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(Especially noteworthy articles’ headings highlighted in gold.)
PANAMA CLOSING IN ON ITS 100TH BIRTHDAY
In comparison with developed countries, the Republic is still in its infancy as a nation and democracy, although firmly rooted, is still, in relative terms, a sapling. The Republic of Panama separated from Colombia in 1903 after having chosen to become a part of it 82 years earlier in 1821 at the end of Spanish rule rather than join the union of Central American provinces. The choice at that time is revealing because Panama has often displayed a reluctance to be assumed to be an integral part of Central America. Panama has had its setbacks, successes and excesses and there is no doubt that much remains to be improved, but it is also true that much has been improved. What Panama must wrestle with -- and in this it is not alone -- is the ever-present jaundiced perceptions which it must try not to unintentionally reinforce whenever it can.More on this story here.
Panama hopes to become Latin American financial services hub.
According to participants at the Council of the Americas conference recently, financial and trading services already contribute 80% of Panama’s GDP, and a further initiative is afoot which backers hope will help transform the country into Latin America’s regional financial services hub.
In partnership with the World Bank’s International Finance Corporation, the Panamanian government is seeking to transform the American military’s Howard airforce base into a special economic zone with tax incentives and high-tech logistical and telecommunications facilities. It is hoped that the project will attract some $600 million in investment and create 20,000 jobs over the next two decades.
This is not to say that Panama is not attractive to foreign investors at present. Currently, no income tax is levied on foreign transactions booked through Panamanian offices, and there are no restrictions on foreign ownership of commercial undertakings. Additionally, there are no duties or tariffs imposed in the Colon Free Trade Area which also provides for exemptions on export income.More on this story here.
NON-DELIVERABLE FORWARD CONTRACTS, THE SECRETIVE SIDE OF CURRENCY TRADING
Born out of the Latin America crisis in 1995, NDFs have blossomed, and are now an indispensable tool for currency speculators and hedgers alike, thriving where currency trading is restricted by central banks. Beginning with the Brazilian real, Chilean peso and Polish zloty, NDFs have now spread to most Asian currencies such as the South Korean won Taiwan dollar and the Chinese yuan. Ironically, what began as a protection against currency devaluation has now become the chief tool for betting on currency appreciation, particularly in China -- where an export boom has led to diplomatic pressure to allow the yuan to rise in value.
Long distance betting: In an NDF contract, two parties agree on a future level for a currency pair. On the agreed future date, the difference between the prevailing and contracted rate is settled in US dollars. An example would be a foreign investor who thinks the yuan, which is pegged to the dollar around 8.28, will be revalued higher within the next year. The speculator might enter into a NDF contract with a bank to sell dollars at 8.12 yuan in one year’s time. If, at the end of 12 months, the yuan was stronger than 8.12 per US dollar, the speculator would profit. If the peg remained, and the yuan still traded at 8.28 per US dollar, he would pay the bank the difference between that and 8.12.More on this story here.
VAUNTED SWISS FORTS HELPLESS AGAINST THIS ASSAULT
Switzerland is only now beginning to reveal its deepest military secret: the hundreds of large forts and smaller defensive works built from 1940-1960. Upgraded, upgunned and made proof against nuclear contamination after World War II, the near invisible Swiss forts, dug into the sheer walls of its mountains, covered with lethal interlocking fire all passages through the nation’s high Alpine region.
I mention these forts again [in his column] because a pack of American lawyers seeking money from Switzerland recently accused the Swiss of collaborating with Germany and Italy during World War II. These claims are loathsome lies. After the fall of France in 1940, Hitler and Mussolini were preparing to invade Switzerland after it refused to join the Axis. Hitler sneered he would quickly crush “these insolent herdsmen and cheesemakers”.
Switzerland, then a nation of only five million, mobilized 800,000 men. Swiss citizen soldiers were ordered to hold the mountain forts and passes, and wage guerrilla war. “Leave your wives and children behind. Fight to your last bullet; then fight to the death with your bayonet” came the chilling command. This little nation, since 1291 Europe’s oldest democracy and freest nation, would not be conquered. Hitler and Mussolini wisely backed off.
After WW II, the Swiss briefly feared invasion by the U.S. and Britain. Then, from 1960-90, Switzerland became a potential target of Soviet invasion. As Machiavelli rightly observed, “The Swiss are most heavily armed, and most free.” The Cold War may be over, but Switzerland today still finds itself under foreign threat.More on this story here.
THE WORD “OFFSHORE” IS INCREASINGLY ASSOCIATED WITH “OUTSOURCING”
Barely a week has gone by in the past decade when the specter of IT outsourcing has not raised its head, promising great rewards for IT users and striking fear into the hearts of in-house IT staffers. In the last half of the 1990s, whole-of-government outsourcing was a catch-cry that ruffled the feathers of more than a few local small and medium enterprises, which found themselves forced to deal with multinational service providers rather than government departments in order to get business.
Long-standing government IT employees were sold off like fatted calves to outsourcers, which often had no intention of keeping them on staff for more than the minimal tenure stipulated in their contract. Now there is a new bogey on the horizon. A phenomenon called offshore outsourcing, or offshoring, is happening all over the developed world, where multinationals from low-cost markets such as India, China, Mexico, the Philippines and Russia are winning business against local IT outsourcers. Their competitive advantage is that they can deliver services such as software applications development and maintenance for significantly lower prices, thanks to the cheaper costs in these countries.
Local outsourcers large and small find themselves competing for IT contracts against cut-price offshorers who can deliver services from software development sausage factories in low-cost locations such as Bangalore and Shanghai. Most of the large multinational outsourcers have now set up their own bases in relatively low-cost locations in an attempt to stay in the race.More on this story here.
Dumping the old timers causing massive hi tech problem.
There is a really huge problem looming on the tech support horizon, and most large companies do not even realize it yet. It is all because they are losing their memory. No, I do not mean senior management is getting so old that Alzheimers is becoming an issue, I mean what I call Institutional Memory (IM). The current trend it to overlook it in the name of cost cutting, and it is most likely a fatal error.More on this story here.
REPORT: “AN UPDATE ON THE COMMODITY CASE FOR GOLD”
The report concludes, after some interesting reading along the way:
What will happen going forward? Right now, the U.S. Fed fears price deflation. The U.S. economy has a significant output gap. As long as such a gap persists, the U.S. inflation rate will fall. Eventually it will go negative. Given huge excess private debt, price deflation, by raising further the real value of debt, could be disastrous.
U.S. policy must increase aggregate demand to get the economic growth rate above trend and reduce the output gap. To do this, the U.S. needs very low mortgage rates. The Fed, above all, must lift bond prices. Because they are targeting higher inflation, it is not easy to induce investors to bid up bond prices.
They are in a game of very difficult expectations management. To succeed, they need total credibility with investors. For this reason, at this very juncture, they cannot afford a large rise in the gold price, as that would draw the attention of bond investors to the long-run implications of Fed efforts and shatter their confidence. For this reason, we expect further official efforts to restrain the gold price. And, over the near term, the official sector probably has the ammunition to succeed.
But the days of official management of the gold price are numbered. In the end, perhaps after one more bout of disinflation or deflation, excessive private debt globally will force central banks to abandon all restraint. As time passes, the central banks’ ammunition will dwindle. As this is happening, there will be a surge in speculation on a coming inflation. Some central banks will become buyers. Then the official management of the gold price will fail, and the gold price will explode.More on this story here.
PATRIOT ACT ATTACKERS “CHICKEN LITTLES”?
It’s official: The fashionable fall meme for unreconstructed Bush administration cheerleaders is the notion that civil-libertarian concerns about the PATRIOT Act have been much ado about nothing: the squawking of so many Chicken Littles.
The defense of PATRIOT has been slow in coming, in part because it was possible, at first, to dismiss criticism as predictable carping from the usual suspects: the American Civil Liberties Union, the Electronic Frontier Foundation, and other notorious “fifth columnists”, to borrow the new right’s sledgehammer-subtle imprecation du jour. Things became trickier once American Baptist Churches, the American Conservative Union, Gun Owners of America, and folks like Georgia ex-representative Bob Barr began voicing reservations. The conservative base has begun to get nervous.
Each piece defending PATRIOT trots out the “don’t you realize we’re at war?” trope, which it is tempting to read as an imputation to civil libertarians of almost mindboggling naiveté. They are not (as one might think) animated by a concern that liberties may be sacrificed without any appreciable gain in security, or an insistence that law enforcement show that existing powers have been used effectively -- a highly dubious proposition -- before expansive new powers are granted. No, the ACLU and company have apparently just been snoozing for two years: They missed the news about that little dust-up involving a couple of planes and skyscrapers two Septembers ago.
Oddly, the sweeping claims of governmental authority -- that all the powers a government might exercise during a conventional military war, say World War II, are equally appropriate in the War on Terror -- are typically coupled with the insistence that PATRIOT has given us nothing (or nothing much) new under the sun.More on this story here.
SECRET SAUDI HISTORY
“I’m sorry,” the clerk at the U.S. National Archives says: “You can’t see the Saudi Arabian documents.” I am surprised. All the National Archive’s documents are already reviewed and then declassified or removed. In theory, whatever is there is no longer secret -- Until 9/11.
“It’s part of the Patriot Act,” the clerk averred. “The U.S. State Department records you requested are indeed declassified and theoretically available. But they also may contain information that terrorists can use, like names and addresses and information of U.S. citizens.” I gave a blank look. “So?” The clerk’s brow furrowed with concern. “A terrorist could come into the National Archives and try to steal their identities or target them for assassination.”
I was stunned by the clerk’s absolute refusal, and stung by his implication that I, a wife, mother, and published researcher and writer, was some kind of horrid criminal. But this is only a taste of the Patriot Act’s damage to the American mind. If the mere desire to research Saudi history is met with stern threats of arrest or detention, imagine what it is like to be a Saudi in America today. Or a Muslim. Or someone from the Middle East. We are hardly any safer for keeping Saudi history a secret. The 9/11 terrorists committed a horrendous crime, but they did not take away our national security. We have done this to ourselves.More on this story here.
RON PAUL ON PAPER MONEY AND TYRANNY
All great republics throughout history cherished sound money. This meant that the monetary unit was a commodity of honest weight and purity. When money was sound, civilizations were found to be more prosperous and freedom thrived. The less free a society becomes, the greater the likelihood its money is being debased and the economic well-being of its citizens diminished. Alan Greenspan, years before he became Federal Reserve Board Chairman in charge of flagrantly debasing the U.S. dollar, wrote about this connection between sound money, prosperity, and freedom. In his article “Gold and Economic Freedom” (The Objectivist, July 1966), Greenspan starts by saying: “An almost hysterical antagonism toward the gold standard is an issue that unites statists of all persuasions. They seem to sense ... that gold and economic freedom are inseparable.” Astoundingly, Mr. Greenspan’s analysis of the 1929 market crash, and how the Fed precipitated the crisis, directly parallels current conditions we are experiencing under his management of the Fed. Yet here we are today with a purely fiat monetary system, managed almost exclusively by Alan Greenspan, who once so correctly denounced the Fed’s role in the Depression while recognizing the need for sound money.
If honest money and freedom are inseparable, as Mr. Greenspan argued, and paper money leads to tyranny, one must wonder why it is so popular with economists, the business community, bankers, and our government officials. The simplest explanation is that it is a human trait to always seek the comforts of wealth with the least amount of effort. This desire is quite positive when it inspires hard work and innovation in a capitalist society. Productivity is improved and the standard of living goes up for everyone. This process has permitted the poorest in today’s capitalist countries to enjoy luxuries never available to the royalty of old.
But this human trait of seeking wealth and comfort with the least amount of effort is often abused. It leads some to believe that by certain monetary manipulations, wealth can be made more available to everyone. Those who believe in fiat money often believe wealth can be increased without a commensurate amount of hard work and innovation. They also come to believe that savings and market control of interest rates are not only unnecessary, but actually hinder a productive growing economy. Concern for liberty is replaced by the illusion that material benefits can be more easily obtained with fiat money than through hard work and ingenuity. The perceived benefits soon become of greater concern for society than the preservation of liberty. This does not mean proponents of fiat money embark on a crusade to promote tyranny, though that is what it leads to, but rather they hope they have found the philosopher’s stone and a modern alternative to the challenge of turning lead into gold.
Big business and banking deserve our harsh criticism, but not because they are big or because they make a lot of money. Our criticism should come because of the special benefits they receive from a monetary system designed to assist the business class at the expense of the working class. Labor leader Samuel Gompers understood this and feared paper money and a central bank while arguing the case for gold. Since the monetary system is used to finance deficits that come from war expenditures, the military industrial complex is a strong supporter of the current monetary system. Liberals foolishly believe that they can control the process and curtail the benefits going to corporations and banks by increasing the spending for welfare for the poor. But this never happens. Powerful financial special interests control the government spending process and throw only crumbs to the poor.More on this story here.
PRIVACY AND HUMAN RIGHTS 2003 REPORT ISSUED
The annual report by EPIC and Privacy International reviews the state of privacy in over fifty-five countries around the world. It outlines legal protections for privacy, new challenges, and summarizes important issues and events relating to privacy and surveillance. It is the most comprehensive report on privacy and data protectione ever published.
The 2003 edition of Privacy and Human Rights looks at the expansion of government surveillance authority. The report finds increased data sharing among government agencies, the use of anti-terrorism laws to suppress political dissent, and the growing use of new technologies of surveillance.More on this story here.
Privacy and Human Rights 2003: An International Survey of Privacy Laws and Developments is available free on-line here, or it can be purchased from the EPIC Bookstore here.
FTC ISSUES REPORT QUANTIFYING EFFECTS OF IDENTITY AND FINANCIAL ACCOUNT THEFT
About 3.3 million American consumers discovered within the last year that their personal information had been used to open fraudulent bank, credit card or utility accounts, or to commit other crimes, according to the Federal Trade Commission’s first national survey on identity theft. The FTC said these cases had collectively cost businesses $32.9 billion and consumers $3.8 billion.
In addition, 6.6 million people fell victim to account theft in the last year. Unlike identity theft, in which the criminal uses personal information to open and use accounts that are in the victim’s name, account theft entails using stolen credit or A.T.M. cards, or financial records, to steal from the victim’s existing accounts. Such account-theft cases, the survey found, caused $14 billion in business losses and $1.1 billion in consumer losses. The vast majority of these cases, almost 80%, involved credit card fraud.
The survey found that in the last five years, the rate of identity and account theft was highest on the West Coast, at 14% of those surveyed, and lowest in the Midwest, at 10%. The South and the Northeast had rates of 13% and 12%. About 26% of victims said they knew the identity of the thief. Of those who knew, a quarter said it was someone employed by a company that had access to personal information, and about 18% said it was a friend, a relative or someone who worked in the victim’s home.More on this story here.
FTC survey summary here.
FTC identity theft web site here.
IMMIGRATION DATA OVERWHELMS U.S. GOVERNMENT CAPABILITIES
The government is gathering more information on immigrants and foreign visitors than ever before. But the efforts may be doing little to protect Americans, experts say. Without the intelligence and interior enforcement to back up the information gathering, the same problems exist that led to the September 11 attacks.
“We still do virtually nothing to enforce immigration laws within the U.S.,” said Ira Mehlman, Los Angeles-based spokesman for the Federation for American Immigration Reform. “Once people get here, they have pretty much carte blanche to stay here and do whatever they want.” Even if such efforts were enforced, they might not protect Americans from September 11-style attackers, who were mostly educated men from middle-class families who entered the U.S. legally and had no criminal record, according to the report, America’s Challenge, by the Migration Policy Institute.
The report said programs such as special registration, in which male visitors from 25 mostly Arab and Muslim countries were required to report to their local immigration offices, could scare potential informants away.
As of August 1, no foreign student or scholar was allowed into the U.S. unless they had been entered into the Student and Exchange Visitor Information System, commonly called SEVIS -- a monumental task that required college officials to log hours upon hours of data entry time. Federal regulations also require schools to track students even after they arrive. Thirty days after the beginning of a school’s fall semester colleges are required to report whether foreign students have registered for class, and whether they are taking the number of course units stipulated in their immigration papers. But school officials are not sure what the federal government will be able to do with the information.More on this story here.
CUBA TRIPS, CIGARS SINK NEW JERSEY BAR APPLICANT
A self-described liberal idealist who says his three visits to Cuba in violation of federal law were acts of civil disobedience has been denied admission to the New Jersey Bar by the state Supreme Court. Zachary Sanders, who passed the New Jersey bar exam in July 2001, first was given a thumbs down by the Committee on Character, which rejected his argument that he had a right to disobey what he called the “immoral and unjust” embargo on trade and travel to Cuba.
A three-lawyer committee said, “it was crystal clear ... that Mr. Sanders believes himself to be absolutely morally justified in breaking the law.” The panel said it viewed him as one who “detaches himself from responsibility to obey the law by endeavoring to distinguish the morality of the law from its legality.”
“In my estimation, being a lawyer does not mean blindly following unjust and immoral laws,” Sanders wrote to the high court in November 2002, after the Committee on Character recommended that he not be admitted. “A healthy respect for the rule of law, and one’s duty to comply with it as an officer of the Court, does not prevent one from engaging in civil disobedience.” Sanders went on to cite injustices codified in law, such as “slavery, Jim Crow segregation, the Japanese internment camps, and the displacement of Native Americans.”
In a rebuttal brief, John Janasie, the first assistant ethics counsel with the Office of Attorney Ethics, argued Sanders’ actions had nothing to do with civil disobedience. “He was selectively choosing to violate the laws of the U.S. in the pursuit of his personal interest and hoping not to get caught,” wrote Janasie.More on this story here.
ANTI-TERROR LAWS INCREASINGLY USED AGAINST COMMON CRIMINALS
In the two years since the nation began giving law enforcement agencies fresh powers to help them track down and punish terrorists, police and prosecutors have increasingly turned the force of the new laws not on al-Qaida cells, but on people charged with common crimes. The Justice Department said it has used authority given to it by the USA Patriot Act to crack down on currency smugglers and seize money hidden overseas by alleged bookies, con artists and drug dealers.
Federal prosecutors used the act in June to file a charge of “terrorism using a weapon of mass destruction” against a California man after a pipe bomb exploded in his lap, wounding him as he sat in his car. A county prosecutor in North Carolina charged a man accused of running a methamphetamine lab with violating a state law barring the manufacture of chemical weapons. If convicted, Martin Dwayne Miller could get from 12 years to life in prison for a crime that usually puts a person behind bars for about six months.
Civil liberties and legal defense groups, though, have been bothered by the string of cases, and say the government will soon routinely be using harsh anti-terrorism laws against run-of-the-mill lawbreakers. “Within six months of passing the Patriot Act, the Justice Department was conducting seminars on how to stretch the new wiretapping provisions to extend them beyond terror cases,” said Dan Dodson, a spokesman for the National Association of Criminal Defense Attorneys. “They say they want the Patriot Act to fight terrorism, then, within six months, they are teaching their people how to use it on ordinary citizens.” Prosecutors are not apologizing.More on this story here.
CORNERED RATS AND THE PLUNGE PROTECTION TEAM (PPT)
Conventional Wall Street media and Washington establishment types are quick to denigrate those of us who theorize about the establishment of a secretive PPT organization to manipulate the markets. But it is a matter of public record that the Working Group on Financial Markets (WGFM), which we allege to be the parent to the PPT, was formed under the Reagan administration. It was done by Executive Order on March 18, 1988. The purposes of the group are to “[enhance] the integrity, efficiency, orderliness, and competitiveness of our Nation’s financial markets and [maintain] investor confidence.”
The WGFM was formed in the aftermath of the crash of 1987 as a natural effort by government bureaucracy to do for the economy what it thinks it is supposed to do -- intervene and manipulate the workings of the marketplace so as to create an ordered economy, an economy that is to the greatest possible extent devoid of volatility, disruption, severity, loss, etc. The fact that severe market volatility was largely a result of government manipulation of the money supply and interest rates was merely blanked out on by the WGFM and its creators. A study of our nation’s economic history will show to any objective observer that there are natural fluctuations inherent in the free-market that humans must always put up with, but which are always self-corrected if the forces of the market are simply LEFT ALONE.
For the past 12-14 years, the PPT has been used by Washington to control the price movements of the NYSE through the buying of S&P futures as former Fed governor Heller advocated. Whenever a crisis appears especially threatening, the PPT swings into action to shore up equity prices on the exchange. The fact that eventually such rigging will destroy the integrity of the markets as free institutions of trading is for someone in the future to worry about. Well that future is rapidly approaching us. And it concerns the new theoretical wrinkle I alluded to above. This is purely hypothetical on my part. I have no verification to prove the claim that follows. But if the reader will keep an open mind and think logically, he should come to the same conclusion that I have.More on this story here.
PATRIOT ACT EXTENDS ITS REACH
Don’t be surprised if your banker, broker or insurance agent gets a bit chummier sometime soon. New federal rules, which must be implemented by October 1, require financial firms to find out more about their customers. It is part of an effort to curb money-laundering activities that could be used to finance terrorism.
At a minimum, the new regulations will drive up costs for financial firms, slow the account-opening process and require customers to supply more personal information. At worst, you may find yourself the subject of a false alarm and even a government investigation, especially if you balk at providing certain information, make large-dollar transactions or come from a nation linked to heavy money laundering or terrorism.
Financial firms will need to verify customer information and check new-account applicants against the names of terror suspects, while running more credit checks. Companies that notice suspicious individuals or businesses must report them to authorities.More on this story here.
THERE IS VALUE IN CALCULATING WHERE YOUR NET WORTH STANDS
Net worth is the difference between what you own and what you owe. It is the single best measure of your family’s financial well-being. Tracking net worth over time will tell you whether you are headed in the right or the wrong direction.
“We all need guideposts to see how we’re doing, and that’s a good one to look at,” said Robin Delaney, a financial planner. “It’s certainly a lot healthier than looking at how many toys you’ve accumulated.”
If you have never calculated your net worth, the result can be an eye-opener. The toughest part is gathering your financial information before you add up all the pluses and minuses. Lots of people track the value of a 401(k) account, but focusing on a single asset tells only part of the story. It can even lead you astray if a rising balance prompts you to make early retirement plans without considering your burgeoning debt.More on this story here.
U.S. SUPREME COURT TO HEAR PRIVACY CASE NEXT TERM
In June, the Supreme Court agreed to decide a dispute involving damages in a privacy matter. The basic issue comes down to how to parse a mildly confusing sentence in a privacy law applicable only to the government. The more interesting question is whether the Supreme Court values privacy.
The case is Doe v. Chao, and it arose under the Privacy Act of 1974. The act requires federal agencies to comply with principles of fair information practices. The law establishes comprehensive privacy rules, including a provision for lawsuits by individuals harmed by improper agency actions. The act is one of several privacy laws that allows an award of minimum statutory damages to successful plaintiffs.
The plaintiffs are coal miners who brought black lung disease compensation claims to the Department of Labor for adjudication. The department used the Social Security numbers of the miners as case numbers. The numbers were later published in a report that became part of legal databases. The result was that the Social Security numbers effectively became public. The basic argument is that this public disclosure of Social Security numbers violated the Privacy Act of 1974.More on this story here.
CELEBRITIES LINE UP TO CRITICIZE BUSH IN A.C.L.U. CAMPAIGN
As President Bush pressed for greater expansion of law enforcement powers, a new advertising campaign by the American Civil Liberties Union has been rolling out to oppose the tactics and proposals of the White House. The ads, which indirectly accuse the administration of trampling on the Bill of Rights, without actually mentioning the president, have already hit a nerve.
“It is absolutely outrageous,” said Mark Corallo, a spokesman for the Justice Department. “You have men and women who are sworn to uphold the Constitution who are literally putting their lives on the line to keep us safe and our lives intact, and the A.C.L.U. is making them out to be some sort of Gestapo-like organization.”
Feelings are bitter on both sides of the debate. Mr. Corallo accused the civil liberties union of trying to create an atmosphere of fear. The A.C.L.U. and its allies said the same about the Justice Department. “The definition of ‘crisis’ has been changed and been made much more elastic,” said Richard Dreyfuss, the actor, who appears in one ad. “Criticism of the administration is not looked upon as allowable or appropriate, because we’re in a ‘crisis’.”
With a budget of $3 million, the campaign is consuming much of the $4.5 million the civil liberties union typically spends on advertising in a year. Anthony D. Romero, executive director of the group, said the decision to spend so much on one effort reflected a belief that disaffection with the Bush administration and its policies was growing, and that opportunities to gain new support and members were growing along with it.More on this story here.
THE PATRIOT ACT’S ASSAULT ON THE BILL OF RIGHTS
To the layperson looking at John Ashcroft’s now-infamous road show in defense of the USA PATRIOT Act, the whole ruckus -- complete with organized protestors and opportunistic reporters -- must look rather comical. In fact, with 91% of registered voters unaware of the Act’s encroachment on civil liberties, the entire dispute might even appear unnecessary. Unnecessary, that is, until you take a look at the Act in all of its 342 pages of verbose details and constitutional infractions. And then, somewhere between the elimination of privacy rights and abolition of checks and balances, it becomes startlingly apparent that over the furor of “preventive justice”, the White House has silently squandered our constitutional protections of due process and civil liberties.
The PATRIOT Act’s baleful abrogation of our right to due process under the law cannot be overstated. As defined in legal jargon, our constitutional right to due process endows every person with appropriate safeguards to protect against arbitrary or unreasonable treatment under the law. It is noteworthy to all, including the Department of Justice, that the framer’s used the term ‘person’ instead of ‘citizen’ in reference to due process. This makes the worst provisions of the PATRIOT Act all the more deplorable for their targeted discrimination of non-citizens. In essence, these provisions institute ideological censorship, authorize deportation for lawful group activities, and allow the Attorney General to detain foreigners with a piece of paper.
Such blatant constitutional violations by the PATRIOT Act, however, are not restricted to foreigners alone. The legislation expands terrorism laws to include “domestic terrorism”, which could subject common political organizations to surveillance, wiretapping, and harassment for political advocacy. Consequently, the mere threat of criminal action is employed to suppress peaceful dissent.More on this story here.
THE MORAL CASE FOR TAX EFFICIENCY AND TAX HAVENS
Bermuda has a terrible reputation with foreign government elites. It is a mid-Atlantic affront to the American and European Governments who believe they have a right to tell the rest of the world how to live and what their tax laws should be. The guts of the problem is, that Bermudians do not pay income tax on their earnings, capital gains taxes, and even worse there are no corporate taxes on profits. This state of affairs is considered to be a greater menace to the financial well-being of Western civilisation than even Jesse Jackson.
Over the past ten years or so, governments (and other quasi governmental organizations such as the OECD) in the United States and Western Europe have been throwing rotten eggs and rotten arguments at the so-called tax havens like Bermuda and the Cayman Islands on the grounds that they siphon off legitimate tax revenues. This has been described as “harmful tax competition” (an oxymoron), or has been categorised as illegal tax evasion.
For years, orthodox economics has condemned tax avoidance as unproductive, as well as being unfair to other taxpayers. Yet public expenditures in almost every country one can name (including Bermuda) are unproductive and have risen steadily, absorbing over 50% of GDP in many countries. Most thoughtful people now belatedly understand that government bureaucracies (often employing about a fifth of the labour force) are not staffed by disinterested philosopher kings who somehow and magically understand what the people want and impose taxes accordingly. It is not overstating the case, to say that many public employees arrived at their desks with the objective of doing good, but somewhere along the way, they ended up doing very well for themselves.
Why should the activities of tax havens be put in the spotlight of public distaste in North America and Europe? An important reason is that high-spending Western governments desperately need lost revenues to keep the state machine ticking over while taxpayers resent the grasping mitt of government on their wallets.More on this story here.
COLORED DIAMONDS: THE WORLD’S MOST CONCENTRATED FORM OF WEALTH
While the most popular diamonds are colorless, attractively colored stones are much rarer and are generally superior investments. Of the estimated 88 million carats of diamonds mined each year, just 2,000 are considered top quality colored variety. Around 80% of those are various intensities of brown. Next, come yellow, pink, blue, green, orange and violet. Red is the rarest of all. Investment-grade colored diamonds are graded as Faint; Very Light; Fancy Light; Fancy Intense/Dark; and Fancy Vivid/ Deep.
Colorless diamond prices, as with any commodity, have experienced dramatic price fluctuation. In contrast, since formal records were first kept at the beginning of the 1970s, prices for fancy colored diamonds have increased in value by an average of between 10%-15%/year, varying from color to color as a factor of color rarity.
Carat for carat, fancy colored diamonds are the world’s most concentrated form of wealth. A multi-million dollar portfolio of colored diamonds easily fits in a small envelope. In addition, most countries, including the United States, do not require that the ownership of colored diamonds (or any other gem) be reported to any government authority. This is true even if you store them overseas. Any profits, of course, may be subject to capital gains tax in your home jurisdiction.More on this story here.
COLOR ME DANGEROUS: TRACKING MORE THAN LUGGAGE AT THE AIRPORT
First we got color codes from the Department of Homeland Security. Remember when they raised the terror alert to orange and urged us to clear the store shelves of duct tape? (By the way, did you know that almost half of the duct tape in this country is suspiciously made by one Ohio company whose owner happened to be a big Republican donor?) Now, the Transportation Security Administration, created after 9/11 with the intention of protecting us in the air -- and which is under attack for spending lots of money while still showing alarming lapses in safeguards -- has decided to color-code each and every one of us the moment we buy a plane ticket. You won’t know it, but they will be assigning you a hue, color-coding your name in a computer soon after you trudge into the airport. Think of it as electronic tattooing or high-tech branding, all in the name of the war on terror.
The new system, called Computer Assisted Passenger Prescreening System II (CAPPS II), which will go into effect next year, will have the airlines sending all of your personal information to the government, which will then check you against databases of private companies that collect information on your shopping habits, which will supposedly help the TSA confirm that you are who you say you are. I am not sure how that is exactly supposed to work. Perhaps they are going to look at your shoes and see that they are Prada, and then look at your shopping activity in the database and see that you actually buy at Payless. “Sorry honey, you’ve been colored red,” the nice ticket agent may tell you. “Guards, haul his ass off to jail -- but get those shoes first!”
“This system is going to be replete with errors,” Barry Steinhardt of the ACLU told the Post. “You could be falsely arrested. You could be delayed. You could lose your ability to travel.”More on this story here.
GOLD: IS IT JUST ANOTHER COMMODITY?
It is one thing to invest in gold. It is another to understand the logic of gold in a free economy. You should do both. But understanding the economic logic of is more important than investing in gold. One of my goals is to make the economics of gold clearer to people. If you do not understand why I recommend gold as an investment, you may decide to buy gold just because you take my word for it. Do not do this. Buy gold or gold-related investments such as North American gold shares only when you understand the economics behind gold.
I think it’s worthwhile to assemble a few of the standard clichés against gold, and then offer answers. Cliché #1: “Gold Is Just Another Commodity”. This is the equivalent of saying “Warren Buffett is just another stock market investor.” Gold is a commodity. That is why it has functioned as money for thousands of years. It no longer does. Gold is not liquid any longer. The general public has gotten used to credit money issued by banks. It is used to pieces of paper with dead politicians’ pictures on them (United States) or live politicians’ pictures (Third World countries), or a missing politician’s picture (Iraq).
If gold is just another commodity, why do the world’s central bankers use it to settle final accounts? Why aren’t bars of some other commodity stored in the vault of the Federal Reserve Bank of New York? Why didn’t they make “Diehard III” about a heist of, say, hard red winter wheat? Central bankers do not trust each other. They know how easy it is to create money out of nothing. They hold dollar-denominated assets, such as U.S. Treasury-bills, because they can earn interest -- not much these days -- but they settle their final accounts with each other in gold.
If gold were just another commodity, there would be greater flexibility in settling accounts. They could choose a different commodity. But they choose gold. They did throughout the 20th century, even during World War II. That is why they created the Bank for International Settlements in Basle, Switzerland. Western and Nazi bankers met with each other because each side knew that without a money economy, it could not win the war. Gold is the base of the money economy in international trade.More on this story here.
FEDERAL SPENDING THREATENS U.S. SECURITY
As is widely known, the federal spigots in foreign affairs, as in domestic affairs, are now wide open: hundreds of billions of dollars will be spent in Iraq, not to mention the billions of dollars in foreign aid that will be sent to dozens of foreign governments, all under the purported rationale of improving life in those countries. Setting aside the fact that historically foreign aid has failed to improve the economic well-being of people in the recipient nations, what all too many Americans are blocking out of their minds, unfortunately, is the threat that the U.S. government’s uncontrolled spending binge poses to our own economic security.
Like it or not, federal spending must ultimately be paid for by the American people, either now -- in the form of income taxation -- or by adding to the federal government’s ever-growing mountain of national debt ($6.8 trillion and growing), to be paid later either through income taxation or the more likely means of central bank debasement of the currency (i.e., inflation). Given the unlikelihood that the Bush administration will raise taxes prior to the 2004 elections, it is a virtual certainty that most of the new spending will be financed by new debt, to be paid off later, most likely through inflation.
What Americans might also find disconcerting is the amount of U.S. debt that is held by foreigners -- $1.347 trillion, more than one-third of the total. Japan now owns $440 billion in U.S. securities, equal to more than one-tenth of all outstanding issues. China, the second-largest buyer of U.S. securities, now owns more than $122 billion, while five other Asian countries -- Hong Kong, South Korea, Taiwan, Singapore, and Thailand -- own more than $166 billion. As Joan Zheng, formerly of the central bank of China and now an economist at J.P. Morgan in Hong Kong, put it, “The U.S. dollar is now at the mercy of Asian governments.”
Americans had better hope that foreigners never decide to dump all that debt onto the market at once, because it would undoubtedly produce an extremely ugly financial and economic crisis whose magnitude is impossible to predict. Given the propensity of Washington officials to make enemies overseas, the threat of such a crisis now hangs over our nation like a sword of Damocles.More on this story here.
THE EVER-EXPANDING PATRIOT ACT
Critics warned the expanded police powers authorized by the so-called Patriot Act would soon be used by opportunistic cops and prosecutors in areas far afield from any threat of al-Qaida-style terrorism. Nonsense, supporters replied. But: “Within six months of passing the Patriot Act, the Justice Department was conducting seminars on how to stretch the new wiretapping provisions to extend them beyond terror cases,” reports a spokesman for the National Association of Criminal Defense Attorneys.
Well ... so what? If some moron in California finds himself charged with “terrorism using a weapon of mass destruction” when he wounds himself because his pipe bomb exploded in his lap, if a North Carolina prosecutor charges the proprietor of a methamphetamine lab with breaking a new state law against “manufacture of chemical weapons,” hoping to send him up for 12 years to life instead of the standard six months ... they are all criminals, right?
Except that ...More on this story here.
RON HOLLAND’S FREEDOM QUOTES PAGE
These freedom quotations should help the readers understand that just as there is spring, summer, fall, and winter, so the seasons and cycles of freedom and tyranny, bull and bear markets, opportunity and control, have existed as long as man has resided upon the earth. The war of freedom verses slavery, good verses evil, and personal responsibility verses dependence is a never ending battle in the history of mankind.
Understanding historical truths on many subjects related to freedom and economics is necessary if productive citizens are again to regain their mastery over evil government tyranny. We can learn much from those that oppose liberty and who would continue their tyranny over us that choose to be sovereign and free. Know and understand the adversary and enemies of your liberty and this is why many well known personalities expressing a philosophy contrary to freedom are quoted here.
Great men fall from grace and are seduced by powerful special interests and the result is often murderous wars or catastrophic financial crises. It is my hope that Freedom Quotes will go a little way toward halting the onslaught of Washington against free people around the world.More on this story here.
THE 2003 FORBES 400 LIST OF THE U.S.’S WEALTHIEST IS OUT
Bill Gates leads the list for the tenth consecutive year. He is followed by Warren Buffet, Microsoft co-founder Paul Allen, and five members of Wal-Mart founder Sam Walton’s family.More on this story here.
A BACK DOOR TO POINDEXTER’S ORWELLIAN DREAM
The perverse dream of integrating law enforcement, military intelligence and vast databases of virtually everything done by virtually every citizen is coming to fruition, only under state, not federal, auspices. DARPA’s dreaded Total Information Awareness (TIA) program, formerly administered by convicted felon and Republican hero John Poindexter, may have been de-clawed by Congress, but it lives on at the state level in an incarnation called, ominously, the MATRIX (Multistate Anti-Terrorism Information Exchange).
There is a lot to dislike in this new end-run around Congressional oversight. For one thing there are federal dollars behind it -- $4 million from the Department of Justice -- which makes it clear that the Feds will be expecting a payoff. It also appears that the scheme is geared more towards data mining in quest of garden-variety criminal activity than anything to do with international terrorism. When you combine that with federal interest, it is hard to resist seeing the MATRIX as a sneaky way for three-letter agencies to keep tabs on ordinary folk and their foibles, side-stepping restrictions on domestic spying instituted since the Church Committee.More on this story here.
RISK REWARD STILL SKEWED IN PONZI’S FAVOR
THE 2700-odd victims who ploughed A$160 million into Geoffrey Dexter’s Wattle Group Ponzi “investment” scam may well rue their gullibility for believing the incredible sales spiels promising risk-free returns of 50% a year. That is because like all Ponzi schemes, named after 1920’s US practitioner Charles Ponzi, Wattle simply dribbled out returns from the incoming stream of funds from new victims who were systematically fleeced by accomplices on big commissions.
However, these unwitting suckers must be somewhat disillusioned at the paltry penalties now being imposed on the procession of Wattle foot-soldiers who have been rolling through the Brisbane [Australia] District Court of late -- more than five years after the scam was shut down. As investor appetite for risk rises, there is a real danger that suspended sentences on good behavior bonds will not be enough to discourage nefarious like-minded operators who regard the rewards as still well worth the risk.
Once the funds disappear offshore pursuing the crooks who took the money can be an expensive and often futile exercise. However, The Courier-Mail’s investigations have linked Wattle to a massive international fraud spanning the United Kingdom, various parts of Europe and ultimately to the home of the Ponzi masterminds -- the US.More on this story here.
LIBERTY IN THE BALANCE: CITIZENS ACROSS THE U.S. SPEAK OUT
JUNEAU, Alaska -- Tim Armstrong served with the 1st Air Mobile Cavalry Division in Vietnam, surviving a mortar barrage that left 33 pieces of shrapnel in his upper body. He is a proud American who remembers the vow he made the day he joined the Army. “I took an oath, just like everyone else who serves in the military, to support and defend the Constitution of the United States,” Armstrong said.
Today, the 56-year-old radio ad salesman says he is still defending the Constitution as he criticizes the USA Patriot Act and many of the security enhancements that accompany life in post-September 11 America. “I think the Patriot Act itself, it infringes on the rights that we swore to uphold and defend,” Armstrong said recently as political leaders in Juneau debated -- and passed -- a resolution opposing the controversial law. “I didn’t go to war to usurp the Constitution.”
Concerned about the lengths to which the government has gone to defend the nation since September 11, 2001, thousands of Americans like Armstrong are speaking out, fighting back and banding together in unusual political alliances against everything from enhanced government surveillance to increased airport security measures. From Alaska to Florida, similar opinions are being expressed in town hall meetings, city council chambers and library conference rooms as citizens seek to put back what they say is some sorely needed balance in the equation between national security and civil liberties. By Tuesday, 171 cities and counties across the country, joined by the states of Alaska, Hawaii and Vermont, had passed resolutions opposing provisions of the Patriot Act.More on this story here.
BOOK REVIEW: JAMES BOVARD’S TERRORISM AND TYRANNY: TRAMPLING FREEDOM, JUSTICE, AND PEACE TO RID THE WORLD OF EVIL
If you want to know what is really going on in President Bush’s War on Terror read this book. What is so valuable about Bovard’s work is that it is just plain, fact-based, footnoted reporting. He is not a polemicist, and you will find no shrill arguments, no straw men, no rants, no name-calling such as you find in most of the quickie political books that people grind out these days. Instead, you get a sober recitation of the facts set within a philosophical framework that exactly matches that of the Founding Fathers.
These facts are damning, but they also often would be hilarious if the consequences were not so serious. Certainly some of the grand goof-ups at American airports would make a Hollywood comedy, and the baldfaced lies and surrealistic comments made by government officials would intrigue and depress George Orwell. One Cabinet official, during the government’s campaign to get people flying again, publicly boasted that he was flying without bodyguards, when in fact his flight had been salted with undercover air marshals.
The bizarre Justice Department of Attorney General John Ashcroft defends itself by saying that even though people are arrested in secret, on charges that are secret, and are being held in places that are secret, the department is not guilty of secrecy because it admits what it is doing.More on this story here.
Another review of James Bovard’s new book.
While our President’s favorite word is “freedom”, his administration has disempowered judges from releasing those who have been jailed without charge, refused Congressional oversight, impounded private communications, secretly searched private dwellings, and lowered “an iron curtain of secrecy around all federal agencies.” Sept. 11 “supposedly proved that the federal government needed more power over Americans and practically everyone else in the world,” writes James Bovard in Terrorism and Tyranny: Trampling Freedom, Justice, and Peace to Rid the World of Evil, whose theme is that we have undergone a post-9/11 coup d’état.
Government officials took advantage of the post-9/11 panic to impose their regime of conformity and secrecy with frightening suddenness. A May 2003 terrorist advisory “warned local law enforcement agencies to keep an eye on anyone who ‘expressed dislike of attitudes and decisions of the U.S. government.’” An ominous development at any time, but particularly when, as Bovard explains, “the Justice Department is advocating the nullification of almost all federal, state, and local consent decrees restricting the power of local and state police to spy on Americans.”
Bovard’s chronicle of the whole sad history of the war on terrorism, from Reagan to Bush I and through the Clinton years, is a tale of appalling incompetence. From early on a recurring pattern was established: endless prior warnings are accompanied by total denial, swiftly followed by total disaster and the refusal to take responsibility -- always ending in an official cover-up. In our ongoing war on terrorism, no one is ever responsible for failures, neither military leaders nor policymakers.
The major complaint of Ashcroft and his defenders is that, prior to 9/11, the intelligence and domestic law-enforcement agencies could not pool their knowledge in tracking down terrorists. Bovard effectively exposes this lie. After 9/11, Ashcroft went to Congress and demanded the right to treat all American citizens as potential foreign agents—without having to show any evidence of wrongdoing. Congress caved, and, in so doing, surrendered practically all the historic gains won by our forefathers.
This book raises a key point: what is the difference between state terrorism and the kind of privatized terrorism embodied by Osama bin Laden? The answer is that the former has taken a far greater human toll. Bovard’s chapter on U.S. ally Israel’s model for fighting terrorism is a searing indictment of a nation-state whose creation was facilitated, after all, by a terrorist organization, the Irgun, one that did not distinguish between civilian and military targets.More on this story here.
WHO PLANS TO STEAL THE 2004 US ELECTIONS?
It is a shell game, with money, companies and corporate brands switching in a blur of buy-outs and bogus fronts. It is a sinkhole, where mobbed-up operators, paid-off public servants, crazed Christian fascists, CIA shadow-jobbers, war-pimping arms dealers -- and presidential family members--lie down together in the slime. It is a hacker’s dream, with pork-funded, half-finished, secretly-programmed computer systems installed without basic security standards by politically-partisan private firms, and protected by law from public scrutiny.
It is how America, the “world’s greatest democracy”, casts its votes. And it is why George W. Bush will almost certainly be the next president of the United States -- no matter what the people of the United States might want.
The technology had a trial run in the 2002 mid-term elections. In Georgia, serviced by new Diebold systems, a popular Democratic governor and senator were both unseated in what the media called “amazing” upsets, with results showing vote swings of up to 16% from the last pre-ballot polls. In computerized Minnesota, former vice president Walter Mondale -- a replacement for popular incumbent Paul Wellstone, who died in a plane crash days before the vote -- was also defeated in a large last-second vote swing. Convenient “glitches” in Florida saw an untold number of votes intended for the Democratic candidate registering instead for Governor Jeb “L’il Brother” Bush. A Florida Democrat who lost a similarly “glitched” local election went to court to have the computers examined--but the case was thrown out by a judge who ruled that the innards of America’s voting machines are the “trade secrets” of the private companies who make them.
The unelected Bush Regime now controls the government, the military, the judiciary -- and the machinery of democracy itself. Absent some unlikely great awakening by the co-opted dullards of the corporate media, next November the last shreds of a genuine American republic will disappear -- at the push of a button.More on this story here and here.
MAKING RETIREMENT DREAMS COME TRUE
Nearly 19 million people in Britain are aged 50 and over -- a number that will increase by five million over the next two decades. With high costs of living in Britain and overcrowding, an increasing number of these will move overseas where expenses are lower, the climate more amenable and standards of living are higher.
Traditionally, many retired people will choose the close proximity of Europe where destinations such as France, Spain and Portugal are popular. Those who are more adventurous or want to stretch their money further, will settle in countries that are offering special visa and tax deals to lure retired people to their shores such as Thailand, Mexico, Sri Lanka, Barbados and Costa Rica.
These countries are building attractive retirement villages with good medical and recreational facilities and every other amenity a resident could possibly need. The attractions of such exotic destinations as Thailand include more reasonable living costs. A two bedroom town house in Bangkok or a condominium on the beach can be rented for around £250-300 per month, medical facilities are excellent and inexpensive and domestic help is cheap.More on this story here.
BUSH’S UNOFFICIAL OFFICIAL SECRETS ACT
How the Justice Department Has Pushed to Criminalize The Disclosure of Non-Security Related Government Information.
Except in a few highly egregious circumstances relating to national security information (espionage and atomic secrets), the U.S. Congress has, in the past, never made it a crime to leak information to the news media. As a result, for over two hundred years, our government has operated without an “official secrets act”. In contrast, Great Britain and other nations have long criminalized the disclosure of government information. But there is a crucial difference between them and us: They lack an equivalent of our First Amendment.
Despite the free speech costs, President George W. Bush has created the equivalent of an official secrets act for America -- and it is only growing stronger. Indeed, by cobbling together provisions from existing laws, Bush’s Justice Department has effectively created one of the world’s most encompassing, if not draconian, official secrets acts.
If Attorney General John Ashcroft has his way, we will see many more prosecutions of this ilk. Ashcroft has told Congress he wants a “comprehensive, coordinated, Government-wide, aggressive, properly resourced, and sustained effort” to deal with “the problem of unauthorized disclosures.” It is important to watch Ashcroft’s lips here: He said “unauthorized” disclosure -- not, say, disclosures of classified information relating to national security, which would be a very different matter. Plainly, he is targeting anyone who leaks information the Bush Administration would rather not have made public -- even when security is in no way at risk.
During the Clinton Administration, an effort was made to actually enact official secrets legislation. But Scott Armstrong -- the Executive Director of the Information Trust, a secrecy watchdog in Washington -- realized what was occurring, and mounted a major lobbying effort to get Clinton to veto it, and he did. This time, however, it is already too late, for Ashcroft has outfoxed the watchdogs. Rather than pressing for new legislation that might spark similar controversy, he has decided to twist and distort laws already on the books to create the equivalent of such legislation. However, these laws were never intended to criminally prosecute such conduct.More on this story here.
OFFSHORE TRUSTS UNDER WORLDWIDE ATTACK
Offshore trusts, the sophisticated redoubt of many well-off and careful South African investors, have been thrust, uncomfortably, into the limelight in the wake of the government’s tax and exchange control regulations amnesty. Not just in SA though. Revenue authorities across the world have introduced measures to clamp down on people using trusts to avoid paying tax.
It is estimated that about a fifth of all the money in the world may be held directly or indirectly in offshore trusts. It is this figure that inevitably triggered major changes in tax and in law, say tax experts.
Barry Spitz, international tax expert and head of Meritor’s amnesty division, says a trust is a vehicle that allows funds to be held in “trust” by a trustee who has the authority to administer them on behalf of a beneficiary. The settlor, the person who gave the assets into trust, may not be liable for taxation on the income, says Spitz. In most jurisdictions only when the accumulated income is distributed does a tax liability arise and the beneficiary is responsible for this.
“Today [offshore] trusts are coming under the scrutiny of the courts of traditional trust countries. When tested against established trust law many have been found to be invalid,” Spitz says. James Aitchison, international tax expert at PricewaterhouseCoopers, says there is a global antipathy towards trusts by revenue authorities. This is part of the tightening up of antiavoidance measures, such as transfer pricing and tax havens. The UK and US have adopted “look through” rules, which disignate when a trust a sham. This is usually where the settlor controls the trustee’s decision-making powers or the trust assets. Michael Honiball, head of international tax at KPMG, says the US has disregarded trusts in many instances when applying “look through” rules. Pleaces like Jersey and Guernsey have also upheld attacks on offshore trusts on the grounds of settlor control.More on this story here.
TWO WALL STREET CLASSICS APPEAR IN NEW EDITIONS
Modern stock markets date back to seventeenth-century Amsterdam, which was then the financial capital of Europe. The science of stock valuation is more recent: for a long time, most scholars considered the stock market to be governed by moods and caprice, placing it beyond the scope of rigorous analysis. Then, starting around the time of the Great Depression, some economists began to give the matter a second look.
Valuing companies based on the information contained in their financial statements constitutes an entire discipline, much of it established by Benjamin Graham and David Dodd in their 1934 textbook, Security Analysis. Graham, who taught at Columbia Business School for years, and numbered Warren Buffett among his students, is regarded as the pioneer of “value investing”, the painstaking pursuit of cheap stocks. In 1949, Graham explained his methods to the general public in The Intelligent Investor, a work that HarperBusiness has just reissued, with a new introduction and running commentary by the journalist Jason Zweig. Buffett has described it as “by far the best book on investing ever written,” and although the case studies it cites are now decades old, its practical advice on how to look at balance sheets and income statements is timeless.
Is all this hard work worth it? Most economists of the postwar generation were skeptical. They believed in what has come to be known as the “Efficient Markets Hypothesis”, or E.M.H., which holds that a company’s stock prices already reflect all the available information about that company’s prospects. If a piece of information or analysis were really valuable, E.M.H. proponents say, other smart investors would already have acted on it, thereby eliminating the chance to make a killing. Trying to be an “intelligent investor”, by doing the arcane analysis that Graham recommended, was a mug’s game.
E.M.H., in one version or another, held sway in universities and business schools for more than a quarter of a century; even today, it is routinely taught to M.B.A. students. One of the people responsible for this state of affairs is Burton G. Malkiel, now a Professor of Economics at Princeton. Back in 1973, Malkiel, who was then little-known, published a book entitled A Random Walk Down Wall Street, which expounded efficient-markets theory for the layman. To the surprise of many, not least the author, it turned into one of the most durable investment guides ever written. Marking the thirtieth anniversary of the original publication, Norton has released a revised and updated eighth edition.More on this story here.
VIN SUPRYNOWICZ: JUST “TAKE THE BUS”
A federal employee who declined to give his name sent an e-mail to the paper a few weeks back:
“Dear traveling public:”:
“(...) We understand you might be having a bad day, but you do not have to take it out on us by making a snide remark like ‘you are violating my civil rights’ or calling us all a ‘bunch of assholes.’
“If you are late arriving at the airport, then you are late, we had nothing to do with the traffic on the freeway or the lines at the ticket counter. Just remember that you do have the option of not having to go through the security screening process. If flying has turned into such an inconvenience for you, then take the bus or drive yourself back to wherever it is you came from.” (...)
Unfortunately, we could not publish this pouting apologia, since it arrived without signature. But I thought I would take a moment to respond to the anonymous author, anyway:
Dear “TSA Screener”:
For the record, it is possible these complaints you are hearing about “violating civil rights” stem from the complainants having read Amendment IV to the U.S. Constitution, which specifies, “The right of the people to be secure in their persons ... papers and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.”
Perhaps you would contend airline passengers voluntarily waive those rights when they decide to travel by air. If this is indeed a matter of voluntarily private contract, can you confirm that individual airlines are free to offer competing “no-search” commercial flights if they wish?
You say, “We do these things for YOUR safety.” How safe were the victims of 9/11 after all the airport searches conducted that day? Do you really believe there would have been as many deaths that day if all American airline passengers had remained free to carry aboard the firearms they are guaranteed under the Second and 14th amendments (as they peacefully did for decades) -- the very firearms of which you are now retained to deprive us?More on this story here.
THE CATO INSTITUTE ASKS, IS OUR ECONOMIC FREEDOM ERODING?
Are you more or less free in your economic life than you were 20 years ago? The question is not trivial because economic freedom is highly correlated with real per capita income and is a necessary component of fundamental liberty. The question was one of the topics debated among a group of the world’s leading economists last week at a meeting of the Mont Pelerin Society.
Government taxing, spending and regulating erode economic freedom. There are those who argue that, at least in the United States, total government taxing and spending has not grown as a share of gross domestic product (GDP) over the last 40 years (it has fluctuated between approximately 28% and 33% of GDP), and so we need not worry. In most countries, government taxing and spending as a share of GDP has risen, but in others, like Ireland, it has dropped sharply (giving the Irish the highest real growth in the European Union). Unfortunately, governments in almost all countries are taxing and spending well above the growth and general welfare maximizing rates.
Even more disturbing is the fact government regulation is growing rapidly in virtually every country. A recent study by the Mercatus Institute of George Mason University and the Weidenbaum Center at the Washington University in St. Louis found direct federal government regulatory spending had grown to $30.1 billion in 2002, but the total cost of regulations on the economy is estimated to be $843 billion (or almost a third of direct federal outlays).
Despite some very encouraging signs toward economic freedom, the U.S. and most of Europe are becoming less free. As Robert Higgs noted in a paper presented at the meeting, “ ... all sorts of economic, environmental, health and safety, and social regulations continue to spew out of Washington and Brussels, among other places. In addition, however, the U.S. government especially requires ever more uncompensated information collection and reporting by its subjects in order to slake the Surveillance State’s insatiable craving for the most minute details of everyone’s conduct. ... Simultaneously, the state and local governments, as well as various international bodies, continue to pour out endless streams of their own regulations, all of which entail resource costs and sacrifices of citizens’ liberties.”More on this story here.
PRIVACY AND CIVILISATION
When the U.S. Supreme Court voted in Lawrence v. Texas (2003) to overturn criminal sodomy statutes nationwide, the conservatives railed-predictably-against the “right of privacy” that the decision seemed to imply. They dissented in favor of “states’ rights” and “federalism” -- as if there could be a right for any state to abrogate the freedom of individuals to engage in private consensual sexual activity. When I heard their dire warnings that this would lead to mass social degeneration -- to the legalization of prostitution, bigamy, gay marriage, narcotics, and so forth -- I wanted to shout out loud: Bring ‘em on! If only such a ruling could decriminalize what Robert Nozick once called all “capitalist acts between consenting adults”, privatizing even the marriage contract, American society would have taken a giant leap forward.
While I do not pretend to be a constitutional scholar, I am persuaded by Randy Barnett (Justice Kennedy’s Libertarian Revolution, Working Paper Series, Boston University School of Law) that the majority decision in the Texas sodomy case did not depend upon any “right of privacy” as such; rather, it provided “an important step in the direction of a more balanced protection of liberty ...” Philosophically speaking, however, there is no contradiction between a “right of libert”q and any“qright of privacy”. And neither of these rights is possible without private property rights.
Ayn Rand objected to the conservatives’ desire to censor or otherwise erode people’s freedom to choose their sexual associations “precisely because [sex] is a value, an exception-making value that requires privacy” (Thought Control, part 3, 22 October 1973). Rand argued, however, that “a clear definition of the right to privacy ... cannot be discussed outside the context of clearly defined and upheld individual rights.” But when such rights are “being evaded, denied, negated and violated by the dominant philosophical theories and political practices of our time,” it is no wonder that so much confusion surrounds the concept of privacy (Letters of Ayn Rand, 622).
Rand understood that privacy was much more than a right. It was a requirement of human cognition and civilization. Rand’s claim that “[t]here is no such thing as a collective brain” is an implication of the fact that “the process of reason” is “the primary act” that human beings must perform in the privacy of their own minds.
It is a tragic, ironic twist that some conservatives have posed as the guardians of capitalism and civilized culture in their fight against moral decay. But in failing to grasp the inextricable link between privacy and civilization, they are no friends of either. And in their struggles against privacy, they stand on the side of barbarism.More on this story here.
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