Secret “Free Trade” Negotiations Will Gut Regulations, Further Enrich Multinationals and Big Financial Firms

May 16th, 2013

– I’ve written before on the Trans-Pacific Partnership (TPP) which is being negotiated between the United States, New Zealand, Brunei, Australia, Chile, Singapore, Peru, Vietnam, Canada, Mexico and Malaysia.  Japan, Korea, Taiwan and the Philippines have also expressed interest in joining.  

– I’ve also written on another agreement that Canada is negotiating, the FIPPA, that is just as toxic to human rights and the ability of the signatory government to legislate freely to protect the health and the rights of their peoples.

– These agreements, largely being drawn up and agreed to in secret, are a reflection of how very deeply the large multinational corporate interests have gotten into the knickers of our governments.

– These agreements do not favor the individual sovereign governments of any of their possible signatories.  The U.S., which is perhaps the largest player in the group, is not much better off that the other countries save for the fact that it is the home ground for many of the large corporate players backing these agreements.  

– But, as you will read, even U.S. Congressmen are complaining about being locked out of the agreements while the representatives of major corporations freely sit in and help shape what’s to be signed.

– Let’s get that straight.  Halliburton, Chevron, PHRMA, Comcast, and the Motion Picture Association of America can all see the current texts of the negotiations – and United States Senator Ron Wyden cannot?

– dennis

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It’s a sign of the times that a reputable economist, Dean Baker, can use the word “corruption” in the headline of an article describing two major trade deals under negotiation and no one bats an eye.

By way of background, the Administration is taking the unusual step of trying to negotiate two major trade deals in the same timeframe. Apparently Obama wants to make sure his corporate masters get as many goodies as possible before he leaves office. The Trans-Pacific Partnership and the US-European Union “Free Trade” Agreement are both inaccurately depicted as being helpful to ordinary Americans by virtue of liberalizing trade. Instead, the have perilous little to do with trade. They are both intended to make the world more lucrative for major corporations by weakening regulations and by strengthening intellectual property laws. The TPP has an additional wrinkle of being an “everybody but China” deal, intended to strengthen ties among nations who will then be presumed allies of America in its efforts to contain China. As we indicated via a link to an Asia Times article over the weekend, that’s proving to be a bit fraught as Japan is flexing its muscles militarily and thus less inclined to follow US directives tamely.

One of the most disturbing aspects of both negotiations is that they are being held in secret….secret, that is, if you are anybody other that a big US multinational who has a stake in the outcome.

Baker describes in scathing terms why these types of deals are bad policy:

…these deals are about securing regulatory gains for major corporate interests. In some cases, such as increased patent and copyright protection, these deals are 180 degrees at odds with free trade. They are about increasing protectionist barriers.

All the arguments that trade economists make against tariffs and quotas apply to patent and copyright protection. The main difference is the order of magnitude. Tariffs and quotas might raise the price of various items by 20 or 30 percent. By contrast, patent and copyright protection is likely to raise the price of protected items 2,000 percent or even 20,000 percent above the free market price. Drugs that would sell for a few dollars per prescription in a free market would sell for hundreds or even thousands of dollars when the government gives a drug company a patent monopoly…

The idea is that once a deal is completed there will be enormous political pressure for Congress to approve it no matter what it contains….news outlets like the Washington Post will use both their news and opinion sections to bash members of Congress who oppose a deal. They will be endlessly portrayed as ignorant Neanderthals who do not understand economics.

The reality of course is that it is the “free traders” who either do not understand economics or deliberately choose to ignore it. Many of the provisions that we are likely to see in these deals, like stronger patent protections, will slow growth and cost jobs.

These deals will also lead to more upward redistribution of income. The more money that people in the developing world pay to Pfizer for drugs and Microsoft for software, the less money they will pay for the products that we export, as opposed to “intellectual property rights”….

This is yet another case where the government is working for a tiny elite against the interests of the bulk of the population.

If that isn’t bad enough, there’s another side of these planned pacts that is often simply ignored. These “trade” deals are Trojan horses to erode or eliminate national regulations. Baker anticipates that these deals will include sections that would limit government regulation (including at the state and local level) on fracking and could revive much of the internet surveillance that reared its ugly head in the failed SOPA.

– More… ➡

 

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Posted in Capitalism & Corporations, Corporate takeover of Government, Corruption, CrashBlogging, Human Rights, Politics - The Wrong Way, Social Breakdown, The Perfect Storm | No Comments »

Time on your hands?

May 1st, 2013

 

Woo-Woo

– Time is an interesting something.   Or, maybe not.  

– A recent issue of Scientific American, that focused the entire issue on the subject of Time, revealed that about 50% of the scientists who study time believe that time exists while the other 50% think it is an artificial construct that comforts our minds but that actually doesn’t exist.

– So here, for those of you who like to leaven your doom and gloom with a bit of science, are three articles that delve into the endlessly fascinating subject of something we’re not even sure if it exists.   Nice, eh?

– Enjoy

– dennis

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Time Crystals could upend Physicists’ Theory of Time

The Big Crunch; Physicists Make Time End

and

What is time? One Physicist Hunts for the Ultimate Theory

– research thanks to Kierin M.

Posted in And Now for Something Completely Different, Science | No Comments »

No Rich Child Left Behind

May 1st, 2013

– An excellent article.  I get discouraged at times by this world but there are still good people doing good work to try to improve our self-understanding and thus, the possibility that we can avoid shooting ourselves in the foot.

– dennis

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By SEAN F. REARDON in the New York Times Opinion Pages

Here’s a fact that may not surprise you: the children of the rich perform better in school, on average, than children from middle-class or poor families. Students growing up in richer families have better grades and higher standardized test scores, on average, than poorer students; they also have higher rates of participation in extracurricular activities and school leadership positions, higher graduation rates and higher rates of college enrollment and completion.

Whether you think it deeply unjust, lamentable but inevitable, or obvious and unproblematic, this is hardly news. It is true in most societies and has been true in the United States for at least as long as we have thought to ask the question and had sufficient data to verify the answer.

What is news is that in the United States over the last few decades these differences in educational success between high- and lower-income students have grown substantially.

– More… ➡

– Research thanks to John P.

 

Posted in And Now for Something Completely Different, CounterCurrents, Science | 1 Comment »

“endorsement of free-market economics predicted rejection of climate science”

April 29th, 2013

Abstract

Although nearly all domain experts agree that carbon dioxide emissions are altering the world’s climate, segments of the public remain unconvinced by the scientific evidence. Internet blogs have become a platform for denial of climate change, and bloggers have taken a prominent role in questioning climate science. We report a survey of climate-blog visitors to identify the variables underlying acceptance and rejection of climate science. Our findings parallel those of previous work and show that endorsement of free-market economics predicted rejection of climate science. Endorsement of free markets also predicted the rejection of other established scientific findings, such as the facts that HIV causes AIDS and that smoking causes lung cancer. We additionally show that, above and beyond endorsement of free markets, endorsement of a cluster of conspiracy theories (e.g., that the Federal Bureau of Investigation killed Martin Luther King, Jr.) predicted rejection of climate science as well as other scientific findings. Our results provide empirical support for previous suggestions that conspiratorial thinking contributes to the rejection of science. Acceptance of science, by contrast, was strongly associated with the perception of a consensus among scientists.

– To the original: ➡

 

Posted in Climate Change, CrashBlogging, Mental Irrationality, The Perfect Storm | No Comments »

Why Is Socialism Doing So Well in Deep-Red North Dakota?

April 12th, 2013

North Dakota is the very definition of a red state. It voted 58 percent to 39 percent for Romney over Obama, and its statehouse and senate have a total of 104 Republicans and only 47 Democrats. The Republican super-majority is so conservative it recently passed the nation’s most severe anti-abortion resolution – a measure that declares a fertilized human egg has the same right to life as a fully formed person.

But North Dakota is also red in another sense: it fully supports its state-owned Bank of North Dakota (BND), a socialist relic that exists nowhere else in America. Why is financial socialism still alive in North Dakota? Why haven’t the North Dakotan free-market crusaders slain it dead?

Because it works.

In 1919, the Non-Partisan League, a vibrant populist organization, won a majority in the legislature and voted the bank into existence. The goal was to free North Dakota farmers from impoverishing debt dependence on the big banks in the Twin Cities, Chicago and New York. More than 90 years later, this state-owned bank is thriving as it helps the state’s community banks, businesses, consumers and students obtain loans at reasonable rates. It also delivers a handsome profit to its owners—the 700,000 residents of North Dakota. In 2011, the BND provided more than $70 million to the state’s coffers. Extrapolate that profit-per-person to a big state like California and you’re looking at an extra $3.8 billion a year in state revenues that could be used to fund education and infrastructure.

One of America’s Best Kept Secrets

Each time we pay our state and local taxes—and all manner of fees—the state deposits those revenues in a bank. If you’re in any state but North Dakota, nearly all of these deposits end up in Wall Street’s too-big to-fail banks, because those banks are the only entities large enough to handle the load. The vast majority of the nation’s 7,000 community banks are too small to provide the array of cash management services that state and local governments require. We’re talking big bucks; at least $1 trillion of our local tax dollars find their way to Wall Street banks, according to Marc Armstrong, executive director of the Public Banking Institute.

So, not only are we, as taxpayers, on the hook for too-big-to-fail Wall Street banks, but we also end up giving our tax dollars to these same banks each and every time we pay a sales tax or property tax or buy a fishing license. In North Dakota, however, all that public revenue runs through its public state bank, which in turn reinvests in the state’s small businesses and public infrastructure via partnerships with 80 small community banks.

How the State Bank Creates Jobs

Banks are supposed to serve as intermediaries that turn our savings and checking deposits into productive loans to businesses and consumers. That’s how jobs are supported and created. But the BND, a state agency, goes one step further. Through its Partnership in Assisting Community Expansion, for example, it provides loans at below-market interest rates to businesses if and only if those businesses create at least one job for every $100,000 loaned. If the $1 trillion that now flows to Wall Street instead were deposited in public state banks in all 50 states using this same approach, up to 10 million new jobs could be created. That would effectively end our destructive unemployment crisis.

No Bailouts for the BND

Banking doesn’t have to be a casino. It doesn’t have to be designed to create gambling opportunities so bank traders and executives can make seven- and eight-figure salaries. As BND president Eric Hardmeyer said in a 2009 Mother Jones interview:

We’re a fairly conservative lot up here in the upper Midwest and we didn’t do any subprime lending and we have the ability to get into the derivatives markets and put on swaps and callers and caps and credit default swaps and just chose not to do it, really chose a Warren Buffett mentality—if we don’t understand it, we’re not going to jump into it. And so we’ve avoided all those pitfalls.

As state government employees, BND executives have no incentive to gamble their way toward enormous pay packages. As you can see, the top six BND officers earn a good living, but on Wall Street, cooks and chauffeurs earn more.

• Eric Hardmeyer, President and CEO: $232,500
• Bob Humann, Chief Lending Officer: $135,133
• Tim Porter, Chief Administrative Officer: $122,533
• Joe Herslip, Chief Business Officer: $105,000
• Lori Leingang, Chief Administrative Officer: $105,000
• Wally Erhardt, Director of Student Loans of North Dakota: $91,725

The very existence of a successful BND undermines Wall Street’s claim that in order to attract the best talent big banks need to offer enormous pay packages. Yet somehow, North Dakota is able to find the talent to run one of the soundest banks in the country? The BND is living proof that Wall Street’s rationale for sky-high executive pay is a self-serving fabrication.

Wall Street Is Gunning for Bank of North Dakota

As you can well imagine, our financial elites would love to see this successful (socialist!) bank disappear. Its salary structure and local investments makes a mockery of Wall Street’s casino banking system. But the bigger threat comes from the possible spread of this public banking concept to other states. Already, there are 20 or so state legislatures that are exploring state banks. Collectively, more public banks would pose an enormous threat to the $1 trillion in state and local bank deposits that now run through Wall Street.

But elite financiers also stand to lose much more. In the 49 states without a public bank, there’s no safe place to turn for loans to rebuild schools and finance other public infrastructure projects. That creates an enormous opportunity for Wall Street firms to hook localities on expensive bond programs—like capital appreciation bonds, which can lead to repayments equaling 10 times the original loan. Investment bankers and advisers also make enormous fees by selling expensive, high-risk financial schemes to state and local governments (read an investigative report here). But such schemes are useless in North Dakota where the state bank provides the capital the state needs for a fraction of the long-term costs.

Trade Agreements: Wall Street’s Weapon of Mass Destruction

Clearly, from Wall Street’s perspective, the North Dakota bank must go, and all other state efforts to replicate it must be thwarted. Wall Street’s stealth weapon may be lodged within the latest corporate trade agreement called the Trans-Pacific Partnership (TPP), which currently is being negotiated in secret. We already know that Wall Street is seeking to remove all tariff restrictions that prevent the U.S. financial services industry from doing business in countries like Brunei, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The biggest banks also want the treaty to eliminate “non-tariff” barriers including regulations that create “unfair” competition with state-owned financial enterprises.

Depending on the final language, it is possible that the activities of the Bank of North Dakota could be ruled illegal because “foreign bankers could claim the BND stops them from lending to commercial banks throughout the state,” according to an analysis by Sam Knight in Truthout. How perfect for Wall Street: a foreign bank can be used as a shill to knock out the BND.

The Public Bank Movement

A small but highly dedicated group of financial writers, public finance experts and former bankers have formed the Public Bank Institute to spread the word. Working on a shoestring budget, its president Ellen Brown (author of Web of Debt), and its executive director Marc Armstrong have become the Johnny Appleseeds of public banking, hopping from state to state to encourage legislatures to explore state-owned banks.

The movement is gathering steam as it holds a major conference on June 2-4 at Dominican University in San Rafael, CA featuring such anti-Wall Street hell raisers as Matt Taibbi and Gar Alperowitz, along with Brigitte Jonsdottir, a member of the Icelandic parliament, and Ellen Brown.

Is America Up For This Fight?

Since the crash, the financial community has largely managed to wriggle off the hook. In fact, fatalism may be replacing activism as we sense that maybe Wall Street is simply too big and too powerful to change. After all, the big banks seem to own Washington, as too-big-to-fail banks are permitted to grow even larger and more invulnerable to prosecution and control.

But this new public banking movement could have legs, especially if it teams up with those fighting for a financial transaction tax (see National Nurses United.) Most Americans remain furious about how financial elites profited from the crisis—before, during and after—while the rest of us pick up the tab. Americans know deep down that Wall Street is the predator and we are the prey.

The state-owned and operated Bank of North Dakota proves that it doesn’t have to be that way. This is the time to fight for public state banking in a big way.

– To the original… ➡

 

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Posted in Capitalism & Corporations, Corporate takeover of Government, CounterCurrents, CrashBlogging, Financial melt-down, The Perfect Storm | No Comments »

‘This Is Working’: Portugal, 12 Years after Decriminalizing Drugs

April 12th, 2013

Twelve years ago, Portugal eliminated criminal penalties for drug users. Since then, those caught with small amounts of marijuana, cocaine or heroin go unindicted and possession is a misdemeanor on par with illegal parking. Experts are pleased with the results.

Before he got involved in the global war on drugs, João Goulão was a family physician with his own practice in Faro, on Portugal’s Algarve coast. Arriving in his small office in Lisbon, the 58-year-old tosses his jacket aside, leaving his shirt collar crooked. He looks a little tired from the many trips he’s taken lately — the world wants to know exactly how the experiment in Portugal is going. Goulão is no longer able to accept all the invitations he receives. He adds his latest piece of mail to the mountain of papers on his desk.

From this office, where the air conditioning stopped working this morning, Goulão keeps watch over one of the world’s largest experiments in drug policy.

One gram of heroin, two grams of cocaine, 25 grams of marijuana leaves or five grams of hashish: These are the drug quantities one can legally purchase and possess in Portugal, carrying them through the streets of Lisbon in a pants pocket, say, without fear of repercussion. MDMA — the active ingredient in ecstasy — and amphetamines — including speed and meth — can also be possessed in amounts up to one gram. That’s roughly enough of each of these drugs to last 10 days.

These are the amounts listed in a table appended to Portugal’s Law 30/2000. Goulão participated in creating this law, which has put his country at the forefront of experimental approaches to drug control. Portugal paved a new path when it decided to decriminalize drugs of all kinds.

“We figured perhaps this way we would be better able get things under control,” Goulão explains. “Criminalization certainly wasn’t working all that well.”

Much the Same as a Parking Violation

As part of its war on drugs, Portugal has stopped prosecuting users. The substances listed in the Law 30/2000 table are still illegal in Portugal — “Otherwise we would have gotten into trouble with the UN,” Goulão explains — but using these drugs is nothing more than a misdemeanor, much the same as a parking violation.

Why set the limits on these drugs at 10 days’ worth of use, though?

“Well, it’s a limit, which by its nature is arbitrary,” Goulão says. Now the head of Portugal’s national anti-drug program and an important figure in Portuguese health policy, he still talks like an easygoing family doctor. Arrayed on Goulão’s windowsill are photographs, including one of him with Richard Branson, the British billionaire and hot air balloon operator. Another shows Goulão with the king of Spain. Both these men have received personal briefings on Portugal’s new drug program from Goulão.

“At the point when we designed the law, we had hardly any data to draw on,” Goulão relates. “We weren’t the least bit certain this would work.”

The question at stake: How can a government keep its citizens from taking dangerous drugs? One way is to crack down on those who provide the drugs — the cartels, the middle men and the street dealers. Another approach is to focus on the customers — arresting them, trying them and imprisoning them. Legal prosecution — as both a control mechanism and a deterrent — is the chosen approach for most governments.

Giving Up on the Idea of a Drug-Free World

“It’s important that we prevent people from buying drugs, and taking drugs, using every method at our disposal,” says Manuel Pinto Coelho, 64, the last great opponent of Goulão’s experiment. Pinto Coelho wants his country to return to normalcy, in the form of the tough war on drugsthat much of the rest of the world conducts.

Pinto Coelho is a doctor too. He has run rehab centers and written books about addiction. Now he’s at odds with former colleagues and with “the system,” as he says.

His greatest concern is that his country has given up on the idea of a drug-free world. How, Pinto Coelho asks, is it possible to keep young people away from drugs, when everyone knows exactly how many pills can legally be carried around? He still believes deterrents are the best form of prevention and that cold turkey withdrawal is the best treatment method. He is also fighting the extensive methadone program Portugal began as part of its drug policy reform, which now provides tens of thousands of heroin addicts with this substitute drug.

These days, Pinto Coelho earns his living running diet clinics, but he spends his evenings writing letters and drafting presentations on his country’s “absurd drug experiment.” He travels to symposiums to warn the rest of the world of its dangers. At home in Portugal, his critical perspective has made him an outsider, but he says he’s been well received abroad. As if offering proof, he shows a fact sheet issued by the United States Office of National Drug Control Policy, a brief and skeptically worded report on the Portuguese experiment.

The Freedom that Overwhelmed the Country

When João Goulão wants to explain why it is Portugal in particular that came up with the idea to stop prosecuting drug users, he starts with the country’s Carnation Revolution.

In 1974, Portugal broke free from nearly 50 years of military dictatorship, a political shift symbolized by the carnations soldiers stuck in the muzzles of their rifles.”Suddenly, the drugs were there,” Goulão says, as Portuguese returning from the country’s overseas colonies brought marijuana with them. Goulão, too, says he smoked pot back then. He was in his early twenties and “drugs promised us freedom.”

But it was a freedom that soon overwhelmed the country. When Goulão established his doctor’s practice in Faro, he soon found himself approached by parents whose children were no longer just smoking joints, but had moved on to heroin. Sometimes the children came to him as well, and Goulão had no idea how to treat them. When the first state-run rehab clinic opened in Lisbon, Goulão attended a training course there.

At that point, he says, the heroin epidemic was just beginning.

In the 1980s, cheap heroin from Afghanistan and Pakistan began flooding Europe. Portugal was not the only country affected, but Goulão says his nation was hit particularly hard, because people here had little idea how to handle drugs. “We were naïve,” he says.

The number of people taking illegal drugs in Portugal was low compared with other countries, but of those who did consume drugs, an unusually high number of them fell into the category that specialists in this field refer to as “problem drug users.”

From the pile of papers on his desk, Goulão unearths a copy of a speech he recently gave in Paris. Flipping through it, he finds the figure he’s looking for: 100,000. This is the number of severely drug-addicted people in Portugal at the height of the epidemic, in the mid-1990s. Portugal’s total population at the time was just under 10 million. The number of drug addicts who became infected with HIV was also considerably higher than in most other countries.

A drug slum formed in Lisbon, at the edge of a neighborhood known as Casal Ventoso. Here junkies slept in shacks or in the garbage, in extremely poor conditions. “They shot up on the street, and they died on the street,” Goulão says. Anyone in Portugal could observe this phenomenon — on TV, in newspaper pictures or even from the nearby highway.

– More… ➡

– See also this story:  ➡

 

Posted in And Now for Something Completely Different, CounterCurrents, Politics - The Right Way | No Comments »

Secret Files Expose Offshore’s Global Impact

April 12th, 2013

– This story is going to have legs for a long time, folks.  High net worth individuals and politicos all over the globe must be crapping themselves wondering what’s going to come out of this story.

– All us small folk are paying higher and higher taxes while the disparity between the rich and poor grows wider and wider and the folks on the top are clearly not paying their share.  They are, in fact, working very hard to pay little or nothing.

– Corporations and the rich are gaming the situation to push the tax burdens down on the middle classes and that’s one of the reasons why the middle classes are beginning to look like an endangered species.

– This can only go so far and there will be a backlash.   This, if carried far enough, is the stuff revolutions are made of.

– dennis

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Dozens of journalists sifted through millions of leaked records and thousands of names to produce ICIJ’s investigation into offshore secrecy ­

A cache of 2.5 million files has cracked open the secrets of more than 120,000 offshore companies and trusts, exposing hidden dealings of politicians, con men and the mega-rich the world over.

The secret records obtained by the International Consortium of Investigative Journalists lay bare the names behind covert companies and private trusts in the British Virgin Islands, the Cook Islands and other offshore hideaways.

They include American doctors and dentists and middle-class Greek villagers as well as families and associates of long-time despots, Wall Street swindlers, Eastern European and Indonesian billionaires, Russian corporate executives, international arms dealers and a sham-director-fronted company that the European Union has labeled as a cog in Iran’s nuclear-development program.

The leaked files provide facts and figures — cash transfers, incorporation dates, links between companies and individuals — that illustrate how offshore financial secrecy has spread aggressively around the globe, allowing the wealthy and the well-connected to dodge taxes and fueling corruption and economic woes in rich and poor nations alike.

The records detail the offshore holdings of people and companies in more than 170 countries and territories.

The hoard of documents represents the biggest stockpile of inside information about the offshore system ever obtained by a media organization. The total size of the files, measured in gigabytes, is more than 160 times larger than the leak of U.S. State Department documents by Wikileaks in 2010.

– More… ➡

 – Later breaking stories on this subject… ➡

Posted in Capitalism & Corporations, Corruption, CrashBlogging, Financial melt-down, Human Rights, Politics - The Wrong Way, Social Breakdown, The Perfect Storm, Wealth Disparity | No Comments »

Ottawa weighing plans for bank failures

April 12th, 2013

– Cyprus and the government’s actions there to seize depositor funds to rescue a failing economy and its banks wasn’t a one-off.  

– This same plan is wending it way through the parliament here in New Zealand under the guidance of the conservative National Government.  And, just as in the article, below, about Canada’s movements in the direction, the New Zealand government is doing their very best to deflect any and all questions about whether or not money would or would not be taken from depositor accounts of a bank to cover the shortfalls if that bank failed.  

– No one in New Zealand has explained why the bank’s officers should not first be stripped of all their assets before anyone should think of going after the bank’s depositors.  

– And no one has explained why, if it is the government’s rightful roll to regulate banks to prevent such things, why the government should not be culpable and why, if they were, they should not spread the burden of their malfeasance across the entire tax-payer base of the country to more fairly spread the load.

– And finally no one has explained why of these three; the bank’s officers, the government and the bank’s depositors, why the depositors (who would would obviously know the least about the bank’s stability) should be the ones tasked with paying the penalty for a bank’s failure.

– Yes, God damn it, the people DO want to know the answers to these questions.

– dennis

Canadian Federal government looking at ‘Cyprus solution’

Buried deep in last month’s federal budget is an ambiguously worded section that has roiled parts of the financial world but has so far been largely ignored by the mainstream media.

It boils down to this: Ottawa is contemplating the possibility of a Canadian bank failure — and the same sort of pitiless prescription that was just imposed in Cyprus.

Meaning no bailout by taxpayers, but rather a “bail-in” that would force the bank’s creditors to absorb the staggering losses that such an event would inevitably entail.

If that sounds sobering, it should. While officials in Ottawa are playing down the possibility of a raid on the bank accounts of ordinary Canadians, they chose not to include that guarantee in the budget language.

Canadians tend to believe their banks are safer and more backstopped than elsewhere in the world. The federal government enthusiastically promotes the notion, and loves to take credit for it.

It may well be true, even if Canada’s six-bank oligopoly isn’t terribly competitive, at least in comparison to the far more diverse American banking universe.

But in the ever-more insecure world that has unfolded since the financial meltdown of 2008, it is also increasingly clear that nothing is safe anymore, not even blue-chip bank stocks and bonds or even, in the case of the Cyprus bail-in, private bank accounts.

And now, Canada is making a bail-in official government policy, too.

“The government proposes to implement a bail-in regime … designed to ensure that, in the unlikely event that a systemically important bank depletes its capital, the bank can be recapitalized and returned to viability,” says Finance Minister Jim Flaherty’s March 21 budget, on page 144.

That would be done, the document says, through the rapid conversion of “certain bank liabilities.”

Ottawa’s budget document leaves the definition of “certain liabilities” to the reader’s imagination.

Bank deposits?

There has been very little public debate about the plan to date, but Finance Department officials and the banks protest it should never be taken to mean small personal deposits would be seized.

Deposits are insured by the Canadian Deposit Insurance Corporation, up to $100,000, and the inviolability of that insurance is key to maintaining the crucial public trust.

“The risk of the Canadian government not honouring its insurance on deposits is as close to zero as you can get,” says Craig Alexander, chief economist at TD Canada Trust.

Perhaps.

As the Cyprus meltdown proceeded, it became clear that Europe’s finance ministers and central banks, encouraged by the International Monetary Fund, were not only willing to freeze and seize uninsured deposits over 100,000 euros, they were also initially willing to cancel deposit insurance and go after small depositors, too.

In the end, the plan was rewritten, and insured deposits were protected. But the signal had been sent: The Europeans and the IMF had been prepared to do the unthinkable.

Holland’s finance minister then declared that bail-ins would be the template for all future bank rescues in Europe, and that he could not rule out seizure of deposits elsewhere.

– More… ➡

 

Posted in Capitalism & Corporations, Corporate takeover of Government, CrashBlogging, Culture - How not to do it, Financial melt-down, Human Rights, Politics - The Wrong Way, The Perfect Storm | No Comments »

Personal – 13 Apr 2013

April 12th, 2013

– My partner, Colette, and I are wrapping up four months in Wellington, New Zealand, this weekend and preparing to spend two weeks touring New Zealand’s North Island by car before we travel across the Cook Strait via ferry to the South island and then by train back to Christchurch.

– I’ve really conceived a love for Wellington.  What a vibrant, beautiful and pleasant a city it is.  We’ve been over most of it on foot and by bus these four months.  We’ve sat in on Parliament’s question and answer sessions, visited endless coffee shops and restaurants, hosted a few friends with us, made use of the libraries, theaters, free concerts, talks and various cultural and ethnic street events.

– Another event that transpired during our time here was that Colette wrapped up 12 years with the New Zealand Ministry of Justice and is now a free agent.

– And yet another event was that it looks like I will finally be paid out for the apartment I lost in Christchurch in the February 2011 earthquake there.  And that money, when it arrives, will augment my income nicely and give me a bit more flexibility which is never a bad thing.

– While I’ve been here I’ve been digging into programming iPhone and iPad apps and I’ve come up to speed nicely.  In fact, just today, I bid my first job to write an app.

– That’s the news.

– Cheers from New Zealand, my friends,

-dennis

 

Posted in Personal, Tech-Software | No Comments »

Can a collapse of global civilization be avoided?

April 7th, 2013

– Beware, if you click on any of the citations in the article, below, you will be taken to the original article.  That is, of course, fine.   Just making you aware of this fact before you click on one.

– dennis

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By Paul R. Ehrlich and Anne H. Ehrlich

Abstract

Environmental problems have contributed to numerous collapses of civilizations in the past. Now, for the first time, a global collapse appears likely. Overpopulation, overconsumption by the rich and poor choices of technologies are major drivers; dramatic cultural change provides the main hope of averting calamity.

1. Introduction

Virtually every past civilization has eventually undergone collapse, a loss of socio-political-economic complexity usually accompanied by a dramatic decline in population size [1]. Some, such as those of Egypt and China, have recovered from collapses at various stages; others, such as that of Easter Island or the Classic Maya, were apparently permanent [1,2]. All those previous collapses were local or regional; elsewhere, other societies and civilizations persisted unaffected. Sometimes, as in the Tigris and Euphrates valleys, new civilizations rose in succession. In many, if not most, cases, overexploitation of the environment was one proximate or an ultimate cause [3].

But today, for the first time, humanity’s global civilization—the worldwide, increasingly interconnected, highly technological society in which we all are to one degree or another, embedded—is threatened with collapse by an array of environmental problems. Humankind finds itself engaged in what Prince Charles described as ‘an act of suicide on a grand scale’ [4], facing what the UK’s Chief Scientific Advisor John Beddington called a ‘perfect storm’ of environmental problems [5]. The most serious of these problems show signs of rapidly escalating severity, especially climate disruption. But other elements could potentially also contribute to a collapse: an accelerating extinction of animal and plant populations and species, which could lead to a loss of ecosystem services essential for human survival; land degradation and land-use change; a pole-to-pole spread of toxic compounds; ocean acidification and eutrophication (dead zones); worsening of some aspects of the epidemiological environment (factors that make human populations susceptible to infectious diseases); depletion of increasingly scarce resources [6,7], including especially groundwater, which is being overexploited in many key agricultural areas [8]; and resource wars [9]. These are not separate problems; rather they interact in two gigantic complex adaptive systems: the biosphere system and the human socio-economic system. The negative manifestations of these interactions are often referred to as ‘the human predicament’ [10], and determining how to prevent it from generating a global collapse is perhaps the foremost challenge confronting humanity.

The human predicament is driven by overpopulation, overconsumption of natural resources and the use of unnecessarily environmentally damaging technologies and socio-economic-political arrangements to service Homo sapiens’ aggregate consumption [11–17]. How far the human population size now is above the planet’s long-term carrying capacity is suggested (conservatively) by ecological footprint analysis [18–20]. It shows that to support today’s population of seven billion sustainably (i.e. with business as usual, including current technologies and standards of living) would require roughly half an additional planet; to do so, if all citizens of Earth consumed resources at the US level would take four to five more Earths. Adding the projected 2.5 billion more people by 2050 would make the human assault on civilization’s life-support systems disproportionately worse, because almost everywhere people face systems with nonlinear responses [11,21–23], in which environmental damage increases at a rate that becomes faster with each additional person. Of course, the claim is often made that humanity will expand Earth’s carrying capacity dramatically with technological innovation [24], but it is widely recognized that technologies can both add and subtract from carrying capacity. The plough evidently first expanded it and now appears to be reducing it [3]. Overall, careful analysis of the prospects does not provide much confidence that technology will save us [25] or that gross domestic product can be disengaged from resource use [26].

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