I doubt they will any more." On December 20, the US bombed a convoy of tribal elders who locals say were on their way to Kabul, to attend a ceremony in Kabul honoring the new government. Mr Khan had told the US that the group were Taliban and al-Qaeda. This was never proved either way, but the certainly belonged to a clan that had become an enemy of Mr Khan. Mr Khan has many of those. He was appointed governor of the local province in January, but lost the post after protests. Mr Khan, reached by satellite telephone yesterday, denied that he had misled the US, and insisted that everyone in Gardez making accusations against him was a member of al-Qaeda. He said the current US campaign in Shahi-kot had vindicated him. "I was the one and only person insisting that that there are al-Qaeda members over there. Finally the Americans understood. No one would believe me. Now I have been proved right." As the US becomes increasingly engaged in anti-terrorist operations around the world - including the remote Philippine island of Basilan and the Pankisi Gorge amid the Caucasus mountains of Georgia - a familiar ghost is emerging from the conflicting reports in hostile territory. A slip of the tongue by Tommy Franks, the commander of US forces in Afghanistan, gave an unwitting glimpse of what has been uppermost in the minds of military planners. Speaking to reporters on Monday, he said: "First let me say that our thoughts and prayers go out to the families and the friends of the service members who have lost their lives in our ongoing operations in Vietnam." Full article at: http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3Z24R5GYC &live=true Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From annewilliamson at msn.con Wed Mar 6 04:44:02 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Sat Jul 8 08:09:11 2006 Subject: [A-List] Paul Foot on Palestine References: Message-ID: <007501c1c502$fd5b2560$0100a8c0@igrushkii> Michael: Thank you for the Paul Foot article. I was near tears from reading such simple truths plainly stated. Such an article would never see the light of day on this side of the pond. -Anne ----- Original Message ----- From: Keaney Michael To: A-List (E-mail) Sent: Tuesday, March 05, 2002 4:16 AM Subject: [A-List] Paul Foot on Palestine Anne Williamson writes: Course the Israelis are smart - they spread $100-$200 million of the billions in US taxpayer funds they receive annually around K Street, into the pockets of lawyers, lobbyists and ALL pols on international and aid committees. ===== In defence of oppression Paul Foot Tuesday March 5, 2002 The Guardian The cycle of death goes on and on. Nearly 50 Palestinians dead in the Israeli army attacks on refugee camps over the past couple of days; 10 Israeli soldiers dead at an army checkpoint near Ramallah. In the west there is a universal shaking of sophisticated heads and a weary, liberal sigh. Tut tut, there they go again. Two enemy peoples in a far-off land, caught up in an age-old conflict, swapping atrocity for atrocity, and endlessly killing each other out of some primeval hatred. There is nothing civilised and humane observers can do about it, apparently, except perhaps to hope that sooner or later one side (the strong) will annihilate the other (the weak). The beauty of this approach is that it requires no intellectual effort, no analysis, no history, above all no need to distinguish between the violence of the oppressed and the violence of the oppressor. Nothing could be clearer from the conflict over Palestine than that the Israelis are the oppressors and the Palestinians the oppressed. The refugee camps invaded by Israeli troops last week are inhabited by people whose parents or grandparents were flung out of their homes and their lands more than half a century ago and have had to watch those lands being occupied and confiscated by Israelis. The reason Israeli troops have the audacity to invade those camps today is that their predecessors, by means of entirely illegal military invasions, conquered the West Bank of Jordan, divided it up into cantons or bantustans and imposed on them equally illegal and ludicrously privileged "settlements". The violence of the Israeli army and police in those regions is the violence of the oppressor, and the consequent violence of the Palestinians is the resistance of the oppressed. Anyone who favours the Israeli occupation of the areas, or the settlements, or who denies the right of violent resistance to the Palestinians is siding unequivocally with the oppressor against the oppressed. Assuming a "plague on both your houses" approach is not just a travesty of the facts. It shuts out all prospect of a solution. If one side is as bad as the other, then any settlement is out of the question since both sides will go on killing each other in any event. A rational assessment of the roles of oppressed and oppressor, on the other hand, tells us not only why people are killing each other, but also how they can be stopped from doing so. If the reason for the violence is the illegal occupation of Palestinian territory, then the obvious solution is for the Israelis to get out of that territory and disband the settlements. If the Israeli government just won't budge on either withdrawal or the settlements, then the obvious answer is for the west to impose sanctions - to cut off the massive economic subsidies and arms shipments that have built up the Israeli economy and its military machine. Remember the indignant hullabaloo when a shipment of arms, bound apparently for the Palestinians, was intercepted. Whoever complains about arms shipments a hundred times greater that pour regularly from our factories and those of the US into Israel? Anyone in the United States or Britain who opposes such sanctions is taking up an unequivocal stand on the side of illegal occupation, military conquest and economic oppression. Especially pathetic on the part of our apologists for Israeli oppression is their bleating about anti-semitism. For the sort of oppression they favour is the seed from which all racialism, including anti-semitism, grows. There is a solution to the Palestine conflict. It depends on the withdrawal of Israeli forces and the disbandment of the settlements. Such a solution is easily within the grasp of western diplomacy, and would stop the killing. Full article at: http://www.guardian.co.uk/comment/story/0,3604,661939,00.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Wed Mar 6 04:52:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:11 2006 Subject: [A-List] Corporate society: co-opting the NGOs Message-ID: Economics columnist Martin Wolf of the FT has been banging the drum periodically against the idea of corporate social responsibility, in terms similar to those used by Milton Friedman. Clearly there is a developing agenda of states seeking to mitigate popular discontent by constructing regulatory regimes which place more responsibility (not necessarily onerous -- far from it) on private corporations to do good, or at least appear to be doing good. As usual, amid all the fluff in this article, are some nicely revealing statements which highlight just how, for instance, the Green parties of Europe have been so ineffectual and corruptible as they have capitulated to the corporate euro. Does caring boost the bottom line? Businesses are under increasing pressure to embrace community concerns . Michael Skapinker and Alison Maitland begin a four-part series by examining whether ethics and environmentalism are just a PR exercise or whether they can help improve profits Financial Times: March 6 2002 The moment he walked into the public meeting at the Richmond Theatre in west London, Sir John Egan knew he was in trouble. There were hundreds of people waiting to tell him they did not want BAA, the company he headed, tobuild a fifth terminal at Heathrow airport. Worryingly, they were clearly not professional agitators. They looked like the people next door - which they were. "These are ordinary people, our neighbours," Sir John told his managers the next day. "They're not promoting an environmental or political cause; they're just upset by the noise and the traffic." A little later, Sir John flew to an inter-national conference in Budapest where the keynote speaker was Des Wilson, a former chairman of Friends of the Earth and one of the UK's most prominent radical campaigners. Mr Wilson reminded the tourist executives that their business was selling clean beaches, oceans and lakes. "You should not have to be pressured into environmental responsibility. You should be the leaders," he said. Shortly afterwards, Sir John recruited him to become BAA's public affairs director. They were an unlikely couple. Sir John, former head of Jaguar cars, was a committed Thatcherite and a leading member of the British business establishment. Mr Wilson left his New Zealand school at 15, arrived in London four years later and, after a series of odd jobs, became a campaigner for the homeless, for lead-free petrol and for the Liberal Democratic party. Sir John was looking for someone who could speak to environmental campaigners and local opponents of the terminal on their own terms. He succeeded. BAA got permission to build its terminal after a four-year public inquiry, the longest in UK history. Mr Wilson encouraged BAA's airport managers to get to know the local community campaigners and to attempt to incorporate their concerns into expansion plans before submitting them for planning approval. Sir John and Mr Wilson have used their experience to write a book* arguing the case for corporate social responsibility, advising companies to engage with those who are not on the shareholders' register. The idea has its opponents. David Henderson, former head of economics and statistics at the Organisation for Economic Co-operation and Development, argued at a debate sponsored by the London Business School and The Economist last week that CSR was misguided and dangerous. Consulting a wide range of stakeholders and complying with new monitoring and accounting systems raised costs for companies and their customers, he said. Companies that engaged in CSR claimed they were protecting their reputation and enhancing profits by responding to society's expectations. "But you have to ask whether these expectations are well founded and reasonable," he said. Imagine, Mr Henderson said, that it became the widely held view that senior managers should do five hours' yoga in their working day and that their progress should be monitored and reported. "Perhaps companies would have to go down that path," he said. "But you would hope that some companies would say: 'This doesn't make sense.'" There are many other executives who profess a belief in CSR - but only because their public relations department has told them to do so. Sir John and Mr Wilson recall being invited by a well regarded company to make a presentation on stakeholder engagement to the board. The finance director spent the meeting checking some figures. One of the leading directors left to make a telephone call. Another repeatedly looked at his watch. So what is the business case for CSR? There have been many studies purporting to prove that it improves profits but they are not entirely convincing. Craig Smith, associate professor of marketing and ethics at London Business School, has identified 80 studies. Of these, 42 demonstrated a positive impact, 19 found no link, 15 produced mixed results and only four showed a negative impact. There were problems with the methodology, he said. Such studies tended to focus on companies that were large, successful and admired anyway. They often relied on what companies said about themselves. They often failed to compare like with like: it was meaningless to compare a company's environmental performance with, say, its record on equal opportunities. There are companies that have managed to turn a commitment to CSR into financial success. Gwyneth Brock, corporate affairs manager for the UK's Co-operative Bank, said the bank's policy of ethical investment had helped to turn it from loss to profit and to bring a nearly fivefold increase in customer deposits in 10 years. An independent cost-benefit analysis last year estimated that the bank's environmental and ethical policies accounted for between 15 per cent and 18 per cent of its pre-tax profits. But it has not worked for everyone. Body Shop became famous for its ethical approach but has ultimately not prospered as a business. The most obvious answer to the question of why companies should care about the wider community is that it is a way of protecting themselves against potential risk. Just as companies keep an eye on which competitors are working on a cheaper or more attractive product, so they should try to keep tabs on which organisations are planning campaigns that might damage their business. The most famous illustration of the damage that can be done was the Brent Spar affair in the mid-1990s, when Shell suffered a consumer boycott over its decision to dispose of an oil platform by sinking it at sea. The company had researched the issue thoroughly and had decided that disposal at sea was the most environmentally responsible option. Greenpeace and many members of the public, particularly in Germany, saw it differently. Shell was forced to back down. Kate Fish, vice-president for public policy at Monsanto, which also fell foul of the campaigners, has spent hours thinking about where companies go wrong. What was so worrying about Shell running into trouble was that it had such highly developed systems for thinking about the future, she recalls. No company had done more to develop the idea of scenario planning. "They had the science on their side but Greenpeace talked about values," Ms Fish says. "What Shell ran up against was: you don't litter. You don't throw your old car into a lake." It is not enough for companies to persuade themselves that they have right on their side. They need to know enough about campaigning organisations to know whether they are going to agree. Many managers object to this, even if they are reluctant to say so publicly: what right, they ask, do these unelected and unaccountable organisations have, to tell companies what they should be doing? Their frustration is understandable but pointless. It is the customers, equally un-elected and unaccountable, who decide whether companies prosper or fail - and the customers trust pressure groups. A recent survey by Edelman, the public relations consultancy, found Europeans trusted campaigning organisations substantially more than companies. In the US, trust for campaigning organisations is approaching that for business. The campaigns work when they attract public support. A business that refuses to think about why consumers follow Greenpeace rather than Shell is failing its shareholders just as much as one that prefers not to consider why people buy Nokia's phones rather than Ericsson's. *Private Business... Public Battleground: the Case for 21st-Century Stakeholder Companies Full article at: http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT30IBD1GYC &live=true Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Wed Mar 6 05:06:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:11 2006 Subject: [A-List] Financial regulatory crisis and GATS Message-ID: Thanks to Ian Murray for this. We've been following developments in the accounting field here for some time now, noting how different interests are vying with each other for influence in the impending set of global accounting standards that appear to be on their way. Prior to Enron it looked very much like the US, via the Arthur Levitt-appointed Paul Volcker, was going to win the day against a divided Europe. Thereafter, however, suddenly it looked like Europe-style regulation as typified by the UK's Financial Services Authority and the agenda promoted by the IASC's David Tweedie would stand a better chance. Now, enter a previously unconsidered actor... ps Maybe if this doesn't work out, we could find a new role for NATO. [NYTimes] March 1, 2002 W.T.O. Pact Would Set Global Accounting Rules By ANTHONY DePALMA As Congress and regulatory officials consider ways to tighten auditing and accounting rules to prevent a repeat of the Enron (news/quote) debacle, a little- known global agreement that places untested new requirements on the domestic regulation of professional services like accounting is quietly advancing - with the help of firms like Arthur Andersen, Enron's much- criticized auditor. The new rules would give the World Trade Organization oversight of the domestic regulation of accounting. Any new national regulation could be challenged by other countries as unfair if it was "more trade restrictive than necessary." Critics of the new rules say such a standard could hobble a government's ability to regulate scores of services. But American officials say the requirement will simply prevent governments from setting up discriminatory rules, limitations and quotas that would interfere with the right of foreign service companies to enter their markets. So far, the new rules, which are being drafted by the World Trade Organization with the help of Arthur Andersen and other companies, have attracted little outside attention. They fall under the General Agreement on Trade in Services, or GATS, a 1994 pact that seeks to liberalize trade in many areas, like architecture and real estate brokerage services, the way the General Agreement on Tariffs and Trade, or GATT, has done for many goods. The services agreement has generated none of the public controversy that has swirled around the organization's attempts to promote merchandise trade. Even after street protests disrupted the group's Seattle conference in 1999, talks on services moved forward. But since the Enron bankruptcy proceedings drew public attention to accounting practices, public interest groups and critics of free trade have begun to worry that the services pact may hamper efforts to curb abuses. "The Enron-Andersen crisis just shows that governments need to retain the ability to experiment with deregulation and then, if they realize they've gone too far, to re-regulate," said Ellen D. Gould, an independent consultant and researcher working on contract with Georgetown University. "What the W.T.O. and these agreements seek to do is make deregulation a one-way street." Even critics agree that in the current atmosphere, unfair-trade complaints would be unlikely against the measures now being discussed. But they ask how the new rules will be interpreted when future issues arise, and a government proposes measures disliked by a trading partner. "What we really need to ask is to what degree are global agreements like this going to limit our ability to regulate services domestically," said Patricia J. Arnold, an associate professor of business at the University of Wisconsin's Milwaukee campus. "The long-term goal of GATS is to eliminate barriers in the cross- border trade in services." American trade officials said such fears were overblown. They point to recent changes in banking regulations, also covered by the services agreement, that were not challenged by any nation on trade grounds. "We think that these things are written sufficiently broadly enough not to cause any problems," a senior trade official said. Joshua Ronen, a professor of accounting at New York University, said the detailed agreement on accounting now being drawn up did not specify licensing requirements or exam standards for individual nations; it merely insists that any such regulations be legitimate and transparent. "I don't think they will have any impact on any reform the United States has in mind," he said. GATS was adopted in 1994 by the 140 nations of the trade organization in response to brisk growth in services, which accounted for one-fifth of all cross-border trade in 1999, or more than $1.35 trillion in all. Trade in services has grown faster than merchandise trade for 20 years. The agreement covers nearly all services, except those provided solely by governments and those involved in air transportation. Developing nations are given leeway to offer some protection for local companies. Accounting was one of the first services for which detailed rules were written. Charles Leonard, an Arthur Andersen spokesman, said the firm was part of an international accounting group that helped draft them. "We were striving for openness and transparency in national standards," he said. The rules do not take formal effect until 2005, but member nations have already agreed not to impose any new regulations that do not meet the proposed standard for openness. It is not clear how that commitment applies to the measures now being debated in Washington. During the process of drafting the agreement several years ago, American officials raised questions about whether prohibiting an accounting company from doing both auditing and consulting work for the same client would be viewed as restricting trade. Such a measure is being considered in Washington now. Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Wed Mar 6 05:19:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:11 2006 Subject: [A-List] US imperialism & global arms trade Message-ID: UNITED STATES: War profiteers have a field day BY EVA CHENG, Green Left Weekly Towards the end of Bill Clinton's presidency in 2000, the moaning and groaning of US "defence" contractors reached new heights - their profits were drying up as US military budgets shrank to a post-Cold War low. Following the September 11 terrorist attacks, everything has changed. Exploiting the traumatic impact on public opinion, the Republican administration of President George Bush immediately secured US$40 billion of emergency funding to "fight terrorism". In early February, Bush sought a further US$48 billion increase in the military budget for fiscal year 2003 (which starts October 1), pushing it to US$396 billion - its highest since 1954 (following the 1950-53 Korean War) and far exceeding the Cold War average annual spending of just under US$300 billion. The US killing in Afghanistan has only whetted Bush's appetite. He made clear as early as December that he plans to make 2002 a "war year". Now he's got the money to carry that plan through. In late October, Bush placed the biggest military order in history with Lockheed Martin, the world's biggest military contractor (US-owned of course). The US$200 billion contract is to develop a joint strike fighter (JSF). Britain also owns a small stake. Not surprisingly, the share prices of US military corporations have risen significantly since September 11, in contrast to the general stock market and the diving airline and related stocks in particular. Shares soar The price of Alliant Techsystems shares, a top US maker of bullets, gunpowder, bombs and rocket-propulsion systems, soared almost 300% higher than its March quote within weeks of the terrorist attacks. Lockheed Martin's share price jumped almost 200% during the same period. Increases in the share prices of Raytheon and other key defence corporations were not far behind. By the end of December, the "pure military plays" (those not dragged down by exposure to the sagging civilian airline business, like Boeing), according to Reuters, had more than made up for losses earlier in 2001, to register a 50% rise in market value for the year. That is a far cry from their performance in 1999, in which Lockheed Martin's share prices dropped 48%, Raytheon's fell 50% and Northrop Grumman's slid by 30%. These share price gains are more than a bubble. The "investors" see big weapon-production contracts coming from Bush's war drive. Apart from the JSF, Lockheed Martin was awarded three contracts, worth a total of US$336 million, three days after Christmas. On the same day, Raytheon was also granted US$513 million worth of contracts for flight simulators and 434 Tomahawk missiles. The profit outlook of US war companies has not been rosier for years. This is why United Defense Industries, owned by the Carlyle Group and to which George Bush senior and many top US politicians have close links, dared to offer its stocks for sale on the US stock market only weeks after September 11. Carlyle stocks were quickly snapped up. Military stocks received a further boost after Bush's early February State of the Union speech which named Iran, Iraq and North Korea as the next targets for his "war on terrorism". Weapon sales Bush's war drive won't only bolster domestic military contracts. It also will boost overseas orders. For years, the US has exported more weapons than any other country by a significant margin. According to a report (the Grimmett Report) presented to US Congress last August, the US "market share" of global weaponry export agreements was as high as 59.1% in 1993. After hovering around 30-40%, the US share hit another high of 50.3% in 2000. Russia's share of the arms market, in the eight years to 2000, ranged between 6.9% in 1993, to high of 28.3% in 1995, before settling at 20.9% in 2000. France and Britain hold third and fourth positions. The top four European weapon exporting countries had a collective share of 20-30% of the 1993-2000 global market, hitting an all-time high of 39.7% in 1998, but slipping to 16% in 2000. In 1993-2000, the US made more than US$101 billion worth of weapons export agreements, far exceeding Russia ($36.3 billion), France ($31.8 billion), Germany ($14 billion), Britain ($13.8 billion) and China ($7.6 billion). With increased military funding, this gap has every likelihood of increasing. The obvious fact is that US wars boost weapon sales and profits for military corporations. The Grimmett report subtly pointed out that the 1990-91 Gulf War "played a major role in further stimulating already high levels of arms transfer agreements with nations in the Near East [Middle East] region. The war created new demands by key purchasers such as Saudi Arabia, Kuwait, the United Arab Emirates (UAE), and other members of the Gulf Cooperation Council, for a variety of advanced weapons systems. The United States dominated arms transfer agreements with the Near East during the 1993-2000 period with 55.2% of their total value." US `market dominance' According to the Grimmett Report, the "Near East" is the biggest arms market in the world, followed by Asia. In 1993-2000, Saudi Arabia topped the list of the world's "developing country" arms purchasers, importing US$24.5 billion worth of weapons. It was followed by the UAE ($19 billion), China ($12.6 billion), Egypt ($11.6 billion), India ($11.5 billion), Israel ($9.5 billion), South Korea ($8.1 billion), Kuwait ($6 billion), Pakistan ($5.3 billion) and South Africa ($4.7 billion). These top 10 usually accounted for 90% of all annual imports by "developing countries". These findings should surprise no-one after a decade of continuous US-British bombing of Iraq and a much longer period of US hostility towards North Korea and China. The recent threats by Republican Party "hawks" in the US administration to settle Washington's "unfinished business" with Iraq's Saddam Hussein, combined with Bush's discovery of an "axis of evil" and his threats to deal with "terrorists" throughout the world will surely keep military tensions high and increase the demand for arms imports. In fact, between 1993-2000, arms transfer agreements to the "developing nations" already accounted for 67.7% of all such agreements worldwide. That share increased to 69% in 2000. "Stimulating" the Third World's demand for killing machines not only increases its dependency on First World governments, which must approve contracts, but also boosts First World arms suppliers' profits and funds the further improvement of the First World's economic and technological dominance over the Third World. Many Third World arms importers fund their purchases by external borrowing, predominantly from the First World. These debts, in turn, reinforce the Third World's economic and political enslavement. Even before the arrival of George Bush junior in the White House, Washington was notorious for starting and fanning wars around the world. The World Policy Institute reported last year that "the United States has supplied arms or military technology to parties to 39 of the 42 active conflicts worldwide". The WPI said that many 1999 US arms deliveries violated basic standards of the International Code of Conduct on Arm Sales. >From Green Left Weekly, March 6, 2002. See http://www.greenleft.org.au/ Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Wed Mar 6 05:28:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:11 2006 Subject: [A-List] BP watch: Caspian Sea carve-up Message-ID: More possible connections with the Mittal scandal, plus the continuing efforts of "Blair" Petroleum to assert "British" interests in Central Asia, competing against Russia and others... Troubled waters in the Caspian Sea By Sergei Blagov Asia Times, March 1, 2002 MOSCOW - In yet another attempt to reach a consensus on Caspian Sea issues, Moscow held a conference this week to discuss how to divide the sea's lucrative resources. Yet all the gathering demonstrated was that the long-awaited consensus remains elusive. The Kremlin has been trying to urge the Caspian littoral states - which also include Azerbaijan, Iran, Kazakhstan and Turkmenistan - to agree on the sea's division. "The Caspian region is among the priority areas of Russia's foreign policy," its Foreign Minister Igor Ivanov told the international conference on Caspian Sea legal issues. The gathering, co-sponsored by Russia's Ministry of Foreign Affairs, Moscow's Institute of International Relations and some Russian oil firms, was attended by representatives from the five littoral states as well as lawyers, experts and researchers. Russian officials renewed their calls for consensus. Continued disputes over the Caspian could entail violent conflicts, according to Viktor Kalyuzhny, Russia's special envoy on the Caspian and deputy foreign minister. Kalyuzhny reiterated at the conference that determination of the Caspian status was an "exclusive affair of the littoral states". Kalyuzhny described a "package solution" as counterproductive and suggested a phased solution instead. Joint conservation and management of the Caspian's unique bio-resources could become a first step in this direction, he said. The principle of shared water resources has proved viable, Kalyuzhny noted. The Caspian, the world's largest inland sea, is a focal point of the accelerating clash of interests between Russian, its newly independent neighbors, and Iran. The Caspian, as an inland sea, has never been subject to international maritime laws and its status is regulated by bilateral treaties of 1921 and 1940 between the former Soviet Union and Iran. Russia believes that the status of the Caspian is already determined by those two agreements, Kalyuzhny said on February 26. The Caspian Sea region has been widely viewed as important to world markets because of its large oil and gas reserves. Proven oil reserves for the entire Caspian Sea region are estimated at 18-35 billion barrels. The basin is also believed to hold some 5 trillion cubic meters of natural gas reserves. However, in recent years the myth of Caspian riches has began to fade somewhat as some oilfields seem not as lucrative as originally expected. The situation in the Caspian basin could be described as a "curse of resources", Steven Mann, the US envoy on Caspian energy issues, told the conference. The region's economic progress lagged behind expectations because of a lack of the rule of law, low-level investments and graft, he was quoted as saying by RIA. Russia currently controls 19 percent of the Caspian - according to the length of its shore - and was to gain from equal division. Kazakhstan (29 percent) and Azerbaijan (21 percent) were against the idea. Russia eventually changed its view and backed Azerbaijan and Kazakhstan, which argued for the delineation of the seabed but not the water itself. The surface of the sea should remain shared, while the seabed needs to be divided on the principle of equal distance or median line, basically according to the length of the shore, according to the Russian experts. Turkmenistan and Iran have disagreed with Russia's plan for splitting the Caspian bottom along a "modified median line" while keeping the waters in common. Kazakhstan and Azerbaijan have agreed. Iran objects, seeking a larger share of the resources. Ashgabat's wavering stance has saved Iran from isolation. In the wake of the Soviet Union's collapse, Iran has suggested that the Caspian should be divided equally and that the five littoral states should each get 20 percent of the sea. According to the treaties of 1921 and 1940, Iran controls just 13 percent of the sea and is poised to benefit greatly from equal division, but its post-Soviet neighbors disagree. The littoral states should refrain from unilateral moves to develop the Caspian resources until the sea's status is determined, Iran's Deputy Foreign Minister and special envoy on the Caspian Mekhdi Safari told the conference. Iran still insists on a "condominium" approach to the Caspian, where oil and gas reserves would be developed jointly by all littoral states, Safari said. Moreover, Iran insists on its original position as Safari said that in respect to the sea's division, the littoral states should get 20 percent of the sea's surface and seabed. Iran claims 20 percent of the Caspian seabed and "will not allow foreign oil firms" to explore and drill in the contested areas, RIA quoted him as saying. Last July, an Iranian gunboat forced a British Petroleum (BP) exploration ship out of disputed waters. The Azeri government had given the BP ship a license to explore the Araz-Alov-Sharg concession, which Iran regards as its own. There have been pieces of circumstantial evidence relative to continued disagreements between Russia and Iran on the Caspian. On February 19, the latter's official news agency IRNA commented that the scheduled two-day official visit of Iranian Foreign Minister Kamal Kharrazi to Moscow was aimed at "cementing existing good ties" and seeking a comprehensive legal regime to govern exploitation of the resources of the Caspian Sea. However, the trip was cancelled at the last minute. On the other hand, Kazakhstan has tended to back Russia on Caspian-related issues. Kazakhstan favors a phased solution of the Caspian problem, Kazakh Deputy Foreign Minister Anatoly Smirnov told the conference. "We should act without waiting until a final solution," he said. In response, there have been encouraging signals from Moscow to Kazakhstan. "Increased export of Kazakh oil will not destabilize Russia's domestic oil market and will not affect international oil prices," Russian Prime Minister Mikhail Kasyanov stated in Moscow on February 26. Russia signed an agreement with Kazakhstan to export up to 15 million tons of oil per year and such volumes "do not cause concern in Russia", Kasyanov said. Subsequently, in Moscow on February 26, visiting Kazakh Prime Minister Imangali Tasmagambetov stated that Kazakhstan's oil export potential was estimated at 30 million tons a year, thus was no threat to the stability of the global oil trade. Kazakhstan largely relies on Russian pipelines to export its oil. Incidentally, Mann opted to remind the conference about alternative routes. He said that both an oil pipeline from Baku to the Turkish port of Ceyhan and the Shah Deniz gas pipeline from Azerbaijan to Turkey should be operational by 2005. Russia, and Kalyuzhny in his previous capacity as energy minister, have long lobbied in favor of of the CPC (Caspian Pipeline Consortium) pipeline that runs runs across Russia from the Tengiz field to Novorossisk on Russia's Black Sea coast. The competition between the CPC and Ceyhan pipelines has been widely seen as a part of "big game" around the Caspian hydrocarbon resources, with Washington trying to calm any fears Moscow might have of. The US has no intention of competing with Russia in the Caspian region, Mann was quoted as saying by RIA at the conference. Turkmenistan, on the other hand, agrees that the seabed needs to be divided, but the country wants to use a method differing from that proposed by Azerbaijan, Russia and Kazakhstan. The Russian and Turkmen positions "have become considerably closer", Russian President Vladimir Putin told Turkmen President Saparmurat Niyazov last January in Moscow. However, as Niyazov has a history of being an unpredictable negotiating partner in talks to determine the Caspian Sea's status, a final consensus will probably have to wait for a Caspian summit, tentatively scheduled for the next fall - or maybe even longer. Notably, last January Niyazov warned that the summit could only be "an exchange of views", indicating he was not ready for a solution. Therefore, the remaining differences between the littoral states arguably indicate that the actual settlement of the status of the Caspian Sea is still some time off. Full article at: http://www.atimes.com/c-asia/DC01Ag02.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Wed Mar 6 05:37:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:11 2006 Subject: [A-List] US imperialism: Summers memo policies Message-ID: Toxic US tech waste trashing Asia By Danielle Knight Asia Times, February 28, 2002 WASHINGTON - Huge quantities of scrap electronics are being exported from the United States to China, Pakistan and India, where the waste is causing environmental and health problems, according to an investigation by five environmental organizations. Up to 80 percent of all electronic waste collected for recycling in the United States actually ends up on container ships bound for Asia. There, the scrap - including millions of tons of computer monitors and circuit boards - is processed in operations harmful to human health and the environment, the groups say. The watchdog organizations, in a joint report, say they witnessed open burning of plastics and wires, riverbank acid works to extract gold from electronics components, melting and burning of toxic soldered circuit boards, and the cracking and dumping of toxic lead-laden cathode ray tubes. Tons of electronic waste bearing labels and identification tags from the United States are dumped along rivers, on open fields, and in irrigation canals, say the groups. "They call this recycling but it's really dumping by another name," says Jim Puckett, coordinator of the US-based Basel Action Network, one of the groups that authored the report. The organization is trying to enforce the Basel Convention, a 1989 United Nations treaty to limit hazardous waste exports. Other organizations involved in the investigation include US-based Silicon Valley Toxics Coalition, Toxics Link India, Greenpeace China, and Pakistan's Society for the Conservation and Protection of the Environment. Their 51-page report, "Exporting Harm: The High-Tech Trashing of Asia", focuses mainly on Guiyu, in China's Guangdong province. Electronic processing centers in the region employ 100,000 low-income migrant workers to break apart obsolete computers primarily imported from North America. The main casualty of the growth in electronics processing has been drinking water. The groundwater in Guiyu has become so polluted since 1995 that well water is no longer fit to drink and fresh water now has to be trucked in from 30 kilometers away, according to the investigators, who visited the region in December. In one part of Guiyu, villagers burn electronic wires to recover copper. The report says it is extremely likely that because of the presence of PVC (polyvinyl chloride) or flame retardants in wire insulation, the emissions and ashes from such burning will contain high levels of dioxins and furans, two toxic pollutants linked to cancer and other health problems. In some parts of Guiyu, says the report, workers dismantle printers and toner cartridges without any protective clothing or respiratory equipment. "The process created constant clouds of toner that billowed around the workers and was routinely inhaled," says the report. The employed workers are mostly former farmers, including women and children, who receive an average wage equivalent to US$1.50 per day. Investigators found similar electronics-processing situations in Karachi and New Delhi. No special equipment or protective clothing of any kind is used, and all the work is done by bare hand, says the report. Interviews with workers in Karachi show that the general public is "completely unaware of the hazards of the materials that are being processed and the toxins they contain", says the report. Officials with the US Environmental Protection Agency (EPA) have acknowledged that a large portion of the nation's electronics waste is exported. But since there is no systematic reporting of exports of such waste, there are no precise estimates of the amounts of scrap headed to developing nations for reprocessing. US industry and government officials have fought an initiative by the European Union that aims to hold electronics corporations responsible for the products they manufacture. Known as the European Commission Directive on Waste from Electrical and Electronic Equipment (WEEE), the legislation would require manufacturers to pay to take computers and appliances back and safely recycle or reprocess them. Japan has taken similar steps to require manufacturers to take back their products at the end of their so-called life cycle. Since WEEE surfaced several years ago, the American Electronic Association, fearing for the corporate bottom line, teamed up with the office of the US Trade Representative to launch a major offensive against the proposal. The environmentalists' report urges the United States to reverse its position and follow Europe's example. "Rather than sweeping our e-waste crisis out the back door by exporting it to the poor of the world, we have got to address it square in the face and solve it at home, in this country, at its manufacturing source," says Ted Smith, executive director of Silicon Valley Toxics Coalition, an advocacy group named after the region in California famous for its computer and related industries. Smith estimates there will be 315 million obsolete computers in the US by 2004. "Consumers in the United States have been the principal beneficiaries of the high-tech revolution and we simply can't allow the resulting high environmental price to be pushed off on to others," he says. The report notes that the United States is the only industrialized nation that has not ratified the Basel Convention. Full article at: http://www.atimes.com/media/DB28Ce01.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Wed Mar 6 05:40:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:11 2006 Subject: [A-List] Japanese political crisis Message-ID: Mythology surrounding Japanese bureaucracy exposed By Purnendra Jain Asia Times, March 7, 2002 ADELAIDE - Exposes of corruption are tarnishing the hallowed corridors of Japan's Ministry of Foreign Affairs (Gaimusho) as never before. Finally, heads are beginning to roll. Some serving ambassadors and high-ranking diplomats face dismissal; others are likely to be transferred to less prestigious positions; some others might quietly resign from their positions. If the public outcry grows and the opposition pursues this disquiet, even more heads could yet roll. The unfolding crisis in the Foreign Ministry may even lead to the fall of the Koizumi administration and ultimately political paralysis in Japan. Revelations of unholy alliances among politicians, diplomats and business groups have been unfolding in front of the public eye since Prime Minister Junichiro Koizumi last month sacked foreign minister Makiko Tanaka and Muneo Suzuki, an influential parliamentarian from the ruling Liberal Democratic Party (LDP), after an internal but very public feud between them. A former vice foreign minister, Suzuki pressured Gaimusho to bar two non-governmental organization groups (NGOs) from attending an international conference in Tokyo in January on the reconstruction of Afghanistan, unbeknownst to then foreign minister Tanaka. Corruption and unethical practices are never-ending phenomena in Japan, as they are deeply embedded in the political system. The Ministry of Construction has long been seen as a hotbed of unethical practices and in recent years the Ministry of Health and Welfare and the Ministry of Finance have been tarnished by public exposure of embezzlement, fiscal misconduct and bureaucratic bungling. Revelations about misconduct and scandals have even reached police officials and public prosecutors. When a high-ranking diplomat was arrested in January 2001 on charges of embezzling millions of dollars, the Foreign Ministry dismissed the case as a single bad apple in the Gaimusho barrel. However, as recent cases reveal, there appear to be many rotten apples within Gaimusho. The spate of public exposures since the mid-1990s appears to have blown the lid off the generally accepted mythology surrounding the Japanese bureaucracy. If there was one high-profile public institution in Japan that commanded respect from all quarters, domestically as well as externally, it was Japan's higher civil service. Based on meritocracy and with about a century of unblemished history behind it, this elite organization has long been revered, powerful and influential. Even US General Douglas MacArthur, who introduced sweeping reform to reshape almost all major institutions including the constitution in the wake of Japan's 1945 defeat, chose not to touch this institution. MacArthur recognized that without the cooperation of bureaucrats, he could not accomplish his mission in occupied Japan between 1945 and 1952. Japan's bureaucracy lived up to its reputation for most of the postwar period. But just as reputations take a long time to build, so too can they be shattered quickly. Revelations of malfeasance over recent years have severely sullied the image of the once highly respected, "incorruptible" bureaucratic elite. They cast light on the downside of Japan's famous "iron triangle" of thick relations between politicians, bureaucrats and business. This structure was touted as the core of Japan's economic miracle in the 1960s and 1970s. But the 1990s and beyond reveal the costs of this arrangement: corrupt practices and a structure that makes corruption appear to be endemic. Cozy and often collusive relationships between politicians, high-ranking bureaucrats and business groups have severely damaged the status of Japan's higher civil service. In this arrangement all three parties are in a win-win situation in terms of personal gain. Patron politicians protect ministry interests in budgetary matters. Bureaucrats are also rewarded through better career positions, especially as they "descend from heaven" (amakudari) to highly paid employment in private or semi-government organizations after their retirement. Politicians receive money from business to fuel their political machines in return for favors they bestow through bureaucrats. Business and industry thrive on government projects and public policies that favor them. Taxpayers foot the bill for this arrangement. Corruption in the bureaucracy is not new. Yet it was generally - if naively - assumed that Gaimusho was beyond its venal reach. That is why the public was so shocked to learn that the Foreign Ministry is surely a part of the unholy alliance and some within this ministry are involved deeply in corrupt practices. A testimony session conducted some two weeks ago in the Diet (parliament) has revealed widespread corruption, unethical practices, lack of transparency and above all political influence and pressure on Gaimusho. This episode began to unfold in January when Gaimusho barred the two NGOs from the international conference on reconstruction of Afghanistan. One of their leaders had commented critically on the Japanese government in a daily newspaper. These NGOs were barred without the knowledge of Tanaka, who later revealed that Muneo Suzuki, then chair of a Lower House committee, had pressured ministry staff into this decision. As a result of his former high-profile positions in the ruling party and in government, including his short stint as vice foreign minister, Suzuki is reported to have strong influence on Gaimusho, which often undermined Tanaka's position as ministerial head. In the wash-up, Prime Minister Koizumi sacked both his foreign minister and administrative foreign vice minister, who is the most senior career diplomat. Suzuki also resigned his committee position. Not satisfied with Koizumi's action, opposition parties demanded that both Tanaka and Suzuki be asked to testify in the Diet (Suzuki will do so on Monday). While the testimony was organized to establish whether Suzuki pressured the Foreign Ministry to bar the two NGOs, the enquiry broadened to other cases of pressure and influence that Suzuki was alleged to have exerted upon the ministry. One opposition member produced a confidential Foreign Ministry paper that established clearly Suzuki's heavy influence on such an important strategic matter as the selection process for corporations awarded contracts to carry out humanitarian aid projects on the four Russian-held islands off Hokkaido. During interrogation in the Diet, it was revealed that Suzuki unduly pressured the ministry to restrict the number of bidders for a project to build a public facility on Kunashiri Island, deliberately to favor companies from his own electoral district in Hokkaido. The facility, funded through Japan's official development assistance (ODA), was known formally as the "Friendship House", but locals called it "Muneo House". Other allegations included his influence on ODA projects in Africa and on the ministry's personnel management. Koizumi quickly realized the seriousness of the issue and asked the new foreign minister to set up an internal inquiry to report within 10 days. The in-house inquiry team, led by a former Supreme Court justice, reported on Sunday that Suzuki was "deeply involved" in the bidding process for the two Japanese government-funded projects on the Russian-held island claimed by Japan. The report also names a number of senior diplomats with close connections to Suzuki who willingly obliged Suzuki's requests. It is not yet clear what action, if any, new Foreign Minister Kawaguchi might take. Unlike her dramatic predecessor Tanaka, Kawaguchi is not rocking the ministerial boat and was chosen precisely for this reason. The prime minister has maintained silence on this issue, clearly fearing a potentially lethal flood of political fallout should this Pandora's box be opened too much further. The myth of the moral integrity of Japan's higher civil servants is once again shot to pieces. This time it is Japan's diplomats who are under fire. The Foreign Ministry's apologia last year about a single bad apple in Gaimusho is now patently untrue. Events of the past month have exposed the venal structure that undergirds even this segment of the bureaucracy through its relations with politicians and business. Indeed, there are likely to be many diplomats and other Gaimusho bureaucrats who have succumbed to the pressures for misdemeanor that business and politics impose. Surely, there are many other Suzukis within Japan's political system, and many corporations receiving political and bureaucratic favor. Punishing Suzuki and some officials involved in the recently exposed scandals will be only a small step in the right direction. Public confidence in Japan's Foreign Ministry and its officials can return only after a thorough housecleaning of the ministry, carried out in fair and transparent manner. This is reasonable, but very hard to ask of Koizumi. It is surely required of his reform aspirations, however difficult the entrenched political interests make this task. Yet if his actions in the past 11 months since taking office are any indication, we ought not hold our breaths. Talk of reform now seems an empty political slogan. Koizumi has lost not only his generous public support, but also the political will that this drove. His inertia indicates yet again the rigidity of Japan's political system, and the tenacity of the pockets of vested interest that continue to keep the system in place. Again, too, we see the demise of reform and all its hopes, after a very brief honeymoon. It appears that the more things change, the more they stay the same in Japanese political life. Purnendra Jain is a professor in the Center for Asian Studies at Australia's Adelaide University. Full article at: http://www.atimes.com/japan-econ/DC07Dh01.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From annewilliamson at msn.con Wed Mar 6 06:11:02 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Sat Jul 8 08:09:11 2006 Subject: [A-List] US imperialism, religion & market fundamentalism References: Message-ID: <000801c1c50f$856ed8a0$0100a8c0@igrushkii> Seth: The below text explains my reference to the Scofield Bible. Many theologically-traditional Christians, deeply alarmed by this noxious interpretation of the Book believe the Scofield Bible to be the work of early Zionists. I have no idea if that is true, and hope to do some research on it later this year. This sickening view of Christianity inverts the entire idea of the faith, i.e., the notion that one's salvation depends upon the death of a single human being much less 2/3 of Israel's people rather than the acceptance of Christ as the Son of God and one's personal redeemer can only be based on a willful misreading of the text. The religion's great strength and innovation - charity and grace - are overturned for some wacked out set of contrivances akin to pure superstition. Gary North, a Rushdoony Christian (he's married to the man's daughter), has written a hilarious book on the subject, "Rapture Fever" with his usual dry wit. (North is an economist, a good one and I have posted some of his work to the list.) But this is the short version :-). Of course, the political and commercial implications are obvious. The "Left Behind" series of books about the Tribulation have been huge moneymakers for these Christian fraudsters. Watch some of the television evangelists after reading this and you'll see 50% of the reason for why they've signed on - money. Malcontents say the other 50% of the rational is that since US media is Jewish-controlled, the only way they can stay on the airwaves is to kow-tow to Israel. True or not, every single one that is successful does so. The truly sad part is that this "rapture fever" infects huges swaths of US Christians, and thus debases further an increasingly degenerate Church. Involved as I most unfortunately am in an ongoing private dispute with a small crowd of these people, I can tell you there is no reasoning with them. Personally, I think it is some weird NWO effort to create a new faith of Judeo-Christianity before moving mid-century to a universal, state-operated Church. Best, Anne PS If Duh-bya's faith is more than the confused and inarticulate musings of a simple mind, then it's quite possible he's a rapture Christian. This would be a good question at a press conference, but none of our pathetic corporate media has the knowledge (nor would they have the spine) to ask it. The answer - were we to ever get it - might just give the US-Israeli "alliance" and Duh-bya's signing on to Sharon's war-mongering and violence a new shading, eh? The Unannounced Reason Behind American Fundamentalism's Support for the State of Israel by Gary North With the President meeting this week with Prime Minister Barak of Israel and Yassir Arafat, it may be time to review a topic that is baffling for Jews, annoying to Arabs, and unavoidable for American Congressmen: the unswerving political support for the State of Israel by American fundamentalists. Vocal support of a pro-Israel American foreign policy is basic for the leaders of American Protestant fundamentalism. This has been true ever since 1948. Pat Robertson and Rev. Jerry Falwell have been pro-Israel throughout their careers, beginning two decades before the arrival of the New Christian Right in the late 1970's. These men are not aberrations. The Trinity Broadcasting Network is equally supportive. So are the best-selling authors who speak for, and influence heavily, Protestant fundamentalism, most notably Hal Lindsey, author of The Late Great Planet Earth (1970), and Tim LaHaye, the husband of Beverly LaHaye of Concerned Women for America, which says on its Web site that it is "the nation's largest public policy women's organization." Rev. LaHaye and his co-author have each earned some $10 million in royalties for their multi-volume futuristic novel, Left Behind. They have a very large audience. People may ask themselves, "Why this support?" Fundamentalists earlier in this century were sometimes associated with anti-Semitism. James M. Gray of the Moody Bible Institute in 1927 wrote an editorial favorable to Henry Ford 's Dearborn Independent series on Jews. Gray's editorial appeared in the Moody Bible Institute Monthly. Arno C. Gabelein, a prominent fundamentalist leader, believed that the Protocols of the Learned Elders of Zion was a legitimate document. Gabelein's 1933 book, The Conflict of the Ages, would today be regarded as anti-Semitic. Other fundamentalist leaders of the pre-War era, while not anti-Semitic, attempted to maintain neutrality on the issue of Hitler's persecution of Jews. In his 1977 book, Armageddon Now!, Christian historian Dwight Wilson cites numerous examples of fundamentalist theologians in the late 1930's who regarded Hitler's discriminatory policies against Jews as part of God's judgment on the Jews. He writes: "Pleas from Europe for assistance for Jewish refugees fell on deaf ears, and 'Hands Off' meant no helping hand. So in spite of being theologically more pro-Jewish than any other Christian group, the premillennarians also were apathetic. . . ." [pp. 96-97]. What was it that persuaded almost the entire fundamentalist movement to move from either hostility or neutrality to vocal support of Israel? No single answer will fit every case, but there is a common motivation, one not taken seriously by most people in history: getting out of life alive. The Not-Quite Last Things The Christian doctrine of eschatology deals with the last things. Sometimes eschatology deals with the personal: the death of the individual. Usually, however, it has to do with God's final judgment of mankind. There have been three main views of eschatology in the history of the church, which theologians classify as premillennialism, postmillennialism, and amillennialism. The pre- and post- designations refer to the expected timing of the bodily return of Jesus in the company of angels: before (pre-) the establishment of an earthly kingdom of God, or after (post-) this kingdom has extended its rule across the earth. The amillennial view is that the kingdom of God is mainly spiritual. This became the dominant view of Christianity for over a millennium after Augustine's City of God, with its distinction between the city of God, the church (spiritual and permanent) and the political cities of man (rising and falling). Luther held this eschatological view. Most of the Continental Protestant Reformers of the sixteenth century held it. But seventeenth-century Scottish Presbyterians were more likely to hold the postmillennial view, and they carried it with them when they emigrated to America. Their postmillennialism rested in part on their belief that God will convert the Jews to Christianity as a prelude to the kingdom's period of greatest expansion, an idea derived from Paul's Epistle to the church at Rome, chapter 11. Presbyterians are officially commanded to pray for the conversion of the Jews. [Westminster Larger Catechism (1647), Answer 191.] The first generation of Puritan Congregationalists in New England also held similar postmillennial opinions. The premillennial view was commonly held in the pre-Augustinian church, although the other views did have defenders. After 1660, premillennialism became increasingly common within American Puritanism. Cotton Mather was a premillennialist. But Jonathan Edwards was postmillennial. In nineteenth-century America, both views were common prior to the Civil War. After the War, premillennialism steadily replaced postmillennialism among fundamentalists. A secularized postmillennialism was adopted by the Social Gospel movement. Non-fundamentalist Protestants from Continental Europe, like the Catholics, remained amillennial. Postmillennialism faded after World War I until the late 1970's, when it experienced a limited revival. Basic to the view of both premillennialism and amillennialism is pessimism regarding the efforts of Christians to build a culture-wide kingdom of God on earth. Both positions hold that only by Jesus' bodily presence among the saints can Christians create an cultural alternative to the competing kingdoms of man. The premillennialist believes that this international kingdom construction task will begin in earnest a thousand years before the final judgment, with Jesus ruling from a literal throne, probably located in Jerusalem. The amillennialist views this universal extension of the kingdom of God into culture as possible only after the resurrection of all humanity at the final judgment, i.e., in a sin-free, death-free, Christians-only world. Tribulation and Rapture Just prior to Jesus' return to set up an earthly kingdom, argue most amillennialists and all premillennialists, there will be a time of persecution, called the Great Tribulation. It is here that the great debate over the Jews begins. Amillennialists believe that Christians will be persecuted by their enemies. A handful of premillennialists, referred to as "historic premillennialists," also identify Christians as the targets. This version of premillennialism has been insignificant institutionally since the 1870's. The dominant premillennial view says that Jews will suffer the Great Tribulation. Born-again Christians will have flown the coop - literally. This is the doctrine of the pre-tribulation Rapture. According to pre-tribulation premillennialists, who are known as dispensationalists, Jesus will come secretly in the clouds and raise deceased Christians - and only Christians - from the dead. Immediately thereafter, every true Christian will be transported bodily into the sky, and from there to heaven: the Rapture event. The passage cited to defend this view is found in Paul's first letter to the church at Thessolonica: "For the Lord himself shall descend from heaven with a shout, with the voice of the archangel, and with the trump of God: and the dead in Christ shall rise first: Then we which are alive and remain shall be caught up [harpazo] together with them in the clouds, to meet the Lord in the air: and so shall we ever be with the Lord" (I Thes. 4:16-17). Throughout most of church history, this passage was associated with the final judgment, but beginning sometime around 1830 in England, it was linked to the premillennial, pretribulational Rapture - a word that is not found in the Greek text or in any English translation of the New Testament. Its Latin root word is in Jerome's Vulgate, a translation of the Greek "harpazo" - seize, catch, or pluck. This outlook on the earthly future became increasingly popular among fundamentalists, beginning in the 1870's. It was formalized in the footnotes of the Scofield Reference Bible (1909; revised, 1917). In 1930, it became the first Oxford University Press book to reach sales of one million. It has now sold over five million copies. C. I. Scofield's system has defined fundamentalism for nine decades. The Rapture-based escape from history is now universally believed by fundamentalists to be imminent. Generations of fundamentalists have believed that they will escape bodily death. They will be transported into the sky, like Elijah, though without benefit of chariots. But when? That has been the great question. The answer: "Soon." But why soon? Why not a millennium from now? The psychological answer: Because men do not live that long in this millennium. The main selling point for fundamentalism's Bible prophecies is to get insight into what is coming soon. In this case, the issue of mortality is central. As the slogan says, "Everybody wants to go to heaven, but nobody wants to die." The doctrine of the imminent Rapture allows Christians to believe seriously that they can go to heaven without dying. Millions of Americans believe this today. But how can they be so sure? Because of the events of 1948. In that year, the crucial missing piece of the prophetic puzzle - the restoration of the nation of Israel - seemed to come true. Critics of the dispensational system could no longer say, "But where is Israel in all this?" The answer, at long last: "In Palestine, just in time for the Great Tribulation." The Grim Fate of Israel The source of the idea of the Great Tribulation is found in Jesus' last words regarding Israel, which are recorded in Matthew 24 and Luke 21. And when ye shall see Jerusalem compassed with armies, then know that the desolation thereof is nigh. Then let them which are in Judaea flee to the mountains; and let them which are in the midst of it depart out; and let not them that are in the countries enter thereinto. For these be the days of vengeance, that all things which are written may be fulfilled. But woe unto them that are with child, and to them that give suck, in those days! for there shall be great distress in the land, and wrath upon this people. And they shall fall by the edge of the sword, and shall be led away captive into all nations: and Jerusalem shall be trodden down of the Gentiles, until the times of the Gentiles be fulfilled (Luke 21:20-24). Throughout most of church history, this prophecy was interpreted as having been fulfilled by the Roman siege of Jerusalem and the destruction of the temple in 70 A.D. With the rise of dispensationalism, however, the fulfillment of this passage was moved into the future. Dispensationalism's critics had long asked: "Where is the nation of Israel? Where are the Jews?" Not in Palestine, surely. So, dispensationalists tended to apply this prophecy of near-destruction to Jews in general - only symbolically residing in Israel - until 1948. This was one reason for their silence on Hitler's persecution. Hitler was just another rung in the ladder of persecution leading to the inevitable Great Tribulation. The prophesied agency of the great persecution has shifted over the years. As Wilson shows in Armageddon Now!, from 1917 until 1977, Russia was a prime candidate. But, after 1991, this has become difficult to defend, for obvious reasons. The collapse of the Soviet Union has created a major problem for dispensationalism's theologians and its popular authors. But there have been no comparable doubts about the intensity of the coming persecution. Here is the opinion of John F. Walvoord, one of dispensationalism's leading theologians, who served for three decades as the president of Dallas Theological Seminary (founded, 1924), the movement's main seminary. The purge of Israel in their time of trouble is described by Zechariah in these words: "And it shall come to pass, that in all the land, saith Jehovah, two parts therein shall be cut off and die; but the third shall be left therein. And I will bring the third part into the fire, and will refine them as silver is refined, and will try them as gold is tried" (Zechariah 13:8, 9). According to Zechariah's prophecy, two thirds of the children of Israel in the land will perish, but the one third that are left will be refined and be awaiting the deliverance of God at the second coming of Christ which is described in the next chapter of Zechariah. [John F. Walvoord, Israel in Prophecy (Grand Rapids, MI: Zondervan, [1962] 1988), p. 108. Nothing can or will be done by Christians to save Israel's Jews from this disaster, for all of the Christians will have been removed from this world three and a half years prior to the beginning of this 42-month period of tribulation. (The total period of seven years is interpreted as the fulfillment of the seventieth week of Daniel [Dan. 9:27].) In order for most of today's Christians to escape physical death, two-thirds of the Jews in Israel must perish, soon. This is the grim prophetic trade-off that fundamentalists rarely discuss publicly, but which is the central motivation in the movement's support for Israel. It should be clear why they believe that Israel must be defended at all costs by the West. If Israel were militarily removed from history prior to the Rapture, then the strongest case for Christians' imminent escape from death would have to be abandoned. This would mean the indefinite delay of the Rapture. The fundamentalist movement thrives on the doctrine of the imminent Rapture, not the indefinitely postponed Rapture. Every time you hear the phrase, "Jesus is coming back soon," you should mentally add, "and two-thirds of the Jews of Israel will be dead in 'soon plus 84 months.'" Fundamentalists really do believe that they probably will not die physically, but to secure this faith prophetically, they must defend the doctrine of an inevitable holocaust. This specific motivation for the support of Israel is never preached from any fundamentalist pulpit. The faithful hear sermons - many, many sermons - on the pretribulation Rapture. On other occasions, they hear sermons on the Great Tribulation. But they do not hear the two themes put together: "We can avoid death, but only because two-thirds of the Jews of Israel will inevitably die in a future holocaust. America must therefore support the nation of Israel in order to keep the Israelis alive until after the Rapture." Fundamentalist ministers expect their congregations to put two and two together on their own. It would be politically incorrect to add up these figures in public. The fundamentalists I have known generally say they appreciate Jews. They think Israel is far superior to Arab nations. They believe in a pro-Israel foreign policy as supportive of democracy and America's interests. They do not dwell upon the prophetic fate of Israel's Jews except insofar as they want to transfer the threat of the Great Tribulation away from themselves and their families. Nevertheless, this is the bottom line: the prophetic scapegoating of Israel. This scapegoat, not Christians, must be sent into the post-Rapture wilderness. Evangelism in Israel Their eschatology has produced a kind of Catch-22 for fundamentalists. What if, as a result of evangelism, the Jews of Israel were converted en masse to Christianity? They would then be Raptured, along with their Gentile brethren, leaving only Arabs behind. This scenario would make the immediate fulfillment of prophecy impossible: no post-Rapture Israelis to persecute. So, fundamentalists have concluded that the vast majority of the Jews of Israel cannot, will not, and must not be converted to Christianity. This raises an obvious question: Why spend money on evangelizing Israelis? It would be a waste of resources. This is why there are so few active fundamentalist ministries in Israel that target Jews. They target Arabs instead. Eschatologically speaking, the body of an Israeli must be preserved, for he may live long enough to go through the Great Tribulation. But his soul is expendable. This is why fundamentalists vocally support the nation of Israel, but then do very little to preach to Israelis the traditional Protestant doctrine of salvation by faith in Jesus Christ. Fundamentalists have a prophetic agenda for Israelis that does not involve at least two-thirds of the Israelis' souls. Israelis are members of the only group on earth that has an unofficial yet operational King's X against evangelism by fundamentalists, specifically so that God may preserve Israelis for the sake of the destruction of modern Israel in the Great Tribulation. The presence of Israel validates the hope of fundamentalists that Christians, and Christians alone, will get out of life alive. July 19, 2000 Gary North is the author of Conspiracy: A Biblical View, which discusses the 20th century's Anglo-American alliance. Download a free copy at www.freebooks.com. Back to LewRockwell.com Home Page ----- Original Message ----- From: Seth Sandronsky To: Sent: Tuesday, March 05, 2002 1:01 PM Subject: Re: [A-List] US imperialism, religion & market fundamentalism > Anne: > > Hi. In the SD book Roads to Dominion: Right-Wing Movements and > Political Power in the United States, the answer is yes to Israel, no to the > other two in the index. Irving Kristol is listed in the index. What's the > Scofield Bible? > > There's no doubt about your last point The U.S. Congress is occupied > territory--occupied by the The American Israel Public Affairs Committee that > facilitates endless U.S. military aid to Israel. > > Best, > Seth > > > From: "Anne Williamson" > Reply-To: a-list@lists.econ.utah.edu > To: > Subject: Re: [A-List] US imperialism, religion & market fundamentalism > Date: Mon, 4 Mar 2002 21:56:03 -0500 > > Seth: > > Does Sarah DIAMOND write about Israeli fascists too? > Or just neocon creeps like Bill KRISTOL? Or the Israeli > lobby that buys our Congress with the US taxpayer money > the same Congress pumps to Israel annually? > > Course the Israelis are smart - they spread $100-$200 million > of the billions in US taxpayer funds they receive annually > around K Street, into the pockets of lawyers, lobbyists and > ALL pols on international and aid committees. > > And does she comment on the Scofield Bible? > > Just curious - A. > > ----- Original Message ----- > From: Seth Sandronsky > To: > Sent: Tuesday, March 05, 2002 2:47 AM > Subject: Re: [A-List] US imperialism, religion & market fundamentalism > > > > Michael, > > > > An American author, Sara Diamond, has written extensively about > Christianity > > in U.S. politics. I've read her Roads to Dominion: Right-Wing Movementns > and > > Political Power in the United States (1995, The Guilford Press, ISBN > > 0-89862-862-8), and recommend it to you and the A-List. While not a > > Marxist, Diamond offers useful analysis of the U.S., with a special focus > on > > the racist right, Christian Right and neo-conservatives generally. > > > > Seth Sandronsky > > > > From: "Keaney Michael" > > Reply-To: a-list@lists.econ.utah.edu > > To: > > Subject: [A-List] US imperialism, religion & market fundamentalism > > Date: Mon, 4 Mar 2002 17:37:36 +0200 > > > > Let's quickly take a look at the FCC and their Chairman Mike Powell. > > > > > > > > To make matters worse, Michael Powell has stated on record that he has > > no concept of "the public interest." As far as he can tell, there is no > > such thing. He has arrogantly declared himself to be a market > > fundamentalist by stating "The Market Is My Religion." He also went on > > to say the following, mocking the American public, freedom, and > > democracy: "The night after I was sworn in, I waited for a visit from > > the angel of the public interest. I waited all night, but she did not > > come." Mike later added, "I still have had no divine awakening and no > > one has issued me my public interest crystal ball." He has even called > > laws that prevent all out media domination "the oppressor." > > > > ===== > > > > Thomas Frank has a piece in the latest Le Monde Diplomatique in which he > > quotes Kenneth Lay's dual belief in Jesus and free markets. Indeed, > > theologian Lay said that Jesus wanted people to have choices. Meanwhile > > Jeffrey Skilling declared, shortly before resigning as Enron CEO, that > > "we're on the side of the angels". > > > > What happened to the Jesus who made it plain that one cannot serve both > > God and mammon? > > > > It appears that Dubya has not been a success during his visit to China. > > Apparently he could not wow the crowds as did Clinton a few years back. > > According to newspaper reports Clinton supposedly had the students > > spellbound on the subject of democracy (or was it that cigar?). > > Meanwhile Bush alienated his audience, including Jiang Zemin, by > > declaring that the US is a "nation based on faith". Believing in his > > ability to make things better for all would certainly require a lot of > > that, but there is a nasty sub-text to all this pious piffle that seems > > to emanate more freely from the White House and other US organs of state > > these days. Billy Graham's son, Franklin, happens to have a > > well-financed mission established in the south of Sudan, where, surprise > > surprise, oil reserves just happen to be attracting US corporate > > interests. The Bush administration marked its interests there very early > > when Colin Powell stated the US's interest in "bringing peace" to that > > country. The federal government is channelling money into "faith-based > > initiatives" that serve related ends under a cloak of charitable "good > > works." In many ways it's an extension of the pentecostalism that was > > imported to Latin America during the 1980s as a means of dislodging > > troublesome liberation theologians and their priestly advocates, as well > > as privatising social discontent by making it a matter of personal > > morality. > > > > Deeper analysis of the employment of a particular variant of > > Christianity by the US state and its corporate backers would be useful. > > Clearly, there are potential fissures in any such coalition, as with the > > struggle over stem cell research legislation. But when it comes to > > "civilising" the "barbarians" (and thereby acquiring their assets on the > > cheap), it certainly serves its purpose. > > > > Michael > > > > > > > > > > > > Seth Sandronsky > > > > > > _________________________________________________________________ > > Join the world's largest e-mail service with MSN Hotmail. > > http://www.hotmail.com > > > > > > > > > > > > > Seth Sandronsky > > > _________________________________________________________________ > Join the world's largest e-mail service with MSN Hotmail. > http://www.hotmail.com > > > From annewilliamson at msn.con Wed Mar 6 08:19:02 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Sat Jul 8 08:09:11 2006 Subject: [A-List] Argentina on the Brink, an Austrian School Analysis References: Message-ID: <001401c1c521$5a814b20$0100a8c0@igrushkii> Argentina on the Brink by Hans Sennholz It is hard to exaggerate the economic and political conditions in Argentina. With the economy in the grip of a paralysis, with unemployment soaring to depression levels, and with street rioting killing 28 people just before Christmas, the country is on the brink of civil war. It was just over a decade ago, in 1991, that Argentina seemed to make a new beginning after years of hyperinflation and "dirty wars" waged by the military against fellow Argentines. When the gross domestic product (GDP) had fallen for three successive years, with goods prices rising at four-digit rates and the "australes" currency depreciating rapidly, the government--under the leadership of President Carlos Sa?l Menem, leader of the Justicialist National Movement, or, as it is also known, the Peronist Party--managed to enact a "stability and convertibility plan." It conducted a currency reform, replacing the austral with the peso at a ratio of 10,000 to one in April 1991. The exchange rate, which was conceived by politics rather than the laws of the market, overvalued the new peso; the fear of public rejection of the new currency prescribed the rate. The reform required the Central Bank of Argentina henceforth to back all issues of currency with international reserves, that is, primarily U.S. dollars. The Menem administration also deregulated some small businesses and privatized many public enterprises. To most Argentines, the future looked bright and prosperous. Indeed, the country prospered for a few years, with GDP rising some 8 percent in 1992 and 7 percent in both 1993 and 1994. The rates of inflation declined from 18 percent in 1992 to 7.4 percent in 1993 and 4 percent in 1994. President Menem also tried to cope with the chronic budget deficits which always had been the primary driving force for the currency debasement. As any cut in expenditures would invite instant voter objections and political repercussions, Menem chose to raise the value-added tax from 16 percent to 18 percent and then to 21 percent, which has been the rate ever since. Moreover, against strong opposition by militant labor unions, he pressed on with the sale of some public enterprises, the proceeds of which helped to reduce his budget deficits, and managed to strike a rescheduling deal with foreign commercial banks, which restructured $23 billion in debt and $8 billion of arrears. Although the Menem administration brought relative economic stability through monetary restraint, it could not resist the old Peronist pressures for popular transfer spending. The 1994 budget provided for a $7-billion boost in spending programs for the country's poorest regions, especially for public works projects. The provincial budget was raised by $300 million. The Social Security budget required $1.3 billion in subsidies to cover deficits flowing from retrospective pensions, ordered by judicial rulings, for 100,000 recipients. At the close of the fiscal year, expenditures exceeded revenues by some 10 percent. In 1995, after much political maneuvering and numerous concessions to his opposition, President Menem managed to be reelected to a four-year term. He vowed to address social and environmental issues and promptly announced a five-year public works program. When the Mexican peso collapsed and sent shock waves throughout the hemisphere, the Menem program actually compounded the difficulties. The growing deficits heightened the distrust and fear that spread from Mexico and sparked a flight of capital from Argentina also. The economic contraction caused tax receipts to decline sharply and the deficits to soar, despite much pressure on the Menem administration by Argentina's great creditor, the International Monetary Fund (IMF), to control growth in public expenditures as a condition for obtaining additional credits. But unable to reduce its expenditures significantly, Menem preferred to extract more revenue: he managed to impose a new tax on interest payable in order to equalize the cost of capital with the high costs of labor. Because most corporations were suffering losses and consequently paying no income taxes, the Menem government, upon IMF urging, invented a new tax: a presumptive income tax which was levied on the assets of every corporation. As any economist and businessman would surmise, both new levies greatly aggravated the recession, thwarting new capital investments throughout Argentina and creating more unemployment. The Asian financial crisis of 1997 and 1998 cast more shadows on Argentine finances. When the government proposed budget cuts to meet the targets agreed upon with IMF and to underpin investor confidence, the president's support from organized labor crumbled. When it proposed measures designed to provide some labor-market flexibility, the unions answered by staging massive general strikes, protesting Menem's pursuit of what they reviled as free-market principles that left at least 17 percent of the workforce without jobs. When the Menem administration sought to curb expenditures through cuts in school funding, it brought student strikes and protest resignations of school officials. The country's slide into recession accelerated when Argentina and Brazil managed to get involved in an ugly trade war. Brazil fired the first shot when it suddenly devalued its currency. Fearing a flood of cheap Brazilian imports, Menem imposed protectionist measures on Brazilian shoes and textiles. Brazil retaliated by imposing restrictions on 90 percent of Argentine imports. In both countries, production fell precipitously and unemployment continued to rise. Both countries managed to secure more loans from the World Bank, the International Monetary Fund, and the Inter-American Development Bank. It was left to Fernando de la R?a, who won the Argentine presidency in October 1999, to calm the waters and reduce the frictions with Brazil. The new president led an alliance of the Radical Civic Union and a new Solidarity Party, a splinter of the Peronists. The Peronists remained in control of the senate and the judiciary. Having inherited a huge deficit from the Menem administration, the new president responded with new tax levies and some spending cuts. His first policy initiative was a significant tax boost which raised not only the sales tax on many consumer goods and services but also the income tax rates for wealthy individuals. Very wealthy Argentines earning $3,500 a month, or $42,000 a year, suffered a 200-percent increase. Under great pressure from the IMF to cut expenditures in order to receive fresh funding, de la R?a took special aim at wasteful expenditures by the provinces whose debts exceeded $18 billion, with the federal government as guarantor. The new president's strategy for lowering the 15-percent unemployment rate was to reduce the fringe costs of labor. A labor code passed during the 1950s provided for a 30-day probation period with lower costs and fewer restrictions for new workers. A new code extended the conditions to six months in larger firms and twelve months in smaller businesses. The payroll tax on new hires was reduced from 17.5 percent to 12 percent. With the country in the grip of economic stagnation, unending budget deficits, and rising foreign debt, by now exceeding $120 billion, the costs of servicing the debt soon rose to 15 percent. But again the World Bank and the Inter-American Development Bank came to the rescue, pledging $40 billion in new loans. The terms for the assistance were simple: reducing the 2001 budget by $700 billion, lowering taxes on corporations, trimming public-sector salaries by 12-15 percent, slicing pensions, and privatizing some pension funds. While Argentina's creditors were pointing toward genuine solutions, the Argentine public showed a growing weariness about the prospect of ever more "austerity." Led by the media, militant union leaders, and vocal civil servants, they often marched and demonstrated in protest. When the unions called general strikes, millions of workers paralyzed the economy, blocking highways, disrupting transportation, closing schools, and damaging business property. Unemployment continued to soar, and underemployment soon affected nearly 50 percent of the workforce. Shortly before Christmas 200,1 popular anger finally boiled over when the government froze all bank accounts to protect the banks from failure. They had lent the money to the government, which had defaulted in its obligations, and to businesses, which were about to fail under the burden of losses and new tax levies. The Argentine banking crisis obviously is the consequence of debtor insolvency. Yet, all banks, domestic as well as foreign, applauded the government for the freeze and chose to fight the depositors who demanded the return of their property in the currency in which it was deposited. Buenos Aires erupted. While most people demonstrated peacefully, some revolutionaries clashed with the police, leaving 28 people dead. It drove Fernando de la R?a from the presidency after just two years in power. In his place, the Argentine Congress installed Adolfo Rodriguez Saa, who resigned after just eight days in office. Congress promptly replaced him with Eduardo Duhalde, a representative of Peronism's powerful political machine. He is to revive the economy, stem the tide of violent protests, and save the political system. * * * * * Great crises call for extraordinary measures that redress the causes of the evil. The Argentine crisis presents not only great dangers to the country's political and economic order but also an opportunity for a new beginning. Attempts at reform, when they fail, aggravate the situation, as the numerous attempts by the Menem and de la R?a administrations so clearly demonstrate. They merely hacked at the branches of the evil; they did not strike at the very root, which is a pervasive entitlement ideology--that is, the common conviction that everyone is entitled to economic benefits at the expense of others. This is clearly visible in the chronic inability of government officials to balance their budgets. In boom and recession they are unwilling to live within their means. And it is visible in their loud protests against "austerity," that is, against any reductions in deficit spending. They could always count on the support by the International Monetary Fund, which could be persuaded to extend old loans and grant new funds. It provided the backing for more issues of pesos used to finance the budget deficits. Few foreign loan funds reached the business investment market. The dollars and pesos caused Argentine prices to rise faster than foreign prices, which led to chronic balance-of-payments deficits. In time the central bank ran short of dollars, which prompted the government to suspend all payments and seize private accounts. In good times, government may lower its exactions; in bad times, it will raise them; and in moments of crisis, it may seize whatever it needs. The financial world is doubting Argentina's viability. It is ever fearful of looming political turmoil and the chronic risk of government profligacy. Indeed, it is difficult to have confidence in the country's political leadership that is managing the people's economic affairs. Argentina is merely paying for mistakes similar to those many other countries are making or have made in the past. Proud and overconfident people seldom learn from the mistakes of others; they are convinced that they face special problems of their own. Argentina's new administration faces two ghastly problems that drive the increasingly violent protests. It must tackle the problems of its chaotic money and banking and solve the explosive issue of unemployment and underemployment, which by now affects one-half of the population. The future of Argentina's political economic order, as well as Duhalde's own political fate, depends on the solution of these problems. The most pressing financial issue is the future of monetary management, in particular, the future of the peso that was pegged to the dollar at parity. Related issues are the freeze of dollar deposits imposed by Duhalde's predecessors, and the default in meeting foreign dollar obligations. At the beginning of February 2002, Duhalde sought a solution by returning to the currency system of the past: the floating peso, which, left to the market, immediately fell substantially. A low rate, he argued, would be Argentina's best way out of recession and the best protection against foreign disruption. Other big emerging countries, such as Brazil and Mexico, now have floating exchange rates. While economists always favor a return to market pricing, which reflects the people's true valuations and choices, they dread the fact that the fiat peso is the wanton creation of spendthrift politicians and government officials. In their hands, it is bound to be depreciated and ultimately destroyed like all other issues before it. And to conceal the gradual destruction of the peso, the same politicians and government officials will enmesh the people in countless regulations and controls which surely will create economic chaos and give rise to a brutal command system. The immediate cost of the float is insolvency for countless debtors--individuals, businesses, and banks alike--as most debts are denominated in dollars while most incomes are in pesos. Two-thirds of bank deposits are in dollars as are most loans. U.S. dollar deposits are converted to pesos at the rate of 1.4 pesos to 1 dollar. As the banks suffer an instant loss of 0.4 peso on every dollar conversion, they are to be compensated with government bonds. In the money markets of the world, the peso actually fell to 2.15 pesos to the dollar, which conveys the full loss of all dollar depositors. They are likely to lose more in the future as the peso continues to depreciate and the restrictions on the withdrawal of dollar deposits continue in effect. Dollar debtors owing pesos to domestic creditors do profit from the conversion as the peso depreciates. Dollar debtors to foreign creditors may be crushed by the conversion; their debt has doubled in terms of pesos. Many corporations with foreign-dollar obligations, which the Argentine government cannot convert, may face bankruptcy. The peso float has special ramifications for big Argentine banks, many of which are foreign-owned. They can be despoiled like all other financial institutions, but foreign banks may also leave the country and seek redress and compensation for contract violations in foreign courts of law. These may even seize Argentine government and corporate property and distribute it to the plaintiffs. A chronic debtor who continually depends on foreign assistance is ill-advised to shortchange his creditors. Yet the Argentine government may seek and receive support from the agencies of other governments. Throughout its financial difficulties, Argentina always has had the advice, guidance, and support of the IMF, whose funds come mostly from the treasuries of wealthy countries. The IMF helped to build the mountain of debt until it crushed the debtor. It carries a large share of the responsibility for the Argentine crisis. Naturally, it denies all and points to the debtor. The Argentina experience raises agonizing questions about the existence of such an international institution. IMF officials are working toward an international arrangement that would provide prompt relief for insolvent debtor governments such as Argentina. They are lobbying for measured, uniform reductions of creditors' claims, which would reduce the debtors' reliance on IMF resources and rescue and shift some of IMF's chronic losses to member governments. While IMF officials are hard at work, it is unlikely that such a rescue operation will be adopted in time to benefit Argentina. The Duhalde administration will have to present a believable economic program to the IMF, that is, another austere budget and another fiscal reform, which will allow it to resume its support. Duhalde will have to negotiate with various debtor groups of governments and banks for moratoria permitting temporary suspension of payments or some reductions of debt. Of course, such creditor favors impede the reputation of the debtor and raise substantially his future interest costs. Reform must come from within; it cannot be imposed by a creditor. A genuine change for the better requires the support of the people; without it, nothing can succeed. Someday the Argentines may be ready for a reform that regenerates and revitalizes the economy. They may demand freedom in all monetary matters: the freedom to enter into any currency contract of their choice, whether it be U.S. dollars, the euro, the peso, or even gold. In a free and unhampered contract system, creditors and debtors, banks and depositors would soon come to reasonable and fair agreements about their contractual relations. A contract system would call for no new taxes, not even compensation for harm done by law and regulation. It would reopen all banks and allow them to meet their obligations to the best of their ability. It would expect the government to honor its peso obligations and manage the peso as it pleases. But it would demand that government cease and desist from any more regulations, new outlays, new taxes, and new disruptions of any kind. The Argentinnes need time and a period of peace for recovery. There is transcendent power in honesty and integrity. Argentina can reform itself and lead the way. Perhaps it can offer a valuable example by setting its people free in all matters of money and credit; toward that end, no international assistance is needed, not even from the International Monetary Fund. * * * * * The Duhalde administration also faces the severe problem of mass unemployment, which is as explosive as the financial situation. While middle-class victims may be demonstrating in front of their banks that are barred from releasing their savings, unemployed workers may be rioting in the streets and ransacking public and private property. Therefore, the curse of chronic unemployment needs to be lifted forthwith. The economic and monetary policies of both the Menem and de la R?a administrations obviously caused the mass unemployment. They aggravated the chronic maladjustment of the costs of labor and the productivity of labor. It is conceivable to have stable money and yet suffer rising unemployment. Under certain conditions, even a country with a gold-coin standard can experience rising unemployment, if labor costs rise faster than labor productivity, if the least-productive labor becomes loss-inflicting labor and is made unemployable. Labor productivity may decline for any number of reasons, but the costs of labor may not decline or may decline at a lesser rate than productivity, which makes marginal labor unemployable. The decline in labor productivity may not be the fault of the labor that is discharged, although it is always the least-productive labor that is let go first. Labor productivity tends to fall in a recession when business must readjust to market conditions; or, it may fall as a result of trade disruptions and trade wars with trade partners; or, it may fall on account of new government intervention by way of economic laws, regulations, or taxation. Business capital may be consumed through government deficit spending that preempts the capital coming to market, or the fear of future intervention may cause business capital to escape to safer employment or safer harbors abroad. Whatever affects the productivity and costs of labor affects the employability of labor. In Argentina, all these causes were at work to increase the army of unemployed. Mass unemployment such as that in Argentina and several other countries around the world is conceivable only in countries with regulated labor markets. Millions of workers may be prevented from freely marketing their labor, which then condemns them to chronic unemployment and dependence on their fellowmen. In a world of need and scarcity, with human labor the scarcest of all factors of production, millions of poor people walk the streets in idleness and despair. It is one of the great economic and moral evils of our time. Little notice is taken of a little evil, but when it reaches the proportion of mass unemployment, it calls for confrontation. Perhaps evil cannot be totally extirpated from the world where it resides in human nature, but perhaps it can be ameliorated where it springs from ignorance and inexperience. Mass unemployment, this writer sincerely believes, is the inevitable consequence of erroneous economic notions and theories. These can be exploded, discarded, and replaced with correct explanations that may provide guidance in avoiding the evil. Both the Menem and de la R?a administrations made several meek attempts at adjusting labor costs to labor productivity by reducing some fringe costs or imparting a measure of market flexibility. Yet, the rising rates of unemployment clearly reveal that labor productivity soon fell faster than the reduction in labor costs, which made marginal labor loss-inflicting. Every such attempt met vocal opposition from individuals called upon to adjust by suffering reductions in income and benefits. Government cannot conquer economic principle which springs from human nature; it cannot legislate full employment. To reform the body politic, the laws and regulations of which cause mass unemployment, is a difficult and tedious task. Any effort to reform must ever be mindful of Solon's advice that "no more good must be attempted than a nation can bear." To achieve full employment but being unable to move the body politic, this economist, therefore, would call for no reduction in pay or benefit, no reduction in vacations or pensions, no increase in effort or labor time, nor even a cut in taxes. He would merely allow all unemployed individuals, male and female, old and young, to accept employment solely under contract conditions which they alone determine. Individuals walking the streets in idleness obviously would suffer no reduction in pay or benefits by accepting employment under their own conditions. And government would suffer no loss in revenue by allowing them to work without immediately imposing a 17.5-percent payroll tax. Such action would give them latitude, which is also the freedom for all individuals to work as they see fit, so long as they do not inflict harm on others. It is an economic necessity and a moral imperative. It is time for Argentines to cash in their experience with government power, government law, government regulation, government money, and government care. They attended a hard school and paid high tuition. It taught all who cared to learn that, after every conceivable political device has been tried and found wanting, there remains freedom. When political minds are unable to concoct yet another law or regulation, another scheme or another care, there always is freedom. It is the very last hope, short of despair. ---------------------------------------------------------------------------- ---- Hans F. Sennholz, emeritus professor of economics at Grove City College, is an adjunct scholar of the Mises Institute. Send him MAIL. See also his Mises.org Articles Archive and his Personal Website. Ludwig von Mises Institute 518 West Magnolia Avenue Auburn, Alabama 36832-4528 334.321.2100 ? Phone 334.321.2119 ? Fax mail@mises.org From annewilliamson at msn.con Wed Mar 6 08:44:02 2002 From: annewilliamson at msn.con (Anne Williamson) Date: Sat Jul 8 08:09:11 2006 Subject: [A-List] Money, Property Rights, and the IMF References: Message-ID: <002201c1c524$bd35d1c0$0100a8c0@igrushkii> Money and Property Rights CNSNews.com | March 06, 2002 | J. Bradley Jansen and Matt Sekerke An important test faces Congress and President Bush: Will we move back toward the Rule of Law and respect for contracts and property rights - or does our government still not know what the meaning of "is" is? Whether or not they abide by US law and oppose International Monetary Fund efforts to use our taxpayer dollars to reward theft through the voiding of Argentina's monetary contract will be a key harbinger. The other option is to encourage Enron-style financial incentives for fraud. When Argentina's president Eduardo Duhalde unilaterally abandoned the currency board monetary system and devalued the peso, he hurt American and other investors. Under a currency board, notes and coins are fully backed by assets in a foreign anchor currency and are fully convertible into the anchor currency at a fixed exchange rate on demand ("Should Developing Countries Have Central Banks?" by Kurt Schuler, Institute for Economic Affairs, 1996). Thus, a currency board provides a guarantee to a noteholder: He or she may always exchange the note for an equivalent amount of the reserve currency. Even the IMF has lauded the guarantees of currency boards, "Demand is higher for a 'currency-board currency' than for currencies without guarantees because holders know that, rain or shine, their liquid money can easily be converted into a major foreign currency" (http://www.imf.org/external/pubs/ft/fandd/1999/09/gulde.htm). There was no IMF doubt that currency boards provide a contractual guarantee for investors. The good news is that Americans as taxpayers should not support a government that steals money from Americans as investors. U.S. law (Title 22, section 2370a) clearly says, "The President shall instruct the United States Executive Directors of each multilateral development bank and international financial institution to vote against any loan or other utilization of the funds of such bank or institution for the benefit of any country" that has expropriated the property of any U.S. person, nullified any contract with any U.S. person, or taken any other action which has the effect of seizing ownership or control of the property of any U.S. person. The provisions apply until the country in question has made restitution or has provided for a suitable remedy such as arbitration under international law. The only question now is whether Congress and the president will uphold U.S. law or permit US taxpayer money to the IMF to reward thieves. Lawmakers should also focus on the IMF's failure to identify the sources of the crisis, and their role in sanctioning the events that led to it. >From April 1, 1991 to January 6, 2002, Argentina's central bank employed a currency board-like system called convertibility which maintained a fixed exchange rate of 1 peso to 1 US dollar by holding US dollar reserves equal to outstanding peso monetary liabilities. Investors put money into Argentina under those clear, legal conditions. When Domingo Cavallo became Economy Minister in March 2001, he introduced a series of measures which put the currency board guarantee in question. Markets interpreted these proposals as preludes to devaluation, pushing interest rates up and driving capital flight from Argentina. As confidence in the Argentine system deteriorated, the IMF should have encouraged Argentina to restore credibility by either adopting a more orthodox currency board or by officially dollarizing. The IMF did neither. In fact, as events unfolded, they did exactly the opposite. The panic began on April 17, 2001, when Cavallo proposed substituting euros for half of the reserve backing of Argentina's currency board-like system. The IMF did not react. On May 21, IMF Managing Director Horst K\'f6hler said he welcomed Argentina's efforts for a debt swap it claimed would support medium-term financing sustainability. Eleven days later, Minister Cavallo engineered a swap that obliged Argentine banks to exchange relatively good, liquid government bonds for new longer-dated, illiquid paper. The central bank was obliged to inject liquidity into the banking system (a feature which is not present in orthodox currency board systems), which greatly expanded the monetary base and reduced dollar reserve backing of the currency below 100% for the first time. Soon after, on June 15, Minister Cavallo announced a dual exchange-rate regime: one for imports and another for most exports. When markets worried again about devaluation, interest rates spiked and capital flowed out of Argentina. A week later, IMF Director of External Relations Thomas Dawson told a press conference that the IMF continued to support Argentina's efforts. By September 7 last year, three events had occurred, with the IMF's approval, which seriously compromised the credibility of the convertibility system. Predictably, this did not stop the IMF from augmenting Argentina's stand-by credit to $21.57 billion. IMF First Deputy Managing Director Anne Krueger appeared utterly oblivious in a press release, saying: "The [new Argentine] program aims at restoring the credibility of the fiscal position and the convertibility regime." At the end of November, Mr. Cavallo further undermined the convertibility system by requiring banks to exchange treasury bills for illiquid new ones. As a result, banks could not meet demands for deposit withdrawals, so he instituted restrictions on deposit withdrawals and transfers of funds abroad. A week later Thomas Dawson informed us "there is no Fund staff view on the subject." Dissatisfaction with these measures led to rioting and a revolving-door political crisis, producing five presidents in two weeks. Eduardo Duhalde became Argentina's fifth president on January 1, 2002, and ended convertibility five days later. He broke the monetary contract and created a new exchange-rate regime which stole about 40% of the value of the peso-similar to FDR's breaking our domestic gold standard contract and devaluation. This ended the legal right of people to convert pesos into dollars, amounting to outright theft of the central bank's foreign reserves. Duhalde's administration proceeded to violate contracts with foreign companies, steal the dollar deposits of Argentines, and wreak havoc on the banking system. Since Argentina's devaluation, all eyes have been on the IMF to come to Argentina's aid. And the Duhalde administration is already penciling in a bailout package to support its budget. The Congress must demand that President Bush follow the law and oppose any new IMF lending to Argentina until it honors its contracts. They should also oppose additional disbursements to the IMF based on the IMF's failure to respond to the unfolding crisis. If the IMF cannot focus on basic contracts, property rights and monetary stability-instead of its new pet projects of higher taxes and less financial privacy-taxpayers would be better served if we gave our notice of withdrawal to the IMF and put our returned deposits to better uses. J. Bradley Jansen is Deputy Director of the Center for Technology Policy of the Free Congress Foundation. Matt Sekerke is a Research Associate at the Johns Hopkins Institute for Applied Economics and the Study of Business Enterprise. Free Congress Foundation From xxxx at earthlink.net Wed Mar 6 20:39:01 2002 From: xxxx at earthlink.net (xxxx) Date: Sat Jul 8 08:09:11 2006 Subject: [A-List] Paul Foot on Palestine References: <007501c1c502$fd5b2560$0100a8c0@igrushkii> Message-ID: <000101c1c58b$3b0083a0$18cf143f@default> frankly, i admired Paul Foot too, and circulated the article all over the internet. it so critically and plainly articulated. hardly ever can you find such people in the media.. thanks Micheal for posting this! bye, Mine --- xxxx Aysen xxxx Ph.D Candidate Department of Political Science SUNY at Albany Nelson A. Rockefeller College 135 Western Ave.; Milne 102 Albany, NY 12222 ----- Original Message ----- From: "Anne Williamson" To: Sent: Wednesday, March 06, 2002 6:35 AM Subject: Re: [A-List] Paul Foot on Palestine > Michael: Thank you for the Paul Foot article. I was near tears > from reading such simple truths plainly stated. Such an article > would never see the light of day on this side of the pond. -Anne > > ----- Original Message ----- > From: Keaney Michael > To: A-List (E-mail) > Sent: Tuesday, March 05, 2002 4:16 AM > Subject: [A-List] Paul Foot on Palestine > > > Anne Williamson writes: > > Course the Israelis are smart - they spread $100-$200 million > of the billions in US taxpayer funds they receive annually > around K Street, into the pockets of lawyers, lobbyists and > ALL pols on international and aid committees. > > ===== > > In defence of oppression > > Paul Foot > Tuesday March 5, 2002 > The Guardian > > The cycle of death goes on and on. Nearly 50 Palestinians dead in the > Israeli army attacks on refugee camps over the past couple of days; 10 > Israeli soldiers dead at an army checkpoint near Ramallah. In the west > there is a universal shaking of sophisticated heads and a weary, liberal > sigh. > > Tut tut, there they go again. Two enemy peoples in a far-off land, > caught up in an age-old conflict, swapping atrocity for atrocity, and > endlessly killing each other out of some primeval hatred. There is > nothing civilised and humane observers can do about it, apparently, > except perhaps to hope that sooner or later one side (the strong) will > annihilate the other (the weak). > > The beauty of this approach is that it requires no intellectual effort, > no analysis, no history, above all no need to distinguish between the > violence of the oppressed and the violence of the oppressor. Nothing > could be clearer from the conflict over Palestine than that the Israelis > are the oppressors and the Palestinians the oppressed. > > The refugee camps invaded by Israeli troops last week are inhabited by > people whose parents or grandparents were flung out of their homes and > their lands more than half a century ago and have had to watch those > lands being occupied and confiscated by Israelis. The reason Israeli > troops have the audacity to invade those camps today is that their > predecessors, by means of entirely illegal military invasions, conquered > the West Bank of Jordan, divided it up into cantons or bantustans and > imposed on them equally illegal and ludicrously privileged > "settlements". > > The violence of the Israeli army and police in those regions is the > violence of the oppressor, and the consequent violence of the > Palestinians is the resistance of the oppressed. Anyone who favours the > Israeli occupation of the areas, or the settlements, or who denies the > right of violent resistance to the Palestinians is siding unequivocally > with the oppressor against the oppressed. > > Assuming a "plague on both your houses" approach is not just a travesty > of the facts. It shuts out all prospect of a solution. If one side is as > bad as the other, then any settlement is out of the question since both > sides will go on killing each other in any event. A rational assessment > of the roles of oppressed and oppressor, on the other hand, tells us not > only why people are killing each other, but also how they can be stopped > from doing so. > > If the reason for the violence is the illegal occupation of Palestinian > territory, then the obvious solution is for the Israelis to get out of > that territory and disband the settlements. If the Israeli government > just won't budge on either withdrawal or the settlements, then the > obvious answer is for the west to impose sanctions - to cut off the > massive economic subsidies and arms shipments that have built up the > Israeli economy and its military machine. > > Remember the indignant hullabaloo when a shipment of arms, bound > apparently for the Palestinians, was intercepted. Whoever complains > about arms shipments a hundred times greater that pour regularly from > our factories and those of the US into Israel? Anyone in the United > States or Britain who opposes such sanctions is taking up an unequivocal > stand on the side of illegal occupation, military conquest and economic > oppression. > > Especially pathetic on the part of our apologists for Israeli oppression > is their bleating about anti-semitism. For the sort of oppression they > favour is the seed from which all racialism, including anti-semitism, > grows. There is a solution to the Palestine conflict. It depends on the > withdrawal of Israeli forces and the disbandment of the settlements. > Such a solution is easily within the grasp of western diplomacy, and > would stop the killing. > > Full article at: > http://www.guardian.co.uk/comment/story/0,3604,661939,00.html > > Michael Keaney > Mercuria Business School > Martinlaaksontie 36 > 01620 Vantaa > Finland > > michael.keaney@mbs.fi > > > > > From soncu at pacbell.net Wed Mar 6 21:59:01 2002 From: soncu at pacbell.net (Sabri Oncu) Date: Sat Jul 8 08:09:11 2006 Subject: [A-List] Nigeria goes for homegrown alternative Message-ID: IMF Endorses Nigeria Decision Wed Mar 6, 5:19 PM ET By GILBERT DA COSTA, Associated Press Writer ABUJA, Nigeria (AP) - The International Monetary Fund (news - web sites) endorsed Wednesday Nigeria's decision to pull out of an informal monitoring arrangement with the fund, citing the troubled country's inability to meet key targets. An IMF mission has been in Nigeria since Feb. 27 to review recent developments and to assess the economic outlook for 2002. Despite some progress in reducing inflation in the last few months, an IMF statement said key macroeconomic targets had been missed. Under current circumstances, there was also a risk government spending in 2002 would be "very high," the statement said. "In light of these risks, the IMF staff mission agreed that it would be prudent for the government not to commit to policies that could prove difficult to fully implement," the IMF said. It did not elaborate, and officials could not immediately be reached for comment. Finance Minister Adamu Ciroma cited the country's "political fragility" when he announced Tuesday that the government did not want to "continue with arrangements where only narrowly defined macroeconomic considerations come into play." He said Nigeria was instead embracing "a homegrown alternative" and would seek the IMF's technical expertise, among others, in devising such a program. President Olusegun Obasanjo had asked the IMF and World Bank (news - web sites) for support in rebuilding Nigeria's troubled economy after 15 years of corrupt military rule. A one-year standby agreement between Nigeria and the IMF expired last October, and an informal monitoring arrangement has been in place since then. Last year, the IMF said the government needed to rein in public spending and tighten monetary policy if it hoped to qualify for future installments of its loan program. From cburford at gn.apc.org Thu Mar 7 00:38:02 2002 From: cburford at gn.apc.org (Chris Burford) Date: Sat Jul 8 08:09:11 2006 Subject: [A-List] Europe/US rivalry: R&D In-Reply-To: Message-ID: <4.3.2.7.1.20020307070052.03c7c9e0@pop3.norton.antivirus> At 01/03/02 15:08 +0200, you wrote: >Seeking to bridge the science gap: >RESEARCH AND DEVELOPMENT: Europe's spending on R&D is lagging far behind >that of the US. Brussels has called for state and private invest 60 per >cent over the next eight years but companies may not rush to meet the >challenge, say Francesco Guerrera and Clive Cookson: >Financial Times; Feb 25, 2002 >By FRANCESCO GUERRERA > >Aknowledge gap hasopened up over the Atlantic in research and >development - one of the key motors of innovation and economic growth. > >Europe has fallen well behind the US, as governments and businesses in >the 15 countries of the European Union fail to keep pace with the >expenditure on science and technology of their US counterparts. > >Between 1995 and 1999, the latest period for which figures are >available, the difference between US and European R&D investment more >than trebled. By the end of the period, European innovators in industry >and government were spending Euros 76bn a year less than their US >colleagues. > >The result is that companies and economies in the EU have fewer, and >less sophisticated, tools to go head to head with their rivals on the >other side of the Atlantic. > >Many in Europe fear that achievements such as last year's sequencing of >the human genome, where European scientists made a huge contribution to >the work of their US counterparts, could become ever rarer. > >"(Lower R&D investment) has eroded our competitiveness and deteriorated >our industrial and trade performance compared to the US. Taking action >to reverse these trends is imperative," says Philippe Busquin, who, as >European commissioner for research, is charged with bridging the >transatlantic knowledge gap. > >After years of warm words and few actions, the European authorities seem >to have woken up to the fact that something radical needs to be done to >turn the tide. Although I have practical problems in keeping up Michael with the number of your forwards and I think there is a danger of the list becoming a bulletin board, I continue to think they are enormously important and well-spotted. The clip above seems to me to be even more important about the growing inter-imperialist rivalry between the USA and Europe, than the protective tariffs on steel. Stell is largely and older industry, but if Europe cannot keep up with leading technological development its means of production will suffer a "moral depreciation" like those of the rest of the world, relative to the USA. The value of the currencies of Japan and Europe will continue to fall, capital will continue to become even more concentrated in the USA. Even though conditions have changed from those at the beginning of last century in which inter-imperialist rivalry inevitably led to war, Europe, for all its total commitment to capitalism, will find it needs to make common cause with some of the other middling states for control of the global economic system. Chris Burford From anatlorenzo at yahoo.com Thu Mar 7 05:02:02 2002 From: anatlorenzo at yahoo.com (=?iso-8859-1?q?Ana=20T.=20Lorenzo?=) Date: Sat Jul 8 08:09:12 2006 Subject: [A-List] Marcha de Solidaridad con Venezuela Bolivariana Message-ID: <20020306223425.20812.qmail@web11507.mail.yahoo.com> Skipped content of type multipart/alternative-------------- next part -------------- A non-text attachment was scrubbed... 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Name: Carta al Presidente de Venezuela.doc Type: application/msword Size: 28672 bytes Desc: Carta al Presidente de Venezuela.doc Url : http://lists.econ.utah.edu/pipermail/a-list/attachments/20020307/c66ceebe/CartaalPresidentedeVenezuela.doc From tariq200 at pes.comsats.net.pk Thu Mar 7 09:25:02 2002 From: tariq200 at pes.comsats.net.pk (Tariq) Date: Sat Jul 8 08:09:12 2006 Subject: [A-List] Afghanistan: the blowback continues References: Message-ID: <011101c1c5f5$06deab00$950f38d2@pes.comsats.net.pk> Dear Michael, The Americans are again repeating a mistake. They trained the Mujahideen who later turned against them. The new Pashtun soldiers now being trained may also be seen fighting against their trainers in the coming time. Why do not the US understand the simple thing to leave all the rest alone and concentrate on their own land and people. This will be for the health of all including the Americans. Tariq ----- Original Message ----- From: Keaney Michael To: A-List (E-mail) Sent: Tuesday, March 05, 2002 2:00 PM Subject: [A-List] Afghanistan: the blowback continues Afghan recruits paid ?140 a month by US troops 600 Pashtuns join attack on Taliban stronghold Rory McCarthy in Zurmad Tuesday March 5, 2002 The Guardian Afghan soldiers involved in a new campaign against a Taliban and al-Qaida stronghold in the mountains of eastern Afghanistan are being trained and paid directly by American troops, it emerged last night. American B52s yesterday rained more bombs on targets at Shah-e-Kot, near the village of Zurmad in the mountains of Paktia. One senior Afghan commander said at least 2,000 al-Qaida fighters, including Arabs, Chechens and Pakistanis, along with Taliban soldiers, were holed up in an underground base. Planning for the attack began at least a month ago when 600 local Afghan men, many of them unemployed, were recruited into a new military force and trained by US troops. Each recruit is being paid $200 (?140) a month in cash by the American soldiers. In addition, every man was given a $50 (?35) gift for the Muslim festival of Eid last month. Khail Mohammad, 22, told the Guardian how he joined the force a month ago, attracted by the money and the promise of proper military training. He was immediately given American-made clothes and boots as well as a Kalashnikov rifle. "We are given $200 a month. They didn't give the money to our commanders but straight to us," said Mr Mohammad, who comes from Maidan in Paktia. The money represents a considerable salary in Afghanistan, where the average monthly wage is closer to $40 (?28). "It was a very good opportunity for us. The Americans are very friendly but they are very serious when they are training." All the recruits were Pashtun, the ethnic group which dominates southern Afghanistan and from which the Taliban emerged eight years ago. For three weeks Mr Mohammad and the other recruits were given basic military training, which included being taught guard duty, how to surround an enemy and elementary first aid. Two local Pashtun commanders, Haji Khaishkyar and Commander Zia, were present during the training, which took place about two miles from the provincial capital, Gardez, at a base in Ghor Gharai. "For most people there it was the first time we were soldiers," he said. "I joined them because I want to help my country. I want to see a good future for Afghanistan and I want to be a soldier." After the first three weeks the men were given four days' intensive weapons training. Each man was offered lessons in one weapon: Kalashnikov assault rifles, rocket-propelled grenades or machine guns. Following the weapons training they began a four-day exercise to prepare for the attack on Shah-e-Kot. On the fifth day, Saturday, the attack began. Although the operation at Shah-e-Kot appears better planned than earlier campaigns against al-Qaida bases at Tora Bora and Zhawara, also in eastern Afghanistan, the attack launched on Saturday quickly ran into trouble when one American soldier and three Afghans were killed by mortar fire. Two other US soldiers and four Afghans were injured. The injured Afghans included Mr Mohammad, who was being treated at the hospital in Gardez after the pick-up truck he was travelling in overturned late on Saturday night. Much of the area around Zurmad is still regarded as sympathetic to the Taliban. A Canadian journalist was seriously injured yesterday when the car she was travelling in was attacked as she drove back from Zurmad to Gardez, an hour-long drive on a rutted dirt track. The woman was travelling with two other journalists and an Afghan driver when another car approached from the opposite direction. A man in the car appeared either to fire a gun or throw a grenade at the right-hand side of the journalists' jeep. Other journalists took the woman to hospital in Gardez where she was being treated last night. Her injuries did not appear to be life threatening. Before the attack began, Mr Mohammad said the Afghan commanders had asked the Taliban and al-Qaida fighters to surrender. "But they answered they would continue fighting as long as they were alive," he said. When the attack began on Saturday the 600 Afghans, together with a number of American soldiers, moved in on Shah-e-Kot, getting within hundreds of metres of the village. But they quickly encountered heavy resistance. "Before we could start attacking they started fighting against us," he said. "They were firing mortars, rockets and machine guns." One of the senior Afghan commanders involved in the attack said last night that Shah-e-Kot was surrounded but the area around Gardez was still dangerous. "There was heavy American bombing today," Abdul Matin Hassan Khiel said. "They are completely surrounded but we don't know how long it will take. It could take one or two days, it could take longer." Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From mstainsby at tao.ca Thu Mar 7 11:44:01 2002 From: mstainsby at tao.ca (Macdonald Stainsby) Date: Sat Jul 8 08:09:12 2006 Subject: [A-List] Afghanistan: the blowback continues References: <011101c1c5f5$06deab00$950f38d2@pes.comsats.net.pk> Message-ID: <002c01c1c609$2631fca0$76195218@vc.shawcable.net> ----- Original Message ----- From: "Tariq" Why do not the US understand the simple thing to leave all the rest alone and concentrate on their own land and people. This will be for the health of all including the Americans. --- They don't understand is not quite the right question: Why they never leave people alone is simple- the structures of racist imperialism forbid it. The need for permanent meddlesome interventionism is not policy, it is systemic. Macdonald ------------------------------------------- Macdonald Stainsby http://lists.econ.utah.edu/mailman/listinfo/rad-green http://lists.econ.utah.edu/mailman/listinfo/leninist-international "They are all Enron, we are all Argentina" --WEF protesters. ---- In the contradiction lies the hope. --Bertholt Brecht From tariq200 at pes.comsats.net.pk Thu Mar 7 19:22:02 2002 From: tariq200 at pes.comsats.net.pk (Tariq) Date: Sat Jul 8 08:09:12 2006 Subject: [A-List] Afghanistan: the blowback continues References: <011101c1c5f5$06deab00$950f38d2@pes.comsats.net.pk> <002c01c1c609$2631fca0$76195218@vc.shawcable.net> Message-ID: <005b01c1c648$7cedf8c0$7c0f38d2@pes.comsats.net.pk> Dear Macdonald Stainsby, Thanks. Tariq Macdonald Stainsby > ----- Original Message ----- > From: "Tariq" > Why do not the US understand the simple thing to leave all the > rest alone and concentrate on their own land and people. This > will be for the health of all including the Americans. > --- > They don't understand is not quite the right question: Why they never leave > people alone is simple- the structures of racist imperialism forbid it. The need > for permanent meddlesome interventionism is not policy, it is systemic. > > Macdonald > ------------------------------------------- > Macdonald Stainsby > http://lists.econ.utah.edu/mailman/listinfo/rad-green > http://lists.econ.utah.edu/mailman/listinfo/leninist-international > > "They are all Enron, we are all Argentina" > --WEF protesters. > > In the contradiction lies the hope. > --Bertholt Brecht From Michael.Keaney at mbs.fi Fri Mar 8 01:11:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:12 2006 Subject: [A-List] Afghanistan: the blowback continues Message-ID: Helpless US chiefs saw commando die IAN BRUCE The Herald, 7 March 2002 A US Navy Seal commando was dragged off and executed by al Qaeda fighters after falling from a helicopter in Afghanistan as his commanders could only watch helplessly on video. The scene was being filmed by an unmanned Predator reconnaissance aircraft. Those who witnessed the horror included General Tommy Franks, commander of US troops in Afghanistan, who viewed it from his central command post 8000 miles away in Florida. Watching with Franks in Tampa, and at US bases in Afghanistan, other US military officials were equally powerless to help Neil Roberts, the 32-year-old Navy Seal. The state-of-the-art Predator spy plane is armed with hellfire missiles, but to use one would only have guaranteed the man's death. Roberts tumbled from the open ramp of one of a pair of special forces' Chinook helicopters hit by enemy fire as they tried to drop combat teams close to al Qaeda positions in the mountains near Gardez on Sunday. One helicopter was damaged by a rocket-propelled grenade and both took hits from automatic gunfire. The pilots immediately lifted off at high speed to escape the ambush and landed about a mile away to check the damage. It was only then they realised Roberts was missing. The least damaged Chinook returned to retrieve him, backed by reinforcements from a quick reaction rescue force of 30 commandos. By then it was too late. Tactical commanders monitoring the operation watched helplessly on their screens as three al Qaeda fighters left cover to capture the commando and force him at gunpoint back towards their positions. Moments later he was shot dead. The rescue teams who finally stormed the ambush site found his body among the rocks. Major General Frank L. Hagenback, the man in charge of the ground operation around Gardez, said: "We saw him on the Predator camera being dragged off by three men. He was unarmed and clearly a prisoner. He died at the hands of his captors." The attempted rescue mission came close to disaster in its turn as the Chinooks were subjected to a storm of gunfire and rocket-propelled grenades. As they dived for cover, al Qaeda fighters tried to overrun their position. It took fighter-bomber strikes and the intervention of AC-130 Spectre gunships strafing the ground only yards in front of the trapped US troopers to break up the attacking waves through the night. By the time daylight and reinforcements arrived 12 hours later, six Americans were dead and 11 more wounded. It was a similar scene to Somalia when militiamen downed two US Blackhawk helicopters with shoulder-fired launchers in Mogadishu in 1993 in the action depicted in the recent film, Blackhawk Down. The fighting is now set to intensify in the mountains. Thousands of US-allied Afghan troops massed in for an offensive aimed at finishing off al Qaeda in the eastern region. Hundreds of American troops also swept into the rugged terrain of Paktia province, bolstering the US force to about 1000. American forces skirmished with al Qaeda fighters, cleared enemy caves and launched wave after wave of airstrikes ahead of advancing ground troops. Allied Afghan commanders said they were bringing in new units into the Shah-e-Kot battle from other parts of Paktia province as well as Logar province to the north and Ghazi province to the west. "There are 5000 soldiers collecting in Shah-e-Kot for a final offensive on the al Qaeda to finish them off," said Commander Ismail Khan. "It will be the final push." The Pentagon admitted resistance was strong and dispatched five Marine attack helicopters to bolster the aerial strike force after Army Apaches were damaged by intense attacks. Neither the former Taliban supreme leader Mullah Moham-med Omar nor the al Qaeda chief, Osama bin Laden, was believed to be in Shah-e-Kot. Meanwhile in Kabul, peacekeepers attempting to defuse anti-aircraft missiles touched off an explosion, killing two German and three Danish soldiers. Full article at: http://www.theherald.co.uk/news/archive/7-3-19102-0-54-14.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Fri Mar 8 01:12:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:12 2006 Subject: [A-List] Afghanistan: the blowback continues Message-ID: Al Qaeda using internet in bid to regroup, says US IAN BRUCE The Herald, 7 March 2002 THE al Qaeda terror network is using the internet to try to regroup and reorganise its scattered forces, according to US intelligence sources. Osama bin Laden's operatives are staying one step ahead of law enforcement agencies by accessing messages in libraries, cybercafes and airport terminals as they attempt to re-establish some form of command structure. The US Defence Intelligence Agency (DIA) has intercepted a growing volume of e-mail traffic from villages in Baluchistan, a lawless province straddling the Pakistan border with Afghanistan, and from Kashmir. The DIA says the content of the message stream indicates that senior al Qaeda figures may be using the remote villages as sanctuaries while they contact their scattered forces and seek new headquarters for the organisation. Active al Qaeda cells have been detected in Indonesia, the Philippines, Malaysia, Spain and Yemen. There has been limited communication with fighters who slipped into Iran and Central Asia as their Taliban host regime collapsed under US bombing. Although the communications did not identify specific threats, the sudden increase in traffic was "troubling" in terms of al Qaeda's potential for passing orders for new strikes against the West, the spokesman said. Full article at: http://www.theherald.co.uk/news/archive/7-3-19102-0-52-33.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Fri Mar 8 01:16:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:12 2006 Subject: [A-List] UK dissent on Iraq Message-ID: Galloway outburst halts Commons CATHERINE MacLEOD The Herald, 7 March 2002 A WESTMINSTER debate on military action against Iraq was brought to a premature halt yesterday when George Galloway, the controversial MP for Glasgow Kelvin, called a government minister "a liar". Mr Galloway, who will find out today if he is to be suspended from the Commons, was incensed that Ben Bradshaw, a junior foreign office minister, had called him "a mouthpiece" for Saddam Hussein. Mr Bradshaw, MP for Exeter, made the intemperate remarks when summing up in a debate on the government's policy towards military action in Iraq. In response to Mr Galloway's impassioned plea against possible military action, Mr Bradshaw said: "Some good points that he made on the Middle East peace process would, I believe, carry more credibility if he hadn't made a career of being not just an apologist but a mouthpiece to the Iraqi regime over many years." Speaking outside the chamber, Mr Bradshaw said: "The fact is, I was simply expressing an opinion which is widely held." Mr Galloway, who later insisted he was protesting against Iraq when "Ben Bradshaw was still in short trousers", immediately jumped to his feet to demand an apology. Although there was none forthcoming, John McWilliam, deputy speaker, demanded that Mr Galloway withdraw his comment about the minister - MPs are not allowed to call each other liars. As Mr Galloway was still protesting his innocence, Mr McWilliam brought the proceedings in Westminster Hall to a halt. He said: "I have no alternative but to report this matter to the House and must immediately suspend the sitting." Such was the tension in the chamber that when Tom Harris, the Glasgow Cathcart MP, made a remark to Mr Galloway as the debate was suspended, Mr Galloway said: "F*** off, you prat." Later Mr Galloway, who said he would have issued a writ against Mr Bradshaw if he had made the remarks outside the chamber, said: "If I truly was not just an apologist but a mouthpiece for a dictator whom I was marching in the streets against before Ben Bradshaw had ever been heard of in politics, then I would be dishonourable. He refused to give way to allow me to place the true facts on the record." Mr Galloway's immediate future now depends on a ruling from Michael Martin, the Commons speaker, who intended to deliberate overnight. Last night MPs were split. The prime minister's official spokesman revealed that Downing Street "don't believe Mr Bradshaw had overstepped the mark" but other MPs, including experienced ministers, believed he had "gone over the top". Mr Galloway has offered to withdraw his comments if Mr Bradshaw withdraws his accusations but, failing that, he promises "not to go quietly". If the speaker decides to suspend him, Robin Cook, the leader of the Commons, will move a motion, after which there will be a debate. Among remarks he may, or may not make about Iraq, Mr Galloway is expected to ask: "why is it right to be in the cabinet, identified as a liar and still be welcome in Downing Street but for calling someone a liar, an MP is thrown out of the Commons, and have his constituents disenfranchised?" Although Tony Blair insisted yesterday that no decisions had been taken over Iraq, Mr Galloway believes the government has embarked on "a softening up process - opening fire on the Iraqi regime and smearing people opposed to a new Middle East war". Mr Galloway is not alone in his opposition to military action against Iraq. Tam Dalyell, Labour MP for Linlithgow, who called for yesterday's debate, urged the government to talk to Iraq "on terms of dignity and good sense". He said: "The idea of bombing Iraq is both ill-conceived and unwise and some of us think wicked." Menzies Campbell, Liberal Democrat foreign affairs spokesman, cautioned against following US policy. Arguing that using force should only be a last resort, he said: "We cannot conduct our foreign policy on the basis of the principle of 'my ally right or wrong'." The Tories support military action. Alan Duncan, the foreign affairs spokesman, argued that Saddam Hussein posed "a clear and present danger". Colourful Mp's series of sound bites February 2001 Condemning US and UK military strikes, he said: "It is the most pitiful excuse for attacking somebody's country that I have heard in my lifetime." March 2000 Attacking the US for what he claimed was its blocking of his humanitarian mission to Iraq, he urged Britain not to follow the US: "We were important players in the Middle East when the Americans were still cowboys chasing the Red Indians". December 1998 Leading a back-bench revolt over military strikes on Iraq, he told ministers after they had scuppered attempts to have a vote: "You are cowards. You couldn't face 20 people opposing you". September 1996 Urging the US and UK to stop the bombing of Iraq, he said: "The poor people of Iraq never elected Saddam Hussein and cannot get rid of him but are now having to suffer under a hail of bombing." January 1994 Meeting Saddam, he said: "Allow me to salute your courage, your strength, your indefatigability." Full article at: http://www.theherald.co.uk/news/archive/7-3-19102-0-44-41.html Why 'Gorgeous' George gets some admiring glances for his attacks MICHAEL SETTLE The Herald, 7 March 2002 THE clash in the Commons yesterday between "Gorgeous" George Galloway and a minister was not the first time Mr Galloway had incurred the wrath of the establishment over his views on Iraq. Nor will it be the last. Since the Gulf war more than a decade ago, the Glasgow Kelvin Labour MP has been consistent and - to the government's annoyance - persistent in his condemnation of the US-UK air raids on Baghdad and elsewhere; "indefensible terrorism" he once dubbed them. His condemnation of the attacks have led his critics to label him Saddam's "useful idiot" and the "MP for Baghdad Central". But while regarded as a maverick by many, Mr Galloway is sneakingly admired by some as an intelligent orator, who is well-liked by journalists for his government irritability factor. In 1998, Clare Short, the international development secretary, accused her colleague of being an apologist for Saddam Hussein. According to Mr Galloway, he set her a deadline to withdraw her remark or face a writ. She duly complied with just minutes to go. However, a year later, George Robertson, the-then defence secretary, repeated the accusation. Without doubt, the pinnacle of Mr Galloway's rebelliousness came in January 1994 when he almost got kicked out of the Labour party. The MP defied a three-line whip and, without warning his party, visited Saddam in Baghdad. He greeted the Iraqi dictator with the now famous words: "I salute your courage, your strength, your indefatigability." On his return to Westminster, the MP was greeted with opprobrium from all sides. On the instructions of John Smith, the then Labour leader, he was read the riot act. A public apology was demanded and he was given a "final warning" for ignoring a three-line whip. The Tories also criticised his "odious support for Saddam". However, the Iraqi news agency claimed "the campaign against George Galloway was mounted by British Zionists who want to blackmail British politicians who sympathise with humanitarian causes and with Iraq in particular". To his critics, such remarks only confirmed their view that the Labour MP's stance gave succour to Saddam's regime. However, Mr Galloway insisted he had been traduced, saying: "I did not salute the Iraqi dictator, I saluted the Iraqi people who have suffered so much. I have been a bitter opponent of Saddam Hussein all of my political life." Indeed, he once described Saddam as a "bestial dictator" and has regularly raised the plight of the ordinary Iraqi people. A founder member of Cardri, the campaign against repression and for democratic rights in Iraq, Mr Galloway claimed, in 2000, that the-then 10-year-old UN trade embargo had killed one million Iraqi children. Two years earlier, he brought a sick Iraqi girl to Britain for treatment. Six-year-old Mariam Hamza's leukaemia was successfully treated in Glasgow. The MP has been involved in humanitarian aid missions to Iraq and his forays to Baghdad, - the last was in 2001 - are unlikely to stop in spite of the criticism he receives from political friend and foe alike. His indefatigability in the face of brickbats earns him admiration in the media if nowhere else. This seemed to be summed up when, following his infamous 1994 trip to Baghdad, he told an audience of students: "I don't give a f... what Tony Blair thinks." He later apologised. Full article at: http://www.theherald.co.uk/news/archive/7-3-19102-0-42-23.html NOTE: Ben Bradshaw is a former BBC journalist who seems to have very quickly found a niche at the Foreign Office, no doubt putting all his journalistic skills to "good" use. He was elected to Parliament in 1997, winning against a nasty campaign mounted by a grotesque punk Thatcherite who made a big issue out of Bradshaw's homosexuality. Fortunately that backfired. However, as with so many New Labour insiders, being "correct" on sexual politics or the anti-apartheid movement or feminism is no guarantee of truly progressive politics. Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Fri Mar 8 01:25:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:12 2006 Subject: [A-List] Iraq news Message-ID: Annan breaks ice with Iraqis IAN BRUCE and CAMERON SIMPSON The Herald, 8 March 2002 UNDER the shadow of US threats against Baghdad, Kofi Annan, the UN secretary-general, conducted a day of talks with a high-level Iraqi delegation yesterday, saying he would press for the return of UN arms inspectors. "So far so good," Mr Annan told reporters at the United Nations without elaborating during a break from talks with Naji Sabri, the Iraqi foreign minister, the first such discussions with a ministerial delegation in a year. A similar meeting with Mohammed al-Sahaf, the former Iraqi foreign minister, in February last year ended in disaster, with Mr Annan receiving a lecture. He decided against a follow-up meeting. The talks yesterday were held amid heightened tensions since George W Bush, the US president, made Iraq the key element of his "axis of evil" state of the union speech in January. He demanded Baghdad accept UN inspectors or face the consequences. The UN has 230 weapons inspectors whose training and salaries are funded by cash taken as reparations for the Gulf war from the oil Iraq is allowed to sell legally for humanitarian relief. Under Dr Hans Blix, a Swedish disarmament expert and international lawyer, the inspectorate has spent the past two years building a huge database on Iraq's weapons programmes and the efforts made to conceal them. Some of the money siphoned from the oil account has been used to buy satellite imagery from commercial companies of Iraqi construction projects, power grids, and changes which might indicate hidden government facilities. A California institute has been commissioned to collate a file of testimony by Iraqi defectors, intelligence information supplied by UN member countries such as the UK and the US, and media reports on Saddam Hussein's ongoing quest for weapons of mass destruction. Although the Baghdad regime has little or no control over the oil escrow accounts set up by the UN in 1996 to allow the purchase of food and medical supplies, there is evidence that it earns up to ?700m a year from oil smuggled via northern Iraq to Turkey, Syria and Jordan. Since Saddam expelled the last of the UN weapons' inspectors in 1998, claiming they were "spies", most of the black market money is believed to have been funnelled into upgrading his battered military machine. Dr Blix said yesterday: "There can be no sanctuaries or discounts on UN Security Council resolutions. These make it quite clear that access for weapons' inspectors must be unconditional, immediate and unrestricted." Tony Blair's cabinet revealed deep unease at the prospect of US military action against Iraq yesterday during the cabinet's meeting in Downing Street. Full article at: http://www.theherald.co.uk/news/archive/8-3-19102-0-22-59.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Fri Mar 8 01:26:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:12 2006 Subject: [A-List] Balkans: the blowback continues Message-ID: Terror suspects are handed over to US IAN BRUCE The Herald, 8 March 2002 SUSPECTED terrorists believed to have been carrying out a reconnaissance mission for attacks on American, British, and German embassies have been handed over to US forces by Macedonian authorities. Four men, two Bosnian Muslims and two Jordanians who were travelling on Belgian passports, are understood to have been flown out of the Balkan republic and are now being questioned with al Qaeda and Taliban prisoners at Guantanamo Bay in Cuba. They were arrested near the US ambassador's residence in Skopje, the Macedonian capital. They carried documents calling for "destruction of the devil and the axis", a reference to the United States and its European allies, and computer disks containing al Qaeda-style training information and propaganda. The Macedonian government has warned for months that parts of its territory controlled by ethnic Albanian insurgents could become a haven for terrorists. Macedonian police ambushed and killed seven "Arab or Pakistani" men last Saturday in a village near Skopje, and later produced rucksacks containing mint-condition Kalashnikov assault rifles and uniforms bearing NLA shoulder-flashes. Ljube Boskovski, Macedonia's interior minister, has repeatedly claimed that foreign mujahideen are fighting alongside the Albanian rebels threatening the country's stability. Full article at: http://www.theherald.co.uk/news/archive/8-3-19102-0-21-48.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Fri Mar 8 01:43:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:12 2006 Subject: [A-List] UK corporate state Message-ID: Leaked memo reveals snub on workers' rights By Marie Woolf Chief Political Correspondent The Independent, 07 March 2002 Tony Blair was accused last night of preparing to scrap a promise to protect workers' rights in order to "keep business on board" with his policy of contracting out public services. A leaked Cabinet Office memo, drawn up last month on the instructions of the Prime Minister's Principal Private Secretary, sets out proposals that would mean dropping an earlier commitment to block the the creation of "two-tier workforces" in companies that have been transferred to the private sector. The leaked memo, in effect, abandons a government promise to support legislation to stop private contractors offering new recruits worse terms than existing staff. It also reneges on a commitment made three years ago by Ian McCartney, then a trade minister, to protect the pensions of employees whose company is sold off. The consultation document, marked "Restricted Policy" says that Tupe rules, which protect the conditions and pay of such staff, should not be extended to cover pensions. The memo, dated 1 February 2002, says: "In order to keep business on board, ministers might think it preferable not to extend the Tupe regulations but to maintain the current system." "The outcome of the Tupe review should be that the scope of Tupe regulations should not be extended to cover pensions and service contracts." The document, drawn up by a working party of civil servants led by Jeremy Heywood, the Prime Ministers' PPS, will alarm the unions who were promised by Stephen Byers at the last Labour conference that he planned to act to end "two-tier workforces." Last night, sources close to Patricia Hewitt said the review of Tupe rules was ongoing. "We are still consulting on the issue," said a senior aide. But the Cabinet Office document makes clear the Government is concerned concessions could deter companies from making public sector deals. The memo says the unions' call for new employees to be treated "no less favourably" than new staff "would seriously lessen the degree of flexibility contractors would have to make improvements." Full article at: http://news.independent.co.uk/uk/politics/story.jsp?story=271740 Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Fri Mar 8 01:46:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:12 2006 Subject: [A-List] UK state: Mittal scandal Message-ID: Further revelations involving Kazakhstan and the privatisation of state assets in the free-for-all that is the former Soviet bloc... More Labour links to Mittal are revealed By Marie Woolf, Chief Political Correspondent The Independent, 08 March 2002 The Blair Government approved a $3.4m (?2.3m) grant to a company owned by Lakshmi Mittal in the same month that the billionaire businessman gave a ?125,000 donation to the Labour Party. Officials at the Department for International Development (DfID) approved the subsidy by the World Bank, in May 2001, in a company run by Mr Mittal in Kazakhstan. The Independent has also learned the Government will soon be asked to approve a multi-million World Bank loan to Mr Mittal to invest in his Sidex steel plant in Romania. Tony Blair wrote to the Romanian Prime Minister to endorse Mr Mittal's bid to buy the business. World Bank officials confirmed yesterday they were expecting an application from the steel magnate for a "phase-two" application to help him pay up to ?200m still owing to the Romanian government over the next five years. The additional cash request comes on top of a second loan that Mr Mittal is expected to request from the European Bank for Reconstruction and Development (EBRD), which already gave him a ?70m loan to help him buy Sidex. "In phase two, EBRD and IFC [International Finance Corporation, part of the World Bank] have been asked to structure the long-term financing," a World Bank spokesman said yesterday. Labour's involvement in the Mittal business empire deepened further yesterday when the Government revealed that its officials had approved four loans to Mr Mittal's companies, including two made after the 1997 election. Civil servants representing the Government on the boards of the EBRD and the World Bank voted in the autumn of 1997 to approve financial aid worth $450m (?315m) to enable Mr Mittal to buy a privatised steel plant in Kazakhstan. The Department for International Development told the officials the requests for money were not controversial and were consistent with its aims of encouraging development in former Eastern bloc countries. No ministers were involved in any of the decisions. Adam Price, Plaid Cymru's spokesman on trade and industry, who raised the first questions about Mr Mittal's links to Labour, last night called on the Government to "come clean". He said: "Day by day, we get fresh confirmation of Labour's involvement in his tangled business affairs. The Government needs to come forward with all the facts surrounding their support from loans, to investments and the Prime Minister's endorsement. The stain of suspicion goes deeper and deeper for every day the Government refuses to come clean." In October 1997, the World Bank approved a $100m loan, in tandem with a $150m loan from the EBRD approved at the same time. The public bodies also approved a $200m investment through commercial banks to Mr Mittal for his Kazakhstan plant. Mr Mittal drew down only $100m of the investments after the rouble crashed in 1998, and he was forced to reduce his investment plans for the Kazakhstan plant. The Government also revealed last night that officials under the last Tory government approved a World Bank loan to Mr Mittal in 1996. Its commercial investment and lending arm agreed a long-term advance of $82.4m to a Caribbean company owned by Mr Mittal. Government officials gave the go-ahead for their representative on the IFC to grant the cash to an integrated wire-rod steel plant in Trinidad and Tobago to bring the plant up to World Bank environmental standards. On the IFC and the EBRD, which are backed by British taxpayers, loans are granted by a board of directors representing countries that invest in the bodies. The British representatives are senior civil servants who get advice from Whitehall about whether to approve loans, grants and investments. Full article at: http://news.independent.co.uk/uk/politics/story.jsp?story=272105 Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Fri Mar 8 01:54:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:12 2006 Subject: [A-List] Afghanistan: the blowback continues Message-ID: Entering its sixth bloody day, the Afghan battle that would be over in 24 hours By Andrew Buncombe in Washington The Independent, 07 March 2002 Some had talked of wrapping up the operation in eastern Afghanistan in little more than 24 hours. Some thought the Taliban and al-Qa'ida forces of no more than a couple of hundred would take to their heels and flee once the mighty US ground forces flexed their muscles. But with the desperate battle for Shah-i-Kot this morning entering its sixth bloody day, two things have become increasingly clear: that the US has been surprised by the strength and tenacity of the Taliban and al-Qa'ida forces, and that those forces intend to battle to the end. At least eight US soldiers have already lost their lives in the struggle for those frozen wastes. "[They are] a brutal and determined adversary," the US Defence Secretary, Donald Rumsfeld admitted yesterday, as he briefed reporters at the Pentagon on developments in Operation Anaconda. The general overseeing operations inside Afghanistan, US Central Command chief Tommy Franks, added: "I would characterise them as very hard, committed and deadly fighters. I think the days ahead are going to be dangerous for our forces." Up to 900 rebel Arab, Chechen, Uzbek and Taliban fighters may be dug in and "bunkered down" in the remote mountains 60 miles south of Gardez, in eastern Afghan-istan's Paktia province, two or three times the size of the force originally anticipated. It seems the initial group holding out at altitudes of up to 12,000ft has been swelled by hundreds of fighters, answering calls from local leaders to join in a holy war against the US forces now so visibly on the ground. "We have intelligence from a variety of sources ... that the local fundamentalists have called a jihad against the Americans and their coalition partners," General 'Buster' Hagenbeck, commander of Operation Anaconda, told reporters at Bagram air base, north of the Afghan capital, Kabul. He said local leaders had been "funnelling [and] infiltrating fighters into this area". He said: "In our estimation, in the last 24 to 48 hours, the number of enemy we've fought over time is in the neighbourhood of 600 to 700." Other sources put the numbers higher. General Hagenbeck added: "In the last 24 hours, we have killed lots ... lots of al-Qa'ida and Taliban. I won't give you precise numbers but we've got confirmed kills in the hundreds." The US is bolstering its soldiers with troops from elsewhere in Afghanistan. Of the 2,000 or so allied forces now encircling the 60 square miles around Shah-i-Kot, General Franks said 1,100 were American soldiers from the ?lite 10th Mountain Division and the 101st Airborne Division as well as special forces. The remainder of the allied force consists of Afghan soldiers and special forces from six coalition countries. The SAS is leading a hunt for the Taliban leader, Mullah Omar Mohammad, in southern Afghanistan. The US is also having to fly in more equipment and hardware. More than a dozen AH-64 Apache gunships and AH-1 Cobra attack helicopters have been dispatched. All the Apaches brought in initially have been shot up by the Taliban and al-Qa'ida forces. "We are adding firepower," said one US official, explaining that a small number of additional A-10 Warthog jets were also being sent. These "tankbusters" are armed with rapid-fire cannon and missiles and will attack dug-in enemy positions and caves. America appears determined, despite its forces suffering its worst losses in battle since 1993 when 18 soldiers were killed in the Somali capital of Mogadishu, a bloody, desperate incident, lodged in the wider US psyche, and featured in the film Black Hawk Down. On Monday, seven soldiers were killed in separate incidents around Shah-i-Kot, after helicopters tried to insert forces into areas they found were heavily defended. Video footage from an unmanned Predator drone revealed one American, Petty Officer Neil Roberts, a Navy Seal, being dragged away by three al-Qa'ida or Taliban fighters. Some have likened the incident to events in Mogadishu when the body of an Army Ranger was dragged through the frenzied streets. "This has nothing to do with Mogadishu," Mr Rumsfeld insisted yesterday. "The individual who was killed ... his body was retrieved. I don't see any comparison." The footage was shot on Monday after PO Roberts, 32, fell from a MH-47 Chinook helicopter that had been hit by a rocket-propelled grenade. His disappearance was not noticed until the helicopter landed a mile away. His comrades returned and found his body. The Predator footage does not show if he was alive when he was dragged away, though General Hagenbeck said he had probably been killed by his captors. "When we extracted all our forces, we brought home the body of that young sailor. From all indications, the al-Qa'ida executed him, probably before our forces got there or immediately upon arrival." There is also footage of an incident hours later when a second insertion team also encountered heavy fire near the site of PO Roberts' death. A team of 21 special forces were dropped off but six of them were killed in a firefight. Of the 15 still alive, 11 were wounded, some seriously. For up to 18 hours, this small force among the rocks held off the enemy. Pentagon officials were able to watch the men scramble around the bare mountainside as a "large force of enemy forces" advanced on them. Eventually the survivors - and the special forces team that had recovered PO Roberts' body- were flown out. Some have sought to portray was what essentially a miscalculation and a failure of military intelligence as heroism. "When the history of the war is written, the traumatic battle in the mountains around Shah-i-Kot will be remembered as a testament to heroism," the USA Today newspaper said. "A bloodied, outnumbered band of US servicemen held off a determined al-Qa'ida force on frigid, rocky terrain at least 8,000ft above sea level. Call it Black Hawk Down in the snow." There are other deadly dangers in Afghanistan. Yesterday two German and three Danish soldiers were killed and seven others injured in a blast at a Kabul ammunition dump. Thirty 30 allied soldiers have been killed since the American military operation began in October. They will not be the last. Full article at: http://news.independent.co.uk/world/asia_china/story.jsp?story=271721 Intercepted e-mail traffic points to new al-Qa'ida grouping in remote Pakistan By Rupert Cornwell in Washington The Independent, 07 March 2002 US intelligence has intercepted e-mail traffic from suspected al-Qa'ida members suggesting the terrorist group is trying to regroup in remote areas of Pakistan close to the Afghan border. The evidence is still fragmentary and US officials are uncertain whether the communications are simply an attempt to re-establish contact after the US military campaign, or a fully fledged plan to rebuild the group. But the intercepts, first disclosed by The New York Times yesterday, could help explain the appearance of the large group of al-Qa'ida fighters that US-led troops are currently fighting to dislodge from their mountain strongholds near Gardez. More worryingly the intercepts could be part of planning for new terrorist attacks - though no specific threats have been detected. Nor have the intercepts yielded evidence that Osama bin Laden or any other top al-Qa'ida operatives are in the encircled pocket. The use of e-mail fits in with a well practised al-Qa'ida habit - followed by the hijackers of 11 September - of using public places such as internet caf?s, airport lounges, libraries and other places which are hard to monitor, to communicate with each other over the internet. The new sanctuaries are believed to be in villages in the remote and mountainous Pakistani border province of Baluchistan, and possibly even in disputed Kashmir. But al-Qa'ida may have moved further afield. Some commanders, according to intelligence reports, are being sheltered in Lebanon by the radical Hizbollah organisation, while others may have fled to Africa and Europe. General Joseph Ralston, Nato's supreme commander and in charge of US forces in Europe, the Mediterranean and west Africa. said recently that some al Qa'ida figures had turned up in Europe. "There is a lot of work to be done in our own backyard," he said. Full article at: http://news.independent.co.uk/world/asia_china/story.jsp?story=271720 Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Fri Mar 8 01:56:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:12 2006 Subject: [A-List] Afghanistan: the blowback continues Message-ID: From: "Tariq" Why do not the US understand the simple thing to leave all the rest alone and concentrate on their own land and people. This will be for the health of all including the Americans. --- They don't understand is not quite the right question: Why they never leave people alone is simple- the structures of racist imperialism forbid it. The need for permanent meddlesome interventionism is not policy, it is systemic. Macdonald ===== Robert Fisk: America's morality has been distorted by 11 September 'It's as if all the lessons of history, in Afghanistan and the Middle East, have been tossed into a bin' The Independent, 07 March 2002 In Afghan fields, the poppies blow. Yes, even as the Americans are moving deeper into the Afghan trap, the warlords and gangsters running much of the western-supported Afghan government are ensuring a bumper new crop of heroin for the world's markets. The UN have warned of this, of course, but nothing is being done. The "war against terror" comes first. The broken roads and highways of Afghanistan are now ribbons of anarchy and brigandage and murder across the country. The pathetic little force of peace-keepers in Kabul cannot control all of the capital, let alone the rest of the country. The Interim President, Hamid Karzai, can scarcely control the street outside his office. But the "war against terror" comes first. Locked into their "war against terror" - and now discovering that their enemies want to fight them - the Americans remain equally indolent when confronted by the infinitely more dangerous conflict 2,000 miles to the west of Kabul, in the streets of Jerusalem, Ramallah, Tel Aviv, Nablus, Jenin and Gaza. When the Israeli army goes on a shooting spree in the refugee camps and kills 16 Palestinians, among them two children, the US calls for "restraint". When a Palestinian suicide bomber murders a crowd of Israelis in Jerusalem, including two babies and a 10-year old, the US boldly blames Yasser Arafat for not "stopping terrorism" by locking up the bad guys. And Ariel Sharon? Why, he's busy destroying the police stations and prisons to make sure Mr Arafat can't do what he's been ordered to do. And when Mr Sharon actually announces that Israel must "inflict greater losses" - in other words, kill more Palestinians - Washington is silent. Maybe it's not indolence. Maybe the Bush administration actually believes that the man held "personally responsible" by an Israeli commission of inquiry for the murder of 1,700 Palestinian civilians in Beirut in 1982 really is fighting America's "war on terror". Maybe America's moral compass has become so skewed by the crimes against humanity on 11 September that President Bush simply no longer cares what Mr Sharon does. It's as if all the lessons of history - in Afghanistan as well as the Middle East - have been tossed into a bin. Take ex-President Clinton. He arrives in Israel and what does he do? He blames Mr Arafat. And what does his preposterous wife say when she does the same thing? "Yasser Arafat bears the responsibility for the violence that has occurred; it rests on his shoulders ..." She says that her role as a US Senator is "to support the Israeli people". Really? What's wrong with supporting innocent Palestinians as well? Wrong religion? Back-to-front writing? Wrong eye colour? So a war against colonial occupation has been transformed into an offshoot of the "war on terror", the language of this war ever more infantile. We now have to learn by rote the following words: tit-for-tat, cycle-of-violence, axis of evil, bunker-buster, daisy-cutter ... Is there no end to this childishness? No, there is not. For the latest little killer is the word "transfer" or "resettlement". As in "the simple answer... would be to create a vast separation from Israel, resettling the Palestinians in Jordan, where 80 per cent of the population is Palestinian." This comes from an article published in USA Today. In Israel itself, an opinion poll asks Israelis how many of them would support "transfer" - of Arabs out of their homes, of course, not Jewish settlers off Arab land - as a solution to the war. This is incredible. "Transfer" is ethnic cleansing and ethnic cleansing is a war crime. If American newspapers are prepared to print such an option and if Israelis are asked to give their opinion on it, what is Mr Milosevic doing in The Hague? The moral collapse is already underway. Take the watering down of the US government's latest report on human rights. In 2000, it said that Egypt's hopelessly unfair military courts "do not ensure civilian defendants due process before an independent tribunal". In the 2001 report, however, that sentence has been censored out. It has to be, of course, because Mr Bush is now setting up his own military courts to try his prisoners at Guantanamo Bay without due process. And while the Americans are distorting the nature of the war between Israel and the Palestinians, they are lying about Afghanistan. General Tommy Franks, the head of the US Central Command, refers in the following words to the mistaken killing of 16 innocent Afghans at Hazar Qadam: "I will not characterise it as a failure of any type." Sorry? Either General Franks - who on Tuesday managed to refer to his newly killed soldiers as dying "in Vietnam" - didn't read the facts or he is a very disreputable man. His boss, Donald Rumsfeld, refuses to use the word "mistake" or even "investigation" after thousands of innocent Afghans died under US bombs because the word "sometimes has the implication of more formality or a disciplinary action". When Washington's top military men are so dishonest, is it any surprise that Israeli tanks can open fire on refugee camps without any serious response from the US or blast cars carrying children because they want to kill their father? It is surely time that Europe became involved. It is surely time that the EU held a summit about these terrible conflicts and involved itself directly. We should be expanding the peace force in Kabul to remove the weapons of Afghanistan and let America move into the swamp of semi- occupation and guerrilla warfare if that is what it wishes. We should be asking Israel to repay the EUR17.29m (?10.5m) of European taxpayers' money that has been destroyed by the Israeli army in its vandalisation of EU-funded Palestinian infrastructure. Since the Americans won't talk to Yasser Arafat, we should take over from them. If Washington is too slovenly to halt this terrible war between Arab and Israeli, we must try to do so. We're asked to fund America's bankrupt policies with our euros. So now it's time to demand that we have a say in them. Instead of that, Downing Street, which over Christmas castigated those journalists who predicted chaos and blood in Afghanistan - myself included, I'm glad to say - feeds Mr Bush's fantasies by supporting yet another war with Iraq. I'm beginning to suspect that 11 September is turning into a curse far greater than the original bloodbath of that day, that America's absorption with that terrible event is in danger of distorting our morality. Is the anarchy of Afghanistan and the continuing slaughter in the Middle East really to be the memorial for the thousands who died on 11 September? Full article at: http://argument.independent.co.uk/commentators/story.jsp?story=271647 From Michael.Keaney at mbs.fi Fri Mar 8 02:02:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:12 2006 Subject: [A-List] US: the "lovers of freedom" Message-ID: For their eyes only The democratic principle of open government is under pressure from a US administration obsessed with secrecy and media manipulation, writes Julian Borger Wednesday March 6, 2002 The United States possesses an extraordinary institution which sets it apart from almost every other nation on Earth and helps define America as an open democracy. It is called the 1966 Freedom of Information Act, and it is in serious trouble. For journalists and ordinary citizens alike, Foia (pronounced "foyer") is the daily embodiment of government of, by and for the people. In theory at least it works like this: you fill in a Foia request form and ask for any piece of information you want from any government agency, and that agency is obliged - barring clear national security considerations - to open its files. In practice, the time this process takes has always depended on who you are. The New York Times tends to get better service out of the system than Joe Public, but the principle of universal access to information has by and large been upheld. That is beginning to change under the present administration, which is emerging as the most obsessive about government secrecy since Watergate. Government officials are under instructions from the attorney general's office to drag their heels on Foia requests whenever it is legal to do so. Furthermore, the White House issued an executive order in November restricting access to the documentary records of past presidencies, while the Pentagon is experimenting with infotainment in place of information. In part, the emphasis on government secrecy is an inevitable consequence of September 11. The terrorist attacks demonstrated that the nation was vulnerable to attack on many fronts not previously thought of as having anything to do with national security. Information about city water supplies or public health contingency plans has been stripped from open websites, for example. However, the information clampdown has a history which predates the war on terror. The official papers from the Texas governor's mansion under George Bush's stewardship might have revealed much about the influence of big business on the way he ran the state. But instead of sending them to the Texas archives, where they would have been subject to the state's own Public Information Act, he had them shipped to his father's presidential library, where they will be considerably harder to get at. The key document that is currently strangling Foia is a memorandum from John Ashcroft, the attorney general, explicitly urging government employees to be stingy with their treatment of information requests. It was issued back in October and was being drafted before September 11. The memo tells civil servants that "when you carefully consider Foia requests and decide to withhold records . . . you can be assured that the department of justice will defend your decisions." The chill induced by Ashcroft's note is only now making itself felt. The energy department delayed the release of documents concerning the corporate role in drawing up the administration's energy policy for months, until a court judgment published last week rebuked it for its "glacial pace" and ordered it to hand the papers over. In an unambiguous ruling judge Gladys Kessler, of the US district court in Washington said: "The government can offer no legal or practical excuse for its excessive delay." The ruling represented a significant victory for government transparency, but the administration is standing firm on other fronts. The vice-president, Dick Cheney, has vowed not to hand over the papers from the deliberations of his energy task force last year and is being taken to court by Congress's auditing arm, the general accounting office. Meanwhile the health and human services department has sat on a two year study into the effects of fallout from Cold War nuclear testing, which estimated that it caused the deaths of 15,000 Americans. The study, ordered by Congress in 1998 sat on the department's shelves for months, while officials insisted that it was a work in progress, until a democratic senator, Tom Harkin, pressured the administration into issuing a "progress report". The health department insists it dispatched that report in September, but it only arrived in the senator's office - less than a mile away - in February. Confidentiality imposed for reasons of national security is also showing signs of "spillage", corroding formally entrenched civil rights. Examples of this include the secrecy surrounding the large-scale detention of illegal immigrants, and the refusal to allow detainees in Guantanamo Bay have access to legal advice. Meanwhile, the Pentagon has severely rationed the flow of information about the war in Afghanistan, appropriately enough in a campaign so reliant on special forces operations and covert action. But the defence department too has gone far beyond the requirements of national security in its zeal for news management. Television cameras have been barred from "negative" incidents, like the evacuation of friendly fire casualties, while film crews have been encouraged to concentrate on soft lifestyle features about US soldiers. The apotheosis of this policy was the aborted creation of an office of strategic influence (OSI), designed to feed ready-made stories - both true and otherwise - to the world's media. In a sign that investigative journalism is going to be a hard beast to defeat, the New York Times revealed the OSI's intentions last month forcing its hasty closure, amid half-hearted denials from the defence secretary, Donald Rumsfeld. But Rumsfeld has not given up making the news in his desired image. The Pentagon has bypassed the ABC News, and done a deal with the television network's entertainment division to produce a reality series about the lives of the troops in Afghanistan. It will be co-produced by Jerry Bruckheimer, who cooperated closely with the Pentagon to make Black Hawk Down, and Bertram Van Munster, who produces a regular television show called Cops offering a sympathetic fly-on-the-wall portrait of the police. Like Cops, the Afghan show is likely to be compulsive viewing, but it's unlikely to tell Americans very much about what is being done in Afghanistan in their name. That, of course, may be the whole point. Full article at: http://www.guardian.co.uk/elsewhere/journalist/story/0,7792,662807,00.ht ml Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Fri Mar 8 02:06:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:12 2006 Subject: [A-List] UK state: Mittal scandal Message-ID: Here's the Guardian's spin on this, helpfully taking the heat off New Labour by unearthing a previous deal involving the Major administration in Trinidad.... More Labour help for Mittal revealed Rob Evans and David Hencke Friday March 8, 2002 The Guardian The wealthy Labour donor Lakshmi Mittal has received government support to get two more cheap loans worth ?175m for a major steel modernisation project in Kazakhstan, Clare Short, the international development secretary, disclosed yesterday. The new loans - worth more than double the ?70m aid for a controversial steel project in Romania - fuelled the row raging over the help given to the Indian millionaire from no fewer than four government departments to aid his business activities. However, a Tory attack on Mr Mittal's connections with Downing Street was also blunted last night. Mr Mittal's company disclosed it had also received government backing for another ?50m cheap loan for a steel complex in Trinidad - supported by the Tory administration in 1996. Details of the government support for Mr Mittal's companies were released by Ms Short in a parliamentary answer to Caroline Spelman, the opposition's overseas development spokeswoman. Mrs Short said: "We are aware of four loans approved by those international institutions that my department is responsible for: Ispat-Sidex in Romania, through the European Bank for Reconstruction and Development; Ispat -Sidex in Romania (EBRD); Ispat-Karmet in Kazakhstan (EBRD and World Bank) and Caribbean Ispat in Trinidad (World Bank). The UK supported all these loans." Mrs Spelman said: "This is more evidence of the government's involvement with Mr Mittal. Why is British taxpayer's money being spent on a foreign billionaire who is trying to wreck our steel industry? This reinforces the need for a full-scale public inquiry." But yesterday Ms Short, who was in Spain, hit back at the allegations: "There is not a zillionth of evidence to suggest any scandal here at all. The decisions were taken by the international bodies themselves... ministers in my department were not involved. It was all handled by junior officials. "This is not aid to set up industries to compete with Britain but to modernise old-style subsidised Communist industries so they can become more efficient and allowing the country to spend money instead on badly needed programmes to improve health and alleviate poverty." The new disclosures followed a row over allegations in yesterday's Daily Mail that the Home Office had written to the Belgian authorities on Mr Mittal's behalf asking for details of a money laundering case in which his associates could be prosecuted. The paper quoted a Belgian official as saying he had never seen a request like it in his professional life. David Blunkett, the home secretary, yesterday demanded a public apology from Michael Howard, the former home secretary, for his allegation that the government had been bought by the Indian billionaire. Downing Street strongly denied any government impropriety, saying that the home office had simply been acting as a "post box" in passing on a request from Mr Mittal's solicitors for information about an inquiry into alleged money laundering. Mr Howard had earlier said he could not recall a single case of this happening when he was home secretary in John Major's government. He told BBC Radio 4's Today programme: "I'm afraid the truth is that this government has been bought." Mr Blunkett said the matter had been handled at a "routine administrative level". Full article at: http://www.guardian.co.uk/uk_news/story/0,3604,663932,00.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Fri Mar 8 02:10:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:12 2006 Subject: [A-List] US imperialism Message-ID: Perhaps also qualifying for the Britain/US split thread, this article both usefully highlights the extent of US military expansion and expresses UK establishment alarm at these developments. Tim Garden's comments echo points being made elsewhere about the good fortune that Sept 11 has brought for certain key interests within the US. >From Suez to the Pacific US expands its presence across the globe Ewen MacAskill, diplomatic editor Friday March 8, 2002 The Guardian Today, almost six months after the attacks on New York and Washington, the US is putting in place a network of forward bases stretching from the Middle East across the entire length of Asia, from the Red Sea to the Pacific. US forces are active in the biggest array of countries since the second world war. Troops, sailors and airmen are now established in countries where they have never before had a presence. The aim is to provide platforms from which to launch attacks on any group perceived by George Bush to be a danger to the US. Footage released by the Pentagon this week of US combat soldiers in the field in eastern Afghanistan graphically illustrated the extent to which the US has totally overcome its decade-long horror of putting troops on the ground. Forward bases are rapidly multiplying. Washington announced at the weekend the establishment of yet another base in Central Asia, a region where before September 11 there was no US presence. The new base will be at Manas in Kyrgystan. Until recently, US troops in that country would have been unthinkable, both as a former part of the Soviet Union and also close to the Chinese border. The base will have 3,000 personnel - troops, communications specialists and technical support - and combat aircraft. According to defence analysts, the intention is to have a host of such forward bases - manned by a few thousand troops and technicians all year round - that can provide support for huge reinforcements as required. These bases are being built in or near any country that Mr Bush decides constitutes "a clear and present danger". Tim Garden, an associate fellow of the London-based Royal Institute of International Affairs, said yesterday: "Everyone was expecting, when the Bush administration came in, that it would see America draw into itself and concentrate on long-range capability and reducing its presence on the ground. "Instead, they are looking at forward basing in lots of areas that may be of use to them for operations in the future." The long and growing list of bases underlines the extent to which the US has shifted from the "Black Hawk Down" era, when the ugly scenes that accompanied the killing of US soldiers in Somalia in 1993 so scarred the American psyche that the then president, Bill Clinton, vowed never again to commit ground troops abroad if there was any chance of them sustaining casualties. In support of US forces fighting in Afghanistan, the US has established bases, each manned by 3,000 troops, in Uzbekistan and Tajikistan. US troops are also stationed in Pakistan, close both to the Afghan and Iranian borders. The US administration says publicly that it will leave the Central Asian bases after the "war on terrorism" is over but privately officials admit they are there to stay. As well as bases, the US is sending in military advisers to a host of countries. In another move into the former Soviet empire, the US announced in the last week that it is to send to Georgia up to 200 advisers plus Huey helicopters to help battle elements of al-Qaida as well as Chechen rebels. The US, in its hunt for al-Qaida fighters, has been patrolling the waters that encompass Pakistan, Yemen and Somalia. Within the last week, Saana, the Yemeni news agency, disclosed that the US is to send 100 military advisers to Yemen to help its republican guard take on tribal leaders alleged to be sympathetic to Osama bin Laden. US special forces are be lieved to be in the Sudan working with opposition groups from Somalia, gathering information about possible al-Qaida supporters in Somalia. In the Philippines, 660 US soldiers are helping to train and equip 3,800 Filipino soldiers in the fight against Islamist rebels, the Abu Sayyaf group, in the mountainous island of Basilan. Ivo Daadler, an international affairs specialist at the Brookings Institute in Washington, disputed that Mr Bush had ever been isolationist. He said Mr Bush was opposed only to the kind of humanitarian interventionism of the Clinton administration in places such as the Balkans, Haiti and Somalia, but not to intervention in what Mr Bush regarded as America's interest. Like the cold war, he predicted the war will last for years, if not decades, and will be "all-consuming". There will be further bases if Mr Bush resorts to force to implement the policy decision to remove the Iraqi president, Saddam Hussein. The build-up of US forces in the Middle East will dwarf the 50,000 US servicemen at present operating between the Red Sea and the Philippines. Saudi Arabia, already keen to see the US pull out of its existing bases in the kingdom, is unlikely to allow the US to launch an attack on Iraq from its territory. Instead, the US will have to look elsewhere, to Kuwait and Turkey. The bases Afghanistan Combat role Pakistan Bases Uzbekistan Base Tajikistan Base Kyrgystan Base Georgia Military advisers and base Philippines Military advisers Red Sea Naval patrols Yemen Military advisers Sudan Military advisers in preparation for action in Somalia Saudi Arabia Base Kuwait US will need to beef up presence if action is taken against Iraq Turkey US will need big bases in the country if action is taken against Iraq Full article at: http://www.guardian.co.uk/bush/story/0,7369,663947,00.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Fri Mar 8 02:17:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:12 2006 Subject: [A-List] UK corporate state: a critique Message-ID: Cage the fat cats Big business has had far too much influence on government. It's time to call a halt Larry Elliott Friday March 8, 2002 The Guardian The City is threatening to go on strike. Angry with the government over its decision to pull the plug on Railtrack, a score or more of the square mile's finest fired off a letter to Gordon Brown this week effectively telling him that they want more compensation for their worthless shares in the company. Unless the chancellor agrees, he will have to pay more for City participation in Labour's cherished public-private schemes. Uniquely, this is one strike that has been widely praised by the rightwing press. Strikes by unions are always bad, since they involve unreasonable "demands" for extra money. A strike by the City, on the other hand, is not "holding the country to ransom" but a reasonable response to a government that has betrayed a trust. The government's response to this attempt at blackmail has so far been commendably robust, but the inescapable conclusion of this spat is that the relationship between the government and business is coming under severe strain. And not before time. It's neither healthy nor desirable for business to wield the political influence it has increasingly enjoyed over the past two decades. It is bad for government and - ultimately - bad for business as well. Politicians once understood this. In his inaugural address in 1933, President Roosevelt didn't waste time trying to cuddle up to Wall Street: he blamed the excesses of big finance for the Depression and said so. "Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men." Nor was FDR content with mere words. The Glass-Stegall Act, for example, ruled that banks should act like banks and stockbrokers should act like stockbrokers and that each should stick to its own speciality. Bankers, in Roosevelt's eyes, were supposed to be sober and cautious, lending money against collateral rather than extending unlimited credit for speculation in the markets. Naturally enough, Wall Street hated Roosevelt. Legend has it that the flunkies of the financier JP Morgan junior had to cut out the picture of the president from the papers every morning before showing them to their boss. Despite what Wall Street might have thought, Roosevelt was neither anti-market nor anti-business. He believed that the market had the power to deliver a remarkable array of goods, but that it was inherently unstable. Governments had the responsibility for regulating the economic environment to ensure that the market could operate to its full potential. This was a sensible position. The most cursory glance at what has happened to living standards, life expectancy and levels of nutrition in the past 200 years suggests that business has delivered. But it has been most effective when it has been treated as a dangerous beast that needs to be caged. Times change. In the post-war years, business in both the US and the UK chipped away at the rules and regulations set up by the New Dealers. Markets were deregulated and restrictions on capital abandoned. Bill Clinton (who else?) repealed Glass-Stegall. All this added to the power of the business interest, and was reinforced by the sense of overdone pessimism that governments were powerless in the face of globalisation. But there was more to it than that. Ceding power to business was seen as an ethically correct thing to do. Business, it was said, exemplified the new virtue. The myriad transactions in markets every day reflected public wants and needs in a way that government never could. Markets were honest, markets were safe, markets were democratic. This was all tosh, as Adam Smith, the supposed grand-pappy of the whole gleaming new world order foretold back in 1776. Smith knew that left to its own devices, business had a tendency towards collusion and corruption rather than integrity. "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices..." And so it has proved. Enron is but one example, with the biggest bankruptcy in corporate history the result of systematic dishonesty on a colossal scale. All the elements of the new business order - a light regulatory touch, a suborning of government, speculation in new, "exciting" financial instruments - combined in a conspiracy against the public. Enron is not a one-off; it is symbolic of a deeper corruption. What's more the public is gradually waking up to the way in which it has been gulled. The losses made by small shareholders following the collapse of the internet bubble were partly their own fault; they were greedy and stupid. But it was also the case that they were being advised to buy stock in "exciting" new dotcoms by analysts working for firms advising the very same companies. Legal action is looming, and rightly so. In the UK, the public now knows that it was fleeced by the pensions industry. Markets only work effectively if both buyers and sellers are in full possession of the same information. This was not the case either when those in sound company schemes were mis-sold much less attractive portable pensions or when the usurious commissions on new plans wiped out any gains from rising share prices in the long bull market of the 1990s. The government's response to this has been right. It has insisted that charges of no more than 1% should be levied by firms selling the new stakeholder pensions, and that has had a knock-on impact on non-stakeholder policies. Regulation is working. In other areas too, there have been signs that the government is reappraising its stance. The role of supine non-executive directors is coming under scrutiny following the Enron collapse; the banking industry is in a panic over the possibility that the government will impose a windfall tax on the excessive profits made from small businesses. The extent of this change of heart should not be exaggerated. The government is still wedded to big-tent politics, and sees an injection of private-sector "values" as the key to reform of the public services. Trade unions were understandably spitting blood yesterday over reports that the prime minister is planning to veto proposals to protect the rights of employees when they transfer from the public to the private sector. Moreover, Labour's own relationship with business is deeply suspect. Tony Blair's critics have tried to establish that he was either a fool or a knave to take a ?125,000 donation from Lakshmi Mittal and then write a letter in support of the Indian multi-millionaire to the Romanian government over a steel company takeover. They might be better off accusing him of being a pimp, for the prime minister and some of his colleagues make no secret of the fact that they - like previous administrations - see it as their job to go around the world procuring for British business. It isn't, and the sooner the government cuts the apron strings the better for all concerned. There is nothing wrong with business. But it needs to know its place. Full article at: http://www.guardian.co.uk/comment/story/0,3604,663885,00.html Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Fri Mar 8 02:21:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:12 2006 Subject: [A-List] Financial regulatory crisis Message-ID: Feeling the heat George W. Bush wants chief executives to become more accountable for financial problems at their companies following the collapse of Enron, write Andrew Hill and Peter Spiegel Financial Times: March 8 2002 In early 2000, as they rode the wave of what would become the longest economic expansion in US history, America's chief executives could do little wrong. They were lauded by the media, highly rewarded by shareholders and largely left alone by regulators and lawmakers. That era has long since passed, given a final kick into history by the collapse of Enron, the energy trader, last December. The 10-point plan outlined yesterday by President George W. Bush to improve corporate responsibility and protect shareholders is potentially less onerous than many in US business had feared. But it endorses the post-Enron view that America's corporate chieftains need reining in. That view was first enunciated by Mr Bush in his State of the Union address in January, when he called for corporate America to be "held to the highest standards of conduct". Carolyn Kay Brancato, corporate governance expert at the Conference Board, a New York-based business research association, says the Enron collapse made many people think that companies and accountants were "fraudulent unless proved otherwise, rather than the other way around". If adopted, Mr Bush's 10 points may go some way to redressing that balance by laying out standards that honest companies can adhere to. The proposals include a call for chief executives to vouch personally for "the veracity, timeliness and fairness" of their companies' public disclosures and financial statements and suggests officers who abuse their power should be banned from corporate leadership. In the wake of Enron, US chief executives are eager to make clear that they are following the line of greatest transparency and integrity. General Electric, the conglomerate, and International Business Machines, the computer group, are among the large companies that will publish more ample accounts for 2001 within the next few days, answering criticism of their financial reporting during the boom years. But chief executives are still afraid that the Bush proposals represent the lightly armed vanguard of more onerous legislation that could hamper their attempts to recover from the downturn and remain competitive inter-nationally. What is more, they believe that legislation, regulation and - crucially - litigation could make it difficult to recruit directors. A poll last month of members of the Business Council, an association of chief executives from some of the largest US companies, indicated that 95 per cent of corporate chiefs expected legislation to tackle the issues and 79 per cent thought the main effect would be to increase the cost of doing business. At their biannual meeting in Boca Raton, Florida, last week, many chief executives said they feared candidates for the board - and particularly those asked to join the audit committees - would question whether the benefits of membership outweighed the risks of being pilloried in the media, or sued. With characteristic hyperbole, Scott McNealy, chief executive of Sun Microsystems, described the atmosphere as akin to "mob lynching". Anne Mulcahy, chief executive of Xerox, said this week that the copier group's search for a replacement chief financial officer had been slowed down by the implications of the Enron collapse. The company, whose accounting methods are being examined by the Securities and Exchange Commission, is vetting candidates more carefully - and vice versa. John Challenger, chief executive of Chicago outplacement firm Challenger Gray & Christmas, points out that chief executives have been under pressure since the stock market slump began in 2000. The number of CEO departures announced by companies peaked between August of that year and February 2001 and has since flattened out. He says there will "probably be another outcry and backlash against CEOs as the Enron [situation] evolves - but it is the boards that are really going to be transformed in the next few years". But corporate activists say that a shake-up in the boardroom would be a good thing, provided it does not go too far and deter good candidates. Nell Minow, who runs The Corporate Library, a governance website, says poor attendance and laziness were characteristics of US boards until Enron. "Boards have suffered for a long time from the service of many people who don't want to work too hard - and I'm glad to see them go. On the other hand, I don't want to make it more onerous so that people turn the invitations down." Ms Brancato says the reaction of some directors asked to join the audit committee of big companies is now: "You've got to be kidding." Warren Buffett, the head of Berkshire Hathaway, the investment group, said on Mon day that audit committees should become more adversarial in their dealings with management and independent auditors. "Auditors have been somewhat compliant when management has pushed them. Audit committees need to hold auditors' feet to the fire," he told a meeting held by the SEC to discuss audit reforms. There are questions, however, about how much chief executives and directors can or should know about the detailed workings of complex companies. Jeffrey Skilling, Enron's former chief executive, has testified that he did not know everything about the partnerships set up by the energy trader. In a letter to members of congress investigating the scandal, his lawyer wrote: "He was not . . . involved in every detail of the transactions, nor would he - as CEO - be expected to." Critics have cast doubt on his ignorance defence but most chief executives have always expected to delegate responsibilities to experts. As one chief executive puts it: "Some of the expectations of boards are overstated. The Enron board would have no idea what was going on just by taking a look at the Enron [energy] trading activity - and nor would any other board, by the way." The White House has itself admitted it shied away from more stringent proposals that could have made the lives of top corporate executives in the US more difficult. These proposals were made only days ago by none other than Paul O'Neill, Mr Bush's treasury secretary, who headed the administration's task force on corporate governance. For instance, Mr O'Neill had proposed barring corporate executives from taking out insurance policies that pay legal fees and court judgments against them when their company is found to have released inadequate financial information. But a senior administration official says that the White House decided such a provision would be overkill, since so-called "wilful acts" of concealment are already excluded from such policies. The treasury secretary had also suggested lowering the threshold for executives' legal responsibility for corporate failures, which currently holds them liable only for "recklessness". Mr O'Neill had wanted to change that standard to "negligence" but the administration backed away, saying it would hold executives legally responsible for mere business judgments. "Investors don't get a guaranteed outcome," says the official. "Businessmen can make boo-boos. When you invest in a company in which a businessman makes a mistake, a business judgment mistake, no one wants to have anyone be guaranteed for those returns." The O'Neill proposals might have been a step too far in demonising executives trying to make their way through the minefield of potential litigation and punishment. In any case, according to some observers, mere discussion of greater regulation is already having an impact on companies. It is the "best of times and the worst of times" for corporate governance, according to Ms Minow. "It's a bad time for governance but a good time for reform." Additional reporting by Tally Goldstein Full article at: http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3XIIYZIYC &live=true Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Fri Mar 8 02:22:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:12 2006 Subject: [A-List] The Policy Network Message-ID: Europe's future and the centre-left Instead of turning against the EU, social democrats must set out a new vision, argue Pascal Lamy and Jean Pisani-Ferry Financial Times: March 8 2002 The constitutional convention led by Valery Giscard d'Estaing has started its work on the future shape of Europe. But questions abound also on the content of the European project. Citizens want to know not just what kind of institutional arrangements will be needed but also what kind of society and what kind of economy the continent is trying to build. The debate must not be limited to constitutional questions. In that context, each country and each political tradition should have a clear vision on the future of Europe. As usual, the end result is bound to be a compromise. French social democrats - of which we are two - can be proud of their contribution. But they should also beware of a drift towards Euroscepticism, which has happened to other pro-European parties. What worries us is that the French, who have long thought the European Union was built in their image, find it hard to come to terms with Europe as it now is. Parts of the French left are particularly affected by this malaise. Anxieties about a lack of democratic legitimacy, the erosion of public services, or the weaknesses of Europe as a global player, lie just below the surface. We do not share this anxiety. Nor do we consider that a drift towards Euroscepticism is inevitable. But we do think that if the French left does not get its European priorities straight, and if it too frequently locks itself into defensive battles, the risks will mount. What is the Europe we want*? Our ideas include: Enlargement: The discussion on deepening versus widening is over. Europe has to make enlargement a success while keeping EU reform on track - reform of structural funds, of the Common Agricultural Policy and of streamlined procedures for decision-making. We also need to reconsider the ceiling on EU expenditure, which may be insufficient to finance new priorities. Last, we should not let fantasies about a possible multi-speed Europe distract us. The formation of a core group of countries may arise but it must not become a distraction from the pressing issue of how to make a larger Europe work. Democracy in Europe: Democracy is a basic tenet of the European project but there is still a deficit. There are ideas aplenty, such as ending the tradition of legislating behind closed doors - something that should be done. We also have a great deal of sympathy for Jacques Delors's proposal that the Commission president should be chosen according to the results of European parliamentary elections. But what is still lacking is a truly pan-European civil society that can bring life to pan-European debates. How? By making it just as easy to launch a European association as a national one. In addition, we propose giving E1 per vote to European parties that include in their lists of MEP candidates more than a third of non- nationals in each country, run for election in more than half the EU member states and attract more than 5 per cent of total votes cast. A balanced single market: The single market is one of Europe's great achievements. Sectors where it is still incomplete, such as finance and energy, lag behind in terms of efficiency and cost-effectiveness. But a well functioning single market requires more than liberalisation. It must include regulations that prevent oligopolistic behaviour and guarantee all citizens equal access to essential services. It also has tax implications. Harmonisation is not an end in itself and tax com petition may be conducive to efficiency - but it has to be avoided when it distorts economic decisions or favours tax avoidance. As capital has become mobile within the EU, and especially the eurozone, the time is ripe to move forward on corporate income tax. A natural first step would be to harmonise the tax bases and to adopt minimum tax rates but the ultimate goal should be creation of a European corporate income tax whose proceeds would either finance the EU or be allocated to member states. To get there, we may need qualified majority voting on tax matters related to the single market: controversial in the UK, perhaps, but a logical development. Social Europe: Political leaders cannot both claim that part of the European identity lies in its social model and ask citizens to support an integration project they perceive as fundamentally unbalanced between its social and economic dimensions. There is nothing inherently spurious in the concept of a social Europe, as long as the line between national and EU competence remains clear. The core set of European norms should be expanded to include the social provisions of the European charter of fundamental rights and the principle of a minimum wage in each country but we see no need for an EU-wide minimum wage. As labour mobility develops within the Union, especially for young workers, action needs to be taken to ensure an effective equality of rights between mobile and immobile workers. The euro and European economic policy: The enthusiastic adoption of the new coins and notes illustrates the success of the euro. There is nevertheless room for serious discussion on the macroeconomic policy framework. Three things are needed. First, a clarification of the European Central Bank strategy. We find much attraction in the British emphasis on a symmetrical inflation target that gives equal weight to inflationary and deflationary pressures. Second, rapid reform of the ECB's internal rules, to preserve its ability to make decisions after enlargement. This reform should reinforce the ECB board, whose role in decision-making is essential. Third, governments should start taking co-ordination seriously. Budgetary discipline is essential but in the wake of significant shocks, Europe cannot tie itself down by applying rules, even intelligent ones. These proposals are offered as a contribution to the debate. The important thing is to confront the issues head on. This, at least, we owe to our citizens. Pascal Lamy is EU trade commissioner; Jean Pisani-Ferry is a member of the French Council of Economic Analysis *The Europe We Want is published today by Policy Network, the London-based think-tank, with a foreword by Peter Mandelson Full article at: http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3A1CL0JYC &live=true Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Fri Mar 8 02:24:02 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:12 2006 Subject: [A-List] UK corporate state Message-ID: The City takes on Westminster After Railtrack, investors are demanding greater security for public-private partnerships, says Charles Pretzlik Financial Times: March 7 2002 On the day that Railtrack was put into administration, one of the London's most senior bankers predicted that relations between the City and Westminster would never be the same again. This week's letter to Gordon Brown from 22 fund managers who invested in the rail network group shows that the fury prompted by Stephen Byers, the Transport secretary, has hardly abated. The City, like other financial centres, likes to think that it is a mature market in which corporate valuations are not overturned overnight. That Railtrack could move abruptly from a market capitalisation of ?1.4bn to zero following the withdrawal of government backing was both a shock to the City's collective wallet and a blow to its pride. After months of grumbling anonymously, the fund managers put their names to a letter in which they warned the chancellor that investors are no longer prepared to trust the government. They said the Railtrack decision has "caused considerable damage to the relationship between the government and the whole of the business sector, particularly in the City." They went on to say the affair "raised the straightforward issue of trust." By the standards of the City, where institutions prefer to grumble discreetly behind closed doors, this is strong stuff. The investors claim the government has jeopardised private investment in private-public partnerships and that projects will only go ahead if investors are paid "substantial premia" for the added risk. These could include projects such as the London Underground public-private partnership and the upgrade of the east coast main line. Relations between the City and the government, especially Labour governments, have always been tinged with tension. It was the Labour party that nationalised a range of industries after the second world war. But the latest outbreak of hostilities has occurred under an administration that enjoyed widespread support from business and the City when it was first elected in 1997. For the City, the government over the last 15 years has been a valuable source of fees from such activities as the issuance of government bonds and the privatisation of state-owned busi nesses. One former senior Treasury civil servant with close ties to the City believes the new hostility could reflect a shifting in the balance of power as the steady stream of "sovereign" revenues has dried up. "This may be a shifting in the balance of power. It may be that the Treasury for some people isn't a big client, or that they are a bit disenchanted with the Labour government," he says. But the letter constitutes more than a general complaint about a change of status. Some of the signatories make little effort to disguise its underlying purpose: an attempt to put Mr Byers under public pressure and help them to recover some of what they have lost. So far, their struggle has lasted five months and the only people with a clear sight of any cash are the lawyers. "We needed to up the ante," says one signatory, "We were not making much progress on getting what shareholders had been asking for. We thought we might hit Byers with a pincer movement by going through the Treasury." However, it is worth noting that a significant number of large City investment institutions declined the invitation to put their names to the letter. Also absent were any of the banks - such as Barclays and Deutsche Bank - who continue to put up debt finance for public sector and quasi-public sector schemes. Tony Blair yesterday pointed to the 44 contracts agreed for joint deals with the private sector since July as evidence that the City has not been put off government projects. A director of one investment bank admits: "Fear and greed are wonderful motivations in the City. Fear of being left out of a deal with public sector or quasi-public sector cash flows associated with it is hard to resist." But if relations between Westminster and the City have not broken down, they have altered. The terms of trade have changed, making it more complicated and more expensive for government-sponsored projects to raise public money. "Largely as a result of Railtrack, a company that was structured in a similar way would find it more difficult to raise funds today without greater clarity about what the government could or could not do to that company," says John Mayne, a managing director in JP Morgan's debt capital markets business. A senior investment banker adds, perhaps optimistically, that if the government wanted to raise public money for Consignia, the state-owned company that runs the Post Office, "people would tell them to go and stick it." The Railtrack episode is certainly prompting greater care on the part of investment institutions before becoming involved in public finance. Investors are seeking greater clarity on the government's role in any project it brings to the City. They are also demanding a higher return to compensate for the perceived increase in risk. The Railtrack letter referred to such an effect, although it made no estimate of how much returns would rise. Bankers estimate that the Railtrack affair increased the cost of raising debt capital for the London Underground by about an eighth of one percentage point. On the ?3bn that is being raised for part of it, this only amounts to ?3.75m. However, the government has had to give a series of quasi-guarantees to potential funders. Some bankers believe the costs will be higher for other projects, including the financing of the corporate vehicle that will succeed Railtrack. Standard & Poor's, the credit rating agency, has now warned the government it will have to provide guarantees for this company if it is to avoid junk bond status. "It is going to cost them more than any money they saved by not having to pay dividends to Railtrack shareholders," says the vice-chairman of one bank. But in some ways, this is simply the City doing what it does best: repricing risk but continuing to do business with customers who will pay it money. "There's a rate for the job," says one banker. Or as, one of the City's most senior bankers put it: "Life goes on, and damn the politicians." Full article at: http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3I0U6LHYC &live=true Michael Keaney Mercuria Business School Martinlaaksontie 36 01620 Vantaa Finland michael.keaney@mbs.fi From Michael.Keaney at mbs.fi Fri Mar 8 02:39:01 2002 From: Michael.Keaney at mbs.fi (Keaney Michael) Date: Sat Jul 8 08:09:12 2006 Subject: [A-List] US imperialism: Argentina Message-ID: Together with Stanley Fischer, ex-IMF honcho, Rudiger Dornbusch writes one of the best-selling economics text books employed to indoctrinate students in the ideology of market fundamentalism. This article seems to highlight a consistent feature of Dornbusch's public pronouncements, if we take into account Leo Panitch's "New Imperial State" article published in New Left Review in March/April 2000: "As Robert Rubin and Lawrence Summers returned from Seoul, where they had been dictating policy to the new Korean government, the US Treasury and Federal Reserve interrupted their Christmas holidays to rope together the Japanese Finance Ministry, the Bundesbank and the Bank of England in coordinating private bank lending to Korea. 'We were all told, "Thou shalt not cut",' one managing director for global markets at an American bank in Hong Kong later admitted. The Wall Street Journal also quoted a UK banker who put this 'rescue operation' in broader perspective: 'The sad fact is that international banks never accomplish much