10/19/2007

Too much garbage, too much pollution, too much stupid, childish consumers



A hundred and six thousand aluminum cans per half a minute!? This really, really, really doesn't look good....

10/01/2007

Bill Moyers featuring John Bogle.... two killer-hippie-economists

Bill Moyers, my new hero, interviews John Bogle on the burden the financial world is putting on the industrial world. Brilliantly insightful!

BILL MOYERS: Welcome to the JOURNAL.JohnBogle

Every week we hear of another publicly traded company being bought by a private equity firm. Some of those investment firms — like Blackstone, the Carlyle Group, and Cerebrus — have become almost as well known as the brand-name companies they've been snapping up, from Chrysler to Dunkin' Donuts to Toys R Us. But private equity firms have no real interest in toys, cars, or baked goods. What they are after is big and quick returns on their capital. To get it, they buy a company and cut the wages, pensions and health benefits of the employees who work there.

Take a look at this front page story in Sunday's NY Times for a glimpse of how this kind of capitalism works. Thousands of nursing homes have been bought up by private equity firms like Warburg Pincus and Carlyle. Profits were increased by reducing costs, then investors quickly resold the facilities for a big profit, leaving and I quote- "residents at those nursing homes worse off, on average, than they were under previous owners."

Exhibit #1: Habana Health Care Center in Tampa, Florida, purchased by a group of private equity firms in 2002. "Within months, the number of clinical registered nurses at the home was half of what it had been a year earlier...budgets for nursing supplies, resident activities and other services also fell..." "When regulators visited, they found malfunctioning fire doors, unhygienic kitchens, and a resident using a leg brace that was broken..."

Basing its report on state government data, the Times says 15 at Habana died from what their families contend was negligent care. But when families sue, they often can't find out even who owns the nursing homes because of the complex corporate structures private equity firms have created to cover their tracks.

It's this kind of capitalism that drives John Bogle up the wall, as you're about to learn. John Bogle believes owners should be in charge — and accountable. He's known and respected world-wide as the father of index funds and the founder of The Vanguard Group, one of the largest mutual funds anywhere, with over a trillion dollars in assets.

Fortune magazine named him one of the four giants of the 20th century in the investment industry. Time magazine called him one of the world's 100 most powerful and influential people. Among his six books is this one 'The Battle for The Soul of Capitalism' and more recently 'The Little Book of Common Sense Investing'. In the current issue of 'Daedalus', the Journal of the American Academy of Arts and Sciences, he has a blockbuster of an essay on democracy in corporate America. You'll find it on our Web site at pbs.org. I talked with John Bogle when he was in town earlier this week.

BILL MOYERS: Thanks for joining me.

JOHN BOGLE: My pleasure.

BILL MOYERS: This story in the NY Times this week. What do you think when you read a story like that?

JOHN BOGLE: Well, first, it's a national disgrace. Simply put. And there are some things that must be entrusted to government and some things that must be entrusted to private enterprise. And what we see there, at least in my judgment, is that we've taken medical care, healthcare and going from making it a profession in which the patient is the object of the game — preserving the patient "first do no harm" as Hippocrates would say or would have said and turned that into a business. And so, it's a bottom line. I've often said we're in a bottom line society. We're measuring the wrong bottom line.

BILL MOYERS:What does it say to you that the real owners of the nursing home, the private investors have created this maze of smoke and mirrors that make it virtually impossible to find out who the owners really are?

JOHN BOGLE:Well, that's so typical of much that's going on in American finance, the way we structure these financial instruments, which are stock certificates or debt instruments. But it's the same thing of the removal of your friendly, local neighborhood bank holding the mortgage and being able to work with you when you fall on hard times to some unnamed, often unknown, financial institution who couldn't care less.

BILL MOYERS:These private equity firms that own these nursing homes wouldn't even talk to The NY Times. They won't talk to reporters. I mean, there's no accountability to the public.

JOHN BOGLE: There's no accountability. And it's wrong. It's fundamentally a blight on our society.

BILL MOYERS:What does it say that big private money can operate so secretly, with so little accountability, that the people who are hurt by it, the residents in the nursing home have no recourse?

JOHN BOGLE:It says something very bad about American society. And you wonder — the first question anybody would have after reading the article — how in God's name do they get away with that? Well, we have all these attorneys that are capable of devising complex instruments, and money managers who are capable of devising highly complex financial schemes. And there's kind of no one to answer to the call of duty at the end of it.

BILL MOYERS: And we're talking about some of the most powerful names in the business. I mean, these are formidable forces, right?

JOHN BOGLE: They're formidable forces. But, I'm afraid--

BILL MOYERS: Respectable citizens, right?

JOHN BOGLE: Well, I mean, I don't know about that. But, it's certainly -- it's easy to say that greed is taking — playing a part — greed has a role in a capitalistic society, but, not the dominant role and--

BILL MOYERS: What should be the dominant? What is the job of capitalism?

JOHN BOGLE:Well, ultimately, the job of capitalism is to serve the consumer. Serve the citizenry. You're allowed to make a profit for that. But, you've got to provide good products and services at fair prices. And that's the long term, that's what businesses do in the long term. The businesses that have endured in America have done that and done that successfully.

But, in the short term, there's all these financial machinations in which people can get very rich in a very short period of time by creating highly complex financial instruments, providing services that can be cut back easily as in the hospital article, not measuring up to basically their duty.

We all know that in professions, the idea has been service to the client before service to self. That's what a profession is. That's what medicine was. That's what accountancy was. That's what attorneys used to be. That's what trusteeship used to be inside the mutual fund industry. But, we've moved from that to a big capital accumulation — self interest — creating wealth for the providers of these services when the providers of these services are in fact subtracting value from society. So, it doesn't work.

BILL MOYERS:So, the private equity nursing homes have added to their wealth. But, they've subtracted from society the care for people who need it.

JOHN BOGLE: That is exactly correct. Not good.

BILL MOYERS:The Wall Street Journal editorial page celebrates what it called the animal spirits of business. And as if that's the heart of capitalism. What do you think about that?

JOHN BOGLE:Well, I like the animal spirits of business. I mean Lord Keynes told us about animal spirits. And it comes out of a part of his work that says, "You know, all the precise numbers and the perspectives mean nothing. What determines the future of a business is its animal spirits." You know, the desire for progress, the desire to create something new. That's all good. But, it's gotten misshapen. Badly--

BILL MOYERS: How so?

JOHN BOGLE: --misshapen.

BILL MOYERS: How so?

JOHN BOGLE: Well, it's gotten misshapen because the financial side of the economy is dominating the productive side of the economy

BILL MOYERS: What do you mean?

JOHN BOGLE: Well, let me say it very simply. The rewards of the growth in our economy comes from corporate, largely - from corporations who are a very important measure, from corporations that are providing goods and services at a fair price innovating and bringing in new technology — providing a higher quality of life for our society and they make money doing it. I mean, and the returns in business in the long run are 100 percent the dividends a corporation pays and the rate at which its earnings grow.

That still exists. But, it's been overwhelmed by a financial economy. The financial economy, which is the way you package all these ways of financing corporations, more and more complex, more and more expensive. The financial sector of our economy is the largest profit-making sector in America. Our financial services companies make more money than our energy companies — no mean profitable business in this day and age. Plus, our healthcare companies. They make almost twice as much as our technology companies, twice as much as our manufacturing companies. We've become a financial economy which has overwhelmed the productive economy to the detriment of investors and the detriment ultimately of our society.

BILL MOYERS: By the financial sector, you mean?

JOHN BOGLE:Banks, money managers, insurance companies, certainly annuity providers. They're all subtracting value from the economy. They have to subtract. To be clear on this now — I don't want to overstate it. To be clear on this, they have to subtract some value. But, the question is--

BILL MOYERS: What do you mean they subtract some value?

JOHN BOGLE:In other words, — you've go to pay somebody something to provide a service. It's just gotten totally out of hand. My estimate is that the financial sector takes $560 billion a year out of society. Five hundred and sixty billion.

BILL MOYERS: Where does it go?

JOHN BOGLE:It goes into the pockets of hedge fund managers, mutual fund managers, bankers, insurance companies. Let me give you this just one little example. If you didn't make a $129 million last year — I'm presuming that you didn't. You don't rank among the highest paid 25 hedge fund managers. A $129 million doesn't get you into the upper echelon.

BILL MOYERS: And on the way here this morning, I saw a story that now a $1 billion will not get you in the Fortune 400. A $1 billion!

JOHN BOGLE:Well, I spend a lot of time thinking about that. I mean, you kind of asked the question, which I've asked in some of my work. What is enough here? And the society is out of control. I mean, in 'The Battle For The Soul of Capitalism', I talk about the frightening similarities between the American economy in America, our nation, at the beginning of the 21st century and Rome all those centuries ago around the 4th century.

BILL MOYERS: What are the comparisons?

JOHN BOGLE:We have an idea that we are the world's value creator and leader. And I'm talking not just about economic value, but, we like to think of America as having the best values of integrity and citizenship in the world. We're getting a little bit too much self interested. We have our own bread and circuses. And they're a little different than the bread and circuses they had in Rome. But, we surely have our circuses whether it's sports teams or casino gambling or the lottery in the states. And we see this not just in our economy, in our financial system. This very short-term focus on everything. You see it, sadly, in our government.

Everybody knows social security is going to run into crisis. We can't run these federal deficits forever. But, everybody looks out two years and says, "Will I be elected two years from now or a year and a half from now?" And, the short term focus ultimately betrays the very values that we have come to be used to in this great nation of ours.

BILL MOYERS: You said the other day to someone that we think we can fight the war in Iraq without paying for it.

JOHN BOGLE:Well, we borrow the money to fight the Iraq War by some estimates and they're not absurd estimates is running now towards a $1 trillion. We could be doing what the British empire did. We could be bankrupting ourselves in the long run. And--

BILL MOYERS: You see us as an empire?

JOHN BOGLE:Well, of course it's an empire. We reach all over the world. We thought of ourselves in many, many respects as the policemen of the world. God knows we know we're the policemen of the Middle East. And there are those say, even from Alan Greenspan on up or down, that oil is the root of that. I mean, these are great societal questions. Protecting oil, which is in turn polluting the atmosphere.

We have problems as a society. And we don't have to surrender to them. But, we have to have a little introspection about where we are in America today. We've go to think through these things. We've got to develop a political system that is not driven by money (Are you laughing as hard as I am?). I mean, these are societal problems for us that don't have any easy answers.

But you don't have to be an economist to know that a great deal of or a minimum in our economy is coming from borrowed money. People are spending at a higher rate than they're earning, and we're starting to pay a price for that now. Particularly in the mortgage side. But, eventually, that could easily spread and people won't be able to do that anymore. You can't keep spending money you don't have. It gets a lot of it, you know, and it wasn't that many years ago — maybe a couple of generations ago — that if you wanted something, you saved for it. And when you completed saving for it, you bought it. Imagine that. And that wasn't so bad. But, now, we know that we can have the instant gratification and pay for it with interest payments, of course, over time, which is not an unfair way to do it. We're going to pay a big price for the excessive debt we've accumulated in this society both in the public side and the private side.

And it's no secret that this lack of savings in our economy — just about zero — is putting us at the mercy of foreign countries. China owns — I don't know the exact number — but, let me say about 25 percent of our federal debt. China does. What happens when they start to buy our corporations with all those extra dollars they've got there? I mean, I think that's very-- these problems are long term, are very much worrisome and very much intractable.

BILL MOYERS: Your book is called 'The Soul Of Capitalism'. Tell me what you mean by the soul of capitalism.

JOHN BOGLE: Well, I try in the book a little definition from Thomas Aquinas about the core of being — he's talking about the human soul, of course — but, the core of being,the elements that give you meaning, the values that you have-- the whole kind of wrap up of what makes a human being a human being.

And that happens in a much more, you know, a much less profound way in a corporation. There is in a good corporation and in capitalism a core of being of providing goods and services, at raising the standard living. And it's done a very good job at that. I don't want to demean that. You know, we went from the beginning of time, to around 1800, — the way people lived barely changed at all. And since 1800, the Industrial Revolution, and capitalism around that time has taken us to standards of living that are just — that would have been unimaginable to anybody of that day. We have all the perquisites and ease and freedom and safety of modern life. And so I salute capitalism for doing that. It's just we've taken capitalism too far. Today's capitalists are different from yesterday's capitalists-

BILL MOYERS: How so? What's the big difference?

JOHN BOGLE:Well, I think much more they're operating on their own. Instead of for the interest of whose money has been entrusted to them. It's an element — it's what we call a bottom-line society, again. But I think it's the wrong bottom line. I want to come back to the difference between the financial system and the productive system. The productive system adds to the value of our economy. And, by and large, the financial system subtracts. And, yet, it's growing and growing and growing. And this short term thing where short term orientation in which trading pieces of paper is regarded as a social value. It is not a social value. Some of it has to happen, don't mistake me.

BILL MOYERS: Right.

JOHN BOGLE: But not as much as we have.

BILL MOYERS: What does it say to you that people seem so indifferent to the fact that one tenth of one percent of the population owns most of the wealth in this country?

JOHN BOGLE:Well, in the long run, I believe it's unsustainable. You know, this is not going to be, you know, a country like France, say, at the time of before the French Revolution. You know, the lords of France, the kings had probably the same kind of distribution of wealth we had today come by through long generations. Their own castles. We have those castles in America now. But it says to me that, in this society, it's not sustainable. There will be an outcry.

Even Allen Greenspan says in his book he's worried, new book-- he's worried about this division in the society. He's worried about dissatisfaction. He's worried about violence in our society. You can only have so much of an advantage to those at the top of the pyramid, and so much disadvantage that's at the bottom of the pyramid, before you start to get some very difficult things going on.

BILL MOYERS: This seems to me to be your great concern, that this self correcting faculty that is built into both democracy and capitalism is in jeopardy?

JOHN BOGLE:Actually, I think it's fair to say it's in jeopardy. But there's one sense that it's not in jeopardy. And that is, ultimately, the system will correct. The bigger the boom, I fear, the bigger the bust. In other words, you pay the price. It's not a self sustaining system at this kind of a level.

BILL MOYERS: Do we need new rules?

JOHN BOGLE: One thing is, I believe, to have a federal standard of fiduciary duty for money managers. They've come from eight percent ownership of American business to 74 percent ownership of American business. It's staggering, over unbelievable change. Without any rules as to how they're supposed to behave. We have state laws of proven investing and fiduciary duty and things of that nature. But they don't seem to be working. And our founding fathers actually thought about having a federal statute-- a federal corporate chartering statute. I think we probably need one because if some of the states step up and say improve their governance provisions, corporations will move to another state. So the state system I don't think can prevail.

So a federal standard of fiduciary duty which demands that our pension trustees and our mutual fund directors make sure that those pension funds and mutual funds are operated in the prime interest of those who have entrusted their money to them. And that includes responsibility for corporate governance. And it will ultimately turn to be focused more on long term investing.

When I came into this business in the 1950's, it was a business focused on the wisdom of long term investing. We changed in that period to a business that is focused on the folly of short term speculation. And think about this for a minute. If you're a true investor holding a company for the long term, you're well aware that the value in that company is company's earnings compounded over time, developing new products and services, developing efficiencies-- trying to size up the proper corporate strategy, you know, making the company more valuable. But, in the folly of short term speculation, you're just thinking will that stock be worth more or less six months from now or a year from now?

Give you a very specific example. In the first 15 years I was in this business, the average mutual fund held the average stock for seven years. Call that long term investing. Now, the average mutual fund holds the average stock for one year. That's short term speculation. So, if you're a speculator, you don't care much about ownership interest. You don't care so much about corporate governance. Why vote a proxy, for example, if you'll not even be holding a stock in three months?

The other part of it is,and this is really makes it a very difficult problem to solve. And that is a little about of — I guess it's Pogo — we have met the enemy and they are us. These mutual fund companies-- these management companies are now owned largely by corporate America. Or international corporations — Deutsche Bank — AXA, big international companies who have bought their way into the US financial system, which is-- don't mean to demean that. But, they own these public corporations-- giant public corporations like insurance companies, big banks-- foreign insurance companies and banks own 41 of the 50 largest mutual fund managers.

Now, what is the job of a corporation when they buy into a mutual fund management company? It's to earn a return on the capital they invest in that company. It's not to earn a return on the capital of the investors who invested with that mutual fund. Now, in fairness, they want to earn as much money as they can for the fund shareholders. But, not at their own expense.

What we've done is have you know, what I call in the book, a pathological mutation of capitalism from that old traditional owners' capitalism to a new form of capitalism, which is manager's capitalism. The evidence is quite compelling that today corporations are run in a very important way to maximize the returns of its managers at the expense of its stockholders.

BILL MOYERS: Its CEOs.

JOHN BOGLE:Its CEOs, well, the upper level of five or six top officers. And they get enormous amounts of pay for actually doing very little. I'm a businessman. Listen, we all-- we chief executives get an awful lot of credit that we don't deserve. Real work in companies is done by the people who are getting themselves together and doing the hard work of making companies grow--

BILL MOYERS: And, yet, these--

JOHN BOGLE: every day.

BILL MOYERS: These are the people who most often get laid off, right?

JOHN BOGLE:They get laid off. And, of course, the ironic part of that is they often get laid off — used to be called downsizing. But, of course, in today's America, it's called right sizing. They get laid off. That reduces expenses. That increases earnings and that means the CEO gets more.

Just think about the country for a minute. For an agricultural economy, 95 percent, 98 percent agricultural when this country came into existence. And even by 1850, half agricultural. Now it's about, they moved from agricultural economy, to a manufacturing economy, to a service economy. And now to a financial service economy. And the financial service economy is what troubles me. Because it's diverting resources from the investors to the capitalists. To the entrepreneurs. To Wall Street. To the investment bankers. The hedge fund managers. To mutual fund managers. And that is a negative to our societal values.

Where agriculture and manufacturing and services, I mean, I'm perfectly willing to give a high value, for example, to art and poetry and literature. They add value to society. It may not be easy to measure it in a society that measures too much of what's not important. And not enough of what is important. As the sign in Einstein's office says-- "There are some things that count that can't be counted. And some things that can be counted that don't count."

BILL MOYERS: John Bogle, thank you for joining me.

JOHN BOGLE: My pleasure.

09/14/2007

Paul Krugman on how the rich are getting richer...again and again

Where's My Trickle?

Four years ago the Bush administration, exploiting the political bounce it got from the illusion of success in Iraq, pushed a cut in capital-gains and dividend taxes through Congress. It was an extremely elitist tax cut even by Bush-era standards: the nonpartisan Tax Policy Center says that more than half of the tax breaks went to Americans with incomes of more than $1 million a year.

Needless to say, administration economists produced various misleading statistics designed to convey the opposite impression, that the tax cut mainly went to ordinary, middle-class Americans. But they also insisted that the benefits of the tax cut would trickle down - that lower tax rates on the rich would do great things for the economy, helping everyone. Well, Friday's dismal jobs report showed that the Bush boom, such as it was, has run its course. And working Americans have a right to ask, "Where's my trickle?"

It's true, as the Bushies never tire of reminding us, that the U.S. economy has added eight million jobs since that 2003 tax cut. That sounds impressive, unless you happen to know that a good part of that gain was simply a recovery from large job losses earlier in the administration's tenure - and that the United States added no fewer than 21 million jobs after Bill Clinton raised taxes on the rich, a move that had conservative pundits predicting economic disaster.

What's really remarkable, however, is that four years of economic growth have produced essentially NO gains for ordinary American workers. Wages, adjusted for inflation, have stagnated: the real hourly earnings of nonsupervisory workers, the most widely used measure of how typical workers are faring, were no higher in July 2007 than they were in July 2003. Meanwhile, benefits have deteriorated: the percentage of Americans receiving health insurance through employers, which plunged along with employment during the early years of the Bush administration, continued to decline even as the economy finally began creating some jobs. And one of the few seeming bright spots of the Bush-era economy, rising homeownership, is now revealed as the result of a bubble inflated in part by financial flim-flam, which deceived both borrowers and investors.

Now you know why 66 percent of Americans rate economic conditions in this country as only fair or poor, and why Americans disapprove of President Bush's handling of the economy almost as strongly as they disapprove of the job he is doing in general.

Yet the overall economy has grown at a reasonable pace over the past four years. Where did the economic growth go? The answer is that it went to the same economic elite that received the lion's share of those tax cuts. Corporate profits rose 72 percent from the second quarter of 2003 to the second quarter of 2007. The real income of the richest 0.1 percent of Americans surged by 51 percent between 2003 and 2005, and although we don't yet have the data for 2006, everything we know suggests that the income of the rich took another upward leap.

The absence of any gains for workers in the years since the 2003 tax cut is a pretty convincing refutation of trickle-down theory. So is the fact that the economy had a much more convincing boom after Bill Clinton raised taxes on top brackets. It turns out that when you cut taxes on the rich, the rich pay less taxes; when you raise taxes on the rich, they pay more taxes - end of story.

But it's not just trickle-down that has been refuted: the whole idea that a rising tide raises all boats, that growth in the economy necessarily translates into gains for the great majority of Americans, is belied by the Bush-era experience. As far as I can tell, America has never before experienced a disconnect between overall economic performance and the fortunes of workers as complete as that of the last four years.

America was a highly unequal society during the Gilded Age, but workers' living standards nonetheless improved as the economy grew. Inequality rose rapidly during the Reagan years, but "Morning in America" was nonetheless bright enough to make most people cheerful, at least temporarily. Inequality continued to increase during the Clinton years, but wages rose, as did the availability of health insurance - and the great majority of Americans felt prosperous.

What we've had since 2003, however, is an economic expansion that looks good if not great by the usual measures, but which has passed most Americans by.

Guaranteed health insurance, which all of the leading Democratic contenders (but none of the Republicans) are promising, would eliminate one of the reasons for this disconnect. But it should be only the start of a broader range of policies - a new New Deal - designed to turn economic growth into something more than a spectator sport.Truth's out.

08/20/2007

Poverty, what's the problem? The bottom billion...



Welcome to Newsweek, welcome to the other America, welcome to the part that doesn't uphold the fake belief that poor people are simply not willing and greedy enough to make the money for a long and healthy life, welcome to the befamed and "extreme" left, where people actually say sensible things about topics that matter instead of making lunatic statements about topics we shouldn't even care to bring up.

07/13/2007

Chinese food 'made from cardboard'

BEIJING, China (AP) -- Chopped cardboard, softened with an industrial chemical and flavored with fatty pork and powdered seasoning, is a main ingredient in batches of steamed buns sold in one Beijing neighborhood, state television said.

The hidden camera follows the man, whose face is not shown, into a ramshackle building where steamers are filled with the fluffy white buns, traditionally stuffed with minced pork. The surroundings are filthy, with water puddles and piles of old furniture and cardboard on the ground.

"What's in the recipe?", the reporter asks. "Six to four", the man says. "You mean 60 percent cardboard? What is the other 40 percent?" asks the reporter. "Fatty meat", the man replies. "I don't eat them myself."

Thanks to CNN

10/16/2006

Kids Build a better Soybean-Fueled Car than Ford, Toyota or GM!

(CBS 17/02/2006) The star at last week's Philadelphia Auto Show wasn't a sports car or an economy car. It was a sports-economy car — one that combines performance and practicality under one hood.

But as CBS News correspondent Steve Hartman reports in this week's Assignment America, the car that buyers have been waiting decades comes from an unexpected source and runs on soybean bio-diesel fuel to boot.

A car that can go from zero to 60 in four seconds and get more than 50 miles to the gallon would be enough to pique any driver's interest. So who do we have to thank for it. Ford? GM? Toyota? No — just Victor, David, Cheeseborough, Bruce, and Kosi, five kids from the auto shop program at West Philadelphia High School.

The five kids, along with a handful of schoolmates, built the soybean-fueled car as an after-school project. It took them more than a year — rummaging for parts, configuring wires and learning as they went. As teacher Simon Hauger notes, these kids weren't exactly the cream of the academic crop.

"We have a number of high school dropouts," he says. "We have a number that have been removed for disciplinary reasons and they end up with us."

One of the Fab Five, Kosi Harmon, was in a gang at his old school — and he was a terrible student. The car project has changed all that. "I was just getting by with the skin of my teeth, C's and D's," he says. "I came here, and now I'm a straight-A student."

To Hauger, the soybean-powered car shows what kids — any kids — can do when they get the chance. "If you give kids that have been stereotyped as not being able to do anything an opportunity to do something great, they'll step up," he says.

Stepping up is something the big automakers have yet to do. They're still in the early stages of marketing hybrid cars while playing catch-up to the Bad News Bears of auto shop.

"We made this work," says Hauger. "We're not geniuses. So why aren't they doing it?" Kosi thinks he knows why. The answer, he says, is the big oil companies. "They're making billions upon billions of dollars," he says. "And when this car sells, that'll go down — to low billions upon billions."

©MMVI, CBS Broadcasting Inc. All Rights Reserved.

09/18/2006

The Modern Successor to the Slave Trade

By Desmond Tutu
The Independent UK
Wednesday 13 September 2006

No longer should the peace business be undermined by the arms business.

For many years, I've been involved in the peace business, doing what I can to help people overcome their differences. In doing so, I've also learnt a lot about the business of war: the arms trade. In my opinion it is the modern slave trade. It is an industry out of control: every day more than 1,000 people are killed by conventional weapons. The vast majority of those people are innocent men, women and children.

There have been international treaties to control the spread of nuclear, chemical and biological weapons for decades. Yet, despite the mounting death toll, there is still no treaty governing sales of all conventional weapons from handguns to attack helicopters. As a result, weapons fall into the wrong hands all too easily, fuelling human rights abuses, prolonging wars and digging countries deeper into poverty.

This is allowed to continue because of the complicity of governments, especially rich countries' governments, which turn a blind eye to the appalling human suffering associated with the proliferation of weapons.

Every year, small arms alone kill more people than the atomic bombs dropped on Hiroshima and Nagasaki put together. Many more people are injured, terrorised or driven from their homes by armed violence. Even as you read this, one of these human tragedies is unfolding somewhere on the planet.

Take the Democratic Republic of Congo, where armed violence recently flared up again, and millions have died during almost a decade of conflict. Despite a UN arms embargo against armed groups in the country, weapons have continued to flood in from all over the world.

Arms found during weapons collections include those made in Germany, France, Israel, USA and Russia. The only common denominator is that nearly all these weapons were manufactured outside Africa. Five rich countries manufacture the vast majority of the world's weapons. In 2005, Russia, the United States, France, Germany and the UK accounted for an estimated 82 per cent of the global arms market. And it's big business: the amount rich countries spend on fighting HIV/Aids every year represents just 18 days' global spending on arms.

But while the profits flow back to the developed world, the effects of the arms trade are predominantly felt in developing countries. More than two-thirds of the value of all arms are sold to Africa, Asia, the Middle East and Latin America.

In addition to the deaths, injuries and rapes perpetrated with these weapons, the cost of conflict goes deeper still, destroying health and education systems.

For example, in northern Uganda, which has been devastated by 20 years of armed conflict, it has been estimated that 250,000 children do not attend school. The war in northern Uganda, which may be finally coming to an end, has been fuelled by supplies of foreign-made weapons. And, as with so many wars, the heaviest toll has been on the region's children. Children under five are always the most vulnerable to disease, and in a war zone adequate medical care is often not available.

The world could eradicate poverty in a few generations were only a fraction of the expenditure on the war business to be spent on peace. An average of $22bn is spent on arms by countries in Asia, the Middle East, Latin America and Africa every year, according to estimates for the US Congress. This sum would have enabled those countries to put every child in school and to reduce child mortality by two-thirds by 2015, fulfilling two of the Millennium Development Goals.

This year, the world has the chance to finally say no to the continuing scandal of the unregulated weapons trade. In October, governments will vote on a resolution at the UN General Assembly to start working towards an Arms Trade Treaty. That Treaty would be based on a simple principle: no weapons for violations of international law. In other words, a ban on selling weapons if there is a clear risk they will be used to abuse human rights or fuel conflict. The UN resolution has been put forward by the governments of Australia, Argentina, Costa Rica, Finland, Japan, Kenya, and the UK. These governments believe the idea of an Arms Trade Treaty is one whose time has come.

I agree. We must end impunity for governments who authorise the supply of weapons when they know there's a great danger those weapons will be used for gross human rights abuses. Great strides are being made towards ending impunity for war criminals. It cannot be acceptable that their arms suppliers continue to escape punishment. No longer should the peace business be undermined by the arms business. I call on all governments to put the control of the international arms trade at the top of their agenda.

01/12/2006

People no longer are free to smoke at work. Factory chimneys are still not forbidden.

Yesterday something really cranked me up. I heard some high chief of the American Chamber of Commerce explain why people are no longer allowed to smoke on the job. This was his arguement: Smokers bring along costs that they do not entirely pay for themselves, like cancers from colleagues, other medical costs, lost worktime, etc... The smoker only pays for the cigarettes and doesn't pay for his friend who just got ill.

I agree with this, the arguement is correct. HOWEVER! The same arguement can put a ban on 'smoke' from any factory. Arent they 'smokers' as well? Sure they are, they also produce (very often even more!) toxic fumes, hereby bringing about costs that they do not entirely pay for themselves, like cancers from emplyees, global warming, other medical costs, etc...

Ofcourse the great economist from the chamber of commerce accidently failed to mention that. Companies have many, many more rights and freedoms than ordinary citizens. When will the world learn, when will economists learn, when will any employee from the chamber of commerce learn? Never, indeed.

11/17/2005

Global warming really starts speeding up but it's only the poorest that suffer

By Patricia Reaney (Wed Nov 16, 1:10 PM ET)
LONDON (Reuters) - Global warming poses an enormous ethical challenge because countries that produce the least amount of greenhouse gases will suffer the most from climate change, scientists said on Wednesday.

Whether it is an increase in poor health from diseases such as malaria or shrinking water supplies, nations in sub-Saharan Africa, Asia and South America are vulnerable to the consequences of changes in global temperatures.
The World Health Organization (WHO) has estimated that climate change leads to more than 150,000 deaths every year and at least 5 million cases of illness. In a review of the impact of global warming on public health, researchers at the University of Wisconsin-Madison and the WHO predict countries in Africa and coastal nations along the Pacific and Indian Oceans will be hardest hit. "Those most at risk from global warming are also those least responsible for causing the problem. There is a real ethical message from the paper," said Jonathan Patz of the UW-Madison's Nelson Institute for Environmental Studies.
"Global warming is not only an environmental problem but a serious health threat," he added in an interview. Greenhouse gases are expected to increase global average temperature by about 6 degrees Fahrenheit by the end of the century, causing extreme flooding, more droughts and intense heatwaves. The researchers said model-based forecasts suggest the risk of climate-related disease assessed by the WHO will more than double by 2030. Flooding will affect the lives of up to 200 million people by the 2080s and heat-related deaths in California will more than double by 2100. "Many of the most important diseases in poor countries, from malaria to diarrhea and malnutrition are highly sensitive to climate," said Diarmid Campbell-Lendrum, of the WHO, and a co-author of the report published in the science journal Nature.

DISAPPEARING GLACIERS
In addition to increasing health problems, warmer temperatures will reduce glaciers and snow packs which could disrupt water supplies in some regions of the world.
More water will fall as rain, rather than snow, so reservoirs will fill earlier than normal. Water shortages could result in areas where reservoirs and dam capacities are insufficient, according to a separate review in the journal. "Mother nature is not going to act like a reservoir as it has in the past and when the water comes out all at once, there isn't enough capacity to contain it," said Tim Barnett, of the Scripps Institution of Oceanography at the University of California, San Diego. Along with scientists at the University of Washington, Barnett said vanishing glaciers will have the most impact on water supplies in the future in China, India and other parts of Asia, which has the third largest ice mass in mountainous areas on Earth. In South America, many people living west of the Andes mountains will also be at risk of shrinking water supplies. "Climate warming is a certainty for our future and ... the long-term prognosis is clear and very dire," Barnett said in a statement. "It's especially clear that regions in Asia and South America are headed for a water supply crisis because once that fossil water is gone, it's gone," he added.