Election Frace at the World Bank

Elections, in the heyday of the Soviet Union, were often announced before voting concluded.  It was all a done deal.  The Soviet Union may be dead, but its ideas on how to conduct democratic elections are still alive and kicking.

On April 16, 2012, the new head of the World Bank was announced. To no one’s surprise, Jim Yong Kim, a Korean-American. His victory was assured since the major powers—Europe, US, Japan and Canada—voted as a bloc, by prior agreement.  By convention, this coalition endorses whomever Washington nominates, and so it has been from the first meeting of the World Bank in 1946.  The only break with tradition is that the winner was not a white, male politician, bureaucrat, or banker.

The Golem President

In Jewish folklore, a golem is a monster made of mud.  In the US, if President Barak Obama wins, he will be the first Golem president of the USA.

Much of the mud will be supplied by Republican strategist Karl Rove, who is expected to use an estimated $300 million that he has stashed away in American Crossroads, a Super PAC, to attack Obama in an advertising blitzkrieg the likes of which the US has never seen before. 

The Treason of Benjamin Franklin

Stop me if you’ve heard this before. A public figure receives a cache of leaked government documents whose contents is so explosive that it will embarrass the government, incite insurgents and encourage them to attack government officials. It could even bring on a war. The person leaking these documents is quickly identified and dealt with by authorities, but more of this later.

Let’s have a free market in IP

Both Samsung and Apple entered into a legal battle over patent infringement back in April 2011 on three different continents.  With such a short shelf life, if one or other company can get an injunction, it wins by just stopping its competitor getting its product to the market.

Climate Change Skeptics v Science Wonks

Nothing is more certain about who will win a war than if only one side turns up, armed to the teeth, while the other sits at home, enjoying a cup of tea and chatting among themselves of how much more superior they are to their opponents. Welcome to the climate wars.

Resource Supertaxes - Miners Fear Race to the Top

One of the unfortunate hallmarks of globalization is that governments must compete fiercely with one another to attract business to their shores. 

Playing governments like a Stradivarius, transnational mining companies have forced them to weaken environmental and other regulations, as well as reduce tax rates and even tax holidays.  The result is the greatest transfer of wealth in history from taxpayers who own the minerals to companies exploiting the resources who have been enjoying super profits for decades. For example, in the last ten years global miners have increased profits tenfold, which was hardly slowed by the global financial crisis.  But could this trend be reversed, as governments realize that they own the mineral resources and not the mining companies, and therefore hold the upper hand?

Water Wars

The US State Department has released an important report on how future water scarcity could threaten future global peace and security.  The report had been prepared by the US Defense Intelligence Agency, with input from the CIA.

It warned that problems with water could destabilize countries in North Africa, the Middle East and South Asia over the next decade.  "During the next 10 years, many countries … will almost certainly experience water problems-- shortages, poor water quality, or floods--that will contribute to the risk of instability and state failure, and increase regional tensions. Additionally, states will focus on addressing internal water-related social disruptions."

Murder of Afghan Civilians - Will Justice Prevail?

What chance is there that the US legal system will deliver justice in the case of the US soldier accused of murdering sixteen Afghan civilians?  Would the US execute one of its own, knowing how that would be received by the military establishment?  Everyone from President Obama down has called for calm while the events are being investigated.  But what chance is there that the process will be speedy and fair.

Greeks Facing "Cartaginian Peace"

A tourist does not experience the real Greece, but that does not mean that he or she doesn’t have an opinion.  Sheltered from real misery and prevented by language from understanding what is going on doesn’t stop a tourist becoming an instant expert.

Recently, sitting around a pool at a boutique hotel in Santorini, I meet some of these instant experts.  One complained about the bus station, staffed by three men, none of whom was willing to provide simple information on the timetable.  Once on the bus, the driver waved people on board, where they found a separate ticket seller walking up and down the aisle, proving how overstaffed the public service was.

Bank Lobbyists Fight Off Regulations

There is nothing new about bankers going off the rails or governments trying to rein them in.

One of the more sophisticated banking sectors was established in Venice in the Middle Ages. By 1361, there already had been sufficient abuse in banking that the Venetian Senate passed a law forbidding bankers to engage in any other commercial pursuit, thus removing the temptation to use their depositors’ funds to finance their own ventures. Sound familiar?  They were also required to open their books for public inspection and to keep their stockpile of coins available for viewing at all reasonable times. Today this would be regulations to require transparency and holding sufficient reserves to guarantee that they could meet demands by depositors for their money back.  To enforce these rules, in 1524, a board of bank examiners was created, which is possibly the first banking oversight regulatory body in history.

Neuro-marketing - Advertsiers Play Mind Games

Called “Satan’s little helper”, the advertising industry has never had a good image.  Perhaps it doesn’t really care what people think.  After all, its bread and butter comes from the corporate sector, and being damned as ruthless manipulators is a good thing if you’re looking for someone to sell your product.

Advertising is the handmaiden to capitalism.  If the efficiencies of mass-produced products are to be realized, they cannot be sold by word-of-mouth.  Second, competition depends on producers being able to sell consumers the benefits of their products.  Conservative economists argue that advertising is just about transmitting useful information to help consumers make choices.

Frankenstein's Monster Goes Corporate

These days you don't have to be Dr. Victor Frankenstein to create a person—that is, a “legal person.”  Throughout the novel, Mary Shelley's monster has no name, no soul and no sense of responsibility other than to itself. As it runs riot, it is clear that the monster belongs to no one, certainly not to Dr. Frankenstein.

Gringrich's Crusade Against Islam

After a number of Korans were burned in rubbish pits at Bagram airbase, north of Kabul, all hell was let loose as angry Muslims rioted and attacked NATO military installations all over Afghanistan.

Quickly realizing the mistake, US commander in Afghanistan, John Allen, apologized for army personnel at Bagram Airbase who "improperly disposed of a large number of Islamic religious materials which included Korans." He went on to say, "I offer my sincere apologies for any offense this may have caused to the president of Afghanistan, the government of the Islamic Republic of Afghanistan, and most importantly, to the noble people of Afghanistan."  The apology had little effect as the crime, in the eyes of Muslims, could not have been greater, for the Koran represents the word of God.

Fish Stocks Crash with Help of Flag of Convenience

On February 24, 2012, Robert B. Zoellick, president of the World Bank, gave a speech in Singapore in which he warned: “Fish stocks are crashing from overexploitation.”

According to the UN Food and Agriculture Organization, twenty-seven percent of the world’s fish stocks are overexploited or depleted.  A further fifty-three percent are fully exploited.  Moreover, overfishing threatens the survival of over one billion people in developing countries who depend upon fish and seafood for their primary source of protein.  It is also an important source of income for poor countries, with island and coastal nations earning $25 billion a year.  In the case of many Pacific Island countries, fish make up eighty percent of total exports.

Who is Bankrolling Climate Change Skeptics?

Professional skeptics, who have made a sport out of distorting the science and slandering scientists working in the area, have been sustained and supported by a number of right-wing think-tanks such as the Heartland Institute, Atlas Economic Research Foundation, International Policy Network, Competitive Enterprise Institute, Public Affairs Institute and a host of other neoliberals think tanks around the world.

Davos provides Cover of Cabal of Global Miners

At the end of January, the newspapers were full of the wise words of the business elite gathering in Davos every year to solve the world’s problems.  Outside the merriment of cocktail parties and catching up with old friends, serious business is also being conducted: nothing less than “improving the state of the world,” according to the mission statement of the World Economic Forum.

But this year some of the participants were  not in Davos to improve the state of the world but using this platform to advance their own commercial interests. At a meeting held on January 30, the world's major mining companies got together for a concerted attack on what they called “resource nationalism.”  Among them were Anglo American, Rio Tinto, Glencore, Codelco and Rusal.

Executive Bonuses are Legalized Kleptomania

There were tears not only on Wall Street but in London and other financial centers around the world as investment bankers opened up envelopes telling them what bonuses they had earned in 2011.  None were more distressed than traders at Goldman Sachs where the average pay check per employee was $292,397 for the first nine months of 2011, compared to $370,056 the previous year.  There were also tears in London as Ed Miliband and David Cameron turned up the pressure on British banks to cut back on bonuses.

Adam Smith Attacks Corporate Lobbyists

If you are a follower of the great Scottish economist Adam Smith—author of The Wealth of Nations, the Bible for market capitalism—a pilgrimage to his grave site in Canongate Churchyard in Edinburgh is a must.  Of late, however, you will find it hard to locate his resting place.  Poorly marked and signposted, it has been neglected by the custodians of the Churchyard. But then again, Adam Smith may just be hiding from those who claim his mantle as champions of capitalism.

US Patrotism and Globalization Don't Mix

In an exhibition of display democracy (the GOP primary contest) Newt Gingrich, a man who prides himself on his policy depth, tried for a knockout blow against Mitt Romney in the run-up to the New Hampshire primary. Romney’s fatal flaw was that he spoke French.

There was no higher crime in political life than showing any proficiency in French, let alone affection for Gallic culture. Undoubtedly, any political aspirant caught reading Flaubert or Balzac could find himself or herself in front of a firing squad after a perfunctory trial.

Banks that are Too-Big-to-Regulate

At the November 2011 meeting of the G20 held in Cannes, the names of 29 banks that are too-big-to-fail were released.  The list includes eight US banks, 17 European banks, three Japanese institutions and one from China.

The fear is that should any of these banks collapse, as in 2008, they could bring down a large part of the financial system. This is the fact of life in a globalized world where banks are interdependent, and the rest of the economy now depends on their well-being.

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The Next Fukiyama Nuclear Accident

The nuclear industry has a number of guilty secrets.The aftermath of the accident at Fukiyama Nuclear Power Station in Japan exposes one of those guilty secrets.

During court proceedings, the Tokyo Electric Power Co. (TEPCO) defended a lawsuit from Fukushima Prefecture golf club, just 45 kilometers west of the stricken plant.  TEPCO argued that it did not have to clean up radioactive contamination on the golf course because it no longer “owned” the radioactive substances. As reported in the Japanese newspaper Asahi Shimbun, a spokesperson from TEPCO said, “Radioactive materials (such as cesium) that scattered and fell from the Fukushima No. 1 nuclear plant belong to individual landowners there, not TEPCO.”  If successful, the company stood to save $160 million in clean-up costs.

The Christmas Bottom Line

Although now gone, a gravestone in Edinburgh’s Canongate Churchyard marked the last resting place of Ebenezer Lennox Scroggie.  This grain merchant served as the inspiration for Dickens’s character Ebenezer Scrooge, and, by a strange quirk of history, was also a relative of Adam Smith.

The grave marker was lost during construction work at the cemetery in 1932, so it is not possible to verify what was written on the gravestone. Nevertheless, it became Dickens’s inspiration for the flinty businessman in A Christmas Carol.  Legend has it that upon visiting the graveyard, Dickens was struck by the epithet on Scroggie’s headstone, on which was engraved that he was a “mean man.”  Commenting later on this discovery, Dickens wrote that it must have “shrivelled” Scroggie’s soul to carry “such a terrible thing to eternity.”

Tax Havens - only little people pay taxes

The complexity of the tax code reminds me of one of the most intractable problems of 19th century diplomacy – what to do with the Schleswig-Holstein Question, in which a number of countries laid claim to the German duchies.  Lord Palmerston said that only three people understood the Schleswig-Holstein question: one was dead, the other had gone insane and the third was himself, but he had forgotten it.

Many tax officials, when assessing corporate tax returns must feel a bit like Lord Palmerston. They invariably face a bewildering labyrinth of subsidiaries and tax write-offs.  Moreover, they need to interpret thousands of pages of tax legislation, made complex through the efforts of lobbyists.  Trying to extract a reasonable amount of tax from transnational corporations, under these circumstances is impossible.

Bankers undermine global regulations

When it comes to bailouts, banks have enthusiastically flown the flag of their “home” country and displayed a particular fondness for their country’s generous taxpayers. But when it comes to making money, suddenly they remember that they are really citizens of the world not beholden to any one country and certainly not to any regulators. They are responsible only to their shareholders.

Playing God - geo-engineering climate change

The international conference on climate change in Durban has been a dismal failure, with participating countries retreating from even the most modest commitments they had made at Copenhagen two years earlier. Is this time to despair or is there a plan B?

According to science, politicians only have a few years left to act before climate change becomes a permanent feature. Even if countries honored their promises, by 2020, rises in carbon dioxide emissions will cause warming of around 2°C― with potentially disastrous consequences.

Poaching doctors from developing countries

Rich countries, short of doctors and nurses, are poaching medical professionals from developing countries where they are desperately needed.

For example, the UK National Health Service has been accused of poaching doctors and other health professionals from developing countries that can ill afford to lose these people. According to the Mail on Sunday, 19 foreign governments, including China and Ghana, have complained about the aggressive recruitment of thousands of overseas medical staff.

Currency manupulation - a threat to world stability

The world careers towards a new global financial crisis, newspapers, politicians and just about everyone is looking for someone to blame.  Aside from the bankers, who have been the mainstay of the blame game (and rightly so), attention is being shifted to how governments are manipulating their currencies.

Big tobacco's dirty tricks

What may be local politics in one country, may, for transnational tobacco corporations, have profound impact on their global strategy.  When Australia decided to insist that cigarettes be sold in plain packages, all hell broke loose, and the tobacco companies came hunting for the government that could upset its global apple cart.

If the Australian experiment was successful and smoking rates decreased, then other countries would follow its lead. For Big Tobacco, this was a potential disaster, and Australia needed to be stopped.

Stateless corporations

On July 20, 2011, Ralph Nader wrote an article in the Chicago Tribune arguing that while the Supreme Court granted corporations new rights as though they were loyal citizens of the US, corporations have shown little to none of the same loyalty back.

Back in 1996, he put his suspicions to the test.  He wrote to 100 of the largest US corporations, urging CEOs to lead the company in the pledge of allegiance at their next shareholders’ meetings.

Globalization - a history lesson

While globalization may be the hot topic of the day, most of what is written about it lacks historic perspective.  As a result most attention is given to economic drivers.  Yet there is more to globalization.

Greek Credit Default Swaps - ticking timebomb

There are clusters of undetected time bombs ticking away in the financial system. And if it explodes, it will magnify the chaos caused by any defaults in the Eurozone, pushing the world economy into a deep, deep chasm.

The ordinance that gives these time bombs their potency are little known derivatives called credit default swaps (CDS). These privately negotiated contracts between two parties in which one party insures against a company or, in this case country defaulting on its debts. For a relatively small premium, the counterparty (namely the insurer) agrees to pay out a certain amount in those circumstances.

Occupy Wall Street - where's the second act?

A common feature of movements that arise seemingly out of nowhere is anger.  It reflects a very human reaction to injustice and long held grievances.

Anger was certainly what drove the Occupied Wall Street movement which arrived without warning and spread from Wall Street to other states of the US and then elsewhere around the world, as public places were occupied in New York, Washington, Melbourne, Rio de Janeiro, Kuala Lumpur, Frankfurt and many other places around the world - over 95 cities across 82 countries - underlining the fact that even protests against globalization are themselves globalized.