tag:blogger.com,1999:blog-18512189484504869862024-03-14T05:01:25.734-04:00ITSSD Journal on Economic FreedomThe ITSSD Journal blogs are administered by the ITSSD's student interns or Advisory Board members as designated belowITSSD Charitable Missionhttp://www.blogger.com/profile/00790887154748866904noreply@blogger.comBlogger116125tag:blogger.com,1999:blog-1851218948450486986.post-60328343260726836192012-11-06T08:52:00.005-05:002012-11-06T08:57:59.552-05:00Gallois Report: "The Precautionary Principle Must Be Used For the Prevention or Reduction of Risks, Not to Paralyze Research"<br />
<a href="http://medias.lemonde.fr/mmpub/edt/doc/20121105/1786014_53da_rapport_de_louis_gallois_sur_la_competitivite.pdf">http://medias.lemonde.fr/mmpub/edt/doc/20121105/1786014_53da_rapport_de_louis_gallois_sur_la_competitivite.pdf</a><br />
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<b><span style="font-family: Verdana, sans-serif; font-size: large;">Compact for the Competitiveness of French Industry</span></b><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhLLwRB6GiA9di7wwFCbK1xH7n27ZNu-dR5Q4DZTiNmMuO71NW3qwZARkywXCSDcJ2okQ2eQKYSR8kAT6LU0D1o7jwNBJ6o4zH7rimdeNn9chQo2_LS-N690hieNCN4J8a02UfBWMy94gii/s1600/Gallois.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><span style="font-family: Verdana, sans-serif;"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhLLwRB6GiA9di7wwFCbK1xH7n27ZNu-dR5Q4DZTiNmMuO71NW3qwZARkywXCSDcJ2okQ2eQKYSR8kAT6LU0D1o7jwNBJ6o4zH7rimdeNn9chQo2_LS-N690hieNCN4J8a02UfBWMy94gii/s320/Gallois.jpg" width="213" /></span></a><span style="font-family: Verdana, sans-serif;">By Louis Gallois</span><br />
<span style="font-family: Verdana, sans-serif;">Commissioner General for Investment</span><br />
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<span style="font-family: Verdana, sans-serif;">Report to the Prime Minister</span><br />
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<span style="font-family: Verdana, sans-serif;">November 5, 2012</span><br />
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<span style="font-family: Verdana, sans-serif;">Assistant Rapporteurs:</span><br />
<span style="font-family: Verdana, sans-serif;">Clement Lubin,</span><br />
<span style="font-family: Verdana, sans-serif;">Pierre-Emmanuel Thiard</span><br />
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<b style="background-color: white; color: #000033; font-size: 16px; line-height: 18.899999618530273px; text-align: justify;"><span style="color: black; font-family: Verdana;"><span style="border: 1pt none windowtext; padding: 0in;"><a href="http://larecherche.service-public.fr/df/oxide?page=resultatsrapportsavancee&action=launchsearch&DynRubrique=&DynCorpus=&DynDomain=BRP&criteriaContent=&q_author=ATTALI%20Jacques&q_dfdate=&q_dftp=&x=15&y=6" style="color: purple;">[The following blog entry was translated from the original French language by ITSSD Advisory Board member Dr. Sorin Straja, who hosts the ITSSD Journal on Energy Security.]</a></span></span></b><br />
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<span style="font-family: Verdana;"><span style="line-height: 18.883333206176758px;">The following paragraph appears on page 39 of the report:</span></span></div>
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<span style="font-family: Verdana;"><span style="line-height: 18.883333206176758px;">"</span><span style="line-height: 18.866666793823242px;">Nous ne voudrions pas clore ces développements sur la formation sans évoquer la culture</span></span></div>
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<span style="font-family: Verdana;"><span style="line-height: 18.866666793823242px;">scientifique et technique. La formation initiale des jeunes doit, plus qu’elle ne le fait </span></span><span style="font-family: Verdana; line-height: 18.866666793823242px;">actuellement, les conduire à s’orienter vers les métiers de l’industrie. Nous avons vu que les </span><span style="font-family: Verdana; line-height: 18.866666793823242px;">formations techniques ont une image peu valorisée dans le secondaire. Les grands enjeux de </span><span style="font-family: Verdana; line-height: 18.866666793823242px;">la science sont insuffisamment explicités. La curiosité technique s’estompe. Plus grave </span><span style="font-family: Verdana; line-height: 18.866666793823242px;">encore, la notion même de progrès technique est trop souvent remise en cause à travers </span><span style="font-family: Verdana; line-height: 18.866666793823242px;">une interprétation extensive – sinon abusive – du principe de précaution et une description </span><span style="font-family: Verdana; line-height: 18.866666793823242px;">unilatérale des risques du progrès, et non plus de ses potentialités. Le principe de précaution </span><span style="font-family: Verdana; line-height: 18.866666793823242px;">doit servir à la prévention ou à la réduction des risques, non à paralyser la recherche ; il doit, </span><span style="font-family: Verdana; line-height: 18.866666793823242px;">au contraire, la stimuler. Fuir le progrès technique parce qu’il présente des risques nous </span><span style="font-family: Verdana; line-height: 18.866666793823242px;">expose à un bien plus grand risque : celui du déclin, par rapport à des sociétés émergentes </span><span style="font-family: Verdana; line-height: 18.866666793823242px;">qui font avec dynamisme le choix du progrès technique et scientifique, tout en n’étant pas </span><span style="font-family: Verdana; line-height: 18.866666793823242px;">plus aveugles que nous sur les nécessaires précautions."</span></div>
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<span style="font-family: Verdana;"><span style="line-height: 18.866666793823242px;">[English Translation]:</span></span></div>
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<span style="font-family: Verdana, sans-serif;">" <span lang="EN">We would not want to close these developments on
education and training without mentioning the scientific and technical culture.
The initial training of young people should, more than it is done currently, lead them towards industry
trades. We have seen that in high-schools the technical training has an image
of little value. The key issues of
science are insufficiently explained. Technical curiosity fades. <b><span style="font-size: large;">More </span></b></span><span lang="EN"><b><span style="font-size: large;">seriously</span></b></span><span lang="EN"><b><span style="font-size: large;">, the very
notion of technical progress is too often challenged through an interpretation
that is extensive - if not even abusive - <span style="color: orange;">of the precautionary principle</span> and a
unilateral description of the risks of progress, but not also of its beneficial
potential. <span style="color: orange;">The precautionary principle</span> must be used for the prevention or
reduction of risks, <u>not to paralyze research</u>;</span></b> <b>it must, on the contrary,
encourage research</b>. <b><i>Rejecting the technical progress because it presents risks
constitutes a far greater danger: that of the decline, compared with emerging
countries that </i></b></span><b><i><span lang="EN">make</span><span lang="EN"> in a
dynamic way the choice of the technical and scientific progress, while being no
more blind than us on the necessary precautions</span><span lang="EN">.</span></i></b>"</span><span style="font-family: Arial, sans-serif; font-size: 10pt;"><o:p></o:p></span></div>
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<span style="font-family: Verdana;"><span style="line-height: 18.866666793823242px;">[Recent media accounts generally describing the contents of the Gallois Report make clear the seriousness of the obstacles faced by French industry and the economy at large, in part, due to insufficient commitment to scientific and technological research and aversion to risk. This is the second time a report was delivered to a sitting French Government that has drawn the same conclusion: <u>the precautionary principle impairs both scientific and technological innovation and economic growth when employed as a disguised barrier to trade and a reflexive luddite mechanism</u>.]</span></span></div>
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<span style="font-family: Verdana, sans-serif;"><span style="line-height: 18.866666793823242px;">[See also: </span><a href="http://itssdeconomicfreedom.blogspot.com/2010/10/attali-commission-france-must-strictly.html" style="color: #333333; font-size: 17px; text-decoration: none;"><i><b>Attali Commission: "France Must Strictly Circumscribe Precautionary Principle to Promote Entrepreneurial Risk-Taking, Innovation & Economic Growth"</b></i></a>, ITSSD Journal on Economic Freedom (Oct. 24, 2010), at: <a href="http://itssdeconomicfreedom.blogspot.com/2010/10/attali-commission-france-must-strictly.html">http://itssdeconomicfreedom.blogspot.com/2010/10/attali-commission-france-must-strictly.html</a> ]</span></div>
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<a href="http://www.ouest-france.fr/actu/economieDet_-Trente-milliards-pour-relancer-l-industrie-francaise-_3634-2129931_actu.Htm">http://www.ouest-france.fr/actu/economieDet_-Trente-milliards-pour-relancer-l-industrie-francaise-_3634-2129931_actu.Htm</a><br />
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Thirty billion to boost French industry</h1>
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<span class="date" style="color: #666666; float: left; font-size: 11px; text-transform: lowercase;">tuesday, november 6, 2012</span></div>
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<strong style="background-color: white; color: #333333; line-height: 18px;"><em><span style="font-family: Verdana, sans-serif;"><span class="goog-text-highlight" style="-webkit-box-shadow: rgb(153, 153, 170) 2px 2px 4px; background-color: #c9d7f1; box-shadow: rgb(153, 153, 170) 2px 2px 4px; box-sizing: border-box; position: relative;">This is the challenge of the Pact for Competitiveness of French industry, presented Monday by Louis Gallois government. </span>François Hollande promises "tough decisions."</span></em></strong><br />
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<span style="font-family: Verdana, sans-serif;">In its mission statement, the Prime Minister asked the General Commissioner for investment <strong>"to give a new </strong><strong>impetus to the French industry "</strong> . The report therefore explores Welsh major axis 74 pages and 22 proposals. <strong>"The general idea is to give some leeway to the French industry relying on compulsory levies,</strong> said yesterday <b><u>the former head of the SNCF and EADS</u></b>. <strong>It is a clash of competitiveness is also a crisis of confidence. '</strong></span></div>
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<span style="color: #ff6600;"><strong><span style="font-family: Verdana, sans-serif;">"Balloon oxygen" financial</span></strong></span></div>
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<span style="font-family: Verdana, sans-serif;">Cost of shock: 30 billion euros of cuts in employers' social and, in a year or two to pay up to 3.5 times the minimum wage (approximately € 4,990).Louis Gallois proposes to fund a two-thirds increase in CSG about two points (between 20 and 22 billion), but also increases targeted VAT and financial transactions. Reduction of public expenditure should take <strong>"in the future, in part, the relay of taxation"</strong> . Health insurance and family allowances could also be tapped.</span></div>
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<span style="font-family: Verdana, sans-serif;">With this <strong>"lifeline"</strong><span class=""> <b>financial state would create an environment conducive to the development of three priority areas: <span style="font-size: large;">enabling technologies</span>, health and economy of living, energy transition. </b></span><b><span style="font-size: large;">Research, innovation and the emergence of intermediate sized companies</span></b>, missing the French industry would be encouraged based on groups of French international. The investment would be supported by the doubling of the capacity of financing public investment Bank (BPI), through public-private partnerships, and the orientation of private savings to industry (longer contracts life insurance).</span></div>
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<span style="font-family: Verdana, sans-serif;">Welsh final installment plan: transfer the financing of social protection to continue to reduce taxes for companies to renegotiate the conditions of access to the labor market and training (paid employment and precarious) to create a new pact social or <strong>"pact productive"</strong> .</span></div>
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<span class="goog-text-highlight" style="-webkit-box-shadow: rgb(153, 153, 170) 2px 2px 4px; background-color: #c9d7f1; box-shadow: rgb(153, 153, 170) 2px 2px 4px; box-sizing: border-box; font-family: Verdana, sans-serif; position: relative;">Frédérique Jourdaa.</span></div>
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<a href="http://www.agefi.fr/fiche-textes-references-wikifinance/pacte-pour-la-competitivite-de-l-industrie-francaise-2045.html">http://www.agefi.fr/fiche-textes-references-wikifinance/pacte-pour-la-competitivite-de-l-industrie-francaise-2045.html</a><br />
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<span style="font-family: 'times new roman', times, serif;"><b><span style="font-size: large;">Ex-Pd-g SNCF and EADS Louis Gallois</span></b><span style="font-size: 14px;"> </span><b>presented Monday, November 5th Prime Minister Jean-Marc Ayrault its long-awaited report on a "pact for competitiveness of French industry." </b>There are 22 proposals formula sales and 30 billion euros the amount of effort required to turn the economy hexagonal, 20 billion decline in employer contributions and $ 10 billion for employee contributions, all funded by VAT, CSG, green taxation, as well as the decline in public spending.</span></div>
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<span style="font-family: 'times new roman', times, serif;"><span class=""><b>Among its 22 proposals, he mentions in particular the commitment of the State not to modify certain provisions relating to companies (research tax credit, devices called "Dutreil" promoting the detention and transfer of businesses, steps towards the investment in SMEs ...)</b>, the role of employees in corporate board, creating a shock competitiveness (name rejected by the government), the revival of research on shale gas (also rejected) the alignment conditions of export credit and guarantees the highest level found in other developed countries, <b>an effort in research</b>, creation, </span><strong></strong><span class="">within the BPI, a product consisting of preferred shares without <b>Voting for growing businesses, the establishment of a "Small Business Act" for SMEs, increased effort in training</b>, the lengthening of life insurance contracts by adapting their diet tax and benefit contracts accounting units (shares) and contracts diversified compared to euro (mainly bonds)...</span></span></div>
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<a href="http://fr.news.yahoo.com/louis-gallois-propose-un-pacte-pour-la-comp%C3%A9titivit%C3%A9-104505406--business.html">http://fr.news.yahoo.com/louis-gallois-propose-un-pacte-pour-la-comp%C3%A9titivit%C3%A9-104505406--business.html</a></div>
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Louis Gallois advocates 30 billion euros of cuts costs</h1>
<a href="http://www.reuters.com/" rel="nofollow" style="color: #5d4370; font-family: arial, helvetica, clean, sans-serif; font-size: 13px; line-height: 16px; text-align: start; text-decoration: none;"><img alt="Reuters" class="logo" src="http://l1.yimg.com/bt/api/res/1.2/FZN6924R0WZ__x92.x6.GA--/YXBwaWQ9eW5ld3M7Zmk9Zml0O2g9Mjc-/http://media.zenfs.com/en_us/News/logo/reuters/d0c3eb8ca18907492a4b337b5cec5193.jpeg" style="background-repeat: no-repeat no-repeat; border: 0px; display: inline !important; margin: 0px 10px 0px 0px; vertical-align: middle;" title="" /></a><cite class="byline vcard" style="color: #7d7d7d; display: inline-block !important; font-family: Georgia, Times, 'Times New Roman', serif; font-size: 12px; font-style: normal; line-height: 2.2em; text-align: start; vertical-align: middle;">By <span class="fn">Elizabeth Pineau and Emmanuel Jarry</span></cite><br />
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PARIS (Reuters) - Louis Gallois proposes lowering social security contributions of 30 billion euros to halt the decline of French industry, in a report to the government on Monday, the eve of the announcement of the first measures of competitiveness .</div>
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The ex-CEO of EADS and SNCF suggests transferring 20 billion in employer contributions and employee contributions 10 billion, up 3.5 minimum wage, taxation (VAT, CSG, carbon tax, taxation estate, niches, etc.)..</div>
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<span style="font-size: large;"><b>"I propose 22 key measures (...) to stop the slide, stop stalling, support investment," he told reporters. "This is what I call (...) the impact of competitiveness, which is in fact a crisis of confidence."</b></span></div>
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According to the Minister of Economy, Pierre Moscovici, the report "we will apply very widely." <span class="">President François Hollande has meanwhile promised "tough decisions" oriented primarily on employment.</span></div>
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The government is still far away from a massive transfer of social contributions to taxes, to protect household consumption and therefore growth.</div>
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"I've always said that the French economy did not need a trauma, but a therapy of deep tissue therapy, therapy over time," said Pierre Moscovici on BFM TV.</div>
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An effort of 30 billion euros in fiscal consolidation is already scheduled for 2013, "we must also bear in mind the purchasing power of households," he added, promising measures to lower the cost of labor, without precision.</div>
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Louis Gallois argues that this transfer is made on a year or two "if fiscal constraints or the desire to limit the impact on the household demand imposed", but no more so as not to dilute its effects.</div>
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The government is being delivered against an increase in the standard rate of VAT, the bulk of the effort (about two-thirds, or 20 to 22 billion) will be financed by an increase in CSG, said he.</div>
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TO A TAX CREDIT?</div>
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According to the website of the weekly Le Point, the government, which will meet on Tuesday at a seminar on the subject, consider using a tax credit to reduce the burden on businesses of twenty billion.</div>
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Point also believes that it would be ready to return part of its decision not to increase the standard rate of VAT, which may be increased from 19.6% to 20% in 2013.</div>
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"I do not comment on rumors or leaks," said Pierre Moscovici. Minister for Relief productive, Arnaud Montebourg: "The decisions are not finalized. We will make tomorrow. We are working on all the assumptions."</div>
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<b>Louis Gallois diagnosis from a severe drop accelerated French industry, whose share in the value added of the French economy fell to 12.5% in 2011, which places France in 15th area euro.</b></div>
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<b>"The French industry has now reached a critical threshold beyond which it is threatened with disintegration," </b><span style="font-size: 14px;">he wrote.</span></div>
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He stressed that the decline 10000000000 employee contributions limit the impact of an increase in the CSG on the purchasing power of employees. In any case, it refers to the consultation on the financing of social protection arrangements that transfer.</div>
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He also believes that reducing public spending will eventually take over for a share of taxes.</div>
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Advancing the figure of 30 billion, or half of the margin loss of French companies since 2001, he said he wanted to combine both a "critical mass" of economic constraints and "absorption system tax within a short time. "</div>
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In his mind, if the decline in payroll must provide a "lifeline" for businesses, it should be clearly oriented investment and innovation, not to the distribution of dividends or salary increases.</div>
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To facilitate the flow, it also offers a limited reduction of corporate income tax for reinvested earnings and taxation of share buybacks, which according to him is that dividend distributions "disguised".</div>
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It suggests measures to stabilize the legal and tax rules, to improve relations between large firms and subcontractors and support for innovation and further research on techniques for exploiting shale gas.</div>
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It also offers improved corporate governance, such as the automatic granting of double voting rights to shareholders holding their shares at least two years.</div>
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To meet capital requirements of midsize (ETI), he advocates including the creation, within the new Public Investment Bank (BPI) shares without voting rights but better paid.</div>
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This report was supported by the right-wing opposition and has been criticized by the Communist Party, while employers' organizations invited the government to act quickly.</div>
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<br />ITSSD Charitable Missionhttp://www.blogger.com/profile/00790887154748866904noreply@blogger.com0tag:blogger.com,1999:blog-1851218948450486986.post-3786677777258450642010-10-24T11:30:00.023-04:002010-10-26T14:21:40.198-04:00Attali Commission: "France Must Strictly Circumscribe Precautionary Principle to Promote Entrepreneurial Risk-Taking, Innovation & Economic Growth"<meta content="text/html; charset=utf-8" equiv="Content-Type"></meta><meta content="Word.Document" name="ProgId"></meta><meta content="Microsoft Word 11" name="Generator"></meta><meta content="Microsoft Word 11" name="Originator"></meta><link href="file:///C:%5CDOCUME%7E1%5CLKogan%5CLOCALS%7E1%5CTemp%5Cmsohtml1%5C01%5Cclip_filelist.xml" rel="File-List"></link><style>
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<div class="MsoNormal"><a href="http://www.ladocumentationfrancaise.fr/rapports-publics/104000541/index.shtml"> <br />
</a></div><div class="MsoNormal"><a href="http://www.ladocumentationfrancaise.fr/rapports-publics/104000541/index.shtml">http://www.ladocumentationfrancaise.fr/rapports-publics/104000541/index.shtml</a></div><div class="MsoNormal"><o:p> </o:p></div><h2 align="center" style="font-weight: bold; margin: 0in 0in 0.0001pt; text-align: center;"><span style="border: 1pt none windowtext; color: #ff6704; font-family: Verdana; font-size: 130%; padding: 0in;">An ambition for ten years - Report of the Committee for the Liberation of growth chaired by Jacques Attali</span></h2><span style="font-size: 100%;"> <br />
</span><meta content="text/html; charset=utf-8" equiv="Content-Type"></meta><meta content="Word.Document" name="ProgId"></meta><meta content="Microsoft Word 11" name="Generator"></meta><meta content="Microsoft Word 11" name="Originator"></meta><link href="file:///C:%5CDOCUME%7E1%5CLKogan%5CLOCALS%7E1%5CTemp%5Cmsohtml1%5C01%5Cclip_filelist.xml" rel="File-List"></link><span style="font-size: 100%;"><o:smarttagtype downloadurl="http://www.5iantlavalamp.com/" name="place" namespaceuri="urn:schemas-microsoft-com:office:smarttags"></o:smarttagtype><o:smarttagtype downloadurl="http://www.5iamas-microsoft-com:office:smarttags" name="City" namespaceuri="urn:schemas-microsoft-com:office:smarttags"></o:smarttagtype><o:smarttagtype downloadurl="http://www.5iantlavalamp.com/" name="country-region" namespaceuri="urn:schemas-microsoft-com:office:smarttags"></o:smarttagtype></span><style>
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<div class="auteur" style="margin: 0in 0in 0.0001pt;"><span style="font-size: 100%;"><b><span style="color: black; font-family: Verdana;"><a href="http://larecherche.service-public.fr/df/oxide?page=resultatsrapportsavancee&action=launchsearch&DynRubrique=&DynCorpus=&DynDomain=BRP&criteriaContent=&q_author=ATTALI%20Jacques&q_dfdate=&q_dftp=&x=15&y=6"><span style="border: 1pt none windowtext; color: black; padding: 0in;"> <br />
</span></a></span></b></span></div><div class="auteur" style="margin: 0in 0in 0.0001pt; text-align: justify;"><span style="font-size: 100%;"><b><span style="color: black; font-family: Verdana;"><a href="http://larecherche.service-public.fr/df/oxide?page=resultatsrapportsavancee&action=launchsearch&DynRubrique=&DynCorpus=&DynDomain=BRP&criteriaContent=&q_author=ATTALI%20Jacques&q_dfdate=&q_dftp=&x=15&y=6"><span style="border: 1pt none windowtext; color: black; padding: 0in;"> [The following blog entry was translated from the original French language by ITSSD Advisory Board member Dr. Sorin Straja, who hosts the ITSSD Journal on Energy Security.]</span></a></span></b></span></div><div class="auteur" style="margin: 0in 0in 0.0001pt;"><span style="font-size: 100%;"><b><span style="color: black; font-family: Verdana;"><span style="border: 1pt none windowtext; color: black; padding: 0in;"><br />
</span></span></b></span></div><div class="auteur" style="margin: 0in 0in 0.0001pt;"><span style="font-size: 100%;"><b><span style="color: black; font-family: Verdana;"><a href="http://larecherche.service-public.fr/df/oxide?page=resultatsrapportsavancee&action=launchsearch&DynRubrique=&DynCorpus=&DynDomain=BRP&criteriaContent=&q_author=ATTALI%20Jacques&q_dfdate=&q_dftp=&x=15&y=6"><span style="border: 1pt none windowtext; color: black; padding: 0in;"> <br />
</span></a></span></b></span></div><div class="auteur" style="margin: 0in 0in 0.0001pt;"><span style="font-size: 100%;"><b><span style="color: black; font-family: Verdana;"><a href="http://larecherche.service-public.fr/df/oxide?page=resultatsrapportsavancee&action=launchsearch&DynRubrique=&DynCorpus=&DynDomain=BRP&criteriaContent=&q_author=ATTALI%20Jacques&q_dfdate=&q_dftp=&x=15&y=6"><span style="border: 1pt none windowtext; color: black; padding: 0in;">Jacques Attali</span><span class="apple-converted-space"><span style="border: 1pt none windowtext; color: black; padding: 0in; text-decoration: none;"> </span></span></a><span style="border: 1pt none windowtext; padding: 0in;">,<span class="apple-converted-space"> </span></span> <br />
<span style="border: 1pt none windowtext; padding: 0in;">FRANCE.<span class="apple-converted-space"> </span>Presidency of the Republic, FRANCE.<span class="apple-converted-space"> </span>Prime Minister</span><o:p></o:p></span></b></span></div><div class="MsoNormal"><span class="apple-style-span" style="font-size: 100%;"><o:p> </o:p></span></div><div class="auteurm" style="margin: 0in 0in 0.0001pt;"><br />
<span style="font-size: 100%;"><st1:city st="on"><st1:place st="on"></st1:place></st1:city></span></div><div class="auteurm" style="margin: 0in 0in 0.0001pt;"><span style="font-size: 100%;"><st1:city st="on"><st1:place st="on"><span style="border: 1pt none windowtext; color: black; font-family: Verdana; padding: 0in;"> <br />
</span></st1:place></st1:city></span></div><div class="auteurm" style="margin: 0in 0in 0.0001pt;"><span style="font-size: 100%;"><st1:city st="on"><st1:place st="on"><span style="border: 1pt none windowtext; color: black; font-family: Verdana; padding: 0in;">Paris</span></st1:place></st1:city></span><span style="border: 1pt none windowtext; color: black; font-family: Verdana; font-size: 100%; padding: 0in;">: XO Editions: French documentation<span class="apple-converted-space"> <br />
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</span></div><div class="auteurm" style="margin: 0in 0in 0.0001pt;"><span style="border: 1pt none windowtext; color: black; font-family: Verdana; font-size: 100%; padding: 0in;"><span class="apple-converted-space"> <br />
</span></span></div><div class="auteurm" style="margin: 0in 0in 0.0001pt;"><span style="border: 1pt none windowtext; color: black; font-family: Verdana; font-size: 100%; padding: 0in;"><span class="apple-converted-space"><span style="font-weight: bold;">October 2010 </span> <br />
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<span style="font-size: 11pt;"><o:p></o:p></span></div><div class="paragraphe" style="margin: 0in 0in 0.0001pt;"><span style="border: 1pt none windowtext; color: black; font-family: Verdana; font-size: 10pt; padding: 0in;"><o:p> </o:p></span></div><div class="paragraphe" style="margin: 0in 0in 0.0001pt; text-align: justify;"><span style="border: 1pt none windowtext; color: black; padding: 0in;">Appointed in August 2007, the Commission headed by Jacques Attali was charged to "examine the conditions for the liberation of the French economic growth".</span> <span style="border: 1pt none windowtext; color: black; padding: 0in;">This report follows the first report released in January 2008 </span><span class="MsoHyperlink">(<a href="http://www.ladocumentationfrancaise.fr/rapports-publics/084000041/index.shtml">http://www.ladocumentationfrancaise.fr/rapports-publics/084000041/index.shtml</a>). <br />
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</div><div class="paragraphe" style="font-weight: bold; margin: 0in 0in 0.0001pt; text-align: justify;"><span style="font-size: 130%;">[SEE:<a href="http://itssddisguisedtradebarriers.blogspot.com/2008/01/sarkozy-claims-to-back-attali.html"> <span style="font-style: italic;">Sarkozy Claims to Back Attali Commission's Liberalization Plan: But Rejects Recommendation to Scrap Precautionary Principle!</span>, </a></span><span style="font-family: times new roman; font-size: 130%; font-weight: bold;">ITSSD JOURNAL ON DISGUISED TRADE BARRIERS (Jan. 25, 2008) at: http://itssddisguisedtradebarriers.blogspot.com/2008/01/sarkozy-claims-to-back-attali.html</span><span style="font-size: 130%; font-weight: bold;">; </span><span style="font-family: times new roman; font-size: 130%; font-weight: bold;"><a href="http://itssddisguisedtradebarriers.blogspot.com/2008/01/french-rethinking-precautionary.html"><span style="font-style: italic;">French Rethinking the Precautionary Principle?? Jamais!!!</span>, </a></span><span style="font-size: 130%;"><span style="font-weight: bold;">ITSSD JOURNAL ON DISGUISED TRADE BARRIERS (Jan. 25, 2008) at:</span></span><span style="font-family: times new roman; font-size: 130%;"><span style="font-weight: bold;"> http://itssddisguisedtradebarriers.blogspot.com/2008/01/french-rethinking-precautionary.html</span> ].</span></div><div class="paragraphe" style="margin: 0in 0in 0.0001pt; text-align: justify;"><span style="border: 1pt none windowtext; color: black; padding: 0in;"> <br />
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</span></div><div class="paragraphe" style="margin: 0in 0in 0.0001pt; text-align: justify;"><span style="border: 1pt none windowtext; color: black; padding: 0in;">This report proposes a strategy for ten years.</span> <span style="border: 1pt none windowtext; color: black; padding: 0in;">This strategy identifies two emergencies: the recovery of public finances (the deficit should be rapidly reduced to 3% of GDP and public debt should be reduced in 2020 to an amount of about 60% of GDP) and employment (to lower the overall unemployment rate to 4.5%; "unlock" youth access to employment; reduce the dualism of the labor market between permanent and temporary jobs).<span class="apple-converted-space"> </span><b>It also defines two long-term priorities: education and <u>management of major growth areas including the environment</u>, natural resources and major infrastructure.</b><o:p></o:p></span></div><div class="MsoNormal"><o:p> </o:p></div><div class="MsoNormal"><br />
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</o:p></div><div class="MsoNormal"><a href="http://lesrapports.ladocumentationfrancaise.fr/BRP/104000541/0000.pdf">http://lesrapports.ladocumentationfrancaise.fr/BRP/104000541/0000.pdf</a></div><div class="MsoNormal"><o:p> </o:p></div><div class="MsoNormal">…<span style="font-family: UnitusT-RegularCondensed; font-size: 16pt;"> </span><meta content="text/html; charset=utf-8" equiv="Content-Type"></meta><meta content="Word.Document" name="ProgId"></meta><meta content="Microsoft Word 11" name="Generator"></meta><meta content="Microsoft Word 11" name="Originator"></meta><link href="file:///C:%5CDOCUME%7E1%5CLKogan%5CLOCALS%7E1%5CTemp%5Cmsohtml1%5C01%5Cclip_filelist.xml" rel="File-List"></link><style>
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</style><span style="font-size: 130%;"><u style="font-weight: bold;"><span style="font-family: UnitusT-RegularCondensed;">SECOND LONG-TERM PRIORITY</span></u></span><span style="font-family: UnitusT-RegularCondensed; font-size: 130%;"><span style="font-weight: bold;">:</span></span></div><div class="MsoNormal"><br />
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<span style="font-family: UnitusT-RegularCondensed; font-size: 130%;"><o:p></o:p></span></div><div class="MsoNormal"><span style="font-size: 130%;"><b><span style="font-family: UnitusT-BoldCondensed;"><o:p> </o:p></span></b></span></div><div class="MsoNormal"><b><span style="font-family: UnitusT-BoldCondensed; font-size: 16pt;"><span style="font-size: 130%;">The protection of the environment and the management of scarce resources</span><o:p></o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><br />
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</o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><span style="border: 1pt none windowtext; padding: 0in;">To grow, <st1:place st="on"><st1:country-region st="on">France</st1:country-region></st1:place> must invest much more than it does in<span style="color: black;"> </span>sustainable development, preserve its environment and implement a integrated strategy for managing scarce resources. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
<span style="border: 1pt none windowtext; color: black; padding: 0in;"></span></div><div class="MsoNormal" style="text-align: justify;"><span style="border: 1pt none windowtext; color: black; padding: 0in;"> <br />
</span></div><div class="MsoNormal" style="text-align: justify;"><span style="border: 1pt none windowtext; color: black; padding: 0in;"> </span><span style="border: 1pt none windowtext; padding: 0in;">From this perspective, our country must take action in three directions:<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
<span style="border: 1pt none windowtext; padding: 0in;"><o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span style="border: 1pt none windowtext; padding: 0in;"><o:p> <br />
</o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span style="border: 1pt none windowtext; padding: 0in;"><o:p> </o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span style="border: 1pt none windowtext; padding: 0in;">• <b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">establish proper ecological pricing by implementing a carbon tax, if possible at the European level</span></b>. Proper pricing is indispensable in guiding consumer choice and improving the profitability of long-term investments in the environment;<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span style="border: 1pt none windowtext; padding: 0in;"><o:p> </o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
<span style="border: 1pt none windowtext; padding: 0in;"><o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span style="border: 1pt none windowtext; padding: 0in;"><o:p> <br />
</o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><span style="color: black;">• <b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">prepare the country for the rising cost of raw materials</span></b>. </span></span><span style="border: 1pt none windowtext; padding: 0in;">And for this, in particular</span><span class="apple-style-span"><span style="color: black;">, secure <st1:place st="on">Europe</st1:place>’s access to energy by enhancing the </span></span><span style="border: 1pt none windowtext; padding: 0in;">domestic </span><span class="apple-style-span"><span style="color: black;">energy market, developing renewable energy sources and cross-border infrastructure, adapting energy pricing so as to maintain the capacity to produce the energy needed, <b><u><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">and increasing the involvement of the European Union in international negotiations </span></u></b></span></span><b><u><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; border: 1pt none windowtext; padding: 0in;">regarding </span><span class="apple-style-span"><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black;">the regulation of raw materials</span></span></u></b><span class="apple-style-span"><span style="color: black;">. In particular, <st1:place st="on"><st1:country-region st="on">France</st1:country-region></st1:place> must secure the conditions required to fund the renewal of its nuclear capacity and acquire the means to <b><u><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">develop a strategy for the control of vital raw materials</span></u></b>;<o:p></o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><span style="border: 1pt none windowtext; color: black; padding: 0in;"><o:p> </o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
<span style="border: 1pt none windowtext; color: black; padding: 0in;"><o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span style="border: 1pt none windowtext; color: black; padding: 0in;"><o:p> <br />
</o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span style="border: 1pt none windowtext; padding: 0in;">• <b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">make <span style="color: black;">better use of our </span></span></b></span><span class="apple-style-span"><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black;">strengths </span></b></span><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; border: 1pt none windowtext; color: black; padding: 0in;">in the management </span><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; border: 1pt none windowtext; padding: 0in;">scarce resources: above and <span style="color: black;">beyond our established positions in the fields of water, of energy, of waste, France must re-establish agriculture at the center of the growth strategy, by emphasizing the innovation and research</span></span></b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; border: 1pt none windowtext; color: black; padding: 0in;">. <b>It must also launch a proper policy of the sea by developing our ports and by <u>intensifying the exploration of sea-beds.</u></b></span><span style="border: 1pt none windowtext; color: black; padding: 0in;"><o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><br />
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<div class="MsoNormal" style="text-align: justify;"><span style="font-size: 180%;"><b><u><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">In addition, the proposals of our first report <span class="apple-style-span"><span style="color: black;">that have </span></span>not yet implemented, in particular on the innovation and competitiveness, remain fully relevant</span></u></b>.</span></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><br />
<o:p></o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><span style="color: black;">All leaders and decision makers of this country must be convinced of the magnitude of the upheavals required to</span></span><span style="color: black;"> <span class="apple-style-span">maintain and modernize our social model, conceived during the Resistance, implemented at the Liberation, deployed during the "Thirty glorious [years]" and abundantly invoked since the first oil shock.<o:p></o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><br />
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<span style="color: black;"></span></div><div class="MsoNormal" style="text-align: justify;"><span style="color: black;"> <span class="apple-style-span"><b><u><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">All of our proposals constitute an ambition for ten</span></u></b></span><b><u><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;"> <span class="apple-style-span">years.</span><span class="apple-converted-space"> </span><span class="apple-style-span">It requires, in order to succeed, <i>radical changes</i> in</span> <span class="apple-style-span">the organization of the government and the relationship to risk and to democracy</span></span><span class="apple-style-span">. </span></u></b><span class="apple-style-span">It can be implemented only if it meets social consensus.</span><span class="apple-converted-space"> </span><span class="apple-style-span"> To achieve this, we are hoping, through this report, to open up a great debate in the country leading to a general mobilization. This debate requires the involvement of a maximum number of political, economic, social and cultural actors.<o:p></o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><br />
<span class="apple-style-span"><span style="color: black;"><o:p></o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><span style="color: black;"><o:p> <br />
</o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><span style="color: black;"><o:p> </o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black;">We are fully aware of the difficulties inherent in these transformations:</span><span style="color: black;"><o:p></o:p></span></b></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><span style="color: black;"><o:p> </o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><br />
<span class="apple-style-span"><span style="color: black;"><o:p></o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><span style="color: black;"><o:p> <br />
</o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><b><u><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black;">• The government lacks the tools for action, since it has gradually relinquished control in favor of Europe</span></u></b><span style="color: black;">, the private sector, the local collectivities and the social dialogue; although these developments may be welcome in principle, they pose real problems regarding the coherence of public action;<o:p></o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><span style="color: black;"><o:p> </o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><span style="color: black;">• The social partners have not really discussed common strategies regarding the long-term objectives. In particular, they have not debated the debt reduction, the environment and fight against illiteracy.<o:p></o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><span style="color: black;"><o:p> </o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><span style="color: black;">• <b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">Special interests may oppose particular reforms which are motivated by considerations of the common interest alone</span></b>.</span></span></div><div class="MsoNormal" style="text-align: justify;"><br />
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<span class="apple-style-span"><span style="color: black;"><o:p></o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><span style="color: black;"><o:p> </o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><span style="color: black;">To make possible the changes described above, the Commission proposes to act in four directions:</span></span></div><div class="MsoNormal" style="text-align: justify;"><br />
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<span class="apple-style-span"><span style="color: black;"><o:p></o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><span style="color: black;"><o:p> </o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><span style="color: black;">• </span></span><span class="apple-style-span"><span style="font-size: 130%;"><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black;">Reform the political institutions, so that they make it easier for the government to act</span></b></span><span style="color: black;"><span style="font-size: 130%;">: </span>to achieve this it is necessary to clarify the institutional responsibilities that are currently too entangled among the government, territorial collectivities and social protection agencies. It is necessary to establish a budgetary rule for return to equilibrium and to ensure that the Parliament ratifies the budgetary stability program. Public policy must also be systematically subjected to independent evaluations, with real consequences in terms of public spending.<o:p></o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><b><u><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black;">• </span></u></b></span><span style="font-size: 180%;"><b><u><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">Promote the risk willingness. Growth means taking risks. Zero risk leads to zero success. The innovation must be favored and assumed; the precautionary principle must be strictly circumscribed.</span></u></b></span><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; font-size: 180%;"> In particular, this requires encouragements for research and the entrepreneurial spirit, a fair pricing for the scarce resources, incentives for the public agents to the reduction of the public deficits, and a more inciting financing of social programs - with a bonus-malus system.</span><o:p></o:p></b></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><span style="color: black;"> <br />
</span></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><span style="color: black;"> <br />
</span></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><span style="color: black;">• </span></span>Mobilize the whole French society in favor of its young people. The generations now in power must perform a massive reorientation of public choices to build a society in which future generations will be able to grow, and in particular to find more easily interesting jobs and good quality housing. This requires the systematic assessment of each proposed public decision according to a simple criterion: “Is this project useful for future generations or, just the opposite, it compromises their future?”</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;">• <b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">Develop a shared European – and notably Franco-German – ambition</span></b>.<span class="apple-style-span"><span style="color: black;">… (pp. 21-23)<o:p></o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><span style="color: black;"><o:p> </o:p></span></span></div><br />
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<div class="MsoNormal" style="text-align: justify;"><b><span style="font-family: UnitusT-BoldCondensed; font-size: 16pt;">A lack of competitiveness<o:p></o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><b><span style="font-family: UnitusT-BoldCondensed; font-size: 16pt;"><o:p> <br />
</o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><b><span style="font-family: UnitusT-BoldCondensed; font-size: 16pt;"><o:p> </o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black;">The lack of productivity gains cannot</span></b></span><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black;"> <span class="apple-style-span">contain rising production costs</span></span></b><span class="apple-style-span"><span style="color: black;"> arising from the evolution of</span></span><span style="color: black;"> <span class="apple-style-span">wages, and therefore hinders the competitiveness of the European countries.</span><span class="apple-converted-space"> </span><span class="apple-style-span">This situation has deteriorated</span> globally <span class="apple-style-span">since the early 2000s except for <st1:country-region st="on"><st1:place st="on">Germany</st1:place></st1:country-region> which achieved to maintain competitiveness better than its partners by limiting wage increases.<o:p></o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><br />
<span style="color: black;"></span></div><div class="MsoNormal" style="text-align: justify;"><span style="color: black;"> <br />
</span></div><div class="MsoNormal" style="text-align: justify;"><span style="color: black;"> <span class="apple-style-span"><b>The productivity gap is particularly rooted in the relative paucity of research and innovation.</b></span><span class="apple-converted-space"><b> </b></span><span class="apple-style-span"><b>More reasons for this situation:</b></span><b> <br />
</b></span></div><div class="MsoNormal" style="text-align: justify;"><br />
<span style="color: black;"></span></div><div class="MsoNormal" style="text-align: justify;"><br />
<span style="color: black;"><b> <o:p></o:p></b></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black; font-size: 16pt;">A high risk aversion</span></b></span><span class="apple-style-span"><b><span style="color: black; font-size: 16pt;"><o:p></o:p></span></b></span></div><div class="MsoNormal" style="text-align: justify;"><span style="color: black; font-size: 16pt;"> <br />
<br />
<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><b><i><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black; font-size: 16pt;">Risk aversion translates into a demand for strong (both social and economic) protection</span></i></b></span><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black; font-size: 16pt;"> <span class="apple-style-span">addressed to the community.</span><span class="apple-converted-space"> </span><span class="apple-style-span">This</span> <span class="apple-style-span">takes the form of support and help programs that are increasingly</span> <span class="apple-style-span">expensive for the past projects at the expense of the future endeavors.<o:p></o:p></span></span></b></div><div class="MsoNormal" style="text-align: justify;"><br />
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<b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black; font-size: 16pt;"></span></b></div><div class="MsoNormal" style="text-align: justify;"><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black; font-size: 16pt;"> <span class="apple-style-span">Other symptoms are unmistakable: the number of entrepreneurs</span> <span class="apple-style-span">who choose <i><u>not</u></i> to grow their businesses;</span> <span class="apple-style-span">preference of investors and regulators for risk-free assets which do not fund growth; the high precautionary savings of the</span> <span class="apple-style-span">households; preference for the retention of the present employment, which blocks the reallocation of employment towards more productive and innovative businesses.<o:p></o:p></span></span></b></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black; font-size: 16pt;"><o:p> </o:p></span></b></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black; font-size: 16pt;"><o:p> <br />
</o:p></span></b></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><b><u><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black; font-size: 16pt;">These features are exacerbated by an extensive application of the precautionary principle, contrary to the constitutional text</span></u></b></span><span class="apple-style-span"><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black; font-size: 16pt;">, <i>which covers in </i></span></b></span><span class="apple-style-span"><b><i><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black; font-size: 16pt;">everyone's mind a growing number of areas, and sterilizes creativity and risk-taking</span></i></b></span><span class="apple-style-span"><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black; font-size: 16pt;"> <i>which are essential for growth.</i></span></b></span><span class="apple-style-span"><b><i><span style="color: black; font-size: 16pt;"><o:p></o:p></span></i></b></span></div><div class="MsoNormal" style="text-align: justify;"><b><span style="color: black; font-size: 14pt;"> <br />
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<o:p></o:p></span></b></div><div class="MsoNormal"><span class="apple-style-span"><b><span style="color: black; font-size: 14pt;">The lack of innovation and upgrading intellectual creation<o:p></o:p></span></b></span></div><div class="MsoNormal" style="text-align: justify;"><br />
<span style="color: black;"></span></div><div class="MsoNormal" style="text-align: justify;"><span style="color: black;"> <br />
</span></div><div class="MsoNormal" style="text-align: justify;"><span style="color: black;"> <span class="apple-style-span">While the production moves to countries with low workforce costs, </span></span><span class="apple-style-span"><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black; font-size: 16pt;">the competitiveness of companies in developed countries</span></b></span><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black; font-size: 16pt;"> <span class="apple-style-span">relies increasingly on innovation. </span><span class="apple-converted-space"> </span><span class="apple-style-span">In France, the effort</span> for the research of the p<span class="apple-style-span">rivate sector is greater than that of China and the European average, but below the average of OECD countries, and especially the United States and Germany</span></span></b><span class="apple-style-span"><span style="color: black;">.</span></span><span class="apple-converted-space"><span style="color: black;"> </span></span><span class="apple-style-span"><span style="color: black;">In addition, the contribution of Research and Development (R & D) to GDP grew less rapidly than in other OECD countries. (pp.34-35)<o:p></o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><span style="color: black;"><o:p> <br />
</o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><span style="color: black;"><o:p> <br />
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</style> </div><div align="center" class="MsoNormal" style="text-align: center;"><b><span style="font-family: UnitusT-RegularCondensed; font-size: 18pt;">SECOND LONG-TERM PRIORITY</span><o:p></o:p></b></div><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: UnitusT-RegularCondensed; font-size: 23pt;">Preservation of the environment and management of scarce resources<o:p></o:p></span></div><div class="MsoNormal"><o:p> </o:p></div><div class="MsoNormal"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify; vertical-align: top;"><span class="longtext"><span lang="EN" style="color: black;">In a mature economy, the growth is no more driven by</span></span><span lang="EN" style="color: black;"> <span class="longtext">logics of catching up but by innovation.</span><span class="apple-converted-space"> </span></span><span class="longtext"><b><span lang="EN" style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black; font-size: 16pt;">Innovation</span></b></span><b><span lang="EN" style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black; font-size: 16pt;"> <span class="longtext">is ultimately the only real source of productivity gains, of growth and of purchasing power</span></span></b><span class="longtext"><b><span lang="EN" style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black; font-size: 14pt;">.</span></b></span><span class="apple-converted-space"><b><span lang="EN" style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black; font-size: 14pt;"> </span></b></span><span class="longtext"><b><span lang="EN" style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black; font-size: 16pt;">It is the result of a</span></b></span><b><span lang="EN" style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black; font-size: 16pt;"> <span class="longtext">complex alchemy and it is not restricted only to the quality of public or private research.</span><span class="apple-converted-space"> </span><span class="longtext">Innovative economies are characterized by:</span></span></b><span class="longtext"><span lang="EN" style="color: black; font-size: 16pt;"><o:p></o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify; vertical-align: top;"><span class="longtext"><span lang="EN" style="color: black;">• </span></span><span class="longtext"><b><span lang="EN" style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black; font-size: 16pt;">A willingness to take risks shared by the entrepreneurs and the society.</span></b></span><span class="apple-converted-space"><b><span lang="EN" style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black; font-size: 16pt;"> <u>I</u></span></b></span><span class="longtext"><b><u><span lang="EN" style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black; font-size: 16pt;">n particular, this</span></u></b></span><b><u><span lang="EN" style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black; font-size: 16pt;"> <span class="longtext">risk willingness requires clearly circumscribing the precautionary principle</span></span></u></b><span class="longtext"><b><span lang="EN" style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black; font-size: 16pt;"> in order to avoid that the inaccuracies that surround</span></b></span><b><span lang="EN" style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black; font-size: 16pt;"> the language<span class="longtext"> of the constitutional text do not lead to the paralysis, to the stagnation and to the blocking of the innovation in an</span> <span class="longtext">increasing number of domains<i><sup>1</sup></i>.</span><span class="apple-converted-space"> </span><span class="longtext"><u>The zero-risk indeed leads to zero growth</u>;</span></span></b><span class="longtext"><b><span lang="EN" style="color: black; font-size: 16pt;"><o:p></o:p></span></b></span></div><div class="MsoNormal" style="text-align: justify; vertical-align: top;"><br />
<b><span lang="EN" style="color: black;"></span></b></div><div class="MsoNormal" style="text-align: justify; vertical-align: top;"><b><span lang="EN" style="color: black;"> <br />
</span></b></div><div class="MsoNormal" style="text-align: justify; vertical-align: top;"><b><span lang="EN" style="color: black;"> </span></b><span class="longtext"><span lang="EN" style="color: black;">• </span></span><span class="longtext"><b><u><span lang="EN" style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black; font-size: 16pt;">Acceptance of the process of creative destruction</span></u></b></span><span class="longtext"><span lang="EN" style="color: black;">.</span></span><span class="apple-converted-space"><span lang="EN" style="color: black;"> </span></span><span class="longtext"><span lang="EN" style="color: black;">This implies</span></span><span lang="EN" style="color: black;"> <span class="longtext">a high degree of competition in the markets</span> for goods of large consumption, the<span class="longtext"> innovation coming from new businesses as much as</span> from established businesses<span class="longtext">.</span><span class="apple-converted-space"> </span><span class="longtext">It also involves accepting, anticipating and accompanying the changes of employment and</span> <span class="longtext">trades implied by the technological changes.<o:p></o:p></span></span></div><div class="MsoNormal" style="text-align: justify; vertical-align: top;"><span lang="EN" style="color: black;"><o:p> </o:p></span></div><div class="MsoNormal" style="text-align: justify; vertical-align: top;"><span lang="EN" style="color: black;"><o:p> <br />
</o:p></span></div><div class="MsoNormal" style="text-align: justify; vertical-align: top;"><span class="longtext"><span lang="EN" style="color: black;">• </span></span><span class="longtext"><b><u><span lang="EN" style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black; font-size: 16pt;">A strong industrial policy, based on the development of small and medium size businesses, vital pool of jobs and of innovation</span></u></b></span><span class="longtext"><span lang="EN" style="color: black;">.</span></span><span class="apple-converted-space"><span lang="EN" style="color: black;"> </span></span><span class="longtext"><span lang="EN" style="color: black;">As such,</span></span><span lang="EN" style="color: black;"> <span class="longtext"><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">it must assist them in conquering new markets by giving them the necessary foundation in the European market,</span></b></span><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;"> <span class="longtext">specifically by access to public markets in the context <u>a European Small Business Act</u>, and it <u>must pursue vigorously the reduction of administrative burdens weighing on them</u> while developing their access to their own funds.</span></span></b><span class="apple-converted-space"> </span><span class="longtext">The first report's proposals are fully</span> <span class="longtext">relevant.</span><span class="apple-converted-space"> </span><span class="longtext">This industrial policy must also use the potentials of the European trade policy that must</span> <span class="longtext">be more based on the principle of reciprocity. (pp. 149-150)</span></span><span style="color: #888888; font-size: 10pt;"><o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal"><span style="font-family: UnitusT-RegularCondensed; font-size: 8pt;"><o:p> </o:p></span></div><div class="MsoNormal" style="margin-left: 0in; text-align: justify; text-indent: 0in; vertical-align: top;"><span class="longtext"><span lang="EN" style="color: black; font-size: 10pt;">1.<span style="font-family: "Times New Roman"; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> </span></span></span><span class="longtext"><span lang="EN" style="color: black; font-size: 10pt;">See report on the evaluation of Article 5 of the environmental charter of the Evaluation Committee and Control of Public Policy at the National Assembly (June 2010).</span></span><span class="apple-converted-space"><span lang="EN" style="color: black; font-size: 10pt;"> </span></span><span class="longtext"><span lang="EN" style="color: black; font-size: 10pt;">If it finds no significant impact on research (with the notable exception of biotechnology research), it calls</span></span><span lang="EN" style="color: black; font-size: 10pt;"> to <span class="longtext">consider a possible modification of Article 5, including citing the desirability of its </span><span class="longtext">repeal, and clarification of the procedures for implementation of the principle to ensure that it is understood and used as a principle of action allowing an efficient and proportionate risk management.<o:p></o:p></span></span></div><div class="MsoNormal" style="margin-left: 0.25in; text-align: justify; vertical-align: top;"><span lang="EN" style="color: black;"> <br />
<o:p></o:p></span></div><div align="center" class="MsoNormal" style="text-align: center;"><b><span style="color: black; font-family: UnitusT-BoldCondensed; font-size: 11pt;"><o:p> </o:p></span></b></div><div align="center" class="MsoNormal" style="text-align: center;"><b><span style="color: black; font-family: UnitusT-BoldCondensed;">Re-establish the agriculture and the food industries at the center of the French growth strategy<o:p></o:p></span></b></div><div class="MsoNormal"><b><span style="color: black; font-family: UnitusT-BoldCondensed; font-size: 11pt;"><o:p> </o:p></span></b></div><div class="MsoNormal"><b><span style="color: black; font-family: UnitusT-BoldCondensed; font-size: 11pt;"><o:p> <br />
</o:p></span></b></div><div class="MsoNormal"><b><u><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; font-family: UnitusT-BoldCondensed; font-size: 16pt;">To emphasize on innovation and research</span></u></b><b><u><span style="font-family: UnitusT-BoldCondensed; font-size: 16pt;"> <o:p></o:p></span></u></b></div><div class="MsoNormal"><span class="apple-style-span"><b><span style="color: black; font-size: 16pt;"><o:p> </o:p></span></b></span></div><div class="MsoNormal"><span class="apple-style-span"><b><span style="color: black; font-size: 16pt;"><o:p> <br />
</o:p></span></b></span></div><div class="MsoNormal" style="text-align: justify;"><b><u><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; font-size: 16pt;">This requires returning to the original meaning of the principle of precaution, which is a principle of action, and thus to clarify its modalities of implementation.</span></u></b><b><u><span style="font-size: 16pt;"> <o:p></o:p></span></u></b></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal"><b><span style="font-family: UnitusT-BoldCondensed;"><o:p> </o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><span style="color: black;">Moreover, the innovation must enable the agriculture to ensure its sustainable development: <o:p></o:p></span></span></div><div class="MsoNormal"><span class="apple-style-span"><span style="color: black;"><o:p> </o:p></span></span></div><div class="MsoNormal"><span class="apple-style-span"><span style="color: black;"><o:p> <br />
</o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><span style="color: black;">• By <b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">improving the competitiveness of production chains</span></b>, and by preparing a lower sensitivity of the farms to the future rising cost of raw materials (oil, fertilizer, but also feed for cattle knowing that Europe is woefully deficient in plant proteins); <o:p></o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><span style="color: black;"><o:p> <br />
</o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><span style="color: black;"><o:p> </o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><span style="color: black;">• By promoting the resilience of the agriculture to the disasters and climate changes and <b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">by encouraging a better carbon </span></b></span></span><span class="apple-style-span"><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black; font-size: 14pt;">balance</span><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; color: black;"> for farming and forestry</span></b><span style="color: black;">;</span></span></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><span style="color: black;">• <b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">By diversifying the uses of renewable carbon from agriculture and forestry to materials, energy and chemistry</span></b>. In fact, the renewable carbon from the plants will replace a portion of carbon derived from oil (50% in the <st1:country-region st="on">USA</st1:country-region> by 2050, 35% in Europe by 2030 and 17% in <st1:country-region st="on"><st1:place st="on">France</st1:place></st1:country-region> by 2017). Global growth of plant chemistry is 50% per year. All industrial sectors are affected: bio-fuels, chemical intermediates, plastics, packaging, constructions, and cosmetics. To achieve this revolution, <b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">we must implement a new procurement system and transformation of agricultural production</span></b>. <o:p></o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><span style="color: black;"><o:p> <br />
</o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><span style="color: black;"><o:p> </o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><st1:place st="on"><st1:country-region st="on"><span class="apple-style-span"><span style="color: black;">France</span></span></st1:country-region></st1:place><span class="apple-style-span"><span style="color: black;"> has many players in the field of plant chemistry, businesses, research institutions, clusters of competitiveness. It is about strengthening the position of <st1:country-region st="on"><st1:place st="on">France</st1:place></st1:country-region> in the global competition. (p.157)<o:p></o:p></span></span></div><div class="MsoNormal"><span class="apple-style-span"><span style="color: black; font-size: 14pt;"><o:p> </o:p></span></span></div><div class="MsoNormal"><span class="apple-style-span"><span style="color: black; font-size: 14pt;"><o:p> <br />
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<div align="center" class="MsoNormal" style="text-align: center;"><b><span style="font-family: UnitusT-RegularCondensed; font-size: 18pt;">Conclusion<o:p></o:p></span></b></div><div align="center" class="MsoNormal" style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: white none repeat scroll 0% 0%; text-align: center;"><span style="font-family: UnitusT-RegularCondensed; font-size: 23pt;">To lead and make a success of the changes<o:p></o:p></span></div><div class="MsoNormal"><span style="font-family: UnitusT-RegularCondensed;"><o:p> </o:p></span></div><div class="MsoNormal"><span style="font-family: UnitusT-RegularCondensed;"><o:p> </o:p></span></div><div class="MsoNormal" style="text-align: justify;">[…] <span class="apple-style-span"><b><span style="font-size: 16pt;">To create the conditions for these changes, it is necessary to</span>:<o:p></o:p></b></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><o:p> </o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span"><o:p> <br />
</o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span class="apple-style-span">• </span><span class="apple-style-span"><b><u><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; font-size: 16pt;">promote risk willingness</span></u></b></span><span class="apple-style-span"><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; font-size: 16pt;">. The search for zero risk leads to zero success. <u>The innovation should be promoted and welcomed; the risk-taking must be paid; the precautionary principle must be strictly circumscribed.</u> Our public policies must create incentives so that everyone has interest to act in the favor of growth, debt reduction, full employment and the environment;</span><o:p></o:p></b></span></div><div class="MsoNormal"><o:p> </o:p></div><div class="MsoNormal"><o:p> </o:p></div><div align="center" class="MsoNormal" style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: white none repeat scroll 0% 0%; text-align: center;"><span style="font-family: UnitusT-RegularCondensed; font-size: 23pt;">Transformations of the public governance and control of public finances<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;">If the record on implementation of the Commission’s proposals on Governance is very mixed, it is possible to identify four areas that have seen real progress […].</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">The main proposals for reform of governance of political and administrative system are dormant and in particular those concerning […]</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">Finally, the significant degradation of our public finances, partly due to the crisis, is in contrast with the Commission’s proposals to reduce by 1% per year the GDP share of the public expenditures. Indeed, the crisis, whose effect was reflected by lower tax revenues and increased public spending, has led to a sharp aggravation of the public deficit and debt. The French public deficit rose from 3.3% in 2008 to 7.5% in 2009; the public debt has, meanwhile, rose from 67.5% to 78.1% of the GDP between 2008 and 2009. </div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">This increase in public liability has not been offset by an increase in private assets of long term and, contrary to the recommendations of the Commission, <b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">the taxation savings has not been the major reform needed to encourage riskier and longer term investments</span></b>. <st1:country-region st="on"><st1:place st="on">France</st1:place></st1:country-region> is still characterized by a rate of household savings particularly high but insufficiently oriented towards long-term financing of our economy. </div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">Finally, <b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; font-size: 16pt;">the focus on the theme of sustainable development over the past two years has not been accompanied by the major counterpart advocated by the Commission through the <u>reform of the writing of the precautionary principle in the Constitution in order to prevent its utilization as a pretext to curb risk-taking.</u></span> </b>(pp. 175-177)</div><span style="font-family: "Times New Roman"; font-size: 12pt;"> <br />
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</style> </div><div class="MsoNormal" style="text-align: justify;">…<span style="font-family: UnitusT-RegularCondensed; font-size: 23pt;"><span style="font-size: 180%; font-weight: bold;">The 42 members of the Commission for the liberation of growth</span><o:p></o:p></span></div><div class="MsoNormal"><b><span style="font-size: 14pt;"><o:p> </o:p></span></b></div><div class="MsoNormal"><b><span style="font-size: 14pt;"><o:p> </o:p></span></b></div><div class="MsoNormal"><b><span style="font-size: 14pt;">ÉRIC LE BOUCHER<o:p></o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;"><b><span style="font-size: 14pt;">The direction of the future<o:p></o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;"><b>First, the seriousness of the offense</b>. Globalization, technology and aging would have forced <st1:place st="on"><st1:country-region st="on">France</st1:country-region></st1:place> to adapt long ago. Far too little has been done while the crisis is now strengthening its dangers. <b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">The country is lagging behind in competitiveness, is suffering of growth failure, persistent unemployment, explosive debt, and it still seeks for the place it may take over the long term in the global division of labor among China, the United States and Germany. The “trend scenario” that our report draws is that of the decline.</span> <o:p></o:p></b></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">To stop it goes through two emergency measures: the restoration of public accounts and the absolute priority given to stimulating employment.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">But this will not be enough. <b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; font-size: 14pt;">The non-adaptation of the French model, despite its soaring costs has led the welfare state to no longer meet the legitimate needs</span></b> expected from the government: to protect the citizens, to treat, to educate, to support the poor, to fund their retirement. <b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; font-size: 14pt;">This failure has led <st1:country-region st="on"><st1:place st="on">France</st1:place></st1:country-region> to shrink at the time of the major upheavals that require action.</span></b> The French, as panicked, lock themselves into the fear of the future, into the obsession of downgrading, and into the paralysis of distrust. </div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;"><b><u><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; font-size: 16pt;">If <st1:place st="on"><st1:country-region st="on">France</st1:country-region></st1:place> does not regain the confidence,</span></u></b><b><u><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; font-size: 14pt;"> </span></u></b><b><u><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; font-size: 16pt;">the risk appetite, the desire to invest, if by principle it prefers the precaution to the adventure</span></u></b><b><u><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; font-size: 14pt;">, it loses all chances that are yet still numerous.</span></u><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;"> <o:p></o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;"><o:p> </o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;"><o:p> <br />
</o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><b><u><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; font-size: 14pt;">But the country will obtain this revival only at the cost of a complete overhaul of its welfare state</span></u></b><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; font-size: 14pt;">, of its educational system, of its social protection, of its attitude with respect to its businesses and their competitiveness and with respect to the overall financing of the economy.</span></b><b><span style="font-size: 14pt;"><o:p></o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">These reforms, which we call "major programs," require time to be implemented, but only they will make again everyone to share the sentiment of living in a country where the government is effective and where the social justice is ensured. Only they will legitimize again the public policy over which hover today all suspicions. The emergency measures themselves, regarding the debt and the employment, shall be admitted only if they fall into this category.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">"For the future generations." The title of our report is mainly a method: Young people are the victims of past inaction. Giving them a place, means to change completely the course of politics, means to position <st1:place st="on"><st1:country-region st="on">France</st1:country-region></st1:place> in the direction of the future. (pp. 211, 228)</div><div class="MsoNormal"><br />
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<div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: UnitusT-RegularCondensed; font-size: 23pt;">SUMMARY OF THE REPORT<o:p></o:p></span></div><div align="center" class="MsoNormal" style="text-align: center;"><span style="font-family: UnitusT-RegularCondensed; font-size: 23pt;">FOR FUTURE GENERATIONS<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;">A major crisis is sweeping through the developed countries. It hit <st1:country-region st="on"><st1:place st="on">France</st1:place></st1:country-region> at a time when our country was far from having implemented the changes needed to put us back on the path to sustainable growth.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="font-weight: bold; text-align: justify;">Other profound transformations – economic, financial, social and political – are shaking the world. They have implications for every household in <st1:country-region st="on"><st1:place st="on">France</st1:place></st1:country-region>, every business, every institution. Technological and cultural changes are almost daily revolutionizing our lifestyles and challenging the structures of power.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">Our country must retain its position in the face of these great changes. Our children, and future generations must be able to create a prosperous economy in which they can safeguard the cohesion of our society and influence developments in the wider world around them.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">For this to happen our country needs to implement the package of reforms set out in our initial report, almost two thirds of which have now been fully or partially set in motion. And the upheavals of the past two years now require prioritized action on a limited number of urgent issues.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">The recommendations of this second report therefore clarify the proposals in our first report, and put them in an order of priority, in the light of the new imperatives.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">We propose a strategy for change over the next ten years as a basis for all reforms that must be carried out by any government, whatever its political orientation, independently of any other reforms that particular governments may choose to make in the light of their specific political choices</span></b>. Our aim is to give our children the chance to make collective choices freely in the future.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;"><b>This framework is grounded in respect for three fundamental needs:<o:p></o:p></b></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">• <b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; font-size: 14pt;"><span style="font-style: italic;">the need for truth</span>: France is in a difficult situation, with falling competitiveness, problems retaining its young people, scientists and entrepreneurs, debt, unemployment and insecurity.</span></b> The country must understand the scale of these realities and acknowledge their implications. It must also recognize its own strengths, which are considerable. France has a growing population, compared to our European partners; <b>it remains dynamic, with large transnational industrial groups and innovative SMEs; it has creative scientists, mathematicians, engineers, executives, artists, artisans and workers; it is a socially dynamic country thanks to its population’s capacity to adapt; it is attractive to investors; its growth outstripped that of Germany by an annual average of almost one point over the last ten years;<o:p></o:p></b></div><div class="MsoNormal" style="text-align: justify;"><b><o:p> </o:p></b></div><div class="MsoNormal" style="text-align: justify;"><b><o:p> <br />
</o:p></b></div><div class="MsoNormal" style="text-align: justify;">• the need for fairness: the efforts required from our country are on a scale unparalleled in peace-time. The concerted and determined action required from those in power cannot succeed unless it is seen as legitimate by everyone. <b>Everyone needs to feel that this effort is shared fairly and that there are real opportunities for social mobility</b>. Here again, <st1:country-region st="on"><st1:place st="on">France</st1:place></st1:country-region> has many strengths. <b>With a social security system that is unique in the world, and despite the difficulties caused by the current crisis, we are one of the least inegalitarian developed countries both in terms of income differentials and wealth distribution</b><sup>1</sup><b>, a country where the incidence of poverty among senior citizens is in constant decline</b>;</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">• the need for legitimacy: to reform the country, we must have effective public governance, clear responsibilities for state bodies, real-time monitoring of reforms and evaluation of their implementation. Here again, despite the doubts many of our compatriots may sometimes have about the poor functioning of our institutions, <st1:place st="on"><st1:country-region st="on">France</st1:country-region></st1:place> has many strengths, with a very lively democracy and an extremely active civil society. </div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal"><span style="font-family: UniversLTStd; font-size: 7.5pt;"><span style="font-size: 85%;">1. The richest 10% control 38% of the wealth in <st1:country-region st="on">France</st1:country-region>, as opposed to 54% in <st1:country-region st="on">Germany</st1:country-region>, 58% in <st1:country-region st="on"><st1:place st="on">Sweden</st1:place></st1:country-region> and 71% in the <st1:place st="on"><st1:country-region st="on">USA</st1:country-region></st1:place> (Source: OECD – Growing Unequal? Income Distribution and Poverty in OECD Countries, 2008).</span><o:p></o:p></span></div><div class="MsoNormal"><span style="font-family: UniversLTStd;"><o:p> </o:p></span></div><div class="MsoNormal"><span style="font-family: UniversLTStd;"><o:p> </o:p></span></div><div class="MsoNormal"><b><span style="font-family: UnitusT-BoldCondensed; font-size: 16pt;">A return to economic growth is necessary and possible.<o:p></o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;">Without new policies to stimulate employment and balance public finances, growth will remain very weak and our society will soon find itself in an economic, financial, ecological and social impasse -and hence in a political one too.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">The combination of an aging population and an imbalance in our public finances places <st1:country-region st="on"><st1:place st="on">France</st1:place></st1:country-region> on a very dangerous slippery slope of growing debt and loss of competitiveness. <span style="font-size: 130%;"><b style="color: red; font-style: italic;">Unless the public finances are very quickly put in order, the national debt will rise far beyond 100% of GDP by 2020</b></span>, even before the impact of pensions is taken into account. Long before it reaches this point it will bring about a decline in the living standards of every French citizen, concentrate a growing proportion of tax receipts on financing the debt to the detriment of public services, and will make recovery impossible.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">Potential growth in <st1:place st="on"><st1:country-region st="on">France</st1:country-region></st1:place>, currently around 1.5%, would further reduce, triggering a vicious circle of more debt, less growth, fewer jobs, more injustice, a growing deficit and more debt. </div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">So a new strategy for growth is vital. This growth must be reoriented and socially and ecologically more sustainable. More growth, different growth, growth for all. This new strategy is possible. <st1:country-region st="on"><st1:place st="on">France</st1:place></st1:country-region> is capable of achieving an average economic growth of at least 2.5% of GDP year on year to 2020.This assumes productivity gains of 2% per year generating a reduction in structural unemployment to 4.5% of the active population. The experience of many of our neighbors shows that this is possible. The current situation in <st1:place st="on"><st1:country-region st="on">France</st1:country-region></st1:place> and the desire of all French citizens to make the efforts necessary to live better show that the transformations needed to achieve it are within our reach.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal"><b><span style="font-family: UnitusT-BoldCondensed; font-size: 16pt;">The <st1:place st="on"><st1:country-region st="on">France</st1:country-region></st1:place> we want to see in 2020<o:p></o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">Our Commission seeks to speak in the name of future generations and to defend their interests. The <st1:country-region st="on"><st1:place st="on">France</st1:place></st1:country-region> we want to see must therefore give priority to its young people in any action undertaken by the state.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;"><b>Our ambition for France is not only to see our country come through the current crisis, but for all French citizens to fulfill their individual potential and have the best opportunities for themselves and their children. Our ambition is for our economy to be more competitive, our society more free, confident and secure and for the country to obtain the maximum benefit from global growth.<o:p></o:p></b></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">• <st1:country-region st="on"><st1:place st="on"><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; font-size: 16pt;">France</span></b></st1:place></st1:country-region><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; font-size: 16pt;"> can and should build a society open to innovators, entrepreneurs, social activists, creators and investors.</span></b> <b>We do not want a <st1:country-region st="on"><st1:place st="on">France</st1:place></st1:country-region> in which the privileged few focus on their private incomes. Our country must foster internal and external mobility. It must foster an active civil society as a precondition of democracy, quality of life and the reorientation of growth.</b> <st1:place st="on"><st1:country-region st="on">France</st1:country-region></st1:place> must be welcoming to those who want to contribute to its growth through their own work.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">• France can and must build a more just and mobile society, particularly for the new generations, by drastically reducing the dropout rate in education and facilitating social mobility by rewarding work with success.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><b><span style="font-family: UnitusT-BoldCondensed; font-size: 16pt;">Achievement of these goals requires a new financially and socially sustainable growth strategy<o:p></o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">To achieve these goals we have identified the key points of the necessary reforms, the fundamental conditions for growth, and the top priorities in relation to the reforms in our earlier report, which nevertheless remain important.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">We propose a ten-year strategy based on:</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">• two immediate imperatives: debt reduction, to prevent the tragedy of a loss of sovereignty, and jobs, to end the scandal of mass unemployment, notably among the young;</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">• two long term priorities: education and the management of the major growth sectors, including the environment, natural resources and major infrastructure. </div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;"><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">We do not want our legacy to future generations to be a <st1:country-region st="on"><st1:place st="on">France</st1:place></st1:country-region> crumbling under a mountain of debt and unfunded pensions</span></b>. On the contrary, we want to leave them a sovereign <st1:place st="on"><st1:country-region st="on">France</st1:country-region></st1:place>, independent of international creditors, free to conduct its own policies and with sufficient fiscal resources to implement government programs. To achieve this we believe <b>it is absolutely necessary – and possible – to reduce government debt to around 60% of GDP by the end of the current decade.</b> This is our top priority. No growth without debt reduction, no debt reduction without growth. </div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;"><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">We do not accept the inevitability of mass unemployment, or a</span></b><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; font-size: 14pt;"> </span><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">youth unemployment rate of over 20%. This is an obstacle to growth, an injustice and a waste</span></b>. We want a society of full employment. This is our second priority.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;"><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">We do not want a <st1:country-region st="on"><st1:place st="on">France</st1:place></st1:country-region> with diminishing levels of education, as is currently the case, particularly in primary education</span></b>. This drop is an obstacle to growth in a globalized, knowledge-based economy. Primary education must be overhauled. This is our first long-term project.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">We do not want to leave future generations with environmental degradation, inadequate infrastructure and a society unprepared for dwindling supplies of oil and many other environmental resources. This is our second major long-term project.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><b><u><span style="font-family: UnitusT-BoldCondensed; font-size: 16pt;">FIRST PRIORITY<o:p></o:p></span></u></b></div><div class="MsoNormal" style="text-align: justify;"><b><span style="font-family: UnitusT-BoldCondensed; font-size: 16pt;"><o:p> </o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><b><span style="font-family: UnitusT-BoldCondensed; font-size: 16pt;"><o:p> <br />
</o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><b><span style="font-family: UnitusT-BoldCondensed; font-size: 16pt;">Regain control of our public finances as the basis of growth and social cohesion<o:p></o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><b><span style="font-family: UnitusT-BoldCondensed; font-size: 16pt;"><o:p> </o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;">First and foremost, in the name of inter-generational fairness and the preservation of the future for generations to come, <st1:country-region st="on"><st1:place st="on"><b>France</b></st1:place></st1:country-region><b> must seek to balance its books and reduce public debt to around 60% of GDP by 2020.</b></div><div class="MsoNormal"><br />
<b><span style="font-family: UnitusT-BoldCondensed; font-size: 14.5pt;"><o:p></o:p></span></b></div><div class="MsoNormal"><b><span style="font-family: UnitusT-BoldCondensed; font-size: 14.5pt;"><o:p></o:p></span></b> </div><div class="MsoNormal" style="text-align: justify;"><b><span style="font-family: UnitusT-BoldCondensed; font-size: 14.5pt;">The priority must be to reduce the government deficit below 3% of GDP as soon as possible, in other words in 2013.<o:p></o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">The French stability program, which seeks to bring the deficit below 3% by the end of the period, must be respected. To succeed, for an annual GDP growth of 2%, the effort needed in comparison to the spontaneous development of the public finances is 25bn euros per year, a total of 75bn euros between now and 2013. This considerable adjustment could be obtained through spending cuts – of 50bn euros – and growth in the tax base and receipts from social contributions, in other words a tax increase – representing 25bn euros.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">Spending cuts must be a clear priority (50bn euros over three years). It is possible to reduce spending without causing deterioration in the service provided. A proportion of public spending reflects the proliferation of administrative grades and quangos, insufficient use of electronic media and outdated management practices in public institutions such as universities and hospitals. In addition, some budgetary or fiscal spending corresponds to a private income received by certain social groups and professions. International experience shows that when spending cuts are prioritized in budgetary reform, stability is generally more durable.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;"><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">Spending cuts will not be enough and it is also necessary to increase the tax base and social contributions receipts (25bn euros in three years).</span></b> In practice the programs for budgetary adjustment implemented in developed countries have all acted both to reduce spending and to increase revenue. In particular, it is important to reduce or abolish tax breaks and welfare loopholes that have anti-redistributive effects or favor the more privileged, such as tax allowances on savings and tax-exempt capital gains. <b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">This means effectively raising taxes. For reasons of fairness it is also important to look again at inheritance tax. None of these tax rises will include any tax shield.</span></b></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;"><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">The plan for budgetary reform that we propose is:</span><o:p></o:p></b></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">• realistic: it will not lead to a reduction in the overall level of public spending, but only to a reduction of its rise;</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">• fair: this plan protects the spending power of the poorest in society and protects future generations;</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">• <b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">balanced: it preserves all the underlying elements of the welfare state and shares the burden of the efforts to be made between central government, local authorities and social security.</span><o:p></o:p></b></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">If the predicted necessary growth does not take place by mid-2011, the return to a government deficit of 3% of GDP in 2013 will require an acceleration of the reforms set out in the rest of this report, by means of additional measures. Otherwise it will have to be delayed. These measures should be discussed with representatives of local authorities and social partners in <st1:country-region st="on"><st1:place st="on">France</st1:place></st1:country-region>, whose support for the debt reduction strategy is crucial. <b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">The measures should also be coordinated with those of our European partners, notably Germany</span></b>.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;"><b><span style="font-family: UnitusT-BoldCondensed; font-size: 14.5pt;">Beyond 2013, continued debt reduction requires continued, far-reaching modernization of our institutions in a perspective of fairness and sustainability, and the reform of budgetary rules.<o:p></o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><b><span style="font-family: UnitusT-BoldCondensed; font-size: 14.5pt;"><o:p> </o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><b><span style="font-family: UnitusT-BoldCondensed; font-size: 14.5pt;"><o:p> <br />
</o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; font-size: 14pt;">To reach debt levels of around 60% in order to preserve the foundations of our welfare state, it will be necessary, throughout the decade, to maintain efforts to <u>increase the efficiency of public services and budgetary control, notably through the computerization of the public services.</u></span></b> This also requires the identification of a new institutional framework for preparing and monitoring budgets.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;"><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">Every effort must be made to modernize social protection, while preserving its universality. The administrative system needs to become more effective and better attuned to those that need it, encouraging professional mobility by reducing status differences. This notably involves giving a greater role to private health insurance and compulsory supplementary health insurance</span></b>, and undertaking far-reaching reform of housing policy, which would have at its heart the welfare of the resident.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">Everything must also be done to make the tax system fairer and more effective. This requires a more progressive tax system, based on better final remuneration for work and creativity, counterbalanced by new resources focusing on three areas: environmental degradation, consumption and personal wealth.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">This readjustment of public finances to favor growth must be able to rely on the support of a strong <st1:place st="on">Europe</st1:place>, which will assist states in reducing their debt while strengthening their collective capacity to invest in future spending. France must therefore work to strengthen the Stability and Growth Pact, <b><u><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; font-size: 16pt;">develop European public funding for research and innovation, notably through the establishment of Europe-wide risk capital funds for SMEs and patent funds, and by encouraging long-term private investment through the establishment of an appropriate accounting, prudential and</span></u></b><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; font-size: 16pt;"> <u>regulatory framework</u></span><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">.</span></b></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><b><u><span style="font-family: UnitusT-BoldCondensed; font-size: 16pt;">SECOND PRIORITY<o:p></o:p></span></u></b></div><div class="MsoNormal" style="text-align: justify;"><b><span style="font-family: UnitusT-BoldCondensed; font-size: 16pt;"><o:p> </o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><b><span style="font-family: UnitusT-BoldCondensed; font-size: 16pt;"><o:p> <br />
</o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><b><span style="font-family: UnitusT-BoldCondensed; font-size: 16pt;">To create jobs and give young people a future<o:p></o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">The second priority relates to jobs, notably jobs for young people. Employment is a factor for growth. It is also a consequence of growth.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">Firstly, everything that makes businesses more competitive is good for jobs. To this end our Commission recommends retaining most of the reductions in charges and transferring an element of social charges to VAT. <b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; font-size: 16pt;">The development of competition, particularly in the services sector (telecommunications, banks and insurance, energy, etc.) is also a useful spur to innovation and job creation in areas of unsatisfied demand</span></b>.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">We also propose action in three directions.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">The creation of an effective, coherent and empowering framework for job-seekers through the establishment of a development contract. This is a major reform. Its starting point is the observation that the job-seeking process is useful for both the unemployed person and the wider community. It therefore deserves to be remunerated and organized through an activity contract for an open period, providing payment for the activity of seeking work or training. Beneficiaries will be offered personal mentoring. In the longer term this contract is intended to become the standard offer of the public employment service in <st1:country-region st="on"><st1:place st="on">France</st1:place></st1:country-region> and will be offered to all jobseekers. It will take different forms depending on how long the beneficiary has been out of work. It will enable significant reductions in the duration of unemployment and extend the duration of employment. It will be funded by a redeployment of spending on employment and training policies.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">The use of vocational training to secure transitions between jobs. This would require fundamental changes to its functioning to make it more effective. In addition to the recently established national <i>Fonds paritaire de sécurisation des parcours professionnels </i>[a fund to support retraining initiatives], the training system needs to be made more effective through the creation of regional funds so that resources can be pooled and shared more effectively within localities for the benefit of jobseekers.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">The reduction of insecurity in the job market, which makes employers and employees risk-averse and causes talents to go to waste. To encourage contracts of longer average duration, we propose that unemployment insurance contributions should vary according to the duration of the employment contract and that the social partners be given the task of drawing up an employment contract with progressive rights.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">In addition, to put an end to the ‘French exception’ of very high youth unemployment, two actions must be developed: </div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">• the reinforcement of initial work-based training as a priority for those with the lowest levels of qualification: apprenticeships, which have been successful in higher education, must be extended to training at a level at or below the 18+ highs school diploma. One solution would be to give businesses the opportunity to pre-recruit young people and fund their training in exchange for a commitment from the beneficiaries to remain in employment with that company for a minimum period (3-5 years);</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">• the reinforcement of training after an initial period of work: movement back and forth between professional careers and training at a basic level should be encouraged by developing specially-adapted university courses and ensuring that young people have sufficient resources.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;"><b><u><span style="font-family: UnitusT-BoldCondensed; font-size: 16pt;">FIRST LONG-TERM PRIORITY<o:p></o:p></span></u></b></div><div class="MsoNormal" style="text-align: justify;"><b><span style="font-family: UnitusT-BoldCondensed; font-size: 16pt;"><o:p> </o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><b><span style="font-family: UnitusT-BoldCondensed; font-size: 16pt;"><o:p> <br />
</o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><b><span style="font-family: UnitusT-BoldCondensed; font-size: 16pt;">To guarantee an education for our children, from nursery to university<o:p></o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><b><span style="font-family: UnitusT-BoldCondensed; font-size: 16pt;"><o:p> </o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><b><span style="font-family: UnitusT-BoldCondensed; font-size: 16pt;"><o:p> <br />
</o:p></span></b></div><div class="MsoNormal" style="text-align: justify;">The education system has long been a strength in <st1:place st="on"><st1:country-region st="on">France</st1:country-region></st1:place>. But no longer. Progress has been made through the implementation of our first report on higher education. The same cannot be said of the primary sector, where more and more children are failing to achieve and social mobility is diminishing. In particular, almost all children identified as being in difficulty before they enter primary school at 6+ remain so afterwards. This waste of talent can ultimately be seen in the active population, with a very large number of people leaving school under-qualified: poor primary education is an obstacle to growth.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">To remedy this we must:</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">• reinforce equal opportunities in the early years. New educational methods must be integrated into the training of nursery nurses and early-years teachers to enable children to gain the skills they need to learn to read. The training of the different professions working with the under-3s should be gradually harmonized to create a new type of early-years educator with enhanced pedagogical skills.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">• reinforce the autonomy and role of school heads. Heads must be able to recruit their own teaching teams and manage their <i>projet</i> <i>d’établissement </i>[school project]. They must be able to run experiments in innovative teaching methods to improve the way all pupils learn reading and arithmetic. So, for example, experiments could start in 2011, in the form of small group workshops, several times a week, in twenty primary schools within an <i>académie </i>[regional education authority], then evaluated independently and, if successful, adapted and extended.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">• establish effective management of human resources in education. The work of teachers must be rigorously evaluated in a way that has an influence on their career. The increase in the duties of teachers should make it possible to give pupils more individually tailored support The in-service training of teachers must be substantially improved and opportunities for a second career outside the state education system should be opened up to them.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">Lastly, in accordance with the recommendations of our first report, improvements in the quality of the higher education system requires enhanced autonomy for the institutions and the reinforcement of collaborations with the wider society and business to encourage innovation. This requires universities to have stronger governance and increased freedom to recruit teaching staff and select students, in tandem with the development of external evaluation, reinforcement of multidisciplinary approaches and an internationalist vision within universities.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;"><b><u><span style="font-family: UnitusT-BoldCondensed; font-size: 16pt;">SECOND LONG-TERM PRIORITY<o:p></o:p></span></u></b></div><div class="MsoNormal" style="text-align: justify;"><b><span style="font-family: UnitusT-BoldCondensed; font-size: 16pt;"><o:p> </o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><b><span style="font-family: UnitusT-BoldCondensed; font-size: 16pt;"><o:p> <br />
</o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><b><span style="font-family: UnitusT-BoldCondensed; font-size: 16pt;">Preservation of the environment and management of scarce resources<o:p></o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><b><span style="font-family: UnitusT-BoldCondensed; font-size: 16pt;"><o:p> </o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><b><span style="font-family: UnitusT-BoldCondensed; font-size: 16pt;"><o:p> <br />
</o:p></span></b></div><div class="MsoNormal" style="text-align: justify;">In order to grow, <st1:country-region st="on"><st1:place st="on">France</st1:place></st1:country-region> must invest much more than it now does in sustainable development, preserve its environment and implement an integrated strategy for the management of scarce resources. From this perspective, our country must take action in three directions:</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">• <b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">establish proper ecological pricing by implementing a carbon tax, if possible at the European level. Proper pricing is indispensable in guiding consumer choice and improving the profitability of long-term investments in the environment</span>;<o:p></o:p></b></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">• <b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">prepare the country for the rising cost of raw materials</span></b>, and in particular, secure Europe’s access to energy by enhancing the internal energy market, <b><u><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">developing renewable energy sources and cross-border infrastructure, adapting energy pricing so as to maintain the capacity to produce the energy needed and increasing the involvement of the European Union in international negotiations concerning the regulation of raw materials</span></u></b>. In particular, <st1:country-region st="on"><st1:place st="on">France</st1:place></st1:country-region> must secure the conditions required to fund the renewal of its nuclear capacity and acquire the means to develop a strategy for the control of vital raw materials;</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">• make better use of our strengths in the management of scarce resources : above and beyond our established positions in the fields of water, energy and waste, <b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">France must place agriculture back at the centre of its strategy for growth, with an emphasis on research and innovation. It must also launch a proper marine policy by developing our ports and intensifying deep-water exploration.</span><o:p></o:p></b></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="font-style: italic; text-align: justify;"><span style="font-size: 180%;"><b style="color: red;"><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; font-size: 16pt;">In addition, the proposals in our first report that have not yet been implemented, notably on innovation and competitiveness, remain as important as ever</span></b>.</span></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">All the country’s leaders and decision-makers must be convinced of <b>the scale of the transformation necessary to preserve and modernize our social model, conceived during the Resistance, implemented during the Liberation, extended during the ‘Thirty Glorious Years’ and abundantly invoked since the first oil crisis</b>. </div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">Altogether, our proposals constitute a ten-year ambition. To succeed, this requires radical changes in the organization of the state and the relationship to risk and to democracy. It can be implemented only if it is the object of social consensus. To achieve this, we are hoping, through this report, to open up a great debate in <st1:country-region st="on"><st1:place st="on">France</st1:place></st1:country-region> leading to a general mobilization. This debate requires the involvement of a maximum number of political, economic, social and cultural actors.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;"><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">We are fully aware of the difficulties inherent in these transformations:</span><o:p></o:p></b></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">• <b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">the state lacks the tools for action, since it has gradually handed over areas of control to Europe,</span></b> the private sector, local and regional authorities and social dialogue; although these developments may be welcome in principle, they pose real problems for the coherence of public action;</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">• the social partners have not really discussed shared strategies in relation to long-term objectives. In particular, they have not discussed debt reduction, the fight against illiteracy and pollution.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">• <b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">sectorial interests may oppose particular reforms which are motivated by considerations of the common interest alone. <o:p></o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;"><o:p> </o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;"><o:p> <br />
</o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">To make possible the changes described above, the Commission proposes action in four directions.</span><o:p></o:p></b></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">• <b><u><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">Reform political institutions so that they make it easier for the state to act</span></u></b> : to achieve this it is necessary to clarify the responsibilities of institutions whose relationships with the government, local authorities and social protection bodies are currently too complicated. Rules leading to a return to budgetary equilibrium must be established and we must ensure that Parliament ratifies the programme for budgetary stability. Public policy must also be subject to systematic, independent evaluation, with real consequences for public spending.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">• <b><u><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%; font-size: 16pt;">Promote the acceptance of risk. Growth means taking risks. The drive to zero risk leads to zero success. Innovation must be encouraged and welcomed; <i>the precautionary principle must be strictly circumscribed</i>. In particular, this involves encouraging research and the entrepreneurial spirit and the fair pricing of scarce resources, the involvement of public servants in the reduction of government deficits and a more incentive-based funding of social protection – with rewards and penalties.</span><o:p></o:p></u></b></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">• Mobilize French society as a whole for the benefit of its young people. The generations now in power must bring about a massive reorientation of public choices to build a society in which future generations will be able to find work and good quality housing more easily. This requires the systematic assessment of every public decision proposed in the light of a simple criterion: is this project useful for future generations or will it make their lives more complicated? </div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">• <b><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">Develop a shared European – and notably Franco-German – ambition. <st1:country-region st="on">France</st1:country-region> and <st1:country-region st="on"><st1:place st="on">Germany</st1:place></st1:country-region> are in the same boat</span></b>. Neither country can come through without the other. Everything that has been said thus far must therefore, in the long term, be carried out jointly with our German partners. </div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">The implementation of these principles should make it possible to undertake all the reforms proposed here to best effect.</div><div align="center" class="MsoNormal" style="text-align: center;">• • •</div><div align="center" class="MsoNormal" style="text-align: center;">•</div><div class="MsoNormal" style="text-align: justify;">Our report is completed. Its life starts here.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">We are going to use our energies to explain and publicize it, to speak to political and social actors to ask for its implementation. Quickly. Sustainably.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;"><b><u><span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">Because we are convinced that if it is not implemented, our country will fall into decline.</span><o:p></o:p></u></b></div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">Because we are convinced that it can be implemented, democratically, calmly and sustainably.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">Because we did not work to ease our consciences but to open up a new path.</div><div class="MsoNormal" style="text-align: justify;"><o:p> </o:p></div><div class="MsoNormal" style="text-align: justify;"><o:p> <br />
</o:p></div><div class="MsoNormal" style="text-align: justify;">May the country follow it.</div><div class="MsoNormal" style="text-align: justify;">(pp. 239-251) <br />
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http://news.bbc.co.uk/2/hi/business/7204972.stm <br />
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<div class="headline"><span style="font-size: 130%;"><span style="font-weight: bold;">Sarkozy gets economic reform plan </span></span></div><b> <br />
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<span style="font-size: 130%;"><span style="font-family: times new roman; font-style: italic;">International economists have presented French President Nicholas Sarkozy with a report of more than 300 proposals to "unleash" national economic growth. </span></span></b> <br />
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BBC World News<br />
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January 23, 2008 <br />
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<div style="text-align: justify;"><span style="font-weight: bold;">The panel was headed by Jacques Attali, an ex-adviser to former socialist president Francois Mitterrand</span>. </div><div style="text-align: justify;"><br />
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</div><div style="text-align: justify;"><span style="font-weight: bold;">Unions and opposition politicians have attacked many of the proposals</span>. </div><div style="text-align: justify;"><br />
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</div><div style="text-align: justify;">But Mr Attali urged the president to implement the measures rapidly. "We believe there is a limited window of opportunity to do so," he said. </div><div style="text-align: justify;"><br />
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</div><div class="bo" style="text-align: justify;">The panel believes that if all the measures are implemented, French economic growth could be at least 1% higher in 2012. <br />
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And it says unemployment could be cut from 7.9% to 5%, and the number of people under the poverty line could be reduced. <br />
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<b>'Remarkable' </b> </div><div style="text-align: justify;"></div><div class="ibox" style="text-align: justify;"><br />
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“ <b> In a world which is changing very fast, France is lagging behind while it has exceptional assets </b> ” <br />
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Nicolas Sarkozy, French president </div><div style="text-align: justify;"></div><div class="bo" style="text-align: justify;"><br />
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"Now responsibility no longer lies with us but with the government, the governing majority, parliament and all of public opinion," said Mr Attali. <br />
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Mr Sarkozy called the panel's work "remarkable" and said he agreed with most of the proposals, though Mr Attali wants the report to be adopted as a whole. <br />
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<span style="font-size: 180%;"><span style="font-weight: bold;">"In a world which is changing very fast, France is lagging behind while it has exceptional assets," the president said. </span></span> <br />
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"I challenge anybody to say that this finding is not reasonable," he added. <br />
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Mr Sarkozy's election promise was to accelerate French economic growth, but last week the government had to revise its 2008 growth forecast down to 2%, with many economists expecting the growth to be even slower. <br />
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Mr Sarkozy has recently vetoed some unpopular measures, as some members of his UMP party don't want to upset voters ahead of March municipal elections. <br />
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http://www.french-property.com/news/money_france/economic_growth_attali_commission/ <br />
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<h1><span style="font-size: 180%;">Attali Commission - A Plan for the Liberation of France</span></h1><div style="font-weight: bold;"><br />
</div><div style="font-weight: bold;">Friday 01 February 2008</div><span style="font-weight: bold;"> <br />
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One of the most important reports in decades on the future of France has been presented to the French Government, but will its recommendations ever see the light of day? </span> <br />
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<div style="font-weight: bold;"><span style="font-size: 130%;">The Attali Commission on Economic Growth was set up by President Sarkozy following his election in May 2007. The Commission is an iconoclastic group of 40 members of the éminence grise of France, who were told by the President to go away and come up with a programme of action to improve the level of competitiveness of the French economy. </span></div><br />
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The report of the Commission was finally unveiled last week, at a ceremony in which President Sarkozy and his leading Ministers were present. <span style="font-weight: bold;">When the Commission was created, President Sarkozy somewhat imprudently and presumptuously stated that he would implement their recommendations. </span><br />
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<span style="font-weight: bold;"><span style="font-size: 130%;">When the day of reckoning came last week, he gave a general welcome to the report, <span style="font-size: 180%;"><span style="font-style: italic;">but he also made it clear that he did not accept </span></span>two of its key recommendations (abolition of administrative counties and <span style="font-size: 180%; font-style: italic;">removing the 'principle of precaution' from the Constitution)</span>,</span> and that implementation of the other recommendations would be subject to achieving a wider consensus. </span> <br />
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He was probably right to hedge his bets for the general reaction to the report has been the usual cacophony of negatisivm whenever the prospect of change is in the air. Not only has this opposition come from the usual suspects of trade unions and professional groups, but it is clear that there is a lot of concern within his own UMP party, which will cause him to sleep lightly at night. <br />
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One of the most controversial proposals is to increase the level of immigration, in order to meet labour requirements. Against the backdrop of the proposed introduction of a quota system for immigration, and a commitment by the President to deport each year around 25,000 illegal immigrants, it will be interesting to observe just how he deals with this one. He was noticeably silent on it at the release of the report. <br />
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Another controversial proposal is one to end controls on certain trades and professional occupations, notably those of taxi drivers, avocats, bailiffs, notaires, hairdressers, and chemists. There have already been howls of protests from all of these groups, so expect some moderation of the proposals to take place if the idea does ever see the light of day. <br />
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One of the central tax proposals of the Commission is to transfer employer and employee social security costs onto the general system of taxation. More specifically, by a hike in the rate of <a href="http://www.french-property.com/guides/france/finance-taxation/taxation/social-security/retirement#7.6"><span style="font-weight: bold;">social welfare levy</span></a> and VAT. Once again, the President is going to find himself in great difficulty in implementing this proposal. As one of the central promises of his election campaign was to increase the standard of living of households, it is difficult to see how this can be squared with any increase in domestic taxation. <br />
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More generally, there is also concern about a lack of coherence in the report, and its failure to address the underlying need for a greater level of investment in the economy. Many of the recommendations are rightly about tackling the regulatory indigestion under which the country suffers but, whilst the report is clear about the destination, the route to get there is less obvious. </div><div id="refHTML"></div><input id="gwProxy" type="hidden" /><input id="jsProxy" onclick="jsCall();" type="hidden" /><br />
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<div id="refHTML"></div>ITSSD Charitable Missionhttp://www.blogger.com/profile/00790887154748866904noreply@blogger.com0tag:blogger.com,1999:blog-1851218948450486986.post-40636869949558188192010-07-12T09:42:00.078-04:002010-07-12T18:16:57.239-04:00US Constitutional Amendments to Establish Guaranteed Environmental Rights Will Undermine Economic Freedom<div><div><div><div align="justify"><strong><span style="font-size:130%;">[THE FOLLOWING ARTICLES EVIDENCE A LONG-TERM EFFORT BY ENVIRONMENTAL EXTREMISTISTS AND MEMBERS OF THE ACADEMY, WHICH ARE ARGUABLY INFLUENCING OBAMA ADMINISTRATION AND CONGRESSIONAL POLICY, TO EMBED VERY COSTLY COMMUNITARIAN ‘SOFT’-SOCIALIST ENVIRONMENT-CENTRIC SUSTAINABLE DEVELOPMENT NORMS OF THE UNITED NATIONS SANCTIONED EUROPEAN AARHUS CONVENTION, THE RECENTLY AMENDED EUROPEAN UNION AND FRENCH CONSTITUTIONS, AND A NUMBER OF UNITED NATIONS MULTILATERAL ENVIRONMENTAL TREATIES, WITHIN THE UNITED STATES OF AMERICA VIA AMENDMENT OF THE UNITED STATES CONSTITUTION AND ITS ACCOMPANYING BILL OF RIGHTS, AND/OR VIA AMENDMENT OF STATE CONSTITUTIONS, TO PROVIDE FOR A RELATIVELY SUPERIOR CONSTITUTIONALLY GUARANTEED ‘ENVIRONMENTAL RIGHT’, THUS EMPOWERING THE ‘ELITES’ OF GOVERNMENT AND NON-GOVERNMENTAL ORGANIZATIONS, PURSUANT TO EUROPE’S PRECAUTIONARY PRINCIPLE AND THE ‘PUBLIC TRUST’ DOCTRINE, TO UNDERTAKE SWEEPING LEGISLATIVE, REGULATORY AND JUDICIAL REFORMS, AND TO EXERCISE AGGRESSIVE ‘GREEN’ ‘POLICE ENFORCEMENT POWERS’ IN THE ‘PUBLIC INTEREST’, THAT WOULD FUNDAMENTALLY ‘CHANGE’ THE AMERICAN COMMON LAW ‘NEGATIVE’ INDIVIDUAL RIGHTS-BASED, FREE MARKET ECONOMIC AND SOCIAL SYSTEMS (i.e. THE UNIQUE AMERICAN SOCIAL COMPACT).]<br /></span></strong></div><strong></strong><br /><div align="center">------------------------------------------------------------------------------------------------<br /><br /><a href="http://www.abanet.org/environ/committees/lawstudents/writingcompetition/2008/WillMitSoL/ShubhaHarris.pdf">http://www.abanet.org/environ/committees/lawstudents/writingcompetition/2008/WillMitSoL/ShubhaHarris.pdf</a><br /><strong><span style="font-size:130%;">Establishing a Constitutional Right to Environmental Quality</span></strong></div><br /><br /><div align="center">Shubha Harris†<br /></div><br /><br /><div align="justify">May 5, 2008</div><br /><div align="justify"><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEixVhAgc8e7f9HKZOnAg0PHDSsGzwqdUbUKwc_LvP1yZQVa-OzygoqxbX09uCcMbPZhlBktV_GSHYphzMmV0e0hFAl9NlIjP39V6TSAt8fIiJybFQmro5CvcjyH3ypnUIJ0RMFeUCi8kvq_/s1600/constitution.jpg"><img id="BLOGGER_PHOTO_ID_5493040252527774450" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 400px; CURSOR: hand; HEIGHT: 268px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEixVhAgc8e7f9HKZOnAg0PHDSsGzwqdUbUKwc_LvP1yZQVa-OzygoqxbX09uCcMbPZhlBktV_GSHYphzMmV0e0hFAl9NlIjP39V6TSAt8fIiJybFQmro5CvcjyH3ypnUIJ0RMFeUCi8kvq_/s400/constitution.jpg" border="0" /></a>…This article begins by discussing <span style="font-size:130%;color:#ff0000;"><strong>recent efforts to enshrine a fundamental right to a healthy environment in the U.S. Constitution</strong></span>.2…It then discusses the arguments for and against adopting a constitutional right to a clean and healthy environment and argues for enacting such a right.5 Finally, <span style="font-size:130%;color:#ff0000;"><strong>it contends that a fundamental right to a healthy environment can be construed as part of the Fifth Amendment’s right to life guarantee</strong></span>, and that the time is right for the U.S. courts to recognize such a right for its citizens.6 (p.1)</div><div align="justify"><br /><br />…<strong><span style="font-size:130%;">V. A CONSTITUTIONAL ENVIRONMENTAL RIGHT</span></strong><br /></div><div align="justify"><br /><strong>A. A Constitutional Amendment to a Healthy Environment</strong><br /></div><br /><div align="justify"><br /><em><strong><span style="color:#ff0000;">1. Arguments Supporting Adopting a Constitutional Amendment</span></strong></em><br /><br /></div><div align="justify">There are several arguments in support of adopting an amendment to the U.S. constitution guaranteeing the right to a clean and healthy environment. <strong>A principal reason for establishing a constitutional right to environmental protection is that doing so takes the issue out of the realm of daily politics and therefore less susceptible to political whims.</strong>59<br /><br /></div><div align="justify">…There exists a strong rationale for establishing a constitutional right to environmental protection to insulate environmental values from narrow majorities in legislative bodies: that rationale can best be described as protecting the right of future generations. Legislative action is an important means for protecting the environment. But relying too heavily on Congress to protect the environment is not realistic. Making choices to preserve and protect the environment are difficult ones. It is much easier for legislators to do what is best right now without regard to future impact.69 Protecting the environment cannot be achieved through short-term measures; rather, it is a long-term goal which requires thoughtful and careful planning. (pp. 7-8)</div><div align="justify"><br /><br />…<strong>Another reason for</strong> adopting a constitutional right to environmental quality is that doing so would make the right more indestructible than mere statements of policy, procedural norms, or even regulatory statutes.70 <strong>Enacting a constitutional environmental right would offer environmental protection the highest rank among legal norms, thereby trumping statutes, administrative rules, and/or court decisions on the matter</strong>.71</div><div align="justify"><br /><br />…A constitutional provision, on the other hand, would provide a minimum guarantee, thereby assuring individuals that the right would receive the same protection accorded other fundamental rights. This is especially important for the poor and for minorities, who are particularly vulnerable to environmental harm because they often live in contaminated areas and/or work in hazardous conditions.77 Adopting a constitutional right to environmental quality will therefore assure Americans, in particular traditionally disadvantaged groups, at least a baseline guarantee that their rights to a decent environment will not be infringed without legal recourse. (pp. 9-10)</div><div align="justify"><br /><br />…<strong>Next, protecting the environment is a global issue. Environmental threats abroad affect Americans and vice versa. Thus, Americans cannot reasonably believe that environmental policy should be only of domestic concern</strong>. As one scholar noted, “[t]he amount of fossil fuel burning in China will affect temperatures in Kansas, and transportation decisions in California will affect the quality of life in Bangladesh.”80 The interdependence of human beings is particularly evident when it comes to the environment. <strong>No nation is an island,81 and the United States’ environmental policy must reflect its role as one part in a single ecosystem.82 As nations around the world begin to recognize an environmental right, so too should the United States</strong>. Our failure to do so will contravene the progress of global environmental efforts.<br /></div><div align="justify"><br />Related to the above, <strong>nations around the world are beginning to include environmental protection as a constitutional right. Arguably, the United States has been the leader of the free world for over a half a century and its Constitution has been and continues to be used as a model to other countries as they form governing documents.83 The United States should be leading the world on environmental issues</strong> – as the U.S. takes aggressive action on the matter, so will other countries. <strong><span style="font-size:130%;color:#ff0000;">Adopting a constitutional right to environmental quality will send a message to the world that the U.S. is serious about environmental protection</span></strong>. (p.10)<br /></div><br /><div align="justify"><br />…<em><strong>2. Arguments Against Adopting a Constitutional Amendment</strong><br /></em></div><br /><div align="justify"><br />…<strong>Several American states have recognized the threat to the environment and have passed amendments to state constitutions. Internationally, the right is being interwoven into Constitutions with increasing frequency. But the right to a healthy environment is generally viewed as a <em>“positive” social right</em>, requiring affirmative action on the part of the government to create a certain standard</strong>. There are several problems with adopting such a positive right in the U.S. Constitution. The first is that <strong><span style="font-size:130%;">the majority of the Constitution’s existing amendments protect <em>“negative” rights rather than positive rights</em>. Negative rights afford individuals protection against an aggressive government as opposed to positive rights which are individual entitlements to protections by the state requiring definite action on the part of the government</span></strong>.93 <strong>Many countries that have enacted Constitutions in the past thirty years have included “positive” rights. These more recent Constitutions protect the right to certain minimum conditions including the right to food, adequate housing, and in many countries, the right to a decent environment.94 Yet these more recent constitutions have been harshly criticized for including overly broad goals and for their failure to deliver the enumerated rights</strong>.95 <span style="color:#ff0000;"><strong>Providing a wide array of social and/or economic rights to citizens requires huge expenditures, and by including such guarantees, most countries will not be able to keep apace with the needs of its citizens</strong></span>.96 The U.S. Constitution does include three positive rights,97 but all of the rights adopted since the Bill of Rights are negative rights.98 <strong><span style="font-size:130%;color:#ff0000;">Adopting a constitutional “right to a healthy environment” is an aspirational right and is generally seen to be nonjusticiable. The Constitution does not contain any rights which are solely aspirational and the notion of including positive, social rights in the Constitution is scorned by many</span></strong>.99 (pp. 11-12)<br /></div><br /><div align="justify"><br />…<strong>Undoubtedly, a right that guarantees individuals that the government will refrain from action which causes environmental harm may be difficult for courts to interpret</strong> and define. Yet courts have faced similar struggles with respect to other fundamental rights and, over time, have developed a body of jurisprudence on which we can rely. The same may be true for an environmental right.<br /></div><br /><div align="justify"><br /><em><strong><span style="color:#ff0000;">3. Enacting a Constitutional Amendment to a Healthy Environment<br /></span></strong></em></div><br /><div align="justify"><br />Notwithstanding the fact that the positive vs. negative right distinction is illusory, the right to environmental protection can be framed as a negative right111 to assuage those concerned about including positive rights in the Constitution. By analogy, the right of free speech is actually prohibitory in nature and assures individuals that the government will not act in such a way that will restrict their freedom of speech. The specific language of the First Amendment reads: “Congress shall make no law. abridging the freedom of speech[.]” <strong><span style="font-size:130%;">Similarly, an environmental rights amendment could be mandatory and prohibitory in nature and read</span></strong><br /></div><br /><div align="justify"><br /><span style="font-size:130%;color:#ff0000;"><em><strong>“Congress shall make no law abridging the right to a clean and healthy environment.”</strong></em></span>112<br /></div><br /><div align="justify"><br /><strong><span style="font-size:130%;color:#ff0000;">Such a right would guarantee individuals that the government and the private actors it regulates could not pollute or otherwise engage in environmentally destructive behavior</span></strong>. <strong><span style="font-size:130%;">Establishing the right as a negative right removes the entitlement element viewed by many as problematic with regard to social rights: a negative environmental right does not require the government to bestow upon individuals minimum necessities, but rather assures individuals that the government will refrain from acting in ways that can harm the environment, much like the government must refrain from interfering with an individual’s right to free speech</span></strong>.113 .Additionally, construing the right as a positive right is problematic because such rights lack justiciable criteria114 and also require implementing legislation. On the other hand, viewing the right as a mandatory, negative right would provide the necessary language for courts to find the right to be self-executing and therefore enforceable.11 (p.14)<br /></div><br /><div align="justify"><br />…<strong><span style="font-size:130%;color:#ff0000;"><em>B. Judicially-Created Right.</em></span></strong></div><div align="justify"><br /><br />…In general, originalists ascribe to limiting judicial power by narrowly construing the Constitution.118 They believe that the meaning of democracy is that elected officials should govern and that judicial review is a “deviant institution” because it allows unelected judges to change the decisions made by elected officials who are directly accountable to the public.119 Those who subscribe to this methodology argue that in order to limit the power of unelected judges, only those rights specifically enumerated or clearly implied in the Constitution’s text should be protected.120<br /></div><div align="justify"><br />On the other hand, <strong><span style="font-size:130%;">non-originalists argue that judges should have considerable discretion in interpreting the Constitution.121 They contend that the Constitution should evolve not only by amendment, but also by judicial interpretation, and thus judges should be permitted to go beyond just the four corners of the Constitution’s text.122 Those who espouse this approach contend that because of advances in society and technology, courts are free to protect rights that are not expressly delineated</span></strong>.123<br /></div><br /><div align="justify"><br /><strong><span style="font-size:130%;">A “fundamental right” is given special status because such rights cannot be infringed by the government without a compelling purpose</span></strong>.124 For the Court to interpret an existing constitutional provision to create a new fundamental right is a not a radical idea. <strong><span style="font-size:130%;color:#ff0000;">Although controversial, the Court has created numerous fundamental rights not specifically enumerated in the Constitution using either the Due Process Clause of the Fifth and Fourteenth Amendments or the Equal Protection Clause of the Fourteenth Amendment.125 Either or both of these clauses can give rise to a constitutional right to a healthy environment</span></strong>. (pp. 15-16)<br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi72urgI-uGrQtSS8mxgZr-GawbXEMCyG_oAaECjsp2EXc6QDsuMZadrQYzFFWaViwfhc55XRSs5d9Pw3Lx7dnJx8F1QfKiocudxFXXUe-G68x3FQW8ubC-ITjGvZMP5N7fymmFL5JIjKj5/s1600/14th+amendment+of+bill+of+rights.jpg"><img id="BLOGGER_PHOTO_ID_5493065678457528514" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 400px; CURSOR: hand; HEIGHT: 299px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi72urgI-uGrQtSS8mxgZr-GawbXEMCyG_oAaECjsp2EXc6QDsuMZadrQYzFFWaViwfhc55XRSs5d9Pw3Lx7dnJx8F1QfKiocudxFXXUe-G68x3FQW8ubC-ITjGvZMP5N7fymmFL5JIjKj5/s400/14th+amendment+of+bill+of+rights.jpg" border="0" /></a><br /></div><br /><div align="justify">…<span style="color:#ff0000;"><strong><em>1</em></strong></span><strong><em><span style="color:#ff0000;">.</span><span style="color:#ff0000;"> Judicially Created Rights Using Substantive Due Process<br /></span></em></strong></div><br /><br /><div align="justify">…<strong>In a recent case, <em>Washington v. Glucksberg</em>, 521 U.S. 702 (1997)…the majority…reasoned that a substantive due process right required two elements: first, the asserted right required a determination of whether it was “deeply rooted in [our] Nation’s history and tradition”;130 second, the right required a “careful description</strong>.”131<br /></div><br /><div align="justify"><br />…<em><strong><span style="color:#ff0000;">2. Recognizing a Constitutional Right to a Healthy Environment Using Substantive Due Process</span></strong></em><br /></div><br /><div align="justify"><br /><strong>Applying this two-part test in favor of finding a constitutional right to a healthy environment does not bode well for the right</strong>. The first factor in the framework requires the right to have been historically and traditionally protected. Yet, <strong><span style="font-size:130%;">there is scant history supporting a constitutional environmental right</span></strong>. Undoubtedly, there is ample recent history supporting the right,132 yet the <em><strong>Glucksberg</strong></em> test requires not a right that has been protected in modern society, but a right that has been traditionally protected throughout America’s history. <strong><span style="font-size:130%;">The U.S. Constitution says nothing about the environment</span></strong>, and throughout our nation’s history, environmental effects have often taken a back-seat to economic progress.<br /></div><br /><div align="justify"><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiQNmMTqy-jDAwG2o5l-lHDWsGN-HzLmi3NVrQ-KF2MffrZnSDgxvPNcYNHqvxwiQM9nkZ2PM_QXwr0bjx01JQkh-8Uj4hQakkCYtKlRrh0KvAIfa90_Or5vbQ6-_ZcRGa4NyIrtVQGtSaa/s1600/us_supreme_court_seal.png"><img id="BLOGGER_PHOTO_ID_5493043047942365842" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 200px; CURSOR: hand; HEIGHT: 200px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiQNmMTqy-jDAwG2o5l-lHDWsGN-HzLmi3NVrQ-KF2MffrZnSDgxvPNcYNHqvxwiQM9nkZ2PM_QXwr0bjx01JQkh-8Uj4hQakkCYtKlRrh0KvAIfa90_Or5vbQ6-_ZcRGa4NyIrtVQGtSaa/s200/us_supreme_court_seal.png" border="0" /></a>…<strong><span style="font-size:130%;color:#ff0000;">the Supreme Court</span> in <em>Lawrence v. Texas</em>, 539 U.S. 558 (2003), <span style="color:#ff0000;">rejected the "deeply rooted in the nation's history" test and stated that to find a right under the substantive due process clause, courts must look to evolving political and cultural values</span></strong>.136 Under this framework, an environmental right seems more feasible. </div><div align="justify"><br /><br />…The majority opinion in <em><strong>Lawrence</strong></em> is viewed by many as groundbreaking because it unequivocally engages in making value judgments about what cultural and political ideas should be considered of constitutional importance.139 <strong><span style="color:#ff0000;">The Court’s language in</span></strong> <em><strong>Lawrence</strong></em> <strong><span style="color:#ff0000;">evinces respect for “constitutional values that have not heretofore found their natural home in the Due Process Clause.”140</span></strong> While the majority opinion in Lawrence has also been harshly criticized, it is ultimately recognition that constitutional law and culture are juxtaposed in a reciprocal, dynamic relationship whereby each influences the other.141 Under this view, a constitutional right to environmental protection can be justified.<br /></div><div align="justify"><br />…<strong>The Court’s reasoning in <em>Lawrence</em> is a major turning point for the substantive due process doctrine, but it is also significant because <span style="color:#ff0000;">it is the first time the Supreme Court cited foreign case law in overturning an American constitutional precedent</span></strong>.146 While there is certainly debate over whether, and to what extent, the Supreme Court should look to foreign case law in deciding constitutional questions,147 <strong>Justice Kennedy’s opinion in <em>Lawrence</em> clearly suggests that <span style="font-size:130%;color:#ff0000;">foreign precedent is relevant in our countries’ constitutional discourse.148 This fact weighs in favor of finding a constitutional right to a healthy environment for Americans</span></strong>. As discussed above, the world’s largest democracy, India, explicitly recognizes an environmental right in its Constitution and the Indian Supreme Court has also interpreted its Due Process provisions to include the right.149 Additionally, courts in other countries have recognized the right.150 These decisions should influence U.S. courts to find an environmental right. (pp. 17-19)<br /><br />-------------------------------------------------------------------------------------------------</div><div align="justify"><br /><a href="http://repository.upenn.edu/cgi/viewcontent.cgi?article=1006&context=mes_capstones">http://repository.upenn.edu/cgi/viewcontent.cgi?article=1006&context=mes_capstones</a><br /></div><div align="center"><br /><strong>EXCERPTS FROM:<br /></strong></div><div align="center"><br /><strong>Department of Earth and Environmental Science<br />Master of Environmental Studies Capstone Projects</strong><br /></div><div align="center"><br />University of Pennsylvania Year 2006<br /><br /></div><div align="center"><strong><span style="font-size:130%;color:#ff0000;">The Necessity and Possibilities of<br />Constitutional Environmental Rights</span></strong> </div><br /><div align="center"><br />Christina Simeone<br />University of Pennsylvania<br /><br /><br /><strong><span style="font-size:130%;color:#33ff33;">An American Evolution – Environmental Rights Chapter</span></strong><br /></div><br /><div align="center"><br />… <strong><span style="font-size:130%;">Nature and Definition of Environmental Rights</span></strong><br /></div><br /><div align="justify"><br />A constitutionally guaranteed environmental right could be worded in many different ways. The wording of the right would shape its duties and scope. Tim Hayward, a scholar devoted to environmental rights, prefers <strong><span style="font-size:130%;color:#ff0000;">the definition of environmental rights referenced in the Brundtland report of 1987</span></strong>:<br /></div><br /><div align="justify"><br /><em><strong><span style="font-size:130%;color:#ff0000;">‘All human beings have the fundamental right to an environment adequate for their health and well-being’1</span></strong></em>.<br /></div><br /><div align="justify"><br />…A U.S. environmental right would be considered an anthropocentric right, because it considers only human health and well-being, not the environment ‘for its own sake’. <strong><span style="font-size:130%;">An eco-centric environmental right would be worded more as a ‘right OF nature’ rather than a ‘right TO nature’.</span></strong> <strong>This distinction is important since legal authorities would probably be more likely to oppose the economic interests of an entity to protect the rights of human than the rights of animals or plants4</strong>. An anthropocentric right can have two further distinctions, ‘weak’ or ‘strong’ anthropocentrism. Strong anthropocentrism, also called the utilitarian view, would consider only the interests of humans and excludes the interests of nonhumans and the environment for its own sake. The utilitarian view only considers the short-term value of all variables of the ecosystem. By this view, the environment is seen as a life-support system for humans, to be manipulated and used in whatever way humans feel is to their best interests. <strong>The focus of ‘weak’ anthropocentrism is on human interests, but it does consider nonhuman and environmental interests. This view acknowledges that humans are integrally linked to the environment and cannot be separated from it. <span style="font-size:130%;">Weak anthropocentrism maintains that if relatively subordinate human interests conflict with essential interests of nonhumans or the environment, priority could be given to the non-human or environmental interests</span>5</strong>. ‘Weak’ anthropocentrism generally recognizes that,<br /></div><br /><div align="justify"><br /><em><strong><span style="font-size:130%;">“human interests are inseparable from the good of the nonhuman constituents of the environment in many ways, some of which we may not yet be aware of, so that a reasonable working presumption (which is absent from ‘strong’ anthropocentrism) is that where there is not a serious cost in human terms there is a positive reason actively to show concern for features and constituents of the nonhuman environment, regardless of whether humans stand to derive any immediate benefit.”</span></strong></em>6<br /></div><br /><div align="justify"><br /><strong><span style="font-size:130%;color:#ff0000;">Ultimately, the nature of environmental rights requires a concerted International effort towards preservation and protection</span></strong>. This is due to the interdependence of environmental sectors, trans-boundary effects of environmental harm, and such complex and compounding phenomena as ozone layer depletion and global warming7. These factors illustrate how regional environmental protection is beneficial, but not a cure in the face of global damage. Many sectors of the economy serve to negatively impact the environment. The processing of raw materials, fuel use, mining and timber practices, transportation and distribution methods, industrial processes, consumer consumption patterns, product life cycles, and many other common practices of the modern world work together to affect and harm the environment. Pollution in one region can migrate and affect many other regions. Thus environmental protection measures in the United States do not ensure that pollution from other countries will not affect our land and populations. Lastly, ozone layer depletion and global warming have real and significant impacts for the whole of humanity. These problems will not subside unless all actors work to make necessary changes. With these three factors in mind one can understand that problems related to environmental degradation will not be accurately addressed until there is a cohesive international effort. Fortunately, much of the rest of the world has already begun to act8. As both a world superpower and cultural icon, the United States has significant influence on the world stage. <strong><span style="font-size:130%;">As the world’s leading consumer and polluter, the United States the ability to set a revolutionary (or evolutionary) precedent by enacting a constitutionally guaranteed environmental right.</span></strong> Implementing a constitutionally guaranteed environmental right in the United States could not only improve the domestic environmental situation, but could also prove instrumental in improving the environmental quality of the entire world. (pp. 1-3)<br /></div><br /><div align="justify"><br />… <strong><span style="font-size:130%;">What Should Environmental Right Guarantee?</span></strong><br /></div><br /><div align="justify"><br />It is logical that an environmental right would mandate certain duties and guarantees to the people that it protects. An effective environmental right must include duties, and procedural and substantive rights9. Additionally, an environmental right should offer injunctive relief and mechanisms to collect damages from infringing parties10.<br /></div><div align="justify"><br />… Dinah Shelton believes that procedural rights of an effective environmental right should require informed consent and political participation Shelton outlines 3 procedural rights that <strong><span style="font-size:130%;">an environmental right should guarantee; 1) a right to prior knowledge of such action, with corresponding state duty to inform, 2) a right to participate in decision-making, and 3) a right to recourse before competent administrative and judicial bodies13</span></strong>. Provisions must also be made to enable an injunction mechanism for immediate procedural guarantees against action causing environmental degradation14. This would not prevent entities from secretly carrying out environmentally harmful projects, but it would give the public the ability to halt such projects once they become aware of them. This injunction would stand until the project could be properly investigated, environmental damages assessed, public participation and information enabled, and damages sought if necessary.<br /></div><br /><div align="justify"><br /><strong>Shelton maintains that even with the above-mentioned procedural guarantees, two questions still remain to be answered; 1) how do the rights to information and participation apply to individuals outside of those immediately affected, and 2) who makes the final decision about projects affecting the environment and are there substantive limits to decision maker actions?15</strong><br /></div><br /><div align="justify"><br />The first question addresses an issue related to the trans-boundary nature of the environmental degradation…<strong>The trans-boundary nature of environmental harm requires that provisions be enacted to afford those outside of the state of jurisdiction (or country of jurisdiction) some means of obtaining information, input in decision-making, and legal recourse if damages arise</strong>. This requirement could mandate that emitters of pollution or providers of environmental damage forecast how the pollution they produce will migrate. If foreign states or countries are affected, information, participation, and redress must be provided accordingly. Correspondingly, the first question posed by Shelton touches on the issues of the rights of non-citizens. The second question posed by Shelton involves an international scenario. By this perspective, <strong><span style="font-size:130%;color:#ff0000;">international treaties that establish customary norms and standards would place limits on decision makers. Final decision on environmental issues would come from the state of jurisdiction. However, that state would be restricted by the limits set by international treaties</span></strong>.<br /><br /><br /><strong>Absent norms and standards set by international treaties</strong>, the second question posed by Shelton remains unanswered for a domestic scenario. In the United States <strong><span style="font-size:130%;">the state supreme court would have preeminent jurisdiction, with appellate courts and the Federal Supreme Court following</span></strong>. <span style="font-size:130%;color:#ff0000;"><strong>The substance of the federal environmental right and the federal administration tasked to enforce such a right (the U.S. Environmental Protection Agency) would impose limits on state decision makers</strong></span>. <strong>Federal laws set protection mandates such as limits on pollution. States must abide by those federal regulations, but are allowed to create stricter protection mechanisms and limits</strong>.<br />(pp. 4-5)<br /></div><br /><div align="justify"><br />… <strong><span style="font-size:130%;">The link between human rights and the environment (discussed in detail later in this chapter) is built on the fact that many national and international jurisdictions recognize that the right to a healthy environment is a fundamental human right</span></strong>. The following substantive matters ensue; 1) litigation should be allowed based on this right and facilitating its enforceability in domestic law by liberalizing provisions regarding ‘standing’, 2) acknowledging that other human rights recognized in domestic legal systems can be violated as a result of environmental degradation (right to property, privacy, life)16… The second issue relates to that fact that nature and the environment are inherently linked to human existence. Therefore, <strong><span style="font-size:130%;">established basic human rights may be violated if the environment is degraded. For example, a person’s right to property or privacy may be violated if pollution from a neighboring property migrates to his or her own property</span></strong>.<br /></div><br /><div align="justify"><br />… Duties, procedural and substantive rights, and injunction and damages mechanisms are all things that should be guaranteed to each citizen and immigrant under a constitutional environmental right. There are other things, reforms specifically, that should be guaranteed at the inception of an environmental right. These include, but are not limited to the reevaluation of pollution standards, reform of traditional cost-benefit analysis practices, and the manifestation of insulating environmental protection goals from short-term political and economic will. <strong><span style="font-size:130%;color:#ff0000;">An environmental right should guarantee that pollution standards be set using the <em>precautionary principle</em> of preventing and anticipating harm</span></strong>. Thresholds of acceptable risk are extremely hard to determine, however, this should not be deterrence. Thresholds should be set based on the most sensitive groups of the population, namely children, the sick and the elderly. Thresholds limits should also consider the compound affects of multiple sources emitting regulated levels. A further discussion of pollution limit setting is later in this chapter.<br /></div><br /><div align="justify"><br /><strong><span style="font-size:130%;color:#ff0000;">Environmental cost-benefit analysis reform should be guaranteed to take place at the inception of an environmental right</span></strong>. Traditional methods employed by the Office of Management and Budget have historically undervalued environmental inputs (see the Economics chapter of this book). Most notably these under-valuations have been with respect to deriving consumer demand for environmental services, future generation preferences, perfect and poor substitutability of environmental outputs, environmental weights, and methods of valuing non-market goods. (pp.6-7)<br /></div><br /><div align="justify"><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh7SneFhpbeVHPz6PZ8myKlvVd6DAIia1dIUOKaH2PO81pkFCZOD14zeRTncVo58IML16y1zx43QbkSI0YcZghJKT3isrB_AjcGm9wuimaYbs-qTanGloFTeRa6wl2dL75raZ71qbWl_xyd/s1600/unece.jpg"><img id="BLOGGER_PHOTO_ID_5493040806980662898" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 177px; CURSOR: hand; HEIGHT: 173px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh7SneFhpbeVHPz6PZ8myKlvVd6DAIia1dIUOKaH2PO81pkFCZOD14zeRTncVo58IML16y1zx43QbkSI0YcZghJKT3isrB_AjcGm9wuimaYbs-qTanGloFTeRa6wl2dL75raZ71qbWl_xyd/s400/unece.jpg" border="0" /></a>…<strong><span style="font-size:130%;">In 1998 the <span style="color:#ff0000;">United Nations Economic Commission for Europe (UNECE) held the Aarhus Convention</span>, also known as the Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters</span></strong>. <strong><span style="font-size:130%;color:#ff0000;">This convention <em>‘links environmental rights and human rights’</em>, recognizes current obligations to future generations, proclaims that <em>sustainable development</em> can only be reached</span> if all stakeholders participate, links government accountability with environmental protection, and establishes methods to increase public participation in international environmental agreements23</strong>. This agreement establishes procedural rights, rights to information, rights to participation in decision-making, and rights to access to justice in environmental matters. While these rights do not encompass a comprehensive environmental right, they do establish fundamental rights that are necessary to securing the right to a healthy environment.<br /></div><br /><div align="justify"><br /><span style="font-size:130%;color:#ff0000;"><strong><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgWVyz5fTjPibucBLX39A7pKyh2gVeLZI9GJGfdmUvbD8QtRI1o7XfTRDPBhiN1bHteeZvTkEWZ2-8_QDR9WTfdrmc-Kn-_8Pn5hXT_JHueyhyVdmGo8C8Dx1dZQpoiWrxscaTdoYrYOJrq/s1600/aarhus_convention.jpg"><img id="BLOGGER_PHOTO_ID_5493040971452276690" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 116px; CURSOR: hand; HEIGHT: 100px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgWVyz5fTjPibucBLX39A7pKyh2gVeLZI9GJGfdmUvbD8QtRI1o7XfTRDPBhiN1bHteeZvTkEWZ2-8_QDR9WTfdrmc-Kn-_8Pn5hXT_JHueyhyVdmGo8C8Dx1dZQpoiWrxscaTdoYrYOJrq/s400/aarhus_convention.jpg" border="0" /></a>The preamble of the Aarhus Agreement makes two very important assertions that inextricably link environmental rights with human rights:<br /></strong></span></div><br /><br /><div align="justify"><em><span style="font-size:130%;color:#ff0000;"><strong>• Recognizing that adequate protection of the environmental is essential to human well-being and the enjoyment of basic human rights, including the right to life itself. </strong></span></em></div><br /><div align="justify"><br /><em><span style="font-size:130%;color:#ff0000;"><strong>• Recognizing also that every person has the right to live in an environment adequate to his or her health and well-being, and the duty, both individually and in association with others, to protect and improve the environment for the benefit of present and future generations.24</strong></span></em><br /></div><br /><div align="justify"><br />The UN asserts that this document is not only about environmental and human rights, but also about government accountability, transparency and responsiveness25. This is apparent through the Agreement’s three main objectives (or pillars): access to information, public participation in decision–making, and access to justice. (p.12)<br /><br /></div><div align="justify">…<strong><span style="font-size:130%;">Aarhus has been ratified by 39 countries including; Greece, Switzerland, Sweden, Norway, the United Kingdom, Germany, Latvia, Romania, etc. The United States has not ratified the Aarhus Convention</span></strong> at the time of my research. Most recent amendment to the Aarhus Convention was the extension of the rights of public participation in decision-making on genetically modified organisms (GMOs). Also added to Aarhus was the Protocol on Pollutant Release and Transfer Registers and the “Environmental Democracy” clearinghouse, used to promote ideas and awareness about Aarhus covered issues. <strong><span style="font-size:130%;">Aarhus represents the concerted thoughts and actions of a proactive eastern society focused on basic human rights, such as the right to a healthy environment.<br /></span></strong><br /><br />… <strong><span style="font-size:130%;">Can Environmental Rights Be Exercised Using Existing Rights?<br /></span></strong></div><br /><br /><div align="justify"><strong><span style="font-size:130%;">The government has used property rights to protect certain areas of land. Whether for natural conservation parks, tourist sites, to prevent development, etc, the government has acted to preserve land deemed to be valuable to the general public. <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjjNB1M-OUYD9gNW7OLBORM7XUMD73-MwjvIcBK7L7etNs-wHZ6kWrW3IIr3ZwyGjHhU9jhbfNGc7lLdwfem16b9qSI7P7z7pVHDDVtGp1xmmp1g1DtWNcBSgYhpBSwQMNt1AV7cMXrFldy/s1600/fifth_amendment.jpg"><img id="BLOGGER_PHOTO_ID_5493041602087664338" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 400px; CURSOR: hand; HEIGHT: 205px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjjNB1M-OUYD9gNW7OLBORM7XUMD73-MwjvIcBK7L7etNs-wHZ6kWrW3IIr3ZwyGjHhU9jhbfNGc7lLdwfem16b9qSI7P7z7pVHDDVtGp1xmmp1g1DtWNcBSgYhpBSwQMNt1AV7cMXrFldy/s400/fifth_amendment.jpg" border="0" /></a>Such <span style="color:#ff0000;">‘regulatory takings’</span> have prevented certain actions on private land, to the dismay of landowners. The Fifth Amendment of the U.S. Constitution requires the government compensate landowners for taking or limiting their land. <span style="color:#ff0000;">However, regulatory takings of the government, for the purpose of protecting the public good, are rarely compensated for</span>.</span></strong> Land-use laws have been a key tool use by the Federal government to achieve environmental protection through regulatory takings. Such laws as the Endangered Species Act (ESA) and Section 404 of Clean Water Act (CWA) are examples of such land-use laws.<br /><br /></div><div align="justify"><strong>Lavinge</strong> <strong>asserts</strong> that initial zoning, tax, and public works design of land use laws has inhibited United States jurisprudence from developing strong and useful mechanisms to support, analyze, or regulate cumulative effects of environmental decision-making or their impacts on future generations36. <strong><span style="font-size:130%;">Property rights and land-use laws can be very controversial. They may offer means to protect environmentally desirable areas of land, yet do little to protect the health and well being of all citizens. In this sense, property rights are not a substitute for a constitutional environmental right</span></strong>. However, when landowners are properly compensated for government-seized land, deemed in the interest of the public good, property rights can be effective tools to enforce and implement aspects of a constitutional environmental right. <span style="font-size:130%;color:#ff0000;"><strong>Properly conceived property rights should be seen as a subordinate mechanism to realizing a dominant constitutional environmental right</strong></span>.<br />(pp. 15-16)<br /><br /><br /><span style="font-size:130%;color:#ff0000;"><strong>Methods of Amending the U.S. Constitution</strong></span></div><div align="justify"><br /><br /><strong>Who Currently Has Environmental Rights?</strong><br /></div><div align="justify"><br /><strong><span style="font-size:130%;">State constitutions shape state laws, branches of government, and direct state bureaucracy. All state constitutions are subordinate to the Federal Constitution</span></strong>. </div><div align="justify"><br /></div><div align="justify">…<span style="font-size:130%;color:#ff0000;"><strong>State constitutions are more easily amended than the federal constitution. The state constitution amendment process involves voter participation</strong></span>. <strong><span style="font-size:130%;">This functional difference from the federal constitution allows state constitutions to directly reflect popular opinion, consent and control. They tend to be larger documents because they are more frequently changed…<br /></span></strong></div><br /><div align="justify"><br />…<strong>Many states within the United States have amended their state constitutions to include environmental rights provisions. <span style="font-size:130%;">From 1970 to 1979, <em>Hawaii, Illinois, Massachusetts, Montana, and Pennsylvania</em> amended their constitutions to include environmental rights</span></strong>41. (pp. 18-19)<br /></div><div align="justify"><br />…<strong>What are the Difficulties with Environmental Rights?</strong><br /></div><div align="justify"><br />… <strong><span style="font-size:130%;">It is also noteworthy to recognize that many international documents asserting environmental rights as a human right are not ratified or endorsed by the United States</span></strong>. <strong><span style="font-size:130%;color:#ff0000;">Apple concludes that <em>a sufficiently specific, universal, and obligatory international treaty accompanied by mainstream recognition of environmental rights would enable U.S. courts to succeed in enforcing environmental rights</em></span>55</strong>.<br /></div><br /><div align="justify"><br />Sevine Ercmann summarizes the finding of three international meetings regarding the enforcement of environmental laws56. Enforcement of environmental laws is paramount to ensuring the enforcement of a constitutional environmental right. The International meetings Ercmann references were sponsored by the U.S. EPA, other relevant U.S. authorities, the Environmental Ministries of the host countries, and the Dutch ministry of Housing, Physical Planning and Environment. These conferences took place in Utrecht, Netherlands in 1990, Budapest, Hungary in 1992, and Oaxaca, Mexico in 1994. Ercmann outlines generalities, necessary means of enforcement, powers to be given to authorities, the role of public awareness, the role of NGOs and other special interest groups, developing mechanisms of enforcement, and three principles going into the future. Ercmann’s data are heavily cited because they represent a cooperative international effort to address a very specific problem.<br /></div><div align="justify"><br />… Ercmann points out general methods to ensure that environmental laws are properly interpreted and enforced. He begins by stating that national and international legal requirements regarding administrative, civil, and criminal provisions must be adopted. These legal requirements should begin with effective compliance measures and increased administrative control and participation.<br /></div><div align="justify"><br />… <strong><span style="font-size:130%;">The international environmental enforcement conferences defined compliance as follows</span></strong>:<br /></div><div align="justify"><br /><em><strong><span style="font-size:130%;">“Compliance is the full implementation of environmental requirements. Compliance occurs when requirements are met and desired changes are achieved….If requirements are well-designed, then compliance will achieve the desired environmental results. If the requirements are poorly designed, then achieving compliance and/or the desired outcome will likely be difficult…”</span></strong></em>57<br /><br /></div><div align="justify">Enforcement is defined as follows:<br /><br /></div><div align="justify">“…<strong><span style="font-size:130%;">Enforcement is the set of actions that government or others take to achieve compliance within the regulated community</span></strong> and to correct or halt situations that endanger the environment or public health.”58<br /><br /></div><div align="justify"><strong><span style="font-size:130%;">Traditional methods of enforcement include monitoring, inspection, reporting, gathering evidence to locate violations</span></strong>, and negotiating with individuals and industrial entities regarding methods of achieving compliance. <strong><span style="font-size:130%;">The last step of compliance enforcement is the ability of enforcement agencies to pursue legal action or to dispute settlements</span></strong>59.<br /></div><div align="justify"><br />Ercmann emphasizes that <strong><span style="font-size:130%;">the success of an enforcement program depends on how the state exercises discretion when prioritizing environmental needs and objectives, and how it chooses the enforcement mechanism to achieve its objectives. Ercmann notes that <span style="color:#ff0000;">effective enforcement may require <em>reorganizing administrative structures, implementing environmental l</em>egislation, using innovative administrative instruments, drafting precise and comprehensive legally binding instruments, and making short-term <em>economic sacrifices</em></span></span></strong>60. <span style="font-size:130%;color:#ff0000;"><strong>All these aspects of ensuring effective enforcement of environmental laws could increase the operating expense of government agencies</strong></span>. <span style="font-size:130%;color:#ff0000;"><strong>Changing administrative structures, drafting precise new laws, forgoing short-term economic benefits, and implementing new enforcement instruments all have associated costs.</strong></span> These costs should be seen as short-term investments for long-term environmental protection. (pp. 23-24)<br /><br /></div><div align="justify">…<span style="font-size:130%;color:#ff0000;"><strong>Authoritative agencies should have the power via administrative and criminal law to 1) seize property; 2) bar a facility from government loans, guarantees or contracts; 3) require service or community work to benefit the environment; 4) impose restrictions on financial assistance; 5) seek reimbursement for public authorities cleanup expenses; 6) impose fines with specified amounts per unit; and 7) seek imprisonment</strong></span>63. Ercmann maintains that enforcement authorities should have the responsibility of granting permits, authorizations, monitoring, reporting, emergency powers, and authorization of remedial action.<br /><br /><br />Emerging environmental enforcement mechanisms that are complimentary to regulations have proved to be effective in increasing compliance outcomes, according to Ercmann. Increases in public awareness through community motivation, education, and incentives have served to enhance regulatory efforts, even when implementation yielded adverse economic impacts68. <span style="font-size:130%;color:#ff0000;"><strong>Nongovernmental organization (NGOs) and citizens have also played important roles in detecting violations and notifying authorities, applying public pressure, and bringing suits to enforce the law. NGOs have proved particularly effective in enforcing compliance through organizing and applying community pressure</strong></span>69.<br /><br /></div><div align="justify">… Issues of <strong>extending standing to citizens, environmental organizations, and NGOs have also bolstered compliance outcomes</strong>, according to Ercmann. An entity must prove that they have standing in a case in order to qualify it for judicial review. Citizen lawsuits can increase public awareness and motivate action by politicians. <strong>Allowing environmental organizations and NGOs standing in court, because of their high level of specialization and expertise, allows many cases to be brought that may not have otherwise had a chance to be heard</strong>. This is because individuals who suffer damages may not have the financial resources to back a case. Also, communities who suffer environmental harm may lack the organizational skills and funding to mount a convincing legal effort. <strong><span style="font-size:130%;color:#ff0000;">Extending standing to environmental organizations and NGOs can help these individuals and communities pursue their right to legal redress. </span></strong>(pp. 25-26)<br /></div><div align="justify"><br />…<span style="font-size:130%;color:#ff0000;"><strong>If the law views the duties of government, under an environmental rights provision, as primarily of “the state to implement and enforce laws that secure to the individual the enjoyment of what is intended as the substance of the right”, then the role of government enforcement seems more clear</strong></span>83. This simply leads to stricter interpretation and implementation of environmental rules and regulations. <strong><span style="font-size:130%;"><span style="color:#ff0000;">The judiciary, congress and the executive would be forced to take more <em>precautionary measures</em></span> to insure that the government was fulfilling its duty to protect citizen’s environmental rights. However, <span style="color:#ff0000;">government duties would have to expand</span> to meet the needs of increased citizen participation, requests for access to information, and avenues of legal redress for environmental matters</span></strong>.<br /><br /></div><div align="justify">… There are many issues concerning imperfect information with respect to environmental problems. Some natural systems are imperfectly or incompletely understood by science, such as global warming. Some sources of pollution are hard to identify, especially when multiple sources are emitting levels below the legal limit. Additionally, the causes of some environmental problems are difficult or impossible to identify within the specific degree of accuracy needed to pursue legal action. <strong><span style="font-size:130%;">In the face of these uncertainties, an environmental right would still require that the court protect citizens if environmental quality has fallen below the guaranteed threshold level. The courts will face considerable problems of knowledge when faced with certain environmental issues. Tim Hayward suggests that a solution to this problem could be to establish a specialty environmental court</span></strong>84. Establishing a specialty court would have the dual benefit of reducing the increased litigation burden that will undoubtedly arise once environmental rights are enacted. The United States legal system is already overburdened. A large influx of new environmental litigation could serve to cripple the system in its current framework. Establishing a new environmental court could result in a more effective way to address environmental litigation through a trained judiciary, expert panels, and a dedicated legal process.<br /></div><div align="justify"><br />…<span style="font-size:130%;color:#ff0000;"><strong>Fulfilling all these additional governmental duties increases the operating expense of the federal and state government</strong></span>. Herein lies the biggest issue with respect to enforcement, the cost. <strong><span style="font-size:130%;">The government will be required to provide new services, an increased volume of services will be requested, and the government will hold a greater degree of liability if they don’t fulfill their obligations</span></strong>. For example, Dinah Shelton states that a state may become responsible for the actions of private actors if they fail to exercise proper due diligence to prevent or respond to violations85. This government liability is a result of the environmental right being classified as a basic human right. Human rights impose positive and negative duties on the government. If the government fails to perform some of it’s positive duties, liabilities may result. <strong><span style="font-size:130%;">Environmental rights may place the government in an uncomfortable position of having to simultaneously increase its expenditures and expose itself to additional liability</span></strong>. This dual increase in financial burden stemming from new administrative duties and liability exposure gives the government substantial reasoning to oppose environmental rights.<br /></div><div align="justify"><br /><span style="font-size:130%;color:#ff0000;"><strong>The government is not the only sector of society that will have to bear the costs of an environmental right</strong></span>. <strong><span style="font-size:130%;">Costs associated with shifting to more sustainable and environmentally friendly business practices cause many commercial and industrial actors</span></strong> to oppose environmental rights. There has been a longstanding belief by industry that strict environmental standards reduce competitiveness86. This belief is true to a certain extent, but is not a rule. <span style="font-size:130%;color:#ff0000;"><strong>There are short-term cost increases and necessary capital investments that will be required of many industrial and commercial entities with the adoption of an environmental right.</strong></span> <span style="font-size:130%;color:#ff0000;"><strong>Increased costs will be necessary to invest in new technology and processes to comply with stricter environmental regulations. These increased costs will no doubt reduce profits in the short term</strong></span>. Many corporations resist this because they are responsible to create quarterly profits for investors. <span style="font-size:130%;color:#ff0000;"><strong>Reduction in profits, even in the short term, could result in lower stock prices and decreased financial commitments from investors. Moreover, cost increases in production may have to be passed on to the consumer in the form of higher product prices</strong></span>. <span style="font-size:130%;color:#ff0000;"><em><strong>This reduces a company’s competitiveness in the free market.</strong></em></span> This may not be a problem if all domestic industries are required to conform to the same standards. In this sense, everyone producing a product will be required to make the same adjustments (assuming their methods of production are similar), and incur similar cost. (pp. 28-30)<br /><br /></div><div align="justify">…<span style="font-size:130%;color:#ff0000;"><strong>The development of an environmental right would require old pollution standards to be reviewed and new pollution standards to be set. An environmental right should guarantee that pollution standards would be set using the precautionary principle. The precautionary principle states that if the consequences of an action are unknown, but judged to have the potential for significantly negative or irreversible consequences, it is better to avoid that action</strong></span>. (p. 32)<br /><br /></div><div align="justify">…<strong>Conclusion</strong><br /><br /></div><div align="justify"><strong>A weak anthropocentric constitutional environmental right worded as</strong>,<br /><br /></div><div align="justify"><em><strong><span style="font-size:130%;">“All human beings have the fundamental right to an environment adequate for their health and wellbeing”</span></strong></em>, </div><div align="justify"> </div><div align="justify"> </div><div align="justify">could have the benefit of protecting humans as a priority while still considering the nature for its own sake. <span style="font-size:130%;color:#ff0000;"><strong>The need for such a right as a fundamental human right is recognized and established by international organizations and treaties</strong></span>. These entities acknowledge that a healthful environment is a prerequisite to being able to enjoy more traditional and established human rights. Within the United States several state constitutions have also reflected the public’s desire for environmental rights and protection.<br /><br /></div><div align="justify">While the idea of environmental rights seems appealing, the drafting, implementation, and enforcement of such a right is pragmatically unattractive. To ensure the feasibility and enforceability of such a right it will have to be drafted with considerable attention to detail. <span style="font-size:130%;color:#ff0000;"><strong>The <em>precautionary principle and doctrine of public trust</em> can guide lawmakers in formulating an amendment that would be interpreted and enforced in the spirit as well as the definition that the law intended</strong></span>. A properly conceived amendment would address implementation and enforcement pathways to achieving goals, self-executing provisions, procedural and substantive rights, necessary reforms, duties of the government, legal rights of citizens and immigrants, mechanisms to solve conflicts with existing laws, flexibility provisions, methods of seeking redress, guarantees set up by the right, and relationship of the federal right to existing state and federal environmental protection legislation and regulation.<br /><br /></div><div align="justify">The considerable difficulties that exist with <span style="font-size:130%;color:#ff0000;"><strong>creating a workable environmental right</strong></span> should not prevent the undertaking. Aside from the legal and administrative planning that must go into the development of such a right, <span style="font-size:130%;color:#ff0000;"><strong><em>significant costs will also be required</em></strong></span>. <strong><span style="font-size:130%;color:#ff0000;">The government and industry might oppose <em>environmental rights</em> because of the cost impact. By the same token, citizens may oppose environmental rights because of higher product prices and <em>the inevitable tax increase</em> that would occur <em>to finance its implementation</em></span></strong>. What should be kept in perspective is that the environmental affects everyone, in all areas of the world, in all sectors of the economy, for as long as the human race exists. Preserving the environment for the benefit of the health and well being of the human race requires sacrifices to be made by all who enjoy the services the environment provides. Government, industry and consumers will all have to share the cost of adopting and implementing constitutional environmental rights. Formulating a plan to Phase in this right will help all parties absorb the associated increased costs over time, with minimal discomfort.<br /><br /></div><div align="justify"><span style="font-size:130%;color:#ff0000;"><strong>The costs incurred to institute and enforce environmental rights should be viewed as market corrections for years of under-valuation of the benefits of environmental goods, services, inputs, and outcomes. <em>The economic prosperity that America has experienced since its establishment has largely been at the expense of environmental prosperity, wellbeing, and abundance</em></strong></span>. It is as if America used a credit card, backed by the environmental, to finance its development. Timber was cut, land, air and water were polluted, species decimated, natural features destroyed, natural resources plundered, all for benefit of Americans. Now that America has developed and stabilized that credit card debt should be repaid. Large accrued interest has mounted on this debt, in the form of pollution, degradation and public policy, business practices and consumer consumption patterns that underestimate the value of environmental inputs. The enormous cost of paying back the debt may be preventing the government from acting, causing industry to resist and making consumers intimidated or complacent. Postponing action further will not solve the problem, it will only increase the intensity of the environmental debt as well as increase the likelihood of negative environmental outcomes. Enacting a constitutional environmental right seems like an enormous undertaking, because it is. It has to be because the breadth of the environment, severity and history of environmental abuse and under-valuation, and the life-sustaining and health determining role of the environment dictate that it be so monumental. The importance of environmental protection for current and future generations argues that the daunting task of creating a viable solution should not deter it from being developed. (pp. 38-39)<br /><br /><br />… <strong><span style="font-size:130%;color:#33ff33;">An American Evolution – Public Health Chapter</span></strong><br /></div><div align="justify"><br /><strong>Introduction</strong><br /></div><div align="justify"><br />… Environmental pollution, caused by human related activity, poses a considerable concern to public health. </div><div align="justify"><br /><br />…<strong><span style="font-size:130%;">Amending the U.S. Constitution with an environmental rights provision would affect how the government, industry, and the public perceive environmentally related public health issues</span></strong>. Environmental rights would effectively enhance the health of the public by <span style="font-size:130%;color:#ff0000;"><strong>1) forcing the government to adopt stricter pollution standards resulting from their increase liability exposure; 2) enact comprehensive environmental regulations to curtail regulatory fragmentation; 3) give citizens, environmental organizations and the EPA more power to stop the actions of entities who pose greater risks to human health; 4) deter future environmentally irresponsible behavior by setting up hefty fines and sanctions for violators and pathways to legal redress for those whose rights have been violated; and 5) encouraging stricter product testing to protect environmentally-related consumer health</strong></span>. An environmental right could realize many positive indirect effects on public health as well. These include environmentally corrective cost-benefit analysis methods resulting in fewer government projects and programs that negatively impact the natural environmental and human health. <span style="font-size:130%;color:#ff0000;"><em><strong>Negative effects could result from environmental rights if the associated cost increases are not managed correctly</strong></em></span>.<br /></div><div align="justify"><br />… <strong>Conclusion </strong><br /></div><div align="justify"><br />…The growing elderly population in America is also <strong><em><span style="font-size:130%;">more susceptible to environmentally related pollution and hazards</span></em></strong>. America faces the problem of having more elderly people who will require increased amounts of medical care because of their old age and susceptibility to disease. Paying for this care will result in a substantial burden on all Americans. <em><strong><span style="font-size:130%;">Environmental pollution and hazards</span></strong></em> particularly affect the elderly. Reducing environmental pollutants could have the cost saving benefit of reducing the amount of medical care required for the elderly population. In this sense, money spent to enact stricter regulations could be realized as cost savings resulting from reduced health expenditures on the federally dependent elderly.<br /></div><div align="justify"><br /><strong><span style="font-size:130%;">Quality of life is another important issue to be considered</span></strong>. America is, arguably, the global benchmark for standard of living and quality of life. Americans tend to be risk adverse (value avoiding risks) and support environmental regulations to enhance their quality of life. America has many regulations to protect public health from pollution; however, those regulations are fragmented and not comprehensive. Industrial hegemonies exist because operations of the chemical industry directly affect the American economy through production of inputs, products, and related services. Fragmentation of regulations and the pervasiveness of the chemical industry in the American economy have led to a complex problem. <span style="font-size:130%;color:#ff0000;"><strong>Imposing stricter health-based pollution standards, <em>guided by the precautionary principle</em> (instead of maximum allowable levels), places limits on the industry that <em>could negatively impact our domestic economy</em></strong></span>. The government is likely unwilling to do this because it equates standard of living and quality of life with economic stability and productiveness. This philosophy may have to change in light of diseases related to environmental pollution. The logic behind this change would come at the realization that Americans value the prevention of disease, through the strict regulation of environmental pollution, more then they value incremental increases in the productivity of the economy. (p. 41)<br /><br /></div><div align="justify">…<strong>As the world’s leader, America could set a significant precedent by enacting a constitutionally guaranteed environmental right. The value of this measure would be realized through symbolism and substance. America would be forced to invest in changing many of its environmentally irresponsible behaviors</strong>. These actions and investments could convince other countries of America’s honest effort to protect the environmental and human health. Other countries may choose to follow America’s progressive lead, for economic or ideological reasons, by enacting their own comprehensive environmental right. This could result in more positive human health outcomes all over the world, by reducing native and transboundary environmental pollution. (p.42)<br /><br />…<strong><span style="font-size:130%;">A constitutionally guaranteed environmental right</span></strong> would not prevent all environmentally related health issues from occurring. It would reduce negative human health outcomes related to anthropogenic pollution by preventing, reducing and eliminating pollution. Though it <span style="font-size:130%;color:#ff0000;"><strong>would impose a cost burden on the domestic economy</strong></span>, these costs can be phased in tolerably. Moreover, these short-term costs could prevent larger long-term costs related to caring for the unhealthy population and correcting damage done to essential aspects of the environment. (p.43)<br /><br /><br />…<strong><span style="font-size:130%;color:#33ff33;">An American Evolution – Government Chapter</span></strong><br /><br /></div><div align="justify"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjOrIKcrLPx3YJj70eYl4Ck8_aC6zabF1-E3vJO-BIR1jGZHzLT2y76AVjdQm6h2ei7pKRFyIHVIqCmnXvxwl94XwDLa8VlpS3tVrkYdEZDk8VXXP_BNB66DD5QgfONCp2KIdfFsWgA11Yo/s1600/billofrightssg7nk8.png"><img id="BLOGGER_PHOTO_ID_5493039982719990450" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 320px; CURSOR: hand; HEIGHT: 270px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjOrIKcrLPx3YJj70eYl4Ck8_aC6zabF1-E3vJO-BIR1jGZHzLT2y76AVjdQm6h2ei7pKRFyIHVIqCmnXvxwl94XwDLa8VlpS3tVrkYdEZDk8VXXP_BNB66DD5QgfONCp2KIdfFsWgA11Yo/s320/billofrightssg7nk8.png" border="0" /></a>… <strong><span style="font-size:130%;color:#ff0000;">The forefathers did not foresee a Constitutional framework for environmental protection</span></strong>. In the absence of an amended Bill of Rights to this regard, the U.S. Constitution has not reflected the need for environmental protection. (p.3)<br /><br /></div><div align="justify">… <strong>The U.S. Constitution has 3 main issues to address when faced with environmental protection and environmental rights issues; 1) inclusiveness of protection; 2) applicability of due process; and 3) fragmentation of political power</strong>2.<br />(p.4)<br /><br /></div><div align="justify">… While some forms of protection are in place for future generations, <span style="font-size:130%;color:#ff0000;"><strong>the rights of future generations are not recognized in the U.S. Constitution</strong></span>. An environmental right would do much to preserve the habitat for future humans and insure that benefit-seeking actions of the present are not undertaken at the cost of future generations.<br /><br /></div><div align="justify">… Due process of law ensures that a person receives fundamental fairness and substantial justice in the legal process7. It refers to how and why laws are enforced. <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjQ69BeYkf2NUinJonpXKywGlEavBXGByzlnTYz4Z3nFGVEnYcimXvVIQLLu3pdqLB8ImY88oyDviP6mtk1RXuddjnMS-CJo17-3b2Z9EN2DLhpGaWl0dkVLtbgXDXaGvJP-MED7d258YTx/s1600/fourth+amendment.jpg"><img id="BLOGGER_PHOTO_ID_5493041797036896738" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 400px; CURSOR: hand; HEIGHT: 228px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjQ69BeYkf2NUinJonpXKywGlEavBXGByzlnTYz4Z3nFGVEnYcimXvVIQLLu3pdqLB8ImY88oyDviP6mtk1RXuddjnMS-CJo17-3b2Z9EN2DLhpGaWl0dkVLtbgXDXaGvJP-MED7d258YTx/s400/fourth+amendment.jpg" border="0" /></a><strong><span style="font-size:130%;">The fourth Amendment guarantees, “the right of people to be secure in their persons, Houses, papers, and effects.” Yet, with many environmental matters, these rights are being infringed upon</span></strong>.<br /><br /></div><div align="justify">… <strong><span style="font-size:130%;">A person’s body can be exposed to chemicals through the air, water, or food, without the person being aware of the violation. <span style="color:#ff0000;">This is an infringement of a person’s fourth Amendment rights</span>.</span></strong> Due process of law would insure legal redress to a person who has been exposed to chemical contamination.<br /><br /></div><div align="justify">… Humans are exposed to these chemicals by breathing air, eating contaminated fish, meats or produce, or ingesting contaminated water. With time, a person can build up a significant amount of chemicals in his or her bloodstream. This exposure and subsequent build up occurs without the knowledge or permission of the individual. Negative health effects may ensue depending on the pathology of the chemicals, sensitivity of the individual to the chemicals, and amount of exposure. </div><div align="justify"> </div><div align="justify"> </div><div align="justify"><strong><span style="font-size:130%;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgPq8TYyswqibAm5QXFN_k0w0nYVqiP8SJ_HH8jquFSU4m4eVA4Mndse3Cf5_X3SN75uhoPAc7ymnWl1Av9znZABgyEEmVq0AJJHEStgJLcsbFcix6h63RBdZ0i0eTGWH_6vyV12Kflfhnu/s1600/declaration+of+independence.jpg"><img id="BLOGGER_PHOTO_ID_5493042103999716482" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 304px; CURSOR: hand; HEIGHT: 320px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgPq8TYyswqibAm5QXFN_k0w0nYVqiP8SJ_HH8jquFSU4m4eVA4Mndse3Cf5_X3SN75uhoPAc7ymnWl1Av9znZABgyEEmVq0AJJHEStgJLcsbFcix6h63RBdZ0i0eTGWH_6vyV12Kflfhnu/s320/declaration+of+independence.jpg" border="0" /></a>The ill person’s unalienable right to “life, liberty and the pursuit of happiness”, as stated in the Declaration of Independence, has been infringed upon</span></strong>. If a negative health outcome manifests, the person has no one to pursue for damages. Hence, the right to due process has been withheld from this person. Those who produce and release chemicals into the air have infringed upon the Fourth Amendment rights of those who have been exposed. <strong><span style="font-size:130%;">The Fifth and Fourteenth Amendments state that we cannot be deprived of life, liberty or property without due process of law.</span></strong> Victims of negative health outcomes related to ambient environmental pollution are not afforded this Constitutional guarantee. (pp. 6-7)<br /><br /><br />…<span style="font-size:130%;color:#ff0000;"><strong>Cost of Regulation<br /></strong></span><br /></div><div align="justify"><span style="font-size:180%;color:#ff0000;"><em><strong>The largest barrier to enacting an environmental right in the United States is cost. Environmental protection through regulations has a significant cost impact on all areas of the economy.</strong></em></span> <span style="font-size:130%;color:#ff0000;"><strong>A Constitutional environmental right would increase costs for consumers, businesses, and the government</strong></span>.(p. 35)<br /></div><div align="justify"><br />…<strong>Federalism and Environmental Rights</strong><br /></div><div align="justify"><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqVPDI8ZayILuHjlUuWN6FhBEo4nV8kH7-Yza4x18WZet6g-8Z1bKPnlyh6HbCK3KPAQiy3__bJwFykTA6ilI2Px3rCGJX7lECKlDi-l7EWDojQwlejNnuqJFtWoGY-Ixag6B9bv1JijZL/s1600/Tenth-Amendment1.gif"><img id="BLOGGER_PHOTO_ID_5493078982450785618" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 400px; CURSOR: hand; HEIGHT: 167px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqVPDI8ZayILuHjlUuWN6FhBEo4nV8kH7-Yza4x18WZet6g-8Z1bKPnlyh6HbCK3KPAQiy3__bJwFykTA6ilI2Px3rCGJX7lECKlDi-l7EWDojQwlejNnuqJFtWoGY-Ixag6B9bv1JijZL/s400/Tenth-Amendment1.gif" border="0" /></a>…A discussion about governmental aspects of a Constitutional environmental right would not be complete without examining <strong><span style="font-size:130%;">the relationship between federal and state governments</span></strong>. There are three basic types of government in the world today, federalism, unitary systems, and confederacies. <strong><span style="font-size:130%;">The idea behind federalism is that there is a national framework of laws that hold significant power, with subordinate state laws and governments that also hold significant power</span></strong>. The U.S., Canada, Australia, Russia, and Brazil are all governed by a federal system. The unitary system is currently the most prevalent in the world. Unitary systems hold power in a central national government, with very little power being given to political subunits likes towns, provinces, etc. Examples of countries run by unitary systems include China, Britain, and France.<br /><br /></div><div align="justify">…<strong><span style="font-size:130%;">The question regarding federalism and environmental protection is whether the federal government should be in charge or if state governments should hold more power</span></strong>. <strong>Currently, the federal government sets environmental standards and state governments are allowed to enact stricter standards, but cannot have standards below the national maximums</strong>. </div><div align="justify"><br /><br /><strong>Advocates of national control over environmental protection believe that it is necessary to prevent states from lowering environmental standards to increase competitiveness and attract business, coined the ‘race to the bottom’</strong>. Federal environmental protection has also been sought because of the transboundary nature of pollution. This rationale suggests that a downwind state could be negatively affected by the upwind state’s pollution or that pollution from one area can affect many other areas. Therefore, a national limit should be in place to offer a baseline amount of protection to all states, regardless of geography. Another argument for federal power is that many state pollution control agencies are short staffed and unable to handle the burden of statewide environmental protection. Correspondingly, national advocates believe that state governments do not have the knowledge to handle many pollution issues. <strong>Many argue that power must be given to the federal government to avoid pressure from local industries that would otherwise overrun state governments.</strong> It is also argued that the federal government would be better suited to protect the environment because it can achieve economies of scale, thus creating a cost advantage. Lastly, some believe that the federal government should have more control over environmental protection because citizens have the right to a clean environment.<br /><br /></div><div align="justify"><strong>Supporters of an increased state role in environmental protection believe that state governments are closer to the people and are more able to identify and address their needs and desires</strong>. State governments are also more familiar with the specific environmental concerns affecting their jurisdiction, and may thus be able to address those concerns more efficiently without the distortion of national intervention. Schoenbrod asserts that the federal lawmakers make relevant and irrelevant environmental regulations, but are not held accountable by the local citizens for results because the politicians are too far removed from the citizens184. State supporters also point to the role of state experiments in coming up with innovative and efficient methods of handling environmental problems. <strong>Too many federal regulations could prevent these experiments from taking place and could result in the stagnation of creative solutions</strong>. Some also suggest that the federal chain of command may be too lengthy and burdensome to implement. <strong>Overly broad federal regulations maybe so cumbersome and full of exclusions and variances that state governments may not be able to interpret or administrate them properly185. Advocates of increased state power also assert that the ‘race to the bottom’ does not exist because of NIMBY (not in my back yard) pressure from citizens</strong>. They claim that there is actually a ‘race to the top’ fueled by citizens that offsets pressure from industries to relax rules. State supporters also suggest that the federal government is susceptible to intense industrial and partisan pressure, which could undermine environmental outcomes. (pp.44-45)<br /><br /></div><div align="justify">…<strong>There is also the belief that globalization has put more pressure on all levels and aspects of government</strong>. Federal, state and local governments have lost incremental units of power as transnational corporations proliferate and NGOs and non-profits gain increased citizen support and organizational competency190. <strong>This has increased the role of the national government as the central orchestrator, while giving state governments more power and control over implementation, often through outsourcing to private contractors</strong>. This phenomenon has resulted in problems of; 1) inability to adapt traditional systems to new problems; 2) limited capacity and accountability; 3) lack of education; 4) issues of scale191 (p.46)<br /><br /></div><div align="justify">…<strong>local governments better address some pollution problems while federal efforts can more appropriately handle other environmental problems</strong>. Kettl asserts that the federal government’s inability to coordinate between partisan groups, Congress, and the executive branch may limit national power relevance.<br /><br /></div><div align="justify">…current forms of government environmental regulation are not effective since they cannot respond to the dynamic and exponential nature of environmental pressures and resulting problems.<br /><br /></div><div align="justify">…<strong>Kettl’s points about the difficulties coordinating different branches of government and the lack of accountability of the federal government are two negative points against the current system of nationally centered environmental protection</strong>. Although, this does not mean that the states should be given the dominant role in environmental protection, it does mean the current system may need restructuring. <strong><span style="font-size:130%;color:#ff0000;">A Constitutional Amendment for an environmental right maybe the exact type of restructuring that is needed to address the issues of coordination and accountability</span></strong>. <span style="font-size:130%;color:#ff0000;"><strong>A Constitutional environmental right would set up positive and negative duties for the federal government as well as legal ramifications if those duties were not fulfilled. The increased legal liability would be an incentive for the government to act appropriately in environmental matters, for fear of expensive legal repercussions. The federal government may be more likely to track accountability for environmental issues to assign blame for costly fines and legal actions associated with environmental proceedings</strong></span>. Surely, any administration would want to know which person in the chain of command was responsible for any improper actions that cost the government money and negative press. Matters concerning the Constitutional also take higher priority in Washington. This increased priority could facilitate coordination between the branches of government. The wording of the Constitutional Amendment could also guide law and policy makers when posed with tough issues, yielding clearer options and choices while reducing debate and partisan politics. <strong><span style="font-size:130%;">A Constitutional right does not mean that states would be given less power in environmental protection. States would still be allowed to have stricter standards than the federal government. Furthermore, a Constitutional commitment to environmental protection could cause more states to adopt state environmental rights</span></strong>. (p.47)<br /><br /><br />… <strong>CONCLUSION </strong><br /><br /></div><div align="justify">…<span style="font-size:180%;color:#ff0000;"><strong>The current form of the U.S. Constitution has inherent barriers to environmental protection that exclude future generation, prevent due process of the law, and impede environmental policy through government fragmentation</strong></span>. <span style="font-size:180%;color:#ff0000;"><strong>Amending the Constitution with an environmental right would address these shortcomings and grant superior environmental health and protection for current and future Americans.</strong></span> It is also clear that the United States Environmental Protection Agency is not powerful enough to do its job effectively. An environmental right could do much to rehabilitate the agency by giving it a right to protect and by reforming much of its internal and external structure. The EPA is also in desperate need of some independence and insulation from the executive, legislative, and judicial branches. It is evident from many examples that political pressure has the ability to undermine environmental protection. An environmental right could help protect the agency from short-term political pressure in favor of long-term environmental protection.<br /><br /></div><div align="justify"><span style="font-size:130%;color:#ff0000;"><strong>The cost of regulation is the most burdensome aspect of environmental regulation</strong></span>. Historically, the environmental and the goods and services it provides have been taken for granted by humans. Placing increased protection mechanisms on the environment and valuating goods and services that were previously not quantified before could put a short-term strain on domestic and world economies. <strong><span style="font-size:130%;">Phasing in this right over a five or ten year period is a good way to help markets adjust and minimize social costs associated with increased environmental regulation. Focusing on the long-term objectives of better health outcomes, stabilizing global climate, avoiding future costs related to environmental degradation and instability, achieving a guaranteed level of environmental quality, and leading developing nations towards an environmentally responsible evolution will help justify short-term costs and economic transitions</span></strong>. Implementing this right will require the government to weight benefits of increased protection with decreased benefits in other areas of spending. Principles of proportionality can help identify the best way to minimize costs and use government resources the most efficiently. <span style="font-size:180%;color:#ff0000;"><strong>Short-term sacrifices will have to be made by all sectors of the economy to develop, implement, and enforce a environmental right.<br /></strong></span><br /></div><div align="justify">The public seems to be more aware of environmental issues and demand is increasing for more environmental protection. Although awareness and demand are increasing, the public seems to be uneducated about the cost realities of augmented environmental protection. They seem to understand that the government must limit business practices, because these practices often harm the environment. They also seem to understand that without decisive government action, individual actions to protect the environment are barely incremental. <strong><span style="font-size:130%;">It is possible that the costs associated with an environmental right would decrease the demand for more environmental protection, in favor of short-term economic benefits. Since it is human nature to prefer current consumption over consumption in the future, it may be hard to appeal to the public to incur costs now to enjoy benefits sometime in the future. It may even be harder to convince people that these costs should be borne now, when the majority of the benefits may not be enjoyed in the same lifetime that the costs where incurred. The majority of the benefits will be received by future generations in the form of climate stability and preserved environmental quality, but present generations do stand to enjoy considerable benefits as well</span></strong>.<br /><br /></div><div align="justify">There are valid arguments for state and federal control over environmental protection. It is also evident that some environmental protection functions are more suited for state implementation where as other are better suited for federal administration. <span style="font-size:130%;color:#ff0000;"><strong><em><span style="font-size:180%;">An environmental right would grant more power to the federal government</span></em>, but would give the states considerable power in setting stricter standards, implementing and enforcing environmental laws. The superior role afforded to the federal government is important to enable increased scientific inquiry and to coordinate in international efforts to address global environmental issues</strong></span>.<br /><br /></div><div align="justify"><strong><span style="font-size:130%;">An Amendment to the U.S. Constitution would have considerable symbolic value. Even if it was loosely constructed and not self-executing it could have a strong effect on government, business and consumer behavior. It could tip the balance in executive and judicial decision-making and change the way Congressional officials approach environmental matters</span></strong>. An environmental right will not prevent or address every environmental issue, but it would elevate environmental protection to a higher level of national priority. It would also spur the United States to become more environmentally sustainable and efficient, which will be advantageous in the future marketplace with higher energy costs and increased demand and competition for resources. All humans should perceive an environmental right as a economic and biological necessity. We need it to protect ourselves from short-term profit-seeking behavior that benefits a minority and harms the majority. We need it in order to obtain a competitive advantage for the future. Most of all, we need it to preserve the habitat of our species, to the best of our ability, to insure our long-term survival. (pp. 48-49)<br /><br /><br /><strong><span style="font-size:130%;"><span style="color:#33ff33;">An American Evolution – Economics Chapter</span><br /></span></strong><br /></div><div align="justify"><strong>Introduction<br /></strong><br /></div><div align="justify"><strong><span style="font-size:130%;">Economic realities are some of the most powerful forces working against the establishment of stricter environmental regulations and a Constitutional environmental right</span></strong>. It is important to understand how certain aspects of America’s economy, government economic policies and corporate structures affect the environment and society. <span style="font-size:180%;color:#ff0000;"><strong>At the heart of many environmental problems lies the very economic foundation of our society, capitalism</strong></span>. Although capitalism is one of the most successful ways to organize a society, it is incurring many problems as populations’ increase, resources diminished and environmental degradation becomes widespread. <strong><span style="font-size:130%;"><span style="color:#ff0000;">The global proliferation of capitalism and the pursuit of economic growth is changing the earth</span>. As the world strives to increase economic activity and production, global and local environmental problems are being created and societal welfare may be stagnating</span></strong>. The preoccupation with short-term economic goals is being carried out at the expense of the environment and the livelihood of future generations. (p.1)<br /><br /></div><div align="justify">…<span style="font-size:130%;"><strong>Externalities </strong><br /></span><br /></div><div align="justify">…<strong><span style="font-size:130%;color:#ff0000;">A Constitutional environmental right could mandate pollution taxes or the development of an institutionalized environmental labeling program, both of which could account for negative environmental externalities</span></strong>. A government run eco-labeling program would initially be voluntary, with the idea that perhaps in time it could become mandatory. <span style="font-size:130%;color:#ff0000;"><strong>Environmental labeling would require products to display information about the environmental impacts related to the life cycle of the product</strong></span>. This would educate consumers about the products they are buying and hopefully encourage producers to improve the environmental performance of their products. <span style="font-size:130%;color:#ff0000;"><strong>Many of the negative externalities created by the production and consumption of the product would be calculated in the environmental lifecycle rating displayed on the eco-label</strong></span>. In this sense the true impact of the product would be understood, even if it was not monetized and inputted into the market price of the good. <span style="font-size:180%;color:#ff0000;"><strong>There are obviously costs associated with an environmental labeling scheme. These costs would be borne by producers, consumers and the government</strong></span>. Perhaps even a tiered cost system could be developed so that environmentally harmful products will be charged more than innocuous products. (pp. 9-10)<br /><br /></div><div align="justify">…<strong><span style="font-size:130%;">Cost Benefit Analysis<br /></span></strong><br /></div><div align="justify">…<span style="font-size:130%;color:#ff0000;"><strong>A Constitutional environmental right could reform many cost benefit analysis methods that undervalue the environment. A special form of cost benefit analysis can be developed that incorporates a low discount rate and higher weights attached to environmental benefits and costs</strong></span>. In this sense, economists would quantify environmental services through existing valuation techniques, but greater weights would be applied to reflect the fact that these valuation techniques are limited in their ability to account for the breadth of benefits the environment provides or the exponential costs that occur as a result of its degradation. Perfect substitutability would not be assumed in environmental CBAs and corrective measures and enhanced costs would have to be attached to this exclusion. These corrections would help CBAs arrive at a more accurate conclusion with respect to the environment. They would also take into account that the public is adverse to risk and values the low cost and stable services that a healthy environment provides. (p.18)<br /><br /></div><div align="justify">…<strong>Globalization </strong><br /><br /></div><div align="justify">Globalization is the interconnection and integration of different national and region markets resulting in one large global market. (p.18)<br /><br /></div><div align="justify">…Clearly, globalization has its benefits and its costs, socially and environmentally. The pursuit of economic growth, via liberalized free trade, has had many negative consequences that have not been compensated for.<br /><br /></div><div align="justify">…Although a Constitutional environmental right would not directly effect the environmental injustices that are occurring as a result of globalization, it could indirectly effect them. <span style="font-size:130%;color:#ff0000;"><strong>A Constitutional environmental right could change the mindset and political climate in America, which could translate into the nation ratifying important international environmental agreements such as the Kyoto Protocol or the Basel Convention</strong></span>. By instituting such a right in the United States many domestically run companies would be incentivized to improve their environmental performance. This could result in better domestic and foreign environmental outcomes if the companies export goods or services. <strong>Since the United States is considered the major world power, implementing an environmental right domestically could send a powerful signal to the rest of the world.</strong> (p.24)<br /><br /></div><div align="justify">…Gr<strong>oss Domestic Product<br /></strong><br /></div><div align="justify">…<span style="font-size:130%;color:#ff0000;"><strong>A Constitutional environmental right could require that an environmental set of indicators be implemented and considered in tandem with the GDP, much like how the NNP (“net national product”) is used</strong></span>. Of course there are many difficulties associated with the design and use of these environmental indicators, but the U.S. is presently developing environmental indicators and can look to the GPI and the UK’s MDP as examples. It is difficult to believe that the indicators developed by the US will perfectly measure the well being of the environment. It is important to understand that a perfect environmental indicator can be developed overtime, in the absence of a perfect indicator, the best available alternative should be used so the relationship between economic growth and environmental well being can be understood and properly dealt with. (p.32)<br /><br /></div><div align="justify">…<span style="font-size:130%;color:#ff0000;"><strong>Short-Term Thinking: Capitalism and Corporations</strong></span><br /><br /></div><div align="justify"><strong><span style="font-size:130%;">Capitalism is the socioeconomic system that governs the United States and many other nations around the world</span></strong>. Capitalism advocates the control of the ‘means of production’ of goods to those who invest money into the production process. These private investors contribute capital to the means of production in the hopes of achieving a profit. <strong><span style="font-size:130%;">Capitalism advocates uninhibited markets, private ownership, and free enterprise as ways to achieving greater efficiency, increased opportunity, enhanced product quality and reduced product costs</span></strong>. As discussed in the beginning of the chapter, Adam Smith believed that free market capitalism and the individual pursuit of profits would result in benefits for all of society. <strong><span style="font-size:130%;">The existence of externalities and limited resources offers disputes to Adam Smith’s theory that social welfare will benefit from capitalism.</span></strong> Correspondingly, capitalism is often characterized by unequal distribution of wealth, intense competition and the pursuit of self-interest unencumbered by ethics, all of which maybe counterproductive to increasing overall social welfare. <strong><span style="font-size:130%;">One reason is because capitalism may make some individuals better off through capital accumulation, perhaps at the expense of other individuals</span></strong>. <span style="font-size:130%;color:#ff0000;"><strong><em>Karl Marx</em>, who believed that capitalism would result in a crisis, popularized this problem. <em>Marx</em> believed a crisis would result as the large population of working class (and a near non-existent middle class) confronts the small numbers of wealthy people who have accumulated the majority concentration of capital</strong></span>.<br /><br /></div><div align="justify">…<span style="font-size:130%;color:#ff0000;"><strong>Many aspects of capitalism are harmful to the environment</strong></span>. <span style="font-size:130%;color:#ff0000;"><strong>One of the most damaging characteristics of capitalism is that it’s foundation in self-interest leads to short-term thinking</strong></span>. Entities within a capitalist society will focus on maximizing profits for themselves, as a result society as a whole may or may not receive indirect benefits.<br /><br /></div><div align="justify">However, it is almost certain that <span style="font-size:130%;color:#ff0000;"><strong>future generations are incurring large costs as a result of this short-term self-interested behavior</strong></span>. These costs are related to environmental damage and non-renewable resource use.<br /><br /></div><div align="justify">…Environmental regulations are put in place to protect the public from the actions of the self-interested polluters. As a result market prices, profits, labor wages and property rents are all affected by environmental regulations. These regulations help protect the public at large from the actions of the self-interested. <strong><span style="font-size:130%;">The existence of environmental regulations is proof that self-interested actions of the capitalist will not always result in benefits for society as a whole</span></strong>. (p. 33)<br /><br /></div><div align="justify">…Some believe that capitalism is ecologically unsustainable, that it can function in the short –term, but can not ultimately survive.75 <span style="font-size:130%;color:#ff0000;"><strong>Andriana Vlachou believes that the sustainability of capitalism is uncertain</strong></span>, especially since it has several characteristics that are contradictory to ecological sustainability76. It is important to note that sustainability has many different definitions. <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjL65dVGUSVME2jGNeImqnJfyx_MvF8VVPu_yRLVLx3AKvgBjRmbiXxGltxlXTAkL1nm89FixAe8mDCro_v5GraPerby_78XMvQE27NIjTDR182iGfq4o0JHXm73yDzzDk5wCVEgLIfiSpC/s1600/Brundtland+Report+-+OurCommonFutureCover.gif"><img id="BLOGGER_PHOTO_ID_5493081183386531154" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 136px; CURSOR: hand; HEIGHT: 200px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjL65dVGUSVME2jGNeImqnJfyx_MvF8VVPu_yRLVLx3AKvgBjRmbiXxGltxlXTAkL1nm89FixAe8mDCro_v5GraPerby_78XMvQE27NIjTDR182iGfq4o0JHXm73yDzzDk5wCVEgLIfiSpC/s200/Brundtland+Report+-+OurCommonFutureCover.gif" border="0" /></a><strong><span style="font-size:130%;">The World Commission on Environment and Development (a/k/a the “Brundtland Commission”) defines sustainable development as development that meets the needs of present generations without compromising the ability of future generations to meet their own needs77. <span style="color:#ff0000;">This definition of sustainability is already in conflict with capitalism</span>, because capitalism is not about fulfilling needs</span></strong>, it is about accumulating capital. It values growth in all forms, whether it is needed or not.<br /><br /></div><div align="justify"><strong><span style="font-size:130%;">Vlachou uses a modified definition of sustainability in relation to capitalism. She asserts that capitalism is ecologically sustainable if it can secure the natural conditions and processes that are necessary for its existence78</span></strong>. This definition posits capitalisms ability to survive as the only measure of sustainability. This seems logical since without basic environmental conditions to support human life and labor capitalism would cease to have a society to exist within. Correspondingly, if capitalism depleted all the natural resources available it would have nothing left to base production on. (p.34)<br /><br /></div><div align="justify">…<span style="font-size:130%;color:#ff0000;"><strong>Vlachou observations indicate that the future of capitalism is uncertain</strong></span>. Capitalism may eventually be a cannibalistic system, doomed to implode on itself. It may be the very foundation of capitalism, which is rooted in short-term self-interest that is driving the destruction of the environment and possibly catabolizing itself. As Kirkpatrick Sale states, “To put it starkly, that {the market economy} means that the environmental movement can never win, can never be anything but a tolerated gadfly, as long as it functions within capitalist society.”83 (p. 35)<br /><br /></div><div align="justify">…<strong><span style="font-size:130%;">American corporations may be particularly shortsighted and detrimental to the environment, <em>compared to European corporations</em></span></strong>89. Conley suggests that this is because <strong><span style="font-size:130%;">American corporations tend to focus narrowly on shareholders <em>while European corporations</em> focus on a broader range of stakeholders (employees, creditors, suppliers, communities)</span></strong>. <strong><span style="font-size:130%;color:#ff0000;">This is partly because unions have more power, growth rates are lower, and unemployment is higher in Europe</span></strong>. American short-term focus is also related to the power that mutual funds have over the institutional investor sector. Large institutional investors hold the majority of stock shares in America and Europe. The logic is as follows: corporations are dependent on institutional investors to finance their operations, pension funds and insurance companies have long time horizons for investment returns, mutual funds have relatively shorter time horizons, therefore institutional mutual fund investors may require corporations they invest in to deliver profits in the short-term. <strong><span style="font-size:130%;">American financial markets <em>are larger than European financial markets</em> in the categories of equities, fund management (pension fund, insurance companies, mutual funds, private wealth management, hedge funds) and investment banking</span></strong>.90 (p. 37)<br /><br /></div><div align="justify">…<strong><span style="font-size:130%;">Since American financial markets have a larger proportion of short-term oriented investments, corporations that are dependent on these investments may adopt a shorter term focus <em>compared to European corporations</em></span></strong>. <span style="font-size:130%;color:#ff0000;"><strong>Additionally, <em>European corporations are adopting</em> the idea of ‘corporate social responsibility’ much faster than American corporations</strong></span>91. ‘Corporate social responsibility’ is the notion that corporations must deliver more than just financial returns to their shareholders, such as sustainable growth, fair employment, and social and environmental well being. (p.38)<br /><br /></div><div align="justify">…<span style="font-size:130%;color:#ff0000;"><strong>A Constitutional environmental right could be an objective ethic imposed on capitalism and corporate practices. <em>Granting citizens environmental rights will create new exposure to liability for those entities that harm the environment, increase environmental health related risks, carryout environmental injustices, or act in ways that exploit the environment and compromise the well being of others</em></strong></span>. Environmental rights could serve to unify and strengthen environmental regulations for air, water, chemicals, wastes and exports. It would force companies to consider the environmental impacts of their actions, for fear of expensive litigation. <strong><span style="font-size:130%;"><span style="color:#ff0000;">It could also give Congress the Constitutional power to regulate the environment <em>independent from the Commerce Clause</em></span><span style="color:#ff0000;">, thus limiting economic considerations from environmental protection</span></span></strong>. Although a Constitutional environmental right will not cure all environmental problems, it has the potential to address many environmental issues that result from capitalistic practices. (pp. 39-40)<br /><br /></div><div align="justify">…<strong>Conclusion<br /></strong><br /></div><div align="justify">…<span style="font-size:130%;color:#ff0000;"><strong>The underlying problem behind the corporation is of course capitalism</strong></span>. Capitalism is what dictates the modus operandi of economic self-interest, the corporation simply compounds this problem by shortening the time allowed to deliver profits through financial quarters, the stock market and dependence on shareholders. <strong><span style="font-size:130%;">Capitalism affects every area of American society including the government, public health decisions, environmental justice, and many others. The rise of globalization has allowed the ideals of capitalism to seep into every area of the globe</span></strong>. Breaking down boarders to allow the search for short-term maximized profits to carry on in any conceivable location without concern for individuals, societies or the environment. Via the WTO, many policies to protect egregious injustices committed by agents of corporate capitalism have been eliminated as barriers to free trade. Globalization has expanded market opportunities and delivered lower priced goods to consumers, giving them the impression that it is a good thing. <strong><span style="font-size:130%;">Americans are consuming more than they need and perhaps are not much better off for it. The American GDP consistently climbs, adding to the notion that all is well.</span></strong> <span style="font-size:130%;color:#ff0000;"><strong>However</strong></span>, under the surface the well being of society as a whole may be stagnating and even declining. <strong><span style="font-size:130%;">Plagued by hidden externalities, the environment is also suffering in the name of economic growth</span></strong>.<br /><br /></div><div align="justify">…<span style="font-size:130%;color:#ff0000;"><strong>A Constitutional environmental right would affirm that a clean and healthful environment is an inalienable right of every person, codifying the once unconscious assumption that many people believed into law. This would effectively help protect the environment, the rights of future generations, and the well being of current generations. <em>This right would also depart with many traditional beliefs, such as the belief that the environment should be free for all to enjoy</em></strong></span>. Although there is no way to prevent people from freely breathing air, consuming fresh water, or enjoying the sunset provided by nature, it should be understood that modern day realities warrant increased environmental protection. <span style="font-size:130%;color:#ff0000;"><strong><span style="font-size:180%;">More environmental protection comes at a cost that should be borne by society as a whole, including corporations, small businesses, the government and consumers</span>. These increased costs should not be perceived as payments to use environmental services; they should be viewed as compensation to preserve the natural balance necessary for individual life, capitalism and the human species to survive</strong></span>. Furthermore, the difficulties and costs arising from the initial implementation of a Constitutional environmental right should not be viewed as inefficiencies of the right, they should be seen as corrections for decades of abuse and under valuation of the environment. (p. 41)<br /><br />-------------------------------------------------------------------------------------------------<br /><br /><a href="http://www.sehn.org/rtfdocs/futuregenerations.pdf">http://www.sehn.org/rtfdocs/futuregenerations.pdf</a><br /><br /></div><div align="center"><strong><span style="font-size:130%;">Constitutional Experiments: Protecting the Environment and Future Generations</span></strong><br /></div><div align="center"> </div><div align="center"><br /><strong>By Carolyn Raffensperger (Science and Environmental Health Network)<br /></strong><br /></div><div align="center"><strong>Conservation Biology - Volume 17, No. 6, December 2003</strong><br /><br /></div><div align="justify"> </div><div align="justify"><strong><span style="font-size:130%;">The great beauty of U. S. constitutional law is that there are actually 51 constitutions, not just one big, old, fossilized document. All 50 states have constitutions, and many regularly revise them through constitutional conventions</span></strong>. These conventions provide the citizenry with an opportunity to experiment and amend these venerable documents so that they reflect changes in the contemporary world rather than the antiquated conditions of centuries ago.<br /><br /></div><div align="justify"><strong><span style="font-size:130%;">Several state constitutions have environmental provisions, most of which were drafted and adopted in the 1970s</span></strong>. These provisions often grant a right to a healthy environment (<strong><span style="font-size:130%;color:#ff0000;">Illinois</span></strong>a), establish a duty to maintain a healthy environment for future generations (<span style="font-size:130%;color:#ff0000;"><strong>Illinois and Pennsylvania</strong></span>b), or even improve the environment (<span style="font-size:130%;color:#ff0000;"><strong>Montana</strong></span>) and give the public a right to enforce these provisions (<span style="font-size:130%;color:#ff0000;"><strong>Illinois</strong></span>). Some state constitutions also assert that public natural resources are the common property of all people (<span style="font-size:130%;color:#ff0000;"><strong>Pennsylvania and Hawaii</strong></span>). <span style="font-size:180%;color:#ff0000;"><strong>These basic constitutional ideas embody the precautionary principle and the public trust doctrine</strong></span> that David Orr mentions in his essay.<br /><br /></div><div align="justify"><strong><span style="font-size:130%;">Two states, Montana and Hawaii <span style="color:#ff0000;">[President Obama's declared 'home state']</span>, reinforced their constitutional environmental provisions through innovative, far-reaching lawsuits</span></strong>. The resulting court decisions are reverberating throughout the nation and likely will eventually affect the Supreme Court’s interpretation of U.S. constitutional rights.<br /><br /></div><div align="justify"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEirvDZk_B86pmFeeibvB4GTtSrmNKtTMFM-E6h9HoIaooU-WKU6h5kghLDGIi_sRdOZko9HrzbVdgSdJtZTOvqAUILd6udTT2hhRK-tGYfQl3aL4nYSHsN36iRWjiZbPG-oGjncjprfe0ej/s1600/Montana+Color_State_Seal.png"><strong><span style="font-size:130%;"><img id="BLOGGER_PHOTO_ID_5493043976486650978" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 200px; CURSOR: hand; HEIGHT: 200px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEirvDZk_B86pmFeeibvB4GTtSrmNKtTMFM-E6h9HoIaooU-WKU6h5kghLDGIi_sRdOZko9HrzbVdgSdJtZTOvqAUILd6udTT2hhRK-tGYfQl3aL4nYSHsN36iRWjiZbPG-oGjncjprfe0ej/s200/Montana+Color_State_Seal.png" border="0" /></span></strong></a><strong><span style="font-size:130%;">The provision in Montana’s 1972 constitution</span></strong> that was challenged in a 1999 mining lawsuit says that “The state and each person shall maintain and improve a clean and healthful environment in Montana for present and future generations.” This provision was invoked in a lawsuit brought by Montana environmental groups suing the Montana Department of Environmental Quality for granting a permit to the Seven-Up Pete Joint Venture to pump millions of gallons of arsenic-tainted water into the Landers Fork and Blackfoot Rivers.…In October of 1999 <strong><span style="font-size:130%;">the Montana Supreme Court ruled unanimously that Montanans’ constitutional right to a clean and healthful environment is a fundamental right. As important, this right is intended to prevent, not just redress, harm</span></strong>.<br /><br /></div><div align="justify">In an opinion written by Justice Terry Trieweiler, <strong><span style="font-size:130%;"><span style="color:#ff0000;">the Montana Supreme Court concluded that Montanans have a right to prevent harm</span>.</span></strong> In an often-quoted phrase, Trieweiler said, “Our constitution does not require that dead fish float on the surface of our state’s rivers and streams before its farsighted environmental protections can be invoked.” The Court also said, <strong><span style="font-size:130%;"><span style="color:#ff0000;">“We conclude that the delegates’ (to the Constitutional Convention) intention was to provide language and protections which are both anticipatory and preventative.” </span>This opinion is significant because environmentalists could actually sue to prevent damage; they did not have to wait until the harm had occurred to get justice. Anticipation and prevention are <span style="color:#ff0000;"><em>at the heart of the precautionary principle</em></span>, which is <span style="color:#ff0000;">designed to prevent harm</span>, not measure and manage it</span></strong>.<br /><br /></div><div align="justify"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiAmKjdM_gONgCfYLkpZw5fX3wdyvqGZvbj0g8O8Ks-6Mia8dzTPi9VizpyA5rQCAoMVbDBqUTmn1S6ohQjlcdhwrcvOxqwYvl6ebAy4m260D4bhjiFa4PS4ZzEKLH1ok7JQzkn-4iesmVi/s1600/Hawaii+State+Seal+best-color.jpg"><img id="BLOGGER_PHOTO_ID_5493044223007655650" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 200px; CURSOR: hand; HEIGHT: 200px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiAmKjdM_gONgCfYLkpZw5fX3wdyvqGZvbj0g8O8Ks-6Mia8dzTPi9VizpyA5rQCAoMVbDBqUTmn1S6ohQjlcdhwrcvOxqwYvl6ebAy4m260D4bhjiFa4PS4ZzEKLH1ok7JQzkn-4iesmVi/s200/Hawaii+State+Seal+best-color.jpg" border="0" /></a>…In a similarly visionary decision, <span style="font-size:130%;color:#ff0000;"><strong>the Hawaiian Supreme Court explicitly adopted <em>the precautionary principl</em>e to further the public trust doctrine that is embedded in Hawaii’s state constitution</strong></span>. </div><div align="justify"> </div><div align="justify"> </div><div align="justify"><strong><span style="font-size:130%;">The article of <span style="color:#ff0000;">public trust doctrine</span> in the constitution says that “For the benefit of present and future generations, the State and its political subdivisions shall conserve and protect Hawaii’s natural beauty and all natural resources, including land, water, air, minerals and energy sources, and shall promote the development and utilization of these resources in a manner consistent with their conservation and in furtherance of the self-sufficiency of the State. All public natural resources are held in trust by the State for the benefit of the people”</span></strong> (Article XI, Conservation, Control and Development of Resources, Conservation and Development of Resources Section 1.).<br /><br /></div><div align="justify"><strong>The Hawaiian Supreme Court used this constitutional provision of public trust</strong> in its Waiahole Ditch Decision (<strong><em>Water Use Permit Applications</em>, 94 Hawaii 97; 9 P.3d 409, 2000</strong>). The Waiahole Ditch case was brought by small family farmers and Native Hawaiians challenging the decision by the Commission on Water Resource Management to allocate water from the Wai¨ahole Ditch. Water in the ditch had been diverted for 80 years by sugar plantations of central Oahu. The court said, “The duty to protect public water resources is a categorical imperative and the precondition to all subsequent considerations, for without such underlying protection the natural environment could, at some point, be irrevocably harmed and the duty to maintain the purity and flow of our waters for future generations and to assure that the waters of our land are put to reasonable and beneficial uses could be endangered.”<br /><br /></div><div align="justify"><span style="font-size:130%;color:#ff0000;"><strong>The Court in Hawaii not only reinforced the public trust doctrine but argued that the precautionary principle was essential for implementing the doctrine</strong></span>:<br /><br /></div><div align="justify"><strong><span style="font-size:130%;">“The absence of firm scientific proof should not tie the Commission’s hands in adopting reasonable measures designed to further the public interest.”</span></strong> The Court said,<br /><br /></div><div align="justify"><span style="font-size:130%;color:#ff0000;"><em><strong>Where scientific evidence is preliminary and not yet conclusive regarding the management of fresh water resources which are part of the public trust, it is prudent <span style="font-size:180%;">to adopt ‘precautionary principles’</span> in protecting the resource</strong></em></span>. That is, where there are present or potential threats of serious damage, lack of full scientific certainty should not be a basis for postponing effective measures to prevent environmental degradation. <span style="font-size:130%;color:#ff0000;"><strong>In addition, where uncertainty exists, a trustee’s duty to protect the resource mitigates in favor of choosing presumptions that also protect the resource</strong></span>. </div><div align="justify"><br /><br /><strong><span style="font-size:130%;">For those who are ruling on the U.S. Constitution, Hawaii and Montana may seem distant. But court watchers have argued that the Supreme Court is constantly monitoring state court decisions as a barometer for the will of the people.</span></strong> <span style="font-size:130%;color:#ff0000;"><strong>This suggests that both the environmental constitutional provisions and the state court decisions will filter up to the U.S. Supreme Court</strong></span> and influence environmental cases.<br /><br />-------------------------------------------------------------------------------------------------<br /><br /><a href="http://riversfoundation.org/ee/publications/Lavigne_Greening_The_Constitution.pdf">http://riversfoundation.org/ee/publications/Lavigne_Greening_The_Constitution.pdf</a><br /></div><div align="center"><br /><strong><span style="font-size:130%;">Greening the U.S. Constitution</span></strong><br /><br /></div><div align="center"><strong>By Peter M. Lavigne (River Foundation of the Americas)<br /><br /></strong></div><div align="center"><strong>Conservation Biology - Volume 17 Issue 6, Pages 1485 - 1486</strong><br /></div><div align="justify"><br /></div><div align="justify"><strong>Published Online: 1 Dec 2003<br /></strong><br /><br />Greening the U.S. Constitution will take more than wishful thinking. A more political and in-depth process is hard to find (Bowen 1966; Hoban & Brooks 1996). <strong><span style="font-size:130%;">United States jurisprudence has long lacked strong and useful mechanisms to support, analyze, or regulate either the cumulative effects of decisions affecting the environment or the downstream effects on future generations</span></strong>.<br /><br /></div><div align="justify">…<span style="font-size:130%;color:#ff0000;"><strong>As we make a transition from environmental mitigation law to ecosystem law…a constitutional amendment guaranteeing the right to a healthy environment makes great sense and the movement to put it into reality has a long way to go. The past 35 years are instructive</strong></span>.<br /><br /></div><div align="justify"><strong><span style="font-size:130%;color:#33ff33;">In the heyday of early environmental law, at least two serious proposals were made to being the change to the U.S. Constitution. Earth Day founder and former Wisconsin Senator Gaylord Nelson led the charge in 1968 with what is thought to be the first proposal to amend the Constitution with a right to a clean environment… Representative Richard Ottinger introduced a more comprehensive amendment in 1970, and several cases were also brought to federal courts to assert that the Constitution already held an implicit right to a clean environment</span></strong>.<br /><br /></div><div align="justify"><strong><span style="font-size:130%;color:#000000;">Between 1970 and 1979, five states amended their constitutions to include the right to a clean environment. Hawaii, Illinois, Massachusetts, Montana, and Pennsylvania all have constitutional amendments asserting the right of “the people” or “each person” to everything from a “right to a healthful environment” (Illinois) or a “right to clean air, pure water, and to the preservation of “natural, scenic, historic, and esthetic values of the environment” (Pennsylvania). Hawaii references its laws relating to environmental quality and provides a citizen enforcement provision (as does Illinois).</span></strong><br /><br /></div><div align="justify">Though there is yet little case law with which to interpret these state constitutional provisions, at least one clear validation of the constitutional amendment path was provided by the Montana Supreme Court. <strong>In the case of</strong> <em><strong>Montana Environmental Information Center et al., v. Department of Environmental Quality</strong></em>, <strong><span style="font-size:130%;color:#ff0000;">the Montana Supreme Court (20 October 1999) held that under its constitution, Montana citizens have a fundamental right to a clean and healthful environment <em>and that any state statute that implicates environmental rights must be strictly scrutinized and can only survive scrutiny if the state establishes a compelling state interest</em></span></strong>.<br /><br /></div><div align="justify">…Beyond the relatively untested state constitutional provisions in the United States…, burgeoning international law and policy debates rage over assertion of rights to the basic necessities of life, including clean water…<br /><br /></div><div align="justify">…David Orr asserts that <strong><span style="font-size:130%;color:#ff0000;">the time has come for an ecological enlightenment in law schools and courts</span></strong>. He is right, of course, and whether our institutions of legal training (law schools), adoption (legislatures), and interpretation (courts) recognize this in the face of the many absurdities of our modern legal system…is a large, open question.<br /><br /></div><div align="justify">…<span style="font-size:130%;color:#ff0000;"><strong>The…failure of modern environmental law to effectively protect ecosystems calls attention to Orr’s proposal to reintroduce a constitutional amendment to enumerate an inalienable right to a clean environment</strong></span>. It is long past time that the United States rejoined the international community with useful leadership on environmental policy and environmental justice. The real question is how to create the political and social change that will transform the way we create environmental policy.<br /><br /></div><div align="justify"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhljnQh9WL5eRps4t2VTagHZaOgBgsE1qWQ3VVzvwNAm_xfpNI-jO30ldayfrU5jXt_QGMamPD-MfRDD9QlIeIVE1cx9UkYTjgWRuNg7simro5TKwDylA-j7S02KWza4Z56d3DU_4CjXYUl/s1600/san+francisco+city+seal.gif"><strong><span style="font-size:130%;"><img id="BLOGGER_PHOTO_ID_5493044869402999922" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 200px; CURSOR: hand; HEIGHT: 199px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhljnQh9WL5eRps4t2VTagHZaOgBgsE1qWQ3VVzvwNAm_xfpNI-jO30ldayfrU5jXt_QGMamPD-MfRDD9QlIeIVE1cx9UkYTjgWRuNg7simro5TKwDylA-j7S02KWza4Z56d3DU_4CjXYUl/s320/san+francisco+city+seal.gif" border="0" /></span></strong></a><strong><span style="font-size:130%;">The City of San Francisco</span></strong> is showing us one way. A bold new environmental code became law in San Francisco in August 2003…<span style="font-size:130%;color:#ff0000;"><strong>The city redesigned its 11 existing environment-related statutes into a new code that challenges traditional assumptions about costs and risks. Fundamentally, the city how asks the question of <em>the precautionary principle</em> – how little harm is possible? – rather than the standard question posed by most environmental statutes – how much harm will we allow?</strong></span> <strong><span style="font-size:130%;">The <span style="color:#ff0000;"><em>precautionary principle</em></span> requires decision-makers to determine whether a potentially harmful activity is necessary whether less hazardous options are available</span></strong>. San Francisco’s example presents a historic opportunity to refocus environmental decision-making. Creating the political change to amend the U.S. Constitution is another.<br /><br />-------------------------------------------------------------------------------------------------<br /><br />[***THE TWO ARTICLES IMMEDIATELY ABOVE APPEARED WITHIN A 2003 ISSUE OF THE JOURNAL, CONSERVATION BIOLOGY, A WILEY-BLACKWELL PUBLICATION <a href="http://www.wiley.com/bw/journal.asp?ref=0888-8892">http://www.wiley.com/bw/journal.asp?ref=0888-8892</a> . THE AUTHORS OF THESE ARTICLES HARKEN FROM TWO NON-PROFIT ENVIRONMENTAL ACTIVIST OR ACTIVIST-SUPPORTING ORGANIZATIONS. THE AMES, IOWA-BASED NON-PROFIT ACTIVIST-ACADEMIC ORGANIZATIONS. THE FIRST IS KNOWN AS <strong><span style="font-size:130%;">THE SCIENCE </span></strong> <div align="justify"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhbwjMfktaUujhTHmeUt6mh4-TJ1bG3SzZmt_SgEsNSwx7En7LC08_sh27PnA0KbAwKBFFtRiY-DfpN-Iu1o_N52k704YT4YlJ6D2AbOMcNCg3f_ucUKR6X9tWxMZ9YkCwpZECTg2pMqXpv/s1600/Science+and+Environmental+Health+Network+logo.gif"><img id="BLOGGER_PHOTO_ID_5493038587813647234" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 322px; CURSOR: hand; HEIGHT: 89px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhbwjMfktaUujhTHmeUt6mh4-TJ1bG3SzZmt_SgEsNSwx7En7LC08_sh27PnA0KbAwKBFFtRiY-DfpN-Iu1o_N52k704YT4YlJ6D2AbOMcNCg3f_ucUKR6X9tWxMZ9YkCwpZECTg2pMqXpv/s400/Science+and+Environmental+Health+Network+logo.gif" border="0" /></a></div><strong><span style="font-size:130%;">AND ENVIRONMENTAL HEALTH NETWORK (“SEHN”)</span> <span style="font-size:130%;">RECOGNIZED AS ADVOCATING IN FAVOR OF ADOPTING EUROPE’S PRECAUTIONARY PRINCIPLE AS U.S. LAW</span></strong> (<a href="http://www.sehn.org/members.html">http://www.sehn.org/members.html</a> ; <a href="http://www.sehn.org/precaution.html">http://www.sehn.org/precaution.html</a> - “<strong><span style="font-size:130%;color:#ff0000;">The Science and Environmental Health Network</span></strong> is working to implement the precautionary principle as a basis for environmental and public health policy. The principle and the main components of its implementation are stated this way in the 1998 Wingspread Statement on the Precautionary Principle…”). THE SECOND ORGANIZATION IS <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgOw9YP289bSYkKHKbPinLhOJJvndBWFDjOK4CAJZlbLw9jDUO0hKdEm70-XG5VTypCTCj9bgNSPfROuriwqpd0ToJup4p6A88v2UyNwk7SHbE2lAzsOiij2cT1qrfpMpsuqmIVLwKpzy-6/s1600/Rivers+Foundation+logo_art.gif"><img id="BLOGGER_PHOTO_ID_5493038671396432130" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 165px; CURSOR: hand; HEIGHT: 144px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgOw9YP289bSYkKHKbPinLhOJJvndBWFDjOK4CAJZlbLw9jDUO0hKdEm70-XG5VTypCTCj9bgNSPfROuriwqpd0ToJup4p6A88v2UyNwk7SHbE2lAzsOiij2cT1qrfpMpsuqmIVLwKpzy-6/s320/Rivers+Foundation+logo_art.gif" border="0" /></a> THE FLAGSTAFF, ARIZONA-BASED NON-PROFIT KNOWN AS <strong><span style="font-size:130%;">THE RIVERS FOUNDATION OF AMERICAS</span></strong>, <strong><span style="font-size:130%;">WHICH MAKES GRANTS TO ENVIRONMENTAL ACTIVISTS.</span></strong> “The Rivers Foundation of the Americas is a public operating foundation dedicated to promoting and funding the conservation, protection and restoration of rivers and their watersheds throughout the Americas…<strong><span style="font-size:130%;">What We Do</span></strong><br /></div><div align="justify"><br /><span style="font-size:130%;color:#ff0000;"><strong>We support activists and their organizations with grants, technical and policy support; and in-kind donations</strong></span>. </div><br /><div align="justify"><br />We are an operating foundation. That means, <span style="font-size:130%;color:#ff0000;"><strong><em>in addition to raising an endowment to give grants and other resources to environmental leaders</em> and organizations, we also do projects</strong></span>.”<br /></div><div align="justify"><br />THE GOVERNING BOARD OF THE RFA IS COMPRISED OF A NUMBER OF ENVIRONMENTAL ACTIVIST LAWYERS. SEE: <a href="http://riversfoundation.org/rfa/about/governance/">http://riversfoundation.org/rfa/about/governance/</a>.]<br /><br />-------------------------------------------------------------------------------------------------<br /><br /><a href="http://www.law.fsu.edu/journals/landuse/vol17_1/kibert.pdf">http://www.law.fsu.edu/journals/landuse/vol17_1/kibert.pdf</a><br /></div><div align="center"><br /><strong><span style="font-size:130%;">GREEN JUSTICE: A HOLISTIC APPROACH TO ENVIRONMENTAL INJUSTICE</span></strong><br /></div><br /><div align="center"><br />NICOLE C. KIBERT<br /></div><br /><div align="justify"><br />170 J. LAND USE & ENVTL. L. [Vol. 17:1 Fall, 2001]<br /><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEio2iRo_BiKkD3rBgnGzH4bLqbly1yBrNrKj1rmVEoE_vQEsHDNqJykE_1IR-DYXhjGh3C9sOnyP5Lazz-peahZ_zqpAO4IXY1_C-hMPiXGO-HY-M358yr9eP-E8pz8LMGXCVS3DvD9bugg/s1600/environmental+justice.jpg"><img id="BLOGGER_PHOTO_ID_5493074801697742818" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 168px; CURSOR: hand; HEIGHT: 200px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEio2iRo_BiKkD3rBgnGzH4bLqbly1yBrNrKj1rmVEoE_vQEsHDNqJykE_1IR-DYXhjGh3C9sOnyP5Lazz-peahZ_zqpAO4IXY1_C-hMPiXGO-HY-M358yr9eP-E8pz8LMGXCVS3DvD9bugg/s200/environmental+justice.jpg" border="0" /></a></div><br /><div align="justify"><strong><span style="font-size:130%;">Environmental injustice</span></strong> is a phenomena that occurs in the United States and around the world in which people of color and of lower socio-economic status are disproportionately affected by pollution, the siting of toxic waste dumps, and other Locally Unwanted Land Uses (LULUs).<br /></div><br /><div align="justify"><br /><strong><span style="font-size:130%;">Initially “environmental justice” was referred to as “environmental racism” because of the disproportionate impact on people of color; however, it is now clear that environmental health risks are foisted predominately on lower income groups of all racial and ethnic groups</span></strong>. In order to be inclusive, as well as to avoid the extra baggage that comes with calling an act “racist,” practitioners almost exclusively use the term “environmental justice” rather than “environmental racism.”1 (p.169)<br /></div><br /><div align="justify"><br />Use of the term “environmental justice” is a step in bringing the issue of a constitutional right to live in a healthy environment for all people – not just to those who are interested in racial equality.<br /></div><br /><div align="justify"><br />…<strong><span style="font-size:130%;">II. WHAT IS ENVIRONMENTAL JUSTICE?</span></strong><br /></div><br /><div align="justify"><br /><strong><span style="font-size:130%;">The United States Environmental Protection Agency defines “environmental justice” as the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation and enforcement of environmental laws regulations and policies</span></strong>.2 Fair treatment means that no group - including racial, ethnic or socioeconomic groups - should bear a disproportionate share of the negative environmental consequences resulting from industrial, municipal, and commercial operations or the execution of federal, state, local, and tribal programs.3 Many studies have shown that, over the past 20 years, minorities - African Americans in particular - are more likely to live in close proximity to an environmental hazard. (p.170)<br /></div><br /><div align="justify"><br />…<strong><span style="font-size:130%;">III. BRIEF HISTORY OF THE ENVIRONMENTAL JUSTICE MOVEMENT<br /></span></strong></div><br /><div align="justify"><br />The official history of environmental justice is approximately 20 years old. (p. 171)<br /></div><br /><div align="justify"><br />… <strong><span style="font-size:130%;">IV. ORIGINS OF ENVIRONMENTAL INJUSTICE</span></strong><br /></div><br /><div align="justify"><br />… <strong>Deep Ecology is an ecological philosophy that places humans within the context of ecological systems rather than outside or central to the system</strong>.23 <span style="color:#ff0000;"><strong>In addition, humans are considered to be equal, not superior or more important, in value to other components of an ecological system</strong></span>…Naess and supporters of Deep Ecology believe that if we could focus on the impact of all of our actions on everything in the system (and importantly place humans within the system) that we could achieve social justice and live in harmony with the environment. Another one of the tenets is to fight against pollution and resource depletion. Taken together, these two tenets describe environmental justice: to treat all people equally while reducing pollution. (p.173)<br /></div><br /><div align="justify"><br />… <strong><span style="font-size:130%;">V. SOLUTIONS FOR ACHIEVING ENVIRONMENTAL JUSTICE</span></strong><br /></div><br /><div align="justify"><br /><em><strong><span style="font-size:130%;color:#ff0000;">A. Legal Solutions<br /></span></strong></em></div><br /><div align="justify"><br />… In order to successfully litigate for environmental justice, lawyers must be able to merge civil rights law and environmental law into one coherent area… <strong><span style="font-size:130%;">Cases have been successful when utilizing a barrage of legal theories in the same suit, including the 13th34 and 14th35 amendments, Title VI of the Civil Rights Act,36 NEPA,37 and a variety of local zoning and historic preservation acts</span></strong>. (pp. 175-76)<br /></div><br /><div align="justify"><br />…<strong><span style="font-size:130%;"><span style="color:#ff0000;">Carol Browner</span>, the EPA Administrator during the Clinton Administration <span style="color:#ff0000;">[Ms. Browner currently serves as director of the White House Office of Energy and Climate Change Policy in the Obama administration]</span>, stated in her introduction to the EPA’s Environmental Justice Strategy, “President Clinton and I believe that all Americans deserve to be protected from pollution – not just those who can afford to live in the cleanest, safest communities. All Americans deserve clean air, pure water, land that is safe to live on, and food that is safe to eat.”</span></strong>43<br /><br /></div><br /><div align="justify">…One way for environmental justice advocates to accelerate the process of recognition of a federal right to a healthy environment is by determining a philosophical route to follow which will aid in achieving the necessary paradigm shift. (pp. 176-77)<br /><br /></div><br /><div align="justify"><em><strong><span style="font-size:130%;color:#ff0000;">B. Philosophical Solutions: A Cultural Paradigm Shift</span></strong></em><br /><br /></div><br /><div align="justify"><strong><span style="font-size:130%;">The most obvious way to stop environmental injustice is to <span style="color:#ff0000;"><em>stop</em></span> putting people at risk by <span style="color:#ff0000;">allowing industry and the government to continue to utilize <em>risk analysis</em> as a method for determining whether pollution should be allowed. There are alternative methods of determining whether a project should <em>proceed</em>. <em>The precautionary principle</em></span> has been defined as "when an activity raises threats of harm to human health or the environment, precautionary measures should be taken even if some cause and effect relationships are not fully established scientifically</span></strong>. In this context the proponent of an activity, rather than the public, should bear the burden of proof."46 This method focuses on how to avoid exposure rather than measuring the amount of acceptable risk. <strong><span style="font-size:130%;color:#ff0000;">In order to encourage alternative methods, such as <em>the precautionary principle</em>, we will have to encourage the government to move away from risk analysis and place the burden on the potential polluter rather than the potentially ill-affected public</span></strong>. A shift such as this will take nothing less than a cultural paradigm shift in which permitting processes are completely open to the public, especially the potentially affected people, and a full range of options are discussed, including no action at all.47 (p.178)<br /></div></div></div></div>ITSSD Charitable Missionhttp://www.blogger.com/profile/00790887154748866904noreply@blogger.com0tag:blogger.com,1999:blog-1851218948450486986.post-57387796284998644392010-07-11T08:49:00.017-04:002010-07-11T10:34:19.834-04:00Americans Should Beware of Complex, Intellectually Beautiful Bureaucratic Systems; Lest We Fall into the Conundrum of the 'Fable of the Roasted Pigs'<div align="justify"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh-pcBJi7cSsr2vArBsI-7-qSA4l7bTnD0TuwYRlFVZA9FXxuAefHY0GEy6pYd_a5uOS9DJ2xkx1uQNL-EySJBt8iP_90L_rhh4BkNN_RM3ZoVKiCCIyysWFTwUJ52v-g9cfUE0Gg19eS8X/s1600/gustavo+f.j.+cirigliano-21.jpg"><img id="BLOGGER_PHOTO_ID_5492634182372632370" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 220px; CURSOR: hand; HEIGHT: 229px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh-pcBJi7cSsr2vArBsI-7-qSA4l7bTnD0TuwYRlFVZA9FXxuAefHY0GEy6pYd_a5uOS9DJ2xkx1uQNL-EySJBt8iP_90L_rhh4BkNN_RM3ZoVKiCCIyysWFTwUJ52v-g9cfUE0Gg19eS8X/s320/gustavo+f.j.+cirigliano-21.jpg" border="0" /></a><strong><span style="font-size:130%;">[THE FOLLOWING ALLEGORY IS A LESSON FOR ALL, AND HAS BROAD APPLICABILITY, ESPECIALLY TO GOVERNMENT BUREAUCRATS AND THE INTELLECTUALS WHO DEVISE THEIR GRANDIOSE INITIATIVES]</span></strong></div><div align="justify"><strong><span style="font-size:130%;"></span></strong></div><div align="justify"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi_DO0N_f0PdDnhD01IFdNgG3NnYlQS5Ph4x-jupVDQ8grzOp3B1yeEedQqSTkomTI9hyphenhyphen0veZZYZgOwV0XPU84rpvh4b5yrkJQ2tJFXFNEMjdPHbLEx0-uZzzLmqmhFWYlgb_scbDVTU2eV/s1600/argentina.jpg"><img id="BLOGGER_PHOTO_ID_5492635121851187250" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 95px; CURSOR: hand; HEIGHT: 70px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi_DO0N_f0PdDnhD01IFdNgG3NnYlQS5Ph4x-jupVDQ8grzOp3B1yeEedQqSTkomTI9hyphenhyphen0veZZYZgOwV0XPU84rpvh4b5yrkJQ2tJFXFNEMjdPHbLEx0-uZzzLmqmhFWYlgb_scbDVTU2eV/s400/argentina.jpg" border="0" /></a> </div><div align="justify"></div><div align="justify"><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgdkm6eyToy-XZupquUyh8ioSB9VAQR3KE17BDKo99lhIdm1OMiCojUOePymnWGoyPI8526Edi-Su0wiAjmVSu6qcg4sn6MWUrv5xczmyMVLGWjaAmoP5OZlk7OOejLs1ktQVg2navHLCIi/s1600/Agenda+of+Reflection+logo.jpg"><img id="BLOGGER_PHOTO_ID_5492634871244618930" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 321px; CURSOR: hand; HEIGHT: 46px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgdkm6eyToy-XZupquUyh8ioSB9VAQR3KE17BDKo99lhIdm1OMiCojUOePymnWGoyPI8526Edi-Su0wiAjmVSu6qcg4sn6MWUrv5xczmyMVLGWjaAmoP5OZlk7OOejLs1ktQVg2navHLCIi/s400/Agenda+of+Reflection+logo.jpg" border="0" /></a></div><br /><br /><br /><div align="justify"></div><p align="justify"><a href="http://www.agendadereflexion.com.ar/2007/06/22/368-la-fabula-de-los-cerdos-asados">http://www.agendadereflexion.com.ar/2007/06/22/368-la-fabula-de-los-cerdos-asados</a><br /><br /><br />Nº 368 - <strong><span style="font-size:130%;">La fábula de los cerdos asados</span></strong><br />Google Translation from Spanish (<strong><span style="font-size:130%;">The fable of the pig roast</span></strong>)<br /><br /><br />By Gustavo Francisco Cirigiliano, Ph.D<br /><br /><br />[Professor Cirigiliano was a professor of philosophy of education at the University of La Plata, in Argentina at the time of publication of this article. Professor Hobert W. Burns of Syracuse University assisted the author in the translation of this fable which first appeared in the November 1959 issue of Catedra y Vida. According to Professor Burns, “Dr. Cirigliano is not only a good thinker, he is dedicated to the principle of democracy and well comprehends that the extension and improvement of democracy in Argentina (and Latin America, and the U.S.) greatly depends upon modifications, or drastic changes in the present educational system.” See: <a href="http://www.jstor.org/pss/20342499">http://www.jstor.org/pss/20342499</a> ] </p><div align="justify"><br /><br />It has the old professor who once set fire to a forest where pigs were to be roasted. The men, accustomed to eating raw meat, and then tested them whenever they wanted to eat pig roast, set fire to the forest.</div><div align="justify"><br /><br />One of the possible variants of an old story about the origin of this is baked.</div><div align="justify"><br /><br />One time there was a fire in a forest in which they were pigs. These are roasted. The men, accustomed to eating raw, tested them and found them delicious. Then, whenever you wanted to eat pig roast, set fire to a forest ... until they discovered a new method.</div><div align="justify"><br /><br />But what I want to tell is what happened when you tried to modify the system to implement a new one. </div><div align="justify"><br /><br />It was time that some things were not going well: the animals are burning, sometimes were partially raw, sometimes so burnt it was impossible to use. As was mounted on a large scale procedure of great concern to everyone, because if the system fails to a large extent, the losses were equally large. Many were those who ate the beef, and many thousands were those with employment in this task. Thus the system simply should not fail. But curiously, as was done on a larger scale, more like fail and cause major losses.</div><div align="justify"><br /><br />Because of deficiencies, complaints increased. It was a general outcry for reform of the need to fund the system. Every year while met Conferences, Seminars, Conferences, Seminars for the solution. But do not think they happened to improve the mechanism, because the following year he returned to repeat the conferences, seminars, conferences and workshops.And so forever.</div><div align="justify"><br /><br />The causes of failure of the system, according to experts, should be attributed either to the discipline of the pigs that did not stay where they should, or the fickle nature of the fire difficult to control, the trees too green, or moisture land, or Weather Information Service could not quite with the place, time and amount of rainfall, or ...</div><div align="justify"><br /><br />The causes were, as seen, difficult to determine because in truth the pig roasting system was very complex: it had mounted a large structure, a great machine, with many variables, had become institutionalized. There were individuals dedicated to light: the igniferi, which in turn were specialists in sectors ignifer fire zone or north, west, etc., Burnt at night, daytime, specializing morning or twilight, summer forest fires, winter ( with jurisdictional disputes over the fall and spring). Specialists had winds (anemotécnicos). There was a General Director and Food Asamiento Asada, a director of Igneous Techniques (with the General Council of Advisors), a General Manager of forestry fire, National Commission Porcología Professional Training, a Higher Institute of Culture and Food Technology (the ISCYTA) and clunkers (Reform Guidance Bureau Igneous-Operative).</div><div align="justify"><br /><br />The snafu was so great that an inspector had 7,000 pigs reforms so. And it was precisely the hodgepodge that facilitated the annual congresses, seminars, conferences and workshops. But they only seemed to serve to increase the snafu in bureaucracy.</div><div align="justify"><br /><br />He had planned and was growing the formation of new forests and woodlands, according to the latest technical information (in selected regions according to a given direct and where the winds not blowing more than three hours, which was reduced moisture content, etc.)</div><div align="justify"><br /><br />There were thousands of people working on the preparation of these forests that would then ignite. There were specialists in Europe and U.S. studying the import of the best woods, trees, vines, seeds, better and more powerful burners, studying operational ideas (eg how to do well so that they fall pigs). There was also great facilities to keep the pigs before the fire, mechanisms to let them out at the right time, technicians in their diet.</div><div align="justify"><br /><br />There were experts in building stables for pigs, teacher educators from experts in the construction of stables for pigs universities that prepare teachers expert trainers in the construction of stables for pigs, researchers offered a fruit of their work universities that prepare teachers expert trainers in the construction of stables for pigs, foundations that supported the researchers who provided a fruit of their work to universities that prepare teachers expert trainers in the construction of stables pigs, etc.</div><div align="justify"><br /><br />The solutions were suggested Congresses eg the triangularly implement fire after square root of n - 1 south wind speed, release the pigs fifteen minutes before the fire reached the forest average 47 º C, others said it was necessary put large fans that would guide the direction of fire. And so on. And you do not need to say, very few of the experts agreed with each other, and each had research and data to approve their claims.</div><div align="justify"><br /><br />One day, a Category ignifer SO / DM / V-LL (or a lighter Southwest specialty woods, day, morning, rain in summer undergraduate), Juan-Common Sense, said the problem was easily solved. Everything was, according to him, that would kill the pig first elected, I will clean and properly cut and put it in a wire mesh or frame over a fire until the influence of heat and flame was on the verge.</div><div align="justify"><br /><br />- "Kill?" Exclaimed indignantly afforestation Manager .- "How will we make people mate! Now the killer is fire. Do we kill? Never!</div><div align="justify"><br /><br />Having noted the Director General of Asamiento, sent for him. She asked him what was saying strange things out there, and after listening, he said:</div><div align="justify"><br /><br />- "What you say is fine, but only in theory. It will not go in practice. Moreover, it is impracticable. Now what do you do with the anemotécnicos, in the case of adopting suggesting? ".<br /><br />- "I do not know," replied John.</div><div align="justify"><br /><br />- "Where lighters placed the different specialties?".</div><div align="justify"><br /><br />- "Do not know."</div><div align="justify"><br /><br />- "And the seed specialists in wood? What designers seven-story barn, with its new cleaning machines and automatic perfumers?. "</div><div align="justify"><br /><br />- "Do not know."</div><div align="justify"><br /><br />- "And those individuals who have gone abroad to perfect for years, and whose training has cost both to the country, I will make cleaning pigs?".</div><div align="justify"><br /><br />- "Do not know."</div><div align="justify"><br /><br />- "Those who have specialized in integrating all these years, Conferences and Seminars and Conferences for the Reform and Improvement of the system, if it meets his all, what I do with them?"</div><div align="justify"><br /><br />- "Do not know."</div><div align="justify"><br /><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjFfBPt9RBiVnh9vcAFpjhP9Y6H3r8fGYGbXlx5I_zwYg1IKRbXlFZqVAMrN25fw5li635-cxCliXlY9_DgV9NS05_L8sywBAZtUwmoV0igoS0AOB2Ylh-siMemBm4FdlIaTpb5O4grJqSz/s1600/certifiedanemotecnitian.jpg"><img id="BLOGGER_PHOTO_ID_5492634360668976434" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 400px; CURSOR: hand; HEIGHT: 178px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjFfBPt9RBiVnh9vcAFpjhP9Y6H3r8fGYGbXlx5I_zwYg1IKRbXlFZqVAMrN25fw5li635-cxCliXlY9_DgV9NS05_L8sywBAZtUwmoV0igoS0AOB2Ylh-siMemBm4FdlIaTpb5O4grJqSz/s400/certifiedanemotecnitian.jpg" border="0" /></a>- "Do you you realize now that his is not the solution we need everyone? Are you believes that if everything were so simple they would not have found before our specialists? Let's see! What authors say that? What authority can help your suggestion? You imagine that I can not tell <strong><span style="font-size:130%;">Anemotécnica Engineers</span></strong> is a question of putting brasitas flameless! What do I do with forests and prepared, ready to be burned, with only wood suitable for fire-in-all, the trees do not produce fruit, which makes leaves shortages do not serve to shadow? What do I do? Tell me! ".</div><div align="justify"><br /><br />- "Do not know."</div><div align="justify"><br /><br />- "What do I do with the commission Asado Writer Program, with its Departments Classification and Selection of Pigs, Functional Architecture Stables, Statistics and Population, etc..?"</div><div align="justify"><br /><br />- "Do not know."</div><div align="justify"><br /><br />- "Tell me the Porcopirotecnia engineer, Don JC Figuration, is not an extraordinary scientific personality?".</div><div align="justify"><br /><br />- "Yes, it seems so."</div><div align="justify"><br /><br />- "Well. The simple fact of possessing valuable and extraordinary pyrotechnics engineers indicates that the system is good. And what do I do with individuals so valuable? ".</div><div align="justify"><br /><br />- "Do not know."</div><div align="justify"><br /><br />- "Have you seen? What you have to bring as a solution is how to best anemotécnicos, how to get faster lighters from the west (which is our biggest problem), how to make eight-story stables or more, rather than seven as now. We need to improve what we have and not change it. Bring you a proposal for our fellows in Europe cost less, or doing a good magazine for in-depth analysis of the problem of asamiento Reform. That's what we need. That is what the country needs. To you what is missing is common sense, common-sense! Say, for example, what do I do with my good friend (and relative) the President of the Commission to Study for the Utilization of Waste former Forests? ".</div><div align="justify"><br /><br />- "I am really puzzled," said Juan.</div><div align="justify"><br /><br />- "Well. Now who knows the problem, do not go around saying you fixes everything. Now we see that the problem is more serious and not so simple as imagined. One from below and from outside states. But be in to know the problem and know the difficulties. Now, between us, I urge you not to insist with one's own because it could bring difficulties with his job. Not for me! I say it for her sake, because I understand, I understand his approach, but you know, you may find other less comprehensive than, you know how it is, sometimes eh? .... "</div><div align="justify"><br /><br />Poor John Common Sense-mu said nothing. Without greeting between scared and stunned, with the feeling of walking upside down, left and never seen again. No one knows where it went. That's why we say that these reform efforts and improvement of the system, lack-Common Sense.</div><div align="justify"><br /><br /><em><strong>The "Fable of roasted pigs," by Gustavo F. J. Cirigliano, was originally published in Life magazine and Chair, Buenos Aires, 1959.</strong></em><br /><br />Text courtesy of <a href="http://www.losocial.com.ar/">http://www.losocial.com.ar/</a> .</div><div align="justify"><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhuJWOYx6ae5biKhJzC7XtdMxQJ0mAqgiDA952t_j7lWBhSW8SKv3q4WylD2TAHqCcEu-AbUzKgMfFks2GGsptVl8221dTl4OP1ESghZG1HUgB7qOCxAwP3OZzsMrkBO95JD0nP-FxNdIJq/s1600/bureaucratic+system.jpg"><img id="BLOGGER_PHOTO_ID_5492633080833813410" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 400px; CURSOR: hand; HEIGHT: 275px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhuJWOYx6ae5biKhJzC7XtdMxQJ0mAqgiDA952t_j7lWBhSW8SKv3q4WylD2TAHqCcEu-AbUzKgMfFks2GGsptVl8221dTl4OP1ESghZG1HUgB7qOCxAwP3OZzsMrkBO95JD0nP-FxNdIJq/s400/bureaucratic+system.jpg" border="0" /></a></div><br /><br /><br /><div align="justify"></div>ITSSD Charitable Missionhttp://www.blogger.com/profile/00790887154748866904noreply@blogger.com0tag:blogger.com,1999:blog-1851218948450486986.post-18954711557653615112010-05-16T08:26:00.020-04:002010-05-16T13:38:43.170-04:00The Legacy of Gordon Brown's, and Perhaps, Obama's Socialism??<a href="http://www.timesonline.co.uk/tol/news/politics/article7127819.ece">http://www.timesonline.co.uk/tol/news/politics/article7127819.ece</a><br /><div></div><div><br /></div><div align="justify"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjEnwMJV5osQAhek8nbV2oxvNk3GZYr3zBiqSsPZ3xDEcOVJkWZ2GfB5fWJbtvfyhMCbfnAB41vTS5_K6yBbLgiAbhVjcwB6FAdRu9fCbGkeA-yEtVh4veDF9Pp0ktmAa5w21X3idrEmsa4/s1600/scorched+earth+policy.jpg"><img id="BLOGGER_PHOTO_ID_5471846158833815090" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 409px; CURSOR: hand; HEIGHT: 363px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjEnwMJV5osQAhek8nbV2oxvNk3GZYr3zBiqSsPZ3xDEcOVJkWZ2GfB5fWJbtvfyhMCbfnAB41vTS5_K6yBbLgiAbhVjcwB6FAdRu9fCbGkeA-yEtVh4veDF9Pp0ktmAa5w21X3idrEmsa4/s320/scorched+earth+policy.jpg" border="0" /></a><strong><span style="font-size:130%;">Labour hid </span></strong><strong><span style="font-size:130%;">‘scorched earth’ debts worth billions </span></strong><br /></div><br /><div><br /></div><div>By Marie Woolf and Jonathan Oliver<br /><br /></div><div><br /></div><div>UK Sunday Times</div><div></div><div><br /></div><div>May 16, 2010</div><div></div><div align="justify"></div><div align="justify"><br /><span style="font-size:130%;color:#ff0000;"><strong>THE government last night accused Labour of pursuing a “scorched earth policy” before the general election, leaving behind billions of pounds of previously hidden spending commitments.</strong></span></div><div></div><div align="justify"><br />The newly discovered Whitehall “black holes” <span style="font-size:130%;color:#ff0000;"><strong>could force even more severe public spending cuts, or higher tax rises</strong></span>, ministers fear.</div><div></div><div align="justify"><br />Vince Cable, the business secretary, said: “I fear that a lot of bad news about the public finances has been hidden and stored up for the new government. The skeletons are starting to fall out of the cupboard.”</div><div></div><div align="justify"><br />The new cabinet has been discovering previously unknown contracts and uncosted spending commitments left by their spendthrift predecessors.</div><div></div><div align="justify"><br />“There are some worrying early signs that numbers left by the outgoing government may not add up,” said Francis Maude, the Cabinet Office minister.</div><div></div><div><br />David Willetts, the universities minister, claimed that Labour had left behind “not so much an in-tray as a minefield”.</div><div></div><div align="justify"><br /><span style="font-size:180%;color:#ff0000;"><strong>Billions of pounds in public money was committed in the run-up to the election campaign in a deliberate strategy to boost Labour’s chances at the ballot box and sabotage the next government.</strong></span><br /></div><div><br /></div><div></div><div align="justify"><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgntHBqMqeFSzKIZjkqnPHPYalHJT-8qxloZmdbqCtVOD5ucbQxpjtb97yGS0tvKTopElWYxyDaLuCs4gabQjpi52K7WFE7g_CUduKSXZtQyPbwRBEU02dmlVYmDLruw5jUVWq1pJRSg5HE/s1600/sleaze+labour+-+bigbook.jpg"><img id="BLOGGER_PHOTO_ID_5471850870991440402" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 400px; CURSOR: hand; HEIGHT: 400px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgntHBqMqeFSzKIZjkqnPHPYalHJT-8qxloZmdbqCtVOD5ucbQxpjtb97yGS0tvKTopElWYxyDaLuCs4gabQjpi52K7WFE7g_CUduKSXZtQyPbwRBEU02dmlVYmDLruw5jUVWq1pJRSg5HE/s400/sleaze+labour+-+bigbook.jpg" border="0" /></a>One former Labour minister told The Sunday Times: <span style="font-size:180%;color:#ff0000;"><strong>“There was collusion between ministers and civil servants</strong></span> to get as many contracts signed off as possible before the election was called.”</div><div align="justify"></div><div align="justify"><br />One former adviser to the schools department said <span style="font-size:180%;color:#ff0000;"><strong>there was a deliberate policy of “scorched earth”. “The atmosphere was ‘pull up all the railways, burn the grain stores, leave nothing for the Tories’,”</strong></span> he added.<br /></div><div><br /></div><div align="justify"><br />The disclosures come as George Osborne, the chancellor, prepares this week to reveal details of an initial £6 billion of cuts to help plug the hole in the £163 billion deficit. <span style="color:#ff0000;"><strong>A full emergency budget next month will see some departmental budgets being slashed by up to 25% as well as tax rises, including a possible hike in Vat.</strong></span></div><div><br /><br />Many ministers are spending this weekend going through their red boxes trying to understand the scale of the budgetary black holes facing their departments.</div><div><br /></div><div></div><div><br /></div><div align="justify"><br />This week the government is expected to call a temporary halt to recently signed IT contracts, while new public sector construction projects will be reviewed.</div><div></div><div align="justify"><br /><strong><span style="font-size:130%;">The “black holes” that ministers have already unearthed include:</span></strong></div><div></div><div align="justify"><br /><strong><em>- A series of defence contracts signed shortly before the election, including a £13 billion tanker aircraft programme whose cost has “astonished and baffled” ministers.</em></strong><strong><em><br /></em></strong></div><strong><em></em></strong><div align="justify"><br /><em><strong>- £420m of school building contracts, many targeting Labour marginals, signed off by Ed Balls, the former schools secretary, weeks before the general election was called.<br /><br />- The troubled £1.2 billion “e-borders” IT project for the immigration service, which, sources say, is running even later and more over-budget than Labour ministers had admitted.</strong></em></div><div align="justify"><br /><em><strong>- A crisis in the student loans company where extra cash may be needed to prevent a repeat of last year’s failure to process tens of thousands of claims on time.</strong></em></div><div><br /><strong><em>- The multi-billion-pound cost of decommissioning old nuclear power plants, which ministers claim has not been properly accounted for in Whitehall budgets.</em><br /><em>- A £600m computer contract for the new personal pensions account scheme rushed through by Labour this year, which will still cost at least £25m even if it is cancelled.</em></strong></div><div></div><div align="justify"><br />Maude, who has been given the task of reducing Whitehall waste, insisted that ministers were not scaremongering to paint their predecessors in a negative light. He said <span style="font-size:130%;color:#ff0000;"><strong>there was widespread concern that Labour had become particularly spendthrift in the run-up to the election campaign.</strong></span><br /></div><div></div><div align="justify"><br />“We put the last government on notice that contracts should not be signed without specific ministerial direction,” he said. “We are now seeking to find out what has been committed in the last few months.”</div><div><br /></div><div align="justify"><br />He hinted that <span style="font-size:130%;color:#ff0000;"><strong>the hidden “poison pills” could force the government to look at even more dramatic spending cuts than the ones already being envisaged.</strong></span> “It certainly doesn’t make the task of reducing the structural deficit any easier,” Maude said.</div><div></div><div align="justify"><br />Willetts revealed that while Lord Mandelson, whose portfolio covered business, innovation and skills, had recently announced large cuts in the universities budget, little work had been done to plan exactly where the axe might fall.<br /></div><div><br /></div><div align="justify"><br />“The outgoing Labour government left not so much an in-tray as a minefield,” Willetts said. “Issues that were left behind as too difficult to tackle by the previous regime are going to have to be dealt with.”</div><div align="justify"><br /><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQzHNoqQFSz4uhFlRhp2sCCtdRwATXN1qdWkh0Ko6u3_BWVPA2ZaeDf2kqNFUtsQvjN5UoNDjW9EJC8NsZ_32wS5ykiaA2e9ttGbAb6e8qfEe0RTq_ZbXL4SIqP3nAy-KZcZ5DN-Lt9Qze/s1600/Gordon+Brown+economic+scorched+earth+-+military+spending.jpg"><img id="BLOGGER_PHOTO_ID_5471848527843226866" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 400px; CURSOR: hand; HEIGHT: 263px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQzHNoqQFSz4uhFlRhp2sCCtdRwATXN1qdWkh0Ko6u3_BWVPA2ZaeDf2kqNFUtsQvjN5UoNDjW9EJC8NsZ_32wS5ykiaA2e9ttGbAb6e8qfEe0RTq_ZbXL4SIqP3nAy-KZcZ5DN-Lt9Qze/s400/Gordon+Brown+economic+scorched+earth+-+military+spending.jpg" border="0" /></a>Gerald Howarth, the new Tory minister for defence procurement, disclosed that <strong>the financial pressures on the Ministry of Defence (MoD) were even graver than he had been expecting.</strong> <span style="color:#ff0000;"><strong>“The appetite for new programmes exceeded the capacity of the MoD’s stomach, particularly in the run-up to the election,” he said. “In the past few months there was a rush of new orders. What we are going to have to do is ensure the equipment programme matches the military need.”</strong></span><br /></div><div align="justify"><br /><span style="color:#ff0000;"><strong>Defence sources say the military has been using the urgent operational requirement (UOR) to borrow money from the Treasury to fund equipment for Afghanistan that the MoD could not afford to buy. </strong></span>“They’ve been using the UOR system like a credit card,” one source said, “and they’ve been maxing out on the card to the point where they’re around £700m over the limit. It’s all got to be paid back.”</div><div></div><div align="justify"><br />Osborne’s cuts package to be announced early this week includes a freezing of spending on new IT projects, stopping most public sector recruitment and renegotiating deals with government suppliers.<br /></div><div><br /></div><div align="justify"><br />With speculation growing that Osborne is planning to announce an increase in Vat from 17.5% to 20% next month, there are growing fears he could face a tax revolt from left-leaning Lib Dem backbenchers.<br /></div><div><br /></div><div align="justify"><br />Lib Dem MP Simon Hughes said on Radio 4’s Today programme yesterday: “Our party remains an independent party. We will take views. We don’t suddenly change our policy.”</div><div><br /></div><div align="justify"><strong><span style="font-size:180%;">[WILL OBAMA & THE DEMOCRATIC PARTY DO THE SAME TO AMERICA???] </span></strong><br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgWv5bEaG2sPXTMRqU9OLFnftfRIA3hdKlrlzG0m-u9NHPOCdhMDybIFlI6QZdlL9TkufHXSPmGCwX29_W5NbRpwSCVtyEBc2uI9ULVO-XG6xETMF8h9A8ZxEo2C5OWS8sY3d_JFn843tzJ/s1600/british+obama.jpg"><img id="BLOGGER_PHOTO_ID_5471843954097304738" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 216px; CURSOR: hand; HEIGHT: 320px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgWv5bEaG2sPXTMRqU9OLFnftfRIA3hdKlrlzG0m-u9NHPOCdhMDybIFlI6QZdlL9TkufHXSPmGCwX29_W5NbRpwSCVtyEBc2uI9ULVO-XG6xETMF8h9A8ZxEo2C5OWS8sY3d_JFn843tzJ/s320/british+obama.jpg" border="0" /></a></div><div><br /></div><div><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhfJaHTQP0cR_7A3zv9JOxfr4B6BeLeA8IvrHk2BIzp6HPekNQYDFU3PFjRxfj_WgQRqh90SaWtWW4HteyxffVV5J6RPuKNjiTJmEh0MrSosw_2nhyV7TskMSrMEExhPYZg1tmoGf1ngvdf/s1600/Gordon+Brown+statute.gif"><img id="BLOGGER_PHOTO_ID_5471844302435331042" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 320px; CURSOR: hand; HEIGHT: 247px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhfJaHTQP0cR_7A3zv9JOxfr4B6BeLeA8IvrHk2BIzp6HPekNQYDFU3PFjRxfj_WgQRqh90SaWtWW4HteyxffVV5J6RPuKNjiTJmEh0MrSosw_2nhyV7TskMSrMEExhPYZg1tmoGf1ngvdf/s320/Gordon+Brown+statute.gif" border="0" /></a> <a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiS_61ObRDHGAjAfL3lqofgjzOosD0XU5dHdPUa0eWVAJfKf8kfBRohbviNtl_mRELtABwzlN_uEpbQsIKZD6ubjCNxl1kfb5Kg1WwZ6vdDM9oVTMI2dgKSWlIu4lCEgvTvPLKMjgttCFaC/s1600/Obama+Doomed.gif"><img id="BLOGGER_PHOTO_ID_5471844570597848322" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 320px; CURSOR: hand; HEIGHT: 200px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiS_61ObRDHGAjAfL3lqofgjzOosD0XU5dHdPUa0eWVAJfKf8kfBRohbviNtl_mRELtABwzlN_uEpbQsIKZD6ubjCNxl1kfb5Kg1WwZ6vdDM9oVTMI2dgKSWlIu4lCEgvTvPLKMjgttCFaC/s320/Obama+Doomed.gif" border="0" /></a></div>ITSSD Charitable Missionhttp://www.blogger.com/profile/00790887154748866904noreply@blogger.com0tag:blogger.com,1999:blog-1851218948450486986.post-8795914742090700772010-01-14T09:15:00.011-05:002010-01-14T09:50:37.469-05:00The EU's Loss of Authority and Influence at the Copenhagen Climate Change Conference Ensures Our Economic Freedom<a href="http://www.thegwpf.org/opinion-pros-a-cons/413-benny-peiser-copenhagen-and-the-demise-of-green-utopia.html">http://www.thegwpf.org/opinion-pros-a-cons/413-benny-peiser-copenhagen-and-the-demise-of-green-utopia.html</a><br /><br /><strong><span style="font-size:130%;">Copenhagen And The Demise Of Green Utopia</span></strong><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiqT8Vl3xLeB9Oe6jkEWHnsp8IYoIOes3d7tL5M-hyhtFZCWQ0EygULpQW0bImMI-SGIIiMTEHfxEOxLBjT-xLeTxSwhmvILUPPe7tdf7bIxNr_upXuEjAo2hDqH-uoP-bOZ18k6sa1Rqds/s1600-h/green-utopia.jpg"><img id="BLOGGER_PHOTO_ID_5426603543315736562" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 252px; CURSOR: hand; HEIGHT: 400px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiqT8Vl3xLeB9Oe6jkEWHnsp8IYoIOes3d7tL5M-hyhtFZCWQ0EygULpQW0bImMI-SGIIiMTEHfxEOxLBjT-xLeTxSwhmvILUPPe7tdf7bIxNr_upXuEjAo2hDqH-uoP-bOZ18k6sa1Rqds/s400/green-utopia.jpg" border="0" /></a><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgtxLUojMOxpq-TFQhuuuC00kLYNpXRTFXgmjBDuRFDHfRTGkDHAMpklMUoWbGQTUp2z3HXE9Q6wzZ46ipoHz1aVbmlG1ewCsCUNeAyoBTD-sRb8myj48GrqDSWNTvV2YvEl6j2YL7LgGlW/s1600-h/french+green+utopia.gif"><img id="BLOGGER_PHOTO_ID_5426604122533527538" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 150px; CURSOR: hand; HEIGHT: 225px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgtxLUojMOxpq-TFQhuuuC00kLYNpXRTFXgmjBDuRFDHfRTGkDHAMpklMUoWbGQTUp2z3HXE9Q6wzZ46ipoHz1aVbmlG1ewCsCUNeAyoBTD-sRb8myj48GrqDSWNTvV2YvEl6j2YL7LgGlW/s400/french+green+utopia.gif" border="0" /></a><br /><br /><br />By Dr. Benny Peiser<br /><br /><br /><div align="justify">The Global Warming Policy Foundation (GWPF)</div><br /><br />14 January 2010<br /><br /><br /><div align="justify"><strong><span style="font-size:180%;"></span></strong> </div><div align="justify"><strong><span style="font-size:180%;">The failure of the UN climate summit in Copenhagen</span></strong> is a historical watershed that <strong><span style="font-size:180%;">marks the beginning of the end of climate hysteria.</span></strong> <strong><span style="font-size:180%;">Not only does it epitomise the failure of the EU’s environmental policy, it also symbolises the loss of Western dominance.</span></strong> The failure of the climate summit was not only predictable – it was inevitable. There was no way out from the cul-de-sac into which the international community has manoeuvred itself. The global deadlock simply reflects the contrasting, and in the final analysis irreconcilable interests of the West and the rest of the world. <strong><span style="font-size:180%;">The result is likely to be an indefinite moratorium on the international climate legislation.</span></strong> After Copenhagen, the chances for a binding successor of the Kyoto Protocol are as good as zero.</div><br /><div align="justify"> </div><div align="justify"><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhF5C8SVFuaDEfHS17IS4pEfc7NituWS1Mv1IAnHmDkb17JwlJxLpcmy1W3kC0MQKbZNQODaZ69QC0DQyodt03B7TJkbgq-oLvGyNVQHBw9rFF0ozM5EDGU2uI65UeYcXLT_G8TNv61nhoZ/s1600-h/eu-green.jpg"><img id="BLOGGER_PHOTO_ID_5426605659031188706" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 320px; CURSOR: hand; HEIGHT: 202px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhF5C8SVFuaDEfHS17IS4pEfc7NituWS1Mv1IAnHmDkb17JwlJxLpcmy1W3kC0MQKbZNQODaZ69QC0DQyodt03B7TJkbgq-oLvGyNVQHBw9rFF0ozM5EDGU2uI65UeYcXLT_G8TNv61nhoZ/s320/eu-green.jpg" border="0" /></a>The extent of the debacle and the shift in the balance of geopolitical power was demonstrated by the fact that <strong><span style="font-size:180%;"><span style="color:#000099;">the final accord was made without the participation of the European Union. The exclusion of Europe is a remarkable symbol of the EU’s growing loss of influence, a <span style="color:#33ff33;">green</span> bureaucracy that was not even asked whether they agreed with the non-binding declaration of China, India and the USA</span>. Although the Copenhagen conference was held in a European capital, the negotiations and the final result of the conference were totally outside European involvement.</span></strong></div><br /><div align="justify"> </div><div align="justify"><br /><strong><span style="font-size:130%;">Climate poker<br /></span></strong></div><div align="justify"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEinaoqoAdVslEpow2OSyHFsUPLflG8T651T4MizIzzCeVdylP-mxSecGQZr2gjnywzGg_o7pxIWHRgO4auRokhxUOLwlkqrq_tRXdqLV6gHGi-EIkXyverUSN8zon3TnwT3SdSzJ51IH0-u/s1600-h/climate+poker.jpg"><img id="BLOGGER_PHOTO_ID_5426606427294030882" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 240px; CURSOR: hand; HEIGHT: 240px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEinaoqoAdVslEpow2OSyHFsUPLflG8T651T4MizIzzCeVdylP-mxSecGQZr2gjnywzGg_o7pxIWHRgO4auRokhxUOLwlkqrq_tRXdqLV6gHGi-EIkXyverUSN8zon3TnwT3SdSzJ51IH0-u/s400/climate+poker.jpg" border="0" /></a>The visibly shaken EU leaders had to admit that they were taken by surprise and had been outmanoeuvred by China, India and the USA. US president Obama and the leaders of India and China had left Copenhagen long before the European heads of state were forced to agree with an accord which had been reached without their input. <strong><span style="font-size:130%;">A rejection of the Asian-American Copenhagen Accord would have been an option, were it not that it would have pushed the EU into the extremist corner of Hugo Chavez and Robert Mugabe.</span></strong><br /></div><div align="justify"><br />The failed climate summit caused a tectonic shift in international relations and left behind a new political landscape. <strong><span style="font-size:180%;color:#000099;">After <span style="color:#33ff33;">Copenhagen</span>, green Europe looks rather antiquated and the rest of the world looks totally different.</span></strong> The principles on which Europe’s climate policies were founded and which formed the basis of the Kyoto Protocol have lost their power while the EU itself lost authority and influence.</div><br /><div align="justify"> </div><div align="justify"><br /><strong><span style="font-size:130%;">True-blooded advocates of Realpolitik who hardly exist in the climate policy debate, had warned for a long time that Copenhagen would fail to bridge the divergent interests of the West and the developing countries.</span></strong> For political realists, it is no surprise whatever that all key decisions were postponed indefinitely. What is more, there is little doubt that China and India are the big winners of the Copenhagen climate poker. The two emerging superpowers managed to win new strategic allies, even among Western nations. <strong><span style="font-size:180%;">China’s and India’s strategy to align themselves with other developing countries in opposition to protectionist threats by the U.S. and the EU proved itself as very successful. In the end, their persistent even forced the Obama administration to join the anti-green alliance.</span></strong></div><br /><div align="justify"> </div><div align="justify"><br /><strong><span style="font-size:130%;">The Asian-American Accord connotes a categorical No to legally binding emission targets.</span></strong> This means that a concrete timescale for the curtailing of global CO2 emissions, not to mention the reduction of the CO2 emissions, has been kicked into the long grass. The green dream of industrial de-carbonisation has been postponed indefinitely.</div><br /><div align="justify"> </div><div align="justify"><br /><strong><span style="font-size:130%;">The NO is non-negotiable</span></strong><br /></div><br /><br /><div align="justify"><strong><span style="font-size:130%;">The imminent danger of a legally binding climate treaty that would force developing nations to impose extremely costly restrictions on cheap energy and thus their economic growth and development was quashed.</span></strong> ‘Business as usual ‘ seems to be the veritable motto of international climate policy for years to come, if not for decades.</div><br /><div align="justify"> </div><div align="justify"><br /><strong>Despite the manifest fiasco, considerable resistance to admit defeat and to accept the new reality still exists in many European capitals. Thus, we hear the usual post-conference mantra: but at the next climate conference we will be successful.</strong> The decisions which were postponed in Copenhagen will be agreed to at the next summit Mexico later this year.</div><br /><div align="justify"> </div><div align="justify"><br /><span style="font-size:180%;color:#33ff33;"><strong>This green rhetoric has no basis in reality. It’s a green fata morgana.</strong></span> After all, the rejection by the developing world to commit to legally binding emission targets is not a tactical negotiation ploy. The categorical NO is absolute and non-negotiable. <strong><span style="font-size:130%;">Due to the evident lack of realistic energy substitutes, developing countries have no choice but to continue to rely on the cheapest form of energy, i.e. fossil fuels - for the foreseeable future.</span></strong></div><br /><div align="justify"> </div><div align="justify"><br /><span style="font-size:130%;color:#000099;"><strong>The European rejection of reality is particularly silly as absolutely nothing was decided in Copenhagen. Even the promised $100 billion climate fund are not binding and are unlikely to materialise in any case.</strong></span> Of course, these figures are pure fantasy because both the EU and the US have made these sums conditional on the signatures of China and India under the climate treaty, a proviso that is not going to happen in the foreseeable future.</div><br /><div align="justify"> </div><div align="justify"><br /><strong><span style="font-size:130%;">The developing nations are not stupid. They have ensnared the West in a climate trap that green politicians set for themselves</span></strong>. To meet the growing pressure by the West, developing countries are demanding $200- 400 billion dollars – per annum - for so-called climate compensation and adaptation measures, together with billions worth of technology transfers. <strong><span style="font-size:130%;">It is difficult to see how the West, already heavily curtailed as a result of the economic crisis, would be prepared to transfer such an astronomical amount of money. Even in good times it would have been a foolish idea</span></strong>.</div><br /><div align="justify"> </div><div align="justify"><br /><span style="font-size:130%;color:#000099;"><strong>For too long, West leaders have been convinced that they are pursuing a clever strategy. The EU promised, in principle, a financial transfer of $30 billion in the next three years to poor countries. However, Manuel Barroso, the president of the European Commission, made perfectly clear that the climate billions are conditional on an international agreement with binding emission limits.</strong></span></div><br /><div align="justify"> </div><div align="justify"><br /><span style="font-size:130%;color:#000099;"><strong>The Copenhagen fiasco will undoubtedly trigger a rethinking of the European climate policy. Especially East European member states – but probably also the Italian and German governments – will be demanding a drastic reassessment of unilateral climate targets which are turning into an economic liability and a political risk. They are already putting a heavy burden on European economies as well as driving ever higher the costs for energy, industrial output and the general public.</strong></span></div><br /><div align="justify"> </div><div align="justify"><br />Most likely, all efforts of reaching a binding climate agreement will fail in coming years. The pressure of lowering expectations of a green utopia will therefore increase. The developing countries can not afford to slow, let alone reduce their dependence on cheap energy and economic development as any significant curtailment would undermine their social and risk political stability.</div><br /><div align="justify"> </div><div align="justify"><br />Even in the Western world, the general climate hysteria shows a marked cooling. If recent opinion polls are to be believed, the obsession with climate change, which was a common feature during much of the 1980s and 90s no longer exists. In its place, climate fatigue is spreading. The novelty of climate change and the habitual alarms have lost their original shock value. Instead, the public seems to be warming to the idea of gradual and inevitable climate change.</div><br /><br /><div align="justify"><strong><span style="font-size:130%;">International climate politics face a profound crisis.</span></strong> <span style="font-size:130%;color:#33ff33;"><strong>Green taxes and climate levies in whatever form and shape have become political liabilities. Revolts among eastern European countries, in Australia and even among Obama's Blue Dog Democrats are forcing law-makers to renounce support for unilateral climate policies. In the UK, the party-political consensus on climate change is unlikely to survive the general elections as both Labour and the Tories are confronted by a growing public backlash against green taxes and rising fuel bills.</strong></span></div><br /><span style="font-size:180%;color:#ff0000;"><strong></strong></span><br /><div align="justify"><span style="font-size:180%;color:#ff0000;"><strong>However, the biggest losers of the Copenhagen fiasco appear to be climate science and the scientific establishment who, with a very few distinguished exceptions, have promoted unmitigated climate alarm and hysteria.</strong></span> It confirms beyond doubt that most governments have lost trust in the advice given by climate alarmists and the IPCC. <span style="font-size:180%;color:#000099;"><strong>The Copenhagen accord symbolises the loss of political power by Europe whose climate policies have been rendered obsolete.</strong></span></div><br /><div align="justify"> </div><div align="justify"><br /><strong><span style="font-size:130%;">Loss of credibility</span></strong></div><br /><div align="justify"> </div><div align="justify"><br />Climate science too is facing a crisis of credibility. It is confronted by growing doubt and criticism, not in the least as a result of the so-called Climategate scandal, the revelations about the behind-the-scene shenanigans by leading climate researchers. Moreover, the unforeseen arrest of the global warming trend has only increased the credibility crisis and has led to growing and deepening scepticism among wide sectors of the public. <strong><span style="font-size:130%;">The standstill global warming, as well as the global economic crisis have greatly dampened the enthusiasm for expensive climate policies as well as for <span style="color:#33ff33;">green taxes and exorbitant subsidies.</span></span></strong></div><br /><div align="justify"> </div><div align="justify"><br />Above all, the debacle of Copenhagen shows that conventional climate policies have no future. <strong><span style="font-size:130%;">What is necessary now is the development of alternative approaches that are politically realistic and economically feasible. In order for a new climate realism to be successful, governments and government agencies should start, at last, to engage and involve critics of conventional climate politics.</span></strong> Instead of continuing to follow the futile approaches and failed policies promoted by climate alarmists for far too long, governments would be well advised to be introduce more balanced and more transparent assessments of climate science and policy research.</div><br /><div align="justify"> </div><div align="justify"><br />It is quite possible that global temperatures might start rising again in the foreseeable future. Admittedly, no one knows exactly if and when this will happen – and if, whether the renewed warming trend will be pronounced, moderate or insignificant. In all likelihood, we will not now for the next twenty or thirty years who will be right or wrong - the climate sceptics or the alarmists. Nevertheless, as long as the global warming standstill continues, more or less, and as long as the political deadlock between the West and the rest of the world lingers, international climate politics will remain firmly on ice.</div><br /><div align="justify"> </div><div align="justify"><br /><em>Dr Benny Peiser is the director of the </em><a href="http://www.thegwpf.org/"><em>Global Warming Policy Foundation</em></a><em> and the editor of the </em><a href="http://www.staff.livjm.ac.uk/spsbpeis/CCNet-homepage.htm"><em>climate policy network CCNet</em></a><em>.<br />Translated by Marianne and Gerrit van der Lingen from the original article in the Swiss weekly </em><a href="http://www.staff.livjm.ac.uk/spsbpeis/wewkopenhagen.pdf"><em>Die Weltwoche, 20. December 2009</em></a></div>ITSSD Charitable Missionhttp://www.blogger.com/profile/00790887154748866904noreply@blogger.com0tag:blogger.com,1999:blog-1851218948450486986.post-19420391816133980052009-12-19T14:00:00.033-05:002009-12-19T16:18:06.537-05:00Barko & Sarko Capitalism - Socialism With a Twist<a href="http://www.brusselsjournal.com/node/4226">http://www.brusselsjournal.com/node/4226</a><br /><div><div><div><div><div><div><div><br /></div><div><strong><span style="font-size:130%;">From Meccania to Atlantis - Part 13 (2): Harpo, Gekko, Barko, Sarko</span></strong></div><div><br /><br /></div><div><strong><span style="font-size:130%;">Chapter 2: Barko = Fundamental Transformation</span></strong> <strong><span style="font-size:130%;">2 + 3 = 5.03820</span></strong><br /><br /></div><div>By Takuan Seiyo</div></div><div></div><div><div><br /></div><div>The Brussels Journal</div><div><br /></div><div>12/18/09</div><div><br /></div><div align="justify">There was a time, before every car had a bumper sticker that read, “Even my llama voted for Obama,” when Americans preferred to affirm in this manner some essential and incontrovertible truth, like “S**t happens.” Swayed by their ruling elites and boob tube to take out reverse mortgage loans to buy swamp vacations condos and 3-ton SUVs with all the desert options for driving to MacDonald’s, they lost their mind. Their political and opinion-making leaders, all graduates of elite universities, all counseled by PhD’s from even more elite universities -- they too had forgotten the simple truths one used to learn in kindergarten. </div><div align="justify"><br /><br /><strong><span style="font-size:130%;">But the Chinese have not forgotten, and they are quoting Benjamin Franklin to the American fools. “He who goes borrowing, goes sorrowing,” </span></strong><a href="http://www.telegraph.co.uk/finance/economics/6146957/China-alarmed-by-US-money-printing.html"><strong><span style="font-size:130%;">admonishes Cheng Siwei</span></strong></a><strong><span style="font-size:130%;">, ex-vice-chairman of the Politburo of the Chinese Communist Party. <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjcBL9VudssBejRHNFWrfOYhLLke1I_6yRE6PkkLlTfwzK6hTQ4VcH0OXhO9Q2uLeh8cyIG7_yl5ccqqTL9JlMUAQMNnfp3tKame7BMQLO7fk8d-eJtry1P6lVo9-FSVn8lVyqT0tAH82f9/s1600-h/geithner.jpg"><img id="BLOGGER_PHOTO_ID_5417050002048451058" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 396px; CURSOR: hand; HEIGHT: 281px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjcBL9VudssBejRHNFWrfOYhLLke1I_6yRE6PkkLlTfwzK6hTQ4VcH0OXhO9Q2uLeh8cyIG7_yl5ccqqTL9JlMUAQMNnfp3tKame7BMQLO7fk8d-eJtry1P6lVo9-FSVn8lVyqT0tAH82f9/s320/geithner.jpg" border="0" /></a>Beijing University students laugh at <span style="color:#ff0000;">U.S. Treasury Secretary Geithner</span> when he reassures them with the transparent fib that his government believes in a “strong dollar.” And Americans swindled by their own government unto the nth generation, take solace in lampooning their Loon in Chief -- here being told by “Hu Jintao”, ”</span></strong><a href="http://www.nbc.com/saturday-night-live/video/clips/china-cold-open/1178451/"><strong><span style="font-size:130%;">I am noticing that each of your plans to save money involves spending even more money."</span></strong></a><strong><span style="font-size:130%;"> </span></strong></div><div align="justify"><br /><br />To construct an economy whose survival depends on the ability of both government and citizens to borrow money and spend it on mad social engineering programs and redundant imported junk is the stuff of retarded children’s fancy. After that house of cards has collapsed, for America’s government to borrow and print additional trillions of dollars, and to sprinkle that onto failed, mismanaged corporations, <a href="http://www.businessandmedia.org/articles/2009/20091118140613.aspx">corrupt Communist labor unions</a>, cesspool banks, and racial extortion racket like <a href="http://www.discoverthenetworks.org/groupProfile.asp?grpid=6968">ACORN</a>, is nothing short of terminal lunacy. Or something more sinister.</div><div></div><div align="justify"><br />In 2002, the U.S. national debt was close to $6 trillion. By November 2009, it had doubled to nearly $12 trillion. The debt is running so fast that it’s expected to pass $18.6 trillion in 2014. But that too is a lie – Snatcher State (1) is founded on lies. For to measure the true national debt of the American Leviathan, one would have to add other U.S. obligations that with respect to unfunded pension and health-care liabilities alone run <a href="http://online.wsj.com/article/SB124303024230548323.html.">over $99 trillion</a>. </div><div></div><div align="justify"><br />The true measure of the United States’ insolvency in November 2009 was $111 trillion, or 5.038 to the power of 20. Leviathan says, “Sorry, our forecast was 5, but it turned out to be 5.038.” Pundits then comment on the debt overrun at 5.038 and find that it’s no big deal. But Leviathan has neglected to mention the tiny superscript mark next to 5.038 that makes it $111 trillion. <strong><span style="font-size:130%;">Maybe if Orwell’s 1984 were called 2009, Winston would have been tortured by the state for writing, “Freedom is the freedom to say that two plus three is five, not 111 trillion.”</span></strong></div><div></div><div align="justify"><br />Generations of American politicians and bureaucratic barons have defined the government’s liabilities in such a way as to exclude unfunded retirement and health care obligations. Try this creative accounting with your espresso cart business, and see how long you can stay out of prison. </div><div></div><div align="justify"><br />What’s $111 trillion? It’s one of those things that, to grasp, one has to stack up Eiffel Towers all the way to Pluto, or to count seconds backwards until a few months before the Big Bang. It’s an obscene number. It’s nothing compared to the $1.4 quadrillion value of outstanding derivatives, but one insane balloon does not excuse another.</div><div></div><div align="justify"><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj6cxPb932Plv_9d5K4abGZvPDnhsloASwVIeegb6UHSVS3pT48JC7Ji41hD6lWjiFRsdQX9jU9PdVTeNndGvMXFXCDzSaE9T13uY6aAMSyA8dqkuQQhf8WG11KYzaEtJTZWZOnIgE7bIDN/s1600-h/Gekko6.jpg"><img id="BLOGGER_PHOTO_ID_5417038094729918754" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 237px; CURSOR: hand; HEIGHT: 320px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj6cxPb932Plv_9d5K4abGZvPDnhsloASwVIeegb6UHSVS3pT48JC7Ji41hD6lWjiFRsdQX9jU9PdVTeNndGvMXFXCDzSaE9T13uY6aAMSyA8dqkuQQhf8WG11KYzaEtJTZWZOnIgE7bIDN/s320/Gekko6.jpg" border="0" /></a><strong><span style="font-size:130%;color:#ff0000;">Gordon Gekko</span></strong> <strong><span style="font-size:130%;">was made into a symbol of greed only because a brain-altered leftie, Oliver Stone, made the film.</span></strong> The banksters are indefensible, that’s true. But they are merely little covetous <a href="http://i.ehow.com/images/GlobalPhoto/Articles/2070845/gecko-madagascar-main_Full.jpg">geckos</a> compared to the rapacity of whore politicians and government pashas who lust for power, permanence of power, perks of power, and the buttered money crumbs that fall their way from the table de luxe where the really smart guys dine.</div><div><br /></div><div align="justify">The Club of Crooks and Loons thrives by beggaring the middle class to fund programs that keep enough voters happy to get the Club re-elected. It raises the funds by direct wealth transfer through “progressive” (double meaning) taxation, and by borrowing and printing, i.e. creating money out of nothing. The latter is a form of stealth progressive taxation. And the purpose is always the same: reckless spending. </div><div></div><div align="justify"><br /><strong><span style="font-size:130%;color:#ff0000;">Manifestly, this “stimulates” the economy with plentiful credit and cheap money. But over time, this robs the middle class by diluting its savings and fixed income through inflation and stealth devaluation.</span></strong> It undermines society as profoundly as the profligate expenditures of the latter Caesars did Rome, financed as they were by shaving the diameter and falsifying the silver and gold content of the coins of the realm. </div><div align="justify"><br /><br />But the Club doesn’t care. The Crooks know that it’s in their re-election interest to conjure and spend vast sums of money. <span style="font-size:180%;color:#ff0000;"><strong>For the same reason they are keen on replacing the white, largely self-reliant majority with a more “diverse,” imported electorate, inured to government handouts robbed from the dispossessed middle class.</strong></span> And the Loons are happy that such spendin’ and diversifyin’ furthers their pet causes of social justice, equality, peace, and penance for whitey. Each one of these words and concepts is a hypocritical euphemism worthy of Molière.</div><div></div><div align="justify"><br /><strong><span style="font-size:130%;">There has been much media chatter that the current travails of financial capitalism are a crisis of the “free market” system. In a recent BBC poll of 29,000 people in 27 countries, </span></strong><a href="http://www.bbc.co.uk/pressoffice/pressreleases/stories/2009/11_november/09/poll.shtml"><strong><span style="font-size:130%;">only 11%</span></strong></a><a href="http://www.bbc.co.uk/pressoffice/pressreleases/stories/2009/11_november/09/poll.shtml"></a><strong><span style="font-size:130%;"> opined that free-market capitalism works well. 23% saw capitalism as fatally flawed. In 15 of the 27 countries, majorities wanted their government to increase its direct ownership of the main industries. <span style="color:#ff0000;">Although only 11 of the 23 sampled countries were of Euro-origin, the pervasive ignorance embedded in these opinions was evinced in this comment by Doug Miller, chairman of the company that conducted the survey: “It appears that the fall of the Berlin Wall in 1989 </span></span></strong><a href="http://www.bbc.co.uk/pressoffice/pressreleases/stories/2009/11_november/09/poll.shtml"><strong><span style="font-size:130%;color:#ff0000;">may not have been</span></strong></a><a href="http://www.bbc.co.uk/pressoffice/pressreleases/stories/2009/11_november/09/poll.shtml"></a><strong><span style="font-size:130%;"><span style="color:#ff0000;"> the crushing victory for free-market capitalism that it seemed at the time.</span>” </span></strong></div><div></div><div align="justify"><br />“Free-market” capitalism? In a system where the government has a monopoly on the price and quantity of money, which it misprices and misprints as a rule? In a system where the government has just bailed out the crooks and the fools from the free market’s judgment, and charged the costs to the productive and prudent?</div><div></div><div align="justify"><br /><span style="font-size:180%;color:#ff0000;"><strong>Greedy financial capitalism has exploited and exploded the credit bubble. But every bubble of the last 20 years has been inflated by the constant expansion of cheap credit by central banks</strong></span>, particularly the U.S. Fed. Had (Federal Reserve Chairmen) Greenspan and Bernanke not flooded with “liquidity,” the Gekkos would not have had the practically limitless free money to play speculative games with.</div><div></div><div align="justify"><br /><span style="font-size:130%;color:#ff0000;"><strong>This is the second systemic sabotage of free market economy even in the freest country of all – the United States. The first one is the government’s persistent failure to exercise its legislative and enforcement powers to restrain fraud, graft, market manipulation and excessive risk taking with other people’s money.</strong></span> A big part of the Crooks and Loons’ scam is that they leave free what they ought to control, i.e. the borders, Islamic infiltration, criminal gangs, bank reserve ratios, derivatives, speculation on margin -- but they control what they ought to leave free, i.e. interest rates, gender and race-blind meritocracy, the people’s right to armed self-defense, and more.<br /></div><div align="justify"></div><div align="justify"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhv_IWNCKWjLo8GOoswLKsk5qi0TWuMnUYM0yG_snvm2xXgwEzwC6kkvU5QLpEsWEnTyBG0MMvmCWWhRe4VijeO8ACByjI3r_ZdHHaMFpNfOBcKrv7aZdy6A3siRkePKMOKSlElCk1PJ7nu/s1600-h/sinking_keynesian_small.jpg"><img id="BLOGGER_PHOTO_ID_5417040573495226578" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 437px; CURSOR: hand; HEIGHT: 284px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhv_IWNCKWjLo8GOoswLKsk5qi0TWuMnUYM0yG_snvm2xXgwEzwC6kkvU5QLpEsWEnTyBG0MMvmCWWhRe4VijeO8ACByjI3r_ZdHHaMFpNfOBcKrv7aZdy6A3siRkePKMOKSlElCk1PJ7nu/s400/sinking_keynesian_small.jpg" border="0" /></a>To compound the disaster, after their bubble imploded, <span style="font-size:130%;color:#ff0000;"><strong>the Keynesian monetary drones</strong></span> threw <a href="http://abcnews.go.com/Business/Politics/story?id=8127005&page=1">$</a><a href="http://abcnews.go.com/Business/Politics/story?id=8127005&page=1">23.7 trillion’s-worth</a> of moneta (i.e. coins) -- in the U.S. alone! -- to extinguish a conflagration of debt with more debt. None of them saw the advance warning signs of the biggest financial crash in history, but all of them now know how to cure it. </div><div><br /><br /><br /><br /></div><div align="justify"><strong><span style="font-size:130%;">The economy is an organic entity. It gets irrationally exuberant and drunk on cheap money, if there is a misguided central bank providing it. But if the economy gets a chance to sleep through the hangover, fast for a year or two on bread and water, the toxins – what “Austrian” economists call malinvestments -- are flushed out of the system and the patient wakes up full of vigor to start a new day afresh. </span></strong><br /></div><div></div><div align="justify"><br />If instead of leaving it alone, the government plies the economy with the very drug that has caused its crash, it produces a jolt of activity today, and a bigger crash tomorrow. It’s like pumping a heroin addict full of opium, to cure the addiction. It’s obvious therefore that if the Monkey Business (2) clowns continue “stimulating” the economy they already destroyed through two decades of overstimulation, they must have either a mental deficiency, or a hidden agenda, or both.<br /></div><div align="justify"><br /><strong><em><span style="font-size:130%;">Barko, spender</span></em></strong><br /><br /></div><br /><div align="justify"><strong><span style="font-size:130%;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUgWkOlLKvP3bTVYScBrMmxnJ34xmhb9PzH5zbr82Bzzinw43nyAySlFDJzOR_vWnS7H7yf4-qFheKGqvIaagCXJ7XKFAGEvJ81iVcxAXBm2QOzf4jCrQOl7eIynjoTm8S_cS5qX4mh8pU/s1600-h/BARKO+-+barack-obama-mural-brooklyn.jpg"><img id="BLOGGER_PHOTO_ID_5417029184387200962" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 200px; CURSOR: hand; HEIGHT: 133px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUgWkOlLKvP3bTVYScBrMmxnJ34xmhb9PzH5zbr82Bzzinw43nyAySlFDJzOR_vWnS7H7yf4-qFheKGqvIaagCXJ7XKFAGEvJ81iVcxAXBm2QOzf4jCrQOl7eIynjoTm8S_cS5qX4mh8pU/s200/BARKO+-+barack-obama-mural-brooklyn.jpg" border="0" /></a>Barko is Barack Hussein Obama -- Great Leader, The One We Have Been Waiting For or, in implanted childrens’ devotionals, “</span></strong><a href="http://fr.sevenload.com/videos/7yvebuv-School-kids-taught-to-praise-Obama"><strong><span style="font-size:130%;">Mmm, mmm, mmm, Barack Hussein Obama</span></strong></a><strong><span style="font-size:130%;">.”</span></strong> Mr. Obama’s unique historical significance is as a “community organizer” brought to the levers of supreme power by a stroke of good fortune and able, therefore, to accelerate the Gramscian <a href="http://www.americanthinker.com/2007/02/cultural_marxism.html">Long March</a> <span style="font-size:130%;color:#ff0000;"><strong>beyond the wildest dreams of any American socialist radical who ever lived.</strong></span> </div><br /><div align="justify"><br /><span style="font-size:130%;color:#ff0000;"><strong><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgh4zUKPXDKdinAm7Pbe6H-i3oZpAtMPG1YWcfUhBJRkFIlQ4KzNvAJPG6f75goieI7gJsVVSL_f1uOcDQhws5Dency3umNKyTK3VB9lWNYoC6nSxjaUbe7I7079rBiIgFt8_ENvSRy1AXT/s1600-h/obama-pelosi-reid+marxist+socialists.jpg"><img id="BLOGGER_PHOTO_ID_5417041739844000962" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 266px; CURSOR: hand; HEIGHT: 265px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgh4zUKPXDKdinAm7Pbe6H-i3oZpAtMPG1YWcfUhBJRkFIlQ4KzNvAJPG6f75goieI7gJsVVSL_f1uOcDQhws5Dency3umNKyTK3VB9lWNYoC6nSxjaUbe7I7079rBiIgFt8_ENvSRy1AXT/s320/obama-pelosi-reid+marxist+socialists.jpg" border="0" /></a>Barko is also a phenomenon that extends beyond Mr. Obama himself. It includes what is known as the Obama-Chicago Machine-Pelosi-Reid political axis, its crypto-socialist billionaire backers and upper class “progressive” acolytes, the pierced-and-tattooed slackers, militant </strong></span><a href="http://www.youtube.com/watch?v=EuX2tysBFQk"><span style="font-size:130%;color:#ff0000;"><strong>labor</strong></span></a><span style="font-size:130%;color:#ff0000;"><strong> and civil service unions, socialist NGOs, and the tens of millions of non-white minorities for whom the Barko coalition is a ticket to bounty requisitioned from others.</strong></span> </div><br /><br /><div align="justify"><span style="font-size:130%;color:#ff0000;"><strong>The Left’s strategy has not changed much since the 1930s. They push government spending ever higher, and then define budget deficits as the problem.</strong></span> When fiscal conservatives point out that the overspending causes the deficits, the Left labels that as extremist, <a href="http://www.youtube.com/watch?v=65wi22hB8q4">supporting slavery</a> and <a href="http://www.youtube.com/watch?v=-usmvYOPfco">homicidal</a>. When in power, the Left ratchets up the spending on its clients and picks the pockets of the productive citizens out of a faked concern for the “deficit gap.” </div><br /><div align="justify"><br />The one rule is that expenditures are never reduced, except as a strategic ploy. If an emergency forces a reduction, what’s reduced is the police, the garbage pick-up, the libraries, but never the budget-busting public workers’ pension programs, or the legions of $150,000-a-year deputies of bureaucrat deputies, hired and retained through thick and thin to fulfill the Holy Grail of Body Snatcher creed: “balance” between competent straight white males and quadriplegic black Muslim lesbians.</div><br /><div align="justify"><br /><strong><span style="font-size:130%;color:#ff0000;">But there comes a time when the spending is no longer an exercise in cynical egotism or delusional ‘social justice,’ but a deliberate battering ram with which to fell a nation and steal its future.</span></strong> There is no precedent in history to the reckless magnitude and speed of <span style="font-size:180%;color:#ff0000;"><strong>the Obama–Pelosi regime’s spending</strong></span>. It’s impossible to capture concisely all the details of the confetti curtain of $100 bills streaming day and night from ten million Bernanke helicopters, but a few mileposts are worth mentioning:</div><br /><div align="justify"><br />The Senate of the most indebted nation in history, a country staggering under mountains of debt that it has no viable way of repaying, continues to pass <a href="http://www.facebook.com/note.php?note_id=142964098172">Titanic spending bills</a> that just in the first nine months of 2009 included:</div><br /><div align="justify"><a name="LETTER.BLOCK5"></a></div><div align="justify">$350 billion Wall Street bailout extension<br />$787 billion “stimulus” package<br />$400 billion, earmark-infested omnibus spending bill<br />$6 billion to federalize charities and pay volunteers<br />$109 billion loan to the International Monetary Fund<br />$3 billion for “Cash for Clunkers”<br />$400 million in corporate welfare to the tourism industry<br />$4 billion bailout of the Postal Service </div><br /><div align="justify"><br />In what the New York Post called “<a href="http://www.nypost.com/p/news/local/stim_out_of_steam_hEKOcY3pyrCBdewXIcmHIN">a stimulus without the stim</a>", the federal government has spent a half-billion dollars on ten large government stimulus contracts in New York City and Long Island that created 54 jobs. That comes to $9 million per job. </div><br /><div align="justify"><br />Overall, the government has spent <a href="http://blogs.reuters.com/james-pethokoukis/2009/12/07/cost-benefit-analysis-of-jobs-stimulus/">$246,436 per each of the 640,329 jobs </a>it claims to have saved or created so far. That's a pretty costly stimulus, a government Ponzi scheme of printing money and so robbing those who hold previously printed money, then flinging the new money about in order to cover up the sorry effects of the government’s own prior malfeasance and stupidity. </div><br /><div align="justify"><br />Each buyer of the 690,000 vehicles that were sold during the “Cash for Clunkers program” (gov. propaganda <a href="http://www.cars.gov/">here</a>) received a government subsidy of $3,500 - $4,500, at a total cost to the taxpayer of $3 billion. But since the majority of these beneficiaries <a href="http://www.autoobserver.com/2009/10/cash-for-clunkers-tab-24000-per-vehicle-of-taxpayer-cash.html">would have bought their cars anyway</a>, the 125,000 who were actually induced by the government to buy cost the taxpayer $24,000 each.<br /></div><br /><div align="justify"><br />Fraud in the “$8000 ‘stimulus’ to each new home buyer” program is currently assessed at <a href="http://video.aol.co.uk/video-detail/your-world-w-neil-cavuto-internal-fraud-at-irs/1593440538">$500 million</a>. Thousands of such $8,000 tax credits have been issued to illegal aliens, children, and people who had not bought a house – the latter including at <a href="http://nlpc.org/stories/2009/11/02/first-time-homebuyer-tax-credit-program-rife-fraud-irs-employees-scam">least 53 IRS [Income Tax Bureau] employees</a>. That’s what happens when a government rather than the free market mechanism dispenses money. </div><div align="justify"></div><div align="justify"><br />Obama has announced a plan to send 78 million American seniors a check for $250 each. That’s a paltry 19.5 billion dollars. In Detroit, thousands line up for “Obama money,” that they believe is a <a href="http://www.youtube.com/watch?v=fOZ-Etb0k0Q&feature=player_embedded">personal gift from The One</a>. In Tampa Bay, millions are wasted to subsidize beauty school tuition for beauticians <a href="http://www.tampabay.com/news/education/article1044637.ece">for whom there are no jobs.</a> Maybe that’s the ultimate Monkey Business haircut. </div><br /><div align="justify"><br /><strong>As if this weren’t enough, the lunatics in the House of Representatives write a 2000+ page bill that nobody has read and </strong><a href="http://apnews.myway.com/article/20091108/D9BREBKG1.html"><strong>pass it at 23:00 on a Saturday night</strong></a>. They propose to spend <a href="http://www.foxnews.com/politics/2009/11/02/sources-house-health-totals-trillion/">another $1.2 trillion</a> on health care for the 12.5% of Mexico’s population (3) that prefers free American doctors, in a reform that would actually worsen everything that’s already bad in the American healthcare system (4), explode U.S. debt, increases taxes, and kill jobs. Two Saturdays later, the Senate gives its stamp of approval, in a wheeling-dealing process that involves buying one senator’s vote with a <a href="http://www.washingtonpost.com/wp-dyn/content/article/2009/11/21/AR2009112102272_pf.html">$300 million bribe to Louisiana</a>, twenty times the amount of the original Louisiana Purchase.<br /></div><div align="justify"><br />And since this is being too niggardly with the taxpayer’s money, Democrat Snatchers in the Senate push through a Climate Change bill that will cost at least <a href="http://hutchison.senate.gov/resources/HutchisonBondGasTaxReport.pdf">$3.6 trillion</a>, such estimates always proven 20 years later to have been too hopeful by a factor of eight.<br /></div><div align="justify"><br />But they are just getting warmed up. “<a href="http://www.washingtonexaminer.com/politics/After-a-flurry-of-stimulus-spending_-questionable-projects-pile-up-8474249-68709732.html">After flurry of stimulus spending, questionable projects pile up,”</a> reports the Washington Examiner. The “projects” range from $300,000 for a GPS-equipped helicopter to hunt for radioactive rabbit excrement, to $800,000 for the John Murtha Airport in Johnstown, Pa. that serves 20 passengers a day. Democratic Congressman Murtha deserves his name on an airport because he is a crook of such staggering proportions that even The Huffington Post – no foe of Democrats – gives him <a href="http://www.huffingtonpost.com/news/john-murtha">his own</a> Web page. </div><br /><div align="justify"><br />While all this is going on, in a brave experiment to disprove the unfashionable “guns–or-butter” maxim , the U.S. wastes <a href="http://www.fas.org/sgp/crs/natsec/RL33110.pdf">$2.6 billion a day</a> to build the unbuildable nations of Iraq and Afghanistan [total wasted in Iraq alone: <a href="http://www.nytimes.com/2009/11/21/world/middleeast/21reconstruct.html">$53 billion</a>, so far], promises to double its foreign aid to $50 billion, to initiate hush money to Third World kleptocracies at [a big part of] <a href="http://online.wsj.com/article/SB126104774041695279.html">$100 billion per year</a>, and generally does everything that the speed of its Bureau of Engraving and Printing presses -- 8,000 sheets of paper money per hour – makes possible.<br /></div><br /><div align="justify"><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjtO3LArX2WtlHxMNnohtGIAYSy2-SDCqHmksj7IqP0PPC5WDDN44wWYPx8Hs9cXqcNniL9GXFEbqT37jYOgBJvDKHLypEX_O2jLfpJijM_yhv2I5VkSiqRQRAd_PvbdKQR67bhmRjsRkgO/s1600-h/jay+leno+joke+about+obama%27s+economic+brain+trust.gif"><img id="BLOGGER_PHOTO_ID_5417054350310347186" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 400px; CURSOR: hand; HEIGHT: 274px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjtO3LArX2WtlHxMNnohtGIAYSy2-SDCqHmksj7IqP0PPC5WDDN44wWYPx8Hs9cXqcNniL9GXFEbqT37jYOgBJvDKHLypEX_O2jLfpJijM_yhv2I5VkSiqRQRAd_PvbdKQR67bhmRjsRkgO/s400/jay+leno+joke+about+obama%27s+economic+brain+trust.gif" border="0" /></a>This is madness for the ages, stuff for future historians of civilizational collapse. And it’s not economic ignoramuses who are doing this. <strong><span style="font-size:130%;">Ben Bernanke, Chairman of the U.S. Federal Reserve, was a professor of Economics at Princeton University. Timothy Geithner, U.S. Secretary of the Treasury, has an M.A. in economics. Paul Krugman, who habitually criticizes these two for not spending enough, is the 2008 Nobel laureate in economics</span></strong>. Even President George W. Bush, who started this insanity in earnest, has an MBA from Harvard. </div><br /><div align="justify"><br /><strong><span style="font-size:130%;color:#ff0000;">The unfolding disaster is tied in part to false economic models of credentialed “experts,” full of the particular arrogance of people who have read 10,000 books but never milked a cow. Like the medieval alchemists, the Greenspan-Bernankes serving Snatcher State still look for the philosopher’s stone – and find it in John Maynard Keynes’s theory that government meddling and deficit spending is not the leaden hobble that a 9-year-old with a piggy bank would recognize, but pure gold.<br /></span></strong></div><br /><div align="justify"><br />Pure gold it is. Since gold is an insurance against the government’s follies and depredations, in the first 10 months of the Obama presidency the price of gold went up by 37%.<br /></div><br /><div align="justify"><br />The fatal conceit of learned socialist bunglers is personified in Dr. – in history, of all things -- Gordon Brown. As the British Chancellor of the Exchequer, between 1999 and 2002 Brown sold 60% of Great Britain’s gold reserves at an average price of $276 an ounce. He had actually managed to drive the price to its lowest in 25 years, still called "Brown Bottom," by announcing his intentions in advance. </div><div></div><br /><div align="justify"><strong><span style="font-size:130%;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjDZ9QaGmDmMC0vuTjy07uTK1kFEkz6qdygWeso4FjqQ2BfSPzZQStN20UcY1R5Acam4J1puNLGY00PdCWccUCHkmDCdp8pi1McHb5w7fhC5M-KfL5BKU8omI4pRBmlMamg19X-yO199ZGC/s1600-h/Gordon+Brown+-+new_deal.jpg"><img id="BLOGGER_PHOTO_ID_5417055780486076466" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 400px; CURSOR: hand; HEIGHT: 358px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjDZ9QaGmDmMC0vuTjy07uTK1kFEkz6qdygWeso4FjqQ2BfSPzZQStN20UcY1R5Acam4J1puNLGY00PdCWccUCHkmDCdp8pi1McHb5w7fhC5M-KfL5BKU8omI4pRBmlMamg19X-yO199ZGC/s400/Gordon+Brown+-+new_deal.jpg" border="0" /></a>By 1 December 2009, gold had risen by 335% and stood at $1200 an ounce. <span style="color:#ff0000;">And Dr. Brown, having managed to trash Great Britain in many other ways since, is now its Prime Minister</span>. Full of grandiose ideas to redeem whitey and uplift the world, among Brown’s other flashes of brilliance has been his effort to get the West’s then-solvent countries to give away much of their gold, via the IMF, to relieve Third World debt. Since this particular outflow to the Third World did not work out, <span style="color:#ff0000;">Brown with other Labour leaders have since </span></span></strong><a href="http://www.telegraph.co.uk/news/newstopics/politics/lawandorder/6418456/Labour-wanted-mass-immigration-to-make-UK-more-multicultural-says-former-adviser.html"><strong><span style="font-size:130%;">done their best</span></strong></a><strong><span style="font-size:130%;"> <span style="color:#ff0000;">to destroy Great Britain via a demographic inflow from the Third World.</span></span></strong></div><br /><div align="justify"><br /><strong><span style="font-size:130%;">The gross mismanagement of the West’s real assets by big business leaders has been far exceeded by the gross mismanagement of the West’s economies and societies by political leaders and bureaucrats. This starts with their Keynesian conviction that they know how to manage the economy. Friedrich von Hayek called it “the fatal conceit."</span></strong> The scope of this term ought to be enlarged to include also social capital, i.e. common ethnic roots, cultural consensus, shared norms of behavior and the resulting social trust – for these invaluable social assets have been similarly destroyed by the fatally mad ruling elites. </div><br /><div align="justify"><br /><strong><span style="font-size:130%;">The 1st Great Depression was not a failure of capitalism but a failure of the leftists elites to understand the nature of both capitalism and their own limitations (5).</span></strong> History’s reproach to the foolish government tinkerers may be deduced by comparing the “Panic of 1920” with the “Panic of 1929.” The first one <a href="http://article.nationalreview.com/?q=MWI2OWUyOWE2NmZjMmQ2ZTg5YzIzZjczY2I2Mzg2N2Q">subsided quickly</a> after President Harding’s government left things alone except for cutting taxes and spending. But the Panic of 1929, followed by much government fiddling, tampering and burning huge sums of money, lasted for the better part of two decades and stopped only because of World War 2. </div><br /><div align="justify"><br />Government meddling, bailing out and “stimulating” is pulling the world straight into the second Great Depression through a fake, “stimulated recovery,” as though there is no lesson to be drawn from the first one. However, the government’s essential incompetence is a Harpo clown issue, and we have <a href="http://www.brusselsjournal.com/node/node/4158">covered that already</a><a href="http://www.brusselsjournal.com/4158"></a>. <strong><span style="font-size:130%;">But Barko and Sarko, the one a sinister destroyer, the other a Body Snatcher lunatic, are stacked on top of the Harpo bumbler.</span></strong></div><br /><div align="justify"><br /><strong><em><span style="font-size:130%;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiLeL-SPqdQTlOcoVhyphenhyphen6WYdTqwQiP_Ce3qjRGjvMic_iavEYOhBFbXoxhpNrqEZPvTX_jx6ArgCdPofthPxU-li7LaYBMxbfA3N0zsYjvTUVs4vYB6ekto3V_3QmccaeBUdH6nqpMB3nFoi/s1600-h/barko4.jpg"><img id="BLOGGER_PHOTO_ID_5417035005113760418" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 320px; CURSOR: hand; HEIGHT: 128px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiLeL-SPqdQTlOcoVhyphenhyphen6WYdTqwQiP_Ce3qjRGjvMic_iavEYOhBFbXoxhpNrqEZPvTX_jx6ArgCdPofthPxU-li7LaYBMxbfA3N0zsYjvTUVs4vYB6ekto3V_3QmccaeBUdH6nqpMB3nFoi/s320/barko4.jpg" border="0" /></a>Barko, waster</span></em></strong></div><br /><div align="justify"><br /><strong>It takes the two meanings of “to waste” to describe what the leftoid American regime is doing to the country it loves to hate. For it’s a wipeout, a gigantic destruction by profligate mega-squandering.</strong> </div><br /><br /><div align="justify"><span style="font-size:180%;color:#ff0000;"><strong>What separates the wasting of the Barko socialists from that of the faux Sarko conservatives (like Nicolas Sarkozy) is speed, quantity, and intent.</strong></span> </div><br /><div align="justify"><br /><strong><span style="font-size:130%;"><span style="font-size:180%;color:#ff0000;">The Barkos wreak accelerated destruction with intelligent purposefulness in order to collapse Western society.</span> Their playbook has been authored by Antonio Gramsci, Herbert Marcuse, Saul Alinsky, even a convicted thief, </span></strong><a href="http://newsrealblog.com/2009/12/09/ex-con-robert-creamer-designed-leftist-blueprint/"><strong><span style="font-size:130%;">Robert Creamer</span></strong></a><strong><span style="font-size:130%;">, a darling of Chicago-style “gangsta-progressives.” Barkos even have a conspiratorial script, the </span></strong><a href="http://www.discoverthenetworks.org/groupProfile.asp?grpid=6967"><strong><span style="font-size:130%;">Cloward – Piven Strategy</span></strong></a><strong><span style="font-size:130%;">.</span></strong> </div></div><div><br /></div><div align="justify"><strong><span style="font-size:130%;"><span style="font-size:180%;color:#ff0000;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh1ZRLKxFkmgJBwTqKT899BBMR6N4O8gLthUHfE8LiAWmd2C5aCfzeOxfW0LotJ06DJ2xUUDlnZysfWuI88k_qB6ycJ9IFZ-6JGQ1oyBZ-U0roF9oHbgAJMeI4gigr9S9jmdpfO6XDxOOrZ/s1600-h/sarko.jpg"><img id="BLOGGER_PHOTO_ID_5417035437356196738" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 298px; CURSOR: hand; HEIGHT: 291px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh1ZRLKxFkmgJBwTqKT899BBMR6N4O8gLthUHfE8LiAWmd2C5aCfzeOxfW0LotJ06DJ2xUUDlnZysfWuI88k_qB6ycJ9IFZ-6JGQ1oyBZ-U0roF9oHbgAJMeI4gigr9S9jmdpfO6XDxOOrZ/s320/sarko.jpg" border="0" /></a>The Sarkos, on the other hand, destroy incrementally, with benign intent -- a mixture of bleeding heart liberalism and stupidity.</span> They hew to John Maynard Keynes, Big Business, and lefto-Christian dhimmo-bishops like </span></strong><a href="http://archbishop-cranmer.blogspot.com/2009/10/bishop-of-croydon-attacks-conservative.html"><strong><span style="font-size:130%;">Nick Baines</span></strong></a><strong><span style="font-size:130%;"> or </span></strong><a href="http://www.brusselsjournal.com/node/node/3274"><strong><span style="font-size:130%;">Godfried Danneels</span></strong></a><strong><span style="font-size:130%;">. There are conspiracies attributed to this side also, such as the “Bilderbergs” and other names given to a behind-the-curtain group of powerful string-pulling bankers. </span></strong></div><div></div><div align="justify"><br /><span style="font-size:130%;color:#ff0000;"><strong>In the United States, George W. Bush was the last Sarko in the White House, and there are Republican Sarkos serving now in the U.S. Congress.</strong></span> But as the country is struggling with its biggest crisis since World War 2, it is firmly in <strong><span style="font-size:130%;">the grip of Barack and the Barko Party</span></strong>. </div><div></div><div align="justify"><br />As if some of the finest financial minds of the United States (e.g. James Grant, <a href="http://online.wsj.com/article/SB10001424052748704342404574575761660481996.html">here</a> ) have not warned of courting disaster, as though millions have not voiced their outrage in thousands of Tea Parties, Barko, like a windup thieving magpie, goes forth. As of 8 December, there are new Obama plans to “<a href="http://news.yahoo.com/s/ap/20091208/ap_on_bi_ge/us_obama_jobs">spend our way out of this recession."</a><br /></div><div></div><div align="justify"><br />Even as voices of warning and dire prediction intensify, the Fed’s Ben Bernanke and U.S. Treasury’s Tim Geithner are intensifying their actions that ignore and defy the warnings. Even as lone Congressmen sound the alarm about the evil circus they witness daily on the job, a new 2500-page Omnibus spending bill is making its way through the Capitol like a tasty rat through a python’s practiced colon. The bill, putting the match to the paltry sum of $446 billion, <a href="http://www.glennbeck.com/content/articles/article/196/34124/">includes 5,200 earmarks</a> for things like a $17 million gift to Ireland and $3 million for bike racks in Washington DC. </div><div></div><div align="justify"><br />And the Senate is hard at work to “clear away” a Republican filibuster of a $1.1 trillion end-of-year spending bill rewarding most federal agencies with <a href="http://apnews.myway.com/article/20091212/D9CHP3L00.html">generous budget boosts</a> and funding such Barko staples as abortions and hard-drug needles. <span style="font-size:130%;color:#ff0000;"><strong>As well, the barking mad party in Congress under Barko’s baton is pulling out all stops to ram through what will be one of the main anchors of Socialist America: the health care “reform” with its grossly underestimated price tag of $1.2 trillion.</strong></span><br /></div><div></div><div align="justify"><br />The same government that wants to mismanage the $2.3 trillion (annual spending) healthcare industry, also drives hard <a href="http://www.nypost.com/p/news/opinion/opedcolumnists/an_epa_power_grab_GwJGiZdvLuVLgKVygMZ8oL">to control the carbon emissions of the American economy</a> – which means, really, to control the American economy. This, after having taken over much of the American auto, banking and insurance industries already. And that’s the government that has just agreed to pay $3.4 Billion to settle a lawsuit relative to its <a href="http://blogs.wsj.com/law/2009/12/09/us-to-pay-34-billion-to-settle-native-american-suit/">mismanagement of the revenue</a> in the American Indian trust fund. </div><div></div><div align="justify"><br />Not by coincidence, the same crazed Leviathian that has just driven the U.S. mortgage market and the world’s economy with it to implosion, continues to subsidize mortgages for people who do not qualify for loans by prudent banking criteria. U.S. Federal Housing Administration has guaranteed <a href="http://www.washingtontimes.com/news/2009/oct/19/feds-help-feed-new-market-for-easy-mortgages/print">37 %</a> of all residential mortgage loans in 2009. <a href="http://www.independent.org/blog/?p=4069">At least 20% of this $725 billion mortgage portfolio will end up in default</a> and another bailout by the U.S. taxpayer.</div><div></div><div align="justify"><br />7.2 million jobs have been lost in America since recession began. The official unemployment rate, at 10.2%, is the highest in 26 years. But even the government admits that the true unemployment rate, including workers who have given up looking for work, is 17.5%. 22% is the truthful rate, per <a href="http://www.gliq.com/cgi-bin/click?weiss_mam+150705-9+MAM1507SPLIT5+tntv.jc@gol.com">Shadow Government Statistics</a>.</div><div></div><div align="justify"><br />The only area where employment is booming is Washington, DC. At 6.2%, it has the lowest unemployment rate of all large American cities. The two million federal employees, including 25,000 new hires just since December 2008, have recently gotten a 2% wage increase. Over 10,000 of them -- an increase of 450% in just two years -- make more than $170,000 per year.<br />In this sense, the Barko regime has mounted a coup d'état in which the état is the instigator and beneficiary of the coup. But there is far more to it. It shows in the urgency and simultaneity of the unprecedented spending on very large society-transforming projects, any one of which alone would be perilous to America’s finances and social viability.</div><div></div><div align="justify"><br />All of the spending iterated above has been initiated by the government of a country amidst the greatest economic crisis in 70 years, while fighting two hot wars and three cold ones, reeling at home from a shattered social and cultural consensus, and crippled by the breakdown of such bedrock institutions as public education that educates, and civil service that serves. </div><div></div><div align="justify"><br />It’s this time that the Barko regime has chosen for smashing and rebuilding the largest sector of the American economy, healthcare. It’s this time they have chosen for closing Guantanamo and holding trials for Al Qaeda jihadis in New York. The idea is not just to burn another quarter billion for the trials and the attendant security, but also to destroy, through the judicial discovery process, the clandestine capabilities of America’s security apparatus.</div><div></div><div align="justify"><br />It’s this time too, early next year, that they have chosen to ram through Amnesty for 15 -20 million illegal immigrants. 60% of those are semi-literate Mestizos and 5% are jihadis-in-waiting. And 15 million translates into at least 60 million through gradual “family reunification” over just 20 years. It’s <a href="http://www.chicagotribune.com/news/chi-fbi-wanted-pg,0,978304.photogallery">this kind</a> of strength in diversity that America is wanting so much.</div><div></div><div align="justify"><br />All Body Snatchers who have access to a microphone crow about this coming epiphany, but the most instructive gloating comes from Janet Napolitano. In a typical inverse reality mode of Snatcher State, <a href="http://www.tucsoncitizen.com/photos/2008/11/22/l103288-1.jpg">Ms. Napolitano</a> is in charge of domestic security for the United States, tasked among others with protecting its borders and enforcing its immigration laws. “<a href="http://news.ncmonline.com/news/view_article.html?article_id=fa3a8766f2ebba0e37379ed4815da549">Timing is everything in the arts of war or politics</a>”,<a href="http://news.ncmonline.com/news/view_article.html?article_id=fa3a8766f2ebba0e37379ed4815da549"></a> said Ms. Napolitano in her speech on the blessings of busting the United States for good with a demographic bomb too, on top of all the other heavy petards.</div><div></div><div align="justify"><br /><strong><span style="font-size:180%;color:#ff0000;">The art of war – if only the foggy “conservatives” had a clue.</span></strong></div><div></div><div align="justify"><br /><strong><span style="font-size:130%;">It’s within the same time bracket that the Barko people chose to unleash the Cap-and-Trade economic catastrophe on their country, under the risible pretext that their failure to do so would lead to a catastrophe. It’s in this time bracket that <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjD-25Sey6b6RfSVJc2K4pYTW8gSKi_7PSEf_9oMT76_v4ozjXrXWAw4QDYMoQaXK7tr3KFzdX3lfklzi9tnRj_ln56qqeVS4jr3qxsg_Ir9NFGX4n9E4DtHaEW4cfJngfSge4sL6I5j4wZ/s1600-h/browner-carol-addressing-si-congress-063008.jpg"><img id="BLOGGER_PHOTO_ID_5417049083482017570" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 320px; CURSOR: hand; HEIGHT: 212px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjD-25Sey6b6RfSVJc2K4pYTW8gSKi_7PSEf_9oMT76_v4ozjXrXWAw4QDYMoQaXK7tr3KFzdX3lfklzi9tnRj_ln56qqeVS4jr3qxsg_Ir9NFGX4n9E4DtHaEW4cfJngfSge4sL6I5j4wZ/s320/browner-carol-addressing-si-congress-063008.jpg" border="0" /></a></span><span style="font-size:180%;color:#ff0000;">Mr. Obama chose to appoint an Afrocentric Black Communist, </span></strong><a href="http://www.moonbattery.com/archives/2009/07/green_jobs_czar.html"><strong><span style="font-size:180%;color:#3333ff;">Van Jones</span></strong></a><strong><span style="font-size:180%;color:#ff0000;">, as “Green Jobs” Czar, and a </span></strong><a href="http://www.socialistinternational.org/"><strong><span style="font-size:180%;color:#3333ff;">Socialist International</span></strong></a><strong><span style="font-size:130%;"><span style="font-size:180%;color:#ff0000;"> operative, Carol Browner, as “Energy and Climate Change” Czar.</span> And that confluence of Third-worldism, socialism and climate change hokum provides the clue as to what the monetary bonfire of hokum stimulus is about too.</span></strong></div><div></div><div align="justify"><br /><strong><span style="font-size:130%;">Mikhail Gorbachev, no stranger to Trotskyite thinking, has reportedly said that the threat of environmental crisis will be the “international disaster key” that will unlock the ‘New World Order’ (6).</span></strong> But even without Gorbachev’s decryption, that key is on plain view every day during the United Nations-staged <a href="http://en.cop15.dk/">Copenhagen climate commedia dell'arte</a>.</div><div></div><div align="justify"><br /><span style="font-size:180%;color:#ff0000;"><strong>The idea is to transfer wealth from the rich to the poor – on a scale undreamt of even by Karl Marx himself.</strong></span> All in the name of equality. No longer the equality of a German coal-mine owner and a German coal miner, but the equality of a German surgeon and a Gambian porter. From each according to his ability, to each according to his need, globally. Or, to paraphrase Charles Krauthammer, taxing hard-working citizens of Western democracies in order to fill the treasuries of Third World kleptocracies.</div><div></div><div align="justify"><br /><span style="font-size:180%;color:#ff0000;"><strong>This is the biggest heist in the history of the world, and the Holy Grail of socialists everywhere</strong></span>, not the least at <span style="font-size:130%;color:#ff0000;"><strong>Socialist International</strong></span>. And the United States is the one obstreperous territory that has stood athwart the road to this progressive progress, starting with George W. Bush’s refusal to sign the Kyoto Protocol.</div><div></div><div align="justify"><br /><span style="font-size:130%;color:#ff0000;"><strong><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgNQHwhQIeAgV0AeGN1QRPZIAzSsobMuT4IUX-XJcptVWjKfQjn8Q3ZMMYCerebeLDiVrpZdamk-g9Rq1S5JPZo_qQJlDdTqWwrkgFWUaju-aXpIOjleB-4In01at-NH3K4JeaMUguNKq2h/s1600-h/socialism+international.png"><img id="BLOGGER_PHOTO_ID_5417047618988115010" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 130px; CURSOR: hand; HEIGHT: 173px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgNQHwhQIeAgV0AeGN1QRPZIAzSsobMuT4IUX-XJcptVWjKfQjn8Q3ZMMYCerebeLDiVrpZdamk-g9Rq1S5JPZo_qQJlDdTqWwrkgFWUaju-aXpIOjleB-4In01at-NH3K4JeaMUguNKq2h/s200/socialism+international.png" border="0" /></a>That’s why the 2009 Nobel Peace Prize went to Barack Hussein Obama. Thorbjørn Jagland, who presided over this travesty, had been, among his other socialist posts, a vice president of the Socialist International.</strong></span> And Barko with his crew steer America’s ship now, with an intention that presidential candidate Obama <a href="http://www.youtube.com/watch?v=_cqN4NIEtOY">hinted to the knowing</a> so vividly.</div><div><br /><br /></div><div><br /></div><div align="justify"><strong><span style="font-size:180%;">[</span><span style="font-size:130%;">Thorbjørn Jagland "has been one of<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjUiSz21PvU0mgweL6-LCip2Bu6S19sY1LIwx4zOX4hJMg0wqMEqQVk_VY1318GVXbG1yO5qvQg0txl2a-EnlnbBYPbF3H8eHs_IuoCwyMWY8uwCWYSxshWlhw-A6S3jhbz2OxGDM4cvuyd/s1600-h/thorbjorn-jagland.jpg"><img id="BLOGGER_PHOTO_ID_5417034361851003090" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 120px; CURSOR: hand; HEIGHT: 120px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjUiSz21PvU0mgweL6-LCip2Bu6S19sY1LIwx4zOX4hJMg0wqMEqQVk_VY1318GVXbG1yO5qvQg0txl2a-EnlnbBYPbF3H8eHs_IuoCwyMWY8uwCWYSxshWlhw-A6S3jhbz2OxGDM4cvuyd/s320/thorbjorn-jagland.jpg" border="0" /></a> several vice presidents of the </span></strong><a title="Socialist International" href="http://en.wikipedia.org/wiki/Socialist_International"><strong><span style="font-size:130%;">Socialist International</span></strong></a><strong><span style="font-size:130%;">...He has stated that the left wing in Norway does not use Socialist International enough." See: <em>Thorbjørn Jagland</em>, Wikipedia, at:</span> </strong><a href="http://en.wikipedia.org/wiki/Thorbj%C3%B8rn_Jagland"><strong>http://en.wikipedia.org/wiki/Thorbj%C3%B8rn_Jagland</strong></a> . <strong><span style="font-size:130%;"><em>See also</em> Dan Calabrese, <em>Who is Thorbjorn Jagland? Obama’s Nobel patron is a long-time leader of Socialist International</em>, The North Star National, (Oct. 10, 2009), at:</span> </strong><a href="http://www.northstarnational.com/2009/10/10/thorbjorn-jagland-obamas-nobel-patron-long-time-leader-socialist-international"><strong>http://www.northstarnational.com/2009/10/10/thorbjorn-jagland-obamas-nobel-patron-long-time-leader-socialist-international</strong></a><strong> (reproduced below)<span style="font-size:180%;">].</span><br /></div></strong><div><br /><br /></div><div align="justify"><strong><span style="font-size:130%;">America’s backbone is its middle class of mainly white, Christian anti-socialists. The last such backbone remaining in the world, with the possible exception of Australia.</span></strong> <span style="font-size:130%;color:#ff0000;"><strong>Crush it, and you have shattered the last obstacle standing before The New World Order. Break it, and you have changed the course of history as profoundly as the French Revolution has, in the same Jacobin direction. </strong></span></div><div></div><div align="justify"><br /><span style="font-size:130%;color:#ff0000;"><strong><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiOHc759GQITXR38HYSSIFlvCwIfGMNPytQEz3G_-scRySi4jvFYtybXjNYGfOBPO-pbCMtKsCbvN9SgzlyvPcBhvkGnc6gtBWI_M6UekuQ1_HxIiVvhLJvhZEmr3AqeW6OebOZaKVXNnij/s1600-h/MajorDomo.jpg"><img id="BLOGGER_PHOTO_ID_5417042460028884930" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 294px; CURSOR: hand; HEIGHT: 320px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiOHc759GQITXR38HYSSIFlvCwIfGMNPytQEz3G_-scRySi4jvFYtybXjNYGfOBPO-pbCMtKsCbvN9SgzlyvPcBhvkGnc6gtBWI_M6UekuQ1_HxIiVvhLJvhZEmr3AqeW6OebOZaKVXNnij/s320/MajorDomo.jpg" border="0" /></a><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEim81NqWqhrXzaApneLt1_B6YTjnNDbXk4eQNlMyRQ1nPQqi3jn11SHaei5n_KvhuV7fPOmu_ofXY-nX_qpdilLhmNBTSINkiTIRKQG9NIlcVV0sH7tv8K4IyyX1QZDe0xUV78jKWSB8HAH/s1600-h/Emanuel-AP_106994t.jpg"><img id="BLOGGER_PHOTO_ID_5417045501438330050" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 174px; CURSOR: hand; HEIGHT: 200px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEim81NqWqhrXzaApneLt1_B6YTjnNDbXk4eQNlMyRQ1nPQqi3jn11SHaei5n_KvhuV7fPOmu_ofXY-nX_qpdilLhmNBTSINkiTIRKQG9NIlcVV0sH7tv8K4IyyX1QZDe0xUV78jKWSB8HAH/s200/Emanuel-AP_106994t.jpg" border="0" /></a>That’s what the spending has been all about, and that’s why they stuffed so many back-breaking projects into the same impossible time frame. That’s why Rahm Emanuel, Obama’s majordomo, said that no serious crisis should go to waste. </strong></span><br /></div><div></div><div align="justify"><br />And that’s why the next chapter in our contrarian cogitations will bear the title Requiescat in pace. The key to ending this nightmare is not in putting one’s electoral faith in a Sarko to replace a Barko while Harpo is running around in the background, but in recognizing that the whole enterprise is a mad circus decayed beyond redemption. The only true choice left is to get up and walk out of the circus tent.</div><div><br /></div><div align="justify">Previous articles in this series can be found <a href="http://www.brusselsjournal.com/node/blog/7745">here</a>.<br />-------------------------------------------------------------------------------------------------<br />(1) The basic analogy reverts to <a href="http://www.brusselsjournal.com/node/node/3612">Part 1</a>, where we cited the film <a href="http://www.dailymotion.com/video/xjs2b_invasion-of-the-body-snatchers-trai_dating">Invasion of the Body Snatchers</a>. In the film, alien “Body Snatchers” produce giant legume Pods that replace living people while appearing to be identical to them. From the Pods develop the new Body Snatchers who cultivate further Pods etc. Snatcher State, per this central metaphor, is a state governed by an elite that seems to be so crazed and indifferent to Earthly reality as if it had come from outside our galaxy.<br /></div><div align="justify"> </div><div align="justify">(2) Monkey Business is the metaphor used in <a href="http://www.brusselsjournal.com/node/node/4158">Part 13(1)</a> <a href="http://www.brusselsjournal.com/4158"></a>and taken from the Marx Brothers film, “Monkey Business,” including its “<a href="http://www.youtube.com/watch?v=Z0Va58K4eW4&feature=related">haircut” scene</a>. </div><div></div><div> </div><div>(3) See <a href="http://blog.heritage.org/2009/11/16/obamacare-puts-one-fifth-of-us-on-welfare/">map</a>.</div><div><br />(4) See <a href="http://online.wsj.com/article/SB10001424052748704431804574539581994054014.html">assessment</a> by the Dean of Harvard Medical School.</div><div align="justify"><br />(5) Space does not permit for summarizing the proof here, but it may be found, among others, in Milton Friedman and Anna J. Schwartz, A Monetary History of the United States, 1867–1960, Princeton University Press, 1963 (more <a href="http://www.cato.org/events/031121bf.html">here</a>) and in Amity Shlaes, <a href="http://www.amazon.com/Forgotten-Man-History-Great-Depression/dp/0066211700">The Forgotten Man: A New History of the Great Depression</a>. And Prof. Walter Williams has made the point that until the 1st Great Depression, all financial crises since 1787 had <a href="http://townhall.com/columnists/WalterEWilliams/2009/11/04/economic_myths_and_irrelevancy">subsided quickly</a><a href="http://townhall.com/columnists/WalterEWilliams/2009/11/04/economic_myths_and_irrelevancy"></a> due to no governmental intervention in the economy.</div><div></div><div align="justify"> </div><div align="justify">(6) Quoted in Marilyn Brannan, “A Special Report: The Wildlands Project Unleashes Its War On Mankind,” Monetary & Economic Review, 1996, p. 5.</div><div align="justify"></div><div align="justify">------------------------------------------------------------------------------------------------- </div></div></div></div></div></div>ITSSD Charitable Missionhttp://www.blogger.com/profile/00790887154748866904noreply@blogger.com1tag:blogger.com,1999:blog-1851218948450486986.post-32475026601128518022009-12-04T09:54:00.007-05:002009-12-04T10:13:15.220-05:00Wall Street Journal Finally Recognizes Threat Posed to Science By European & Obama Administration-Endorsed Precautionary Principle: It's About Time!!<a href="http://www.realclearpolitics.com/articles/2009/12/03/science_is_on_the_credibility_bubble_99388.html">http://www.realclearpolitics.com/articles/2009/12/03/science_is_on_the_credibility_bubble_99388.html</a><br /><div><strong><span style="font-size:130%;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjmmfKvUriPECJgzI2ku6YF28ZTI_bEQA493c-otGX-1WB9nfdYWpYDNWyYCxXPyRuW4YhvBY5wwgvVS8lmQDpzCO49DrSZzvDTEAxgHkafJPwva2_79cBbt98XmbrLNqPE7iQoT54SBNCy/s1600-h/Eurobama_sm.jpg"><img id="BLOGGER_PHOTO_ID_5411397920293976850" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 242px; CURSOR: hand; HEIGHT: 320px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjmmfKvUriPECJgzI2ku6YF28ZTI_bEQA493c-otGX-1WB9nfdYWpYDNWyYCxXPyRuW4YhvBY5wwgvVS8lmQDpzCO49DrSZzvDTEAxgHkafJPwva2_79cBbt98XmbrLNqPE7iQoT54SBNCy/s320/Eurobama_sm.jpg" border="0" /></a>Science is on the Credibility Bubble</span></strong></div><div><br /> </div><div>By Daniel Henninger</div><div><br /> </div><div>(Wall Street Journal Deputy Editor)</div><div><br /> </div><div><strong><span style="font-size:130%;">Real Clear Politics</span></strong></div><div><br /> </div><div>December 3, 2009</div><br /><div align="justify"><br /><strong>Surely there must have been serious men and women in the hard sciences who at some point worried that their colleagues in the global warming movement were putting at risk the credibility of everyone in science. The nature of that risk has been twofold: First, that the claims of the climate scientists might buckle beneath the weight of their breathtaking complexity. Second, that the crudeness of modern politics, once in motion, would trample the traditions and culture of science to achieve its own policy goals.</strong> With the scandal at the East Anglia Climate Research Unit, both have happened at once. </div><br /><div align="justify"></div><br /><div align="justify"><br />I don't think most scientists appreciate what has hit them. <strong><span style="font-size:130%;color:#ff0000;">This isn't only about the credibility of global warming.</span></strong> For years, global warming and its advocates have been the public face of hard science. Most people could not name three other subjects they would associate with the work of serious scientists. This was it. The public was told repeatedly that something called "the scientific community" had affirmed the science beneath this inquiry. A Nobel Prize was bestowed (on a politician).<br /></div><div align="justify"><br /><br />Global warming enlisted the collective reputation of science. Because "science" said so, all the world was about to undertake a vast reordering of human behavior at almost unimaginable financial cost. Not every day does the work of scientists lead to galactic events simply called Kyoto or Copenhagen. At least not since the Manhattan Project. </div><br /><div align="justify"></div><br /><div align="justify"><br /><span style="font-size:130%;color:#ff0000;"><strong>What is happening at East Anglia is an epochal event. As the hard sciences-physics, biology, chemistry, electrical engineering-came to dominate intellectual life in the last century, some academics in the humanities devised the theory of postmodernism, which liberated them from their colleagues in the sciences. Postmodernism, a self-consciously "unprovable" theory, replaced formal structures with subjectivity. With the revelations of East Anglia, this slippery and variable intellectual world has crossed into the hard sciences.</strong></span></div><br /><div align="justify"></div><br /><div align="justify"><br />This has harsh implications for the credibility of science generally. <strong>Hard science, alongside medicine, was one of the few things left accorded automatic stature and respect by most untrained lay persons. But the average person reading accounts of the East Anglia emails will conclude that hard science has become just another faction, as politicized and "messy" as, say, gender studies. <span style="font-size:130%;color:#ff0000;">The New England Journal of Medicine has turned into a weird weekly amalgam of straight medical-research and propaganda <span style="font-size:180%;">for the Obama redesign of U.S. medicine. </span></span></strong></div><br /><div align="justify"></div><br /><div align="justify"><br />The East Anglians' mistreatment of scientists who challenged global warming's claims-plotting to shut them up and shut down their ability to publish-evokes the attempt to silence Galileo. The exchanges between Penn State's Michael Mann and East Anglia CRU director Phil Jones sound like Father Firenzuola, the Commissary-General of the Inquisition. </div><br /><div align="justify"></div><br /><div align="justify"><br />For three centuries Galileo has symbolized dissent in science. In our time, most scientists outside this circle have kept silent as their climatologist fellows, helped by the cardinals of the press, mocked and ostracized scientists who questioned this grand theory of global doom. Even a doubter as eminent as Princeton's Freeman Dyson was dismissed as an aging crank. </div><br /><div align="justify"></div><br /><div align="justify"><br /><span style="font-size:130%;color:#ff0000;"><strong>Beneath this dispute is a relatively new, very postmodern environmental idea known as "the precautionary principle." As defined by one official version: "When an activity raises threats of harm to the environment or human health, precautionary measures should be taken even if some cause and effect relationships are not fully established scientifically."</strong></span> The global-warming establishment says we know "enough" to impose new rules on the world's use of carbon fuels. The dissenters say this demotes science's traditional standards of evidence. </div><br /><div align="justify"></div><br /><div align="justify"><br /><span style="font-size:130%;color:#ff0000;"><strong>The Environmental Protection Agency's dramatic Endangerment Finding in April that greenhouse gas emissions qualify as an air pollutant-<span style="font-size:180%;">with implications for a vast new regulatory regime-used what the agency called a precautionary approach.</span></strong></span> The EPA admitted "varying degrees of uncertainty across many of these scientific issues." <span style="font-size:180%;color:#ff0000;"><strong>Again, this puts hard science in the new position of saying, close enough is good enough. </strong></span>One hopes civil engineers never build bridges under this theory. </div><br /><div align="justify"><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjDMNY1J2exPRiuBUEFNa0wlSRynOZRuXsMF0DY9mTlZTfv-G7Iq05NQVAPN3hi0kGmS1giIm1HY1vwv4-gseXABitHU8QbqdfXCGxxUzzfPH2PgA9r0mXz0d8gM5mrfafXcST4o0SGMn9X/s1600-h/Lisa+Heinzerling+--+04_01_08_Green10.jpg"><span style="font-size:130%;color:#ff0000;"><strong><img id="BLOGGER_PHOTO_ID_5411395980966608450" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 183px; CURSOR: hand; HEIGHT: 241px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjDMNY1J2exPRiuBUEFNa0wlSRynOZRuXsMF0DY9mTlZTfv-G7Iq05NQVAPN3hi0kGmS1giIm1HY1vwv4-gseXABitHU8QbqdfXCGxxUzzfPH2PgA9r0mXz0d8gM5mrfafXcST4o0SGMn9X/s320/Lisa+Heinzerling+--+04_01_08_Green10.jpg" border="0" /></strong></span></a><span style="font-size:130%;color:#ff0000;"><strong><span style="color:#3333ff;">The Obama administration's</span> new head of policy at EPA, Lisa Heinzerling, is an advocate of turning precaution into standard policy. In a law-review article titled "Law and Economics for a Warming World," Ms. Heinzerling wrote, <span style="font-size:180%;">"Policy formation based on prediction and calculation of expected harm is no longer relevant; the only coherent response to a situation of chaotically worsening outcomes is a precautionary policy. . . ."</span></strong></span></div><br /><div align="justify"><br /> </div><div align="justify"><span style="font-size:130%;color:#ff0000;"><strong>If the new ethos is that "close-enough" science is now sufficient to achieve political goals, serious scientists should be under no illusion that politicians will press-gang them into service for future agendas.</strong></span> Everyone working in science, no matter their politics, has an stake in cleaning up the mess revealed by the East Anglia emails. Science is on the credibility bubble. If it pops, centuries of what we understand to be the role of science go with it.<br /></div><br /><div></div>ITSSD Charitable Missionhttp://www.blogger.com/profile/00790887154748866904noreply@blogger.com0tag:blogger.com,1999:blog-1851218948450486986.post-68969083838331764732009-07-31T19:03:00.035-04:002009-08-01T07:49:56.126-04:00Eureka!! British Media Finally Realizes Seriousness of Threat Posed to Freedom by Green Socialists and Green Fascists<a href="http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article6725471.ece">http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article6725471.ece </a><br /><span style="font-size:130%;"><span style="font-weight: bold;"><br /><span style="font-size:180%;"><span style="color: rgb(51, 255, 51);">Blunt warning about greens under the bed</span></span></span></span><div style="text-align: justify;"> </div><span style="font-size:100%;"><span style="font-style: italic;"><span style="font-weight: bold;"><br /></span></span></span><br /><div style="text-align: justify; color: rgb(255, 0, 0);"><span style="font-size:130%;"><span style="font-style: italic;"><span style="font-weight: bold;">Once the lure of communism seduced the idealistic. Today’s environmental ideologues ris</span></span></span><span style="font-size:130%;"><span style="font-style: italic;"><span style="font-weight: bold;">k becoming just as d</span></span></span><span style="font-size:130%;"><span style="font-style: italic;"><span style="font-weight: bold;">angerous<br /></span></span></span><br /><span style="font-size:130%;"><span style="font-style: italic;"><span style="font-weight: bold;"><br /></span></span></span><span class="byline"><span style="color: rgb(0, 0, 0);">By Antonia Senior</span></span><br /><span class="byline"><span style="color: rgb(0, 0, 0);"><br /><br /><br />TimesOnline</span></span><br /><span class="byline"><span style="color: rgb(0, 0, 0);"><br /><br /></span></span><br /><span class="byline"><span style="color: rgb(0, 0, 0);">July 24, 2009</span></span><br /><span class="byline"><span style="color: rgb(0, 0, 0);"><br /></span></span><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhmNfT1_18yw_S9KKgvxm3QmXTjSOgfmSmCkWWAzCIFQ9OXhjKmig1RF3jR4GcytXTcV1PJgs2ovth9JpL309W5h8eHNWrB-SbqfU2c-VVnIzFAv03VtN8qPgXsaMkiuDYWmNcEXZ7Hjdor/s1600-h/fascism+new-labour-800.jpg"><img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 400px; height: 321px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhmNfT1_18yw_S9KKgvxm3QmXTjSOgfmSmCkWWAzCIFQ9OXhjKmig1RF3jR4GcytXTcV1PJgs2ovth9JpL309W5h8eHNWrB-SbqfU2c-VVnIzFAv03VtN8qPgXsaMkiuDYWmNcEXZ7Hjdor/s400/fascism+new-labour-800.jpg" alt="" id="BLOGGER_PHOTO_ID_5364768942759629874" border="0" /></a><span style="color: rgb(0, 0, 0);font-size:180%;" ><span style="font-weight: bold;">Britain</span></span><span style="color: rgb(0, 0, 0);"> is,</span><span style="color: rgb(0, 0, 0);"> thankf</span><span style="color: rgb(0, 0, 0);">ully, an ideologically barren land. The split between Right and Left is no longer</span><span style="color: rgb(0, 0, 0);"> ideological, but tribal. Are you a nice social liberal wh</span><span style="color: rgb(0, 0, 0);">o believes in markets, or a nasty socia</span><span style="color: rgb(0, 0, 0);">l liberal who believes in markets? Anthony Blunt’s memoirs, published this week, reveal</span> <span style="font-size:130%;"><span style="font-weight: bold;"><span style="color: rgb(0, 0, 0);">a different age, one in which </span><span style="color: rgb(204, 102, 0);"><span style="font-size:180%;">fascism</span></span></span></span><span style="font-size:130%;"><span style="font-weight: bold;"><span style="color: rgb(204, 102, 0);"> </span>and <span style="color: rgb(255, 0, 0);font-size:180%;" >communism</span> <span style="color: rgb(0, 0, 0);">were locked in a seemingly definitive battle for </span></span></span><span style="color: rgb(0, 0, 0);font-size:130%;" ><span style="font-weight: bold;">souls.</span></span><p style="color: rgb(0, 0, 0);"><br /></p> <p style="color: rgb(0, 0, 0);">Blunt talks of <span style="font-size:180%;"><span style="font-weight: bold;">“the religious quality” of the en</span></span><span style="font-size:180%;"><span style="font-weight: bold;">thusiasm for the Left </span></span>among the students of Cambridge. There is only one ideology in today’s developed world that exercises a similar grip. <span style="font-size:130%;"><span style="font-weight: bold; font-style: italic;">If B</span></span><span style="font-size:130%;"><span style="font-weight: bold; font-style: italic;">lunt were young today, he would not be <span style="color: rgb(255, 0, 0);">red;</span> he would be <span style="color: rgb(51, 255, 51);">green</span>.</span></span></p><p style="color: rgb(0, 0, 0);"><br /></p> <p style="color: rgb(0, 0, 0);"><span style="font-size:180%;"><span style="font-weight: bold;">His band of angry young men would find <span style="color: rgb(51, 255, 51);">Gore </span>where once they found <span style="color: rgb(255, 0, 0);">Mar</span></span></span><span style="font-size:180%;"><span style="font-weight: bold;"><span style="color: rgb(255, 0, 0);">x</span>.</span></span> Blunt evokes a febrile atmosphere in which each student felt his own decision had the power to shape the future. <span style="font-size:180%;"><span style="font-weight: bold;">W</span><span style="font-weight: bold;">here once they raged about <span style="color: rgb(255, 0, 0);">the fleecing of the </span></span></span></p><p style="color: rgb(0, 0, 0);"><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh5LEwB4QmE3rv69fockbPGf3mWf14YjdgugrWfgxqoNRsrnPYji0X7giIJsGDq1JydRJvMwfKyTGPhdTknHCbbTEfg-qMN6NZGqR3UrjsLJ2B_nCbH1FENEUSUf62REDyOs-bmFyFSETvy/s1600-h/socialism+-+green+on+the+outside+red+on+the+inside.jpg"><img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 400px; height: 262px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh5LEwB4QmE3rv69fockbPGf3mWf14YjdgugrWfgxqoNRsrnPYji0X7giIJsGDq1JydRJvMwfKyTGPhdTknHCbbTEfg-qMN6NZGqR3UrjsLJ2B_nCbH1FENEUSUf62REDyOs-bmFyFSETvy/s400/socialism+-+green+on+the+outside+red+on+the+inside.jpg" alt="" id="BLOGGER_PHOTO_ID_5364769562834815714" border="0" /></a></p> <p style="color: rgb(0, 0, 0);"><span style="font-size:180%;"><span style="font-weight: bold;"><span style="color: rgb(255, 0, 0);">proletaria</span></span></span><span style="font-size:180%;"><span style="font-weight: bold;"><span style="color: rgb(255, 0, 0);">t </span>a</span></span><span style="font-size:180%;"><span style="font-weight: bold;">nd quaked at <span style="color: rgb(204, 102, 0);">t</span></span></span><span style="font-size:180%;"><span style="font-weight: bold;"><span style="color: rgb(204, 102, 0);">h</span></span></span><span style="font-size:180%;"><span style="font-weight: bold;"><span style="color: rgb(204, 102, 0);">e march of fascism</span>,</span></span> Blunt and his circle, transposed to <span style="font-size:180%;"><span style="font-weight: bold;">today’s college bar, would rage </span><span style="font-weight: bold;">about</span></span> <span style="font-size:180%;"><span style="font-weight: bold; color: rgb(51, 255, 51);">the fleecing of the planet </span><span style="color: rgb(51, 255, 51); font-weight: bold;">and quake at its imminent destruction.</span></span> <span style="font-size:180%;"><span style="font-weight: bold; font-style: italic;">If you squint, <span style="color: rgb(255, 0, 0);">r</span></span></span><span style="font-size:180%;"><span style="font-weight: bold; font-style: italic;"><span style="color: rgb(255, 0, 0);">e</span></span></span><span style="font-size:180%;"><span style="font-weight: bold; font-style: italic;"><span style="color: rgb(255, 0, 0);">d </span>and <span style="color: rgb(51, 255, 51);">green</span> look disarmingly similar.</span></span></p> <p style="color: rgb(0, 0, 0);"><br /></p><p style="color: rgb(0, 0, 0);"><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjHYMvuKdyrn4kstQYqu4JN4Ms-rzymmKRzEvWGcLxAuQBSuEGLFpwS6cL4CzPQnxZaQgV78jvAOeGmxYW8n7ozc6lz1iJQSgHtgLqEsmdfPjFim272okiE9ChnK_HlLG-a-OyeOKgSKQJ7/s1600-h/green+fascism.jpg"><img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 279px; height: 400px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjHYMvuKdyrn4kstQYqu4JN4Ms-rzymmKRzEvWGcLxAuQBSuEGLFpwS6cL4CzPQnxZaQgV78jvAOeGmxYW8n7ozc6lz1iJQSgHtgLqEsmdfPjFim272okiE9ChnK_HlLG-a-OyeOKgSKQJ7/s400/green+fascism.jpg" alt="" id="BLOGGER_PHOTO_ID_5364768681002922082" border="0" /></a></p> <p style="color: rgb(0, 0, 0);"><span style="font-size:180%;"><span style="font-weight: bold;">Both identify an end utopia that is difficult to dispute. </span><span style="font-weight: bold;"><span style="color: rgb(255, 0, 0);">The dikta</span></span></span><span style="font-size:180%;"><span style="font-weight: bold;"><span style="color: rgb(255, 0, 0);">t “from each </span></span></span><span style="font-size:180%;"><span style="font-weight: bold;"><span style="color: rgb(255, 0, 0);">according to his ability, to </span></span></span><span style="font-size:180%;"><span style="font-weight: bold;"><span style="color: rgb(255, 0, 0);">each according to his means”</span> sounds lovely on paper.</span></span> <span style="font-size:180%;"><span style="color: rgb(51, 255, 51); font-weight: bold;">Greens promise a world in which we actually survive a coming ecological apocalypse.</span></span> A desirable outcome, undoubtedly.</p><p style="color: rgb(0, 0, 0);"><br /></p> <p style="color: rgb(0, 0, 0);"><span style="font-size:180%;"><span style="font-style: italic; font-weight: bold;">But the means to thes</span></span><span style="font-size:180%;"><span style="font-style: italic; font-weight: bold;">e ends see</span></span><span style="font-size:180%;"><span style="font-style: italic; font-weight: bold;">m similarly insurmountable. </span></span><span style="font-size:180%;"><span style="font-style: italic; font-weight: bold;">Both routes demand an immediate suspension of human nature.</span></span></p><p style="color: rgb(0, 0, 0);"><span style="font-size:180%;"><span style="font-style: italic; font-weight: bold;"><span style="font-size:100%;"><br /></span></span></span></p><p style="color: rgb(0, 0, 0);"><span style="font-size:180%;"><span style="font-style: italic; font-weight: bold;"><span style="font-size:100%;"></span> </span></span><br /></p> <p style="color: rgb(0, 0, 0);"><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEitPu2hXhR87R-GIKHKVX_hG5dZSH9VWANZqASZk6olJzdRUD50_MyjvGYD9jV4nY2dX81c9pv6KNVgwIZIu7tdonTqcH_6TBT4QJ5ri4OwGEUF13PEANc0Ibgm4lMTbJqEAovda7teq2ur/s1600-h/csd_logo.gif"><img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 169px; height: 156px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEitPu2hXhR87R-GIKHKVX_hG5dZSH9VWANZqASZk6olJzdRUD50_MyjvGYD9jV4nY2dX81c9pv6KNVgwIZIu7tdonTqcH_6TBT4QJ5ri4OwGEUF13PEANc0Ibgm4lMTbJqEAovda7teq2ur/s200/csd_logo.gif" alt="" id="BLOGGER_PHOTO_ID_5364791976660505906" border="0" /></a></p> <p style="color: rgb(0, 0, 0);"><span style="font-size:130%;"><span style="font-weight: bold;"><span style="font-size:180%;">[</span>ACTUALLY, <span style="color: rgb(255, 0, 0);">IT SOUNDS EERILY SIMILAR</span> TO THE <span style="color: rgb(51, 102, 255);">UNITED NATIONS</span> CONCEPT OF <span style="color: rgb(51, 255, 51);">ENVIRONMENT-CENTRIC SUSTAINABLE DEVELOPMENT</span>!! - <span style="color: rgb(51, 102, 255);">"DEVELOPMENT THAT MEETS THE NEEDS OF THE PRESENT WITHOUT COMPROMISING THE ABILITY OF FUTURE GENERATIONS TO MEET THEIR OWN NEEDS".</span> See: <span style="font-style: italic;">Sustainable Development</span>, Wikipedia at: </span></span> <span style="font-size:100%;"><a href="http://en.wikipedia.org/wiki/Sustainable_development" style="text-decoration: underline; color: rgb(0, 0, 204); font-weight: bold;">http://en.wikipedia.org/wiki/Sustainable_development</a></span><span style="font-size:180%;"><span style="font-weight: bold;"><span style="font-size:100%;"> </span>; <span style="font-size:130%;"><span style="font-style: italic;">Framing Sustainable Development; The Brundtland Report – 20 Years On</span>, United Nations Commission on Sustainable Development at p. 1, at: </span><span style="font-size:85%;"><a href="http://www.un.org/esa/sustdev/csd/csd15/media/backgrounder_brundtland.pdf">http://www.un.org/esa/sustdev/csd/csd15/media/backgrounder_brundtland.pdf</a></span> ].</span></span><span style="font-size:130%;"><span style="font-style: italic; font-weight: bold;"><br /></span></span></p><p style="color: rgb(0, 0, 0);"><br /></p><p style="color: rgb(0, 0, 0);"><span style="font-size:130%;"><span style="font-style: italic; font-weight: bold;"><br /></span></span></p><p style="color: rgb(0, 0, 0);"><span style="font-size:130%;"><span style="font-style: italic; font-weight: bold;">Ideologies often credit <span style="font-size:180%;">man </span>with either more nobility or more venality than he deserves. In reality he is a mundane creature. He wants a home for himself and those he loves, stocked with food. And he wants to have the right to control his own destiny, own his own stuff, and to acquire more if he can without interference or fe</span></span><span style="font-size:130%;"><span style="font-style: italic; font-weight: bold;">ar of imminent death. </span><span style="font-weight: bold;">Such low-level acquisitive desires support high concepts: property rights and the rule of law, without which there would be no foundation for democra</span></span><span style="font-size:130%;"><span style="font-weight: bold;">cy</span><span style="font-style: italic; font-weight: bold;">.</span></span><br /></p> <p style="color: rgb(0, 0, 0);"><br /></p><p style="color: rgb(0, 0, 0);"><br /></p> <p style="color: rgb(0, 0, 0);">My desire to live a free, mundane life is a fundamental cog in our messy, glorious, capitalist democracy. It is built on millions of such small entrenched postitions. Red-filtered, my desires are despicable and bourgeois and must be beaten out of me with indoctrination or force. Green-filtered, my small desires are despicable acts of ecological vandalism. My house is a carbon factory. My desire to travel, to own stuff, to eat meat, to procreate, to heat my house, to shower for a really, really long time; all are evil.</p><p style="color: rgb(0, 0, 0);"><br /></p><p style="color: rgb(0, 0, 0);"><br /></p> <p style="color: rgb(0, 0, 0);">The word evil is used advisedly. <span style="font-size:180%;"><span style="font-weight: bold;">Both the <span style="color: rgb(51, 255, 51);">green</span> and <span style="color: rgb(255, 0, 0);">red</span> positions are infused with overpowering religiosity</span></span>. <span style="font-size:180%;"><span style="font-weight: bold;">Dissenters from the consensus are shunned apostates. </span></span>Professor Ian Pilmer, the Australian geologist and climate change sceptic, could not find a publisher for his book <i>Heaven and Earth</i>, which questions the orthodoxy about global warming. He is the subject of hate mail and demonstrations. It is entirely immaterial whether he is right or wrong. An environment that stifles his right to a voice is worse than one that is overheating.</p> <p style="color: rgb(0, 0, 0);"><br /></p><p style="color: rgb(0, 0, 0);"><br /></p><p style="color: rgb(0, 0, 0);">Even within the convinced camp, dissent from certain party lines is frowned upon. Nuclear power is the cheapest, greenest alternative to fossil fuels that we possess, yet it is anathema to advocate its proliferation at the expense of wind and sun. <span style="font-size:180%;"><span style="font-weight: bold;">Fans of nuclear are the Trotskys of the movement, subject to batterings by verbal ice pick.</span></span><br /></p><p style="color: rgb(0, 0, 0);"><br /></p><p style="color: rgb(0, 0, 0);"><br /></p> <p style="color: rgb(0, 0, 0);"><span style="font-size:130%;"><span style="font-style: italic; font-weight: bold;">The great ecological time bomb is population growth. </span></span>By 2050 the United Nations’ demographers expect the world’s population to reach 9.2 billion, compared with 6.8 billion today. That’s 2.4 billion extra carbon footprints. Half measures seem futile. We all hope for some new technology to rescue us. But what if it never materialises? The logical position is to be a cheerleader for swine flu, but not in my backyard. Do we have to pray for swine flu to ravage foreign children, to save our own from frying in the future?<br /></p><p style="color: rgb(0, 0, 0);"><br /></p><p style="color: rgb(0, 0, 0);"><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhtWWi6i4F-RZxDjtud3k9QF-vbNy9zzxXNPEa661B364WVrwWBms9LuthFAXehXoTHQceeEruVn3WFeiWHt6TgHCw_yI3TFja0cb3_FD8kLAZ1vXCNmkgEeSxS-aPLf7oXOKvSETeGxwkj/s1600-h/alliance+for+green+socialism+logo.gif"><br /></a></p><p style="color: rgb(0, 0, 0);"><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjHSY6W7VxzNwkFdotF-LToEb6v1X5n3IiOjAfUGMIQRsqnh-BD0fWd4qy49nGDt7vN12IdXsFrFKsKrfzyauuDR9MaFSz3vhShVlq48AaoE9NKM721Lef2Em4aOFryFym5r9ntHRnYkPnQ/s1600-h/national-bolshevik-party-480x319.png"><img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 197px; height: 131px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjHSY6W7VxzNwkFdotF-LToEb6v1X5n3IiOjAfUGMIQRsqnh-BD0fWd4qy49nGDt7vN12IdXsFrFKsKrfzyauuDR9MaFSz3vhShVlq48AaoE9NKM721Lef2Em4aOFryFym5r9ntHRnYkPnQ/s320/national-bolshevik-party-480x319.png" alt="" id="BLOGGER_PHOTO_ID_5364788012220191778" border="0" /></a></p><p style="color: rgb(0, 0, 0);"><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgBuAMSoV5LcdDXMF0zfOcXJyP9PD2OB0h4ge7579t_arZlZK2XBhwPGMGlgP-HFCTQCdFvIbXDjZNOkJJ557yD8s5s-1pz8Ql7yD0NbqMNTvpFOCPI8XKDd009fUtfJDN-419vSPu77Sy3/s1600-h/green+nazis.png"><img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 213px; height: 128px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgBuAMSoV5LcdDXMF0zfOcXJyP9PD2OB0h4ge7579t_arZlZK2XBhwPGMGlgP-HFCTQCdFvIbXDjZNOkJJ557yD8s5s-1pz8Ql7yD0NbqMNTvpFOCPI8XKDd009fUtfJDN-419vSPu77Sy3/s320/green+nazis.png" alt="" id="BLOGGER_PHOTO_ID_5364788664964807634" border="0" /></a></p> <p style="color: rgb(0, 0, 0);"><span style="font-size:180%;"><span style="font-weight: bold;"><span style="color: rgb(51, 255, 51);">We are at the early stage of the green movement</span>. <span style="color: rgb(255, 0, 0);">A time akin to pre-Bolshevik socialism</span></span></span>, when all believed in the destruction of the capitalist system, but were still relatively moderate about the means of getting there. We are at the stage of naive dreamers and fantasists. <span style="font-size:180%;"><span style="font-weight: bold;">Russia</span></span> was home to the late <span style="font-size:130%;"><span style="font-weight: bold;">19th-century Narodnik movement</span></span>, in which rich sons of the aristocracy headed into the countryside to tell the peasants it was their moral imperative to become a revolutionary class. They retreated, baffled, to their riches when the patronised peasants didn’t want to revolt. <span style="font-size:130%;"><span style="font-weight: bold;">Zac Goldsmith and Prince Charles look like modern Narodniks</span></span>, talking glib green from the safety of their gilded lives.</p><p style="color: rgb(0, 0, 0);"><br /></p><p style="color: rgb(0, 0, 0);"><br /></p> <p style="color: rgb(0, 0, 0);"><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhNeQ1Pu84OIVfVFQHj29NQthhWgVCrt38WRj-GIvdwER5vR3V9EYzM6WQVJ1qoUuCO-nDNKerS0eNWgcCts6AMzvMHKqEfIxUrj-Qt0NDI27apDdqTZ5RXLJAZP0RlDkkCVEAaCS8HLwNM/s1600-h/green-nazis1.jpg"><img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 343px; height: 389px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhNeQ1Pu84OIVfVFQHj29NQthhWgVCrt38WRj-GIvdwER5vR3V9EYzM6WQVJ1qoUuCO-nDNKerS0eNWgcCts6AMzvMHKqEfIxUrj-Qt0NDI27apDdqTZ5RXLJAZP0RlDkkCVEAaCS8HLwNM/s400/green-nazis1.jpg" alt="" id="BLOGGER_PHOTO_ID_5364768584986481618" border="0" /></a></p> <p style="color: rgb(0, 0, 0);">Indulge me in some historical determinism. <span style="font-size:180%;"><span style="font-weight: bold;">We, the peasants, are failing to rise up and embrace the need to <span style="color: rgb(51, 51, 255);">change</span>. We will not choose to give up modern life, with all its polluting seductions. </span><span style="font-weight: bold; font-style: italic;"><span style="color: rgb(51, 255, 51);">Our intransigent refusal to choose green</span> <span style="color: rgb(204, 102, 0);">will be m</span></span></span><span style="font-size:180%;"><span style="font-weight: bold; font-style: italic;"><span style="color: rgb(204, 102, 0);">et by a new militancy</span> <span style="color: rgb(255, 0, 0);">from those who believe we must be saved from ourselves</span>.</span></span> <span style="font-size:180%;"><span style="font-weight: bold;">Ultra-green states cannot arise without some form of forced switch to autocracy; <span style="color: rgb(204, 102, 0);">the dictatorship </span><span style="color: rgb(51, 255, 51);">of the environmentalists</span>.</span></span></p><p style="color: rgb(0, 0, 0);"><br /></p><p style="color: rgb(0, 0, 0);"><br /></p> <p style="color: rgb(0, 0, 0);"><span style="font-size:180%;"><span style="font-weight: bold;">The old two-cow analogy is</span></span><span style="font-size:180%;"><span style="font-weight: bold;"> a useful one. You have two cows. <span style="color: rgb(255, 0, 0);">The communist steals both your cows, and may give you some milk, if you’re not bourgeois scum. </span><span style="color: rgb(204, 102, 0);">The fascist lets you keep the cows but seizes the milk and sells it back to you.</span> <span style="color: rgb(51, 255, 51);">Today’s Green says you can keep the cows, but should choose to give them up as their methane-rich farts will unleash hell at some unspecified point in the future</span>. </span></span>You say, sod it, I’ll keep my cows thanks. <span style="font-size:180%;"><span style="font-weight: bold;"><span style="color: rgb(0, 102, 0);"><span style="color: rgb(0, 153, 0);">Tomorrow’s green,</span></span><span style="color: rgb(51, 204, 0);"> </span><span style="color: rgb(255, 0, 0);">the Bolshevik </span><span style="color: rgb(0, 153, 0);">green, shoots the cows and makes you forage for nuts</span></span></span><span style="color: rgb(0, 153, 0);">. </span></p> <p style="color: rgb(0, 0, 0);"><br /></p><p style="color: rgb(0, 0, 0);"><br /></p> <p style="color: rgb(0, 0, 0);"><span style="font-size:180%;"><span style="font-weight: bold;">If the choice is between ecological meltdown, or a more immediate curtailment of our freedom</span></span>, where do those of us who are neither red nor green, but a recalcitrant grey, turn? Back to those small desires, and a blinkered hope that the choice never becomes so stark. If it does, <span style="font-size:180%;"><span style="font-weight: bold;">I’ll take my chances with Armageddon</span></span>.<br /></p><p style="color: rgb(0, 0, 0);"><br /></p><p style="color: rgb(0, 0, 0);">-------------------------------------------------------------------------------------------------<br /></p><p style="color: rgb(0, 0, 0);"><span style="font-size:130%;"><a style="color: rgb(255, 0, 0);" href="http://socialistresistance.org/?p=573"><span><span style="font-weight: bold;"><span style="color: rgb(0, 0, 0);"><br /></span></span></span></a></span></p><p style="color: rgb(0, 0, 0);"><span style="font-size:130%;"><a style="color: rgb(255, 0, 0);" href="http://socialistresistance.org/?p=573"><span><span style="font-weight: bold;"><span style="color: rgb(0, 0, 0);">http://socialistresistance.org/?p=573</span></span></span></a><span style="font-style: italic;"><span style="font-weight: bold;"><span style="color: rgb(0, 0, 0);"> .</span></span></span></span></p> <p style="color: rgb(0, 0, 0);"><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEizUkjWEx6MC6ozz-XElgM6_khVA8vOG4cfX7Q23tQxeIHP9fhA_MrBjIYEVc4rH71brvVuc0uP5e57nGnUxMtsoXwm5-7rksGa49FX0SbmmbWSyJ2jxkPqRCYgb0HWgASlEj0L0pW_olzB/s1600-h/green+left+and+socialist+resistance+to+capitalism.png"><img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 423px; height: 375px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEizUkjWEx6MC6ozz-XElgM6_khVA8vOG4cfX7Q23tQxeIHP9fhA_MrBjIYEVc4rH71brvVuc0uP5e57nGnUxMtsoXwm5-7rksGa49FX0SbmmbWSyJ2jxkPqRCYgb0HWgASlEj0L0pW_olzB/s400/green+left+and+socialist+resistance+to+capitalism.png" alt="" id="BLOGGER_PHOTO_ID_5364770085094665266" border="0" /></a></p> <div class="postinfo"> <span style="color: rgb(0, 0, 0);"><span style="font-size:130%;"><span style="font-weight: bold;">SR & Green Left Plan 'Climate </span></span></span><span style="color: rgb(0, 0, 0);"><span style="font-size:130%;"><span style="font-weight: bold;">and </span></span></span><span style="color: rgb(0, 0, 0);"><span style="font-size:130%;"><span style="font-weight: bold;">Capitalism' Seminar</span></span><br /><br /></span><br /><span style="font-size:180%;"><span style="font-weight: bold;">Socialist Res</span></span><span style="font-size:180%;"><span style="font-weight: bold;">istance</span></span><br /><br /><br /><span style="color: rgb(0, 0, 0);">June 27, 2009</span><br /></div><br /><br /><p style="color: rgb(0, 0, 0);"><span style="font-size:180%;"><span style="font-weight: bold;">Planned for Saturday September 12, Climate and Cap</span></span></p> <p style="color: rgb(0, 0, 0);"><span style="font-size:180%;"><span style="font-weight: bold;">italism is the first seminar organised jointly by Green Left and Socialist Resistance, the ec</span></span><span style="font-size:180%;"><span style="font-weight: bold;">osocialist currents in two of Britain’s left parties, </span></span><span style="font-size:180%;"><span style="font-weight: bold;">the Greens and Respect.</span></span> This energetic and open day of discussion will bring experts, campaigners, radical activists and others together. The event will be in the Friends’ Meeting House, London, NW1 (at Euston).</p><p style="color: rgb(0, 0, 0);"><br /></p><p style="color: rgb(0, 0, 0);"><br /></p> <p style="color: rgb(0, 0, 0);"><span style="font-size:130%;"><strong>The plan for the day</strong></span></p> <p style="color: rgb(0, 0, 0);"><br /></p><p style="color: rgb(0, 0, 0);"><br /></p> <p style="color: rgb(0, 0, 0);">After registration at 10, the opening plenary will addressed by Romayne Phoenix, from Green Left, and Ian Angus, editor of “The global fight for climate justice”, a new book being launched next month. Romayne is a <span style="font-size:180%;"><span style="color: rgb(51, 255, 51); font-weight: bold;">Green</span></span> councillor: Ian is one of the <span style="font-size:180%;"><span style="color: rgb(255, 0, 0); font-weight: bold;">Socialist Resistance </span></span>advisory board.</p><p style="color: rgb(0, 0, 0);"><br /></p><p style="color: rgb(0, 0, 0);"><br /></p> <p style="color: rgb(0, 0, 0);">Before lunch, at least three workshops will be held, all with plenty of time for questions and discussions, to give the context for <span style="font-size:180%;"><span style="font-weight: bold;">the combined economic and ecological crises</span></span>. Amongst those planned are:</p><p style="color: rgb(0, 0, 0);"><br /></p><p style="color: rgb(0, 0, 0);"><br />1. Crisis and the response: with Sean Thompson, author of new pamphlet on <span style="font-size:180%;"><span style="color: rgb(51, 255, 51); font-weight: bold;">the Green New Deal</span></span>, and the <span style="font-size:180%;"><span style="color: rgb(255, 0, 0); font-weight: bold;">Scottish Socialist Party</span></span>’s Raphie de Santos, co-author of <span style="font-size:180%;"><span style="font-weight: bold; color: rgb(255, 0, 0);">‘Socialists and the Capitalist Recession’</span></span></p> <p style="color: rgb(0, 0, 0);"><br />2. Gender, ecology and <span style="font-size:180%;"><span style="font-weight: bold; color: rgb(51, 255, 51);">ecosocialism</span></span>: with Sheila Malone, co-editor of ‘Ecosocialism or Barbarism’</p><p style="color: rgb(0, 0, 0);"><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhtWWi6i4F-RZxDjtud3k9QF-vbNy9zzxXNPEa661B364WVrwWBms9LuthFAXehXoTHQceeEruVn3WFeiWHt6TgHCw_yI3TFja0cb3_FD8kLAZ1vXCNmkgEeSxS-aPLf7oXOKvSETeGxwkj/s1600-h/alliance+for+green+socialism+logo.gif"><br /></a></p><p style="color: rgb(0, 0, 0);"> 3. <span style="color: rgb(255, 0, 0);font-size:180%;" ><span style="font-weight: bold;">Alternatives to the marke</span><span style="font-weight: bold;">t</span></span>: with a panel invited including Derek Wall, former principal speaker of the <span style="font-size:180%;"><span style="color: rgb(51, 255, 51); font-weight: bold;">Green Party</span></span></p><p style="color: rgb(0, 0, 0);"><br /></p><p style="color: rgb(0, 0, 0);"><br /></p> <p style="color: rgb(0, 0, 0);">The interaction and sharing of experience will deepen in the afternoon, where participants in major struggles for <span style="font-size:180%;"><span style="font-weight: bold;"><span style="color: rgb(51, 255, 51);">climate and social justice</span> </span></span>will be speaking. The discussions will include:<br /></p><p style="color: rgb(0, 0, 0);"><br /></p><p style="color: rgb(0, 0, 0);">1. Voices from the Global South: facilitated by Ian Angus<br /></p><p style="color: rgb(0, 0, 0);"><br /></p><p style="color: rgb(0, 0, 0);">2. Direct action and prefiguration; with speakers from British direct action campaigns</p><p style="color: rgb(0, 0, 0);"><br /></p><p style="color: rgb(0, 0, 0);">3. <span style="font-size:180%;"><span style="font-weight: bold; color: rgb(51, 255, 51);">Sustainable cities</span></span>; with invited experts including the Campaign for Free Public Transport</p><p style="color: rgb(0, 0, 0);"><br /></p> <p style="color: rgb(0, 0, 0);">4. Alternative production: with speakers from the Swedish and British trade union movement struggles for <span style="font-size:180%;"><span style="font-weight: bold; color: rgb(51, 255, 51);">sustainable manufacturing</span></span>.</p> <p style="color: rgb(0, 0, 0);"><br /></p><p style="color: rgb(0, 0, 0);"><br /></p> <p style="color: rgb(0, 0, 0);"><span style="font-size:180%;"><span style="font-weight: bold; color: rgb(255, 0, 0);">The closing plenary will provide an opportunity to see how anti-capitalists in Respect, <span style="color: rgb(51, 255, 51);">the Green party</span> and elsewhere on the left can deepen their co-operation - both in the run up to the Copenhagen demonstrations at the end of this year, and next year’s general elec</span></span><span style="font-size:180%;"><span style="font-weight: bold; color: rgb(255, 0, 0);">tion</span></span>. ‘Socialist Resistance’ editor Liam MacUaid will discuss strategies for uniting reds and greens while Green Left’s Andy Hewett will discuss the tasks going forward to Copenhagen. The event will close at 5.30pm.</p> <p style="color: rgb(0, 0, 0);"><strong><br /></strong></p> <p style="color: rgb(0, 0, 0);"><strong>How to register</strong></p><p style="color: rgb(0, 0, 0);"><br /><strong></strong></p> <p style="color: rgb(0, 0, 0);">You can register in advance and make two savings: get one-third off the price of your ticket, and a further two pounds on the cost of the book being launched at the conference. Tickets cost 6 pounds unwaged (4 in advance) and 12 pounds waged (8 in advance). To register, make your cheque payable to ‘Resistance’ and post it to PO Box 62732 London SW2 9GQ.</p><p style="color: rgb(0, 0, 0);"><br /></p> <p style="color: rgb(0, 0, 0);"><strong>Find out more</strong></p> <p style="color: rgb(0, 0, 0);"><br /></p><p style="color: rgb(0, 0, 0);">Visit <span style="font-size:180%;"><a style="color: rgb(51, 255, 51); font-weight: bold;" href="http://ecosocialism.org/">http://ecosocialism.org</a><span style="color: rgb(51, 255, 51); font-weight: bold;"> </span></span>for updates on the event. You can register on that site for updates, and to take part in the preparations of the event. If you have any questions or comments send an email to <em>seminar at ecosocialism dot org</em>.</p><p style="color: rgb(0, 0, 0);">------------------------------------------------------------------------------------------------- </p> <p style="color: rgb(0, 0, 0);"><a href="http://www.greensocialist.org.uk/ags/umbrella">http://www.greensocialist.org.uk/ags/umbrella</a></p><p style="color: rgb(0, 0, 0);"><span style="text-decoration: underline;"><br /></span></p><p style="color: rgb(0, 0, 0);"><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgXx49dSbwGwnnRO70SUyKSsAPurFlH1UnrtAbo4JWiZRT3K3iFveQwSqPorqBDMDipe6eeTwJIb9mhJThR0qfCuDI60pDuPi9gAFxZUvjIOh8jg2036Nw57d3mtZ6huxyIt1H5GIg-K718/s1600-h/alliance+for+green+socialism+logo.gif"><img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 65px; height: 86px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgXx49dSbwGwnnRO70SUyKSsAPurFlH1UnrtAbo4JWiZRT3K3iFveQwSqPorqBDMDipe6eeTwJIb9mhJThR0qfCuDI60pDuPi9gAFxZUvjIOh8jg2036Nw57d3mtZ6huxyIt1H5GIg-K718/s400/alliance+for+green+socialism+logo.gif" alt="" id="BLOGGER_PHOTO_ID_5364778632901203602" border="0" /></a></p> <p style="color: rgb(0, 0, 0);">The <span style="font-size:180%;"><b>Alliance for Green Socialism</b></span> is a political organisation devoted to the building of a peaceful, environmentally safe and socially responsible world. A world in which diversity is both respected and celebrated. A world in which relations are based on mutual understanding and not force, where rights and a decent life are available for all, not just the rich. <span style="font-size:180%;"><span style="font-weight: bold;">The AGS believes this can come about by the development of a democratic, <span style="color: rgb(255, 0, 0);">socialist</span> and <span style="color: rgb(51, 255, 51);">environmentally conscious </span>society</span></span>. Our two basic principles are summed up in our name.<br /></p> <p style="color: rgb(0, 0, 0);"><br /></p> <p style="color: rgb(0, 0, 0);"><span style="font-size:180%;"><span style="color: rgb(51, 255, 51); font-weight: bold;">Green</span></span><span style="color: rgb(51, 255, 51);"><span style="font-weight: bold;"> is for a world where the serious issues of pollution and global warming are properly dealt with. This means tackling the oil-driven system of big business, which drives us into successive wars and conflicts.</span> </span></p><p style="color: rgb(0, 0, 0);"><br /></p> <p style="color: rgb(0, 0, 0);"><span style="font-size:180%;"><span style="color: rgb(255, 0, 0); font-weight: bold;">Socialism</span></span> <span style="color: rgb(255, 0, 0); font-weight: bold;">is the opposite of such a system in which the needs of the people take priority and the power of big business is curbed. A key element in this being an expansion of various forms of public ownership, from taking the railways back into the state sector to an expansion of cooperatives. </span><br /></p><p style="color: rgb(0, 0, 0);"><br /></p><p style="color: rgb(0, 0, 0);"><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEirvnBGJzrQP1MNB9yTLaUA8obA3aET_5EoeLZ97QLIWeP-3EXS9U5Rws4maHF-VL-zdArkQscenUwAWuIXw0bDEK-q61bGnApzuGWVx-480-sXU43rMRDdsIQYeL4gtiz1k5eSaT07XYfv/s1600-h/green+socialist.png"><img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 145px; height: 145px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEirvnBGJzrQP1MNB9yTLaUA8obA3aET_5EoeLZ97QLIWeP-3EXS9U5Rws4maHF-VL-zdArkQscenUwAWuIXw0bDEK-q61bGnApzuGWVx-480-sXU43rMRDdsIQYeL4gtiz1k5eSaT07XYfv/s400/green+socialist.png" alt="" id="BLOGGER_PHOTO_ID_5364773894085593538" border="0" /></a></p> <p style="color: rgb(0, 0, 0); font-weight: bold;"><span style="font-size:180%;">Linking these two indivisible themes is a commitment to openness and democracy. </span></p></div><input id="gwProxy" type="hidden"><!--Session data--><input onclick="jsCall();" id="jsProxy" type="hidden"><div id="refHTML"></div><input id="gwProxy" type="hidden"><!--Session data--><input onclick="jsCall();" id="jsProxy" type="hidden"><div id="refHTML"></div><input id="gwProxy" type="hidden"><!--Session data--><input onclick="jsCall();" id="jsProxy" type="hidden"><div id="refHTML"></div><input id="gwProxy" type="hidden"><!--Session data--><input onclick="jsCall();" id="jsProxy" type="hidden"><div id="refHTML"></div><input id="gwProxy" type="hidden"><!--Session data--><input onclick="jsCall();" id="jsProxy" type="hidden"><div id="refHTML"></div><input id="gwProxy" type="hidden"><!--Session data--><input onclick="jsCall();" id="jsProxy" type="hidden"><div id="refHTML"></div><input id="gwProxy" type="hidden"><!--Session data--><input onclick="jsCall();" id="jsProxy" type="hidden"><div id="refHTML"></div><input id="gwProxy" type="hidden"><!--Session data--><input onclick="jsCall();" id="jsProxy" type="hidden"><div id="refHTML"></div><input id="gwProxy" type="hidden"><!--Session data--><input onclick="jsCall();" id="jsProxy" type="hidden"><div id="refHTML"></div>ITSSD Charitable Missionhttp://www.blogger.com/profile/00790887154748866904noreply@blogger.com0tag:blogger.com,1999:blog-1851218948450486986.post-27707172474556508172009-07-08T16:02:00.004-04:002009-08-01T10:56:50.915-04:00Is Economic Freedom a Positive Byproduct of America's Immigrant Roots?<h1 style="display: block;"><span style="font-size:85%;"><a href="http://www.nytimes.com/2005/12/11/magazine/11ideas_section2-7.html">http://www.nytimes.com/2005/12/11/magazine/11ideas_section2-7.html</a></span></h1><br /><div style="text-align: justify;"><span style="font-size:180%;"><span style="font-weight: bold;">[</span></span><span style="font-weight: bold;">Readers should take note that during the early 20th Century "between 1935 and 1942", risk-taking "European refugees brought more than $5 billion to the U.S..." <span style="font-style: italic;">See</span> Adrian Wooldridge, <span style="font-style: italic;">The Evolution of Wealth: Discerning a distinctly American style of affluence</span>, Book Review of Larry Samuel, <span style="font-style: italic;">Rich - The Rise and Fall of American Wealth Culture</span>, Wall Street Journal (July 31, 2009) at: </span><a style="font-weight: bold;" href="http://online.wsj.com/article/SB10001424052970204619004574318431042373224.html?mod=djemPJ">http://online.wsj.com/article/SB10001424052970204619004574318431042373224.html?mod=djemPJ</a> <span style="font-size:180%;"><span style="font-weight: bold;">].</span></span><br /></div><br /><br /><nyt_headline style="font-weight: bold;" version="1.0" type=" "><span style="font-size:130%;">The Hypomanic Ame</span></nyt_headline><a style="font-weight: bold;" onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhx0uUDp6t3loL106gsUnood3c6kcx2i8nXEei7MYDqs3RmnQMGhoWH5xrUE9z2hVhdxxkzVFSzctARESjeEhWlEePH4F78NZJ2O-oz-iJqdUtTWgIjxO7R0hxTw0nD1S1wc9WtCvmGXpk/s1600-h/hypomanic.jpg"><img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 283px; height: 400px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhx0uUDp6t3loL106gsUnood3c6kcx2i8nXEei7MYDqs3RmnQMGhoWH5xrUE9z2hVhdxxkzVFSzctARESjeEhWlEePH4F78NZJ2O-oz-iJqdUtTWgIjxO7R0hxTw0nD1S1wc9WtCvmGXpk/s400/hypomanic.jpg" alt="" id="BLOGGER_PHOTO_ID_5355460536259539826" border="0" /></a><nyt_headline style="font-weight: bold;" version="1.0" type=" "><span style="font-size:130%;">rican</span></nyt_headline><nyt_text> </nyt_text><nyt_text><div id="articleBody"><br /><br />By Emily Bazelon<br /><br /><br />New York Times Book Review<br /><br /><br /><div class="timestamp">December 11, 2005</div><p style="text-align: justify;"><br /></p><p style="text-align: justify;">For centuries, scholars have tried to explain the American character: is it the product of the frontier experience, or of the heritage of dissenting Protestantism, or of the absence of feudalism? This year, two professors of psychiatry each published books attributing American exceptionalism to a new and hitherto unsuspected source: American DNA. They argue that <span style="font-size:130%;"><span style="font-style: italic; font-weight: bold;">the United States is full of energetic risk-takers because it's full of immigrants, who as a group may carry a genetic marker that expresses itself as restless curiosity, exuberance and competitive self-promotion - a combination known as</span><span style="font-weight: bold;"> <span style="color: rgb(255, 0, 0);">hypomania</span></span></span>.</p></div></nyt_text><div style="text-align: justify;"><br /><nyt_text></nyt_text><br /><nyt_text><div id="articleBody"> <p><span style="font-size:130%;"><span style="font-weight: bold;">Peter C. Whybrow of U.C.L.A. and John D. Gartner of Johns Hopkins University Medical School make their cases for an immigrant-specific genotype</span></span> in their respective books, <span style="font-style: italic;font-size:130%;" ><span style="font-weight: bold;">"American Mania"</span></span> and "The Hypomanic Edge." Even when times are hard, Whybrow points out, <span style="font-size:130%;"><span style="font-style: italic; font-weight: bold;">most people don'</span></span><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjPoSUZtqiYMmQNGynlo54j8IsTyl_7-I4mNsJt1bOpr43R1T4RVIa_GLNAWbArtewIvt1d55sT5Jj6SjpUGp_8F5aq2RlGqPXvKvAs94soLJHCX6vQ2QD8HBAAqER92B2Fa9eNHoO5jZE/s1600-h/hypomanic+IV.JPG"><img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 162px; height: 245px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjPoSUZtqiYMmQNGynlo54j8IsTyl_7-I4mNsJt1bOpr43R1T4RVIa_GLNAWbArtewIvt1d55sT5Jj6SjpUGp_8F5aq2RlGqPXvKvAs94soLJHCX6vQ2QD8HBAAqER92B2Fa9eNHoO5jZE/s400/hypomanic+IV.JPG" alt="" id="BLOGGER_PHOTO_ID_5355462111063707106" border="0" /></a><span style="font-size:130%;"><span style="font-style: italic; font-weight: bold;">t leave th</span></span><span style="font-size:130%;"><span style="font-style: italic; font-weight: bold;">eir homelands. The 2 percent o</span></span><span style="font-size:130%;"><span style="font-style: italic; font-weight: bold;">r </span></span><span style="font-size:130%;"><span style="font-style: italic; font-weight: bold;">so who do are a self-selecting group. What distinguishes </span></span><span style="font-size:130%;"><span style="font-style: italic; font-weight: bold;">them, he suggests, might be the genetic makeup of their dopamine-receptor system - the pathway in the brain that figures centrally in boldness and novelty seeking.</span></span></p> </div></nyt_text><br /><nyt_text></nyt_text><br /><nyt_text><div id="articleBody"> <p>The genetic variation that gets neurons firing along the dopamine circuits seems to have been disproportionately prevalent in the kinship groups that over generations walked the farthest 10,000 to 20,000 years ago, from Asia across the Bering Strait into the Americas. T<span style="font-size:130%;"><span style="font-style: italic; font-weight: bold;">his genetic makeup, <span style="font-size:180%;">Whybrow</span> argues, may also be present to a high degree among the 98 percent of Americans who were either born in another country or into families that came to this country in the last three centuries.</span></span> <span style="font-size:180%;"><span style="font-weight: bold;">If the genetic marker cuts across immigrants of all origins, it's not about where you come from, it's that you came at all.</span></span></p></div></nyt_text><br /><nyt_text></nyt_text><br /><nyt_text><div id="articleBody"> <p>Why aren't Canada and Australia, where many immigrants and their descendants also live, as hypomanic as the United States? Whybrow answers that behavior is always a function of genetics and environment - nature with an overlay of nurture. <span style="font-size:180%;"><span style="font-weight: bold;">"Here you have the genes and the completely unrestricted marketplace," he says - with the anything-goes rules of American capitalism also reflecting immigrant genetics. "That's what gives us our peculiar edge." </span></span></p> </div> </nyt_text><br /><nyt_byline version="1.0" type=" "></nyt_byline>-------------------------------------------------------------------------------------------------<br /><br /><a href="http://www.hypomanicedge.com/reviews/bostonglobe/b-globe.htm">http://www.hypomanicedge.com/reviews/bostonglobe/b-globe.htm</a><br /><br /><span style="font-size:130%;"><span style="font-weight: bold;" class="texttitle3">The Hypomanic American</span></span><br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiNfh5H5yPZLNa8z4NsWLHHXoa4amHXVwnsS8xMoGlQ50UZlw_FD_U4KdK2BWGVDHwsBv4_3obzpwgp4xc5acfOxvOMplpqZg9ayNA0PD93mUGn_9g_Ea12K6GURk5-mvzCXAvq30sZULc/s1600-h/hypomanic+II.jpg"><img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 400px; height: 264px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiNfh5H5yPZLNa8z4NsWLHHXoa4amHXVwnsS8xMoGlQ50UZlw_FD_U4KdK2BWGVDHwsBv4_3obzpwgp4xc5acfOxvOMplpqZg9ayNA0PD93mUGn_9g_Ea12K6GURk5-mvzCXAvq30sZULc/s400/hypomanic+II.jpg" alt="" id="BLOGGER_PHOTO_ID_5355460820671564706" border="0" /></a><br />By Annie Murphy Paul<br /><br /><br />Feb. 27, 2 005<br /><br /><br />Boston Globe Book Review<br /><br /><br /> <em style="font-weight: bold;">A psychologist argues that America is rich because a lot of us are a little bit nuts</em>.<br /><br /><br /><span class="texttitle2">THE PEOPLE WHO</span> come to see Alden Cass, a therapist with a practice in Manhattan, make their living from the market: bankers, brokers, traders, financial advisers. They're a special breed. '<span style="font-size:130%;"><span style="font-weight: bold;">'These guys love risk,''</span></span> says Cass. ''They eat it for breakfast.'' His clients think, talk, and act fast.<span style="font-size:130%;"><span style="font-style: italic; font-weight: bold;"> T</span><span style="font-style: italic; font-weight: bold;">hey need just a few hours' sleep. They're prone to reckless behavior, sexual promiscuity, extravagant spending. They exhibit all the signs, that is, of what psychologists call ''hypomania'': an energetic, ebullient state that is a milder form of the mania associated with bipolar illness.</span></span></div><p style="text-align: justify;" class="rightfrontpage"><br /></p><p style="text-align: justify;" class="rightfrontpage"><br /></p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="rightfrontpage">Cass claims that the majority of his patients are hypomanic, and though he treats them for the problems that hypomania can produce - depression, burnout, substance abuse, wrecked relationships - he also recognizes its advantages. '<span style="font-size:130%;"><span style="font-weight: bold;">'These people have a boldness and a self-confidence that sets them apart from the average citizen,'' </span></span>Cass asserts. <span style="font-size:130%;"><span style="font-weight: bold; font-style: italic;">''Hypomania is great for business.''</span></span></p><p style="text-align: justify;" class="rightfrontpage"><br /></p><p style="text-align: justify;" class="rightfrontpage"><br /></p><h1 style="text-align: justify;"><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjbnuSnTTgywPOcL5aMcNudgp8SHTsrnP3JzHQh-gX_uqpgqh-KQhB2WOvMeePipKyPjx8hkAIpp9K_esCwDUvhmhRofyAnQre9XGVFJyJDRVp4tVo0s2cR_HyEpTrQCVmDg4ZvggwCG9I/s1600-h/hypomanic+III.jpg"><img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 186px; height: 279px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjbnuSnTTgywPOcL5aMcNudgp8SHTsrnP3JzHQh-gX_uqpgqh-KQhB2WOvMeePipKyPjx8hkAIpp9K_esCwDUvhmhRofyAnQre9XGVFJyJDRVp4tVo0s2cR_HyEpTrQCVmDg4ZvggwCG9I/s400/hypomanic+III.jpg" alt="" id="BLOGGER_PHOTO_ID_5355461125929946306" border="0" /></a></h1><div style="text-align: justify;"> </div><p style="text-align: justify;" class="rightfrontpage">John D. Gartner, a psychologist at Johns Hopkins University, agrees. In his new book '<span style="font-size:130%;"><span style="font-weight: bold;">'The Hypomanic Edge: The Link Between (A Little) Craziness And (A Lot of) Success In America''</span></span> (Simon & Schuster), Gartner contends not only that most of today's successful entrepreneurs and businesspeople are hypomanic, but that many of our history's leading figures, such as Alexander Hamilton, Andrew Carnegie, and Henry Ford, had the condition as well. <span style="font-size:180%;"><span style="font-weight: bold;">The United States has more hypomanics than other countries</span></span>, Gartner claims, <span style="font-size:180%;"><span style="font-weight: bold;">and these people are largely responsible for the nation's power and prosperity.</span></span></p><p style="text-align: justify;" class="rightfrontpage"><br /></p><p style="text-align: justify;" class="rightfrontpage"><br /></p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="rightfrontpage"> <span style="font-size:130%;"><span style="font-weight: bold;">''Energy, drive, cockeyed optimism, entrepreneurial and religious zeal, Yankee ingenuity, messianism, and arrogance - these traits have long been attributed to an 'American character,''' </span></span>Gartner writes. ''But given how closely they overlap with the hypomanic profile, they might be better understood as expressions of an American temperament, shaped in large part by our rich concentration of hypomanic genes.''</p><p style="text-align: justify;" class="rightfrontpage"><br /></p><p style="text-align: justify;" class="rightfrontpage"><br /></p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="rightfrontpage">Might - or might not. Gartner himself allows that his book rests largely on unproven assumptions, but doesn't back away from his conviction that they're correct. H<span style="font-size:130%;"><span style="font-weight: bold; font-style: italic;">ypomania, he proclaims, ''has made us what we are.''</span></span></p><div style="text-align: justify;"><br /><br /></div><p style="text-align: justify;" class="rightfrontpage"><span style="font-size:130%;"><span style="font-weight: bold;">The most striking element of hypomania</span></span>, as described in the Diagnostic and Statistical Manual of Mental Disorders, <span style="font-size:130%;"><span style="font-weight: bold;">is a wildly elevated and expansive mood. </span></span>Such episodes last at least a week, and during them hypomanics feel like masters of the universe. Buoyed by a sense of their own importance, they are restless and excitable, throwing themselves with abandon into work or pleasurable activities like shopping or sex.</p><p style="text-align: justify;" class="rightfrontpage"><br /></p><p style="text-align: justify;" class="rightfrontpage"><br /></p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="rightfrontpage">This state closely resembles the initial stages of full-blown manic depression, or bipolar disorder. But instead of spiraling into debilitating manias and then into a paralyzing depression, <span style="font-size:130%;"><span style="font-weight: bold;">hypomanics generally experience only the invigorating effects of the onset of mania and usually emerge from it without professional help (though sometimes a period of mild depression follows)</span></span>.</p><p style="text-align: justify;" class="rightfrontpage"><br /></p><p style="text-align: justify;" class="rightfrontpage"><br /></p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="rightfrontpage">''If you ask most hypomanics, they don't experience the condition as a problem,'' comments Gartner, who says he is himself hypomanic. ''When they're experiencing hypomania, they feel vital, alive, energized. Their best self, their healthiest self, is their hypomanic self.''</p><p style="text-align: justify;" class="rightfrontpage"><br /></p><p style="text-align: justify;" class="rightfrontpage"><br /></p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="rightfrontpage">Indeed, while hypomania has been the subject of relatively little research and clinical attention, <span style="font-size:130%;"><span style="font-weight: bold;">there are a handful of studies indicating that people in a hypomanic state are more flexible and creative in their thinking, are more motivated and productive, and have more positive expectations for the future. </span></span>And while there is a large speculative literature on the connection between manic depression and artistic creativity, Gartner claims that <span style="font-size:130%;"><span style="font-style: italic; font-weight: bold;">''until now, there has never been a serious suggestion that the talent for being an entrepreneur and mania, the genetically based psychiatric disorder, are actually linked.''</span></span></p><p style="text-align: justify;" class="rightfrontpage"><br /></p><p style="text-align: justify;" class="rightfrontpage"><br /></p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="rightfrontpage">''American entrepreneurs are largely hypomanic,'' Gartner declares, but the story doesn't begin and end with today's would-be Donald Trumps. <span style="font-weight: bold;"><span style="font-size:180%;">The United States is a land of immigrants, he observes, populated by those whose ancestors were energetic and optimistic enough to leave a familiar homeland for strange shores. </span>This self-selected group, Gartner surmises, likely included many hypomanics. In addition, studies have found that immigrants generally have higher rates of bipolar disorder. Because there is a genetic link between the disorder and hypomania - the relatives of manic-depressives are more likely to be hypomanic - America's long history of immigration, Gartner concludes, has made it a ''hypomanic nation.''</span></p><p style="text-align: justify;" class="rightfrontpage"><br /></p><p style="text-align: justify;" class="rightfrontpage"><br /></p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="rightfrontpage">Some mental health experts endorse many of his ideas. Psychiatrist Kay Redfield Jamison ends her recent book, ''Exuberance'' (Knopf), with musings about the influence of immigration on Americans' characteristically exuberant temperament. <span style="font-size:180%;"><span style="font-weight: bold;">'</span><span style="font-weight: bold;">'Individuals who sought the new, who took risks that others would not, or who rebelled against repressive social systems may have been more likely to immigrate to America and, once there, to succeed,''</span></span> she writes.</p><p style="text-align: justify;" class="rightfrontpage"><br /></p><p style="text-align: justify;" class="rightfrontpage"><br /></p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="rightfrontpage">But Jamison, who recorded her own struggles with manic depression in ''An Unquiet Mind'' (1995), thinks that Gartner may take his ideas too far.<span style="font-size:130%;"><span style="font-style: italic; font-weight: bold;"> ''Certainly there have been studies, long before his book, suggesting that there is a disproportionate rate of bipolar illness in immigrant populations, which is not surprising, really, when you think about the energy and the optimism and impulsiveness that drives people to immigrate,'' </span></span>she said in a recent telephone interview. ''Now, does that mean that most Americans are hypomanic? No, that means - at least from my point of view - that a very real minority may be hypomanic, though perhaps a very important minority.''</p><p style="text-align: justify;" class="rightfrontpage"><br /></p><p style="text-align: justify;" class="rightfrontpage"><br /></p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="rightfrontpage">Others in the field are less receptive to Gartner's conjectures. ''Gartner is trying to use a few fascinating cases to explain an entire country's economic behavior, and that's a bit of a stretch,'' says Jon McClellan, an associate professor of psychiatry at the University of Washington in Seattle who has written about the dangers of overdiagnosing bipolar illness. Besides, he adds, ''I'm really bothered by this notion that we're genetically superior to people from other countries. That's an argument that's been used for all sorts of bad things, and we should be very careful about making it.''</p><p style="text-align: justify;" class="rightfrontpage"><br /></p><p style="text-align: justify;" class="rightfrontpage"><br /></p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="rightfrontpage">What's more, <span style="font-weight: bold;">McClellan notes, Gartner's claims go beyond what the rather meager research on hypomania can support. (For example, estimates on the prevalence of the condition range from as low as .1 percent to as high as 10 percent.) ''Scientifically,'' he says, ''the evidence just isn't there.''</span></p><p style="text-align: justify;" class="rightfrontpage"><br /></p><p style="text-align: justify;" class="rightfrontpage"><br /></p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="rightfrontpage"><span style="font-size:130%;"><span style="font-weight: bold;">Peter C. Whybrow, a psychiatrist and neuroscientist at UCLA, agrees - though he has his own theory about how Americans' genes make them different</span></span>. He has just published a book, ''American Mania: When More is Not Enough'' (W.W. Norton), that he describes as ''the flip side'' of Gartner's cheerful depiction of a country full of enterprising entrepreneurs. But, Whybrow explains, <span style="font-size:130%;"><span style="font-weight: bold;">''I use the word 'mania' metaphorically, not literally.'' In contrast to Gartner's largely upbeat assessment of American culture, Whybrow's book warns that our innate desire for all that's new and exciting has spun out of control, leading to rising levels of anxiety, depression, and obesity.</span></span></p><p style="text-align: justify;" class="rightfrontpage"><br /></p><p style="text-align: justify;" class="rightfrontpage"><br /></p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="rightfrontpage">In the book, <span style="font-size:180%;"><span style="font-weight: bold;"><span style="font-size:130%;"><span style="color: rgb(255, 0, 0);">Whybrow traces the unique character of the United States</span> - </span>what he calls ''America's astonishing appetite for life'' - not to hypomania but <span style="color: rgb(255, 0, 0);">to a genetic variation, found more frequently among Americans than among other peoples, that inclines individuals who have it toward taking risks</span>.</span></span></p><p style="text-align: justify;" class="rightfrontpage"><br /></p><p style="text-align: justify;" class="rightfrontpage"><br /></p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="rightfrontpage">''We don't know enough about the genetics of hypomania to say that it's what drives the American temperament,'' says Whybrow (himself an immigrant from Britain). <span style="font-size:180%;"><span style="font-weight: bold;">''But we do know that in the American population you find a much higher prevalence of the D4-7 allele, which is the risk-taking gene. I think the factor that distinguishes the inhabitants of the United States is much more likely to be a novelty-seeking gene than some form of manic-depressive illness.''</span></span></p><p style="text-align: justify;" class="rightfrontpage"><br /></p><p style="text-align: justify;" class="rightfrontpage"><br /></p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="rightfrontpage"><span style="font-weight: bold;">Gartner concedes that his book is partly ''speculative.'' </span>While he points to studies suggesting that the United States (along with Canada and New Zealand) has the world's highest incidence of manic depression, he acknowledges that there is no data available on countries' relative rates of hypomania. And he admits that his ''pilot study'' - in which he diagnosed as hypomanic all 10 Internet CEOs who responded to ads he placed on various websites - is far from conclusive.</p><p style="text-align: justify;" class="rightfrontpage"><br /></p><p style="text-align: justify;" class="rightfrontpage"><br /></p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="rightfrontpage">''What I'm doing is putting certain things together, drawing an inference,'' he says. ''I'm saying: 'Look, isn't it interesting that the countries that have been havens for immigrants also have the highest rates of bipolar disorder? And isn't it interesting that those are the countries that have the highest rates of new company creation?' <span style="font-weight: bold;">Yes, it could be coincidental - but in science, we say that the simplest explanation is usually the right one.''</span></p><p style="text-align: justify;" class="rightfrontpage"><br /></p><p style="text-align: justify;" class="rightfrontpage"><br /></p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="rightfrontpage">But as controversial as Gartner's book is among scientists, it is likely to find even less of a sympathetic hearing among historians. <span style="font-weight: bold;">''The Hypomanic Edge'' offers case studies of well-known Americans who Gartner believes to be hypomanic. Some of them are contemporary, like Craig Venter, the brash scientist whose company won the race to decode the human genome. </span>''My self-diagnosis: I probably have a very mild case of manic depression,'' he is quoted as telling the author. Others died centuries ago.</p><p style="text-align: justify;" class="rightfrontpage"><br /></p><p style="text-align: justify;" class="rightfrontpage"><br /></p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="rightfrontpage"><span style="font-weight: bold;">Gartner makes his most vigorous case for a posthumous diagnosis of hypomania on behalf of Alexander Hamilton</span>, the founding father and immigrant from the West Indies. Unable to conduct an interview with the man himself, Gartner turned to five of Hamilton's biographers, who he claims recognized typical hypomanic characteristics - ''restless and impatient''; ''unusually active at work and other pursuits''; ''supremely confident of success'' - while declining to identify them as signs of pathology.</p><p style="text-align: justify;" class="rightfrontpage"><br /></p><p style="text-align: justify;" class="rightfrontpage"><br /></p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="rightfrontpage">One of these biographers was Richard Brookhiser, author of ''Alexander Hamilton, American'' (1999), who Gartner reports was ''cool to the idea of diagnosing'' his subject. But Brookhiser said in a recent telephone interview that he simply doubts the usefulness of such diagnoses.</p><p style="text-align: justify;" class="rightfrontpage"><br /></p><p style="text-align: justify;" class="rightfrontpage"><br /></p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="rightfrontpage">As a student of American history, he said, ''you have to be willing to use anything that comes to hand if it looks promising or if it's going to teach you something or take you further into the minds of these fascinating people. You just have to be careful about imposing psychiatric terminology from the 21st century on people who will never be able to answer back.''</p><p style="text-align: justify;" class="rightfrontpage"><br /></p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="rightfrontpage"><em>Annie Murphy Paul is a writer living in Cambridge. Her book ''The Cult of Personality'' was published last September. </em></p>ITSSD Charitable Missionhttp://www.blogger.com/profile/00790887154748866904noreply@blogger.com0tag:blogger.com,1999:blog-1851218948450486986.post-74792052633552379842009-02-18T21:16:00.022-05:002009-02-22T13:45:48.955-05:00The Creeping 'Authenticity' of Europe's Intrusive Civil Law System<div align="justify"><a href="http://www.notaries.org.uk/eu_authentic_acts/eu_authentic_acts.html"><span style="color:#3333ff;"><strong>http://www.notaries.org.uk/eu_authentic_acts/eu_authentic_acts.html</strong></span></a><br /><br /><strong><span style="font-size:130%;">The Creeping ‘Authenticity’ of Europe’s Intrusive Civil Law System</span></strong><br /></div><div align="justify"><br /><em><strong><span style="font-size:130%;color:#000099;">English Professional Notaries Blog Embraces & Posts ITSSD Findings on Proposed French Authentic Acts Initiative</span></strong></em></div><br /><br />By Lawrence A. Kogan<br /><br /><br /><strong><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjRUmNnFobfzGheoob0cH0HPOGWqMCADc3ja0oRkTl0UVktt-PTloXYhao_YJDFREu2wUSCaTDfwUT-CNCWWZDw015t8PlF-dosCaXyigJUWlrELghLotAk0LSciK-fvCF-Fw2TqpKKqI_V/s1600-h/NEW+-+Notary+Talk+of+England+and+Wales.gif"><img id="BLOGGER_PHOTO_ID_5304330558145540498" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 117px; CURSOR: hand; HEIGHT: 85px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjRUmNnFobfzGheoob0cH0HPOGWqMCADc3ja0oRkTl0UVktt-PTloXYhao_YJDFREu2wUSCaTDfwUT-CNCWWZDw015t8PlF-dosCaXyigJUWlrELghLotAk0LSciK-fvCF-Fw2TqpKKqI_V/s400/NEW+-+Notary+Talk+of+England+and+Wales.gif" border="0" /></a>NotaryTalk of England and Wales</strong><br /><br /><br />February 19, 2009<br /><br /><br /><br /><strong><span style="font-size:130%;">SYNOPSIS:</span></strong><br /><br /><br /><div align="justify"><em></em></div><div align="justify"><em>France is moving to universalise</em> <em>through European regional harmonisation and extra-EU international commerce, the Napoleonic civil-law requirement of authentic acts/instruments, which potentially affects every conceivable private transaction within and beyond continental Europe. Apparently, Continental European governments are not very concerned about the impact on English common-law evidentiary rules. Such rules form the foundation of the common-law notion of due process on which private property owners depend for their day in court and for legal certainty and protection in common-law jurisdictions. This article identifies how France is working to export the main tenets of its civil-law system of preventive justice throughout global commerce to ‘change’ international law and the Anglo-American free-enterprise system.</em></div><br /><br /><br />To download this article [PDF format], please click <a href="http://www.notaries.org.uk/eu_authentic_acts/files/page52_4.pdf"><strong><span style="color:#3333ff;">HERE</span></strong></a><span style="color:#3333ff;"> </span><br /><br /><br /><a href="http://www.notaries.org.uk/eu_authentic_acts/files/page52_4.pdf"><strong><span style="color:#3333ff;">http://www.notaries.org.uk/eu_authentic_acts/files/page52_4.pdf</span></strong></a><br /><br /><br /><br /><div align="justify">This article is a longer and more detailed version of the recently released article entitled, <em>Effort to Expand 'Authentic Acts' in Europe Imperils Economic Freedom</em>, published on February 13, 2009 by the Washington Legal Foundation.</div><br /><br /><br /><div align="justify"><strong><span style="font-size:180%;">[</span><span style="font-size:130%;">See: <em>France Proposes New EU Ministry of Silly Authentic Acts ala Monty Python that Jeopardizes Anglo-American Free Enterprise</em>, ITSSD Journal on Economic Freedom, at:</span> </strong><a href="http://itssdeconomicfreedom.blogspot.com/2009/02/france-proposes-eu-law-ministry-of.html"><strong><span style="color:#3333ff;">http://itssdeconomicfreedom.blogspot.com/2009/02/france-proposes-eu-law-ministry-of.html</span></strong></a><strong> <span style="font-size:180%;">].</span></strong> </div><br /><br /><div align="justify">-------------------------------------------------------------------------------------------------<br /></div><div align="justify"><strong></strong></div><br /><br /><div align="justify"><strong><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgz7ET9CYjdHjHp10s5dGI3zBbceOvK1T1YTWZ29breBEvm3YubzgTmn5yEq1Y7zRrj6EooD9kt7aDhbhR-1-xYwPq53PCK3wWU1WBsTRv7R71X3_5aGzun5WeaDcE5VV-MEKJEu19h9snB/s1600-h/Gregory+Taylor+-+UK+Notary.jpg"><img id="BLOGGER_PHOTO_ID_5304329597366178482" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 200px; CURSOR: hand; HEIGHT: 152px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgz7ET9CYjdHjHp10s5dGI3zBbceOvK1T1YTWZ29breBEvm3YubzgTmn5yEq1Y7zRrj6EooD9kt7aDhbhR-1-xYwPq53PCK3wWU1WBsTRv7R71X3_5aGzun5WeaDcE5VV-MEKJEu19h9snB/s200/Gregory+Taylor+-+UK+Notary.jpg" border="0" /></a>"NotaryTalk of England and Wales ("NEW") is a forum for the discussion of matters of interest and concern to the Notarial profession in England and Wales, and for providing information about Notaries at the national, European and international levels. This website is owned and administered by Gregory Taylor, Notary Public "</strong> </div><br /><br /><br /><br /><div align="justify"><strong><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh9un2JNs8ThyDgOoCTRXeN2WGyxkBipFAiELKgL2WwDK0DeljAFpw9nnf4Rlx9ItIk-KduRGdqK-fbMBw-XvZlbGS86LcSD1k1K0chShGRjdX3F1FoSOFUoGL29B42nU5rbOZvGxpm-fM7/s1600-h/Notary+SocArms+-+UK.jpg"><img id="BLOGGER_PHOTO_ID_5304330984847301746" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 166px; CURSOR: hand; HEIGHT: 233px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh9un2JNs8ThyDgOoCTRXeN2WGyxkBipFAiELKgL2WwDK0DeljAFpw9nnf4Rlx9ItIk-KduRGdqK-fbMBw-XvZlbGS86LcSD1k1K0chShGRjdX3F1FoSOFUoGL29B42nU5rbOZvGxpm-fM7/s400/Notary+SocArms+-+UK.jpg" border="0" /></a>"[T]he organisation representing most of the Notaries in England and Wales is The Notaries' Society whose website (containing a full directory of its members) can be accessed by clicking </strong><a href="http://www.thenotariessociety.org.uk/" rel="self"><strong><span style="color:#3333ff;">HERE</span></strong></a><strong>.</strong></div><br /><br /><br /><div align="justify"><strong>CLICK </strong><a href="http://www.notaries.org.uk/members/members.html" rel="self"><strong><span style="color:#3333ff;">HERE</span></strong></a><strong> FOR LIST OF MEMBERS OF 'NEW'".</strong></div><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br />-------------------------------------------------------------------------------------------------<br /><br /><br />Even <em><strong><span style="font-size:130%;color:#000099;">les notaires de France</span></strong></em> are now paying attention to our article.<br /><br /><br /><div align="justify"><strong><span style="font-size:130%;"><span style="font-size:180%;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhEKyV-oC71W7cWOk9Jkq5xKC3xIwUmguJEwKtEf6qrxQw29Z8S6oFt0UvglmO9SctPhjTBsbLA00HGzDyWDuy6dDsj8ctxp9A8GYOv4QJ48pAHL4tpKh012ZqQDRrjPfo0a0OOgJxzszOp/s1600-h/Juris+Prudentes+-+plume.gif"><img id="BLOGGER_PHOTO_ID_5304514618560508466" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 136px; CURSOR: hand; HEIGHT: 200px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhEKyV-oC71W7cWOk9Jkq5xKC3xIwUmguJEwKtEf6qrxQw29Z8S6oFt0UvglmO9SctPhjTBsbLA00HGzDyWDuy6dDsj8ctxp9A8GYOv4QJ48pAHL4tpKh012ZqQDRrjPfo0a0OOgJxzszOp/s200/Juris+Prudentes+-+plume.gif" border="0" /></a><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEim1b8xilshZnTdb9BIAqXFPDZ05V8SPG7YFLvm0SXWUZWL3FHUx1PVRHpKJJ2IgKjitBw_NJtrWo5VAMqAGIFYYZ-OOXNRuu0R7LTHfMVX9o9ZuxLOIylTwoUO-7kQsdk3i5OzLEmPmeIA/s1600-h/Juris+Prudentes+-+plume2.jpg"><img id="BLOGGER_PHOTO_ID_5304514945252908834" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 111px; CURSOR: hand; HEIGHT: 200px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEim1b8xilshZnTdb9BIAqXFPDZ05V8SPG7YFLvm0SXWUZWL3FHUx1PVRHpKJJ2IgKjitBw_NJtrWo5VAMqAGIFYYZ-OOXNRuu0R7LTHfMVX9o9ZuxLOIylTwoUO-7kQsdk3i5OzLEmPmeIA/s200/Juris+Prudentes+-+plume2.jpg" border="0" /></a>[</span>See: <em>Actualite: The Creeping 'Authenticity' of Europe's Intrusive Civil Law System</em>, Juris Prudentes, Droits Immobilier website at:</span> </strong><a href="http://www.jurisprudentes.org/bdd/faqs_article.php?id_article=9455"><strong>http://www.jurisprudentes.org/bdd/faqs_article.php?id_article=9455</strong></a><strong> ; <a href="http://www.jurisprudentes.org/">http://www.jurisprudentes.org/</a> ; <a href="http://www.jurisprudentes.org/avocat.htm">http://www.jurisprudentes.org/avocat.htm</a><span style="font-size:180%;">].</span></strong></div><br /><br /><br /><div align="justify">It has come to our attention that, among many or most of the younger Notaries within the <em>'progressive'</em> notarial community in France, there is a sense that the Continental Notarial establishment is losing the long-term battle of maintaining its unique identity against the 'Anglo-American' model. Perhaps this is why that establishment is desperately trying to fight a 'rear-guard' action based on <em>anti-competitive practices</em>. Whether or not such efforts fail depends on the response from the Anglosphere.</div>ITSSD Charitable Missionhttp://www.blogger.com/profile/00790887154748866904noreply@blogger.com0tag:blogger.com,1999:blog-1851218948450486986.post-49908156761458709882009-02-13T13:43:00.020-05:002009-02-13T21:03:32.755-05:00France Proposes New EU Ministry of Silly Authentic Acts ala Monty Python that Jeopardizes Anglo-American Free Enterprise<div align="justify"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhgtkEoxpaAbookSbNzcKkvN6Y5Z0DUbsAR1wK2uDsplhDyB2MVogNz8MOh6YKXWlMj2LRgIP8QwGXprKhREC1CO6hSxGvBy1zMWOPkfO_En5qD0ZwyV1kIJsJl-N80Q-R5vRBP1HeA1m1R/s1600-h/Ministry_of_Silly_Walks.jpg"><img id="BLOGGER_PHOTO_ID_5302358926225531266" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 315px; CURSOR: hand; HEIGHT: 246px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhgtkEoxpaAbookSbNzcKkvN6Y5Z0DUbsAR1wK2uDsplhDyB2MVogNz8MOh6YKXWlMj2LRgIP8QwGXprKhREC1CO6hSxGvBy1zMWOPkfO_En5qD0ZwyV1kIJsJl-N80Q-R5vRBP1HeA1m1R/s400/Ministry_of_Silly_Walks.jpg" border="0" /></a><strong><span style="font-size:130%;">ITSSD: French 'Authentic Acts' Proposal Jeopardizes Anglo-American Free Enterprise</span></strong><br /><br /></div><br /><div align="justify">PRINCETON, N.J., Feb. 13 /PRNewswire-USNewswire/ -- In a short article published by the Washington Legal Foundation, international business, trade and regulatory lawyer Lawrence Kogan identifies how France is working to export two central tenets of Napoleonic civil law preventive justice throughout global commerce to "change" the rule of international law and Anglo-American free enterprise. </div><br /><div align="justify"><br />Arguably, says Kogan, "Were it not for its uncanny resemblance to Monty Python's timeless skit - <a href="http://us.rd.yahoo.com/dailynews/usnw/pl_usnw/storytext/itssd__french__authentic_acts__proposal_jeopardizes_anglo_american_free_enterprise/30953859/SIG=130gctoh7/*http://itssdjournaleconomicsabotage.blogspot.com/2008/09/al-gores-call-for-climate-change.html"><strong>The Ministry of Silly Walks</strong></a>, the Sarkozy Government's recent proposal to expand the privileged monopoly long enjoyed by les notaires de France and the intrusive and regulation-prone French legal system would likely have been considered more seriously and opposed by Anglo-American businesses and political leaders."</div><br /><br /><div align="justify"><strong>[</strong><a href="http://www.youtube.com/watch?v=IqhlQfXUk7w"><strong>http://www.youtube.com/watch?v=IqhlQfXUk7w</strong></a><strong> - <em><span style="font-size:130%;">Ministry of Silly Walks</span></em>]</strong></div><br /><div align="justify"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEguuagv8mR6ITdu9pZTdtRlzrT9UVmRc2KoP9cZibJeFA0ptz7YVAkneagApLyezhsL_t16Y3EjOWpFSMC31PEPZ-EIZWVmzrRAp81OV14givlFfnFkDLn42AqFYes1s-9oULVnYcAXT0k7/s1600-h/Les+Notaires+de+France.jpg"><img id="BLOGGER_PHOTO_ID_5302466770717971474" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 405px; CURSOR: hand; HEIGHT: 273px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEguuagv8mR6ITdu9pZTdtRlzrT9UVmRc2KoP9cZibJeFA0ptz7YVAkneagApLyezhsL_t16Y3EjOWpFSMC31PEPZ-EIZWVmzrRAp81OV14givlFfnFkDLn42AqFYes1s-9oULVnYcAXT0k7/s400/Les+Notaires+de+France.jpg" border="0" /></a><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjrIrzaQQgtpEc85JDRy5eoHIvGQdBgnTpIkFJSOE7dEoNoPHGGlk4cqLcnu2FVbd3DZTSH0MjME8lY6bom0MqjEXGnaVU70zwR-zUyxBl8zTIU5o7opHmdPqI7RBf8NSndQVWduzrjDpSm/s1600-h/French+Notary+Structure.jpg"><img id="BLOGGER_PHOTO_ID_5302461452006904082" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 390px; CURSOR: hand; HEIGHT: 417px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjrIrzaQQgtpEc85JDRy5eoHIvGQdBgnTpIkFJSOE7dEoNoPHGGlk4cqLcnu2FVbd3DZTSH0MjME8lY6bom0MqjEXGnaVU70zwR-zUyxBl8zTIU5o7opHmdPqI7RBf8NSndQVWduzrjDpSm/s400/French+Notary+Structure.jpg" border="0" /></a><span style="font-size:130%;color:#ff0000;"><strong>Civil law notaries are agents of the State</strong></span> who possess the ministerial responsibility for issuing 'authentic acts'. Authentic acts are drawn up legal instruments that follow a prescribed form, recognize and provide conclusive evidence that specific private agreements have been reviewed and approved by empowered public officials, and render such agreements legally enforceable in a court of law.<br /></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"><br />From afar, the Sarkozy initiative appears earnest - a regional harmonization effort designed to promote greater economic 'efficiency', 'consumer protection' and 'legal certainty' within the 27-state Eurozone. A closer inspection, however, reveals that it does not guarantee true reciprocity. Also, it indirectly broadens the scope of governmental oversight and control over private business and personal transactions consummated within and beyond the region.</div><br /><div align="justify"><br />"Most troubling of all," emphasizes Kogan, "is how civil law preventive justice enables governmental use of authentic instruments, as it does Europe's Precautionary Principle, to undermine common law evidentiary rules and private property rights. Private property owners in contentious justice-based common law jurisdictions depend on substantive and procedural due process to ensure their day in court and the protection of their exclusive rights from government overreach. These fundamental rights will now be jeopardized to the extent civil law judges are required to attach greater probative value to authenticated instruments than to common law notarized private agreements, and are denied the discretion to consider other forms of documentary evidence to resolve legal disputes."</div><br /><div align="justify"><br /><em>The Institute for Trade, Standards and Sustainable Development (ITSSD) is a non-partisan non-profit international legal research and educational organization that examines international law relating to trade, industry and positive sustainable development around the world. <strong><span style="font-size:130%;color:#cc0000;">This article is accessible online at</span></strong>:</em> </div><br /><div align="justify"><br /><a href="http://itssd.org/2-13-09Kogan_LegalBackgrounder%20-%20FINAL.pdf">http://itssd.org/2-13-09Kogan_LegalBackgrounder%20-%20FINAL.pdf</a><br /><br /></div><br /><div align="justify"><span style="color:#cc0000;"><em><strong>and</strong></em> </span><br /></div><br /><div align="justify"></div><br /><div align="justify"><a href="http://www.wlf.org/upload/2-13-09Kogan_LegalBackgrounder.pdf">http://www.wlf.org/upload/2-13-09Kogan_LegalBackgrounder.pdf</a> .</div>ITSSD Charitable Missionhttp://www.blogger.com/profile/00790887154748866904noreply@blogger.com0tag:blogger.com,1999:blog-1851218948450486986.post-84097954373810459672009-01-26T09:53:00.049-05:002009-01-26T12:38:26.894-05:00Will Obama Dampen the Flame of Innovative Anglo-American Entrepreneurial Capitalism With Socialist-Leaning French-German Continental Over-Regulation?<a href="http://www.reuters.com/article/governmentFilingsNews/idUSLQ27440320090126?sp=true">http://www.reuters.com/article/governmentFilingsNews/idUSLQ27440320090126?sp=true</a><br /><br /><div align="left"><strong><span style="font-size:130%;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEienJYa5-8DqaW3slfNDxUWAJ3QYY3SmKgxAc3knsPgL6qeZcWLRSCe4ejhEMOFb9WE-3S5RamDOK8n-LltSLBksf0lR80MlCWIAX0nGXdh7BCEISwu323bVS9YTttl40rXMKSoUj2H7Gq_/s1600-h/entrepreneurship.jpg"><img id="BLOGGER_PHOTO_ID_5295621636078931938" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 285px; CURSOR: hand; HEIGHT: 400px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEienJYa5-8DqaW3slfNDxUWAJ3QYY3SmKgxAc3knsPgL6qeZcWLRSCe4ejhEMOFb9WE-3S5RamDOK8n-LltSLBksf0lR80MlCWIAX0nGXdh7BCEISwu323bVS9YTttl40rXMKSoUj2H7Gq_/s400/entrepreneurship.jpg" border="0" /></a><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjqnmyFbOWdNyQW3u0EuTovrcckVpjWchAvopW6Sg89q9DAWAEzLD1Myjzq_S-NycW_pxd8TYY5ycmgARg0zaTr49Aiw_FD1Qpq-NYhkHfzFMH4Z7gHMe4fJVM1yLEQpDLU5Bir68I9k9rS/s1600-h/flame.jpg"><img id="BLOGGER_PHOTO_ID_5295617254866511954" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 266px; CURSOR: hand; HEIGHT: 400px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjqnmyFbOWdNyQW3u0EuTovrcckVpjWchAvopW6Sg89q9DAWAEzLD1Myjzq_S-NycW_pxd8TYY5ycmgARg0zaTr49Aiw_FD1Qpq-NYhkHfzFMH4Z7gHMe4fJVM1yLEQpDLU5Bir68I9k9rS/s400/flame.jpg" border="0" /></a>A New Direction in Global Financial Regulation</span></strong></div><br /><br />By John Kemp<br /><br /><br />Reuters<br /><br /><br />January 26, 2009<br /><br /><div><br /></div><div align="justify">LONDON, Jan 26 (Reuters) - <strong><span style="font-size:180%;color:#000099;">UK Prime Minister Gordon Brown's call today for a new G20 charter of principles on financial regulation</span></strong> [ID:nLQ293854] reflects an emerging consensus among policymakers that, once the immediate crisis has passed, the regulatory framework must be fundamentally redesigned.</div><div></div><div align="justify"></div><div align="justify"><br />In particular, <em><strong><span style="font-size:130%;">policymakers are concerned with how to correct the basic <span style="font-size:180%;color:#ff0000;">moral hazard</span> problem in which bankers have an incentive to extend too much credit, while private firms and households have an incentive to take on too much debt.</span></strong></em></div><div></div><div align="justify"></div><div align="justify"><br /><span style="color:#000099;"><strong><span style="font-size:180%;">A consensus is emerging that the volume of credit expansion needs to be restrained and managed as a separate policy objective</span></strong>.</span> <span style="font-size:180%;color:#ff0000;"><strong>This marks a sharp break with past practice</strong></span> -- in which central banks attempted to control the cost of credit by manipulating short-term interest rates, but have increasingly left its quantity to decisions by individual banks and borrowers.</div><div></div><div align="justify"></div><div align="justify"><br /><strong>There is also something of an emerging agreement that if <span style="font-size:180%;color:#ff0000;">credit control</span> is a separate economic objective alongside "internal balance" (output-inflation) and "external balance" (trade and capital flows) then a new instrument needs to be developed to achieve this target</strong>.</div><div></div><div align="justify"></div><div align="justify"><br />With three targets (internal balance, external balance and financial balance) <strong>Tinbergen's Rule says there need to be three independent policy instruments -- fiscal policy, monetary policy, and a distinct credit policy.</strong></div><div></div><div align="justify"></div><div align="justify"><br />In his recent speech to the CBI Annual Dinner in the East Midlands last week, <strong><em><span style="font-size:130%;color:#ff0000;">Bank of England Governor Mervyn King alluded to the need to develop a new policy instrument to achieve credit-policy objectives. He stated a strong preference it should not be interest rates</span></em></strong>. King argued rates should continue to be used to target output and inflation.</div><div></div><div align="justify"></div><div align="justify"><br /><strong><span style="font-size:180%;">The clear implication is the "new policy instrument" referred to by King will have to be some form of direct quantitative control, so as not to interfere with interest-rate strategy, and allow the authorities to manipulate the volume of credit for any given level of interest rates. </span></strong><br /></div><div align="justify"></div><div align="justify"><br /><strong><span style="font-size:130%;">SECOND GENERATION CONTROLS</span></strong></div><div align="justify"><br /><br />In 1945-1975, banking crises were few, but credit was expensive and unavailable to many households and businesses. The banking system was tightly controlled and the quantity of credit was rationed through a variety of direct mechanisms (reserve requirements, intensive bank examinations, margin requirements and a host of other direct lending controls).</div><div align="justify"><br /><br /><span style="font-size:180%;color:#ff0000;"><strong>Most of these were dismantled during the 1980s and 1990s. They could be resurrected but this would face stiff opposition from within the industry.</strong></span> <strong><span style="font-size:180%;color:#3333ff;">It would also face hostility from within the economics establishment (broadly in favour of market solutions) and among politicians (worried about the impact of reduced access to credit for many households, and voters, in the lower half of the income distribution).</span></strong></div><div></div><div align="justify"><br /><strong><span style="font-size:180%;">Fed Vice-Chairman Don Kohn and Prof Lawrence Summers (<span style="color:#3333ff;">now head of the Obama administration's National Economic Council</span>) both poured scorn on what they saw as a rose-tinted view of the heavy regulatory past at the Fed's annual Jackson Hole symposium in 2005.<br /></span></strong></div><div><br /></div><div align="justify"><strong><span style="font-size:180%;">Both men are presumably chastened by the subsequent meltdown. But their personal opposition to intensive quantitative controls is probably still intact, and shared by many policymakers at the top of the new administration, in Congress, and among the wider regulatory community.<br /></span></strong></div><div><br /></div><div align="justify"><em><strong><span style="font-size:180%;">So the search is on for a compromise.</span></strong></em> The idea is to create a new instrument or instruments that would work with the grain of the market, rather than cut against it, and <strong><span style="font-size:130%;">enable regulators to exercise some <span style="font-size:180%;color:#ff0000;">control</span> over the quantity of credit being extended while preserving flexibility for banks to </span><span style="font-size:180%;">innovate</span></strong>.</div><div></div><div align="justify"><br /><strong><span style="font-size:180%;">If the old pre-1980 quantitative controls are seen as "first generation" methods, the hunt is on for more sophisticated market-friendly "second generation" methods that promote stability while protecting growth.</span></strong></div><div></div><div align="justify"><br />The first design issue for these new quantitative controls is whether to impose them directly or indirectly.</div><div></div><div align="justify"><br />First-generation quantitative controls were formulated within the central bank and consisted of a series of prescriptive lending ratios.</div><div></div><div align="justify"><br /><strong><span style="font-size:130%;">The trend in recent years has been towards a more indirect approach, in which the central bank and other regulators set out general principles and a flexible framework; banks are then free to manage their business and risk-taking within this</span></strong>. <strong><span style="font-size:180%;color:#cc0000;">One key question is how far second-generation controls will build on the modern principles-based indirect approach,</span></strong> <strong><span style="font-size:180%;color:#ff0000;">or revert to a more prescriptive command-and-control one. </span></strong></div><div></div><div align="justify"><br /><strong><span style="font-size:130%;">COUNTER-CYCLICAL INSTRUMENTS</span></strong></div><div></div><div align="justify"><br /><strong><span style="font-size:130%;">The second design issue is how to make quantitative controls "active" rather than "passive".</span></strong> First-generation controls were largely specified in passive terms: fixed capital and lending ratios that were invariant over the cycle. But there is an emerging consensus second-generation controls should be more active and capable of varying over the cycle, limiting credit growth during the expansion phase, but also mitigating the collapse of credit during a contraction.</div><div></div><div align="justify"><br /><strong><span style="font-size:130%;">Contra-cyclical bank regulation policies are especially popular at the moment, because the industry is in the contraction phase, and contra-cyclicality implies a loosening of policy</span></strong>. The real challenge is to create a contra-cyclical approach that is sufficiently robust it can compel the banks to increase their capital cushions during an upturn.</div><div></div><div align="justify"><br /><em><strong>One option is to impose reserve requirements or risk-weightings which rise above the long-term mean during expansions and are allowed to fall below it during the contraction phase.</strong></em> <span style="font-size:130%;color:#ff0000;"><strong>But that raises thorny questions of who measures the cycle and how. Dating and measuring business and credit cycles, and identifying turning points are notoriously difficult in real time.</strong></span></div><div></div><div align="justify"><br />To take a recent example: the start of the most recent expansion is controversial, with many commentators now arguing the Fed missed the beginning of the upturn and failed to raise interest rates in a timely manner. <strong>If the Fed, or another regulator, had been responsible for adjusting reserve requirements or risk-weightings, as well as interest rates, would the adjustments have been any more successful?</strong></div><div></div><div align="justify"><br /><span style="font-size:130%;color:#ff0000;"><strong>If relying on regulators' discretion to identify turning points in the credit cycle is problematic</strong></span>, is there a way to make contra-cyclical controls endogenous to the lending system?</div><div></div><div align="justify"><br />The aim would be to make reserve requirements, risk-weightings or other instruments depend on the volume of credit extended in the immediate past period(s). Credit controls would be progressively tightened the longer and faster credit expands, and progressively loosened the longer and further credit falls.</div><div></div><div align="justify"><br /><strong><span style="font-size:130%;color:#ff0000;">The problem with endogenous credit control policies (like endogenous interest rate policies) is that they do not work well around cyclical turning points</span></strong>. In the summer of 2007, an endogenous contra-cyclical policy would probably still be tightening conditions in response to the explosive credit growth in 2004-H12007 rather than loosening them to forestall the calamitous collapse of credit that occurred later in the year. </div><div></div><div align="justify"><br /><strong><span style="font-size:130%;">INSTITUTIONAL REACH</span></strong></div><div><br /><br />In practice, credit is hard to define, measure and restrict.</div><div></div><div align="justify"><br />Conventional bank lending is only one element of an increasingly complex and diverse credit-creating system.</div><div></div><div align="justify"><br />Finance companies, commodity brokers, special investment vehicles, and even hedge funds, all of which are increasingly active in wholesale money markets, may be engaging in credit-creating processes.</div><div></div><div align="justify"><br />The question of what types of credit to control is analogous to the debate during the 1980s about what measure of the money supply to target. Moreover, Goodhart's Law suggests any statistical or economic relationship between the chosen target measure and the wider economy will tend to break down once pressure is applied for control purposes.</div><div></div><div align="justify"><br />In fact, as soon as the authorities decide on which forms of credit are subject to regulation and control, there is an immediate incentive to create other forms of credit in other institutions that are not subject to control and therefore more profitable. This was precisely the reason for the huge growth in the "shadow banking system" during the 1990s and 2000s.</div><div></div><div align="justify"><br /><strong><span style="font-size:130%;">To have any chance of being effective, the new credit policy will need to cover the whole range of institutions which create credit, not just commercial banks, and need to be applied on a fairly international basis, to prevent this sort of institutional and jurisdictional arbitrage.</span></strong><br /></div><div></div><div align="justify">------------------------------------------------------------------------------------------------- </div><div></div><div align="justify"><a href="http://www.usatoday.com/money/economy/2008-05-12-soros_N.htm">http://www.usatoday.com/money/economy/2008-05-12-soros_N.htm</a></div><div></div><div align="justify"><strong><span style="font-size:130%;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiEcjLzL07nzCk0_hmKKo-IL24eBy1ZAJwrbbRZ8jrparNUm6S400_pZTr2R0gESQHG2-sxJoAJ7N6NKKQt2gk_-E2xHXiXmp5wLm6I9iz1jJwTyswoiwJzCElhcN5ZBxtsBbtkhyGyYAdH/s1600-h/Soros+-+The+New+Paradigm+for+Financial+Markets.jpg"><img id="BLOGGER_PHOTO_ID_5295645173776877842" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 400px; CURSOR: hand; HEIGHT: 400px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiEcjLzL07nzCk0_hmKKo-IL24eBy1ZAJwrbbRZ8jrparNUm6S400_pZTr2R0gESQHG2-sxJoAJ7N6NKKQt2gk_-E2xHXiXmp5wLm6I9iz1jJwTyswoiwJzCElhcN5ZBxtsBbtkhyGyYAdH/s400/Soros+-+The+New+Paradigm+for+Financial+Markets.jpg" border="0" /></a>Soros Sees 'Reflexivity' Theory of Economics as Life's Work</span></strong></div><div><br /></div><div align="justify">By David J. Lynch</div><div><br /></div><div align="justify">USA Today</div><div><br /></div><div align="justify">May 13, 2008</div><div><br /></div><div align="justify">WASHINGTON — For most people, being known as a fabulously wealthy investor, prominent global philanthropist and outspoken critic of the current occupant of the White House would constitute sufficient acclaim.<br /><br /><br />But George Soros, now in his eighth decade and enjoying a personal fortune estimated at $9 billion, yearns to be seen as something other than a financial oracle or Democratic Party sugar daddy. <em><strong><span style="font-size:130%;">The Hungarian émigré, who built a worldwide reputation by out-thinking markets, desperately wants to be acknowledged as a philosopher</span></strong></em>.<br /><br /><br /><a name="vid"></a><strong>His bid for such recognition — in a new book published last week</strong> — lies in <strong><span style="font-size:130%;">a theory called "reflexivity," which Soros argues should supplant conventional economic thought that's based on coolly calculating rational actors.</span></strong> Soros, 77, who first read philosophy as a teenager during World War II, has promoted the concept for more than 20 years with little success.<br /><br /><br />But hailing reflexivity as his "life's work," <span style="font-size:180%;color:#ff0000;"><strong>Soros now says the current financial crisis offers an opportunity for him to garner wider acceptance. "I'm actually hopeful this time I'll break through," he says.<br /></strong></span><br /><br />It'll be an uphill fight. Critics of reflexivity, especially among the economists Soros disparages, have been brutal. A reviewer of one of his earlier books savaged his "windy amateur philosophy" and attacked him for being unfamiliar with basic economics.<br /><br /><br />"It is difficult to conceive of a more mistaken understanding of the profession's research in the last 10-15 years. … The great danger of the (earlier) book is that non-economists will take seriously his ill-founded criticism of economic research," wrote economist Christopher Neely of the Federal Reserve Bank of St. Louis.<br /><br /><br /><strong><span style="font-size:130%;">In his latest work, The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means, Soros traces a straight line between today's financial turmoil and what he says are fatally flawed conventional assumptions about how markets behave</span></strong>. If banks, investors and regulators had embraced reflexivity years ago, there never would have been a financial crisis, Soros insists.<br /><br /><br />Here's why: <strong>Since the days of Adam Smith, economists have taught that markets sort out issues of supply and demand by settling at a point of equilibrium. Prices may temporarily deviate from that balanced state, but eventually, they return to it.</strong><br /><br /><br /><strong>Classic free market theory holds that everyone in an economy acts rationally, based on complete information while seeking to maximize their individual welfare or profits</strong>.<br /><br /><br /><strong>Of course, real life never matches up exactly with the theory's assumptions. But they represent, economists say, a useful way of making sense of a complex world.<br /></strong><br /><br /><strong><span style="font-size:130%;">To Soros</span></strong>, the conventional approach is rubbish. <em><strong><span style="font-size:130%;">Instead of a world of near-identical actors, coolly assessing their economic interests and acting with clear-eyed precision, he sees a world (and markets) governed by passion, bias and self-reinforcing errors. Because fallible human beings are both involved in, and trying to make sense of, this world, they inevitably make mistakes. Those mistakes then feed on themselves in "reflexive" ways that, when taken to extremes, result in situations such as the now-deflating U.S. housing bubble.</span></strong></em><br /><br /><br /><strong><span style="font-size:130%;">Standard economic theory is flawed, Soros says, because it treats markets populated by thinking human beings as if they operated according to the natural laws that govern atoms and molecules</span></strong>. Economists say Soros badly exaggerates the limitations of standard theory and ignores subsequent refinements. <strong><span style="font-size:130%;">But if conventional economics teaches that markets are always (eventually) right, Soros insists they are always wrong</span></strong>.<br /><br /><br />What does this have to do with house prices in Las Vegas or credit availability in Tampa? Plenty. <em><strong><span style="font-size:130%;">Only people who were overly confident about how markets operate could have come up with the innovative financial instruments — such as collateralized debt obligations (CDOs) — that ultimately proved so toxic.</span></strong></em> <span style="color:#ff0000;"><strong>The banks that developed and sold these products did so comforted by arcane mathematical models that ostensibly demonstrated how these securities would behave under various scenarios.</strong></span><br /><br /><br /><em><strong><span style="font-size:130%;color:#ff0000;">The only problem was that when the crunch hit, the securities didn't behave the way the models said they should.</span></strong></em> That came as a surprise to the bankers responsible for the models. Soros said it wouldn't have come as a surprise to anyone who believed in reflexivity.<br /><br /><br /><strong>"They would not have designed these CDOs, for instance, or CDOs squared. They would not have engaged in trading strategies that assumed that markets, that deviations are random.</strong> <strong><span style="font-size:180%;color:#ff0000;">They would change the amount of leverage that they use, the amount that they are willing to borrow, because of the element of uncertainty," </span></strong>he said in an hour-long interview last week.<br /><br /><br /><strong><span style="font-size:130%;">So far, so good?</span></strong><br /><br /><br />Soros received a harsh lesson in uncertainty, false truths and the vagaries of human behavior at an early age. He was a teenager when Nazi soldiers occupied his native Hungary in March 1944. Within less than two months, more than 440,000 Hungarian Jews were deported, many to Auschwitz.<br /><br /><br />The Soros family was among the one-third of Hungary's Jewish population who survived the Holocaust, thanks to Soros' father, Tivadar, who arranged false identities for his family.<br /><br /><br />"My life, my sort of formative experience, was the Nazi occupation, you know, when (I was) 14 years old. They would have exterminated me," Soros says quietly. "And everything grew out of that. I always tried to understand reality — and that's been my passion."<br /><br /><br />By February 1945, advancing Russian soldiers had replaced the Germans, bringing a new totalitarian ideology just as certain of ultimate truth as the National Socialist ideology it supplanted. As conditions deteriorated under the postwar Soviet occupation, Soros eventually emigrated to London. He studied at the London School of Economics, got a foothold in finance, and moved to the USA in 1956.<br /><br /><br /><strong><span style="font-size:130%;">In 1970, he started the Quantum fund, a hedge fund that returned better than 42% per year for a decade. The explanation for that outsize success, Soros says, is reflexivity.</span></strong> </div><div></div><div align="justify"><br /><strong>"You have got to make decisions even though you know you may be wrong,"</strong> he says. <strong><span style="font-size:180%;">"You can't avoid being wrong, but by being aware of the uncertainties, you're more likely to correct your mistakes than the traditional investor."<br /></span></strong><br /><br /><em><strong>Soros retired from full-time investing in 2000 and concentrated on philanthropy through a network of non-profit organizations he had established in the 1980s and his Open Society Institute.</strong></em> <span style="font-size:180%;color:#ff0000;"><strong>Together, the groups distribute $400 million to $500 million each year to "civil society"</strong></span> projects in more than 50 countries, such as election monitoring in Tajikistan and a network of community libraries in Haiti. <strong><span style="font-size:180%;"><span style="color:#3333ff;">Soros </span><span style="color:#3333ff;">also has emerged as a major financial contributor to the Democratic Party</span></span></strong> and harsh critic of President Bush and the "war on terror."<br /><br /><br />The financier's political views have made him the bête noire of many in the conservative movement. Fox News commentator Bill O'Reilly, for example, has criticized Soros for seeking to impose a "radical left agenda" on the USA, while conservative websites such as freerepublic.com routinely assail him as "anti-American."<br /><br /><br />The credit crunch that erupted last year prompted Soros to return to investing, to protect his portfolio from the gathering financial catastrophe. Several months later, <em><strong><span style="font-size:130%;">Soros says the U.S. has weathered the "acute phase" of the markets crisis. "But the impact on the real economy is yet to be felt," he says.<br /></span></strong></em><br /><br />Soros makes no bones about his judgment that the current financial crisis is the "worst since the 1930s." <strong><span style="font-size:180%;color:#ff0000;">He sees the subprime mortgage debacle as the signal event that unhinged both this decade's housing bubble and a 25-year-long "super-bubble" that originated in the debt-laden policies of the Reagan administration.<br /></span></strong><br /><br /><strong>But despite Soros' apocalyptic rhetoric, the Dow is hovering near 13,000 and unemployment is a relatively low 5%.</strong> Soros explains the disconnect with the tale of the man who falls off the Empire State building and thinks to himself halfway down: "So far, so good."<br /><br /><br />"That's where we are right now," Soros laughs.<br /><br /><br />Still, for anyone who's listened to some of the gloomier economic prophets, such as economist Nouriel Roubini or The Trillion-Dollar Meltdown author Charles Morris, <em><strong><span style="font-size:130%;color:#ff0000;">Soros' analysis of the financial crisis itself is unremarkable. Like others, he blames a failure of regulators, including Alan Greenspan's Federal Reserve, to keep a tight enough rein on Wall Street. He anticipates further sharp declines in housing prices and says, when pressed, that Americans ultimately won't escape this episode without suffering a noticeable decline in their standard of living</span></strong></em>.<br /><br /><br />"I'm afraid that will be the case, and it will be hard to take," he says. <strong><span style="font-size:180%;color:#ff0000;">"And it will be politically unpalatable, and it will probably give rise to all kinds of populist political appeals (for) a way out that will also be very dangerous."<br /></span></strong><br /><br />The Federal Reserve's aggressive efforts to pump cash into the banking system and the government's $168 billion economic stimulus, which began sending taxpayers checks this month, will be insufficient to stir a recovery, he says. Talk — from Bush administration officials and Wall Street optimists — of an economic recovery later this year "is totally without foundation," he says.<br /><br /><br />Even as clean-up continues on the housing bubble's aftermath, new bubbles are forming in commodities markets and perhaps China, he says. <strong>Soros acknowledges that his crystal ball is "cloudy" on the Asian giant, but predicts that the country faces serious domestic inflation and export weakness if the U.S. downturn spreads abroad. "China is not immune to the worldwide dislocation that started here," he says.<br /></strong><br /><br />What Soros sees as the market economy's inherent tendency to lurch from bubble to bubble and excess to excess makes it all the more essential that those at the economy's helm embrace reflexivity, he says. <strong><span style="font-size:180%;">Reflexivity cannot provide firm predictions about the future, only a better understanding of the past and an awareness of all that could go wrong, he says. Regulators and market participants alike will need to accept a much greater amount of uncertainty</span></strong> — as Soros says he has.<br /><br /><br />"Being aware of reflexivity, I am often overwhelmed," he says. "Genuinely, I am actually overwhelmed by the uncertainties. And I'm constantly on the watch being aware of my own misconceptions, being aware that I'm acting on misconceptions and constantly looking to correct them."<br /></div><div></div><div align="justify">-------------------------------------------------------------------------------------------------</div><div></div><div align="justify"><a href="http://w4.stern.nyu.edu/sternbusiness/fall_2007/comparativeCapitalism.html">http://w4.stern.nyu.edu/sternbusiness/fall_2007/comparativeCapitalism.html</a><br /></div><div></div><div align="justify"><strong><span style="font-size:130%;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh2NDpVr0mP7ShK2Z52HGj_Gdbm04tsfYUoNynll4rD9eQiqdjzYYR8BESZFCk_NIodRtJjMXdEV28nrMh-HIR_nVTwApS0xFFPuwGAcXoN3gWOKF6OGPC7R9kwtHGFI9WKn1a8UkITsHK0/s1600-h/comparitiveCapitalism.jpg"><img id="BLOGGER_PHOTO_ID_5295627892803230274" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 391px; CURSOR: hand; HEIGHT: 400px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh2NDpVr0mP7ShK2Z52HGj_Gdbm04tsfYUoNynll4rD9eQiqdjzYYR8BESZFCk_NIodRtJjMXdEV28nrMh-HIR_nVTwApS0xFFPuwGAcXoN3gWOKF6OGPC7R9kwtHGFI9WKn1a8UkITsHK0/s400/comparitiveCapitalism.jpg" border="0" /></a>What accounts for Europe’s and America’s different attitudes toward the free market?</span></strong> </div><div><br /></div><div align="justify">By Augustin Landier, David Thesmar, and Mathias Thoenig </div><div><br /></div><div align="justify">STERN Business </div><div><br /></div><div align="justify">(Fall/Winter 2007) </div><div><br /></div><div align="justify"><strong><span style="font-size:130%;">Throughout the Western world, a vast region generally viewed as dominated by capitalism, people’s attitudes toward the virtues of free markets vary widely.</span></strong> According to the World Value Survey, <span style="font-size:130%;color:#ff0000;"><strong>only 22 percent of French people believe that owners should run their businesses and appoint their managers</strong></span>, <span style="font-size:130%;color:#3333ff;"><strong>while as much as 58 percent of Americans agree with this statement</strong></span>, to cite one example. Academics have focused on a range of issues to explain the dispersion of pro-free market attitudes. Some argue that the uniqueness of US history – a large, ethnically heterogeneous society – has endowed modern American citizens with persistent anti-redistributive beliefs. The political economy view holds that people that gain the least from globalization are less likely to support it (for example, unskilled workers in the North, skilled workers in the South, people working in industries with high trade exposure). Still others argue that differences can be ascribed to cultural factors such as patriotism, neighborhood attachment, or a strong sense of identity. </div><div><br /></div><div align="justify"><strong>We set out to understand what determines attitudes toward free markets by investigating how beliefs about the market economy vary across individuals, time, and countries.</strong> We constructed a dataset based on economic data like pension funding and stock market participation, and on opinion surveys, like the World Value Survey (WVS), which collects data on age, gender, and income, and measures attitudes toward economics, marriage, and religion across dozens of countries; and the Internal Social Survey Program (ISSP), whose 1996 wave contained questions on ethnicity, private property, and attitudes on state interference with free competition. By running regression analysis on this data, we were able to investigate the influence of certain factors in accounting for the differential attitudes. Our analysis of the WVS focused on the answers given to questions about (1) the benefits/harms done by competition; (2) whether owners, employees, or the state should run the firms; (3) the merits of private ownership of business and industry; and (4) the trustworthiness of large firms. The data show a large variation in cross-country attitudes toward free markets. Two examples are given in Table 1, which focuses on the 18 richest countries in our sample and displays mean variables for all three waves of the WVS. </div><div align="justify"><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEierURC9tRYCVL-tuPdcCv9luRGKCn57w6mJjrdi233JeS4AkrJMVNQbI0-k8DTqrfVkY2_T7ofL4AfLpYoqPCDa8qU3kQ8ZpKCDCu5JMNHK2pxeL5-nuiXnKGWQqifLLngXrS5c4CeLBFg/s1600-h/Attitudes+Toward+Free+Markets+comparativeTable1.jpg"><img id="BLOGGER_PHOTO_ID_5295628596358867346" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 401px; CURSOR: hand; HEIGHT: 400px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEierURC9tRYCVL-tuPdcCv9luRGKCn57w6mJjrdi233JeS4AkrJMVNQbI0-k8DTqrfVkY2_T7ofL4AfLpYoqPCDa8qU3kQ8ZpKCDCu5JMNHK2pxeL5-nuiXnKGWQqifLLngXrS5c4CeLBFg/s400/Attitudes+Toward+Free+Markets+comparativeTable1.jpg" border="0" /></a><strong><span style="font-size:130%;">In the cross section of countries, preference for redistribution and attitudes toward free markets showed little, if any correlation.</span></strong> <strong><span style="font-size:180%;color:#ff0000;">But this was less true at the individual level. People that tended to favor income equality also tended to distrust competition, large companies, and shareholder control of firms. </span></strong>In order to isolate the pure effect of “pro-free market” beliefs, we used as control variables attitudes such as: trust (many existing studies have shown that trust explains well the cross section of various economic outcomes, such as GDP growth); aversion to inequality (defiance toward free markets may stem from a concern for equality); pro-trade (in many instances, defiance toward market forces can be defiance toward globalization); and religion (academic work has shown, in general, that being religious is positively correlated with a positive perception of work and thrift). When we ran the data, we found that the unconditional correlations were not very high, which suggests that individual determinants of opinions are very diverse across attitudes. <strong><span style="font-size:180%;">And yet we found that all four “market” variables are positively correlated with each other. Pro-competitive people also tend to support less equality, seem to favor free trade, and tend to be less religious and less confident in other people, for example.</span></strong> </div><div><br /></div><div align="justify"><strong><span style="font-size:130%;">Self-Interest Why do attitudes toward free markets vary so much across individuals?</span></strong> </div><div><br /></div><div align="justify">The political economy view holds that self-interested individuals hold the beliefs that suit them best. In the developed world, for example, <strong><em><span style="font-size:130%;">those least supportive of free trade also tend to have lower levels of education or work in industries where foreign competition is high</span></em></strong>. To test this hypothesis, we explored responses on two broad and distinct sets of issues: attitudes toward competition and attitudes toward the profit-motive. Attitudes toward ownership and competition shared some common determinants that proved to be statistically significant. <strong><span style="font-size:130%;">Support for competition and owner control was also more prevalent among older people. (One possible explanation is that older people, being closer to retirement or more entrenched in their jobs, are more sheltered from the shocks of competition.) People with higher levels of income also showed strong support for market forces and self-interested behavior.</span></strong> Our preferred interpretation of this finding is that <strong><span style="font-size:130%;">income is a proxy for the ratio of financial wealth to human capital. Another possibility is that income is a proxy for skill.</span></strong> Skilled labor is more protected from off-shoring and creative destruction that accompany for-profit management and tougher competition. </div><div></div><div align="justify"><br />“<strong><span style="font-size:130%;color:#ff0000;">French legal origin was strongly related to competition aversion</span></strong>, <span style="font-size:130%;color:#000099;"><strong>and British common law was related to a strong preference for owner control. </strong></span>These findings suggest that long-run institutional determinants rooted in the history and culture of a country dominate more recent developments in the organization of its economy.” A more powerful test of the political economy view consists in combining the individual characteristics with country-level institutional features. We did so by looking at the cross-country dispersion in pension funding and financial development as a measure of the extent of financial markets institutions and compared how young and old people answered the questions. In theory, older people, who control a greater chunk of financial wealth, should display more free-market support in countries where they are the most likely to hold a larger fraction of financial wealth. </div><div><br /></div><div align="justify">Generally speaking, we found that in countries where pensions are funded, in financially developed countries, the old are much more likely to be supporters of the free market than the young. The probability that the young favor owner control was larger by 18 percentage points in the pension-funded countries. The probability that older citizens do so is larger by 30 percentage points. It’s natural to wonder whether the institutional determinants that impact the support for markets come from very far in the past or are largely driven by recent developments. </div><div><br /></div><div align="justify"><strong><span style="font-size:180%;">Several scholars have argued that in a cross-section of countries, distant legal origins matter</span></strong>. <strong><span style="font-size:130%;color:#ff0000;">Compared with countries whose systems derive from French civic law,</span></strong> <span style="font-size:130%;color:#000099;"><strong>countries whose systems derive from British common law have a stronger propensity to protect debtholders and shareholders, have lower job protection, and facilitate entry by making business creation easier</strong></span>. <strong><span style="font-size:180%;">When we ran the numbers, we found that legal origin has a significant impact. </span><em><span style="font-size:130%;color:#ff0000;">Notably, French legal origin was strongly related to competition aversion</span></em></strong>, <span style="font-size:130%;color:#000099;"><em><strong>and British common law was related to a strong preference for owner control.</strong></em></span> <strong><span style="font-size:180%;">These findings suggest that long-run institutional determinants rooted in the history and culture of a country dominate more recent developments in the organization of its economy. </span></strong></div><div><br /></div><div align="justify">There’s more evidence that culture matters. Consider that only about 48 percent of American households own stocks directly or indirectly. This makes it unlikely that the median voter will support owner control or free competition just because it boosts the return of its portfolio. And yet, 57 percent of US respondents agreed with the statement that the “owners should appoint the management,” and more than 70 percent of US respondents who work for others agree with the proposition that “management should only care about profits.” <strong><em><span style="font-size:130%;">The diffusion of equity ownership in the US cannot alone explain why American citizens support free markets more than do citizens of other countries. Culture may be a factor in explaining such results</span></em></strong>. <strong><span style="font-size:180%;">Scholars have argued that attitudes are affected by ethnic origins because they have a cultural component, and that culture is transmitted within the family. </span></strong>To test this hypothesis, we constructed two indices of cultural proximity to seven major western cultures: France, Germany, Russia, Spain, Sweden, the UK, and the US. The first index measures proximity to economic culture using as controls an aversion to inequality and a pro-trade attitude. The second index of cultural proximity is related to non-economic values, such as religious proximity. </div><div></div><div align="justify"><br />We also looked at whether each country has been, at some point in history, a colony of one of the seven countries we mentioned above. </div><div align="justify"><br /><strong><span style="font-size:180%;color:#ff0000;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjzg7i_0Fpulli8WFdfmcsZe5aI6_Wv2Y0cmrpWMWKwsy171mwYMvNPEYtxJueGJcLB0f8-xvZA4eZJba1TcJwEzAUqC_ZgXPW2BclEuuUvIbyjPOB1opkqpxRiGMEXJ7af4PaLpidSw6aB/s1600-h/social+market+economy+-+merkel.jpg"><img id="BLOGGER_PHOTO_ID_5295653191485770498" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 389px; CURSOR: hand; HEIGHT: 265px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjzg7i_0Fpulli8WFdfmcsZe5aI6_Wv2Y0cmrpWMWKwsy171mwYMvNPEYtxJueGJcLB0f8-xvZA4eZJba1TcJwEzAUqC_ZgXPW2BclEuuUvIbyjPOB1opkqpxRiGMEXJ7af4PaLpidSw6aB/s320/social+market+economy+-+merkel.jpg" border="0" /></a>Our tests showed that cultural proximity to French economic attitudes predicts a <em>significantly lower</em> support for owner control, as does proximity to Germanic and Nordic economic attitudes.<br /></div></span></strong><div></div><div></div><div align="justify"><span style="font-size:180%;color:#000099;"><strong>Proximity to British attitudes does, however, predict a higher-than-average propensity to favor owner control. Countries with British legal origins and/or who have been, at some point, colonized by the British tend to display a higher degree of ownership control.</strong></span> </div><div></div><div align="justify"><br /><span style="font-size:180%;color:#ff0000;"><strong>Meanwhile, countries that had been colonized by Spain and Russia are systematically <em>less </em>supportive of competition</strong></span>, <span style="font-size:180%;color:#3333ff;"><strong>while former Swedish and British colonies are more pro-competitive</strong></span>. </div><div></div><div align="justify"><strong><span style="font-size:130%;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEie6qOigR9N140NYnX_iHjsOEbbkxB5Pq0_NSlfPWkmXSiiycSsthjhtoTBM16zlUTgRenLCNwv0VoHZdVEinGL7IIuEL3xs0EBudvXWK-arbm9qR_iHzXSD9FFcNJ0kIn6NrcOVflpTEZC/s1600-h/MakeCapitalismHistory(5).jpg"><img id="BLOGGER_PHOTO_ID_5295638145376693154" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 293px; CURSOR: hand; HEIGHT: 400px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEie6qOigR9N140NYnX_iHjsOEbbkxB5Pq0_NSlfPWkmXSiiycSsthjhtoTBM16zlUTgRenLCNwv0VoHZdVEinGL7IIuEL3xs0EBudvXWK-arbm9qR_iHzXSD9FFcNJ0kIn6NrcOVflpTEZC/s400/MakeCapitalismHistory(5).jpg" border="0" /></a>Generational Difference</span></strong> </div><div><br /></div><div align="justify">For country differences in beliefs about markets to be permanent and unexplained by self-serving behavior, divergent beliefs of individuals need to persist throughout generations. But we also know that ideas and attitudes change over time. <strong><em><span style="font-size:130%;">We tried to get at this issue by focusing on <span style="color:#ff0000;">former communist countries</span> and comparing attitudes toward free markets held by younger generations to attitudes of generations that were already adults when the Berlin Wall fell.</span></em></strong> <strong><span style="font-size:180%;color:#ff0000;">We found that in the West, younger generations tend to be <em>less</em> pro-market in general. For people born after 1970, the probability of supporting owner control or competition was lower by 1 percentage point. </span><em><span style="font-size:130%;">The probability of supporting state ownership over private ownership was higher by 5 percent</span></em></strong>, a much larger difference. </div><div></div><div align="justify"><br /><em><strong><span style="font-size:130%;color:#ff0000;">But the generational divide was significantly larger in post-communist countries than in other countries.</span></strong></em> In former communist countries, the young are 7 percentage points more likely to support the for-profit motive, 9 percentage points more likely to support private ownership over state ownership, but only 2 percentage points more likely to support competition. These findings suggest that the forces that shape the preference for redistribution are not necessarily the same as those which shape attitudes toward market forces. Clearly, past shocks and shared experiences shape generation/population-wide attitudes. To investigate further how fast beliefs can adapt from one generation to the next if the economic context changes, we looked at evidence from immigrants. For our purposes, we grouped country/language/ethnicity of origin into four broad categories: English-speaking countries, Continental Europe, Eastern Europe, and Nordic countries. The regressions we ran broadly confirm the results obtained on individual and country data. Respondents from English-speaking countries show consistently more support for both free markets and private property. <span style="font-size:180%;color:#ff0000;"><strong>Respondents of Eastern European origin show the strongest support for state ownership and an activist industrial policy.</strong></span> </div><div><br /></div><div align="justify">We ran the same regressions focusing on US residents. The focus on the US is useful because it is the country where regions of origin are the most diverse. Here, we found mixed evidence that indeed, free market attitudes are strongly transmitted within the family and are weakly dependent of the economic context. For instance, respondents of Eastern Europe origin were 22 percent more likely to support redistribution; US residents of such origin were 6 percent less likely – not statistically significant – to do so. In general, the difference in attitudes between US citizens of Anglo-Saxon descent and other origins was both small and insignificant statistically, while the difference was strong on the worldwide sample. This suggests that such beliefs are much more conditioned by environmental characteristics than by transmission of family values.</div><div><br /></div><div align="justify">What should we conclude from this investigation? First, we find that the traditional political view according to which individuals hold political opinions that are self-serving is consistent with the data. <strong><span style="font-size:130%;">In general, individuals that would benefit more from a pro-market agenda exhibit stronger pro-market opinions</span></strong>. But this tendency alone can’t explain the sometimes significant differences between countries. The attitudes of a country toward markets are slow-varying and seem, on aggregate, to be strongly determined by historical and cultural factors. <em><strong><span style="font-size:130%;">When it comes to explaining differences between countries’ views toward fundamental issues of markets and competition, economic theory matters. <span style="font-size:180%;">But so, too, do other factors, such as culture, legal systems</span>, ethnicity, and family, matter</span></strong></em>. </div><div><br /></div><div align="justify"><em>Augustin Landier is assistant professor of finance at NYU Stern, David Thesmar is professor of economics at the Ecole Nationale de la Statistique et de l’Administration Economique (ENSAE) in Paris, and Mathias Thoenig is professor of economics at the University of Geneva.</em> </div><div></div><div align="justify">-------------------------------------------------------------------------------------------------<br /><strong><span style="font-size:130%;"></span></strong></div><div align="justify"><strong><span style="font-size:130%;"></span></strong></div><div align="justify"><strong><span style="font-size:130%;">[THE FINDINGS OF THE STERN BUSINESS SCHOOL STUDY REPRODUCED ABOVE ARE FURTHER CORROBORATED BY A FINANCIAL TIMES INVESTIGATIVE ARTICLE WHICH DISCUSSES HOW EUROPEAN GOVERNMENTS CONTINUE TO EDUCATE THEIR YOUNG TO DESPISE ANGLO-AMERICAN CAPITALISM.]</span></strong> </div><div align="justify"><br /><strong><span style="font-size:180%;">[</span><span style="font-size:130%;">See: <em>European Governments Educate Young Against Free Markets & American Capitalism in Favor of European Welfare State Dream - Europe's School Books Demonise Enterprise</em>, ITSSD Journal on Economic Freedom, at: </span></strong><a href="http://itssdeconomicfreedom.blogspot.com/2008/01/european-governments-educate-young.html"><strong>http://itssdeconomicfreedom.blogspot.com/2008/01/european-governments-educate-young.html</strong></a><strong> <span style="font-size:180%;">].</span></strong></div><div><br /></div><div align="justify">-------------------------------------------------------------------------------------------------</div><br /><div><div><a href="http://www.opinionjournal.com/editorial/feature.html?id=110009068">http://www.opinionjournal.com/editorial/feature.html?id=110009068</a></div><br /><div><strong>ECONOMIC JUSTICE</strong> </div><br /><div><strong><span style="font-size:130%;">Dynamic Capitalism - Entrepreneurship is Lucrative--and Just.</span></strong></div><br /><div></div><div>BY EDMUND S. PHELPS</div><br /><br /><div>Wall Street Journal</div><br /><br /><div>Tuesday, October 10, 2006<br /></div><br /><br /><div align="justify"><strong><span style="font-size:130%;">There are two economic systems in the West.</span></strong> </div><br /><br /><div align="justify"><em><strong><span style="font-size:130%;">Several nations--including the U.S., Canada and the U.K.--have a private-ownership system marked by great openness to the implementation of new commercial ideas coming from entrepreneurs, and by a pluralism of views among the financiers who select the ideas to nurture by providing the capital and incentives necessary for their development</span></strong></em>. Although much innovation comes from established companies, as in pharmaceuticals, much comes from start-ups, particularly the most novel innovations. <strong><span style="font-size:180%;">This is free enterprise, a k a capitalism.<br /></span></strong><br /><br /><span style="font-size:130%;color:#ff0000;"><strong>The other system--in Western Continental Europe--though also based on private ownership, has been modified by the introduction of institutions aimed at protecting the interests of "stakeholders" and "social partners."</strong></span> The system's institutions include big employer confederations, big unions and monopolistic banks. Since World War II, a great deal of liberalization has taken place. But new corporatist institutions have sprung up: Co-determination (cogestion, or Mitbestimmung) has brought "worker councils" (Betriebsrat); and in Germany, a union representative sits on the investment committee of corporations. <span style="font-size:180%;color:#ff0000;"><strong>The system operates to discourage changes such as relocations and the entry of new firms, and its performance depends on established companies in cooperation with local and national banks.</strong></span> <span style="font-size:130%;"><em><strong>What it lacks in flexibility it tries to compensate for with technological sophistication</strong></em>.</span> <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhiCygZpNhxzRFDPMpMGVrjJ28W8hoTJytlJJrUXQhYRzvaqLPYcevRXo1yD8IuTmDdDTzXida3InEd8olaBPqwOyBS3RxOR2-qO-QvSm1-xbjP-o_k6BVMW51mIcfDruog1rCKxjdyseZo/s1600-h/social+market+economy.jpg"><img id="BLOGGER_PHOTO_ID_5295652116005714306" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 388px; CURSOR: hand; HEIGHT: 240px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhiCygZpNhxzRFDPMpMGVrjJ28W8hoTJytlJJrUXQhYRzvaqLPYcevRXo1yD8IuTmDdDTzXida3InEd8olaBPqwOyBS3RxOR2-qO-QvSm1-xbjP-o_k6BVMW51mIcfDruog1rCKxjdyseZo/s320/social+market+economy.jpg" border="0" /></a><span style="font-size:180%;color:#ff0000;"><strong>So different is this system that it has its own name: the "social market economy" in Germany, "social democracy" in France and "concertazione" in Italy.<br /></strong></span><br /><br /><strong><span style="font-size:130%;">Dynamism and Fertility </span></strong><br /><br /><br /><strong><span style="font-size:180%;">The American and Continental systems are not operationally equivalent,</span></strong> <em><strong><span style="color:#ff0000;">contrary to some neoclassical views</span></strong></em>. </div><br /><br /><div align="justify"><em><strong><span style="font-size:130%;">Let me use the word "dynamism" to mean the fertility of the economy in coming up with innovative ideas believed to be technologically feasible and profitable--in short, the economy's talent at commercially successful innovating</span></strong></em>. </div><br /><br /><div align="justify">In this terminology, <strong><span style="font-size:180%;">the free enterprise system is structured in such a way that it facilitates and stimulates dynamism</span></strong> <span style="font-size:180%;color:#ff0000;"><strong>while the Continental system impedes and discourages it.<br /></strong></span><br /><br /><span style="font-size:180%;color:#ff0000;"><strong>Wasn't the Continental system designed to stifle dynamism?</strong></span> <em><strong><span style="font-size:130%;">When building the massive structures of corporatism in interwar Italy, theoreticians explained that their new system would be more dynamic than capitalism--maybe not more fertile in little ideas, such as might come to petit-bourgeois entrepreneurs, but certainly in big ideas. Not having to fear fluid market conditions, an entrenched company could afford to develop radical innovation.</span></strong></em> <span style="font-size:180%;color:#ff0000;"><strong>And with industrial confederations and state mediation available, such companies could arrange to avoid costly duplication of their investments. The state and its instruments, the big banks, could intervene to settle conflicts about the economy's direction.</strong></span> <em><strong><span style="font-size:130%;">Thus the corporatist economy was expected to usher in a new futurismo that was famously symbolized by Severini's paintings of fast trains. (What was important was that the train was rushing forward, not that it ran on time.)<br /></span></strong></em><br /><br /><em><strong>Friedrich Hayek, in the late 1930s and early '40s, began the modern theory of</strong></em> <strong><span style="font-size:180%;">how a capitalist system, if pure enough, would possess the greatest dynamism--not socialism and not corporatism. </span></strong>First, virtually everyone right down to the humblest employees has "know-how," some of what Michael Polanyi called "personal knowledge" and some merely private knowledge, and out of that an idea may come that few others would have. <strong><span style="font-size:130%;">In its openness to the ideas of all or most participants, the capitalist economy tends to generate a plethora of new ideas.<br /></span></strong><br /><br />Second, <em><strong>the pluralism of experience that the financiers bring to bear in their decisions gives a wide range of entrepreneurial ideas a chance of insightful evaluation</strong></em>. <strong><span style="font-size:180%;">And, importantly, the financier and the entrepreneur do not need the approval of the state or of social partners</span></strong>. Nor are they accountable later on to such social bodies if the project goes badly, not even to the financier's investors. <strong><span style="font-size:130%;">So projects can be undertaken that would be too opaque and uncertain for the state or social partners to endorse</span></strong>. Lastly, the pluralism of knowledge and experience that managers and consumers bring to bear in deciding which innovations to try, and which to adopt, is crucial in giving a good chance to the most promising innovations launched. <strong><span style="font-size:180%;"><span style="color:#ff0000;">Where the Continental system convenes experts to set a product standard before any version is launched</span>, capitalism gives market access to all versions.<br /></span></strong><br /><br /><strong>The issues swirling around capitalism today concern the consequences of its dynamism</strong>. <em><strong><span style="font-size:130%;">The main benefit of an innovative economy is commonly said to be a higher level of productivity--and thus higher hourly wages and a higher quality of life. There is a huge element of truth in this belief, no matter how many tens of qualifications might be in order</span></strong></em>. Much of the huge rise of productivity since the 1920s can be traced to new commercial products and business methods developed and launched in the U.S. and kindred economies. (These include household appliances, sound movies, frozen food, pasteurized orange juice, television, semiconductor chips, the Internet browser, the redesign of cinemas and recent retailing methods.) There were often engineering tasks along the way, yet business entrepreneurs were the drivers.<br /><br /><br />There is one conceivable qualification that ought to be addressed. Is productivity not finally at the point, after 150 years of growth, that having yet another year's growth would be of negligible value? D.H. Lawrence spoke of America's "everlasting slog." Whatever the answer, <em><strong><span style="font-size:130%;">it is important to note that advances in productivity, in generally pulling up wage rates, make it affordable for low-wage people to avoid work that is tedious or grueling or dangerous in favor of work that is more interesting and formative</span></strong></em>. </div><br /><div align="justify"><br />Of course, productivity levels in the smaller countries will always owe more to innovations developed abroad than to those they develop themselves. Some might suspect that the domestic market is so tiny in a country such as Iceland, for instance, that even in per capita terms only a very small number of homemade innovations would bring a satisfactory productivity gain--and thus an adequate rate of return. <strong><span style="font-size:180%;color:#ff0000;"><span style="color:#000099;">In fact, most of the Continental economies,</span> including the large ones, have been content to sail in the slipstream of a handful of economies that do the preponderance of the world's innovating</span></strong>. The late Harvard economist Zvi Griliches commented approvingly that in such a policy, the Europeans "are so smart."<br /><br /><br /><strong><span style="font-size:180%;">I take a different view</span></strong>. <strong><em><span style="font-size:130%;">For one thing, it is good business to be an innovative force in the "global economy."</span></em></strong> Globalization has diminished the importance of scale as well as distance. Tiny Denmark sets its sights on markets in the U.S., the EU and elsewhere. Iceland has entered into European banking and biogenetics. <span style="font-size:180%;color:#ff0000;"><strong>France has long done this--and can do more of it. But it could do so more successfully if it did not insulate its innovational decisions so much from evaluations by financial markets--including the stock market--as Airbus does.</strong></span> The U.S. is already demonstrably in the global innovation business. To date, there is an adequate rate of return to be expected from "investing" in the conception, development and marketing of innovations for the global economy--a return on a par with the return from investing in plant and equipment, software and other business capital. That is a better option for Americans than suffering diminished returns from investing solely in the classical avenue of fixed capital.<br /><br /><br />I would, however, stress a benefit of dynamism that I believe to be far more important. <em><strong><span style="font-size:130%;">Instituting a high level of dynamism, so that the economy is fired by the new ideas of entrepreneurs, serves to transform the workplace--in the firms developing an innovation and also in the firms dealing with the innovations. The challenges that arise in developing a new idea and in gaining its acceptance in the marketplace provide the workforce with high levels of mental stimulation, problem-solving, employee-engagement and, thus, personal growth</span></strong></em>. Note that an individual working alone cannot easily create the continual arrival of new challenges. It "takes a village," preferably the whole society.<br /><br /><br /><strong><span style="font-size:130%;">The concept that people need problem-solving and intellectual development originates in Europe: There is the classical Aristotle, who writes of the "development of talents"; later the Renaissance figure Cellini, who jubilates in achievement; and Cervantes, who evokes vitality and challenge. </span></strong>In the 20th century, Alfred Marshall observed that the job is in the worker's thoughts for most of the day. And Gunnar Myrdal wrote in 1933 that the time will soon come when more satisfaction derives from the job than from consuming. </div><br /><br /><div align="justify"><span style="color:#3333ff;"><strong><span style="font-size:180%;">The American application of this Aristotelian perspective is the thesis that most, if not all, of such self-realization in modern societies can come only from a career</span></strong>.</span> Today we cannot go tilting at windmills, but we can take on the challenges of a career. If a challenging career is not the main hope for self-realization, what else could be? Even to be a good mother, it helps to have the experience of work outside the home.<br /><br /><br />I must mention a "derived" benefit from dynamism that flows from its effects on productivity and self-realization. <em><strong><span style="font-size:130%;">A more innovative economy</span> tends to devote more resources to investing of all kinds--in new employees and customers as well as new office and factory space. And although this may come about through a shift of resources from the consumer-goods sector, it also comes through the recruitment of new participants to the labor force. Also, the resulting increase of employee-engagement serves to lower quit rates and, hence, to make possible a reduction of the "natural" unemployment rate. Thus, high dynamism tends to bring a pervasive prosperity to the economy on top of the productivity advances and all the self-realization going on.</strong></em> True, that may not be pronounced every month or year. Just as the creative artist does not create all the time, but rather in episodes and breaks, so the dynamic economy has heightened high-frequency volatility and may go through wide swings. <strong><span style="font-size:180%;">Perhaps this volatility is not only normal but also productive from the point of view of creativity and, ultimately, achievement</span></strong>.<br /><br /><br /><strong><span style="font-size:130%;">Ideals and Reality<br /></span></strong><br /><br />I know I have drawn an idealized portrait of capitalism: The reality in the U.S. and elsewhere is much less impressive. <strong><span style="font-size:130%;">But we can, nevertheless, ask whether there is any evidence in favor of these claims on behalf of dynamism. Do we find evidence of greater benefits of dynamism in the relatively capitalist economies than in the Continental economies as currently structured?</span></strong> <span style="font-size:180%;color:#ff0000;"><strong><span style="color:#000099;">In the Continent's Big Three</span>, hourly labor productivity is lower than in the U.S. Labor-force participation is also generally lower. And here is new evidence: The World Values Survey indicates that the Continent's workers find less job satisfaction and derive less pride from the work they do in their job</strong></span>. </div><br /><div align="justify"><br /><strong><span style="font-size:130%;">Dynamism does have its downside. The same capitalist dynamism that adds to the desirability of jobs also adds to their precariousness. The strong possibility of a general slump can cause anxiety.</span></strong> But we need some perspective. <span style="font-size:180%;color:#ff0000;"><strong>Even a market socialist economy might be unpredictable: In truth, the Continental economies are also susceptible to wide swings.</strong></span> <span style="font-size:130%;color:#ff0000;"><em><strong>In fact, it is the corporatist economies that have suffered the widest swings in recent decades. </strong></em></span>In the U.S. and the U.K., unemployment rates have been remarkably steady for 20 years. It may be that when the Continental economies are down, the paucity of their dynamism makes it harder for them to find something new on which to base a comeback.<br /><br /><br /><strong><span style="font-size:130%;">The U.S. economy might be said to suffer from incomplete inclusion of the disadvantaged. <em><span style="color:#ff0000;">But that is less a fault of capitalism than of electoral politics.</span></em></span></strong> <strong><span style="font-size:180%;">The U.S. economy is not unambiguously worse than the Continental ones in this regard: Low-wage workers at least have access to jobs</span></strong>, which is of huge value to them in their efforts to be role models in their family and community. In any case, we can fix the problem.<br /><br /><br /><span style="font-size:180%;color:#000099;"><strong>Why, then, if the "downside" is so exaggerated, is capitalism so reviled in Western Continental Europe?</strong></span> <span style="font-size:130%;color:#000099;"><strong><em>It may be that elements of capitalism are seen by some in Europe as morally wrong in the same way that birth control or nuclear power or sweatshops are seen by some as simply wrong in spite of the consequences of barring them. </em></strong></span></div><br /><br /><div align="justify"><span style="font-size:130%;color:#ff0000;"><strong>And it appears that the recent street protesters associate business with established wealth; in their minds, giving greater latitude to businesses would increase the privileges of old wealth</strong></span>. <strong><span style="font-size:130%;">By an "entrepreneur" they appear to mean a rich owner of a bank or factory, while for Schumpeter and Knight it meant a newcomer, a <em>parvenu </em>who is an outsider.</span></strong> <strong><span style="font-size:180%;">A tremendous confusion is created by associating "capitalism" with entrenched wealth and power. The textbook capitalism of Schumpeter and Hayek means opening up the economy to new industries, opening industries to start-up companies, and opening existing companies to new owners and new managers.</span></strong> It is inseparable from an adequate degree of competition. Monopolies like Microsoft are a deviation from the model.<br /><br /><br />It would be unhistorical to say that capitalism in my textbook sense of the term does not and cannot exist. Tocqueville marveled at the relatively pure capitalism he found in America. <strong><span style="font-size:180%;">The greater involvement of Americans in governing themselves, their broader education and their wider equality of opportunity, all encourage the emergence of the "man of action" with the "skill" to "grasp the chance of the moment."<br /></span></strong><br /><br /><strong><span style="font-size:130%;">I want to conclude by arguing that generating more dynamism through the injection of more capitalism does serve economic justice.<br /></span></strong><br /><br /><strong><span style="font-size:130%;">We all feel good to see people freed to pursue their dreams. <em>Yet Hayek and Ayn Rand went too far in taking such freedom to be an absolute, the consequences be damned</em></span></strong><em>.</em> In judging whether a nation's economic system is acceptable, its consequences for the prospects of the realization of people's dreams matter, too. Since the economy is a system in which people interact, the endeavors of some may damage the prospects of others. <strong>So a persuasive justification of well-functioning capitalism must be grounded on its all its consequences, not just those called freedoms.<br /></strong><br /><br /><strong>To argue that the consequences of capitalism are just requires some conception of economic justice.</strong> I broadly subscribe to the conception of economic justice in the work by John Rawls. <strong>In any organization of the economy, the participants will score unequally in how far they manage to go in their personal growth. An organization that leaves the bottom score lower than it would be under another feasible organization is unjust</strong>. So a new organization that raised the scores of some, though at the expense of reducing scores at the bottom, would not be justified. Yet a high score is just if it does not hurt others. "Envy is the vice of mankind," said Kant, whom Rawls greatly admired.<br /><br /><br /><strong><span style="font-size:130%;">The 'Least Advantaged'</span></strong><br /><br /><br />What would be the consequence, from this Rawlsian point of view, of releasing entrepreneurs onto the economy? In the classic case to which Rawls devoted his attention, the lowest score is always that of workers with the lowest wage, whom he called the "least advantaged": Their self-realization lies mostly in marrying, raising children and participating in the community, and it will be greater the higher their wage. <strong><span style="font-size:130%;">So if the increased dynamism created by liberating private entrepreneurs and financiers tends to raise productivity, as I argue--and if that in turn pulls up those bottom wages, or at any rate does not lower them--it is not unjust. Does anyone doubt that the past two centuries of commercial innovations have pulled up wage rates at the low end and everywhere else in the distribution?<br /></span></strong><br /><br />Yet the tone here is wrong. As Kant also said, persons are not to be made instruments for the gain of others. Suppose the wage of the lowest- paid workers was foreseen to be reduced over the entire future by innovations conceived by entrepreneurs. Are those whose dream is to find personal development through a career as an entrepreneur not to be permitted to pursue their dream? To respond, we have to go outside Rawls's classical model, in which work is all about money. In an economy in which entrepreneurs are forbidden to pursue their self-realization, they have the bottom scores in self-realization--no matter if they take paying jobs instead--and that counts whether or not they were born the "least advantaged." <strong><em><span style="font-size:130%;">So even if their activities did come at the expense of the lowest-paid workers, Rawlsian justice in this extended sense requires that entrepreneurs be accorded enough opportunity to raise their self-realization score up to the level of the lowest-paid workers--and higher, of course, if workers are not damaged by support for entrepreneurship. In this case, too, then, the introduction of entrepreneurial dynamism serves to raise Rawls's bottom scores.<br /></span></em></strong><br /><br /><strong>Actual capitalism departs from well-functioning capitalism--monopolies too big to break up, undetected cartels, regulatory failures and political corruption.</strong> <em><strong>Capitalism in its innovations plants the seeds of its own encrustation with entrenched power. These departures weigh heavily on the rewards earned, particularly the wages of the least advantaged, and give a bad name to capitalism</strong></em>. <strong><span style="font-size:180%;">But I must insist: It would be a non sequitur to give up on private entrepreneurs and financiers as the wellspring of dynamism merely because the fruits of their dynamism would likely be less than they could be in a less imperfect system. I conclude that capitalism is justified--normally by the expectable benefits to the lowest-paid workers but, failing that, by the injustice of depriving entrepreneurial types (as well as other creative people) of opportunities for their self-expression</span></strong>.<br /><br /><br /><em>Mr. Phelps, the McVickar Professor of Political Economy at Columbia, was yesterday awarded the 2006 Nobel Prize for economics. Click </em><a href="http://online.wsj.com/public/article/SB116040641682286918-eYQHPphhCNbqZo4iADI8D4u21co_20071009.html" target="_blank"><em>here</em></a><em> to read a selection of his previous articles from The Wall Street Journal.</em></div></div>ITSSD Charitable Missionhttp://www.blogger.com/profile/00790887154748866904noreply@blogger.com0tag:blogger.com,1999:blog-1851218948450486986.post-6688527689243342422008-12-24T14:22:00.050-05:002009-01-06T09:08:11.954-05:00Are Obama and the Intellectuals 'Rewriting' the History Surrounding FDR's NEW DEAL So They May Justify Adapting it to the Current Financial Crisis?<a href="http://www.nytimes.com/2008/12/21/weekinreview/21uchitelle.html?_r=1&ref=weekinreview">http://www.nytimes.com/2008/12/21/weekinreview/21uchitelle.html?_r=1&ref=weekinreview</a><br /><br /><strong><span style="font-size:130%;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEikZ_jSFo4hxehuH4eSUJbtxDhZvmGU0k4aUjhG6Y4A0txwy-J9zrFrnhZCR6Bc_UvbH3LRegUwE2bIOFetNqkKyYY9vEbpUPNdQVM93zZbq86rfTagIXUmWe2H7Pu7nvsVBwnuJw-Kgfza/s1600-h/FDR+shreds+US+constitution.jpg"><img id="BLOGGER_PHOTO_ID_5283485888715968194" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 250px; CURSOR: hand; HEIGHT: 271px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEikZ_jSFo4hxehuH4eSUJbtxDhZvmGU0k4aUjhG6Y4A0txwy-J9zrFrnhZCR6Bc_UvbH3LRegUwE2bIOFetNqkKyYY9vEbpUPNdQVM93zZbq86rfTagIXUmWe2H7Pu7nvsVBwnuJw-Kgfza/s400/FDR+shreds+US+constitution.jpg" border="0" /></a>A Trap in Obama’s Spending Plan</span></strong><br /><br /><br />By LOUIS UCHITELLE<br /><br /><br />New York Times<br /><br /><br />December 21, 2008<br /><br /><div><div align="justify"><br />As the recession deepens, <strong><span style="font-size:130%;">President-elect Barack Obama is gearing up to spend hundreds of billions of dollars on public investment projects, counting on them to lift the economy</span></strong>, as they have in the past.<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">But this time that may not happen.</span></strong> <em><strong><span style="font-size:130%;">Public spending, American style, has worked best in good times, when people have jobs and executives are eager to invest</span></strong></em>. A new public highway is soon lined — in good times — with stores and malls filled with consumers. A dollar spent by government generates three or four from the private sector.<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;"><span style="color:#990000;">That symbiosis makes a humming economy hum more, as it did in the 1950s and ’60s.</span> But it may not work that way when the American economy is in full retreat, as it was in the 1930s and seems to be today.<br /></span></strong><br /><br />As a measure of the current disaster, the Federal Reserve last week lowered interest rates to an unheard-of near-zero percent and offered in effect to give away money if a fearful nation would only spend it. But <em><strong><span style="font-size:130%;">panicked by investment losses or fearful for their jobs, people tend to hold back. In such circumstances, a new road could be lined not by shopping malls, but by empty, overgrown land.<br /></span></strong></em><br /><br />That is the risk facing Mr. Obama’s plan. By January, <strong><span style="font-size:180%;color:#ff0000;">Congress</span></strong> will probably be asked to approve an outlay of more than $700 billion. Spent in one year on construction, research or equipment, it might well offset the contraction at first. But <strong><span style="font-size:180%;color:#ff0000;">unless it also revived general confidence, the economy could collapse again, once the money was gone.<br /></span></strong><br /><br />“If that spending can’t get the private sector going, then it is just a make-work maintenance operation,” said Stanley Moses, an economist at <a title="More articles about Hunter College" href="http://topics.nytimes.com/top/reference/timestopics/organizations/h/hunter_college/index.html?inline=nyt-org">Hunter College</a> in New York.<br /><br /><br />History illustrates how tricky it can be to make public spending work as intended. <strong><span style="font-size:180%;color:#3333ff;">The many dams </span></strong><a title="More articles about Franklin Delano Roosevelt." href="http://topics.nytimes.com/top/reference/timestopics/people/r/franklin_delano_roosevelt/index.html?inline=nyt-per"><strong><span style="font-size:180%;color:#3333ff;">Franklin D. Roosevelt</span></strong></a><strong><span style="font-size:180%;color:#3333ff;">’s administration built generated an abundance of electricity, lowering its cost so that families could afford to operate the appliances then becoming available. The construction itself put money into workers’ pockets. <span style="color:#ff0000;">But the appliances were too costly for most families during the Depression, and the manufacturers wouldn’t extend credit</span></span></strong>. For all the money spent by the Roosevelt administration, public investment was failing to jump-start a key private-sector industry.<br /><br /><br /><strong><span style="font-size:180%;color:#3333ff;">His administration was inventive, however, and found a way around the problem by subsidizing installment purchases</span></strong>. That was when appliance production finally rose. <em><strong><span style="font-size:130%;">In time, installment plans evolved into consumer loans and charge cards, and that helped make the American consumer economy the envy of the world.<br /></span></strong></em><br /><br /><strong><span style="font-size:130%;">These symbiotic relationships</span></strong> between the public and private sectors — playing off each other in ways hard to anticipate and hard to channel — <strong><span style="font-size:130%;">became an essential ingredient of American prosperity from World War II until the mid-1970s.<br /></span></strong><br /><br />“It is not in the nature of a market system to have adequate private investment all of the time,” said Robert Pollin, co-director of the Political Economy Research Institute at the University of Massachusetts at Amherst. “So we used public investment to smooth things over and improve the climate for private investment.”<br /><br /><br />That changed. In the 1970s, the public reacted against high taxes and growing budget deficits, and conservatives argued that putting money in private hands would lift the economy more effectively. Public investment tapered off, and was used less as a tool of economic policy as the economy experienced the increasingly sharp ups and downs of the 1980s, 1990s and the new century.<br /><br /><br />Now, in the opening months of the worst bust since <a title="Recent and archival news about the Great Depression." href="http://topics.nytimes.com/top/reference/timestopics/subjects/g/great_depression_1930s/index.html?inline=nyt-classifier">the Great Depression</a>, <strong><span style="font-size:130%;color:#3333ff;"><em>Mr. Obama is expected to seek sustained outlays over at least two years to repair roads, bridges and waterways; to build and repair public schools; to expand the broadband network; to digitize medical information; to advance green technology</em></span></strong>. An economic adviser says his goal is “<strong><span style="font-size:130%;">to encourage private investment, particularly in areas where we have too little investment today</span></strong>, for example, solar systems and wind power.”<br /><br /><br />But Mr. Obama is bucking a deep private-sector funk, a bit like what Roosevelt described in his first Inaugural Address as “fear itself — nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.” Borrowers and lenders have pulled back. Business investment has plummeted. So has consumer spending. “A psychology of bad times is becoming the mindset of the public,” says Andrew Kohut, director of the <a title="More articles about Pew Research Center" href="http://topics.nytimes.com/top/reference/timestopics/organizations/p/pew_research_center/index.html?inline=nyt-org">Pew Research Center</a>, a survey operation.<br /><br /><br /><em><strong><span style="font-size:130%;color:#3333ff;">Like Roosevelt’s dams, Mr. Obama’s expenditures will no doubt generate jobs and wages in the construction phase. But in 1937, Roosevelt, thinking that the private sector could sustain itself, pulled back on public spending</span></strong></em>. Some historians say this was a big reason the economy sank again.<br /><br /><br /><span style="font-size:180%;color:#3333ff;"><strong>Mr. Obama faces a similar danger.</strong></span> <strong><span style="font-size:180%;color:#33cc00;">Green-technology spending might spawn a far more efficient solar panel, but investors still might shrink at manufacturing it.</span></strong> <strong><span style="font-size:180%;color:#ff0000;">What if consumers — having lost equity in their homes and scrimping on cars, vacations, even college tuition — were reluctant to buy and install the panels?</span></strong> “There are so many problems today and no good news, and that is enough to stop the impact of what Mr. Obama does,” said Mr. Moses of Hunter College.<br /><br /><br />The president-elect and his advisers recognize this danger. But they — and many others, including some Republicans — see no other choice. <em><strong><span style="font-size:130%;">“The most important thing the new administration can do at a moment when the collective psyche has been so shattered is to spend money now on tangible things,” said Mark Zandi, chief economist at Moody’s </span></strong></em><a href="http://economy.com/" target="_"><em><strong><span style="font-size:130%;">Economy.com</span></strong></em></a><em><strong><span style="font-size:130%;">, who advised </span></strong></em><a title="More articles about John McCain." href="http://topics.nytimes.com/top/reference/timestopics/people/m/john_mccain/index.html?inline=nyt-per"><em><strong><span style="font-size:130%;">John McCain</span></strong></em></a><em><strong><span style="font-size:130%;">’s presidential campaign</span></strong></em>. <strong><span style="font-size:130%;color:#3333ff;">“People want to see up front a repaired bridge, a new energy technology, a better water system.</span></strong> They want to feel these will have huge benefits down the road, and that might get them spending again.”<br /></div><br /><br /><br /><br /><div align="justify"><strong><span style="font-size:180%;">[THE PROBLEM WITH THIS THEORY, HOWEVER, IS THAT PEOPLE WANT TO SEE PRIVATE BENEFITS FROM PUBLIC WORKS EXPENDITURES. A REPAIRED BRIDGE IS NOT LIKELY TO MAKE PEOPLE FEEL BETTER, AS MUCH AS, PUBLIC <em>REPAYABLE</em> LOANS EXTENDED TO COMPANIES TO CONSTRUCT FACTORIES THAT GENERATE EMPLOYMENT, LOCAL OR OTHERWISE - e.g., TO BUILD HYBRID & ELECTRIC CAR BATTERIES, WINDMILLS, SOLAR PANELS, LIGHTBULBS, PHARMACEUTICALS, CELLULAR PHONES & OTHER INFORMATION TECHNOLOGIES, STEEL, PLASTICS, ETC. - ACTIVITIES WHICH WOULD REESTABLISH THE UNITED STATES AS A MANUFACTURING NATION, WHICH WOULD NOT ONLY RESTORE CONSUMER CONFIDENCE, BUT ALSO ALLOW CITIZENS TO EARN AN HONEST WAGE, A PORTION OF WHICH COULD THEN BE USED TO ACQUIRE THE PRODUCTS SO <em>MANUFACTURED. </em>CONSUMERS WOULD ALSO DERIVE CONFIDENCE FROM KNOWING THAT U.S. CURRENCY IS BEING RECYLED DOMESTICALLY RATHER THAN BEING OUTSOURCED].</span></strong><br /></div><br /><br /><div align="justify"><br />Whatever the obstacles, Mr. Obama’s plan would mean giving up the view — widely held since the 1970s by economists, policy makers and business executives — that the private sector, by itself, is the key source of prosperity and full employment, and government spending is inefficient.<br /><br /><br />Perhaps with that in mind, Mr. Obama evoked as an illustration of his plan’s breadth not the desperate 1930s, but the prosperous 1950s and ’60s. That was when President <a title="More articles about Dwight David Eisenhower." href="http://topics.nytimes.com/top/reference/timestopics/people/e/dwight_david_eisenhower/index.html?inline=nyt-per">Dwight Eisenhower</a> and Congress set out to build the Interstate System of highways — a gift to an expanding auto industry and to trucking that also linked the country, encouraging all sorts of other investments.<br /><br /><br />But there is a big difference between Eisenhower’s era and Mr. Obama’s. By 1950, the Depression’s gloom had been banished by the common effort of World War II, followed by immense postwar demand for American production. Road building was just one public investment that set off huge private outlays. The space program stands out; so does military spending, which spurred computer development and created the Internet. And <a title="Recent and archival health news about Medicare." href="http://topics.nytimes.com/top/news/health/diseasesconditionsandhealthtopics/medicare/index.html?inline=nyt-classifier">Medicare</a>, born in the 1960s, became intertwined with private medicine.<br /></div><br /><br /><br /><br /><div align="justify"><strong><span style="font-size:180%;">[THIS IS QUITE IMPORTANT. U.S. DEFENSE DEPARTMENT SPENDING, ESPECIALLY PUBLIC RESEARCH & DEVELOPMENT, SPAWNED THE INNOVATIVE NEW MILITARY TECHNOLOGIES THAT IMPROVED U.S. NATIONAL SECURITY - A PUBLIC BENEFIT. ALTHOUGH ORIGINALLY FINANCED BY THE FEDERAL GOVERNMENT (U.S. TAXPAYERS), APPROPRIATE LEGISLATION WAS ULTIMATELY ENACTED THAT PROMOTED THE TRANSFER OF THESE PUBLICLY FUNDED TECHNOLOGIES TO PRIVATE & PUBLIC UNIVERSITIES and PRIVATE SMALL & MEDIUM-SIZED BUSINESS CAPABLE OF COMMERCIALIZING THESE TECHNOLOGIES (i.e., CONVERTING THEM) TO DERIVATIVE MARKET-RELEVANT PATENT-PROTECTED PRODUCTS FROM WHICH CONSUMERS CONTINUE TO DERIVE TANGIBLE and INTANGIBLE PRIVATE BENEFITS].</span></strong><br /></div><br /><br /><div align="justify"><br />Such symbiotic successes prompted a French journalist, Jean-Jacques Servan-Schreiber, to issue a warning to Europe in 1968. In “The American Challenge,” a best seller, he wrote that “the government official, the industrial manager, the economics professor, the engineer and the scientist have joined forces” to support American economic growth, and that the juggernaut would soon reduce Europe to an American colony.<br /><br /><br />He was wrong. <span style="color:#000099;"><span style="font-size:180%;"><strong>Europe outpaced the United States in its embrace of public-private symbiosis. And now Mr. Obama proposes, in effect, to restore the formula in this country</strong>. </span></span></div><br /><br /><div align="justify"><strong><span style="font-size:180%;">[HOWEVER, THE EUROPEAN 'PUBLIC-PRIVATE PARTNERSHIP' MODEL GLOWINGLY REFERRED TO ABOVE IS NOT THE MODEL THE UNITED STATES SHOULD FOLLOW - ITS FORMULA SUFFERS FROM A FAILURE TO HONOR PRIVATE INTELLECTUAL PROPERTY RIGHTS, COMMERCIAL LICENSING (FREEDOM OF CONTRACT) AND AN OVER-RELIANCE UPON GOVERNMENT INTERVENTION].</span></strong></div><br /><br /><div align="justify"><strong><span style="font-size:180%;">[</span><span style="font-size:130%;">See: Lawrence A. Kogan, <em>European Universities Learn Importance of Technology Transfer</em>, Financial Times (9/29/06) at: <a href="http://www.itssd.org/Publications/financialtimesletter.pdf"><span style="font-size:100%;">http://www.itssd.org/Publications/financialtimesletter.pdf</span></a> ; </span></strong><strong><span style="font-size:130%;"><a href="http://rassegnastampa.unipi.it/rassegna/archivio/2006/09/30SI16007.PDF"><span style="font-size:100%;">http://rassegnastampa.unipi.it/rassegna/archivio/2006/09/30SI16007.PDF</span></a> </span><span style="font-size:180%;">].</span></strong></div><br />------------------------------------------------------------------------------------------------<br /><br /><a href="http://www.huffingtonpost.com/larry-beinhart/the-great-depression-the_b_151572.html">http://www.huffingtonpost.com/larry-beinhart/the-great-depression-the_b_151572.html</a><br /><br /><div align="justify"><br /><strong><span style="font-size:130%;">The Great Depression, The New Deal, World War II and the Crash of '08</span></strong><br /><br /><br />By Larry Beinhart<br /><br /><br />Posted December 16, 2008<br /><br /><br /><em><strong>Let's start with what everyone can agree on. There was a Great Depression, then the New Deal, then World War II. Also, that America emerged from that war as the world's economic powerhouse and embarked on an astonishing period of growth, prosperity and power</strong></em>. </div><br /><div align="justify"><br /><strong><span style="font-size:130%;color:#ff0000;">What is controversial is how much good the New Deal did or did not do.</span></strong> The economy grew, but there was a downward blip from 1936-38 when Roosevelt raised taxes and cut spending in an attempt to balance the budget. (If you're interested, see graph <a href="http://en.wikipedia.org/wiki/File:Gdp20-40.jpg">http://en.wikipedia.org/wiki/File:Gdp20-40.jpg</a>)<br /><br /><br /><strong>Unemployment was at about 25% at the start of the Great Depression. In 1940 it was still at 15%.<br /></strong></div><br /><div align="justify"><br />The universal consensus used to be that <strong><span style="font-size:130%;color:#3333ff;">the New Deal</span></strong> was effective, though not perfect. Moreover, it <strong><em><span style="font-size:130%;color:#3333ff;">saved the United States from embracing the extremes of Fascism or Communism as so many other countries did</span></em></strong>. But the Right has invested huge sums of money and put a great deal of effort into manufacturing and then selling the claim that Roosevelt's policies were not effective.<br /><br /><br /><strong><span style="font-size:180%;">"Before we go into a new New Deal, can we just acknowledge that the first New Deal didn't work?"<br /><br />George Will, ABC, The Roundtable<br /></span></strong><br /><br /><strong><em><span style="font-size:130%;">Even that the New Deal was counter-productive.<br /></span></em></strong><br /><br />UCLA Economists: Government Intervention Prolonged Great Depression 2004 study found FDR's 'misguided policies' delayed recovery. By Paul Detrick Business & Media Institute<br /><br /><br />What then - according to the Right - ended the Great Depression?<br /><br /><br /><strong><span style="font-size:180%;">The "New Deal" Was an Utter Failure. It was, in fact, the Second World War that brought an end to the Great Depression.Exposing Liberal Lies (Web Blog)</span></strong><br /><br /><br /><strong><span style="font-size:180%;color:#3333ff;">Actually, there's not much doubt that World War II finally fixed the unemployment problem and lifted the economy up to a significantly higher level</span></strong>.</div><br /><div align="justify"></div><br /><div align="justify"></div><br /><div align="justify">Here, from a more reputable, fair and balanced source:<br /><br /><br /><strong><span style="font-size:180%;">The war decisively ended the depression itself.</span></strong></div><br /><div align="justify"></div><br /><div align="justify"></div><br /><div align="justify">Christopher J. Tassava, EH (economic history) net.<br /><br /><br />But what was World War II, for America, as an economic event?<br /><br /><br />The United States entered World War in December of 1941.<br /></div><br />So '41 can be treated, in economic terms, as a pre-war year.<br /><br /><br />In 1941, tax revenues were 7.7% of GDP (Gross Domestic Product) and government spending was 12.1% of GDP.<br /><br /><br />Taxes went up.<br /><br /><br />Deficits were disregarded. Government spending zoomed.<br /><br /><br /><div align="justify"><br /><strong><span style="font-size:180%;color:#ff0000;">By 1944, tax revenues were 21.7% of GDP and government spending accounted for 45.3% of GDP. Almost half.<br /></span></strong></div><br /><div align="justify"><br />It was the New Deal without restraint.<br /></div><br /><div align="justify"><br />It was Keynesian economics on steroids.<br /></div><br /><div align="justify"><br />It was Roosevelt unleashed. <strong><span style="font-size:180%;color:#3333ff;">If the New Deal did not end the Great Depression, but World War II did, what's the lesson?<br /></span></strong></div><br /><div align="justify"><br /><span style="color:#ff0000;"><strong><em><span style="font-size:130%;">By the numbers, it has to be that the New Deal was too half-hearted.</span></em></strong><br /></span></div><br /><div align="justify"><br />It was also that patriotism was able to overcome the backwardness of Republicans and the shortsightedness of the rich.<br /><br /><br />War is an expensive endeavor. It is also, in and of itself, not a very profitable one. As we've seen with the Iraq, Afghanistan and War on Terror adventures, it can be like throwing money into a pit and blowing it up.<br /></div><br /><div align="justify"><br /><strong><span style="font-size:180%;">Why did WWII create such success for the United States?</span></strong></div><br /><div align="justify"></div><br /><div align="justify"><strong><span style="font-size:180%;">Looked at it strictly as an economic event, we put all our efforts and assets and all our credit into fighting half the world and we emerged as the only modern industrial nation left intact</span></strong>. Though it was not (as far as I know) a conscious goal, and it was a high risk way to get there, we came out of it with a dominant market share of all manufacturing and technology and even agricultural sectors.<br /><br /><br />What does this tell us about what the response to the crash of '08 should be? It should be whole-hearted. Not half-hearted. <strong><span style="font-size:180%;color:#3333ff;">We should not fear high taxes, deficits, or government spending</span></strong>. Provided - provided - that we will be producing something of serious economic benefit.<br /><br /><br /><strong><span style="font-size:130%;color:#3333ff;">This is not a war against a foreign power. It is an effort against the problems of our own economy</span></strong>.<br /></div><br /><div align="justify"><br />We have to determine what those problems are and what they are not. They are not the sub prime crises or the housing bubble. Those are symptoms. There are two real problems. </div><br /><div align="justify"></div><br /><div align="justify"><br /><strong><span style="font-size:180%;color:#ff0000;">One is our faith in free markets to the degree that it is magical thinking. Markets are never free (in that ideal, magical way), they are never honest by themselves</span></strong>, they are never far-sighted, and they don't supply everything that either a strong economy or a healthy society needs.<br /></div><br /><div align="justify"><br /><em><strong>If there is an advantage, a greater profit, to be had through fraud, deception, excessive risk taking, collusion and monopoly, diversion of funds, failure to live up to contracts, bribing, buying or influencing governments (which are the only, and necessary, check on fraud, deception and all the rest), some members of the business community will engage in them. They will, at least in the short run, and often in the long run, out perform their more honest competitors.<br /></strong></em></div><br /><div align="justify"><br />There are things we need for economic health that established business have battled tooth and nail and will continue to fight until their death and ours.<br /><br /><br />The second is that in the last seven years we have come to the crisis point of a long term trend. <strong><span style="font-size:130%;color:#ff0000;">We crossed the line from being a producing economy to being a credit economy</span></strong>. This is an unsustainable condition.</div><br /><div align="justify"></div><br /><div align="justify"></div><br /><div align="justify"><strong><span style="font-size:180%;color:#ff0000;">It is also a consequence of the underlying philosophical proposition that free markets create the best of all possible worlds</span></strong>.<br /><br /><br /><em><strong><span style="font-size:130%;">The goal must be to transform America into an economy that produces more than it consumes.</span></strong></em><br /></div><br /><div align="justify"><br />The question is how to do that?<br /></div><br /><div align="justify"><br />Oddly enough, the solutions that have been proposed are on the right track.<br /></div><br /><div align="justify"><br /><strong>1.</strong> <em><strong><span style="font-size:130%;">Invest in infrastructure</span></strong></em>. Expenditures on infrastructure become an invisible subsidy for all other business. They make all other business cheaper, faster, easier and more efficient. Expenditures on infrastructure, for the most part, cannot be outsourced. <strong><span style="font-size:130%;">[THIS ASSUMES THAT THE STRUCTURES REQUIRED ARE MANUFACTURED IN THE U.S.]<br /></span></strong></div><br /><div align="justify"><br /><strong>2.</strong> <strong><span style="font-size:130%;"><em>Energy independence</em></span></strong>. Imported oil normally accounts for about a third of the US trade deficit. The way to end that is to <strong><span style="font-size:130%;color:#33cc00;">produce our own energy and to consume less energy</span></strong>. The question is how? <strong><span style="font-size:130%;color:#33cc00;">The green answers are wind, solar, tidal energy, possibly geo-thermal.</span></strong> These are infrastructure intensive. The primary cost is building machinery, setting it up and then building efficient transmission lines. Money that we spend on oil pours out of America just like dumping it down a sewer. Money spent on infrastructure stays in town. <strong><span style="font-size:130%;">Then there's "clean" coal and nuclear. There's lots of literature that says both are feasible. </span></strong>I don't know who paid for it. The problem is to include all the costs - the environmental destruction - and actual, effective regulation. Theoretically, both are easily solved. In the real world, it has proved to be unlikely.<br /></div><br /><div align="justify"><br /><strong>3.</strong> <strong><span style="font-size:130%;"><em>National health</em>.</span></strong> <strong><span style="font-size:130%;">[<span style="color:#000099;">EUROPEAN</span>/<span style="color:#ff0000;">CANADIAN</span> HEALTHCARE MODEL DESIRED]</span></strong> The private health care we now is the worst of all possible worlds for a modern, westernized society. Its bureaucratic, wasteful, and it rations care. Its far and away the most expensive system. It sends money to non-productive places. It make American business non-competitive. </div><br /><div align="justify"></div><br /><div align="justify"><strong>4.</strong> <strong><span style="font-size:130%;"><em>Government goal setting for business and technology</em></span></strong>. <strong><span style="font-size:130%;color:#000099;">[EUROPEAN MODEL]</span></strong> The glory of free market capitalism is that it is innovative. Thousands, even hundreds of thousands of different people come up with new ideas and try them out. Most fail, a few are wild successes. That won't go away. Imagination, ambition, greed, innovation, will remain. <strong><span style="font-size:180%;color:#ff0000;">There are lots of things wrong with central planning. One is that it "distorts" the economy. Compared to what? To imaginary free markets? Probably.</span></strong> To where we are now? Unlikely. <strong><span style="font-size:180%;color:#ff0000;">Can it be worse? Probably not.</span></strong> <strong><span style="font-size:180%;color:#ff0000;">The second is that it stifles innovation. Compared to what? Innovation in financial instruments? Clearly, the market, left to itself, did not produce</span></strong> alternative energy, popular, efficient American cars, pleasurable mass transit, a new electrical grid, a solution to the obesity epidemic, a reduction in the prison population, and a host of other things. </div><br /><div align="justify"><br /><strong><span style="font-size:130%;">We have a choice. Go to war for our economic future and well being. Or muddle along with half measures, lost in a fog of pseudo-free market theology, and let ourselves be drained by our own parasites</span></strong> and plundered by the more driven, forward thinking, and committed.<br /></div><br /><div align="justify"><br /><em>Larry Beinhart is the author of Wag the Dog, The Librarian, and Fog Facts: Searching for Truth in the Land of Spin.</em></div><br /><div align="justify"></div><br /><div align="justify">------------------------------------------------------------------------------------------------ </div><br /><div align="justify"><a href="http://mises.org/story/3234">http://mises.org/story/3234</a></div><br /><div align="justify"><strong><span style="font-size:130%;">The Disaster Called the New Deal</span></strong><br /><br /><br />By David Gordon<br /><br /><br /><em>Book Review of New Deal or Raw Deal? How FDR's Economic Legacy Has Damaged America, By Burton Folsom, Jr. Threshold Editions, 2008.</em><br /><br /><br />12/9/2008<br /><br /><br />Ludwig von Mises Institute<br /><br /><br />Readers of The Mises Review will not be surprised to learn that Folsom considers the New Deal a failure. Nevertheless, even those already familiar with such books as John T. Flynn's The Roosevelt Myth will find Folsom's book valuable. Folsom advances new and important arguments.<br /><br /><br />His anti–New Deal verdict is hard to dispute: levels of unemployment at the end of the 1930s remained at depression levels. <strong><span style="font-size:180%;color:#ff0000;">In May 1939, Treasury Secretary Henry J. Morgenthau Jr., one of Franklin Roosevelt's best friends, testified before the House Ways and Means Committee: "I say after eight years of this Administration we have just as much unemployment as when we started… And an enormous debt to boot" (p. 2).</span></strong> <strong><span style="font-size:180%;color:#ff0000;">When he spoke, unemployment exceeded 20 percent.</span></strong> Further, and here Folsom has absorbed the pioneering research of Robert Higgs, <em><strong><span style="font-size:130%;">not even the onset of World War II ended the Depression. True enough, unemployment ended; but this was only because of the draft.</span></strong></em> <strong><span style="font-size:130%;"><em>Absent this military slavery, there is every reason to think that Roosevelt would have continued to struggle with unemployment.<br /></em></span></strong><br /><br />A diehard defender of Roosevelt might essay two replies to this indictment. He might argue that Roosevelt was insufficiently far-reaching: despite his radical reputation, Roosevelt only reluctantly embraced the Keynesian prescription of increased public spending. <strong><span style="font-size:180%;color:#ff0000;">Roosevelt did indeed spend a great deal on government programs; but this must be balanced against his tax increases.</span></strong> <strong><span style="font-size:180%;">When the two are taken together, the stimulus that New Deal outlays provided the economy was less than needed to restore prosperity</span></strong>. William Leuchtenburg, one of the most influential historians of the New Deal, favors this approach.<br /><br /><br /><strong><em><span style="color:#3333ff;">"The havoc that had been done before Roosevelt took office," Leuchtenburg argues, "was so great that even the unprecedented measures of the New Deal did not suffice to repair the damage." … Some historians say that FDR should have done more deficit spending during the recession of 1937. (p. 12)<br /></span></em></strong></div><br /><div align="justify"><br /><strong><span style="font-size:130%;">Folsom wisely rejects this argument</span></strong>. It rests on a familiar fallacy, classically exposed by Frédéric Bastiat in the 19th century and Henry Hazlitt in the 20th. <strong><span style="font-size:180%;color:#ff0000;">Spending by the government does not add to employment, since taxes displace private spending and investing.</span></strong> Folsom aptly quotes Hazlitt in this connection:<br /><br /><br />"Every dollar of government spending must be raised through a dollar of taxation," Hazlitt emphasized. If the WPA builds a $10 million dollar bridge, for example, "the bridge has to be paid out of taxes… <em><strong><span style="font-size:130%;">Therefore," Hazlitt observed,</span></strong></em> <strong><span style="font-size:180%;color:#ff0000;">"for every public job created by the bridge project a private job has been destroyed somewhere else… All that has happened, at best, is that there has been a diversion of jobs because of the project."</span></strong> (p. 84)<br /><br /><br />Keynesians of course have a response ready. They will say that investors, owing to pessimism about the future, would not have spent on their own the money the government takes in taxes. Instead, they would have hoarded it; had the money remained in private hands, the increase in employment would have been less than what occurred under the beneficent auspices of Washington.<br /><br /><br />Folsom ably dispatches this Keynesian canard. If businessmen were reluctant to invest, precisely the antibusiness attitude of the Roosevelt administration was in large part responsible. <strong><span style="font-size:180%;color:#ff0000;">Roosevelt supported confiscatory rates of taxation; small wonder, then, that investors were reluctant to embark on new projects.</span></strong> They had good reason to think that if they were to be successful, Roosevelt would grab their profits for his own dubious schemes. Polls of businessmen taken in 1939 make evident this reluctance.<br /><br /><br />In March 1939, for example, AIPO [American Institute of Public Opinion] asked a national sample, "Do you think the attitude of the Roosevelt administration toward business is delaying business recovery?" More than twice as many respondents said "yes" as said "no." (p. 248)<br /><br /><br />Unfortunately, there is a gap in Folsom's case. His argument, as so far presented, is sound; but what if the government simply increases the money supply? In that case, defenders of interventionism will claim, the new jobs created by the government generate a net increase in employment.<br /><br /><br />To refute this, one needs the Austrian theory of the business cycle. <em><strong><span style="font-size:130%;color:#ff0000;">Government spending, if it takes place through the expansion of bank credit, will, if "successful," result in another artificially created boom. The recovery thus generated will result in the long run in even worse economic distress, once that new boom in turn collapses. Nor can a policy of further monetary expansion indefinitely postpone disaster. Eventually people's confidence in the monetary system will crumble, and a hyperinflation will result.<br /></span></strong></em><br /><br />Folsom, though not blind to the danger of inflation, ignores Austrian theory. In his own account of the continued severity of the depression that began in 1929, <strong><span style="font-size:180%;color:#ff0000;">he rightly stresses the malign effects of the Smoot-Hawley tariff. Its extraordinarily high rates greatly restricted trade, not only through restricting imports but also because of retaliatory tariffs imposed by other nations.</span></strong> But he says nothing at all about the Austrian view, i.e., that the expansion of bank credit during the 1920s was the principal cause of the 1929 crash.<br /><br /><br />Quite the contrary, he follows Milton Friedman and the Chicago School in bemoaning the Federal Reserve's contraction of the money supply.[1] He appears not to be aware of the Austrian view. He does not cite Hayek or Mises on the cycle, and he ignores Lionel Robbins's outstanding The Great Depression. (The fact that Robbins wrongly repudiated his own book should not make one reluctant to benefit from its analysis.) He includes only one reference to Rothbard's America's Great Depression, and this is in connection with Herbert Hoover and the RFC (p. 276, note 18).<br /><br /><br />But I come not to bury Folsom, but, mostly, to praise him. One of his best insights is that the <strong><span style="font-size:180%;color:#ff0000;">New Deal programs were financed in large part by the poor. At Roosevelt's behest, excise taxes were imposed on many popular items of consumption; and these weighed especially heavily on the impoverished. "In the first four years of Roosevelt's presidency, revenue from excise taxes exceeded that of income and corporate taxes combined" (p. 126).</span></strong> (I do not think it right, though, to call excise taxes "regressive," as Folsom does. Everyone paid the same rate; the poor were not charged more.)<br /><br /><br />This was far from the only way in which New Deal programs hurt the poor. Blacks fared very badly under Roosevelt, the supposed great exemplar of enlightened modern liberalism. Minimum-wage laws proved a stumbling block to efforts by blacks to secure jobs. These laws prevented employers from undercutting unions by offering lower wages to nonunion members. Since blacks faced exclusion from many of the powerful unions, they were in effect frozen out. Roosevelt, by the way, allowed unions freely to violate private-property rights: sit-down strikes, i.e., the forcible seizure and occupation of an employer's property, were for him quite in order. In the famous sit-down strike by Walter Reuther's United Auto Workers against General Motors, neither "Governor Frank Murphy of Michigan nor President Roosevelt was willing to support evicting the strikers from GM property" (p. 120).<br /><br /><br /><strong>Roosevelt was not much concerned with the effects of his programs on blacks. Indeed, he did little to support civil rights: he would not, e.g., support antilynching legislation. To do so might antagonize important Southern congressmen</strong>. Despite his seeming indifference to blacks, Roosevelt gained support among many members of the black community, in part owing to carefully calibrated publicity gestures by members of his administration. Nevertheless, several prominent blacks saw through him. Roosevelt snubbed Jesse Owens after the latter's triumph at the 1936 Berlin Olympic Games; and thereafter Owens campaigned against him. Joe Louis sent a telegram of support to Wendell Willkie in the 1940 election: "'Win by a knockout,' Louis telegrammed" (p. 210).<br /><br /><br />Folsom ably addresses an objection to his anti-Roosevelt thesis. If Roosevelt's policies were such a miserable failure, why was he reelected? In 1936, he won by a landslide over the Republican candidate, Governor Alf Landon of Kansas. Moreover, not even the most bitter anti-Roosevelt partisan can deny the president's popularity.<br /></div><br /><div align="justify"><br />In part, Folsom claims, the answer lies in Roosevelt's great personal charm. Even opponents, such as the eminent journalist Arthur Krock, found themselves under its sway. Krock once explained to Roosevelt why he no longer attended presidential press conferences. "You charm me so much that when I go back to write a comment on the proceedings, I can't keep it in balance" (p. 223).<br /><br /><br />But Folsom has a deeper explanation. <strong>Roosevelt manipulated welfare programs, especially jobs under the WPA, to gain votes. </strong>WPA officials were quite willing, if need be, to twist arms in order to gain votes for the president and his congressional supporters. More generally, under the expert advice of Emil Hurja, the principal assistant to Postmaster General James Farley, polls were undertaken to indicate where patronage and pork could be used to best advantage.<br /><br /><br />Folsom here uses to good advantage a long-forgotten book, Who Were the Eleven Million? by David Lawrence, the founder and editor of US News & World Report. Through a county-by-county analysis of the 1936 election, Lawrence showed that voting for Roosevelt varied directly with the patronage and jobs extended. Sometimes one can trace in detail the way particular acts of political beneficence shifted voters to the Democratic camp. The Republicans were caught in a bind. As the party out of power, they could not match Roosevelt as a dispenser of favors. They could to an extent try the path of virtue, denouncing Roosevelt's tactics for what they were; but this tactic could not be pushed too far. To do so risked alienating voters who benefited from the government's largesse. Thus, Landon promised to maintain payments to farmers under the AAA, fatally compromising his denunciation of Roosevelt for political manipulation of welfare.<br /><br /><br />Folsom places great emphasis on Roosevelt's character, and the president comes off very poorly indeed. Politicians are hardly noted for honesty, but even judged by the low standards of the breed, Roosevelt was mendacious. In a speech in the 1920 election, when he ran for vice president on the Democratic ticket, Roosevelt falsely claimed to have drafted the constitution of Haiti. When challenged, he denied ever making the statement, though numerous witnesses attested that he had done so. Folsom might also have mentioned the charges of dubious dealings leveled against Roosevelt's Warm Springs Foundation for polio victims. (Folsom does mention this project but says little about it.)<br /><br /><br />The president did not grow more honest with age. Though he had promised to stay neutral in the fight between Alben Barkley and Pat Harrison for Senate majority leader, he came down decisively for Barkley, who won the vote, 38-37.[2] As a result, he converted the popular Harrison from a strong New Dealer to an opponent.<br /><br /><br />Roosevelt also had an unslakeable thirst for power. Though the 1936 elections gave the Democrats overwhelming control of Congress, this was not enough for Roosevelt. He sought to purge those who were not fully behind his program. In particular, he could not forgive those who dared to oppose his unsuccessful proposal to pack the Supreme Court. <strong>He opposed long-serving and influential Democratic congressmen, favoring instead more pliant newcomers. (One favorite was Lyndon Johnson, whose later efforts to bring the New Deal to South Vietnam were not altogether a success.)</strong> In most cases, Roosevelt's efforts proved unavailing. The once-dominant Roosevelt, despite his undoubted political gifts, found himself in a much weaker political position at the end of the 1930s than he had been in 1936. Roosevelt had overreached.<br /><br /><br />Roosevelt's quest for power and disdain for criticism had a sinister side. He used government agencies, especially the FBI and IRS, to harass his political opponents. Thus, at the president's instigation, a case of tax evasion against former Treasury Secretary Andrew Mellon was pursued, though known to be without basis by Elmer Irey, the head of the special intelligence unit of the IRS. Robert Jackson, who ordered the prosecution of Mellon, was later elevated to the Supreme Court. Mellon was eventually vindicated. As soon as Jesse Owens and Joe Louis criticized Roosevelt, IRS investigations of them commenced. Readers of this well-documented book will view Roosevelt with distaste.[3]<br /><br /><br /><strong><em><span style="font-size:130%;">Notes</span></em></strong></div><br /><br /><div align="justify"><strong>[1]</strong> It is possible to support the Austrian view of the Depression's cause while still rejecting the Fed's monetary policy once the Depression started as overly deflationist, but it is most unlikely that Folsom adopts this approach. For a criticism of Chicago orthodoxy, see Murray Rothbard, America's Great Depression, and Melchior Palyi, The Twilight of Gold.<br /><br /><strong>[2]</strong> I cannot resist the story of Barkley's death. In a speech in 1956, he said, "I would rather be a servant in the House of the Lord than to sit in the seats of the mighty" and moments later dropped dead from a heart attack.<br /><br /><strong>[3]</strong> There appears to be a mishap in the text of p. 306, note 38. Folsom refers to a letter from Arthur Sears Henning to Herbert Hoover, apparently on the court-packing plan, and thanks Gary Dean Best for calling this letter to his attention; but the letter is not mentioned in the accompanying text.<br /></div><br />------------------------------------------------------------------------------------------------<br /><br /><div><a href="http://thinkprogress.org/2008/11/23/will-new-deal/">http://thinkprogress.org/2008/11/23/will-new-deal/</a></div><br /><div><strong><span style="font-size:130%;">George Will: ‘The First New Deal Didn’t Work<br /></span></strong></div><br /><br /><div>By Faiz Shakir</div><br /><br /><div>ThinkProgress.com</div><br /><br /><div>Nov. 23rd, 2008 </div><br /><br /><div align="justify">Economists on both the <a href="http://pr.thinkprogress.org/2008/10/pr20081022">left</a> and <a href="http://yglesias.thinkprogress.org/archives/2008/10/feldstein_vs_the_neo_hooverites.php">right</a> broadly agree that the need for stimulative government spending is necessary to prevent a further collapse of the global economic system — just as <a href="http://www.thenation.com/doc/20080407/zinn">the New Deal</a> and the deficit spending of World War II restored the health of the global economy in the last century. </div><br /><div align="justify"><br />This morning on ABC’s This Week, conservative columnist George Will echoed the <a href="http://yglesias.thinkprogress.org/archives/2008/11/will_v_krugman_on_the_depression.php">false</a> right-wing <a href="http://wonkroom.thinkprogress.org/2008/10/28/heritage-new-deal/">meme</a> that FDR’s New Deal policies made the Depression worse:</div><br /><div align="justify"><br />Before we go into a new New Deal, can we just acknowledge that the first New Deal didn’t work?</div><br /><br /><div align="justify">As Nobel-laureate Paul Krugman wrote recently in the New York Times, “There’s a whole intellectual industry, mainly operating out of right-wing think tanks, <a href="http://www.nytimes.com/2008/11/10/opinion/10krugman.html?hp">devoted to propagating the idea</a> that F.D.R. actually made the Depression worse. So it’s important to know that most of what you hear along those lines is based on deliberate misrepresentation of the facts. The New Deal brought real relief to most Americans.”</div><br /><div align="justify"><br />Krugman observed that the true short-comings of the New Deal policies resulted from the fact that they were <a href="http://www.nytimes.com/2008/11/10/opinion/10krugman.html?hp">not bold enough</a> over the short-term:</div><br /><div align="justify"><br />[T]he truth is that the New Deal wasn’t as successful in the short run as it was in the long run. And the reason for F.D.R.’s limited short-run success, which almost undid his whole program, was the fact that his economic policies were too cautious. […]<br /><br /><strong><span style="font-size:180%;color:#3333ff;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-9p6UZ7xB8TMpAs-vLhgHA6Wx6RRassWolq-GJLck0qTkPQkf8A6BtbCViuz-u3LllFJZ9vE-pEnpQFYJvz7VdM3Sg5Efn0v_7za3CnHPEVytjjqYUQ6YC8m1r0opDO6b7TmoyjGJ1_3P/s1600-h/FDR+New+Deal+Chart.jpg"><img id="BLOGGER_PHOTO_ID_5283477446688665394" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 400px; CURSOR: hand; HEIGHT: 330px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-9p6UZ7xB8TMpAs-vLhgHA6Wx6RRassWolq-GJLck0qTkPQkf8A6BtbCViuz-u3LllFJZ9vE-pEnpQFYJvz7VdM3Sg5Efn0v_7za3CnHPEVytjjqYUQ6YC8m1r0opDO6b7TmoyjGJ1_3P/s400/FDR+New+Deal+Chart.jpg" border="0" /></a>In short, Mr. Obama’s chances of leading a new New Deal depend largely on whether his short-run economic plans are sufficiently bold</span></strong>. Progressives can only hope that he has the necessary audacity.</div><br /><br /><div align="justify">Brad DeLong offers <a href="http://delong.typepad.com/sdj/2008/11/lessons-from-th.html">this chart</a> to emphasize the value of the New Deal.</div><br /><br /><div align="justify">------------------------------------------------------------------------------------------------</div><br /><div align="justify"><a href="http://www.cato.org/pub_display.php?pub_id=3327">http://www.cato.org/pub_display.php?pub_id=3327</a></div><div align="justify"><br /><strong><span style="font-size:130%;">Fresh Debate About FDR's New Deal<br /></span></strong><br /><br />by Jim Powell<br /><br /><br /><em><strong>J<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEixnBAL5TH-Z7T5VRCbVAf0TjGrnlXvQxE9v9fggWYDUHFtxNjD8zWn1YQ8KctUnw9QkAjvYzXaNVkohwxrxTqnq0gqNorlOgjX6Vz4A2lbNi9hcXPGh9LhMv9ckCaP2tD7mFYNJYtxh2B4/s1600-h/new+deal+folly.jpg"><img id="BLOGGER_PHOTO_ID_5283474486867449234" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 415px; CURSOR: hand; HEIGHT: 293px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEixnBAL5TH-Z7T5VRCbVAf0TjGrnlXvQxE9v9fggWYDUHFtxNjD8zWn1YQ8KctUnw9QkAjvYzXaNVkohwxrxTqnq0gqNorlOgjX6Vz4A2lbNi9hcXPGh9LhMv9ckCaP2tD7mFYNJYtxh2B4/s400/new+deal+folly.jpg" border="0" /></a>im Powell, a senior fellow at the Cato Institute, is author of <span style="color:#3333ff;">FDR's Folly</span><span style="color:#3333ff;">, How Roosevelt and His New Deal Prolonged the Great Depression</span>, (Crown Forum, 2003).<br /></strong></em><br /><br />December 2, 2003<br /><br /><br />It has been 70 years since Franklin Delano Roosevelt launched his New Deal in an effort to banish the Great Depression of the 1930s -- perhaps the most important economic event in American history. <strong><span style="font-size:130%;color:#ff0000;"><em>The New Deal was controversial then, and it's still controversial, because <span style="font-size:180%;">it failed to resolve the most important problem of the era: chronic unemployment that averaged 17 percent.</span><br /></em></span></strong><br /><br /><strong><span style="font-size:180%;color:#ff0000;">Newsweek columnist Robert Samuelson acknowledged that if World War II hadn't come along, America might have stumbled through many more years of double-digit unemployment.</span></strong> Samuelson, however, is among those who give FDR high marks for handling the political crisis of the 1930s, the worst political crisis this country has faced since the Civil War.<br /><br /><br />But the political crisis was caused by the double-digit unemployment, and in my new book, <em><strong><span style="font-size:130%;color:#3333ff;">FDR's Folly, How Roosevelt and His New Deal Prolonged the Great Depression</span></strong></em> (Crown Forum, 2003), <strong><span style="font-size:180%;color:#ff0000;">I report mounting evidence developed by dozens of economists, at Princeton, Brown, Columbia, Stanford, the University of Chicago, University of Virginia, University of California (Berkeley) and other universities, that double-digit unemployment was prolonged by FDR's own New Deal policies</span></strong>.<br /><br /><br />How can that be? Consider just a few of <strong><span style="font-size:180%;color:#3333ff;">FDR's policies.</span></strong> <strong><span style="font-size:180%;color:#ff0000;"><span style="color:#33cc00;">The New Deal</span> tripled federal taxes between 1933 and 1940 -- excise taxes, personal income taxes, inheritance taxes, corporate income taxes, dividend taxes, excess profits taxes all went up, and FDR introduced an undistributed profits tax.</span></strong> A number of New Deal laws, including some 700 industrial cartel codes, made it more expensive for employers to hire people, and this discouraged hiring.<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">Frequent changes in the tax laws plus FDR's anti-business rhetoric ("economic royalists") discouraged people from making investments essential for growth and jobs.</span></strong> New Deal securities laws made it harder for employers to raise capital. FDR issued antitrust lawsuits against some 150 employers and companies, making it harder for them to focus on business. FDR signed a law ordering the break-up of America's strongest banks, with the lowest failure rates. <strong><span style="font-size:180%;color:#ff0000;">New Deal farm policies destroyed food -- 10 million acres of crops and 6 million farm animals -- thereby wiping out farm jobs and forcing food prices above market levels for 100 million American consumers.</span></strong> FDR's Folly spells out much more in startling, sometimes hilarious detail.<br /><br /><br />Robert Bartley, who edited the Wall Street Journal for three decades and is now a commentator, called for a fresh debate about the New Deal. Newspaper publisher Conrad Black, author of Franklin Delano Roosevelt, Champion of Freedom, responded by claiming that <strong><span style="font-size:180%;color:#3333ff;">if "workfare" recipients were included among the "employed," then New Deal unemployment rates were lower than the U.S. Department of Labor has reported for decades.</span></strong> Those tempted to agree with Black might listen to jazz great Louis Armstrong's 1940 tune "The WPA" -- referring to FDR's biggest "workfare" program, the Works Progress Administration. Among the memorable lines: "Sleep while you work, rest while you play, lean on your shovel to pass the time away, at the WPA."<br /><br /><br /><strong><em><span style="font-size:130%;">There's a fascinating split between economists and political historians about the New Deal. <span style="color:#ff0000;">The idea that FDR cured double-digit unemployment, wrote author and commentator Thomas Sowell in a recent column, "was never pervasive among economists, and even J.M. Keynes -- a liberal icon -- criticized some of FDR's policies as hindering recovery from the depression."</span><br /></span></em></strong><br /><br /><strong><span style="font-size:130%;color:#3333ff;">Meanwhile, pro-FDR political historians such as James MacGregor Burns, Arthur M. Schlesinger, Jr., Frank Freidel, William Leuchtenburg, and Kenneth S. Davis, have focused on the personalities, elections, speeches, "Fireside Chats" and other aspects of the New Deal's political story, disregarding evidence about the economic consequences of New Deal policies</span></strong>. This continues to be the case with younger political historians like Alan Brinkley, author of The End of Reform: New Deal Liberalism in Recession and War, who called the New Deal "a bright moment." Disregarding the economic consequences, too, are children's book authors like Joy Hakim, whose recent bestseller Freedom: A History of US includes a glowing account of New Deal heroics.<br /><br /><br />Aside from FDR's Folly, <strong><span style="font-size:180%;color:#ff0000;">the only major work mentioning evidence about the economic consequences of the New Deal is by Stanford University political historian David M. Kennedy: his 1999 book Freedom from Fear, winner of a Pulitzer Prize. "Whatever it was," he wrote, the New Deal "was not a recovery program."</span></strong> The New Deal might be gone, but the debate goes on. </div><div align="justify"> </div><div align="justify">------------------------------------------------------------------------------------------------- </div><div align="justify"> </div><div align="justify"><strong><span style="font-size:180%;">[</span><span style="font-size:130%;">See also <em>Europe & United Nations Try to Cram Down US Throat Socialist Financial and Environmental Global Governance; Will Bush & Successor Swallow?</em>, ITSSD Journal on Economic Freedom, at:</span> </strong><a href="http://itssdeconomicfreedom.blogspot.com/2008/10/europe-un-us-blue-party-cram-down-bush.html"><strong>http://itssdeconomicfreedom.blogspot.com/2008/10/europe-un-us-blue-party-cram-down-bush.html</strong></a><strong> <span style="font-size:180%;">].</span></strong></div><div align="justify"> </div></div>ITSSD Charitable Missionhttp://www.blogger.com/profile/00790887154748866904noreply@blogger.com1tag:blogger.com,1999:blog-1851218948450486986.post-38668572014042660682008-11-13T19:42:00.047-05:002008-11-19T23:29:53.521-05:00Are Bush Calls For Defense of Capitalism Too Late, Amid Euro-Socialist, Sandanista and US Congressional Clamor for Regulate, Tax & Spend Policies?<a href="http://www.bworldonline.com/BW111708/content.php?id=145">http://www.bworldonline.com/BW111708/content.php?id=145</a>
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<br /><div align="justify"><strong><span style="font-size:130%;">Saving capitalism</span></strong></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify">By Filomeno S. Sta. Ana III</div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify">Business World Yellow Pad</div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify">Vol. XXII, No. 81</div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify">Monday, November 17, 2008 MANILA, PHILIPPINES</div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify">The title of an Associated Press report was: "Bush warns: Don’t disturb capitalism." The story, however, did not state whether George W. Bush really uttered those words. Yet, the title captures the gist of Bush’s speech that he delivered at the Federal Hall on Wall Street. </div><div align="justify"></div><div align="justify"></div><div align="justify">
<br />The speech was intended to communicate the US position for the meeting of the G-20 countries — a group of highly developed countries and some influential developing countries called emerging markets. The crucial G-20 meeting was an occasion to address the collective action problems in response to the global financial and economic crisis. </div><div align="justify"></div><div align="justify"></div><div align="justify">
<br />The AP story quoted Bush extensively: </div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /><strong><span style="font-size:130%;">"We must recognize that government intervention is not a cure-all." "Our aim should not be more government. It should be smarter government." "It is true that this crisis included failures, by leaders and borrowers, by financial firms, by governments and independent regulators. But the crisis was not a failure of the free-market system. And the answer is not to try to reinvent that system."</span></strong> </div><div align="justify"></div><div align="justify"></div><div align="justify">
<br />The lame-duck president is living in a different world. He wears blinders. He wishes to apply his ideology at all times. <strong><span style="font-size:180%;">But his conservative economic creed of less government loses relevance in times of economic crisis</span></strong>. </div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /><strong><span style="font-size:130%;">Bush dislikes more government. But what do you call the US government bailout of financial institutions, amounting to more than US$700 billion? The fact is, the bailout was a necessary though insufficient condition, to restore confidence in the financial system and keep credit flowing, so as to resuscitate the real economy. </span></strong></div><div align="justify"></div><div align="justify"></div><div align="justify">
<br />And to disparage government intervention, Bush uses the trick of inserting a red herring in his speech: "government intervention is not a cure-all." Only dumb people believe in a panacea. </div><div align="justify"></div><div align="justify"></div><div align="justify">
<br />But <strong><span style="font-size:130%;">Bush is correct to say that we need "smarter government." Indeed, a smarter government would have taken precautionary measures through policy and regulation and could have thus averted a deep crisis. Unwittingly, Bush’s statement about "smarter government" merely confirms that he or his government isn’t smart. The US and the rest of the world are fortunate for two related reasons: First, Bush would no longer be around to preside over US policies and institutions. Second, the successor is Bush’s opposite. </span></strong></div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /><strong><span style="font-size:180%;color:#ff0000;"><span style="color:#000000;">One metaphor that best describes the current crisis of capitalism is the "gale of creative destruction."</span> Raul Fabella, professor at University of the Philippines School of Economics, reintroduced this metaphor when he spoke in a public forum about the Philippine economy. Raul borrowed the term from Joseph Schumpeter. The "gale of creative destruction" is precisely what makes capitalism resilient. Destroy the old and build the new. Thus, the current crisis will destroy the free-market model, which was dominant for at least two decades, and deflate its "triumphalism." Supplanting it will be a system that enhances the role of government, institutions, and regulation in a market economy. </span></strong></div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /><strong><span style="font-size:180%;color:#ff0000;">Recent actions taken by the richest countries — e.g., recapitalization and nationalization of banks as well as enormous fiscal spending — have socialist characteristics. </span></strong></div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /><strong><span style="font-size:180%;color:#ff0000;">But what’s wrong about having socialist features or having socialism?</span></strong> <strong><span style="font-size:180%;color:#3333ff;">The conservatives have labeled <span style="color:#ff0000;">Barack Obama</span> socialist. His plan to introduce universal health coverage in the US is <span style="color:#ff0000;">socialistic.</span></span></strong> In fact, Hillary Clinton’s proposed health reforms are more radical than Obama’s program. That makes Hillary not only a feminist but a socialist, too. So what? </div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /><strong><span style="font-size:180%;">Schumpeter, who did not advocate socialism, nevertheless thought that socialism could not be avoided. In his address titled "The March into Socialism," Schumpeter said "the capitalist order tends to destroy itself and that centralist socialism is...a likely heir apparent." </span></strong></div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /><strong><span style="font-size:180%;">Schumpeter gave three reasons for believing that capitalism is destroying itself and that socialism is the likely alternative. It is not capitalism’s failure but its successes that will lead to its demise. </span></strong></div><div align="justify"></div><div align="justify"></div><ul><li><div align="justify"><strong><em><span style="font-size:130%;color:#990000;">First, Schumpeter thought that technological progress and bureaucratic administration in modern capitalism eventually stifle entrepreneurship and innovation.</span></em></strong> </div></li></ul><div align="justify"></div><p align="justify"><strong><em><span style="font-size:130%;color:#990000;"></span></em></strong></p><ul><li><div align="justify"><strong><em><span style="font-size:130%;color:#990000;">Second, the advance of capitalism leads to the dominance of large corporations and the decimation of social strata such as small businessmen and farmers that are pillars of individual proprietorship. This weakens capitalism’s institutional scaffolding. </span></em></strong></div></li></ul><div align="justify"></div><div align="justify">
<br /><strong><em><span style="font-size:130%;color:#990000;"></span></em></strong></div><ul><li><strong><em><span style="font-size:130%;color:#990000;">Third, capitalist culture promotes rational and critical thinking, and this leads to the emergence of deep intellectuals who turn against the system. </span></em></strong></li></ul><div align="justify"></div><div align="justify"></div><div align="justify"><strong><span style="font-size:180%;color:#ff0000;"></span></strong></div><div align="justify"><strong><span style="font-size:180%;color:#ff0000;">To illustrate, the communist leaders in the Philippines, the Lavas and Jose Maria Sison, came from the elite and were products of the best schools.</span></strong> </div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /><strong><span style="font-size:180%;color:#ff0000;">Socialism, too, has its own version of creative destruction. Old socialism — the central command economy — has vanished except in a surreal place called North Korea. The "actually existing socialism" is a market economy. And it is in the socialist economies of developing countries where rapid growth has occurred — in China and in Vietnam.</span></strong> <strong><span style="font-size:180%;color:#000099;">The social democrats likewise claim they are socialists. And surely, living in the Scandinavian countries is like living in heaven. Markets and competition, on the one hand, and socialism, on the other hand, can thus co-exist. In fact, they can complement each other. </span></strong></div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /><strong><span style="font-size:180%;color:#ff0000;">As leaders put in place the new reforms to tackle the present and future economic global crises, we can expect a further convergence of so-called capitalism and so-called socialism. </span></strong></div><div align="justify"></div><div align="justify"></div><div align="justify">
<br />As the unrepentant communist but "capitalist roader" Deng Xiao-Ping once said, it does not matter whether the cat is black or white so long as it catches mice. </div><div align="justify">
<br /><em>Mr. Sta. Ana coordinates Action for Economic Reforms (</em><a href="http://www.aer.ph/" target="_blank"><em>www.aer.ph</em></a><em>)</em> </div>
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<br /><a href="http://www.abc.net.au/insidebusiness/content/2007/s2420907.htm">http://www.abc.net.au/insidebusiness/content/2007/s2420907.htm</a>
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<br /><div align="justify"><strong><span style="font-size:130%;">Bush Pushes For Free Market</span></strong></div>
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<br /><div align="justify">Date : 16/11/2008
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<br />Reporter: Alan Kohler
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<br />ALAN KOHLER, PRESENTER: President Bush's big speech on Thursday in which he defended free market capitalism and small government <strong><span style="font-size:130%;">sounded a bit like the ravings of the captain of the Titanic as he went down with the ship, blaming the iceberg</span></strong>.</div>
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<br /><div align="justify"><strong><span style="font-size:130%;"><em>No one's recommending a switch to socialism, just better capitalism, specifically better regulation of it.</em></span></strong> <strong><span style="font-size:180%;">[REALLY?? ARE YOU SURE ABOUT THAT??] </span></strong>In fact, in the same speech President Bush talked about the need for more and better regulation of financial markets before contradicting himself by suggesting that the threat to economic prosperity comes not from too little government but too much government.</div>
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<br /><div align="justify"><strong><span style="font-size:180%;">[DEAR MR. KOHLER. ARE YOU SAYING THAT EUROPEAN CAPITALISM IS <em>BETTER </em>CAPITALISM?? PERHAPS YOU REQUIRE A LESSON IN THE DISTINCTION BETWEEN ANGLO-AMERICAN CAPITALISM AND CONTINENTAL CAPITALISM, OR PERHAPS, YOU ALREADY KNOW AND YOUR STATEMENT IS NUANCED!! IT MORE THAN IMPLIES THAT, IN YOUR VIEW, IT IS TIME FOR THE UNITED STATES TO ADOPT EUROPE'S SOCIAL-MARKET REDISTRIBUTIONIST FORM OF CAPITALISM: a/k/a 'SOFT SOCIALISM'. DO YOU NOT RECALL THE FAMOUS U.S. SUPREME COURT DECISION THAT LONG AGO DEFINED THE PRESENCE OF 'OBSCENITY'?? IN </span></strong><a href="http://laws.findlaw.com/us/378/184.html"><strong><span style="font-size:180%;">Jacobellis v. Ohio, 378 U.S. 184, 197 (1964)</span></strong></a><strong><span style="font-size:180%;">, JUSTICE POTTER STEWART EXPLAINED 'HARD CORE' PORNOGRAPHY OR 'OBSCENITY' IN THE FOLLOWING MANNER: "I SHALL NOT TODAY ATTEMPT FURTHER TO DEFINE THE KINDS OF MATERIAL I UNDERSTAND TO BE EMBRACED...<em>BUT I KNOW IT WHEN I SEE IT..</em>." AT LEAST ONE LONGTIME UNIVERSAL PROVERB PROVIDES A COMMON SENSE COROLLARY TO THIS: <em>IF IT WALKS LIKE A DUCK AND QUACKS LIKE A DUCK, THEN IT IS A DUCK! </em>OR, IN OTHER WORDS, WHY DON'T YOU JUST <em>CALL A SPADE, A SPADE?</em>]</span></strong> </div>
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<br />The crisis was not a failure of the free market system, he declared.
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<br /><strong><em><span style="font-size:130%;">Actually, I think you'll find it was, Mr President. The crisis is now greatest wherever the market was freest.</span></em></strong> Governments around the world are being forced reluctantly to nationalise their banking system in various ways, including Australia, where the Government has guaranteed bank deposits. And the G20 government leaders are meeting in Washington, the global HQ of regulatory failure, trying to agree on a fiscal rescue for the world economy and to restrain themselves from protectionism in their hour of emergency. </div>
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<br /><strong><em><span style="font-size:130%;">And then there's the car industry. As much a foundation of capitalism as the housing sector and the financiers to which they are both coupled, the US car industry, including its offshoots in Australia, is the author of its own misery, having failed to deal with their customers' changing energy needs. </span></em></strong>Instead of preparing for the future the car barons lobbied congress to be exempt from it. But the future arrived anyway, and they're now for the wrecker's yard. Kevin Rudd has coughed up $6.2 billion of taxpayers' money to support the car industry here, and in America, a debate is raging over whether to bailout Detroit to save millions of jobs. <strong><span style="font-size:130%;">Another triumph for the free market.</span></strong></div>
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<br /><a href="http://network.nationalpost.com/np/blogs/fullcomment/archive/2008/11/15/national-post-editorial-page-the-worst-economic-system-except-for-all-the-others.aspx">http://network.nationalpost.com/np/blogs/fullcomment/archive/2008/11/15/national-post-editorial-page-the-worst-economic-system-except-for-all-the-others.aspx</a>
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<br /><div align="justify"><strong><span style="font-size:130%;">The worst economic system … except for all the others</span></strong></div><div align="justify"></div><div align="justify"></div><div align="justify">Canadian Post Editorial Page</div><div align="justify"></div><div align="justify"></div><div align="justify">Posted by Kelly McParland</div><div align="justify"></div><div align="justify"></div><div align="justify">November 15, 2008, 9:00 AM</div><div align="justify"></div><div align="justify"></div><div align="justify"><strong><em><span style="font-size:130%;color:#990000;">Winston Churchill once told the British House of Commons that “democracy is the worst form of government except all those other forms that have been tried from time to time.” In the economic sphere, perhaps the same could be said about capitalism: It’s the worst way to order markets — except for all the other ways that have ever been tried.
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<br /><strong><span style="font-size:180%;">We’re not talking about pure laissez-faire capitalism here. If that ever existed, it disappeared around the time of the trust busters and muckrakers of a century ago. Rather, we mean the basic concept that free markets are preferable to centrally planned economies.</span></strong> </div><div align="justify"></div><div align="justify"></div><div align="justify"><strong><em><span style="font-size:130%;">There will always be a regulatory role for government preventing fraud and abuse, mitigating the peaks and valleys of the investment cycle, and settling contractual disputes, among others.</span></em></strong> </div><div align="justify"></div><div align="justify"></div><div align="justify"><strong><span style="font-size:180%;color:#990000;">But in general, markets work best when consumers are free to spend their disposable income as they choose (and are left with as much disposable income as possible), when executives and entrepreneurs — not bureaucrats — make business decisions, and government is mostly left to play umpire.
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<br /><strong><em><span style="font-size:130%;">Take Canada’s economy for instance. Three of its four largest economic expansions since the Second World War have occurred since the Canada-U.S. Free Trade Agreement and NAFTA were signed. </span></em></strong>Economic nationalism failed to produce the benefits its advocates envisioned. When bureaucrats and politicians tried to pick economic winners and losers, protect aging industries with direct grants, limit foreign investment and erect tariff barriers against imports to spark domestic production, our economy was flat (or at least flatter), and for longer periods, than during the period since free trade.
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<br /><strong><span style="font-size:130%;">There can be no denying that free markets produce spikes and troughs, such as the trough the world’s financial markets are experiencing now. And each time one occurs, there are calls</span></strong> — as there will be this weekend from G20 leaders gathered in Washington. D.C. — <strong><em><span style="font-size:130%;color:#990000;">for more international oversight by governments against future downturns. But, as history shows, government regulatory initiatives are just as likely to prolong hardship as they are to ameliorate it.
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<br />In a speech to the Manhattan Institute Thursday, U.S. President George Bush said “It’s true this crisis included failures — by lenders and borrowers and by financial firms and by governments and independent regulators. But the crisis was not a failure of the free-market system.” This is true, if ironic, coming from Mr. Bush. His administration’s initial $700-billion bailout package has done as much to deepen the current crisis as it has to solve it.
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<br /><strong><span style="font-size:130%;color:#990000;">The idea that the government had to intervene to save the financial system was not in itself misguided. As others have noted, the financial markets are the equivalent of a basic utility: Their failure would mean the collapse of the entire economy. </span></strong>Amidst a credit freeze-up in which bankers had no idea who was hiding what radioactive assets on their balance sheets, lending ceased. Washington had little choice but to oil the gears with extra liquidity.
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<br />Unfortunately, the public servants controlling the $700-billion oil can had little idea where to direct the spout. <strong><span style="font-size:130%;color:#990000;">Initially bureaucrat-driven, the Bush White House had to rework its stimulus plan this week to make it consumer-driven because financial regulators were doing preposterous things with the bailout money, such as using it to secure the credit of corporations and banks that were not in financial trouble.
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<br /><strong><span style="font-size:180%;">Yet, even though Mr. Bush’s own cabinet has failed to live up to his faith in free-market capitalism, his words are nonetheless true.</span></strong> <strong><span style="font-size:180%;color:#000099;">As he rightly pointed out, many European countries have lately experienced economic freefalls as large as the Americans despite being far more heavily regulated.</span></strong> Even Sarbanes-Oxley, the complex compliance regulations placed on U.S. business in the post-Enron era, failed to do anything to prevent or lessen the current woes.
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<br />Would any of us want to go back to the days of regulated airfares? The end of regulation in air travel has opened up flights and jet holidays to millions of Canadians who could never afford them when government set the price. The same is true of the cost of long-distance calling, cellphones and the rapid expansion of choice in cable television: <strong><span style="font-size:180%;">The moment government ceased being the economic decision-maker, and turned over that task to the consumer, choice when up and price went down.
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<br /><strong><span style="font-size:180%;color:#ff0000;">Canada and the world does not need a return to wage and price controls, rent controls, 6-and-5 inflation targets, foreign investment reviews or any of the other ways governments in the past 50 years have tried to smooth out the bull and bear cycles of the market.
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<br /><strong><em><span style="font-size:130%;color:#cc0000;">If G20 leaders want to do something useful, they can look for ways to make markets work better, rather than trying to concoct ambitious news schemes to increase government presence in economic choices, something that almost always just makes matters worse.
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<br /><em>National Post</em>
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<br /><a href="http://euobserver.com/9/27114/?rk=1">http://euobserver.com/9/27114/?rk=1</a>
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<br /><strong><span style="font-size:130%;">US laissez-faire to battle European 'social market' at G20</span></strong>
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<br />LEIGH PHILLIPS
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<br /><div align="justify">EUObserver.com</div>
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<br />14.11.2008 @ 17:31 CET
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<br /><div align="justify">EUOBSERVER / BRUSSELS - Ahead of the G20 meeting of the world's leading industrialised and emerging economies this weekend, <em><strong><span style="font-size:130%;">the president of the United States and the president of the European Commission have laid down their markers for what should be the solutions to save the global economy.</span></strong></em></div>
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<br /><strong><span style="font-size:180%;color:#ff0000;">On Thursday, US President George W. Bush made an impassioned plea for laissez-faire capitalism and warned against turning away from free markets</span></strong>, <strong><span style="font-size:180%;color:#000099;">while commission President Jose Manuel Barroso extolled the virtues of public intervention and the European welfare state model built at the end of World War Two.
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<br /><strong><span style="font-size:180%;color:#000099;">The European 'social market' model has been celebrated by President Barroso (Photo: wikipedia)</span></strong>
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<br /><div align="justify">"In the wake of the financial crisis, voices from the left and right are equating the free enterprise system with greed and exploitation and failure," said the US leader in a speech on Friday (14 November) at the Federal Hall National Memorial.</div>
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<br /><div align="justify">He conceded that there had been failures, but the blame for these should be pinned on borrowers, financial firms and regulators, not capitalism.
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<br /><div align="justify">"But the crisis was not a failure of the free market system," he said.
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<br /><div align="justify">"And the answer is not to try to reinvent that system. It is to fix the problems we face, make the reforms we need, and move forward with the free market principles that have delivered prosperity and hope to people all across the globe."</div>
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<br /><div align="justify"><strong><span style="color:#ff0000;">Mr Barroso, himself a conservative</span></strong>, <strong><span style="font-size:180%;">[IS THIS A JOKE?? A 'CONSERVATIVE' WHAT??]</span></strong> said that <strong><em><span style="font-size:180%;color:#000099;">the US has had to catch up with the European lead on all major global issues</span></em></strong> <strong><span style="font-size:180%;">[??] </span></strong>and now the US is behind on what is necessary to fix the world economy.</div>
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<br /><div align="justify"><strong><span style="font-size:180%;">[DEAR MR. BARROSO, YOU SEEM TO MISUNDERSTAND. THE UNITED STATES DOES NOT WISH TO DRIVE ITSELF OFF THE ECONOMIC AND TECHNOLOGICAL CLIFF, AS DOES EUROPE. YES, WE HAVE PROBLEMS WITH THE LAISSEZ FAIRE FORM OF CAPITALISM THAT HAS SERVED OUR NATION EXTREMELY WELL SINCE ITS BIRTH. BUT, OUR SYSTEM, UNLIKE THE BUREAUCRATIZED EUROPEAN 'SOCIAL-MARKET' CAPITALIST SYSTEM, IS FLEXIBLE ENOUGH TO APPEAL TO, INSPIRE & BENEFIT <em>ALL</em> CITIZENS WILLING TO WORK AND TAKE ADVANTAGE OF OPPORTUNITIES. BY CONTRAST, EUROPE'S ELITIST RENT-SEEKING 'SOFT' SOCIALISM WORKS FOR THE BENEFIT OF ONLY THOSE IN POSITIONS OF 'AUTHORITY' - THE <em>'INTELLECTUALS'</em>.]</span></strong> </div>
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<br /><em><strong><span style="font-size:130%;color:#000099;">"When our American friends now are ready to embrace a real commitment to fight climate change, this is exactly what we are been saying and promoting for some time. When our American partners are saying they want to engage more in a multilateral world, this is exactly what the EU has been saying and promoting for some time. When our American partners now are saying they should put some rules in a financially unpredictable, sometimes unregulated market, this is exactly what the EU has been supporting for some time,"</span></strong></em> he told a European Network of Foundations conference on democracy promotion in Brussels today. </div>
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<br />"When our American friends now are saying that they should find some ways of promoting some public tools, some public systems, in terms of social security, public education, <strong><span style="font-size:130%;color:#000099;">this is exactly what we Europeans have been doing at least since the end of the Second World War, with the development of our social market economy,"</span></strong> he said.</div>
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<br /><div align="justify"><strong><span style="font-size:180%;">[MR. BARROSO EXTOLS THE VIRTUES OF THE EUROPEAN 'WELFARE STATE'.]</span></strong></div>
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<br /><strong><span style="font-size:130%;">Global governance</span></strong>
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<br /><div align="justify"><strong><span style="font-size:180%;color:#000099;">European political parties, businesses, and NGOs too have all laid out what they hope to see agreed to.</span></strong></div>
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<br /><div align="justify">The national chambers of commerce from each of the G20 countries issued a joint declaration calling on world leaders to agree to strengthened national and international supervisory structures and improve the quality of regulatory standards, but warned governments against raising tariffs and protectionism.
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<br />"The World Trade Organisation should be taken as a positive example of global governance," the 20 chambers said in a statement.
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<br /><div align="justify"><strong><span style="font-size:180%;color:#ff0000;"><a href="http://upload.wikimedia.org/wikipedia/en/thumb/4/45/PES_logo.svg/151px-PES_logo.svg.png"><img style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 151px; CURSOR: hand; HEIGHT: 189px" alt="" src="http://upload.wikimedia.org/wikipedia/en/thumb/4/45/PES_logo.svg/151px-PES_logo.svg.png" border="0" /></a>Meanwhile, the Socialist grouping in the European Parliament on Thursday issued a five-point plan from Manchester where their MEPs had been having a strategising pow-wow, for a rebuilding of the world financial system and how to boost the economy. </span></strong></div>
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<br /><strong><span style="font-size:180%;color:#ff0000;">Their "Manchester Declaration", is a largely Keynesian document, calling for a European green investment package to put money in people's pockets and make the shift to a low-carbon economy, targetting in particular vulnerable households and small businesses.
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<br /><div align="justify"><strong><span style="font-size:180%;color:#ff0000;">The left-of-centre MEPs call for much greater levels of intergovernmental co-ordination and public spending.</span></strong></div>
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<br /><div align="justify"><strong><span style="font-size:180%;color:#ff0000;">"The European Union has a key role to play in raising and channelling funds. There should be no taboo," said French Socialist MEP Pervenche Berès, chair of the European Parliament's economic and monetary affairs committee.</span></strong> "The member states should discuss the possibility of the EU issuing Eurobonds to invest in European projects."</div>
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<br /><strong><span style="font-size:130%;">Priming the global pump </span></strong>
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<br /><div align="justify"><strong><span style="font-size:180%;color:#ff0000;">UK premier Gordon Brown</span></strong>, who is likely to play a prominent role in the G20 discusions, having been the architect of the bail-out packages adopted in part or in whole by other EU capitals that saved their banks from a complete credit crunch.</div>
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<br /><strong><span style="font-size:180%;color:#ff0000;"><a href="http://www.ena.lu/obj/photo/vfp/obj04118.jpg"><img style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 111px; CURSOR: hand; HEIGHT: 128px" alt="" src="http://www.ena.lu/obj/photo/vfp/obj04118.jpg" border="0" /></a>However, despite his also being a member of the Socialist political family</span></strong>, he is expected at the summit to emphasise the need for co-ordinated global tax cuts to prime the global economic pump, although he also supports government spending increases.</div>
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<br /></div><div align="justify">"We need to agree on the importance of co-ordination of monetary and fiscal policy," he said before heading to Washington.</div>
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<br />"There is a need for urgency. By acting now, we can stimulate growth in all our economies. The cost of inaction will be far greater than the cost of any action."</div><div align="justify">
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<br />The Labour prime minister has also repeatedly warned against new "over-regulation" in response to the crisis. Nevertheless, <strong><span style="font-size:180%;color:#ff0000;">Mr Brown is also pushing for international oversight of the world's top 30 banks by a college of supervisors</span></strong>. </div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify">In a curious twist of fate, <strong><span style="font-size:180%;"><span style="color:#ff0000;">French President Sarkozy, who, being of the conservative UMP party, has been perhaps the most dirigiste of EU leaders in the solutions he has embraced both at the European level and what he hopes to see the G20 endor</span><span style="color:#ff0000;">se.</span></span></strong></div>
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<br /><strong><span style="font-size:180%;color:#ff0000;">Mr Sarkozy</span></strong>, who currently chairs the EU's six-month rotating presidency, <strong><span style="font-size:180%;color:#ff0000;">will argue for the development of cross-border regulation of financial institution lending practices and investment decisions. </span></strong></div>
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<br /><strong><span style="font-size:180%;color:#ff0000;">On Thursday he also used the opportunity of the lead-up to the summit to deliver an obituary for the US dollar as a world currency.</span></strong></div>
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<br /><strong><span style="font-size:180%;">"I am leaving tomorrow for Washington to explain that the dollar</span></strong> - which after the Second World War under Bretton Woods was the only currency in the world - <strong><span style="font-size:180%;">can no longer claim to be the only currency in the world. What was true in 1945 cannot be true today," he said.</span></strong></div>
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<br />While <strong><span style="font-size:180%;color:#ff0000;">Germany</span></strong> put up one of the main blocks to French plans for the development of a common European stimulus package at a summit of EU leaders last week, <strong><span style="font-size:180%;color:#ff0000;">Chancellor Angela Merkel supports Mr Sarkozy's wish to see regulation of hedge funds and an end to excessive remuneration for bank executives. </span></strong></div>
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<br />However, despite their differences, the EU leaders head to Washington united on a plan of action they are to take to the meeting that would see greater transparency of financial transactions through revised accounting standards, the construction of an early warning system to tackle risks and a central role for the International Monetary Fund (IMF) "in a more efficient financial architecture." </div>
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<br />Many aspects of the European plan are likely to meet resistance from President Bush, who remains unconvinced that deregulation of financial markets had any role to play in the crash. </div>
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<br />Thus while Brussels is impatient that action be taken urgently to deal with the crisis, in many ways does not expect much from this first summit, and <strong><span style="font-size:180%;color:#3333ff;">the French EU presidency has called for a second G20 summit to be held next February in order to involve the Democractic president-elect, Barack Obama</span></strong>, who will only send former Clinton Administration secretary of state <strong><span style="font-size:180%;color:#3333ff;">Madeleine Albright and and former Iowa Congressman Jim Leach</span></strong> to the Washington meeting.</div>
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<br /><strong><span style="font-size:130%;">G20 undemocratic, say NGOs</span></strong>
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<br /><div align="justify"><strong><span style="font-size:180%;color:#ff0000;">Development NGOs nevertheless believe that the transatlantic differences are largely superficial, as all G20 leaders, from centre-left to centre-right, have long been convinced of the need for ever greater market liberalisation, if not all to the same degree. </span></strong></div>
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<br /><div align="justify"><strong><span style="font-size:180%;">[OF COURSE THEY DO!! IF AMERICANS BUY-INTO THIS NONSENSE, THEN BOTH EUROPE & THE UNITED STATES WILL BE PASSENGERS IN THE SAME HOLE-RIDDEN BOAT - A MODERN DAY ECONOMIC & POLITICAL TITANIC NAMED THE <span style="color:#ff0000;">S.S. SOCIALISTA</span>! THIS IS WHAT THE OVER-REGULATION & TAXATION-BESEIGED INDUSTRIES IN EUROPE HAVE LONG LOBBIED FOR - A 'LEVELING OF THE GLOBAL ECONOMIC PLAYING FIELD'. AND, NOW, MANY U.S. MULTINATIONAL COMPANIES THAT SUFFER FROM 'POLITICAL & REGULATORY FATIGUE' AS THE RESULT OF ONGOING TRANSATLANTIC TENSIONS AND THE 2008 U.S. PRESIDENTIAL ELECTION RESULT, ARE FINALLY 'CRYING UNCLE' AND GIVING INTO EUROPE'S LEGALISTIC 'FULL COURT PRESS', WITHOUT REGARD OF THE NEGATIVE IMPACTS FOR THE MILLIONS OF SMALL & MEDIUM-SIZED BUSINESSES ON BOTH SIDES OF THE ATLANTIC, WHICH WILL BE SWEPT UP IN THIS <em><span style="color:#ff0000;">SOCIALIST TSUNAMI!!</span></em>]</span></strong></div>
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<br />A coalition of 630 civil society organisations has criticised the meeting as undemocratic as 170 countries have not been invited even though the decisions reached by the G20 affect everyone. </div>
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<br /><div align="justify"><strong><span style="font-size:180%;color:#ff0000;">The groups are demanding that future global summits involved all goverments and that the United Nations be the convener, not the United States. They also want to see the engagement of citizens' groups and social movements and full transparency during all discussions. </span></strong></div>
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<br />They are particularly worried about giving the World Bank and the International Monetary Fund new powers.
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<br />"The policies of northern governments, the World Bank and the International Monetary Fund pursued for the past thirty years have failed spectacularly," said Vitalis Meja with Afrodad.
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<br /><div align="justify"><strong><span style="font-size:180%;color:#ff0000;">"And now, the response is to bring 20 governments to DC for a new ‘Washington Consensus'." </span></strong><strong><span style="font-size:180%;color:#ff0000;"></div></span></strong><span style="font-size:100%;"></span>
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<br /><span style="color:#33ff33;">Friends of the Earth</span> and the Jubilee Debt campaign criticised the positions of all the leaders heading into the summit.
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<br /></span></strong></span></strong><div align="justify">"While those that created the crisis have been bailed out (bonus intact) with unprecedented sums of taxpayer money, the poor in developed and developing nations have received nothing," they said in a statement. </div><div align="justify">
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<br /><strong><span style="color:#ff0000;">"Let's call time on global greed," they continued. "The same systems that create poverty here – unfair trade rules and tax systems, debt burdens, privatisation and attacks on welfare spending – also create poverty in the developing world."</span></strong></div>
<br /><em>© 2008 EUobserver.com. All rights reserved.
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<br /><a href="http://www.socialistgroup.org/gpes/newsdetail.do?lg=en&id=103648&href=home">http://www.socialistgroup.org/gpes/newsdetail.do?lg=en&id=103648&href=home</a>
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<br /><strong><span style="font-size:130%;">THE SOCIALIST GROUP IN THE EUROPEAN PARLIAMENT </span></strong>
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<br /><div align="justify"><strong><em><span style="font-size:130%;color:#ff0000;">Socialists set out five-point plan to beat recession. Said Socialist Group leader Martin Schulz today: ”We support the call for a new Bretton Woods to create a new, more accountable, more stable and fairer system of global financial governance.</span></em></strong> </div>
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<br /><div align="justify">13/11/2008 - Socialists set out five-point plan to beat recession.</div>
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<br /><div align="justify">In response to the official recognition of recession in the EU today, <strong><span style="font-size:180%;color:#ff0000;">Socialist Euro MPs today set out a five-point plan to rebuild the world financial system and boost the economy.</span></strong></div><div align="justify">
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<br /><strong><span style="font-size:180%;color:#ff0000;">The Group, which has been holding talks in Manchester, UK, this week, issued a three-page Manchester Declaration on the financial crisis.
<br /></span></strong></div><div align="justify"></div><div align="justify"><strong><span style="font-size:180%;color:#000099;">The declaration, published after discussions by video-conference with EU Commissioner Joaquim Almunia</span></strong>, sets out a five-point action plan for the EU. <strong><span style="font-size:180%;color:#ff0000;">It builds on a policy position adopted last week by prime ministers and party leaders of the Party of European Socialists, led by former Danish premier Poul Nyrup Rasmussen. </span></strong></div>
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<br /><strong><span style="font-size:180%;color:#ff0000;">Said Socialist Group leader Martin Schulz today:”We support the call for a new Bretton Woods to create a new, more accountable, more stable and fairer system of global financial governance.
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<br /><div align="justify">“We face the deepest economic crisis in 80 years with dramatic job losses. In addition, more than 150 million jobs may disappear next year throughout the developing world, as a result of the rich world’s credit crunch. Governments have saved the banks with public money but it is now pay-back time.” </div>
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<br /><strong><span style="font-size:130%;color:#000099;"><a href="http://www.p2pon.com/wp-content/uploads/image/news-pics/European-Parliament-logo.jpg"><img style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 180px; CURSOR: hand; HEIGHT: 135px" alt="" src="http://www.p2pon.com/wp-content/uploads/image/news-pics/European-Parliament-logo.jpg" border="0" /></a>Said Pervenche Berès, chairwoman of the European Parliament’s economic and monetary affairs committee:</span></strong> <strong><span style="font-size:130%;color:#ff0000;">“Only strong, coordinated government action both at European and international level can restore confidence, secure and create more jobs, fill order books, and boost demand from both business and consumers.</span></strong> The more coordinated such actions are, the more effective they will be. </div>
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<br />“The European Union has a key role to play in raising and channelling funds. There should be no taboo. The member states should discuss the possibility for the EU to issue Eurobonds to invest in European projects.” </div>
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<br /><strong><em><span style="color:#ff0000;">The Socialist Group called on its member parties across the 27-nation EU to take on board the substance of the Manchester Declaration.</span></em></strong> </div>
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<br />Calling for strong European and international coordination, the Declaration urges: </div>
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<br /><ul><li><strong><span style="font-size:180%;color:#ff0000;">Targeting measures to help on those who need it most and in particular small firms and vulnerable households. This will involve rapidly restoring levels of lending to households and businesses, especially SMEs</span></strong>
<br /></li></ul><p align="justify"><strong><span style="font-size:180%;">[THIS SOUNDS VERY SIMILAR TO <span style="color:#3333ff;">OBAMA'S 'SPREADING THE WEALTH' DOCTRINE</span>!!]</span></strong></p>
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<br /><ul><li><div align="justify"><strong><span style="font-size:180%;color:#ff0000;">A European ban on mega-bonuses and golden parachutes;</span></strong>
<br /></div></li></ul><p align="justify"></p><div align="justify"><strong><span style="font-size:180%;">[OUTSIDE THE CONTEXT OF ANY GOVERNMENTAL 'BAILOUT' OF PRIVATE COMPANIES AS A RESULT OF OR INCIDENT TO THE GLOBAL FINANCIAL CRISIS, THIS REFLECTS AN INTRUSION OF GOVERNMENT INTO CORPORATE GOVERNANCE AFFAIRS, AND THE PRIVATE RIGHT TO FREEDOM OF CONTRACT].</span></strong></div>
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<br /><ul><li>Refusal of compulsory redundancies <strong><span style="font-size:180%;">[??]</span></strong>
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<br /></li><li><strong><span style="font-size:180%;color:#33ff33;">Implementation of a European Green Investment package to boost the economy</span></strong>, avoid a long-lasting recession and help Europe to meets its climate and energy goals</li></ul><p>
<br /></p><ul><li>Revival of the Doha world trade talks to reach successful, development-friendly conclusions.</li></ul>
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<br /><p align="justify"><strong><span style="font-size:180%;">[THIS SOUNDS VERY SIMILAR TO <span style="color:#3366ff;">THE UNITED NATIONS & <span style="color:#3333ff;">U.S. DEMOCRATIC PARTY'S 'NEW GREEN DEAL' AND TO OBAMA'S PLEDGE</span> <span style="color:#33ff33;">OF PROVIDING "5 MILLION NEW GREEN JOBS"</span>!!]</span></span></strong></p><p>
<br />Solange Hélin Villes <a href="mailto:solange.helin@europarl.europa.eu">solange.helin@europarl.europa.eu</a>+ 32 2 283 21 47 + 32 476 51 01 72 <a href="http://www.socialistgroup.eu/">http://www.socialistgroup.eu/</a></p><p>------------------------------------------------------------------------------------------------</p><div align="justify"><a href="http://www.whitehouse.gov/news/releases/2008/11/20081113-4.html">http://www.whitehouse.gov/news/releases/2008/11/20081113-4.html</a></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"><strong><span style="font-size:130%;">President Bush Discusses Financial Markets and World Economy</span></strong> </div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify">Federal Hall National Memorial</div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify">New York, New York </div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify">November 13, 2008</div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify">THE PRESIDENT: Thank you very much. Please be seated. Thank you. Larry, thank you for the introduction. Thank you for giving Laura and me a chance to come to this historic hall to talk about a big issue facing the world. And today I appreciate you giving me a chance to come and for me to outline the steps that America and our partners are taking and are going to take to overcome this financial crisis. </div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify">And I thank the Manhattan Institute for all you have done. I appreciate the fact that I am here in a fabulous city to give this speech. (Applause.) People say, are you confident about our future? And the answer is, absolutely. And it's easy to be confident when you're a city like New York City. After all, there's an unbelievable spirit in this city. This is a city whose skyline has offered immigrants their first glimpse of freedom. This is a city where people rallied when that freedom came under attack. This is a city whose capital markets have attracted investments from around the world and financed the dreams of entrepreneurs all across America. This is a city that has been and will always be the financial capital of the world. (Applause.) </div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /></div><div align="justify">And I am grateful to be in the presence of two men who serve ably and nobly New York City -- Mayor Koch and Mayor Giuliani. Thank you all for coming. Glad you're here. (Applause.) I thank the Manhattan Institute Board of Trustees and its Chairman Paul Singer for doing good work, being a good policy center. (Applause.) And before I begin, I must say, I would hope that Ray Kelly would tell New York's finest how much I appreciate the incredible hospitality that we are always shown here in New York City. You're the head of a fabulous police force, and we thank you very much, sir. (Applause.) </div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /></div><div align="justify">We live in a world in which our economies are interconnected. Prosperity and progress have reached farther than any time in our history. Unfortunately, as we have seen in recent months, financial turmoil anywhere in the world affects economies everywhere in the world. And so this weekend I'm going to host a Summit on Financial Markets and the World Economy with leaders from developed and developing nations that account for nearly 90 percent of the world economy. Leaders of the World Bank, the International Monetary Fund, the United Nations, and the Financial Stability Forum are going to be there, as well. We'll have dinner at the White House tomorrow night, and we'll meet most of the day on Saturday. </div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /></div><div align="justify">The leaders attending this weekend's meeting agree on a clear purpose -- to address the current crisis, and to lay the foundation for reforms that will help prevent a similar crisis in the future. We also agree that this undertaking is too large to be accomplished in a single session. The issues are too complex, the problem is too significant to try to solve, or to come up with reasonable recommendations in just one meeting. So this summit will be the first of a series of meetings. </div><div align="justify"></div><div align="justify"></div><div align="justify">It will focus on five key objectives: understanding the causes of the global crisis, reviewing the effectiveness of our responses thus far, developing principles for reforming our financial and regulatory systems, launching a specific action plan to implement those principles, <strong><span style="font-size:180%;">and reaffirming our conviction that free market principles offer the surest path to lasting prosperity</span></strong>. (Applause.) </div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify">First, we're working toward a common understanding of the causes behind the global crisis. Different countries will naturally bring different perspectives, but <strong><span style="font-size:180%;">there are some points on which we can all agree: </span></strong></div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /><em><span style="font-size:130%;color:#990000;"><strong></strong></span></em></div><div align="justify"><em><span style="font-size:130%;color:#990000;"><strong>Over the past decade, the world experienced a period of strong economic growth. Nations accumulated huge amounts of savings, and looked for safe places to invest them. Because of our attractive political, legal, and entrepreneurial climates, the United States and other developed nations received a large share of that money. </strong></span></em></div><div align="justify"><em><span style="font-size:130%;color:#990000;"><strong></strong></span></em></div><div align="justify"></div><div align="justify">
<br /><em><span style="font-size:130%;color:#990000;"><strong></strong></span></em></div><div align="justify"><em><span style="font-size:130%;color:#990000;"><strong>The massive inflow of foreign capital, combined with low interest rates, produced a period of easy credit. And that easy credit especially affected the housing market. Flush with cash, many lenders issued mortgages and many borrowers could not afford them. Financial institutions then purchased these loans, packaged them together, and converted them into complex securities designed to yield large returns. These securities were then purchased by investors and financial institutions in the United States and Europe and elsewhere -- often with little analysis of their true underlying value.</strong> </span></em></div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /><span style="color:#990000;"><em><strong><span style="font-size:130%;"></span></strong></em></span></div><div align="justify"><span style="color:#990000;"><em><strong><span style="font-size:130%;">The financial crisis was ignited when booming housing markets began to decline. As home values dropped, many borrowers defaulted on their mortgages, and institutions holding securities backed by those mortgages suffered serious losses. Because of outdated regulatory structures and poor risk management practices, many financial institutions in America and Europe were too highly leveraged. When capital ran short, many faced severe financial jeopardy. This led to high-profile failures of financial institutions in America and Europe, led to contractions and widespread anxiety -- all of which contributed to sharp declines in the equity markets.</span></strong></em> </span></div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /></div><div align="justify">These developments have placed a heavy burden on hardworking people around the world. Stock market drops have eroded the value of retirement accounts and pension funds. The tightening of credit has made it harder for families to borrow money for cars or home improvements or education of the children. Businesses have found it harder to get loans to expand their operations and create jobs. Many nations have suffered job losses, and have serious concerns about the worsening economy. Developing nations have been hit hard as nervous investors have withdrawn their capital. </div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify">We are faced with the prospect of a global meltdown. And so we've responded with bold measures. <strong><span style="font-size:180%;">I'm a market-oriented guy, but not when I'm faced with the prospect of a global meltdown.</span></strong> At Saturday's summit, we're going to review the effectiveness of our actions. </div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify">Here in the United States, we have taken unprecedented steps to boost liquidity, recapitalize financial institutions, guarantee most new debt issued by insured banks, and prevent the disorderly collapse of large, interconnected enterprises. These were historic actions taken necessary to make -- necessary so that the economy would not melt down and affect millions of our fellow citizens. </div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /></div><div align="justify">In Europe, governments are also purchasing equity in banks and providing government guarantees for loans. In Asia, nations like China and Japan and South Korea have lowered interest rates and have launched significant economic stimulus plans. In the Middle East, nations like Kuwait and the UAE have guaranteed deposits and opened up new government lending to banks. </div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /></div><div align="justify">In addition, nations around the world have taken unprecedented joint measures. Last month, a number of central banks carried out a coordinated interest rate cut. The Federal Reserve is extending needed liquidity to central banks around the world. The IMF and World Bank are working to ensure that developing nations can weather this crisis. </div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /></div><div align="justify">This crisis did not develop overnight, and it's not going to be solved overnight. But our actions are having an impact. Credit markets are beginning to thaw. Businesses are gaining access to essential short-term financing. A measure of stability is returning to financial systems here at home and around the world. It's going to require more time for these improvements to fully take hold, and there's going to be difficult days ahead. But the United States and our partner are taking the right steps to get through this crisis. </div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /><em><strong><span style="font-size:130%;color:#660000;">In addition to addressing the current crisis, we will also need to make broader reforms to strengthen the global economy over the long term. This weekend, leaders will establish principles for adapting our financial systems to the realities of the 21st century marketplace. We will discuss specific actions we can take to implement these principles. We will direct our finance ministers to work with other experts and report back to us with detailed recommendations on further reasonable actions.</span></strong></em> </div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /><strong><em><span style="font-size:130%;color:#660000;"></span></em></strong></div><div align="justify"><strong><em><span style="font-size:130%;color:#660000;">One vital principle of reform is that our nations must make our financial markets more transparent. For example, we should consider improving accounting rules for securities, so that investors around the world can understand the true value of the assets they purchase. </span></em></strong></div><div align="justify"><strong><em><span style="font-size:130%;color:#660000;"></span></em></strong></div><div align="justify"></div><div align="justify">
<br /><strong><em><span style="font-size:130%;color:#660000;"></span></em></strong></div><div align="justify"><strong><em><span style="font-size:130%;color:#660000;">Secondly, we must ensure that markets, firms, and financial products are properly regulated. For example, credit default swaps -- financial products that insure against potential losses -- should be processed through centralized clearinghouses instead of through unregulated, "over the counter" markets. By bringing greater stability to this large and important financial sector, we reduce the risk to our overall financial systems. </span></em></strong></div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /><strong><em><span style="font-size:130%;color:#660000;"></span></em></strong></div><div align="justify"><strong><em><span style="font-size:130%;color:#660000;">Third, we must enhance the integrity of our financial markets. For example, authorities in every nation should take a fresh look at the rules governing market manipulation and fraud -- and ensure that investors are properly protected. </span></em></strong></div><div align="justify"><strong><em><span style="font-size:130%;color:#660000;"></span></em></strong></div><div align="justify"></div><div align="justify">
<br /><strong><em><span style="font-size:130%;color:#660000;"></span></em></strong></div><div align="justify"><strong><em><span style="font-size:130%;color:#660000;">Fourth, we must strengthen cooperation among the world's financial authorities. For example, leading nations should better coordinate national laws and regulations. We should also reform international financial institutions such as the IMF and the World Bank, which are based largely on the economic order of 1944. To better reflect the realities of today's global economy, both the IMF and World Bank should modernize their governance structures. They should consider extending greater voter -- voting power to dynamic developing nations, especially as they increase their contributions to these institutions. They should consider ways to streamline their executive boards, and make them more representative. </span></em></strong></div><div align="justify"><strong><em><span style="font-size:130%;color:#660000;"></span></em></strong></div><div align="justify"></div><div align="justify">
<br /><strong><em><span style="font-size:130%;color:#660000;"></span></em></strong></div><div align="justify"><strong><em><span style="font-size:130%;color:#660000;">In addition to these important -- to these management changes, we should move forward with other reforms to make the IMF and World Bank more transparent, accountable, and effective. For example, the IMF should agree to work more closely with member countries to ensure that their exchange rate policies are market-oriented and fair. And the World Bank should ensure its development programs reflect the priorities of the people they are designed to serve -- and focus on measurable results.</span></em></strong> </div><div align="justify"></div><div align="justify">
<br /></div><div align="justify">All these steps require decisive actions from governments around the world. At the same time, <strong><span style="font-size:180%;">we must recognize that government intervention is not a cure-all. For example, some blame the crisis on insufficient regulation of the American mortgage market. But <span style="color:#000099;">many European countries had much more extensive regulations, and still experienced problems almost identical to our own.</span> </span></strong></div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /><strong><span style="font-size:180%;"></span></strong></div><div align="justify"><strong><span style="font-size:180%;">History has shown that the greater threat to economic prosperity is not too little government involvement in the market, it is too much government involvement in the market. (Applause.)</span></strong></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify">We saw this in the case of Fannie Mae and Freddie Mac. Because these firms were chartered by the United States Congress, many believed they were backed by the full faith and credit of the United States government. Investors put huge amounts of money into Fannie and Freddie, which they used to build up irresponsibly large portfolios of mortgage-backed securities. And when the housing market declined, these securities, of course, plummeted in value. It took a taxpayer-funded rescue to keep Fannie and Freddie from collapsing in a way that would have devastated the global financial system. And <strong><span style="font-size:180%;">there is a clear lesson: Our aim should not be more government -- it should be smarter government. </span></strong></div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /></div><div align="justify">All this leads to the most important principle that should guide our work: While reforms in the financial sector are essential, <strong><span style="font-size:180%;">the long-term solution to today's problems is sustained economic growth. And the surest path to that growth is free markets and free people.</span></strong> (Applause.) </div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /><strong><span style="font-size:180%;">This is a decisive moment for the global economy. In the wake of the financial crisis, voices from the left and right are equating the free enterprise system with greed and exploitation and failure. It's true this crisis included failures -- by lenders and borrowers and by financial firms and by governments and independent regulators. But the crisis was not a failure of the free market system. And the answer is not to try to reinvent that system. It is to fix the problems we face, make the reforms we need, and move forward with the free market principles that have delivered prosperity and hope to people all across the globe. </span></strong></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /><strong><span style="font-size:180%;"><em><span style="color:#990000;">Like any other system designed by man, capitalism is not perfect. It can be subject to excesses and abuse. But it is by far the most efficient and just way of structuring an economy.</span></em> At its most basic level, capitalism offers people the freedom to choose where they work and what they do, the opportunity to buy or sell products they want, and the dignity that comes with profiting from their talent and hard work. The free market system provides the incentives that lead to prosperity -- the incentive to work, to innovate, to save, to invest wisely, and to create jobs for others. And as millions of people pursue these incentives together, whole societies benefit. </span></strong></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /><strong><span style="font-size:180%;"><em><span style="color:#990000;">Free market capitalism is far more than economic theory. It is the engine of social mobility</span></em> -- the highway to the American Dream. It's what makes it possible for a husband and wife to start their own business, or a new immigrant to open a restaurant, or a single mom to go back to college and to build a better career. It is what allowed entrepreneurs in Silicon Valley to change the way the world sells products and searches for information. It's what transformed America from a rugged frontier to the greatest economic power in history -- a nation that gave the world the steamboat and the airplane, the computer and the CAT scan, the Internet and the iPod. </span></strong></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /><strong><span style="font-size:180%;"><em><span style="color:#990000;">Ultimately, the best evidence for free market capitalism is its performance compared to other economic systems.</span></em> Free markets allowed Japan, an island with few natural resources, to recover from war and grow into the world's second-largest economy. Free markets allowed South Korea to make itself into one of the most technologically advanced societies in the world. Free markets turned small areas like Singapore and Hong Kong and Taiwan into global economic players. Today, the success of the world's largest economies comes from their embrace of free markets. </span></strong></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /><strong><span style="font-size:180%;color:#ff0000;">Meanwhile, nations that have pursued other models have experienced devastating results. Soviet communism starved millions, bankrupted an empire, and collapsed as decisively as the Berlin Wall. Cuba, once known for its vast fields of cane, is now forced to ration sugar. And while Iran sits atop giant oil reserves, its people cannot put enough gasoline in its -- in their cars. </span></strong></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /><strong><span style="font-size:180%;"><em><span style="color:#990000;">The record is unmistakable: If you seek economic growth, if you seek opportunity, if you seek social justice and human dignity, the free market system is the way to go.</span></em> (Applause.) And it would be a terrible mistake to allow a few months of crisis to undermine 60 years of success. </span></strong></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /><strong><span style="font-size:180%;">Just as important as maintaining free markets within countries is maintaining the free movement of goods and services between countries. When nations open their markets to trade and investment, their businesses and farmers and workers find new buyers for their products. Consumers benefit from more choices and better prices.</span></strong> Entrepreneurs can get their ideas off the ground with funding from anywhere in the world. Thanks in large part to open markets, the volume of global trade today is nearly 30 times greater than it was six decades ago -- and some of the most dramatic gains have come in the developing world. </div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify">
<br />As President, I have seen the transformative power of trade up close. I've been to a Caterpillar factory in East Peoria, Illinois, where thousands of good-paying American jobs are supported by exports. I've walked the grounds of a trade fair in Ghana, where I met women who support their families by exporting handmade dresses and jewelry. I've spoken with a farmer in Guatemala who decided to grow high-value crops he could sell overseas -- and helped create more than 1,000 jobs. </div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify">
<br />Stories like these show why it is so important to keep markets open to trade and investment. This openness is especially urgent during times of economic strain. Shortly after the stock market crash in 1929, Congress passed the Smoot-Hawley tariff -- a protectionist measure designed to wall off America's economy from global competition. The result was not economic security. It was economic ruin. <strong><em><span style="font-size:180%;color:#990000;">And leaders around the world must keep this example in mind, and reject the temptation of protectionism.</span></em></strong> (Applause.) </div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify">
<br /><strong><span style="font-size:180%;">There are clear-cut ways for nations to demonstrate the commitment to open markets. The United States Congress has an immediate opportunity by approving free trade agreements with Colombia, Peru*, and South Korea. America and other wealthy nations must also ensure this crisis does not become an excuse to reverse our engagement with the developing world. And developing nations should continue policies that foster enterprise and investment. As well, all nations should pledge to conclude a framework this year that leads to a successful Doha agreement. </span></strong></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify">
<br />We're facing this challenge together and we're going to get through it together. <strong><span style="font-size:130%;">The United States is determined to show the way back to economic growth and prosperity. I know some may question whether America's leadership in the global economy will continue. The world can be confident that it will, because our markets are flexible and we can rebound from setbacks. We saw that resilience in the 1940s, when America pulled itself out of Depression, marshaled a powerful army, and helped save the world from tyranny. We saw that resilience in the 1980s, when Americans overcame gas lines, turned stagflation into strong economic growth, and won the Cold War. We saw that resilience after September the 11th, 2001, when our nation recovered from a brutal attack, revitalized our shaken economy, and rallied the forces of freedom in the great ideological struggle of the 21st century.</span></strong>
<br /></div><div align="justify"></div><div align="justify"></div><div align="justify"></div><div align="justify">The world will see the resilience of America once again. We will work with our partners to correct the problems in the global financial system. We will rebuild our economic strength. And we will continue to lead the world toward prosperity and peace. </div><div align="justify"></div><div align="justify"></div><div align="justify">
<br />Thanks for coming and God bless. (Applause.) </div><div align="justify"></div><div align="justify">------------------------------------------------------------------------------------------------</div><div align="justify"></div><div align="justify"></div><div align="justify"><a href="http://network.nationalpost.com/np/blogs/fullcomment/archive/2008/11/14/207904.aspx">http://network.nationalpost.com/np/blogs/fullcomment/archive/2008/11/14/207904.aspx</a></div><div align="justify"></div><div align="justify"><strong>Can Bush and Flaherty save capitalism?</strong></div><div align="justify"></div><div align="justify"></div><div align="justify">By Peter Foster</div><div align="justify"></div><div align="justify">
<br />Canadian National Post</div><div align="justify"></div><div align="justify"></div><div align="justify">Posted: November 13, 2008, 9:19 PM by NP Editor </div><div align="justify"></div><div align="justify"></div><div align="justify"><strong><em>Antidote to Father d’Escoto’s ‘liberation theology’ at the UN</em></strong></div><div align="justify"></div><div align="justify"></div><div align="justify">It is encouraging that at least two key participants in this weekend’s G20 meetings in Washington have come out in favour of battered capitalism. Yesterday, <strong><span style="font-size:180%;">both President George W. Bush and Canadian Finance Minister Jim Flaherty declared that the current crisis did not represent a failure of markets.
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<br /><strong><em><span style="font-size:180%;">In a speech in New York, Mr. Bush even delivered a much needed paean for the easily forgotten achievements of economic freedom. Mr. Bush’s address to the Manhattan Institute might be dubbed “the speech John McCain never gave, but should have, and that Barack Obama never will.” </span></em></strong>He referred pointedly to the voices both from the left and right who were equating the crisis with “greed and exploitation.” They were, he suggested, very wrong.The Dow, as if picking up the president’s positive message, gained almost 1,000 points in the wake of the speech. That obviously wasn’t the only reason for the rally, but there’s no doubt that the market welcomes some respite from six months of relentless Wall Street and capitalism bashing.
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<br /><em><strong><span style="font-size:130%;"><span style="color:#ff0000;">Typical of anti-capitalist humbug were the noises emerging this week from a UN meeting on inter-faith tolerance</span> promoted by one of the most religiously intolerant regimes on earth, Saudi Arabia.
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<br /><strong><span style="font-size:180%;color:#ff0000;">One of its masterminds was the recently elected head of the UN General Assembly, Miguel d’Escoto Brockmann, a former Sandinista government official and perpetual proponent of rabid, anti-Western “liberation theology.” Señor d’Escoto kicked off the conference with towering condemnation of the West’s “unbridled greed.”</span></strong>
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<br /><strong><span style="font-size:130%;">“It is a time of numerous bankruptcies,” declared Father d’Escoto, “but the worst is the moral bankruptcy of humankind’s self-proclaimed ‘more advanced societies,’ which has spread throughout the world. It is not only Wall Street that needs to be bailed out. We need to bail out all of humankind from its social insensitivity.”</span></strong>
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<br /><strong><span style="font-size:180%;color:#ff0000;">Father d’Escoto’s social sensitivity is more than adequately attested to by the fact he is a past recipient of the Lenin Peace Prize (previously the Stalin Peace Prize).</span></strong> When he was elected head of the General Assembly, he declared, “I do not want to turn this presidency into a place to take it out on the United States.” But then since he had described Ronald Reagan as the “butcher of my people,” U.S. representatives were a little cynical of such professed even-handedness.
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<br /><strong><span style="font-size:130%;color:#ff0000;">Father d’Escoto has called for a more democratic UN, although we have to remember that his idea of democracy is of the one-way variety embraced by the former Sandinistas.
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<br /><strong><em><span style="font-size:130%;color:#ff0000;">The red cleric, it should be noted, appointed Maude Barlow as the UN’s special envoy for water. Upon her appointment, Ms. Barlow told the Wall Street Journal: “I don’t think I would have been offered a role there by anyone but someone like Father Miguel. He cares deeply about the poor.”
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<br />But not deeply enough, it seems, to reflect on why socialism has proved so disastrous for them. Mr. Bush’s speech yesterday was a welcome antidote to such drivel.
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<br />Although no Senator Obama — the new gold standard (if that’s not an oxymoronic term) for political rhetoric — Mr. Bush elicited enthusiastic applause several times when referring to the resilience and financial status of New York, and to how free market capitalism was “more than an economic theory.” It had been, he said, “the highway to the American dream.” It had produced the steamboat and the airplane, the computer and the CAT scan, the Internet and the iPod. It had worked wonders in other economies, from Japan and South Korea, through Singapore, Hong Kong and Taiwan. The United States, he also pointed out, had bounced back many times before; in the 1940s, in the 1980s — at the end of which it had won the Cold War — and after 9/11.
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<br />The President also delivered one very clear warning to his successor that a key policy response to the 1929 stock market crash had been the introduction of the disastrous Smoot-Hawley tariff, which had been designed to protect jobs but had served only to lengthen breadlines by destroying trade.
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<br /><strong><span style="font-size:130%;">Mr. Bush’s speech was more directly aimed at the world leaders he will be meeting over dinner tonight at the White House, and on Saturday, to discuss the financial crisis. He is obviously keen to ward off the assault of <span style="color:#ff0000;"><em>dirigistes such as French President Nicolas Sarkozy</em></span></span></strong>. Mr. Bush declared that G20 participants should reaffirm that “free-market principles offer the surest path to lasting prosperity.”
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<br />In a piece in the Financial Times (which you can also read on our site) meanwhile, <strong><span style="font-size:130%;color:#990000;">Mr. Flaherty too had rare kind words for the invisible hand, downplayed grand global financial architectural plans and suggested that reform — like charity — should begin at home. “The open market system did not fail in this crisis,” he said.
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<br /><em><strong><span style="font-size:130%;color:#990000;">When it comes to regulation, it seems, we have myriad examples of what doesn’t work, but in terms of bringing people out of poverty, in promoting innovation and even, as Mr. Bush suggested, “social justice,” there is no substitute for capitalism.</span></strong></em> It was inspiring to hear the President reaffirm that fact, and point out that the perpetual danger is not from too little government, but from too much, especially of the kind promoted down at Turtle Bay.
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<br /><em>Financial Post</em>
<br /></div><div align="justify">------------------------------------------------------------------------------------------------</div><div align="justify"></div><div align="justify"><a href="http://www.msnbc.msn.com/id/27698354">http://www.msnbc.msn.com/id/27698354</a>
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<br /><strong><span style="font-size:130%;">Bush makes case for the free markets</span></strong>
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<br /><em><strong><span style="font-size:130%;">Speech in advance of economic summit defends American capitalism
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<br />The Associated Press
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<br />updated 2:40 p.m. ET, Thurs., Nov. 13, 2008
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<br />NEW YORK - President George W. Bush asserted Thursday that <strong><span style="font-size:130%;color:#ff0000;">the global financial crisis is “not a failure of the free market” and urged world leaders to adopt modest financial reforms that stop short of the tighter regulations Europeans favor.
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<br /><strong><span style="font-size:180%;">“Our aim should not be more government. It should be smarter government,”</span></strong> Bush said during a speech in New York, a day before about two dozen world leaders converge on Washington for a weekend summit he is hosting.
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<br />Bush called on the leaders to embrace<strong><span style="font-size:180%;"> “reasonable” reforms</span></strong>, saying changes won’t work if they shun the free market system or restrict trade.
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<br />The president delivered <strong><span style="font-size:180%;">a vigorous defense of free-market capitalism and easier global trade</span></strong> to frame his approach to the high-level gathering. Bush invited representatives of some of the world’s biggest industrial democracies, emerging nations and international bodies to Washington to start developing a more coordinated world response to the economic woes that have millions of people struggling to keep their jobs, their homes and their hopes.
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<br />With the severe economic downturn threatening to end Bush’s tenure on a sour note before President-elect Barack Obama takes over, he will host the leaders at a White House dinner Friday and review causes and solutions for the financial mess Saturday.
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<br />It was fitting that Bush’s argument against regulatory overreach was delivered not in Washington but from the heart of Wall Street. He spoke at venerable Federal Hall, which was home to the first Congress and is within shouting distance of New York Stock Exchange.
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<br />Bush called for reforms to strengthen the global economy long-term and said leaders at this weekend’s meeting would “discuss specific actions we can take.”
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<br /><strong><span style="font-size:130%;">Among the areas for possible agreement, Bush listed:
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<br /><strong><span style="color:#990000;"> Bolstering accounting rules for stocks, bonds and other investments so investors have a clearer sense of the true value of what they buy.
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<br /> Requiring “credit default swaps” — a type of corporate debt insurance — to be processed through a central clearinghouse. That would help provide crucial information on the parties involved in these complex, unregulated products. Prices for this insurance soared in the aftermath of the Lehman Brothers’ bankruptcy and imperiled American International Group, a major insurer of this kind of corporate debt.
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<br /> Taking a fresh look at rules aimed at preventing fraud and manipulation in trading of stocks and other securities.
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<br /> Better coordinating financial regulations among countries.
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<br /> Giving a wider variety of countries voting power at the International Monetary Fund and the World Bank.
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<br /><strong><span style="font-size:130%;color:#3333ff;">Notably absent from his speech was any talk about what the U.S. might do to bail out the troubled auto industry or the debate over a second U.S. stimulus package</span></strong>.
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<br /><strong><span style="font-size:180%;color:#ff0000;">“The crisis was not a failure of the free market system,” Bush said. “And the answer is not to try to reinvent that system.”
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<br /><strong><span style="font-size:180%;">But Bush’s argument that “government intervention is not a cure-all” came as some critics think his administration already is overstepping in private markets.</span></strong> The federal dollars being spent or put on the line to rebuild the nation’s financial system could easily run into the trillions. Already the Bush administration has enacted a $700 financial rescue package, backed the purchase of investment bank Bear Stearns, bought stock in leading banks, engineered a government takeover of mortgage giants Fannie Mae and Freddie Mac, guaranteed money market fund holdings and funneled billions to stabilize troubled insurance giant American International Group.
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<br /><strong><span style="font-size:180%;color:#ff0000;">“I’m a market-oriented guy, but not when I’m faced with the prospect of a global meltdown,” Bush said.
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<br /><strong><span style="font-size:180%;color:#000099;">At the same time, the president aggressively defended the U.S. against charges from around the world that insufficient U.S. regulation led to the credit collapse worldwide.
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<br /><strong><span style="font-size:180%;color:#000099;">This was his way of pushing back against both the criticism and the calls by allies for more intrusive rules. Heading into the meeting, Europeans are seen as looking more urgently for broad changes and tighter universal banking regulations than is the United States.</span>
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<br /><strong><span style="font-size:180%;color:#ff0000;">“Many European countries had much more extensive regulations and still experienced problems almost identical to our own,” Bush said.
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<br />Some critics have said that <em><strong><span style="font-size:130%;">lax oversight by U.S. and other regulators failed to detect problems and respond with action that could have prevented the meltdown</span></strong>.</em> The crisis began with the collapse of the U.S. housing market, which froze credit, then shook the broader financial sector and finally rippled overseas.
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<br /><strong><span style="font-size:180%;color:#ff0000;">“History has shown that the greater threat to economic prosperity is not too little government involvement in the market, it is too much government involvement in the market,”</span></strong> he said. “It would a terrible mistake to allow a few months of crisis to undermine 60 years of success.”
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<br />Dan Price, Bush’s deputy national security adviser for international economic affairs, rejected suggestions of discord with other nations and said it was “grossly inaccurate” to suggest the U.S. was not taking a firm lead in reform.
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<br />“We are no less committed to fixing the problems, and addressing regulatory and other deficiencies, than any other leader,” he said.
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<br />While in New York, the president addressed a conference at the United Nations on religious tolerance and met privately with King Abdullah of Saudi Arabia.
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<br />The summit is just the first in a series intended to deal with the enormity of the economic meltdown, and the next meeting won’t be until after Bush leaves office on Jan. 20.
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<br />In the United States alone, the nation’s jobless ranks zoomed past 10 million last month, the most in a quarter-century, as 240,000 more people lost jobs. In the latest dire sign, American automakers say they are struggling to survive.
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<br />Obama is steering clear of the summit but will have a couple representatives available to meet with leaders on his behalf.
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<br />Besides the United States, the countries represented will be Argentina, Australia, Brazil, Britain, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea and Turkey. Those countries and the European Union make up the so-called G-20.
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<br /><em>Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.</em>
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<br /><a href="http://news.yahoo.com/s/ap/20081113/ap_on_go_pr_wh/meltdown_bush;_ylt=AjrVdiPB3rfRfgvsj0x2a34Gw_IE">http://news.yahoo.com/s/ap/20081113/ap_on_go_pr_wh/meltdown_bush;_ylt=AjrVdiPB3rfRfgvsj0x2a34Gw_IE</a>
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<br /><strong><span style="font-size:130%;">Bush defends capitalism on eve of economic summit</span></strong></div>
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<br />By BEN FELLER
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<br />Associated Press </div><div align="justify"></div><div align="justify"></div><div align="justify">November 13, 2008
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<br />NEW YORK – President George W. Bush fervently defended U.S.-style free enterprise Thursday as the cure for the world's financial chaos, not the cause. He warned foreign leaders ahead of a weekend summit not to crush global growth with restrictive new rules.
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<br />"We must recognize that <strong><span style="font-size:180%;color:#ff0000;">government intervention is not a cure-all</span></strong>," Bush said from Wall Street, setting his own tone for the two-day meeting that begins Friday in Washington seeking solutions to the economic crisis that has spread around the world. <strong><span style="font-size:180%;color:#ff0000;">"Our aim should not be more government. It should be smarter government."
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<br />The president acknowledged that <strong><span style="font-size:180%;">governments share the blame for the severe economic troubles that have hit banks, homes and whole countries</span></strong>.
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<br />He spelled out his prescription, which includes tougher accounting rules and more modern international financial institutions. But <strong><span style="font-size:130%;color:#cc0000;"><em>he stopped short of the tighter oversight and regulation that European leaders want. All his ideas came with a warning: </em></span></strong><span style="font-size:180%;color:#ff0000;"><strong>Don't disturb capitalism.
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<br />"In the wake of the financial crisis, voices from the left and right are equating the free enterprise system with greed, exploitation and failure," Bush said.
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<br /><strong><em><span style="font-size:180%;color:#ff0000;">"It is true that this crisis included failures, by leaders and borrowers, by financial firms, by governments and independent regulators," Bush said. "But the crisis was not a failure of the free market system. And the answer is not to try to reinvent that system."
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<br /><strong><span style="font-size:180%;color:#ff0000;">That warning about the dangers of too much government intervention came not long after he championed the biggest bailout in U.S. history: a $700 billion taxpayer-funded plan to rescue the financial industry. His government has also signed off on costly rescues for housing, insurance and other financial institutions.</span></strong>
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<br />The U.S. wields enormous clout in any global response to the economic crisis, and Bush is host for the weekend gathering, bringing together heads of state from the world's biggest economies as well as emerging nations. It is intended to be the first in a series.
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<br />But Bush's personal influence is waning.
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<br /><strong><span style="font-size:130%;color:#3333ff;">In about two months, Democrat Barack Obama will take over as president. Though the president-elect does not plan to attend this summit, he has authorized former Iowa Rep. Jim Leach and former Secretary of State Madeleine Albright to represent him</span></strong>. Obama's transition team says they will primarily be listeners on the periphery of the meetings.
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<br />The world leaders come to Washington with their own ideas for change. <strong><span style="font-size:180%;color:#000099;">French President Nicolas Sarkozy, British Prime Minister Gordon Brown and others are advocating a broader overhaul of financial regulations than Bush wants. The Europeans also want a pledge for concrete changes in just 100 days.
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<br /><strong><em><span style="font-size:130%;">The stated goal for this weekend is to examine the causes of the crisis and begin mapping out principles for a response.
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<br /><strong><span style="font-size:130%;color:#000099;">But Britain's Brown, on his way to the summit, declared, "There is a need for urgency."</span></strong></div>
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<br />It was fitting that Bush's argument against regulatory overreach was delivered not in Washington but on Wall Street. His speech venue was venerable Federal Hall, home to the first Congress and within shouting distance of the New York Stock Exchange.
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<br />There was freshly sobering news on the U.S. economy: The number of newly laid-off people seeking unemployment benefits jumped to a level not seen since just after the Sept. 11, 2001, terrorist attacks. Still the Dow Jones industrial average surged 553 points at the end of the trading day.
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<br />Some of Bush's admonitions raised questions about his own past actions, including last month's big bailout law.
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<br />Also, he is one of those voices from the right who railed about greed, saying in an unguarded moment in July that Wall Street "got drunk and now it's got a hangover."
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<br />On Thursday, he defended his administration against charges from some leaders that insufficient oversight and regulation in the U.S. contributed to — even caused — the mess by failing to raise alarms. Obama is among those who say no one was minding the people's business as the housing market plunged, credit markets ground to a halt and the broader financial system went into distress.
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<br />White House aides play down Bush's differences with other nations, saying the leaders have much in common, as evidenced by the gathering itself.
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<br />Bush's list of possible areas for agreement include:
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<br /><ul><li>Bolstering accounting rules for stocks, bonds and other investments so investors have a clearer sense of the true value of what they buy.
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<br /></li><li>Requiring "credit default swaps" — a type of corporate debt insurance — to be processed through a central clearinghouse. That would help provide crucial information on the parties involved in these complex, unregulated products.
<br /></li></ul><p align="justify"></p><ul><li>Taking a fresh look at rules aimed at preventing fraud and manipulation in trading of stocks and other securities.
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<br /></li><li><div align="justify">Better coordinating financial regulations among countries.
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<br /></div></li></ul><ul><li><div align="justify">Giving more countries voting power at the International Monetary Fund and the World Bank.
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<br /></div></li></ul><div align="justify">Besides the United States, the countries represented at the White House dinner Friday and meetings on Saturday will be Argentina, Australia, Brazil, Britain, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea and Turkey. Those countries and the European Union make up the so-called G-20.
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<br />Australian Prime Minister Kevin Rudd said before he left for Washington that he would raise with fellow leaders his view that <strong><em>a system in which executives of financial firms are rewarded for maximizing risk "cannot be sustained</em></strong>." He said, "That's just dumb, it's wrong and it's bad."
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<br /><strong><span style="font-size:130%;color:#ff0000;">Trade union leaders from participating countries planned to join AFL-CIO leaders Friday in meetings with several foreign heads of state, including Brazilian President Luiz Inacio Lula da Silva</span></strong>, and with IMF Managing Director Dominique Strauss-Kahn and World Bank President Robert Zoellick.
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<br /><strong><span style="font-size:180%;">The labor leaders are calling for re-regulation of global financial markets, an internationally coordinated fiscal stimulus and balanced economic growth to address income inequality</span></strong>.
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<br /><em>AP Writers Jeannine Aversa and Jim Kuhnhenn contributed to this story from Washington.</em></div>
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<br /></div><div align="justify"><strong><span style="font-size:180%;">[IT WOULD SEEM THAT SIGNIFICANTLY DIFFERENT ATTITUDES TOWARDS CAPITALISM - ANGLO-AMERICAN FREE MARKET-BASED CAPITALISM <em>vs.</em> EUROPEAN CONTINENTAL SOCIAL REDISTRIBUTIONIST CAPITALISM - CONTINUE TO PREVAIL IN TRANSATLANTIC RELATIONS. ONE RECENT NYU STUDY EXAMINES AND DEVELOPS METRICS TO ACCOUNT FOR THIS DIVERGENCE. IT FOCUSED ON THE VARIOUS ATTITUDES CONCERNING COMPANY OWNERSHIP, COMPETITION, PRIVATE PROPERTY RIGHTS, THE ROLE OF GOVERNMENT, ETC. THE STUDY CONCLUDED THAT CULTURAL & ENVIRONMENTAL DIFFERENCES LARGELY ACCOUNT FOR SUCH DIVERGENT VIEWS, AND MAY PERHAPS EXPLAIN THE SIGNIFICANT DISCREPANCIES BETWEEN THE UNITED STATES AND EUROPEAN PROPOSALS TO 'FIX' THE CURRENT GLOBAL FINANCIAL CRISIS.]</span></strong> </div>
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<br /><a href="http://w4.stern.nyu.edu/sternbusiness/fall_2007/comparativeCapitalism.html">http://w4.stern.nyu.edu/sternbusiness/fall_2007/comparativeCapitalism.html</a>
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<br /><div align="justify"></div><div align="justify"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEix9TP_aog5SVyQSjTnrAK33e-GNi1A5Y11gIbO6FmHNjvV6NFyoIjcEtSFJQzbxEwEurXHfphDKfcVf7v_bicmJSfaDuI7-or_qtVqts8pEpDStZYTriQxcaBdxCAk2HKQ25z8TGekeXIw/s1600-h/comparitiveCapitalism.jpg"><img id="BLOGGER_PHOTO_ID_5268320241496843058" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 188px; CURSOR: hand; HEIGHT: 200px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEix9TP_aog5SVyQSjTnrAK33e-GNi1A5Y11gIbO6FmHNjvV6NFyoIjcEtSFJQzbxEwEurXHfphDKfcVf7v_bicmJSfaDuI7-or_qtVqts8pEpDStZYTriQxcaBdxCAk2HKQ25z8TGekeXIw/s200/comparitiveCapitalism.jpg" border="0" /></a><strong><span style="font-size:130%;">What accounts for Europe’s and America’s different attitudes toward the free market?</span></strong>
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<br /></div><div align="justify">By Augustin Landier, David Thesmar, and Mathias Thoenig
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<br />STERN Business (Fall/Winter 2007)
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<br /><strong><span style="font-size:180%;">Throughout the Western world, a vast region generally viewed as dominated by capitalism, people’s attitudes toward the virtues of free markets vary widely.</span></strong> According to the World Value Survey, only 22 percent of French people believe that owners should run their businesses and appoint their managers, while as much as 58 percent of Americans agree with this statement, to cite one example.
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<br /><strong>Academics have focused on a range of issues to explain the dispersion of pro-free market attitudes. Some argue that the uniqueness of US history – a large, ethnically heterogeneous society – has endowed modern American citizens with persistent anti-redistributive beliefs. The political economy view holds that people that gain the least from globalization are less likely to support it (for example, unskilled workers in the North, skilled workers in the South, people working in industries with high trade exposure). Still others argue that differences can be ascribed to cultural factors such as patriotism, neighborhood attachment, or a strong sense of identity.
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<br /><strong><span style="font-size:130%;">We set out to understand what determines attitudes toward free markets by investigating how beliefs about the market economy vary across individuals, time, and countries</span></strong>. We constructed a dataset based on economic data like pension funding and stock market participation, and on opinion surveys, like the World Value Survey (WVS), which collects data on age, gender, and income, and measures attitudes toward economics, marriage, and religion across dozens of countries; and the Internal Social Survey Program (ISSP), whose 1996 wave contained questions on ethnicity, private property, and attitudes on state interference with free competition. By running regression analysis on this data, we were able to investigate the influence of certain factors in accounting for the differential attitudes.
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<br /><em><strong><span style="font-size:130%;">Our analysis of the WVS focused on the answers given to questions about (1) the benefits/harms done by competition; (2) whether owners, employees, or the state should run the firms; (3) the merits of private ownership of business and industry; and (4) the trustworthiness of large firms.</span></strong></em> The data show a large variation in cross-country attitudes toward free markets. Two examples are given in Table 1, which focuses on the 18 richest countries in our sample and displays mean variables for all three waves of the WVS.
<br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjjU3hKig3WirnhfLu0yrdfX_AJqVb-mws52V8ZVn5ez2pyV0vF8LAiIzQqhnNAT-wsSrqvZS1zh5g5xfwkMsakHR8arBHY4cRYh6hXY8Wj_9hOY65iwFckPR-9dzfGtah0W7l4XUsng2_1/s1600-h/Attitudes+Toward+Free+Markets+comparativeTable1.jpg"><img id="BLOGGER_PHOTO_ID_5268320553493663218" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 367px; CURSOR: hand; HEIGHT: 400px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjjU3hKig3WirnhfLu0yrdfX_AJqVb-mws52V8ZVn5ez2pyV0vF8LAiIzQqhnNAT-wsSrqvZS1zh5g5xfwkMsakHR8arBHY4cRYh6hXY8Wj_9hOY65iwFckPR-9dzfGtah0W7l4XUsng2_1/s400/Attitudes+Toward+Free+Markets+comparativeTable1.jpg" border="0" /></a></div>
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<br /><strong>In the cross section of countries, preference for redistribution and attitudes toward free markets showed little, if any correlation. But this was less true at the individual level.</strong> People that tended to favor income equality also tended to distrust competition, large companies, and shareholder control of firms. In order to isolate the pure effect of “pro-free market” beliefs, we used as control variables attitudes such as: trust (many existing studies have shown that trust explains well the cross section of various economic outcomes, such as GDP growth); aversion to inequality (defiance toward free markets may stem from a concern for equality); pro-trade (in many instances, defiance toward market forces can be defiance toward globalization); and religion (academic work has shown, in general, that being religious is positively correlated with a positive perception of work and thrift). When we ran the data, we found that the unconditional correlations were not very high, which suggests that individual determinants of opinions are very diverse across attitudes. And yet we found that all four “market” variables are positively correlated with each other. <strong><span style="font-size:130%;">Pro-competitive people also tend to support less equality, seem to favor free trade, and tend to be less religious and less confident in other people, for example.
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<br /><strong><span style="font-size:130%;">Self-Interest</span></strong>
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<br /><em><strong><span style="font-size:130%;">Why do attitudes toward free markets vary so much across individuals? The political economy view holds that self-interested individuals hold the beliefs that suit them best.</span></strong></em> In the developed world, for example, those least supportive of free trade also tend to have lower levels of education or work in industries where foreign competition is high. To test this hypothesis, we explored responses on two broad and distinct sets of issues: attitudes toward competition and attitudes toward the profit-motive. <em><strong><span style="font-size:130%;">Attitudes toward ownership and competition shared some common determinants that proved to be statistically significant. Support for competition and owner control was also more prevalent among older people. (One possible explanation is that older people, being closer to retirement or more entrenched in their jobs, are more sheltered from the shocks of competition.)</span></strong></em> <em><strong><span style="font-size:130%;">People with higher levels of income also showed strong support for market forces and self-interested behavior.</span></strong></em> Our preferred interpretation of this finding is that income is a proxy for the ratio of financial wealth to human capital. Another possibility is that income is a proxy for skill. Skilled labor is more protected from off-shoring and creative destruction that accompany for-profit management and tougher competition.</div>
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<br /><div align="justify"><em><strong><span style="font-size:130%;"><span style="font-size:180%;color:#ff0000;">“French legal origin was strongly related to competition aversion,</span> and <span style="font-size:180%;color:#000099;">British common law was related to a strong preference for owner control.</span> These findings suggest that long-run institutional determinants rooted in the history and culture of a country dominate more recent developments in the organization of its economy.”</span></strong></em>
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<br />A more powerful test of the political economy view consists in combining the individual characteristics with country-level institutional features. We did so by looking at the cross-country dispersion in pension funding and financial development as a measure of the extent of financial markets institutions and compared how young and old people answered the questions. In theory, older people, who control a greater chunk of financial wealth, should display more free-market support in countries where they are the most likely to hold a larger fraction of financial wealth. Generally speaking, we found that in countries where pensions are funded, in financially developed countries, the old are much more likely to be supporters of the free market than the young. The probability that the young favor owner control was larger by 18 percentage points in the pension-funded countries. The probability that older citizens do so is larger by 30 percentage points.
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<br />It’s natural to wonder whether the institutional determinants that impact the support for markets come from very far in the past or are largely driven by recent developments. Several scholars have argued that in a cross-section of countries, distant legal origins matter. <strong><span style="font-size:180%;color:#33cc00;">Compared with countries whose systems derive from <span style="color:#ff0000;">French civic law</span>, countries whose systems derive from <span style="color:#000099;">British common law</span> have a stronger propensity to protect debtholders and shareholders, have lower job protection, and facilitate entry by making business creation easier. </span></strong>When we ran the numbers, we found that legal origin has a significant impact. <strong><span style="font-size:180%;color:#ff0000;">Notably, French legal origin was strongly related to competition aversion</span></strong>, and <strong><span style="font-size:180%;color:#000099;">British common law was related to a strong preference for owner control.</span></strong> These findings suggest that long-run institutional determinants rooted in the history and culture of a country dominate more recent developments in the organization of its economy.
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<br />There’s more evidence that culture matters. Consider that <strong><span style="font-size:180%;">only about 48 percent of American households own stocks directly or indirectly. This makes it unlikely that the median voter will support owner control or free competition just because it boosts the return of its portfolio. And yet, 57 percent of US respondents agreed with the statement that the “owners should appoint the management,” and more than 70 percent of US respondents who work for others agree with the proposition that “management should only care about profits.”</span></strong> The diffusion of equity ownership in the US cannot alone explain why American citizens support free markets more than do citizens of other countries.
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<br /><em><strong><span style="font-size:180%;">Culture may be a factor in explaining such results.</span></strong></em> <strong><span style="font-size:130%;">Scholars have argued that attitudes are affected by ethnic origins because they have a cultural component, and that culture is transmitted within the family</span></strong>. To test this hypothesis, we constructed two indices of cultural proximity to seven major western cultures: France, Germany, Russia, Spain, Sweden, the UK, and the US. <strong><em><span style="font-size:130%;">The first index measures proximity to economic culture using as controls an aversion to inequality and a pro-trade attitude.</span></em></strong> <strong><span style="font-size:130%;">The second index of cultural proximity is related to non-economic values, such as religious proximity</span></strong>. <strong><span style="font-size:130%;"></span></strong></div>
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<br /><div align="justify"><strong><span style="font-size:130%;">We also looked at whether each country has been, at some point in history, a colony of one of the seven countries we mentioned above</span></strong>. </div>
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<br />
<br />
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<br /><div align="justify">Our tests showed that <strong><span style="font-size:180%;color:#ff0000;">cultural proximity to French economic attitudes predicts a significantly lower support for owner control, as does proximity to Germanic and Nordic economic attitudes.</span></strong> </div>
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<br />
<br />
<br />
<br /><div align="justify"><strong><span style="font-size:180%;color:#000099;">Proximity to British attitudes does, however, predict a higher-than-average propensity to favor owner control. Countries with British legal origins and/or who have been, at some point, colonized by the British tend to display a higher degree of ownership control</span></strong>. </div>
<br />
<br />
<br />
<br />
<br /><div align="justify"><strong><em><span style="font-size:180%;">Meanwhile, countries that had been colonized by Spain and Russia are systematically less supportive of competition,</span></em></strong> <strong><span style="color:#3366ff;"><span style="font-size:180%;">while former Swedish <span style="color:#000099;">and British colonies</span></span> </span><span style="font-size:180%;color:#000000;"><em>are more pro-competitive.
<br /></em></span></strong>
<br />
<br /><strong><span style="font-size:130%;">Generational Difference
<br /></span></strong>
<br />
<br />For country differences in beliefs about markets to be permanent and unexplained by self-serving behavior, divergent beliefs of individuals need to persist throughout generations. But we also know that ideas and attitudes change over time. We tried to get at this issue by focusing on former communist countries and comparing attitudes toward free markets held by younger generations to attitudes of generations that were already adults when the Berlin Wall fell. <strong><span style="font-size:180%;color:#ff0000;">We found that in the West, younger generations tend to be less pro-market in general. For people born after 1970, the probability of supporting owner control or competition was lower by 1 percentage point. The probability of supporting state ownership over private ownership was higher by 5 percent, a much larger difference. </span></strong></div>
<br />
<br />
<br />
<br />
<br /><div align="justify">But the generational divide was significantly larger in post-communist countries than in other countries. <strong><span style="font-size:180%;">In former communist countries, the young are 7 percentage points more likely to support the for-profit motive, 9 percentage points more likely to support private ownership over state ownership, but only 2 percentage points more likely to support competition.</span></strong> <strong><em><span style="font-size:130%;">These findings suggest that the forces that shape the preference for redistribution are not necessarily the same as those which shape attitudes toward market forces</span></em></strong>. Clearly, past shocks and shared experiences shape generation/population-wide attitudes.
<br />
<br />
<br />To investigate further how fast beliefs can adapt from one generation to the next if the economic context changes, we looked at evidence from immigrants. For our purposes, we grouped country/language/ethnicity of origin into four broad categories: English-speaking countries, Continental Europe, Eastern Europe, and Nordic countries. The regressions we ran broadly confirm the results obtained on individual and country data. <strong><span style="font-size:180%;">Respondents from English-speaking countries show consistently more support for both free markets and private property</span></strong>. <strong><em><span style="font-size:180%;">Respondents of Eastern European origin show the strongest support for state ownership and an activist industrial policy.
<br /></span></em></strong>
<br />
<br />We ran the same regressions focusing on US residents. The <strong><span style="font-size:180%;">focus on</span></strong> <strong><span style="font-size:180%;">the US</span></strong> is useful because it is the country where regions of origin are the most diverse. Here, <strong><em><span style="font-size:130%;">we found mixed evidence that indeed, free market attitudes are strongly transmitted within the family and are weakly dependent of the economic context. For instance, respondents of Eastern Europe origin were 22 percent more likely to support redistribution; US residents of such origin were 6 percent less likely – not statistically significant – to do so.</span></em></strong> <strong><em><span style="font-size:130%;">In general, the difference in attitudes between US citizens of Anglo-Saxon descent and other origins was both small and insignificant statistically</span></em></strong>, while the difference was strong on the worldwide sample. <strong><span style="font-size:180%;color:#ff0000;">This suggests that such beliefs are much more conditioned by environmental characteristics than by transmission of family values.
<br /></span></strong>
<br />
<br />What should we conclude from this investigation? First, we find that the traditional political view according to which individuals hold political opinions that are self-serving is consistent with the data. <strong><span style="font-size:130%;">In general, individuals that would benefit more from a pro-market agenda exhibit stronger pro-market opinions.</span></strong> But this tendency alone can’t explain the sometimes significant differences between countries. <strong><em><span style="font-size:130%;">The attitudes of a country toward markets are slow-varying and seem, on aggregate, to be strongly determined by historical and cultural factors. </span></em><span style="font-size:180%;color:#cc0000;">When it comes to explaining differences between countries’ views toward fundamental issues of markets and competition, economic theory matters. </span><span style="font-size:180%;color:#990000;">But so, too, do other factors, such as culture, legal systems, ethnicity, and family, matter.
<br /></span></strong>
<br /><em>Augustin Landier is assistant professor of finance at NYU Stern, David Thesmar is professor of economics at the Ecole Nationale de la Statistique et de l’Administration Economique (ENSAE) in Paris, and Mathias Thoenig is professor of economics at the University of Geneva.
<br /></em></div>
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<br />
<br />
<br /><div align="justify"><strong><span style="font-size:180%;">[THE FINDINGS OF THE STERN BUSINESS SCHOOL STUDY REPRODUCED ABOVE ARE FURTHER CORROBORATED BY A FINANCIAL TIMES INVESTIGATIVE ARTICLE WHICH DISCUSSES HOW EUROPEAN GOVERNMENTS CONTINUE TO EDUCATE THEIR YOUNG TO DESPISE CAPITALISM.]</span></strong>
<br /></div>
<br />
<br />
<br /><div align="justify">
<br /><strong><span style="font-size:180%;">[</span><span style="font-size:130%;">See: <em>European Governments Educate Young Against Free Markets & American Capitalism in Favor of European Welfare State Dream - Europe's School Books Demonise Enterprise</em>, ITSSD Journal on Economic Freedom, at:</span> </strong><a href="http://itssdeconomicfreedom.blogspot.com/2008/01/european-governments-educate-young.html"><strong>http://itssdeconomicfreedom.blogspot.com/2008/01/european-governments-educate-young.html</strong></a> <strong><span style="font-size:180%;">].</span></strong></div>
<br />ITSSD Charitable Missionhttp://www.blogger.com/profile/00790887154748866904noreply@blogger.com0tag:blogger.com,1999:blog-1851218948450486986.post-37550961506465543582008-11-05T09:34:00.009-05:002008-11-05T22:07:21.050-05:00The EU Socialist Regulatory Disease Worsens...Will it Now Strike a Profligate Democratic Congress???<a href="http://www.taxpayersalliance.com/bettergovernment/2008/10/new-research-eu.html">http://www.taxpayersalliance.com/bettergovernment/2008/10/new-research-eu.html</a><br /><br /><strong><span style="font-size:130%;">TaxPayers' Alliance Bulletin - 31st October 2008</span></strong><br /><br /><br /><strong><span style="font-size:130%;color:#000099;">The Burden of EU Regulation: Who's to Blame?</span></strong><br /><br /><div align="justify"><br />Against the background of worsening economic conditions and businesses struggling to remain solvent, earlier this week the TPA published a detailed study of the severe burden placed on business by EU regulations. <strong><span style="font-size:130%;color:#ff0000;">The report reveals the true scale of EU regulations, and uncovers the fact that the pace of regulation is increasing at a record rate, with thousands of new regulations introduced each year. As well as over-regulation from Brussels, though, the report also studies the contribution made to the regulatory burden by "gold plating" in Whitehall. With regulation costing British business £150 billion a year</span></strong>, the report proposes three simple, practical ways to reduce the problem and therefore help British business to weather the economic storm, including introducing an EU Transparency Bill, sunset clauses and increased scrutiny. (Excerpts of Report are provided below).</div><div align="justify"></div><div align="justify"></div><div align="justify"><strong><span style="font-size:130%;">Key Findings</span></strong><br /></div><ul><li><div align="justify">There are currently 16,980 EU acts in force. <strong><span style="font-size:180%;color:#ff0000;">Between 1998 and 2007 there has been a net gain of 9,415 EU laws. </span></strong></div></li></ul><p align="justify"></p><ul><li><div align="justify"><strong><span style="font-size:180%;color:#ff0000;">In 2007</span></strong>, 3,010 EU laws became UK law, while only 993 EU regulations were repealed - <strong><span style="font-size:180%;color:#ff0000;">a net gain of 2,017 extra laws.</span></strong><br /></div></li></ul><ul><li><div align="justify">The rate of new EU laws has increased to a record speed, with <strong><span style="font-size:180%;color:#ff0000;">a net gain of over 2,000 new laws in each of the last two years,</span></strong> compared to an annual average net gain of only 942 new laws between 1998 and 2007.</div></li></ul><p align="justify"></p><ul><li><div align="justify"><strong><span style="font-size:180%;color:#ff0000;">Almost half of the extra 9,415 EU laws created in the last ten years have been introduced in 2006 and 2007. Despite EU rhetoric about reducing regulation, it is growing at a record rate. </span></strong></div></li></ul><p align="justify"></p><ul><li><div align="justify">Whitehall also adds to the burden: at least 770 pages of UK Statutory Instruments will be needed to enact the 76 Directives passed by the EU in 2007. Assuming this as an average per year, then <strong><span style="font-size:180%;color:#ff0000;">EU directives alone have necessitated over 7,700 pages of UK law since 1997.</span></strong> </div></li></ul><p align="justify"></p><ul><li><div align="justify">Despite the enormous amount of EU legislation, <strong><span style="font-size:180%;color:#ff0000;">UK gold-plating and poor enforcement practices exaggerate the burden of regulation</span></strong>. </div></li></ul>-------------------------------------------------------------------------------------------------<br /><a href="http://tpa.typepad.com/home/files/UK_and_EU_Regulatory_Burden_Embargoed_Monday_27_October.pdf">http://tpa.typepad.com/home/files/UK_and_EU_Regulatory_Burden_Embargoed_Monday_27_October.pdf</a><br /><strong><span style="font-size:130%;">RESEARCH NOTE 36</span></strong> <div align="justify"><br /><strong><span style="font-size:130%;">BRUSSELS OR WHITEHALL: LOCATING THE SOURCE OF THE UK’S REGULATORY BURDEN</span></strong></div><div align="justify"></div><div align="justify"><br />But what is driving the relentless rise in regulation? <strong><span style="font-size:130%;">Conventional wisdom holds that the European Union is responsible; Tony Blair and Gordon Brown have both asserted that “half of all [...] new regulation comes from the EU”, and the Open Europe think tank has suggested that over 70 per cent of UK law originates in Brussels.4 Pro-EU groups, however, believe the source is Whitehall itself</span></strong>, highlighting the frequent elaboration and embellishment of EU law by British civil servants, adding unnecessary additional burdens to simple regulations.5</div><div align="justify"></div><div align="justify"><br /><strong><span style="font-size:180%;color:#ff0000;">In fact the EU and Whitehall are both equally culpable.</span></strong> The EU overlegislates, and often drafts that law badly. In turn, UK governments use EU directives as vehicles for their own policy agendas, attaching numerous additional clauses and extending its scope (a practice known as ‘goldplating’).</div><div align="justify"></div><div align="justify"><br /><strong><span style="font-size:180%;color:#ff0000;">Differing cultures of compliance and enforcement between member states then translate minor regulatory differences into significant disparities in regulatory costs.</span></strong></div><div align="justify"></div><div align="justify"><br />Assessing the current evidence, and through a detailed examination of specific examples, this paper concludes that gold-plating is a central feature of the EU-UK legislative process. But the real problem lies more in the differing levels of regulatory implementation and enforcement across the European Union than with gold-plating. (p. 3)</div><div align="justify"></div><div align="justify"></div><div align="justify"><strong><span style="font-size:130%;color:#000099;">...2.1 The European Union</span></strong></div><div align="justify"></div><div align="justify"><br /><strong><span style="font-size:180%;color:#ff0000;">A joint paper signed by the French, German and UK governments suggests that <span style="color:#000099;">approximately half of all new regulations affecting businesses originate in the EU</span>, a figure backed up by both the OECD and House of Commons Library.11</span></strong> <strong><span style="font-size:180%;color:#000099;">Gunter Verheugen, the EU’s Enterprise Commissioner, told the Financial Times in 2006 that the cost of EU law to European business is £405 billion a year.12</span></strong> Open Europe estimates that 77 per cent of the major regulations passed in the UK since 1998 were wholly or partly driven by EU law.13 (p. 5).</div><div align="justify"></div><div align="justify"></div><div align="justify"><br />The total bulk of active EU law now stretches to over 170,000 pages and comes in three main forms.14</div><div align="justify"></div><div align="justify"><br /> <strong><span style="font-size:180%;color:#000099;">Decisions</span></strong> are the least significant, constituting a very small percentage of the total and often addressed towards specific members.<br /></div><div align="justify"></div><div align="justify"> <span style="font-size:180%;color:#000099;"><strong>Regulations</strong></span> make up the bulk of EU law, with 1,564 being passed in 2007 alone. These become UK law automatically, without the need for members to translate into national law.<br /></div><div align="justify"></div><div align="justify"> <strong><span style="font-size:180%;color:#000099;">Directives </span></strong>– 76 of which were adopted by the EU in 2007. These require members to transpose them into national law, making them the ideal vehicle for any potential gold-plating.<br />The financial cost of EU regulation – and EU derived regulations – vary from one to three per cent of UK GDP.15 Taking a middle point of two per cent (similar to Dutch and Danish estimates of their EU burden), this implies a burden of around £30 billion in 2007-08.16 (p.6)</div><div align="justify"></div><div align="justify"></div><div align="justify"><strong><span style="font-size:130%;color:#000099;">...2.2 UK gold-plating</span></strong></div><div align="justify"></div><div align="justify"><br /><strong><span style="font-size:180%;color:#ff0000;">Since joining the EEC in 1973, Whitehall and the UK government have consistently ‘gold-plated’ EU legislation</span></strong> during its transposition into national law, making regulations more burdensome than the EU intended them to be. <strong><span style="font-size:130%;color:#000099;">Gold-plating involves over-implementing an EU directive, going beyond the minimum necessary to comply with the requirements of European legislation by:</span></strong></div><div align="justify"></div><div align="justify"><br /> <strong><span style="font-size:130%;color:#ff0000;">Extending the scope, adding in some way to the substantive requirement or substituting wider UK legal terms for those used in the directive;</span></strong> or</div><div align="justify"></div><div align="justify"><br /> <strong><span style="font-size:130%;color:#ff0000;">Not taking full advantage of any derogations which keep requirements to a minimum; or</span></strong><br /></div><div align="justify"></div><div align="justify"> <strong><span style="font-size:130%;color:#ff0000;">Providing sanctions, enforcement mechanisms and matters such as burden of proof which go beyond the minimum needed; or<br /></span></strong></div><div align="justify"></div><div align="justify"> <strong><span style="font-size:130%;color:#ff0000;">Implementing early, before the date given in the directive.</span></strong></div><div align="justify"></div><div align="justify">(p. 7)</div><div align="justify"></div><div align="justify"></div><div align="justify"><br /><strong><span style="font-size:130%;color:#33ff33;">3.2 [BURDENSOME ENVIRONMENTAL] Landfill Regulations</span></strong></div><div align="justify"></div><div align="justify"><br />Requiring <strong><span style="font-size:130%;color:#ff0000;">39 pages to transpose the 19 pages of EU Directive 1999/31/EC, the UK Landfill Regulations of 2002 are now a classic example of goldplating.</span></strong> <strong><span style="font-size:180%;color:#000099;">By increasing the categories for defining waste, setting strict rules for the monitoring of landfill sites and establishing timetables for reporting, the burden of these regulations far extends beyond what was mandated by the EU.</span></strong></div><div align="justify"><strong><span style="color:#000099;"></span></strong></div><div align="justify"><strong><span style="color:#000099;"></span></strong></div><div align="justify"><br /><strong><span style="font-size:130%;color:#336666;">...3.3 Motorcycle Tests [BURDENSOME INDUSTRY STANDARDS]</span></strong></div><div align="justify"></div><div align="justify"><br /><strong><span style="font-size:180%;color:#ff0000;">Efforts to harmonise road standards across the EU led to the 2000/56/EC directive on driving licences.</span></strong> Implementation of this 13 page document was unusually slow for the UK, eventually being transposed into the 18 page Motor Vehicles (Driving Licences) Regulations of 2003. The new regulations have caused consternation within the motorcycle licensing industry. (p. 11)</div>ITSSD Charitable Missionhttp://www.blogger.com/profile/00790887154748866904noreply@blogger.com1tag:blogger.com,1999:blog-1851218948450486986.post-54282834504137254582008-10-22T13:06:00.091-04:002008-10-23T09:36:48.136-04:00Europe & United Nations Try to Cram Down US Throat Socialist Financial and Environmental Global Governance; Will Bush & Successor Swallow?<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhEJz3sURywCR3PZEzPJWe8LLUgy3P7zAteuhrRu1ziIU7e-F54XIBWQlCbOLqPcS3UIQZwcX0pZ8GB9ioER1PIRVGQHsjuGTWcaA0GWhn-doMRe5NUEj49De-S_XqC5wVG5-a4hB3VJ9U5/s1600-h/deepthroat.gif"><img id="BLOGGER_PHOTO_ID_5260108600309904674" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 402px; CURSOR: hand; HEIGHT: 375px" height="319" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhEJz3sURywCR3PZEzPJWe8LLUgy3P7zAteuhrRu1ziIU7e-F54XIBWQlCbOLqPcS3UIQZwcX0pZ8GB9ioER1PIRVGQHsjuGTWcaA0GWhn-doMRe5NUEj49De-S_XqC5wVG5-a4hB3VJ9U5/s400/deepthroat.gif" width="393" border="0" /></a><br /><div><div align="justify"><span style="font-size:180%;">[</span><span style="font-size:130%;"><strong>After reading the following entries, it is quite difficult to conclude other than that European leaders and governments have gone out of their way to influence the 2008 U.S. presidential election. As further substantiation for this claim, readers should review: <em>''Yes We Can' - 'Crises' Used as Pretense for EURO-Socialist Global Governance-based Wealth Redistribution - 'Change We Can Believe In'</em>, ITSSD Journal on Economic Freedom, at: </strong></span><a href="http://itssdeconomicfreedom.blogspot.com/2008/10/yes-we-can-crises-used-as-pretense-for.html"><strong>http://itssdeconomicfreedom.blogspot.com/2008/10/yes-we-can-crises-used-as-pretense-for.html</strong></a> ; </div><br /><br /><div align="justify"><strong><span style="font-size:130%;"><em>Obama & Gore Make Carbon Regulations/Taxes a Key Partisan Issue In Uncertain Economic Times-Shouldn't Dems Suffer Same Fate as Canada's Liberal Party?</em>, ITSSD Journal on Energy Security, at:</span></strong> <a href="http://itssdenergysecurity.blogspot.com/2008/10/obama-gore-make-carbon-regulationstaxes.html"><strong>http://itssdenergysecurity.blogspot.com/2008/10/obama-gore-make-carbon-regulationstaxes.html</strong></a> ;</div><div align="justify"></div><div align="justify"></div><div align="justify"><strong><span style="font-size:180%;"><span style="font-size:130%;"><em>Eurocrats & US Liberal Progressives Declare End of Anglo-American Capitalism & US Superpower Status: Is Euro-Style Global Socialism Next?</em>, ITSSD Journal on Economic Freedom, at: <a href="http://itssdeconomicfreedom.blogspot.com/2008/09/eurocrats-us-liberal-progressives.html"><span style="font-size:100%;">http://itssdeconomicfreedom.blogspot.com/2008/09/eurocrats-us-liberal-progressives.html</span></a></span> ].</span></strong></div><br /><div>-------------------------------------------------------------------------------------------------</div><br /><div><a href="http://www.telegraph.co.uk/news/worldnews/europe/3226962/Europeans-signal-clash-with-US-over-global-capitalism.html">http://www.telegraph.co.uk/news/worldnews/europe/3226962/Europeans-signal-clash-with-US-over-global-capitalism.html</a></div><br /><div align="justify"><strong><span style="font-size:130%;color:#ff0000;">Europeans signal clash with US over global capitalism</span></strong> </div><br /><div align="justify"><em><strong><span style="color:#000099;"></span></strong></em></div><div align="justify"><em><strong><span style="color:#000099;">European heads of state are to demand leadership from the United States</span></strong> at a series of summits designed to reform the global financial system</em>. </div></div><div> </div><div> </div><div align="justify">By Bruno Waterfield</div><div> </div><div> </div><div align="justify">Telegraph.co.uk</div><div> </div><div> </div><div align="justify">19 Oct 2008</div><div><br /></div><div align="justify"> </div><div align="justify">World leaders will meet in the United Sates next month <strong><span style="font-size:180%;">to find a 'fix' for the international financial crisis</span></strong> after President George W. Bush bowed to European calls for a global economic summit</div><div align="justify"></div><div align="justify"><br /><strong><span style="font-size:180%;"><span style="color:#ff0000;">Mr Bush bowed</span><span style="color:#ff0000;"> to demands</span> <span style="color:#000099;">from French President Nicolas Sarkozy</span></span></strong>, current holder of the EU's rotating presidency and José Manuel Barroso, President of the European Commission, at his Camp David presidential retreat.<br /></div><div><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh7PqaViUfmtDs5lg8mN_A4MOgURXjWII_v6aniYLYMPoBwwB-z5vhx6175LLxoNcxoMm8pIEDAaqznEsP2pHAy9gFMOoYCuvXuK4b7ldP4SejPsNBqRVdVfDfZT_pjCUGgkDjk3AqY7U3y/s1600-h/bush+bows.jpg"><img id="BLOGGER_PHOTO_ID_5260125952424122370" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 279px; CURSOR: hand; HEIGHT: 165px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh7PqaViUfmtDs5lg8mN_A4MOgURXjWII_v6aniYLYMPoBwwB-z5vhx6175LLxoNcxoMm8pIEDAaqznEsP2pHAy9gFMOoYCuvXuK4b7ldP4SejPsNBqRVdVfDfZT_pjCUGgkDjk3AqY7U3y/s320/bush+bows.jpg" border="0" /></a><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgf6KtrYfqsJENaTr6dwL8583wqfPcPYHdPCGbgamo2cn-ru0r0Ai8BmRxYzi0Ceeby2TogCqDu7K7nHyhxPjWScmphU_HtkDnUJ8ekyzyJJ1wr1gamvWxskgKZKq2i6OGlo4unhsLNuzxE/s1600-h/Sarkozy+a+la+Napoleon.jpg"><img id="BLOGGER_PHOTO_ID_5260125429293389010" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 300px; CURSOR: hand; HEIGHT: 224px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgf6KtrYfqsJENaTr6dwL8583wqfPcPYHdPCGbgamo2cn-ru0r0Ai8BmRxYzi0Ceeby2TogCqDu7K7nHyhxPjWScmphU_HtkDnUJ8ekyzyJJ1wr1gamvWxskgKZKq2i6OGlo4unhsLNuzxE/s400/Sarkozy+a+la+Napoleon.jpg" border="0" /></a><br /><br /><br /><br /></div><div><br /><br /></div><div><br /><br /><br /></div><div><br /><br /></div><div><br /></div><div align="justify"><strong><span style="color:#ff0000;"><span style="font-size:180%;">The emboldened Europeans signalled that the bloc was ready to ambush Mr Bush and his successor <span style="color:#33cc00;">[??]</span>, who is expected to attend the meeting, to impose a European vision for new financial market regulation.</span></span></strong><br /></div><div><br /></div><div align="justify"><strong><span style="font-size:180%;color:#ff0000;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgHnZoP-zQDdmby77WRSCa8zaZ5apTqvs7ShsqSu7ndMDdYmIY3I3kxSsUtomV0-pUFzyXkkoAT_BNi_Oke24y_vB-xL3bZUtqCntiEu3_kzdjSfvXAVgny6XKsn0z3P_pcsgLqwh9LWgAP/s1600-h/zapatero.jpg"><img id="BLOGGER_PHOTO_ID_5260123608603811154" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 166px; CURSOR: hand; HEIGHT: 225px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgHnZoP-zQDdmby77WRSCa8zaZ5apTqvs7ShsqSu7ndMDdYmIY3I3kxSsUtomV0-pUFzyXkkoAT_BNi_Oke24y_vB-xL3bZUtqCntiEu3_kzdjSfvXAVgny6XKsn0z3P_pcsgLqwh9LWgAP/s200/zapatero.jpg" border="0" /></a>"The EU must take over the leadership of change because that is what it has long been calling for while the US was not favourable," said José Luis Rodriguez Zapatero, the Spanish Prime Minister. "There has to be regulation and limits to everything to do with incentives and rewards."<br /></div></span></strong><div><br /></div><div align="justify"><strong><span style="font-size:180%;color:#000099;">[AT LEAST THE SPANISH PRIME MINISTER SHOWS HIMSELF TO BE A SOCIALIST!!]</span></strong></div><div></div><div align="justify"><br /><strong><span style="font-size:180%;color:#ff0000;"><span style="color:#000099;">The French leader</span> <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi8tZGfDII4gGO0xVSUOs_5M4D_iiNg6dMDtGHsYK6cjru4ZjE7lPWcHUpiuRxNcKJOO0vXUoif7200YXRUpHawLQENZcTWH0a6jN4xv5SYfaKpyIvEMmChA8_34oEvUkLG9Ch0NXAfvddI/s1600-h/cafedumerde446.jpg"><img id="BLOGGER_PHOTO_ID_5260124420257487314" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 400px; CURSOR: hand; HEIGHT: 229px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi8tZGfDII4gGO0xVSUOs_5M4D_iiNg6dMDtGHsYK6cjru4ZjE7lPWcHUpiuRxNcKJOO0vXUoif7200YXRUpHawLQENZcTWH0a6jN4xv5SYfaKpyIvEMmChA8_34oEvUkLG9Ch0NXAfvddI/s400/cafedumerde446.jpg" border="0" /></a>reiterated his attacks on the American-led sytem of capitalism."We cannot continue along the same lines because the same problems will trigger <span style="color:#000099;">the same disasters</span><span style="color:#000099;">," said Mr Sarkozy</span>. "This is no longer acceptable. <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiMk1AHPLuxFUOzh-M08twualpr9yeGJsnv3FdSTY1-OZIPP00GuKIHybAmhz_vlvKcrz34mBXVw0z1K13DVh7X79J1ChxlnD0QosFx8NCqz1XcM5qyrhjH8SpVbyab3GMSomdS72cJ_Fiu/s1600-h/France+Irrelevant+for+over+150+years.jpg"><img id="BLOGGER_PHOTO_ID_5260122268228648786" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 224px; CURSOR: hand; HEIGHT: 311px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiMk1AHPLuxFUOzh-M08twualpr9yeGJsnv3FdSTY1-OZIPP00GuKIHybAmhz_vlvKcrz34mBXVw0z1K13DVh7X79J1ChxlnD0QosFx8NCqz1XcM5qyrhjH8SpVbyab3GMSomdS72cJ_Fiu/s320/France+Irrelevant+for+over+150+years.jpg" border="0" /></a>This is no longer possible. This sort of capitalism is a betrayal of the sort of capitalism we believe in." </span></strong><br /></div><div align="justify"></div><div align="justify"><strong><span style="font-size:180%;">[SARKOZY PRETENDS TO BE IN FAVOR OF 'FREE MARKETS', BUT OBVIOUSLY, 'FREE MARKETS' ARE TO BE DEFINED BY THE 'FRENCH', WHICH REALLY MEANS HEAVILY REGULATED MARKETS CREATED, OVERSEEN & ENFORCED BY GOVERNMENT. DEAR PRESIDENT SARKOZY, COULD YOU PLEASE EXPLAIN HOW THE FRENCH VERSION OF CAPITALISM IS NOT WHAT CZECH PRESIDENT VACLAV KLAUS REFERS TO AS 'SOFT SOCIALISM', SI VOUS PLAIT????]</span></strong></div><div><br /></div><div align="justify">The summit, expected to take place just days or weeks after US presidential elections in November, will start a political tussle over The <strong><span style="font-size:130%;color:#ff0000;">US President has backed the steps European nations have taken in recent weeks to stabilise financial markets but has signalled American uneasiness with some EU calls for a root and branch overhaul of capitalism. </span></strong></div><div></div><div><br /><strong><span style="font-size:180%;">But remarks after the Camp David meeting has already exposed deep trans-Atlanic differences.</span></strong> "</div><div><br /></div><div align="justify">We will work to strengthen and modernise our nations' financial systems so we can help ensure that this crisis doesn't happen again," said Mr <strong><span style="font-size:130%;">Bush.</span></strong><br /></div><div><br /></div><div align="justify"><strong><span style="font-size:130%;">"As we make the regulatory and institutional changes necessary to avoid a repeat of this crisis, it is essential that we preserve the foundations of democratic capitalism a commitment to free markets, free enterprise, and free trade," he said. "We must resist the dangerous temptation of economic isolationism and continue the policies of open markets that have lifted standards of living and helped millions of people escape poverty around the world."<br /></span></strong></div><div><br /></div><div align="justify"><strong><span style="font-size:180%;color:#000099;"><span style="color:#000099;">In contrast, President Sarkozy and other EU leaders have floated radical ideas of reforming rating agencies, the creation of new international financial supervisors and tough regulation of hedge funds and tax havens.</span> </span></strong></div><div align="justify"><br /><br /><strong><span style="font-size:180%;color:#3366ff;">Even the venue of the global economic conference could be a source of discord after President Sarkozy called for it to be held under the auspices of the United Nations in New York</span></strong>, near America's Wall Street financial district, the source, the EU claims, of the present economic crisis. </div><div align="justify"><br /><br /><strong><span style="font-size:180%;color:#3366ff;">"Insofar as the crisis began in New York, then the global solution must be found to this crisis in New York," Mr Sarkozy said. </span></strong></div><div></div><div align="justify"><br /><strong><span style="font-size:130%;color:#ff0000;">A weakened President Bush</span></strong>, who will be seeing out his last months in office after US presidential elections on Nov 4. The US leader is expected to try and wrest back control by holding the summit in Washington.<br /></div><div align="justify"><br /><br /><strong><span style="font-size:180%;">[WE HOPE THAT BUSH DOES NOT 'GIVE AWAY THE AMERICAN FARM' IN ORDER TO CREATE SOME PERCEPTION OF A 'POSITIVE' LEGACY FOR HIMSELF. THAT WOULD BE SELF-DELUSIONAL.]</span></strong><br /></div><div align="justify"><br /><strong><span style="font-size:180%;color:#ff0000;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjtt29nYAVNZFXXyqatPhVFoylU4GMrWHA6C2qd2ypSIuIj5k-pYcJ_yxhWCWCQeZvf686uz5cs4CKlYqe95voUI9xYv5C95oRR4R4_u3yQ5HPMMA37W4hOLwUgvItH_v0_H6cHYDxEDX1L/s1600-h/obama_PeterPan.gif"><span style="font-size:180%;"><img id="BLOGGER_PHOTO_ID_5260127633677651586" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 113px; CURSOR: hand; HEIGHT: 197px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjtt29nYAVNZFXXyqatPhVFoylU4GMrWHA6C2qd2ypSIuIj5k-pYcJ_yxhWCWCQeZvf686uz5cs4CKlYqe95voUI9xYv5C95oRR4R4_u3yQ5HPMMA37W4hOLwUgvItH_v0_H6cHYDxEDX1L/s320/obama_PeterPan.gif" border="0" /></span></a>European diplomats are hoping that a new US President-elect might be more receptive to European style "social market" reforms, especially if the elections sweep Democrat candidate Barack Obama into power.<br /></div></span></strong><div><br /></div><div align="justify"><strong><span style="font-size:180%;color:#3333ff;">['YES WE CAN' - 'CHANGE WE COULD BELIEVE IN']</span></strong></div><div><br /></div><div align="justify">As Mr Bush nears the end of his second term and prepares to hand over the White House in January next year, any future American financial reforms will fall to his successor.</div><div></div><div align="justify">------------------------------------------------------------------------------------------------</div><div></div><div align="justify"><a href="http://www.telegraph.co.uk/earth/main.jhtml?xml=/earth/2008/10/22/eaunep122.xml">http://www.telegraph.co.uk/earth/main.jhtml?xml=/earth/2008/10/22/eaunep122.xml</a></div><div><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjF2GV-fo_k2qHdyjJaEZn1oJtUAVPoYIFuAo9liIoA_8WLaRh9SJo2Pls7buY7mSSvLq92RGLKGnyj072XLXlvPFQxYRML-XywIWRiDIxriBLrD6BPlgVMc6CGPT75FwNk2w3wv4ExrVwk/s1600-h/UNEP+New+Green+Deal.gif"><img id="BLOGGER_PHOTO_ID_5260109948822575426" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; CURSOR: hand" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjF2GV-fo_k2qHdyjJaEZn1oJtUAVPoYIFuAo9liIoA_8WLaRh9SJo2Pls7buY7mSSvLq92RGLKGnyj072XLXlvPFQxYRML-XywIWRiDIxriBLrD6BPlgVMc6CGPT75FwNk2w3wv4ExrVwk/s400/UNEP+New+Green+Deal.gif" border="0" /></a><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgqRPS-ZHrzel2OfzF8UFh952ek7q7g5OtLt4XpzalZPyB6YbO1Us5HgzutZD7ipDVVyyGad1UI0JKx1tmhpgE7L2IsCYabnWP2Ydc3mNhwxYwGAauUCk1QD1CCCqYSFJJ2rAyoT-0c2zN_/s1600-h/unep+monster.bmp"><img id="BLOGGER_PHOTO_ID_5260122002725581858" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 148px; CURSOR: hand; HEIGHT: 166px" height="224" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgqRPS-ZHrzel2OfzF8UFh952ek7q7g5OtLt4XpzalZPyB6YbO1Us5HgzutZD7ipDVVyyGad1UI0JKx1tmhpgE7L2IsCYabnWP2Ydc3mNhwxYwGAauUCk1QD1CCCqYSFJJ2rAyoT-0c2zN_/s320/unep+monster.bmp" width="176" border="0" /></a><strong><span style="font-size:130%;color:#33ff33;"><span style="color:#3366ff;">UN</span> announces green 'New Deal' plan to rescue world economies</span></strong><br /></div><div><br />By Paul Eccleston</div><div><br /></div><div align="justify">Telegraph.co.uk<br /></div><div><br /></div><div align="justify">22/10/2008</div><div></div><div><br /><strong><span style="font-size:130%;color:#3366ff;">A global green 'New Deal' is needed to transform the world's economies, according to a new UN report.</span></strong></div><div><br /></div><div><a lang="en.uk" href="http://www.telegraph.co.uk/earth/main.jhtml?xml=/earth/2008/10/21/eamorley121.xml" jquery1224706547109="61">Low carbon economy must be part of economic recovery</a><br /><a lang="en.uk" href="http://www.telegraph.co.uk/earth/main.jhtml?xml=/earth/2008/10/07/eastern107.xml" jquery1224706547109="62">Credit crisis is time to act on climate change, says Lord Stern</a><br /><a lang="en.uk" href="http://www.telegraph.co.uk/earth/main.jhtml?xml=/earth/2008/02/28/eafred128.xml" jquery1224706547109="63">Greening the global economy</a><br /></div><div></div><div align="justify"><strong><span style="font-size:130%;color:#3333ff;">It would be similar to Franklin D Roosevelt's New Deal which helped the US recover from the Great Depression of the 1930s.</span></strong></div><div><br /></div><div align="justify"><strong><span style="font-size:130%;color:#ff0000;"><span style="font-size:180%;">But it would be aimed at a fundamental restructuring of economies</span> weaning away dependence on oil and towards cleaner and more sustainable sources of energy.</span></strong></div><div><br /></div><div align="justify"><strong><span style="font-size:130%;color:#33ff33;">The Green Economy Initiative from the UN Environment Programme (UNEP) calls for global economies which invest in better care and management of the Earth's natural resources</span></strong> such as rainforests and oceans.</div><div><br /></div><div align="justify"><strong><span style="font-size:180%;">[THIS IS OTHERWISE KNOWN AS <span style="color:#33ff33;">'ENLIGHTENED' ENVIRONMENTALISM</span> WHICH HAS BEEN PERFECTED BY THE <span style="color:#33ff33;">GREEN</span> & <span style="color:#ff0000;">SOCIALIST</span> PARTIES OF EUROPE.]</span></strong></div><div><br /></div><div align="justify">Rather than more boom and bust cycles and the continued asset stripping of dwindling resources, the new green system would nurture and re-invest in them.<br /></div><div><br /></div><div align="justify"><strong><span style="font-size:130%;color:#33ff33;">It would refocus the global economy, create growth, trigger a 21st century employment boom and at the same time combat climate change</span></strong>, it is claimed.</div><div><br /></div><div align="justify"><strong><span style="font-size:180%;">[THIS REFOCUS WILL BROADEN GOVERNMENTS' ROLE SO THAT THEY INTRUDE INTO EVERY FACET OF INDIVIDUALS' ECONOMIC LIVES! IN OTHER WORDS, THIS IS <span style="color:#ff0000;">'SOFT' SOCIALISM</span>]</span></strong></div><div></div><div align="justify"><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjU266d44JcP1vY0onbaE8huGQ_0D9u3e5PkFlXU51C34NkehVEyHUOipT7y3zKJCU_TPL69FDrGzDi5W3Dul__3hlh8v4tzMLL_AukNGynR86QcYy5O7ZQAiQKeCV0sElamJ3kDBp5vnMn/s1600-h/steiner+the+UNEP+nazi.jpg"><img id="BLOGGER_PHOTO_ID_5260122688008812178" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 200px; CURSOR: hand; HEIGHT: 163px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjU266d44JcP1vY0onbaE8huGQ_0D9u3e5PkFlXU51C34NkehVEyHUOipT7y3zKJCU_TPL69FDrGzDi5W3Dul__3hlh8v4tzMLL_AukNGynR86QcYy5O7ZQAiQKeCV0sElamJ3kDBp5vnMn/s200/steiner+the+UNEP+nazi.jpg" border="0" /></a>Launching the report in London <strong><span style="font-size:180%;color:#33ff33;">Achim Steiner, UNEP executive director, said the worldwide financial crisis had created an historic opportunity to replace a system which had seen the world's GDP double between 1981-2005 but which had resulted in 60 per cent of the Earth's ecosystem being degraded</span></strong> while 2.6bn people were still living on less than $2 per day.</div><div><br /></div><div align="justify"><strong><span style="font-size:180%;">[WHAT MR. STEINER SUCCINCTLY DESCRIBES IS THE MALTHUSIAN 'NEGATIVE' PARADIGM OF ENVIRONMENT-CENTRIC SUSTAINABLE DEVELOPMENT THE OBJECTIVE OF WHICH IS TO IDENTIFY 'MARKET FAILURES'!]</span></strong></div><div><br /></div><div align="justify"><strong><span style="font-size:130%;">He said the financial, food and fuel crises of 2008 had been caused by speculation and a failure by governments to regulate markets</span></strong> but they were also part of a wider market failure which was eating away the world's natural resources.</div><div></div><div align="justify"><br /><strong><span style="font-size:180%;">[ACTUALLY, THE SPIKING OF FOOD, FINANCIAL AND FUEL PRICES HAS BEEN LARGELY ATTRIBUTABLE NOT TO 'MARKET FAILURES', BUT TO 'GOVERNMENT FAILURES' - NAMELY BUREAUCRATIC INEPTITUDE AND LACK OF JUDGMENT (i.e., 'picking the wrong 'winners' and 'losers'), WASTE, CORRUPTION AND LACK OF TRANSPARENCY. MR. STEINER SHOULD BE QUITE FAMILIAR WITH THESE PROBLEMS, BECAUSE THEY HAVE PLAGUED THE UNITED NATIONS AND THE NATIONS OF EUROPE FOR DECADES.]</span></strong></div><div align="justify"></div><div align="justify">------------------------------------------------------------------------------------------------ </div><div></div><div align="justify"><a href="http://greeninc.blogs.nytimes.com/2008/10/22/the-green-new-deal/?pagemode=print">http://greeninc.blogs.nytimes.com/2008/10/22/the-green-new-deal/?pagemode=print</a> </div><div></div><div align="justify"><strong><span style="font-size:130%;color:#33ff33;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjpY7LjKSJUTbFjiWAV3OFRaFVaviK2QUgsVAMWSV67qJoMlFNfHovtw5vMBpEa4VA-KsHMeebioQoNRVfLt4zPvKW3QxuIlSy5zYQgA4O_2dU3IgLe2qkfp7C3-S-y3imzqjQpKiiwwk2p/s1600-h/green_deal.jpg"><img id="BLOGGER_PHOTO_ID_5260109343256715858" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; CURSOR: hand" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjpY7LjKSJUTbFjiWAV3OFRaFVaviK2QUgsVAMWSV67qJoMlFNfHovtw5vMBpEa4VA-KsHMeebioQoNRVfLt4zPvKW3QxuIlSy5zYQgA4O_2dU3IgLe2qkfp7C3-S-y3imzqjQpKiiwwk2p/s400/green_deal.jpg" border="0" /></a>The Green New Deal</span></strong></div><div><br /><br />By James Kanter</div><div><br /></div><div align="justify">New York Times</div><div><br /></div><div align="justify"><strong><span style="font-size:130%;color:#3366ff;">Achim Steiner, the Executive Secretary of the United Nations Environment Program</span></strong>, proposed a “Green New Deal” on Wednesday.<br /></div><div><br /></div><div align="justify"><strong><span style="font-size:130%;">The financial crisis has stoked widespread concern that momentum toward policies on climate change and sustainability is about to stall.<br /></span></strong></div><div><br /></div><div align="justify"><strong><span style="font-size:130%;"><span style="font-size:180%;">[THAT WOULD BE A GOOD BET].</span></div></span></strong><div><br /></div><div align="justify"><strong><em><span style="font-size:130%;color:#000099;">European governments are among those that are </span></em></strong><a href="http://www.nytimes.com/2008/10/21/business/worldbusiness/21climate.html?_r=1&scp=2&sq=James%20Kanter%20Poland&st=cse&oref=slogin"><strong><em><span style="font-size:130%;color:#000099;">using the crisis as an excuse to ease back</span></em></strong></a><strong><em><span style="font-size:130%;color:#000099;"> on the pace at which they had promised to tackle climate change</span></em></strong>.<br /></div><div><br /></div><div align="justify"><span style="font-size:180%;"><strong>[DO WE SEE EURO-HYPOCRISY??]</strong></span></div><div><br /></div><div align="justify"><strong><span style="font-size:180%;color:#33ff33;">Now, leading figures in environmentalism and conservation are fighting to make the case that saving the planet also will save the economic system.<br /></span></strong></div><div><br /></div><div align="justify"><strong><span style="font-size:180%;color:#33ff33;"><span style="color:#000000;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgxlxXAsSJ5ZbcjwSLdrvIawPcZaxvXiA5EPMY9iOAisCI_cDLdfGKjHmEynA0bCSQpGcSOprXyVM4OzLUj03UsLqTfiDt9AD0qK7CQHu2xRZQf-RX4F3RCTg25HUvROA8ubN2hG282RswH/s1600-h/green_superman_logo_2.jpg"><img id="BLOGGER_PHOTO_ID_5260112424237167698" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; CURSOR: hand" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgxlxXAsSJ5ZbcjwSLdrvIawPcZaxvXiA5EPMY9iOAisCI_cDLdfGKjHmEynA0bCSQpGcSOprXyVM4OzLUj03UsLqTfiDt9AD0qK7CQHu2xRZQf-RX4F3RCTg25HUvROA8ubN2hG282RswH/s400/green_superman_logo_2.jpg" border="0" /></a>[THANK YOU FOR TRYING TO 'SAVE US'].</span></div></span></strong><div><br /></div><div align="justify">Earlier this week, Yvo de Boer, the executive secretary of the <a href="http://unfccc.int/2860.php">United Nations Framework Convention on Climate Change</a>, <a href="http://greeninc.blogs.nytimes.com/2008/10/21/un-climate-change-chief-discusses-global-financial-crisis/">told me</a> <strong><span style="font-size:180%;color:#ff0000;">governments should consider requiring bankers and financiers to check whether their investments faced climate-related liabilities like pending lawsuits or legislation related to global warming</span></strong>.<br /></div><div><br /></div><div align="justify"><strong><em><span style="font-size:130%;">Mr. de Boer said that loans that aren’t vetted for climate liabilities are just as vulnerable as the poorly vetted real estate loans for new houses responsible for triggering the current crisis.</span></em></strong> He said governments could implement the new rules when they sold many of the banks they have taken into public ownership back into private hands.<br /></div><div><br /></div><div align="justify"><strong><span style="font-size:180%;">[</span><span style="font-size:130%;">ON THE SUBJECT OF REGULATORY, CORPORATE GOVERNANCE & REPUTATION & ACCOUNTING RISK MANAGEMENT, ESPECIALLY CONCERNING CONTINGENT ENVIRONMENTAL LIABILITIES, See: Lawrence A. Kogan, <em>Precautionary Preference: How Europe's Regulatory Protectionism Threatens American Free Enterprise</em>, ITSSD White Paper (August 2005), published as - <em>Precautionary Preference: How Europe Employs Disguised Regulatory Protectionism to Weaken American Free Enterprise</em>,<br />International Journal of Economic Development Volume Seven, Numbers 2-3, pp. 65-411 (Dec. 2005), at: </span></strong><a href="http://www.itssd.org/White%20Papers/ijed-7-2-3-kogan.pdf"><strong>http://www.itssd.org/White%20Papers/ijed-7-2-3-kogan.pdf</strong></a><strong> ; <span style="font-size:130%;">See also, EU Commission Response to ITSSD Precautionary Preference Study, at:</span> </strong><a href="http://www.itssd.org/References/Government/EUCommission-ResearchDirectorate-G%5B1%5D...pdf"><strong>http://www.itssd.org/References/Government/EUCommission-ResearchDirectorate-G%5B1%5D...pdf</strong></a> <strong><span style="font-size:180%;">].</span></strong> </div><div><br /></div><div align="justify">On Wednesday Achim Steiner, the executive secretary of the <a href="http://www.unep.org/">United Nations Environment Program</a>, launched an initiative in London <strong><span style="font-size:180%;color:#ff0000;">called the<span style="color:#33ff33;"> </span></span></strong><a href="http://www.unep.org/Documents.Multilingual/Default.asp?DocumentID=548&ArticleID=5955&l=en"><strong><span style="font-size:180%;color:#33ff33;">Global Green New Deal</span></strong></a><span style="color:#ff0000;"><strong><span style="font-size:180%;"> in a deliberate echo of U.S. President Franklin Delano Roosevelt’s plan to tackle the Great Depression.</span></strong><br /></span></div><div><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjO9n6qYayrvMIqTmXPA6w5MQ-QTPVn-OlEjHTsJwEiOui9YshrggX2EA-gbRVFDH5A3A7r_uEZKOrU9bj-IG7w2Xj-HRCOxfm6UxEZRR5DbC1RYJgcZJ_9e9sJJi1MJ4tUq1vmWA4M3kzb/s1600-h/global+crises.jpg"><img id="BLOGGER_PHOTO_ID_5260112597708183746" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; CURSOR: hand" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjO9n6qYayrvMIqTmXPA6w5MQ-QTPVn-OlEjHTsJwEiOui9YshrggX2EA-gbRVFDH5A3A7r_uEZKOrU9bj-IG7w2Xj-HRCOxfm6UxEZRR5DbC1RYJgcZJ_9e9sJJi1MJ4tUq1vmWA4M3kzb/s400/global+crises.jpg" border="0" /></a><br /><span style="color:#ff0000;"><span style="font-size:180%;color:#000000;"><strong>[THESE PERSONS HAVE CREATED THE PERCEPTION OF SIMILAR 'CRISES' FOR THE PURPOSE OF JUSTIFYING THEIR 'SOFT' SOCIALIST REVOLUTION FOR <span style="color:#3333ff;">'CHANGE WE CAN BELIEVE IN'</span>].</strong></span></div></span><div><br /></div><div align="justify">The New Deal “set the stage for the biggest economic growth the world has seen,” said Mr. Steiner. “Today we need similar vision, urgent action and strong political engagement to direct financial flows and manage markets to deal with the even greater global challenges of our time,” he said.<br /></div><div><br /></div><div align="justify"><strong><span style="font-size:180%;">Mr. Steiner’s message is that <span style="color:#ff0000;">massive government investment into industries</span> creating jobs to tackle climate change is the same medicine that could help prevent a prolonged descent into economic misery and reduce bills for imported energy.<br /></span></strong></div><div><br /></div><div align="justify"><strong><span style="font-size:180%;">[NO. <em>THIS</em> ISN'T SOCIALISM, IS IT??]</span></strong></div><div><br /></div><div align="justify">Other business opportunities include clean-tech ventures, sustainable agriculture, conservation, and the intelligent management of the planet’s ecosystems.<br /></div><div><br /></div><div align="justify"><strong><span style="font-size:180%;color:#33ff33;">Mr. Steiner’s organization is proposing to spend $4 million on a study of these ideas</span></strong>, led by Pavan Sukhdev, the head of the global markets business in India for Deutsche Bank, with most contributions toward the cost of the study coming from Norway, Germany and the European Commission. </div><div><br /></div><div align="justify"><strong><span style="font-size:180%;">[ANOTHER BUREAUCRATIC STUDY? OBVIOUSLY, THIS IDEA IS HALF-COOKED AND<em> NOT </em>'READY FOR PRIME TIME'!]</span></strong></div><div></div><div align="justify"><br />The research should be completed in two years, but <strong><span style="font-size:130%;color:#ff0000;"><em><span style="color:#33ff33;">it is a fair bet</span></em> the final report will make the case that governments should invest more money in creating <em><span style="color:#33ff33;">green jobs</span></em></span></strong>, as well as protecting forest lands and other parts of the so-called “ecosystem infrastructure.”</div><div><br /></div><div align="justify"><strong><span style="font-size:180%;">[OF COURSE IT IS. AFTER ALL, ISN'T A POLITICAL DECISION THAT ONLY THE ELITES CAN MAKE??? SO MUCH FOR DEMOCRACY!]</span></strong></div><div></div><div align="justify">------------------------------------------------------------------------------------------------</div><div></div><div align="justify"><a href="http://www.taipanpublishinggroup.com/Taipan-Daily-101708.html">http://www.taipanpublishinggroup.com/Taipan-Daily-101708.html</a></div><div><br /><strong><span style="font-size:130%;color:#3333ff;">The Return of FDR, Part III: The Green New Deal</span></strong> <strong><span style="font-size:130%;color:#3333ff;">[REAL CHANGE - CHANGE WE CAN BELIEVE IN']</span></strong></div><div></div><div align="justify"><br />By Justice Litle, Editorial Director<br /></div><div><br /></div><div align="justify">Taipan Publishing Group </div><div><br /></div><div align="justify"><strong><em><span style="font-size:130%;">For 25 years, the “motor of the world economy” has been the American consumer. With that motor finally threatening to sputter out, the time for a “Green New Deal” is at hand...</span></em></strong></div><div><br /></div><div>The euphoria didn’t last...<br /><br /></div><div align="justify">On Monday, October 13, the Dow racked up its largest one-day point gain in history. In percentage terms, it was the largest single-day gain since 1933.<br /></div><div><br /></div><div align="justify">The rally was a pent-up sigh of relief as governments around the world responded to the credit crisis. The emergency backstop measures put in place by country after country -- see “<a href="http://www.taipanpublishinggroup.com/Taipan-Daily-101608.html" target="_blank" included="null">The Return of FDR, Part II</a>” -- gave investors a glimpse of light at the end of the tunnel. For one day at least, fear was put aside. </div><div><br /></div><div>But then the economic data began to roll in, and the fear returned. Even if the credit crisis comes to an end, the market realized, the pain of global economic downturn could just be getting started.</div><div></div><div align="justify"><br /><strong>New 5-Currency Index CD From EverBank</strong><br /></div><div><br /></div><div align="justify">The new Debt-Free Index CD is comprised of equal parts Singapore dollar, Japanese yen, Swiss franc, Australian dollar and Brazilian real. Why these currencies? All five economies have a strong balance of payments - a factor that could aid performance against the U.S. dollar. <a href="http://www.everbank.com/001CurrencyCDIndexDebtFree.aspx?referID=11663" target="_blank" included="null">Concerned about investing in a weak U.S. dollar? Diversify with this new Index CD.</a></div><div></div><div align="justify"><br />Martin Wolf, one of the sharpest minds at the Financial Times, sees consumer outlook -- “particularly in the English speaking world, and above all the United States” -- as the most important question now. </div><div><br /><br />“Are [consumers] going to be optimistic and spend,” Wolf muses, “or are they going to say, ‘We spent too much. We borrowed too much. Our wealth is falling. Houses are falling, equities are falling, we’ve got to save a lot.” </div><div><br /></div><div>The answer to that question, Wolf believes, will tell us what we need to know about how long the downturn will last.</div><div></div><div align="justify"><br /><strong>Time for a New Motor?</strong></div><div><br /></div><div align="justify"><strong><span style="font-size:180%;color:#ff0000;">George Soros</span></strong> <strong><span style="font-size:130%;">[CAPITALIST-TURNED SOCIALIST EXTRAORDINAIRE]</span></strong> thinks the conclusion is foregone.</div><div align="justify"></div><div><br />For the last 25 years, Soros observes, the “motor of the world economy” has been the American consumer. And not only has the American consumer been aggressively consuming, he “has been spending more than he has been saving.”</div><div><br /><br /></div><div><span style="color:#ff0000;"><strong>“So that motor is now switched off,”</strong> <strong><span style="font-size:180%;">says Soros</span>. “It’s finished. It’s run out of -- can’t continue.</strong> </span></div><div><br /></div><div align="justify">You need a new motor.”<br /></div><div><br /></div><div align="justify">The declines of that truly awful week when the Dow lost 18% were tied to the credit crisis. Before governments across the globe stepped up, there was a fear that nothing would be done.</div><div><br /><br />The declines that followed Monday’s rally, however, were tied to a separate issue... rooted in fears that the U.S. consumer may, after many years and countless false alarms, be well and truly tapped out. If so, we don’t know what the new “motor of the world economy” is going to be.<br /></div><div></div><div align="justify">Soros has a notion of what that new motor could be. Moral aspects aside, I think he is right. It’s an idea some readers will like and others will hate...<br /></div><div><br /></div><div align="justify"><strong><span style="font-size:180%;color:#33ff33;">“We have [another] big problem,” Soros says. “Global warming.</span></strong> It requires big investment. And that could be the motor of the world economy for years to come... instead of consuming, building an electricity grid, saving on energy, rewiring the houses, adjusting your lifestyle where energy has got to cost more until you introduce those new things. So it will be painful. But at least we will survive and not cook.”<br /></div><div><br /></div><div align="justify"><strong><span style="color:#33ff33;"><span style="font-size:130%;">The Green New Deal </span><br /></span></strong></div><div><br /><br /></div><div align="justify">Concerns over global warming and the high cost of fossil fuels are closely aligned. Whether or not you embrace the concept of global warming -- and there is still real debate on the subject -- you no doubt remember the sky-high fuel prices the world had to deal with earlier this year.<br />Energy prices are falling now, mainly due to deflation fears and the phenomenon of “demand destruction.” But when global growth resumes, energy prices will go right back up again. And then there are the indirect costs, like the rampant pollution and quality-of-life issues that plague China and India.</div><div><br /></div><div align="justify"><strong><span style="font-size:180%;color:#33ff33;">Many top thinkers thus agree with Soros. There is a very strong feeling that the world needs a “Green New Deal”... an alternative-energy-focused motor</span></strong> that can get the global economy humming again.<br /></div><div align="justify"></div><div align="justify"></div><div align="justify"><strong><span style="font-size:130%;">2008 versus 1932</span></strong><br /></div><div><br /></div><div align="justify"><strong><span style="font-size:130%;">Let’s take a quick look at the similarities between now and the 1930s.</span></strong></div><div><br /><br /></div><div>When FDR took office in 1932, a devastating financial crisis was in full swing. (Sound familiar?) The country was desperate for leadership. Partisan lines were blurred as the whole of America demanded change. </div><div><br /></div><div>FDR wasted no time laying into the bankers. His harsh words were right in synch with today’s times: “Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men....The money changers have fled from their high seats in the temple of our civilization.”<br /></div><div><br /></div><div align="justify">Fled from their high seats, indeed. After declaring a bank holiday, FDR wasted no time in drafting new legislation, overhauling the system, and generally trying to get America back to work. </div><div><br /></div><div>American farmers were a major focus of FDR’s New Deal. The general belief was that farming held the key to getting the economy back on its feet. In the end, many controversial programs and measures were put in place... more than a few that live to this day. While farming served as the linchpin back then, green energy can serve as the linchpin now.<br /></div><div><br /></div><div align="justify">So was the original New Deal effective? Was it a good thing? That’s a can of worms your humble editor would rather not open. </div><div><br /></div><div align="justify">Some feel FDR did little more than dig holes so he could order men to fill them up again. The skeptics further argue it was really only World War II that brought the United States out of its epic slump. FDR’s defenders, on the other hand, feel that the programs implemented and leadership provided were absolutely necessary for the times. Your humble editor shrugs.</div><div></div><div align="justify"><br />The 3 stocks you’ll need to bank as much as 19,000% on the new Gas Rush<br /></div><div><br /></div><div align="justify">Ballooning crude prices and shifting energy technologies have pushed the world to the brink of a global rush on natural gas. Here are the 3 petro-companies one ace analyst predicts are poised to cash in the most — including one that recent history proves could quickly yield 190-fold gains. <a href="http://www.isecureonline.com/reports/CST/WCSTJA15/" target="_blank" included="null">Get all the details on these companies, and the maverick who recommends them, right HERE...</a><br /></div><div><br /></div><div align="justify"><strong>Pragmatic Thoughts (Not Moral Pronouncements)</strong><br /></div><div><br /></div><div align="justify">We are more interested here in sussing out what’s likely to happen, rather than debating the right or wrong of whether it should. And in that regard, <strong><span style="font-size:130%;color:#33ff33;">it looks like the pieces are in place for the new FDR (i.e., America’s next president) to implement a Green New Deal</span></strong>. </div><div><br /></div><div>Consider the backdrop of current events:<br /><br /></div><div align="justify">• We are in a time of unprecedented financial crisis (not unlike 1932), with little or no dissent toward the assertion that free-market capitalism has imperiled its very existence (and must be reined in).<br /></div><div><br /></div><div align="justify">• The American public -- and the world at large -- is desperate for leadership, to a degree that is only possible in a time of true crisis. (When things are better, people focus on their day-to-day lives.)<br /></div><div><br /></div><div align="justify">• Political leaders have the added impetus of avoiding at all costs a repeat of the mid-to-late 1930s. Their desire to sidestep the full “Great Depression experience” creates an added sense of urgency.<br /></div><div><br /></div><div align="justify">• In terms of economic thought, John Maynard Keynes rules the day. When all the “guarantees” are added up, trillions have already been committed on both sides of the Atlantic. Trillions more could well follow.<br /></div><div><br /></div><div align="justify">• U.S. consumers account for 20% of world GDP in spending terms (Martin Wolf). Global leaders everywhere are deeply aware of the danger of John Q. Public sputtering out, and thus deeply keen to get a new “motor” up and running.<br /></div><div><br /></div><div align="justify">• Alternative energy is the “motor” candidate for which all the right boxes are checked. There is moral authority (via global warming concerns); global buy-in (via the energy issues all non oil-exporting countries face); massive scale and scope (projects too vast for the private sector to handle, i.e. retrofitting tens of thousands of gas stations across the U.S.); and, last but not least, a genuine need for massive spending (many trillions for new and upgraded infrastructure).<br /></div><div><br /></div><div align="justify"><strong><span style="font-size:130%;">From <span style="color:#3333ff;">Pelosi </span>to <span style="color:#ff0000;">Eisenhower</span></span><span style="color:#ff0000;"><br /></span></strong></div><div><br /></div><div align="justify">We are likely to see more crisis spending in the days ahead. Like the war in Iraq, the final tally for government involvement in the global financial system will only rise and rise. (Unlike Iraq, however, there is at least the possibility that taxpayers will profit... but that’s a speculative notion, and a very long-term one at that.)</div><div></div><div align="justify"><br /><strong><span style="font-size:180%;color:#3333ff;">On October 8, House Speaker Nancy Pelosi gave a foretaste of this with her call for a $150 billion stimulus package aimed at Main Street rather than Wall Street. Assuming an Obama win, the Democrats are planning to hit the ground running on November 5. That means breaking out the checkbooks for Round Two (and Three, and Four, and so on). </span></strong></div><div></div><div align="justify"><br /><strong><span style="color:#ff0000;">If McCain wins, the spending outlook doesn’t change that much. </span></strong>He, too, has plans to bail out U.S. homeowners. <span style="color:#ff0000;"><strong>A Republican White House paired up with a Democratic Congress might even touch off a “top this” contest to see who can be more generous</strong>.<br /></div></span><div><br /></div><div align="justify"><strong><em><span style="color:#33ff33;">Whoever wins, the U.S. budget is going to be busted like never before.... and it will not be long before the “Green New Deal” starts taking shape</span></em></strong>. As it does, do not be surprised to hear a buildup of references to good old Dwight Eisenhower.<br /></div><div><br /><br /></div><div align="justify">Roughly one half century ago, <strong>President Eisenhower signed the Federal-Aid Highway Act of 1956. As a result, there are just under 47,000 miles of interstate highway crisscrossing the United States today</strong>. The longest stretch, route I-90, runs a full 3,000 miles across the continent.<br /></div><div align="justify"></div><div align="justify"></div><div align="justify">Ike’s highway system was not at all cheap to build, and still costs upwards of $80 billion a year to maintain. But given all we’ve gotten these past 50 years, who will dispute it was worth it? The open road is an indelible part of American life and culture -- not to mention the incalculable value of transport, or the millions of truck stops, burger joints and bedroom communities that sprang up on the new interstate.<br /></div><div><br /></div><div align="justify"><strong>From Roof to Shining Roof</strong><br /></div><div><br /></div><div align="justify">When you start with Ike’s highways, it’s not hard to imagine the same type of grand vision applied to green energy solutions. </div><div></div><div align="justify"><br />The soaring speeches practically write themselves. Just imagine it: <strong><em><span style="font-size:130%;color:#ff0000;">Millions of proud, hard-working Americans climbing up on the roofs of their eco-friendly homes, installing the solar panels that will set them free from the burden of high energy costs</span></em></strong>, while leading an industry boom that restores and renews the nation.<br /></div><div></div><div></div><div align="justify">Or picture fresh-faced toddlers waving from the back seats of biodegradable electric cars -- cars built by American hands in freshly capitalized Ford and GM plants, designed to travel up to 300 miles per day on near-zero emissions, plugging into the natural gas and nuclear-powered grid at night to refuel. My Country ‘Tis of Thee, Sweet Land of Li-ber-ty...</div><div><br /></div><div align="justify">OK, that was a little cynical. But you get the idea. If the U.S. consumer is tapped out, then America -- and the world -- will need a new deal. So why not make it a green one? And on top of that... whisper it now... who wouldn’t mind another investment bubble (this time in alternative energy shares)?</div><div align="justify"></div><div align="justify"><br />Mind or not, we’re going to get one of those, too... a new bubble, that is. When the next mania comes, alternative energy is almost certainly where it will take root. Financial panics will come and go, just as they’ve been doing for thousands of years -- did you know Wikipedia has an entry for “The Business Panic of 33 AD”? -- but human nature never changes.<br /><br /></div><div></div><div align="justify"><strong><span style="font-size:180%;color:#ff0000;">Who Pays for All This?</span></strong><br /></div><div><br /></div><div align="justify">By now you might be wondering: <strong><span style="font-size:180%;color:#009900;">Who’s gonna pay for all this stuff? Where will the money come from?<br /></span></strong></div><div><br /></div><div align="justify"><strong><span style="font-size:180%;color:#ff0000;">It’ll mainly be taxpayers, of course... the same people who always pay.</span></strong> But a mass investment wave in global green infrastructure will at least have some nice follow-on benefits. <strong><em><span style="font-size:130%;">Like Eisenhower’s highways, we’ll get something solid in return for our investment</span></em></strong> -- unlike the trillions that simply vanished into the maw of the great Wall Street housing bubble ponzi scheme.<br /></div><div><br /></div><div align="justify"><strong><span style="font-size:180%;color:#ff0000;">Over-eager investors will also voluntarily pay a big chunk of the “green” bill, too</span></strong>. I speak here of those who will wind up plowing their money into the green tech bubble (once it inflates) at the very height of the boom, paying for excess capacity that plummets in price to become a cheap consumer good later.<br /></div><div><br /></div><div align="justify"><strong><span style="font-size:130%;">In other words, excess capacity in the short run will lead to wonderfully cheap green energy in the long run. It will happen with “green tech” the same way things are playing out now with bandwidth. </span></strong>A few years back, bubble-hyped telecom investors fudged the profit calculations on thousands of miles of fiber-optic cable. In result, they were forced to sell their stakes at a blowout loss, leaving the cable in the ground for you and me to enjoy at low cost.<br /></div><div><br /></div><div align="justify"><strong><span style="font-size:130%;">It’s an old historical pattern. We saw it even earlier with the railroad boom and bust. After the great railroad investment debacle, the trains and tracks were still there for the country to use.</span></strong> </div><div><br /></div><div align="justify"><strong><span style="font-size:180%;color:#ff0000;">On the heels of the Green New Deal will be the Green Mega-Investment Bubble -- and then, when that bursts, a wonderful glut of energy saving technologies on the other side.<br /></span></strong></div><div><br /></div><div align="justify">But now we’re getting ahead of ourselves... There will be huge profits to be made on the run-up in all things green, likely sustainable for many years, before we circle back round to bust again. And so it goes.<br /></div><div><br /></div><div align="justify">My apologies... I thought we’d be able to close with a discussion of the dollar and gold as it relates to all this. But I don’t want to give such an important topic short shrift, so we’ll return to that next week.<br /></div><div><br /></div><div align="justify">Meanwhile, I’d love to hear from you. What do you think of Martin Wolf’s question? Is your own household optimistic or pessimistic heading into the future? Do you like the thought of a new FDR taking the reins, or does it turn your stomach? <strong>What’d you think of the old FDR? Hero? Villain? Overrated meddler? What are your thoughts on the Green New Deal? Is it a good direction for our country (and the world)? </strong></div><div></div><div><br />Let me know: <a href="mailto:%20%3Cscript%20language=" included="null" 20type="text/javascript" 20="%20'ma'%20+%20'il'%20+%20'to';%20var%20path%20=%20'hr'%20+%20'ef'%20+%20'=';%20var%20addy55457%20=%20'justice'%20+%20'@';%20addy55457%20=%20addy55457%20+%20'taipandaily'%20+%20'.'%20+%20'com';%20document.write(%20'%3Ca%20'%20+%20path%20+%20'\''%20+%20prefix%20+%20':'%20+%20addy55457%20+%20'\'%3E'%20);%20document.write(%20addy55457%20);%20document.write(%20'%3C\/a%3E'%20);%20//--%3E\n%20%3C/script%3E%3Cscript%20language='JavaScript'%20type='text/javascript'%3E%20%3C!--%20document.write(%20'%3Cspan%20style=\'display:%20none;\'%3E'%20);%20//--%3E%20%3C/script%3EThis%20e-mail%20address%20is%20being%20protected%20from%20spambots.%20You%20need%20JavaScript%20enabled%20to%20view%20it%20%3Cscript%20language='JavaScript'%20type='text/javascript'%3E%20%3C!--%20document.write(%20'%3C/'%20);%20document.write(%20'span%3E'%20);%20//--%3E%20%3C/script%3E""><br /></div></a><div><br /></div><div align="justify">Warm regards,<br /></div><div><br /></div><div align="justify">JL</div><div><br />------------------------------------------------------------------------------------------------</div><div></div><div align="justify"><a href="http://www.guardian.co.uk/environment/2008/oct/08/climatechange.carbonemissions">http://www.guardian.co.uk/environment/2008/oct/08/climatechange.carbonemissions</a></div><div><br /><span style="font-size:130%;color:#000099;"><strong><span style="color:#33ff33;">New deal</span> offers an alternative to global fatalism</strong></span></div><div><br /></div><div align="justify">By Caroline Lucas</div><div><br /></div><div>The Guardian</div><div><br /></div><div>October 8 2008 </div><div><br /><br /></div><div align="justify"><strong><span style="font-size:130%;color:#33ff33;">There's a received wisdom that Greens don't do well in a recession. As the threat of unemployment pushes the environment out of voters' minds, green issues take a back seat. So it has proved in every recession</span></strong>. Except this one.<br /></div><div></div><div></div><div align="justify">I became leader of the Green party just two days after one of the most far-right administrations in US history was forced to nationalise nearly half of the country's mortgage market. The financial crisis we are entering has variously been described as the worst since 1978, '47, '33 and '29. And yet <strong><em><span style="font-size:130%;color:#33ff33;">the Greens are continuing to climb in the opinion polls</span></em></strong>.<br /></div><div><br /></div><div align="justify"><strong><span style="font-size:180%;color:#ff0000;">People are coming to the realisation that the system of globalised markets - unregulated, unpoliced and unguided - is fatally flawed. Everyone agrees that we need to confront the failed corporate control of our economy, and restore it to democratic control. Everyone, that is, except the establishment parties in Westminster.<br /></span></strong></div><div><br /></div><div align="justify"><strong><span style="font-size:180%;">[<span style="color:#33ff33;">GREEN/ECO-</span><span style="color:#ff0000;">SOCIALISM</span> IS THE ANSWER!!]</span></strong></div><div><br /></div><div align="justify"><span style="color:#ff0000;"><span style="font-size:180%;"><strong>Labour, the Conservatives and the Liberal Democrats have, bizarrely, chosen this moment to converge in support of the kind of neoliberalism that has caused this crisis in the first place</strong>.</span></span> In doing so, they have abandoned not only common sense but also the majority of voters.<br /></div><div><br /></div><div align="justify">Conversely, <strong>the Green party has seriously got to grips with the economic situation and is delivering practical solutions.</strong> <span style="font-size:180%;color:#33ff33;"><strong>[??]</strong></span> We are more confident than ever in destroying the myth that we are a single-issue party. We are stepping into the gap left by parties that are now opposition in name only, exposing the economic and social failings of the establishment.<br /></div><div><br /></div><div align="justify">The alternative we are providing is practical. Gordon Brown spent days haggling with energy barons to deliver a half-hearted, excessively means-tested response to fuel poverty. In Kirklees, Yorkshire, Green councillors delivered a universal free insulation scheme that will slash the bills of 40,000 households, while also creating jobs, providing training, and cutting carbon emissions.<br /></div><div><br /></div><div align="justify"><strong><span style="font-size:180%;">[WHO WILL PAY FOR THAT??]</span></strong></div><div><br /></div><div align="justify">At national level too, <strong><span style="font-size:180%;color:#33ff33;">Greens are helping to set an agenda for change</span></strong>. <strong><span style="font-size:180%;color:#3333ff;">['CHANGE WE CAN BELIEVE IN']</span></strong> With a group of eight others, including the Guardian's Larry Elliot, <strong><span style="font-size:180%;color:#ff0000;">I have co-authored a proposal for a <span style="color:#33ff33;">Green New Deal</span> to tackle what is, in reality, a 'triple crunch': economic recession, accelerating climate change, and rising oil prices underpinned by an encroaching peak in oil production</span></strong>.<br /></div><div><br /></div><div align="justify">Like Roosevelt, who launched his New Deal during the Great Depression of the 1930s, we need to end the fairytale that the economy can look after itself, and all of us, through trickle-down and the invisible hand. <strong><span style="font-size:180%;"><span style="color:#33ff33;">The Green New Deal</span> <span style="color:#ff0000;">calls for the re-regulation of finance and taxation, cracking down on tax evasion, and de-merging the mega-banks</span> into more containable entities, closer to the real economy, with retail banking separated from high finance</span></strong>.<br /></div><div><br /></div><div align="justify"><strong><span style="font-size:180%;color:#33ff33;">It also means investment in the infrastructure of tomorrow's economy. For 1930s America, that meant bridges and agricultural colleges. With climate change and peaking oil production, what we need today are home insulation, public transport and renewable energy</span></strong>. A 21st-century project to make the nation's buildings truly energy efficient, together with a revolution in renewable energies, would secure our energy supplies into the future, protect us against oil price fluctuations, re-invigorate our manufacturing sector and seriously address climate change.<br /></div><div><br /></div><div align="justify"><strong><span style="font-size:180%;color:#ff0000;">In addition to government funding</span></strong>, <strong><em><span style="font-size:130%;">inducements for private investments from pensions and other savings would be introduced,</span></em></strong> to generate thousands of high-quality, green-collar jobs, revitalise money flows, loosen ties to unreliable oil markets and cut carbon emissions.<br /></div><div><br /></div><div align="justify">The Green party is poised to send MPs to Westminster for the first time. In Brighton Pavilion, where I am standing, the most recent election results show we are now ahead of all the other parties. The same is true in Norwich South, where Adrian Ramsay, is on course to unseat Charles Clarke. And in Lewisham-Deptford, the deputy chair of the London Assembly, Darren Johnson, has turned one of the safest Labour seats in the country into a key battleground. <strong><span style="font-size:180%;color:#ff0000;">It's my priority as leader to make sure we communicate to people that there is <em><span style="color:#33ff33;">an alternative to a drab, fatalistic, neoliberal establishment</span></em>.</span></strong></div><div></div><div align="justify"><br />By offering universal free insulation to communities, we'll cut bills, create jobs, and start the work of creating a housing stock fit for a zero-carbon economy. <strong><span style="font-size:180%;color:#ff0000;">By attacking poverty and pay, we'll address the inequality that blights lives - and stimulate the economy at the same time. </span></strong></div><div><br /></div><div align="justify"><strong><span style="font-size:180%;">[WHAT YOU MEAN TO SAY, IS THAT YOU WISH TO 'SPREAD THE WEALTH AROUND' - <span style="color:#3333ff;">'YES WE CAN'</span>!]</span></strong></div><div><br /><em>• Caroline Lucas is leader of the Green party and a Green MEP.</em></div><div></div><div align="justify"><em>------------------------------------------------------------------------------------------------ </em></div><div></div><div align="justify"><a href="http://www.independent.co.uk/environment/green-living/a-green-new-deal-can-save-the-worlds-economy-says-un-958696.html">http://www.independent.co.uk/environment/green-living/a-green-new-deal-can-save-the-worlds-economy-says-un-958696.html</a> </div><div></div><div><strong><span style="font-size:130%;color:#33ff33;">A 'Green New Deal' can save the world's economy, says UN</span></strong></div><div><br /></div><div>By Geoffrey Lean</div><div></div><div><br />The Independent.co.uk</div><div><br /></div><div align="justify">12 October 2008 </div><div><br /></div><div align="justify"><strong><span style="font-size:180%;color:#3366ff;">Top economists and United Nations leaders</span></strong> are working on a <strong><span style="font-size:180%;color:#33ff33;">"Green New Deal" to create millions of jobs, revive the world economy, slash poverty and avert environmental <span style="color:#ff0000;">disaster</span></span></strong>, as the financial markets plunge into their deepest crisis since the Great Depression.<br /></div><div><br /></div><div align="justify"><strong><span style="font-size:180%;">[THEY ARE TRYING TO 'SAVE THE WORLD' FROM EVIL MARKET CAPITALISM AND ITS ENVIRONMENTAL & SOCIAL CONSEQUENCES]</span></strong></div><div><br /></div><div align="justify"><strong><span style="font-size:130%;color:#ff0000;">The ambitious plan</span></strong> – the start of which will be formally launched in London next week - <strong><em><span style="font-size:130%;color:#33ff33;">will call on world leaders, including the new US President, <span style="color:#ff0000;">to promote a massive redirection of investment away from the speculation</span> that has caused the bursting “financial and housing bubbles” and into job-creating programmes to restore the natural systems</span></em></strong> that underpin the world economy.<br /></div><div><br /></div><div align="justify"><strong><span style="font-size:180%;">[IN OTHER WORDS, MASSIVE WEALTH REDISTRIBUTION FROM THE UNITED STATES TO ALL OTHER NATIONS!]</span></strong></div><div><br /></div><div align="justify">It aims to convince them that, <strong>far from restricting growth, healing the global environment will be a desperately -needed driving force behind it.<br /></strong></div><br /><div><br /></div><div align="justify"><strong><span style="font-size:180%;"><span style="color:#33ff33;">The Green Economy Initiative</span> - <span style="color:#3366ff;">which will be spearheaded by the United Nations Environment Programme (UNEP)</span>,</span></strong> headquartered here, and is already being backed by governments – draws its inspiration from Franklin Roosevelt's New Deal, which ended the 1930s depression and helped set up the world economy for the unprecedented growth of the second half of the 20th century.<br /></div><div><br /><br /></div><div align="justify"><strong><span style="font-size:180%;">[EUROPEAN DESIGNED, UN-ENFORCED ENVIRONMENTAL, ECONOMIC, SOCIAL GLOBAL GOVERNANCE].</span></strong></div><br /><div></div><div align="justify">It, too, envisages basing recovery on providing work for the poor, as well as reform of financial practices, after a crash brought on by unregulated excesses of the free market and the banking system.<br /></div><div><br /></div><div align="justify">The new multimillion dollar initiative – which is being already funded by <strong><span style="font-size:130%;color:#000099;"><span style="font-size:180%;">the German and</span> </span></strong><strong><span style="font-size:180%;"><span style="color:#000099;">Norwegian Governments and the European Commission</span> – arises out of a study commissioned by world leaders at the 2006 G8 summit into the economic value of ecosystems. It argues that <span style="color:#ff0000;">the world is caught up in not one, but three interlinked crises</span>, with the food and fuel crunches accompanying and intensifying the financial one.<br /></span></strong></div><div><br /></div><div align="justify"><strong><span style="font-size:180%;">[THE USE OF 'CRISES' AS A PRETENSE TO JUSTIFY MASSIVE EURO-SOCIALIST ENVIRONMENTAL & FINANCIAL REGULATION AND TAXATION, PROMOTED THROUGH THE UNITED NATIONS].</span></strong></div><div></div><div><br />Soaring prices of grain and oil, it stresses, have stemmed from outdated economic priorities that have concentrated on short term exploitation of the world's resources, without considering how they can be used to sustain prosperity in the long term. Over the last quarter of a century, says UNEP, world growth has doubled, but 60 per cent of the natural resources that provide food, water, energy and clean air have been seriously degraded. </div><div><br /></div><div align="justify"><strong><span style="font-size:180%;color:#33ff33;">Achim Steiner, UNEP's Executive Director, adds that new research shows that every year, for example the felling of forests deprives the world of over $2.5 trillion worth of such services</span></strong> in supplying water, generating rainfall, stopping soil erosion, cleaning the air and reducing global warming . By comparison, he points out, the global financial crisis is so far estimated to have cost the world the smaller one-off sum of $1.5 trillion.<br /></div><div><br /></div><div align="justify"><strong><span style="font-size:180%;color:#33ff33;">“We are pushing, if not pushing past, the limits of what the planet can sustain,” he says. “If we go on as we are today’s crisis will seem mild indeed compared to the crises of tomorrow”.<br /></span></strong></div><div><br /></div><div align="justify"><strong><span style="font-size:180%;">[THE U.N.'s STEINER IS WARNING US ALL ABOUT THE 'MOTHER OF ALL CRISES' - EARTHLY ARMAGEDDON!]</span></strong> </div><div align="justify"><br /><br /><strong><span style="font-size:180%;color:#33ff33;">Switching direction and concentrating on 'green growth', he says, will not only prevent such catastrophes, but rescue the world's finances.</span></strong> “The new, green economy would provide a new engine of growth, putting the world on the road to prosperity again. This is about growing the world economy in a more intelligent, sustainable way.<br /></div><div align="justify"><br /></div><div align="justify"><strong>“</strong><em><strong>The 20th century economy, now in such crisis, was driven by financial capital. The 21st century one is going to have to be based on developing the world's natural capital to provide the lasting jobs and wealth that are needed, particularly for the poorest people on the planet”<br /></div></strong></em><em><strong></strong></em><div><br /></div><div align="justify">He says for example, that it makes more sense to invest in preserving forests, peatlands and soils, which naturally absorb carbon dioxide, than destroying them and then developing expensive technology to do the job.<br /></div><div><br /></div><div align="justify">He points out that the world market for environmental goods and service already stands at $1.3 trillion and is expected to double over the next 12 years even on present trends, and adds. </div><div><br /></div><div align="justify">“There is an enormous opportunity to ride on this increasing global demand for environmental improvement and turn it into the driver of economic growth, job creation and poverty reduction that is now so desperately needed. And in some places it is already beginning to happen.”<br /></div><div><br /></div><div align="justify">Mr Steiner will launch the initiative in London a week on Wednesday, October 22nd, with the announcement of three projects, concentrating on how investing in the world's natural systems, in renewable energy and in other green technologies would stimulate growth and provide jobs, and giving examples of where it is already taking place.<br /></div><div><br /></div><div align="justify">He will describe, for example, how Mexico is now employing 1.5 million people to plant and manage forests, how <strong><span style="font-size:180%;">China has created the world's biggest solar energy industries</span></strong> from scratch in just a few years, and how <strong><span style="font-size:130%;"><em>Germany has leapt from being a laggard to a leader in renewable energy by giving people attractive incentives to install it in their home. </em></span></strong></div><br /><br /><div><br /></div><div align="justify"><strong><span style="font-size:180%;color:#ff0000;">[HOW IS THAT BEING PAID FOR? AND WHO IS PAYING FOR IT? VIA ENVIRONMENTAL TAXES & USER FEES, NO DOUBT?]</span></strong></div><div><div></div><div></div><div>Pavan Sukhdev, the chair of <em><strong><span style="font-size:130%;color:#000099;">Deutschbank's Global Market Centre</span></strong></em>, who is leading the initiative, says: “. Hundreds of millions of jobs can be created, there is no question that traditional industries like steel and cars cannot provide them. But this is a really huge business opportunity.”</div></div>ITSSD Charitable Missionhttp://www.blogger.com/profile/00790887154748866904noreply@blogger.com0tag:blogger.com,1999:blog-1851218948450486986.post-33921933364695064462008-10-19T10:34:00.176-04:002008-11-05T11:19:26.987-05:00''Yes We Can' - 'Crises' Used as Pretense for EURO-Socialist Global Governance-based Wealth Redistribution - 'Change We Can Believe In'<div align="justify"><strong><span style="font-size:180%;color:#ff0000;">''Yes We Can' - 'Crises' Used as Pretense for EURO-Socialist Global Governance-based Wealth Redistribution - 'Change We Can Believe In'"</span></strong></div><p><br /> </p><p><a href="http://www.msnbc.msn.com/id/27550469/?GT1=43001">http://www.msnbc.msn.com/id/27550469/?GT1=43001</a></p><p><strong><span style="font-size:130%;">Hard choices and challenges follow triumph<br />Obama ran on platform of change — now he must spell out exactly how<br /></span></strong></p><p>By Dan Balz</p><p> </p><p>The Washington Post</p><p> </p><p>November 5, 2008</p><p> </p><p><strong><span style="font-size:130%;">...<span style="color:#3333ff;"><span style="font-size:180%;color:#ff0000;">Rep. Rahm Emanuel (Ill.)</span>, the fourth-ranking Democrat in the House, argued that <span style="font-size:180%;color:#ff0000;">"no crisis should go to waste,"</span> meaning that the depth of the country's problems create an opportunity for the next president to offer big solutions on issues like energy and health care... </span><span style="font-size:180%;color:#ff0000;">Emanuel is under consideration to become White House chief of staff...</span></span></strong><br /></p><p>------------------------------</p><div align="justify"><strong><span style="font-size:180%;">OUTLINE</span></strong></div><br /><br /><br /><div align="justify"><strong><span style="font-size:130%;">I. Introduction</span></strong></div><br /><br /><br /><div align="justify"><strong><span style="font-size:130%;">II. European and Certain U.S. Leaders Are Using the Exaggerated Climate 'Crisis' as a Pretense for Strict New Global Governance Wealth Redistribution Regulations to Save the World from the Enviromental Externalities 'Triggered' by Anglo-American Market-based Capitalism<br /></span></strong></div><br /><br /><div align="justify"><strong><span style="font-size:130%;"><br />III. European and Certain U.S. Leaders Have Characterized the Current Financial 'Crisis' as One of Capitalism', and Are Using it as a Pretense to Reform Global Financial Markets as Part of an Overall Effort to Create a NEW Global Governance Regime Intended to 'Save' Anglo-American Market-based Capitalism From Itself'<br /><br /><br />IV. European and Certain U.S. Leaders Have Called for Global Financial Governance Reforms Based on Feared Similarities Between the Causes of 19th Century Globalization and the Current Era of Globalization. Certain U.S. Leaders Also Seek to Use This 'Crisis' as an Opportunity to Complete Their Long-Term 'European Experiment' Gone Awry </span></strong><br /></div><br /><br /><br /><div align="justify"><strong><span style="font-size:130%;">V. List of Sources (set forth below in order of appearance)</span></strong> </div><br /><br /><br /><div align="justify"><strong><span style="font-size:130%;"><em></em></span></strong></div>-------------------------------------------------------------------------------------------------<br /><br /><br /><div align="justify"><strong><span style="font-size:130%;"><em>I. Introduction:</em></span></strong></div><br /><br /><br /><br /><div align="justify"><strong><span style="font-size:130%;">The following articles demonstrate efforts being undertaken by current and former public officials in Europe and the United States to sensationalize and exploit 'CRISES' (both real - financial and exaggerated - climate change) to justify the imposition, at the national, regional and global levels, of more public regulation of private economic activities. This pretense for more governmental control of peoples' private economic lives is <span style="font-size:180%;color:#ff0000;">NOT CONDITIONED ON</span> the need to establish reasonable and fair <span style="font-size:180%;color:#ff0000;">'rule of law'</span> substantive and procedural benchmarks (verifiable empirical science, economic cost-benefit analysis, political checks and balances/balance of powers - accountability, transparency and 'due process) for the public benefit and consistent with individual rights. Unfortunately, the strict rules and regulations called for will, no doubt, impair individual rights and national sovereignty. They also fall outside the requirements of due process, transparency and political accountability which are guaranteed to ALL U.S. citizens by the U.S. Constitution and its accompanying Bill of Rights. </span></strong></div><br /><br /><br /><br /><div align="justify"><strong><span style="font-size:130%;">These 'leaders' implore their public constitutents to simply 'trust' in their knowledge, judgment, foresight and grandiose 'reputations' when, in reality, it is precisely their LACK OF wisdom, knowledge, foresight, sincerity and judgment that we all should be suspect of and concerned about!</span></strong></div><br /><br /><br /><br /><div align="justify"><strong><span style="font-size:130%;"><span style="font-size:180%;color:#ff0000;">NO</span>. The burden is on governmental officials to present to the public credible evidence that substantiates and differentiates the real risks from the potential but remote hazards they have exaggerated, and which they claim must be reduced or eliminated (i.e., problems they wish to solve) immediately. If they are unable to prove that there is an urgent problem that necessitates 'fixing' in the first place AND that their recommended solutions to the problem identified provide the best 'fix' at 'the least cost' to individuals' political and economic rights, especially that of exclusive private property, then they CANNOT go forward with their proposals and/or recommendations, for they will NOT have the consent of the governed.</span></strong></div><br /><br /><br /><br /><div align="justify"><strong><span style="font-size:130%;">In the United States, the legitimacy of the <span style="font-size:180%;color:#ff0000;">'rule of law'</span> and the license to be governed by all branches of the U.S. Government, including the Executive, Legislative AND Judicial branches, derives from the consent of the American people. </span></strong><strong><span style="font-size:130%;">Former U.S. President Abraham Lincoln clearly recognized that the American nation was: 1) "<span style="font-size:180%;">conceived in Liberty and dedicated to the proposition that all men are created equal</span>"; 2) uniquely and flexibly structured to serve the needs and interests of both the individual and the American people as a whole; and 3) one in which the government is constrained (limited) by the <span style="font-size:180%;">'rule of law'</span> <span style="font-size:180%;">(rather than based upon the 'rule of men')</span>, founded on the universal principles set forth within the U.S. Declaration of Independence and the U.S. Constitution and its accompanying Bill of Rights. It is worth repeating to these 'leaders' that, the U.S. Government has long derived its legitimacy ONLY from the consent of the governed - i.e., the American people. <span style="color:#ff0000;">THIS IS NOT EUROPE, WHERE THE PEOPLE DERIVE THEIR RIGHTS FROM THE GRACE OF THE GOVERNMENT!! </span></span></strong></div><br /><br /><br /><br /><div align="justify"><strong><span style="font-size:130%;">Arguably, the governing documents of the United States are as unique in today's world as they were when they were adopted during the 18th Century. The U.S. nation remains the oldest and most stable form of representative democracy (a true republic) in the world today. Thus, it would immeasurably benefit peoples around the world (but not perhaps their elitist leaders and governments) if these documents served as the framework for <span style="font-size:180%;">a new global 'rule of law' system of Governance <em>'Of the People, By the People, and For the People'.</em></span> </span></strong></div><br /><br /><p><br /><strong><span style="font-size:130%;">According to one European legal expert:</span></strong></p><br /><p align="justify"><br /><strong><em>"The purpose of <span style="font-size:180%;">the rule of law</span> is to tame the discretionary power of government and thus enable individuals to pursue their private ends in efficiency-friendly way[s]. On the other hand, <span style="font-size:180%;color:#ff0000;">the rule of men</span> is about the power of the ruling group to make discretionary changes in the pursuit of its own ends. A major difference between the rule of law and <span style="font-size:180%;color:#ff0000;">the rule of men</span> is that the rule of law requires a well-defined, stable and credible process by which formal rules can be changed. In a rule of men state, changes in formal rules are a vehicle through which the ruling group seeks its ends."</em></strong><br /><br /></p><br /><p align="justify"><strong><span style="font-size:130%;">See: SVETOZAR (STEVE) PEJOVICH, CAPITALISM AND THE RULE OF LAW: THE CASE FOR COMMON LAW 5 (2007) <a href="http://economics.gmu.edu/pboettke/Boettke/workshop/fall07/Pejovich.pdf">http://economics.gmu.edu/pboettke/Boettke/workshop/fall07/Pejovich.pdf</a> </span></strong><strong><span style="font-size:130%;">(emphasis added) (permission for citation obtained), referenced in Lawrence A. Kogan, <em>The Extra-WTO Precautionary Principle: One European 'Fashion' Export the United States Can Do Without</em>, 17 Temple Political & Civil Rights Law Review 2, (Spring 2008) 491, 602-603, fn 574, at: <a href="http://www.itssd.org/Kogan%2017%5B1%5D.2.pdf">http://www.itssd.org/Kogan%2017%5B1%5D.2.pdf</a> .</span></strong><br /></p><br /><br /><br /><p align="justify"><span style="font-size:130%;"><strong>For example, </strong></span></p><br /><p></p><br /><p><br /><span style="font-size:130%;"><strong><em><span style="font-size:100%;">"...the European regulators’ historical inclination is to subjugate individual rights and freedoms to “social obligations” and “socially beneficial” causes." International law experts agree that European citizens are deemed to enjoy only a positive implied conditional right to private property that is highly subject to “collective power” and the “public interest”— that is, the “general will.”</span></em></strong></span> <strong><em>Id</em>., at pp. 598-599. </strong></p><br /><br /><br /><p align="justify"><strong><span style="font-size:130%;">"[T]he constitutional rights of European citizens have long been viewed as “positive rights” granted by the state to the people, rather than as “negative rights” of the people recognized by the state."</span></strong> <strong><em>See</em>: Lawrence A. Kogan, <em>Europe’s Warnings on Climate Change Belie More Nuanced Concerns</em>, Institute for Trade, Standards and Sustainable Development (June 2007) at: </strong><a href="http://www.itssd.org/White%20Papers/Europe_sWarningsonClimateChangeBelieMoreNuancedConcerns.pdf"><strong>http://www.itssd.org/White%20Papers/Europe_sWarningsonClimateChangeBelieMoreNuancedConcerns.pdf</strong></a><strong> </strong>.</p><br /><br /><p align="justify"><br /><strong><em>"A brief review of German legal and political history is quite revealing. According to Humboldt University law professor Dieter Grimm, the constitutions and bills of rights previously enacted by successive German monarchs were intended to preserve the legitimacy and survival of their dynasties, and little more. As a result, they created “positive” rather than “negative” rights that subsequently failed to endure the political whims of national parliaments and to secure consent from short-term-minded monarchs and unelected bureaucracies."</em></strong> <strong><em>Id</em>., at note 17, at 4.</strong></p><br /><br /><p align="justify"><br /><strong><span style="font-size:130%;">By comparison,</span></strong></p><br /><br /><p align="justify"><br /><em><strong>"One purpose of the American Revolution, therefore, was to strengthen and protect the people’s fundamental rights. <span style="font-size:180%;">Consequently, fundamental rights “could from the very beginning be negative rights” that served primarily to protect individuals from the government</span> . . . . In contrast . . . the inclusion of positive rights in German law can be traced to the fact that <span style="font-size:180%;">European constitutions, unlike the U.S. Constitution, did not establish an entirely new political entity because the nation-state existed before the constitutions emerged</span>. This meant “they never changed the tradition of the state,” and part of this saved tradition, especially in Germany, was that “the state always retained the role of being the representative of the higher aspirations of society.”</strong></em></p><br /><br /><br /><p><strong><span style="font-size:130%;">See: Press Release, Elizabeth Katz, University of Virginia School of Law, <em>German High Court Has More Power Over Legislature</em>, Grimm Says (Mar. 9, 2006), at: </span></strong><a href="http://www.law.virginia.edu/html/news/2006_spr/grimm.htm">http://www.law.virginia.edu/html/news/2006_spr/grimm.htm</a> .</p><br /><br /><p align="justify">====================================================================</p><br /><br /><p align="justify"><strong><span style="font-size:130%;"><em>II. European and Certain U.S. Leaders Are Using the Exaggerated Climate 'Crisis' as a Pretense for Strict New Global Governance Wealth Redistribution Regulations to 'Save' the World from the Environmental Externalities Triggered by Anglo-American Market-based Capitalism:</em></span></strong><br /></p><br /><br /><br /><br /><div align="justify"><a href="http://www.elperiodicodearagon.com/noticias/noticia.asp?pkid=448004">http://www.elperiodicodearagon.com/noticias/noticia.asp?pkid=448004</a></div><br /><br /><div align="justify"><strong><span style="font-size:130%;">Gore compara el cambio climático con la crisis financiera</span></strong></div><br /><br /><br /><p align="justify"><strong>English Translation:</strong></p><br /><br /><div align="justify"><a href="http://translate.google.com/translate?hl=en&sl=es&u=http://www.elpais.com/articulo/sociedad/Gore/compara/crisis/financiera/cambio/climatico/elpepusoc/20081016elpepusoc_3/Tes&sa=X&oi=translate&resnum=2&ct=result&prev=/search%3Fq%3DGore%2Bcompara%2Bel%2Bcambio%2Bclim%25C3%25A1tico%2Bcon%2Bla%2Bcrisis%2Bfinanciera%26hl%3Den%26sa%3DG">http://translate.google.com/translate?hl=en&sl=es&u=http://www.elpais.com/articulo/sociedad/Gore/compara/crisis/financiera/cambio/climatico/elpepusoc/20081016elpepusoc_3/Tes&sa=X&oi=translate&resnum=2&ct=result&prev=/search%3Fq%3DGore%2Bcompara%2Bel%2Bcambio%2Bclim%25C3%25A1tico%2Bcon%2Bla%2Bcrisis%2Bfinanciera%26hl%3Den%26sa%3DG</a> </div><br /><br /><p align="justify"><strong><span style="font-size:130%;">Al Gore compares the financial crisis with climate change</span></strong></p><br /><br /><p align="justify">PEDRO Gorospe - Bilbao - 16/10/2008 </p><br /><p></p><br /><p><br />Former U.S. vice president and Nobel Peace Prize winner Al Gore warned today during a conference held at the Guggenheim museum in Bilbao that <strong><span style="font-size:180%;color:#33ff33;">climate change is "the worst crisis faced by humanity," but at the same time offers opportunities for business and investment, and has compared with the global financial crisis...</span></strong></p><br /><p></p><br /><p align="justify"><br /><strong><span style="font-size:180%;">[THIS IS AN APPEAL TO INDUSTRY TO 'BUY INTO' THE FEARMONGERING, OR ELSE! IF THEY AGREE, THEY WILL BE REWARDED WITH FREE OR INEXPENSIVE CARBON CREDITS AND THE CONSUMING PUBLIC WILL BE PUNISHED WITH THE HIGHER PRODUCT & SERVICES PRICES, AND INCREASES IN THE GENERAL COST OF LIVING THAT CORPORATE COMPLIANCE WITH SUCH RULES & REGULATIONS WOULD ENGENDER (i.e., TRIGGER THROUGHOUT NATIONAL ECONOMIES). THE PUBLIC WOULD ALSO LOSE TO THE EXTENT SUCH RULES & REGULATIONS WOULD RESTRICT/IMPAIR THE EXERCISE OF INDIVIDUAL ECONOMIC & POLITICAL FREEDOMS].</span></strong></p><br /><p align="justify"><strong><span style="font-size:130%;"></span></strong></p><br /><p align="justify"><strong><span style="font-size:130%;"></span></strong></p><br /><p align="justify"><strong><span style="font-size:130%;">For Example:</span></strong></p><br /><p align="justify"></p><br /><p align="justify"><br /><strong><span style="font-size:180%;">[</span><span style="font-size:130%;">See: Edition - <em>Sarkozy piqué au vif par sa poupée vaudou</em>, LCI.fr (Oct. 21, 2008) at:</span></strong> <a href="http://tf1.lci.fr/infos/france/justice/0,,4131292,00-sarkozy-veut-jeter-un-sort-a-sa-poupee-vaudou-.html"><strong>http://tf1.lci.fr/infos/france/justice/0,,4131292,00-sarkozy-veut-jeter-un-sort-a-sa-poupee-vaudou-.html</strong></a> <strong><span style="font-size:130%;">("Le président a demandé à l'éditeur d'un manuel vaudou vendu avec une poupée à son effigie le retrait du produit, sinon il le poursuivra en justice. Le kit à l'effigie de Ségolène Royal pourrait aussi faire l'objet de poursuites, selon l'avocat de cette dernière." //"The president asked l' editor d' a handbook voodoo sold with a headstock with its effigy withdrawal of the product, if not it will prosecute it. The kit with l' effigy of Ségolène Royal could also make l' object of continuations, according to l' lawyer of the latter.")</span></strong> </p><br /><p align="justify"></p><br /><p align="justify"><strong><span style="font-size:130%;"><span style="font-size:180%;">[</span>See: <em>Obama campaign outraged by New Yorker cover</em>, Agence France Presse (July 14, 2008) at:</span></strong> <a href="http://www.breitbart.com/article.php?id=080714152414.ywhxksb5&show_article=1"><strong>http://www.breitbart.com/article.php?id=080714152414.ywhxksb5&show_article=1</strong></a> <strong><span style="font-size:130%;">("Barack Obama's campaign decried Monday a satirical cartoon on the cover of The </span></strong><a class=" lingo_link" style="DISPLAY: inline; FONT-WEIGHT: 400; FONT-SIZE: 14px; CURSOR: pointer; COLOR: black; FONT-STYLE: normal; FONT-FAMILY: Arial; TEXT-DECORATION: underline" href="http://search.breitbart.com/q?s=New%20Yorker%20magazine&sid=breitbart.com" rel="nofollow" _old_href="http%3A%2F%2Fsearch.breitbart.com%2Fq%3Fs%3DNew%2520Yorker%2520magazine%26sid%3Dbreitbart.com"><strong><span style="font-size:130%;">New Yorker magazine</span></strong></a><strong><span style="font-size:130%;"> showing the Democratic presidential hopeful wearing Islamic dress while his wife holds a Kalashnikov. The influential weekly defended its cover, titled "The Politics of Fear," as a critique of unfounded allegations during the campaign that have attempted to paint Obama, who is Christian, as a closet radical Muslim. "The </span></strong><a class=" lingo_link" style="DISPLAY: inline; FONT-WEIGHT: 400; FONT-SIZE: 14px; CURSOR: pointer; COLOR: black; FONT-STYLE: normal; FONT-FAMILY: Arial; TEXT-DECORATION: underline" href="http://search.breitbart.com/q?s=New%20Yorker&sid=breitbart.com" rel="nofollow" _old_href="http%3A%2F%2Fsearch.breitbart.com%2Fq%3Fs%3DNew%2520Yorker%26sid%3Dbreitbart.com"><strong><span style="font-size:130%;">New Yorker</span></strong></a><strong><span style="font-size:130%;"> may think, as one of their staff explained to us, that their cover is a satirical lampoon of the caricature Senator Obama's right-wing critics have tried to create," Obama spokesman Bill Burton said. "But most readers will see it as tasteless and offensive. And we agree," he said in a statement.")</span><span style="font-size:180%;">]</span></strong> </p><br /><p align="justify"></p><br /><p align="justify"></p><br /><div align="justify"><span style="font-size:130%;"><strong><span style="font-size:180%;">[</span>See: <em>Czech President Vaclav Klaus and ITSSD CEO Share Some Thoughts and Ambitions Concerning Freedom & Climate Change</em>, ITSSD Journal on Economic Freedom, at: </strong></span><a href="http://itssdeconomicfreedom.blogspot.com/2008/05/following-e-mail-correspondences-took.html"><strong>http://itssdeconomicfreedom.blogspot.com/2008/05/following-e-mail-correspondences-took.html</strong></a> <strong><span style="font-size:180%;">].</span></strong></div><br /><br /><br /><p align="justify"><strong><span style="font-size:180%;">[</span><span style="font-size:130%;">See: Lawrence Kogan, <em>Europe’s Warnings on Climate Change Belie More Nuanced Concerns</em>, ITSSD (June 2007), <em>supra</em>.</span><span style="font-size:180%;">]</span></strong><br /></p><br /><p align="justify"></p><br /><div align="justify"><strong><span style="font-size:130%;"><span style="font-size:180%;">[</span>See: <em>Czech President Vaclav Klaus Has Long Warned Against Global 'Europeanism': But is the 110th U.S. Congress Listening? Does it Want This for America??</em>, ITSSD Journal on Economic Freedom, at:</span></strong> <a href="http://itssdeconomicfreedom.blogspot.com/2008/06/czech-president-vaclav-klaus-has-long.html"><strong>http://itssdeconomicfreedom.blogspot.com/2008/06/czech-president-vaclav-klaus-has-long.html</strong></a><strong> </strong><span style="font-size:180%;">].</span></div><br /><br /><br /><p align="justify"><strong><span style="font-size:130%;"><span style="font-size:180%;">[</span>See: ITSSD Website - <em>Issues - Negative SD and Brussels Centralized Decision-Making</em>: <a href="http://www.itssd.org/issues"><span style="font-size:100%;">www.itssd.org/issues</span></a> </span><span style="font-size:180%;">]</span></strong></p><br /><p></p><br /><p><strong><span style="font-size:180%;">[</span></strong><strong>Czech President Vaclav Klaus – Brussels Promotes Far-Reaching Regulation of Human Activities and Standardization & Harmonization of Human Life</strong> </p><p><a href="http://www.itssd.org/Issues/Microsoft%20Word%20-%20KlausonEuropeanIntegrationModels.pdf"><strong>http://www.itssd.org/Issues/Microsoft%20Word%20-%20KlausonEuropeanIntegrationModels.pdf</strong></a> <strong><span style="font-size:180%;">]</span></strong><br /><br /></p><div align="justify"><strong><span style="font-size:180%;">[</span></strong><strong>Czech President Vaclav Klaus – EU Requirements Have Brought More Regulation, Government Intervention, Political Correctness and Popular ‘Isms’ That Jeopardize Freedom</strong><br /></div><a href="http://www.itssd.org/Issues/Microsoft%20Word%20-%20KlausonFreedom_DemocracyinContemporaryEurope.pdf"><strong>http://www.itssd.org/Issues/Microsoft%20Word%20-%20KlausonFreedom_DemocracyinContemporaryEurope.pdf</strong></a> <strong><span style="font-size:180%;">]</span></strong><br /><br /><br /><p align="justify"><strong><span style="font-size:180%;">[</span></strong><strong>Czech President Vaclav Klaus – There is a Dangerous Tendency of the Current World to Legislate Everything, Which Threatens to Lead to Supranational Global Governance</strong><br /><a href="http://www.itssd.org/Issues/Microsoft%20Word%20-%20KlausonLaw-Making.pdf"><strong>http://www.itssd.org/Issues/Microsoft%20Word%20-%20KlausonLaw-Making.pdf</strong></a> <strong><span style="font-size:180%;">]</span></strong><br /></p><p align="justify"><strong><span style="font-size:100%;"></span></strong></p><br /><p align="justify"><strong><span style="font-size:180%;">[</span></strong><strong>Czech President Vaclav Klaus – On The Nuanced Threat Posed by<br />Intellectuals and 'Soft' Socialism </strong><br /></p><p><a href="http://www.itssd.org/Issues/Microsoft%20Word%20-%20KlausontheIntellectualsandSocialism.pdf"><strong>http://www.itssd.org/Issues/Microsoft%20Word%20-%20KlausontheIntellectualsandSocialism.pdf</strong></a> <strong><span style="font-size:180%;">]</span></strong><br /></p><p></p><p align="justify"><strong><span style="font-size:180%;">[</span></strong><strong>Czech President Vaclav Klaus – The Paternalistic, Overregulated Regional European Welfare State Economic System Shares Features With Communism and Limits National Sovereignty</strong><br /><a href="http://www.itssd.org/Issues/Microsoft%20Word%20-%20KlausontheDutchandFrenchReferenda_theSozialeMarktwirtschaft.pdf"><strong>http://www.itssd.org/Issues/Microsoft%20Word%20-%20KlausontheDutchandFrenchReferenda_theSozialeMarktwirtschaft.pdf</strong></a> <strong><span style="font-size:180%;">]</span></strong><br /><br /></p><p align="justify"><strong><span style="font-size:180%;">[</span></strong><strong>Czech President Vaclav Klaus -- The Biggest Threat to Freedom, Democracy, the Market Economy and Prosperity Now is Ambitious Environmentalism, Not Communism</strong><br /><a href="http://www.itssd.org/Issues/Microsoft%20Word%20-%20KlausonRisktoFreedomnotRisktoClimate.pdf"><strong>http://www.itssd.org/Issues/Microsoft%20Word%20-%20KlausonRisktoFreedomnotRisktoClimate.pdf</strong></a> <strong><span style="font-size:180%;">]</span></strong><br /><br /></p><p align="justify"><strong><span style="font-size:180%;">[</span></strong><strong>Czech President Vaclav Klaus – Western Europe Owes its Successful Sixty Years of Development to American Presence in Europe</strong> <a href="http://www.itssd.org/Issues/Microsoft%20Word%20-%20KlausonhowtheUSPresenceinEuropeContributedtoEUDevelopment.pdf"><strong>http://www.itssd.org/Issues/Microsoft%20Word%20-%20KlausonhowtheUSPresenceinEuropeContributedtoEUDevelopment.pdf</strong></a> <strong><span style="font-size:180%;">].</span></strong><br /></p><p align="justify">-------<br /></p><p align="justify">...Faced with the Basque government to complete, political representatives and key executives of large companies Basque, <strong><span style="font-size:180%;color:#33ff33;">Al Gore</span></strong>, after posing in the picture next to Ibarretxe, has delivered a lecture entitled Thinking green; an economic strategy for the twenty-first century in the who <strong><span style="font-size:130%;"><span style="font-size:180%;color:#33ff33;">has compared the global financial crisis with the deterioration of the environment. In his view, the turbulence caused by garbage or subprime mortgages in the United States who have ended up intoxicated at the international system are very similar to the "carbon junk bonds" that are polluting the entire atmosphere. Moreover, in both cases it is a global crisis</span>...</span></strong><br /></p><br /><br /><p align="justify"><br /><strong><span style="font-size:180%;">[RATHER, WE BELIEVE THE CRISIS IS ACTUALLY ONE OF TRUTH, JUSTICE AND POLITICAL LEADERSHIP. MR. GORE IS CORRECT ABOUT THE EXCESSIVE </span></strong><strong><span style="font-size:180%;">POLLUTION IN THE WORLD TODAY. HOWEVER, IT IS LARGELY ATTRIBUTABLE TO THE POLITICAL DETRITUS THAT HE AND HIS 'FELLOW UTOPIAN TRAVELERS' CONTINUE TO SPEW.]</span></strong><br /></p><br /><br /><div align="justify">...In the event that the Department of Industry of the Basque government had organized since 2006 to celebrate the 25th anniversary of the Basque Energy (SLE) and who has been held now because they could not take place in 2007, Al Gore has addressed directly against directors of companies such as Iberdrola and Gamesa Basque, who has emphasized his role in the deployment of new renewable energy. "Euskadi is a small country with big companies," has valued...<br /><br /><br /><strong><span style="font-size:180%;">[</span>The Basque Country (</strong><a title="Basque language" href="http://en.wikipedia.org/wiki/Basque_language"><strong>Basque</strong></a><strong> Euskadi, </strong><a title="Spanish language" href="http://en.wikipedia.org/wiki/Spanish_language"><strong>Spanish</strong></a><strong> País Vasco) is an </strong><a title="Autonomous communities of Spain" href="http://en.wikipedia.org/wiki/Autonomous_communities_of_Spain"><strong>autonomous community</strong></a><strong> in northern </strong><a title="Spain" href="http://en.wikipedia.org/wiki/Spain"><strong>Spain</strong></a><strong>. It was granted the status of </strong><a title="Historical regions in Spain" href="http://en.wikipedia.org/wiki/Historical_regions_in_Spain"><strong>historical region</strong></a><strong> within Spain with the </strong><a title="Spanish Constitution of 1978" href="http://en.wikipedia.org/wiki/Spanish_Constitution_of_1978"><strong>Spanish Constitution of 1978</strong></a><strong>. The capital is </strong><a title="Vitoria-Gasteiz" href="http://en.wikipedia.org/wiki/Vitoria-Gasteiz"><strong>Vitoria-Gasteiz</strong></a><strong> (Vitoria is the name in Spanish, Gasteiz in Basque). See: Basque Country (autonomous community), Wikipedia, at: </strong><a href="http://en.wikipedia.org/wiki/Basque_Government"><strong>http://en.wikipedia.org/wiki/Basque_Government</strong></a><strong> <span style="font-size:180%;">].</span></strong><br /><br /><br />...In this regard, <strong><span style="font-size:180%;color:#33ff33;">the manager of the documentary entitled An Inconvenient Truth has admitted that nuclear power can have a role in the energy future, but will not be the principal. <span style="color:#ff0000;">This space is reserved</span> for what wind, solar or geothermal energy</span></strong>.<br /></div><br /><br /><div align="justify"><strong><span style="font-size:180%;">[MR. GORE AND HIS FELLOW DEMAGOGUES ARE 'PICKING WINNERS AND LOSERS' BECAUSE THEY 'KNOW WHAT IS BEST' FOR THE PUBLIC? <span style="color:#ff0000;">NO.</span> <span style="color:#ff0000;">THEY ARE 'PICKING WINNERS AND LOSERS BECAUSE THEY KNOW WHAT IS BEST FOR THEMSELVES!</span> MR. GORE AND HIS POLITICAL COLLEAGUES ARE INVESTED IN MANY OF THE WIND, SOLAR AND GEOTHERMAL PROJECTS THEY NOW CALL FOR, WHICH THREATEN TO BE DERAILED BY THE CURRENT FINANCIAL CRISIS - i.e., THERE IS VERY LITTLE FEDERAL OR STATE CASH TO INVEST IN THESE PROJECTS DUE TO PRIVATE & PUBLIC FINANCIAL INSTITUTION CAPITAL & LIQUIDITY SHORTAGES, DIMINISHED STATE TAX REVENUES AND ALSO DUE TO THE $70 & LOWER PRICE /BARREL OF OIL, WHICH REMOVES THE ECONOMIC INCENTIVE TO INVEST IN MORE EXPENSIVE ALTERNATIVE ENERGY PROJECTS WITH ROI ONLY REALIZABLE IN THE DISTANT FUTURE.] </span></strong></div><br /><br /><br /><div align="justify"><strong><span style="font-size:180%;">[THE ONLY WAY TO ENSURE THAT THESE PROJECTS GO FORWARD AND THAT THEIR FINANCIAL INVESTMENTS IN THESE TECHNOLOGIES & PROJECTS (WHICH ARE NOW 'UNDER WATER') YIELD PROFITS IS FOR THESE OFFICIALS TO AGREE TO STIGMATIZE & REGULATE CARBON AS A 'HAZARDOUS SUBSTANCE' (HAZMAT). THIS CAN BE POSSIBLE BY ENACTING OVERLY RESTRICTIVE NON-SCIENCE <em>HAZARD</em> (NOT RISK)-BASED NATIONAL AND INTERNATIONAL CARBON EMISSIONS CAPS AND CARBON OFFSET RULES (i.e., IMPOSITION OF DISGUISED CARBON TAXES) THAT DEFY ECONOMIC RATIONALITY. THE PUBLIC MUST DEMAND THAT MR. GORE AND HIS EUROPEAN COLLEAGUES RESOLVE THEIR MANY CONFLICTS OF INTEREST, BEFORE THEIR RECOMMENDATIONS AND PRESCRIPTIONS ARE ADOPTED!]</span></strong></div><br /><br /><p align="justify">-------------------------------------------------------------------------------------------------<br /></p><br /><p align="justify"><strong><span style="font-size:130%;"><span style="font-size:180%;">[MEDIA DROPS COMMERCIAL AFTER FINDING IMAGINED/EXAGGERATED CLAIMS OF CLIMATE CRISIS TAKEN TOO FAR - CLIMATISTAS OUTRAGED!!</span></span><span style="font-size:180%;">]</span></strong></p><br /><p></p><br /><p></p><br /><p align="justify"><a href="http://www.guardian.co.uk/world/2008/oct/10/algore-television">http://www.guardian.co.uk/world/2008/oct/10/algore-television</a><br /><br /><strong><span style="font-size:130%;">ABC deems Gore climate change advert too 'controversial' for TV</span></strong><br /></p><br /><br /><div align="justify">By Elana Schor in Washington </div><br /><br /><br /><p align="justify">guardian.co.uk,<br /><br /><br />Friday October 10 2008 18.29 BST </p><br /><br /><br /><p align="justify"><strong><em><span style="font-size:130%;">The ABC network has refused to air an advert produced by Al Gore's environmental group, ruling that its charge of US government favouritism to the oil industry is too "controversial" for television.</span></em></strong></p><br /><br /><br /><div align="justify"><strong><span style="font-size:180%;color:#33ff33;">The TV commercial, part of the WE campaign run by Gore's Alliance for Climate Protection</span></strong>, <a href="http://www.wecansolveit.org/content/about">http://www.wecansolveit.org/content/about</a> was submitted for airing after this week's presidential debate between Barack Obama and John McCain - both of whom have vowed to limit greenhouse gas emissions if elected.<br /></div><br /><br /><br /><div align="justify">But ABC concluded that the advert violated its internal policy against "controversial" content during network-sponsored programmes, network spokeswoman Julie Hoover told the Guardian.<br /></div><br /><br /><div align="justify">"All of our advertising is reviewed on a case-by-case basis, and the context of this particular ad was determined not to be acceptable per our policy on controversial issue advertising," Hoover said.</div><br /><br /><br /><p align="justify">The WE campaign has since attracted more than 170,000 supporters to an online petition drive asking ABC to reconsider its decision.<br /></p><br /><p align="justify"></p><br /><div align="justify"><strong><span style="font-size:180%;">The script of the advert is similar in tone to political speeches made by Obama and McCain during the election season</span></strong>. <strong><span style="font-size:180%;">An unseen narrator states that <span style="color:#33ff33;">climate change</span> can be combated through wind and solar power as well as "end[ing] our dependence on foreign oil".</span></strong></div><br /><br /><br /><p align="justify">Over an image of a young child playing with blocks, the narrator continues: <strong><em><span style="font-size:130%;color:#ff0000;">"So why are we still stuck with dirty and expensive energy? Because big oil spends hundreds of millions of dollars to block clean energy. Lobbyists, ads, even scandals. All to increase their profits, while America suffers."</span></em></strong></p><br /><br /><br /><div align="justify">An ABC email published on the blog of Grist magazine stated that the advert was rejected due to its split-second shot of the US Capitol building.</div><br /><br /><br /><p align="justify"><strong><span style="font-size:130%;">"Per our guidelines, national buildings may be used in advertising provided the depictions are incidental to the advertiser's promotion of the product or service," the email stated. "Given the messages and themes of this commercial, the image of the Capital [sic] building is not incidental to this advertising."<br /></span></strong><br /></p><br /><div align="justify"><strong><span style="font-size:180%;color:#3333ff;">Cathy Zoi, [former Former White House Deputy Director for Environmental Policy and Chief of Staff At the White House Council On Environmental Quality, in the two Clinton-Gore Administrations] chief executive of the WE campaign</span></strong>, <strong><em><span style="font-size:130%;color:#3333ff;">called ABC's decision "outrageous"</span></em></strong> in light of US networks' frequent airing of adverts from Chevron, Exxon Mobil and other oil companies. </div><br /><br /><br /><div align="justify"><strong><span style="font-size:180%;">"As our country faces deep economic problems, we need to be able to have an honest debate about the root causes of our problem," Zoi wrote in an email to supporters of Gore's group on Wednesday.<br /></div></span></strong><br /><br /><br /><div align="justify"><strong><span style="font-size:180%;">[AND READERS ARE TO ACCEPT THAT THE ROOT OF ALL ECONOMIC PROBLEMS IS THE CLIMATE PROBLEM, MS. ZOI???]</span></strong></div><br /><br /><br /><p align="justify">To build publicity for their products, American companies often produce TV adverts with content that pushes the limits of broadcast standards. A Snickers commercial featuring two men embarrassed after sharing a kiss was pulled from the US airwaves last year after complaints from gay-rights groups.</p><br /><p></p><br /><p><br />But <strong><span style="font-size:180%;color:#ff0000;">rejection of an advert from a non-profit group is a far more rare occurrence.</span></strong> At the height of the US controversy over same-sex marriage in 2004, CBS and NBC turned down a commercial from the United Church of Christ that touted its acceptance of gay congregants.</p><br /><br /><p align="justify"><br /><strong><span style="font-size:180%;">**[READERS SHOULD NOTE THAT FOR A NON-PROFIT GROUP AD TO BE PULLED BY THE MEDIA, IT MUST BE ESPECIALLY INACCURATE, M</span></strong><strong><span style="font-size:180%;">ISLEADING,</span></strong><strong><span style="font-size:180%;"> OFFENSIVE OR OTHERWISE EGREGIOUSLY 'POLITICAL' IN NATURE]**</span></strong>.</p><br /><br /><p align="justify">===================================================================</p><br /><br /><p align="justify"><strong><em><span style="font-size:130%;">III. European and Certain U.S. Leaders Have Characterized the Current Financial 'Crisis' as 'One of Capitalism' and Are Using it as a Pretense to Reform Financial Markets as Part of an Overall Effort to Create a NEW Global Governance Regime Intended to 'Save Anglo-American Market-based Capitalism From Itself':</span></em></strong></p><br /><p align="justify"></p><br /><p align="justify"><a href="http://www.ft.com/cms/s/c2ba0fe0-9f5a-11dd-a3fa-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fc2ba0fe0-9f5a-11dd-a3fa-000077b07658.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Feurope">http://www.ft.com/cms/s/c2ba0fe0-9f5a-11dd-a3fa-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fc2ba0fe0-9f5a-11dd-a3fa-000077b07658.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Feurope</a></p><br /><p align="justify"></p><br /><p align="justify"><strong><span style="font-size:130%;">Sarkozy calls for European wealth funds<br /></span></strong></p><br /><p align="justify"><br />By Joshua Chaffin and Tony Barber<br /><br /><br />Financial Times<br /><br /><br />Oct. 21, 2008<br /><br /><br /><strong><span style="font-size:130%;color:#000099;">Nicolas Sarkozy, France’ president</span></strong>, called on Tuesday for the creation of European sovereign wealth funds to buy stakes in companies with low share prices and protect them from non-European predators. Stock markets are at a historically low level.<br /><br /><br />There could be an opportunity to create our own sovereign wealth funds, which would make it possible to defend national interests and European interests, Mr Sarkozy said in remarks at the European Parliament.<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">His proposal underlined how some European Union leaders are seizing on the global financial crisis as a calamity that exposes the failure of US-style free markets and justifies a return to the state’s traditionally strong role in European economic policy.</span></strong><br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">EU leaders also see the crisis as an opportunity to reshape the world’s financial institutions, which were designed largely by the US towards the end of the second world war</span></strong>, and to give more influence to rising powers such as China and India as well as Europe itself.<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">Mr Sarkozy, generally regarded as the most pro-US French leader in several decades, said in his speech that it was no longer acceptable for the rest of the world to finance US current account deficits, or for the US to dominate the international credit rating agency industry and the setting of accountancy rules.<br /></span></strong><br /><br />He said he would use a visit to Beijing this week to try to persuade the leaders of China and India to attend a summit on reforming the world’s financial system. The summit is likely to be held soon after next month’s US presidential election. They’ve got to be invited. They are essential partners in the international system, Mr Sarkozy said. This is a global crisis, so the response can only be global. If we are not bold, it will be fatal<br /><br /><br />Mr. Sarkozy’s proposal for European sovereign wealth funds played on the fear that certain companies, particularly so-called strategic assets, might be vulnerable to foreign takeover because the stock market carnage sparked by the financial crisis has driven their share prices so low.<br /><br /><br />Jose Manuel Barroso, European Commission president, said on Tuesday that some EU leaders had mentioned this fear at a summit in Brussels last week. But the proposal sits uneasily with the EU’s stance on foreign sovereign wealth funds, which are state-owned investment agencies in control of enormous foreign currency reserves and which are based everywhere from Abu Dhabi and Saudi Arabia to China and Singapore.<br /><br /><br />On the one hand, the authorities in Brussels have sought agreement with the funds on a voluntary code of conduct, stressing principles such as transparency and investments based on commercial rather than political motives. On the other, Brussels has tried to reassure the funds that the EU welcomes foreign investment and does not suspect them of plotting unwanted raids on prized European companies.<br /><br /><br />Mr Sarkozy’s proposal drew no public response from the European Commission on Tuesday. But it will ring alarm bells with critics who fear that <strong><span style="font-size:130%;color:#000099;">Europe’s emergency actions in the financial ‘crisis’ particularly this month’s‚ 2,000bn rescue for the financial sector, are already whetting an unhealthy appetite for state intervention and protectionism.<br /></span></strong><br /><br /><strong><span style="font-size:130%;color:#33ff33;">European carmakers are demanding low-interest loans to match those awarded to the big US car manufacturers, and European industrialists are demanding concessions to offset the costs of meeting EU targets for fighting climate change.<br /></span></strong><br />------------------------------------------------------------------------------------------------ </p><br /><p align="justify"><br /><a href="http://www.iht.com/articles/ap/2008/10/18/america/NA-Canada-Europe-Economy.php">http://www.iht.com/articles/ap/2008/10/18/america/NA-Canada-Europe-Economy.php</a></p><br /><br /><p><strong><span style="font-size:130%;">UN Secretary General offers host financial summit</span></strong></p><br /><p></p><br /><p><br />The Associated Press<br /></p><br /><br /><p>October 18, 2008</p><br /><br /><br /><p align="justify">QUEBEC CITY: <strong><span style="color:#3366ff;">U.N. Secretary General Ban Ki-moon</span></strong> offered Saturday to host an emergency expanded G8 summit at the United Nations headquarters to discuss the global financial crisis.<br /></p><br /><p align="justify"></p><br /><p align="justify"><strong><span style="color:#3366ff;">Ban issued a statement backing French President Nicolas Sarkozy's recent appeal for world leaders to act collectively to address the economic meltdown by holding a summit of major economic powers by December.<br /></p></span></strong><br /><br /><br /><p align="justify">Ban and Sarkozy met in Quebec City on the sidelines of a summit of French-speaking nations. Sarkozy cut short his stay at the three-day Francophone meeting to discuss plans for such a summit Saturday afternoon with U.S. President George W. Bush at the presidential retreat in Camp David, Maryland.<br /></p><br /><br /><p align="justify"><strong><span style="color:#3366ff;">"I strongly believe that holding the summit at the United Nations, the symbol of multilateralism, will lend universal legitimacy to this endeavor and demonstrate a collective will to face this serious global challenge," said Ban.<br /></span></strong></p><br /><br /><br /><p align="justify"><strong><span style="font-size:180%;color:#000099;">Sarkozy said Friday that the world's financial system needs to be overhauled so that it can be better supervised in the wake of the crisis.<br /></span></strong></p><br /><br /><br /><p align="justify"><strong><span style="font-size:180%;"><span style="color:#000099;">"Together we need to rebuild a capitalism that is more respectful to man, more respectful to the planet, more respectful to future generations and be finished with a capitalism obsessed by the frantic search for short-term profit," Sarkozy said in an address to the Organisation International de la Francophonie during the opening ceremony of the summit Friday night.</span> </span></strong></p><br /><br /><p><br /><strong><span style="font-size:180%;">[<span style="color:#33ff33;">ENVIRONMENT-CENTRIC, </span><span style="color:#ff0000;">EU </span><span style="color:#ff0000;">SOCIALIST-STYLE </span></span></strong><strong><span style="font-size:180%;"><span style="color:#ff0000;">PROTECTIONISM MASQUARADING AS SUSTAINABLE DEVELOPMENT </span>].<br /></p></span></strong><br /><br /><p align="justify">Along with the economic crisis, Canada and the European Union have also been talking about stronger economic co-operation through a potential Canada-EU trade pact.<br /></p><br /><br /><p align="justify">Officials have said that the agreement would allow for Canadian and European workers to work in each other's regions and allow for EU and Canadian companies to bid on government procurements.<br /></p><br /><br /><br /><p align="justify">Canadian Prime Minister Stephen Harper, who is also attending the summit, said that Canada and the EU plan to launch negotiations on an economic partnership as soon as possible in 2009.<br /></p><br /><br /><br /><p align="justify">The possibility of a broad agreement follows a Canada-EU joint study launched in Berlin last year and released earlier this week that recommends a more comprehensive economic plan for both parties.<br /></p><br /><p align="justify"></p><br /><p align="justify"><strong><span style="font-size:180%;color:#ff0000;">Leaders of French-speaking nations, attending the summit which ends Sunday, are discussing the financial crisis, climate change, human rights and the French language.<br /></span></strong></p><br /><br /><br /><p align="justify">The 12th annual La Francophonie is being attended this year by representatives of 55 member countries and 13 observer nations.</p><br /><p align="justify">------------------------------------------------------------------------------------------------<br /></p><br /><p align="justify"><a href="http://www.foxnews.com/wires/2008Oct20/0,4670,UNMeltdownSummit,00.html">http://www.foxnews.com/wires/2008Oct20/0,4670,UNMeltdownSummit,00.html</a></p><br /><br /><p align="justify"><strong><span style="font-size:130%;">UN chief offers to host global financial summit</span></strong></p><br /><p></p><br /><p><br />By Carley Petesch</p><br /><br /><br /><p align="justify">Associated Press</p><br /><br /><br /><p align="justify">October 20, 2008<br /></p><br /><br /><p align="justify">NEW YORK — <span style="color:#3366ff;"><strong><span style="font-size:130%;">U.N. Secretary-General Ban Ki-moon has offered to host an emergency expanded G8 summit at the United Nations to discuss the global financial crisis</span></strong>.<br /></span></p><br /><br /><p align="justify">Ban issued a statement Saturday backing French President Nicolas Sarkozy's recent appeal for world leaders to act collectively to address the economic meltdown by holding a summit of major economic powers by December.<br /></p><br /><br /><p align="justify"><strong><em><span style="font-size:130%;"><span style="color:#3366ff;">Ban, who met Sarkozy in Quebec City on the sidelines of a summit of French-speaking nations</span> over the weekend, agreed that a collective approach is necessary to manage the international financial crisis.<br /></span></em></strong></p><br /><br /><br /><p align="justify"><strong><span style="font-size:130%;color:#3366ff;">"Holding the summit at the United Nations, the symbol of multilateralism, will lend universal legitimacy to this endeavor and demonstrate a collective will to face this serious global challenge,"</span></strong> Ban said.<br /></p><br /><br /><br /><p align="justify">Ban said he also supported the idea of convening the forum in early December at the latest.<br />"Such a format will allow us to more effectively act upon this crisis which requires a global solution through cohesive international partnership," the secretary-general said.<br /></p><br /><br /><p align="justify">The Group of Eight major industrial nations announced Wednesday they would hold the global summit to forge common action to prevent another economic meltdown.<br /></p><br /><br /><p align="justify"><strong><span style="font-size:180%;color:#000099;">Sarkozy said all European Union nations now backed <span style="color:#ff0000;">radical </span>restructuring of international institutions like the International Monetary Fund and World Bank</span></strong>. He demanded that the summit take place in November "preferably in New York, where everything started" and lead toward "a new capitalism."<br /></p><br /><br /><br /><p align="justify">EU leaders meeting in Brussels on Wednesday "all agreed that we don't want the same causes to produce the same effects in future," he said. "Europe will not let this crisis pass without taking action."</p><br /><br /><br /><p align="justify"><strong><span style="font-size:130%;color:#000099;">British Prime Minister Gordon Brown said the meeting would require vision similar to the creation of the U.N. and the Bretton Woods conference that laid out an international financial and monetary system in the 1940s. </span></strong>Emerging economies such as China and India and European economies outside the G-8 should also participate, he said.</p><br /><p align="justify">------------------------------------------------------------------------------------------------</p><br /><p align="justify"><a href="http://www.nytimes.com/2008/10/19/opinion/19cox.html">http://www.nytimes.com/2008/10/19/opinion/19cox.html</a><br /><br /><strong><span style="font-size:130%;">Swapping Secrecy for Transparency<br /></span></strong><br /><br />By CHRISTOPHER COX<br /><br /><br />Op-ed<br /><br /><br />New York Times<br /><br /><br />Oct. 19, 2008<br /><br /><br /><strong><span style="font-size:130%;">THE historic volatility in the financial markets has raised important questions about the lack of meaningful regulation of financial instruments known as credit-default swaps</span></strong>. The $85 billion government rescue last month of the insurance conglomerate American International Group, for example, was needed in large part to protect those who held A.I.G.’s credit-default swaps and risked crushing losses if those instruments weren’t honored.<br /><br /><br /><strong><span style="font-size:130%;">A.I.G. had issued $440 billion in credit-default swaps — which are like insurance contracts on bonds and other assets that are meant to pay off if those assets default. But as markdowns on A.I.G.’s investments in subprime mortgages led to downgrades in its credit ratings, the holders of the credit-default swaps demanded more collateral, which A.I.G. could not provide.<br /></span></strong><br /><br /><strong><span style="font-size:180%;color:#ff0000;">As large as A.I.G.’s swaps exposure was, it represented only 0.8 percent of the $55 trillion in credit-default swaps outstanding — this total market is more than the gross domestic product of all nations on earth combined.<br /></span></strong><br /><br /><strong><em><span style="font-size:130%;">Yet despite its enormous size, the credit-default swaps market has operated in the shadows. There is no public disclosure nor any legal requirement for these contracts to be reported to the Securities and Exchange Commission or any other agency. So government regulators have had no way to assess how much risk is in the system, whether credit-default swaps have been accurately valued or honestly traded, and when people issuing and trading them have taken on risk that threatens others.</span></em></strong><br /><br /><br /><strong><span style="color:#ff0000;"><em>Because these instruments have been bought and sold widely and in many cases anonymously, they have trapped the large financial institutions in a web of transactions. This has created systemic risk that is particularly serious in the current stressful economic environment, contributing to a gravitational pull that stands to drag everyone down.<br /></em></span></strong><br /><br />All investors — from individuals through their 401(k) plans to pension funds and asset managers — are paying a price today for the lack of oversight. We must urgently address the problems created by this unregulated environment.<br /><br /><br /><strong><span style="font-size:130%;">Credit-default swaps are not inherently good or evil. They play an important role in the smooth functioning of capital markets by allowing a broad range of institutional investors to manage the credit risks to which they are exposed. They are also a useful means for investors to signal their view of an entity’s business prospects and creditworthiness</span></strong>.<br /><br /><br /><strong><span style="font-size:180%;">But our markets function best when they are highly transparent, when everyone can see exactly which transactions are occurring and what the instruments being traded are worth. This gives investors confidence that they can accurately assess risk.<br /></span></strong><br /><br /><strong><span style="font-size:130%;color:#3333ff;">Back in 2000, Congress specifically decided not to regulate credit-default swaps. At that time, this market was just a few years old and still very small. For example, in 1999 a report by the President’s Working Group on Financial Markets envisioned no systemic risk from such derivatives since “private counterparty discipline” — investors’ natural desire to keep their own risks to a minimum — would work to protect the broader financial system.<br /></span></strong><br /><br /><strong><span style="font-size:180%;color:#ff0000;">But the market for credit-default swaps has recently mushroomed. In just the past two years, it has doubled in size.</span></strong> And as the market has grown, private counterparty discipline has proven inadequate. As we have seen, individual market participants did not pay enough attention until it was too late.<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">To place a value on credit-default swaps and the mortgage-related securities they insure, buyers and sellers of swaps relied too heavily on financial models that couldn’t predict the mortgage market meltdown. They also trusted too much in the credit ratings of the securities and of the firms selling the credit-default swaps, and these ratings underestimated the risk.<br /></span></strong><br /><br /><strong><em>Congress needs to fill this regulatory hole by passing legislation that would not only make credit-default swaps more transparent but also give regulators the power to rein in fraudulent or manipulative trading practices and help everyone better assess the risks involved.<br /></em></strong><br /><br /><em><strong>Congress could require that dealers in over-the-counter credit-default swaps publicly report both their trades and the value of those trades</strong></em>. This would make the market more transparent, and make it easier for everyone engaged in credit-default swaps to assess their value. It would also provide regulators with the information they need to uncover unfair or fraudulent practices and to monitor risk.<br /><br /><br /><em><strong>Then, the Securities and Exchange Commission should be given explicit authority to issue rules against fraudulent, deceptive or manipulative acts and practices in credit-default swaps</strong></em>.<br /><br /><br /><em><strong>Finally, Congress could provide support for federal regulators to mandate the use of one or more central counterparties — financially stable clearance and settlement organizations — and exchange-like trading platforms for the credit-default swaps market</strong></em>. As it is now, it is often impossible even to know who stands on the other side of a swap contract, and this increases the risk involved. We at the S.E.C. are already working with the Federal Reserve, the Commodity Futures Trading Commission and industry participants to accomplish these goals on a voluntary basis, using the authority we currently have.<br /><br /><br />Because of the truly global nature of the over-the-counter derivatives market, we will need to work closely with governments in other major markets. The climate for such cooperation is good, because the cross-border impacts of the current market problems are obvious to all.<br /><br /><br />Transparency is a powerful antidote for what ails our capital markets. When investors have clear and accurate information, and when they can make informed decisions about where to put their resources, money and credit will begin to flow again. By giving regulators the authority they need to bring the credit derivatives market into the sunshine, we can take a giant step forward in protecting our financial system and the well-being of every American.<br /><br /><em>Christopher Cox is the chairman of the United States Securities and Exchange Commission.<br /></em></p><br /><p align="justify">-------------------------------------------------------------------------------------------------<br /><br /><a href="http://www.bloomberg.com/apps/news?pid=20601103&sid=atEt2ELh7cZY&refer=news">http://www.bloomberg.com/apps/news?pid=20601103&sid=atEt2ELh7cZY&refer=news</a><br /><br /><strong><span style="font-size:130%;">Bush to Host First in Series of Summits on Financial Crisis</span> </strong><br /><br /><br />By Roger Runningen and Gregory Viscusi<br /><br /><br />Bloomberg News<br /><br /><br />Oct. 19, 2008<br /><br /><br />Oct. 19 (Bloomberg) -- The leaders of the U.S., France and the European Commission will ask other world leaders to join in a series of summits on the global financial crisis beginning in the U.S. soon after the Nov. 4 presidential election.<br /><br /><br />President George W. Bush, French President Nicolas Sarkozy and European Commission President Jose Barroso said in a joint statement after meeting yesterday that they will continue pressing for coordination to address ``the challenges facing the global economy.''<br /><br /><br /><strong><em>The initial summit will seek ``agreement on principles of reform needed to avoid a repetition and assure global prosperity in the future,'' and later meetings ``would be designed to implement agreement on specific steps to be taken to meet those principles,'' the statement said.<br /></em></strong><br /><br />European leaders have pressed to convene an emergency meeting of the world's richest nations, known as the Group of Eight, joined by others such as India and China, to overhaul the world's financial regulatory systems. The meetings are to include developed economies as well as developing nations.<br /><br /><br />``The first task is to stabilize the financial markets in our own countries,'' <strong><span style="font-size:130%;">Bush</span></strong> said in welcoming Sarkozy and Barroso to the Camp David presidential retreat in rural Maryland. ``Given that the world has never been more interconnected, it is essential that we work together because we're in this crisis together.''<br /><br /><br /><strong>Free Markets<br /></strong><br /><br />He <strong><span style="font-size:130%;">stressed that any steps to prevent future crises must maintain and strengthen the free-market system.<br /></span></strong><br /><br /><strong><span style="font-size:130%;">``It is essential we preserve the foundations of democratic capitalism,'' Bush said.<br /></span></strong><br /><br /><strong><span style="color:#ff0000;"><em>Sarkozy and Barraso are pressing Bush for a G8 agenda that includes stiffer regulation and supervision for cross-border banks, a global ``early warning'' system and an overhaul of the International Monetary Fund. Talks may also encompass tougher regulations on hedge funds, new rules for credit-rating companies, limits on executive pay and changing the treatment of tax havens such as the Cayman Islands and Monaco.</em></span></strong><br /><br /><br />Sarkozy and Barroso, in separate statements, welcomed Bush's offer to host the first summit.<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">``We want to work hand in hand with the Americans to create the capitalism of the 21st century,'' [SOCIALISM] Sarkozy said</span></strong>. ``The meeting should be held rapidly, perhaps before the end of November. Since the crisis started in New York, maybe we can find the solution in New York.''<br /><br /><br /><strong>Need for Reform<br /></strong><br /><br /><span style="color:#000099;"><em><strong>Barroso</strong></em></span> said an ``unprecedented level of global coordination'' is needed to address market instability.<br /><br /><br /><strong><span style="color:#000099;"><em>``The international financial system -- its basic principles and regulations and its institutions need reform. We need a new global financial order,'' he said.<br /></em></span></strong><br /><br />U.S. Treasury Secretary Henry Paulson and French Finance Minister Christine Lagarde also attended tonight's meeting at Camp David.<br /><br /><br />United Nations Secretary-General Ban Ki-moon today offered to host a summit at UN headquarters in New York City by early December.<br /><br /><br />The leaders decided to pursue a series of summits because the task was too ambitious to be dealt with in a single meeting, White House spokesman Tony Fratto told reporters later.<br /><br /><br />It was ``a reasonable expectation'' that the first summit would be scheduled for November though ``not necessarily'' in New York, he said. Fratto didn't name a location and said there are numerous logistics hurdles in bringing together ``a large number of countries in a very short time.''<br /><br /><br />He said it was ``premature'' to say whether a second summit would be held before Bush left office in three months.<br /><br /><br /><strong>Banking Regulation<br /></strong><br /><br /><strong><span style="color:#000099;">British Prime Minister Gordon Brown is pushing for greater cross-border oversight of the global financial system.</span></strong> He has said each of the world's top 30 banks should be under the supervision of a panel of regulators from the countries where those institutions do business.<br /><br /><br />``The reform of the international financial system is not only necessary to prevent a crisis happening again, it is essential to end the current crisis,'' Brown said on Oct. 16.<br /><br /><br /><strong><span style="font-size:130%;">Bush, 62, has cautioned that any revamping must not restrict the flow of trade and investment or set a path toward protectionism. </span></strong>The G8 nations are Britain, Canada, France, Germany, Italy, Japan, Russia and the United States. The U.S. hasn't committed itself to the sweeping terms of Europe's agenda, White House press secretary Dana Perino said yesterday.<br /><br />``There are other countries that are going to have ideas, as well,'' she said.<br /><br />------------------------------------------------------------------------------------------------<br /><br /><a href="http://news.bbc.co.uk/2/hi/business/7678577.stm">http://news.bbc.co.uk/2/hi/business/7678577.stm</a><br /><br /><strong><span style="font-size:130%;">Leaders to rethink global finance</span></strong><br /><br /><br />BBC News<br /><br /><br />Oct. 19, 2008<br /><br /><br />President George W Bush has invited world leaders to gather in the US by the end of the year to discuss reform of the global financial system.<br /><br /><br />The summit would be the first of a series announced after talks between Mr Bush, French President Nicolas Sarkozy and EU Commission chief Manuel Barroso.<br /><br /><br />But the agenda is unclear and differences are already emerging.<br /><br /><br /><strong><span style="font-size:130%;">Mr Bush said any plan must not undermine free markets. Mr Sarkozy said "hateful practices" must be abandoned.<br /></span></strong><br /><br />Before he arrived at Camp David, the US presidential retreat in the state of Maryland, the French leader warned the world could not "continue to run the economy of the 21st Century with instruments of the economy of the 20th Century".<br /><br /><br /><strong>Calls for action</strong><br /><br /><br />After the meeting, Mr Bush said: "It is essential that we work together because we are in this crisis together."<br /><br /><br /><strong><span style="font-size:130%;">Together we will work to modernise and strengthen our nations' financial systems so we can help ensure this crisis doesn't happen again</span></strong>.<br /><br /><br /><strong>US President George W Bush<br /></strong><br /><br />He went on to invite world leaders to an economic summit after the US election in November, to discuss responses to the current financial crisis.<br /><br /><br /><strong><em>"Together we will work to modernise and strengthen our nations' financial systems so we can help ensure this crisis doesn't happen again," he added.</em></strong><br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">But Mr Bush said any plan to rethink financial mechanisms should "preserve the foundations of democratic capitalism" and include "a commitment to free markets, free enterprise and free trade".<br /></span></strong><br /><br /><strong>'New order'<br /></strong><br /><br /><strong><span style="font-size:180%;color:#000099;">Mr Sarkozy said the crisis could offer a "great opportunity" to build the capitalism of the future and leave behind the "hateful practices" of the past.<br /></p></span></strong><br /><br /><p align="justify"><strong><span style="font-size:180%;color:#ff0000;">[THESE ARE NUANCED 'CODE' WORDS. READERS SHOULD REVIEW EXCERPTS OF DOCUMENTS SET FORTH AT THE END OF THIS BLOG.]</span></strong><br /><br /></p><br /><br /><p align="justify">We cannot continue along the same lines because the same problems will trigger the same disasters<br /><br /><br /><strong>French President Nicolas Sarkozy</strong><br /><br /><br /><strong><em><span style="color:#ff0000;">"We cannot continue along the same lines because the same problems will trigger the same disasters," he warned</span></em></strong>.<br /><br /><br />Mr Sarkozy said the hedge funds, tax havens and financial institutions operating without supervision should all be re-thought.<br /><br /><br />"This is no longer acceptable," he added. <strong><span style="font-size:180%;color:#ff0000;">"This sort of capitalism is a betrayal of the sort of capitalism we believe in."<br /></span></strong><br /><br /><strong><span style="font-size:180%;color:#000099;">European Commission President Manuel Barroso, who also took part in the talks, said: "We need a new global financial order."<br /></span></strong><br /><br />Details of the summits are still to be worked out, but White House spokesman Tony Fratto said the first was likely to be held in November.<br /><br /><br />He added that Mr Sarkozy had recommended New York as a location. UN Secretary General Ban Ki-moon has proposed using the organisation's headquarters there as a venue.<br /><br /><br />That summit would seek to "review progress being made to address the current crisis and to seek agreement on principles of reform needed to avoid a repetition," the leaders said in their statement.<br /><br /><br />"Later summits would be designed to implement agreement on specific steps to be taken to meet those principles," it added. Other world leaders are to be consulted over the plan.<br /><br /><br /><strong><em>Correspondents say such meetings would echo the Bretton Woods conference of 44 nations after World War II, which established many of the institutions and monetary systems that are now under threat.<br /></em></strong><br />-------------------------------------------------------------------------------------------------<br /><br /><a href="http://news.bbc.co.uk/2/hi/business/7677486.stm">http://news.bbc.co.uk/2/hi/business/7677486.stm</a><br /><br /><strong><span style="font-size:130%;">US to host global finance summit</span></strong><br /><br /><br />BBC News<br /><br /><br />Oct. 19, 2008<br /><br /><br />The presidents of the US, France and the European Commission have unveiled plans for a series of summits to discuss the global financial crisis.<br /><br /><br />Speaking before talks at Camp David with Nicolas Sarkozy and Jose Manuel Barroso, George W Bush said it was "essential that we work together".<br /><br /><br />The first summit will be held in the US after November's presidential election.<br /><br /><br /><strong><span style="font-size:130%;color:#000099;">The Europeans want the meetings to pave the way for talks on an overhaul of the world's financial regulatory systems.</span></strong><br /><br /><br />Before he arrived at Camp David, the presidential retreat in the state of Maryland, <strong><span style="font-size:180%;color:#000099;">Mr Sarkozy warned the world could not "continue to run the economy of the 21st Century with instruments of the economy of the 20th Century".<br /></span></strong><br /><br /><strong>Calls for action<br /></strong><br /><br />The BBC's Adam Brookes in Washington says that against the beautiful autumnal backdrop of the retreat, Mr Bush uttered words of cold comfort to his French counterpart and Mr Barroso.<br /><br /><br />Together we will work to modernise and strengthen our nations' financial systems so we can help ensure this crisis doesn't happen again.<br /></p><br /><p align="justify"><strong></strong></p><br /><p align="justify"><strong>US President George W Bush</strong><br /><br /><br />"It is essential that we work together because we are in this crisis together," he said.<br /><br /><br />Mr Bush went on to invite world leaders to a global economic summit in the US soon to talk about the global response to the financial crisis.<br /><br /><br />"Together we will work to modernise and strengthen our nations' financial systems so we can help ensure this crisis doesn't happen again," he added.<br /><br /><br />But <strong><span style="font-size:180%;color:#ff0000;">Mr Bush asserted that any plan to re-think the mechanisms of the global financial system could not be allowed to undermine the free market.<br /></span></strong><br /><br /><strong><span style="font-size:180%;color:#ff0000;">"It is essential that we preserve the foundations of democratic capitalism - a commitment to free markets, free enterprise and free trade," he said.<br /></span></strong><br /><br /><strong>'New order'<br /></strong><br /><br /><strong><span style="font-size:180%;color:#000099;">President Sarkozy seemed to have a rather more sweeping vision to deal with what he called a "worldwide crisis", our correspondent says</span></strong>.<br /><br /><br /><strong><span style="font-size:180%;color:#000099;">He said the crisis could offer a "great opportunity" to build the capitalism of the future and leave behind the "hateful practices" of the past.<br /></span></strong><br /><br /><strong><span style="font-size:180%;color:#000099;">We cannot continue along the same lines because the same problems will trigger the same disasters<br /></span></strong><br /><br /><strong>French President Nicolas Sarkozy</strong><br /><br /><br />"We cannot continue along the same lines because the same problems will trigger the same disasters," he warned.<br /><br /><br />Mr Sarkozy said the hedge funds, tax havens and financial institutions operating without supervision should all be re-thought.<br /><br /><br />"This is no longer acceptable," he added. <strong><span style="font-size:180%;color:#ff0000;">"This sort of capitalism is a betrayal of the sort of capitalism we believe in."<br /></p></span></strong><br /><br /><p align="justify"><strong><span style="font-size:180%;">[THIS SOUNDS AWFULLY CLOSE TO BARACK OBAMA'S CAMPAIGN THEME: 'CHANGE WE CAN BELIEVE IN'. IS THIS NOT A TACIT, IF NOT DIRECT ENDORSEMENT OF BARACK OBAMA FOR THE NEXT PRESIDENT OF THE UNITED STATES???]</span></strong><br /><br /></p><br /><br /><p align="justify"><strong><span style="color:#000099;">Mr Barroso</span></strong> said European nations had taken swift action to tackle the squeeze in the financial markets, but stronger and more effective global action was now required.<br /><br /><br /><strong><span style="color:#000099;">"We need a new global financial order," he added.<br /><br /></span></strong><br />Details of the summits are still to be worked out, but White House spokesman Tony Fratto said the first was likely to be held in November.<br /><br /><br />He added that Mr Sarkozy had recommended New York as a location. UN Secretary General Ban Ki-moon has proposed using the organisation's headquarters there as a venue.<br /><br /><br />That summit would seek to "review progress being made to address the current crisis and to seek agreement on principles of reform needed to avoid a repetition," the leaders said in their statement.<br /><br /><br />"Later summits would be designed to implement agreement on specific steps to be taken to meet those principles," it added. Other world leaders are to be consulted over the plan.<br /><br /><br />Correspondents say such meetings would echo the Bretton Woods conference after World War II.<br /><br /><br /><em><strong>At Bretton Woods, world leaders agreed to establish the International Monetary Fund and the International Bank for Reconstruction and Development, the original institution of the World Bank Group, in an effort to prevent a repeat of the depression of the 1930s.<br /></strong></em><br /><br /><strong>'Big enough and bold enough'<br /></strong><br /><br />Earlier on Saturday, in his weekly radio address, Mr Bush sought once again to reassure Americans about the $700bn bail-out of US financial institutions.<br /><br /><br />Elements of the plan are similar to those earlier announced by European governments.<br /><br /><br />The president said the federal government had taken "aggressive measures" to protect financial security.<br /><br /><br /><strong><span style="color:#000099;">The BBC's Jane O'Brien in Washington says European leaders have in the past blamed the US for the crisis, which started when borrowers began defaulting on their mortgages.<br /></span></strong><br /><br />But she adds that Mr Sarkozy, whose country currently holds the EU presidency, has made it clear he wants to move away from finger-pointing and towards a partnership with the US.<br /><br />-------------------------------------------------------------------------------------------------<br /><br /><a href="http://www.timesonline.co.uk/tol/comment/letters/article4973559.ece">http://www.timesonline.co.uk/tol/comment/letters/article4973559.ece</a><br /><br /><strong><span style="font-size:130%;">EU advice on money: Should the EU give counsel on resolving the credit crunch?</span></strong><br /><br /><br />Op-ed<br /><br /><br />TimesOnline.uk<br /><br /><br />Oct. 19, 2008<br /><br /><br />Sir, It is truly disturbing in the current economic and financial global crisis to witness Presidents Sarkozy and Barroso strutting about at Camp David with President Bush. <strong><span style="font-size:180%;color:#ff0000;">The idea that the European Union can offer a solution to current world problems must be weighed against its own systemic failures over the last few decades.<br /></span></strong><br /><br /><strong><span style="font-size:180%;color:#ff0000;">The failure of the Lisbon economic agenda, the high and increasing levels of unemployment in the euro-zone, the massive costs of over-regulation which are destroying enterprise, the total failure of the Stability and Growth Pact, the assumed irreversible nature of the European Union legal framework, and the promotion of bureaucracy at the expense of democracy is testament to the reasons why the current model of the European Union is not fit for purpose.<br /></span></strong><br /><br />International conferences and co-operation based on free and fair markets and democratic principles are necessary and laudable, but <strong><span style="font-size:180%;color:#ff0000;">no confidence can possibly be placed in the track record of the current model of European Union speaking with its so-called single voice, whose economic failures precede the current financial crisis and are partly responsible for it.<br /></span></strong><br /><br /><strong><em><span style="font-size:130%;">Economic success will only come about if the European Union reverts to an association of democratic nation states co-operating together but without a centralised, bureaucratic, undemocratic model of government.<br /></span></em></strong><br />Bill Cash, MP<br />House of Commons, SW1<br /><br />-------------------------------------------------------------------------------------------------<br /><br /><a href="http://www.royalgazette.com/siftology.royalgazette/Article/article.jsp?articleId=7d8a92b30030005&sectionId=65">http://www.royalgazette.com/siftology.royalgazette/Article/article.jsp?articleId=7d8a92b30030005&sectionId=65</a><br /><br /><strong><span style="font-size:130%;">Browncesceau saves the world? No</span></strong><br /><br /><br />The Royal Gazette – Bermuda<br /><br /><br />ON THE MONEY Roger Crombie<br /><br /><br />Oct. 18, 2008<br /><br /><br />A quick question: <strong>What is the capital of Iceland? Answer: $74.25.</strong><br /><br /><br />Because of the financial crisis, I had to make a mercy dash to the UK last week, to help <strong><em><span style="font-size:130%;">Gordon Brown, the</span></em></strong> <strong><em><span style="font-size:130%;">British Prime Minister</span></em></strong>, avoid making a series of catastrophic mistakes.<br /><br /><br />Unfortunately, I got there 40 years too late. I have in the past been unkind about <strong><em><span style="font-size:130%;">Mr. Brown</span></em></strong>, but I realise now how wrong I was. He <strong><em>is by no means a fool; he is a dangerous, dogmatic dimwit. For ten long years, he has relentlessly driven the British economy down the drain at full speed, burying his borrowing so that no one would find out just how badly off the British really are</em></strong>.<br /><br /><br />Mr. Brown has now achieved an even greater feat. <strong><em><span style="font-size:130%;">Having bankrupted the country over his decade as Chancellor of the Exchequer, he has gone himself one better as Prime Minister and bankrupted it all over again.<br /></span></em></strong><br /><br /><strong><span style="color:#ff0000;">Like all the 1960s socialists who clog up Britain, and in some cases Bermuda, Mr. Brown is married to the idea that Government knows best. His heroes are the discredited socialist leaders who drove Britain onto the rocks in the 1960s and 1970s: Harold Wilson, James Callaghan, Michael Foot and all the other sad, wet people who blighted the country</span></strong>.<br /><br /><br /><strong><span style="color:#ff0000;">The economic model to which Mr. Brown aspires is that of Romania under Nicolae Ceausescu, the "communist" dictator, in which all power accrued to the Government, and the people were in essence wards of state. Ceausescu was despatched by a firing squad, in part for undermining the economy.<br /></span></strong><br /><br />On Monday, Mr. Browncesceau showed us what he was made of when he nationalised the British banks. In a performance that would have been howlingly funny, had it not been tragically sad, Mr. Browncesceau likened himself to Winston Churchill, a proper politician.<br /><br /><br />(A big head seems to be a prerequisite for the job: Mr. Ceausescu referred to himself as the "genius of the Carpathians".)<br /><br /><br />For a couple of days, Mr. Browncesceau was credited with saving the world, even though the nationalisation idea was not his.<br /><br /><br />Similar plans have been batted about since the 1960s, when the banks were on Harold Wilson's hit list, but he was too busy nationalising (and destroying) a long list of other industries. The Swedes had a very similar plan early in the 1990s, when their banking sector experienced bumpy conditions.<br /><br /><br /><strong><em>There are so many reasons why nationalising banks is a bad idea that I hesitate to list them here.</em></strong><br /><br /><br />Instead, I'll just mention one: it doesn't work. As we saw by the end of the week, credit lines were once again frozen and nothing good had happened to anyone. Browncesceau to the rescue? My foot.<br /><br /><br />(Full disclosure: I have a few hundred Pounds in an account with a British bank that merged with another bank after I opened the account.<br /><br /><br />The merged bank was bought by another bank, which in turn was bought by another bank, which has now been forcibly taken over by Mr. Browncesceau, a man with no banking experience. I'll be transferring the money to a bank operated by actual bankers with banking experience.)<br /><br /><br />To reach the UK, I flew on British Airways. Remember them? Lord, how everyone hates them. But there was a reason I didn't fly Zoom.<br /><br /><br />Now, what was it? Let me see. Oh yes, Zoom provided a thoroughly unreliable "service" for a brief period and then went out of business, taking its customers' money with it. British Airways, however, has been serving Bermuda since 1937-ish. Lesson for the week: cheap ain't cheap if you don't receive what you paid for.<br /><br /><br /><em><strong>Most of the British local councils and hundreds of thousands of British taxpayers apparently had their money in Icelandic banks, because those banks were paying more in interest on deposits.</strong></em> This is the Zoom situation in reverse, but the principle is the same. There are no bargains in this world, only false economies.<br /><br /><br /><em><strong>While my heart breaks for those dumb enough to have invested in Iceland, my brain remembers that the rest of us have to get by on regular rates of return, because in the long run, it is better to earn a regular rate of interest than to lose your capital.<br /></strong></em><br />Here are the facts, kiddies, and you might as well get used to them. We are in for a recession.<br /><br />The major global economies are going to have a rough time of it for a couple of years.<br /><br /><br />Bermuda will be somewhat affected, no doubt. There won't be any new hotels; some of the office buildings in Hamilton that have been started won't be finished any time soon; Canadian construction workers will be leaving in large numbers; the insurance industry, in general, looks to be in for an excellent couple of years if the hedge funds survive; retail doesn't look too great; and the Government sector will continue to boom as if nothing had happened, thank goodness.<br /><br /><br />Having started by lambasting politicians, why would I support a Bermuda Government that will keep hiring and spending, and spending and hiring, as if it were 1966 all over again?<br /><br /><br /><em><strong>Because in Bermuda, the Government fulfils functions not required in most countries. Start with the basic premise: the Bermuda Government employs thousands of people to produce nothing of value.</strong></em><br /><br /><br />If it did not, these people would be in the general workforce, where workers are required to produce, and can be fired if they don't.<br /><br /><br /><em><strong>The Bermuda model simply wouldn't work unless the people who are content to do nothing were not given money for doing nothing. The Government makes it possible for hard workers to get ahead by taking out of the game all those who don't much feel like contributing.</strong></em><br /><br /><br />This, of course, is Browncesceau's dream, a world in which everyone is employed by him, but no one does anything.<br /><br /><br /><strong><span style="color:#ff0000;">Then and only then would the desire of Karl Marx for an egalitarian society be achieved (if you don't count Browncesceau and his colleagues stuffing themselves with caviar).<br /></span></strong><br /><br />And in closing I must offer words of encouragement to Dr. Ewart Brown and his colleagues in the Bermuda Government.<br /><br /><br />Although nominally committed to introducing the ideas of the 1960s in little old Bermuda, they have steadfastly refused to do anything like that, governing instead as if they were the British Tory Party of the 1850s. We can only be deeply grateful for that.<br /><br /><br />-------------------------------------------------------------------------------------------------<br /><br /><a href="http://www.larouchepub.com/pr/2008/081018jch_on_france_24.html">http://www.larouchepub.com/pr/2008/081018jch_on_france_24.html</a><br /><br /><strong><span style="font-size:130%;">Jacques Cheminade and Christian de Boissieu debate NBW on TV France 24's `Face Off'<br /></span></strong><br /><br />Executive Intelligence Review<br /><br /><br />Oct. 18, 2008<br /><br /><br />Oct. 18, 2008 (EIRNS)--The broadcast aired directly in English at noon on October 17, 2008, on France 24's English-language program `Face Off,' and will be posted on the TV station's Internet site all during Saturday, when French President Sarkozy will be meeting his U.S. counterpart, Bush.<br /><br /><br /><strong>Transcript:<br /></strong><br /><br />Anchorman of France 24: Hello and welcome to face-off on France 24. Europe wants an overhaul of the world's financial order. At the EU summit in Brussels this week leaders called for more transparency and regulation of global markets. <strong><span style="font-size:130%;">That means in effect a rethink of Bretton Woods, the 1944 conference that created the rules of modern day capitalism</span></strong>.<br /><br /><br />Representing the European Union, French President Nicolas Sarkozy is to meet his US counterpart, George W. Bush, on Saturday to flesh out this idea. There are also plans for a summit in an expanded G8 format to push for it. So, what could Bretton Woods II look like and who actually needs it? Let's ask our guests, <strong><span style="font-size:130%;">Christian de Boissieu, who is the president of the Economics Analysis Council which advises the French Prime Minister</span></strong>, and also with me, <strong><span style="font-size:130%;">Jacques Cheminade, the president of the Solidarity and Progress association</span></strong>. Good morning.<br /><br /><br />F24: Jacques, I like to start with you. This is going to be a difficult sell for Nicolas Sarkozy in Camp David, isnt it?<br /><br /><br />JC: <strong><span style="font-size:130%;color:#ff0000;">He's helped by the situation. You know that Joseph Stiglitz said, and this is a quote: "The Wall Street crisis is to the markets what has been the fall of the Berlin wall to Communism." So it's an issue of life and death.<br /></span></strong><br /><br />CDB: I think the same in the sense that this crisis is global, and to a global crisis we need some global solution. To come back to the title of this broadcast, I would say that what is important for me is 'new:' <strong><span style="color:#ff0000;">it is not Bretton Woods, it is the new Bretton Woods, because in my mind this worldwide conference is going to be very different from the first Bretton Woods</span></strong> which was about exchange rates; which was about monetary cooperation; which was about how to finance external deficits. And now the topics with which we have to deal are totally different. <strong><span style="color:#ff0000;">We don't have to rebuild from scratch, we have to improve the system in regard of banking and financial regulation</span></strong>.<br /><br /><br />F24: Well, [we'll] explore that in detail in a minute. On the question of America: does the US actually need a New Bretton Woods, when it actually exemplifies, it embodies Bretton Woods?<br /><br /><br />CDB: <strong><span style="font-size:180%;color:#ff0000;">My view is that the US economy and the US banking and financial system are in such a bad situation that they actually will [accept] playing this game of further, expanded international coordination.</span></strong> It is going to be not only necessary for us, but also for them.<br /><br /><br />F24: Jacques, does the US need a New Bretton Woods?<br /><br /><br />JC: Oh yeah, <strong>the American people and the true American System do need a new Bretton Woods; but Wall Street and the City of London—that's another story</strong>. For example, M. Gordon Brown has said that hedge funds, off-shore markets, and tax heavens have to be regulated but <strong>you can't regulate vice if you want to produce virtue</strong>.<br /><br /><br />CDB: You know, I was plugged by these wordings by M. Brown. In the sense that not only M. Sarkozy, but also today M. Brown and some others, are advocating to hold a New Bretton Woods conference. As I said before, <strong><span style="font-size:130%;color:#ff0000;">I think the US will play the game because they are obliged to do so. They cannot play the game of being a free rider in the current circumstances. This crisis, the subprime crisis, was coming from the US, <span style="color:#000000;">and it has become global for all the reasons we know, and the US must participate. </span><span style="font-size:180%;">And I think it is also a question of global governance</span></span></strong>.<br /><br /><br />To come back to the format, I guess that this Saturday, M. Sarkozy and M. Bush will appeal for a meeting of the expanded G8 but with whom? Perhaps the G13 format with China, India, Brazil, and some other countries. I think that in the end we need to have everyone around the table<br /><br /><br />JC: Absolutely.<br /><br /><br />CDB: Everyone, all the emerging countries and the developing countries. You have today 185 member countries belonging to the IMF. Let this assembly of countries decide for us, for the world, and not only a small club of countries.<br /><br /><br />JC: France can be a catalyzer, but not an author of the new system. The New Bretton Woods, <strong><span style="font-size:130%;">the issue of the New Bretton Woods is, either you adapt to the situation, and you try to keep the existing financial system by all kinds of tricks and regulations. Or, you go toward a new system, and that's a challenge for civilization at this point</span></strong>. I fully agree with M. de Boissieu on this issue; it's a challenge for civilization.<br /><br /><br />CDB: For me the menu of <strong><span style="font-size:130%;">this possible new Bretton Woods</span></strong> must be twofold. First: to give a consistent answer to the entire list of questions which have been raised by this current financial crisis. This list is very long: <strong><em>how to improve the working of the rating agencies; how to improve transparency of information; the debate of how to implement a reasonable code of conduct for the sovereign wealth funds; the debate about the accounting standards</em></strong> — which is very important in respect to what we saw in the recent past.<br /><br /><br />This is the first topic: not to give piece-meal answers but a global answer to the global problem. I would say not only to improve regulation. The issue here is to ameliorate the quality of banking and financial regulation rather than the quantity. Second topic is the fact that we have to redefine the role of the IMF for the future.<br /><br /><br />F24: Jacques, could you respond on <strong><span style="font-size:130%;">this issue of quality rather than quantity of regulation</span></strong>. What do you think of that?<br /><br /><br />JC: Well, if you look, at this point, at the outstanding, non-regulated, derivatives markets, it's 600,000 billion dollars. And if you look at all the interbank derivatives transactions, it was about 2 million billion to a quadrillion dollars, and probably more. So we have a tremendous problem in front of us: you have a pyramid of illegitimate and unpayable debts. So either you apply triage on this illegitimate and unpayable debt, or you apply triage on the people and the economy; and that's the choice!<br /></p><br /><br /><br /><br /><br /><p align="justify"><br />CDB: Jacques, may I say that you're talking in fact about what is called the Over The Counter (OTC) market, which could create some systemic risk. We have to better articulate the organized market with the OTC market, and <strong><em>I agree with you to re-regulate somewhat a part of the OTC market and to extend also the perimeter of financial regulation to bodies and institutions which are today totally out of the system.</em></strong><br /><br /><br />JC: I would say, as a politician, a dirty word: <strong>bankruptcy reorganization</strong>. What you do to a bankrupt firm? You put it into bankruptcy reorganization, and <strong>you try to establish the conditions under which firms continue to function for the economy. It should be the same for the international economic system</strong>. At this point, the money went away from true long-term real investment, away from what's good for the people and the economy, and went into money making money. This process started with the big bang of the City of London, initially in 1986, and before that, by the decoupling of the dollar from gold on August 15, 1971. That's the issue.<br /><br /><br />CDB: When I said that the current topic [for the NBW] is not the exchange rate, as different from the original 1944 Bretton Woods conference, I think that at some point, we will rediscover the exchange rates problems. But now, in the short run, topic number one has to be financial regulation.<br /><br /><br />JC: But you can't revive a corpse with electro-shocks. <strong>You have to rebuild something that works</strong>, and it doesn't necessarily mean throwing everything in the [paper] basket. <strong>It means to regulate in a true way, and that means to check all the derivatives markets, and throw away everything having to do with mere bets as opposed of functioning as insurance. Derivatives based on insurance of tangible assets should be maintained, but all the rest should be thrown away.<br /></strong><br /><br />CDB: To come back to the issue I raised when I talked about quality rather than mere quantity of regulation. If one looks back to the history of securitization, over the past fifteen, or past ten years, one realizes that in most cases, <strong><em>securitization was introduced by banks and their customers in order to circumvent some banking regulation</em></strong>.<br /><br /><br />JC: Absolutely.<br /><br /><br />CDB: And therefore, <strong><span style="font-size:130%;color:#ff0000;">when we design the future financial system, we have to keep in mind that there is a dialectic between regulation and innovation. And therefore, we will have to improve Basel II, the solvency rules for the banks; we will have to look at the solvency and liquidity rules of insurance companies and also liquidity rules for the banks</span></strong>.<br /><br /><br />F24: Who is going to provide the regulations? You mentioned the IMF earlier, that it needs be a new actor, a new leader? Is that a realistic option that it could provide the oversight?<br /><br /><br />CDB: <strong><span style="font-size:130%;">My proposal is that the IMF could co-manage, co-manage the future systemic banking and financial crisis. When I say co-manage, it means manage with the central banks, because the IMF is not going to become a true central bank and manage with the governments</span></strong>. And therefore, <strong><span style="font-size:180%;color:#ff0000;">we have to give some regulatory powers to the IMF —which is not the case today</span></strong>— which will be exercised with the national authorities, co-managed.<br /><br /><br />F24: What do you think of that, of <strong><span style="font-size:180%;color:#ff0000;">a system of co-regulation?<br /><br /></span></strong><br />JC: The same people that are responsible for the mess in which we are, cannot be called upon to solve it. And I am very doubtful when I see Alan Greenspan as special advisor to M. Gordon Brown in England; when I see Michel Camdessus, the former head of the IMF, called upon to lead the French agency to refinance the banks in France, and worse, since that is a conflict of interest. I'm shocked and really furious when I see Henry Paulson calling M. Neel Kashkari, who's from Goldman Sachs, to rule over the 700 billion dollars of the Paulson plan! I would say, if I can make a joke: No Sachs next night! No more Sachs!<br /><br /><br />CDB: This is a different point than the one I was making.<br /><br /><br />JC: Yes, You are an expert and I am a politician.<br /><br /><br />CDB: In my view, I want to avoid any kind of conflict of interest.<br /><br /><br />JC: Good!<br /><br /><br />CDB: The debate about <strong><span style="font-size:130%;color:#ff0000;">if we have to give some regulatory powers to the IMF which could be exercised jointly with the national authorities</span></strong>, this is an important question. And it is also a political question.<br /><br /><br />F24: But who should then provide the oversight, if it's not the people who, in your view, are responsible for the mess?<br /><br /><br />JC: Well, I have been calling for a New Bretton Woods since years and years, and my American friend Lyndon LaRouche also has called for a New Bretton Woods, and we denounced derivatives right at their beginning. He denounced them in 1993, whereas George Soros, who is now talking and talking, created the derivatives and created the hedge funds. So, that's what I meant when I said that those responsible for the crisis should not be put in a position to speak, and speak about how to solve it. The doctor that made the good diagnosis should be one that should be in charge of curing the patient.<br /><br /><br />F24: I'm sorry we have to end here, so Christian can't even have the last word since we ran out of time. Thank you, etc.<br /><br />-------------------------------------------------------------------------------------------------<br /><a href="http://www.wsws.org/articles/2008/oct2008/eusu-o17.shtml">http://www.wsws.org/articles/2008/oct2008/eusu-o17.shtml</a><br /><br /><strong><span style="font-size:130%;">EU call for global financial regulation masks intra-European and international tensions</span></strong><br /><br /><br />By Chris Marsden<br /><br /><br /><span style="color:#ff0000;"><strong>World Socialist Website</strong></span><br /><br /><br />17 October 2008<br /><br /><br /><strong><span style="font-size:130%;color:#ff0000;">The European Union on Wednesday issued a call for a summit of the major economies to design a new system of global financial regulation, which EU leaders are calling “Bretton Woods II</span></strong>.”<br /><br /><br />Following a two-day meeting of EU leaders, German Chancellor Angela Merkel declared, “We should have a meeting this year, preferably in November, of the heads of state and government of the G8 countries and the emerging markets to rethink the world’s financial system and prevent any repetition of such things.”<br /><br /><br /><strong><span style="font-size:130%;color:#000099;">But despite the unity of the EU leaders behind the call for a “new Bretton Woods” and a global trade deal, the meeting in Brussels provided further evidence of the perplexity and impotence of Europe’s leaders in the face of the plunge of the global economy into recession.<br /></span></strong><br /><br />The EU summit confirmed the plans of the European powers to bail out their major banks at taxpayer expense, approving the €2.7 trillion rescue package initially agreed in Paris last Sunday. “The whole of Europe, without exception, approves the plan agreed on Sunday,” said French President Nicolas Sarkozy, whose country holds the rotating EU presidency.<br /><br /><br /><strong>But these measures and similar initiatives by the United States have already failed to restore confidence in the markets</strong>. With growing evidence that the world economy is contracting and announcements of factory closures and rising unemployment, the EU summit met against a background of further major falls in share prices on European and Asian bourses. Its final day saw falls of between 5 and 11 percent in Europe, with Britain’s FTSE index closing at its lowest level in five years, France’s CAC 40 down 5.9 percent, Germany’s DAX down 4.9 percent and Tokyo suffering its biggest one-day loss since 1987.<br /><br /><br />EU leaders within the euro-zone agreed to set up a financial crisis management unit to share sensitive financial information and seek a common response to the ongoing crisis. However, <em><strong><span style="color:#000099;">the EU summit failed to agree a unified plan to revive Europe’s economies, and there was no discussion of measures to provide relief for tens of millions of workers who will be devastated by a severe recession.<br /></span></strong></em><br /><br />Statements were made expressing concern about the “negative impact on real economies” by Danish Prime Minister Anders Fogh Rasmussen, while Sarkozy said, “We would be lying if we said we weren’t looking at what is happening on the stock markets.” But restoring confidence to financial markets was deemed to be the key to bolstering Europe’s economy, a theme that was stressed by Britain’s prime minister, Gordon Brown.<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">With the cost of “restoring confidence” climbing to trillions of dollars, what is actually on the agenda are tax hikes, mass layoffs and cuts in public spending.</span></strong> The relaxing of the EU’s fiscal rules restricting budget deficits to 3 percent of gross domestic product (GDP) will be used to funnel finance to the banks in order that they can compete against their US and Asian rivals, not to alleviate the suffering of working people. Officials say that budget deficits will be allowed to exceed this limit by “several decimal points.”<br /><br /><br />Any moves toward subsidising industry will have the same purpose—to bolster Europe’s competitive position in relation to its American and Asian rivals. Responding to the US government’s $25 billion loan guarantee to American-based automakers, Luxembourg’s Jean-Claude Juncker said, “If the Americans massively support their car industry, Europe cannot not react.”<strong><span style="font-size:130%;color:#000099;"> Within the EU itself, the financial crisis has intensified national divisions, threatening to undermine the foundations of European monetary unity. The claims that Europe has spearheaded a coordinated international response to the crisis are empty. In reality, governments have carried out unilateral actions to prop up their national banking systems, with each such move forcing the hand of the other governments to follow suit, for fear of a flight of capital to those countries offering the most generous guarantees to their banks.<br /></span></strong><br /><br /><strong><span style="font-size:180%;">The response of the United States to the EU summit’s call for a new global regulatory framework was decidedly cool. “We will have an opportunity to discuss these—and the ideas of others—at the appropriate time,” said White House spokesman Tony Fratto.<br /></span></strong><br /><br />Within the framework of the general principles agreed by the EU, moreover, each national government retains full latitude to act as it sees fit to prop up the banks based within its own borders, undercutting the banks of other countries.<br /><br /><br />In this struggle over control of dwindling financial resources, the bigger countries will naturally have a massive advantage over the smaller ones, which will not be bailed out by the EU. <strong><span style="color:#000099;"><em>Germany and Britain have both made clear that they will not countenance the continuation of the subsidies that have hitherto been the bedrock of the EU project.<br /></em></span></strong><br /><br />That is why, even prior to the summit, there was open speculation in financial journals regarding the continued viability of the euro currency and of the EU itself. Ambrose Evans-Pritchard wrote <strong><span style="font-size:180%;color:#000099;">in the Daily Telegraph, “We have reached the watershed moment when Germany has to decide whether to put its full sovereign weight behind the [European Monetary Union] project or reveal that it is not prepared to do so in a crisis.... This is a very dangerous set of circumstances for monetary union. </span></strong>Will we still have a 15-member euro by Christmas?”<br /><br /><br />Writing for the Associated Press, <strong><span style="font-size:180%;color:#000099;">William J. Kole warned that “If the EU can’t forge a common response to a collapse that transcends borders, involves multinational lenders and has pushed the euro currency down to its lowest level in a year, some wonder: What’s the point of having an EU?”<br /></span></strong><br /><br />Wolfgang Munchau in the Financial Times noted, <strong><span style="font-size:180%;color:#ff0000;">“For Europe, this is more than just a banking crisis. Unlike in the US, it could develop into a monetary regime crisis. A systemic banking crisis is one of those few conceivable shocks with the potential to destroy Europe’s monetary union.”<br /></span></strong><br /><br /><strong>Bretton Woods II<br /></strong><br /><br />Financial breakdown, global recession and growing fault-lines within the foundations of the EU form the context within which the viability of European proposals for an overhaul of the world’s financial system must be judged.<br /><br /><br />Prime Minister Brown and President Sarkozy are both claiming credit for urging the establishment of a new world system of financial governance and regulation. But aside from rhetoric and proposals for a shared set of governing principles, neither has articulated a substantive plan.<br /><br /><br />Brown, stressing that “Global financial markets present challenges that no one nation can solve in isolation,” urged the adoption of a four-point agenda to “strengthen global cooperation and build a new global financial architecture for the years ahead—a new Bretton Woods, which recognizes the globalization of financial risk in the responsibilities of global institutions.”<br /><br /><br />His four points consist of “a global early warning system” to deal with future financial crises, “globally accepted standards of supervision and regulation,” “cross-border supervision” of the 30 largest banks and insurance companies, and “cooperation and concerted action” at a time of crisis.<br /><br /><br />He has called for reform of the World Bank, for the IMF to be rebuilt as “fit for purpose” and for other national regulators to work more closely together.<br /><br /><br />His proposals are to be put for discussion at the forthcoming G8 summit to be held either in November or December, which he wants extended to include China and India, which are expected, in return for their inclusion, to foot part of the bill for future economic crises.<br /><br /><br />Brown’s schema and his talk of a “Bretton Woods II” ignore the vast changes that have occurred in world economy over the past half-century.<br /><br /><br />The system of financial regulation established at the 1944 conference of allied powers in Bretton Woods, New Hampshire was forged under the financial hegemony of the United States. Conceived of as a means of ensuring against a return to the Depression of the 1930s and the unbridled economic conflicts between nations that had led to the Second World War, it proceeded from the vast and unrivalled economic resources and industrial might of American capitalism.<br /><br /><br />Under conditions of the wartime devastation of European and Japanese capitalism, the United States was in a position to sponsor the reconstruction of world capitalism, on terms favourable to its own interests. This was epitomised by the establishment of the dollar as the world reserve and trading currency, backed by gold.<br /><br /><br />Bretton Woods was an attempt to overcome the general historical decline of the world capitalist system on the basis of the strength and dominance of the US as the most powerful capitalist nation. However, in rescuing Europe and Japan in order to ensure the markets on which its industry relied, the US inevitably set in motion processes that undermined its own economic supremacy.<br /><br /><br />By 1971, the decline in the relative position of the United States in the world economy was expressed in America’s inability to back its pledge to redeem dollars at the fixed rate of $35 per ounce of gold. The US removed the gold backing from the dollar, and the Bretton Woods system collapsed.<br /><br /><br />In the ensuing decades, the US bourgeoisie sought to overcome its economic decline by turning to ever more grotesque forms of economic parasitism and speculation. Today, the industrial decline of the US and its transformation from the world’s leading creditor to its largest debtor means that, rather than being in a position to rescue the world capitalist system, the US is dragging its economic rivals into the abyss.<br /><br /><br />Neither can the role previously played by the US be assumed by a coalition of European powers. Not only have they travelled the same route as Wall Street into speculation almost entirely removed from the creation of real value, but they are also incapable of overcoming the national antagonisms unleashed by the economic crisis.<br /><br /><br />As for China, its economy has proved to be tied more than any other to crisis-ridden US capitalism, holding the bulk of America’s debts and relying heavily on the American market for the export of its manufactured goods. Its financial markets have lost fully two-thirds of their value since October last year.<br /><br />-------------------------------------------------------------------------------------------------<br /><br /><a href="http://www.ft.com/cms/s/0/cf6042fa-9c3f-11dd-a42e-000077b07658.html?nclick_check=1">http://www.ft.com/cms/s/0/cf6042fa-9c3f-11dd-a42e-000077b07658.html?nclick_check=1</a><br /><br /><strong><span style="font-size:130%;">Plea to safeguard free trade</span></strong><br /><br /><br />By Peggy Hollinger<br /><br /><br />Financial Times<br /><br /><br />October 17, 2008<br /><br /><br /><strong><span style="font-size:130%;">Leaders of the international business community urged politicians on Friday not to abandon the free market as the world’s governments seek to resolve the problems that created the global financial crisis.<br /></span></strong><br /><br />The heads of business federations from France, Germany, the UK, the US and Italy met in Paris to hammer out a common response to the crisis ahead of the summit on Saturday in the US between José Manuel Barroso, the European Commission president, and Nicolas Sarkozy, the president of France, and George W. Bush, the US president.<br /><br /><br />Officials said the <strong><span style="color:#ff0000;"><em>business leaders also wanted to make their voices heard because the US meeting would focus on a wholesale redesign of the world’s financial architecture, including broader powers for the International Monetary Fund.</em></span></strong><br /><br /><br /><strong><span style="font-size:130%;color:#ff0000;">Signalling fears that governments will be tempted to over-regulate, and even shift into protectionism, the business leaders defended free trade and a global market economy as the sole means to ensure economic growth.</span></strong><br /><br /><br /><strong><span style="color:#ff0000;">“Although the market economy is messy and sometimes extravagant, we know it is by far the best system we have for allocating resources around the world and raising prosperity,” said Richard Lambert, the head of the CBI, the UK employers’ group.<br /></span></strong><br /><br /><strong><em><span style="font-size:130%;color:#ff0000;">Laurence Parisot, head of Medef, France’s employers’ union, said: “History shows that growth comes from free trade, from giving space to people to innovate. We must not weaken our companies. What happened was not the fault of a liberal market, which needs rules. It was an absence of rules.”<br /></span></em></strong><br /><br /><strong><span style="font-size:130%;color:#ff0000;">They reiterated their support for the government plans launched this month designed to stabilise the global banking system, but said these must remain limited. “It must only be a temporary participation in financial markets,” said Emma Marcegaglia, the head of Italy’s Confindustria.<br /></span></strong><br /><br />Mr Lambert said a “firewall had been put up around these troubles and there are signs that the medicine is starting to work”.<br /><br /><br />Mr Lambert gave his backing for reform of the IMF. “Certainly it is odd that in a drama like this could happen and the IMF does not have a role. We need to ask ourselves whether the IMF could play a more active role.” Jürgen Thumann, of Germany’s BDI said it was good news the US was “now open and ready for discussion” on a new approach to economic government.<br /><br /><br />But <strong><span style="color:#ff0000;">Donald Shepard of the US Chamber of Commerce warned against new agencies.</span></strong> “It would be a mistake to have a knee-jerk reaction,” he said. “But it does make sense to look at the way we deal with things from a regulatory standpoint.”<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">Over-regulation or any attempt to increase taxes on companies to fund rescue plans would simply exacerbate the adverse economic consequences, said Ms Parisot.</span></strong> “Today we are in recession; perhaps not in an academic sense, but the companies in all our countries are cutting staff, reducing investment and questioning research spending. We are at a very low point in the economic cycle.”<br /><br /><br />Business leaders also called on governments to ensure the global banking system did not retreat into a risk-averse mentality.<br /><br />-------------------------------------------------------------------------------------------------<br /><br /><a href="http://us.ft.com/ftgateway/superpage.ft?news_id=fto101720080801486895">http://us.ft.com/ftgateway/superpage.ft?news_id=fto101720080801486895</a><br /><br /><strong><span style="font-size:130%;">French business leader warns on over-regulation </span></strong><br /><br /><br />By Peggy Hollinger<br /><br /><br />Financial Times<br /><br /><br />Oct 17 2008<br /><br /><br /><strong><span style="font-size:130%;">Governments must resist the temptation to over-regulate in their search for a response to the problems that have created the current financial and economic crisis, warned Laurence Parisot, head of Medef, France's powerful employers' union.</span></strong><br /><br /><br />Speaking to the Financial Times ahead of a meeting on Friday of business leaders from the UK, US, Germany and Italy, <strong><em><span style="font-size:130%;color:#ff0000;">Ms Parisot warned that a shift away from a liberalised free market could create serious adverse consequences for the global economy.<br /></span></em></strong><br /><br /><strong><span style="font-size:180%;">"History shows that growth comes from free trade, from giving space to people to innovate. We must not weaken our companies. What happened was not the fault of a liberal market, which needs rules. It was an absence of rules (that is to blame)," she said.<br /></span></strong><br /><br />Friday's meeting seeks to hammer out a common response to the crisis ahead of the summit on Saturday between European Commission President José Manuel Barroso, Pesident Nicolas Sarkozy of France and President George W Bush of the US.<br /><br /><br /><strong><em><span style="color:#ff0000;">The business leaders hope to reinforce the message that a recovery from the resulting global slowdown can only be achieved if companies are allowed to flourish. Over regulation or any attempt to increase the tax burden on companies to fund rescue plans would simply exacerbate the adverse economic consequences, said Ms Parisot.</span></em></strong> "Today we are in recession; perhaps not in an academic sense, but the companies in all our countries are cutting staff, reducing investment and questioning research spending. We are at a very low point in the economic cycle."<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">The business leaders are also expected to urge governments to ensure that the global banking system does not retreat into a totally risk-averse mentality which could penalise in particular small and medium sized companies</span></strong>. Borrowing costs must remain reasonable, even if it is understandable that they should rise, Ms Parisot said.<br /><br /><br />"Now that banks have the guarantees, they have to play the game," she said. "They have to do everything to irrigate the economy ... and conditions have to remain acceptable." The governments were right to launch their rescue packages but "it has to be a win win situation."<br /><br />-------------------------------------------------------------------------------------------------<br /><a href="http://www.france24.com/en/20081017-bush-successor-overhaul-financial-rules-us-candidates">http://www.france24.com/en/20081017-bush-successor-overhaul-financial-rules-us-candidates</a></p><br /><br /><p align="justify"><strong><span style="font-size:130%;">Bush: successor must overhaul financial rules</span></strong></p><br /><p></p><br /><p><br />Agence France Presse</p><br /><br /><br /><p align="justify">Oct. 17, 2008</p><br /><br /><br /><p align="justify"><em>US President George W. Bush has warned the economic rescue plan is "going to take a while" to bear fruit, and that it is up to his successor, Barack Obama or John McCain, to overhaul US financial rules.</em> </p><br /><p></p><br /><p><br />US President George W. Bush said Friday that "it's going to take a while" for his economic rescue plan to bear fruit and charged his successor with carrying out an overhaul of US financial rules. </p><br /><br /><br /><p align="justify">"The actions will take more time to have their full impact. It took a while for the credit system to freeze up; it's going to take a while for the credit system to thaw," he said in a speech to the US Chamber of Commerce. </p><br /><p></p><br /><p align="justify"><br />With just 18 days before the November 4 elections, <strong><span style="font-size:130%;">Bush said whoever enters the White House in late January will have to "ensure that this situation never happens again" by updating US regulations on banking. </span></strong>Citing US Treasury Secretary Henry Paulson's overhaul proposal and "good suggestions" from others, Bush declared: <strong><em>"Enacting these ideas into law must be a top priority for the next president and the next Congress."</em></strong> </p><br /><p align="justify"><br /><br /><strong><span style="font-size:130%;">Amid deep unease over the US government buying stakes in US banks -- notably on the right flank of his Republican party -- Bush defended the move as a "last resort" and denied that he had taken "a step toward nationalizing banks." "This is simply not the case. This program is designed with strong protections to ensure the government's involvement in individual banks is limited in size, limited in scope, and limited in duration," he said.</span></strong> </p><br /><br /><br /><p align="justify"><strong><em>At the same time, Bush said he had taken "systematic and aggressive measures" and that "they're big enough and bold enough to work, and the American people can be confident they will."</em></strong></p><br /><br /><br /><p align="justify">Bush's speech came one day before he was to host French President Nicolas Sarkozy and European Commission chief Jose Manuel Barroso at his Camp David retreat for talks on the global financial meltdown. <strong>The US president has signed on to a proposal from Sarkozy, whose country holds the rotating European Union presidency, to hold an emergency summit of world leaders -- a gathering now expected in late November</strong>. </p><br /><br /><br /><p align="justify"><strong><span style="font-size:130%;color:#ff0000;">Bush made no explicit reference to Sarkozy's call for a top-to-bottom overhaul of international financial regulations but said that "our 21st century global economy continues to be regulated by laws written in the 20th century."</span></strong> "Our European partners are taking bold steps. They show the world that we're determined to overcome this challenge together. And they have the full support of the United States," Bush said. </p><br /><br /><br /><p align="justify">After he spoke, Wall Street shares fell at the opening as a weak report on US housing starts prompted profit-taking a day after a powerful rally. The Dow Jones Industrial Average fell 222.94 points (2.48 percent) to 8,756.32 in the first exchanges a day after a dramatic rebound lifted the blue-chip index more than 400 points. Market action came as a report showed construction starts on new US homes slumped an additional 6.3 percent in September to the lowest level since the recession in 1991. </p><br /><br /><br /><p align="justify"><strong>The White House</strong> said Thursday it was too soon to say where and when world leaders might hold talks later this year or whether US presidential hopefuls would take part, and <strong>played down expectations for the Camp David talks. "I wouldn't expect a lot out of it. I don't expect any new policy announcements. I don't expect dates for meetings to be announced," said spokeswoman Dana Perino. </strong></p><br /><br /><br /><p align="justify">"I think that it will just be a chance for them to continue the discussions that they've been having since the beginning" of the crisis, she said.</p><br /><p align="justify">------------------------------------------------------------------------------------------------</p><br /><p align="justify"></p><br /><p align="justify"><a href="http://www.economist.com/world/europe/displayStory.cfm?story_id=12414280&source=features_box_main">http://www.economist.com/world/europe/displayStory.cfm?story_id=12414280&source=features_box_main</a></p><br /><br /><p align="justify"><strong><span style="font-size:130%;">Seeking an end to the madness - Europe's leaders want to see a new global financial system emerge</span></strong></p><br /><p></p><br /><p><br />The Economist</p><br /><p></p><br /><p><br />Oct. 16, 2008</p><br /><br /><br /><p align="justify">IT COULD have been worse. That was the message from European Union (EU) leaders as they emerged from a long-planned two-day summit in Brussels on Thursday October 16th. In today’s desperate times, the avoidance of catastrophe counts as an achievement.<br /></p><br /><br /><p align="justify">The financial crisis is concentrating minds. European unity held, as leaders from all 27 countries in the union endorsed a €2 trillion ($2.7 trillion) rescue plan for banks that had been agreed by the countries that use the single currency, plus Britain, at a meeting in Paris on Sunday.<br /></p><br /><br /><p align="justify"><strong><span style="font-size:130%;color:#000099;">The plan amounts to a set of agreed guidelines for co-ordinated action. That falls short of the grand claims made for it by some, notably the summit host, President Nicolas Sarkozy of France</span></strong>. </p><br /><p></p><br /><p><br /><strong><span style="font-size:130%;color:#000099;">He said that it marked the birth of a “European economic government”.</span></strong> It does represent a step on from the damaging cacophony that reigned beforehand, in which European governments announced beggar-thy-neighbour schemes to guarantee deposits in their local banks.<br /></p><br /><br /><p align="justify">Other grandiose claims swirled. <strong><span style="color:#000099;">For the first time “in history”, Mr Sarkozy told his colleagues, plans drawn up by the EU had “inspired the measures taken in other countries of the world, including the United States.”</span></strong> <strong><span style="font-size:180%;color:#ff0000;">Europe “demanded” a global summit to discuss the creation of <em>a new form of capitalism</em>, based on moral values, and the effective regulation and supervision of all corners of the financial world, including hedge funds and rating agencies, said Mr Sarkozy.<br /></span></strong></p><br /><br /><p align="justify">The French leader and the European Commission president, José Manuel Barroso, will meet President George Bush at Camp David on Saturday, to discuss the agenda for that global summit, described as <strong><span style="font-size:130%;color:#ff0000;">the starting point for a new “Bretton Woods”</span></strong>, after the 1944 meeting of Western leaders that led to the foundation of the World Bank and the International Monetary Fund. </p><br /><br /><br /><p align="justify">The summit should take place in New York, “where everything began”, suggested Mr Sarkozy, making one more swipe at the excesses of Wall Street. It would probably happen in November or December, with the American president-elect invited to send representatives to join Mr Bush, said the French president.<br /></p><br /><br /><p align="justify"><strong><span style="font-size:130%;color:#000099;">Telling differences of tone existed beneath the brave talk of unity. Mr Sarkozy talked of a “new” sort of capitalism which would serve business and people. France wants to see tough measures against the “madness” of executive pay and bonuses that encouraged risk-taking, as well as a clampdown on tax havens. Other leaders, such as Jean-Claude Juncker of Luxembourg, backed proposals to support important industrial sectors, such as European carmakers, and not just banks.<br /></span></strong></p><br /><br /><br /><p align="justify"><strong><span style="font-size:180%;color:#000099;">Britain’s prime minister, Gordon Brown, arrived clutching a sober, seven-page plan for fixing the existing machinery of free market capitalism</span></strong>. <strong><span style="font-size:180%;color:#ff0000;">The world needs more transparency, integrity and systems of global governance, he argues. He wants to see cross-border “colleges” of national supervisors to assume oversight of the 30 largest financial institutions in the world, by the end of the year, and to see the IMF become an “early warning system” for problems looming in the world economy.</span></strong> The summit conclusions did not take up his call for world leaders to agree a free-trade deal urgently, to send a signal that the crisis would not lead to a dangerous lurch back to protectionism.<br /></p><br /><br /><br /><p align="justify"><strong><span style="font-size:130%;color:#33ff33;">The other achievement in Brussels also centred on avoiding a disaster. All 27 countries confirmed their “determination” to stick with ambitious targets for fighting climate change, agreed amid much self-congratulation in March 2007. By the year 2020, those targets would see EU members cutting carbon emissions by 20% compared with 1990 levels; they should also derive 20% of energy from renewable sources. Preserving those targets was a close-run thing.</span></strong> In the words of the British foreign secretary, David Miliband, several countries were suffering from “buyers’ remorse”, after their bold promises of 18 months ago.<br /></p><br /><br /><br /><p align="justify"><span style="font-size:130%;"><strong><span style="color:#33ff33;">Italy’s prime minister, Silvio Berlusconi suggested that EU measures to curb carbon emissions should be postponed until after the financial crisis. Eight ex-communist countries suggested that the current plan for cutting emissions would cause them unbearable economic pain.</span></strong> <strong><span style="color:#33ff33;">In the end, the swing vote came from Angela Merkel, the German chancellor, who stared down intense lobbying from German industry to say she still supported the climate change package.</span></strong></span> The issue now passes to (yet another) EU meeting in December. Whether unity can hold until then may depend on whether a deep recession has Europe in its grip.</p><br /><p align="justify"></p><br /><p align="justify">------------------------------------------------------------------------------------------------</p><br /><br /><p align="justify"><a href="http://afp.google.com/article/ALeqM5j-xKtkezCEKfK93PjyHwqvQOdVNw">http://afp.google.com/article/ALeqM5j-xKtkezCEKfK93PjyHwqvQOdVNw</a><br /><br /><strong><span style="font-size:130%;">EU leaders push for finance overhaul at summit</span></strong><br /><br /><br />Agence France Presse<br /><br /><br />Oct. 15, 2008<br /><br /><br />BRUSSELS (AFP) — <strong><span style="font-size:130%;color:#000099;">European Union leaders pushed for rapid moves to overhaul global finance, demanding a world summit be convened for a complete rethink of the system</span></strong> in the wake of the banking crisis.<br /><br /><br />Announcing that all 27 of the EU's leaders were behind measures taken by members of the single currency eurozone to safeguard banks, French President Nicolas Sarkozy said Wednesday there was also a unanimous demand for a world summit to be held by the end of the year on reforming global financial institutions.<br /><br /><br />"Everyone agrees on the need for a global summit soon," said Sarkozy whose country currently holds the revolving EU presidency.<br /><br /><br />"We want this summit to take place before the end of the year and we think that November is a good time," he added.<br /><br /><br />Sarkozy had earlier told his peers that the turmoil in the financial system, which has seen stock exchanges plummet in recent weeks, was "one crisis too many".<br /></p><br /><br /><p align="justify">"The system must be completely overhauled, an overhaul that must be global," he said.<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">"A new capitalism is needed, based on values which put finance at the service of business and citizens, and not vice versa."<br /></span></strong><br /><br />The call from Sarkozy, who is to travel to the United States this weekend for talks with President George W. Bush on the recent turmoil, were echoed by British Prime Minister Gordon Brown who said that a crisis was being witnessed "that has the potential to affect every country around the world."<br /><br /><br />"The challenge for the international community is to stabilise current market conditions, mitigate and manage the risk of contagion to other parts of the globe <strong><span style="font-size:130%;color:#000099;">and reform the international financial system for the future," Brown added</span></strong>, according to a copy of a speech that was delivered behind closed doors.<br /><br /><br />Brown said in particular that an "early warning system" needed to be set up to avoid a repeat of the recent turmoil and that <strong><span style="font-size:130%;">the International Monetary Fund needed to be made "fit for purpose."<br /></span></strong><br /><br />Buoyed by the initial positive reaction of markets to bank rescue packages in the eurozone, leaders gathered in Brussels hoped it would mark the start of a more coordinated approach to a crisis many say stems from the United States.<br /><br /><br />The eurozone leaders last weekend agreed a comprehensive package designed to shore up banks, including making more than a trillion euros available for interbank loans.<br /><br /><br />Sarkozy said that there had been overwhelming support for the package from the other EU leaders who do not use the euro.<br /><br /><br />"The whole of Europe, without exception, approves the measures adopted on Sunday in Paris," he said.<br /><br /><br />However he added that the <strong><span style="font-size:130%;color:#ff0000;">EU nations have still not reached a definitive agreement on the text which contains the measures, amid some reservations over state intervention from the Czech government.<br /></span></strong><br /><br />Speaking alongside Sarkozy, EU Commission chief Jose Manuel Barroso said <strong><span style="font-size:130%;color:#ff0000;">it was essential that Europe and the United States work in tandem to address the root causes of the banking crisis</span></strong>.<br /><br /><br />"Europe is indispensable for a global response but a European response alone is not enough," he said.<br /><br /><br />The summit began amid the release of more grim economic data from the EU's two biggest economies with unemployment in Britain jumping to an eight-year high of 5.7 percent while Chancellor Angela Merkel said Germany's economy was heading for a slowdown, albeit a transitory one.<br /><br /><br />Before the financial crisis reared its head, EU leaders were to have focused at the summit on Europe's efforts to tackle climate change.<br /><br /><br />As the summit evolved, splits over climate change goals widened with first Poland and then Italy threatening to veto plans to tackle the issue if attempts were made to impose a deal.<br /><br /><br />Last year the European Union adopted the target of reducing greenhouse gas emissions by 20 percent by 2020 from 1990 levels.<br /><br />-------------------------------------------------------------------------------------------------<br /><br /><a href="http://www.bloomberg.com/apps/news?pid=20601100&sid=aPA5UOvpGQug&refer=germany">http://www.bloomberg.com/apps/news?pid=20601100&sid=aPA5UOvpGQug&refer=germany</a><br /><br /><strong><span style="font-size:130%;">Brown Seeks Global `Early Warning' System on Crises (Update4)<br /></span></strong><br /><br />By James G. Neuger and Mark Deen<br /></p><br /><p align="justify">Bloomberg News</p><br /><p align="justify"><br /><br />Oct. 15, 2008<br /><br /><br />Oct. 15 (Bloomberg) -- <strong><span style="font-size:130%;color:#000099;">U.K. Prime Minister Gordon Brown called for an overhaul of global financial regulation and an ``early warning'' system to prevent banking crises, setting up a trans-Atlantic clash over world economic management.<br /></span></strong><br /><br />Brown, author of the British bank-bailout plan that was copied across Europe and in the U.S., urged a strengthening of the International Monetary Fund and better monitoring of global companies and banks.<br /><br /><br />``We now have global financial markets, but what we do not have is anything other than national and regional regulation and supervision,'' Brown told a Brussels press conference today before a two-day European Union summit.<br /><br /><br />Brown's call, echoed by other EU leaders in the wake of the biggest stock-market selloff since 1933, is likely to face headwinds from the U.S., which has enjoyed a dominant role in international financial institutions since the current rules were set at the end of World War II.<br /><br /><br />``<strong><span style="font-size:130%;color:#000099;">The U.S. got what it wanted in 1944 and, I suspect, will do so again simply because the Europeans won't be able to decide what they want,'' said Martin Weale, director of the National Institute of Economic and Social Research in London.<br /></span></strong><br /><br />At Bretton Woods, New Hampshire, in 1944, nations agreed to fix exchange rates, establish the IMF and start the process of Europe's postwar reconstruction by encouraging coordinated economic policies.<br /><br /><br /><strong>Top 30 Banks<br /></strong><br /><br />Brown said national regulators must coordinate their work and banks should be pushed to disclose more trading positions. He called for an end-of-year deadline to place each of the world's top 30 banks under the supervision of a panel of regulators from the countries where it is active.<br /><br /><br />French President Nicolas Sarkozy called for regulating rating companies and ``necessary supervision'' for hedge funds.<br /><br /><br />``The role of public players needs to be reconsidered. I would propose a simple principle, that no financial institution should escape regulation and supervision,'' Sarkozy said in a statement distributed by his press service at the EU summit today.<br /><br /><br /><strong><span style="font-size:130%;color:#000099;">While stressing a global approach, European governments are split over how to go about it</span></strong>, with leading countries -- including Brown's Britain -- traditionally opposed to handing over business regulation to outside authorities.<br /><br /><br />European leaders are pressing for a jumbo summit of the Group of Eight industrial nations plus developing countries including China and India to rework global financial rules and management of the IMF. Brown and Sarkozy said that summit should take place before the end of the year. Sarkozy said it should be held ``preferably in New York where everything began.''<br /><br /><br /><strong>Global Economy<br /></strong><br /><br /><strong><span style="font-size:130%;color:#ff0000;">``Now we have to create the institutions that are relevant not for national and sheltered economies, but are relevant for the global economy,'' Brown said.<br /></span></strong><br /><br />To jumpstart that process, Sarkozy, holder of the EU's six- month presidency, will travel with European Commission President Jose Barroso to the U.S. on Oct. 18 to meet President George W. Bush.<br /><br /><br />EU governments initially reacted to the crisis in a ``piecemeal and ad hoc'' fashion, ``creating an impression of disorder and sending confused signals to financial markets,'' aides to Barroso said in a paper prepared last week and released yesterday.<br /><br /><br />In the meantime, European leaders have committed as much as $2 trillion to guarantee interbank lending and buy stakes in banks, to prevent hobbled credit markets from tipping the broader economy into recession.<br /><br /><br /><strong>U.S. Follows Suit<br /></strong><br /><br />The U.S. followed suit yesterday, announcing an unprecedented $250 billion government investment in banks, starting with nine institutions deemed critical to the survival of the system.<br /><br /><br /><strong><span style="font-size:130%;color:#000099;">European Central Bank President Jean-Claude Trichet said a reshaped world financial system should try to restore the ``discipline'' that governed markets in the decades after World War II.<br /></span></strong><br /><br /><strong><span style="font-size:130%;color:#000099;">``Perhaps what we need is to go back to the first Bretton Woods, to go back to discipline,'' Trichet said after giving a speech at the Economic Club of New York yesterday. ``It's absolutely clear that financial markets need discipline: macroeconomic discipline, monetary discipline, market discipline.''<br /></span></strong><br /><br /><strong><em><span style="color:#000099;">Trichet indicated that recent market turmoil was partly a consequence of the deregulation that occurred after Bretton Woods' demise. That was triggered in 1971, when inflation forced the U.S. to abandon the dollar's peg to gold, an anchor of the system, heralding the era of floating exchange rates.<br /></span></em></strong><br /><br /><strong>`Rejection of Discipline'</strong><br /><br /><br />``The explosion of the first Bretton Woods in a way could be interpreted as a rejection of discipline,'' said Trichet.<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">German Chancellor Angela Merkel told parliament in Berlin today that her government wanted ``a strengthened role for the IMF for keeping tabs'' on global financial institutions.<br /></span></strong><br /><br />Trichet and U.S. Federal Reserve Chairman Ben S. Bernanke are struggling to restore order to credit markets after the collapse of Lehman Brothers Holdings Inc. and $640 billion in writedowns make banks reluctant to lend. The ECB and the Fed last week cut interest rates in tandem and this week agreed to flood the financial system with dollars.<br /><br /><br />``Creating stability by adapting frameworks that have worked historically can improve credibility and hence the effectiveness of policy stabilization measures,'' said Lena Komileva, an economist at Tullett Prebon Plc in London. ``This idea may gain traction with policy makers.''<br /><br />-------------------------------------------------------------------------------------------------<br /><br /><a href="http://www.eubusiness.com/news-eu/1223839028.97">http://www.eubusiness.com/news-eu/1223839028.97</a><br /><br /><strong><span style="font-size:130%;">EU in push for world finance summit: Sarkozy</span></strong><br /><br /><br />EU Business.com<br /><br /><br />12 October 2008, 23:30 CET<br /><br /><br />(PARIS) - <strong><span style="font-size:180%;color:#000099;">The European Union will ask the United States to jointly organise an international summit to reform the global finance system, French President Nicolas Sarkozy said</span></strong> Sunday after talks with EU leaders.<br /><br /><br />After agreeing on a bank rescue plan, Sarkozy said Europe must now join the United States and other powers to address the root causes of the banking crisis that has seriously rattled stock markets.<br /><br /><br /><strong><span style="font-size:180%;color:#000099;">"We must convince our American friends of the necessity of an international summit to review the international financial system," said Sarkozy.<br /></span></strong><br /><br />"We in Europe are not ready to let this go on in this fashion."<br /><br /><br />The president first proposed holding the world summit in an address to the United Nations last month, saying that <strong><span style="font-size:180%;color:#ff0000;">the gathering would lay the groundwork for more state regulation to replace the laissez-faire market approach.<br /></span></strong><br /><br />Sarkozy is hoping to organise the gathering in November to bring together leaders of the Group of Eight club of industrial nations along with emerging powers Brazil, China and India.<br /><br /><br />On Sunday, he said that once the fires of the financial crisis had been doused, governments and regulators would take a closer look at the situation to determine who might be held to account for the meltdown.<br /><br /><br />"Some officials will have to assume their responsibilities," he said.<br /><br /><br />"There will be reviews and changes. For the time being, we are trying to manage the crisis, to pull out of the crisis and to restore confidence."<br /><br /><br />Leaders of the 15-nation eurozone single currency bloc agreed Sunday on a joint plan to confront the banking crisis, hoping to avert further massive losses on the stock markets.<br /><br /><br />Summit of the euro area countries: declaration on a concerted European action plan of the euro area countries<br /><a href="http://www.eu2008.fr/PFUE/lang/en/accueil/PFUE-10_2008/PFUE-12.10.2008/sommet_pays_zone_euro_declaration_plan_action_concertee">http://www.eu2008.fr/PFUE/lang/en/accueil/PFUE-10_2008/PFUE-12.10.2008/sommet_pays_zone_euro_declaration_plan_action_concertee</a> </p><br /><br /><p align="justify">------------------------------------------------------------------------------------------------ </p><br /><br /><p align="justify"><a href="http://www.bruegel.org/Public/Publication_detail.php?ID=1170&publicationID=8809">http://www.bruegel.org/Public/Publication_detail.php?ID=1170&publicationID=8809</a></p><br /><br /><p align="justify"><a href="http://www.bruegel.org/Public/Scholars_Publications.php?ID=1170&contactID=2121">http://www.bruegel.org/Public/Scholars_Publications.php?ID=1170&contactID=2121</a> </p><br /><br /><p align="justify"><strong><span style="font-size:130%;">TESTING TIMES FOR GLOBAL FINANCIAL GOVERNANCE</span></strong></p><br /><br /><br /><p align="justify">By Ignazio Angeloni<br /></p><br /><br /><p align="justify">Bruegel Essay and Lecture Series </p><br /><br /><br /><p align="justify">Oct. 2008</p><br /><br /><br /><p align="justify"><strong><span style="font-size:180%;color:#ff0000;">...[T]he world is not suffering from excessive financial globalisation but from insufficient regulatory globalisation.</span></strong> (Foreword at p. 3)<br /></p><br /><br /><p align="justify"><strong><span style="font-size:130%;">...In this essay I look at the crisis from a different perspective, that of its possible consequences for the governance of global financial markets</span></strong>. (p. 7)<br /></p><br /><br /><br /><p align="justify">...First, in today’s global financial policy architecture, the quantum of cooperation among national and supranational financial authorities (information exchange, prior consultation, common decision making, etc.) is less that would be desirable. <strong><span style="font-size:180%;">There is a growing conflict between the degree of globalisation reached by today’s financial markets and the national bias that still dominates financial regulation and supervision.<br /></span></strong></p><br /><br /><p align="justify">Second, <strong><span style="font-size:180%;color:#ff0000;">the current turmoil deepens this conflict, calling for yet more coordination of financial policies if not their delegation, in part, to supranational institutions</span></strong>. This is most evident in relation to banking supervision on large cross-border financial conglomerates.<br /></p><br /><p align="justify"></p><br /><p align="justify">Finally, I argue that <strong><span style="font-size:180%;">one consequence of this crisis may indeed consist of precisely this outcome, namely a move towards closer coordination at the global level</span></strong>. Historically, crisis situations have often been catalysts or accelerators of institutional change. The role assumed over the last year by <strong><em><span style="font-size:180%;">the Financial Stability Forum (FSF)</span></em></strong> in stimulating and coordinating the regulatory response of all major global financial authorities hints at this; the urgency of the situation and the necessity to act jointly seem to have overcome the elements of resistance that had hampered the Forum’s action in previous years. (p. 8)<br /></p><br /><br /><p align="justify">...In October [2007], two months after the onset of the crisis, the G7 ministers and governors meeting in Washington for the IMF/World bank annual meetings asked the FSF to ‘undertake an analysis of the causes and weaknesses that have produced the turmoil and to set out recommendations for increasing the resilience of markets and institutions going forward’,and to report back to the G7 at the spring meetings (April 2008). (p. 26)<br /></p><br /><br /><p align="justify"><strong><em>The report presented in April 2008 at the Washington meetings...was comprehensive and ambitious in several ways. The bottom line is a sequence of some 65 detailed policy actions, to be undertaken by national authorities, international bodies, the private sector and the FSF itself, by a tight deadline.</em></strong> They are divided into <strong><span style="font-size:130%;">five areas</span></strong>:<br /></p><br /><br /><br /><p align="justify">1. Strengthening prudential instruments (capital provision, liquiditymanagement, risk controls);</p><br /><br /><p align="justify">2. Enhancing market information (transparency and valuationprocedures);</p><br /><br /><p align="justify">3. Reforming credit rating (both their provision and use);</p><br /><br /><p align="justify">4. Enhancing the authorities’ response to risks;</p><br /><br /><p align="justify"><strong><span style="font-size:130%;">5. New arrangements to respond to stress situations</span></strong>. (p. 27)<br /></p><br /><br /><br /><br /><p align="justify">...<strong><span style="font-size:130%;color:#ff0000;">These recommendations add up to a programme for reform of a large part of the global financial system...The document clearly signals that the FSF, in which most of them are represented, is to coordinate their action and embodies their regulatory and supervisory power</span></strong>. <em><strong><span style="font-size:130%;">The document also contains a broad range of initiatives to be undertaken by international organisations, specialised supervisory groups (such as BCBS and IOSCO), standard-setters as well as the private sector</span></strong></em>. In terms of breadth of coverage, the ability to bring together input and authority from different sources and the relevance of its likely impact, <strong><span style="font-size:180%;color:#ff0000;">the FSF report to the G7 constitutes an unprecedented act of global governance.<br /></span></strong></p><br /><br /><p align="justify"><strong>In an unusually long and detailed press release after its April meeting 18, the G7 endorsed the programme and set tight deadlines for its implementation – 100 days for the most urgent disclosure, accounting and liquidity and risk management changes, end 2008 for the remainingactions in the list. Importantly, the G7 has also given a mandate to the FSF to monitor the process and to ensure its timely execution.</strong>(p. 29)<br /></p><br /><br /><br /><p align="justify"><strong>CONCLUSION<br /></strong></p><br /><br /><br /><p align="justify"><strong><span style="font-size:130%;">While financial interdependence and the cross-border impact of domestic policies have increased in recent decades, financial market regulation and supervision remain predominantly in the national domain, with only a modest quantum of international coordination</span></strong>. <strong><span style="font-size:130%;color:#ff0000;"><em>This creates inefficiencies and risks, but the more recent crisis experience may help create a consensus for this to change</em></span></strong>. There are signs that this may already be happening. <strong><span style="font-size:130%;color:#ff0000;">The role of the Financial Stability Forum in coordinating the regulatory response to the crisis offers an interesting new model of international cooperation</span></strong>. (p. 30).<br /></p><br /><br /><br /><p align="justify"><em><strong><span style="font-size:130%;">The ‘FSF model’ – composed of a mix of a strong political mandate, broad sectoral and geographical representation of competent authorities and effective internal management – is proving effective and indicates what future cooperation among financial policymakers at the lobal level may look like.<br /></span></strong></em></p><br /><br /><br /><p align="justify">...<strong><span style="font-size:130%;color:#ff0000;">The informal arrangements that have applied during the crisis will need to be transformed into more stable structures, where coordination among regulators on crisis prevention can become the rule in normal times</span></strong>. This not only requires cohesion and political will but directly calls into question the role of the IMF.<br /></p><br /><p align="justify"></p><br /><p align="justify">...<strong><span style="font-size:130%;color:#ff0000;">The IMF and the FSF provide complementary elements of supranational and international governance, and hence will need to cooperate, no matter how difficult this may be in practice</span></strong>.<br /></p><br /><br /><p align="justify">In order to derive benefit from this painful experience, it is vital that protectionist instincts and the temptation to exercise indiscriminate controls be resisted. <strong><span style="font-size:130%;">Neither the regulatory deficiencies nor the errors by market participants which are at the root of this crisis fundamentally call into question the benefits of properly functioning, open and competitive financial markets</span></strong>. <strong><span style="font-size:130%;color:#ff0000;">If anything</span></strong>, the arguments advanced here suggest the opposite, namely that <strong><span style="font-size:130%;color:#ff0000;">the system may have suffered from insufficient globalisation (by regulatory and supervisory authorities), not from excessive globalisation (of financial markets).</span></strong>(p. 31)<br /><br />-------------------------------------------------------------------------------------------------<br /><a href="http://www.bruegel.org/Public/Publication_detail.php?parentCatID=13&publicationID=1781">http://www.bruegel.org/Public/Publication_detail.php?parentCatID=13&publicationID=1781</a></p><br /><br /><p align="justify"><strong><span style="font-size:130%;">WILL GLOBAL CAPITALISM FALL AGAIN?</span></strong></p><br /><p></p><br /><p><br />By Jeffry Freiden</p><br /><br /><br /><p align="justify">BRUEGEL ESSAY AND LECTURE SERIES</p><br /><br /><br /><p align="justify">June 2006</p><br /><br /><br /><p align="justify">Fifteen years ago, in December 1991, <strong>the dissolution of the Soviet Union</strong> epitomised the end of the division of the world into separate blocs and the emergence of a truly global economy. Though the term had been coined somewhat earlier, it was at about the same time that globalisation entered the public debate. At that time, it was looked upon as a promise. Fifteen years on, however, dissatisfaction is widespread. <strong>When asked in Spring 2006 whether globalisation was a threat or an opportunity, 47% of EU citizens chose the first answer and only 37% the second. They blame international economic integration for job losses, increased economic insecurity and rising inequality. The proportion of those who regard globalisation as a threat is as high as 70% in France and Greece. In the US, fears are not identical to European ones, but while the concern about jobs is somewhat less pronounced, alarm over security is more</strong> <strong>prominent.</strong> </p><br /><br /><br /><p align="justify">At the same time, <strong><span style="font-size:130%;color:#ff0000;">the vision of a truly multilateral world in which global rules and institutions would ensure a level playing field for workers and producers from all countries, big and small, has receded</span></strong>...<strong>Throughout the world, and across Europe, more governments are moving away from reliance on multilateral rules to emphasise the promotion and protection of national interests</strong>.(Foreword at p. 3)</p><br /><br /><br /><p align="justify">...<strong><span style="color:#ff0000;">Economists and historians have frequently emphasised the similarities between the first wave of globalisation – the one which ended with World War I – and the current one.</span></strong> Then as now, consumers and investors had access to products and assets from the whole world as trade and capital flows flourished. Then, as increasingly nowadays, people were also on the move in search for better economic opportunities. But what Stefan Zweig would later call “The world of yesterday” abruptly ended in 1914.</p><br /><br /><br /><p align="justify">...Frieden’s main conclusion is that against the background of major adjustments, the economic rules of the XIXth century’s global economy had become incompatible with the politics of post-WWI societies...</p><br /><br /><br /><p align="justify">...From his analysis, he also draws lessons for today. <strong><span style="font-size:180%;color:#3333ff;">The main one is that whatever the benefits of free trade, persuasion alone won’t suffice. This especially applies to the US where rising inequalities, macroeconomic strains and security worries could soon interact and lead public opinion to question the country’s international economic policy</span></strong>. </p><br /><br /><br /><p align="justify"><strong><span style="font-size:180%;color:#3333ff;">To make worldwide economic integration politically sustainable, Frieden suggests working simultaneously at the global and national levels: he calls both for a legitimate political governance of globalisation and for domestic policies to smooth transitions and compensate those who lose in the process</span></strong>. (p. 4)</p><br /><br /><br /><p align="justify">...Why could the first era of global capitalism not be restored? It was not for lack of trying. For twenty years after World War I ended, statesmen and diplomats engaged in round after round of conferences and consultations. The nations of the world signed treaties, created international organisations, and committed themselves to new obligations, in unprecedented measure. </p><br /><br /><br /><p align="justify">Yet nothing seemed to work. The problem was not lack of technological progress...Nor was the problem necessarily slow growth.<br /></p><br /><br /><p align="justify">...<strong><span style="font-size:180%;color:#ff0000;">The underlying sources of weakness in the international economic order after 1918 were political.</span></strong> One problem, which has received a great deal of attention, was international political conflict. Certainly this was important. <strong><span style="font-size:130%;">The United States was by 1918 the world’s largest and most important economy: the world’s largest trading nation, largest lender, most important financial centre and international investor.</span></strong> <strong><span style="font-size:130%;color:#ff0000;">Yet the United States government, dominated by isolationists who wanted little to do with the rest of the world, withdrew from international politics after 1920.</span></strong> (p.11)</p><br /><br /><br /><p align="justify">This was unquestionably debilitating. By the same token, the continuation in the diplomatic realm of the Franco-German rivalry that had been fought out on the battlefield was also a serious problem. (pp. 11-12)</p><br /><p></p><br /><p><br />International political problems introduced great instability into the inter-war political economy, <strong><span style="font-size:130%;">but </span><span style="font-size:180%;color:#3333ff;">I would focus attention on an even more important source of conflict: domestic politics</span></strong>. (p.12)</p><br /><br /><br /><p align="justify">...To summarise and generalise, the first age of globalisation worked because it was economically and politically feasible for governments to do what was necessary to sustain their international economic commitments. It was not restored after World War I because these enabling conditions were no longer present. <strong><span style="font-size:180%;color:#3333ff;">Keynes drew his conclusions early on: it was, he said exceedingly dangerous “to apply the principles of an economics, which was worked out on the hypothesis of laissez-faire and free competition, to a society which is rapidly abandoning these hypotheses.”</span></strong> (p. 14).</p><br /><br /><br /><p align="justify">Of course, many political and economic leaders continued to hew to the beliefs of an earlier day. After all, the gold-standard policies had worked before. Policymakers had learned that economies would adjust themselves, and that what governments needed to do was resist the temptation to step in. The appropriate stance was to follow the dictum: “Don’t just do something,<br />stand there.” (pp. 14-15).</p><br /><br /><br /><p align="justify">...<strong><span style="font-size:130%;">Whatever the intellectual justification for the classical stance, conditions had changed in ways that made it no longer economically or politically practicable</span></strong>. And yet, alternatives were very slow to develop, and even slower to be adopted. Keynes expressed his frustration to a member of the Bank of England’s board, accusing the Bank of “attacking the problems of the changed post-war world with... unmodified pre-war views and ideas. <strong><span style="font-size:180%;color:#ff0000;">To close the mind to the idea of revolutionary improvements in the control of money and credit is to sow the seeds of the downfall of individualistic capitalism</span></strong>. Do not be the Louis XVI of the monetary revolution.” </p><br /><br /><br /><p align="justify">...<strong>Despite the warnings from Keynes and others, when difficulties arose in the 1920s, and especially in the 1930s, there was initially little or no politically viable response</strong>. <strong><span style="font-size:180%;color:#ff0000;">The result of this failure was, as we know, a terrible backlash</span></strong>, and one that in some sense was predictable. (p. 15)</p><br /><br /><br /><p align="justify">...The ensuing backlash had some predictable properties. Supporters of the classical order had argued that giving priority to international economic ties required downplaying such concerns as social reform, nation building, and national assertion.</p><br /><br /><br /><p align="justify">...[I]f the choice was between social reform and international economic integration, they would choose <strong><span style="color:#ff0000;">social reform</span></strong> – thus leading to the Communists’ option of radical autarky. If the choice was between national assertion and global economic integration, another set of mass movements<br />chose nation-building – thus leading to <strong><span style="color:#ff0000;">fascist autarky</span></strong> in Europe and economic nationalism in the developing world.</p><br /><br /><br /><p align="justify">In fact these views – <strong><span style="color:#ff0000;">economic nationalism as applied by fascists, developmentalists, or communists</span></strong> – appeared to be in the ascendant all through the interwar period.</p><br /><br /><br /><p align="justify">...It took quite a while for any sort of serious alternative to develop. <strong><span style="font-size:180%;color:#3333ff;">Eventually what arose was what we think of today as the social democratic welfare state. This involved a commitment to both the market and a wellformed system of social insurance at one and the same time. Despite the somewhat suspect nature of social democratic principles in today’s environment, their rise in the 1930s and 1940s did seem to capture something inherent in modern capitalist economies</span></strong>. <strong><span style="font-size:180%;color:#ff0000;">Societies dominated by big business and big labour seemed also to require big government.</span></strong> The result was a compromise, which started to form in the mid 1930s and gradually increased in strength and speed.</p><br /><br /><br /><p align="justify">...<strong><span style="font-size:180%;color:#3333ff;">This compromise, whether in its Scandinavian <span style="color:#ff0000;">socialist, American New Deal</span>, or several other incarnations, became the central component part of the industrialised world’s social organisation after World War II. And the Bretton Woods system that arose at the same time was an extension and expansion of this compromise to the organisation of the world economy</span></strong>. (pp. 16-17)</p><br /><p></p><br /><p><br />...This Bretton Woods system of compromise worked spectacularly well. Global economic integration advanced continually if gradually; government spending on a wide variety of social programmes advanced as well; and the world experienced the most rapid and most stable period of sustained economic growth in history. <strong><span style="font-size:180%;color:#3333ff;">The extraordinary success of the Bretton Woods order actually helped undermine the very operation of the system itself. The gradual pace and compromise nature of the path to economic integration allowed an ever greater opening of markets; but the more open markets became, the more difficult it was to sustain gradualism and compromise. </span></strong>(p. 18)</p><br /><br /><br /><p align="justify">...The first era of globalisation collapsed because there was no effective political and policy response to changing economic and social conditions. It did not fail, in my view, for technical or objective economic reasons, but rather for political-economy reasons. The major nations’ reigning social orders faced new, and newly powerful, demands, and did not satisfy them. (p. 19)</p><br /><br /><br /><p align="justify">...<strong><span style="font-size:130%;">As was the case a hundred years ago, access to international markets today provides enormous benefits</span></strong>. Globalisation’s contribution to economic growth and development are palpable, and are widely enjoyed. The biggest human story of the past 25 years is the integration of China and India into the world economy, and the remarkable increase in living standards of hundreds of millions of people that has resulted. <strong><span style="font-size:130%;">Nevertheless, exposure to the international economy can impose serious costs on people, industries, regions, even whole countries</span></strong>. (p. 20)</p><br /><br /><br /><p align="justify">...[T]he challenge is to address the legitimate concerns of those who are either losing or not gaining in the contemporary economic environment. <strong><span style="font-size:130%;color:#ff0000;">Certainly many of the fears expressed in the political arena are exaggerated, and opportunistic politicians exploit them mercilessly; but that should not obscure the reality of the underlying socioeconomic trends that motivate these fears.</span></strong> (p. 21)</p><br /><br /><br /><p align="justify">...There is very little remaining of the traditional business protectionism of previous eras. To be<br />sure, there are protectionist pressures from farm communities and industries, but these pressures are much less important politically than they have been in the past. Some of the traditionally protectionist industries have simply faded away, while others have become internationally integrated; in any case, these industrial lobbies are weaker than they have been.</p><br /><br /><br /><p align="justify"><strong><span style="font-size:180%;"><span style="color:#3333ff;">In their place has come a drumbeat of broad discontent with international economic integration. This is something that is relatively new – at least in more modern America. It is reminiscent of the mass public concern of 75 or 100 years ago in the United States, when economic isolationism was the norm in American public opinion. But in recent years there has rarely been so much, and such generalised, uneasiness about America’s place in the world economy</span><span style="color:#3333ff;">. </span></span></strong></p><br /><br /><br /><p align="justify"><strong><span style="font-size:180%;"><span style="color:#3333ff;">The state of the nation’s public opinion should be kept in mind as we look at three important trends <em>in</em> American society: deteriorating income distribution, macroeconomic imbalances, and concern about national security. All of them have serious implications for the political economy of America’s role in the world. </span></span></strong>(p. 22)</p><br /><br /><p align="justify"></p><br /><br /><p align="justify"><strong><span style="font-size:180%;">[IN OTHER WORDS, THE AUTHOR IS CONCERNED THAT, DUE TO MOSTLY DOMESTIC POLITICAL & ECONOMIC PROBLEMS WITHIN THE U.S, U.S. POLITICAL LEADERS WILL HAVE NO CHOICE BUT TO TO DIS-ENGAGE (WITHDRAW) FROM THE WORLD WHICH NOW DEPENDS ON IT, AND THIS WILL THEREBY TRIGGER NEGATIVE GLOBAL HARDSHIPS. <span style="color:#3333ff;">AT LEAST, THIS IS WHAT OBAMA AND THE DEMOCRATS ARE IMPLYING</span>.]</span></strong></p><br /><br /><br /><p align="justify">...[I]n the United States there is an insistent, if muffled, drumbeat of apprehension about what globalisation means for unskilled workers, and now increasingly for semi-skilled and skilled workers in the middle class. Global economic integration has clearly provided tremendous benefits to the top quarter or so of the income distribution, but there are many in the United States who are not convinced that the remainder of society has benefited. (p. 25)</p><br /><br /><br /><p align="justify">...America’s fiscal stance and the capital inflow from abroad – have been central to the American<br />economic expansion. This capital inflow has, among other things, tended to keep the U. S. dollar stronger than it otherwise would be...The relatively strong dollar has, over the past ten years, been associated with increased...housing prices. The housing market expansion in turn has contributed to the generalised feeling of prosperity that has mitigated some of the latent dissatisfaction with trends in income distribution. For the booming housing market has had a significant wealth effect, allowing many middle-class Americans to borrow against the rising value of their real estate. These interrelationships could be developed on many dimensions, such as with how the availability of foreign funds made substantial tax cuts possible. The general point is that the current state of the American economy and of its political economy is related to the massive capital inflows.</p><br /><br /><br /><p align="justify">The current imbalances are unsustainable. I do not pretend to know when they will come to an end, or how; but eventually the United States will have to reduce its fiscal deficit, and eventually the capital inflow will have to be reduced and even reversed as external liabilities are serviced. And this in turn implies a reduction in consumption, an increase in savings, and a decline in the real exchange rate of the dollar – an unwinding of what has happened in the past ten years. Any number of scenarios might follow from this; almost all the realistic ones involve a decline in the relative price of housing (as the real exchange rate declines). The resulting pressure on the mortgage market is likely to cause financial distress, which will exacerbate the general macroeconomic pressures on the middle classes.</p><br /><br /><p align="justify"></p><br /><p align="justify">Whatever the preferred scenario one chooses for an end to the current imbalances, the process will create strains in the American macroeconomy – and in American politics. For <strong><span style="font-size:180%;color:#ff0000;">the mass public support for – or at least lack of open opposition to – America’s current integration into the world economy is largely due to the current boom</span></strong>. (p. 26)</p><br /><br /><br /><p align="justify">When the expansion comes to an end, and when many of the factors that have sustained it, turn around – when the United States goes from living beyond its means to living within its means and then some – latent tensions over globalisation will almost certainly come to the fore. (pp. 26 and 28)</p><br /><br /><br /><p align="justify">...This brings me to the third dimension of relevance to assessing the likely future of America’s international economic role, and that is how national security concerns interact with the politics of foreign economic policy.</p><br /><br /><br /><p align="justify">It is not widely appreciated today how unpopular international economic engagement was even at the point at which the United States was leading the world toward the construction of the Bretton Woods system. In the aftermath of World War II, public opinion appeared overwhelmingly opposed to trade liberalisation, which after all had been anathema to most Americans for nearly a century.</p><br /><p></p><br /><p></p><br /><p align="justify">...There seemed little prospect that the Truman Administration would be able to convince a Republican Congress, and a reluctant mass public, of the need for renewed global engagement... [<strong><span style="font-size:130%;color:#ff0000;">T]he Truman Administration was able to secure Congressional and popular support for its international economic policies by linking them to the struggle against the Soviet Union</span></strong>...Many conservative Republicans in the Congress were unenthusiastic about international economic engagement – as they had always been – but believed in the need for military and political involvement in stopping the spread of Soviet-backed Communism in Europe and elsewhere. (p. 28)</p><br /><br /><br /><p align="justify">...<strong><span style="font-size:130%;color:#ff0000;">The connection between national security and international economic engagement no longer seems so obvious</span></strong>. If, as many would argue, the principal concern of American national security policy is the struggle against extremist Islamic terrorism, the international economic implications are less than straightforward...Others would insist that the principal security concern of the United States over the coming decades will be the rise of China. Here, too, it is hard to know how America’s current international economic policies relate to that national security challenge. (p. 29)</p><br /><br /><br /><p align="justify">...<strong><span style="font-size:180%;color:#3333ff;">Compromises between globalism and nationalism, and between social reform and markets, permitted the Western economies to grow rapidly and stably after World War II.</span></strong> <strong><span style="font-size:180%;color:#3333ff;">But those compromises eroded as the world economy became ever more tightly integrated</span></strong>, especially after the developing countries and centrally planned economies rejoined the international economic order.</p><br /><br /><br /><p align="justify"><strong><span style="font-size:180%;color:#ff0000;"><span style="color:#3333ff;"><span style="color:#ff0000;">Today capitalism is at least as global as it was in the decades before 1914, which raises the spectre of a return to the failures that ended that earlier episode of global capitalism</span>.</span><span style="color:#3333ff;"> And so the central challenge of our portion of the twenty-first century will be to avoid a repetition of past ragedies, of both sorts.</span></span></strong> <strong><span style="font-size:180%;color:#3333ff;">We need to eschew an exaggerated reliance on market forces to solve all problems, and on the support of the beneficiaries of the global economy to address all discontent.</span></strong> <strong><span style="font-size:180%;">But we also need to avoid an unwarranted turn toward economic insularity, and a simple surrender to the proponents of protection.</span></strong></p><br /><br /><br /><p align="justify">This will require a delicate balancing act...<strong><span style="font-size:180%;color:#3333ff;">The first part of it is to build and sustain a functioning, integrated, international political and economic order.</span></strong> There will be continuing threats to this order, both from traditional opponents in the economic realm and from a great variety of non-economic forces – geopolitical, ideological, religious – that oppose a global economy as a matter of principle or expedience. <strong><span style="font-size:180%;color:#3333ff;">Supporters of an open international economy need to work together to build an effective and stable governance structure for international economic interactions</span></strong>. (p. 31)</p><br /><p></p><br /><p><br />The second part of the balancing act is to <strong><span style="font-size:180%;color:#3333ff;">create and sustain domestic political and economic conditions that allow enduring support for international commitments</span></strong>. This might include consultation among affected social groups, compensation for those asked to sacrifice, targeted interventions to smooth transitions, and <strong><span style="font-size:180%;color:#3333ff;">whatever else helps maintain the social and political stability necessary for national political economies to reap the fruits of international economic integration</span></strong>. (pp. 30-31)</p><br /><p align="justify"></p><br /><p align="justify">-------------------------------------------------------------------------------------------------</p><br /><br /><p align="justify"><em><strong><span style="font-size:130%;">IV. European and Certain U.S. Leaders Have Called for Global Financial Governance Reforms Based on Feared Similarities Between the Causes of 19th Century Globalization and the Current Era of Globalization. Certain U.S. Leaders Also Seek to Use This Opportunity to Complete Their Long-Term 'European Experiment' Gone Awry. </span></strong></em></p><br /><p></p><br /><p align="justify"><strong><span style="font-size:180%;">[</span><span style="font-size:130%;">See: <em>Eurobama Seeks Support From Green EU Social Welfare Regulatory State to 'Change' America</em>, ITSSD Journal on Pathological Communalism, at: </span></strong><a href="http://itssdpathologicalcommunalism.blogspot.com/2008/08/eurobama-seeks-support-from-green-eu.html"><strong>http://itssdpathologicalcommunalism.blogspot.com/2008/08/eurobama-seeks-support-from-green-eu.html</strong></a> <strong><span style="font-size:180%;">].</span></strong></p><br /><p></p><br /><p></p><br /><p align="justify"><strong><span style="color:#3333ff;"><span style="font-size:180%;"><span style="color:#000000;">[</span><span style="color:#000099;">IT WOULD APPEAR THAT FRENCH PRESIDENT NICOLAS SARKOZY, GERMAN CHANCELLOR ANGELA MERKEL AND BRITISH PRIME MINISTER GORDON BROWN HAVE COLLECTIVELY DISMISSED A TEMPORARY 'FIX' TO THE EXISTING BRETTON WOODS SYSTEM. RATHER, THEY PREFER TO CREATE A NEW IMF, WORLD BANK AND WORLD TRADE ORGANIZATION, SO THAT THEY CAN BETTER PROTECT THEIR INDUSTRIES FROM COMPETITION AND ULTIMATELY 'REDISTRIBUTE WEALTH' FROM THE U.S. TO THE EMERGING AND DEVELOPING ECONOMIES. </span>THIS IS ARGUABLY THE INTERNATIONAL/GLOBAL ARM OF BARACK OBAMA'S DOMESTIC 'JOE-THE-PLUMBER' 'SPREAD-THE-WEALTH' THEME, CONSISTENT WITH OBAMA'S PRESIDENTIAL CAMPAIGN SLOGAN: "CHANGE YOU CAN BELIEVE IN"<span style="color:#000000;">]. </span><br /></span></span></strong></p><br /><br /><br /><p align="justify"><strong><span style="font-size:180%;color:#000099;">[<span style="color:#3333ff;">HOWEVER, BARACK OBAMA'S NUANCED CALL FOR 'CHANGE'</span> IS NOT A 'NEW' CALLING, AND NOT UNLIKE EUROPE'S NUANCED CALLS FOR A NEW GLOBAL FINANCIAL GOVERNANCE FRAMEWORK. RATHER THEY ARE VERY SIMILAR, AND PERHAPS IDENTICAL! ACTUALLY, THERE IS NOW DOCUMENTARY EVIDENCE SHOWING THAT EUROPE'S CALL FOR 'CHANGE' ORIGINALLY HARKENED FROM THE UNITED STATES DURING THE 1950's and 1960's. AND, ONE FORM IT ASSUMED WAS THE PUSCH FOR THE CREATION OF A EUROPEAN FEDERATION OF STATES TO FACILITATE THE DEVELOPMENT OF A MULTI-POLAR WORLD - NO QUESTIONS ASKED, AND NO RESERVATIONS PERMITTED. APPARENTLY, THE TRUE 'FATHERS OF EUROPE' WERE AMERICAN MULTILATERALISTS AND THEIR EXPERIMENT WAS, AT FIRST, WILDLY SUCCESSFUL. HOWEVER, FOLLOWING THE FALL OF THE BERLIN WALL, THEIR CREATION WENT AWRY. THEIR 'BABY' BECAME A 'FRANKENSTEIN MONSTER'. THEY COULD NOT HAVE ANTICIPATED NEARLY 50 YEARS AGO THAT A FEDERATION OF SEMI-SOVEREIGN EUROPEAN STATES WOULD ULTIMATELY STRIVE TO WORK <span style="color:#ff0000;">AGAINST</span> UNITED STATES NATIONAL INTERESTS, BUT FOLLOWING EUROPEAN MONETARY UNION DURING 1992, IT HAS. INDEED, EUROPEAN COMMISSION POLICY DOCUMENTS AND ACADEMIC STUDIES NOW REVEAL HOW THE EUROPEAN UNION BELIEVES THAT ITS MISSION / RAISON D'ETRE IS TO 'SAVE THE WORLD', WHICH REQUIRES SAVING THE UNITED STATES' AND THE WORLD FROM THE VERY SAME CAPITALIST SYSTEM THAT SAVED EUROPE AND THE WORLD FOLLOWING WWII.] </span></strong></p><br /><br /><br /><p align="justify"><strong><span style="font-size:180%;color:#000099;">[IT IS THE OPINION OF THE GOVERNMENTAL AND ACADEMIC ELITES WITHIN THE EUROPEAN UNION THAT GLOBALIZED ANGLO-AMERICAN STYLE CAPITALISM PURSUANT TO WHICH THE CURRENT U.S.-DOMINATED INTERNATIONAL SYSTEM HAS BEEN SHAPED, IS NO LONGER ADEQUATE TO RESOLVE GLOBAL TRANSNATIONAL PROBLEMS. FURTHERMORE, IN THEIR VIEW, STUDIES HAVE SHOWN THAT MARKET-BASED 'CAPITALISM' HAS HISTORICALLY GIVEN RISE TO REPEATING CYCLES OF INEQUALITY, POVERTY AND VIOLENCE THAT MUST BE BROKEN. AN ENLARGED FEDERATION OF 'ENLIGHTENED' EUROPEAN STATES COOPERATING ON THE BASIS OF 'POOLED SOVEREIGNTY', HAS THE CHOICE OF EITHER CHALLENGING THIS SYSTEM HEAD-ON, OR OF 'DOMESTICATING' IT (i.e., 'PUTTING A HUMAN FACE ON CAPITALISM' - TRANSFORMING IT INTO 'SOCIAL-CAPITALISM') THROUGH ESTABLISHMENT OF A NEW AND REVISED 'RULE OF LAW'-BASED GLOBAL GOVERNANCE FRAMEWORK. THIS WOULD NECESSITATE REFORM OF SUPRANATIONAL INSTITUTIONS, INCLUDING THE BRETTON WOODS INSTITUTIONS, THE UNITED NATIONS AND ITS AGENCIES, ETC. SUCH REFORM WOULD BE PREMISED UPON THE EUROPEAN REGIONAL MODEL OF SUSTAINABLE DEVELOPMENT DRIVEN 'POOLED SOVEREIGNTY'. THIS, IN TURN, WOULD REQUIRE ALL NATIONS TO AGREE TO SUPRANATIONAL GLOBAL HARMONIZATION AND ENFORCEMENT OF FINANCIAL, ENVIRONMENTAL, TECHNOLOGICAL, LABOR AND SOCIAL LAWS, REGULATIONS AND STANDARDS IN ALL SPHERES OF 'ECONOMIC LIFE', EVEN IF IT MEANS THE SACRIFICE OF INDIVIDUALISM AND EXCLUSIVE PRIVATE PROPERTY RIGHTS.]</span></strong></p><br /><br /><br /><p align="justify"><span style="font-size:130%;color:#000099;"><strong><span style="font-size:180%;color:#000000;">[</span><span style="color:#000000;"><em>"Indeed, Europe had long targeted the U.S. regulatory and free enterprise systems for fundamental restructuring. Its aim has all along been to achieve supranational legal and economic governance over the affairs of global (mainly U.S.) industry through an environment-centric negative paradigm of “sustainable development.” There is, in fact, significant documentary evidence showing how the European Community and a number of EU member state governments have, for many years, tried to persuade/compel American-based international businesses and their domestic and foreign suppliers, as well as U.S. federal, state, and local legislators, to adopt similar rules. In so many words, Europe has been engaged in a legalistic and economic war with the United States in an effort to reshape the post-World War II paradigm in the European image. And it has employed “soft” regulatory rather than “hard” military power to achieve this. The unfortunate reality is that Europe is now well on its way to governing the American way of life; that is, re-colonizing America and the world..."</em><span style="font-size:180%;">]</span></span></strong></span></p><br /><br /><br /><p align="justify"><strong><span style="color:#000099;"><span style="font-size:130%;"><span style="color:#000000;">See: Lawrence A. Kogan, <em>THE EXTRA-WTO PRECAUTIONARY PRINCIPLE: ONE EUROPEAN “FASHION” EXPORT THE UNITED STATES CAN DO WITHOUT</em>, 17 TEMPLE POLITICAL & CIVIL RIGHTS LAW REVIEW 2, 491, 493 (2008), supra.</span></span></span></strong><br /><br /></p><br /><br /><p align="justify"><strong><span style="font-size:180%;color:#000099;"><span style="color:#000000;">[</span>THE FOLLOWING EUROPEAN COMMISSION DOCUMENTS, ACADEMIC STUDIES AND MEDIA ARTICLE THAT CONFIRM THIS ARE SET FORTH BELOW.<span style="color:#000000;">]</span></span></strong></p><br /><br /><p>------------------------------------------------------------------------------------------------</p><br /><br /><p align="justify"><a href="http://ec.europa.eu/governance/docs/comm_rapport_en.pdf">http://ec.europa.eu/governance/docs/comm_rapport_en.pdf</a><br /><br /><strong><span style="font-size:130%;">REPORT FROM THE COMMISSION ON EUROPEAN GOVERNANCE</span></strong><br />European Communities (2003)<br /><br /><br /><strong>On 25 July 2001 the European Commission adopted a White Paper on European Governance which has been made available to the public on the Internet (2) and has also been widely distributed as a brochure</strong>. It has been the subject of debates, seminars, articles and studies.<br /><br /><br />A public consultation was formally launched, running up until 31 March 2002 allowing members of the public to submit their comments. <strong>In its White Paper the Commission announced that, before the end of 2002, it would report on progress achieved with regard to governance initiatives</strong> and draw lessons from the public consultation. (p.5)<br /><br /><br />…<strong>3. Implementing the White Paper</strong><br /><br /><br /><strong>The White Paper on European governance set out key proposals for changes in four broad, action areas:</strong> ‘better involvement’, ‘better policies, regulation and delivery’, <strong><span style="font-size:180%;color:#000099;">‘the EU’s contribution to global governance’ </span></strong>and ‘refocused policies and institutions’. (p. 11)<br /><br /><br /><span style="font-size:180%;"><strong>3.3. Contribution of the EU to global governance</strong><br /></span><br /><br />1. The White Paper stressed that <strong><span style="font-size:180%;color:#000099;">successful governance reform at home was needed in order for the EU to make a credible case for <em>change</em> at global level</span></strong>; change to which it should be no less committed.<br /><br /><br />2. The Commission’s action in the international field is guided by compliance with the rights and principles contained in the EU Charter of Fundamental Rights proclaimed at the Nice Summit in December 2000. The Charter makes the overriding importance and relevance of fundamental rights more visible to EU citizens and will also promote coherence between the EU’s internal and external approaches.<br /><br /><br /><strong><span style="font-size:130%;">The Commission, in 2002, adopted communications on a global partnership for sustainable development (2), on responses to the challenges of globalisation (3) and on corporate social responsibility </span></strong>(4). <strong><span style="font-size:180%;color:#000099;">At its most visible, the EU is promoting at international level the governance principles it adheres to at home. The EU has worked towards a more inclusive globalisation agenda, seeking to ensure that market liberalisation takes place in a broader regulatory framework (WTO — Doha meeting, November 2001).</span></strong> It has contributed to the World Conference against Racism (Durban, August–September 2001), worked towards increasing official development assistance and stressed the need to broaden and strengthen the participation of developing countries and countries with economies in transition in international economic decision-making and norm-setting (International Conference on Financing for Development, Monterrey, March 2002) and has taken stock of and reaffirmed its commitment to the implementation of the internal and external dimensions of global sustainable development through a multidimensional approach. In this context eradicating poverty and changing unsustainable patterns of production and consumption are overarching objectives (UN World Summit on Sustainable Development — Johannesburg, August–September 2002).<br /><br /><br />The EU has also acted to ensure that no genocide, war crimes or other crimes against humanity can ever again go unpunished by welcoming the entry into force (July 2002) of the Rome Statute (5), providing for the creation of the International Criminal Court (ICC). The EU (6) confirmed its support for the early establishment and effective functioning of the ICC, as well as its determination to encourage the widest possible international support for it. The latter concern led the EU to propose the development of a broader dialogue between the European Union and the United States on the matter. It also led the EU to develop, as one of its guiding principles for Member States considering the necessity and scope of possible arrangements with the United States, to address the desirability of the US reengaging in the ICC process.<br /><br /><br /><strong><span style="font-size:180%;color:#000099;">…5. On the question of how the Union can contribute to a comprehensive reform of multilateral institutions and improve cooperation, the Commission is developing a more comprehensive and strategic approach for both the Commission and the EU in its relations with the United Nations system and the Bretton Woods Institutions.</span></strong> The Commission is seeking to consolidate and reinforce systematic EU coordination across the UN system. It proposes progressively reinforcing EU representation in the Bretton Woods Institutions and supporting policy coherence between the UN, the WTO and the Bretton Woods Institutions.<br /><br /><br /><strong><span style="font-size:180%;color:#000099;">The EU can clearly play a role in promoting cooperation between institutions on the basis of new models geared to responding to a rapidly changing world. </span></strong>But its role should not be limited to process building. The EU also seeks to redress inadequate participation of developing countries, which often raises the question of the legitimacy of international organisations. On the above issues, the Commission is examining the creation of a non-bureaucratic policy discussion space in order to encourage a freer exchange of views outside a formal ‘negotiating mindset’. (pp. 25-27)<br /><br />-------------------------------------------------------------------------------------------------<br /><br /><a href="http://europa.eu/eur-lex/en/com/cnc/2001/com2001_0428en01.pdf">http://europa.eu/eur-lex/en/com/cnc/2001/com2001_0428en01.pdf</a><br /><br /><strong><span style="font-size:130%;">EUROPEAN GOVERNANCE - A WHITE PAPER</span></strong><br /><br /><br />COM(2001) 428 final<br /><br /><br />Commission of the European Communities<br /><br /><br />July 25, 2001<br /><br /><br />…<strong><span style="font-size:180%;color:#000099;">PROPOSALS FOR CHANGE</span></strong><br /><br /><br />…<strong><span style="font-size:180%;">Global governance</span></strong><br /><br /><br />The White Paper looks beyond Europe and contributes to the debate on global governance. <strong><span style="font-size:130%;">The Union</span></strong> should seek to apply the principles of good governance to its global responsibilities. <strong><span style="font-size:130%;">It should aim to boost the effectiveness and enforcement powers of international institutions.<br /></span></strong><br /><br />The Commission will:<br /><br /><br />· Improve the dialogue with governmental and non-governmental actors of third countries when developing policy proposals with an international dimension.<br /><br /><br />· Propose a review of the Union’s international representation in order to allow it to speak more often with a single voice. (p 5).<br /><br /><br /><strong><span style="font-size:130%;">3.3. The EU’s contribution to global governance</span></strong><br /><br /><br /><strong><span style="font-size:130%;color:#000099;">The proposals in the White Paper have been drawn up against the background of enlargement, but they also offer a useful contribution to global governance. The Union’s first step must be to reform governance successfully at home in order to enhance the case for change at an international level.<br /></span></strong><br /><br /><strong><span style="font-size:130%;color:#000099;">The objectives of peace, growth, employment and social justice pursued within the Union must also be promoted outside for them to be effectively attained at both European and global level.</span></strong> This responds to citizens’ expectations for a powerful Union on a world stage. Successful international action reinforces European identity and the importance of shared values within the Union.<br /><br /><br />…By acknowledging the global dimension more strongly, the Union will strengthen its voice in multilateral negotiations. <strong><span style="font-size:180%;color:#000099;">It should aim to improve the effectiveness and legitimacy of global rule making, working to modernise and reform international and multi-lateral institutions in the medium to long term. The goal should be to boost the effectiveness and enforcement powers of multi-lateral institutions.</span></strong> In the short term, the Union should build partnerships with other countries in order to promote greater co-operation and coherence between the activities of existing international organisations and increase their transparency.<br /><br /><br />International action should be complemented by new tools. <strong><span style="font-size:180%;color:#000099;">Many ideas in this White Paper could be tested at global level</span></strong>, such as peer review of progress made towards internationally agreed targets or the development of co-regulatory solutions to deal with aspects of the new economy. As in the Union, these approaches should complement successful elements of international public law, most notably the World Trade Organisation and the International Court of Justice.<br /><br /><br />To achieve these objectives, the Union needs to speak more with a single voice. It should strengthen its representation in international and regional fora, including in relation to economic and financial governance, the environment, development and competition policy. Often, important improvements can and should be introduced under the current Treaty, and would considerably improve the visibility of what the Union is doing at the global level. In some areas, like finance, a change in the Treaty is required. (pp. 26-27)<br /><br />-------------------------------------------------------------------------------------------------<br /><br /><a href="http://ec.europa.eu/governance/areas/group11/report_en.pdf">http://ec.europa.eu/governance/areas/group11/report_en.pdf</a><br /><br /><strong><span style="font-size:130%;">REPORT OF WORKING GROUP “STRENGTHENING EUROPE’S CONTRIBUTION TO WORLD GOVERNANCE”<br /></span></strong>(Group 5)<br /><br /><br />White Paper on Governance<br /><br /><br />MAY 2001<br /><br /><br />…Executive Summary<br /><br /><br /><strong><span style="font-size:130%;color:#000099;"><span style="font-size:180%;">The EU has a clear interest in promoting global governance</span> as a means of achieving the core of objectives of sustainable development, security, peace and equity, objectives no territorial actor can secure alone.</span></strong> Positive transnational cooperation is possible and the EU should show a willingness to experiment in order to improve it. The external aspects must be key in any EU deliberations on governance.<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">This report is based on the conviction that society, as opposed to only individuals, markets and state, does exist; and that a society does exist within the European Union within which governance can be discussed and improved.</span></strong> Democracy is essential to governance but governance is sometimes criticised as introducing non-public and more selfish elements into the public sphere of government. The danger of privatising and eroding democracy clearly exists but including business and civil society in governance can reduce some of the imperfections of government.<br /><br /><br /><strong><span style="font-size:130%;color:#000099;">The report identifies two sets of reasons for the pursuit of better governance beyond EU borders: growing interdependence driven by economic globalisation; and the rise of threatening, transnational challenges such as climate change and poverty</span></strong> which require greater effort and shared responsibility at global level.<br /><br /><br /><strong><span style="font-size:180%;color:#000099;">The existing system of governance, although it has achieved much, still has many shortcomings which contribute to conflict, poverty, unsustainable development</span></strong>. Current institutions of governance are increasingly criticised as being unaccountable, lacking transparency and legitimacy and being incapable of responding to today’s challenges. There is considerable scope for improving these institutions and complementing them with new tools. The EU has much to contribute to this task but it must also improve its own ability to provide input if it is to realise its full potential. Like the institutions of global governance, the EU must improve transparency and openness to voices from outside and strive to speak with a single, coherent voice.<br /><br /><br /><strong><span style="font-size:130%;">…We submit the following recommendations:</span></strong><br /><br /><br />5. <strong><em><span style="font-size:130%;color:#000099;">The EU should use the growing range of proven approaches to global problems (benchmarking, peer review, non-hierarchical governance, soft law and, where appropriate, co- and self-regulation) to build on the successful elements of hard international public law</span></em></strong>. It should not follow the favourite recipes of the past without close assessment of possible lower cost alternatives or complements.<br /><br /><br />9. <strong><span style="font-size:180%;color:#33ff33;">The EU should continue to nurture greater coherence and integration between all policy areas, including by reviewing structures, in order to strengthen its contribution to global governance: the sustainable development strategy is a key opportunity to do this</span></strong>.<br /><br /><br />10. Drawing on ideas emerging from Member States and civil society, <strong><span style="font-size:180%;color:#ff0000;">the EU should launch a comprehensive internal discussion on the necessary reform of multilateral institutions in the medium to long term. The aim should be to boost the effectiveness and powers of enforcement of such bodies by identifying resources and structural change</span></strong> taking into account the specific nature of problems confronted by each organisation and scope for action at global/regional level.<br /><br /><br />11. In the short term, the EU should strive to promote greater coherence between existing international organisations. The EU should also continue to champion greater openness and transparency in international organisations. The aim should be that all members can play a full role, institutions are open to contributions from outside players, and institutions have greater legitimacy in the eyes of those affected.<br /><br />-------------------------------------------------------------------------------------------------<br /><br /><a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=976860">http://papers.ssrn.com/sol3/papers.cfm?abstract_id=976860</a><br /><br /><strong><span style="font-size:130%;">The European Union: global challenge or global governance? 14 world system hypotheses and two scenarios on the future of the Union<br /></span></strong><br /><br />By Arno Tausch</p><br /><p></p><br /><p><br />Appearing in Gernot Köhler/Emilio José Chaves <strong><span style="font-size:130%;">Globalization: Critical Perspectives</span></strong>, Nova Science, Huntington NY (2001)<br /><br /><br />(April 26/27 2001)</p><br /><p></p><br /><p></p><br /><p>Munich Personal RePEc Archive</p><br /><br /><br /><br /><p align="justify">(2003)</p><br /><br /><p align="justify"></p><br /><p align="justify">MPRA Paper No. 319, posted October 10, 2006</p><br /><br /><br /><p align="justify">MPRA Paper No. 319, posted 07. November 2007 / 00:56</p><br /><br /><br /><p align="justify"><a href="http://mpra.ub.uni-muenchen.de/319/1/MPRA_paper_319.pdf">http://mpra.ub.uni-muenchen.de/319/1/MPRA_paper_319.pdf</a></p><br /><br /><br /><p align="justify">Introduction<br /><br /><br /><strong>This paper starts from the assumption that there are two basic scenarios for the future of an enlarged European Union in the Tsunami world system. One is an enlarged EU that would be a global challenger</strong>, a scenario which would amount to the repetition of the cycles of global challenges, this time on the part of the European Union.<br /><br /><br />…Although such a scenario is not applicable to the present EU-15 or, at any rate, an EU-15, enlarged by the two island economies of Malta and Cyprus, and the present 10 Central and East European candidate countries, an EU comprising up to 40 nations of the third and fourth enlargement wave indeed would be a major change in the structure of the international system and could be driven by its own internal deficient dynamics, characterized by low innovation and high government spending, and by the pressures of the world system, into such a position. <strong>Again, the European landmass, united under one leadership, would then be in the challenging position, - as happened under the Hapsburgs, the French under Richelieu and later under Napoleon, and under Germany in World War I and II, while the dynamics of flexible, sea-power oriented world leadership again would be happening somewhere else...hypotheses, presented here, speak in favor of such a pessimistic scenario</strong>.<br /></p><br /><br /><p align="justify">A large section of the paper is thus dedicated to show, that a global challenge option - which might be implicit in the thinking behind the trilateral competition between Europe, America, and Asia - is not only not feasible, but that it is world politically dangerous. <strong><span style="font-size:180%;color:#33ff33;">A second scenario is the European Union as the driving force behind a movement towards global governance, the only and reasonable <span style="color:#ff0000;">alternative to the workings of the capitalist world system</span> <span style="color:#ff0000;">and it’s tendencies towards inequality and conflict.</span></span></strong><span style="color:#ff0000;"> </span>This scenario is the policy option and practical end-result of the assessment of future trends in the world system, presented by Boswell and Chase-Dunn (2000).<br /><br /><br />…<strong><span style="font-size:180%;color:#ff0000;">In their world-systems-based analysis of the spiral of capitalism and socialism, Boswell and Chase-Dunn (1999) arrive at the conclusion that the European Union would be best fitted to become an engine of socially progressive transformation of the world system. Such an analysis would find lots of sympathy among labor-oriented or social-movement oriented circles on both sides of the Atlantic and beyond</span></strong>, and is also reflected in various other ‘denominations’ of the world systems profession, like in the statements by <strong><span style="font-size:180%;color:#ff0000;">Samir Amin</span></strong>, who - although very critical of the Union in its present form – <span style="font-size:180%;color:#ff0000;"><strong>speaks about the necessity for Europe to become an alternative pole in the world economy, characterized by the tendencies towards unfettered globalization.<br /></strong></span></p><br /><br /><p align="justify">…Our first scenario is somber in nature, it enjoys a high kind of probability, and it has dire consequences. It shows that there is a recurrent, and shortening cycle of conflict in the international system, linked to the long cycles of economics and politics.<br /><br /><br />…Our assessment of the alternative that Europe could present in the transformation of the world towards a more humane and global governance should thus contribute to showing the dangers of a repetition of the hegemonial challenge scenario, that already was practiced by the Hapsburgs, by France and by Germany. A scenario, that was characterized each time by the combination of protectionism + imperialism.<br /><br /><br />An imperial path for a United Europe would be the last thing, that the world needs, although there are – from past experiences - lots of indicators that would warn us, that Europe will follow precisely this path. Social science has the imperative to face up to existing dangers: thus, an early socio-liberal and democratizing reform of the European Union would be the (last) alternative to renewed global power rivalry, and conflict in the 21st Century, involving the European landmass. (pp. 2-3)<br /><br /><br />…<strong><span style="font-size:130%;">Hypothesis 2: there is a Tsunami war cycle of 100 to 150 years length</span></strong><br /><br /><br /><em><strong>Globalization theory (see Kiljunen, 2000, in this volume) assumes that global governance must become the answer to the tendencies of polarization and poverty described above. Global conflict theory answers by saying that without global governance and peace mechanisms, the world system would threaten to drift back into deadly cycles of hegemonial challenge and global wars.</strong></em> History does not end, thus, only flags have changed. According to Goldstein’s empirical analysis in particular (1988), <strong><span style="font-size:180%;">the capitalist world systems tends continuously towards wars and violent conflicts.<br /></span></strong><br /><br />…<strong><span style="font-size:130%;">Hypothesis 7:</span></strong> <strong><em>European Union extension threatens to repeat the errors of the ‘terraferma’ strategies in history before (Venice, the Hapsburgs, Napoleonic France, Germany). <span style="font-size:180%;">One has especially to watch the unequal exchange relationships between the European center and the East European periphery. Low growth, big government, big corruption are all part of the social problem dimension that Europe’s political economy nowadays faces.</span> Several authors, including Chase-Dunn and Podobnik, and Chase Dunn and Hall, too,</em> <span style="font-size:180%;color:#ff0000;">are also fairly pessimistic about the future trajectory of the United States of America.</span> <span style="font-size:180%;color:#ff0000;">They cite international capital investment abroad in those countries, where profit rates are highest, as the main reason, why the ‘internationalized capitalists’ in the core no longer have a vested interest in their home economy. Capital investment abroad becomes, the argument goes, the driving force for hegemonic decline</span> <em>(Chase-Dunn and Hall, 1997).<br /></em></strong><br /><br />…<strong><span style="font-size:180%;color:#ff0000;">The hegemonic decline of the USA will most probably set in slowly, cushioned by the present weaknesses of Japan and of the European competitors.</span></strong> In Europe, economic stagnation and unemployment will significantly rise due to rising interest rates and rent-seeking that is enhanced by the way European institutions are built at present. In terms of the environment, government subventions to declining productive branches (36.8% of the budget of the EU are for the structural funds) will increase technological backwardness and preserve transport intensity, and hence, pollution. Economic inequalities threaten to increase with such a structure, and in turn will form a block of its own against world economic ascent. (p. 62)<br /><br /><br />Inexorably, the centers of gravity of the world economy will be shifting towards the LDCs, here most notably during the 1970s and 1980s to the countries of the Pacific, and after the Asian currency crisis 1997, most likely to India and China. The effect of the Europe-agreements between the EU and the countries of Eastern Europe seem to repeat the experience of Lomé and can be summarized in one word: a massive positive balance of trade in favor of the Union and to the detriment of the partners in the East, that leads to political and economic friction (Hickman, 1994; Inotai, 1993). <em><strong><span style="font-size:130%;">A growing number of academic critics of present Union economic policy maintain that the EU-approach to foreign trade and relations with the semi-periphery and the periphery is based on two fatally erroneous assumptions. First, the gradualism of trade liberalization; second, the protectionist answer to the current economic malaise in Western Europe.</span></strong></em><br /><br /><br />…<strong><span style="font-size:130%;">Hypothesis 14:</span></strong> <strong><span style="font-size:180%;color:#ff0000;">there are chances of a policy of capitalist ascent in the 21st century, based on human capital formation, and the overcoming of the ‘urban bias’ of world development. But Europe, with it’s huge state sector, it’s high tariff walls against foreign competition, and it’s large scale penetration by foreign capital, it’s slow process of technological innovation, is destined to become the ‘Argentina’ of the 21st Century.</span></strong> Also. it’s small future population base and rigid migration regime do not qualify it for a rapid 21st Century economic growth. <strong><span style="font-size:180%;color:#ff0000;">There is a great risk that the European West will treat the newly democratic East as a reservoir of surplus-value and exploitation</span></strong>.<br /><br /><br /><strong><span style="font-size:180%;color:#33ff33;">Scenario (2) starts from the assumption, that anyway, Europe is not in a position to become a global challenger. Our scenario is a radical, socio-liberal, and globalistic approach, directed against nationalism, protectionism, and social decay. Instead of accumulating world power, Europe should accumulate competence in problem solving, in modeling the future, and in treating better the tormented environment.</span></strong> <strong><span style="font-size:180%;color:#ff0000;">Thus, the enlarged European Union should concentrate it’s still existing, considerable economic and world political energies on creating the conditions for global governance and global innovation.</span></strong> Thus, Europe at last could show a real greatness - foregoing the concept of power in benefit of the concept of global well-being and welfare.<br /><br /><br />…[However,]… Our federal and socio-liberal vision is incompatible with the vision of a Europe of nations, which - in the ultimate instance - leads to the distribution coalition building at the level of the European institutions. A Europe of nations will always, in one way or the other, lead to a blockade of the European institutions - the small nations versus the big ones, the South against the North; the Euro ins against the Euro outs, the wine drinkers against the beer consumers, the friends of pasta and salami against the adherents of sausage and so on. The number of combinations is infinite, and a Europe of 21, let alone many more member states is simply ungovernable on the basis of the present institutions.<br /><br /><br />…<em><strong>By allowing for full-fledged democracy on the European level, combined with a socio-liberal social policy, based on a market economy, an active human capital formation, gender empowerment, an economic policy, that largely ends state subventions for energy misuse and private transport, and an open system of migration policy, generally modeled around the existing patterns of migration policy in countries like Australia, Canada, and the United States of America, there would be enough room for a real economic and social recovery on the level of the European states</strong></em>.<br /><br />------------------------------------------------------------------------------------------------<br /></p><br /><p align="justify"><a href="http://www.telegraph.co.uk/news/worldnews/europe/1356047/Euro-federalists-financed-by-US-spy-chiefs.html">http://www.telegraph.co.uk/news/worldnews/europe/1356047/Euro-federalists-financed-by-US-spy-chiefs.html</a></p><br /><br /><p align="justify"><strong><span style="font-size:130%;">Euro-federalists financed by US spy chiefs</span></strong></p><br /><br /><br /><p align="justify">By Ambrose Evans-Pritchard</p><br /><br /><br /><p align="justify">June 19, 2001</p><br /><br /><br /><p align="justify"><strong><span style="font-size:180%;color:#ff0000;">DECLASSIFIED American government documents show that the US intelligence community ran a campaign in the Fifties and Sixties to build momentum for a united Europe. It funded and directed the European federalist movement.<br /></span></strong></p><br /><br /><br /><p align="justify"><strong><em><span style="font-size:130%;"><span style="color:#ff0000;">The documents confirm suspicions voiced at the time that America was working aggressively behind the scenes to push Britain into a European state. </span>One memorandum, dated July 26, 1950, gives instructions for a campaign to promote a fully fledged European parliament. It is signed by Gen William J Donovan, head of the American wartime Office of Strategic Services, precursor of the CIA.<br /></span></em></strong></p><br /><br /><br /><p align="justify">The documents were found by Joshua Paul, a researcher at Georgetown University in Washington. They include files released by the US National Archives. <strong><span style="font-size:130%;">Washington's main tool for shaping the European agenda was the American Committee for a United Europe, created in 1948. The chairman was Donovan, ostensibly a private lawyer by then.<br /></span></strong></p><br /><p align="justify"></p><br /><p align="justify">The vice-chairman was Allen Dulles, the CIA director in the Fifties. The board included Walter Bedell Smith, the CIA's first director, and a roster of ex-OSS figures and officials who moved in and out of the CIA. <strong><span style="font-size:130%;">The documents show that ACUE financed the European Movement, the most important federalist organisation in the post-war years. In 1958, for example, it provided 53.5 per cent of the movement's funds.<br /></span></strong></p><br /><br /><p align="justify"><strong><em><span style="font-size:130%;">The European Youth Campaign, an arm of the European Movement, was wholly funded and controlled by Washington. The Belgian director, Baron Boel, received monthly payments into a special account. When the head of the European Movement, Polish-born Joseph Retinger, bridled at this degree of American control and tried to raise money in Europe, he was quickly reprimanded.<br /></span></em></strong></p><br /><br /><br /><p align="justify"><strong><span style="font-size:130%;color:#ff0000;">The leaders of the European Movement - Retinger, the visionary Robert Schuman and the former Belgian prime minister Paul-Henri Spaak - were all treated as hired hands by their American sponsors. The US role was handled as a covert operation. ACUE's funding came from the Ford and Rockefeller foundations as well as business groups with close ties to the US government.<br /></span></strong></p><br /><br /><br /><p align="justify">The head of the Ford Foundation, ex-OSS officer Paul Hoffman, doubled as head of ACUE in the late Fifties. <strong><span style="font-size:180%;color:#ff0000;">The State Department also played a role. A memo from the European section, dated June 11, 1965, advises the vice-president of the European Economic Community, Robert Marjolin, to pursue monetary union by stealth.</span></strong></p><br /><br /><br /><p align="justify"><strong><span style="font-size:180%;color:#ff0000;">It recommends suppressing debate until the point at which "adoption of such proposals would become virtually inescapable".</span></strong></p><br /><p align="justify"><span style="color:#000000;">==================================================================== </span></p><br /><br /><p align="justify"><strong><span style="font-size:130%;">V. List of Sources </span><span style="font-size:100%;">(in order of appearance)</span></strong></p><br /><p></p><br /><p><br /><span style="font-size:130%;">SVETOZAR (STEVE) PEJOVICH, CAPITALISM AND THE RULE OF LAW: THE CASE FOR COMMON LAW 5 (2007)<br /></span></p><br /><br /><p align="justify"><span style="font-size:130%;">Lawrence A. Kogan, <em>The Extra-WTO Precautionary Principle: One European 'Fashion' Export the United States Can Do Without</em>, 17 Temple Political & Civil Rights Law Review 2, (Spring 2008)<br /></p></span><br /><br /><p align="justify"><span style="font-size:130%;">Lawrence A. Kogan, <em>Europe’s Warnings on Climate Change Belie More Nuanced Concerns</em>, Institute for Trade, Standards and Sustainable Development (June 2007)<br /></p></span><br /><br /><p align="justify"><span style="font-size:130%;">Press Release, Elizabeth Katz, University of Virginia School of Law, <em>German High Court Has More Power Over Legislature, Grimm Says</em> (Mar. 9, 2006)<br /></p></span><br /><br /><p align="justify"><span style="font-size:130%;">PEDRO Gorospe, <em>Al Gore compares the financial crisis with climate change</em>, Bilbao – (16/10/2008) </span></p><br /><p><span style="font-size:130%;"></span></p><br /><p><span style="font-size:130%;"></p><br /><p align="justify"><em>Edition - Sarkozy piqué au vif par sa poupée vaudou</em>, LCI.fr (Oct. 21, 2008)</p><br /><p align="justify"></p><br /><p align="justify"><br /><em>Obama campaign outraged by New Yorker cover</em>, Agence France Presse (July 14, 2008)</p><br /><p></span></p><br /><p></p><br /><p><span style="font-size:130%;"><em>Czech President Vaclav Klaus and ITSSD CEO Share Some Thoughts and Ambitions Concerning Freedom & Climate Change</em>, ITSSD Journal on Economic Freedom<br /></p></span><br /><br /><p align="justify"><span style="font-size:130%;"><em>Czech President Vaclav Klaus Has Long Warned Against Global 'Europeanism': But is the 110th U.S. Congress Listening? Does it Want This for America??</em>, ITSSD Journal on Economic Freedom<br /></p></span><br /><br /><p align="justify"><span style="font-size:130%;">ITSSD Website - Issues - Negative SD and Brussels Centralized Decision-Making: Czech President Vaclav Klaus (6 Entries)<br /><br /><br /><em>Basque Country</em> (autonomous community), Wikipedia<br /></span></p><span style="font-size:130%;"><br /><br /><p align="justify">Elana Schor, <em>ABC deems Gore climate change advert too 'controversial' for TV</em>, (10/10/08) Guardian.co.uk<br /></p><br /><p align="justify"><em></em></p><br /><p align="justify"><em>UN Secretary General offers host financial summit</em>, Associated Press (Oct. 18, 2008)<br /></p><br /><br /><p align="justify">Carley Petesch, <em>UN chief offers to host global financial summit</em>, Associated Press (Oct. 20, 2008)<br /></p><br /><p align="justify"></p><br /><p align="justify">CHRISTOPHER COX, <em>Swapping Secrecy for Transparency</em>, New York Times (Oct. 19, 2008)<br /></p><br /><br /><p align="justify">Roger Runningen and Gregory Viscusi, <em>Bush to Host First in Series of Summits on Financial Crisis</em>, Bloomberg News (Oct. 19, 2008)<br /></p><br /><br /><p align="justify"><em>Leaders to rethink global finance</em>, BBC News (Oct. 19, 2008)<br /></p><br /><br /><p align="justify"><em>US to host global finance summit</em>, BBC News (Oct. 19, 2008)<br /></p><br /><br /><p align="justify"><em>EU advice on money: Should the EU give counsel on resolving the credit crunch?</em>, TimesOnline.uk (Oct. 19, 2008)<br /></p><br /><br /><p align="justify">Roger Crombie, <em>Browncesceau saves the world? No</em>, The Royal Gazette (Oct. 18, 2008)<br /></p><br /><br /><p align="justify"><em>Jacques Cheminade and Christian de Boissieu debate NBW on TV France 24's `Face Off'</em>, Executive Intelligence Review (Oct. 18, 2008)<br /></p><br /><br /><p align="justify">Chris Marsden, <em>EU call for global financial regulation masks intra-European and international tensions</em>, World Socialist Website (Oct. 17, 2008)<br /></p><br /><br /><p align="justify">Peggy Hollinger, <em>Plea to safeguard free trade</em>, Financial Times (Oct. 17, 2008)<br /></p><br /><br /><p align="justify">Peggy Hollinger, <em>French business leader warns on over-regulation</em>, Financial Times (Oct. 17, 2008)<br /></p><br /><br /><p align="justify"><em>Bush: successor must overhaul financial rules</em>, Agence France Presse (Oct. 17, 2008)<br /></p><br /><br /><p align="justify"><em>Seeking an end to the madness - Europe's leaders want to see a new global financial system emerge</em>, The Economist (Oct. 16, 2008)<br /></p><br /><br /><p align="justify"><em>EU leaders push for finance overhaul at summit</em>, Agence France Presse (Oct. 15, 2008)<br /></p><br /><br /><p align="justify">James G. Neuger and Mark Deen, <em>Brown Seeks Global `Early Warning' System on Crises</em> (Update4) Bloomberg News (Oct. 15, 2008)<br /></p><br /><p align="justify"></p><br /><p align="justify"><em>EU in push for world finance summit: Sarkozy</em>, EU Business.com (Oct. 12, 2008)<br /></p><br /><p align="justify"></p><br /><p align="justify">Ignazio Angeloni, TESTING TIMES FOR GLOBAL FINANCIAL GOVERNANCE, Bruegel Essay and Lecture Series (Oct. 2008)<br /></p><br /><br /><p align="justify">Jeffry Freiden, WILL GLOBAL CAPITALISM FALL AGAIN?, BRUEGEL ESSAY AND LECTURE SERIES (June 2006)<br /></p><br /><p></p><br /><p align="justify"><em>Eurobama Seeks Support From Green EU Social Welfare Regulatory State to 'Change' America</em>, ITSSD Journal on Pathological Communalism<br /></p><br /><p align="justify"></p><br /><p align="justify"></p><br /><p align="justify">REPORT FROM THE COMMISSION ON EUROPEAN GOVERNANCE, © European Communities (2003)<br /></p><br /><br /><p align="justify">EUROPEAN GOVERNANCE - A WHITE PAPER, Commission of the European Communities COM(2001) 428 final<br /></p><br /><br /><p align="justify">REPORT OF WORKING GROUP “STRENGTHENING EUROPE’S CONTRIBUTION TO WORLD GOVERNANCE”, White Paper on Governance (Group 5) (MAY 2001)<br /></p><br /><br /><p align="justify">Arno Tausch, <em>The European Union: global challenge or global governance? 14 world system hypotheses and two scenarios on the future of the Union</em>, in Gernot Köhler/Emilio José Chaves Globalization: Critical Perspectives, Nova Science, Huntington NY (2001)<br /></p><br /><br /><p align="justify">Ambrose Evans-Pritchard, <em>Euro-federalists financed by US spy chiefs</em>, Telegraph.co.uk (June 19, 2001) </span></p>ITSSD Charitable Missionhttp://www.blogger.com/profile/00790887154748866904noreply@blogger.com0tag:blogger.com,1999:blog-1851218948450486986.post-24670042869038264402008-10-13T21:36:00.028-04:002008-10-13T22:53:29.166-04:00Finger-Pointing European Leaders Discover That Leverage, Greed & Poor Regulatory Oversight Of Euro Banks Exceeded That Of American Counterparts<div><div><div><a href="http://www.nytimes.com/2008/10/13/business/worldbusiness/13euro.html?pagewanted=1&em">http://www.nytimes.com/2008/10/13/business/worldbusiness/13euro.html?pagewanted=1&em</a></div><div></div><div><strong><span style="font-size:130%;"></span></strong> </div><div><strong><span style="font-size:130%;">U.S. Missteps Are Evident, but Europe Is Implicated</span></strong> </div><div></div><div></div></div><div><div><br /></div><div>By NELSON D. SCHWARTZ<br /></div><div></div><div><br /><br /></div><div>Published: October 12, 2008</div><div></div><div><br /><br /></div><div>PARIS — A week ago, European leaders said they knew who was responsible for the global <a title="More articles about the credit crisis." href="http://topics.nytimes.com/top/reference/timestopics/subjects/c/credit_crisis/index.html?inline=nyt-classifier">credit crisis</a>.<br /></div><div><br /></div><div></div><div><br /></div><div><a title="More articles about Silvio Berlusconi." href="http://topics.nytimes.com/top/reference/timestopics/people/b/silvio_berlusconi/index.html?inline=nyt-per"><strong><span style="font-size:130%;">Silvio Berlusconi</span></strong></a><strong><span style="font-size:130%;">, Italy’s prime minister, blamed a “capitalism of adventurers” in the United States, a group that encompassed risk-taking investment bankers and home buyers who borrowed more than they could afford. The British prime minister, </span></strong><a title="More articles about Gordon Brown." href="http://topics.nytimes.com/top/reference/timestopics/people/b/gordon_brown/index.html?inline=nyt-per"><strong><span style="font-size:130%;">Gordon Brown</span></strong></a><strong><span style="font-size:130%;">, pointedly noted that the crisis had “come from America.” </span></strong></div><div><strong><span style="font-size:130%;"><br /></div></span></strong><div></div><div><strong><span style="font-size:180%;">But now, after problems at European banks helped set off a global stock market rout and a 20 percent plunge on Wall Street last week, experts say lenders here all too willingly embraced many of the riskiest practices of their American counterparts, bulking up on risky debt and relying on short-term loans, rather than deposits, to finance their operations.<br /></span></strong></div><div><br /><br /></div><div><strong><span style="font-size:180%;">Indeed, even while European leaders continued to point fingers at the United States as they completed their own rescue efforts Sunday, analysts predicted that the eventual cost of the </span></strong><a title="More articles about the credit crisis bailout plan." href="http://topics.nytimes.com/top/reference/timestopics/subjects/c/credit_crisis/bailout_plan/index.html?inline=nyt-classifier"><strong><span style="font-size:180%;">bailout</span></strong></a><strong><span style="font-size:180%;"> on this side of the Atlantic could soon rival that of the $700 billion American plan.<br /></span></strong></div><div><br /><br /></div><div>And that pain won’t be Europe’s alone, as the turmoil here continues to reverberate through the world’s stock markets and make a global recession look more and more likely.<br /></div><div></div><div><br /><br /></div><div><strong><span style="font-size:180%;">“The same mechanisms that led to the crisis in the United States were operating here,” said Arnoud Boot, a professor of finance and banking at the University of Amsterdam. “It’s totally misplaced for European leaders to put the blame on the Americans.”<br /></span></strong></div><div><br /><br /></div><div>While the deposit guarantees and capital injections deployed in Britain and Ireland and across the Continent from France and Belgium all the way to Greece might allay the immediate panic, these steps will not necessarily free up credit for European businesses already hard hit by the global economic slowdown.<br /></div><div><br /></div><div><strong><span style="font-size:130%;">In fact, an ocean of short-term debt issued by European banks is set to come due over the next two quarters, with $375 billion maturing in the fourth quarter of 2008 and another $339 billion needing to be refinanced in the first quarter of 2009.</span><br /></strong></div><div><br /><br /></div><div>“If the banks do not manage to roll over this debt, we may witness balance sheet contraction with major negative implications for the real economy or more bank failures,” said Vasco Moreno, who tracks European banks for Keefe, Bruyette & Woods, a research firm specializing in financial institutions.<br /></div><div><br /><br /></div><div><strong><span style="font-size:180%;">The American subprime loan crisis may have been the trigger, Mr. Boot said, but dangers like too much leverage, too little oversight and an executive-bonus culture that encouraged risk-taking had been building for years in Europe, just as in the United States.<br /></span></strong></div><div><br /><br /></div><div><strong><span style="font-size:180%;color:#ff0000;">By some measures, in fact, European banks exposed themselves to even higher levels of debt than American banks did. And the after-effects are likely to be felt for years, potentially reducing European demand for American exports, a rare bright spot for domestic companies until recently.<br /></span></strong></div><div><br /><br /></div><div><strong><em><span style="font-size:130%;color:#ff0000;">European institutions do not directly face the kind of bad mortgages that brought down </span></em></strong><a title="More information about Wachovia Corp" href="http://topics.nytimes.com/top/news/business/companies/wachovia_corporation/index.html?inline=nyt-org"><strong><em><span style="font-size:130%;color:#ff0000;">Wachovia</span></em></strong></a><strong><em><span style="font-size:130%;color:#ff0000;"> and </span></em></strong><a title="More articles about Washington Mutual Inc." href="http://topics.nytimes.com/top/news/business/companies/washington_mutual_inc/index.html?inline=nyt-org"><strong><em><span style="font-size:130%;color:#ff0000;">Washington Mutual</span></em></strong></a><strong><em><span style="font-size:130%;color:#ff0000;">, because local lending standards here never fell as far as they did in the United States. But their own heavy borrowing has made European banks vulnerable now that easy credit is a thing of the past and plunging stock prices make it harder to raise money</span></em></strong>.<br /></div><div><br /><br /></div><div>“The market is really efficient in identifying the weakest players in the industry here in Europe,” said Christophe Ricetti, a banking analyst with Natixis.<br /></div><div><br /><br /><a href="http://upload.wikimedia.org/wikipedia/de/thumb/6/6a/HypoRealEstate-Group-Logo.svg/800px-HypoRealEstate-Group-Logo.svg.png"><img style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 281px; CURSOR: hand" height="62" alt="" src="http://upload.wikimedia.org/wikipedia/de/thumb/6/6a/HypoRealEstate-Group-Logo.svg/800px-HypoRealEstate-Group-Logo.svg.png" border="0" /></a><strong><span style="font-size:130%;">A glaring example is </span></strong><a title="More articles about Hypo Real Estate." href="http://topics.nytimes.com/top/news/business/companies/hypo_real_estate/index.html?inline=nyt-org"><strong><span style="font-size:180%;">Hypo Real Estate</span></strong></a><strong><span style="font-size:130%;">, Germany’s second largest commercial real estate lender, whose loans exceeded its deposit base by more than eight times.</span><br /></strong><br /></div><div></div><div><br /></div><div><strong>Less than 24 hours after Mr. Berlusconi and Mr. Brown blamed the United States about a week ago for the crisis and offered assurances about Europe’s relative stability, Hypo’s near collapse forced Germany to hastily guarantee all consumer deposits and mount a $67 billion rescue effort to save the stricken bank.<br /></strong></div><div><br /><br /></div><div>Several days later, British authorities would unveil a $255 billion plan to shore up its own shaky banking system.<br /></div><div><br /><br /></div><div><strong><span style="font-size:180%;">Other banks that overreached include the Royal Bank of Scotland and </span></strong><a title="More information about the Fortis Group." href="http://topics.nytimes.com/top/news/business/companies/fortis_group/index.html?inline=nyt-org"><strong><span style="font-size:180%;">Fortis</span></strong></a>, a Dutch-Belgian lender, which last year took on huge debt to finance a $100 billion takeover of rival ABN Amro — a deal that had the bad timing to coincide with the market’s peak.<br /></div><div><br /><a href="http://www.topnews.in/files/Royal-Bank-of-Scotland.JPG"><img style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 245px; CURSOR: hand" height="94" alt="" src="http://www.topnews.in/files/Royal-Bank-of-Scotland.JPG" border="0" /></a> <strong><span style="font-size:130%;">Late Sunday night, the British government appeared poised to take a majority ownership stake in the </span><span style="font-size:180%;">Royal Bank of Scotland</span></strong>, while Fortis has already been taken over and broken up by the Dutch and Belgian governments.<br /><br /><br /></div><div><strong><span style="font-size:130%;color:#ff0000;">“The high leverage could have been sustainable if the risks were kept under better control,” Mr. Boot said, “but clearly, supervision was insufficient.”<br /></span></strong></div><div><br /><br /></div><div>In Ireland, loans at the biggest banks also far outpaced deposits. That led the Irish government to issue a blanket guarantee on private savings accounts on Sept. 30, a move that set off criticism by other European governments — until they found themselves forced to follow suit.<br /><br /></div><div><br /></div><div><strong><span style="font-size:180%;color:#000099;">Despite having to take drastic action close to home, in recent days European leaders have continued to focus on the American role in the global economic debacle, especially the decision last month by Federal Reserve and Treasury Department officials to let </span></strong><a title="More articles about Lehman Brothers." href="http://topics.nytimes.com/top/news/business/companies/lehman_brothers_holdings_inc/index.html?inline=nyt-org"><strong><span style="font-size:180%;color:#000099;">Lehman Brothers</span></strong></a><strong><span style="font-size:180%;color:#000099;"> collapse.<br /></span></strong></div><div><br /><br /></div><div><strong><em><span style="font-size:130%;">“For the equilibrium of the world financial system, this was a genuine error,”</span></em></strong> Christine Lagarde, the French finance minister, said last week.<br /></div><div><br /><br /></div><div><strong><span style="font-size:130%;color:#000099;">And on Sunday, after a conference of European leaders at the Élysée Palace here aimed at easing the panic, President </span></strong><a title="More articles about Nicolas Sarkozy" href="http://topics.nytimes.com/top/reference/timestopics/people/s/nicolas_sarkozy/index.html?inline=nyt-per"><strong><span style="font-size:130%;color:#000099;">Nicolas Sarkozy</span></strong></a><strong><span style="font-size:130%;color:#000099;"> of France returned to this theme.<br /></span></strong></div><div><br /><br /></div><div><strong><span style="font-size:130%;"><span style="color:#000099;"><em>“This crisis was not born in Europe,” Mr. Sarkozy said.</em></span> </span><span style="font-size:130%;color:#ff0000;"><em>“This crisis was born in America. It is now a global crisis.”<br /></em></span></strong></div><div><br /><br /></div><div><strong><span style="font-size:180%;color:#000099;">But according to one commonly used yardstick to measure borrowing — the ratio of assets to equity — <span style="color:#ff0000;">European banks employed more than twice as much leverage as their American counterparts, Mr. Moreno, the analyst, said.</span><br /></span></strong></div><div><br /><br /></div><div>“The banks have a large amount of debt to roll over until the end of 2009,” he said.<br /></div><div><br /><br /></div><div>To be sure, <em><strong>not all European institutions indulged in risky borrowing and lending, Richard Portes, professor of economics at London Business School, said. Despite a rapidly deflating housing bubble in Ireland, Spain and Britain, the French bank </strong></em><a title="More information about More information about BNP Paribas S.A." href="http://topics.nytimes.com/top/news/business/companies/bnp_paribas_sa/index.html?inline=nyt-org"><em><strong>BNP Paribas</strong></em></a><em><strong>, Santander of Spain and Britain’s </strong></em><a title="More information about HSBC Holdings PLC" href="http://topics.nytimes.com/top/news/business/companies/hsbc_holdings_plc/index.html?inline=nyt-org"><em><strong>HSBC</strong></em></a><em><strong> have emerged largely unscathed</strong></em>, he noted.<br /></div><div><br /><br /></div><div>Even as excessive debt emerges as the most pressing concern, <strong><span style="font-size:130%;">the decision by other European institutions to wade into the market for complicated, mortgage-backed American securities and other </span></strong><a title="More articles about derviatives." href="http://topics.nytimes.com/top/reference/timestopics/subjects/d/derivatives/index.html?inline=nyt-classifier"><strong><span style="font-size:130%;">derivatives</span></strong></a><strong><span style="font-size:130%;"> overhangs the system.<br /></span></strong></div><div><br /><br /><a href="http://www.hurleypalmerflatt.com/images/UBS.jpg"><img style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 250px; CURSOR: hand" height="95" alt="" src="http://www.hurleypalmerflatt.com/images/UBS.jpg" border="0" /></a> <a title="More information about UBS AG." href="http://topics.nytimes.com/top/news/business/companies/ubs_ag/index.html?inline=nyt-org"><strong><span style="font-size:180%;">UBS</span></strong></a><strong><span style="font-size:130%;">, the Swiss giant, for example, bought tens of billions of dollars in American subprime debt in a bid for higher yields, only to find out too late that it was toxic, generating huge losses at UBS over the last year.<br /></span></strong><br /><br /></div><div></div><div><a href="http://www.30frankfuif.net/30f_/Images/Fortis_Bank.gif"><img style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 192px; CURSOR: hand; HEIGHT: 224px" height="311" alt="" src="http://www.30frankfuif.net/30f_/Images/Fortis_Bank.gif" border="0" /></a> <strong><span style="font-size:130%;">And after </span><span style="font-size:180%;">Fortis</span></strong> <strong><span style="font-size:130%;">was divided up earlier this month, with the Dutch government nationalizing local operations, and Belgian authorities selling most of the remainder to BNP Paribas, experts found that it owned more than 10 billion euros worth of toxic, illiquid securities. </span></strong><br /><br /><br /></div><div>As part of the deal worked out by Belgian authorities, those mostly American asset-backed securities have been placed in a separate “ring-fenced” entity, meant to quarantine them from more valuable holdings. As part of the deal, Belgian taxpayers got stuck with nearly a quarter of this hard-to-sell portfolio.<br /></div><strong><span style="font-size:130%;"></span></strong><div><strong><span style="font-size:130%;"><div><br /></div><div><a href="http://www.bballantwerp3on3.be/dexia%20logo.jpg"><img style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 252px; CURSOR: hand" height="105" alt="" src="http://www.bballantwerp3on3.be/dexia%20logo.jpg" border="0" /></a></div><div>At <span style="font-size:180%;">Dexia</span>, a French-Belgian lender to municipalities that was saved by a government-led $9.2 billion capital injection in September, <span style="color:#ff0000;">the difficulties can also be traced to a similar mix of hazardous American securities and European mishandling of them.<br /></div></span></span></strong><br /><br /><div>In 2000, Dexia entered the fast-growing market for municipal bond insurance in the United States, acquiring Financial Security Assurance. <strong><span style="font-size:180%;">To lift profits, the unit relied on </span></strong><a title="More articles about credit default swaps." href="http://topics.nytimes.com/top/reference/timestopics/subjects/c/credit_default_swaps/index.html?inline=nyt-classifier"><strong><span style="font-size:180%;">credit default swaps</span></strong></a><strong><span style="font-size:180%;"> and other now beaten-down derivatives, ultimately draining Dexia’s capital and forcing the recent government intervention.<br /></span></strong><br /></div><br /><div><span style="font-size:180%;color:#ff0000;"><strong>“Using credit-default swaps was cheaper, but it was opaque and the board of Dexia couldn’t follow all that,” said one government official who was involved in the rescue.</strong></span> He spoke on condition of anonymity because he was not authorized to discuss internal matters.<br /></div><br /><br /><div>Officials from Dexia and Fortis declined to comment.<br /></div><br /><br /><div><span style="font-size:180%;color:#ff0000;"><strong>Even worse, added this official, oversight of Dexia was split between Paris and Brussels. French regulators oversaw the unit of the company that included Financial Security Assurance, while Belgian authorities were responsible for monitoring the entire company.</strong></span></div><br /><div><br /><span style="font-size:180%;color:#ff0000;"><strong>“Nobody understood it,” the government official said.</strong></span></div><div></div></div></div></div>ITSSD Charitable Missionhttp://www.blogger.com/profile/00790887154748866904noreply@blogger.com0tag:blogger.com,1999:blog-1851218948450486986.post-52517604509314389172008-09-30T23:04:00.067-04:002008-10-06T01:08:55.395-04:00Eurocrats & US Liberal Progressives Declare End of Anglo-American Capitalism & US Superpower Status: Is Euro-Style Global Socialism Next?<p><a href="http://www.guardian.co.uk/business/2008/oct/02/europeanbanks.eu">http://www.guardian.co.uk/business/2008/oct/02/europeanbanks.eu</a></p><p><strong><font size="4"></font></strong> </p><p><strong><font size="4">Sarkozy calls crisis talks</font></strong></p><br /><p></p><br /><p>By David Gow</p><br /><p></p><br /><p>October 2, 2008</p><br /><p>Guardian.co.uk</p><br /><p></p><br /><p>PRESIDENT Nicolas Sarkozy summoned French bankers to an emergency meeting last night amid increasingly desperate efforts in Europe to check the spread of financial market chaos.<br /></p><br /><p>With authorities in Belgium, The Netherlands, France, Germany and Luxembourg intervening to save banking groups across the Continent, the president called for a European Union response to the turmoil.<br /></p><br /><p>"There have been multiple contacts between the different European governments," Mr Sarkozy said.<br /></p><br /><p>"The situation requires rapid reactions. Everybody must show calm and a sense of responsibility."<br /></p><p><strong>However, regulators in Brussels insisted on a case-by-case approach to the crisis and ruled out an American-style multi-billion-euro bailout fund</strong>.<br /></p><br /><p>European Commission spokesman Johnannes Laitenberger said: "This is neither the time nor the place for a European version of the Paulson package."<br /></p><br /><p>Mr Sarkozy's initiative came amid growing concern in Paris that the country's banking system could suffer despite official insistence that it is among the most solid in the world, with a broad spread of activities and a high level of deposits.<br /></p><br /><p>Mr Sarkozy repeated a pledge made last week to guarantee French banks and the savings of their customers. "We must not give way in the face of destabilisation," he said. "We have to support the banks."<br /></p><br /><p>Mr Sarkozy called the heads of France's main banks and insurance firms to last night's meeting to discuss the crisis and the measures that the state could take to help them through it.<br /></p><br /><p>French Finance Minister Christine Lagarde indicated her willingness to intervene when she pledged support for Dexia, the embattled Belgian banking group, after panic sparked by reports thatit needed a capital boost.<br /></p><br /><p>Last night, Dexia became the latest European bank to need a state bailout, with Belgium, France and Luxembourg agreeing to pump E6.4 billion ($11.3billion) into the group following emergency talks that stretched throughout the night.<br /></p><br /><p>"Our ambition was to have very strong political involvement in order to send a signal to the markets," Belgian Prime Minister Yves Leterme said after the deal was reached.<br /></p><br /><p>The French Government and the French state financial institution Caisse des Depots will add a further E3billion to the pot, while Luxembourg will invest E376million through a convertible loan.<br /></p><br /><p>On Sunday, the governments of Belgium, The Netherlands and Luxembourg injected E11.2 billion ($19.9 billion) into Fortis in a rescue package that left them with 49 per cent of the bank's activities in each of the three countries.<br /></p><br /><p>Under the rescue package, Fortis will sell the E24 billion stake it acquired in Dutch bank ABN Amro last year and replace Maurice Lippens as chairman.<br /></p><br /><p>Filip Dierckx, who became Fortis's third chief executive this year when he stepped into the post on Friday, admitted that participating with the Royal Bank of Scotland in the takeover of ABN Amro had unsettled his bank. "There was bad timing in the ABN Amro deal," he said.<br />Analysts said Fortis would be lucky to get E8 billion for its ABN Amro stake.<br /></p><br /><p>The German Government was also in interventionist mood as it led a consortium of banks to salvage Hypo Real Estate, the commercial property lender, with E35 billion in credit guarantees.<br />A government spokesman said the state would guarantee 40 per cent of a first tranche of E14billion and 100 per cent of a second tranche of E21 billion. </p><p> </p><p>Meanwhile, Ireland announced a blanket guarantee on bank deposits to try to bolster its financial system after a record slump on Dublin's stock market.<br /></p><br /><p>The move triggered a partial recovery. </p><br /><p><br />Brussels is pressing for tough rules to protect EU banks from meltdown. The French president, Nicolas Sarkozy, has asked Britain, Germany and Italy for emergency talks, possibly this weekend in Paris, to discuss a European response to the crisis. He is rumoured to be mulling over a proposal for a €300bn (£237bn) bail-out plan for EU banks.<br /></p><br /><p><strong>José Manuel Barroso, president of the European commission, indicated he was in talks with Sarkozy about an EU approach to stricter regulation, revised rules on evaluating complex assets, improved guarantees for bank depositors and greater transparency on executive pay</strong>.<br /></p><br /><p>A controversial plan by Charlie McCreevy, the EU's single-market commissioner, to tighten up banking regulation would force the banks to retain 5% of any exotic instruments they develop on their own books to prevent them passing on toxic assets to other banks. It would also restrict a bank's lending to any other single bank to 25% of its capital base and introduce stricter regulation by a group of pan-European supervisors.<br /></p><br /><p>"I'm really trying to row back on what's been occurring," he said. "All the incentives have been to wrap up as many mortgages as possible, put them in a package and send them off to someone else - get rid of them to make more and more money."<br /></p><br /><p><strong>Barroso also indicated he backed French proposals to make European "fair value" accounting standards more flexible amid substantial disquiet among European banks about the current system, which, they argue, forces them to write down their assets more than necessary and squeeze their capital.</strong></p><br /><p><br />McCreevy admitted it would be "devilishly" difficult to get all 27 countries to agree. He is proposing a "college" of supervisors that would be headed by the regulator in the bank's home country, who would be empowered to "break the Gordian knot" in the event of disagreements.</p><br /><p>------------------------------------------------------------------------------------------------</p><br /><p><a href="http://www.kuna.net.kw/NewsAgenciesPublicSite/ArticleDetails.aspx?id=1941455&Language=en">http://www.kuna.net.kw/NewsAgenciesPublicSite/ArticleDetails.aspx?id=1941455&Language=en</a></p><br /><p><br /><strong><font size="4">Sarkozy convenes Summit to discuss financial markets crisis</font></strong><br /></p><br /><p>Economics</p><p></p><br /><p>Kuwait News Agency</p><br /><p></p><p>10/2/2008 1:36:00 PM<br /></p><br /><p><br />PARIS, Oct 2 (KUNA) -- French President Nicolas Sarkozy, who also currently presides the European Union, is hosting a Summit meeting here Saturday of five major European nations to discuss the ongoing financial crisis on international markets, Sarkozys office announced Thursday.</p><br /><p>In addition to the French leader, the meeting will bring together British Premier Gordon Brown, German Chancellor Angela Merkel, Italian Prime Minister Silvio Berlusconi, as well as the Prime Minister of Luxembourg Jean-Claude Juncker.</p><br /><p>Senior officials from the European Union Commission, like President Jose-Manuel Barosso will also attend, as will the President of the European Central Bank (ECB), Jean-Claude Trichet.</p><br /><p>"This Summit aims to prepare the contribution of European members of the G8 to the next meeting of this body that will be devoted to the international financial crisis," a statement from the French Presidents office indicated.</p><br /><p>Major European nations have been acting in concerted fashion this past week to prevent the bankruptcy or threat of bankruptcy to certain major companies because of the financial crisis that has also devastated the financial sector in the United States, mainly due to bad housing loans that have defaulted.</p><br /><p>Some troubled European companies have been bought out and others partially nationalized by governments, notably local financing and investment entity "Dexia," which was saved by action on the part of Holland, Belgium and Luxembourg, which took a 49 percent stake in the company. France also provided funds for a bailout of "Dexia." The ECB and many other major Central Banks and the US Federal Reserve have injected hundreds of billions of dollars into the markets to prevent credit availability drying up, thus putting the squeeze on businesses and consumers.</p><br /><p><strong>It is unclear if the major European powers are going to propose a plan to bailout other companies or establish a fund for this purpose as is being attempted in the United States</strong>.</p><br /><p><strong><em>But on Wednesday, the Organization for Economic Cooperation and Development (OECD), which represents the 30 most industrialized countries in the world, said that the US plan was already having an effect in reversing the sharply negative trend on stock markets and added that a European plan should be considered in the same vein.</em> </strong></p><br /><p>------------------------------------------------------------------------------------------------</p><br /><p><a href="http://www.businessweek.com/ap/financialnews/D93HODA00.htm">http://www.businessweek.com/ap/financialnews/D93HODA00.htm</a></p><br /><p><strong><font size="4">Sarkozy working on financial crisis summit<br /></font></strong></p><p> </p><p>By LAURENT PIROT</p><br /><p></p><br /><p>France' president, Nicolas Sarkozy, is pushing for a summit with Germany, Britain and Italy and a new law to regulate executive severance pay.</p><p> </p><p>French government spokesman Luc Chatel said the summit could be held in the coming days. An expected participant, top European financial official Jean-Claude Juncker, suggested it would happen Saturday in Paris.<br /></p><br /><p>"The financial crisis testifies to a system that is running out of steam," said Chatel. "Therefore <strong><font size="4">we need to find solutions to restructure a capitalism that is adapted to today's era</font></strong>."<br /></p><p> </p><p><strong>His comments echoed a fiery speech last week from Sarkozy, who said the world flirted with catastrophe during the financial crisis and that <font size="4">laissez-faire capitalism "is finished."<br /></font></strong></p><br /><p>Chatel said Sarkozy is in contact with European leaders and wants a meeting in the coming days with other European members of the G-8, which would mean Italy, Germany and Britain. The head of the European Central Bank and Juncker could also take part.<br /></p><br /><p>German Chancellor Angela Merkel's spokesman said the meeting appears likely to happen in Paris on Saturday afternoon.<br /></p><br /><p>Chatel, speaking after a Cabinet meeting, said Sarkozy also wants a law passed "very quickly" in France to regulate so-called 'golden parachutes' -- big payouts for departing corporate executives.<br /></p><br /><p>Sarkozy threatened in his speech last week to legislate if executives did not come up with their own "acceptable" practices by the end of the year.<br /></p><br /><p>Chatel said, however, that Sarkozy now no longer wants to wait and wants a law in the coming weeks. Sarkozy's party controls parliament.</p><br /><p>------------------------------------------------------------------------------------------------</p><br /><p><a href="http://money.ninemsn.com.au/article.aspx?id=640441">http://money.ninemsn.com.au/article.aspx?id=640441</a></p><br /><p><strong><font size="4">Sarkozy urges common safety net</font></strong><br /></p><p><br />By Ben Hall in Paris</p><br /><p></p><br /><p>Financial Times, </p><br /><p></p><br /><p>1 Oct 2008 </p><p> </p><br /><p><strong>Nicolas Sarkozy's proposal for a European Union-wide bail-out scheme is an audacious bid to seize the political initiative as the financial crisis sweeps through Europe.</strong></p><br /><p><strong></strong><br />The French president is unlikely be put off by criticism from other bloc members from at least discussing the idea at a summit of some <strong>EU leaders</strong> in Paris on Saturday. <strong><em>He wants an open-minded debate, "putting aside dogma", about ways of addressing the crisis, said an official</em>.<br /></strong></p><br /><p>French government figures insisted on Wednesday that there was no fully worked out proposals for the scheme and they rejected the price tag of €300bn ($422bn, £238bn) that some German officials have attached to it.<br /></p><br /><p><strong><em>They attacked the French idea, arguing it was for individual states to handle their own banking bail-outs. Officials in London are also sceptical, but there could be support from other quarters</em></strong>. The idea is believed to have been raised initially by the Dutch government.<br /></p><br /><p><strong>The French idea is not necessarily for a single EU bail-out fund. It could be a question of each member state agreeing to set up its own fund according to a common model, say officials.<br /></strong></p><br /><p>"This is not an idea for some kind of Paulson plan because we don't have the same magnitude of toxic assets as the US," said a senior official in Paris.<br /></p><br /><p><strong>But France is concerned that not all EU countries are in position to bail out a failing bank, especially if they are small economies or have already undertaken a rescue operation.</strong><br /></p><br /><p>Christine Lagarde, finance minister, floats the idea of a fund in an interview on Thursday, telling Handelsblatt, a German newspaper: "We in the EU generally agree we need to support the financial sector. That poses the question: Do we need a European [shock]-absorption fund to rescue banks? That's only an idea. We need to discuss that."<br /></p><br /><p>Until recently France has publicly shown little interest in a co-ordinated rescue plan beyond tightening up EU financial markets regulation over the longer term.<br /></p><br /><p>Paris initially dismissed the request of Hank Paulson, US Treasury secretary, for Europe to set up its own rescue fund last month. Only on Wednesday, François Fillon, prime minister, set out a unilateral approach, vowing to prevent the collapse of any French bank.<br /></p><br /><p>Mr Fillon said Paris would "exclude no solution" required to save a bank from failure and indicated it would take stakes or even nationalise institutions in return for recapitalisation.<br />"We will give ourselves the means to prevent a major financial catastrophe," he said in an interview with Les Echos newspaper. "There will be no failure."<br /></p><br /><p>But the spread of panic across Europe and France's participation in the €6.4bn bail-out of Dexia with ­Belgium and Luxembourg seems to have prompted reflection on whether ad hoc arrangements are sufficient.<br /></p><br /><p>For Belgium, Dexia's rescue came after the nationalisation, with the Netherlands, of Fortis.<br />"French banks will not be sheltered from difficulty if a big European bank fails," Mr Fillon said.</p><br /><p>------------------------------------------------------------------------------------------------- </p><br /><p><a href="http://www.theaustralian.news.com.au/story/0,25197,24427830-26040,00.html">http://www.theaustralian.news.com.au/story/0,25197,24427830-26040,00.html</a> </p><br /><p><strong><font size="4">Sarkozy calls in French bank chiefs</font></strong></p><br /><p></p><br /><p>By Adam Sage and Rory Watson</p><br /><p></p><br /><p>The Australian</p><br /><p></p><br /><p>October 01, 2008 </p><br /><p></p><br /><p></p><br /><p>-------------------------------------------------------------------------------------------------<br /><a href="http://www.efinancialnews.com/investmentbanking/rss/content/2452013015">http://www.efinancialnews.com/investmentbanking/rss/content/2452013015</a></p><br /><p><strong><font size="4">Sarkozy seeks change to fair value rules</font></strong> </p><br /><p><br />By Tom Fairless</p><br /><p></p><br /><p>Financial News Online</p><br /><p></p><br /><p>30 Sep 2008<br /></p><br /><p>French President Nicolas Sarkozy has summoned finance executives to discuss ways to reform accounting </p><p></p><p>-------------------------------------------------------------------------------------------------</p><br /><p><a href="http://www.spiegel.de/international/business/0,1518,581201,00.html">http://www.spiegel.de/international/business/0,1518,581201,00.html</a></p><br /><br /><strong><font size="4">SPIEGEL INTERVIEW WITH GERMAN FINANCE MINISTER STEINBRÜCK</font></strong><br /><br /><br /><br /><strong>'We Were All Staring into the Abyss'</strong><br /><br /><br /><br />SPEIGEL ONLINE<br /><br /><br /><br />9/29/08<br /><br /><br /><br /><strong><em>SPIEGEL spoke with German Finance Minister Peer Steinbrück about the roots of the US credit disaster, whether Germany is in grave danger and what the future has in store for world banking.</em></strong><br /><br /><br /><br />SPIEGEL: Mr. Steinbrück, Wall Street is imploding. The government of the United States wants to establish a $700 billion (€480 billion) bailout program for its banks and their bad loans. How serious is the situation for the rest of the world?<br /><br /><br /><br />Steinbrück: We are experiencing the most severe financial crisis in decades, although one should be careful about historic comparisons with 1929. One thing is clear: <strong><font size="4">After this crisis, the world will no longer be the same. The financial architecture will change globally</font></strong>.<br /><br /><br />SPIEGEL: Could you be more specific, please.<br /><br /><br /><br />Steinbrück: <strong><font size="4">There will be shifts in terms of the importance and status of New York and London as the two main financial centers</font></strong>. <strong><em>State-owned banks and funds, as well as commercial banks from Europe, China, Russia and the Arab world will close the gaps, creating new centers of power in the financial world.<br /></em></strong><br /><br />SPIEGEL: In other words, we are experiencing the beginning of a tectonic shift…<br /><br /><br />Steinbrück:... but not one that is abrupt and jarring. It will be an evolutionary process that will take several years.<br /><br /><br />SPIEGEL: The current thunder is certainly deafening. We have just seen all US investment banks disappear in one fell swoop.<br /><br /><br />Steinbrück: Three of them were either taken over or went bankrupt. The two others, because they abandoned their business model to save themselves. No one would have thought this possible until recently. Meanwhile, 25 financial service providers have disappeared from the market in the United States. All of this is illustrative of an earthquake. In addition, many institutions are still fundamentally lacking liquidity.<br /><br /><br />SPIEGEL: And <strong><font size="4">is the United States completely to blame?<br /></font></strong><br /><br />Steinbrück: <strong><em><font size="4">The source and focus of the problems are clearly in the United States. There are many causes.</font></em></strong> After 9/11, a great deal of cheap money was tossed into the market. Apparently some of that money went to people with poor creditworthiness. This led to the growth of the real estate bubble. The banks embarked on a race over profit margins. Then speculation spun completely out of control…<br /><br /><br />DER SPIEGEL<br /><br /><br />German growth could be dropping.<br /><br /><br />SPIEGEL: …which also benefited German banks for a while.<br /><br /><br />Steinbrück: But they didn't invent these transactions. The stokers on the financial markets were responsible for that.<br /><br /><br />SPIEGEL: And how is the US patient doing now?<br /><br /><br /><br />Steinbrück: It's in the ICU with pneumonia. This means that here in Europe, we can at least expect to get a bad cold. <strong><font size="4">The US patient lacked legislation, a regulatory framework that could have helped avoid this development. That's the key issue for me. The financial products became more and more complex, but the rules and safeguards didn't change</font></strong>. I don't know anyone in New York or London who would have asked for a stronger regulatory framework 18 months ago. <strong>They were always saying: The market regulates everything. What a historic mistake!<br /></strong><br /><br /><br /><br />SPIEGEL: Your US counterpart, Treasury Secretary Henry Paulson, began by essentially nationalizing the two US mortgage giants, Fannie Mae and Freddie Mac. But then he allowed investment bank Lehman Brothers to plunge in bankruptcy before saving the insurance giant AIG with an $85 billion (€58 billion) bailout. This doesn't exactly look like a clear course of action.<br /><br /><br /><br />Steinbrück: In the case of Lehman, the US government wanted to send a signal to the market that they are not prepared to offer a bailout under any circumstances. In the case of AIG, we had direct talks at the G7 level and implored them to stabilize the situation. An AIG bankruptcy would have triggered shock waves around the world. We were all staring into the abyss at that point.<br /><br /><br />SPIEGEL: What role does the US election campaign play in resolving the crisis?<br /><br /><br /><br />Steinbrück: I hope that my US counterpart will be capable of taking action for as long as possible. We cannot have a six-month vacuum until the next president takes office and his administration is ready to get to work.<br /><br /><br /><br /><br />SPIEGEL: <strong>Paulson headed the investment bank Goldman Sachs for a long time. Does this make him part of the problem?<br /></strong><br /><br />Steinbrück: He is undoubtedly doing a good job. And at least Goldman Sachs still had the option of making its own decision to transform itself into a bank holding company.<br /><br /><br />SPIEGEL: That same Paulson snubbed you a year and a half ago. You arrived late for a meeting with him in Washington and he gave you all of 11 minutes of his time -- standing up.<br /><br /><br /><br /><br />Steinbrück: You don't seriously believe that such trivia plays any role whatsoever in my assessment of a counterpart and of the situation!<br /><br /><br />SPIEGEL: <strong>We are alluding to arrogance and a way of thinking that Paulson may have shared with many major players on Wall Street.</strong><br /><br /><br />Steinbrück: <strong>The way of thinking on Wall Street was quite clear: "Money makes the world go round!" The logic went like this: The government should stay out of our business! And when we Germans began -- and perhaps it was even too late by then -- to ask for controls, for more transparency and equity guidelines, they laughed at us at first.<br /></strong><br /><br />SPIEGEL: When did those initiatives begin?<br /><br /><p> </p><p>Steinbrück: Back in the days of Gerhard Schröder's chancellorship. It was reinforced when Germany assumed the G-7 presidency in early 2007. The first real debate on the subject happened in February 2007, during a meeting of the G-7 finance ministers at Villa Hügel in Essen. Then British Chancellor of the Exchequer Gordon Brown was not very amused by our call for more transparency for hedge funds. The talks have been significantly more constructive since last fall.<br /></p><p> </p>SPIEGEL: What, specifically, will you call for?<br /><br /><br /><br /><br />Steinbrück: A few agreements were already reached with the British and Americans within the G-7 in April. They include imposing new rules on the conduct of the rating agencies, tightening equity regulations and gaining a better handle on cross-border bank supervision. But as far I am concerned, it isn't enough for the industry to develop its own code of conduct. I also want to see the banks no longer allowed to sell all of their risks as they see fit. <strong>I think it as a dangerous systemic design flaw that not only loans, but also credit risk is 100-percent marketable. This can lead to uncontrollable wildfires, as we are now seeing.<br /></strong><br /><br />SPIEGEL: How much government does capitalism need? How much can it tolerate?<br /><br /><br /><strong><font size="5">Steinbrück: Overall, we have to conclude that certain elements of <font color="#ff0000">Marxist theory</font> are not all that incorrect.<br /></font></strong><br /><br />SPIEGEL: And you, of all people, are saying this?<br /><br /><br />Steinbrück: <strong><font color="#ff0000">Every exaggeration creates, in a dialectic sense, its counterpart -- an antithesis. In the end, unbridled capitalism with all of its greed, as we have seen happening here, consumes itself…<br /></font></strong><br /><br />SPIEGEL: …because it creates an unbridled state?<br /><br /><br /><br />Steinbrück: That would the wrong development. And I don't believe in it, either. <strong>Fortunately, we in Germany have done quite well for ourselves with a happy medium, <font size="4">the social market economy.<br /></font></strong><br /><br /><br />SPIEGEL: The German government is unwilling to participate in America's $700 billion bailout package. Is this your final word?<br /><br /><br /><br /><br />Steinbrück: I see neither the need for nor the possibility of taking on the responsibility for American banks. Besides, our situation is more robust.<br /><br /><br />SPIEGEL: But the United States will certainly bail out US banks first -- a distortion of competition that could put European institutions under more pressure than ever.<br /><br /><br />Steinbrück: That's an issue, of course. But I can't give you a shoot-from-the-hip solution. First we have to see what exactly the Americans intend to do.<br /><br /><br />SPIEGEL: And <strong>if things became serious in Europe, you would also have to butt heads with Brussels over intervention options</strong>.<br /><br /><br />Steinbrück: You couldn't be more right! And I have already pointed this out. <strong>The Americans are clearly faster when it comes to crisis management, because they aren't hampered by these aid procedures.<br /></strong><br /><br />SPIEGEL: Nevertheless, you do have worst-case scenarios on the back burner.<br /><br /><br />Steinbrück: It doesn't make any sense to speculate publicly over something like this. A crisis can easily become a self-fulfilling prophecy that way.<br /><br /><br />SPIEGEL: You recently met with the top executives from the German banking and insurance industries. What was the mood like?<br /><br /><br />Steinbrück: Very serious and open. But discretion is needed to achieve any progress on this front.<br /><br /><br />SPIEGEL: The German state-owned banks, at any rate, are a prime example of a case in which government influence does not automatically guarantee more security. On the contrary. The amount of gambling that took place at institutions like SachsenLB was unbelievable. And taxpayers are the ones who end up footing the bill.<br /><br /><br />Steinbrück: The responsibility lies with the respective shareholders. Some of them, however, are showing signs of wanting to pass this responsibility on to the government. That's when I stop playing Mr. Nice Guy. They should kindly solve their own problems.<br /><br /><br />SPIEGEL: Some, it would seem, have failed to apply the rules that already exist in the German system.<br /><br /><br />Steinbrück: I cannot confirm that. The auditors can only examine what is in the financial statements and what is presented to them. IKB and SachsenLB simply outsourced tremendous risks. I also caution against taking a stop-the-thief approach. In one case, for example, a former department head from the finance ministry who was on the supervisory board of one of these banks has been severely criticized. In an effort to pass some blame on to me, it has been conveniently forgotten that half of the who's who in the German economy was on this same board.<br /><br /><br />SPIEGEL: Perhaps you should have simply allowed something like IKB to go bankrupt, instead of bailing it out with billions from the state-owned bank KfW and then essentially giving it away to an American financial investor.<br /><br /><br />Steinbrück: And what would have happened then? We had less then five weeks to conduct a thorough audit. We had 36 hours to decide what would be more costly -- stabilization or insolvency. That was the situation on July 28 and 29 of last year. What happens to the €25 billion ($36 billion) worth of deposits at the IKB? Are they supposed to vanish into thin air? What would have been the consequences for the overall German financial economy? The damage would have disproportionately higher. It's easy to be critical now.<br /><br /><br />SPIEGEL: <strong>And what about the fact that KfW just happened to transfer €319 million ($463 million) to Lehman Brothers, the US investment bank that declared bankruptcy that very same day? This sort of thing doesn't exactly create confidence in state-owned banks.<br /></strong><br /><br />Steinbrück: <strong>That was an awful mistake, of course. A grotesque error. But it was a mistake made by bank executives, not the administrative board</strong>, <em><strong><font size="4">which includes politicians among its members.<br /></font></strong></em><br /><br />SPIEGEL: <strong><font color="#ff0000">It proves that normal risk management procedures failed completely -- directly under the nose of the finance minister.<br /></font></strong><br /><br />Steinbrück: No, it proves that an inexcusably wrong decision was made. Do you think I wasn't livid about this? The entire crisis we are talking about here is incomprehensible for the normal citizen. But such an idiotic transfer -- even my 89-year-old mother is outraged about it. All 80 million German citizens understand this…<br /><br /><br /><br /><br />SPIEGEL: …and suddenly you had the tabloid Bild calling the KfW "Germany's stupidest bank."<br /><br /><br />Steinbrück: Okay, okay. But it's also worth noting that KfW passed all tests and checks regarding its risk management procedures that were performed by the federal audit court and auditors last year. Of course, I know that the bottom line is that what happened was completely ridiculous. But even that has to be carefully examined. We cannot simply start shooting at random, just to flush out a few executives and keep the public happy.<br /><br /><br />SPIEGEL: <strong><font size="4">At any rate, the failures and breakdowns among many state-owned German banks show that the government isn't exactly an effective banker.<br /></font></strong><br /><br />Steinbrück: <strong><font size="4">I never claimed that it was. The government is neither better nor worse as a banker. Financial transactions are not its core field of operations</font></strong>. The fact that many bankers working for state-owned banks clearly miscalculated is partly the result of their having lost sight of the relationships between risks and profitability. But let me say this once again: Lehman was no state-owned bank, nor was Bear Stearns, Northern Rock or IKB.<br /><br /><br />SPIEGEL: How dramatic will the effects of the financial crisis be on the German economy?<br />Steinbrück: So far, the only obvious outcome is that numbers are getting worse. At this point, no one can provide a credible estimate of how bad they will become. Of course, this crisis will also affect growth. However, some developments are currently moving in the opposite direction. The employment market is still strong. And we are still pleased with our tax revenues.<br /><br /><br /><br />SPIEGEL: You were optimistic only two weeks ago. You said that there was no reason to expect cataclysmic scenarios, and that growth for the year would remain at 1.7 percent.<br /><br /><br /><br />Steinbrück: I object to your criticism. I have always been on the cautious side, and at the beginning of the year I stated that 2009 will be worse than 2008. I have no reason to revise my predictions for 2008. But 2009 will be significantly worse than the previous estimate of 1.2 percent growth.<br /><br /><p> </p><p>SPIEGEL: Should German depositors be concerned about their savings?<br /></p><br />Steinbrück: No. No one should be worried about savings accounts. We will see a tectonic shift in the global financial system. Entire types of banks and their business models will disappear, but that doesn't mean that anyone in Germany should be worried about their savings.<br /><br /><br />SPIEGEL: <strong><font size="4">Is capitalism currently undergoing a general crisis?</font></strong><br /><br /><br />Steinbrück: <strong>I don't think so. But the behavior of some elites is worth criticizing. We have to be careful not to allow enlightened capitalism to become tainted with questions of legitimacy, acceptance or credibility. This isn't merely an issue of excessive salary developments in some areas. I'm talking about tax evasion and corruption</strong>. I'm talking about scandals and affairs of the sort we have recently experienced, although one shouldn't generalize these occurrences. But they are the sort of thing the general public understands all too well. And when they are allowed to continue for too long, the public gets the impression that "those people at the top" no longer have to play by the rules. There have been times in Germany when these elites were closer to the general population. Some things have gotten out of control in this respect.<br /><br /><br />SPIEGEL: One cannot regulate morality.<br /><br /><br /><br />Steinbrück: No, but that too is dialectics. The elites must understand that it is a matter of self-protection, of developing a sense of the right balance or allowing judgment to prevail.<br /><br /><br /><br />SPIEGEL: Mr. Steinbrück, thank you very much for taking the time to speak with us.<br /><br /><p> </p><p>Interview conducted by Wolfgang Reuter and Thomas Tuma<br /></p>Translated from the German by Christopher Sultan<br /><br />-------------------------------------------------------------------------------------------------<br /><br /><br /><a href="http://www.thelocal.de/14569/20080928/">http://www.thelocal.de/14569/20080928/</a><br /><br /><strong><font size="4">American financial crisis sparks German schadenfreude</font></strong><br /><br /><br />The Local - Germany's News in English<br /><br /><br /><br />Published: 28 Sep 08 10:07 CETOnline:<br /><br /><br /><br /><a href="http://www.thelocal.de/14569/20080928/">http://www.thelocal.de/14569/20080928/</a><br /><br /><br /><strong>After years of pressing for tighter financial regulation German politicians got a bad case of schadenfreude and "I told you so" last week as US financial system grappled with the biggest crisis since the Great Depression.<br /></strong><br /><br /><br /><strong><font size="4">German Finance Minister Peer Steinbrück was at the forefront, hitting out at the lack of oversight in the United States that he said was in large part to blame for the crisis.</font></strong><br /><br /><br /><br />"The long term consequences of the crisis are not yet clear. But <strong><em><font size="4">one thing seems likely to me: the USA will lose its superpower status in the global financial system. The world financial system is becoming multipolar," Steinbrück said</font></em></strong> in a speech to parliament.<br /><br /><br />"Wall Street will never be the same again. A few days ago there were two Mohicans left remaining out of the investment banks. Now they no longer exist," Steinbrück said, referring to the change in status of Goldman Sachs and Morgan Stanley into bank holding companies.He added that the entire global economy would be changed by the US crisis. "The whole world over we must adjust ourselves to lower rates of growth and - with a time lag - unfavourable developments on labour markets," the centre-left Social Democrat said.<br /><br /><br /><strong><font size="4">Steinbrück added that what was needed is "stronger international regulation agreed at international level" in order to "re-civilize" financial markets</font></strong> so that such a crisis was never repeated.Before that it was the turn of Germany's Foreign Minister Frank-Walter Steinmeier, who was recently selected by his Social Democrat party to run for chancellor in September 2009 against the popular conservative incumbent Angela Merkel. We told you so, was Steinmeier's message, made in a visit to the nerve centre of world finance, the New York Stock Exchange.<br /><br /><br />"I must say that we, and the finance minister (Steinbrück) in particular, were right in the recommendations that we have been making for two years," he told reporters on Wall Street.<br /><br /><br /><br />"First of all, to ensure more transparency on international finance markets and secondly, to demonstrate more sensitivity to risk." "It is a discussion that we have had for a long time in Europe, that the completely unregulated parts of the international financial market must be more closely monitored and that we must try to reach an agreement on common regulations," he said.<br /><br /><br /><br /><strong>Germany headed the Group of Eight industrialized nations last year and advocated greater transparency in international financial transactions, especially in hedge funds</strong>. <strong><font size="4">But it was thwarted by US and British resistance.</font></strong> Merkel, Germany's conservative premier since 2005, was at pains to remind listeners of this.<br /><br /><br />"I criticise the perception that <strong>the financial markets</strong> have of themselves," she told the Münchner Merkur newspaper. "Alas, they <strong><font size="4">have opposed for too long the introduction of rules with the backing of the British and American governments</font></strong>," she said. "On top ofnational rules, we need more international agreements to stem irresponsible financial speculation."<br /><br /><br /><strong><em>The comments of course have to be taken in context -- Germany is warming up for elections when Merkel's conservative CDU and Steinmeier and Steinbrück's SPD want to end their fractious current "grand coalition" in place since 2005.</em></strong><br /><br /><br />And Germany's banks have also benefited from the huge banking boom in recent years, not least Deutsche Bank, the country's only bank with a meaningful investment banking presence on Wall Street. Germany is also as much part and parcel of the global economy as any other country.<br /><br /><br /><strong><font size="4">"One should not lose sight of the fact that regulation is not the answer to everything," said Manfred Weber, head of Germany's banking association. "The role of banks in financing growth should not be complicated by new rules and regulations."<br /></font></strong><br /><br /><br />AFP (<a href="mailto:news@thelocal.de">news@thelocal.de</a>)<br /><br />-------------------------------------------------------------------------------------------------<br /><br /><a href="http://en.wikipedia.org/wiki/Schadenfreude">http://en.wikipedia.org/wiki/Schadenfreude</a><br /><br /><br /><strong>Schadenfreude (IPA: </strong><a class="mw-redirect" title="Help:IPA" href="http://en.wikipedia.org/wiki/Help:IPA"><strong>[ˈʃaːdənˌfʁɔʏ̯də]</strong></a><strong> </strong><a class="internal" title="De-schadenfreude.ogg" href="http://upload.wikimedia.org/wikipedia/commons/0/03/De-schadenfreude.ogg"><strong>Audio (German)</strong></a><strong> (</strong><a title="Wikipedia:Media help" href="http://en.wikipedia.org/wiki/Wikipedia:Media_help"><strong>help</strong></a><strong>·</strong><a title="Image:De-schadenfreude.ogg" href="http://en.wikipedia.org/wiki/Image:De-schadenfreude.ogg"><strong>info</strong></a><strong>)) is </strong><a title="Happiness" href="http://en.wikipedia.org/wiki/Happiness"><strong>enjoyment</strong></a><strong> taken from the </strong><a title="Suffering" href="http://en.wikipedia.org/wiki/Suffering"><strong>misfortune</strong></a><strong> of someone else.</strong> The word referring to this emotion has been borrowed from German by the English language<a title="" href="http://en.wikipedia.org/wiki/Schadenfreude#cite_note-0">[1]</a> and is sometimes also used as a <a title="Loanword" href="http://en.wikipedia.org/wiki/Loanword">loanword</a> by other languages.<br /><br /><br /><br /><a class="mw-redirect" title="Philosopher" href="http://en.wikipedia.org/wiki/Philosopher">Philosopher</a> and <a class="mw-redirect" title="Sociologist" href="http://en.wikipedia.org/wiki/Sociologist">sociologist</a> <a class="mw-redirect" title="Theodor Adorno" href="http://en.wikipedia.org/wiki/Theodor_Adorno">Theodor Adorno</a> defined schadenfreude as <strong>“largely unanticipated delight in the suffering of another </strong>which is cognized as trivial and/or appropriate.”<a title="" href="http://en.wikipedia.org/wiki/Schadenfreude#cite_note-1">[2</a><br /><br />-------------------------------------------------------------------------------------------------<br /><br /><a href="http://euobserver.com/19/26814">http://euobserver.com/19/26814</a><br /><br /><br /><strong><font size="4">'Laissez-faire' capitalism is finished, says France</font></strong><br /><br /><br />By ELITSA VUCHEVA<br /><br /><br />EU Observer<br /><br /><br /><br />26.09.2008 @ 09:30 CET<br /><br /><br /><br />Both France and Germany on Thursday (25 September) said the current financial crisis would leave important marks on the world economy, with <strong><font size="5">French president Nicolas Sarkozy declaring that the under-regulated system we once knew is now "finished," and German finance minister Peer Steinbruck saying the crisis marks the beginning of a multi-polar world, where the US is no longer a superpower.<br /></font></strong><br /><br />"The all-powerful market that always knows best is finished," says France's president (Photo: European Parliament - Audiovisual Unit)<br /><br /><br />Speaking to an audience of some 4,000 supporters in Toulon, France, <strong><em><font color="#ff0000" size="4">Mr Sarkozy said the financial turmoil had highlighted the need to re-invent capitalism with a strong dose of morality, as well as to put in place a better regulatory system.<br /></font></em></strong><br /><br />"The idea of the all-powerful market that must not be constrained by any rules, by any political intervention, was mad. The idea that markets were always right was mad," Mr Sarkozy said.<br /><br /><br /><strong><font color="#ff0000" size="4">"The present crisis must incite us to refound capitalism on the basis of ethics and work … Self-regulation as a way of solving all problems is finished. Laissez-faire is finished. The all-powerful market that always knows best is finished," he added.<br /></font></strong><br /><br /><br />He accused "this system that allows the ones responsible for a disaster to leave with a golden parachute" of having "increased inequality, demoralised the middle classes and fed [market] speculation."<br /><br /><br />A European response<br /><br /><br /><br /><br /><strong><font color="#ff0000">The French president</font></strong> also criticised "the logic of short-term financial profit" and said risks were hidden "to obtain ever more exorbitant profits" – something which, he said, was not the true face of capitalism.<br /><br /><br /><strong><font color="#ff0000" size="4">"The market economy is a regulated market ... in the service of all. It is not the law of the jungle; it is not exorbitant profits for a few and sacrifices for all the others. The market economy is competition that lowers prices ... that benefits all consumers."<br /></font></strong><br /><br /><br /><br />The speech by Mr Sarkozy, who is also the EU's current president-in-office, echoes similar statements he made earlier this week, when he called for an international meeting to discuss the crisis before the end of the year.<br /><br /><br /><br />On Thursday, he also called on Europe to "reflect on its capacity to act in case of an emergency, to re-consider its rules, its principles," while learning the lessons from what is happening worldwide.<br /><br /><br /><br /><br />Mr Sarkozy said: "For all Europeans, it is understood that the response to the crisis should be a European one."<br /><br /><br />"In my capacity of president of the Union, I will propose initiatives in that respect at the next European Council [15 October]," he added.<br /><br /><br /><strong>'The world will never be the same again'</strong><br /><br /><br /><strong><font color="#ff0000" size="4">Meanwhile, German finance minister Peer Steinbruck criticised the US for failing to act in the wake of the crisis and said it would now lose its status of "superpower."</font></strong><br /><br /><br /><strong><font color="#ff0000" size="4">"The US will lose its status as the superpower of the world financial system. This world will become multi-polar,"</font></strong> with the emergence of centres in Asia and Europe, he told the German parliament on Thursday.<br /><br /><p> </p><p>"The world will never be as it was before the crisis," he added.<br /></p>Mr Steinbruck's criticism of the US has been amongst the sharpest yet made since the beginning of the crisis.<br /><br /><br /><strong>He notably blamed Washington for resisting stricter regulation, even after the crisis started last summer, and said this free-market-above-all attitude and the argument "used by these 'laissez-faire' purveyors was as simple as it was dangerous," the Associated Press reports.<br /></strong><br /><br />He stressed that Germany had made recommendations last year for more rules, which Washington refused to consider.<br /><br /><br /><br />They "elicited mockery at best or were seen as <strong><font size="4">a typical example of Germans' penchant for over-regulation,"</font></strong> Mr Steinbruck said.<br /><br /><br /><br /><br />Earlier this week, German foreign minister Frank-Walter Steinmeier also said the US should have listened to the advice coming from Europe, notably from Germany, that more control was needed.<br /><br /><br />"It is a discussion that we have had for a long time in Europe, that the completely unregulated parts of the international financial market must be more closely monitored and that we must try to reach an agreement on common regulations," he said during a visit to the New York Stock Exchange on Wednesday, according to Forbes.<br /><br />------------------------------------------------------------------------------------------------<br /><br /><a href="http://www.nytimes.com/2008/09/26/business/worldbusiness/26france.html?partner=rssnyt&emc=rss">http://www.nytimes.com/2008/09/26/business/worldbusiness/26france.html?partner=rssnyt&emc=rss</a><br /><br /><strong><font size="4">Sarkozy Stresses Global Financial Overhaul</font></strong><br /><br /><br /><br />By STEVEN ERLANGER<br /><br /><br />New York Times<br /><br /><br />September 26, 2008<br /><br /><br /><br />Correction Appended<br /><br /><br />PARIS — President <a title="More articles about Nicolas Sarkozy" href="http://topics.nytimes.com/top/reference/timestopics/people/s/nicolas_sarkozy/index.html?inline=nyt-per">Nicolas Sarkozy</a> of <a title="More news and information about France." href="http://topics.nytimes.com/top/news/international/countriesandterritories/france/index.html?inline=nyt-geo">France</a> tried to reassure citizens on Thursday that their savings and the nation’s economy were safe. While the global financial crisis will have serious consequences for the French economy, he said, bank deposits will be guaranteed and individual taxes will not be raised.<br /><br /><br /><strong><font color="#ff0000">Mr. Sarkozy</font></strong> promised that the government would move ahead with its reforms, especially in shrinking the bloated state sector, and he <strong><font color="#ff0000">called for an overhaul of the world’s financial system, arguing that an era of unregulated markets was over.<br /></font></strong><br /><br />“A certain idea of globalization is dying with the end of a financial capitalism that had imposed its logic on the whole economy and contributed to perverting it,” he said.<br /><br /><br /><br /><strong><font color="#ff0000">“The idea of the all-powerful market that could not be contradicted by any rules, by any political intervention” was “a crazy idea,” he said. “The idea that the market is always right is a crazy idea.” </font></strong><br /><strong><font color="#ff0000"></font></strong><br /><br /><strong><font color="#ff0000">Mr. Sarkozy</font></strong> spoke to a rally of 4,000 supporters in the southern city of Toulon, but his speech, described by his office as a major address on the economy, was televised nationwide.<br /><br /><br /><br /><br />“The crisis isn’t over, and the consequences will be serious,” he said.<br /><br /><br />“Like everywhere else in the world, the French are scared. Scared for their savings, scared for their jobs, scared for their purchasing power.”<br /><br /><br />The main threat to the economy, he said, is fear, and it can be conquered only by telling the truth. He called again for a conference of world leaders before year-end to address the underlying reasons for the crisis.<br /><br /><br />“We’ve just passed two fingers from catastrophe,” he said. <strong><font color="#ff0000">“Self-regulation, to fix all problems, is over. Laissez-faire is over.”<br /></font></strong><br /><br /><strong>Mr. Sarkozy</strong> emphasized that he was deeply engaged in trying to manage the crisis and <strong>would pursue his main economic reforms. Those include a shrinking of the large state sector, eliminating 30,600 jobs next year and streamlining local government, and allowing more workers, despite the 35-hour week, to get overtime pay without significantly higher taxes</strong>.<br /><br /><br />But his speech, while long on rhetoric about the abuses of capitalism, was short on specifics, especially on regulating and improving the global system.<br /><br /><br /><br />The French are already anxious about their purchasing power falling behind inflation and are convinced that America’s economic problems will worsen their own financial status.<br /><br /><br /><br /><br />Already, forecasts for French economic growth for next year have been cut in half to about 1 percent, and slower growth will inevitably mean lower tax revenue and a higher budget deficit.<br />In the budget he is scheduled to deliver on Friday, Mr. Sarkozy is expected to announce a freeze on government spending and a retreat from promises to balance the budget by 2012 — a target that was already two years behind a <a title="More articles about the European Union." href="http://topics.nytimes.com/top/reference/timestopics/organizations/e/european_union/index.html?inline=nyt-org">European Union</a> goal for member countries.<br /><br /><br />The public deficit is expected to reach 2.7 percent of gross domestic product this year, and economists worry that without harsher spending cuts, France will exceed the 3 percent limit of the European Union next year. But the high deficit leaves Mr. Sarkozy little maneuvering room to avert a slowdown, especially since the <a title="More articles about European Central Bank" href="http://topics.nytimes.com/top/reference/timestopics/organizations/e/european_central_bank/index.html?inline=nyt-org">European Central Bank</a>, which controls the euro currency, sees its main mission as controlling inflation.<br /><br /><br />French business confidence fell in September to its lowest level since mid-2003, according to Insee, the statistics office.<br /><br /><br /><br />On Thursday, Laurence Parisot, head of the main French business lobby, Medef, said that “the financial crisis, which came from the Unites States, is something extremely serious — it is a Sept. 11 of finance.”<br /><br /><br /><br /><br />This financial crisis “could provoke a very dangerous economic crisis,” she said, risking a serious recession.<br /><br /><br />Still, France has so far been reasonably well insulated from the American crisis, in large part because French banks are still heavily retail, mortgages normally require significant down payments and French regulations do not allow subprime mortgages.<br /><br /><br />This article has been revised to reflect the following correction:<br /><br /><br />Correction: October 1, 2008 An article on Friday about calls for an overhaul of the global financial system by President Nicolas Sarkozy of France referred incorrectly to the head of the French business lobby Medef. Laurence Parisot is a woman.<br /><br />------------------------------------------------------------------------------------------------<br /><br /><a href="http://www.irishtimes.com/newspaper/breaking/2008/0925/breaking74.htm">http://www.irishtimes.com/newspaper/breaking/2008/0925/breaking74.htm</a><br /><br /><br /><br />Sarkozy demands overhaul of global capitalism<br /><br /><br /><br />Irish Times<br /><br /><br /><br />September 25, 2008<br /><br /><br /><br />French president Nicolas Sarkozy <strong><font size="4">demanded</font></strong> an overhaul of the world's capitalist system today, saying the financial crisis had laid bare serious flaws in international banking.<br /><br /><br />In a keynote speech on the market mayhem, Mr Sarkozy said the crisis would weigh on the French economy for months to come, but promised that nobody in France would lose their bank deposits.<br /><br /><br /><strong><font color="#ff0000" size="4">"A certain idea of globalisation is drawing to a close with the end of a financial capitalism that had imposed its logic on the whole economy and contributed to perverting it,"</font></strong> Mr Sarkozy told some 4,000 supporters at a rally in southern France.<br /><br /><br />"The idea of the absolute power of the markets that should not be constrained by any rule, by any political intervention, was a mad idea. The idea that markets are always right was a mad idea," he said.<br /><br /><br /><br /><br />He repeated his call for major power leaders to meet before the end of the year to map out a new financial system and said it was vital to review currency levels, adding that both the dollar and Chinese yuan were undervalued.<br /><br /><br />"We cannot continue to manage the economy of the 21st century with the instruments of the economy of the 20th century," he said.<br /><br /><br /><br />He also warned bankers and business leaders to curb their salary levels, saying the government would introduce legislation by the end of the year if they failed to reform themselves.<br /><br /><br />Reuters<br /><br />------------------------------------------------------------------------------------------------<br /><br /><a href="http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3081909/Financial-Crisis-US-will-lose-superpower-status-claims-German-minister.html">http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3081909/Financial-Crisis-US-will-lose-superpower-status-claims-German-minister.html</a><br /><br /><strong><font size="4">Financial Crisis: US will lose superpower status, claims German minister</font></strong><br /><br /><br />By Ambrose Evans-Pritchard<br /><br /><br />Telegraph UK<br /><br /><br /><br />Last Updated: 11:31PM BST 25 Sep 2008<br /><br /><br /><br /><em><strong>German finance minister Peer Steinbrück has slammed Anglo-American capitalism for endangering global stability in its lust for profit and predicted that the US would now be toppled as the superpower of international finance.</strong></em><br /><br /><br /><br />In a remarkable outburst at the German parliament, Mr Steinbrück said the world would never be the same after “Black September”. He demanded a sweeping code of regulations to “civilise the financial markets” and clamp down on speculators.<br /><br /><br />Mr Steinbrück announced a swingeing eight-point plan to reorder the global markets - which will heighten fears in the City of London of interference by the European Commission.<br /><br /><br /><strong>“The US will lose its superpower status in the global financial system,” he said, predicting a new multi-polar order where power is spread across the globe.<br /></strong><br /><br /><strong><font size="4">“The financial crisis is above all an American problem. The other G7 financial ministers in continental Europe share this opinion,”</font></strong> he said, a pointed turn of phrase that excludes Britain’s Alistair Darling.<br /><br /><br />“This inadequately regulated system is now collapsing, with far-reaching consequences for the US financial market and contagion effects for the rest of the world,” he said.<br /><br /><br />The current single market commissioner – Irish “Thatcherite” Charlie McCreevy – is almost certain to be replaced by a much more dirigiste successor next year.<br /><br /><br /><strong><font size="4">Senior politicians in France and Germany have in recent weeks called for a radical shake-up of the market system. A powerful EU faction that has always been hostile to the City of London – which is known in Brussels as “the casino” – see this crisis as a rare chance to ram through irreversible changes.<br /></font></strong><br /><br />“They want to regulate the capital levels of every firm and partnership, limit takeovers and regulate asset stripping. In short, they want to regulate the Anglo-Saxon version of capitalism out of existence,” said John Whittacker, MEP and UKIP’s economic spokesman.<br /><br /><br /><br />Mr Steinbrück said the deft response of the world leaders in recent days had averted catastrophe. “Crisis management worked. We did not have a collapse of the international financial system,” he said.<br /><br /><br /><br /><br />Mr Steinbrück said the drive for short-term profit and huge bonuses in the Anglo-Saxon world was the root cause of the gravest crisis in decades. “Investment bankers and politicians in New York, Washington and London were not willing to give these up,” he said.<br /><br /><br />Meanwhile, ratings agency Fitch said the vast bail-outs agreed yesterday by the US Congress do not add significantly to America’s public debt of 57pc of GDP since the money is being used to buy assets, which are backed by collateral.<br /><br /><br />“You can’t just add up these liabilities and treat them the same way as government debt,” said Fitch’s managing director, Brian Coulton.<br /><br /><br /><br />Germany itself is no longer a model risk. Fitch said the country has a public debt of 65pc of GDP, the highest level within the elite group of AAA-rated nations.<br /><br />------------------------------------------------------------------------------------------------<br /><br /><a href="http://www.iht.com/articles/2008/09/25/business/reax.php">http://www.iht.com/articles/2008/09/25/business/reax.php</a><br /><br /><strong><font size="4">Clergymen join politicians in Europe to criticize U.S. capitalism</font></strong><br /><br /><br /><a href="http://www.iht.com/cgi-bin/search.cgi?query=By" sort="'publicationdate&submit=">By Eric Pfanner</a><br /><br /><br />International Herald Tribune<br /><br /><br />Published: September 25, 2008<br /><br /><br /><a href="http://www.nytimes.com/2008/09/26/business/worldbusiness/26euro.html?ref=worldbusiness">http://www.nytimes.com/2008/09/26/business/worldbusiness/26euro.html?ref=worldbusiness</a><br /><br /><br /><br /><strong>Criticizing Capitalism From the Pulpit</strong><br /><br /><br />By <a title="More Articles by Eric Pfanner" href="http://query.nytimes.com/search/query?ppds=bylL&v1=ERIC" inline="'nyt-per" fdq="19960101&td=sysdate&sort=newest&ac=ERIC">ERIC PFANNER</a><br /><br /><br /><br />New York Times<br /><br /><br /><br />September 26, 2008<br /><br /><br /><br />PARIS — Whatever happened to “God helps those who help themselves?”<br /><br /><br /><strong><font color="#ff0000" size="5">Even religious leaders have joined the chorus of Europeans criticizing unbridled, American-style capitalism, which Continental politicians have cited as a root cause of the global financial crisis.<br /></font></strong><br /><br />The archbishop of Canterbury, <a title="More articles about Rowan Williams." href="http://topics.nytimes.com/top/reference/timestopics/people/w/rowan_williams/index.html?inline=nyt-per">Rowan Williams</a>, wrote this week in The Spectator, a British magazine, that placing too much trust in the market had become a kind of “idolatry.” <strong><font color="#ff0000">At the same time, he reminded readers of </font></strong><a title="More articles about Karl Marx." href="http://topics.nytimes.com/top/reference/timestopics/people/m/karl_marx/index.html?inline=nyt-per"><strong><font color="#ff0000">Karl Marx</font></strong></a><font color="#ff0000"><strong>’s criticism of laissez-faire capitalism, noting, “He was right about that, if about little else.”</strong><br /></font><br /><br />Mr. Williams, the spiritual leader of the Anglican church, called for increased regulation of financial markets, praising regulators’ moves to curb short-selling in the wake of the collapse of <a title="More articles about Lehman Brothers." href="http://topics.nytimes.com/top/news/business/companies/lehman_brothers_holdings_inc/index.html?inline=nyt-org">Lehman Brothers</a> and sharp declines in the share prices of other financial institutions.<br /><br /><br />“Governments should not lose their nerve as they look to identify a few more targets,” he added.<br /><br />In the trans-Atlantic sniping over the causes and solutions to the credit crunch, Mr. Williams’s scolding tone has been echoed by some European politicians.<br /><br /><br />Peer Steinbrück, the German finance minister, blamed a reckless pursuit of short-term profit and outsize bonuses in “Anglo-American” financial centers — as well as a lack of backbone among policy makers unwilling to stand up to this greed.<br /><br /><br />Addressing the Bundestag Thursday, he said, the long-term consequences would be punitive for American prestige.<br /><br /><br />“The U.S. will lose its status as the superpower of the world financial system,” Mr. Steinbrück said. “The world financial system will become multipolar.”<br /><br /><br />Mr. Steinbrück reaffirmed the German government’s opposition to a costly bailout of the financial system. The Bush administration has called on other countries to join in its proposed $700 billion cleanup of troubled bank assets.<br /><br /><br /><strong><font size="4">Mr. Steinbrück,</font></strong> like Mr. Williams, also urged policy makers to enhance financial oversight.<br />The Wall Street crisis, with its complex arcana — collateralized debt obligations and the like — might seem like unusual waters for a religious leader to wade into, but Mr. Williams has not shied away from making headlines on sensitive subjects. <strong><font size="4">He caused gasps in Britain earlier this year, for instance, when he said there might be a role for Islamic Shariah law in settling disputes within the British Muslim community.<br /></font></strong><br /><br />Another British clergyman, John Sentamu, the archbishop of York, was even less circumspect than Mr. Williams in criticizing hedge funds that had sold short the shares of a British bank, HBOS, forcing it in an emergency sale to a rival, <a title="More information about Lloyds TSB Group Plc" href="http://topics.nytimes.com/top/news/business/companies/lloyds-tsb-group-plc/index.html?inline=nyt-org">Lloyds TSB</a>.<br /><br /><br />They were “clearly bank robbers and asset strippers,” he said in a speech Wednesday evening.<br />Mr. Williams did not specifically blame the United States for the crisis — British investors profited as much as American high-rollers from the boom, and the bust has hit London almost as hard as New York — but Mr. Steinbrück did.<br /><br /><br /><br />“The United States is the source and the obvious focus of the crisis,” he said, adding that it had spread from America to Europe like a “toxic oil slick.” Mr. Steinbrück said he saw no reason for Germany or other European countries to take part in a bailout.<br /><br /><br /><br />He argued that the German financial system had weathered the storm better in part because it was anchored by universal banks like <a title="More information about Deutsche Bank AG" href="http://topics.nytimes.com/top/news/business/companies/deutsche_bank_ag/index.html?inline=nyt-org">Deutsche Bank</a>, with operations that span consumer lending and investment banking. The last two big independent investment banks, <a title="More information about Goldman Sachs Group Incorporated" href="http://topics.nytimes.com/top/news/business/companies/goldman_sachs_group_inc/index.html?inline=nyt-org">Goldman Sachs</a> and <a title="More information about Morgan Stanley" href="http://topics.nytimes.com/top/news/business/companies/morgan_stanley/index.html?inline=nyt-org">Morgan Stanley</a>, have moved toward such a model since the crisis deepened.<br /><br /><br /><br />Mr. Steinbrück said European banks would now play a greater role in the world financial system.<br /><br />------------------------------------------------------------------------------------------------<br /><br /><a href="http://www.eubusiness.com/news-eu/1222182157.67">http://www.eubusiness.com/news-eu/1222182157.67</a><br /><br /><strong><font size="4">France's Sarkozy calls for summit on 'regulated capitalism'</font></strong><br /><br /><br /><br />EU Business<br /><br /><br /><br />23 September 2008, 23:00 CET<br /><br /><br /><strong><font color="#3366ff" size="4">(UNITED NATIONS)</font></strong> - <strong>French President Nicolas Sarkozy</strong> called Tuesday for an international summit to address the global financial crisis, <strong>advocating a "regulated capitalism" to end abuses.<br /></strong><br /><br /><br />In his first public comments since the crisis erupted, Sarkozy went before the UN General Assembly to invite fellow leaders to learn quickly the lessons from the torment that has seized the financial markets.<br /><br /><p> </p><p>"I'm convinced that it's the duty of heads of state and government of the countries most directly concerned to meet before the end of the year to examine together the lessons of the most serious financial crisis the world has experienced since that of the 1930s," Sarkozy said.<br /></p>Sarkozy, whose country holds the rotating presidency of the European Union, told reporters later that he aimed for a summit in November of the Group of Eight (G8) leading industrial countries, but possibly including emerging countries like China.<br /><br /><br /><strong>He hoped such a meeting would set down "principles and new rules" for the financial system, which will help settle big problems with rating agencies, bank solvency, executive bonuses and hedge funds.</strong><br /><br /><br /><strong><em>"What is important is that no country, even the most powerful in the world, can provide an effective response to the crisis that the world alone is experiencing," the Frensh leader said.<br /></em></strong><br /><br /><br /><br />Before the UN General Assembly,<strong><font color="#ff0000"> Sarkozy did not offer specific recipes for how to put ethical checks on businesses.<br /></font></strong><br /><br /><strong><font color="#ff0000">But he has long appealed for rebuilding "a regulated capitalism in which whole swathes of financial activity are not left to the sole judgment of market operators."</font></strong><br /><br /><br />As he did on Monday evening when he received the Elie Wiesel Foundation's humanitarian award, Sarkozy said he wanted a system in which "those who jeapordize people's savings are punished."<br /><br /><br />Before US and French business and finance leaders, Sarkozy said those responsible for what he called a "disaster" to be "punished and held accountable."<br /><br /><br />Speaking to reporters, he railed against critics, especially those in France, who dismissed his appeals as simplistic.<br /><br /><br />"Freedom without accountability will lead us where? It will lead us where we are today," Sarkozy said.<br /><br /><br /><strong><font color="#ff0000" size="4">"This crisis came from a real deviation from the market economy mechanisms. Capitalism, which should be geared to production, indulged in speculation," he added.<br /></font></strong><br /><br />He slammed the corporate reward system of bonuses for business leaders who succeed and "golden parachutes" for those who are let go.<br /><br /><br />"This is a rather curious system. When things are going well, when big bonuses are being handed out, mega bonuses, we know who is responsible," he said.<br /><br /><br /><br /><br />"When it doesn't work on the other hand ... then we don't know who is responsible," he added.<br /><strong><font color="#ff0000" size="5">Sarkozy recalled that it was almost exactly a year ago to the day when he pleaded at the same UN forum for a "New Deal" to address problems both with the economy and environment.<br /></font></strong><br /><br />It was President Franklin Roosevelt who introduced the "New Deal" to rescue the US economy from the stock market crash of 1929.<br /><br /><br /><strong><font color="#ff0000">Sarkozy pushed for a form of capitalism focusing more on development and less on speculation</font></strong>.<br />"There is a solution ... It is time now to act," the French leader said.<br /><br /><br />Text and Picture Copyright 2008 AFP.<br /><br />------------------------------------------------------------------------------------------------<br /><br /><a href="http://network.nationalpost.com/np/blogs/fpcomment/archive/2008/09/20/a-crisis-of-global-statism.aspx">http://network.nationalpost.com/np/blogs/fpcomment/archive/2008/09/20/a-crisis-of-global-statism.aspx</a><br /><br /><strong><font size="4">A crisis of global statism</font></strong><br /><br /><br />By Lawrence Solomon<br /><br /><br />Financial Post<br /><br /><br />September 20, 2008<br /><br /><br /><strong><font color="#ff0000" size="5">The current financial turmoil is a “crisis of capitalism,” said a spokesman for Britain’s Socialist Workers Party, as good Marxists have been repeating for more than a century.<br /></font></strong><br /><br />“[A]n unregulated financial system is a disaster,” echoed Sheila Rowbotham, professor of gender and labour history at Manchester University. <strong><font color="#ff0000" size="5">Added a leftist London mayoral candidate, “Capitalism has had its chance and failed; now it’s socialism’s turn.”<br /></font></strong><br />I wonder what they have been smoking.<br /><br /><br />Remember that the financial crisis opened last year with the meltdown of the American subprime mortgage market. At that time, half of the residential mortgages in the U.S. were already held or guaranteed by Fannie Mae and Freddy Mac, two so-called “government sponsored enterprises” (GSE). Over the past year, the two GSEs have financed four out of five mortgages. Fannie May was created in the wake of the Great Recession by Franklin D. Roosevelt; Freddy Mac by Congress in 1970. Private investors happily bought securities issued by the two GSEs because they knew the federal government would never let these companies fail – which proved true last week when they were entirely taken over by Washington. Before the crisis started, the American mortgage market was a paragon of socialism, unparalleled in any other Western country.<br /><br /><br /><strong><font size="5">The 1997 Community Reinvestment Act</font></strong>, which prevents mortgage lenders from “discriminating” against minority applicants, did not help sound financial decisions. At every turn of a financial decision, some regulator is lurking.<br /><br /><br />The American financial system is tightly regulated. Created in 1934, the powerful Securities and Exchange Commission (SEC) enforces regulations on all kinds of financial transactions, from registration of securities to disclosure of corporate information. The 2002 Sarbanes-Oxley Act further extended the intervention domain of the SEC. The U.S. Department of Justice prosecutes CEOs and entrepreneurs, and the convicted targets are often given long jail sentences. On Thursday, the New York Attorney General, a would-be Elliot Spitzer or Patrick Fitzgerald, announced that he has started a “wide-ranging investigation into short selling in the financial market.”<br /><br /><br />When Treasury Secretary Hank Paulson says, “I don’t believe in raw capitalism without regulation,” he is not revealing a scoop. He is reiterating what has been official American policy for the last century. Whether the result is financial socialism with a human capitalist face, or state capitalism with a strong socialist flavour, it is a matter of choosing between a half empty and a half full glass.<br /><br /><br />The partial exportation of American regulation to other countries has led to a sort of global financial statism.<br /><br /><br />Another source of financial turmoil has been the brisk increase in the money supply by the American central bank, the Federal Reserve System, as indicated in higher inflation and low interest rates. For many years, economists of the so-called “Austrian” school of economics (in the wake of late Nobel prizewinner Friedrich Hayek and Ludwig von Mises) have warned us of an impending disaster if money is pumped into the economy to prevent necessary adjustments. This, they claimed, will ultimately bring a worse crisis.<br /><br /><br />There is no inherent reason to trust the state to regulate efficiently. The state is made of men (politicians and bureaucrats) who respond to their own incentives and interests. If there is a political gain to be made from expanding mortgages and postponing a crisis for future politicians to deal with, it will be pursued.<br /><br /><br />Despite this, a false confidence in the power of the state to guarantee stability has developed. Some investors have come to believe that, whatever mistake they make, they have a right to their profits, and the authorities will enforce it. The rescue of Bear Stearns, the two GSEs and AIG will only fuel this belief. But if some people have made bad investments and are relieved from their responsibility for their own mistakes, it only means that the cost will be transferred to others, probably through a worst crisis.<br /><br /><br />Moreover, as many commentators have remarked, guaranteeing large financial firms from failure will bring calls for regulating them still more tightly. This is old story: past political interventions create the reasons for new ones.<br /><br /><br />The present financial turmoil is really a failure of global statism. Socialism has failed once again. Let’s try capitalism.<br /><br /><br />Pierre Lemieux is an economist in the Department of Management Sciences of the Université du Québec en Outaouais and a research fellow at the Independent Institute, Oakland, CA (e-mail: pierre.lemieux@uqo.ca).<br /><br />-------------------------------------------------------------------------------------------------<br /><a href="http://www.iht.com/articles/2008/09/19/opinion/edlet.php">http://www.iht.com/articles/2008/09/19/opinion/edlet.php</a><br /><br /><strong><font size="4">American socialism; Put not your faith in princes</font></strong><br /><br /><br />International Herald Tribune<br /><br /><br />Editorial Opinion<br /><br /><br />Published: September 19, 2008<br /><br /><br /><strong><font color="#ff0000" size="4">American socialism<br /></font></strong><br /><br />The bailouts of Bear Stearns, Fannie Mae and Freddie Mac and now of AIG ("U.S. takes radical steps to save AIG," Sept. 18) show that nationalization and state intervention are no longer dirty words in the United States.<br /><br /><br />Ironically, these multibillion-dollar bailouts are being carried out by an administration that preaches the virtues of the free market and private enterprise to the rest of the world.<br /><br /><br />For decades, Washington has been cautioning the world against injecting public money into the banking system while demanding greater deregulation and privatization of the financial sector. When India and China recapitalized their banking systems some years ago, they were severely criticized by the United States. Do as the United States says, not as it does.<br /><br />Who says that socialism is dead? It is alive and kicking in America. But this socialism nationalizes losses and privatizes profits.<br /><br /><br />Kavaljit Singh Delhi, India<br /><br /><br />America is losing its credibility due to gross mismanagement of foreign policy and economic controls.<br /><br /><br />One can blame either political party, but collectively, during the past decade, the American government has failed its citizens.<br /><br /><br />We should remember all empires eventually weaken, if not crumble. Any schoolboy - at least in my generation - knows that a country must raise taxes to fight a war - or it pays in the end. It comes as no surprise that America's madcap spending spree of the past five years has come to no good; nothing defies economic gravity forever.<br /><br /><br />Tom Coyner, Seoul<br /><br /><br />Put not your faith in princes<br /><br /><br /><strong>Politicians have failed America. America's children will inherit crises of epic proportions</strong>.<br /><br /><br />If the United States overcomes the severe financial, environmental, energy, health, housing and other challenges, it will not be because of politicians. It will likely be because ordinary citizens and their communities somehow find ways to address the country's life-and-death issues.<br /><br /><br />The arrogance and self-serving ways of some national politicians is breathtaking. Service leadership is beyond them.<br /><br /><br />The hope for America seems not to rest with most of the country's leaders, but with people who work with organizations like the Red Cross, Salvation Army, Boy Scouts, religious relief and refugee agencies and chambers of commerce.<br /><br />Donovan Russell, Moravia, New York<br /><br />-------------------------------------------------------------------------------------------------<br /><br /><a href="http://www.socialistgroup.eu/gpes/newsdetail.do?id=96993&lg=en">http://www.socialistgroup.eu/gpes/newsdetail.do?id=96993&lg=en</a><br /><br /><br /><br /><br /><strong><em><font color="#ff0000">Socialists call for stronger financial and economic coordination. Pervenche Berès MEP, who chairs the <font color="#000099">European Parliament Committee on Economic and Monetary Affairs</font>, today called for "stronger financial and macro-economic co-ordination in the Euro zone."</font></em></strong><br /><br />THE SOCIALIST GROUP IN THE EUROPEAN PARLIAMENT<br /><br /><br />11/09/2008 - <strong><font color="#ff0000">Socialists call for stronger financial and economic coordination.<br /></font></strong><br /><br />Pervenche Berès MEP, who chairs the European Parliament Committee on Economic and Monetary Affairs, today, 11 September 2008, called for "stronger financial and macro-economic co-ordination in the Euro zone."<br /><br /><br />"I regret that for the time being a coordinated and swift response from the Euro group to the recent bad growth figures seems to be impossible. The US government was able to launch a massive budgetary plan to support its economy while the ECB was able to react quickly last summer. "<br /><br /><br />Speaking before the informal meeting of the Euro group and Finance Ministers in Nice tomorrow, Pervenche Berès asked "where is the response from the Euro group, when will we finally give ourselves instruments to act?".<br /><br /><br />European Central Bank President, Jean-Claude Trichet, yesterday confirmed to the European Parliament's Committee on Economic and Monetary Affairs that higher commodity prices had pushed inflation to 4% this year, and that Euro zone inflation is at a "worrying" level and could stay high in the months ahead.<br /><br /><br />Ms Berès was satisfied with Jean-Claude Trichet's admission at the meeting - "there will be no return to the status quo ante.... This crisis is new because it is at the heart of the system in the industrialised countries," M. Trichet had said.<br /><br /><br />Pervenche Berès added "obviously the way we are thinking about the relationship between monetary policy and financial markets is fundamentally going to change:"<br /><br /><br />At the same meeting chaired by Ms. Berès, Jean-Claude Juncker, the President of the Euro group, called for more economic coordination.<br /><br /><br />"I fully support him," said Ms Berès. "He said that the current situation is 'improving but more has to be done' - and he was quite right."<br /><br /><br />She added "all the main economic actors should draw lessons from the present financial crisis and use this opportunity after 10 years of successful European Monetary Union to agree on a strong, more ambitious roadmap aimed at improved economic coordination in Europe",<br /><br /><br />The European Parliament is currently drawing up a roadmap, concrete proposals are on the table for discussion, and these will include the future international representation of the Euro zone.<br /><br /><br />Contact: David Poyser<br />GSM/mobile 00 32 476 540886<br /><a href="http://www.socialistgroup.eu/">http://www.socialistgroup.eu/</a><br /><br />-------------------------------------------------------------------------------------------------<br /><br /><a href="http://www.newsocialist.org/index.php?id=1636">http://www.newsocialist.org/index.php?id=1636</a><br /><br /><strong><font size="4">Global Instability and Challenges to the Dollar: Assessing the Current Financial Crisis<br /></font></strong><br /><br />By David McNally<br /><br /><br />New Socialist<br /><br /><br />We are living through financial turmoil so serious at the moment that the International Monetary Fund calls it “the largest financial crisis in the United States since the Great Depression.” Already, commercial banks have collapsed in both Britain and Germany, as has the fifth-largest investment bank on Wall Street. A series of hedge funds have gone under or are teetering on the brink of ruin. It is a near certainty that more financial institutions will fail before the crisis burns out.<br /><br /><br /><strong><font color="#ff0000">It is clear that the Left needs serious analysis of just what is happening to world capitalism at the moment. Too often, however, our assessments are stuck in the past, revolving around debates as to whether or not this crisis represents a repeat of 1929 and the Great Depression.<br /></font></strong><br /><br />Such debates detract from the hard work of analysis that is needed. <strong>Ignoring the inherently dynamic and historical nature of capitalist society and the continual transformations this involves, they take one particular historical moment in the history of capitalism as the norm against which all others will be measured.</strong> The end result is a sterile exchange between, on the one hand, those who assume that history tends to repeat itself and, on the other side, those critics who so exaggerate what has changed (particularly the ability of central banks to dampen tendencies to financial instability) that they present a picture of a capitalism whose contradictions have been effectively muted.<br /><br /><br />The real challenge for Marxist analysis, however, is to grasp both the changes and the enduring economic contradictions within capitalism, in order to understand how capitalist transformation displaces and reorganizes crisis tendencies without eliminating them.<br />In the absence of such analysis, much of the radical commentary on offer tends to focus on the blatant deceit and corruption of financial players who have contributed to the market upheaval. This has its purposes. But it runs the risk of downplaying the structural features of late capitalism that breed financial meltdowns – and in so doing of suggesting that the Left should focus on issues like financial regulation rather than class struggle against capital.<br /><br /><br />Trying to make sense of this crisis is one important step toward developing both an analysis of late capitalism and some of the tasks that confront the Left. To be sure, any assessment of unfolding events will necessarily be partial and incomplete. Nonetheless, it is possible to offer some crucial guidelines for making sense of this crisis.<br /><br /><br />A Banking Crisis, Not a Liquidity Crisis<br /><br /><br />It is critical to recognize at the outset that, contrary to the claims of central banks, this is not a liquidity crisis, i.e. financial turmoil caused by insufficient supplies of money flowing through the financial system. Instead, we are dealing with an insolvency crisis caused by the fact that many financial institutions are effectively broke. The result is a trauma in the banking sector.<br /><br /><br />This trauma persists because a myriad of lending institutions hold billions of dollars in massively depreciated paper that nobody is interested in buying from them. There is a host of exotic names for this paper – Collaterallized Debt Obligations (CDOs), Asset Backed Commercial Paper (ABCP) and so on – but essentially it is an array of debt obligations, or titles to payment of interest and principal on a vast array of loans. Until the crisis broke, investors had been treating such paper as a stock of assets that could at any time be sold, i.e. as liquid wealth. Yet, the value of a debt rests in the first instance on the capacity of the borrower to pay. If the borrower cannot pay, the alternative is for the creditor to seize the asset. But if the asset itself is losing value, then it may not cover the loan – and there might not be anyone out there who wants to buy it. In short, it may not be convertible to cash.<br /><br /><br />And that is precisely what is happening on a larger and more complex scale today. Economic reality is demonstrating that much of this paper – tied in the first instance to tens of millions of US mortgages – is worth billions of dollars less than what was paid for it. So, much of it is being written off or written down (revalued at amounts that involve enormous losses). It is as if you once had $1000 in the bank, against which you had borrowed many times that amount (say, ten times that amount or $10,000), and you have now learned that you only have $500. Once your creditors discover that, they will scramble to collect in the knowledge that there’s no way you will ever pay off all that you owe. But your $500 will be gone pretty fast. And since you owe $10,000, a lot of your creditors won’t be able to collect. And they won’t be able to sell off your debts to anyone else either.<br /><br /><br />Fictitious Capital in the Current Crisis<br /><br /><br />To their holders debts, no matter what their exotic names, are forms of fictitious capital, to use Marx’s term. Rather than consisting of actual assets – such as machines, equipment, factories, buildings or stocks of commodities – that have been produced by past labour, fictitious capitals are paper titles to future wealth. So, if I purchase someone’s mortgage, I have bought a claim to their future mortgage payments. But this claim only becomes real when they have met all the payments required. Until such time, my “capital” in the form of someone’s mortgage remains largely fictitious, or unreal. Stocks, bonds and a whole host of complex financial instruments all qualify as fictitious capitals, where money has been paid for future returns that may or may not materialize.<br /><br /><br />When capitalism is in a boom or prosperity phase, capitalists rarely worry about the idea that future returns might not materialize. Banks, corporations and investors frenetically buy and sell paper claims to wealth, often with manic get-rich-quick expectations. These are the moments when asset bubbles develop, i.e. ridiculously inflated prices for things like shares of dotcom companies or real estate in Tokyo or San Francisco. So over-confident are investors about the solidity of their fictitious capitals that they use them as means of payment between financial institutions and investors as if they were hard cash.Bubbles burst, however. And when they first start to lose air an investor panic sets in. All of a sudden, those holding commercial paper realize it is not as good as cash. Indeed, as its value plummets, buyers are hard to find and the values of fictitious capitals start to collapse. At such moments, institutions and individual investors begin panic selling. And they start to call in their loans to other companies or investors. Over night, cash and cash alone becomes king.<br /><br /><br />“A monetary crisis,” writes Marx, “occurs only where an ongoing chain of payments has been developed along with an artificial system for settling them. Whenever there is a general disturbance . . . money suddenly and immediately changes over from its merely nominal shape, money of account, into hard cash…” [1]<br /><br /><br />And at such moments, capitalists start to trust only those who have great stacks of cash in reserve. Those whose assets consist overwhelmingly of dubious debt paper quickly find they are being abandoned. In such circumstances, an institutional “run on a bank” can occur, of the sort that rocked Bear Stearns in mid-March of 2008. In the course of 48 hours, Bear’s holdings of cash and liquid assets plummeted from $17 billion to $2 billion as investors pulled their funds from the bank.<br /><br /><br />So, the root problem is not a lack of liquidity in the system. It’s that there are all kinds of institutions out there that to whom nobody wants to lend, and whose ostensible “assets” nobody wants to buy. Worse, none of the players in the system are entirely certain as to who is holding increasingly worthless paper, or how much of it they have. As a result, the flow of funds between banks and between banks and other lenders (like mortgage companies) keeps seizing up.<br /><br /><br />This is the reason that injecting cash into the system does not restore confidence. In fact, despite deep cuts to interest rates by central banks, particularly the US Federal Reserve (designed to encourage borrowing) and massive injections of money into the banking system, American banks have continued to tighten lending to consumers, corporations and other banks [2]. The loss of confidence in Bear Stearns thus took place for a fundamental economic reason, not a simply psychological one: Bear’s actual assets, particularly those tied to real estate loans, had been losing massive amounts of value for months. In fact, in June of 2007 two of the bank’s hedge funds, which were deeply invested in sub-prime mortgages, effectively collapsed.<br /><br /><br />From Housing Bubble to…<br /><br /><br />And it is there, in the housing sector, that we find a key link between the financial crisis and material assets in the wider economy. For, central to this crisis is the collapse of a manic bubble in US house prices.<br /><br /><br />For a hundred years after 1895, as Dean Baker has noted, US house prices increased at the rate of inflation. Then, as a result of speculative mania in housing, from 1995 to 2007 they rose 70 per cent more than the cost of everything else. That created an extra $8 trillion in paper wealth for US homeowners. And, with that ostensible wealth in their sights, American consumers ran to the stores, often after taking out loans against the increased value of their homes. At the same time, banks started to loosen up mortgage lending, often far beyond the real capacity of borrowers to pay, and then turned around and sold the debt to all kinds of investors. As a result, huge amounts of fictitious capital from the US mortgage sector built up throughout the financial system.<br /><br /><br />That bubble started to burst last summer, with a rise in the number of mortgage holders in default. Many of the mortgages that US buyers had taken out were designed with very low payments in the first year or two. But as they “reset” at higher levels, large numbers of borrowers could not keep up. And it just kept getting worse. US housing prices dropped about 13 per cent last year, and have continued tumbling this year. As the houses on which they have taken mortgages fall in value, the cost of buying them has risen for millions of Americans. Huge numbers are just putting the keys in the mail and sending them back to the mortgage lender. Others, unable to make payments, are suffering foreclosure. In March of this year, foreclosures jumped 57 per cent in the US, while house repossessions by banks more than doubled compared to a year earlier. In May, despite claims that the worst was over, foreclosures rose another 48 percent over a year earlier [3]. Many analysts now expect US house prices to decline by another 10 to 20 per cent over the next year. Some believe prices will fall for the next five years.<br /><br /><br />Meanwhile, the meltdown in the value of their paper assets is calamitous for those who bought those mortgages – through a variety of schemes known as mortgage-backed securities. The borrowers cannot pay and the underlying assets are in freefall. The fictitious character of their assets has been thrown into sharp relief. Buyers for these toxic debts cannot be found, unless it is at staggering low prices.<br /><br /><br />This is why the asset-backed commercial paper (ACPB) market has been frozen in Canada for the last six months. And now the same thing has happened to the $300 billion auction rate note market in the US. There are simply no buyers of these “assets” to be found.<br /><br /><br />Yet housing is just part of the problem. Equally dubious junk is now turning up in commercial paper tied to credit card loans, commercial (not just residential) real estate, auction rate notes, leveraged buyout loans and much more. Indeed, growing numbers of analysts are also raising warnings about corporate debt [4].<br /><br /><br />Not surprisingly, estimates of the total damage of the crisis to the financial system keep rising. Initial predictions had the figure between $50 and $100 billion. Then as bank after bank wrote off billions more, estimates in the range of $400 billion and even $600 billion emerged. In April, the International Monetary Fund calculated that the meltdown will result in losses of nearly $1 trillion. One analyst writing in the Wall Street Journal suggests the global damage will hit $1.4 trillion.<br /><br /><br />Whatever the ultimate figure – and it is likely to be at the higher end of the predictions – it represents a very large hit for the system. It also means that there are huge losses still to be recorded before the financial system recovers. Nouriel Roubini, among that very small minority of economists who saw the sub-prime meltdown coming and one of the few who have consistently warned that its consequences would be extremely serious, has argued that “the worst is still to come” for the US and global economies. Indeed, in May of this year the number of companies at risk of receiving a credit rating downgrade – i.e. as being more financially precarious than before – rose to record levels, indicating that much more turmoil lies ahead [5].<br /><br /><br />Global Slowdown<br /><br /><br />Just how deep and prolonged the slowdown in the global economy will be remains to be seen. But in recent years as much as half of all US economic growth has been housing-driven. Borrowing against rising home values, American consumers fed the engine of the world economy, particularly in their enormous purchases of manufactured goods from around the world. During this round of credit-driven growth, US household debt more than doubled, increasing from $6.4 trillion in 1999 $13.8 trillion in 2006.<br /><br /><br />Between 1980 and 2000 US imports increased 40 per cent, accounting for 19 per cent of world imports and roughly four per cent of world GDP. Now, as the housing bubble bursts, as consumers hold off on big purchases and try to pay down debt, world exports to the US will decline, and global growth will taper off. In fact, imports into the US dropped by over $6 billion in March, a clear sign that the global slowdown is spreading. Moreover, even a modest move by US consumers to rebuild their savings will knock about 1.5 per cent off US economic growth per annum. And with US consumer confidence now at a 28 year low, it is clear that consumption spending in the US will no longer be driving global growth.<br /><br /><br />Across the US, construction spending, industrial production, private employment and manufacturing output are all falling. The US economy is clearly in recession. It remains to be seen just how significant the accompanying global slowdown will be.<br /><br /><br />The Dollar, World Money and the Current Crisis<br /><br /><br />Alongside the turmoil in financial markets, the current crisis also poses major challenges to the US dollar as the dominant form of world money today.<br /><br /><br />World money is necessary to the measuring and allocating of value – prices, profits, wages, etc. – within and between regions and nations. It is also essential as a store of value, as a stable asset in which wealth can be stored. In order to do this efficiently, global money must be effectively “as good as gold” – something that everyone will accept because it is a stable and universally recognized means of payment. This is what it means for money to play the role of a genuinely universal equivalent.<br /><br /><br />For most of the history of capitalism, gold anchored the system of world money, either through an actual gold standard (in which international payments were made in gold) or a gold convertibility standard, under which the leading currency could be converted into gold by the world’s central banks.<br /><br /><br />Since 1971, however, when US President Nixon broke the dollar’s tie to gold, the US dollar has operated as inconvertible world money. This has produced two tendencies: first, a significant long-term decline in the value of the dollar relative to other major currencies; and, secondly, a new volatility in world currency markets, as investors try to avoid holding on to currencies whose value may plummet. In fact, much of the proliferation of those complex financial instruments called derivatives is a product of the new instabilities in prices, currencies and profits that monetary instability creates. But in the absence of any other viable candidates for world money status, the dollar continued its reign.<br /><br /><br />Indeed, throughout the last decade or more, the status of the dollar seemed to be rising. Despite huge deficits in the US current account – the balance between what economic actors based in the US owe the rest of the world and what the rest of the world owes these US actors – the dollar kept riding high. This led some pundits to argue that current account deficits (i.e. debts to the rest of the world) are irrelevant where the dominant imperial power is concerned. Even as the US economy started to run deficits of $500 billion per year and more with the rest of the world – deficits that are essentially paid for by printing and shipping off dollars – these commentators insisted that there would be no meaningful consequences for the economy of the United States.<br /><br /><br />The reality is much more complex. It is true that the world money-issuing state can get away with deficits that would not be tolerated in the case of any other nation-state. But it is not true that it can do so infinitely. Sooner or later, as more and more of the currency floods into world markets to cover these deficits, a point must be reached at which some of those holding dollars become tempted to unload them in favour of other currencies or assets. And at that point, an inevitable decline in the dollar’s value would set in, increasing the pressure on others to dump it as a depreciating financial asset.<br /><br /><br />Flight from the Dollar?<br /><br /><br />In fact, precisely this process has been underway for some time now. Beginning in 2001, private investors began to dump dollars. As a result, the greenback has lost 40 per cent of its value relative to other currencies since 2002. And the decline would have been much worse were it not for the fact that central banks in Asia, particularly China and Japan, stepped into the breach and invested massively in the US.<br /><br /><br />These Asian central banks have been effectively returning to the US the dollars it ships overseas to pay for its current account deficit. (This is done by making foreign investments in the US, be it in US treasury bills or the stocks of banks and corporations.) Some commentators have held that this process could continue for decades, dubbing it “Bretton Woods II,” after the original Bretton Woods agreement that created the post-World War 2 dollar-gold regime.<br /><br /><br />But there have always been three inherent flaws in this arrangement. First, this massive recycling of dollars back to the US only fuels speculative bubbles, as US financial institutions try to make profits by finding borrowers for this money, be it investors in dotcom stocks, or low income home buyers. Yet, when these bubbles burst, as has the most recent one in housing, it makes the US national economy a less attractive place for investment (since investments have become highly risky and unprofitable). Secondly, as the Federal Reserve lowers interest rates to prevent the bursting bubble from becoming a full-fledged crisis (as it has been doing in recent months), it makes dollar-denominated assets less and less attractive, since higher interest rates are available elsewhere. Finally, as low US interest rates provoke a flight from the dollar, investors holding the US buck have a greater and greater incentive to get out of it.<br /><br /><br />And even foreign central banks are doing so, albeit incrementally, under the byword of “diversifying” their holdings – i.e. reducing the percentage of international reserves they keep in dollars. In recent years, China, Russia and South Korea have all reduced the proportion of international reserves they hold in dollars. Russia, for instance, has gone from 30 per cent to 50 per cent of its reserves in currencies other than the dollar. More recently, a number of Middle East oil-exporting states have done the same. So worried are US officials by these moves that, when the United Arab Emirates was musing about dropping its currency peg to the dollar, US officials visited the UAE central bank governor to lobby against the move.<br /><br /><br />Why does the US government care about countries reducing their dollar holdings? Put simply, the ability to print dollars to pay debts is a huge imperial privilege. It is, in the words of the Economist magazine, as if you could “write cheques that were accepted as payment but never cashed” [6]. This privilege, known as seigniorage, allows the state that issues world money to appropriate a disproportionate share of global value and surplus value just by virtue of its role in the world monetary system. This has allowed the US great flexibility in financing imperial wars and it has provided an enormous boost to the US national economy, which has paid for goods with paper.<br /><br /><br />But now private investors and central banks are becoming increasingly reticent about taking ever-growing amounts of these blank cheques. Furthermore, for the fist time in several generations they now have a meaningful alternative to the dollar: the euro. And many signs indicate that the euro is starting to play a larger world money role.<br /><br /><br />When it was first introduced in 1999, for instance, the euro comprised 18 per cent of all global reserves. Today it represents 25 per cent of international reserves. As a means of payment for cross-border operations, the euro now figures in 39 per cent of all such transactions, versus 43 per cent for the dollar. And in international bond markets, 49 per cent of all debt was denominated in euros in 2006, compared to 37 per cent for the dollar.<br />None of this is meant to suggest that the euro will simply displace the dollar. The European Union economy is not large and dynamic enough for that to happen and the dollar is still the world’s dominant currency by a considerable measure. But these trends do suggest that the dollar’s role is diminishing now that there is a viable alternative. With this in mind, Deutsche Bank predicts that the euro will constitute between 30 and 40 per cent of world reserves by 2010.<br /><br /><br />What these developments indicate is a genuine contradiction between regionally based accumulation projects. Capitals based primarily in Europe are using the European Union and its central bank to strengthen their global standing relative to American-based capitals. To be sure, capitals share convergent interests. But they are equally divided by divergent ones. Indeed, one of the keys to understanding the patterns of regional rivalry in the age of the new imperialism is to grasp the complex ways in which convergence and divergence of interests interact. The long-term conflict between the world-money capacities of the euro and the dollar figures centrally here. Without a doubt, this is not the territorially-based rivalry that was at the core of early 20th century competition among imperialist powers. But it does nevertheless involve new patterns of competition between regional political-economic projects for the appropriation of larger shares of world value.<br /><br /><br />And at the moment, the capacities of the American state look to be constrained by a declining global appetite for the dollar among investors. In 2007, for instance foreign residents borrowed $596 billion in long-term stocks and bonds in the US, down from $722 billion the year before [7]. This relative decline in the appetite for the dollar poses a real dilemma for the US state. In order to prop up the dollar, and retain the seigniorage privileges that boost its national economy and underwrite the financing of imperial militarism, it would have to raise US interest rates. But interest rate hikes would deepen the recession in the US (making it harder to borrow and pushing many indebted Americans into bankruptcy and default), and they might topple more indebted corporations and banks.<br /><br /><br />For the moment, the US state has chosen to try to offset the recession by keeping interest rates low. But this only depresses the value of the dollar and weakens its world money status. And this gives the US state less financial means to maneuver on the world stage. As a result, the chairman of the Federal Reserve Bank, Ben Bernanke has taken to talking up the dollar, though so far to mixed results [8].<br /><br /><br />And so, the US state confronts a dilemma: to prevent a deep slump it must pursue policies that weaken the world standing of the dollar. In the medium to longer term, however, a diminished dollar will create tighter constraints on the financial capacities of US imperial operations. This is a real and abiding contradiction and the US state is not able to wish it away.<br /><br /><br />Persistent Contradictions<br /><br /><br />If the current financial crisis illustrates anything, then, it is the persistence of fundamental contradictions of neoliberal capitalism. With an enormous “dollar overhang” sloughing through the world economy, asset bubbles regularly form – in Japanese real estate, in East Asian stock markets, in dot-com, or in US real estate. And each time, central banks intervene to monetize debt obligations, i.e. to give legal tender for junk. And the end result is to flood the financial system with money that will flow into yet another speculative bubble, as seems to be happening at the moment in commodities such as oil, gold and foodstuffs. Meanwhile, global dollar surpluses will continue to exert downward pressure on the value of the greenback.<br /><br /><br />Thus far the US Federal Reserve has offered up $500 billion in US treasury bonds, effectively as good as cash, for junk on the books of banks and investment houses. The Bank of England is proceeding along the same lines.<br /><br /><br />But as they flood the system with money, these central banks also prime the pump of their nemesis – inflation. This has prompted the International Monetary Fund to issue a stern warning about rising inflation. As soon as central banks think they have stabilized the financial system, they are likely to heed the warning by turning to anti-inflation policies that will trigger corporate bankruptcies, job losses and declining living standards. Already the European Central Bank has indicated that fighting inflation is its priority and the Bank of Canada surprised observers by failing to lower interest rates in June 2008, citing worries about inflation.<br /><br /><br />Of course, capitalist classes the world over will try to make sure that working classes and the global poor bear the brunt of the inflationary hardship. And the weakness of the international left is not promising in this regard, despite important and inspiring movements of resistance, particularly in much of Latin America.<br /><br /><br />Too often, however, sections of the Left imagine that their role is to offer policies that will avert crises of capitalism. In so doing, they gravitate to a kind of Keynesian politics designed to boost demand and consumption.<br /><br /><br />It is not the job of the Left to save capitalism from itself, however. To be sure, we have an obligation to advocate and agitate for policies to protect the victims of the crisis, policies that cut against the very market logic of neoliberalism. A case in point would be campaigns for publicly-funded social housing programs at a time when, in the US, millions face foreclosure. Equally important are campaigns to raise social assistance rates in order to protect the most vulnerable.<br /><br /><br />But equally vital is a Left that names the actual contradictions of capitalism, one that addresses the disasters of the neoliberal model and publicizes the inherent conflict between capital accumulation and the satisfaction of human needs. And this requires a Left that speaks openly of socialism as the alternative.<br /><br /><br />We now confront a significant crisis of the neoliberal reorganization of capitalism. And every crisis represents an opportunity – for both the old order and the forces of the new. The Marxist Left is not especially well-equipped in this regard. But we must do what we can so that the forces of authentic change are better prepared when the next crisis breaks, as surely it will. To this end, it is incumbent on us to seek to understand this crisis, to agitate to protect its poorest victims, and to do the patient work of socialist education about real alternatives to the logic of the market.<br /><br /><br />NOTES<br /><br /><br />1. Karl Marx, Capital, v. 1, trans Ben Fowkes (Harmondsworth: Penguin Books, 1976), p. 236.<br />2. See Financial Times, May 6, 2008, and Tony Jackson, “Lack of trust lurks at the heart f banking troubles,” Financial Times, June 2, 2008.<br />3. “U.S. Foreclosures surge 48% in a year,” Toronto Star, June 14, 2008.<br />4. Sean Farrell, “The next banking crisis?” _ The Independent_, June 3, 2008.<br />5. Elena Moya, “Credit woes set May record,” Reuters, June 7, 2008<br />6. “The disappearing dollar,” The Economist, December 5, 2004.<br />7. Wall Street Journal, June 15, 2008<br />8. Barrie McKenna, “Bernanke endorses strong dollar,” Globe and Mail, June 4, 2008.<br />David McNally is a regular contributor to New Socialist. An earlier and shorter version of this article appeared in Relay. A Korean translation will appear in the journal Marxism 21.<br /><br />-------------------------------------------------------------------------------------------------<br /><br /><br /><br /><br /><br /><a href="http://www.socialist.net/europe-competition-misery.htm">http://www.socialist.net/europe-competition-misery.htm</a><br /><br />Europe: a competition in misery<br /><br /><br />By Socialist Appeal<br /><br /><br />Friday, 29 August 2008<br /><br /><br />Gordon Brown used to draw attention to other countries' economic performance only in order to show how much better his own policies worked. Not any more. His stewardship of the British capitalist economy has been shown to be a lamentable failure. It's back to boom and bust, despite all the moronic sloganising to the contrary we have heard from him over the past eleven years.<br /><br /><br />So we're in the Brown stuff, and everybody knows it. It's easy to get caught up with the travails in the USA, where the present recession began. But how about the rest of Europe? They are also facing hard times. And it's no good Gordon gloating. Britain has a trade deficit with more or less everyone, but our biggest trade partner by far, and the biggest black hole in the trade figures, is with Europe. If they catch cold, they sneeze at us and make our problems worse. Europe is by far our biggest export market, and as it goes into recession they'll buy less of our stuff - and that is going to hurt.<br />Nouriel Roubini is an economic commentator known as Dr Doom. But he's got everything right so far. His latest newsletter predicts that, "Europe is the next leg down in the global housing bubble."<br /><br /><br />Denmark is already in recession. It's official. The Roskilde bank has had to be bailed out by the government. Earlier the Trelleborg Bank was forced to sell itself to Sydbank. In the second quarter of 2008 Italy's GDP fell by 0.3%. But then, Italy is the sick man of Europe. However France's GDP also fell 0.3%. Sweden has been on a credit binge in the Baltic countries, which are slowing rapidly. Sweden is due to take a hit. The financial crisis has also hit the plans of the right wing government in Sweden. Determined to privatise state assets, they would have to sell them for a song. “We are not going to have a clearance sale here,” says Finance Minister Odell, adding that it would be “political suicide.” In Germany, which a lot of people were hoping would get out Europe out of this pickle, output also dropped by 0.5% last quarter. These are the big players in the EU. The Eurozone as a whole fell by 0.2% in the second quarter of 2008.<br /><br /><br />Let's take a more detailed look at Spain. The finance minister says, "It's the most complex crisis ever." The Spanish economy has been extraordinarily dependent on the construction industry, responsible for 25% of GDP. The Spanish have been knocking out 600,000 houses a year for the past five years (compared with the pathetic 100,000 generated by the UK building industry this year). Of course it was all based on the house price bubble, and it's all gone pear-shaped. Demand has collapsed, construction giant Martinsa-Fadesa has gone belly up, and several banks are teetering on the brink. 280,000 building workers have lost their jobs and unemployment is up by half a million this year already. Car sales and industrial production are down. It's just like home!<br />Two quarters of actual economic decline counts as a recession. So here it comes. And this trouble is set to continue till at least 2009.<br /><br /><br />Kenneth Rogoff, former chief economist at the IMF, promises that "the worst is to come." He continues, "We're not just going to see mid-sized banks go under in the next few months, we're going see a whopper, we're going to see a big one - one of the big investment banks or big banks."<br /><br /><br />Is there anything they can do about it? The European Central Bank is keeping interest rates at an excruciating 4.25%. This acts as a straitjacket on the economies of the Eurozone. The reason? The ECB thinks inflation is the main enemy. Maginot line economics! No wonder only 5% of Spaniards and 8% of Germans think the ECB is doing a good job.<br /><br /><br />The Euro has been falling against the dollar for the past six months. We don’t notice that in Britain as sterling is in freefall. The reason for the revival of the dollar is paradoxical. Speculators have realised that the recession may have been born in the USA, but it’s now spread to the rest of the world, so the Euro sinks. The recent fall in oil prices have also been a factor for the now rising dollar, but the price of oil is likely to provide currencies with a switchback ride in the future.<br /><br /><br />Michael Saunders, writing in the 'Financial Times,' (15.08.08) declares, "It's time to forecast a recession." He continues, "In pretty well all of Europe - the Euro area and the UK - the downturn is going to be longer and deeper than the consensus expects." It's a "competition in misery."<br /><br /><br />So we'll get poorer because they're getting poorer, and then they'll get poorer because we're poorer. It's a downward spiral with no end in sight. European workers face a gloomy future. They have no alternative but to fight to defend their standard of living and to overthrow the system that is the cause of their problems.<br /><br /><br />They have a fighting tradition. This year there has been a huge public sector strike of 100,000 in Denmark, a country of 5 million people. The strike was illegal, but that didn’t stop the Danish working class. There have been three general strikes in Greece in three months against the attempted privatisation of education and cutting pension rights, as the bosses attempt to lay the burden of the crisis on the shoulders of the working class.<br /><br /><br />Belgium has seen an epidemic of wildcat strikes leading up to an effective general strike in June. Portugal has been in a state of continuous ferment for years. The bosses are determined to tear up legislation protective of workers’ rights and casualise employment completely. As in Greece, pensions are in their sights. Even in sleepy Switzerland a railway workshop in Bellinzona, threatened with closure, was occupied by the workforce for two months, leading to a situation of virtual dual power in the town. We must build on the best traditions of the European working class to fight capitalist cutbacks and build a better future.<br /><br /><br />Meanwhile the Irish referendum on the Lisbon Treaty threw up a ‘no’ vote. So the Treaty, which outlines a new decision-making process for an enlarged EU, is effectively a dead duck. This has in effect paralysed decision-making for the European Union as a whole. But experience of the past fifty years has shown that, if EU integration is not going forward, then it will begin to roll back. Now Europe is on the threshold of recession, nationalist resentment at the EU will be on the rise. As Marx said, “It is one thing to share out profits and quite another to share out losses.” European integration has only proceeded as far as it has because of economic growth and prosperity. That can’t be relied on in the future.<br /><br /><br />Decisions have to be taken, about EU expansion into Turkey, the Balkans and Eastern Europe, and about harmonisation of standards for services. All of this, of course, is part of the dominant neo-liberal agenda within the councils of the EU. As Europe has been enlarged, each new poor eastern member has been seen as an excuse to tear up social protection for the working class among existing members and push standards down to the bottom. Before a member nation is allowed to join, the World Bank and WTO go in and lay down the law about implementing a full neo-liberal programme.<br /><br /><br />The revised Working Time Directive, ‘inspired’ behind the scenes by New Labour, has been diluted so as to allow working for 63 hours a week instead of 48. European trade unions should be fighting this change with all their might. Inflation is on the rise all over Europe. The European working class must unite to demand a sliding scale of wages across Europe like the Italian scala mobile (automatic cost of living- related wage increases) which for years protected workers’ living standards against the ravages of inflation.<br />Here is the programme the International Marxist Tendency put to the European Trade Union Confederation when they demonstrated against European finance ministers at Ljubljana, Slovenia, last April.<br /><br /><br />· Substantial wage increase to take back what has been lost in the last years!<br />· For a national minimum wage in each country of at least two thirds of the average wage, as a first step towards a European minimum wage.<br />· For a sliding scale of wages to defend our living standards!<br />· Repeal all EU directives that introduce or support casualisation of labour!<br />· No to the Lisbon Treaty!<br />· Scrap all racist immigration and asylum policies!<br />· No to "social partnership"!<br />· For fighting and democratic trade unions!<br />· Organise shop stewards' committees (democratically elected and subject to recall) in every branch of industry, coordinated on a European level.<br />· For the re-nationalisation of what has been privatised for the profit of a few capitalists, and the public ownership under democratic workers' control and management of pension and health systems, transport, telecommunications, the production and distribution of energy, banking, insurance and credit, and of all major industries.<br />· No to the Bosses' European Union. For a Socialist united states of Europe!<br /><br /><br /><br />-------------------------------------------------------------------------------------------------<br /><br /><br /><br /><br /><br /><a href="http://www.marketoracle.co.uk/Article5687.html">http://www.marketoracle.co.uk/Article5687.html</a><br /><a href="http://www.financialsense.com/fsu/editorials/schiff/2008/0731.html">http://www.financialsense.com/fsu/editorials/schiff/2008/0731.html</a><br /><br /><br />United States Abandoning Capitalism for Socialism / The Cost of Socialism<br /><br /><br />By: John Browne, Senior Market Strategist, Euro Pacific Capital<br /><br /><br />The Market Oracle/Financial Sense University<br /><br /><br />Jul 30, 2008 - 07:15 PM<br /><br /><br />Over the past few decades, the United States has steadily evolved from a nation of ‘producers' to one of ‘consumers'. The change has been celebrated by politicians and economists as proof of America's arrival at the top of the global economic food chain. In reality, the development has depleted the nation of its hard-earned wealth, and has led us to the brink of ruin.<br /><br /><br /><br />But rather than encouraging a return of America's productive energy, our government is responding to the growing economic crisis by simply trying to boost consumerism at all costs. Their strategy involves socializing losses among all citizens so that the depletion can't be easily discerned.<br /><br /><br />Now that the nation has chosen socialism as its economic salvation, it is worthwhile to examine some historic precedents. They are not encouraging. Europe, the former Soviet block and much of Africa and Asia, show vividly that socialism curbs individual freedom and enterprise, and leads inevitably toward economic decline.<br /><br /><br />America was blessed both with abundant natural resources and individual freedom, the backbone of enterprise. The combination rendered American productivity the envy of the world. Based on the strength of our industry and productivity, the American Treasury became the world's largest.<br /><br /><br />Why would America swap a history of successful capitalism for a murky future of socialism? The Answer is politics.<br /><br /><br />When the vast majority of the country's private sector working population is employed in the service sector, then votes tip in favor of consumerism. This is happening in America. Consumer spending now accounts for 72 percent of Gross Domestic Product (GDP), and is viewed as the engine of our continued prosperity.<br /><br /><br />Over the past decade, when recession threatened to curtail spending, the government pumped hundreds of billions of dollars into the economy. This led to two massive liquidity-driven booms; first in technology, then in housing. During these booms, greed knew few bounds and leverage became a way of life.<br /><br /><br />But when the merry-go-round stalled, politicians did not, and will not, allow the normally corrective mechanism of a recession to operate. It is trying to take the pain out of capitalism, while leaving only the pleasure. This is impossible.<br /><br /><br />In the current attempt at a market correction, the government has decided that our bloated financial companies are “too big to fail”. As a result, the government has lent billions of taxpayers' dollars to bail out Wall Street and the mortgage industry. Some investment banks were given privileged access to the ‘Fed Window' to borrow unlimited amounts of money, secured by ‘junk' securities and at the lowest (negative) interest rates, well below the level of inflation. In addition, the shares of the larger financial companies were also given special ‘short-selling' trading protections.<br /><br /><br />It is important to note that these protections were not given to other industries, and were not even extended to the entire financial industry. Those receiving the public largesse are precisely the large institutions most responsible for the mess. It was the financial and corporate fat cats who made the private profits gleaned from massive, irresponsible lending and borrowing. Yet, when it comes to rescue, the ordinary citizen pays.<br /><br /><br />Declining corporate earnings, increased government intervention and higher taxes are tell-tale symptoms of socialism. They can now be expected in America, bringing downward pressure on U.S. government paper and equities. Recession in America will likely reverberate around the world, bringing worldwide strain to economies and equities.<br /><br /><br />Let us hope that the rest of the world will not follow America's example and head down the road toward socialism. Economies adopting a free market approach are likely to far outperform those embracing the discarded doctrines of financial failure.<br /><br /><br />For a more in depth analysis of our financial problems and the inherent dangers they pose for the U.S. economy and U.S. dollar denominated investments, read my new book “Crash Proof: How to Profit from the Coming Economic Collapse.”<br /><br /><br />By John Browne<br />Euro Pacific Capital<br />http://www.europac.net/<br /><br />John Browne is the Senior Market Strategist for Euro Pacific Capital, Inc. Mr. Brown is a distinguished former member of Britain's Parliament who served on the Treasury Select Committee, as Chairman of the Conservative Small Business Committee, and as a close associate of then-Prime Minister Margaret Thatcher.<br /><br /><br /><br /><br /><br />-------------------------------------------------------------------------------------------------<br /><br /><br /><br /><br /><br /><a href="http://www.marketwatch.com/news/story/eleven-reasons-america-new-top/story.aspx?guid=%7BD23E1901-728E-4A3C-99D1-7E80F74C3AE3%7D">http://www.marketwatch.com/news/story/eleven-reasons-america-new-top/story.aspx?guid=%7BD23E1901-728E-4A3C-99D1-7E80F74C3AE3%7D</a><br /><br />11 reasons America's a new socialist economy: How free market ideology backfired, sabotaging capitalistic democracy<br /><br /><br />By Paul B. Farrell<br /><br /><br />MarketWatch<br /><br /><br />Last update: 11:47 a.m. EDT July 22, 2008<br /><br /><br />ARROYO GRANDE, Calif. (MarketWatch) -- Welcome to the conservative's worst nightmare: The law of unintended consequences. Why? Nobody wants to admit it, folks, but the conservatives' grand ideology is backfiring, actually turning the world's greatest capitalistic democracy into the world's newest socialist economy.<br /><br /><br />A little history: The core principles of conservative economic ideology are grounded in Nobel economist Milton Friedman's 1962 classic "Capitalism and Freedom." Too late to stop President Lyndon Johnson's Great Society, those principles became the battle cries energizing conservatives since Reagan: Unrestricted free markets, free enterprise and free trade; deregulation, privatization and globalization; trickle-down economics and trickle-up wealth to an elite plutocracy destined to rule the new American capitalist utopia.<br /><br /><br />So what happened? Are you guys nuts? Hey, I'm talking to all you blind Beltway politicians (in both parties) ... plus the Old Boys Club running Wall Street (into the ground) ... plus all you fat-cat CEOs (with megamillion parachutes) ... and all your buddies scamming everybody else to get on the Forbes 400. You are proof of Lord Acton's warning: "Power corrupts and absolute power corrupts absolutely."<br /><br /><br />It's backfiring! You folks turned our America from a great capitalistic democracy into a meddling socialist economy. Still you don't get it. You're acting like teen addicts tripping on an overdose of "greed-is-good" testosterone while your caricature of conservative economics would at best make a one-line joke on Jay Leno.<br /><br /><br />Here are 11 reasons your manipulations are sabotaging the great principles of leaders like Friedman and Reagan:<br /><br /><br />1. Dumber than a fifth grader with cognitive dissonance<br /><br /><br />Kids know what it means. They know most adults today can't see past the end of their noses. Liberals tune out candidate McBush for being lost in the past. Conservatives can't hear Obama without seeing that turban.<br /><br /><br />Cognitive dissonance simply means most brains cannot see past their own narrow ideologies. They dismiss any data that contradicts their old ideologies. Whether you're a conservative Republican or liberal Democrat, you only hear what you already know is "true." All else is tuned out.<br /><br /><br />2. Where did all the leaders go with their moral character?<br /><br /><br />Friedman's economics requires leaders of moral character. Did it run into Lord Acton's warning: "Power corrupts, absolute power corrupts absolutely?" Former Ford and Chrysler CEO Lee Iacocca said yes in "Where Have All the Leaders Gone?"<br />Friedman's great conservative principles have been commandeered by myopic ideologues whose idea of leadership is balancing the demands of self-interest lobbyists with the need for campaign donations. Unfortunately, a new "change" president won't be enough; there are 537 elected officials in Washington controlled by 42,000 special interest lobbyists.<br /><br /><br />3. Fed and U.S. Treasury adopted Enron accounting tricks<br /><br /><br />Bad news: Enron failed several years ago because of its off-balance-sheet accounting scam. The Fed's doing the same thing: Dumping Bear's $30 billion liabilities onto the taxpayer's "balance sheet." Next Treasury proposes adding $5.3 trillion more from Fannie Mae and Freddie Mac.<br /><br /><br />Unfortunately clever accounting tricks by Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke aren't going to fool foreign lenders analyzing America's creditworthiness. Worse-case scenario: U.S. Treasury bills with less than a triple-A rating.<br /><br /><br />With 90 banks on the brink and already too many bail-outs, our so-called leaders are running out of magic bullets. So now the taxpayer's "balance sheet" has become the all-purpose "dumping ground" and it's overcrowding fast as our leaders raise the white flag of socialism.<br /><br /><br />4. Deregulation creating new socialist housing system<br /><br /><br />Back in 1999 a Democratic president and Republican Congress were in love with a fantasy called the "new economics." Enthusiastic lobbyists invented the brilliant idea of dismantling the wall between commercial and investment banking: They killed the Glass-Steagall Act that was keeping the sleazy hands of short-term hustlers out of the pockets of long-term lenders.<br /><br /><br />Flash forward: We lost 85-year-old Bear Sterns and $32 billion IndyMac. Lehman's iffy. And 90 banks. With the virtual takeover of Freddie and Fanny, Wall Street's grand experiment with free-market ideology is backfiring, having socialized the housing market.<br /><br /><br />They have nobody to blame but their self-centered greed.<br /><br /><br />5. Trade deficits outsourced more of America's wealth than jobs<br /><br /><br />One look at Forbes lists of fat cats and you know the 21st Century doesn't just belong to Asia, it belongs to everyone but America. Why? Once again, remember Warren Buffett's famous "Farmer's Story" in Fortune: "We were taught in Economics 101 that countries could not for long sustain large, ever-growing trade deficits ... our country has been behaving like an extraordinarily rich family that possesses an immense farm. In order to consume 4% more than they produce -- that's the trade deficit -- we have, day by day, been both selling pieces of the farm and increasing the mortgage on what we still own."<br /><br /><br />Friedman was right: Congressional spending is the biggest cause of inflation, and, wow, those conservatives sure did love blank-check deficit spending the past eight years!<br /><br /><br />6. Banking system in meltdown, minting penny stocks<br /><br /><br />The Friedman conservatives apparently understand Joseph Schumpeter's "creative destruction." Yet, our free-market ideologues can't seem to accept that America is now on the "destructive" downside leg of the cycle, in the economy, markets, trade, politics and, yes, sadly, even with their conservative ideology.<br /><br /><br />You don't have to be smarter than a fifth grader to figure out that our leaders are clueless about the reality of our crumbling banking system, with many banks trading as penny stocks, while the Fed still panders to conservative pre-election politics rather than getting serious about inflation.<br /><br /><br />7. Ideologues preach savings, but still push spending<br /><br /><br />A core principle of conservatism is frugality, saving for the future. Grandparents raised me, struggled during the Depression, passed on strong ideals.<br /><br /><br />Somewhere over the past generation conservatives forget frugality. This distortion peaked in 2003 when consumers were told to spend, not sacrifice, and fuel the economy even as government spent excessively on war. That was a clear breach of every conservative leader's position in earlier wars.<br /><br /><br />As a result, in one brief generation, as the power of conservative ideologues grew,<br /><br /><br />America's savings rate dropped precipitously from 11% in 1980 to less than zero today.<br /><br /><br />8. Warning, the market's under 2000 peak, losing money<br /><br /><br />Imagine you're on Jeff Foxworthy's fabulous show competing to see if you really are smarter than a fifth grader. Question: "If you put $10,000 in the market in March of 2000 when the Dow peaked at 11,722, how much money would you have today if the market's 10% under 11,722?" So you guess $9,000.<br /><br /><br />But then two fifth graders raise their hands: One asks if the CPI inflation rate should be considered? If so, maybe $5,000 is closer to the right answer. The other kid wants to know if you're buying stuff in Chicago or Singapore.<br /><br /><br />The truth is, the best answer for most adults is: "You've lost a hell of a lot of money in the market under the grand conservative ideology the past eight years."<br /><br /><br />9. Inflation and dollars: Is Zimbabwe the new model for the U.S.?<br /><br /><br />The Los Angeles Times ran a photo of a Zimbabwe $500 million bank note, worth $20 at noon, less at dinner. Why? Inflation's there is running 32 million (yes million!) percent annually. The German company printing their banknotes finally cut them off.<br /><br /><br />Things may be worse in America, psychologically. Our ideological obsession with "growth" is not working because there is too much collateral damage, namely inflation.<br /><br /><br />Our dollar has lost substantial value to the euro because our dysfunctional leaders are convinced that a trade policy funded by debt makes sense.<br /><br /><br />Now we owe China $1.3 trillion, sovereign funds want equity not cheap dollar IOUs, and still our clueless Treasury and the Fed continue debasing our currency, printing money like Zimbabwe.<br /><br /><br />10. Free-market health care failing 47,000,000 Americans<br /><br /><br />Big Pharma loves free-market conservatism and no-compete Medicare drug programs. Nobody else is happy. Taxpayers get stuck with the bill.<br /><br /><br />"The Coming Generational Storm" tells us that without massive reforms and big lifestyle changes for taxpayers (especially retirees), within a couple short decades America's entitlement programs will eat up the entire federal budget. Medicare is the biggest cost item in your future, over $50 trillion in unfunded liabilities.<br /><br /><br />Conservative ideologues naively believe the answer is more pay-out-of-pocket insurance plans, even with 47 million already uninsured because they can't pay. Here as in so many areas of our economy, free-market junkies really are suffering a severe case of cognitive dissonance, as blind to the facts about the uninsured as they are to their outdated free-market fantasies.<br /><br /><br />11. Conservative free-market policies inflated oil 300%!<br /><br /><br />Yep, oil inflated 300% in eight short years under the "leadership of two oil men." But, you can't blame them. We put the foxes in the henhouse, knowing full well "real" oil men love digging holes on the supply side, supporting ethanol subsidies and blaming speculators -- it's in their genes! Talk about cognitive dissonance; real oil men thrive on cowboy images of Marlboro Men in Hummers, Navigators and F-150 trucks.<br /><br /><br />Net result? Another perfect example of "creative destruction" in action as conservative ideology meets "law of unintended consequences," driving GM, the symbol of America capitalism, closer to bankruptcy ... while turning America into a socialist economy.<br /><br />-------------------------------------------------------------------------------------------------<br /><br /><br /><br /><br /><br /><a href="http://www.insightmag.com/ME2/dirmod.asp?sid=&nm=Free+Access&type=Publishing&mod=Publications%3A%3AArticle&mid=8F3A7027421841978F18BE895F87F791&tier=4&id=55D6605E3E1E40ECA5B8AE0DB0F40C03">http://www.insightmag.com/ME2/dirmod.asp?sid=&nm=Free+Access&type=Publishing&mod=Publications%3A%3AArticle&mid=8F3A7027421841978F18BE895F87F791&tier=4&id=55D6605E3E1E40ECA5B8AE0DB0F40C03</a><br /><br /><br /><br /><br /><br />London: Sarkozy seeks to moralize capitalism<br /><br /><br /><br /><br /><br /><br /><br /><br />Commentary by Herbert London<br /><br /><br /><br /><br /><br /><br /><br /><br />Issue Date: www.insightmag.com - April 22-30, 2008<br /><br /><br /><br /><br /><br /><br /><br /><br />In a recent Le Figaro report Nicolas Sarkozy said, “At the end of the French presidency, my aim is that [Europe] will have moved towards a common <a class="kLink" oncontextmenu="return false;" id="KonaLink0" onmouseover="adlinkMouseOver(event,this,0);" style="POSITION: static; TEXT-DECORATION: underline! important" onclick="adlinkMouseClick(event,this,0);" onmouseout="adlinkMouseOut(event,this,0);" href="http://www.insightmag.com/ME2/dirmod.asp?sid=&nm=Free+Access&type=Publishing&mod=Publications%3A%3AArticle&mid=8F3A7027421841978F18BE895F87F791&tier=4&id=55D6605E3E1E40ECA5B8AE0DB0F40C03#" target="_top">immigration policy</a>, a common defense policy, a common energy policy, and a common environment policy.” He noted, “The citizens of all of Europe demand protection; they want Europe to protect them, not make them vulnerable. They want it to allow them to act, not oblige them to suffer.”<br /><br /><br /><br /><br />President Sarkozy goes on to contend that this “protective Europe” is incompatible with “the excesses of financial capitalism.” He maintains that France under his guidance will take initiatives “to moralize capitalism.” As part of his vision Europe is to be seen for “community preference” and to make matters perfectly clear President Sarkozy has called on the government backed Caisse des Dépôts et Consignations bank to take the lead in protecting France from the “power of extremely aggressive sovereign funds.”<br /><br /><br /><br /><br />How does one parse the ambiguous phrases? Is European immigration policy, to cite one example, going down a path taken by France in which more than a quarter of Marseille residents are Muslim and unrest now characterizes urban life in this once peaceful city? What does Sarkozy mean by a common environmental policy? Are European nations about to embrace a common carbon footprint? And if so, will such regulation be enforced by bureaucrats in Brussels?<br /><br /><br /><br /><br />Perhaps the most interesting and often-heard expression used by Sarkozy is “moralizing capitalism.” For years European leaders have been decrying “the inhuman dimensions of Anglo-Saxon capitalism”—code words for the free market. Sarkozy is merely following the rhetorical lead of his predecessors.<br /><br /><br /><br /><br />However, in his desire to place strict controls on sovereign investment he may be inhibiting cash-starved industries and corporations and, in the process, restricting innovation Europe needs to be competitive. If moralizing capitalism means protective regulation that keeps union control over the labor market, stagnation is the inevitable result. It has been demonstrated in France and elsewhere in Western Europe that if you cannot fire, you cannot hire, a condition that has led Europeans to envy the relatively low unemployment rate in the United States.<br /><br /><br /><br /><br />Clearly Europe has benefited from Arab capital that has gravitated north in search of investment opportunity. This condition aimed in part as punishment for American Middle East policy, has bolstered the euro against the dollar and, to a modest degree, has had a salutary influence on European economies.<br /><br /><br /><br /><br />But in actuality Europe’s industries are largely moribund. They cannot compete against Asian markets and often demand protection against the economic onslaught. The unfunded liability due to cradle to grave security—even with recent modifications in outlook—is daunting.<br /><br /><br /><br /><br />As a consequence, the Sarkozy proposal to moralize capitalism—which has the ring of human decency to it—is catastrophic for a Europe that suffers from economic sclerosis. If anything, France and Western Europe desperately require a shot of adrenalin in the form of free market initiatives.<br /><br /><br /><br /><br />Clearly Europeans have a preference for security, long vacations, short work weeks and reduced competition. However, Europeans are not alone in the world. The intrusion of other markets is a reality and the interest of competitiveness will have to be assuaged.<br /><br /><br /><br /><br />While Sarkozy’s pro-American <a class="kLink" oncontextmenu="return false;" id="KonaLink1" onmouseover="adlinkMouseOver(event,this,1);" style="POSITION: static; TEXT-DECORATION: underline! important" onclick="adlinkMouseClick(event,this,1);" onmouseout="adlinkMouseOut(event,this,1);" href="http://www.insightmag.com/ME2/dirmod.asp?sid=&nm=Free+Access&type=Publishing&mod=Publications%3A%3AArticle&mid=8F3A7027421841978F18BE895F87F791&tier=4&id=55D6605E3E1E40ECA5B8AE0DB0F40C03#" target="_top">foreign policy</a> stance is justifiably applauded, his European economic position is hopelessly predictable and doomed to fail. Perhaps as a member of the EU in good standing, he, as the leader of France, is obliged to repeat standard European slogans. But these are empty slogans that if enacted into policies will further weaken Europe economically and make it less likely the continent will assume the defense responsibility to which is so often gives lip-service.<br /><br /><br /><br /><br />Sarkozy has enjoyed a honeymoon period with American leaders, but his platitudinous economic position should offer a moment of reflection. Are we merely hearing much of the bankrupt moralizing of the recent past—an echo of <a class="kLink" oncontextmenu="return false;" id="KonaLink2" onmouseover="adlinkMouseOver(event,this,2);" style="POSITION: static; TEXT-DECORATION: underline! important" onclick="adlinkMouseClick(event,this,2);" onmouseout="adlinkMouseOut(event,this,2);" href="http://www.insightmag.com/ME2/dirmod.asp?sid=&nm=Free+Access&type=Publishing&mod=Publications%3A%3AArticle&mid=8F3A7027421841978F18BE895F87F791&tier=4&id=55D6605E3E1E40ECA5B8AE0DB0F40C03#" target="_top">Chirac</a>? That is the most likely conclusion to be reached from his remarks.<br /><br />-Herb London is president of the Hudson Institute and a member of Insight's Editorial Advisory Board.<br /><br /><br /><br /><br /><br /><br /><br /><br />-------------------------------------------------------------------------------------------------<br /><br /><br /><br /><a href="http://www.scottishsocialistparty.org/new_stories/issues/socialism.html">http://www.scottishsocialistparty.org/new_stories/issues/socialism.html</a><br /><br />Alan McCombes speaking at the SSP's 'Socialism' event<br /><br /><br />Imagine a socialist Scotland: A vision for the 21st century<br /><br /><br />By Alan McCombes<br /><br /><br />A fully-fledged socialist society could never be achieved within the borders of a small country such as Scotland. The eradication of all social and economic inequality could only be achieved on an all-European, or perhaps even a world scale. Nonetheless, a Scottish socialist government could at least begin to move in the direction of socialism by taking control over key sectors of the economy, by introducing workplace and community democracy, and by implementing radical and popular reforms which would set an example for other countries to follow.<br /><br /><br />A new socialist economy would be based on a range of different types of enterprises with the emphasis on social ownership. Large-scale industry, oil, gas, electricity, the national railway network could be owned by the people of Scotland as a whole and run by democratically elected boards in which workers, consumers, and the wider socialist government were all represented. These would not be based on the old-style nationalisation projects. Instead of centralised planning by a remote bureaucracy, there could be decentralised democratic planning using the most advanced information technology. Where practically possible, socially owned enterprises could be broken down into smaller sub-units to enable closer scrutiny by the wider public.<br /><br /><br />Social ownership could also involve community-owned and municipally-owned companies. Municipally-owned building companies could be established to build new homes, schools, community centres, sports centres and other local facilities. Local bus and underground systems too could be taken over and run by the larger councils, or jointly by neighbouring smaller councils.<br /><br /><br />Another form of social ownership that could be encouraged through the provision of cheap loans and other incentives would be workers' co-operatives. Repeated studies have shown that when employees own and run their own companies, they work harder and more efficiently. Following one of the most in-depth studies ever carried out, based on research in the UK, Greece, Italy, Spain, Cyprus, and Malta, one expert, Dr Godfrey Baldacchino of the University of Malta concluded, 'Worker-owners typically work better, they work harder, they offer competitive services, they distribute their gains more equitably, they enjoy high levels of participation in decision-making and they enjoy high levels of job satisfaction.'3<br /><br /><br />In a socialist Scotland, some sections of the economy would most likely remain in private hands. It would be absurd for any socialist government to try to take over small shops, ice cream vans, Indian takeaways, taxi-cab firms, car mechanics yards and the multitude of other small-scale enterprises which play a central role in producing goods and delivering services.<br /><br /><br />In total, there are just under 300,000 businesses in Scotland. Only 1.2 per cent of these employ over 50 people, while at the other end of the spectrum, 93.7 per cent of businesses employ less than ten people. In a socialist Scotland, these hundreds of thousands of small businesses would thrive because they would be competing with each other on a level playing field, rather than competing with big business on similar terms that the Christians competed with the lions in ancient Rome.<br /><br /><br />Some larger companies, too, may even remain in private hands on the grounds of expediency. For example, there are now almost 40,000 workers employed in Scottish call centres, most of which have been set up by outside companies based in England or abroad. Attempting to take a call centre into public ownership is likely to be a futile gesture: it would literally stop functioning overnight, leaving banks of silent telephones. Similarly, some branch assembly plants, particularly in the electronics sector, are individual links in an international production chain.<br /><br /><br />In these instances, a socialist government could enforce certain basic standards of wages and conditions, including a minimum wage of at least a £7 an hour (at today's values); trade-union rights; a shorter working week; and workers' control over health, safety, and other workplace conditions.<br /><br /><br />Companies which refused to meet these conditions would forfeit their assets. They could also be forced by law to provide minimum redundancy payments, perhaps the equivalent of two to three years' wages, to allow a reasonable time for the sacked workers to be retrained and redeployed.<br /><br /><br />Today in Scotland, each worker employed by a foreign-owned company produces on average an astonishing £184,000 of wealth. By contrast, capital investment in these companies adds up to just £7600 per employee. Even with vastly increased wages, improved conditions, shorter hours, and higher rates of corporation tax, most companies would probably still find it profitable to remain .4<br /><br /><br />But, within a socialist Scotland, the private sector would be subordinate to the social sector. Profit would no longer be the raison d'etre of all economic activity. Instead of being siphoned off to shareholders, the surpluses produced by workers would be used to increase wages, reduce hours, improve working conditions, develop public services, and boost investment. Social and environmental considerations would take precedence, as would longer-term planning and training.<br /><br /><br />If the minutes of the board meetings of, for example, Scotland's giant construction companies were publicly available - which they're not - they would no doubt be preoccupied with questions such as: `How can we cut costs? Where can we make redundancies? Where will we advertise? Where can we get cheaper materials? Is there any land up for sale that is likely to increase in value? How much can we increase the cost of a new three-bedroom house without losing market share? Can we work out a strategy for driving some of our rivals out of business?'<br /><br /><br />Within a socialist economy, the elected board of a socially owned construction firm could have a different agenda. It could discuss such questions as: `What are the latest homelessness figures and how are we tackling the problem? What are the results of the tenants' consultation over the design options for the new council estate in the East End of Glasgow? Are the materials we are using on this project sufficiently durable? Will the houses be properly insulated to save energy? Will they be barrier-free to make them suitable for disabled residents? Can we reduce the price of a new three-bedroom home? Are safety standards on our sites being adhered to? Are we in a position yet to move from a four-day week to a three-and-ahalf-day week?'<br /><br /><br />There could be total transparency in the workings of all branches of the economy, with minutes of every board meeting of all large enterprises published online. There would be mechanisms to ensure that board members could be removed from their positions at any time by those who elected them. Although there would be the need for managerial and technical specialists, whose salaries would be subject to negotiation, board members themselves would receive no more than the average wage of a skilled worker in that industry.<br /><br /><br />To survive and thrive, any economy must constantly innovate. Yet the total amount spent on research and development in Scotland in 1999 was just £330 million, less than two per cent of the £18 billion profit bonanza made in Scotland in the same year by just 20 companies.5 Scotland has the skills and technology to develop its own socially owned electronics, information technology, and chemical industries which would not be at the mercy of boards of directors in distant cities.<br /><br /><br />There are hundreds of thousands of websites devoted to radical environmentalism, anti-capitalism, and socialism. A socialist Scotland could utilise communications technology, not only to generate international political solidarity, but also to open up trade with this potentially massive radical cybermarket.<br /><br /><br />Such far-reaching change could not be carried through without full political and economic independence. The devolved semiparliament at Holyrood, with its lack of economic muscle, could not even begin to scratch the surface of inequality in Scotland. Nor could the SNP's alternative to devolution - Independence in Europe within a single European currency - offer genuine independence. Control over economic policy would simply shift from Westminster and the Bank of England to Brussels and the European Central Bank. And, like their London-based counterparts, the bankers, bureaucrats, and big-business-oriented politicians who run the European Union will fiercely resist any serious attempt to build a more egalitarian society in Scotland, or in any other European country.<br /><br /><br />A socialist government in Scotland would require to create its own central bank. It would bring the other major banks and financial institutions into the public sector and establish a network of community banks, building societies, and insurance companies. Based on the same principles on which credit unions operate in many local communities, a new socialist financial system could provide low-interest credit, attractive savings terms, and cheap insurance. It would especially benefit farmers, small businesses, and workers' co-operatives.<br /><br /><br />For most mainstream politicians, the idea of banks being owned by the people rather than by private shareholders is unthinkable. Banks, after all, are the private property of rich individuals to run as they see fit. You can't just deprive these people of their livelihood as though they were shipyard workers, or miners, or machine operators.<br />In a socialist Scotland, this culture of deference to the rich and powerful will be dissolved. just as capitalism set out to abolish `the divine right of kings', socialism will set out to abolish the divine right of bankers, shareholders, and stockbrokers. The needs of society as a whole will eventually be elevated above convention, tradition, and sentiment.<br /><br /><br />Certainly, shareholders would be compensated. A democratically elected compensation board could be established, which was representative of society as a whole. It would try to arrive at a fair settlement with shareholders to ensure that they were not driven into debt, bankruptcy, and poverty. But there would be no question of doling out millions of pounds in compensation to wealthy individuals, as previous Labour government did when they nationalised industries such as coal, rail, and steel.<br /><br /><br />Publicly owned banks exist even in the most right-wing free-market societies. In the United States, the Federal Reserve is state-owned. The European Central Bank, too, is owned not by private shareholders but by the member states of the European Union. The Bank of France and the Bank of England are publicly owned. Even Russia under Boris Yeltsin, after privatising three quarters of all public enterprises was forced to nationalise some of the country's biggest banks when the Moscow stock exchange went into free fall in the late 1990s.<br /><br /><br />There are thousands of examples of local, regional, and national banks and financial institutions that are socially owned in one form or another. Most building societies and many insurance companies including one of Scotland's biggest financial institutions, Standard Life - were built, not as profit-making businesses but as mutuals, owned by their customers. In a significant rejection of the smash-and-grab culture of free-market capitalism, Standard Life's two million policy-holders recently voted to retain the company's mutual status, rejecting bribes worth an average of £6000 per person to float it on the stock exchange.<br /><br /><br />Neither Standard Life nor any of these other institutions are run democratically. None are run remotely in the interests of the wider community. All of them are subservient to the demands of private capital. Nonetheless, the fact that publicly owned banks and mutual insurance companies exist and thrive even in the heartlands of free-market capitalism is an answer to those who argue that public ownership of finance is impractical.<br /><br /><br />Some politicians, even on the Left of the political spectrum, express fear that radical measures directed against the banks and other capitalist institutions would provoke a `flight of capital'. Naturally, a socialist government would try to counter that with immediate legislation restricting the amount of money that could be shifted out of the country. Before Thatcher rewrote the rules in the early 1980s, even the British government, along every other government in the world, had strict controls on the movement of capital in and out of the country.<br /><br /><br />In today's hi-tech economy, it is much easier to shift capital around. But a financial system is more than just money. It consists of physical resources: staff, buildings, computers, cash machines. It is built upon expertise. Whether any financial system can function effectively or not depends first and foremost on the skills, the training, the know-how, the experience of the workforce at every level.<br /><br /><br />Money can be shuffled around from one country to another. But an entire financial system employing 100,000 skilled and trained workers cannot just be dismantled and moved abroad.<br /><br /><br />In any case, most of the operations of the financial sharks who shift money around are purely parasitical. They are like touts buying up tickets for a big cup final so that they can later sell them at five times their original value. They create nothing and add nothing to the general welfare of society. As things stand today, only a small fraction of the £300 billion controlled by Edinburgh's financial institutions is actually invested in the Scottish economy.<br /><br /><br />One argument against socialism that has been checkmated by the development of information technology is the claim that democratic planning is impossible in a complex society. `Let the market decide!' is the cry of the profiteers. They rightly denounce the centralised bureaucratic planning of the economy that contributed to the downfall of the Soviet Union.<br /><br /><br />But the creation of a democratically co-ordinated, harmonious, integrated economy is more viable today than ever before. Information technology can track sales, prices, distribution, and a mass of other relevant data. It can make instantaneous adjustments where necessary. Even now, the big supermarkets operate a system whereby every sale is recorded in a centralised database, which in turn is linked to a series of warehouses. Computerised order books then instantaneously calculate which stocks need to be replenished.<br /><br /><br />In other words, production is planned. But, under capitalism, such commercial planning is limited and fragmented. It is also highly secretive. Information is jealously hoarded by each individual company and exploited for commercial gain. If an item is selling well, the price will be jacked up to the highest level the market will tolerate. The prices of other goods will be temporarily slashed as a means of undercutting competitors and eventually driving them out of business.<br /><br /><br />Under capitalism, the flow of information that has been made possible by computer technology is abused for private profit. Under a socialist economy, these information systems would be expanded and integrated across the economy, and they would be geared to the broad needs of society as a whole, rather than to the narrow demands of company shareholders.<br /><br /><br />It would be foolhardy at this stage to even attempt to set out an exact blueprint of how a socially owned economy in Scotland would function in fine detail. There would be continual improvisation and fine-tuning on the basis of experience.<br /><br /><br />Moreover, the establishment of an independent socialist Scotland would only be a transitional step towards a wider international socialist confederation. It is an open question whether the battle for socialism across Europe will be pioneered in Scotland or whether the people in Scotland will follow a trail first blazed elsewhere.<br /><br /><br />There is no arguing with the fact that capitalism ended the 20th century triumphant. But, as the 21s' century progresses and the mists of confusion begin to be dispelled, the idea of socialism will emerge more clearly and powerfully than ever before. Socialism's time may not yet have come, but `it's comin' yet for a' that'.<br /><br /><br />Copyright Scottish Socialist Party 2008<br /><br /><br /><br /><br /><br />-------------------------------------------------------------------------------------------------<br /><br /><br /><br /><br /><br /><a href="http://www.europesworld.org/EWSettings/Article/tabid/191/ArticleType/ArticleView/ArticleID/20588/Default.aspx">http://www.europesworld.org/EWSettings/Article/tabid/191/ArticleType/ArticleView/ArticleID/20588/Default.aspx</a><br /><br />EUROPEAN PARLIAMENT SPOTLIGHT<br /><br /><br /><em>“In light of recent market turbulence, we need to lay the foundations for a more stable and secure EU financial market”</em><br /><br /><br />Spring 2008<br /><br /><br />by unknown Socialist Group in the European Parliament<br /><br /><br />What should the EU be doing to improve the global competitiveness of Europe’s financial services and banking sector?<br /><br /><br /><br /><br /><br /><br />The EU’s first step to improve the global competitiveness of the financial sector must be to complete the internal market for financial services, with measures to encourage market integration matched by new efforts to protect consumer rights. The industry needs to develop more pan-European financial products to meet the demands of the EU’s increasingly mobile citizens. And the EU needs to create an adequate framework of supervision to ensure that these products are portable and recognised by all relevant regulators. Harmonisation on consumer protection must, however, respect the diversity of member states’ traditions and their varied legal systems.<br /><br /><br /><br /><br /><br /><br />The EU should also eradicate fiscal barriers to cross-border economic activity and prevent tax competition which creates obstacles to cross-border financial services. Further harmonisation of the tax base and more fiscal convergence would be a massive step forward in this regard. The EU’s competitiveness on global financial markets also depends critically on stronger transatlantic dialogue, although cooperation cannot increase at the expense of Europe’s tough regulatory goals, including high prudential standards, transparency and consumer rights.<br /><br /><br /><br /><br /><br /><br />Certain issues demand urgent attention, notably transparency for investors, markets and regulators, valuation standards and risk management in the financial sector. The EU, therefore, needs to bring forward specific regulatory proposals on hedge funds and private equity groups, rating agencies and supervision. And, in light of recent financial market turbulence, there should be an in-depth review of the problems on the inter-bank money markets and other related credit crises. We need to learn all the necessary lessons and lay the foundations for a more stable and secure EU financial market in future.<br /><br /><br /><br /><br /><br /><br />The EU has often been criticised for being too distant from its citizens. What would be your plan to bring the EU closer to its citizens?<br /><br /><br /><br /><br /><br /><br />The low turnout in the recent Romanian elections for the European Parliament – at just 29% of the voters - underlined how important it is to involve people in EU affairs. The EU is big, diverse and complex, which makes pan-European communications a tough nut to crack. All the different EU partners - politicians, governments and the Commission – need to do more to explain how the EU makes a difference to people’s daily lives. Commissioner Margot Wallström recently made an excellent start in improving EU communications with her Plan D − for debate, dialogue and democracy. We also have to find ways to make sure that Europe’s leaders and politicians listen to the people. And we have to stop the endless “blame game” between Brussels and national governments as it confuses everyone.<br /><br /><br /><br /><br /><br /><br />Many inter-institutional initiatives are underway to help the EU communicate better, which are all welcome. However, dialogue in Europe cannot become a set of institutional arrangements. Communications must be citizen-centred, empowering people and providing them with the information they need to vote meaningfully. MEPs have a critical role in this respect. It is up to each of us to translate the EU into something relevant to the day-to-day experience of our constituents. Here in the Socialist group, we are developing our website (www.socialistgroup.eu) to tell people about our work and to provide an interactive space for them to reach us. We also support the Party of European Socialists’ initiative to consult voters - for the first time ever - about the content of the European election manifesto (<a href="http://www.pes.org/">http://www.pes.org/</a>).<br /><br /><br /><br /><br /><br /><br />The EU is the biggest development and humanitarian aid donor in the world. What should Europe be doing to emphasise this?<br /><br /><br /><br /><br /><br /><br />As you say, the EU is the world's biggest spender on humanitarian and development aid. If you add together the resources provided by the EU and its 27 member states, the sums of money are very large indeed. A genuine common foreign policy would make this contribution even more valuable as well as more recognisable, and an EU High Representative could bring all this humanitarian and development support together into one effective policy.<br /><br /><br /><br /><br /><br /><br />With 2008 being the European Year of Intercultural Dialogue, what should its concrete aims be and how could they be achieved?<br /><br /><br /><br /><br /><br /><br />One of the most serious risks to the world right now is the idea that a “clash of civilisations” is inevitable and that the world's big religions and cultures cannot live together. It’s an argument that is being pushed by fundamentalists in the Islamic world and in the west. This kind of claim leads to armed conflict – even though it simply isn’t true. In fact, the opposite is correct. You enrich your own culture by learning from other people's cultures. In order to learn from others, you first have to learn about your own culture and be confident about your own identity. You also have to keep an open mind about other cultures, and be prepared to respect their values, rather than seeing them as a threat. That is the idea behind intercultural dialogue; it is a dialogue that brings peace and enrichment. It is the idea behind our unique European project and it’s an idea that’s worth exporting.<br /><br /><br /><br /><br /><br /><br />What timeframe do you see for EU enlargement in the Western Balkans? What are the main stumbling blocks and how should they be resolved?<br /><br /><br /><br /><br /><br /><br />The EU's presence in the western Balkans is significant and is, in part, a military presence. I would prefer not to need to have soldiers there. If Bosnia-Herzegovina, Macedonia and Serbia follow the path to EU integration, then we can start to replace those soldiers with construction workers. It is only a matter of time before countries in the western Balkans join the Union. Individual countries will decide for themselves about the pace of this process and each country’s application will be judged by the EU on its own merits. Croatia is already very close to joining, although at this stage nobody has a firm date. We need to offer all of the former Yugoslavia states the prospect of membership; indeed, the potential for accession has already had a stabilising effect throughout the region. However, it would be highly speculative to discuss a specific time-frame for this at the moment. And, in any case, the existing EU member states need to ratify the Treaty of Lisbon as the Union cannot take in any more new members under the present treaties. We have wasted enough time on institutional reform already.<br /><br /><br /><br />Martin Schulz <a href="mailto:maschulz@europarl.europa.eu">maschulz@europarl.europa.eu</a> was interviewed for Europe’s World by journalist Simon Taylor. <strong><font size="4">This section is supported by the Socialist Group (</font></strong><a href="http://www.socialistgroup.eu/"><strong><font size="4">http://www.socialistgroup.eu</font></strong></a><strong><font size="4">)<br /></font></strong><br /><br /><br />-------------------------------------------------------------------------------------------------<br /><br /><br /><br /><br /><br /><a href="http://www.rgm.com/articles/BrusselsJournal.html">http://www.rgm.com/articles/BrusselsJournal.html</a><br /><br />Austrian Bank Scandal: When Socialists Play With Money<br /><br /><br />By Chris Gillibrand<br /><br />The Brussels Journal<br /><br />April 4, 2006<br /><br /><br />A major banking scandal is rocking the Austrian political elites – left and right. A bank owned by the Socialist trade union (which is close to the Socialist Party SPÖ, currently in opposition) loses billions in shady hedge deals while the union strike fund evaporates in the Caribbean and the bank gets implicated in a corruption case in Israel. Meanwhile the bank is financed by the European Investment Bank (EIB), and an Austrian Finance Ministry official (married to the Socialist ex-chief of the bank) ignores a crucial report and is appointed to the Executive Board of the European Central Bank (ECB). The Conservative Finance Minister claims to know nothing – after just having sold the Government-owned Post Office Savings Bank (PSK) to the socialist bank. Welcome to Austria, presently presiding the European Union council of ministers.<br /><br /><br />Let me introduce!<br /><br /><br />The <a href="http://www.bawag.com/bawag/home/nav.html">Bank für Arbeit und Wirtschaft AG, BAWAG</a> or in English, ‘Bank for Employment and Commerce’ was founded in 1922 by the Socialist Chancellor Karl Renner. Up until now the majority stakeholder in the Bank has been the <a href="http://www.oegb.at/servlet/ContentServer?pagename=OEGBZ/Page/OEGBZ_Index&n=OEGBZ_e_0">Austrian Trades Union Federation</a>, the ÖGB. With the repurchase of the shares of the Bayerische Landesbank in 2004, it is now wholly-owned by the ÖGB. The bank’s original intent, from which it has strayed far, was to extend cheap credits to the needy.<br /><br /><br />Almost all of the members of the BAWAG Supervisory Board are fully paid up socialists and trade unionists. The two exceptions are Albert Hochleitner, the ex-CEO of Siemens Austria, and Leo Wallner, the chairman of the state-owned monopoly, <a href="http://www.casinos.at/">Casinos Austria</a>. Günter Weninger, chairman of the Supervisory Board, who has now been forced to resign, also has a day job as the Finance Chief of the ÖGB. He started professional life as an electrician which has given rise to suggestions in the Austrian press that he might have to return to his original trade. The Managing Board has eight members, four of whom have now resigned. The CEO, Johann Zwettler had already resigned in October 2005. He and his predecessor, Helmut Elsner, are now under police investigation.<br /><br /><br />BAWAG opened up operations in the Caribbean in 1995 under the direction of Wolfgang Flöttl, the son of the then CEO, Walter Flöttl. The idea was that these investments should hedge risk. When it was made public that the son received $2 billion from BAWAG without the father seeking the formal approval of the Supervisory Board, the Caribbean business got closed after a year. The extent of Supervisory Board knowledge is still questioned.<br /><br /><br />After the departure of Flöttl Senior, the business was then reopened by Flöttl’s successor, Helmut Elsner, with Supervisory Board approval after only one year. Elsner was already known as Flöttl’s “man for big business.” Living well, he enjoyed a service penthouse provided on the top of the BAWAG offices in Vienna as had his predecessor, Flöttl. Also provided with a penthouse was the head of the socialist trade union ÖGB, <a href="http://www.oecd.org/speaker/0,2879,en_21571361_34225293_34700696_1_1_1_1,00.html">Fritz Verzetnitsch</a>.<br /><br /><br />This time around, Flöttl Junior invested in high-risk funds and the business clocked up a massive loss of almost €1 billion which threatened the solvency of BAWAG in 2000. The Bank was only saved by a guarantee from the ÖGB (trade union dues amount to 1% of members salaries, so they have accumulated quite a lot of money to play with). The losses themselves were systematically covered up in offshore accounts in the Caribbean and accounts at a US futures broker called <a href="http://www.refco.com/">REFCO</a>. The union strike fund went walkabouts as collateral in the Caribbean and disappeared.<br /><br /><br />On 1 December 2000, the Finance Minister (then and now) <a href="http://en.wikipedia.org/wiki/Karl-Heinz_Grasser">Karl-Heinz Grasser</a> (from the ÖVP, the conservative <a href="http://www.oevp.at/English/index.aspx?bhcp=1">Austrian People’s Party</a>) commissioned the <a href="http://www.oenb.at/en/ueber_die_oenb/about_the_oenb.jsp">National Bank of Austria</a> to do an audit of BAWAG. It was highlighted in the report that the banking system and national banking laws had been violated. There was neither mention of the losses in the Caribbean nor of the ÖGB guarantee. BAWAG received a copy together with the banking oversight authorities in the Finance Ministry. Grasser claims never to have seen a copy of this report.<br /><br /><br />Why were the Finance Ministry reluctant to expose themselves on this issue highlighted in this report? This could be explained by the fact that BAWAG were finally given clearance by the European Commission to acquire the <a href="http://en.wikipedia.org/wiki/Bawag_P.S.K._Group">Austrian Post Office Savings Bank</a> (PSK) from the Austrian Government in November 2000. Not only did this acquisition give BAWAG a new client base (previously many of its banking products had been sold through the network of trade union branches and membership has been declining) but it gave BAWAG a needed liquidity at that time. The Austrian Government (consisting of the People’s Party ÖVP and <a href="http://en.wikipedia.org/wiki/Jörg_Haider">Jörg Haider</a>’s party) pocketed the money from the privatisation and all were happy behind the scenes. A total merger was finally achieved in 2004.<br /><br /><br />However, the ignorance and inaction of the Finance Ministry is astounding given that there are two State Commissioners nominated to oversee the affairs of the BAWAG Group; for BAWAG, none other than the Chef de Cabinet of the Finance Ministry and for PSK, the Head of Directorate General III in the Federal Chancery.<br /><br /><br />No more audits were performed on BAWAG in the following years. Neither the Governor of the National Bank of Austria, Klaus Liebscher who is near to the Austrian People’s Party nor his Deputy, <a href="http://www.ecb.int/ecb/orga/decisions/html/cvtumpel-gugerell.en.html">Gertrude Tumpel-Gugerell</a>, who was responsible for financial market oversight thought them necessary. A separate <a href="http://www.fma.gv.at/en/fma.htm">Financial Market Oversight Authority</a> (FMA) was set up in 2002. Finance Ministry staff were transferred to the FMA but not the incriminating report.<br /><br /><br />Gertrude Tumpel-Gugerell is herself “near” to the Socialist Party; so near in fact that her husband is <a href="http://eu.arbeiterkammer.at/www-3502.html">Herbert Tumpel</a>, President of the <a href="http://www.arbeiterkammer.at/www-18.html">Chamber of Workers</a>. Herr Tumpel has a past-life as Chairman of the Supervisory Board of BAWAG when the Flöttls were undertaking transactions under the codeword “Special Business.”<br /><br /><br />Frau Tumpel was Executive Director responsible for financial markets in the National Bank of Austria from 1997 to 2003 and was appointed Deputy-Governor in 1998. In 2002, she became a member of the Supervisory Board of the FMA on its establishment and Chair of the Banking Advisory Committee of the European Union. Already, a Member of the Banking Supervision Committee of the <a href="http://www.ecb.int/home/html/index.en.html">European Central Bank</a> in 1999, she gave up all these posts to be a Member of the Executive Board of the ECB from 2003 onwards. She and five other members are responsible for the day-to-day running of the Eurozone, reporting to the Governing Council (the Executive Board plus the Governors of the National Central Banks). Why has no sound been heard from this direction?<br /><br /><br />The scandal breaks<br /><br /><br />BAWAG Caribbean ventures avoided the news until October 2005 when its former partner REFCO <a href="http://www.thestreet.com/_googlen/stocks/brokerages/10275613.html?cm_ven=GOOGLEN&cm_cat=FREE&cm_ite=NA">filed for bankruptcy</a>. The 2004 Annual Report of BAWAG records: “The successful cooperation with the REFCO Group will be continued without an equity stake, so that the BAWAG PSK Group will continue to benefit from this access route to international customers in the future.”<br /><br /><br />In the event, what this really meant was a personal loan of $410 million to the CEO of REFCO, <a href="http://en.wikipedia.org/wiki/Refco">Phillip Bennett</a>, only hours before the company went bankrupt. The collateral for the loan was REFCO shares which became instantly worthless. A warrant has been issued in Austria for Bennett’s arrest. Curiously, an arrest warrant for Flöttl Junior has just been withdrawn by an Austrian judge.<br /><br /><br />When the extent of the exposure to <a href="http://news.moneycentral.msn.com/ticker/article.asp?Symbol=US:RFXCQ&Feed=AP&Date=20060324&ID=5594940">the Caribbean business</a> was made known in late March 2006 the Supervisory Board Chairman, Weninger resigned. At this stage the use of the strike funds as collateral was also discovered and trade union leader Fritz Verzetnitsch <a href="http://edition.cnn.com/2006/BUSINESS/03/27/austria.unionchief.reut/index.html?section=cnn_latest">instantly resigned</a> both as ÖGB Chairman and Member of Parliament.<br /><br /><br />BAWAG itself is so public minded that it has a representative on the Technical Expert Group of the EU’s <a href="http://www.iasplus.com/efrag/efrag.htm">European Financial Reporting Advisory Group</a>. As the Bible says, you should not ignore the plank in your own eye when trying to remove the specks in other people’s eyes.<br /><br /><br />BAWAG always had the reputation of being a cutting-edge bank. Via REFCO, they were involved in the PIPE (Private Investment in Public Equity) market which was often used as finance of last resort for near bankrupt companies. They were the first bank in Europe to offer loans over the internet. While, over the years BAWAG showed considerable reluctance to enter the markets of Central Europe, outside the immediate scandal some of their strategic moves, have been what might be called “interesting” not to say “opportunistic.”<br /><br /><br />In Israel, there has been an extraordinary investment (among others) in a casino in Jericho, jointly funded by among others, the Palestine Authority, <a href="http://www.casinosaustria.com/">Casinos Austria</a> and BAWAG. This was burned out during the Intifada but there appear to have been plans for another casino with the same ownership line-up in Southern Gaza! BAWAG is heavily involved in the still open <a href="http://english.people.com.cn/200601/04/eng20060104_232873.html">corruption allegations against members of Sharon’s family</a>.<br /><br /><br />Stranger still, BAWAG opened a representative office in a hotel in <a href="http://www.heritage.org/research/features/index/country.cfm?id=Libya">Libya</a> in October 2005, a strange enthusiasm even given the improving relations with the EU and the large number of other countries where BAWAG is not yet represented. The launch was attended by a delegation of twenty-five from Austria including none other than <a href="http://en.wikipedia.org/wiki/Ewald_Nowotny">Ewald Nowotny</a>, former socialist politician and vice-President of the <a href="http://www.eib.eu.int/">European Investment Bank</a> (EIB) from 1999 until 2003. He is now Honorary vice-President of the EIB. At the age of 29, he was appointed Chairman of the Board of Directors of the Austrian Post Office Savings Bank (PSK), a post he held until 1978.<br /><br /><br />The EIB is the EU’s financing institution. It was created by the Treaty of Rome. The members of the EIB are the EU Member States of the European Union, who have all subscribed to the Bank’s capital. In the EIB’s own words:<br /><br /><br />· The EIB enjoys its own legal personality and financial autonomy within the Community system. The EIB's mission is to further the objectives of the European Union by providing long-term finance for specific capital projects in keeping with strict banking practice.<br />· It thereby contributes towards building a closer-knit Europe, particularly in terms of economic integration and greater economic and social cohesion.<br />· As an institution of the Union, the EIB continuously adapts its activity to developments in Community policies.<br />· As a Bank, it works in close collaboration with the banking community both when borrowing on the capital markets and when financing capital projects.<br />· The EIB grants loans mainly from the proceeds of its borrowings, which, together with "own funds" (paid-in capital and reserves), constitute its "own resources".<br />· Outside the European Union, EIB financing operations are conducted principally from the Bank's own resources but also, under mandate, from Union or Member States' budgetary resources.<br /><br /><br />The EIB has been extremely active in providing loans to BAWAG and to BAWAG/PSK.<br /><br /><br /><br />It may be a coincidence but at the time of writing this article, records of the above loans have disappeared from the EIB website.<br /><br /><br />Of great curiosity value are what seems like two loans signed on 6 October 2005, just a few days before the REFCO scandal broke for €180 million – the first for €100 million for a global loan focusing “on projects of limited scale in the fields of environmental protection and improvement as well as infrastructure, energy, health, education and SMEs situated to more than 70% in regional development areas” and the second for €80 million “for financing for small and medium scale ventures.” It maybe that the second sum is included in the first.<br /><br /><br />Another loan for €20 million was signed on 17 March 2006 also for “financing for small and medium scale ventures.” It maybe that this loan is also the final tranche of the initial loan. Loans, therefore, of at least €100 million and possibly €200 million were made (depending on how one interprets the descriptions and dates of the transactions.)<br /><br /><br />A further line of credit for €100 million for “the financing of projects of limited scale in the fields of infrastructure, environmental protection and improvement, rational use of energy, health and education located in regional development areas” was published on 6 March 2006 as being under consideration.<br /><br /><br />Why such big loans so recently? On what basis did the EIB approve this financing? Did they not ask the Austrian Finance Ministry about the state of BAWAG’s finances? Why did not the Finance Ministry inform them? Surely even just the business in Israel and first news of the Caribbean scandal should have sounded alarm bells.<br /><br /><br />It can, therefore, be of no surprise that the new Chief Executive of BAWAG is going to be… Ewald Nowotny who declared on 23 March 2006 that “the bank’s balance sheet was now ‘clean and solid.’” He assures everyone that there are no more dead bodies in the cellar.<br /><br /><br />“Social partnership”<br /><br /><br />So cosy are the political relationships in Austria even after the partial collapse of the notorious <a href="http://www.answers.com/topic/proporz">proporz system</a> that ex-People’s Party politician, Christoph Leitl, now the Head of the Austrian Chamber of Economics and President of <a href="http://www.eurochambres.be/">Eurochambres</a> declared that he had “respect” for trade union leader Verzetnitsch on his resignation. Short of a complete meltdown of BAWAG, it would have been in his interest to say this if any of his members are owing money to this socialist bank. Here they are together at a “Dialogue of the Social Partners” event organised by the Diocese of Linz in February.<br /><br /><br />Leitl has now praised the crisis management of the ÖGB und BAWAG! Needless to say, when questioned, he does not support the resignation of Tumpel from the Chamber of Workers.<br /><br /><br />Cosy indeed; the Austrian President, Prime Minister, Leitl himself and even the left-leaning Bishop of Linz were honoured guests among the 500 people who attended Verzetnitsch’s 60th birthday party in May 2005 (entitled “60 years for the Socialist Movement”!). The “Social Partners” collected €72000 for the newly established “Verzetnitsch Education Fund for Young People” by the end of the evening. Given the fate of the strike funds, one can only hope that this money is in safe keeping – but it was a BAWAG account. As their advertising runs, “BAWAG saving is safe, easy and lucrative.” Another advert more believably urges “Jet Set with Friends.”<br /><br /><br />Now the scandal has broken, the <a href="http://www.spoe.at/">Socialist Party</a> SPÖ is distancing itself from its old friends in the fly-by-night banking world. It has have been quick to support the <a href="http://quote.bloomberg.com/apps/news?pid=10000085&sid=aVk5dLSeKQHg&refer=news_index">sale of BAWAG</a>, as it is a major embarrassment in the upcoming elections, which it had been predicted to win even under Alfred Gusenbauer, a leader who occupies a charisma free-zone all of his own. After all, if you run a Bank for your own interests and not those of your customers, you will treat the country and her voters in the same way.<br /><br /><br />Austria in truth has never recovered from the shock of the artillery bombardment of the Karl-Marx-Hof at the centre of “Red Vienna” in 1934 by the Christian Social conservative predecessors of the Austrian People’s Party. The elites now justify to themselves that they have to do everything to avoid such a crisis ever again, but a high price has to be paid in terms of corruption (or at least a good appearance of it) and contempt for a normal democratic process with an effective opposition. And the Austrian state presently has other threats than communists within. The time of the unbreakable “Social Partnership” of the Chamber of Workers (represented by Tumpel), the Trade Unions Federations (represented by Verzetnitsch) and the Chamber of Economics (represented by Leitl) should be long gone. Ironically, it is self-serving and no longer serves the interests of society or of ordinary Austrians outside the elites.<br /><br /><br />We are Europe<br /><br /><br />If the BAWAG affair comes to be seen as “business as usual in Austria,” Vienna could loose its place in banking as the mini-Frankfurt-on-the-Danube. Even as the BAWAG scandal broke, it was revealed that the <a href="http://www.hypo-alpe-adria.at/">Hypo Adria Alpe Bank</a> has run up €328 million in losses in a mere two weeks of foreign exchange trading, prompting descriptions in the Austrian press of “third-world standards.” Surely this Austria is not the same country as the one holding the Presidency of the EU!<br /><br /><br />With the slogan “Youth can’t wait – We are Europe,” the ÖGB Youth Movement demonstrated outside the recent EU Youth Minister’s Meeting in Bad Ischl. You bet the Socialists can’t wait – after all Verzetnitsch started his climb to penthouse life within this same youth movement. In reality, Austria is an all too accurate mirror of the “social partnership” model that is also practiced by the European institutions.<br /><br /><br /><br />------------------------------------------------------------------------------------------------<br /><br /><br /><br /><br /><br /><br /><a href="http://www.thenation.com/doc/20060417/forum">http://www.thenation.com/doc/20060417/forum</a><br /><br />Taming Global Capitalism Anew<br /><br /><br />By Joseph E. Stiglitz, Thea Lee, Will Hutton, James K. Galbraith, Jeff Faux, Joel Rogers, Marcellus Andrews & Jane D'Arista<br /><br /><a href="http://www.thenation.com/doc/20060417">This article appeared in the April 17, 2006 edition of The Nation</a><br /><br />March 30, 2006<br /><br /><br />One of the greatest achievements of the twentieth century was a social contract that provided far more economic security and prosperity for working Americans than had existed in any previous period. But successive waves of changes in the world economy, together with the ascendancy of a strain of economic philosophy that puts the freedom of capital above the interests of society, have placed enormous strain on the postwar social contracts of all Western countries, resulting in stagnating wages, greater insecurity and levels of income and wealth inequality not seen since the early 1900s. And even more far-reaching challenges arising from the current pattern of globalization, with its emphasis on the outsourcing of service as well as manufacturing jobs, may lie ahead.<br /><br /><br />Developing a strategy for taming global capitalism anew therefore constitutes the overriding challenge of our time. For that reason, we have invited some of the leading progressive thinkers in this country and a longtime observer of the American economy to offer their ideas on how the United States, as the major capitalist country and the major player in globalization, could reshape both capitalism and globalization in ways that build a new social contract serving the needs of working people everywhere.--The Editors<br /><br /><br />A Progressive Response to Globalization<br /><br /><br />JOSEPH E. STIGLITZ<br /><br /><br />Globalization is often viewed as posing a major threat to "capitalism with a human face." Trade liberalization puts downward pressure on unskilled wages (and increasingly even skilled wages), increasing inequality in more developed countries. Countries trying to compete are repeatedly told to increase labor-market flexibility, code words for lowering the minimum wage and weakening worker protections. Competition for business puts pressure to reduce taxes on corporate income and on capital more generally, decreasing funds available for supporting basic investments in people and the safety net. And international agreements, such as Chapter 11 of NAFTA and the intellectual property provisions of the Uruguay Round of trade talks, have been used to short-circuit national democratic processes.<br /><br /><br />Yet Sweden and the other Scandinavian countries have shown that there is an alternative way to cope with globalization. These countries are highly integrated into the global economy; but they are highly successful economies that still provide strong social protections and make high levels of investments in people. They have been successful in part because of these policies, not in spite of them. Full employment and strong safety nets enable individuals to undertake more risk (with the commensurate high rewards) without unduly worrying about the downside of failure. These countries have not abandoned the welfare state but have fine-tuned it to meet globalization's new demands.<br /><br /><br />We should do the same.<br /><br /><br />At the same time, we must temper globalization itself--not by withdrawing behind protectionist borders and not by trying to enhance the well-being of our citizens at the expense of those abroad who are even poorer. Rather, we should reshape globalization to make it more democratic, and we should moderate its pace to give countries more time to cope. There will still be losers in a reshaped globalization, but the vast majority of citizens in both the North and the South will be better off with the right policies.<br /><br /><br />Coping with globalization entails recognizing both the consequences of globalization and the limitations in the standard responses. Increased education is important, but it is not enough. At this time we should make taxation more progressive in order to offset the economic forces increasing inequality, not decrease the degree of progressivity as we have done in the past five years. We should strengthen our safety nets, not weaken them.<br /><br /><br />The United States has one of the worst unemployment insurance programs in the advanced industrial countries. A redesign of our social insurance program to make it more of an integrated lifetime social insurance program, along the lines of the provident funds of Singapore, could provide substantially more complete insurance coverage without weakening economic incentives.<br /><br /><br />Most important, we should have a true commitment to full employment. The high priests of the financial markets have convinced many of the dangers of even moderate inflation, contending that even slight increases in inflation are very costly, especially to the poor, and that the costs of reversing inflation are extremely high. This is all nonsense, as we demonstrated in successive issues of the Economic Report of the President while I was chair of the Council of Economic Advisers. Today we should be worried not about inflation but about our lackluster growth, which leaves a large "jobs deficit." Full employment is the most important social protection. And even moderate unemployment, even of the disguised kind (discouraged workers, increased numbers on disability and large numbers who work part-time involuntarily), puts downward pressure on wages, exacerbating the problems brought on by globalization.<br /><br /><br />There are two other elements of a progressive agenda that are sometimes not given sufficient attention. The first is enhancing savings among lower-income individuals, including by matching grants (for example, by cashable tax credits). Some conservatives have embraced the concept of the ownership society--by which they too often mean simply that those who own more get to own still more. But it is important for individuals of modest means to have a cushion to protect themselves against the vagaries of the market.<br /><br /><br />The second is enhancing investment in research, strengthening our competitive advantages, so necessary if we are to maintain robust growth. Today, a disproportionate amount of our nation's research budget is spent on military objectives; funds for basic science, or even advances in applied technology that would improve living standards and help us protect the environment, are scarce.<br /><br /><br />Globalization's advocates often portray it as presenting unprecedented opportunities. For those committed to creating a society based on principles of social justice, it is also presenting unprecedented challenges. These are some of the elements of the progressive response to these challenges.<br /><br />Joseph E. Stiglitz, University Professor at Columbia University, won the Nobel Prize for Economics in 2001 and is the author of The Roaring Nineties.<br /><br /><br />A New Domestic and Global Strategy<br /><br /><br />THEA LEE<br /><br /><br />The challenge we face today in the United States is how to engage in the global economy without decimating our own middle class and gutting our social regulatory system. The logic of global capitalism as currently practiced is to drive down workers' wages, weaken their bargaining power and strip away their social protections in both rich and poor countries, while simultaneously encouraging and celebrating the excesses of debt-driven consumerism.<br /><br /><br />But this system is inherently unstable and unsustainable. The United States is running a current account deficit of more than $700 billion a year to fund consumption we can't afford. This is not financially sustainable. Meanwhile, many workers in developing countries work twelve to sixteen hours a day, in dangerous conditions, without the right to form an independent union, at poverty pay, so that multinational corporations can boost their bottom line. That is not politically sustainable.<br /><br /><br />Any policy agenda to build a better system must have both a national and an international component. At the national level, we need to fight for workers' rights to form unions and bargain for decent wages and working conditions; we need affordable and equitable healthcare and retirement security systems that do not create competitive disadvantages for domestic companies; and we need to invest in education, technology and infrastructure, especially in manufacturing.<br /><br /><br />While national reforms are critical to improving workers' daily lives, we must not ignore the global component, because if we don't get that piece right, unregulated global competitive pressures will eventually undermine any domestic reforms and worker gains. Trying to protect the American middle class without changing our interaction with the global economy is like pouring water into a leaky vessel.<br /><br /><br />For the United States, there are three key components to a new global strategy: taxes, currency and trade rules. In order to bring about real change, we need to work with domestic businesses as well as with our global justice allies. Domestic producers are equally frustrated by US policies that make it virtually impossible for them to compete in the global economy while producing on American soil.<br /><br /><br />First, our corporate tax system is insanely inefficient and unfair. American taxpayers currently subsidize the offshoring of their own jobs (at a rate of at least $7 billion a year) through policies that exempt income earned offshore from corporate taxes. Very few other countries have similar systems, and most have some form of "border adjustable" tax that exempts exports from sales or value-added taxes. Our current system taxes exports, while subsidizing the offshoring of jobs. We need a complete overhaul of our corporate tax system to address this self-inflicted wound.<br /><br /><br />Second, the overvalued dollar is killing our domestic manufacturing sector and exacerbating the problems in tradable services (a category that now covers everything not nailed to the floor). While the high dollar policy serves the Wal-Marts of the corporate world very well, it creates almost insurmountable competitive problems for domestic producers. The Bush Administration has clearly decided to cater to the retailers, outsourcers and importers. It is now up to Congress to pass legislation that will force China and Japan to stop manipulating their currencies to gain competitive advantage.<br /><br /><br />Third, the framework of rules in the global trading system (through the WTO and our own domestic agreements) is severely lopsided in favor of multinational corporate interests--leaving workers, small farmers, the environment and the poor ever more vulnerable and weak. If we understand the central problem of the global economy to be one of an imbalance of power and income distribution, then it becomes clear that global trade rules need to be rewritten to insure that workers have a voice at their workplaces and in national political debates. Linking core workers' rights as defined by the International Labor Organization to market access would do three important things: It would empower workers and give them a fighting chance to bargain for their fair share of the wealth they create; it would help build a middle class, so that workers can buy some of the goods they produce; and it would put a leash on multinational corporations by taking the profit out of exploitation.<br /><br /><br />No single action will get us out of the hole we're in, but together these tax, currency and trade policy pieces point us in the right direction.<br /><br />Thea Lee is policy director of the AFL-CIO.<br /><br /><br />Re-creating Public-Interest Politics<br /><br /><br />WILL HUTTON<br /><br /><br />Looked at from Europe and Asia, the US economy has emerged as a formidable global competitor with the leading brands, the leading technologies and a careful strategy of producing low-value-added goods in Asia while nurturing high technology at home. If American blue-collar jobs have been lost in mass-production manufacturing, they have been created in distribution, transportation and services--and also in the high-value-added "knowledge economy."<br /><br /><br />Thus American blue-collar workers are split into four components: those under direct competition from Asia, those working in the blue-collar service sector, those directly or indirectly benefiting from high-value-added knowledge work and those who work in the public sector. Each component is in very different circumstances--and even in the public sector, the appeal of trade unions and collective action is fading. Democrats have allowed too many of these new categories of workers to be recruited to the Republican cause with their redefinition of the public interest as private. The repercussions for the battle of ideas have been global.<br /><br /><br />The first task in any rebirth of liberal politics is to recognize contemporary realities--the primacy of a highly individualized culture with a highly segmented working class with very different objective interests--and not hanker to re-create an order that is past. Liberals need to be clear-eyed about the extent to which the current world system benefits the United States; for example, Chinese goods are cheap, boost real incomes and create a disinflationary climate of low interest rates that has provided a massive economic stimulus. Protection might benefit one of the four components of the working class--those in direct competition with Asia--but it would hurt the other three, not to mention poverty-stricken Asian peasants now delighted to have the opportunity for self-improvement.<br /><br /><br />The second task is to understand that winning the argument at the big political level, as much as detailed policies, is a condition for winning power. In this regard, what has to be done is not to make the case for "government" or "collective" action, which goes against the contemporary grain of American political culture, but to recapture the idea of the public and the importance of the public institutions through which it is delivered. For example, American universities--among the country's great public institutions--are the envy of the world, but they have increasingly become the preserve of the children of a rich elite who can afford the stunning fees, with a consequent alarming reduction in social mobility. They must be reclaimed; even the top private universities recognize the "publicness" of their vocation and the degree to which the "public" is currently being corrupted. Social mobility is a public interest, and its decline is of public concern. The argument needs to be made in those terms.<br /><br /><br />I would go further still. The United States was colonized by the values of the Enlightenment and its commitment to reason, to checks and balances in government, and to the importance of a lively public sphere. It was these Enlightenment values interacting with the great nineteenth-century egalitarian tradition that gave the United States its dynamism as much as its go-getting capitalism. Now the values of the market and increasingly religion have been allowed to crowd out the vitality of the entire fabric of Enlightenment institutions. The liberal case surely has to be to reassert why these institutions are so important and to remake the case in today's context--hence the instinctive liberal support for open-sourcing, the public dissemination of knowledge and the fair distribution of access to information. I would also add the old progressive case against excessive corporate power and breathe life into the Sherman and Clayton acts. Trustbusting and taking on the creationists are essential parts of the story.<br /><br /><br />We also need to revive institutions of grassroots altruism and solidarity. Nowhere in the industrialized West has the progressive cause gone far without the support of organized labor; but the conventional trade union no longer captures the imagination or hearts of working people. Only when unions start growing with a much more clearheaded sense of what their members want and what can be delivered will there be a more secure political base.<br /><br /><br />But it all starts with associating liberals with the idea of the public in its best Enlightenment sense, showing how that has worked for the United States in the past and could work for it in the future.<br /><br />Will Hutton, a British writer, is the author of A Declaration of Interdependence (Norton) and is completing a new book on China and the United States.<br /><br /><br />Taming Predatory Capitalism<br /><br /><br />JAMES K. GALBRAITH<br /><br /><br />In 1899 Thorstein Veblen described predation as a phase in the evolution of culture, "attained only when the predatory attitude has become the habitual and accredited spiritual attitude...when the fight has become the dominant note in the current theory of life." After an entire century's struggle to escape from this phase, we've suffered a relapse.<br /><br /><br />The predators are everywhere unleashed; and the institutions built to contain them, from the United Nations to the AFL-CIO to the SEC, are everywhere under siege. Predation has again become the defining feature of economic life. Our first problem is to grasp this reality in full.<br /><br /><br />Postwar prosperity was built on a vast cut in the cost of security and the achievement of peace in Europe and much of Asia. The American role in the cold war system was to provide security; for this the dollar's role as anchor of the world trading system was our reward. But now, with Iraq, we are seen worldwide as the leading predator state, promoting war as a solution rather than as the ultimate economic and human horror. For this, many would like to see our privileges revoked.<br /><br /><br />Corporate and financial fraud and political corruption form the second great domain of predatory capitalism. DeLay, Frist and Abramoff are the names in the news, but the tone is set by the leadership--Cheney of Halliburton and Bush of Harken Energy--a large predator and a small scavenger, specialists in cronyism and expert in nothing else. When predation becomes the dominant business and political form, the foundation of capitalism crumbles. Markets lose legitimacy, investors fly to safety in bonds, and authentic innovation and shared growth both become unattainable. The solution must be not just a change of parties but a new political class, including a new media not under corrupt control.<br /><br /><br />Then there is the predatory attack on unions and labor, in which many economists are complicit. This is far advanced in America and most visible today in Europe, as reflected by the doctrine of flexible labor markets, which claims that the conquest of unemployment requires cutting the pay of the working poor. But there is no history of unemployment ever being conquered this way--certainly not in the United States of the 1940s, 1960s or 1990s. Modern Europe also affords counterexamples of equalizing growth, from Norway and Denmark to recent gains in Spain, as well as object lessons, most recently in France, of the catastrophe of designed exclusion.<br /><br /><br />The way forward is a program for growth and justice built on the needs of the working population and the middle class. To begin with, in the United States there must be a powerful demolition of the old political order: We need elections where all votes are cast and counted. The campaign against voter repression is the essential civil rights struggle of our time, even though most progressives don't seem to realize it yet. Prevailing will require fundamental reform such as the introduction of nationwide vote-by-mail (the Oregon system). Without that, and also many relentless prosecutions, nothing else will be achieved.<br /><br /><br />The economic commitment, in turn, must be to full employment here, to egalitarian growth in Europe and Japan, and to a worldwide development strategy favoring civil infrastructure and the poor. Public capital investment, stronger unions and a high minimum wage should frame the domestic agenda. Overseas, crackdowns on tax havens and the arms trade, a stabilizing financial system and an end to the debt peonage of poor countries should be among the priorities of a new structure.<br /><br /><br />The truths are that egalitarian growth is efficient, that speculation must be regulated, that crime starts at the top and that peace is the primary public good. These truths are poison to predators and are the reason predators have fostered and subsidized an entire cynical intellectual movement devoted to "free" markets made up of a class of professor-courtiers now everywhere in view. Taming predatory capitalism could start with breaking this econo-corporate analytical axis, and reviving the concept of countervailing power, first formulated by John Kenneth Galbraith in 1952.<br /><br />James K. Galbraith, chair of the board of Economists for Peace and Security, teaches at the University of Texas and is senior scholar with the Levy Economics Institute.<br /><br /><br />A North American Social Contract<br /><br /><br />JEFF FAUX<br /><br /><br />Social justice will come to the global economy only when enough people in enough nation-states are organized across borders to demand it. Yet in a world of 6.5 billion people in more than 200 separate countries--representing wide differences in culture, living standards and political consciousness--the idea of a popular transnational politics effective enough to humanize the relentlessly interconnecting markets seems impossibly utopian.<br /><br /><br />But if we think of establishing a global social contract as a step-by-step process, in which political solidarity is built first among neighboring societies, region by region, it becomes easier to imagine. The ongoing struggle for a "Social Europe" to match the expanded<br /><br /><br />European capitalist market offers the best real-world example of the promise of a regional social contract.<br /><br /><br />We should open up a second front in this global class war in North America. The North American Free Trade Agreement was the template for the neoliberal global project. In its protection of corporate interests and its undermining of democracy, NAFTA is even more reactionary than the World Trade Organization. Not surprisingly, it has reinforced inequality and insecurity in all three countries--most visibly demonstrated by the daily migration of Mexicans across the border, desperately seeking jobs. NAFTA's failure makes North America a microcosm of globalization's Catch-22: Bringing social justice to global markets requires global institutions to regulate global business, but these institutions are dominated by elites who oppose social justice.<br /><br /><br />After twelve years, integration among the three North American economies has gone too far to reverse. So it is time for progressives in all three countries to mobilize together to promote a social contract on their own continent. This does not mean merging into one country. Rather, it means the creation of a cross-border political movement to challenge the agenda of elites in all three countries, who established NAFTA precisely to escape democratic constraints on their wealth and power.<br /><br /><br />The problems of developing political solidarity across North America's national borders are different from but not necessarily more difficult than those encountered among the twenty-five countries that now make up the European Union. A cross-border movement could build on the many organizational and personal relationships that already exist.<br /><br /><br />Early steps to gain experience and trust could include joint actions against corporate abuses that span the continent. A simultaneous strike against a common employer or a protest against a common environmental abuse could dramatize the interests that people in all three countries share. Progressives could develop a common legislative agenda, introducing the same proposals in all three legislatures. This agenda might come to form the basis of a new North American social contract that would include the following elements:<br /><br /><br />§ A Bill of Rights for citizens of North America, enforceable in all countries, that would reassert the primacy of civil protection of individuals and democratic government over the extraordinary privileges NAFTA gives to corporate investors.<br /><br /><br />§ A New Continental Deal, in which Canada and the United States commit substantial long-term aid to Mexico in order to nurture higher and sustainable economic growth while Mexico commits to policies (independent trade unions, minimum wages, equitable taxes) that assure a wider distribution of the benefits of growth.<br /><br /><br />§ A Continental Development Strategy that shifts the economic policy objectives of all three countries from subsidizing pursuit of global profits by corporate investors to support of greater industrial self-sufficiency, resource conservation and increased investment in health and education. Driven by these goals, a progressive North American Customs Union would manage modest levels of balanced trade with the rest of the world.<br />Creating a politics around such a continental social contract could help inspire progressive activists to develop their own common vision of the future to replace NAFTA's nihilist nightmare of unregulated capitalism. Such a movement would also help reinforce beleaguered progressives in Europe, South America and Southeast Asia (China and India are regions in themselves), who are trying to bring to life regional models of development that respect human life and dignity. Finally, it could help undercut American elites' messianic illusions of their moral right to rule the world--which infects liberals as well as conservatives--and force them to turn to the humbler but more productive task of making their own part of the globe a better place.<br /><br />Jeff Faux was the founder and is now di stinguished fellow at the Economic Policy Institute. His latest book is The Global Class War.<br /><br /><br />Build the High Road Here<br /><br /><br />JOEL ROGERS<br /><br /><br />American progressives have lots of ideas on the alternative international rules and institutions in monetary policy, finance, trade, human rights and development needed to make globalization work better for the North and South. What we lack is the power to implement them. Under the "dictatorship of no alternatives" that defines current policy debates, it is important to propose one to the fraying "Washington Consensus" and seek allies, particularly in this NAFTA hemisphere, in its enactment. But we should not wait on international reform to build democratic power in this economy, starting from where we are right now. We should build a high-road--high-wage, low-waste, democratically accountable--economy right here. Doing so will give focus to domestic efforts, connect them practically to international ones and eventually yield the organization, experience and confident social base we want to contribute to global fights. Building the high road here should be at least half of any international strategy.<br /><br /><br />Of course, some progressives think internationalization already dooms this enterprise--that capital's mobility will defeat any attempt at increasing democratic control over the economy. But they're mistaken. Economies don't just slide around on a frictionless, flat world. They have gravity and traction. The economic importance of place hasn't been destroyed by internationalization but in many ways has increased. Capital markets are far from perfect, and capital is less mobile than commonly assumed. And some constraints on capital are actually a net gain to it, not a loss.<br /><br /><br />Around the country, hundreds of largely isolated projects are already showing this. They include worker-training and skill-certification programs that increase productivity while capturing it in income; the use of union pension funds to stabilize and grow distressed local economies while generating returns on investment; "smart growth" policies that reduce commuting times and lower real housing costs while improving the environment; living-wage and allied efforts to raise standards on company performance while increasing productivity; and the Apollo Alliance program for good jobs and energy independence. These efforts are considered by many progressives to be a sidebar to their main show and usually not even as a single class of activities. In fact, they are all examples of the high-road politics we should be pursuing.<br /><br /><br />This harnesses democracy as a force of production, a source of value, and not just values in the economy. It builds productive infrastructure (in part physical, in larger part institutional) that adds value, reduces waste and captures the benefits of doing both. Such infrastructure attracts capital by increasing its return but also grounds capital by its own immobility. And with capital's exit threats thus reduced, real bargaining can again begin. The essence of that bargaining is demanding more of capital than is now demanded by markets--less pollution, higher wages, better labor relations, more community investment--in exchange for the infrastructure that allows capital to meet the demands profitably under competitive conditions.<br /><br /><br />None of this is rocket science. We already know how to add value in places by improving education and worker training; increasing research and commercialization capacity; providing the marketing, financial and other business services that are beyond the capacities of individual firms; and helping to cluster firms to realize complementary strengths while enlisting workers in their upgrading. We know how to reduce waste by establishing markets and making direct investment in renewable energy and more resource-efficient--and, with accurate accounting, much cheaper--energy, housing, transportation and consumer durables. We know how to improve government efficiency by democratizing elections, applying the private sector's metrics revolution to its operations and engaging citizen organizations in open-source problem-solving and regulatory enforcement. Doing these things together improves living standards by strengthening democracy. It shows democracy as a solution in organizing daily life, not part of the problem.<br /><br /><br />This is not a new insight. Markets can't set rules for themselves, solve their collective-action problems or elicit wide voluntary citizen contribution. Democracy's ability to do them all is its signature strength, and there are no limits on their being done better and better--thus producing more wealth, more citizen engagement and wider freedom in future choice. This directly helps immobile workers, even under internationalization. Indeed, even in the "worst case" of perfect competition, with instantaneous capital adjustment to changes in expected after-tax rates of profit, all gains from such place-based democratic efficiency would go to the immobile workers who call those places home.<br /><br /><br />Neoliberalism declares unfettered business domination our best bet for material well-being. We should declare high-road democracy a better bet, and invite others to place it with us. We will not lack for takers in the United States. Americans are sick to death of "business as usual," and desperate for an alternative that works. And our working class wants more of government than death and taxes, more of life than their irrelevance, more of their "leaders" than fake empathy and real contempt. A role in constructing a better economy, and a society fit to live in, is what paving the high road provides.<br /><br />Joel Rogers, a Nation contributing editor, teaches at the University of Wisconsin.<br /><br /><br />Universal Capitalism<br /><br /><br />MARCELLUS ANDREWS<br /><br /><br />The non-college-educated majority of working Americans, and increasingly even some college-educated workers, face two long-term problems. First, the buying power of their wages cannot keep pace with the cost of the things they need, including healthcare, housing and schooling. Second, their path to upward economic mobility is disappearing because stagnant and falling real wages combined with ever more severe economic segregation limit their ability to invest in themselves or their children, whether alone or collectively, because of the weakened tax base of working-class communities.<br /><br /><br />It is very difficult to find a way to reverse the downward pull of globalization and global labor migration on the wages of modestly educated people. But that does not mean that we are without a way of improving the standard of living of working people. Ironically, the problem may provide its own solution. Let me explain. Contemporary economic trends are pushing the wages of workers down while boosting the returns to financial capital and knowledge capital. That being the case, the best way to promote economic opportunity for low-wage workers and especially their children is to pioneer collective forms of capital ownership and wealth accumulation. In short, we should work to make every American a capital owner.<br /><br /><br />One way to proceed is for the federal government to reserve a portion of each year's tax receipts--say, 1 percent of GDP--for contributions into a collective capital account that is invested in a set of privately managed and federally supervised index funds. This capital fund, which I will call the Opportunity Fund, would be a trust fund completely free of government interference, subject to the same rules and regulations as other index and mutual funds. With contributions of tax receipts each year, its value would grow as the financial wealth of the country and the economy grows, generating not only capital gains but also interest and dividend income for the American people.<br /><br /><br />The interest and dividend income generated by the Opportunity Fund could be used in a variety of ways. It could be used to supplement working families' wage income by providing the funds needed for a basic annual income payment, whose size could vary according to such criteria as age, number of children and income level (perhaps with a work requirement to avoid dependency problems). It could also be used to fund a child savings account system that builds up an inheritance for every child on a progressive basis, with a larger share of the funds going to children from poorer families. The child savings account could be used when a person reaches age 18 or soon thereafter to pay for college, buy a home or establish a retirement nest egg, or to pursue some other approved investment purpose.<br /><br /><br />The Opportunity Fund form of universal capitalism is, in short, a method for redistributing capital income through collective savings. It could put a more sustainable floor on the income of workers than does our collapsing welfare state. It could provide the financial basis for the children of every working family to be able to invest in their own human capital and their own economic future. It could also help correct the problem of economic and wealth inequality by creating a system of public inheritance that would help those who are not lucky enough to have been born into families that can pass on wealth to their children.<br /><br /><br />The Opportunity Fund is viable, practical and eminently doable right now. It is also the best way--perhaps the only way--to meet all of our country's most pressing economic and social objectives. Not only must we promote fairness within and between generations; we also need to save more and borrow less (subject of course to Keynes's lesson that too much saving too fast can cause recession and unemployment) so our country will have a more sustainable financial future. And we must also rebuild our economy by investing more in order to be able to better compete in today's world economy. The Opportunity Fund form of universal capitalism is an idea whose time has come because it can meet these objectives better than the current collapsing social welfare system.<br /><br />Marcellus Andrews is the author of The Political Economy of Hope and Fear: Capitalism and the Black Condition in America.<br /><br /><br />Reform the International Financial System<br /><br /><br />JANE D'ARISTA<br /><br /><br />President Richard Nixon's decision to end the Bretton Woods agreement in 1971 was a milestone in the erosion of the Western social contract. This decision ushered in a new international monetary system--one in which international payments in dollars would be made by private banks rather than exchanges of gold between the Federal Reserve and other central banks, and the value of the dollar would be determined by supply and demand.<br /><br /><br />This new dollar-centric international monetary system has been a powerful force in shaping the global economy and is, to a great extent, responsible for the current pattern of globalization. For the United States, it has meant that US policy-makers have had to hold real US interest rates higher than those of other strong currencies and have had to accept a higher value of the dollar relative to other major currencies. This has not only led to slower US economic growth but has made US goods less competitive vis-a-vis those of other economies. Thus the cost of American dollar hegemony has been the loss of export markets and, along with it, the loss of relatively good jobs in the tradable-goods sector of the economy.<br /><br /><br />For developing countries, the consequences have been no less serious. The post-Bretton Woods system has pushed more and more economies toward export-led growth, which tends to suppress domestic wages and regulatory standards. Countries that cannot pay for imports and attract foreign investment in their own currencies must "earn" these external currencies, mainly dollars, by exporting more than they import to one or a few countries that issue the global means of payment. To remain competitive with other nations and insure continued access to these markets, they have adopted policies that maintain downward pressure on wages and exchange rates and have shunned those that stimulate the demand necessary for sustained development.<br /><br /><br />This export-led growth paradigm created by the current international monetary system appears to have benefited the United States, the key currency country, especially in recent years, enabling us to consume more than we produce. A large share of the dollars that flow out of the United States to pay for imports flows back as investments in US financial assets. This foreign investment expands credit and allows Americans to spend more and save less. It also makes many Americans feel wealthier than they actually are by fueling inflated real estate and equity prices. But the cost of this pattern of growth has been the rapid buildup of both domestic and external debt.<br /><br /><br />This extraordinary growth in both US domestic and external debt now raises questions about the sustainability of this paradigm. Will highly indebted US households be forced to reduce their spending? If so, will a fall in imports reduce foreign financial investment, raise interest rates and induce or exacerbate a recession? And if the United States does, in fact, falter in its role as buyer of last resort in the global economy, what policies in which countries will insure continued growth?<br /><br /><br />To build a new global social contract, the underlying logic of the international financial system must be radically altered. What is needed is a new international monetary regime that can open access to international trade and investment for all nations on equal terms by allowing all currencies to be used in cross-border as well as domestic transactions. Keynes's international clearing agency could serve as a basic structure for such a system, reclaiming the public sector's role in global payments through a process of debiting and crediting cross-border payments against reserve accounts held with the clearing agency by member countries, with changes in reserves used to determine periodic adjustments in exchange rates.<br /><br /><br />An international monetary system based on the idea of an international clearing agency could also be designed to create a true lender of last resort, replacing the current ad hoc facilities, which depend on taxpayer donations. This would provide an effective channel for containing damaging financial crises and maintaining the financial stability needed for balanced growth in the global economy. It would also permit a resumption of the demand-led growth policies that are a necessary support for a new, global social contract.<br /><br />Jane D'Arista is an author, lecturer and former Congressional staff economist who writes for the Financial Markets Center.<br /><br /><br /><strong>About Joseph E.Stiglitz</strong><br /><br />Joseph E. Stiglitz is University Professor at Columbia University. He received the Nobel Prize in Economics in 2001 for research on the economics of information. Most recently, he is the co-author, with Linda Bilmes, of The Three Trillion Dollar War: The True Costs of the Iraq Conflict. <a href="http://www.thenation.com/directory/bios/joseph_e_stiglitz">more...</a><br /><br /><br /><strong>About Thea M. Lee<br /></strong><br />Thea M. Lee is policy director of the AFL-CIO. <a href="http://www.thenation.com/directory/bios/thea_lee">more...</a><br /><br /><br /><strong>About Will Hutton</strong><br /><br />Will Hutton's A Declaration of Interdependence: Why America Should Join the World (Norton) was published in May. <a href="http://www.thenation.com/directory/bios/will_hutton">more...</a><br /><br /><br /><strong>About James K. Galbraith</strong><br /><br />James K. Galbraith is author of The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too (Free Press, August 5, 2008). He teaches at The University of Texas at Austin. <a href="http://www.thenation.com/directory/bios/james_k_galbraith">more...</a><br /><br /><br /><strong>About Jeff Faux</strong><br /><br />Jeff Faux was the founder of, and is now distinguished fellow at, the Economic Policy Institute. His latest book is The Global Class War (Wiley). <a href="http://www.thenation.com/directory/bios/jeff_faux">more...</a><br /><br /><br /><strong>About Joel Rogers<br /></strong><br />Joel Rogers, a Nation contributing editor, teaches at the University of Wisconsin, Madison. <a href="http://www.thenation.com/directory/bios/joel_rogers">more...</a><br /><br /><br /><strong>About Marcellus Andrews<br /></strong><br />Marcellus Andrews is the author of The Political Economy of Hope and Fear: Capitalism and the Black Condition in America. <a href="http://www.thenation.com/directory/bios/marcellus_andrews">more...</a><br /><br /><br /><strong>About Jane D'Arista</strong><br /><br />Jane D'Arista is an author, lecturer and former Congressional staff economist who writes for the Financial Markets Center. <a href="http://www.thenation.com/directory/bios/jane_d_arista">more...</a><br /><br /><br /><br /><br /><br />-------------------------------------------------------------------------------------------------<br /><br /><br /><br /><br /><br /><em>The new understanding of the market is essential to comprehend the Network Economy. The Marxist concept of capitalism has long outlived its usefulness, if ever it had any. At most, it was a tool for understanding power relationships in the early Industrial revolution era; as a tool for understanding corporations, it was readily superseded by Coase's theory of the firm. Capitalism is dead. Let us move on to examine the emerging world of the Network Economy and the Network Commonwealth.<br /></em><br /><br /><a href="http://www.panarchy.org/keynes/laissezfaire.1926.html">http://www.panarchy.org/keynes/laissezfaire.1926.html</a><br /><br /><br />John Maynard Keynes<br /><br /><br /><strong><font size="4">THE END OF LAISSEZ-FAIRE<br /></font></strong><br /><br />(1926)<br /><br />--------------------------------------------------------------------------------<br /><br /><br />Note:<br /><br /><br /><br /><em>This essay, which was published as a pamphlet by the Hogarth Press in July 1926, was based on the Sidney Ball Lecture given by Keynes at Oxford in November 1924 and a lecture given by him at the University of Berlin in June 1926.<br /><br /><br />This essay is worth reading for especially two reasons. First of all, for the wealth of historical information about the origin of the laissez-faire expression and attitudes. Secondly, as a political text full of fallacious reasoning and misleading images.<br /><br /><br />Unfortunately, no serious thinker intervened to show the emptiness of Keynes' positions; and so Keynesism became the new economic doctrine and protectionism the political recipe, in fashion once again, leading to all sorts of economic and political disasters.<br /></em><br />--------------------------------------------------------------------------------<br /><br /><br />I<br /><br />The disposition towards public affairs, which we conveniently sum up as individualism and laissez-faire, drew its sustenance from many different rivulets of thought and springs of feeling. For more than a hundred years our philosophers ruled us because, by a miracle, they nearly all agreed or seem to agree on this one thing. We do not dance even yet to a new tune. But a change is in the air. We hear but indistinctly what were once the clearest and most distinguishable voices which have ever instructed political mankind. The orchestra of diverse instruments, the chorus of articulate sound, is receding at last into the distance.<br /><br /><br />At the end of the seventeenth century the divine right of monarchs gave place to natural liberty and to the compact, and the divine right of the church to the principle of toleration, and to the view that a church is 'a voluntary society of men’, coming together, in a way which is 'absolutely free and spontaneous' (Locke, A Letter Concerning Toleration). Fifty years later the divine origin and absolute voice of duty gave place to the calculations of utility. In the hands of Locke and Hume these doctrines founded Individualism. The compact presumed rights in the individual; the new ethics, being no more than a scientific study of the consequences of rational self-love, placed the individual at the centre. ‘The sole trouble Virtue demands', said Hume, 'is that of just Calculation, and a steady preference of the greater Happiness.' (An Enquiry Concerning the Principles of Morals, section LX).<br /><br /><br />These ideas accorded with the practical notions of conservatives and of lawyers. They furnished a satisfactory intellectual foundation to the rights of property and to the liberty of the individual in possession to do what he liked with himself and with his own. This was one of the contributions of the eighteenth century to the air we still breathe.<br /><br /><br /><br /><br /><br /><br />The purpose of promoting the individual was to depose the monarch and the church; the effect - through the new ethical significance attributed to contract - was to buttress property and prescriptions. But it was not long before the claims of society raised themselves anew against the individual. Paley and Bentham accepted utilitarian hedonism from the hands of Hume and his predecessors, but enlarged it into social utility (‘I omit’ says Archdeacon Paley, 'much usual declamation upon the dignity and capacity of our nature, the superiority of the soul to the body, of the rational to the animal part of our constitution; upon the worthiness, refinement, and delicacy of some satisfactions, and the meanness, grossness, and sensuality of others: because I hold that pleasures differ in nothing but in continuance and intensity' - Principles of Moral and Political Philosophy, Book 1, chap. 6). Rousseau took the Social Contract from Locke and drew out of it the General Will. In each case the transition was made by virtue of the new emphasis laid on equality. 'Locke applies his Social Contract to modify the natural equality of mankind, so far as that phrase implies equality of property or even of privilege, in consideration of general security. In Rousseau's version equality is not only the starting-point but the goal.' (Leslie Stephen, English Thought in the Eighteenth Century, II, 192).<br /><br /><br />Paley and Bentham reached the same destination, but by different routes. Paley avoided an egoistic conclusion to his hedonism by a God from the machine. 'Virtue', he says, 'is the doing good to mankind, in obedience to the will of God, and for the sake of everlasting happiness' - in this way bringing I and the others to a parity. Bentham reached the same result by pure reason. There is no rational ground, he argued, for preferring the happiness of one individual, even oneself, to that of any other. Hence the greatest happiness of the greatest number is the sole rational object of conduct - taking utility from Hume, but forgetting that sage man's corollary: 'Tis not contrary to reason to prefer the destruction of the whole world to the scratching of my finger.' 'Tis not contrary to reason for me to choose my total ruin to prevent the least uneasiness of an Indian, or person totally unknown to me ... Reason is and ought only to be the slave of the passions, and can never pretend to any other office than to serve and obey them.'<br /><br /><br />Rousseau derived equality from the state of nature, Paley from the will of God, Bentham from a mathematical law of indifference. Equality and altruism had thus entered political philosophy, and from Rousseau and Bentham sprang both democracy and utilitarian socialism.<br /><br /><br />This is the second current - sprang from long-dead controversies, and carried on its way by long-exploded sophistries - which still permeates our atmosphere of thought but it did not drive out the former current. It mixed with it. The early nineteenth century performed the miraculous union. It harmonised the conservative individualism of Locke, Hume, Johnson, and Burke with the socialism and democratic egalitarianism of Rousseau, Paley, Bentham, and Godwin. (Godwin carried laissez-faire so far that he thought all government an evil, in which Bentham almost agreed with him. The doctrine of equality becomes with him one of extreme individualism, verging on anarchy. 'The universal exercise of private judgement’ he says, 'is a doctrine so unspeakably beautiful that the true politician will certainly feel infinite reluctance in admitting the idea of interfering with it' - see Leslie Stephen, op. cit. II, 277).<br /><br /><br />Nevertheless, that age would have been hard put to it to achieve this harmony of opposites if it had not been for the economists, who sprang into prominence just at the right moment. The idea of a divine harmony between private advantage and the public good is already apparent in Paley. But it was the economists who gave the notion a good scientific basis. Suppose that by the working of natural laws individuals pursuing their own interests with enlightenment in condition of freedom always tend to promote the general interest at the same time! Our philosophical difficulties are resolved-at least for the practical man, who can then concentrate his efforts on securing the necessary conditions of freedom. To the philosophical doctrine that the government has no right to interfere, and the divine that it has no need to interfere, there is added a scientific proof that its interference is inexpedient. This is the third current of thought, just discoverable in Adam Smith, who was ready in the main to allow the public good to rest on 'the natural effort of every individual to better his own condition', but not fully and self-consciously developed until the nineteenth century begins. The principle of laissez-faire had arrived to harmonise individualism and socialism, and to make at one Hume's egoism with the greatest good of the greatest number. The political philosopher could retire in favour of the business man - for the latter could attain the philosopher's summum bonum by just pursuing his own private profit.<br />Yet some other ingredients were needed to complete the pudding. First the corruption and incompetence of eighteenth-century government, many legacies of which survived into the nineteenth. The individualism of the political philosophers pointed to laissez-faire. The divine or scientific harmony (as the case might be) between private interest and public advantage pointed to laissez-faire. But above all, the ineptitude of public administrators strongly prejudiced the practical man in favour of laissez-faire - a sentiment which has by no means disappeared. Almost everything which the State did in the eighteenth century in excess of its minimum functions was, or seemed, injurious or unsuccessful.<br /><br /><br />On the other hand, material progress between 1750 and 1850 came from individual initiative, and owed almost nothing to the directive influence of organised society as a whole. Thus practical experience reinforced a priori reasonings. The philosophers and the economists told us that for sundry deep reasons unfettered private enterprise would promote the greatest good of the whole. What could suit the business man better? And could a practical observer, looking about him, deny that the blessings of improvement which distinguished the age he lived in were traceable to the activities of individuals ‘on the make’?<br /><br /><br />Thus the ground was fertile for a doctrine that, whether on divine, natural, or scientific grounds, state action should be narrowly confined and economic life left, unregulated so far as may be, to the skill and good sense of individual citizens actuated by the admirable motive of trying to get on in the world.<br /><br /><br />By the time that the influence of Paley and his like was waning, the innovations of Darwin were shaking the foundations of belief. Nothing could seem more oppose than the old doctrine and the new - the doctrine which looked on the world as the work of the divine watchmaker and the doctrine which seemed to draw all things out of Chance, Chaos, and Old Time. But at this one point the new ideas bolstered up the old. The economists were teaching that wealth, commerce, and machinery were the children of free competition - that free competition built London. But the Darwinians could go one better than that - free competition had built man. The human eye was no longer the demonstration of design, miraculously contriving all things for the best; it was the supreme achievement of chance, operating under conditions of free competition and laissez-faire. The principle of the survival of the fittest could be regarded as a vast generalisation of the Ricardian economics. Socialist interferences became, in the light of this grander synthesis, not merely inexpedient, but impious, as calculated to retard the onward movement of the mighty process by which we ourselves had risen like Aphrodite out of the primeval slime of ocean.<br /><br /><br />Therefore I trace the peculiar unity of the everyday political philosophy of the nineteenth century to the success with which it harmonised diversified and warring schools and united all good things to a single end. Hume and Paley, Burke and Rousseau, Godwin and Malthus, Cobbett and Huskisson, Bentham and Coleridge, Darwin and the Bishop of Oxford, were all, it was discovered, preaching practically the same thing - individualism and laissez-faire. This was the Church of England and those her apostles, whilst the company of the economists were there to prove that the least deviation into impiety involved financial ruin.<br /><br /><br />These reasons and this atmosphere are the explanations, we know it or not - and most of us in these degenerate days are largely ignorant in the matter - why we feel such a strong bias in favour of laissez-faire, and why state action to regulate the value of money, or the course of investment, or the population, provokes such passionate suspicions in many upright breasts. We have not read these authors; we should consider their arguments preposterous if they were to fall into our hands. Nevertheless we should not, I fancy, think as we do, if Hobbes, Locke, Hume, Rousseau, Paley, Adam Smith, Bentham, and Miss Martineau had not thought and written as they did. A study of the history of opinion is a necessary preliminary to the emancipation of the mind. I do not know which makes a man more conservative - to know nothing but the present, or nothing but the past.<br /><br /><br /><br />--------------------------------------------------------------------------------<br /><br /><br />II<br /><br />I have said that it was the economists who furnished the scientific by which the practical man could solve the contradiction between egoism and socialism which emerged out of the philosophising of the eighteenth century and the decay of revealed religion. But having said this for shortness' sake, I hasten to qualify it. This is what the economists are supposed to have said. No such doctrine is really to be found in the writings of the greatest authorities. It is what the popularisers and the vulgarisers said. It is what the Utilitarians, who admitted Hume's egoism and Bentham's egalitarianism at the same time, were driven to believe in, if they were to effect a synthesis.(One can sympathise with the view of Coleridge, as summarised by Leslie Stephen, that ‘the Utilitarians destroyed every element of cohesion, made Society a struggle of selfish interests, and struck at the very roots of all order, patriotism, poetry, and religion').<br /><br /><br />The language of the economists lent itself to the laissez-faire interpretation. But the popularity of the doctrine must be laid at the door of the political philosophers of the day, whom it happened to suit, rather than of the political economists.<br /><br /><br />The maxim laissez-nous faire is traditionally attributed to the merchant Legendre addressing Colbert some time towards the end of the seventeenth century. ('Que faut-il faire pour vous aider?' asked Colbert. 'Nous laisser faire' answered Legendre). But there is no doubt the first writer to use the phrase, and to use it in clear association with the doctrine, is the Marquis d'Argenson about 1751. (For the history of the phrase, see Oncken, 'Die Maxime Laissez faire et laissez-passer’ from whom most of the following quotations are taken. The claims of the Marquis d'Argenson were overlooked until Oncken put them forward, partly because the relevant passages published during his lifetime were anonymous - Journal Oeconomique, 1751 - and partly because his works were not published in full - though probably passed privately from hand to hand during his lifetime - until 1858 - Mémoires et Journal inédit du Marquis d'Argenson)<br /><br /><br />The Marquis was the first man to wax passionate on the economic advantages of governments leaving trade alone. To govern better, he said, one must govern less. ('Pour gouverner mieux, il faudrait gouverner moins.’) The true cause of the decline of our manufactures, he declared, is the protection we have given to them. ('On ne peut dire autant de nos fabriques: la vraie cause de leur déclin, c'est la protection outrée qu'on leur accorde.') 'Laissez faire, telle devrait être la devise de toute puissance publique, depuis que le monde est civilisé.’ ‘Détestable principe que celui de ne vouloir grandeur que par l'abaissement de nos voisins! Il n'y a que la méchanceté et la malignité du coeur de satisfaites dans ce principe, et l’intérêt y est opposé. Laissez faire, morbleu! Laissez faire!!'<br /><br /><br />Here we have the economic doctrine of laissez-faire, with its most fervent expression in free trade, fully clothed. The phrases and the idea must have passed current in Paris from that time on. But they were slow to establish themselves in literature; and the tradition associating with them the physiocrats, and particularly de Gournay and Quesnay, finds little support in the writings of this school, though they were, of course, proponents of the essential harmony of social and individual interests. The phrase laissez-faire is not to be found in the works of Adam Smith, of Ricardo, or of Malthus. Even the idea is not present in a dogmatic form in any of these authors. Adam Smith, of course, was a Free Trader and an opponent of many eighteenth-century restrictions on trade. But his attitude towards the Navigation Acts and the usury laws shows that he was not dogmatic. Even his famous passage about ‘the invisible hand' reflects the philosophy which we associate with Paley rather than the economic dogma of laissez-faire. As Sidgwick and Cliff Leslie have pointed out, Adam Smith's advocacy of the 'obvious and simple system of natural liberty' is derived from his theistic and optimistic view of the order of the world as set forth in his Theory of Moral Sentiments, rather than any proposition of political economy proper. (Sidgwick, Principles of Political Economy, p. 20).<br /><br /><br />The phrase laissez-faire was, I think, first brought into popular usage in England by a well-known passage of Dr Franklin's. (Bentham uses the expression 'laissez-nous faire' - Works, p. 440). It is not, until we come to the later works of Bentham - who was not an economist at all - that we discover the rule of laissez-faire, in the shape in which our grandfathers knew it, adapted into the service of the Utilitarian philosophy. For example in A Manual of Political Economy, (Written in 1793, a chapter published in the Bibliothèque Britannique in 1798, and the whole first printed in Bowring's edition of this Works - 1843) he writes: 'The general rule is that nothing ought to be done or attempted by government; the motto or watchword of government, on these occasions, ought to be - Be quiet ... The request which agriculture, manufacturers, and commerce present to governments is as modest and reasonable as that which Diogenes made to: Stand out of my sunshine.'<br /><br /><br />From this time on it was the political campaign for free trade, the influence of the so-called Manchester School and of the Benthamite Utilitarians, the utterances of secondary economic authorities and the education stories of Miss Martineau and Mrs Marcet, that fixed laissez-faire in the popular mind as the practical conclusion of orthodox political economy ? with this great difference, that the Malthusian view of population having been accepted in the meantime by this same school of thought, the optimistic laissez-faire of the last half of the eighteenth century gives place to the pessimistic laissez-faire of the last half of the nineteenth century. (Cf. Sidgwick, op. cit. p. 22: 'Even those economists, who adhered in the main to Adam Smith's limitations of the sphere of government, enforced these limitations sadly rather than triumphantly; not as admirers of the social order at present resulting from ‘natural liberty’,, but as convinced that it is at least preferable to any artificial order that government might be able to substitute for it.')<br /><br /><br />In Mrs Marcet's Conversations on Political Economy (1817), Caroline stands out as long as she can in favour of controlling the expenditure of the rich. But by page 418 she has to admit defeat:<br /><br /><br />CAROLINE. The more I learn upon this subject, the more I feel convinced that the interests of nations, as well as those of individuals, so far from being opposed to each other, are in the most perfect unison.<br /><br /><br />MRS B. Liberal and enlarged views will always lead to similar conclusions, and teach us to cherish sentiments of universal benevolence towards each other; hence the superiority of science over mere practical knowledge.<br /><br /><br />By 1850 the Easy Lessons for the Use of Young People, by Archbishop Whately, which the Society for Promoting Christian Knowledge was distributing wholesale, do not admit even of those doubts which Mrs B. allowed Caroline occasionally to entertain. 'More harm than good is likely to be done’ the little book concludes, 'by almost any interference of Government with men's money transactions, whether letting and leasing, or buying and selling of any kind.' True liberty is 'that every man should be left free to dispose of his own property, his own time, and strength, and skill, in whatever way he himself may think fit, provided he does no wrong to his neighbours'.<br /><br /><br /><br /><br /><br /><br />In short, the dogma had got hold of the educational machine; it had become a copybook maxim. The political philosophy, which the seventeenth and eighteenth centuries had forged in order to throw down kings and prelates, had been made milk for babes, and had literally entered the nursery.<br /><br /><br />Finally, in the works of Bastiat we reach the most extravagant and rhapsodical expression of the political economist's religion.<br /><br /><br />In his Harmonies Économiques,<br /><br /><br />I undertake [he says] to demonstrate the Harmony of those laws of Providence which govern human society. What makes these laws harmonious and not discordant is, that all principles, all motives, all springs of action, all interests, co-operate towards a grand final result … And that result is, the indefinite approximation of all classes towards a level, which is always rising; in other words, the equalisation of individuals in the general amelioration.<br /><br /><br />And when, like other priests, he drafts his Credo, it runs as follows:<br /><br /><br />I believe that He who has arranged the material universe has not withheld His regard from the arrangements of the social world. I believe that He has combined and caused to move in harmony free agents as well as inert molecules … I believe that the invincible social tendency is a constant approximation of men towards a common moral, intellectual, and physical level, with at the same time, a progressive and indefinite elevation of that level. I believe that all that is necessary to the gradual and peaceful development of humanity is that its tendencies should not be disturbed, nor have of their movements destroyed.<br /><br /><br />From the time of John Stuart Mill, economists of authority have been in strong reaction against all such ideas. 'Scarcely a single English economist of repute', as Professor Cannan has expressed it, 'will join in a frontal attack upon Socialism in general,’ though, as he also adds, 'nearly every economist, whether of repute or not, is always ready to pick holes in most socialistic proposals'. (Theories of Production and Distribution, p. 494). Economists no longer have any link with the theological or political philosophies out of which the dogma of social harmony was born, and their scientific analysis leads them to no such conclusions.<br /><br /><br />Cairnes, in the introductory lecture on 'Political Economy and Laissez-faire', which he delivered at University College, London, in 1870, was perhaps the first orthodox economist to deliver a frontal attack upon laissez-faire in general. ‘The maxim of laissez-faire', he declared, 'has no scientific basis whatever, but is at best a mere handy rule of practice.’ (Cairnes well described the' prevailing notion' in the following passage from the same lecture: 'The prevailing notion is that P.E. undertakes to show that wealth may be most rapidly accumulated and most fairly distributed; that is to say, that human well-being may be most effectually promoted by the simple process of leaving people to themselves; leaving individuals, that is to say, to follow the promptings of self-interest, unrestrained either by State or by the public opinion, so long as they abstain from force and fraud. This is the doctrine commonly known as laissez-faire; and accordingly political economy is, I think, very generally regarded as a sort of scientific rendering of this maxim - a vindication of freedom of individual enterprise and of contract as the one and sufficient solution of all industrial problems.')<br /><br /><br /><br /><br /><br /><br />This, for fifty years past, has been the view of all leading economists. Some of the most important work of Alfred Marshall - to take one instance - was directed to the elucidation of the leading cases in which private interest and social interest are not harmonious. Nevertheless, the guarded and undogmatic attitude of the best economists has not prevailed against the general opinion that an individualistic laissez-faire is both what they ought to teach and what in fact they do teach.<br /><br /><br /><br />--------------------------------------------------------------------------------<br /><br /><br />III<br /><br />Economists, like other scientists, have chosen the hypothesis from which they set out, and which they offer to beginners because it is the simplest, and not because it is the nearest to the facts. Partly for this reason, but partly, I admit, because they have been biased by the traditions of the subject, they have begun by assuming a state of affairs where the ideal distribution of productive resources can be brought about through individuals acting independently by the method of trial and error in such a way that those individuals who move in the right direction will destroy by competition those who move in the wrong direction. This implies that there must be no mercy or protection for those who embark their capital or their labour in the wrong direction. It is a method of bringing the most successful profit-makers to the top by a ruthless struggle for survival, which selects the most efficient by the bankruptcy of the less efficient. It does not count the cost of the struggle, but looks only to the benefits of the final result which are assumed to be permanent. The object of life being to crop the leaves off the branches up to the greatest possible height, the likeliest way of achieving this end is to leave the giraffes with the longest necks to starve out those whose necks are shorter.<br /><br /><br />Corresponding to this method of attaining the ideal distribution of the instruments of production between different purposes, there is a similar assumption as to how to attain the distribution of what is available for consumption. In the first place, each individual will discover what amongst the possible objects of consumption he wants most by the method of trial and error ‘at the margin’, and in this way not only will each consumer come to distribute his consumption most advantageously, but each object of consumption will find its way into the mouth of the consumer whose relish for it is greatest compared with that of the others, because that consumer will outbid the rest. Thus, if only we leave the giraffes to themselves, (1) the maximum quantity of leaves will be cropped because the giraffes with the longest necks will, by dint of starving out the others, get nearest to the trees; (2) each giraffe will make for the leaves which he finds most succulent amongst those in reach; and (3) the giraffes whose relish for a given leaf is greatest will crane most to reach it. In this way more and juicier leaves will be swallowed, and each individual leaf will reach the throat which thinks it deserves most effort.<br /><br /><br />This assumption, however, of conditions where unhindered natural selection leads to progress, is only one of the two provisional assumptions which, taken as literal truth, have become the twin buttresses of laissez-faire. The other one is the efficacy, and indeed the necessity, of the opportunity for unlimited private money-making as an incentive to maximum effort. Profit accrues, under laissez-faire, to the individual who, whether by skill or good fortune, is found with his productive resources in the right place at the right time. A system which allows the skilful or fortunate individual to reap the whole fruits of this conjuncture evidently offers an immense incentive to the practice of the art of being in the right place at the right time. Thus one of the most powerful of human motives, namely the love of money, is harnessed to the task of distributing economic resources in the way best calculated to increase wealth.<br /><br /><br />The parallelism between economic laissez-faire and Darwinianism, already briefly noted, is now seen, as Herbert Spencer was foremost to recognise, to be very close indeed. Darwin invoked sexual love, acting through sexual selection, as an adjutant to natural selection by competition, to direct evolution along lines which should be desirable as well as effective, so the individualist invokes the love of money, acting through the pursuit of profit, as an adjutant to natural selection, to bring about the production on the greatest possible scale of what is most strongly desired as measured by exchange value.<br /><br /><br />The beauty and the simplicity of such a theory are so great that it is easy to forget that it follows not from the actual facts, but from an incomplete hypothesis introduced for the sake of simplicity. Apart from other objections to be mentioned later, the conclusion that individuals acting independently for their own advantage will produce the greatest aggregate of wealth, depends on a variety of unreal assumptions to the effect that the processes of production and consumption are in no way organic, that there exists a sufficient foreknowledge of conditions and requirements, and that there are adequate opportunities of obtaining this foreknowledge. For economists generally reserve for a later stage of their argument the complications which arise - (1) when the efficient units of production are large relatively to the units of consumption, (2) when overhead costs or joint costs are present, (3) when internal economies tend to aggregation of production, (4) when the time required for adjustments is long, (5) when ignorance prevails over knowledge and (6) when monopolies and combinations interfere with equality in bargaining - they reserve, that is to say, for a later stage their analysis of the actual facts. Moreover, many of those who recognise that the simplified hypothesis does not accurately correspond to fact conclude nevertheless that it does 'represent what is ‘natural’ and therefore ideal.<br /><br /><br />They regard the simplified hypothesis as health, and the further complications as disease.<br /><br /><br />Yet besides this question of fact there are other considerations, familiar enough, which rightly bring into the calculation the cost and character of the competitive struggle itself, and the tendency for wealth to be distributed where it is not appreciated most. If we have the welfare of the giraffes at heart, we must not overlook the sufferings of the shorter necks who are starved out, or the sweet leaves which fall to the ground and are trampled underfoot in the struggle, or the overfeeding of the long-necked ones, or the evil look of anxiety or struggling greediness which overcasts the mild faces of the herd.<br /><br /><br /><br /><br /><br /><br />But the principles of laissez-faire have had other allies besides economic textbooks. It must be admitted that they have been confirmed in the minds of sound thinkers and the reasonable public by the poor quality of the opponent proposals - protectionism on one hand, and Marxian socialism on the other. Yet these doctrines are both characterised, not only or chiefly by their infringing the general presumption in favour of laissez-faire, but by mere logical fallacy. Both are examples of poor thinking, of inability to analyse a process and follow it out to its conclusion. The arguments against them, though reinforced by the principle of laissez-faire, do not strictly require it. Of the two, protectionism is at least plausible, and the forces making for its popularity are nothing to wonder at. But Marxian socialism must always remain a portent to the historians of opinion - how a doctrine so illogical and so dull can have exercised so powerful and enduring an influence over the minds of men and, through them, the events of history. At any rate, the obvious scientific deficiencies of these two schools greatly contributed to the prestige and authority of nineteenth-century laissez-faire.<br /><br /><br />Nor has the most notable divergence into centralised social action on a great scale - the conduct of the late war - encouraged reformers or dispelled old-fashioned prejudices. There is much to be said, it is true, on both sides. War experience in the organisation of socialised production has left some near observers optimistically anxious to repeat it in peace conditions. War socialism unquestionably achieved a production of wealth on a scale far greater than we ever knew in peace, for though the goods and services delivered were destined for immediate and fruitless extinction, none the less they were wealth. Nevertheless, the dissipation of effort was also prodigious, and the atmosphere of waste and not counting the cost was disgusting to any thrifty or provident spirit.<br /><br /><br />Finally, individualism and laissez-faire could not, in spite of their deep roots in the political and moral philosophies of the late eighteenth and early nineteenth centuries, have secured their lasting hold over the conduct of public affairs, if it had not been for their conformity with the needs and wishes of the business world of the day. They gave full scope to our erstwhile heroes, the great business men. “At least one-half of the best ability in the Western world,” Marshall used to say, “is engaged in business.” A great part of ‘the higher imagination' of the age was thus employed. It was on the activities of these men that our hopes of progress were centred.<br /><br /><br />Men of this class (Marshall wrote in 'The Social Possibilities of Economic Chivalry', Economic Journal, XVII, 1907 - 9) live in constantly shifting visions, fashioned in their own brains, of various routes to their desired end; of the difficulties which Nature will oppose to them on each route, and of the contrivances by which they hope to get the better of her opposition. This imagination gains little credit with the people, because it is not allowed to run riot; its strength is disciplined by a stronger will; and its highest, glory is to have attained great ends by means so simple that no one will know, and none but experts will even guess, how a dozen other expedients, each suggesting as much brilliancy to the hasty observer, were set aside in favour of it. The imagination of such a man is employed, like that of the master chess-player, in forecasting the obstacles which may be opposed to the successful issue of his far-reaching projects, and constantly rejecting brilliant suggestions because he has pictured to himself the counter-strokes to them. His strong nervous force is at the opposite extreme of human nature from that nervous irresponsibility which conceives hasty Utopian schemes, and which is rather to be compared to the bold facility of a weak player, who will speedily solve the most difficult chess problem by taking on himself to move the black men as well as the white.<br />This is a fine picture of the great captain of industry, the master-individualist, who serves us in serving himself, just, as any other artist does. Yet this one, in his turn, is becoming a tarnished idol. We grow more doubtful whether it is he who will lead us into paradise by the hand.<br /><br /><br />These many elements have contributed to the current intellectual bias, the mental make-up, the orthodoxy of the day. The compelling force of many of the original reasons has disappeared but, as usual, the vitality of the conclusions outlasts them. To suggest social action for the public good to the City of London is like discussing the Origin of Species with a bishop sixty years ago. The first reaction is not intellectual, but moral. An orthodoxy is in question, and the more persuasive the arguments the graver the offence. Nevertheless, venturing into the den of the lethargic monster, at any rate I have traced his claims and pedigree so as to show that he has ruled over us rather by hereditary right than by personal merit.<br /><br /><br /><br />--------------------------------------------------------------------------------<br /><br /><br />IV<br /><br />Let us clear from the ground the metaphysical or general principles upon which, from time to time, laissez-faire has been founded. It is not true that individuals possess a prescriptive ‘natural liberty’ in their economic activities. There is no ‘compact’ conferring perpetual rights on those who Have or on those who Acquire. The world is not so governed from above that private and social interest always coincide. It is not so managed here below that in practice they coincide. It is not a correct deduction from the principles of economics that enlightened self-interest always operates in the public interest. Nor is it true that self-interest generally is enlightened; more often individuals acting separately to promote their own ends are too ignorant or too weak to attain even these. Experience does not show that individuals, when they make up a social unit, are always less clear-sighted than when they act separately.<br /><br /><br />We cannot therefore settle on abstract grounds, but must handle on its merits in detail what Burke termed “one of the finest problems in legislation, namely, to determine what the State ought to take upon itself to direct by the public wisdom, and what it ought to leave, with as little interference as possible, to individual exertion.” (Quoted by McCulloch in his Principles of Political Economy). We have to discriminate between what Bentham, in his forgotten but useful nomenclature, used to term Agenda and Non-Agenda, and to do this without Bentham's prior presumption that interference is, at the same time, ‘generally needless’ and ‘generally pernicious.’ (Bentham's Manual of Political Economy, published posthumously, in Bowring's edition - 1843). Perhaps the chief task of economists at this hour is to distinguish afresh the Agenda of government from the Non-Agenda; and the companion task of politics is to devise forms of government within a democracy which shall be capable of accomplishing the Agenda. I will illustrate what I have in mind by two examples.<br /><br /><br />(1) I believe that in many cases the ideal size for the unit of control and organisation lies somewhere between the individual and the modern State. I suggest, therefore, that progress lies in the growth and the recognition of semi-autonomous bodies within the State-bodies whose criterion of action within their own field is solely the public good as they understand it, and from whose deliberations motives of private advantage are excluded, though some place it may still be necessary to leave, until the ambit of men's altruism grows wider, to the separate advantage of particular groups, classes, or faculties - bodies which in the ordinary course of affairs are mainly autonomous within their prescribed limitations, but are subject in the last resort to the sovereignty of the democracy expressed through Parliament.<br /><br /><br />I propose a return, it may be said, towards medieval conceptions of separate autonomies. But, in England at any rate, corporations are a mode of government which has never ceased to be important and is sympathetic to our institutions. It is easy to give examples, from what already exists, of separate autonomies which have attained or are approaching the mode I designate - the universities, the Bank of England, the Port of London Authority, even perhaps the railway companies. In Germany there are doubtless analogous instances.<br /><br /><br />But more interesting than these is the trend of joint stock institutions, when they have reached a certain age and size, to approximate to the status of public corporations rather than that of individualistic private enterprise. One of the most interesting and unnoticed developments of recent decades has been the tendency of big enterprise to socialise itself. A point arrives in the growth of a big institution - particularly a big railway or big public utility enterprise, but also a big bank or a big insurance company - at which the owners of the capital, i.e. its shareholders, are almost entirely dissociated from the management, with the result that the direct personal interest of the latter in the making of great profit becomes quite secondary. When this stage is reached, the general stability and reputation of the institution are the more considered by the management than the maximum of profit for the shareholders. The shareholders must be satisfied by conventionally adequate dividends; but once this is secured, the direct interest of the management often consists in avoiding criticism from the public and from the customers of the concern. This is particularly the case if their great size or semi-monopolistic position renders them conspicuous in the public eye and vulnerable to public attack. The extreme instance, perhaps, of this tendency in the case of an institution, theoretically the unrestricted property of private persons, is the Bank of England. It is almost true to say that there is no class of persons in the kingdom of whom the Governor of the Bank of England thinks less when he decides on his policy than of his shareholders. Their rights, in excess of their conventional dividend, have already sunk to the neighbourhood of zero. But the same thing is partly true of many other big institutions. They are, as time goes on, socialising themselves.<br /><br /><br />Not that this is unmixed gain. The same causes promote conservatism and a waning of enterprise. In fact, we already have in these cases many of the faults as well as the advantages of State Socialism. Nevertheless, we see here, I think, a natural line of evolution. The battle of Socialism against unlimited private profit is being won in detail hour by hour. In these particular fields - it remains acute elsewhere - this is no longer the pressing problem. There is, for instance, no so-called important political question so really unimportant, so irrelevant to the reorganisation of the economic life of Great Britain, as the nationalisation of the railways.<br /><br /><br />It is true that many big undertakings, particularly public utility enterprises and other business requiring a large fixed capital, still need to be semi-socialised. But we must keep our minds flexible regarding the forms of this semi-socialism. We must take full advantage of the natural tendencies of the day, and we must probably prefer semi-autonomous corporations to organs of the central government for which ministers of State are directly responsible.<br /><br /><br /><br /><br /><strong><em>I criticise doctrinaire State Socialism, not because it seeks to engage men's altruistic impulses in the service of society, or because it departs from laissez-faire, or because it takes away from man's natural liberty to make a million, or because it has courage for bold experiments. All these things I applaud.</em></strong> I criticise it because it misses the significance of what is actually happening; because it is, in fact, little better than a dusty survival of a plan to meet the problems of fifty years ago, based on a misunderstanding of what someone said a hundred years ago. Nineteenth-century State Socialism sprang from Bentham, free competition, etc., and is in some respects a clearer, in some respects a more muddled version of just the same philosophy as underlies nineteenth-century individualism. Both equally laid all their stress on freedom, the one negatively to avoid limitations on existing freedom, the other positively to destroy natural or acquired monopolies. They are different reactions to the same intellectual atmosphere.<br /><br /><br />(2) I come next to a criterion of Agenda which is particularly relevant to what it is urgent and desirable to do in the near future. We must aim at separating those services which are technically social from those which are technically individual. The most important Agenda of the State relate not to those activities which private individuals are already fulfilling, but to those functions which fall outside the sphere of the individual, to those decisions which are made by no one if the State does not make them. The important thing for government is not to do things which individuals are doing already, and to do them a little better or a little worse; but to do those things which at present are not done at all.<br /><br /><br /><br /><br /><br /><br />It is not within the scope of my purpose on this occasion to develop practical policies. I limit myself, therefore, to naming some instances of what I mean from amongst those problems about which I happen to have thought most.<br /><br /><br />Many of the greatest economic evils of our time are the fruits of risk, uncertainty, and ignorance. It is because particular individuals, fortunate in situation or in abilities, are able to take advantage of uncertainty and ignorance, and also because for the same reason big business is often a lottery, that great inequalities of wealth come about; and these same factors are also the cause of the unemployment of labour, or the disappointment of reasonable business expectations, and of the impairment of efficiency and production. Yet the cure lies outside the operations of individuals; it may even be to the interest of individuals to aggravate the disease. I believe that the cure for these things is partly to be sought in the deliberate control of the currency and of credit by a central institution, and partly in the collection and dissemination on a great scale of data relating to the business situation, including the full publicity, by law if necessary, of all business facts which it is useful to know. These measures would involve society in exercising directive intelligence through some appropriate organ of action over many of the inner intricacies of private business, yet it would leave private initiative and enterprise unhindered. Even if these measures prove insufficient, nevertheless, they will furnish us with better knowledge than we have now for taking the next step.<br /><br /><br />My second example relates to savings and investment. I believe that some coordinated act of intelligent judgement is required as to the scale on which it is desirable that the community as a whole should save, the scale on which these savings should go abroad in the form of foreign investments, and whether the present organisation of the investment market distributes savings along the most nationally productive channels. I do not think that these matters should be left entirely to the chances of private judgement and private profits, as they are at present.<br /><br /><br />My third example concerns population. The time has already come when each country needs a considered national policy about what size of population, whether larger or smaller than at present or the same, is most expedient. And having settled this policy, we must take steps to carry it into operation. The time may arrive a little later when the community as a whole must pay attention to the innate quality as well as to the mere numbers of its future members.<br /><br /><br /><br />--------------------------------------------------------------------------------<br /><br /><br />V<br /><br />These reflections have been directed towards possible improvements in the technique of modern capitalism by the agency of collective action. There is nothing in them which is seriously incompatible with what seems to me to be the essential characteristic of capitalism, namely the dependence upon an intense appeal to the money-making and money-loving instincts of individuals as the main motive force of the economic machine. Nor must I, so near to my end, stray towards other fields. Nevertheless, I may do well to remind you, in conclusion, that the fiercest contests and the most deeply felt divisions of opinion are likely to be waged in the coming years not round technical questions, where the arguments on either side are mainly economic, but round those which, for want of better words, may be called psychological or, perhaps, moral.<br /><br /><br />In Europe, or at least in some parts of Europe - but not, I think, in the United States of America - there is a latent reaction, somewhat widespread, against basing society to the extent that we do upon fostering, encouraging, and protecting the money-motives of individuals. A preference for arranging our affairs in such a way as to appeal to the money-motive as little as possible, rather than as much as possible, need not be entirely a priori, but may be based on the comparison of experiences. Different persons, according to their choice of profession, find the money-motive playing a large or a small part in their daily lives, and historians can tell us about other phases of social organisation in which this motive has played a much smaller part than it does now. Most religions and most philosophies deprecate, to say the least of it, a way of life mainly influenced by considerations of personal money profit. On the other hand, most men today reject ascetic notions and do not doubt the real advantages of wealth. Moreover, it seems obvious to them that one cannot do without the money-motive, and that, apart from certain admitted abuses, it does its job well. In the result the average man averts his attention from the problem, and has no clear idea what he really thinks and feels about the whole confounded matter.<br /><br /><br />Confusion of thought and feeling leads to confusion of speech. Many people, who are really objecting to capitalism as a way of life, argue as though they were objecting to it on the ground of its inefficiency in attaining its own objects. Contrariwise, devotees of capitalism are often unduly conservative, and reject reforms in its technique, which might really strengthen and preserve it, for fear that they may prove to be first steps away from capitalism itself. Nevertheless, a time may be coming when we shall get clearer than at present as to when we are talking about capitalism as an efficient or inefficient technique, and when we are talking about it as desirable or objectionable in itself. For my part I think that capitalism, wisely managed, can probably be made more efficient for attaining economic ends than any alternative system yet in sight, but that in itself it is in many ways extremely objectionable. Our problem is to work out a social organisation which shall be as efficient as possible without offending our notions of a satisfactory way of life.<br /><br /><br />The next step forward must come, not from political agitation or premature experiments, but from thought. We need by an effort of the mind to elucidate our own feelings. At present our sympathy and our judgement are liable to be on different sides, which is a painful and paralysing state of mind. In the field of action reformers will not be successful until they can steadily pursue a clear and definite object with their intellects and their feelings in tune. There is no party in the world at present which appears to me to be pursuing right aims by right methods. Material poverty provides the incentive to change precisely in situations where there is very little margin for experiments. Material prosperity removes the incentive just when it might be safe to take a chance. Europe lacks the means, America the will, to make a move. We need a new set of convictions which spring naturally from a candid examination of our own inner feelings in relation to the outside facts.ITSSD Charitable Missionhttp://www.blogger.com/profile/00790887154748866904noreply@blogger.com0tag:blogger.com,1999:blog-1851218948450486986.post-16873162527525577202008-09-22T07:39:00.022-04:002008-09-22T23:30:28.958-04:00ITSSD Reports: US Fed Must Respect US Taxpayers & Garnish Wall Street Bonuses & Golden Parachutes for Bail-Out Plan to Work<strong><span style="font-size:180%;">[</span><span style="font-size:130%;">See: <em>Garnishment actions on wages and bank accounts</em>, at:</span></strong> <a style="COLOR: #00c; TEXT-DECORATION: underline" href="http://www.fair-debt-collection.com/searches/garnishment.html"><strong>http://www.fair-debt-collection.com/searches/garnishment.html</strong></a> <strong><span style="font-size:180%;">]</span></strong><br /><br /><strong><span style="font-size:180%;">[</span><span style="font-size:130%;">See:</span></strong> <em><strong><span style="font-size:130%;">Attachment - Legal Definition</span></strong></em>, at: <a href="http://definitions.uslegal.com/a/attachment/"><strong>http://definitions.uslegal.com/a/attachment/</strong></a><span style="font-size:180%;"><strong>]</strong>.</span><br /><br /><br /><strong><span style="font-size:180%;">[</span></strong> <strong><span style="font-size:130%;">See: <em>Attachment - Legal Definition</em>, at:</span></strong><br /><a href="http://legal-dictionary.thefreedictionary.com/attachment"><strong>http://legal-dictionary.thefreedictionary.com/attachment</strong></a> <strong><span style="font-size:180%;">].</span></strong><br /><strong><span style="font-size:100%;"></span></strong><br /><strong></strong><br /><strong><span style="font-size:180%;">[</span><span style="font-size:130%;">See: <em>Attachment</em>, at:</span> <a href="http://www.lectlaw.com/def/a086.htm">http://www.lectlaw.com/def/a086.htm</a> <span style="font-size:180%;">].</span></strong><br /><strong></strong><br /><strong></strong><br /><strong><span style="font-size:180%;">[</span><span style="font-size:130%;">See: <em>Bankruptcy Preference</em>, at:</span> <a href="http://www.moranlaw.net/preferences.htm">http://www.moranlaw.net/preferences.htm</a> <span style="font-size:180%;">].</span></strong><br /><strong><span style="font-size:100%;"></span></strong><br /><strong></strong><br /><strong><span style="font-size:180%;">[</span><span style="font-size:130%;">See: Michael Korybut, <em>How Preferences Are Treated Under the New Bankruptcy Law</em>, The Secured Lender (Jan/Feb 2007), at: </span><a href="http://findarticles.com/p/articles/mi_qa5352/is_200701/ai_n21281735/pg_5?tag=untagged">http://findarticles.com/p/articles/mi_qa5352/is_200701/ai_n21281735/pg_5?tag=untagged</a> <span style="font-size:180%;">]</span>.</strong><br /><strong></strong><br /><strong></strong><br /><strong><span style="font-size:180%;">[</span><span style="font-size:130%;">See: <em>Fraudulent Transfers (And How To Avoid Them)</em>, at: </span><a href="http://www.rpifs.com/protection/apfraud.htm">http://www.rpifs.com/protection/apfraud.htm</a> <span style="font-size:180%;">]</span>. </strong><br /><strong></strong><br /><strong></strong><br /><strong><span style="font-size:180%;">[ </span><span style="font-size:130%;">See: <em>Fraudulent Transfers and Bankruptcy Considerations</em>, at: </span><a href="http://www.assetprotectionbook.com/ch6.htm">http://www.assetprotectionbook.com/ch6.htm</a> <span style="font-size:180%;">]</span>.</strong><br /><br />------------------------------------------------------------------------------------------------<br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiyhnyYW1HVJiW448_r7pGDpan8dBZgVZBHUY-75ilQg-F-Glo1WowOQnQsJwZgVZ8RV4xpFJk8ykU-hIa96TCApfS2nRSfOXtjfCdwu_A7uSzMQcW3pfjdvNk3SwAzH3rkYmPHzGH5v99_/s1600-h/Rodney-Dangerfield+-+Get+No+Respect.gif"><img id="BLOGGER_PHOTO_ID_5248818143206537810" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 425px; CURSOR: hand; HEIGHT: 442px" height="400" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiyhnyYW1HVJiW448_r7pGDpan8dBZgVZBHUY-75ilQg-F-Glo1WowOQnQsJwZgVZ8RV4xpFJk8ykU-hIa96TCApfS2nRSfOXtjfCdwu_A7uSzMQcW3pfjdvNk3SwAzH3rkYmPHzGH5v99_/s400/Rodney-Dangerfield+-+Get+No+Respect.gif" width="408" border="0" /></a><a href="http://www.independent.co.uk/news/business/news/fury-at-25bn-bonus-for-lehmans-new-york-staff-937560.html">http://www.independent.co.uk/news/business/news/fury-at-25bn-bonus-for-lehmans-new-york-staff-937560.html</a><br /><br /><strong><span style="font-size:130%;">Fury at $2.5bn bonus for Lehman's New York staff</span></strong><br /><br /><br />By David Prosser<br /><br /><br />The Independent UK<br /><br /><br />Monday, 22 September 2008<br /><br /><br /><strong><em><span style="font-size:130%;">Up to 10,000 staff at the New York office of the bankrupt investment bank Lehman Brothers will share a bonus pool set aside for them that is worth $2.5bn (£1.4bn), Barclays Bank, which is buying the business, confirmed last night.</span></em></strong><br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">The revelation sparked fury among the workers' former colleagues, Lehman's 5,000 staff based in London, who currently have no idea how long they will go on receiving even their basic salaries, let alone any bonus payments.</span></strong> It also prompted a renewed backlash over the compensation culture in global finance, with critics claiming that many bankers receive pay and rewards that bore no relation to the job they had done.<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">A spokesman for Barclays said the $2.5bn bonus pool in New York</span></strong> had been set aside before Lehman Brothers filed for chapter 11 bankruptcy in the United States a week ago. Barclays has agreed that the fund should continue to be ring-fenced now it has taken control of Lehman's US business, a deal agreed by American bankruptcy courts over the weekend.<br /><br /><br /><strong><span style="font-size:180%;">[U.S. EXECUTIVE GREED AT EXPENSE OF AMERICAN AND OTHER TAXPAYERS!! LEHMAN EXECUTIVE BONUSES & GOLDEN PARACHUTES SHOULD NOT BE PROTECTED BY BANKRUPTCY FILING IN ANY COUNTRY - SHOULD BE CONTRIBUTED BY EXECUTIVES TO BAIL-OUT THE U.S. TAXPAYER and PAY SALARIED WORKERS WHO ARE OWED THEIR PAYCHECKS!!]</span></strong><br /><br /><br />Barclays is paying $1.75bn for the US operation of Lehman and is keen to retain its best staff. It said it had made no promises to individual staff members about how much they will receive but that the bonus fund would be paid out. In addition to the $2.5bn cash pool, Barclays is also in negotiations with about 30 executives it considers to be Lehman's best assets and plans to offer them contracts worth tens of millions of dollars. British employees of Lehman described the bonus payments as a "scandal" as they waited anxiously yesterday to see whether a deal could be struck with buyers circling the bank's European operations.<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQUPrGAMWC0LlyR_rttotboS8lmJ-a0wqJyaKoGgUNsPTlJTuDbSwhCshzL5mADc1JS48v5HZvNdz1ffeaXVfOLpXhm23UdbS8b1SDzA5E1hEgyJ4VPDW1SK4F8EkKw7RSMFXN4vPxLn8G/s1600-h/us+mortgage+crisis.gif"><img id="BLOGGER_PHOTO_ID_5249053237596684482" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 462px; CURSOR: hand; HEIGHT: 328px" height="298" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQUPrGAMWC0LlyR_rttotboS8lmJ-a0wqJyaKoGgUNsPTlJTuDbSwhCshzL5mADc1JS48v5HZvNdz1ffeaXVfOLpXhm23UdbS8b1SDzA5E1hEgyJ4VPDW1SK4F8EkKw7RSMFXN4vPxLn8G/s400/us+mortgage+crisis.gif" width="492" border="0" /></a>Many of Lehman's UK staff are particularly angry about the US payouts because it has emerged that in the days running up to the bankruptcy, some $8bn in cash was transferred out of the account of the bank's European business into accounts at the New York head office.<br /></span></strong><br /><br />There is no suggestion any of this cash was used to supplement the bonus fund, but partly as a result of the transfers, PricewaterhouseCoopers (PWC), the administrator to the European business, initially found it impossible to guarantee salaries would be paid. <strong><em><span style="font-size:130%;">The September wages of thousands of European staff were only secured in the middle of last week, when PWC negotiated a £100m loan to fund the payments. PWC wrote to Lehman Brothers' head office in New York last week, requesting the repayment of the $8bn, but a spokesman said yesterday that the administrator had received no formal response.<br /></span></em></strong><br /><br />The row will increase pressure on the Government to tackle perceptions that City pay is out of control. Speaking on The Andrew Marr Show on BBC1 yesterday, <strong><span style="font-size:180%;">Gordon Brown said Britain would review financial services awards following the credit crisis. "There's been a great deal of irresponsibility," the Prime Minister said.</span></strong> <strong><span style="font-size:180%;color:#ff0000;">"There's an element of the bonus system that is unacceptable."<br /></span></strong><br /><br /><strong><span style="font-size:180%;">[THIS IS THE FIRST THING UK MINISTER GORDON BROWN HAS SAID THAT WE AGREE WITH!!!]</span></strong><br /><br /><br />However, Adair Turner, who formally takes over today as chairman of the Financial Services Authority, the UK's chief City regulator, warned it would be very difficult to police individual pay deals.<br /><br /><br /><strong><span style="font-size:180%;">[NONSENSE - A COMPANY THAT IS BANKRUPT IS SUBJECT TO THE OVERSIGHT OF ITS CREDITORS, ESPECIALLY WHERE THE CREDITOR IS THE FEDERAL GOVERNMENT!]</span></strong><br /><br /><br /><strong><em><span style="font-size:130%;">"I think it would be really exceptional in any industry to have direct regulation on what different people are paid, I don't think that's appropriate and I don't think that would be workable," he said.<br /></span></em></strong><br /><br /><strong><span style="font-size:180%;">[IT IS APPROPRIATE FOR REGULATORS, IN A TIME OF CRISIS WHICH TRIGGERS A GOVERNMENT BAIL-OUT, TO OVERSEE AND REGULATE EXECUTIVE COMPENSATION IN EXCESS OF EARNED WAGES - THAT INCLUDES BONUSES, GOLDEN PARACHUTES, & STOCK OPTIONS, WARRANTS, ETC. (WORTHLESS HERE WITHOUT A GOVERNMENT BAIL-OUT!!]</span></strong><br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">"What is appropriate for regulators to do, is the need to ask searching questions about the nature of people's remuneration and to ask questions of institutions as to whether they are paying out bonuses before they are really sure whether the profits are really there."A spokesman for the TUC said the US payouts were unfair.</span></strong> <strong><em><span style="font-size:130%;color:#33cc00;">"It looks like those that will suffer the most from the Lehman Brothers' collapse are those at the bottom of the corporate chain while many of those at the top will be looked after," he said.<br /></span></em></strong><br /><br />Critics of the UK's attitude towards City pay also pointed out that the US has much stronger litigation laws. For example, <strong><span style="font-size:180%;color:#ff0000;">advocates acting for Lehman creditors in the US said over the weekend that they might sue Richard Fuld, the investment bank's chief executive, who was paid $34.4m last year, in an attempt to force him to return some of the money.</span></strong><br /><br /><span style="color:#ff0000;">------------------------------------------------------------------------------------------------- </span><br /><strong><span style="font-size:180%;color:#000000;">[THE DEMOCRATS, NOT THE REPUBLICANS, HAVE IT RIGHT ON THIS ONE!! BUT THEY SHOULD ONLY FOCUS ON EXECUTIVE BONUSES & GOLDEN PARACHUTES TO PRESERVE THE RESPECT AND POCKETBOOK OF THE AMERICAN TAXPAYER - KEEP OUT FOR NOW ALL OTHER LESSER DEMANDS.]</span></strong><br /><br /><br /><a href="http://www.courant.com/news/nationworld/hc-finance0922.artsep22,0,6758548.story">http://www.courant.com/news/nationworld/hc-finance0922.artsep22,0,6758548.story</a><br /><br /><strong><span style="font-size:130%;">Dems Try To Shape Bailout: Seek Pay Limits For Execs, Oversight, Homeowner Aid<br /></span></strong><br /><strong><span style="font-size:130%;"></span></strong><br />By LORI MONTGOMERY And DAVID CHO<br /><br /><br />Washington Post<br /><br /><br />September 22, 2008<br /><br /><br />WASHINGTON — - Congressional Democrats considering the Bush administration's emergency plan to shore up the U.S. financial system on Sunday <strong><span style="font-size:180%;color:#ff0000;">countered with their own demands for limits on executive pay for firms getting bailed out</span></strong>, stricter oversight of the program and provisions for struggling homeowners.<br /><br /><br />Democratic leaders have broadly embraced the administration's proposal to spend up to $700 billion to take troubled assets off the books of faltering firms and are not questioning the need to give the Treasury Department expansive authority to halt the meltdown in world markets. <strong><span style="font-size:180%;color:#ff0000;">But by attempting to limit executive pay, they risk alienating key Republicans who object to such restrictions and delaying passage of the rescue plan, which in turn may stir renewed fear in the markets.</span></strong><br /><br /><br />Sunday night, the <a class="taxInlineTagLink" id="ORGOV000035" title="Federal Reserve" href="http://www.courant.com/topic/economy-business-finance/economy/economic-policy/federal-reserve-ORGOV000035.topic">Federal Reserve</a> said the two remaining investment banks, <a class="taxInlineTagLink" id="ORCRP015181" title="The Goldman Sachs Group Incorporated" href="http://www.courant.com/topic/economy-business-finance/the-goldman-sachs-group-incorporated-ORCRP015181.topic">Goldman Sachs</a> and <a class="taxInlineTagLink" id="ORCRP010226" title="Morgan Stanley Dean Witter & Company" href="http://www.courant.com/topic/economy-business-finance/morgan-stanley-dean-witter-&-company-ORCRP010226.topic">Morgan Stanley</a>, now will be classified as regular commercial banks. That means that they will be subject to a broad and intensive set of government oversight rules that apply to regular banks. It also means that there are no remaining stand-alone investment banks.There were five investment banks at the beginning of the year, but Bear Stearns was bought by commercial bank <a class="taxInlineTagLink" id="ORCRP010217" title="J.P. Morgan Chase & Co." href="http://www.courant.com/topic/economy-business-finance/j.p.-morgan-chase-&-co.-ORCRP010217.topic">J.P. Morgan</a> in the spring, <a class="taxInlineTagLink" id="ORCRP008980" title="Lehman Brothers Holdings Incorporated" href="http://www.courant.com/topic/economy-business-finance/lehman-brothers-holdings-incorporated-ORCRP008980.topic">Lehman Brothers</a> has gone bankrupt, Merrill Lynch is being acquired by <a class="taxInlineTagLink" id="ORCRP001609" title="Bank of America Corp." href="http://www.courant.com/topic/economy-business-finance/bank-of-america-corp.-ORCRP001609.topic">Bank of America</a>, and now Goldman Sachs and Morgan Stanley are becoming commercial banks.<br /><br /><br />Treasury Secretary Henry Paulson was working Sunday night to press House leaders to strike an agreement on the bailout bill by early this morning, according to sources. No deal with the Senate appeared close Sunday night.<br /><br /><br />Sources familiar with Treasury's thinking said Sunday night that the department is also continuing to monitor troubled financial firms and may have to intervene in the markets again this week, before Congress acts on the bailout, to address specific flash points.<br /><br /><br />Democrats sought to add oversight provisions and <strong><span style="font-size:180%;">taxpayer protections to the proposal</span></strong>, which amounts to the largest government intervention in the private markets since the Great Depression. <strong><span style="font-size:130%;">"We will not simply hand over a $700 billion blank check to Wall Street," House Speaker </span></strong><a class="taxInlineTagLink" id="PEPLT005126" title="Nancy Pelosi" href="http://www.courant.com/topic/politics/nancy-pelosi-PEPLT005126.topic"><strong><span style="font-size:130%;">Nancy Pelosi</span></strong></a><strong><span style="font-size:130%;">, D-Calif., said in a statement.</span></strong><br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">Under the proposal drafted by House Democrats, the Treasury would be required to force faltering firms that want to sell their troubled assets to the government to "meet appropriate standards for executive compensation." Those standards would include a ban on incentives that encourage chief executives to take "inappropriate or excessive" risks, a mechanism to rescind bonuses paid for earnings that never materialize and limits on severance pay.</span></strong><br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">The Democratic measure also would require the Treasury to use its status as the new owner of billions of dollars in mortgage-backed assets to reduce foreclosures by forcing banks to rewrite loans for distressed homeowners and to forgive a portion of their debt. And it calls for a strict regimen of oversight, including independent audits and regular reports to Congress.</span></strong><br /><br /><br />The proposal was presented to Treasury officials during marathon negotiating sessions this weekend over the bailout plan. <strong><span style="font-size:180%;color:#ff0000;">House Republicans sent Treasury a separate set of demands, including the suggestion that a joint committee of Congress be created to oversee the program. </span></strong><br /><br /><br /><strong><span style="font-size:180%;color:#3333ff;">And Senate Democrats Sunday were still assembling a list of provisions they hope to add, including new powers for bankruptcy judges to modify mortgages on primary residences, an idea House Democrats said Sunday that they had abandoned.</span></strong><br /><br /><br /><br /><strong><span style="font-size:180%;">[THIS IS NOT THE APPROPRIATE TIME FOR A LAUNDRY LIST TO ADDRESS THE WISH LIST OF POLITICIANS. ACTUALLY, HISTORY REFLECTS THAT, the Glass-Steagall Act of 1933 was not adopted to protect consumers, although one of its most celebrated provisions was the establishment of the Federal Deposit Insurance Corporation, which guarantees bank deposits of up to $100,000. The law was enacted during the first 100 days of the Roosevelt administration to rescue a banking system which had collapsed, wiping out the life savings of millions of working people, and threatening to bring the profit system to a complete standstill. </span></strong><br /><strong><span style="font-size:100%;"></span></strong><br /><strong><span style="font-size:100%;"></span></strong><br /><strong><span style="font-size:180%;">[IF THE PRIMARY PURPOSE OF THE PROPOSED (and now debated) RESTRUCTURING / BAILOUT LEGISLATION IS TO RESTORE THE TRANSPARENCY, INTEGRITY AND STRENGTH OF THE U.S. FINANCIAL SYSTEM BY, AMONG OTHER THINGS, ENSURING MARKET LIQUIDITY, THEN THE KEY EXECUTIVES, PARTNERS & PRINCIPALS OF THESE 'SAVED' WALL STREET FIRMS MUST SACRIFICE THEIR PROMISED BONUSES, EQUITY-KICKERS/INCENTIVES & GOLDEN PARACHUTES. THIS IS ESSENTIAL TO PRESERVE MARKET LIQUIDITY AND THE FINANCIAL SYSTEM AT LARGE. FURTHERMORE, THE U.S. GOVERNMENT MUST ENSURE AGAINST THE 'OFFSHORING' OF SUCH COMPENSATION MONIES TO NON-U.S. SECRET BANK ACCOUNTS NOT SUBJECT TO U.S./ INTERNATIONAL TRANSPARENCY RULES.]. </span></strong><br /><br />Though lawmakers had promised to work across party lines and between chambers to speed the rescue plan to passage by Friday, that process was not working smoothly.<br /><br /><br /><strong><span style="font-size:180%;">[DEMOCRATS SHOULD NOT GRANDSTAND AT EXPENSE OF AMERICAN TAXPAYER. ONLY DEAL WITH THE ESSENTIALS SUCH AS ENSURE THE GARNISHMENT OF EXECUTIVE BONUSES & GOLDEN PARACHUTES!!]</span></strong><br /><br /><br /><a class="taxInlineTagLink" id="PEPLT001714" title="Christopher Dodd" href="http://www.courant.com/topic/politics/christopher-dodd-PEPLT001714.topic">Sen. Christopher Dodd</a>, D-Conn., chairman of the Senate Banking Committee, said it's still possible to meet the deadline. But "this is of such import, if it takes a little longer to get right, then so be it," Dodd said. "I'm all for moving as quickly as we can, but I'm far more interested in getting it right."<br /><br /><br />On the Sunday morning television talk shows, Paulson said he has asked his counterparts in other nations to consider establishing similar programs.<br /><br /><br />On Sunday, British Prime Minister <a class="taxInlineTagLink" id="PEPLT007532" title="Gordon Brown" href="http://www.courant.com/topic/politics/gordon-brown-PEPLT007532.topic">Gordon Brown</a> said he would travel to <a class="taxInlineTagLink" id="PLGEO100100800000000" title="New York" href="http://www.courant.com/topic/us/new-york-PLGEO100100800000000.topic">New York</a> on Wednesday to discuss what he called the "first crisis of the global economy." <strong><span style="font-size:180%;color:#ff0000;">Brown said a "global regulatory system" should be established to govern a world where national borders often have little meaning.</span></strong> He added that Britain "was paying a price" for problems that started in the United States.<br /><br /><br /><strong><span style="font-size:180%;">[GORDON BROWN, THE SOCIALIST, OF COURSE, WOULD PREFER A GLOBAL REGULATORY SYSTEM CENTERED IN THE UNITED NATIONS THAT IS MODELED AFTER CONTINENTAL EUROPE'S FINANCIAL SYSTEM.]</span></strong><br /><br /><br />Though lawmakers on Capitol Hill were not working in unison, they were voicing similar concerns Sunday about whether the bailout plan includes enough oversight and protections for taxpayers.<br /><br /><br />The administration's proposal would give the Treasury secretary sweeping authority to purchase assets from any financial institution, whether headquartered in the United States or abroad, over the next two years. <strong><span style="font-size:180%;">It would place no limit on when the assets could be sold. And it would allow the Treasury secretary to spend up to $700 billion without oversight or review by other federal agencies or the courts.</span></strong><br /><br /><br />"It's the biggest amount of money with the least amount of detail I think I've ever seen in my life," said Douglas Elmendorf, a Brookings Institution economist who has worked in the Treasury Department and at the Federal Reserve. <strong><span style="font-size:180%;">"The secretary does whatever he wants and spends whatever he wants."</span></strong><br /><br /><br /><strong><span style="font-size:180%;">Lawmakers across the spectrum are demanding more oversight of the bailout. House Democrats have the most specific proposal, which would order the Government Accountability Office to establish a permanent outpost within the Treasury to monitor the bailout program. </span></strong>That office would have unfettered access to the activities and financial documents of the rescue program, and would be required to submit reports to Congress every 60 days.<br /><br /><br /><strong><span style="font-size:180%;">Many lawmakers also want additional protections for taxpayers. House Republicans, for example, have asked that any profits generated by the sale of the bad assets be used to reduce the budget deficit and not for any other purpose.</span></strong><br /><br /><br />Where the parties appear to diverge is over Democrats' demand for government authority over the paychecks of executives whose companies participate in a taxpayer bailout. House Republicans opposed the idea, aides said, and Sen. Richard C. Shelby, R-Ala., a key figure in the debate, said Sunday on <a class="taxInlineTagLink" id="ORCRP002841" title="CBS Corp." href="http://www.courant.com/topic/economy-business-finance/cbs-corp.-ORCRP002841.topic">CBS</a>'s "Face the Nation" that he thinks compensation should be set by corporate boards.<br /><br /><br /><strong><span style="font-size:180%;">[SENATOR SHELBY IS OUT OF ORDER, OUT OF TOUCH WITH THE AMERICAN PEOPLE AND IN BED WITH WALL STREET EXECUTIVES, IF HE AVOIDS HOLDING THEM ACCOUNTABLE!!].</span></strong><br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">Speaking on the same program, Rep. </span></strong><a class="taxInlineTagLink" id="PEPLT002187" title="Barney Frank" href="http://www.courant.com/topic/politics/barney-frank-PEPLT002187.topic"><strong><span style="font-size:180%;color:#ff0000;">Barney Frank</span></strong></a><strong><span style="font-size:180%;color:#ff0000;">, D-Mass., chairman of the House Financial Services Committee, said voters would protest a program that appears to permit corporate executives to pocket taxpayer dollars."It would be a grave mistake to say that we're going to buy up the bad debt that results from the bad decisions of these people, and then allow them to get millions of dollars on the way out the door," Frank said. "The American people don't want that to happen."</span></strong><br /><br /><br /><strong><span style="font-size:180%;color:#3333ff;">[WHILE WE DISAGREE WITH REPRESENTATIVE BARNEY FRANK ON MANY ISSUES, HE IS RIGHT ABOUT THIS ONE. AMERICAN TAXPAYERS MUST BE PROTECTED AGAINST THE GREED AND LARGESSE OF WALL STREET EXECUTIVES AT THIS MOST CRITICIAL TIME!!]</span></strong>ITSSD Charitable Missionhttp://www.blogger.com/profile/00790887154748866904noreply@blogger.com0tag:blogger.com,1999:blog-1851218948450486986.post-44443654310058655812008-09-14T20:10:00.068-04:002008-09-16T19:20:42.943-04:00PROOF POSITIVE: US Blue Party Welcomes UK's Gordon Brown & EU Socialist Party Leaders Who Endorse Obama in Effort to Influence U.S. Election Outcome<a href="http://online.wsj.com/article/SB122137277597832981.html?mod=googlenews_wsj">http://online.wsj.com/article/SB122137277597832981.html?mod=googlenews_wsj</a><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhKFoHOWR0C7kTPlJx3yKq9CHyY07Cb33WXpTewabDUJ6tYGtek9RjE9BoAgL_uVyyz5TrBZHDRUc1K07OaxUXA_eFT6KkZxJhgRr1MGfrHb8HF2UJSyKy2UDSQ5Xd6L9i1v9Fadt4Y2EXY/s1600-h/Obama+Doomed.gif"><img id="BLOGGER_PHOTO_ID_5246040174453344946" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; CURSOR: hand" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhKFoHOWR0C7kTPlJx3yKq9CHyY07Cb33WXpTewabDUJ6tYGtek9RjE9BoAgL_uVyyz5TrBZHDRUc1K07OaxUXA_eFT6KkZxJhgRr1MGfrHb8HF2UJSyKy2UDSQ5Xd6L9i1v9Fadt4Y2EXY/s320/Obama+Doomed.gif" border="0" /></a><br />Political Diary<br /><br /><br /><strong><span style="font-size:130%;">Who's British, Brown and Red All Over?</span></strong><br /><br /><br />By ABHEEK BHATTACHARYA<br /><br />September 14, 2008<br /><br /><br /><strong><em><span style="font-size:130%;">Barack Obama may be losing ground to John McCain in recent domestic polls, but his popularity at No. 10 Downing Street seems secure.<br /></span></em></strong><br /><br /><strong><em><span style="font-size:130%;">Britain's opposition Tories as well as the McCain campaign quickly latched onto what appears to be naked bias by British Prime Minister Gordon Brown</span></em></strong>. In Tuesday's Parliamentary Monitor, a version of Washington's Roll Call, he penned an article lavishing praise upon Mr. Obama. <strong><span style="font-size:130%;">"In the electrifying U.S. presidential campaign, it is the Democrats who are generating ideas to help people through more difficult times," he wrote</span></strong>. The Illinois junior senator is a like-minded "progressive politician who [is] grappling with the challenges" of his time. Mr. Brown's article did not mention John McCain.<br /><br /><br /><strong><span style="font-size:130%;">William Hague, a Conservative Member of the British Parliament, called the PM's comments "out of order."</span></strong> The McCain campaign's response was more mocking. Spokesman Michael Goldfarb noted that while the piece bestowed the "coveted Gordon Brown endorsement" on Mr. Obama, it seemed to do so for a policy proposal -- Mr. Obama's so-called Foreclosure Prevention Fund -- that Mr. Obama himself has quietly dropped.<br /><br /><br /><strong><em><span style="font-size:130%;">Mr. Brown's supporters privately blame a junior Labour Party official who was using Mr. Obama's example to gin up support for his own party's foreclosure relief proposals. His aides say Mr. Brown never read the article before signing off.</span></em></strong> In any case, the gaffe is another reminder that Mr. Obama still draws strong support from the European elites, however much the European mass media has lately shifted its fascination to the mooseslayer Sarah Palin.<br /><br />-------------------------------------------------------------------------------------------------<br /><a href="http://www.dailymail.co.uk/news/article-1054118/Gordon-Brown-U-turns-soothe-Republican-fury-apparent-endorsement-Obama.html">http://www.dailymail.co.uk/news/article-1054118/Gordon-Brown-U-turns-soothe-Republican-fury-apparent-endorsement-Obama.html</a><br /><br /><br /><strong><span style="font-size:130%;">Gordon Brown U-turns to soothe Republican fury over his apparent endorsement of Obama<br /></span></strong><br /><br />By Benedict Brogan<br /><br /><br />MailOnline<br /><br />Last updated at 7:31 AM on 11th September 2008<br /><br /><br /><strong><span style="font-size:180%;color:#000099;">Gordon Brown was scrambling to mend fences with John McCain last night after he issued what looked like a ringing endorsement of Barack Obama.<br /></span></strong><br /><br /><strong><span style="font-size:180%;color:#000099;">The Prime Minister was said to be 'in a rage' following a bureaucratic blunder in Downing Street that produced a major breach of diplomatic protocol.<br /></span></strong><br /><br /><strong><em><span style="font-size:180%;color:#000099;">An article in Mr Brown's name appeared in a Westminster magazine with warm words of praise for Mr Obama, the Democrat candidate for the White House.<br /></span></em></strong><br /><br /><strong><span style="font-size:130%;color:#ff0000;">But it made no mention of Mr McCain, his Republican rival.<br /></span></strong><br /><br /><strong><span style="font-size:130%;color:#ff0000;">Mr Brown's apparent enthusiasm for Mr Obama caused an uproar in the U.S. and provoked worried calls from Mr. McCain's officials to the British embassy in Washington.<br /></span></strong><br /><br /><strong><span style="font-size:180%;color:#ff0000;">They feared that he had breached the longstanding convention that requires Prime Ministers to keep out of foreign elections by backing Mr Obama.<br /></span></strong><br /><br />Senior officials in Number 10 held a series of hastily arranged phone calls with key figures in the McCain campaign in an attempt to reassure them.<br /><br /><br />Mr Brown and Mr McCain did not speak however.<br /><br /><br />Mr Brown tried to repair the damage by declaring his 'great admiration' for both senators.<br /><br /><br /><strong><span style="font-size:130%;color:#ff0000;">But the Republican camp let its anger show by issuing a statement under the sarcastic headline 'The Coveted Gordon Brown Endorsement'</span></strong> - <strong></strong><a href="http://www.johnmccain.com/McCainReport/Read.aspx?guid=d7eb6c0b-d3c1-48b8-84cc-917f5faaa67f"><strong>http://www.johnmccain.com/McCainReport/Read.aspx?guid=d7eb6c0b-d3c1-48b8-84cc-917f5faaa67f</strong></a> .<br /><br /><br />One Government source said: 'They have given us a slapping. All our good work has been undone.'<br /><br /><br />The article that appeared in the Parliamentary Monitor magazine was not written by Mr. Brown but by an official who used a draft that he thought had been approved.<br /><br />------------------------------------------------------------------------------------------------<br /><br /><a href="http://www.telegraph.co.uk/news/newstopics/uselection2008/barackobama/2713430/Gordon-Brown-triggers-row-with-John-McCain-by-backing-Barack-Obama.html">http://www.telegraph.co.uk/news/newstopics/uselection2008/barackobama/2713430/Gordon-Brown-triggers-row-with-John-McCain-by-backing-Barack-Obama.html</a><br /><br /><strong><span style="font-size:130%;">Gordon Brown triggers row with John McCain by 'backing' Barack Obama<br /></span></strong><br /><br /><strong><em><span style="color:#000099;"><span style="font-size:130%;">Gordon Brown has triggered a potential row with John McCain, the Republican presidential candidate, after apparently backing Barack Obama - breaking convention not to get involved in foreign elections.<br /></span><br /></span></em></strong><br />Telegraph.co.uk<br /><br /><br />By Robert Winnett, Deputy Political Editor and Tom Leonard<br /><br /><br />Last Updated: 2:34PM BST 11 Sep 2008<br /><br /><br />John McCain's campaign team have questioned the value of the endorsement given by Gordon Brown to Barack Obama when a policy cited as the key reason behind the praise has changed.<br /><br /><br /><strong><span style="font-size:130%;color:#000099;">The Prime Minister heaped praise on Mr Obama and the Democrats in a magazine article, saying they were "generating the ideas to help people through more difficult times."<br /></span></strong><br /><br />Dealing with economic problems is the crucial battleground in the US elections and Mr Brown's comments were interpreted as backing the Democrat candidate.<br /><br /><br /><strong><em><span style="font-size:130%;">The Prime Minister's office and the British Embassy in Washington were last night involved in an embarrassing behind-the-scenes operation to try and limit the fallout from the incident. They were alerted after the highly influential Drudge Report website picked up the story, sparking a flurry of comment and analysis from election watchers in the US.</span></em></strong><br /><br /><br />Well-placed sources claimed that Mr Brown may not have read the article written in his name by a "junior Labour official".<br /><br /><br /><strong>A source said: "It is clearly going to annoy the Republicans and is a naive mistake by a junior Labour person. The American Embassy is doing a lot of work to reassure the McCain campaign that this is not an endorsement of Obama."<br /></strong><br /><br /><strong><span style="color:#000099;">In a statement, Number 10 said that the "Prime Minister is not endorsing any candidate and never would." It added: "Presidential elections are a matter for the American people. The Prime Minister looks forward to working closely with whoever is elected."<br /></span></strong><br /><br /><strong><em>The article appeared in the Parliamentary Monitor magazine and was intended to set out Mr Brown's plans to overhaul Labour policies ahead of the party's annual conference this month.<br /><br /><br />In the article, Mr Brown drew attention to policies to help deal with the economic downturn. He said: "Around the world, it is progressive politicians who are grappling with these challenges. In the electrifying US Presidential campaign, it is the Democrats who are generating the ideas to help people through more difficult times.<br /></em></strong><br /><br />"To help prevent people from losing their home, Barack Obama has proposed a Foreclosure Prevention Fund to increase emergency pre-foreclosure counselling, and help families facing repossession."<br /><br /><br />No mention is made of Mr. McCain or his proposed policies in the article.<br /><br /><br /><strong><span style="font-size:180%;color:#000099;">The Conservatives last night seized on the apparent gaffe. William Hague, the shadow Foreign Secretary, said: "A responsible British Prime Minister needs to be ready to work with either Presidential candidate after the US election, and should neither take sides nor be seen to be taking sides.<br /></span></strong><br /><br /><strong><span style="font-size:180%;color:#000099;">"Gordon Brown needs to make clear why he appeared to be favouring the Democrats in this article and to explain whether this was his deliberate intention or a careless mistake."<br /><br />The chief reaction from ordinary US voters on politics websites was one of derision, with many pointing out that the endorsement of a prime minister as troubled as Mr Brown was of dubious value.<br /></span></strong><br /><br /><strong><span style="font-size:180%;color:#cc0000;">There was also a widespread amount of annoyance – not confined to Republicans - that a foreign political leader should be seeking to influence the US election.<br /></span></strong><br /><br /><strong>Readers of the influential US Politico blog were roughly split two to one between those who were critical of Mr Brown's comments and those who approved of them.<br /></strong><br /><br /><strong>One wrote: "Brits like Obama? That's like a dog whistle to the Dumbed Down Americans to vote for Palin-McCain. Thanks Brown."<br /><br /><br />Another commented: "Cue beam of light...People of the World, he is the One for you. But we have a quirky little thing here in the colonies, American voters pick our President. Not the British Prime Minister nor the People of the World."</strong><br /><br /><br /><strong>The colonial theme was picked up by others. "The most incompetent PM in recent English history for the first time since King George III and Lord North telling the USA who should run their country," wrote one. "Makes me feel like dumping some tea in the harbour."<br /></strong><br /><br /><strong><span style="font-size:180%;color:#3333ff;">British Prime Ministers have largely declined to disclose their support for American candidates.<br /><br />However the Blair administration was questioned for its close relationship with the Al Gore election team in the run-up to the 2000 election</span></strong> while John Major's links with George Bush senior also came in for criticism. The Bush camp contacted the Conservative government in the 1992 election battle seeking details about Mr Clinton's time as a Rhodes Scholar at Oxford.<br /><br />-------------------------------------------------------------------------------------------------<br /><a href="http://www.independent.co.uk/news/world/politics/protests-after-brown-gives-his-support-to-obama-925564.html">http://www.independent.co.uk/news/world/politics/protests-after-brown-gives-his-support-to-obama-925564.html</a><br /><br /><strong><span style="font-size:130%;">Protests after Brown gives his support to Obama</span></strong><br /><br /><br />By Andrew Grice and Leonard Doyle in Washington<br /><br /><br /><br /><br />The Independent.co.uk<br /><br /><br /><br /><br />Thursday, 11 September 2008<br /><br /><br /><div><br /></div><div><span style="font-size:130%;"><strong><em>Gordon Brown has sparked a transatlantic row with John McCain, the Republican candidate in the American presidential election, over an article in his name which appeared to back the Democrat Barack Obama.</em></strong><br /></span><br /><br />The Prime Minister was embarrassed after an article appeared in his name which welcomed Senator Obama's "progressive" new ideas for helping people weather the economic storm, without mentioning Senator McCain. It provoked a protest to the British embassy in Washington by the McCain team, and could cause tensions in the Anglo-American relationship if he wins the November election.<br /><br /><br /><strong><span style="font-size:130%;color:#000099;">Mr Brown's article undermined his strenuous efforts not to take sides in the presidential race. He has been careful to give both candidates equal time and treatment during his meetings with them in London and Washington this year.<br /></span></strong><br /><br />The article, in Parliament's Monitor magazine, said: "In the electrifying US presidential campaign, it is the Democrats who are generating ideas to help people through difficult times." Mr Brown praised Mr Obama's proposed fund to prevent householders having their homes repossessed when they were struggling to pay their mortgage.<br /><br /><br />It emerged that Mr Brown did not draft the piece and may not have personally approved it before it was sent to the magazine. <strong><span style="font-size:180%;color:#000099;">Although based on a Labour Party conference document written by him, the mistake was blamed on an unnamed Downing Street aide and more senior officials who did not spot the diplomatic gaffe.<br /></span></strong><br /><br /><strong><span style="font-size:180%;color:#000099;">The article made waves on blogs in America, where The Drudge Report headlined it as "Brown backs Obama". In Washington, British diplomats were licking their wounds, but did not return calls to discuss the Brown blunder.<br /></span></strong><br /><br /><strong><em><span style="font-size:130%;color:#3333ff;">To deepen the Prime Minister's blushes, it emerged that Mr Obama no longer supported the policy he hailed.</span></em></strong> This allowed the McCain team to ridicule Mr Brown. Michael Goldfarb, his spokesman, said Mr Brown's "coveted endorsement" was bound to highlight that Mr Obama "seems to have changed his position". He said: "Far be it from this campaign to underestimate the value of an endorsement from the British Prime Minister, Gordon Brown, but there is one slightly embarrassing detail that this endorsement is bound to highlight."<br /><br /><br /><strong><span style="font-size:180%;color:#000099;">At a press conference, Mr Brown attempted to reassure Mr McCain by denying that he was intervening in the US election. He said: "The decision on the American election is a matter entirely for the American people and I have scrupulously met both Senator McCain and Senator Obama and talked to them both about the issue that affect our two countries and the future of global issues."<br /></span></strong><br /><br /><strong><em><span style="font-size:130%;color:#000099;">William Hague, the shadow Foreign Secretary, said Mr Brown should not have written the comments. He said: "A responsible British prime minister needs to be ready to work with either presidential candidate after the US election, and should neither take sides nor be seen to be taking sides."<br /><br /></span></em></strong><br />The dangers of interfering in elections abroad were highlighted after John Major's Tory government was accused of helping George Bush Senior in the 1992 presidential race by digging for potentially damaging information about Bill Clinton. This led to frosty relations when Mr Clinton became president.<br /><br />-------------------------------------------------------------------------------------------------<br /><a href="http://elections.foxnews.com/2008/09/10/gordon-brown-under-fire-for-praising-obamas-economic-proposals">http://elections.foxnews.com/2008/09/10/gordon-brown-under-fire-for-praising-obamas-economic-proposals</a><br /><br /><strong><span style="font-size:130%;">Gordon Brown Under Fire for Praising Obama’s Economic Proposals</span></strong></div><div><br /></div><div></div><div><br />by Associated Press<br /></div><div><br /></div><div>Wednesday, September 10, 2008<br /><br /><br />Britain’s Gordon Brown has praised Sen. Barack Obama in a commentary published Wednesday, seemingly breaching protocols that prevent world leaders from endorsing candidates in foreign elections.<br /><br /><br />Brown hailed Obama’s proposals for a mortgage foreclosure prevention fund and said he believed the Democratic Party is the organization offering policies to help people through the current economic woes.<br /><br /><br />“In the electrifying U.S. presidential campaign, it is the Democrats who are generating the ideas to help people through more difficult times,” Brown wrote in Parliamentary Monitor magazine.<br /><br /><br />“To help prevent people from losing their home, Barack Obama has proposed a foreclosure prevention fund to increase emergency pre-foreclosure counseling, and help families facing repossession.”<br /><br /><br /><span style="color:#cc0000;"><span style="font-size:180%;"><span style="color:#000099;"><strong>Brown’s Labour Party</strong> </span><strong><span style="color:#000099;">is traditionally allied to Obama’s Democrats</span></strong></span> <strong>— <span style="font-size:180%;">but under international conventions, foreign leaders refrain from intervening in ballots overseas.</span><br /></strong></span><br /><br />In meetings with both Obama and Republican presidential candidate John McCain, Brown has gone to great lengths to appear impartial.<br /><br /><br />During separate visits to London by the candidates, Brown refused to greet the men on the doorstep of his official residence — an honor reserved only for elected heads of government.<br /><br /><br /><strong><span style="font-size:130%;color:#000099;">Brown’s Downing Street office denied Wednesday that the article amounted to an endorsement of Obama.<br /></span></strong><br /><br />“The prime minister is not endorsing a candidate, and never would,” said a spokesman, on condition of anonymity in line with policy.<br /><br /><br /><strong><span style="font-size:180%;color:#000099;">But Britain’s main opposition Conservative Party said Brown was guilty of a serious gaffe.<br /><br />“A responsible British prime minister needs to be ready to work with either presidential candidate after the U.S. election, and should neither take sides nor be seen to be taking sides,” said Conservative lawmaker William Hague.<br /><br /></span></strong><br /><strong><span style="font-size:130%;color:#ff0000;">McCain’s spokesman Michael Goldfarb dismissed the apparent backing for Obama in a snippy Web posting titled “The Coveted Gordon Brown Endorsement.” He said that in praising Obama’s housing strategy, Brown had in fact highlighted a policy that Obama appears to have recently dropped.<br /></span></strong><br /><br />“Whether this will cause Prime Minister Brown to rethink his support for Sen. Obama remains unclear,” Goldfarb wrote.<br /><br />------------------------------------------------------------------------------------------------<br /><br /><a href="http://www.order-order.com/2008/09/gordon-openly-backs-obama-president.html">http://www.order-order.com/2008/09/gordon-openly-backs-obama-president.html</a><br /><br /><strong><span style="font-size:130%;">Gordon Openly Backs Obama President McCain Here We Come<br /></span></strong><br /></div><div><br />Guido Fawkes Blog</div><div><br /></div><div>September 10, 2008<br /><br /><strong><span style="font-size:180%;">In a breach of internationally accepted convention, Gordon has openly backed Obama in an article under his byline. The story got picked up last night by Drudge and followed up by the news wires. </span></strong></div><div><br /></div><div><strong><em><span style="font-size:130%;color:#000099;">The McCain campaign has been in contact with the British Embassy in Washington to "express concern". William Hague has queried the wisdom of the PM taking sides. Downing Street is desperately back-pedalling, claiming the article was written by a junior underling.<br /></span></em></strong><br /><br />The first meeting Obama had with Gordon <a href="http://www.order-order.com/2008/07/first-poll-shows-obama-hit-by-jonah.html">resulted in McCain inching ahead in the polls</a>. This is more good news, get your money on McCain. Barring an act of god, the curse of Jonah Brown means Obama is now doomed...<br /><br /><br /><strong>UPDATE : Team McCain are trying to keep a straight face - see the campaign's piss-take "</strong><a href="http://www.johnmccain.com/mccainreport/Read.aspx?guid=d7eb6c0b-d3c1-48b8-84cc-917f5faaa67f"><strong>The Coveted Gordon Brown Endorsement</strong></a><strong>".</strong> <strong><span style="font-size:180%;">Loser backs loser</span></strong>...<br /><br />-------------------------------------------------------------------------------------------------<br /><a href="http://www.telegraph.co.uk/news/newstopics/uselection2008/barackobama/2713150/Gordon-Brown-backs-Barack-Obama-for-US-president.html">http://www.telegraph.co.uk/news/newstopics/uselection2008/barackobama/2713150/Gordon-Brown-backs-Barack-Obama-for-US-president.html</a><br /><br /><strong><span style="font-size:130%;">Gordon Brown backs Barack Obama for US president<br /></span></strong></div><div><br /></div><div></div><div>By Robert Winnett, Deputy Political Editor</div><div><br /></div><div></div><div></div><div>UK Telegraph<br /></div><div></div><div><br /></div><div>September 9, 2008</div><div><br /></div><div></div><div></div><div><strong><em><span style="font-size:130%;">Gordon Brown has backed Barack Obama in the race for the US presidency, praising the senator's ideas and family-friendly policies in an article that makes no mention of John McCain.<br /></span></em></strong></div><div></div><div><br /><strong><span style="font-size:180%;">His clear show of support for Mr Obama has sparked fierce debate among American bloggers</span></strong> </div><div><br /></div><div><strong><span style="font-size:180%;color:#ff0000;">The move is a striking break with tradition. British Prime Ministers in the past have largely declined to disclose their favourite American candidates.<br /></span></strong><br /><br />Writing in an article in the Parliamentary Monitor magazine, Mr Brown said: "In the electrifying US presidential campaign, it is the Democrats who are generating the ideas to help people through more difficult times.<br /><br /><br />"To help prevent people from losing their home, Barack Obama has proposed a Foreclosure Prevention Fund to increase emergency pre-foreclosure counselling, and help families facing repossession."<br /><br /><br />Mr Brown does not mention Mr Obama's opponent, the Republican candidate John McCain, at all in the article.<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">His clear show of support for Mr Obama has sparked fierce debate among American bloggers.<br /></span></strong><br /><br />In the same article Mr Brown admits that he must "rise" to the challenge of being Prime Minister and pledged to "rethink" Labour policy.<br /><br /><br /><strong><span style="font-size:180%;color:#000099;">In some of his most candid comments Mr Brown calls on his critics to give him time to address their concerns.<br /></span></strong><br /><br /><strong><span style="font-size:180%;color:#000099;">Although Cabinet colleagues have rallied behind him, many Labour MPs and trade union bosses remain deeply unhappy with Mr Brown's leadership, which has seen the party fall 20 points behind the Tories in opinion polls and lose a string of by-elections.<br /></span></strong><br /><br /><strong><em><span style="font-size:180%;color:#000099;">"Whether global or domestic, deep-seated or just fleeting, the pressures that we face in the short-term and the long-term have all changed since New Labour first came into Government," Mr Brown wrote.<br /><br />"And so, the way we govern must change too.</span></em></strong> That is why in Manchester this year [at the Labour Party conference] it is time to adapt and rethink New Labour policy.''<br /><br /><br />He added: "What I ask of our country, our Government, and our party, cannot be done without leadership. So, at conference in Manchester and in the weeks that follow, I will set out how I - and our party, and our government, and our country - must rise to conquer those challenges and to ensure fairness for all.''<br /><br /><br />The Prime Minister also acknowledged that improvements in social mobility under Labour had not matched expectations and had to be stepped up.<br /><br /><br />"We need to be honest with ourselves: while poverty has been reduced and the rise in inequality halted, social mobility has not improved in Britain as we would have wanted,'' he said.<br /><br /><br /><strong><span style="font-size:180%;color:#000099;">The comments were seized upon by the Conservatives who said they were an admission that the Prime Minister has run out of ideas. Mr Brown decided not to call a snap election this time last year saying that he needed more time to set out his vision for the country</span></strong>.<br /><br /><br /><strong><span style="font-size:180%;color:#000099;">Chris Grayling, a shadow Cabinet minister, said: "Gordon Brown had 10 years to think about what he was going to do when he became Prime Minister but now he is there he has changed his mind about what to do already.<br /></span></strong><br /><br /><strong><span style="font-size:180%;color:#000099;">"After months of dithering, raising taxes on Britain's poorest families and losing half the nation's personal data we have just about the weakest Prime Minister in history. He is right that Britain needs a change, but it is clear that neither he nor Labour can provide it."</span></strong><br /><br /><br />Meanwhile, Alistair Darling, the Chancellor, used a speech to the TUC annual congress in Brighton to attack excessive City bonuses and urged the unions not to demand inflation-busting pay increases.<br /><br /><br />He said: "It would be so damaging for us to allow inflation to become entrenched, as it did in the past. That's why, in the private and public sectors, pay rises must be consistent with our inflation target.<br /><br /><br />"Otherwise every penny in pay rises will be very quickly swallowed up by higher prices. And we all remember the job losses that followed in the past once inflation takes a grip."<br /><br /><br />He criticised "excessive" City bonuses which he said may encourage traders to take unnecessary risks - "especially when people seem to get money for failing not succeeding…that's got to change".<br /><br /><br />He also appeared to rule out a windfall tax on utility companies but pledged to increase Government borrowing to help fund tax cuts or state handouts during the economic downturn.<br />-------------------------------------------------------------------------------------------------<br /><a href="http://waugh.standard.co.uk/2008/09/brown-backs-oba.html">http://waugh.standard.co.uk/2008/09/brown-backs-oba.html</a><br /><br /><br /><strong><span style="font-size:130%;">Brown backs Obama</span></strong><br /><br /><br />Evening Standard.co.uk<br /><br /><br />By Paul Waugh<br /><br /><br /><strong><span style="font-size:180%;">Gordon Brown has broken with British convention and made clear that he favours Barack Obama as the next US President.<br /></span></strong><br /><br /><strong><span style="font-size:180%;color:#cc0000;">In a departure from the usual self-denying ordinance of Prime Ministers past, Brown has written an article for The Monitor magazine in which he praises Obama's plans to get the US out of the housing slump.<br /></span></strong><br /><br />Referring to the anxieties facing voters across the globe during the economic slowdown, he says: "Around the world, it is progressive politicians who are grappling with these challenges....In the electrifying US Presidential campaign, it is the Democrats who are generating the ideas to help people through more difficult times. To help prevent people from losing their home, Barack Obama has proposed a Foreclosure Prevention Fund to increase emergency pre-foreclosure counselling, and help families facing repossession."<br /><br /><br /><strong><span style="font-size:180%;color:#cc0000;">There is not a single mention of McCain or his own plans to help tackle the impact of the slowdown. As this is an article written by the PM himself, no one can claim he is being quoted out of context or misrepresented.<br /></span></strong><br /><br /><strong><span style="font-size:180%;">I'm sure that Number 10 will be hastily issuing messages soon to try to restore a sense of balance once the gaffe has been pointed out - but the words are out there now.</span></strong><br /><br /><br />Unlike T Blair (who infuriated Labour MPs by failing to attack Bush), <strong><span style="font-size:180%;color:#000099;">Gordon has strong and deep links to the Dems, but as soon as he became PM he had to bury all that and be extremely careful not to endorse either candidate. </span></strong>A natural ally of Hillary Clinton, he has been as wowed by Obama as others in the Labour Party. Yet he must know that a McCain presidency is just as likely in a tight race. <strong><span style="font-size:180%;color:#3333ff;">It seems in this article he just couldn't help himself and let slip what he really thought. Lets see if the Dems in the US seize on his support....</span></strong><br /><br /><br /><strong>FOOTNOTE</strong><br /><br /><br />Others have pointed out just how the rest of the piece, for domestic consumption, does not have Brown claiming he will change his own policies. It seems clear that at the very least, it is a badly drafted piece which allowed the impression that he meant he wanted to "adapt and rethink" Brownism. Far from it, allies say, he's saying he wants to adapt Blairism.<br /><br /><br />11PM UPDATE. <strong><span style="font-size:130%;">It is worth pointing out some of the history behind the convention of non-interference in US elections</span></strong>.<br /><br /><br /><em><strong>Despite the long-established Tory-Republican, Labour-Democrats affinities, few British PMs have dared to interfere in the Presidential elections. The dangers of doing so were made all too clear by Bill Clinton's team after John Major's administration tried to help George Bush senior in the 1992 campaign. Much has been written about this incident, but thankfully both men have talked about it, as well as their officials, so we now have a rough picture of what went on</strong></em>.<br /><br /><br />In September 92, two Tory campaign managers flew to the US to advise the Bush team on election strategy. At about the same time, the British Government conducted a search on Clinton's passport file amid Republican claims that he had sought British citizenship to avoid the Vietnam draft in 1968 (Clinton was then at University College, Oxford). Clinton's team were furious and Major has written in his autobiography [that the passport incident "added a layer of frost to dealings between London and Washington". He claims that there followed a "staffer's feud" in 1993. It is often claimed that Clinton's decision to grant Gerry Adams a US visa was a retaliation against Major, though this is unproven.<br /><br /><br /><strong><em><span style="font-size:130%;">But Major was not the first to blunder his way into American elections. According to Henry Kissinger, Harold Wilson "committed the extraordinary misjudgment of betting on a Democratic victory" in 1968 - by appointing a friend of Dem candidate Hubert Humphrey as US ambassador to Washington</span></em></strong>.<br /><br /><br /><strong><em>Today's Tories are much smarter about not allying themselves exclusively to the McCain camp, sending shadow ministers to the Dem convention in Denver last month</em></strong>. There are many things about Obama that David Cameron admires, particularly his change message, though he has recently been working closely with McCain on a hawkish line on Georgia, for example.<br /><br /><br />Should McCain win in November, lets see whether Gordon's latest article adds a "layer of frost" to what many still quaintly think of as the "special relationship".<br /><br />------------------------------------------------------------------------------------------------- </div><div> </div><div><strong><span style="font-size:180%;">[</span><span style="font-size:130%;"><em>This is not the first time either Britain or the European Union's Brusselscrats have tried to influence US domestic laws and policies. </em>S</span></strong><strong><span style="font-size:130%;">ee, e.g.: <em>Britain Leads EU Charge to Undermine US Climate Change Policy - Prior ITSSD Studies’ Findings Confirmed</em>, ITSSD Website (7/17/06) at:</span></strong> <a href="http://www.itssd.org/Press%20Release/BritainUndermines.pdf"><strong>http://www.itssd.org/Press%20Release/BritainUndermines.pdf</strong></a> . <strong><span style="font-size:130%;">See also: <em>Beware of the Flying Dutchman When Traveling to Brussels</em>, ITSSD Website (Aug. 2006), at:</span></strong> <a href="http://www.itssd.org/Publications/Beware-Flying-DutchmanIII.pdf"><strong>http://www.itssd.org/Publications/Beware-Flying-DutchmanIII.pdf</strong></a><span style="font-size:180%;"><strong>].</strong></span></div><div> </div><div>------------------------------------------------------------------------------------------------- </div><div><br /><a href="http://www.dw-world.de/dw/article/0,2144,3622672,00.html">http://www.dw-world.de/dw/article/0,2144,3622672,00.html</a><br /><br /><strong><span style="font-size:130%;">EU Looks to Close Ranks with US to Keep Global Influence<br /></span></strong><br /><br />DW-World.de<br /><br /><br />Deutsche Welle<br /><br /><br />14.09.2008<br /><br /><br /><strong><span style="font-size:130%;">The European Union must close ranks with the United States if the two powers are to keep their global influence during the rise of states like China, India and Russia, EU foreign policy chiefs said at informal talks</span></strong>.<br /><br /><br />"The new American administration will, as we all of course also, have to cope with the new emerging countries: apart from Russia, which is an old power with a new assertiveness, India, Brazil and China," EU Foreign Policy Commissioner Benita Ferrero-Waldner said Friday, Sept. 5.<br /><br /><strong><span style="font-size:130%;">"We want to be more equal partners with the US, but how can we do that?</span></strong> We have to raise our own game, we have to be more clear and united in the positions we are taking, we have to be more effective and forthcoming in using our policy and our instruments," she said.<br /><br /><br /><strong><span style="font-size:130%;color:#3333ff;">At an informal meeting in the French city of Avignon, the foreign ministers of the EU's 27 member states discussed how to cooperate with the next US president on questions of global security such as climate change and energy security, French Foreign Minister Bernard Kouchner, who chaired the meeting, said.</span></strong><br /><br /><br /><strong><span style="font-size:130%;">EU plans cooperation with US</span></strong><br /><br /><br /><strong><span style="font-size:130%;color:#ff0000;">Kouchner hosted the meeting, as France currently holds the EU presidency<br /></span></strong><br /><br />"The world is dangerous, the return of nationalism and micro-nationalism impose on (the EU and US) a common vision and common steps," he warned.<br /><br /><br />"We want to set up a sort of better process, not to be surprised, not to be completely bare-handed, and not always to be obliged to threaten someone else," he said.<br /><br /><br /><strong><em>Ahead of the US election, scheduled for Nov. 4, the EU is therefore set to draw up a list of the areas in which it would like to work more closely with the US, to be sent to President George W. Bush and the two candidates in the election.<br /></em></strong><br /><br /><strong><span style="font-size:180%;">"It's not to take advantage (of the change of administration), but knowing that our American friends ... also wish that the EU should be politically present in the world's problems, and take its political place, <span style="color:#ff0000;">not just as a fund-raiser</span> but a player in its matters of peace, and sometimes of war," Kouchner said.<br /></span></strong><br /><br />But at the same time, he also criticized the policies of current US Vice-President Dick Cheney, who on Friday visited Ukraine on a whirlwind tour of the former Soviet Union aimed at boosting ties in the wake of August's Georgian-Russian war.<br /><br /><br />Cheney "has a certain sense of protecting people, but I'm not so sure he had a lot of success with this particular sense," he said.<br /><br /><br /><strong><span style="font-size:130%;">Looking for answers to climate, energy<br /></span></strong><br /><br />Also at the meeting, ministers discussed with the EU's top foreign-policy figure, Javier Solana, how the bloc should update its common security strategy -- a document written in December 2003.<br /><br /><br />Earlier in the day, Germany's foreign minister called for a probe into the Russian-Georgian war.<br /><br /><br /><strong><span style="font-size:130%;">"There are questions like climate change and energy security which need an answer," Solana said, adding that he hoped to present a "short and useful" new document to EU leaders by the end of the year.</span></strong><br /><br /><br /><strong><span style="font-size:180%;color:#000099;">Tellingly, however, the original strategy of 2003 stresses the need for the EU to project its values around the world</span><span style="font-size:180%;color:#3333ff;"> by working with international organizations such as the UN and WTO.<br /></span></strong><br /><br /><strong><span style="font-size:180%;color:#000099;">"The best protection for our security is a world of well-governed democratic states," it says, listing political and social reform and the defense of human rights as "the best means of strengthening the international order."<br /></span></strong><br /><br />And the rise of Russia, China and India has alarmed EU diplomats, with the Russian-Georgian war and the collapse of WTO talks in a row between China, India and the US both seen as signs that Western domination of the international agenda can no longer be assured.<br /><br /><br />"Over the last few years, you've seen a determined effort on the part of Europe and the Americans to forge common positions on issues as diverse as Iran, Russia, and international development," British Foreign Minister David Miliband pointed out.<br /><br /><br />"There's still an opportunity to work together, not at the expense of the rising powers in China and India, but as a way of binding them into the global system and making sure that responsibility is shared by all the powers in the modern world," he said. (DPA News Agency)<br /><br /><strong><span style="font-size:180%;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj_rToJBnlRXcCWDOQh2LqWrJOhz8HKR52lfHq7W_MIzNbizYjDJYckxMTzHL1bbGIHGtdB0bdboXC0myJBSV-W2W4H2RN4vSXxwXTA6BOdzcPfZzEmCVH5_QEcKm3lLEdLKPrtFKsKTMc9/s1600-h/Brown+and+Party+of+European+Socialists.jpg"><strong><span style="font-size:180%;"><img id="BLOGGER_PHOTO_ID_5246050808090632466" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 436px; CURSOR: hand; HEIGHT: 276px" height="247" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj_rToJBnlRXcCWDOQh2LqWrJOhz8HKR52lfHq7W_MIzNbizYjDJYckxMTzHL1bbGIHGtdB0bdboXC0myJBSV-W2W4H2RN4vSXxwXTA6BOdzcPfZzEmCVH5_QEcKm3lLEdLKPrtFKsKTMc9/s320/Brown+and+Party+of+European+Socialists.jpg" width="385" border="0" /></span></strong></a>[</span></strong><strong><span style="font-size:180%;">If UK Prime Minister Gordon Brown openly cohorts with the President of the Party of European Socialists, how close does he really believe an EU-US relationship could be??</span></strong></div><div><br /></div><div><strong><span style="font-size:180%;">VERY CLOSE, IF HIS FAVORITE CANDIDATE, BARACK EUROBAMA, WINS THE U.S. PRESIDENCY!!]</span></strong><br /><br />-------------------------------------------------------------------------------------------------<br /><a href="http://www.pes.org/content/view/1383/109">http://www.pes.org/content/view/1383/109</a><br /><br /><strong><span style="font-size:130%;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiQRWwBZV3RcO8o706Imu7y0pO5YkkBJG9_TsCseqTnG-FDgoMD4_6pgQCO9rapyWWNwirmEOMgHo4b1-6z-DsBDXvJroBt2rtnLlIZdhE9rNo4a7WwqZ2bBdHlUblWofRWfAw1YdNWOrjM/s1600-h/euroSocialistLogo.gif"><img id="BLOGGER_PHOTO_ID_5246049709900686322" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; CURSOR: hand" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiQRWwBZV3RcO8o706Imu7y0pO5YkkBJG9_TsCseqTnG-FDgoMD4_6pgQCO9rapyWWNwirmEOMgHo4b1-6z-DsBDXvJroBt2rtnLlIZdhE9rNo4a7WwqZ2bBdHlUblWofRWfAw1YdNWOrjM/s320/euroSocialistLogo.gif" border="0" /></a><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi1BleqXauCkihFEA0L_diBxPJJgpUxiYh7RD9I4AdZtIychtCG8UbBMnWiFl7-gdaOwyc_ZWMr0z4ACr51ZqGykeLW4CuqJMANIa1J1qzY-hRgQmw32NmKseXvXz4qezLXqmJBuSCPuERv/s1600-h/Party+of+European+Socialists+I.png"><img id="BLOGGER_PHOTO_ID_5246050090217247922" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; CURSOR: hand" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi1BleqXauCkihFEA0L_diBxPJJgpUxiYh7RD9I4AdZtIychtCG8UbBMnWiFl7-gdaOwyc_ZWMr0z4ACr51ZqGykeLW4CuqJMANIa1J1qzY-hRgQmw32NmKseXvXz4qezLXqmJBuSCPuERv/s400/Party+of+European+Socialists+I.png" border="0" /></a>The European Socialist Party Publicly Campaigns for Obama</span></strong><br /></div><div><br /><br />1 September 2008<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">Denver – PES Was There:</span></strong><br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">The Party of European Socialists was well-represented at the US Democratic National Convention where Barack Obama was nominated Democratic Presidential candidate.<br /></span></strong><br /><br />The PES was represented by Ruairi Quinn, PES Presidency member and Treasurer, and Philip Cordery, PES Secretary General. <strong><em><span style="font-size:130%;color:#ff0000;">PES member parties had high level representatives including Mona Sahlin, Leader of the Swedish Social Democrats; Eamon Gilmore, Leader of the Irish Labour Party; Caroline Gennez, Leader of the Flemish Socialists SPa; Lilianne Ploumen, Chair of the Dutch Labour PvdA; Ivailo Kalfin, Foreign Minister of Bulgaria, Hubertus Heil, Secretary General of the German SPD; Eero Heinäluoma former Leader of SDP Finland; Josef Kalina, from SPÖ Austria, Ed Miliband MP from the UK Labour Party; Juan Fernando López Aguilar from Spanish Socialists PSOE, Nicolai Wammen from SD Denmark; and many others as well as Walter Veltroni, Leader of the Italian Partito Democratico</span></em></strong>.<br /><br /><br /><strong><span style="font-size:180%;color:#3333ff;">PES participants were hosted by the Chair of the National Democratic Committee Howard Dean</span></strong>. They had a full agenda and took part in the International Leaders Forum (ILF) organised by <strong><span style="font-size:180%;color:#3333ff;">National Democratic Institute,</span></strong> <strong><span style="font-size:180%;color:#3333ff;">meeting with prominent policy makers and politicians, including Bill Clinton, former Secretary of State Madeleine Albright and Nancy Pelosi, Speaker of the House of Representatives.</span></strong> Many also took the opportunity to meet other progressive American organisations such as ‘Take Back America’ and the trade union AFL-CIO.<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">PES Secretary General Philip Cordery said “The European socialists and social-democrats support Barack Obama for President.</span></strong> His ‘Plan for America’ is a progressive agenda which we believe would bring many benefits to the American people and to the world.”<br /><br /><br /><strong>FOR MORE INFORMATION<br />Julian Scola, Communications Advisor - Media & Campaigns<br />Party of European Socialists, Rue du Trône, 98, B-1050 Brussels<br />Mobile +32 486 117 394<br /><a href="mailto:julian.scola@pes.org">julian.scola@pes.org</a><br /></strong></div><div>------------------------------------------------------------------------------------------------- </div><div><br /></div><div><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh6mFTH-2WW7pnbuIvY9W-Vebty1OcMQkln8EIL_-legHUeEtbs-CR6Nf2jAotRjhJN3WOJWkyCAIXj38RqanBNv0PRThXdKNnrYOyXiEXs4rOiinyHXGFENYLUCYHzdu2vQNKI3zp_1IAV/s1600-h/Dean+Photographed+with+President+of+Party+of+European+Socialists.jpg"><img id="BLOGGER_PHOTO_ID_5246048005340205970" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 411px; CURSOR: hand; HEIGHT: 249px" height="192" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh6mFTH-2WW7pnbuIvY9W-Vebty1OcMQkln8EIL_-legHUeEtbs-CR6Nf2jAotRjhJN3WOJWkyCAIXj38RqanBNv0PRThXdKNnrYOyXiEXs4rOiinyHXGFENYLUCYHzdu2vQNKI3zp_1IAV/s320/Dean+Photographed+with+President+of+Party+of+European+Socialists.jpg" width="390" border="0" /></a></div><div><strong><span style="font-size:130%;color:#3333ff;">21 months ago: <span style="color:#ff0000;">The European Socialists speak prior to their group photo with President of the Party of European Socialists Poul Nyrup Rasmussen, left, Portuguese Prime Minister Jose Socrates</span> and United States Democratic National Committee chairman Howard Dean, right, <span style="color:#ff0000;">during the Party of European Socialists congress in Porto, northern Portugal, Friday, Dec. 8, 2006</span></span></strong>.(AP Photo/Stringer) </div><div></div><div><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh2QxFwAekVG7iYfJ7H6KwzW5uQrAGHJqbO7CY9rzLTKMQMqDR1wEoe0cGwDXQVtuBh7sKKQ9h58ujeu_s2mFAvaqQtaL6OT7dIaH41HbWSRkGmCXilwzeJHrMBRz2wImuYj8pDi0OL8mWL/s1600-h/Dean+Photographed+with+President+of+Party+of+European+Socialists+III.jpg"><span style="color:#3333ff;"><img id="BLOGGER_PHOTO_ID_5246049116850632274" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 415px; CURSOR: hand; HEIGHT: 233px" height="208" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh2QxFwAekVG7iYfJ7H6KwzW5uQrAGHJqbO7CY9rzLTKMQMqDR1wEoe0cGwDXQVtuBh7sKKQ9h58ujeu_s2mFAvaqQtaL6OT7dIaH41HbWSRkGmCXilwzeJHrMBRz2wImuYj8pDi0OL8mWL/s320/Dean+Photographed+with+President+of+Party+of+European+Socialists+III.jpg" width="415" border="0" /></span></a><strong><span style="font-size:130%;"><span style="color:#3333ff;">21 months ago:</span> <span style="color:#3333ff;">Howard Dean, U.S. Democratic National Committee chairman, laughs</span> <span style="color:#ff0000;">with Poul Nyrup Rasmussen, right, Party of European Socialists president, after his speech during the Party of European Socialists congress in Porto, northern Portugal, Friday, Dec. 8, 2006</span></span></strong>.(AP Photo/Paulo Duarte)<br /></div><div></div><div>-------------------------------------------------------------------------------------------------<br /><a href="http://www.iht.com/articles/ap/2008/08/31/america/France-Socialists-Obama.php">http://www.iht.com/articles/ap/2008/08/31/america/France-Socialists-Obama.php</a><br /><br /><strong><span style="font-size:130%;">France: Socialist chief endorses Obama<br /></span></strong><br /><br />The Associated Press<br /><br /><br />Published: August 31, 2008<br /><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhi1YdaOmWtN0Jeb-jWUAGeUV4WLcnuZfLiGcyc0_FBslvOkoKkqsRSViu1OiV4nsJO0YanQA_t-SzQwyRkNU3pfUA_VNbe0dByhNv4lmPcky4lxw0MJkB2zap8g18nI9vR17vPp2c25Kqc/s1600-h/french+socialist+party+logo.jpg"><img id="BLOGGER_PHOTO_ID_5246054728209605890" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; CURSOR: hand" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhi1YdaOmWtN0Jeb-jWUAGeUV4WLcnuZfLiGcyc0_FBslvOkoKkqsRSViu1OiV4nsJO0YanQA_t-SzQwyRkNU3pfUA_VNbe0dByhNv4lmPcky4lxw0MJkB2zap8g18nI9vR17vPp2c25Kqc/s320/french+socialist+party+logo.jpg" border="0" /></a><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgRxh0gxoWJZdLioMYuwNM4cbMH0tvCUI0MPx4yd2bYXOtQQI8-AEWe8IhZ4EJrW7uJX6AsdZ9HfseFj8NfCgnucMrri6ulwEnwqzF7yH-QBZRFz8iNwsunpv6V1CFs4ZkkNI7YV1mk-asQ/s1600-h/francois-hollande-25-04-2007.jpg"><img id="BLOGGER_PHOTO_ID_5246055436770045378" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 378px; CURSOR: hand; HEIGHT: 252px" height="214" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgRxh0gxoWJZdLioMYuwNM4cbMH0tvCUI0MPx4yd2bYXOtQQI8-AEWe8IhZ4EJrW7uJX6AsdZ9HfseFj8NfCgnucMrri6ulwEnwqzF7yH-QBZRFz8iNwsunpv6V1CFs4ZkkNI7YV1mk-asQ/s320/francois-hollande-25-04-2007.jpg" width="332" border="0" /></a>PARIS: <strong><span style="font-size:180%;color:#ff0000;">The head of France's opposition Socialist Party strongly endorsed U.S. Democratic presidential nominee Barack Obama and said Sunday</span></strong> that an Obama victory would be "good news" for the United States and the world.<br /><br /><br /><strong><span style="font-size:130%;">Francois Hollande said an Obama presidency would usher in a positive, new chapter in international relations.</span></strong><br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">"We need an Obama victory next November," Hollande told party supporters at an annual meeting in the Atlantic coastal city of La Rochelle</span></strong>. An Obama win "will be good news, not only for the American people, but for the whole world."<br /><br /><br />Hollande cited Obama's position on Iraq and the Israeli-Palestinian conflict, and his apparent willingness to reach out to international partners under a "new diplomacy," as reasons to support the candidate.<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">Hollande promised to work for the senator's victory, but acknowledged that the French Socialists' endorsement could end up tarnishing Obama's image in the eyes of the American electorate, given the way some voters regard socialism.</span></strong><br /><br /><br />During a brief visit to France in July, Obama met with conservative President Nicolas Sarkozy but not with opposition Socialists. Sarkozy also received Republican presidential hopeful, Arizona Sen. John McCain, in Paris in March.<br /><br /><br /><strong><em><span style="font-size:130%;">Relations between the United States and France became strained under Sarkozy's predecessor, fellow conservative Jacques Chirac, who led France's vociferous opposition to the 2003 U.S.-led invasion of Iraq</span></em></strong>. Relations between the two countries have steadily improved since last year's election of pro-American Sarkozy.<br /><br />-------------------------------------------------------------------------------------------------<br /><a href="http://www.pes.org/content/view/1380/72">http://www.pes.org/content/view/1380/72</a><br /><a href="http://www.manifesto2009.pes.org/en/debate/post/654">http://www.manifesto2009.pes.org/en/debate/post/654</a></div><div><br /><strong><span style="font-size:130%;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEih7hRC9Ek8Sa_3vB8RtcQe660Pbo_dcsQdCvflA7nsm0XWsPeuTWjNjMA9MzNF-GWnpcePf8Px5i3t1kYSpSjjJc9kJ7JPt6-JLqnAXQ9vex2xBxCh80IXxy8NNy-TlJfcSbn-GaxzmMIs/s1600-h/Barack+Jam+for+Obama+-+Party+of+European+Socialists+Campaign.jpg"><img id="BLOGGER_PHOTO_ID_5246058659309223266" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; CURSOR: hand" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEih7hRC9Ek8Sa_3vB8RtcQe660Pbo_dcsQdCvflA7nsm0XWsPeuTWjNjMA9MzNF-GWnpcePf8Px5i3t1kYSpSjjJc9kJ7JPt6-JLqnAXQ9vex2xBxCh80IXxy8NNy-TlJfcSbn-GaxzmMIs/s400/Barack+Jam+for+Obama+-+Party+of+European+Socialists+Campaign.jpg" border="0" /></a>Barack jam for Obama<br /></span></strong><br /><br />28 August 2008<br /><br /><br /><strong><span style="font-size:180%;">PES Activists from Hungary are producing and selling apricot jam to show their support for Barack Obama.<br /></span></strong><br /><br /><strong><span style="font-size:180%;">‘Barack’ means apricot in Hungarian – spelt exactly like Obama’s first name</span></strong> - so PES activists made apricot jam in the eastern Hungarian town of Tallya labelled ‘Barack for Obama’ to show their support for the Democratic Presidential hopeful.<br /><br /><br />Matyas Gati, one of the organizers, said <strong><span style="font-size:180%;">“This is a fun way of making a serious point. Barack Obama is very popular in Hungary because he is so charismatic and because he offers a real alternative to the Republicans </span><em><span style="font-size:130%;">who have made such a mess of things in America and abroad. </span></em><span style="font-size:180%;color:#ff0000;">We also wanted to show that we PES activists share the same democratic values and aspirations as Mr Obama. He embodies the principles and values we want to promote as PES activists.</span></strong> <strong><span style="font-size:180%;color:#ff0000;">We support his ideas for change and the attitude of his politics.”<br /></span></strong><br /><br />Funds raised from selling the jam is going to local charities tackling child poverty.<br /><br /><br /><span style="font-size:180%;color:#ff0000;"><strong>Now Zita Gurmai, President of PES Women, has been presented with the ‘Barack for Obama’ jam in Brussels which she will share with her European Parliamentary colleagues</strong></span>. “I know there is lots of Obama merchandising but Hungarian ‘barack’ jam must be the most original. I am very proud that it was PES activists who came up with the idea. It shows that PES activists are people with the best ideas.”<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">The Party of European Socialists – which brings together all Europe’s socialist, social democratic and labour parties </span></strong>– launched PES activists to give individual members of its member parties a chance to become more involved in European-wide politics and campaigning. Over 10,000 party members have joined PES activists and there are city groups in many countries.<br /><br /><br /><strong><span style="font-size:130%;">Watch ‘Barack for Obama’ jam video here: </span></strong><a href="http://www.kapcsolat.hu/obama"><strong><span style="font-size:130%;">http://www.kapcsolat.hu/obama</span></strong></a><strong><span style="font-size:130%;"><br /></span></strong><br /><br /><strong>FOR MORE INFORMATION<br />Julian Scola, Communications Advisor - Media & Campaigns<br />Party of European Socialists, Rue du Trône, 98, B-1050 Brussels<br />Mobile +32 486 117 394<br /><a href="mailto:julian.scola@pes.org">julian.scola@pes.org</a><br /></strong><br />------------------------------------------------- <strong><em><span style="font-size:130%;color:#ff0000;">En Francais</span></em></strong><br /><br /><strong><span style="font-size:130%;color:#3333ff;">Une confiture de 'Barack' pour Obama</span></strong><br /><br /><br />Le 28 août 2008<br /><br /><br />Profitant du fait que le mot 'Barack' signifie littéralement 'abricot' en hongrois, les militants du PSE de Hongrie ont eu l'idée de produire et de vendre une confiture d'abricot sous l'étiquette ‘Barack for Obama’ (littéralement: de l'abricot pour Obama).<br /><br /><br />Cette initiative a été lancée par les militants hongrois de la ville de Tallya, à l'Est de la Hongrie, qui veulent ainsi exprimer leur soutien au candidat démocrate aux présidentielles américaines Barack Obama.<br /><br /><br />Matyas Gati, l'un des organisateurs de l'initiative, a déclaré: "C'est une façon amusante de faire passer un message sérieux. Barack Obama est très populaire en Hongrie parce qu'il est si charismatique et aussi parce qu'il représente une véritable alternative aux Républicains qui ont créé un tel gâchis aux Etats-Unis et ailleurs. Nous voulions aussi montrer que nous, les militants du PSE, partageons les mêmes valeurs démocratiques et les mêmes aspirations que M. Obama. Il incarne les principes et valeurs que nous voulons défendre en tant que militants du PSE. Nous appuyons ses idées en faveur du changement et sa manière de faire de la politique.”<br /><br /><br />Les fonds réunis à travers les ventes de confiture iront à des oeuvres de charité locales centrées sur la lutte contre la pauvreté infantile.<br /><br /><br />Zita Gurmai, présidente du PSE Femmes, a reçu son pot de confiture ‘Barack for Obama’ à Bruxelles, qu'elle partagera avec ses collègues eurodéputés. “Je sais qu'il existe beaucoup de marchandisage autour d'Obama mais la confiture de 'barack' hongroise doit être, à mon avis, le produit le plus original. Je suis très fière que ce soient les militants du PSE qui aient trouvé cette idée. Ce sont les militants qui ont les meilleures idées.”<br /><br /><br />Le Parti socialiste européen, qui réunit les partis socialistes, sociaux-démocrates et travaillistes d'Europe, a lancé l'initiative des militants du PSE afin de donner aux militants individuels des partis membres une chance de participer plus activement à la politique et aux campagnes européennes. Plus de 10.000 militants de partis membres du PSE sont devenus militants du PSE et il existe de nombreux groupes dans de nombreuses villes de plusieurs pays.<br /><br /><br />Regarder la vidéo ‘Barack for Obama’<br /><br /><strong>Pour plus d'informations:<br />Julian Scola, responsable Communications - Médias & Campagnes<br />Parti socialiste européen, Rue du Trône, 98, B-1050 Bruxelles<br />Portable +32 486 117 394<br /><a href="mailto:julian.scola@pes.org">julian.scola@pes.org</a><br /></strong><br />-------------------------------------------------------------------------------------------------</div><div><br /><a href="http://www.ibdeditorials.com/IBDArticles.aspx?id=304124899839152">http://www.ibdeditorials.com/IBDArticles.aspx?id=304124899839152</a><br /><br />IBD Editorials<br /><br /><br /><strong><span style="font-size:130%;">Finding Friends On Far, Far Left</span></strong><br /><br /><br />By INVESTOR'S BUSINESS DAILY<br /><br /><br />Posted Wednesday, August 20, 2008 4:20 PM PT<br />Election '08:<br /><br /><br /><strong><span style="font-size:180%;color:#3333ff;">The saying that a man is known by the company he keeps is true of political relationships. In Barack Obama's case, some of the groups that support him are an indictment of his political orientation.<br /></span></strong><br /><br /><strong><span style="font-size:180%;">Among Obama's biggest admirers, for example, is one Pepe Lozano. Unknown at the national level, Lozano is more of a small-time agitator, just as Obama was in his community organizing days in Chicago. Maybe that explains part of the attraction.<br /></span></strong><br /><br /><span style="font-size:180%;color:#ff0000;"><strong>But it's more likely that Lozano, a leader in the Chicago Young Communist League and an editorial board member of the People's Weekly World, newspaper of the Communist Party USA</strong></span>, finds that Obama is the communist party's best hope because of the junior senator's far-left positions.<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">"This is a history-making process," Lozano told a Chicago gathering of about 250 in June, "and we will be missing it if we don't do all we can to elect Barack Obama president."<br /></span></strong><br /><br />The next month, the People's Weekly World editorialized in favor of Obama, calling his a "transformative candidacy that would advance progressive politics for the long term."<br /><br /><br /><span style="font-size:180%;color:#ff0000;"><strong>The communist support is nothing new, however. Joel Wendland, managing editor of Political Affairs: Marxist Thought Online, another CPUSA magazine, suggested in February that Obama could be "the people's president."</strong></span><br /><br /><br />Also in February, Political Affairs editor Terri Albano talked about how the "kind of upsurge" surrounding Obama "comes around just once in a lifetime. I hope for all progressives — each of us — (to) get involved. Don't stand on the sidelines. Be active. Don't let history pass you by."<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">While communists are endorsing Obama, the Communist Party USA isn't.</span></strong> But that's not because it doesn't like Obama. <span style="font-size:180%;color:#ff0000;"><strong>The CPUSA simply does not endorse candidates. Yet it issued what could be called a non-endorsement endorsement of Obama in March, saying "his campaign has the clearest message of unity and progressive change."<br /></strong></span><br /><br /><strong><span style="font-size:180%;color:#ff0000;">"This election can begin to turn the tide: <span style="color:#3333ff;">It can help bring universal health care, save the environment</span> and start the restoration of our democratic rights," the group said. "This election can strengthen democracy for all."</span></strong><br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;"><span style="color:#3333ff;">If Obama is smarting</span> because he didn't get an official Communist Party USA endorsement, maybe he will be mollified by the approval of an old communist to the south. Fidel Castro in the spring wrote in the state newspaper Granma that Obama is "the most progressive candidate for the U.S. presidency."<br /></span></strong><br /><br /><strong><em><span style="font-size:130%;">That's an endorsement that anyone who doesn't have a socialist agenda should be ashamed of, especially given Castro's murder and intimidation of his foes and his repeated, egregious human rights violations of average Cuban citizens.</span></em></strong><br /><br /><br /><strong><span style="font-size:180%;color:#3333ff;">But from what we can tell, Obama has not rejected Castro's support.</span></strong> What we can tell, though, is that when Obama says he stands for change, he could be talking about erasing facts that he considers to be politically damaging.<br /><br /><br />Last month he scrubbed clean from his Web site evidence that he opposed the successful Iraq surge, and last winter he deleted the endorsement of the extremist Rev. Jeremiah Wright, who had become a political liability.<br /><br /><br /><strong><span style="font-size:180%;color:#3333ff;">But despite his campaign's penchant for cyberhygiene, the community blog on his own Web site still has an entry that's rather incriminating: <span style="color:#ff0000;">"This group is for self-proclaimed Marxists/Communists/Socialists for the election of Barack Obama to the presidency</span></span></strong>. . . . We support Barack Obama because he knows what is best for the people!" The fact that it can still be found on Obama's official site would indicate that the campaign has no problem with it — and that it might even appreciate the endorsement.<br /><br /><br /><strong><span style="font-size:180%;color:#3333ff;">The current campaign is not Obama's first association with groups that promote socialism or its more stringent ideological cousin, communism.<br /><br /><br />In 1995, he sought the endorsement of the New Party for his 1996 state Senate candidacy. The party — a collection of anti-capitalist ex-communists and socialists that disbanded in 1998 after six years of trying to push the Democratic Party even further left — gladly gave Obama its support.<br /></span></strong><br /><br /><strong><span style="font-size:180%;color:#ff0000;">Obama also was endorsed in that election by the Democratic Socialists of America, the largest socialist group in the U.S. While the name might sound benign, the DSA has a poisonous agenda. Its goal is to establish "an openly socialist presence in American communities and politics" and is committed to "restructuring society."</span></strong><br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">Members "are socialists because we reject an international economic order sustained by private profit, alienated labor, race and gender discrimination, environmental destruction, and brutality and violence in defense of the status quo."<br /><br /></span></strong><br />Just as it should be no surprise that a Che Guevara poster was found hanging in an Obama campaign office, it would not be a shock to see an Obama poster on a wall in <strong><span style="font-size:180%;color:#ff0000;">the Committees of Correspondence for Democracy and Socialism</span></strong>'s headquarters.<br /><br /><br /><em><strong><span style="font-size:130%;"><span style="font-size:180%;color:#ff0000;">Mark Solomon, the group's national co-chair</span>, wrote in a virtual endorsement in February that Obama "is an attractive, articulate and talented politician" whose "campaign has sparked a powerful surge."</span></strong></em><br /><br /><br />But that would be expected, since this group, which branched off from the Communist Party USA in 1991, organized the October 2002 rally in which Obama criticized the U.S. invasion of Iraq — while still serving as a state senator in Illinois. The ties between Obama and the committees go back years.<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">Across the Atlantic, the Party of European Socialists also has given its blessing.<br /></span></strong><br /><br /><strong><span style="font-size:180%;color:#ff0000;">President Poul Nyrup Rasmussen says that <span style="color:#3333ff;">"Obama is the choice for change and renewal. He gives hope to millions of Americans and Europeans</span> for a fairer world. . . . Progressive Europeans are united in hope that Barack Obama will be the new president following the U.S. elections."<br /></span></strong><br /><br />Obama supporters might excuse the candidate's support from communists, Marxists and socialists, saying he is the only alternative since these groups would never support the Republican nominee. (Which is entirely correct and indicative of the Democratic Party's continuing decline into the pit of democratic socialism.)<br /></div><div><br /><strong><em><span style="font-size:130%;">But the truth is, these groups usually reserve their endorsements and support for fringe candidates, not someone from a major party. That's not the case this time around. They seem to have their man. </span></em></strong></div>ITSSD Charitable Missionhttp://www.blogger.com/profile/00790887154748866904noreply@blogger.com0tag:blogger.com,1999:blog-1851218948450486986.post-35052244296895309322008-09-08T12:02:00.016-04:002008-12-15T14:06:28.081-05:00'Putting Country First' Means Defending America's Sovereignty, Constitution and Free Enterprise System Against Foreign Incursion<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEikC9amg8lpnFQ7rqopBbFpxLH88QBwtHbX6ZfHJhKz0jAYHdgaKeIYupYJbeVVGWd6PA6aczjCTW4mPXGxwsbRUpguRgGVCt9n85S6DQInuaOX3niXB53lFxQCE7-kJLGmKqLXwTZsI4CU/s1600-h/temple+II.bmp"><img id="BLOGGER_PHOTO_ID_5280093833457264098" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 200px; CURSOR: hand; HEIGHT: 54px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEikC9amg8lpnFQ7rqopBbFpxLH88QBwtHbX6ZfHJhKz0jAYHdgaKeIYupYJbeVVGWd6PA6aczjCTW4mPXGxwsbRUpguRgGVCt9n85S6DQInuaOX3niXB53lFxQCE7-kJLGmKqLXwTZsI4CU/s200/temple+II.bmp" border="0" /></a><br /><div align="justify"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgcfrVcClZj1JrMQ-TFFZvIAxW51tOhyF5SPPHadvHaWMcONiV744ERoFhzF5kbI_WpEapDo09OUagd2BFKy-FYKm_rtzQC9txj_AZQmn-Y45LMQjC8aGI1_MGopAKMe3bkpsKAXInu9AzE/s1600-h/temple%2520law%2520logo%2520small.jpg"><img id="BLOGGER_PHOTO_ID_5280093694887206498" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 200px; CURSOR: hand; HEIGHT: 47px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgcfrVcClZj1JrMQ-TFFZvIAxW51tOhyF5SPPHadvHaWMcONiV744ERoFhzF5kbI_WpEapDo09OUagd2BFKy-FYKm_rtzQC9txj_AZQmn-Y45LMQjC8aGI1_MGopAKMe3bkpsKAXInu9AzE/s200/temple%2520law%2520logo%2520small.jpg" border="0" /></a><em><strong><span style="font-size:130%;">In a new Temple Political & Civil Rights Law Review article entitled, The Extra-WTO Precautionary Principle: One European 'Fashion' Export the United States Can Do Without, international trade and regulatory lawyer Lawrence Kogan documents how America's Blue Party is quietly assisting our transatlantic cousins to reform the common law foundations of America's unique constitutional and free enterprise systems in Europe's continental civil law image.</span></strong></em><br /><em><strong><span style="font-size:130%;"></span></strong></em><br /><em><strong><span style="font-size:130%;"></span></strong></em><br /><em><strong><span style="font-size:130%;">"The unfortunate reality is that green-socialist Europe is increasingly governing the American way of life, that is, re-colonizing America through 'soft (law) power'. This will continue, unless our political leaders 'put country first' and act aggressively to reverse this trend", emphasizes Kogan. </span></strong></em><br /><strong><em><span style="font-size:130%;"></span></em></strong><br /><strong><em><span style="font-size:130%;"></span></em></strong><br /><em><strong><span style="font-size:130%;">"Protectionist Europe has long sought to undermine U.S. product design, process and manufacturing methods by imposing on American global supply-chains and small businesses its costly, non-science-based and WTO-inconsistent environmental requirements which are also promoted globally by the politically unaccountable institutions of the United Nations."</span></strong></em><br /><em><strong><span style="font-size:130%;"></span></strong></em><br /><em><strong><span style="font-size:130%;"></span></strong></em><br /><em><strong><span style="font-size:130%;">According to Kogan, "European governments and like-minded U.S. politicians have strongly criticized America for refusing to ratify European-crafted UN environmental treaties, and now call for fundamental domestic 'change' to rehabilitate America's image abroad." To facilitate this transformation, "Mostly Blue Party legislators and executives have opened up the doors of U.S. statehouses and regulatory agencies to Europe's collectivist, communitarian model of rulemaking, thereby placing America's individual rights-based federalist system and Americans' constitutionally guaranteed exclusive private property rights at considerable risk." "Furthermore", notes Kogan, "This sovereign incursion threatens to tilt the ongoing global competition between Anglo-American (negative-rights-based) and Continental (social-redistributionist) capitalism" in Europe's favor.</span></strong></em><br /><br /><br /><strong><em><span style="font-size:130%;">This raises many questions to which the American electorate deserves clear and unambiguous answers. For example, "Will our current and future leaders defend, at the federal, state and local levels, America's founding principles which have enabled the U.S. throughout its history to remain a nation without peers? Or, will they simply decide, on political correctness grounds, to broad-brush these traditions away for the sake of 'global solidarity'?" This ITSSD study is accessible online at</span></em></strong>: <a href="http://www.itssd.org/Kogan%2017[1].2.pdf"><strong>http://www.itssd.org/Kogan%2017[1].2.pdf</strong></a> .<br /></div><div align="justify"> </div><div align="justify"><strong><span style="font-size:180%;">[</span><span style="font-size:130%;">A DRAFT VERSION OF THIS ARTICLE ACTUALLY SERVED AS AN INSPIRATION FOR THE SYMPOSIUM ULTIMATELY CONVENED BY THE POLITICAL & CIVIL RIGHTS LAW REVIEW (CPLR) ON OCTOBER 20, 2007. See:</span></strong> <a href="http://www.itssd.org/Temple%20Political%20and%20Civil%20Rights%20Law%20Review.mht"><strong>http://www.itssd.org/Temple%20Political%20and%20Civil%20Rights%20Law%20Review.mht</strong></a><strong> <span style="font-size:130%;">;</span> </strong><a href="http://www.temple.edu/law/tpcrlr/2007brochure.pdf"><strong>http://www.temple.edu/law/tpcrlr/2007brochure.pdf</strong></a> <strong><span style="font-size:180%;">].</span></strong><br /></div><div align="justify">------------------------------------------------------------------------------------------------<br /></div><div align="justify"><strong><span style="font-size:130%;"><span style="font-size:180%;">[</span><em>The above press release and accompanying law review article challenge Thomas Friedman's thesis that "Americans can prosper by 'outgreening' everyone else," which is a recipe for mutually destructive trade protectionism. Unfortunately, as the book review below reveals, Mr. Friedman is large on words but light on data. </em></span></strong></div><div><br /> </div><div align="justify"><strong><span style="font-size:130%;"><em>While reducing U.S. energy dependence on foreign sourced-oil and gas is critical to maintaining America's future prosperity and sovereignty, adopting a very expensive top-down European regulatory model that impairs the exercise of exclusive private property rights, rather than a market-based approach that recognizes and protects private property rights to achieve this objective would be tantamount to committing economic suicide. Furthermore, highlighting the urgency of linking energy security to anti-climate change green policy objectives establishes a strawman /false dichotomy. They are mutually exclusive issues. The U.S. currently has available many of its own energy resources & technologies which can be exploited using American labor and know-how to secure greater energy independence, including oil, natural gas (including liquified natural gas) clean-coal, nuclear, solar, wind, geothermal, biomass, hydroelectric, , etc. </em></span><span style="font-size:180%;">]</span></strong></div><div><br /><br /><a href="http://www.washingtonpost.com/wp-dyn/content/story/2008/09/05/ST2008090501795.html">http://www.washingtonpost.com/wp-dyn/content/story/2008/09/05/ST2008090501795.html</a><br /><br /><br /><strong><span style="font-size:130%;">COVER REVIEW</span></strong><br /><br /><br /><strong><span style="font-size:130%;">A Climate for Change</span></strong><br /><br /><br />Tom Friedman says Americans can prosper by "outgreening" everyone else.<br /><br /><br />Washington Post<br /><br /><br />Sunday, September 7, 2008; Page BW03<br /><br /><br />Book Review by Joseph S. Nye Jr.<br /><br /><br />of<br /><br /><strong></strong><br /><span style="font-size:130%;"><strong>HOT, FLAT, AND CROWDED: </strong><strong>Why We Need a Green Revolution -- And How It Can Renew America</strong> </span><br /><br /><br />By Thomas Friedman,<br /><br /><br />Farrar Straus Giroux. 438 pp. $27.95<br /><br /><br />Like it or not, we need Tom Friedman.<br /><br /><br />The peripatetic columnist has made himself a major interpreter of the confusing world we inhabit. He travels to the farthest reaches, interviews everyone from peasants to chief executives and expresses big ideas in clear and memorable prose. While pettifogging academics (a select few of whom he favors) complain that his catchy phrases and anecdotes sometimes obscure deeper analysis, by and large Friedman gets the big issues right.<br /><br /><br />Almost a decade ago, in The Lexus and the Olive Tree, he celebrated the arrival of "globalization." Three years ago, in The World is Flat, he warned that borders, oceans and distance no longer protect us from the information revolution that is leveling the global economic playing field and relocating our jobs. Now he updates and expands this diagnosis by showing how population growth, climate change and the expansion of the world's middle class are producing a planet that is "hot, flat, and crowded." Unchecked, these trends will produce dangerous instability; but Friedman remains guardedly optimistic that we can stave off this nightmare, particularly if the United States changes its wasteful energy habits. <strong><span style="font-size:130%;">In this important book, Friedman says we can survive, even prosper, by going green.<br /></span></strong><br /><br />Of course, rousing a full-bellied nation, groggy from decades of energy overconsumption, is no small task. As the current election debate reminds us, the United States has proven inept at developing a serious energy strategy. Our approach, says one expert quoted by Friedman, is "the sum of all lobbies"; we have energy politics rather than energy policy. In the aftermath of 9/11, <a href="http://www.washingtonpost.com/ac2/related/topic/George+W.+Bush?tid=informline" target="">George W. Bush</a> ignored calls by Friedman and others for a "USA Patriot Tax" of $1 per gallon on gasoline. Instead, the president offered tax cuts and urged us to shop. <strong><span style="font-size:130%;">Rather than stimulating the economy to move toward fuel-efficient vehicles and renewable energy, we became more dependent on China to finance our deficit and Saudi Arabia to fill our gas tanks.</span></strong> Americans wound up paying even more for gas in 2008, but we enabled <a href="http://www.washingtonpost.com/ac2/related/topic/OPEC?tid=informline" target="">OPEC</a> to be the tax collector instead of using the revenues ourselves. Friedman calls this a "No Mullah Left Behind" policy and quotes former <a href="http://www.washingtonpost.com/ac2/related/topic/Central+Intelligence+Agency?tid=informline" target="">CIA</a> director Jim Woolsey: "We are funding the rope for the hanging of ourselves."<br /><br /><br /><strong><span style="font-size:180%;color:#33ff33;">Friedman believes we need to become "green hawks," turning conservation and cleaner energy into a winning strategy in many different arenas, including the military.</span></strong> ("Nothing," he writes, "will make you a believer in distributed solar power faster than having responsibility for trucking fuel across Iraq.") We should stop defining our current era as "post-Cold War," he says, and see it as an "Energy-Climate Era" marked by five major problems: growing demand for scarcer supplies, massive transfer of wealth to petrodictators, <strong><span style="font-size:180%;color:#33ff33;">disruptive climate change</span></strong>, poor have-nots falling behind, and an accelerating loss of bio-diversity. A green strategy is not simply about generating electric power, it is a new way of generating national power.<br /><br /><br /><strong><span style="font-size:180%;">[WRONG, MR. FRIEDMAN. LET'S BE HONEST. BEING 'ENVIRONMENTALLY 'GREEN' IS NOT AS MUCH A MOTIVATOR AS BEING FINANCIALLY 'GREEN' - i.e., FLUSH WITH ECONOMIC SAVINGS AS THE RESULT OF GREATER ENERGY INDEPENDENCE. THIS MEANS REDUCING THE COST OF FILLING UP ONE'S GAS TANK, WHICH, BY THE WAY HAS <em>INCREASED,</em> IN PART, DUE TO THE FEDERALLY MANDATED 10% ETHANOL COMPOSITION OF GASOLINE. SINCE ETHANOL DOES NOT BURN AS EFFICIENTLY AS GASOLINE, IT NOW TAKES MORE $$ TO FILL UP THE GAS TANK THAN IT DID BEFORE TO DRIVE FEWER MILES - APPROXIMATELY 10%-20% REDUCED MPG. IN ADDITION, THERE IS ALSO THE FINANCIAL BENEFIT OF REDUCING THE COST OF HEATING & COOLING ONE'S HOME OR BUSINESS VIA OFF-GRID RENEWABLE SOLAR & TECHNOLOGIES, BUT FOR THE SIGNIFICANT PRICE DISCREPANCY BETWEEN SUCH RENEWABLE SOURCES and CONVENTIONAL FOSSIL-FUEL (OIL, GAS, COAL) & ALTERNATIVE-BASED ENERGY (NUCLEAR) SOURCES. HOWEVER, ENVIRONMENTAL EXTREMISTS and U.S. BLUE PARTY POLITICIANS ARE BLOCKING ANY EFFORT TO EXPLOIT THESE AFFORDABLE and READILY AVAILABLE RESOURCES, AND WISH TO PENALIZE THOSE PARTIES WHICH GENERATE OR RELY ON THEM TO OPERATE THEIR BUSINESSES AND HOUSEHOLDS. PROMOTING THE USE OF SOLAR & WIND TECHNOLOGIES IS IMPORTANT, BUT NOT AT THE EXPENSE OF OTHER BUSINESSES AND CONSUMERS. FURTHERMORE, THE FAILURE OF POLITICIANS TO ACKNOWLEDGE THAT OUR CURRENT ENERGY INFRASTRUCTURE IS OUTDATED AND UNABLE TO EASILY ACCOMODATE GRID-CENTRALIZED SOLAR & WIND GENERATED ENERGY, WITHOUT SIGNIFICANT <em>NEW</em> INFRASTRUCTURE INVESTMENTS AND HIGHER ENERGY COSTS FOR BUSINESS & CONSUMERS, CREATES A FALSE PROPHET. IT IS ALSO BOTH DISINGENUOUS and DISHONEST.]</span></strong><br /><br /><br />Incremental change will not be enough. The three-time <a href="http://www.washingtonpost.com/ac2/related/topic/Pulitzer+Prize+Committee?tid=informline" target="">Pulitzer Prize</a>-winning writer for the <a href="http://www.washingtonpost.com/ac2/related/topic/The+New+York+Times+Company?tid=informline" target="">New York Times</a> scoffs at the kind of magazine articles that list "205 Easy Ways to Save the Earth." In the 1990s, global carbon dioxide emissions rose 1.1 percent annually, and many nations (not including the United States) signed the <a href="http://www.washingtonpost.com/ac2/related/topic/Kyoto+Protocol?tid=informline" target="">Kyoto Protocol</a> to try to curb those emissions. But from 2000 to 2006, growth in CO2emissions tripled to 3 percent per year.<br /><br /><br />Friedman cites an estimate by <a href="http://www.washingtonpost.com/ac2/related/topic/Royal+Dutch+Shell+plc?tid=informline" target="">Royal Dutch Shell</a> that it typically takes 25 years for a new form of energy to capture 1 percent of the world market. Shell predicts that if we do things right, renewable energy will provide 30 percent of global needs by 2050, but fossil fuels will still provide 55 percent. Friedman says we need to do better than that. "Carbon neutral" is not ambitious enough; companies and institutions should seek a "carbon advantage" over rivals. This will require innovations in clean energy; greater energy efficiency (including the use of information technology to create smart grids and smart buildings); and a new ethic of conservation. <strong><span style="font-size:180%;color:#ff0000;">Friedman argues that rather than costing too much, such initiatives can create investment opportunities, new jobs and global leadership for the U.S. economy. Here one wishes he had provided more evidence from some of the pettifogging academic economists.</span></strong><br /><br /><br /><strong><span style="font-size:180%;">[WE ALSO WOULD LIKE TO SEE THE NUMBERS/ FIGURES UPON WHICH HE RELIES FOR THIS THESIS, WHICH HE WOULD BE HARDPRESSED TO FIND...]</span></strong><br /><br /><br /><strong><span style="font-size:180%;color:#33ff33;">Friedman is skeptical of treaties, and he argues that "a truly green America would be more valuable than fifty Kyoto Protocols.</span></strong> Emulation is always more effective than compulsion." <strong><span style="font-size:180%;">He makes a good case that "outgreening" other countries would contribute to America's soft power as well as our hard power. </span></strong>"We are still the city on the hill for many Chinese," he notes, "even though they hate what we've done at times at the top of the hill." But the problem of China could overshadow what we do at home. In 2007, China surpassed the United States as the world's leading emitter of carbon dioxide. Chinese argue that on a per capita basis each of their citizens is responsible for only one-fifth the emissions of an American, and that developing countries should not have to cut back until they reach rich countries' CO2levels. This is a formula for global disaster. As Friedman says, "Mother Nature isn't into fair. All she knows is hard science and raw math."<br /><br /><br /><strong><span style="font-size:180%;">[ACTUALLY, SHOWING HOW MARKET MECHANISMS CAN FILL IN THE SIGNIFICANT PRICE GAPS NOW EXISTING BETWEEN THE COST OF PROCURING, DISTRIBUTING & USING CONVENTIONAL FOSSIL & ALTERNATIVE FUELS AND THE COST OF PROCURING, DISTRIBUTING AND USING RENEWABLE SOLAR, WIND, BIOMASS, ETC. IN ORDER TO FACILITATE OUR NATION'S ENERGY SOURCE SHIFT AT A REASONABLE PRICE FOR BOTH SMALL BUSINESSES & CONSUMERS, AND AT THE SAME TIME, and HOW MARKET MECHANISMS CAN LEAD TO NEW SUSTAINABLE GREEN LABOR, SERVICE AND TECHNOLOGY JOBS THAT CANNOT BE OUTSOURCED OR SUBJECT TO ACQUISITION & LAYOFFS, WOULD CONTRIBUTE MIGHTILY TO AMERICA'S 'SOFT' & 'HARD' POWER.]</span></strong></div>ITSSD Charitable Missionhttp://www.blogger.com/profile/00790887154748866904noreply@blogger.com0tag:blogger.com,1999:blog-1851218948450486986.post-48868534641411742282008-09-05T17:58:00.033-04:002008-09-05T19:50:25.554-04:00Moscow Militarism + Poor Market Fundamentals = Reduced Foreign Investor Confidence, Ruble Devaluation, FDI Flight, & Diminished Access to Capital<div><a href="http://www.ft.com/cms/s/0/0b5cafca-7ae2-11dd-adbe-000077b07658.html">http://www.ft.com/cms/s/0/0b5cafca-7ae2-11dd-adbe-000077b07658.html</a><br /><br /><strong><span style="font-size:130%;">Moscow forced to support the troubled rouble</span></strong><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhfNh2O6H4oMRr9RR1FwJ6nfUzGFkeStaAOvrFtZPeXJ9HItggdhyphenhyphenudunRqB6j_Bk2gucJZJZqmkB88Upz3qPIFiWOgePxSR5cmd7u9KXPFRv7joks58BvF5HSl-curx1DHjKrwyAhe1ChT/s1600-h/Russia+1000+rubles.jpg"><img id="BLOGGER_PHOTO_ID_5242676309780873170" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; CURSOR: hand" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhfNh2O6H4oMRr9RR1FwJ6nfUzGFkeStaAOvrFtZPeXJ9HItggdhyphenhyphenudunRqB6j_Bk2gucJZJZqmkB88Upz3qPIFiWOgePxSR5cmd7u9KXPFRv7joks58BvF5HSl-curx1DHjKrwyAhe1ChT/s320/Russia+1000+rubles.jpg" border="0" /></a><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg79TVOILVpBmNXVTGyg_fasKK1SK0u09j7zfP_eWKFZNRk8axK2XHsBoV2gq_dgJbjMhkEO889Gs0LYgIK2VO77AX_G9X5hxYUHcxPoH6I_YaY0y3xKJGw23ew8_v9G70RbU3wkiu-MoU7/s1600-h/Rouble.jpg"><img id="BLOGGER_PHOTO_ID_5242676748836796354" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; CURSOR: hand" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg79TVOILVpBmNXVTGyg_fasKK1SK0u09j7zfP_eWKFZNRk8axK2XHsBoV2gq_dgJbjMhkEO889Gs0LYgIK2VO77AX_G9X5hxYUHcxPoH6I_YaY0y3xKJGw23ew8_v9G70RbU3wkiu-MoU7/s200/Rouble.jpg" border="0" /></a>By Charles Clover in Moscow and Peter Garnham in London<br /><br /><br />Financial Times<br /><br /><br />September 5 2008<br /><br /><br /><strong><span style="font-size:180%;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg27xEG8IYe32z_C0guPdLpjywUR-WPYSV_3YYLIGet3x9r8f8HSGA6WRy5Op6ndbt4Luz4c6Eu6EaUMswz6m27FPv9szdBkGfbEbkN2v_mNcQtn3w_ikCS4-r2Y8l1P9iEA66K6hxxiqP2/s1600-h/russian-central-bank.jpg"><img id="BLOGGER_PHOTO_ID_5242687241313511682" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; CURSOR: hand" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg27xEG8IYe32z_C0guPdLpjywUR-WPYSV_3YYLIGet3x9r8f8HSGA6WRy5Op6ndbt4Luz4c6Eu6EaUMswz6m27FPv9szdBkGfbEbkN2v_mNcQtn3w_ikCS4-r2Y8l1P9iEA66K6hxxiqP2/s320/russian-central-bank.jpg" border="0" /></a>Russia's central bank intervened heavily to support the rouble yesterday with analysts saying that $21bn of foreign capital might have been pulled out of the country</span></strong> as Moscow paid the price for its conflict with Georgia.<br /><br /><br /><strong><span style="font-size:180%;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjBGw1X-TbXAaxSbmtqAcyH4uxVtmIt65I1hBTQyIJDevnaXz1knecPJXcllNdNJuwxRVseVt4rRg0cAnky1o6Vvxnds-5CXSe6xSGz9fDTXSRQhjGy01Y1PGxwgOM6VnB7j7fBA2K88_D_/s1600-h/euro_dollar+basket.png"><img id="BLOGGER_PHOTO_ID_5242684270993003522" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; CURSOR: hand" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjBGw1X-TbXAaxSbmtqAcyH4uxVtmIt65I1hBTQyIJDevnaXz1knecPJXcllNdNJuwxRVseVt4rRg0cAnky1o6Vvxnds-5CXSe6xSGz9fDTXSRQhjGy01Y1PGxwgOM6VnB7j7fBA2K88_D_/s200/euro_dollar+basket.png" border="0" /></a>The rouble fell as low as 30.41 against a dollar-euro dual currency basket</span></strong>, its weakest level since the Russian central bank adopted the basket in February 2007. The central bank governor admitted that there had been capital outflows since the war but the amount was much lower.<br /><br />The currency intervention was the first since the height of the war with Georgia at the beginning of August.<br /><br /><br />Before the conflict, the central bank's interventions in the market were aimed at stemming the rise of the rouble, which it manages to a basket weighted 55 per cent in dollars and 45 per cent in euros. The attractions of resource-rich Russia, a net foreign creditor with sustainable trade and fiscal surpluses and the third-largest foreign exchange reserves, had made the rouble a one-way upward bet.<br /><br /><br />However, <strong><span style="font-size:180%;">the rouble has suffered as foreign investors have pulled money out of Russia</span></strong>.<br /><br /><br /><strong><em><span style="font-size:130%;">The outflow of capital from Russia has slowed markedly from its pace in the middle of August, when capital flight was $21bn in the two weeks to the end of August 22</span></em></strong>, according to Goldman Sachs, the investment bank, and foreign currency reserves fell at their most precipitous rate since the 1998 currency crisis.<br /><br /><br /><strong><em><span style="font-size:130%;">Capital outflows in the week ending August 29 were a much lower $1.7bn, though over the past two days the value of the rouble against the dollar and euro sank 2 per cent indicating renewed capital flight</span></em></strong>. <strong><span style="font-size:180%;">To stop the rouble falling further, the central bank sold $3.5bn-$4bn in reserves</span></strong>, currency dealers were reporting.<br /><br /><br /><strong><span style="font-size:180%;">Dealers at MDM Bank in Moscow believe that the central bank sold up to $4.5bn in an effort to halt the rouble's fall, said Mikhail Galkin, an MDM analyst.</span></strong> <strong><em><span style="font-size:130%;">The rouble sell-off is a sign that in spite of the stabilisation of the conflict in Georgia, and the absence of tough sanctions on Russia, investors still perceive political risk. </span></em></strong><br /><br /><br /><strong><span style="font-size:180%;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxwx9LDnDEMczjKiTdSkv_C9EtWTziurNC-p3dcXMjiRx6eIIta9c0Y6HxZ1Ozp430ZfYMvyIkOulSHA5coroQrIFYc2zadnSfEtxgz4bLkvoBGyaPYsI60kdWRC5KMC8OikHK1ASxJcJH/s1600-h/Russia+RTS+stock+market+index+logo.jpg"><img id="BLOGGER_PHOTO_ID_5242684925918462178" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; CURSOR: hand" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxwx9LDnDEMczjKiTdSkv_C9EtWTziurNC-p3dcXMjiRx6eIIta9c0Y6HxZ1Ozp430ZfYMvyIkOulSHA5coroQrIFYc2zadnSfEtxgz4bLkvoBGyaPYsI60kdWRC5KMC8OikHK1ASxJcJH/s320/Russia+RTS+stock+market+index+logo.jpg" border="0" /></a>Russia's Rts stock market index fell 3.94 per cent after dropping 4.25 per cent on Wednesday</span></strong>.<br /><br /><br />The central bank said that the capital outflow from Russia last month, when unnerved investors headed for the exits, was $5bn. "According to very preliminary estimates, the outflow [in August] totalled around $5bn," said Russian news agencies quoting Sergei Ignatyev, central bank chairman.<br /><br /><br /><strong><em><span style="font-size:130%;">Ivan Tchakarov, a vice-president of emerging markets research at Lehman Brothers, said: "We find [the] CBR claim that only $5bn . . . left Russia in August highly unlikely . . . In our view, August capital outflows may amount to at least $15bn-$20bn."</span></em></strong><br /><br /><br />Many analysts say global market weakness has played a part in the rouble's fall. Nikolai Podguzov, head of bond strategy at Renaissance Capital, the Moscow investment bank, said: "The recent sell off in equities and bonds is mainly attributable to global factors, not the situation in the Caucasus.<br /><br /><br />"At least we didn't see any rude headlines on the political situation over the past few days."<br /><br /><br />Russia's central bank still boasts an impressive warchest to defend its currency. Its reserves measured this week at $582bn, the third-largest foreign currency reserves in the world.<br /><br />------------------------------------------------------------------------------------------------<br /><br /><strong><span style="font-size:130%;">Global Market Brief: The Financial Aftermath of the Russo-Georgian War</span></strong><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjhPPe_D5R4UC5rkP7MjEitDLslAv_GxiugJAudsaQ8UbCI1h0QvMtI6yHLT6I8ky37iTDGxYqLgsHti2uNpby2mICq4NC-8mzoom25cEvybS7EkKZ9GKqrtjGW1PDqtmjNfIhIHorbzcNU/s1600-h/Russia_and_Georgia_flags.png"><img id="BLOGGER_PHOTO_ID_5242678578493609058" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; CURSOR: hand" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjhPPe_D5R4UC5rkP7MjEitDLslAv_GxiugJAudsaQ8UbCI1h0QvMtI6yHLT6I8ky37iTDGxYqLgsHti2uNpby2mICq4NC-8mzoom25cEvybS7EkKZ9GKqrtjGW1PDqtmjNfIhIHorbzcNU/s200/Russia_and_Georgia_flags.png" border="0" /></a>Stratfor Today<br /><br /><br /><br /><br />September 4, 2008<br /><br /><br /><br /><br /><strong><span style="font-size:130%;">During the </span></strong><a href="http://www.stratfor.com/weekly/russo_georgian_war_and_balance_power" target="_blank"><strong><span style="font-size:130%;">Russo-Georgian war</span></strong></a><strong><span style="font-size:130%;">, Russia’s stock index declined to its lowest level in two years, <span style="font-size:180%;">the ruble registered its largest monthly decline against the U.S. dollar in more than nine years, and foreign investment flight amounted to $25 billion in just three weeks</span>, according to French investment bank BNP Paribas.<br /></span></strong><br /><br />But <a href="http://www.stratfor.com/analysis/russia_impact_and_lack_thereof_foreign_direct_investment" target="_blank"><strong><span style="font-size:180%;">the flight of foreign direct investment</span></strong></a> that has resulted from deteriorating ties between Russia and the West <strong><span style="font-size:180%;">will <em>not</em> hurt Russia as much as is believed</span></strong>.<br /><br /><br />Rather, <strong><span style="font-size:180%;">Russia will be dealt a massive blow when the West ceases giving Russian companies the financial access they need to continue expanding or even operating. </span></strong><br /><strong><span style="font-size:180%;"><span style="font-size:100%;"></span></strong></span><br /><span style="font-size:180%;"><strong><span style="font-size:180%;"></span></strong><br /></span><strong><span style="font-size:180%;color:#ff0000;">The main reason Russian companies have done so well in the past few years (and made Russia a much stronger country) is that foreign entities have been the ones financing their expansion</span></strong>. This is all about to change.<br /><br /><br /><strong><span style="font-size:130%;">The Russian Model</span></strong><br /><br /><br />There are three main types of financial models in the world: Western, Asian and Russian. The Western financial model is economically based, with gaining money and profit as the end goal; such a model tends to crush inefficiency and protect the system as a whole. The Asian model is socially based. This model’s goal is maximum employment and social stability, where money is used as a political resource for nonfinancial ends despite all inefficiencies. <span style="font-size:130%;"><strong><em><span style="color:#cc0000;">The Russian model is politically based. In Russia, finance is a political tool to control the country and operates much like money for loan sharks or organized crime</span></em></strong>.</span> <strong><em><span style="font-size:130%;">The system is highly inefficient, but it allows a very small few to hold all the power in an enormous country.<br /></span></em></strong><br /><br /><strong><span style="font-size:130%;color:#cc0000;">It is the Russian model that has made it nearly impossible for Russian companies to gain access to cash outside their own earnings and has led them to look outside the country</span></strong>. To put it simply, a company needs money in order to grow; in its search for that money, it has three options. It can use its own money, but this limits a company in its ability to make major purchases, take on large projects, or greatly or quickly expand. This option has been seen not only in companies’ purchases, but in most financial transactions in Russia. A good example of this in Russia is mortgages, which the country had never seen until the past few years. Previously, Russians had to use their own money to buy homes without any financing options.<br /><br /><br />The other two options involve borrowing money, either by taking out loans or by issuing bonds. A loan would have to come from a bank, and any sizable loan would have to come from a large (most likely Western) one. Issuing bonds is like dividing up pieces of a loan to a number of purchasers.<br /><br /><br /><span style="color:#cc0000;"><strong><em><span style="font-size:130%;">Most Russian companies cannot turn to Russian banks for loans, because the banks are either too small to finance major projects or are state- or oligarch-owned</span></em></strong>.</span> <strong><span style="font-size:130%;">Of Russia’s 10 largest banks, the top five are all state-owned, which means that if a company wants to finance a major project it has to develop an understanding with the Kremlin</span></strong>. Traditionally, the major state banks have stayed out of financing large projects, mainly because they have no expertise in these fields. When the government does actually step into the role of financier, it is usually because of political or control issues and not because the Kremlin sees a good investment.<br /><br /><strong><span style="font-size:130%;">The other large banks in Russia are typically oligarch-run. </span></strong><a href="http://www.stratfor.com/analysis/russia_struggles_within" target="_blank"><strong><span style="font-size:130%;">The oligarchs</span></strong></a><strong><span style="font-size:130%;"> are billionaires who lead most of Russia’s vital sectors, both private and state-controlled</span></strong>. Most of these individuals rose to power during the Yeltsin-era “shock therapy” transition from socialist structures to capitalist ones (which more resembled a free-for-all), but the oligarchs who have remained in power are either owned by the Kremlin or have the Kremlin’s blessing to continue holding strategic sectors.<br /><br /><br />During their rise, the oligarchs basically created their banks in order to fund projects or manage their own companies. <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj8ENVgXRbXteNmFGdtWVnMeWhyKNxguNYYLR7jA-R-wIcgv4byi6pseNizYyS964xiKHt4A0FzZu9qc1GYvrB3b_43pM649AtHh04_B_JAzuxZfKjo9SvIHKHOV1J-v2oWj-5YBlGPU6pN/s1600-h/rosbank+-+logo_first_en.gif"><img id="BLOGGER_PHOTO_ID_5242688121090004978" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; CURSOR: hand" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj8ENVgXRbXteNmFGdtWVnMeWhyKNxguNYYLR7jA-R-wIcgv4byi6pseNizYyS964xiKHt4A0FzZu9qc1GYvrB3b_43pM649AtHh04_B_JAzuxZfKjo9SvIHKHOV1J-v2oWj-5YBlGPU6pN/s320/rosbank+-+logo_first_en.gif" border="0" /></a>For example, <em><strong><span style="font-size:130%;">Rosbank was created by the owners of Interros — oligarchs Mikhail Prokorov and Vladimir Potanin — in order to finance projects by Interros’ Norilsk Nickel, the world’s largest nickel company. These banks typically are not able to take on any other company’s major projects and often cannot handle major financing for their own related firms; moreover, these oligarchs have no interest in funding any rival oligarch’s expansion plans.</span></strong></em> The oligarchs also created these banks in order to keep the Kremlin from having a say in their companies and projects (though the Kremlin has since either worked its way into partial ownership of most “private” banks or placed lackeys as bank chiefs).<br /><br /><br /><strong><span style="font-size:130%;"><span style="color:#cc0000;">Russian companies cannot issue bonds to the domestic market</span> simply because there are not enough interested people in the country with the money to buy them</span></strong>. Those who have money to spend are, once again, the government or the oligarchs, and all the same rules apply to their investment in bonds as to the banking sector.<br /><br /><br /><strong><span style="font-size:130%;">The only option left has been for Russian companies to turn to foreign money and banks. This is an option Russian companies have turned to only very recently (in the last five years) after the fall of the Soviet Union and a decade of economic turmoil</span></strong>. The Russian market has been so starved for capital — particularly for investment, and for nearly a century — that foreigners are seeing a lot of bang for their buck in financing Russian companies, and they have been lending cash and snapping up bonds left and right. <strong><span style="font-size:130%;">The potential for growth in Russia is so great that <span style="color:#cc0000;">foreign cash is estimated to fund 70 percent of Russian debt</span>.</span></strong> <strong><span style="font-size:130%;">It is foreign loans and bonds that are actually making a difference in Russian companies and economic expansion.<br /></span></strong><br /><br /><strong><span style="font-size:130%;">Sudden Changes</span></strong><br /><br /><br />But the Georgian-Russian war has changed all of this. It is not that the war was the proximate trigger for the massive fall in Western confidence in Russia; rather, it was a clear sign of a downfall already in progress. <strong><span style="font-size:130%;"><span style="color:#cc0000;">General perception of and confidence in Russia has now changed — especially in the West. Russian companies (and then the Russian economy) will have to shift when the reality hits that the West simply no longer has confidence in Russia or its companies</span>.</span></strong> <strong><em><span style="font-size:130%;">Russia was already a risky market, given the Kremlin, oligarchs and organized crime, but when global credit conditions are poor — as they are now — investors tend to shun riskier ventures.<br /></span></em></strong><br /><br />According to BNP Paribas, the amount of debt raised by Russian companies in August was 87 percent less than July’s levels, and <strong><span style="font-size:180%;"><em><span style="color:#ff0000;">the issuance of new equity nearly halted — from $933 million in July to $3 million in August.</span></em> </span></strong><strong><span style="font-size:180%;">This dramatic slowdown will not lead to a Russian collapse (the country does have its own money), but Russian companies will find it very hard to raise capital and fund expansions, leading to stagnating operations.<br /></span></strong><br /><br /><strong><span style="font-size:130%;"><span style="font-size:180%;">Russian President Dmitri Medvedev is already hearing the cries of Russian companies and oligarchs over the tightened situation and <span style="color:#cc0000;">restrictions from world financial markets</span>.</span> Medvedev will be meeting with the country’s biggest firms and businessmen at the annual Russian Union of Industrialists and Entrepreneurs summit on Sept. 19-20.</span></strong> Medvedev has vowed to unveil a new program for easy credit soon after the summit, once he has input from the country’s business leaders.<br /><br /><br /><strong><span style="font-size:130%;">The Kremlin’s Options</span></strong><br /><br /><br />There are three options for Moscow. <strong><span style="font-size:130%;">First, Russia could just take the blow, no matter how many ticked-off oligarchs it creates. This would mean that <span style="color:#cc0000;">some of Russia’s most powerful companies would have to revamp their plans entirely. Such a move would definitely affect the expansion plans of nonstate firms, but it will also hit many state companies</span> — like energy giants Rosneft and Gazprom — which have been gorging on the bonds markets.</span></strong> It also means that the Russian government, which uses many of the companies as champions and tools for domestic or foreign control, would have to overhaul its future strategy as well.<br /><br /><br /><strong><span style="font-size:130%;">Second, <span style="color:#cc0000;">the government could learn how to spend [/lend - increase liquidity] money.</span> Moscow does not have a problem with cash and holds the world’s third-largest foreign currency reserve (currently just under $600 billion).</span></strong> <strong><span style="font-size:130%;">The problem is that the government does not like to spend any of its reserves unless it is desperately needed.</span></strong> The only time in the past decade the Kremlin has dipped into the reserves was to finance its war with Georgia. But some Russian oligarchs, like Potanin, are already calling on the Kremlin to tap its reserves to ease the crisis.<br /><br /><br />The third option is the most difficult: <strong><span style="font-size:130%;">Russia could actually set up a real large bank for real large loans. But this would change the country’s entire financial model and cut the Kremlin’s and local politicos’ abilities to control and manipulate who can borrow money and for what. The social and economic implications of this option are something that the Kremlin has never shown it is willing to risk</span></strong>. <span style="color:#3333ff;"><span style="font-size:180%;"><strong><em>Setting up a real banking structure would offer people in Russia a resource outside the government’s control, which would in turn give them the ability to have an opinion and hold economic power, and potentially rival the government in making decisions</em></strong> </span></span>— something that Russia has never seen or allowed before.</div>ITSSD Charitable Missionhttp://www.blogger.com/profile/00790887154748866904noreply@blogger.com0tag:blogger.com,1999:blog-1851218948450486986.post-76620078008039120372008-09-02T08:36:00.115-04:002008-09-02T11:41:36.415-04:00It's Not Such a Complication: More Moscow Militarism = Less FDI, Scientific & Technology Cooperation and Exchange, Trade, Economic Growth for Russia<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEigC8GOX8utfphcrABXFiv3cjPOjiyDTwiiPh1_AK1I0HkzQtZ8iSiCgAzBTdIyhNOcDdYgVsoGdHEg6WaRxTziBziNY9zvP_K1Ivlscq-qnaHw8g6nnXgOwpppDudVMSF6UmSxch8h2oJq/s1600-h/soviet_union_map_2.jpg"><img id="BLOGGER_PHOTO_ID_5241446157811430050" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 395px; CURSOR: hand; HEIGHT: 238px" height="198" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEigC8GOX8utfphcrABXFiv3cjPOjiyDTwiiPh1_AK1I0HkzQtZ8iSiCgAzBTdIyhNOcDdYgVsoGdHEg6WaRxTziBziNY9zvP_K1Ivlscq-qnaHw8g6nnXgOwpppDudVMSF6UmSxch8h2oJq/s320/soviet_union_map_2.jpg" width="377" border="0" /></a> <em><strong><span style="font-size:130%;color:#ff0000;">The following series of articles clearly show that the newly projected Military aggression of and return to Soviet-era strong-arm tactics by the lingering Putin Government that has apparently decided to limit and curtail economic and political freedom, the rule OF law, recognized and enforced private property rights, and further development of technologies and the sciences for the benefit of Russia's citizens, both within and outside Russia's borders, resting instead on traditional forms of political intimidation and a passing period of petrodollar power: 1) will unfortunately cause Russia to fall further behind in ensuring indigenous scientific and technological development, broad diversified domestic economic growth, modernization, greater societal well-being and improved standards of living (e.g., due to a devalued national currency and higher domestic interest rates) for the Russian people; and 2) will unfortunately undermine Russia's ability to secure critically needed foreign direct investment, know-how, international scientific and technological cooperation, and the political respect of the global community. Why would the current Russian Government be so short-term minded such that it is willing to risk all of the domestic and international economic, scientific, technological, political and human progress that has been made during the past 18 years? Why would the current Russian Government be willing to cause the Russian people who deserve much, much more, to suffer once again?</span></strong></em><br /><div><div></div><div></div><br /><br /><div><a href="http://www.nytimes.com/2008/09/01/world/europe/01russia.html?scp=7&sq=september+1%2C+2008&st=nyt">http://www.nytimes.com/2008/09/01/world/europe/01russia.html?scp=7&sq=september+1%2C+2008&st=nyt</a><br /></div><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhCaNTtxchKHoH1dP8VNveOn6b4uIMtiFkBijr1t_zOf-dGHQyhg_k_0t0alkzXscpC70MYKtcxIESuAsp2HvPMlXr0Oh85pbKOl14er97QIoxMUxE1AxQrPtLr2V9mBOAr0jYM8RtVVmNe/s1600-h/map_of_russia.jpg"><img id="BLOGGER_PHOTO_ID_5241446463661598866" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 388px; CURSOR: hand; HEIGHT: 277px" height="240" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhCaNTtxchKHoH1dP8VNveOn6b4uIMtiFkBijr1t_zOf-dGHQyhg_k_0t0alkzXscpC70MYKtcxIESuAsp2HvPMlXr0Oh85pbKOl14er97QIoxMUxE1AxQrPtLr2V9mBOAr0jYM8RtVVmNe/s320/map_of_russia.jpg" width="353" border="0" /></a><strong><span style="font-size:130%;">Russia Claims Its Sphere of Influence in the World</span></strong><br /><div></div><div><br />By ANDREW E. KRAMER</div><br /><div></div><div><br />MOSCOW — <strong><span style="color:#3333ff;">President Dmitri A. Medvedev of Russia</span></strong> on Sunday laid out what he said would become his government’s guiding principles of foreign policy after its landmark conflict with Georgia — notably including a claim to <strong><span style="font-size:180%;">a “privileged” sphere of influence in the world</span></strong>. <strong><span style="font-size:180%;">[??] </span></strong><br /><br /></div><div><strong><span style="font-size:180%;">[PERHAPS LAW PROFESSOR PRESIDENT MEDVEDEV IS NOT FAMILIAR WITH THE FAMOUS SMITH BARNEY SLOGAN OF AN EARLIER ERA: "AT SMITH BARNEY, WE DON'T MAKE MONEY, WE <em>EARN IT</em>." DEAR PRESIDENT MEDVEDEV, THE SAME APPLIES TO THE INFLUENCE AND POLITICAL POWER OF A NATION - A NATION DOESN'T CLAIM/MAKE A 'PRIVILEGED' SPHERE OF INFLUENCE & POWER IN THE 21st CENTURY - <em>YOU MUST EARN IT OVER TIME</em>.]</span></strong> </div><br /><div></div><div><br />Speaking to Russian television in the Black Sea resort of Sochi, a day before a summit meeting in Brussels where European leaders were to reassess their relations with Russia, <strong><span style="color:#3333ff;">Mr. Medvedev</span></strong> said his government would adhere to five principles.<br /><br /><br /><strong><em><span style="font-size:130%;">Russia, he said, would observe international law. It would reject what he called United States dominance of world affairs in a “unipolar” world.</span></em></strong> It would seek friendly relations with other nations. It would defend Russian citizens and business interests abroad. And <strong><span style="font-size:180%;">it would claim a sphere of influence in the world</span></strong>.<br /><br /><br />In part, <strong><span style="color:#3333ff;">Mr. Medvedev</span></strong> reiterated long-held Russian positions, like his country’s rejection of American aspirations to an exceptional role in world affairs after the end of the cold war. <strong><span style="font-size:130%;">The Russian authorities have also said previously that their foreign policy would include a defense of commercial interests, sometimes citing American practice as justification.<br /></span></strong></div><br /><div></div><br /><div><strong><span style="font-size:180%;">[A NATION'S DEFENSE OF ITS COMMERCIAL INTERESTS IS NOT UNUNUSUAL. HOWEVER, PLEASE EXPLAIN HOW AMERICAN PRACTICES UNDERMINE RUSSIAN COMMERCIAL INTERESTS].</span></strong><br /><br /></div><div><strong><em><span style="font-size:130%;">In his unabashed claim to a renewed Russian sphere of influence, Mr. Medvedev said: “Russia, like other countries in the world, has regions where it has privileged interests. These are regions where countries with which we have friendly relations are located.” </span></em></strong></div><br /><div></div><div><br />Asked whether this sphere of influence would be the border states around Russia, he answered, “It is the border region, but not only.”<br /></div><br /><br /><br /><div></div><br /><br /><br /><div><strong><span style="font-size:180%;">[ALL NATIONS HAVE INTERESTS. ABOUT WHAT INTERESTS DO YOU SPEAK, PRESIDENT MEDVEDEV? AND HOW ARE OTHER NATIONS WORKING AGAINST THEM??]</span></strong><br /></div><br /><br /><br /><div><br />Last week, Mr. Medvedev used vehement language in announcing Russia’s recognition of the independence of South Ossetia and Abkhazia. Though he alluded in passing to respecting Georgia’s territorial integrity, he defended Russia’s intervention as necessary to prevent a genocide.<br /><br /><br />Mr. Medvedev, inaugurated in May, was an aide to Vladimir V. Putin, the former president and now prime minister.<br /><br /><br /><strong><em><span style="font-size:130%;">Mr. Putin appeared on Russian television on Sunday from the nation’s far east, where he was inspecting progress on a trans-Siberian oil pipeline to China and the Pacific Ocean, a clear warning to Europe that Russia could find alternative customers for its energy exports.</span></em></strong> He was later shown in a forest, dressed in camouflage and hunting a Siberian tiger with a tranquilizer gun.<br /></div><br /><br /><br /><div></div><br /><br /><br /><div><strong><span style="font-size:180%;">[IN THE SHORT TERM, MR. PUTIN, YOU WILL LIKELY BENEFIT FROM THE FOOLHARDY ENERGY & CLIMATE CHANGE POLICIES AND OTHER STRATEGIC MISCALCULATION OF THE EUROPEAN UNION TO RELY ALMOST ENTIRELY ON RUSSIAN NATURAL GAS. IN THE LONG TERM, HOWEVER, YOUR GAME OF ENERGY ROULETTE, EXTORTION & ATTEMPTED MARKET MONOPOLIZATION WILL UNDERMINE RUSSIAN INFLUENCE and TRIGGER THE RAPID DEVELOPMENT OF ALTERNATIVE and RENEWABLE ENERGY TECHNOLOGIES and SOURCES WITHIN EUROPE AND BEYOND. THE WIDE DEPLOYMENT OF SUCH NEW TECHNOLOGIES and THE REFOCUSING ON ALTERNATIVE ENERGY SOURCES WILL ULTIMATELY REDUCE THE ECONOMIC & STRATEGIC VALUE OF RUSSIA'S PETROLEUM & NATURAL GAS EXPORTS and INCREASE THE ENERGY INDEPENDENCE AND ECONOMIC FREEDOM OF BOTH THE EAST & WEST.]<br /></span></strong></div><div></div><div><br />Leaders of the 27 members of the European Union, who will meet in an emergency session on Monday, were considered highly unlikely to impose sanctions or go beyond diplomatic measures in expressing disapproval of Russia’s conflict with Georgia.<br /><br /><br />The members in Eastern Europe have tended to be more wary and more confrontational toward Russia, while Western European countries have tended to be more concerned with not jeopardizing energy imports from Russia.<br /><br />------------------------------------------------------------------------------------------------<br /><br /><a href="http://www.nytimes.com/2008/08/29/world/europe/29policy.html?_r=1&oref=slogin">http://www.nytimes.com/2008/08/29/world/europe/29policy.html?_r=1&oref=slogin</a><br /><br /><strong><span style="font-size:130%;">Russia Deal May Fall, a Casualty of Conflict<br /></span></strong><br /></div><div>By PETER BAKER<br /></div><br /><div><br />New York Times<br /><br /><br />August 29, 2008<br /><br /><br />WASHINGTON — <em><strong>Just three months ago, President Bush reached <span style="font-size:130%;">a long-sought agreement with Russia intended to open a new era of civilian nuclear cooperation</span> and sent it to Congress for review. Now, according to administration officials, Mr. Bush is preparing to scrap his own deal.</strong><br /></em><br /><br /><strong><span style="font-size:130%;">The imminent collapse of the nuclear deal, once a top Bush priority, represents the most tangible casualty so far of the deteriorating relations with Russia following its brief war with neighboring Georgia</span></strong>. With Vice President Dick Cheney heading to Georgia next week, Mr. Bush is also poised to announce about $1 billion in economic aid to the country, the officials said.<br /><br /><br />Unlike more symbolic actions being discussed in Washington, like throwing Russia out of the Group of 8 industrialized nations, canceling the nuclear pact would involve concrete consequences potentially worth billions of dollars to Russia. Yet it also would mean unraveling an initiative that was critical to Mr. Bush’s vision of safely spreading civilian nuclear energy around the world, a program that relied in part on Russian involvement.<br /><br /><br /><strong><span style="font-size:180%;">The agreement would have reversed decades of bipartisan policy and allowed extensive commercial nuclear trade, technology transfers and joint research between Russia and the United States. It also would have cleared the way for Russia to import, store and possibly reprocess spent nuclear fuel from American-supplied reactors around the world — a lucrative business for Russia and a way for the United States to build nuclear plants while keeping radioactive waste out of less reliable hands</span></strong>.<br /><br /><br /><strong><em><span style="font-size:130%;">The pact already faced deep skepticism in Congress because of Russia’s resistance to tougher action against Iran over its nuclear program. But it might have cleared the legislative review process if not for the clash between Russia and Georgia. Now Bush administration officials have concluded it will not survive a Congressional vote</span></em></strong>, and say that withdrawing it would send a signal to Moscow yet preserve the possibility of resubmitting it to Congress next year if tensions ease.<br /><br /><br /><strong><span style="font-size:130%;">“The administration is just about at the point of making a decision to pull it,” said a senior administration official, who requested anonymity to discuss internal deliberations. “We’re getting pretty close to that.”</span></strong> The official added that an announcement by the president “could happen any time soon.”<br /><br /><br />Other officials cautioned that Mr. Bush had made no final decision and might wait to see what came out of a meeting of European Union heads of state on Monday. The White House press secretary, Dana M. Perino, said there would be consequences for Russia but declined to discuss them. “We just aren’t there yet,” she said. “It’s premature to say.”<br /><br /><br /><strong><span style="font-size:130%;">But some experts on Russia and on nuclear proliferation said Mr. Bush had few options. “This agreement is probably going to be the first casualty of Georgia,” said Robert Nurick, a nonproliferation specialist at the Monterey Institute of International Studies.</span></strong> “Whatever you may think of the merits, there’s no point in bashing your head against the wall.”<br /><br /><br />While Mr. Bush ponders his options, Senator Barack Obama of Illinois, the Democratic presidential nominee, and his running mate, Senator Joseph R. Biden Jr. of Delaware, met separately on Thursday with a Georgian delegation visiting the party convention in Denver.<br /><br /><br />“He wanted to show solidarity and show that he’s engaged on this very important foreign policy issue,” said Michael McFaul, an Obama adviser.<br /><br /><br />Meanwhile, Cindy McCain, the wife of Senator John McCain, the presumptive Republican nominee, visited Georgia this week as part of a humanitarian mission.<br /><br /><br />At the White House, the nuclear pact and the economic package are at the top of a menu of options being debated by senior officials. Officials said they were still finalizing the aid package, which they estimated would be in the $1 billion range. Other ideas include rebuilding the shattered Georgian military and <strong><span style="font-size:130%;">aggressively investigating Russian business transactions in the West in search of corrupt practices, officials said</span></strong>.<br /><br /><br />John P. Hannah, the vice president’s national security adviser, would not discuss administration plans, but told reporters on Thursday that in Georgia Mr. Cheney would deliver “a clear and simple message that the United States has a deep and abiding interest in the well-being and security of this part of the world.”<br /><br /><br /><strong><span style="font-size:180%;">The nuclear deal was broached by Mr. Bush during a July 2006 visit to Russia, and the two governments spent two years shaping a formal agreement before signing it in Moscow in May on the day before Vladimir V. Putin, who is now prime minister, stepped down as president. The United States already has similar agreements with Europe, China, Japan and other countries.<br /></span></strong><br /><br />The pact does not require Congressional approval but must be reviewed on Capitol Hill for 90 legislative days before it can go into effect. Congress could block the deal with majority votes in both houses or it could proactively approve it without waiting for the clock to expire.<br /><br /><br /><strong><span style="font-size:130%;">Senator Biden, chairman of the Senate Foreign Relations Committee, had introduced a bipartisan measure to approve the deal, and his House counterpart, Representative Howard L. Berman of California, had pushed through committee a measure approving it with conditions. But now neither predicts it will pass.</span></strong> “Even before Georgia, there were real issues,” Mr. Berman said. “This came along, and there’s just no appetite for it now.”<br /><br /><br />The issue prompted an intense debate within the administration, with some advocates of the agreement arguing for just leaving it alone because the 90-day period would probably not be completed this year, anyway, requiring the clock to restart next year.<br /><br /><br /><strong><span style="font-size:180%;">“At the moment, people are worried that the current crisis in Georgia will make it harder to insulate the nonproliferation cooperation from the wider difficulties in the relationship,” said Robert J. Einhorn, a former assistant secretary of state for nonproliferation.<br /></span></strong><br /><br />Critics of the agreement, though, said the president should not only withdraw it but also vow not to resubmit it next year. “Without taking these actions, the administration’s tough talk should be viewed as white noise,” said Henry D. Sokolski, executive director of the Nonproliferation Policy Education Center, based in Washington.<br />Steven Lee Myers contributed reporting.<br /></div><br /><div>------------------------------------------------------------------------------------------------</div><div></div><br /><div><a href="http://www.forbes.com/markets/2007/08/24/germany-russia-lukoil-markets-equity-cx_vr_0824markets15.html">http://www.forbes.com/markets/2007/08/24/germany-russia-lukoil-markets-equity-cx_vr_0824markets15.html</a><br /><br /><br />Forbes.com<br /><br /><br /><strong><span style="font-size:130%;">Russian Energy Roulette</span></strong><br /><br /><br />By Vidya Ram</div><br /><div></div><div></div><br /><div>08.24.07<br /><br /><br />LONDON - <strong><span style="font-size:130%;">Russia is making steady inroads into the European energy market, but not just through state-owned Gazprom. Lukoil, the country's largest private oil company, has also been steaming ahead there</span></strong>. <strong><em><span style="font-size:180%;">But news that Russia's oil supply to Germany has fallen by a third is fueling concerns that Europe's reliance on Russia, and companies like Lukoil, is very risky business.<br /></span></em></strong><br /><br /><strong><span style="font-size:130%;">The operator of the Schwedt refinery in eastern Germany, PCK Raffinerie, confirmed that its supply of oil from Russia has been disrupted since July</span></strong>. The causes of the decline are yet unclear: PCK has not offered a reason but has simply said it is in talks with its suppliers.<br /><br /><br /><strong><span style="font-size:130%;">The refinery is jointly owned by BP, Royal Dutch Shell, Total and Agip, and processes approximately 10 billion tons of oil a year - nearly 10% of Germany's total capacity</span></strong>.<br /><br /><br />Sergei Grigoriev, a high-ranking executive at the <strong><span style="font-size:180%;color:#ff0000;">Russian state-controlled</span></strong> pipeline operator Transnet, which transports the gas, blamed Lukoil and some of the country's other smaller companies. He denied claims that ongoing repairs to the Druzhba pipeline, which carries gas through Belarus and into eastern Germany, was the cause of the troubles.<br /><br /><br />He told Dow Jones newswires that Lukoil might be looking for new markets. Lukoil was not reachable for comment.<br /><br /><br /><strong><span style="font-size:180%;">There may be a lot of truth to what Grigoriev said. One analyst, who spoke on condition of anonymity, told Forbes.com that the disruption was caused by Lukoil's plans to build its supplies to the east - particularly in the direction of China - its focus on supplying oil to Europe via its port city of Primorsk. By supplying oil by sea rather than through pipelines, Lukoil can charge a $2 premium per barrel.<br /></span></strong><br /><br />The analyst added that there was no reason for Europe to panic, since Lukoil <strong><em><span style="font-size:180%;color:#ff0000;">could</span></em></strong> continue with its usual supplies for the rest of the year.<br /><br /><br />Germany can also take some comfort from the fact that the refinery managed to scramble supplies from the North Sea. <span style="font-size:180%;color:#ff0000;"><strong>Nevertheless these latest developments highlight the potential of dangers of relying on Russia for its energy resources.</strong></span> Till now many of Europe's fears have been focused on Gazprom, and the impact that Russia's troubled relations with Ukraine and Belarus could have on energy supplies. <strong><span style="font-size:180%;">When Russia cut off gas supplies to Ukraine, delivery to Germany was affected, as the country continued to siphon off gas intended for western markets.<br /></span></strong><br />------------------------------------------------------------------------------------------------<br /><br /><a href="http://www.atimes.com/atimes/Central_Asia/HJ24Ag01.html">http://www.atimes.com/atimes/Central_Asia/HJ24Ag01.html</a><br /><br /><strong><span style="font-size:130%;">Russian energy roulette spooks Japanese</span></strong><br /></div><div></div><br /><br /><div>By Hisane Masaki<br /><br /></div><div>Asia Times Online</div><div></div><br /><div><br /><strong>October 24, 2006<br /></strong><br /><br />TOKYO - <strong><span style="font-size:180%;"><span style="font-size:130%;">The imbroglio over the huge Sakhalin-2 oil-and-gas project in Russia's Far East involving two Japanese firms has cast a cloud over resource-poor Japan's new national energy strategy.</span> </span><span style="font-size:130%;">It has also served as a fresh reminder that Japan's economic power seems to have lost much of its luster, at least in the eyes of the Russians.<br /></span></strong><br /><br /><strong><span style="font-size:180%;color:#ff0000;">Last month, the Russian Natural Resources Ministry froze a key environmental permit for the project off the coast of Sakhalin Island, citing problems with conservation.</span></strong> The decision drew immediate protests from Japan and the European Union. Prime Minister Shinzo Abe, who was still his predecessor Junichiro Koizumi's chief cabinet secretary, said a major delay to Sakhalin-2 could hurt diplomatic relations.<br /></div><br /><div></div><br /><div><strong><span style="font-size:180%;">[CONSIDERING RUSSIA'S NEWLY CLAIMED 'PRIVILEGED SPHERE OF INFLUENCE', IT IS NOW CLEAR HOW RUSSIA INTENDS TO USE INTERNATIONAL LAW - TO INTIMIDATE OTHER NATIONS AND TO SECURE AN ENERGY MONOPOLY AT THEIR EXPENSE.]</span></strong></div><div></div><div><br />Japan's ambassador to Moscow, Yasuo Saito, was blunter. He criticized <strong><span style="font-size:180%;">the "unilateral" Russian decision as "lacking transparency". </span></strong>The British government said it was "deeply concerned".<br /><br /><br /><strong><em><span style="font-size:130%;">The project is operated by an international consortium called Sakhalin Energy, in which Royal Dutch Shell has a 55% stake. Japanese trading firms Mitsui and Co and Mitsubishi Corp hold shares of 25% and 20%, respectively.<br /></span></em></strong><br /><br />Natural gas taken from two fields off the northeast coast of the island will be transported through an 800-kilometer pipeline to Prigorodnoye, in the island's southernmost part, where it will be liquefied and shipped to Japan, South Korea and the United States.<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">To be sure, even before Moscow began looking into the environmental problems surrounding Sakhalin-2, Russian and foreign environmental groups had raised strong questions about the project. But the stunning Russian move is widely believed to be a veiled ploy to pressure Sakhalin Energy to reshape the original 1990s deal to the Kremlin's benefit.<br /></span></strong><br /><br /><strong><span style="font-size:180%;color:#ff0000;">With prices for crude oil and other natural resources rising or at least stuck at high levels, the Russian administration of President Vladimir Putin has been promoting a strategy to place energy under national control. The major oil company Yukos, which was hostile to the government, was charged with tax evasion and eventually forced to dissolve.<br /></span></strong><br /><br />Sakhalin-2 is the only wholly foreign-funded project among major resource development programs in Russia. <strong><em><span style="font-size:130%;">There has therefore been growing discontent in Russia over the project, with some saying it is based on an "unequal treaty" that bars Russian companies from taking part, and which severely restricts the country's share of the profits.<br /></span></em></strong><br /><br /><strong><span style="font-size:130%;">Russia's gas-export monopoly Gazprom agreed last year to acquire a 25% stake in Sakhalin-2 in exchange for ceding to Royal Dutch Shell a stake in its big gas field in western Siberia. But talks stalled after the Sakhalin-2 operator announced it would double costs to US$20 billion because of higher steel prices and the weaker US dollar. There were also plans in effect for Mitsui and Mitsubishi to transfer a combined total of 5 percentage points of their stakes to the Russian company.<br /></span></strong><br /><br /><strong><span style="font-size:130%;">Putin acknowledged on Friday that the conditions of the contract, known as a production-sharing agreement, and increasing costs for Sakhalin-2 are disadvantageous for his country because Russia cannot receive any profits until the project operator recoups the investment cost.<br /></span></strong><br /><br /><strong><span style="font-size:130%;">In what appears to be the latest in a series of Russian efforts to take greater control of domestic energy resources, Gazprom said this month that it will develop the giant Shtokman natural-gas field in the Barents Sea alone, a disappointing move for five foreign companies, including US oil majors Chevron Corp and ConocoPhillips, that had been on a short list to partner with Gazprom on the $20 billion project, one of the world's largest undeveloped gas fields.<br /></span></strong><br /><br /><strong><span style="font-size:130%;">Optimism on both sides<br /></span></strong><br /><br />In what was seen by some as a conciliatory tone, however, Russian Natural Resources Minister Yuri Trutnev gave Sakhalin-2's operator a month - until the end of October - to come up with plans to rectify what they called major environmental violations before a possible shutdown of the $20 billion operation. The plans will be submitted to the minister this week.<br /><br /><br />Royal Dutch Shell's chief executive said that the company has fully addressed all ecological issues and is seeking dialogue with the Russian authorities. <strong><em><span style="font-size:130%;">"Although the project has faced significant environmental challenges, we firmly believe these have been fully and transparently addressed," Jeroen van der Veer told an investment advisory council chaired by Russian Prime Minister Mikhail Fradkov.<br /></span></em></strong></div><div><strong><em><span style="font-size:130%;"></div></span></em></strong><div><strong><span style="font-size:180%;">[REALLY?]</span></strong></div><br /><div><br />"This project is 80% complete now with all LNG [liquefied natural gas] pre-sold under long-term contracts ... We are confident that all remaining issues can be resolved through our ongoing, constructive and fair dialogue with the Russian government."<br /><br /><br />Trutnev said that if the company's plan is acceptable, the development won't be stopped, and noted that he had received assurances from the Royal Dutch Shell head that the energy giant is working to resolve the problems. Trutnev praised the company for taking a more constructive approach to Russia's environmental concerns than has been the case to date.<br /><br /><br />"My meeting ... with van der Veer represents a 180-degree about-turn," Trutnev said. "He talked about existing violations, about ecological standards and how they have already started improving the situation." Trutnev noted, however, that "absolutely any sanctions" are possible if the proposals prove unsatisfactory. Trutnev's ministry will announce the results of its environmental probe into Sakhalin-2 as early as this week.<br /><br /><br />Japanese Minister for Economy, Trade and Industry Akira Amari also expressed optimism recently about the fate of Sakhalin-2. Amari said he thought there would be a resolution between the operator Sakhalin Energy and the Russian government over the recent problems. "One way or another, Sakhalin-2 will be resolved," Amari said. <strong><span style="font-size:130%;">"The basic contract hasn't been nullified." Amari said he thought Sakhalin Energy would be able to convince Moscow of its efforts to deal with the environmental issues.<br /></span></strong><br /><br /><strong><em><span style="font-size:130%;color:#ff0000;">The Sakhalin-2 project is expected to turn out 9.6 million tons of LNG a year from 2008. Eight Japanese companies, including Tokyo Electric Power Co, Tokyo Gas Co and Chubu Electric Power Co, have agreed to purchase 4.73 million tons per year - equivalent to 8% of Japan's LNG imports in fiscal 2005.</span></em></strong> The initial impact on Japan of a delay in imports from the project might be limited. But if there were a prolonged suspension, the impact could be far-reaching.<br /><br /><br /><strong><span style="font-size:130%;color:#ff0000;">Japan is the world's largest LNG importer, purchasing 58 million tons of LNG from abroad in 2005, of which 25% was from Indonesia</span></strong>. Most of Indonesia's long-term LNG supply contracts with East Asian countries, such as Japan, China, Taiwan and South Korea, start expiring from 2010. <strong><span style="font-size:130%;color:#ff0000;">Indonesia is poised to cut in half its Japan-bound exports of gas when long-term contracts expire in 2010 to boost the availability of natural gas for domestic industries amid decreasing natural-gas production at home.</span></strong><br /></div><div><br /><strong><span style="font-size:130%;">If imports from Sakhalin-2 are delayed for an extended period, affected Japanese companies would need to find alternative suppliers</span></strong>. It remains to be seen, however, whether Japan will be able to secure the same volume it has been importing up until now, as <strong><span style="font-size:130%;">countries with large energy demands, such as China and India, are increasing their imports of LNG. In 2010, China and India are expected to need an additional 5 million tons and 8 million tons, respectively, compared with current levels</span></strong>.<br /><br /><br />The island of Sakhalin also started producing and exporting crude oil in 1999, with exports to Japan beginning in 2001. In 2005, the area provided Japan with 10.89 million barrels, accounting for about 1% of the country's crude-oil imports. The new pipeline, scheduled to start operating in late 2007, will allow crude oil to be exported year-around, instead of only in summer at present.<br /><br /><br /><strong><span style="font-size:180%;">Headwinds against Japan's energy security</span></strong><br /><br /><br /><strong><em><span style="font-size:130%;">The Sakhalin issue has come at an awkward time for Japan, which adopted this year the "New National Energy Strategy". The new strategy reflects growing Japanese concerns about energy security in the medium and long terms amid high oil prices and an intensifying global rush for oil, gas and other resources, led by China and India.<br /></span></em></strong><br /><br /><strong><span style="font-size:130%;color:#ff0000;">Japan imports almost all of its oil, about 90% of which comes from the volatile Middle East. Japan is also the world's largest LNG importer. Japan is struggling to diversify the suppliers of oil, gas and other energy resources. </span></strong>The new strategy, adopted in late May, also calls for, among other things, increasing the ratio of oil developed and imported by domestic companies - from 15% to 40% of total imports by 2030.<br /><br /><br />But this 40% target for "Hinomaru oil" has become even more difficult to achieve following Japan's recent agreement to give up its controlling interest in the $2 billion development of Iran's massive Azadegan oilfield amid tensions over Tehran's nuclear program.<br /><br /><br />After days of hectic haggling, Japan's Inpex Corp, a core firm of Inpex Holdings Inc, and National Iranian Oil Co reached a basic agreement early this month on a major cut in the largest Japanese oil and gas developer's stake in the oilfield, in southwestern Iran, to 10% from 75%. Inpex Corp will also return its status as operator of the project to the state-owned Iranian oil company. Still, Inpex Corp is expected to maintain the right to import crude oil from the field in the future with the 10% stake.<br /><br /><br />Meanwhile, <strong><span style="font-size:180%;color:#ff0000;">Russia's energy-resource nationalism could spill over into another major project on Sakhalin - the $12.8 billion Sakhalin-1 project, managed by an international consortium led by US oil major ExxonMobil Corp. The project cost is now said to have increased to $17 billion.</span></strong><br /></div><div><br />Russia's environmental watchdog, Rosprirodnadzor, reportedly plans to check the project to determine whether it complies with environmental-protection laws after finishing such a check on Sakhalin-2. Other consortium participants include Tokyo-based Sakhalin Oil and Gas Development Co (SODECO), owned by the Japanese government and private sector, and Russia's state-owned oil firm Rosneft. The Russian firm has a 20% stake in the project.<br /><br /><br /><strong><span style="font-size:130%;">In yet another blow to Japan's energy security, exports of natural gas from Sakhalin-1 could all go to China. ExxonMobil, which holds the right to decide which parties receive natural-gas exports, reportedly concluded this month a provisional contract with China's state-run China National Petroleum Corp (CNPC) on the import via a pipeline of about 6 million tons (in liquefied conversion) of natural gas to be produced at Sakhalin-1. ExxonMobil and CNPC reportedly plan to conclude a formal contract a year later.<br /></span></strong><br /><br />The Sakhalin-1 development started on the condition that all of the 6 million tons of natural gas for export purposes - the amount excluding that to be taken by Russia - would be exported to Japan. SODECO reportedly agreed to the provisional contract on the condition it receives 30% of proceeds from exports to China. SODECO is jointly funded by Japan Petroleum Exploration Co, Japan National Oil Corp, Itochu Corp and Marubeni Corp. SODECO owns the right to acquire 30% of resources available from the project. Japan's imports of oil from Sakhalin-1, which began this month, will not be affected, but no natural gas may be exported to Japan.<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">Meanwhile, Japan and China have lobbied for alternative routes for a pipeline from eastern Siberia's oilfields to Pacific Rim nations. Russia has played the two energy-hungry Asian nations against each other.</span></strong> Japan failed to gain a guarantee that Russia will give priority to building a "Pacific route" from Taishet near Lake Baikal to Perevoznaya Bay near Nakhodka on Russia's Pacific coast via the halfway point at Skovorodino, near the Russia-China border, rather than to building a "China route" heading to Daqing, northeastern China, from Skovorodino.<br /><br /></div><div><strong><span style="font-size:180%;">[CHINA SHOULD BE AS WARY OF RUSSIAN ENERGY ROULETTE POLICIES AS JAPAN.]</span></strong></div><div></div><br /><div><br /><strong><span style="font-size:180%;color:#ff0000;">Russian state pipeline monopoly</span></strong> Transneft is building the pipeline in two stages. It expects to finish the first stage at Skovorodino in 2008. Construction work on the first stage linking Taishet and Skovorodino began in late April. No date has been set for the second stage. There are strong expectations that imports of oil from eastern Siberia through the proposed pipeline to Russia's Pacific coast, if and when they go into full swing, will help diversify oil sources and contribute to stable oil supplies to Japan in the long term.<br /><br /><br />Tokyo has been asking the Russian government to sign an intergovernmental agreement pledging that it will build the entire route of the projected 4,188km pipeline. But Moscow has rejected the Japanese request and said its priority now is to explore and develop the untapped reserves of eastern Siberia to provide the oil to fill the pipe. Although Inpex Corp and trading houses have been considering joining the Siberian project, they are waffling in view of the lack of a Russian government guarantee that Moscow will build a pipeline that could deliver oil up to the Russian Pacific coast - and then to Japan.<br /><br /><br /><strong><span style="font-size:130%;">Japan on the diplomatic defensive</span></strong><br /><br /><br /><strong><span style="font-size:130%;">Japan once controlled the lower half of Sakhalin Island. After World War II this territory, and the string of islands to the south called the Kurils, was ceded to the Soviet Union. Tokyo no longer has territorial claims on Sakhalin, but sovereignty over the Kurils has been in dispute for decades.<br /><br /><br />Not so long ago, it was thought that Japan's trump card in the ongoing negotiations was its ability to develop the rich resources of the Russian Far East. <span style="color:#ff0000;">However, what the Japanese government officials have long taken for granted as a negotiating chip - Japan's economic power - seems to have lost much of its luster, at least in the eyes of Russian leaders. For Russia, the strategic significance of Japan has declined</span>.<br /></span></strong><br /><br />The current situation is a stark contrast with just about a decade ago when <strong><span style="font-size:130%;">Putin's predecessor Boris Yeltsin made what the current Russian government now thinks were too many concessions on the territorial row, driven by the need to seek Japanese help in turning around the then ailing Russian economy.<br /></span></strong><br /><br />While Japan's economic power has been relatively on the decline after the burst of the asset-inflated "bubble economy" of the late 1980s, the Russian economy has been barreling ahead in recent years, thanks to high prices of crude oil, the country's main export item. <strong><span style="font-size:180%;">Russia, the world's second-largest oil producer, has posted robust economic growth, and its gold and foreign-currency reserves have hit record high levels.<br /></span></strong><br /></div><div><strong><span style="font-size:180%;">[YES. BUT, THE RUSSIAN GOVERNMENT'S NARROWLY FOCUSED POLICIES HAVE FAILED TO CREATE A BROAD, DIVERSIFIED and SCIENTIFICALLY & TECHNOLOGICALLY ADVANCED ECONOMY.]</span></strong></div><br /><div></div><div><br />These days, the attraction of the Russian economic magnet for Japan seems even stronger than that of the Japanese one for Russia. <strong><span style="font-size:180%;">Japan's direct investment in Russia jumped more than sevenfold in fiscal 2004, which ended in March 2005, to $51 million, from fiscal 2003, although the figure represented a still minuscule 0.1% of the country's overall direct investment abroad</span></strong>.<br /><br /></div><div><strong><span style="font-size:180%;">[PERHAPS JAPANESE COMPANIES SHOULD RETHINK THEIR FOREIGN DIRECT INVESTMENT IN RUSSIA???]</span></strong></div><br /><div></div><div><br />The two biggest Japanese auto makers, Toyota Motor Corp and Nissan Motor Co, have decided to build assembly plants in St Petersburg. In the energy sector, too, Japanese companies are investing billions of dollars to help extract oil and natural gas in nearby regions of Russia, including the Sakhalin-1 and Sahkalin-2 projects.<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">Many analysts say, however, that if Russia courts foreign capital in rough times but then twists the law to its own ends in good times, foreign companies, including Japanese ones, will become reluctant to invest in the country. It will not be in the interests of Russia in the long term, they say.<br /></span></strong><br /><br /><strong><span style="font-size:180%;color:#ff0000;">There is growing international distrust toward Moscow, particularly with regard to energy security.</span></strong> At this July's Group of Eight summit in St Petersburg, where energy security was high on the agenda, Putin failed to dispel the distrust. <strong><span style="font-size:180%;color:#ff0000;">In January, Russia temporarily stopped gas supplies to Ukraine in a price dispute. All of this has stirred considerable alarm among European countries that depend heavily on oil and natural gas supplied by Russia</span></strong>.<br /><br /><br />In St Petersburg, the G8 leaders agreed on an action plan to bring greater stability to energy markets. The program will promote development of more transparent and predictable energy markets and support energy-saving programs. <strong><span style="font-size:180%;color:#ff0000;">If Russia wants to attract more foreign investment in its energy sector, it needs to win the confidence of potential investors, many analysts say.<br /></span></strong><br /><br />On the oil pipeline linking eastern Siberia with Russia's Pacific coast, <strong><em><span style="font-size:130%;">some Japanese government officials, concerned about the future possibility of a sudden halt to supplies as happened to Ukraine, have begun to ask: Will the pipeline actually contribute to ensuring Japan's energy security?<br /></span></em></strong><br /><br />Prime Minister Fradkov is expected to visit Tokyo by the end of the year. Topping his agenda will be energy issues, including Sakhalin-2 and the Pacific-route oil pipeline. Fradkov's Japan visit will be preceded by a meeting of the trade and economic committee between the two governments, co-chaired by Japanese Foreign Minister Taro Aso and Russian Energy and Industry Minister Viktor Khristenko.<br /><br /><br /><em>Hisane Masaki is a Tokyo-based journalist, commentator and scholar on international politics and economy. Masaki's e-mail address is </em><a href="mailto:yiu45535@nifty.com"><em>yiu45535@nifty.com</em></a>.<br /><br />------------------------------------------------------------------------------------------------<br /><br /><a href="http://www.marketwatch.com/news/story/russia-sees-massive-capital-outflow/story.aspx?guid=%7B51AE8E9D-A929-4101-9DFD-EAA36957E9D5%7D">http://www.marketwatch.com/news/story/russia-sees-massive-capital-outflow/story.aspx?guid=%7B51AE8E9D-A929-4101-9DFD-EAA36957E9D5%7D</a><br /><br /><strong><span style="font-size:130%;">Russian reserves fall sharply on war with Georgia<br /></span></strong><br /><br />By Polya Lesova,<br /></div><br /><div><br />Dow Jones MarketWatch<br /></div><br /><div><br />NEW YORK (MarketWatch) -- <strong><span style="font-size:180%;color:#ff0000;">Russia's foreign exchange reserves fell by $16.4 billion during the week after the military conflict with Georgia broke out, suffering one of the biggest weekly declines since the 1998 financial crisis.<br /></span></strong><br /><br /><strong><span style="font-size:180%;">Russia's international reserves dropped by $16.4 billion to stand at $581.1 billion during the week from Aug. 8 to Aug. 15, according to figures released Thursday by the central bank of Russia.<br /></span></strong><br /><br />This is the largest weekly drop in reserves since the 1998 Russian crisis, with the exception of one week in June 2006 when Russia paid a part of its Paris Club debt, according to Danske Bank. </div><div></div><div><br /><strong><span style="font-size:180%;color:#ff0000;">"The drive of this decline is portfolio outflows," said Lars Christensen, chief analyst at Danske Bank. "The move since the beginning of the conflict is almost entirely driven by rising geopolitical tensions and investors taking off the bet on the Russian economy."<br /></span></strong><br /><br />"It's pretty clear that we're back to the worst geopolitical tensions since the end of the Cold War," Christensen said.<br /><br /><br />"It's pretty clear that we're back to the worst geopolitical tensions since the end of the Cold War." — Lars Christensen, Danske Bank<br /><br /></div><div>Fighting between Russian and Georgian forces broke out on Aug. 8 over the breakaway region of South Ossetia and hostilities quickly spread to Georgia proper. Last week, Georgian and Russian leaders agreed to a peace plan mediated by European diplomats.<br /><br /><br />However, tensions between Russia and the West have continued to escalate, especially after the United States signed a deal with Poland to position missile interceptors on Polish soil. <strong><span style="font-size:130%;">Russia warned that this could fuel an arms race and said its response will go beyond diplomacy</span></strong>.<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">"So long as Russia remains confrontational, investor sentiment will remain poor towards Russian equities, the ruble and fixed income markets," said Paul Biszko, senior emerging markets analyst at RBC Capital Markets.<br /></span></strong><br /><br />"No one clearly wants to buy the sell-off yet," Biszko said. "People are waiting to see how the conflict evolves and whether it blows up into a more serious issue."<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">Since August 7, Moscow's benchmark RTS stock index has fallen 7.6%. The index's market capitalization has declined by $12 billion to stand at $144 billion in the same period, according to data from the website of the Russian Trading System.<br /></span></strong><br /><br /><strong><span style="font-size:180%;color:#ff0000;">Year to date, the RTS index has fallen 25.7% compared with a 23% decline in the MSCI Emerging Markets index.<br /></span></strong><br /><br /><strong><span style="font-size:180%;">Even before the war with Georgia, investor sentiment toward Russia was already damaged by Prime Minister Vladimir Putin's call for an investigation of steel company Mechel (</span></strong><a href="http://www.marketwatch.com/quotes/mtl"><strong><span style="font-size:180%;">MTL</span></strong></a><strong><span style="font-size:180%;">: Mechel </span></strong><a href="http://www.marketwatch.com/tools/quotes/quotes.asp?symb=MTL"><strong><span style="font-size:180%;">MTL</span></strong></a><strong><span style="font-size:180%;"> 24.89, -0.21, -0.8%) , which wiped out billions of dollars of its market capitalization, as well as by the ongoing dispute between BP PLC (</span></strong><a href="http://www.marketwatch.com/quotes/bp"><strong><span style="font-size:180%;">BP</span></strong></a><strong><span style="font-size:180%;">: 56.90, +0.10, +0.2%) and their Russian partners in their joint venture TNK-BP.</span></strong><br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">U.S. dollar appreciation and falling gold prices together contributed roughly $5.5 billion to the decline in Russia's foreign exchange reserves in the week ending Aug. 15, wrote analysts at Goldman Sachs New Markets Economic Research.<br /></span></strong><br /><br /><strong><span style="font-size:180%;color:#ff0000;">"But even so, we estimate that there was roughly a $15 billion capital outflow last week," the Goldman Sachs analysts said.<br /></span></strong><br /><br /><strong><span style="font-size:180%;">The first two days of the war in South Ossetia triggered a sharp depreciation of the ruble against its dollar/euro (55%/45%) dual currency basket. That depreciation was stopped only by central bank interventions.<br /></span></strong><br /><br />"We now have an idea of the magnitude of those interventions," the Goldman analysts said. "The size of the outflow is also an indication of the sheer magnitude of long ruble positioning."<br />Polya Lesova is a New York-based reporter for MarketWatch.<br /><br />------------------------------------------------------------------------------------------------<br /><br /><a href="http://www.salon.com/wires/ap/business/2008/08/22/D92NG3P02_russia_investment_worries/index.html">http://www.salon.com/wires/ap/business/2008/08/22/D92NG3P02_russia_investment_worries/index.html</a><br /><strong><span style="font-size:130%;">Georgia, Khodorkovsky case hurt Russia sentiment</span></strong><br /></div><br /><div><br />By EMILY FLYNN VENCAT Associated Press Writer<br /><br /><br />Aug 22nd, 2008 LONDON -- Denial of parole for a jailed Russian oil tycoon and tension between Russia and the West over Moscow's military clash with Georgia are giving global investors increasing reasons to worry whether the country is the right place to be.<br /><br /><br />The refusal Friday by a Siberian court to grant early release for former Yukos head Mikhail Khodorkovsky came as investors were already pulling money out because of falling oil prices, the spreading global credit crunch and fears of political meddling in business.<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">The dollar-denominated MICEX index of leading Russian stocks has dipped 4 percent since the start of hostilities in Georgia on Aug. 8, and interest rates on some Russia bonds have risen compared to U.S. Treasuries, indicating greater perception of risk.<br /></span></strong><br /><br /><strong><span style="font-size:180%;color:#ff0000;">"Unknown political risk and constant negative headlines are not likely to induce investors to buy," investment bank Troika Dialog said in a report earlier this week.<br /></span></strong><br /><br />Khodorkovsky was imprisoned for eight years in 2005 on a fraud and tax conviction; the subsequent demand for huge back taxes led to the effective renationalization of Yukos, which was taken over by the state oil company Rosneft.<br /><br /><br />His ongoing incarceration is a "completely political decision" that further illustrates the extent to which Russia's leaders interfere with business, said Ben Yearsley, investment manager at Hargreaves Lansdown Stockbrokers.<br /><br /><br />Georgia added to the sense of uncertainty that was already weighing on stocks even before the clash broke out. <strong><span style="font-size:130%;">Investors were being scared off by new fears that politics could disrupt business, as a dispute between oil major BP PLC and <span style="color:#ff0000;">Russian billionaire shareholders</span> over the BP-TNK oil joint venture chilled the investment climate after the venture's CEO was forced out of the country over immigration issues.<br /></span></strong><br /></div><br /><div><strong><span style="font-size:180%;">[READERS MUST CONSIDER THE EXTREME ONGOING BUSINESS CORRUPTION WITHIN RUSSIA, AND THE RUSSIAN GOVERNMENT'S JUSTIFIED EFFORTS TO CURTAIL IT, ESPECIALLY WHERE IMPORTANT NATIONAL ASSETS WERE SOLD (PRACTICALLY GIVEN AWAY) TO CERTAIN 'FAVORED' BUSINESS INTERESTS & INDIVIDUALS AT 'INSIDE' & OTHER THAN MARKET-LEVEL PRICES, WITHOUT TRANSPARENT AND ACCOUNTABLE BIDDING RULES & PROCESSES IN PLACE.]</span></strong> </div><div></div><br /><div><br /><strong><span style="font-size:130%;">Then, Prime Minister Vladimir Putin accused Russian mining company Mechel of price fixing, causing Mechel's shares to plummet.<br /></span></strong><br /><br />As a result of this cocktail of factors, major funds have started reining in investment, as suggested by a recent drop in foreign currency reserves and the stock market dip.<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">Elena Shaftan, head of Jupiter's Emerging European Opportunities fund, which has around 600 million pounds ($1.1 billion) under management, said fears over the Mechel case combined with falling commodities prices — Russia is the world's largest single oil producer — caused the fund to reduce its exposure to the country from 70 percent to just 45 percent earlier this month.<br /></span></strong><br /><br />"We were concerned that the declining oil price and the Mechel case would put pressure on the margins of companies and hence their earnings," she said.<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">Maxim Osadchiy at Moscow-based Antanta Pioglobal investment bank said that all markets in Russia are seeing capital flight. "Foreigners are selling out bonds, which is seen from bigger spreads and stocks, which is clear from declining benchmarks," Osadchiy said.<br /></span></strong><br /><br /><strong><span style="font-size:180%;color:#ff0000;">The interest rate gap, or spread, between Russian government eurobonds has risen from 157 basis points over U.S. Treasuries on Aug. 8 to 183 basis points, indicating higher risk premium.<br /></span></strong><br /><br />Still, many economists and investors believe that Russian market jitters will pass soon, especially since the country is still enjoying strong economic growth of 8 percent even as many world economies are on the brink of recession.<br /><br /><br />Some think the uncertainties may mean the country also offers a good deal compared to other emerging economies. Whereas Chinese companies usually trade for around 16 times earnings, Russian companies tend to trade at just 7 times earnings.<br /><br /><br />"We believe the market has overreacted somewhat" to the Georgia-Russia conflict, said <strong>Ivan Tchakarov, Russia economist at Lehman Brothers. "While many investors were plainly shocked by the escalation of the conflict with Georgia, we think that those bold enough to increase their Russia exposure at this time of perceived elevated political risk may be rewarded."<br /></strong><br /><br /><strong>Ghadir Abu Leil-Cooper, manager of Baring Asset Management's Russia fund, agreed: "Although volatility can be unwelcome in the short term, it is precisely at times such as this that active managers can take advantage of market inefficiencies."<br /></strong><br /><br />"We believe the long-term investment case for Russia is compelling," she added.<br /><br /><br /><strong><span style="font-size:130%;">The reality is that Russia has less reason to worry about courting foreign money now than after its embarrassing 1998 financial collapse. A decade ago, when Russia relied on the West for loans and needed to attract foreign private investment for economic growth, the country's rulers might have worried more that a war and overt political interference with business might scare these investors off its soil.<br /><br /><br />Today's Russia is in a position to dictate its own terms. Flush with wealth from exporting oil and gas, Russia is a net investor into the rest of the world, the economy is growing faster than 8 percent a year, and it boasts foreign-exchange reserves of $600 billion.<br /></span></strong></div><div></div><br /><br /><div><strong><span style="font-size:180%;">[RUSSIA'S ECONOMY IS NOT WELL DIVERSIFIED, NOR IS THERE A MIDDLE CLASS TO SPEAK OF. FURTHERMORE, RUSSIAN WEALTH HAS NOT BEEN SPENT ON FURTHER DEVELOPING RUSSIAN SCIENCE & TECHNOLOGY THAT CAN BE COMMERCIALIZED TO TAKE ADVANTAGE OF THE MARKETS AND TO IMPROVE THE WELL-BEING OF RUSSIA'S CITIZENS.]</span></strong></div><br /><div></div><div></div><div>———<br /><em>Associated Press writer Nataliya Vasilyeva in Moscow contributed to this story.<br />Salon provides breaking news articles from the Associated Press as a service to its readers, but does not edit the AP articles it publishes.<br /></em><br />------------------------------------------------------------------------------------------------<br /><br /><a href="http://query.nytimes.com/gst/fullpage.html?res=9C03E4DA113DF931A1575BC0A96E9C8B63">http://query.nytimes.com/gst/fullpage.html?res=9C03E4DA113DF931A1575BC0A96E9C8B63</a><br /><br /><strong><span style="font-size:130%;">NEWS ANALYSIS; U.S. Sees Much to Fear in a Hostile Russia<br /></span></strong><br /><br />By PETER BAKER<br /><br /><br />New York Times<br /><br /><br />August 22, 2008<br /><br /><br />The president of Syria spent two days this week in Russia with a shopping list of sophisticated weapons he wanted to buy. The visit may prove a worrisome preview of things to come.<br /><br /><br /><strong><span style="font-size:130%;">If Russia's invasion of Georgia ushers in a sustained period of renewed animosity with the West, Washington fears that a newly emboldened but estranged Moscow could use its influence, money, energy resources, United Nations Security Council veto and, yes, its arms industry to undermine American interests around the world.</span></strong><br /><br /><br />Although Russia has long supplied arms to Syria, it has held back until now on providing the next generation of surface-to-surface missiles. But the Syrian president, Bashar al-Assad, made clear that he was hoping to capitalize on rising tensions between Moscow and the West when he rushed to the resort city of Sochi to meet with his Russian counterpart, Dmitri A. Medvedev.<br /></div><div><br /><strong><span style="font-size:130%;">The list of ways a more hostile Russia could cause problems for the United States extends far beyond Syria and the mountains of Georgia. In addition to escalated arms sales to other anti-American states like Iran and Venezuela, policy makers and specialists in Washington envision a freeze on counterterrorism and nuclear nonproliferation cooperation, manipulation of oil and natural gas supplies, pressure against United States military bases in Central Asia and the collapse of efforts to extend cold war-era arms control treaties.</span></strong><br /><br /><br />''It's Iran, it's the U.N., it's all the counterterrorism and counternarcotics programs, Syria, Venezuela, Hamas -- there are any number of issues over which they can be less cooperative than they've been,'' said Angela E. Stent, who served as the top Russia officer at the United States government's National Intelligence Council until 2006 and now directs Russian studies at Georgetown University. <strong><span style="font-size:180%;">''And of course, energy.''<br /></span></strong><br /><br />Michael McFaul, a Stanford University professor and the chief Russia adviser for Senator Barack Obama, the presumptive Democratic presidential nominee, said Russia appeared intent on trying to ''disrupt the international order'' and had the capacity to succeed. ''The potential is big because at the end of the day, they are the hegemon in that region and we are not and that's a fact,'' Professor McFaul said.<br /><br /><br /><strong><span style="font-size:130%;">Russia may yet hold back from some of the more disruptive options depending on how both sides play these next few weeks and months. Many in Washington hope Russia will restrain itself out of its own self-interest; Moscow, for instance, does not want Iran to have nuclear weapons, nor does it want the Taliban to regain power in Afghanistan. Dmitri Rogozin, a hard-liner who serves as Russia's ambassador to NATO, told the newspaper Izvestia this week that Moscow still wanted to support the alliance in Afghanistan.</span> </strong>''NATO's defeat in Afghanistan would not be good for us,'' he said.<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">Moscow may also be checked by the desire of its economic elite to remain on the path to integration with the rest of the world. The main Russian stock index fell sharply in recent days, costing investors $10 billion -- many with close ties to the circle of Prime Minister Vladimir V. Putin.<br /></span></strong><br /><br />Still, although the confrontation over Georgia had been building for years, the outbreak of violence demonstrated just how abruptly the international scene can change. Now Russia is the top focus in Washington and some veteran diplomats fret about the situation spiraling out of control.<br /><br /><br /><strong><span style="font-size:130%;">''Outrage is not a policy,'' said Strobe Talbott, who was deputy secretary of state under President Clinton and is now the president of the Brookings Institution. ''Worry is not a policy. Indignation is not a policy. Even though outrage, worry and indignation are all appropriate in this situation, they shouldn't be mistaken for policy and they shouldn't be mistaken for strategy.''<br /></span></strong><br /><br /><strong><span style="font-size:130%;">For Washington, there are limited options for applying pressure. Senator John McCain, the presumptive Republican presidential nominee, wants to throw Russia out of the Group of 8 major powers. Such a move would effectively admit the failure of 17 years of bipartisan policy aimed at incorporating Russia into the international order.<br /></span></strong><br /><br />Yet Washington's menu of options pales by comparison to Moscow's. Masha Lipman, an analyst at the Carnegie Moscow Center, said ''there's a lot more'' that the United States needed from Russia than the other way around, citing efforts to secure old Soviet nuclear arms, support the war effort in Afghanistan and force Iran and North Korea to give up nuclear programs. ''Hence Russia has all the leverage,'' she said.<br /><br /><br /><strong>In forecasting Russia's potential for causing headaches, most specialists look first to Ukraine, which wants to join NATO. The nightmare scenario circulating in recent days is an attempt by Moscow to claim the strategic Crimean peninsula to secure access to the Black Sea.</strong> Ukrainian lawmakers are investigating reports that Russia has been granting passports en masse to ethnic Russians living in Crimea, a tactic Moscow used in the Georgian breakaway republics of South Ossetia and Abkhazia to justify intervention to protect its citizens.<br /><br /><br />Arms sales, as Mr. Assad's visit underscored, represent another way Russia could create problems. Israeli and Western governments have already been alarmed about reports that the first elements of the Russian-built S-300 antiaircraft missile system are now being delivered to Iran, which could use them to shoot down any American or Israeli planes that seek to bomb nuclear facilities should that ever be attempted.<br /><br /><br />While Mr. Rogozin expressed support for assisting NATO in the war in Afghanistan, other officials have warned darkly about cutting off ties with NATO. The two sides have already effectively suspended any military cooperation programs. But Russia could also revoke its decision in April to allow NATO to send nonlethal supplies overland through its territory en route to Afghanistan.<br /><br /><br />Russia could also turn up pressure on Kyrgyzstan to evict American forces that support operations in Afghanistan and could block any large-scale return to Uzbekistan, which expelled the Americans in 2005. ''The argument would be, 'Why help NATO?' '' said Celeste A. Wallander, a Russia scholar at Georgetown's School of Foreign Service.<br /><br /><br />Even beyond the dispute over Iran, Russia could obstruct the United States at the United Nations Security Council on a variety of other issues. Just last month, Russia vetoed sanctions against Zimbabwe's government, a move seen as a slap at Washington.<br /><br /><br />''If Russia's feeling churlish, they can pretty much bring to a grinding halt any kind of coercive actions, like economic sanctions or anything else,'' said Peter D. Feaver, a former strategic adviser at the National Security Council.<br /><br /><br /><strong><span style="font-size:130%;">Russia could also accelerate its withdrawal from arms control structures. It already has suspended the Conventional Forces in Europe treaty to protest American missile defense plans and threatened to pull out of the Intermediate-Range Nuclear Forces treaty. Renewed tension could fray a recently signed civilian nuclear cooperation agreement and doom negotiations to extend soon-to-expire strategic arms control verification programs.<br /></span></strong><br /><br />''Ironically, since the collapse of the Soviet Union, there's always been the concern about Russia becoming a spoiler,'' said Ms. Stent, of Georgetown, ''and now we could see the realization of that.''<br /></div><br /><div>-------------------------------------------------------------------------------------------------</div><div></div><div></div><div><a href="http://www.spiegel.de/international/business/0,1518,571470,00.html">http://www.spiegel.de/international/business/0,1518,571470,00.html</a><br /><br /></div><div><strong><span style="font-size:130%;">Oil, Interrupted - Europe Grapples with Russia-Georgia Woes</span></strong></div><br /><div></div><div><br />SPIEGELOnline<br /><br /><br />By Jack Ewing and Mark Scott<br />With Anna Smolchenko in Moscow and Kerry Capell in London.<br /></div><br /><div></div><div></div><div>08/12/08 </div><div><br />Companies hope for a swift resolution, but <strong><span style="font-size:180%;">with energy supplies at risk, the fighting might spur the West to seek other gas and oil sources.<br /></span></strong><br /><br />If armed conflict in Georgia proves short-lived, the effect on economic relations between Russia and Europe could be limited. That, in any event, is what European business leaders fervently hope. For companies such as carmakers Daimler, Renault, and Fiat, fast-growing Russia has become an increasingly important market, helping to compensate for slowing sales in Western Europe. <strong><span style="font-size:180%;color:#ff0000;">"I don't think the conflict will have big consequences, at least if it doesn't escalate," says Martin Hoffmann, a Russia expert for the Federation of German Industries.<br /></span></strong><br /><br /><strong><span style="font-size:180%;color:#ff0000;">But Russia's willingness to use force to pursue its interests will certainly give companies pause about investing there in the future. And it will give impetus to efforts by European countries to become less dependent on Russian energy. "The main problem for Russia is that investor perception, which was already low, will deteriorate even further," says Katinka Barysch, deputy director of the Centre for European Reform, a London think tank.<br /></span></strong><br /><br /><strong><span style="font-size:130%;">Denying Any Lasting Effect</span><br /></strong><br /><br /><strong><span style="font-size:180%;color:#ff0000;">Investor nervousness was reflected in the Russian stock market, which plunged Friday then recovered after Russian President Dmitry Medvedev said the conflict was nearing its end. Most affected were energy shares such as Rosneft, Gazprom, Lukoil, and Inter RAO, an electricity generating outfit with plants in Georgia. "The very fact of the conflict is not putting investors in the mood to invest in Russia," says Alexander Petrov, an analyst with Univer investment group.<br /></span></strong><br /><br />But it’s Georgia, not Russia, that appears to be the biggest economic loser so far. The escalation of the hostilities has already led to a downgrade of Georgia’s sovereign debt rating by both Fitch and Standard & Poor's.<br /><br /><br /><strong><span style="font-size:180%;">Russia</span></strong>, meanwhile, <strong><span style="font-size:180%;">will have to deal primarily with political damage—and officials in Moscow insisted the fighting would not have a lasting effect on the economy</span></strong>. <span style="font-size:180%;"><strong>"The events themselves of course have an influence [on the outflow of capital] but they can't significantly change the fundamentals," Finance Minister Alexei Kudrin told reporters.<br /></strong><br /><strong>[THIS IS NOT CERTAIN; IN FACT, IT IS UNLIKELY, IN THE LONGER TERM THAT RUSSIA'S ECONOMY CAN WITHSTAND THE PSYCHOLOGY OF NEGATIVE WORLD MARKET PERCEPTIONS. WITH CAPITAL FLIGHT, A DROP IN FOREIGN DIRECT INVESTMENT & INTERNATIONAL TRADE, A DEVALUATION OF THE RUBLE AGAINST THE U.S. DOLLAR AND THE EURO, & THE RESULTING INCREASE IN DOMESTIC INTEREST RATES DUE TO MARKET PERCEPTIONS OF INCREASED POLITICAL & ECONOMIC RISK, WITHOUT ANY CHANGE IN CURRENT RUSSIAN DOMESTIC POLICIES, THERE ARE LIKELY TO BE SIGNIFICANT CHANGES IN THE FUNDAMENTALS OF THE RUSSIAN ECONOMY - ALL WITHOUT ECONOMIC SANCTIONS BEING IMPOSED BY FOREIGN GOVERNMENTS.]</strong></span></div><div></div><br /><div><br /><strong><em><span style="font-size:130%;">Even if the conflict widens, it's unlikely that Western countries will try to impose economic sanctions on Russia—a step that would have major consequences for their own economies.</span></em></strong> </div><br /><div></div><div></div><br /><div><strong><span style="font-size:130%;">German exports to Russia rose more than 50 percent in the first half of 2008, to $290 billion, an indication of how important a market Russia has become. "Russia is a very strong country in terms of economic development," says Christian Dreger, an economist at the German Institute for Economic Research in Berlin. "It helps compensate for weaker growth in other regions."</span></strong><br /><br /></div><br /><div><strong><span style="font-size:180%;">[THIS WILL ONLY CONTINUE AS LONG AS THE MARKET BELIEVES THAT CONTRACTS WITH RUSSIAN FIRMS WILL BE HONORED AND THAT ASSETS WILL NOT BE EXPROPRIATED BY THE RUSSIAN GOVERNMENT.]</span></strong></div><br /><div></div><div><br /><strong><span style="font-size:180%;color:#ff0000;">But Russia's integration into the world economy will suffer a setback. "The country is trying to enter the World Trade Organization, and this armed conflict with Georgia will make that process even more difficult," says Carlo Gallo, an analyst with consultant Control Risks Group. "The conflict with Georgia empowers the hardliners [in Russia]. Economic reform in Russia will be delayed."<br /></span></strong><br /><br /><strong><span style="font-size:130%;">Alternatives to Russian Gas<br /></span></strong><br /><br /><strong><span style="font-size:180%;">The fighting also drives home how dependent Europe is on Russia for energy, particularly gas. As a result, Europe, already a leader in wind and solar energy, is likely to increase its investment in alternative energy.<br /></span></strong><br /><br /><strong><span style="font-size:180%;">And the crisis could give new life to other projects designed to weaken Russia's energy grip on Europe. For example, Germany, which has no port to receive liquefied natural gas, might finally push through long-delayed plans to build one. An LNG port would allow Germany to import gas from countries not connected to the region by pipeline.</span></strong> "Russia is an immediate neighbor. You can't wish it doesn't exist," says Friedemann Müller, a senior fellow at the German Institute for International & Security Affairs in Berlin. "I don't think Europeans will say we don't want to have to do anything with this country. <strong><span style="font-size:180%;">But Europeans will think we trusted too much that Russia would become more like a Western country."<br /></span></strong><br /><br />Other projects, though, could suffer a setback. A gas pipeline called Nabucco, for instance, is aimed at diversifying Europe's supplies by linking the Caucasus with Austria, Bulgaria, and Turkey. But the conflict highlights the volatility of energy supplies from the Caucasus, which are crucial to making Nabucco a reality. <strong><span style="font-size:180%;color:#ff0000;">"There's no doubt that what's happening has increased the investment risk within Georgia and the region," says Nick Butler, director of the Centre for Energy Studies at Cambridge University's Judge Business School and former strategy chief at oil giant BP. "This is one more step by the Russians trying to increase their power among their former satellites. That raises questions over further [foreign] investment in Georgia, as well as countries like Azerbaijan and Ukraine."</span></strong><br /><br />-------------------------------------------------------------------------------------------------<br /><a href="http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/08/11/cnbp111.xml">http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/08/11/cnbp111.xml</a><br /><br /><strong><span style="font-size:130%;">BP on alert as Russian jets attack pipeline in Georgia</span></strong><br /><br /><br />By Jonathan Sibun</div><div></div><div></div><br /><br /><div>UK Telegraph</div><div></div><br /><div><br />Last Updated: 12:27am BST 11/08/2008<br /><br /><br />BP, which employs hundreds in Georgia, owns a 30pc stake in the Baku-Tbilisi-Ceyhan pipeline, the world's second longest. It carries more than 1pc of the global oil supply or 1m barrels a day from Azerbaijan to the Mediterranean and was attacked unsuccessfully by Russian jets on Saturday.<br /><br /><br />Local reports recorded 51 missile strikes that left craters less than 100 yards on either side of a pressure vent.<br /><br /><br />A BP spokesman said that, after thorough checks, the company had "disclosed no bombing in the vicinity of the BTC line".<br /><br /><br />He said the pipeline was in any case out of action after a fire broke out on the line in Egypt last week. It has still not been put out and oil has been diverted along the Western Route pipeline, he said.<br /><br /><br /><strong><span style="font-size:130%;">More on oil<br /></span></strong></div><br /><div><br />Georgia has been calling for international help and could be keen to heighten fears about any threat to the pipeline, given the potential impact on the West's oil supplies.<br /><br /><br />The spokesman said BP had only "two handfuls of Brits" working in Georgia but that the company would follow embassy advice on whether to keep them in there. The Foreign Office last night warned of "escalating violence" and advised British citizens to leave as soon as possible.<br /><br /><br />HSBC is another UK company operating in Georgia. The bank opened its first office in the capital Tbilisi in June with a staff of 44.<br /><br /><br />At the time of the opening, Tony Turner, the bank's chief executive in the country, said the company had plans to open more branches. "With GDP growth in excess of 10pc, strong FDI [Foreign Direct Investment] inflows and a series of highly successful structural reforms in place, we believe Georgia offers some of the best growth opportunities in the CIS region."<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">Analysts warned of the impact of the war on Georgia's drive to attract foreign investment. Paul Stevens, of think-tank Chatham House, told Sky News: "The conflict is going to cause people to think twice about investing in the oil industry in the Caspian region."<br /></span></strong><br /><br />Opec nations earned as much in the first half of 2008 as they did in the whole of last year, thanks to record oil prices and production. Members of the Saudi Arabia-led oil exporters’ cartel made $645bn (£335bn) between January and June, just below the record $671bn earned in 2007, according to the US department of energy.<br /><br />------------------------------------------------------------------------------------------------- </div><div></div><br /><div><a href="http://www.businessweek.com/magazine/content/08_34/b4097000700662.htm?chan=top+news_top+news+index_news+%2B+analysis">http://www.businessweek.com/magazine/content/08_34/b4097000700662.htm?chan=top+news_top+news+index_news+%2B+analysis</a><br /><br /><br /><strong><span style="font-size:130%;">Georgia: A Blow to U.S. Energy</span></strong> - </div><br /><div><br /><em><strong>The plans of the U.S. and Western oil companies for expanded pipelines in the Caspian region may well be a casualty of Russia's attack<br /></strong></em><br /><br />by Steve LeVine<br /><br /><br />Business Week<br /><br /><br />August 13, 2008, 7:21PM EST<br /><br /><br />The sudden war in the Caucasus brought Georgia to heel, reasserted Russia's claim as the dominant force in the region, and dealt a blow to U.S. prestige. But in this part of the world, diplomacy and war are about oil and gas as much as they are about hegemony and the tragic loss of human life. <strong><span style="font-size:130%;">Victory in Georgia now gives Russia the edge in the struggle over access to the Caspian's 35 billion barrels of oil and trillions of cubic feet of gas</span></strong>. The probable losers: the U.S. and those Western oil companies that have bet heavily on the Caspian as one of the few regions where they could still operate with relative freedom.<br /><br /><br /><strong><span style="font-size:130%;">At the core of the struggle is a vast network of actual and planned pipelines for shipping Caspian Sea oil to the world market from countries that were once part of the Soviet empire</span></strong>. American policymakers working with a BP-led consortium had already helped build oil and natural gas pipelines across Georgia to the Turkish coast. Next on the drawing board: another pipeline through Georgia to carry natural gas from the eastern shore of the Caspian Sea to Austria—offering an alternate supply to Western Europe, which now depends on Russia for a third of its energy.<br /><br /><br /><strong><span style="font-size:180%;color:#ff0000;">But after the mauling Georgia got, "any chance of a new non-Russian pipeline out of Central Asia and into Europe is pretty much dead," says Chris Ruppel, an energy analyst at Execution, a brokerage in Greenwich, Conn. The risk of building a pipeline through countries vulnerable to the wrath of Russia is just too high.<br /></span></strong><br /><br /><strong><span style="font-size:180%;">The Russia-Georgia war thus may have dealt a blow to 15 years of American economic diplomacy. Back in the mid-1990s, Clinton Administration officials looking at a map of the recently dismantled Soviet Union grasped a singular fact about its southern perimeter: The newly independent countries there were overflowing with oil and natural gas but had to ship it via Russia to reach customers. Without pipelines of their own, the Caspian states would never fully develop their energy industries, or be politically independent of Russia.</span></strong> The lack of pipelines also curbed the export potential of companies like Chevron, which owns half of Tengiz, the giant Kazakhstan oilfield. After first resisting, BP (BP) and Chevron (CVX) backed the American pipeline strategy.<br /><br /><br /><strong><span style="font-size:130%;">Moscow's Anger<br /></span></strong><br /><br /><strong><span style="font-size:130%;">Georgia was a key transit point for any line to the West. John Wolf, a former U.S. ambassador and now head of the Eisenhower Fellowship program in Philadelphia, was in the thick of the bargaining and arm-twisting that created the so-called East-West Energy Corridor. Wolf recalls powwowing with the leaders of Azerbaijan, Georgia, and Turkey on the construction of what would become the 1,000-mile-long Baku-Ceyhan, the Caspian's first independent oil export pipeline. These leaders knew they risked provoking Russia's wrath but figured the gamble was worth it, Wolf says. Now almost 1 million barrels a day normally course through the pipeline. For Georgia, it's not the fees it collects from pipeline transit—about $60 million annually—that are important. Instead, the pipeline's presence signaled Georgia's stability and encouraged a flood of foreign investment.<br /></span></strong><br /><br />That stability, of course, has proved illusory. Yet <strong><span style="font-size:130%;">the Russians won't interfere with the Baku-Ceyhan pipeline directly, analysts say. Moscow's strategy depends on not spooking the Europeans, who might then be encouraged to back the construction of other non-Russian energy pipelines. Since there have been no confirmed attacks on the pipelines running through Georgia, no European leader has called for a reconsideration of energy policy.<br /></span></strong><br /><br />Besides, the Russians may not need to shut down the Baku-Ceyhan line to win the advantage in the energy wars. <strong><span style="font-size:180%;color:#ff0000;">"There's no doubt that what's happening has increased the investment risk within the region," says Nick Butler, a former senior executive at BP who directs the Cambridge Centre for Energy Studies at the University of Cambridge's Judge Business School. Already, on Aug. 12, BP shut down a secondary oil pipeline that ends at Georgia's Black Sea port of Supsa, saying there could be a risk of attack on the line.</span></strong><br /><br /><br /><strong><span style="font-size:130%;">Russia's Pipeline Plans</span></strong><br /><br /><br />Both Chevron and ExxonMobil (XOM) had also planned to ship hundreds of thousands of additional barrels a day along the route traversing Georgia. Now that may be subject to change. "Do you want to put more eggs in the South Caucasus basket?" asks Edward C. Chow, a former Chevron executive and now a senior fellow at the Center for Strategic & International Studies in Washington." And if you do, are there certain accommodations that need to be made with the Russians to protect them?"<br /><br /><br /><strong>What about the White House's plans for a pipeline to ship natural gas to Europe? The proposed pipeline's success depends on Turkmenistan, which has the fourth-largest natural gas reserves on the planet, an estimated 3 trillion cubic meters. The Turkmen are cautious: Under former President Saparmurat Niyazov, they refused to defy the Russians and support the construction of the Baku-Ceyhan pipeline. "[Niyazov] thought about it and probably decided he didn't want to wake up dead," says former U.S. diplomat Wolf.<br /></strong><br /><br />The assault on Georgia may make the Turkmen even more wary of the new pipeline. Instead, they may end up cutting a deal with the Russians, who are vigorously pursuing new gas pipelines of their own in a bid to dominate energy in the region. "A new Iron Curtain," says analyst Ruppel, "is descending around the periphery of Russia." </div></div>ITSSD Charitable Missionhttp://www.blogger.com/profile/00790887154748866904noreply@blogger.com0