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YEAR IN REVIEW - 2002
The Financial Times Year in Review for 2002 (from a U.K. perspective, naturally) here. Man of the year: George W. Bush.
The Economist looks back and ahead. The year was surprisingly good, at least compared to what was expected. A year ago a conceivably nuclear confrontation between India and Pakistan looked eminent, but now looks unlikely. The US did not act unilaterally against Iraq. The real economy showed more resilience than the financial markets.Rest of article here
A primer on headlining 2002 U.S. Business Scandals, in a convenient Flash format file, here.
LESSONS FROM THE FALL OF AN EMPIRE
The first volume of Edward Gibbon’s classic study Decline and Fall of the Roman Empire came out in 1776, coincidentally the year of the signing of the American Declaration of Independence. Gibbon forcefully made the case that most historic empires lasted for just 200 years before eventual decline and collapse. What perspectives can be productively applied in viewing the current preeminent situation that America occupies, one comparable to historic antecedents such as Great Britain and Spain, as well as Rome?Article here. (Subscribers only.)
IS SAUDI ARABIA TOUGH ENOUGH ON TERRORISM?
A recent news item raised questions about links between terrorist groups and the Saudi Arabia’s Islamic charities. The Treasury Department’s under secretary for enforcement recently told the Senate Judiciary Committee that the Saudi government had taken only “baby steps” to stem financing of terrorist activities. Money from the Saudi government continues to go to the terrorist group Hamas. The Saudi government also refuses to cooperate with the families of the victims of 9/11. Appropriate actions going forward are suggested.Rest of opinion piece here.
LIFTING THE LID ON HOT MONEY
The scale of money laundering is huge: according to the IMF it involves between 2% and 5% of the world’s GDP (or £1.3 trillion). An investigation by the Scottish newspaper Scotland on Sunday found evidence that everything from back street tanning salons to high street banks are being used - usually unawares - by criminals ranging from small-time gangsters to big-time drug traffickers and international terrorists. “Suspicious” transactions are no longer so easily ignored, but, according to an expert in fraud, western governments are fighting an uphill battle, particularly as cyberbanking makes cleaning dirty money easier. An informative overview of the “industry”.More on this story here.
CARIBBEAN NATIONS CLEAN UP THEIR DIRTY CASH PROBLEMS
Caribbean nations have made significant, and largely successful, efforts to avoid FATF-threatened sanctions for having inadequate measures in place to fight money laundering. Only Grenada and St. Vincent and the Grenadines remain on the FATF Blacklist. With the Caribbean facing economic problems because of a drop in tourism and the impending removal of European Union trade privileges for bananas and sugar, efforts to combat money laundering in the region may unravel.More on this story here.
CAYMAN ISLAND LEADER RESISTS U.K.
GEORGE TOWN, C.I.- “UK should not have control of our financial affairs,” says Leader Bush. But will he really resist London?More on this story here.
A hopeful editorial on the Bahamas. “[H]ard times are nothing new ... [D]espite the many reports of serious crime, AIDS and other public health issues; a depressed economy, and a general decline of morality and discipline, it is well to remember that God is still on the throne and His grace is still our saving strength as a nation.” Crime a particular concern.Rest of editorial here.
NYC DA MORGENTHAU RECYCLES HIMSELF
NEW YORK: Better enforcement against those who avoid their share of “what we pay for a civilized society” is needed to help close a projected $6 billion (city) 2003 budget gap. Tax increases will increase revenues in the short run, but will increase the incentives to avoid and evade. Offshore tax havens come in for the usual criticism [note: NYC has a city income tax, so anything that evades federal or state taxes also costs the city tax revenues]. Hundreds of cash businesses in the city report little income. Increased tax enforcement requires a substantial investment of time and resources, but more than pays for itself.Rest of editorial here.
PANAMA THE WINNER IN TAIWAN-CHINA RIVALRY
Panama is one of the few countries that has diplomatic relations with Taiwan, but the presence of the Panama Canal gives China too big a stake to walk away in protest. In recent years Chinese companies have invested $200 million in Panama, with millions more pledged, while Panama has received more than $450 million in investment and foreign aid from Taiwan in the past five years. Panama, in return, sponsored Taiwan’s bid this fall to enter the United Nations - a doomed effort given China’s opposition, but one that helped Taiwan raise its diplomatic profile. China has become the third largest user of the Panama Canal, with traffic predicted to grow with the mainland’s entry into the World Trade Organization. In trying to claim the loyalties of the local Chinese population, the rivals take every opportunity to one-up each other.Rest of article here.
TONGA, THE EX-TAX HAVEN, HAS A CHARACTER FOR A PRINCE
Satellite geek, lounge singer, military fetishist, a crazy genius - meet the future king of the tiny South Pacific nation of 100,000. In the digital age it would seem that any island nation can find a path to prosperity - except Tonga. Despite political stability and a mostly literate population, the economy is a basket case. Money sent home from families overseas account for most of Tonga’s income, at 60% of the country’s $225 million GDP. The flip side of living in a tropical paradise is languishing on a tropical island you can not escape. Satellite receivers will open Tonga’s information pipeline to the outside world, at last. The prince’s goal may not be to save Tonga from itself so much as to save himself from Tonga - the prince’s life will get more circumscribed still once he takes the throne.Rest of article here.
TIPS FOR A WEALTHY NEW YEAR
Automatically invest some money each month, cut debt, track your finances rigorously using your computer, comparison shop on insurance, refinance your house, and cultivate a good attitude.More advice here.
INSURANCE STOCKS ONE OF THE FEW STOCK MARKET BRIGHT LIGHTS
A fund advisor discusses insurance stocks. Property & casualty insurers have lost 25% of their capital in the last two years, from the World Trade Center (an estimated $30-40 billion) and other catastrophes, and from declines in the values of their investment portfolios. The survivors have benefited from premium rates which were up 30 to 300% in 2002. The increased appreciation of risks has increased demand even at the higher rates. A further favorable industry dynamic is improved industry management following the demutualization of some older companies. Bermuda is desirable for its concentration of industry intellectual capital as well as tax efficiency.More on this story here.
GOLD IS NOT MONEY ... YET
The public does not understand the case against government manipulation of the monetary system. Neither do most economists and politicians. The public does not even regard gold as money. Some central bankers still believe that gold is money, but only for central bankers. They stole it fair and square from commercial banks, who stole it fair and square from their depositors. The victims did not complain much in 1914, 1931, and 1933. The recent upward move of gold’s dollar-denominated price has to do with gold’s status as a well-known inflation hedge and war hedge. We are experiencing nothing like “a return to gold”. The public remains unfamiliar with gold coins, and this is not likely to change, short of an international economic catastrophe. Interesting history and discussion from well-known newsletter writer Gary North.Rest of article here.
BOOK REVIEW: GREENBACK: THE ALMIGHTY DOLLAR AND THE INVENTION OF AMERICA
Two hundred and eighty million people who cannot agree on anything agree that a scrap of paper with a bunch of zeroes on it is worth a bundle. English historian and travel writer Jason Goodwin raises an eyebrow at this willful collective hallucination. From the start, paper produced different desires than precious metal, and these became, by cause or effect, America’s desires. Since paper lost relative value any time someone printed more, the only thing to do with it was spend it right away.Rest of book review here.
AVOIDING OFFSHORE SCAMS
More advice from Vernon Jacobs, along with David Duke.
Tax savings myth: Diverting profits to a foreign corporation / IBC. The theory that this can be readily accomplished seems to be based on an ignorance of the Internal Revenue Code rules on the allocation of income between related parties.Explanation here.
Scam: Create a foreign trust without a U.S. grantor. Most of these arrangements fail because the tax law looks through these intermediate parties to the person who has the real influence. In the case of a foreign trust, if you are the person with the money, the IRS will treat you as the trust grantor no matter how many intermediate entities you interject in the arrangement.Explantion here.
IRS OFFERS TAX CHEATS A WAY OUT
The IRS earlier this month revamped its “voluntary disclosure” practices. The new rules clarify that the IRS will go easy on certain “tax cheats” if they come clean before the agency starts after them.More on this story here.
Inland Revenue promises a “ruthless” new offensive against UK big business tax “evaders”. Fifty new inspectors and new anti-money laundering regulations which make access to offshore account details easier will aid the hunt. Corporate tax receipts for October were down 28% year over year due to the weakening economy, and public borrowing is climbing fast. The New Year will bring a National Audit Office report, which could indicate that - as in the US - tax dodging by individuals as well as companies is rising fast.More on this story here.
Police and customs officers will be able to search for, seize and forfeit criminals’ cash under new powers which come into force 1/1/2003. Cash can be seized anywhere, not just at borders. Forfeiture of seized cash can be ordered if a magistrate is satisfied the cash is intended for use in unlawful conduct or is recoverable property. [Note: This is similar to U.S. forfeiture laws.]More on this story here.
US BANKRUPTCIES SMASH OLD RECORD AS FRAUD, POST-BUBBLE HANGOVER TAKE THEIR TOLL
U.S. public companies broke bankruptcy records - 186 public companies with $368 billion in debt filing, vs. last year’s record $259 billion - for a second straight year as accounting fraud and the last decade’s debt spree took their toll. Included were 5 of the 10 largest bankruptcies ever. It is likely to get worse before it gets better, partly due to the “domino effect” where companies that do business with the filers fun into difficulty. Power companies and retailers next?More on this story here.
US HISTORY RIDDLED WITH FRAUDS, SWINDLES, GET-RICH-QUICK SCHEMES
The latest round of corporate malfeasance leaves the public shocked - shocked! - at corruption in the boardroom. Round up twice the usual number of suspects. But you must remember this: White-collar crime is as American as apple pie. From a governor of the Jamestown settlement to now, it has never really stopped.More on this story here.
DON’T RUN IF YOU’RE RICH?
Should wealth disqualify a candidate from seeking public office? Equally one could ask whether it would make sense to insist that 75% of Congress never graduate from college, and that 13% of them never graduate from high school, in order to ensure that they accurately reflect the makeup of the overall populace? The campaign finance “reforms” that were supposed to level the playing field in a populist direction have instead served to increase the likelihood of more millionaire candidates, because the Supreme Court has unequivocally ruled that you have a right to spend as much as you want on behalf of your own candidacy. Too many cynics in today’s society view financial resources as a reflection of crookery and corruption, rather than the product of talent and hard work.Rest of editorial here.
WAY AHEAD OF THE NEWS MEDIA
Here is an Israeli based web site associated with The Economist that insiders say gets the scoop well ahead of the world media. Osama Bin Laden is alive and back home in Saudi Arabia. Who is the intelligence entity that enabled him to circumvent the intricate system of pits and snares the Americans laid for him?Other example stories here.
WHY ARE CONSPIRACY THEORIES SO POPULAR?
From the Masonic or Papist plots to rule the world, to who really crashed those planes into the World Trade Center, the theories proliferate. Some seem, in Joseph Conrad’s words, “childish, crude inventions for the theatre or a novel”. Some conspiracies are real. Few believed The Holocaust happened before the camps were liberated. In the Bolshevik revolution a small group of violent fanatics seized control of a large empire. Half the governments of the Middle East trace their origins to coups - in a sense, conspiracy is the region’s only real form of politics. Conspiracy theories are impossible to disprove, because any fact that does not fit the theory can be dismissed as a trick by the conspirators to throw ordinary folk off the scent. That some conspiracies are real, however, does not mean that they all are. Among the costs of belief are a dimunition in trust and optimism. Blaming others for one’s troubles may be emotionally satisfying, but it is a counsel of despair. [We are reminded of the advice to “Never ascribe to conspiracy what can be explained by stupidity.”]Rest of article here.
REFUGEES FLEE FROM AMERICA TO CANADA
VANCOUVER: From January to the end of October 2002, 191 people have filed refugee claims citing persecution in the U.S., compared to 81 for the same period in 2001. “I expect that what we’re seeing is a reflection of the change in due process in the U.S. as a result of Sept. 11,” says an immigration lawyer. “Rights have eroded more in the U.S. than they have here.”
A spokeswoman for the Montreal-based Canadian Council for Refugees says she does not know why the number of claims against the U.S. has increased. But they have heard from claimants who had been living in the U.S. who say they no longer felt safe there after Sept. 11, 2001 because of their country of origin. There have been some outrageous human rights abuses in the U.S., including arrests without charges and psychological torture, she said, but people are biased to believe that human rights abuses do not occur in western countries. “We tend to start from the assumption that they’re not very bad because, you know, the United States, home of liberty and everything. It can’t be that bad.”More on this story here.
TAMING THE TASK OF CHECKING FOR TERRORISTS’ NAMES
When presented with an ID, airlines and insurance companies, e.g., are required to cross-check the name with watch lists of suspected terrorists and their supporters. With some foreign names there are endless variations in spelling, even with no typos. There are over 200 ways to spell ‘Mohammed’ in our alphabet, but there is only one way in Arabic. Looking for names with similar consonant sounds, a longstanding method of name analysis, could find these matches for the name Criton: Courtmanche, Corradino and Cortinez. One company has developed a language analyzer, based on phonics, for translating Latinized names back into their original alphabets so they can be searched against lists in the original languages.More on this story here.
PROPOSAL TO CUT U.S. VISITOR VISAS STAY TO 30 DAYS DECRIED
A federal proposal to change certain foreign visas that allow a six-month stay in the USA to only 30 days sent a chill through businesses catering to tourists and those with a second home. Complaints came from expected groups such as the Travel Industry Association of America and the American Hotel & Lodging Association, but also from the National Association of Home Builders and the American Electronics Association. The INS logged a near-record 10,275 comments from the public on the proposed change. The latest proposal, not yet final, would grant three months to those who enter the country on B-2 visas. (Fifteen of the 19 Sept. 11 hijackers were in the country on such visas when they launched their attacks. The other terrorists held different types of visas. All the hijackers entered the USA legally, although three overstayed the time allotted by their visas.) Many critics of the initial proposal see the 90-day proposal as a reasonable compromise.More on this story here.
AMERICAN LAWYERS UNDER A CLOUD
2002 was a year in which corporate scandal touched lawyers, from white-collar defenders (everyone wants them) to prosecutors (their caseloads are ballooning) to corporate counsel (they are being sued and indicted). A personification of the ethical deflation of the legal industry is former Tyco International chief general counsel Mark Belnick, a lead investigator 15 years ago during Iran-contra who now faces charges of falsifying business records regarding $14 million in undisclosed, interest-free loans to himself. The SEC accused Belnick of defrauding “Tyco shareholders of millions of dollars through egregious self-dealing transactions”. Attorneys who rode the boom times with America’s top companies now face questions about how they permitted crimes to go unreported.More on this story here.
COURT ORDER NOT NECESSARY
A recent study by CSO magazine found that many Chief Security Officers have or would turn over corporate, business partner and customer records just because a law enforcement or government official requested it, without a subpoena, court order, or any other formal legal process. The willingness of corporate agents to simply “turn over” our private personal records represents a much more significant threat to privacy and civil liberty than the USA-PATRIOT Act, the Homeland Security legislation, Carnivore, Magic Lantern, etc. One of the difficulties with the issue of voluntary dissemination of information to the government is determining who “owns” the information in corporate databases. A long line of cases has made it clear that, for example, ISP billing information - the subscriber’s name, screen name, address, telephone number, etc. - is information that belongs to the ISP, and not the subscriber, and therefore the ISP is generally free to disclose this to the government. There may be no way for a consumer to know in advance whether his or her service provider will simply capitulate, and turn any and all requested information to the government.More on this story here.
NEW SWISS PRESIDENT WANTS NATION TO JOIN THE E.U.
ZURICH: The new Swiss president for 2003, Pascal Couchepin, is convinced that Switzerland must join the European Union. His main goal is to reinforce national unity and understanding between linguistic regions, and to prevent social conflicts from getting out of hand.Rest of interview here.
A comment on the 2002 EU-Swiss conflict from Canada. While the Swiss wrap themselves in the mantle of privacy rights, what is really at stake is the amount of cash in the Swiss banking system. The Europeans should lower the high tax rates that prompt so much evasion in the first place, but: “The tax havens have no business encouraging behaviour that siphons badly needed capital out of struggling economies.”Rest of editorial here.
DANES FACE ANOTHER EURO VOTE
COPENHAGEN: The Danish prime minister announced he would hold a referendum on joining the single currency as early as sometime in 2003. The Danes rejected the euro in a referendum in 2000, but support for the single currency is now running at more than 60%. Sweden also has a referendum to start using the euro planned in September, and polls there suggest it will pass. Passage would leave Britain as the only one of the EU’s 15 members to remain outside the euro, but UK opinion polls suggest the public there is not yet buying in.More on this story here.
ISLE OF MAN SAILS WITH WINDS OF CHANGE
DOUGLAS: Adapting to UK, EU, US and OECD pressures. Although it is not a member of the European Union, the small island says it is anxious to cooperate with its trading partners and protect the future of its financial services industry. “The EU is our biggest trading partner and we have to take their concerns into account.” Financial services account for 45% of government revenues and 41.5% of the GDP of the island, which is home to 76,315 people. The island has also signed a treaty with the United States on the exchange of tax information. “There is no future for us if we are going to run a financial service to come from shaky, grey or evasive tax sources. There is no future for that type of jurisdiction,” says the chief of one of the island’s regulatory agencies.More on this story here.
SHOULD YOU INVEST IN RUSSIA?
Russia is again being hyped as an investment opportunity. The reality is that Russia is a Third World country with First World pretensions (and nuclear weapons). It exhibits all the risks attendant to other medium-sized developing countries and emerging economies. Peaceful co-existence with the non-Chechnya regions is fraying at the edges. “Modern”, “stable” Russia is merely a glittering veneer beneath which lurk the old ills of authoritarianism, lawlessness, oligarchy, aggression, ignorance, superstition, and repression mingled with extremes of poverty and disease. Interesting summary of the situation.Full analysis here.
JAPANESE SHIPPING CO. HIT WITH HUGE BACK TAX BILL
TOKYO: Japan’s biggest shipping company failed to declare about 5.8 billion yen in taxable income in the five years through 1999, according to sources. The tax authorities ordered Nippon Yusen to pay an estimated 2.7 billion yen, including penalties. Some freighter “sales” were really just transfers between subsidiaries.Rest of story here.
THAILAND IS THE PLACE TO BE
Doug Casey looks at Thailand, “probably the mellowest, friendliest and certainly one of the cheapest countries on the face of the planet.” $50,000 will get you an excellent house. Low cost of living, a friendly populace, political stability, free-market orientation, pleasant climate and scenery, and safety add up to a good case for investing in Thai property.Rest of analysis here.
TERRORISM FEAR CURBS AMERICAN TRAVELS OFFSHORE
Americans who travel abroad weigh the terrorism risk. International schools that serve the children of U.S. citizens have been warned that they are primary targets, as have U.S. embassies, but warnings have also been extended to shopping districts, resorts, nightclubs and beaches frequented by Americans. With increased security at official U.S. facilities, terrorists and their sympathizers will seek less-guarded or “softer” targets. Ordering taxis ahead of time, rather than taking them off the street, and keeping voices low when speaking English are standard procedure for some well-traveled expats. An international security firm advises Americans abroad to stay in contact with the local U.S. Embassy, to heed its advice on travel and safety and to have in place a system of communication with friends, family or business associates “so that somebody always knows where you are supposed to be.”More on this story here.
Air travel tips from the Transportation Security Administration. Dress and pack smart. Familiarize yourself with the security process.Air travel preparation tips here.
NOVAK, MITCHELL EXPOSE PROPOSED IRS RULE
The IRS proposed a regulation that would require the reporting of interest paid to bank accounts held by nonresident aliens. Strong opposition forced the IRS to withdraw the regulation in July 2002, but this proved to be a hollow gesture since the Service immediately reissued the proposed rule with a few cosmetic alterations. This regulation, left over from the Clinton administration, undermines President Bush’s pro-growth, pro-competition tax policy. Daniel Mitchell of the Heritage Foundation dissects the Treasury Department’s arguments in favor of the regulation, one by one.
Columnist Robert Novak wonders why the proposal persists despite well-voiced and articulated opposition, including Congressmen who write that “the regulation flagrantly violates the intent of Congress”, and conflict with the administration’s stated policy objectives. Critics think it was kept alive by Josh Bolten, the White House domestic policy chief. One economist estimates that the U.S. GDP would be reduced by 0.8%, a loss of $80 billion. The regulation could have been withdrawn any time during the last two years with a stroke of the presidential pen. So what gives?More on this story here and here.
PUBLIC CONFESSION GETS CONVICTED TAX EVADER OUT OF JAIL EARLY
“Don’t get involved in tax-haven countries,” intoned Dr. Daniel Bullock on a CNN interview. Bullock bought into a scheme that promised to distribute his income to trust accounts in offshore tax havens, deduct the amount from his U.S. taxes and get money back from the accounts as a supposedly nontaxable “foreign” gift, according to an AP report. The judge in the case told Bullock that his comments could be a powerful deterrent for others.More on this story here.
IRS NARROWS THE SCOPE OF CORPORATE AUDITS
Under a new program designed to allow its auditors to cut to the chase, the increasingly cash-strapped agency is authorizing them in many cases to drop some traditional components of business audits and focus instead on big-ticket items such as tax shelters, bypassing such time-consuming checks as looking at the cost of goods sold and whether employment taxes were paid correctly. Teams of IRS auditors will review a business’s return and “select items for examination based on ... risk-analysis techniques” and “materiality”.More on this story here.
THE POLITICAL OBSTACLES TO REAL US TAX REFORM
Hypothetically good ideas, like eliminating double-taxation on dividends and reducing the payroll tax, often fall down because of the ammunition they might give one’s political opponents. Instead good-sounding, but economically less efficient, initiatives are proposed. Until voters reward subtle but sound tax reforms, lawmakers will keep turning out the flashy favors that pay.Rest of analysis here.
U.S. ANTI-MONEY LAUNDERING RULES EXPANDING TO MUTUAL FUNDS, AND BEYOND
A recommendation by the Treasury Department, the SEC and the Federal Reserve would bring mutual fund companies more in line with banks and other companies that are required to file similar reports with the government. The recommendation came in a report to Congress regarding implementation of the USA Patriot Act. The report also recommended that “unregistered investment companies” such as hedge funds, venture capital funds, real-estate investment trusts and commodity pools be required to set up procedures verifying the identity of customers when they open accounts, a provision that applies to other financial institutions, although a Treasury official said it had not been decided which unregistered investment companies might be subject to such a requirement.More on this story here and here.
ECONOMIC GROWTH PREDICTIONS FOR 2003 (FORECAST EARLY AND OFTEN)
The global economy will recover next year, growing as much as 2.5% by the World Bank’s estimate, as a U.S. rebound starts to pull Europe and Asia out of their slumps. Milton Friedman weighs in: “I don’t understand all this screaming and yelling. We’re still recovering from a big bubble. The economy is in fine shape.” War with Iraq may upset some forecasts. OECD, others have their say as well.More on this story here.
GOODBYE TO THE $US AS THE WORLD’S RESERVE CURRENCY?
The US has been a major importer of foreign goods since the early 1980s. An increasing portion of these imports have been financed by debt, rather than exchanged for export goods and services. This has swamped the international monetary system with liquidity, and created a world-wide financial bubble. The net external investment position of the United States now is negative at more than $2 trillion, and the absence of private savings and growing government deficits drives a need of still more external financing. At some point the imbalance between this debt and the U.S. economy’s productive capacity will become too large, and the dollar will no longer be unquestioningly accepted as the world reserve currency.
Various factors that will contribute to reverse the past pattern of international capital flows into the US are already in place and gaining force. Europe, Japan, and Emerging Asia are not likely to retain their historical roles as suppliers of capital. A repatriation of assets out of the United States and back to its foreign creditors, would imply a weakening of the US dollar and probably lead to higher interest rates. The US economy would consequently face a severe economic downturn. A demise of the US dollar as the dominant global currency would mean that the current relation between domestic absorption and production could no longer be maintained. Given the time and difficulties it takes to build up adequate production capabilities, the immediate response would necessarily fall on private demand.
[Note: The basic elements and reasoning of this proposition have been noted and argued for years, starting in the 1980s. Are the theory’s predictions at long last imminent?]Complete article here.
WEST VIRGINIA DOCTORS STRIKE OVER MALPRACTICE INSURANCE COSTS
Most operations in northern West Virginia were canceled or were being moved. At least 24 surgeons in the coming week will begin 30-day leaves of absence. The surgeons expect lawmakers to get their message: From insurance rates to liberal liability laws, the state has created a hostile working environment, and doctors are ready to leave. A similar walkout was averted in Pennsylvania. A general surgeon saw his annual premiums soar from $18,000 to $58,000 in seven years despite not having had a single lawsuit filed against him. He urged the state to enact laws that make it harder to sue and cap damage awards.More on this story here.
DOES THE U.S. NEED A NATIONAL I.D. CARD?
Buried on page 177 of the new law establishing the Department of Homeland Security is a one-sentence provision that has so far escaped public notice: “Nothing in this act shall be construed to authorize the development of a national identification system or card.” Polls show that most Americans are not at all appalled by the idea of having a government card that verifies someone’s identification. What is appalling, according to the columnist, is that we have not openly debated the issue. He suggests that people might favor an alternative that enhances security and convenience, which also staves off a more drastic government-run program that will look awfully appealing amid the panic that is bound to come after the next attack.Rest of column here.
New Hampshire company Imaging Automation’s scanners and software are used to verify documents such as driver’s licenses and passports. But no technology is foolproof. Enough money could buy an exceptional forgery, and two 9/11 terrorists had obtained authentic Virginia ID cards. Public records databases on which the technology relies can contain out-of-date or incorrect information, which could lead to wrongly flagging someone as using a fake ID. Biometrics technology, such as finger printing and facial recognition, has yet to be proven effective. The unauthorized use of data gathered by devices like scanners and the databases used to support them is a privacy concern.More on this story here.
CANADIAN ALIENS TO GET NEW PHOTO ID CARDS
Any of the 400-600,000 Canadian resident aliens who plans to travel outside Canada must get a new photo ID card. Without the Permanent Resident Card, a landed immigrant could get stranded at an airport and will have difficulty getting back into Canada. Permanent residents who are citizens and have Canadian passports do not need the new cards. The cards replace existing documents that do not have pictures of immigrants and are easy to copy.Rest of story here.
A man who is Pakistani by birth, but Canadian by citizenship, will not be fingerprinted and photographed by U.S. immigration officials and he will not sign a registry before entering the United States. Consequently he is denied entry into the US. By mid-December, roughly 200 Canadians had launched protests alleging that they had been subjected to unfair probing by U.S. immigration officials on the basis of their country of birth. Many of those complaints were lodged after the Americans promised to stop treating foreign-born Canadians differently from those born in Canada. Notwithstanding such assurances, in the end the individual immigration employee is the one who has the final say.More on this story here.
THE STAKES FOR LIBERTY
The debate over how far to extend the government’s powers to fight terrorism has been frustrating, with the Bush administation’s claims that all its proposals are beyond reproach being met by civil libertarians’ alarmist characterizations of every such proposal. Lost is the context of what the stakes really are. The broad danger, in the editorial’s view, is that an alternative legal system has come into existence for an ill-defined category of offenses involving national security. It can try suspected terrorists in courts or in military tribunals or, if it chooses to designate them as enemy fighters, not try them at all. It can give or deny them lawyers. Without more clearly defined boundaries and restrictions, this alternative legal scheme could easily invade the traditional system and undermine its protections. With Congress so far unwilling to get involved in defining reasoned boundaries, the courts have been the only realistic check on the Bush administration’s unilateral assertions of power. This is a far-too-passive means of making law in such a fateful area.Complete editorial here.
THE ULTIMATE RAMPART AGAINST TYRANNY
In a fitting final clipping for the 2002 pages, Libertarian journalist Pierre Lemieux writes of how some early resistors to tyranny are sticking their necks out in Canada. The ability to effectively resist tyranny is crucially dependent on possessing arms for self-defense ... for those times “when the sanctions of society and laws are found insufficient to restrain the violence of oppression.” George Orwell succinctly wrote: “That rifle hanging on the wall of the working-class flat or labourer’s cottage is the symbol of democracy. It is our job to see that it stays there.” Many people like to think that they would start resisting before tyranny is well entrenched, but few actually would. Armchair resistors who imagine themselves as heroes adulated by the populace are usually wrong: They will be treated as marginals, cranks, outcasts, criminals. Only later will early resistors be seen as heroes.
On January 1-3 a few members and supporters of the Canadian Unregistered Firearm Owners Association (CUFOA) will post their “Declaration of Non-compliance” and go to Ottawa to present to the Prime Minister with the ashes from their firearms licences and gun registration certificates. If they have not yet been arrested, they will visit the offices of the Minister of Justice and the Attorney-General. As the infamous C-68 “law” comes into full force, owning firearms without a personal licence and a registration certificate for each gun are crimes that carry penalties of up to 10 years in jail. The demonstrators will either be arrested, showing the real nature of the law, or else they will prove that the state does not dare enforce its law against peaceful citizens. From those of us who are less brave, from those of us who believe in individual liberty, from our future descendants, these heroes deserve gratitude and praise.Full story here.
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