Wealth International, Limited

Offshore News Digest for Week of December 22, 2003


In my line of work, it is rather hard to think of reasons to be cheerful. On the contrary, it requires quite a lot of concentrated intellectual effort: one has the sensation of scraping the bottom of one’s skull for thoughts that just are not there. Of course, since lamentation about the state of the world is one of life’s unfailing pleasures, the world is a greater source of satisfaction than ever. Another consolation is that most people are not nearly as miserable as they ought to be, or would be if they saw their own lives in a clear light. I meet more than 1,000 people a year who have tried to do away with themselves, and the wonder is not that they should be so many but that they should be so few. Reasons to be cheerful? Is that reasons for me to be cheerful, or reasons for one, that is to say for humanity in general, to be cheerful?

A man who interviewed me pointed out that I was never bored. I had not thought of that before, but it is true: I am never bored. I am appalled, horrified, angered, but never bored. The world appears to me so infinite in its variety that many lifetimes could not exhaust its interest. So long as you can still be surprised, you have something to be thankful for (that is one of the reasons why the false knowingness of street credibility is so destructive of true happiness).

Dutchman Adriaen Coorte specialized in the humble art of painting gooseberries. The translucence of this fruit now strikes me as so beautiful that I can gaze at them with intense pleasure, if not for hours (that would be an exaggeration), at least for minutes. I suspect that this reflectiveness is one of the consolations of age.

More on this story here.


At the heart of the Christmas story rests some important lessons concerning free enterprise, government, and the role of wealth in society. Let’s begin with one of the most famous phrases: “There’s no room at the inn.” In fact, the inns were full to overflowing in the entire Holy Land because of the Roman emperor’s decree that everyone be counted and taxed. Inns are private businesses, and customers are their lifeblood. There would have been no reason to turn away this man of aristocratic lineage and his beautiful, expecting bride.

When the Wise Men and the Holy Family got word of Herod’s plans to kill the newborn Son of God, did they submit? Not at all. The Wise Men, being wise, snubbed Herod and “went back another way” -- taking their lives in their hands (Herod conducted a furious search for them later). As for Mary and Joseph, an angel advised Joseph to “take the child and his mother, and fly into Egypt.” In short, they resisted. Lesson: the angels are on the side of those who resist government.

In the Gospel narratives, the role of private enterprise, and the evil of government power, only begin there. Jesus used commercial examples in his parables (e.g., laborers in the vineyard, the parable of the talents) and made it clear that he had come to save even such reviled sinners as tax collectors.

More on this story here.


On the first day of Christmas, the Free State gave to me: A shining city o’freedom on the hill. (And so on ...)

More on this story here.


The holiday season is a time for spiritual reflection, celebration and frenzied commerce. These activities might seem incompatible. They are not. We celebrate the Christmas season and indulge our capacity for joy. We place dazzling decorations on our houses, buildings and anything on which we can hang lights or tinsel. We feast on tasty treats. We sing beautiful songs of the season -- inspiring, happy or just plain fun! We show our love for family and friends, often with gifts that are the fruits of our productive capacity. We especially try to teach our children the meaning of the season. And most of all, if our hearts and minds are filled and open, we will reflect upon the spirit within us that can make peace on earth and peace in our souls truly possible.

More on this story here.


Though it is a season of good cheer and goodwill toward all, it is also a time of conspicuous energy consumption. To many people, America the Beautiful is at her best in December when so much of the nation is illuminated by billions of tiny stringed light bulbs. Holiday lighting is a great social offering -- a positive externality, in the jargon of economics -- given by many to all.

Should good citizens think twice about holiday lighting, given global warming and other suspected climate changes supposedly caused by increasing atmospheric concentrations of carbon dioxide? Hardly.

More on this story here.


It was a dark and stormy night before Christmas; I in my pajamas was ready for bed: it was late, and snow was softly falling outside. A dusting became a deepening blanket of white as I relished the peace and unearthly quiet; I’d halfway dozed off when there came a loud rap on the door. “An emergency,” I thought; “some poor soul who’s lost in the storm -- who else would knock at this hour? Burglars don’t usually knock, and lately the cops tend not to knock either!” I dashed on a robe and scrambled to open the door.

There were three men, all nattily dressed in black. One stepped forward, and said “We’re wise guys, and we bring you tidings of discomfort: enjoy.” The second stepped forward, and said, “We’ve come to offer you some frank and sensible advice: Anarchist lady, you should pay more attention to what you say, do, and think.” The third stepped forward, silently handed me an official looking envelope, and in the twinkling of an eye the three wise guys mysteriously vanished into the snowy night.

Shaken, I sat down to read the enclosed document; as nearly as I could translate the legal jargon, it said something like this: “You’re either with us or against us. Behave like a good American should; we the wise guys know who you are, and we’re watching you: if you don’t wise up, we’ll call on you again, and next time we won’t knock politely. Your lawyer won’t save you; we are the long nose and the strong-arm of the law.”

Rest of fable here.


The practice of religion satisfies a basic human need; the same need demonstrated by primitive people. Religion was, at one time, as commonly practiced as irreligion is today. Church and civil rule were virtually the same. Conflict arose, however, with a desire for what might be termed “flexibility”, such as the “flexibility” of modern fiat currency, which is heralded as one of its advantages. Religious teaching is inflexible, and rigid. God cannot change His mind, and those who claim to speak on His behalf cannot either. Something is right, or it is wrong. It cannot be wrong to steal today, but right to steal next week or year, or under color of “law”. Flexibility is a hallmark of government. It enforces some “laws” and ignores others, and finds innumerable ways of disguising its iniquities as good. Moral relativity is the order of the day, more or less, sort of, which goes a long way toward understanding our world and our society.

By any objective standard, government is a dreadful idea. Its rules are arbitrary and illogical. Its force is often extreme, and wielded carelessly. It imposes a tremendous burden upon those who subscribe to it, and an even greater one on those who do not. It complicates all human activity, and plunders and loots productivity at every stage. It helps a few at the cost of the many, although referring to itself as “democratic”. For the benefit of its adherents and cronies it sends our sons off to die, if necessary, in places we have never heard of, and which present no threat to us. Why do we put up with it?

Because the instinctive desire to worship and obey dies hard; indeed, it does not die at all. A loving but stern and unyielding God may not be acceptable, but something must be worshipped, so let it be the state, imperfect as it is. Authority seems to be demanded by human nature.

More on this story here.


The State continually fails and destroys, yet it persists. You say, “Of course it persists -- it has the guns.” True, but it is not like we are standing around with our hands up, nor is that what the State wants us to do. Its destructive interventions notwithstanding, it wants us to create as much wealth as possible so it will have an ample source of plunder. How it goes about the plundering process is critical to its success. The golden rule is: the victims must approve of it.

Let’s look at how this works with its two greatest sources of loot, income taxes and central banking. Government created both in 1913 -- erecting in effect its two main pillars. Without them, the State is a pussycat, begging for a dish of milk. With them, the State, in a country as rich as the U.S., becomes the greatest destructive force of all time.

Under altruistic guidelines, taxing the rich to extinction is morally acceptable because being rich is proof of moral degeneracy. But there’s a problem: the rich are a minority, and even if their wealth is confiscated, it cannot support the unlimited power lust of state rulers. Besides, most of the rich are politically active, which means they write the laws or influence how the laws are written, and they are not about to legislate themselves into oblivion. This leaves the ever-so-plump middle class. They are the ones who buy most of what the rich produce, so it would not work to tax them out of existence. The problem becomes how to keep the people servile while transferring their wealth to state coffers.

More on this story here.


The stockings were hung by the chimney with care, When Tom Ridge appeared with a pre-Christmas scare!

Just four days before Christmas, Mr. Ridge was the principal source of network entertainment as he announced that he was raising the “terror alert” in America from “yellow” to “orange”. The upcoming holidays might, he supposed, provide an opportunity for some ill-defined group to attack some possible targets someplace in the homeland he imagines it his province to protect. When a 6.5 earthquake hit central California the following day, I almost expected members of the Busheoisie to praise Tom for his foresight and for making us aware of the threat of tectonic terrorism!

There will be those who will commend Mr. Ridge for keeping America informed of terrorist threats. But his words informed us of nothing. His words were of no value whatsoever in helping individuals make plans. His predictions had no more substance than the psychics who show up in the media this time of the year to tell us that a “major catastrophe” will occur, or a “prominent person” will die, in 2004. Mr. Ridge’s “alert” was designed for one purpose only: to keep us terrified so that the state can continue to manipulate our fears for their purposes. We are held hostage by our own fears, and the more amorphous the fear-object the more terrified we become. When fear combines with the unknown, our imaginations know no restraint.

More on this story here and here.

On the feds holding their breath until they turn orange.

The media is all a-twitter with reports of “credible specific intelligence” that al-Qaeda cells in America have plans for holiday season attacks. We have seen similar reports before, with no sign of the predicted violence. Now we have just gone to condition “Orange”. What does it all mean?

I am reminded of an example we used in a university course on scientific reasoning I taught. A psychic conveniently named “Mrs. Prophet” warned of an imminent threat of nuclear war -- which might be averted by the prayers of her followers. It was the perfect scam, bringing her credit whether or not nukes started flying. Either she predicted the tragedy or her followers saved us from it!

Why should we believe an essentially identical kind of claim from Ashcroft or Ridge?

More on this story here.

Christmas and Homeland Insecurity.

I was watching a replay of the Hollywood Christmas parade on television when suddenly the announcers called attention to a new participant in the parade ... The Department of Homeland Security. The DHS was hyping their newly produced TV series, D.H.S., starring Timothy Cavanaugh and Alison Heruth-Waterbury, billed as a “cliff-hanger TV series for the new season.” The D.H.S. series is supposed to show how government agents are risking their lives to protect Americans at home.

Normally Christmas parades are a time of fun and fantasy as moms and dads hold their children at curbside for a view of floats and bands. In the past, any potential security threats have been kept behind the scenes at events like these so the public can enjoy them without concern, that is, until now. The policy seems to be, “Keep the public slightly on edge.”

More on this story here.


As I sat by my fireside the other evening, smoking my pipe, drinking a bottle of old Port and occasionally kicking the cat, I thought again about my exemplar, Jacob Marley. What would Marley have made of the colossal mess that Bush, Cheney & Co., have pulled us into? Then it came to me: Marley’s Christmas list! Out of the stony cockles of his hard old heart, Marley would have known what each and every dramatis personae deserved.

More on this story here.


For an overwhelmingly Christian country which prides itself on freedom of expression, removing “offensive” Christmas trees and censoring school Santas may seem curious. But as far as American public institutions are concerned, it is not Christmas but the “holiday season”.

The supporters of such thinking believe it is necessary to ensure the US, founded by those fleeing political persecution, does not exclude anyone on the basis of their faith. But for others, both within the religious right and beyond it, the joy of Christmas is being eroded by a group of politically-correct lobbyists who are turning another great American cause -- freedom -- on its head with a particularly joyless form of censorship.

More on this story here.


Binyamin Shilon, 78, and Shoshana November, 73, were separated from each other and their two brothers in their native Poland during the 1930s. After World War II broke out, Mr. Shilon joined the Soviet army. His sister was sent to the Auschwitz concentration camp in southern Poland. They survived and emigrated separately to Israel, each believing all the rest of the family had been eliminated by the Nazis.

Then on Friday, an American cousin brought Mrs. November to Yad Vashem, Israel’s official Holocaust memorial authority in Jerusalem, to check the records left by other survivors. The simple check revealed that Mr. Shilon was alive, and just a 90-minute drive from her own house. That night, she spoke to her brother for the first time since 1938.

More on this story here.


Paradoxically, the horrors of war attract many people. The pursuit of extreme situations is for many a route to meaning in life. But Chris Hedges, a distinguished war correspondent who has himself been gripped by this attraction, warns against it. “The enduring attraction of war is this: even with its destruction and carnage it can give us what we long for in life. It can give us purpose, meaning, a reason for living. Only when we are in the midst of conflict does the shallowness and vapidness of much of our lives become apparent ... war is an enticing elixir. It gives us resolve, a cause. It allows us to be noble,” he says in his book War Is a Force That Gives Us Meaning.

As Hedges sees matters, it is very difficult to lead a meaningful life by yourself. If, by contrast, you feel yourself tightly connected with others, the task becomes much easier. This is all the more so if your connection with others aims to achieve a goal that you and your comrades deem vitally important. He makes it clear that the struggle for meaning takes very different form on the home front and in actual combat. On the home front, the “myth of war” prevails, but matters are very different in actual combat. The reality of fear and killing quickly ends the myths absorbed on the home front; but another form of meaning through collective endeavor now comes to the fore.

Given the facts that Hedges so assiduously amasses about combat, combined with his description of the effects of war on truth and free inquiry, is not the conclusion obvious? The emotional ecstasies of war are bought at too high a price. Unfortunately, matters are not so simple.

More on this story here.


U.S. civil liberties and human rights groups hailed the one-two punch delivered by two federal appeals courts against the Bush administration’s refusal to recognize basic due-process rights of alleged U.S. and foreign detainees held as “enemy combatants” in Washington’s “war on terrorism”. “Both (decisions) attacked the Bush administration’s view that a war metaphor can justify restrictions on basic criminal justice rights away from a traditional battlefield,” Human Rights Watch’s executive director told the New York Times. Justice Department officials, who said they believed the two 2-1 decisions were flawed, indicated they may seek further review. Both cases could well wind up in the Supreme Court, according to legal analysts on both sides.

The first case involved an appeal by lawyers for Jose Padilla, a U.S. citizen arrested in Chicago in May 2002 as a material witness in the government’s ongoing counter-terrorism investigation and subsequently designated by Bush as an “enemy combatant”. He was subsequently transferred to a high-security naval brig in Charleston, South Carolina, where he has been refused permission to communicate with his family, with a lawyer, or any nonmilitary personnel for 18 months. The Second Circuit Court of Appeals in New York ruled explicitly that the president lacked the power to authorize the unilateral detention of a U.S. citizen.

The second case was based on a petition for habeas corpus by the brother of a Libyan, Salim Gherebi, captured in Afghanistan two years ago and held, along with more than 600 other so-called “enemy combatants” at the U.S. naval base at Guantanamo Bay, Cuba. His lawyer contended that, even though his client was being held outside U.S. territory, Washington was obliged to provide him with certain basic protections under U.S. law, including the right to contest his detention in a U.S. court. The two-judge majority ruled that indefinite detention by the executive branch without charges defied basic principles of U.S. jurisprudence.

More on this story here.

A Constitutional challenge for us all.

In a landmark victory for constitutional protections and the separation of powers in the post-9/11 era, a panel of the 2nd U.S. Circuit Court of Appeals issued a 2-1 ruling barring the president from declaring a U.S. citizen an “enemy combatant” without congressional authorization. In a decision likely to influence another case on enemy combatants before the Supreme Court case, the federal appeals court ordered the government to release U.S. citizen Jose Padilla from military custody in thirty days, with the option of transferring Padilla to civilian authorities for a criminal trial.

The ruling marks a growing judicial backlash against unfettered presidential authority during a period of war. Given the week’s events, the ruling could not have come at a better time. With controversy over the status of Guantanamo detainees and the PATRIOT Act growing to a feverish pitch, it is about time the Constitution gained a voice, and an arm strong enough to back it up. The actions of the Administration in this case defy the fundamental role of our constitutional rights: protecting the rights of the minority against the tyranny of the state. If all of us cannot find something to get riled up about in the case of Jose Padilla, then the Constitution will have lost its last line of defense against tyrannical rule -- an informed and active populace.

More on this story here.


In its medical-marijuana ruling earlier this week, the 9th Circuit Court of Appeals has endorsed compassion and states’ rights. It is a matter of simple humanity to accommodate such sufferers as the defendents. California law did that, as does Washington’s.

Two years ago, the U.S. Supreme Court ruled that federal drug laws have no exception for medical need. Now comes this case, which says the federal drug law interferes with states’ rights. The line between the federal government and the states is in the Constitution, which grants federal authority over interstate commerce. But what is interstate? What is commerce? These words are open to interpretation, and between the New Deal and the Clinton era, courts were quick to label things as interstate commerce. The classic [and notorious] case was in 1942, when the Supreme Court said a farmer might affect interstate commerce by growing grain for his own chickens, and therefore could be regulated. In 1995, the Court’s “federalist” conservatives began to limit this federal power, ruling in two cases that gun possession and rape were not commerce. Let the states handle them.

Now the same doctrine supports medical marijuana. The 9th Circuit (rejecting one member who wanted to apply the chicken case to medical marijuana) is saying to the justices: Apply your federalist logic to this. They should.

More on this story here.

Breach in the courts’ blanket use of the “Commerce Clause”?

The recent medical marijuana decision issued by the federal Ninth Circuit Court enforces a state’s right to overrule the federal Controlled Substances Act of 1970 if certain conditions are met with regard to marijuana use that is recommended by a physician. Among others, one of the conditions the judges stipulated is that the marijuana must not be sold. To a sharp defense attorney, that stipulation is significant and potentially more far-reaching than the Ninth Circuit may have intended.

In order to justify the federal War on Drugs, the federal government has always claimed that the perpetually abused Commerce Clause gives them the authority to enforce federal drug laws, because “drugs are sold”, and therefore fall into the category of commerce. (Any thinking person knows the Founding Fathers never intended that, but the feds have gotten away with that chicanery for 34 years without any real serious challenge to their premise.) In order for the feds to enforce federal drug laws, there has been an unchallenged assumption in each prosecution that commerce was somehow involved. But I cannot think of any federal drug prosecution that has ever been required to prove commerce was involved before the case could proceed to trial.

It seems reasonable that if federal drug prosecutors are going to hide behind the specious and dishonest Commerce Clause argument, then they should be required to prosecute within the limitations that argument represents. Ergo, if the feds cannot prove commerce was involved, they do not have jurisdiction. While an illegal drug manufacturer or drug dealer might be an easier mark for federal drug law prosecution, what about the person convicted under federal drug law for merely being in possession? Think about it.

More on this story here.


Originally sold to Congress as a means of fighting terrorism, the Patriot Act has been used in numerous criminal cases unrelated to terrorism probes, officials say. In addition, some financial institutions have been citing it to explain why they are now asking for sensitive personal information from their customers. Citizens looking to join college savings plans, for example, have been told they must provide extra information under the act. And under its auspices, hotels and airlines have compiled personal information on customers and turned it over to the government.

Although the federal government defends its use of the law as appropriate and necessary, some elected officials and civil liberties advocates say the practices bear out their concerns that the scope of the law is too broad. “It was never my intent to have the Patriot Act used as a kitchen sink for all of the law enforcement tool goodies that the FBI has been trying to get for the last decades,” said U.S. Rep. Shelley Berkley, a Nevada Democrat who voted for the act in October 2001. “It’s a classic case of bureaucratic overreaching. It is Patriot Act creep.”

In Las Vegas, Berkley’s office hears almost daily from constituents angry about the issue. “My constituents are up in arms”q she said. “Las Vegas has always had a tenuous relationship with the FBI. People who move here are kind of independent-thinking people, and they want to be left alone. They don’t believe in government interference with their lives.”

More on this story here.


After entering the House of Representatives in 1995, Georgia Republican Bob Barr acquired a reputation as one of the most conservative members of Congress. A former federal prosecutor, a firm social conservative, and a strong supporter of the War on Drugs, Barr does not fit most people’s image of a civil libertarian. But in his eight years in Congress (he failed to win re-election in 2002), Barr was one of Washington’s loudest critics of the federal government’s abuses of power, taking the lead in investigating the raid on Waco and in opposing Bill Clinton’s efforts to undermine due process in terrorism cases.

Since leaving Congress, Barr has taken an advisory post with the American Civil Liberties Union (ACLU) and started writing a column for Atlanta’s alternative weekly Creative Loafing -- neither ordinarily a haven for Republicans. While many on the right have fallen behind the Bush administration even as it betrays their purported principles, Barr represents another set of conservatives’ growing discomfort with the administration’s erosion of individual liberty. Reason Associate Editor Jesse Walker talked with Barr in September.

More on this story here.


In an annual report submitted to Congress, United State’s senior trade negotiator, Robert B. Zoellick, commented that China’s “uneven and incomplete WTO compliance record can no longer be attributed to start-up problems,” and identified a number of “systemic concerns” that will make progress on future Sino-American trade relations “problematic”. Zoellick noted “Chin’qs questionable use of certain tax policies to favor domestic production”, which has led to “an increasing use of industrial policies to encourage domestic industries at the expense of imports from abroad or foreign businesses operating in China.”

More on this story here.

Neo-Protectionist-in-Chief: Dangerous Bush trade policies.

Defense Secretary Donald Rumsfeld and Secretary of State Colin Powell ought to explain to Commerce chief Don Evans and Bush political guru Karl Rove Rove how Bush’s reelection-driven trade policies too often jeopardize U.S. national security. To satisfy parochial domestic interests, Bush’s neo-protectionism creates headaches for American soldiers and diplomats abroad. This counterproductive shortsightedness cannot stop soon enough.

Consider Americ’qs ongoing efforts to pacify North Korea. China, an at least nominally Communist country contiguous with Pyongyang, surely is Washington’s best bet to keep the unpredictable Kim Jong Il from going, literally, ballistic. So, rather than keep China cool, calm, and cooperative, the White House on November 18 imposed fresh import quotas on Chinese brassieres and nightgowns. Three days later, a Chinese trade delegation canceled plans to visit the U.S. and sign orders for American agricultural goods. With Asia at the crossroads between peace and rearmament, President Bush chose to wrestle with the Chinese over intimate apparel.

Pakistan has shared airspace, intelligence, and military facilities with U.S. forces, has captured some 500 al Qaeda members and cracked down on the Muslim-extremist madrassas. Yet despite Islamabad’s valiance in the war on terror, America still imposes tariffs of up to 16% on Pakistani textiles and quotas that also limit the supply of such items as pillowcases and dishrags manufactured there. Stymied by such things as U.S. orange juice tariffs and sugar price supports, Colombian farmers turn instead to coca, poppy, and heroin production. One need not be a DEA agent to see how this frustrates U.S. antidrug efforts.

More on this story here.


Our neo-mercantilist elites are busy as ever turning political power into privileged market opportunities for themselves and their friends. Political-military and economic power, as we have known them, are alive and well, but having won most of their gambles, stand in more need than ever for comforting ideological cover.

In a long and active lifetime of reflecting and writing on politics, the late Murray Rothbard paid much attention to the role of ideology and, therefore, to the role of intellectuals in state-level political systems. He writes that the rulers’ handing out of economic benefits, “only secures a minority of eager supporters” and “still does not gain the consent of the majority.” Thus, “the majority must be persuaded by ideology that their government is good, wise and, at least, inevitable... Promoting this ideology among the people is the vital social task of the ‘intellectuals’.”

For at least twenty years, political scientists and international lawyers effectively in the employ of power have been donning philosophical garments to justify great-power interventionism, and a few philosophers have repaid the compliment and taken up the same project. The peculiar thing about some of the new liberal imperialists is their attempt to ground their system on the philosophy of Immanuel Kant [1724-1804].

More on this story here.

What a tangled web the neocons weave.

While most of the world is still trying to come to terms with the neo-imperial ambitions of the post-Sept. 11 Bush administration, U.S. political analysts, particularly those on the libertarian right and the left, have been trying to map out the various forces behind the administration’s hawks in order to better understand and counteract them. While these forces are often depicted in the abstract, they constitute a network of flesh-and-blood people who have worked together closely and openly -- both in and out of government -- for more than 30 years in some cases.

Two of the structure’s most remarkable characteristics are how few people it includes and how adept they have been in creating new institutions and front groups that act as a vast echo chamber for each other and for the media, particularly in Washington. In this, the neo-conservatives, who lack any grassroots constituency, have been especially effective. In fact, the network consists of a very small elite, much smaller for example than the post-World War II internationalist “establishment” who have long dominated US foreign policy.

The Interhemispheric Resource Center compares the network to a spider’s web -- hence the name of their latest Internet website, Right Web, probably the most comprehensive and integrated effort yet to link the various connections and relationships that have given the “Right” its power and influence. Even a brief meander through the site demonstrates both just how small and incestuous this network has been and how ambitious are its goals, both in foreign and domestic policy.

More on this story here.


The Bahamian House of Assembly has approved an amendment to the Financial Transaction Reporting Act, first passed in 2000, that will grant financial institutions an additional three months to verify customer accounts. The amendment means the deadline for account verification has been pushed back to March, giving the country more time to become compliant with international money laundering and regulatory standards.

Some have also raised concerns that the amendment may contravene the 40 recommendations on money laundering laid down by the FATF. Nevertheless, Minister of Financial Services and Investments, Allyson Maynard-Gibson is confident that the current legislation is fully compliant with FATF guidelines.

More on this story here.

Bahamas/U.S. Tax Information Exchange Agreement comes into effect January 1.

The wide-sweeping measure will give the minister the power to obtain information pursuant to a request from the United States, as currently, no such power exists under the laws of The Bahamas, Minister of State for Finance James Smith told the Senate on Monday. However, the Act provides safeguards that allow the minister to deny a request where the information being requested is subject to legal privilege, public policy and other national security interests, he said.

More on this story here.


While addressing the nation in his now traditional annual televised phone-in debate with the Russian public, Putin explained that oil and gas firms have made large profits in recent years thanks to high prices in the international markets, and suggested that these excess profits should be taxed at something like 80%, as is the case in many other industrialized nations. Under current arrangements, excess profits are taxed at nearer 50%. “We have to stop the stealing of national resources and bring order to how they are used,” he said.

More on this story here.

Putin warns oligarchs of hard line.

President Vladimir Putin issued a stark warning to Russia’s oligarchs as a Moscow court extended by three months a pre-trial detention of Mikhail Khodorkovsky. Speaking before the Russian Chamber of Commerce and Industry, Mr. Putin qualified his earlier promise not to review the results of the country’s privatizations, saying this did not apply to “people who did not follow the law” when they took place.

Mr. Putin’s warning appeared to be addressed to a handful of the country’s richest and most powerful tycoons, who benefited from the country’s chaotic and often lawless privatizations. After a two-day closed hearing, a Moscow court ruled that Mr. Khodorkovsky would remain in prison at least until March 25, after the presidential elections in which Mr. Putin is expected to be re-elected. Mr. Khodorkovsky is charged with fraud, tax evasion and theft.

More on this story here.


A throwaway line in the middle of an Observer story today tells us that British Chief Constables already possess the legal power to stop cars remotely, using satellite technology. Probably using advanced computer technology we reckon. But so far the Chief Constables have not exercised the right, it has transpired. The right is probably contained in the blizzard of legislation that the UK government passes in every session it holds.

More on this story here.


Some European politicians are trying to stop an agreement between Europe and the United States to share travelers’ personal information in an effort to screen for terrorists and drug smugglers. Two European Parliament members are already calling for the EU’s highest court to examine the legality of the announced compromise, which was negotiated by the EU’s executive branch, known as the European Commission. The Commission said airlines could continue to share personal passenger data because the United States’ privacy protections were “adequate”.

Parliament members, including Johanna Boogerd, a Dutch Liberal, sharply questioned that judgment. “The adequacy finding means that the Commission believes that the U.S. provides adequate protection of the passenger data, despite the fact that the transfer is without the consent of the passengers, that the transfer in itself is illegal according to EU data-protection laws, and that the U.S. has no proper data-protection laws nor a fully independent data protection officer,” Boogerd said.

More on this story here.


The Federal Trade Commission estimates that identity theft costs nearly $53 billion annually. Some seven million people were victimized in 2002. Yet little is known about how the perpetrators actually operate. It is a popular perception that most identity theft happens on the Internet, but over the course of dinner, convicted identity thief Stephen Massey quickly made it clear that low-tech methods of getting people’s personal information are far more effective. His identity-theft crimes depended on the work of a carefully built ring, one that employed hordes of petty thieves and drug addicts. The crimes originated in dumpsters and garbage cans, where information can be culled from discarded personnel files and other trash.

More on this story here.


People with sophisticated safety and communications systems in their cars may be getting an unwanted feature. An appeals court decision last month revealed that the government may be able to convert some of the systems into roaming in-car wiretaps. The technology involved combines a global positioning satellite transmitter with a cellular telephone. Drivers can use the services to seek information and emergency help.

The device discussed in the decision allows drivers to punch one of three buttons: for emergencies, general information and roadside assistance. The phone has a speaker and microphone, and it turns out that the microphone may be activated surreptitiously, allowing government agents to listen in on conversations in the car.

More on this story here.


Driven by worries about safety, the need for accountability, and perhaps a certain “I Spy” impulse, families and employers are adopting surveillance technology once used mostly to track soldiers and prisoners. New electronic services with names like uLocate and Wherify Wireless make a very personal piece of information for cellphone users -- physical location -- harder to mask.

But privacy advocates say the lack of legal clarity about who can gain access to location information poses a serious risk. And some users say the technology threatens an everyday autonomy that is largely taken for granted. The devices, they say, promote the scrutiny of small decisions -- where to have lunch, when to take a break, how fast to drive -- rather than general accountability. A federal mandate that wireless carriers be able to locate callers who dial 911 automatically by late 2005 means that millions of phones already keep track of their owners’ whereabouts. Analysts predict that as many as 42 million Americans will be using some form of “location-aware” technology in 2005.

But it is not just the unnerving effect of uncovering small lies that has some users of the technology worried. Like caller I.D., location devices lift the curtain on a zone of privacy that many Americans value, even if they rarely have anything serious to hide. Advocates of location-aware technology insist that its safety benefits -- like locating a 911 caller or a stolen car, or an Alzheimer’s disease-afflicted loved-one -- outweigh the privacy issues. Critics of the new technology do not dispute its usefulness, but worry that it will become ubiquitous before legal guidelines are established

More on this story here.


Few Americans have heard of Jonathan Blattmachr. But among the 16,000 or so lawyers in America who specialize in trusts and estates, which is to say in the passing of wealth from one generation to the next, he enjoys the status of a Hollywood star. In these circles, his first name alone prompts recognition. The Rockefellers are among those who seek his counsel.

Because his specialty is maintaining wealth across time, he needs to know more than just the size and shape of his clients’ fortunes. His work requires knowing whether a marriage is an enduring bond of love or a commercial relationship, or whether heirs can be trusted with fortunes or only allowed a stream of income. He knows of prodigal sons and promising granddaughters, of executives at family-owned businesses who will not learn for years that the brass ring was never going to be theirs. His clients reveal these things to Blattmachr because he can help them maintain their wealth now and for their children. He can chart clandestine routes through the maze of the tax code, making a man who appears as a Midas to his bankers look like a pauper to the tax man.

Blattmachr’s practice exists because America has two tax systems, separate and unequal. One is for wage earners, and most of us know firsthand that that system works effectively. The other is for the wealthy, who control much of what the I.R.S. knows about their finances and who in recent years have paid a shrinking share of their incomes. Blattmachr is not ashamed of this. In fact, he sees himself not as someone who exploits the system for the benefit of the few but as the guy who keeps the system honest for everyone.

More on this story here.


The local salami maker that has grown to become a global food and milk producer with sales of €7.6 billion admits that €3.9 billion has vanished from its accounts. The scale of its debts and its tangled web of offshore companies that stretches around the world has raised fears that Parmalat, one of the best-known brands in Italy, could become Europe’s Enron.

The crisis that has been building through the autumn came to a head on Friday when Bank of America said that it had no record of an account in the name of a Parmalat subsidiary, Bonlat Financing Corp, based in the Cayman Islands. Parmalat had told Bonlat’s auditors, Grant Thornton, that the account contained nearly €4 billion. What shocked investors in the company even more was that BofA added that it did not recognise the authenticity of documents that purported to show the funds existed. But even before the hole was uncovered, Parmalat was deep in the worst cash crisis of its 40-year history.

More on this story here, here, and here.

Cayman Islands probes Parmalat subsidiary, fund.

Attorney-General Sam Bulgin said monetary authorities in the Caribbean tax haven were investigating the Bonlat Financing Corp. subsidiary of Parmalat and investment fund Epicurum, which Bonlat appears to have run. Bulgin said authorities were unsure if they would find anything at the two entities. “It is only appropriate that we launch an investigation to see whether any offenses, including money laundering and/or fraud, were committed in this jurisdiction,” Bulgin told Reuters.

More on this story here.

Parmalat files for protection from creditors.

After weeks on the brink of default, the Italian dairy and food giant Parmalat filed for protection from creditors on Wednesday under a new Italian government decree. It remains unclear how much of Parmalat’s global food business, which sells products like Archway cookies and long-life milk, new CEO Enrico Bondi will be able to salvage. Mr. Bondi, who made a name for himself in the 1990’s as a specialist in corporate turnarounds, faces a daunting task.

Magistrates investigating the company’s tangled finances sent financial police on Wednesday to search the home of Calisto Tanzi, Parmalat’s founder and chairman, in Collecchio, where Parmalat is based, near Parma in north central Italy. Mr. Tanzi was succeeded by Mr. Bondi. Mr. Tanzi, his son Stefano and about 20 other Parmalat executives and others connected to the company are being investigated on suspicion of fraud. People close to the investigation said that Parmalat’s complex maneuvers resulted in the creation of fictitious assets to offset perhaps as much as $11 billion of liabilities.

More on this story here.


Corrupt African leaders have used both simple suitcases and complex financial schemes to loot their treasuries. But stealing the money has always been far easier than bringing it back home. After recently locating $1 billion in looted taxpayer money hidden overseas, Kenya has begun an effort to reclaim the funds believed stolen during the administration of the former president, Daniel arap Moi. Kenyan officials hope they would gain pointers from the failed attempts of their neighbors.

Across Africa, other governments are engaged in similar frustrating efforts. The searches highlight theft on a huge scale. The efforts are being stymied by international banking laws, aggressive legal responses by accused officials and the sheer inventiveness of the money laundering. And the search efforts are costly.

More on this story here.


As we approach the end of another year, it seems as though South Africa is suffering from some sort of policy schizophrenia. President Mbeki assures the country and the world that South Africa is committed to following free market policies, and yet his government undermines the free market almost at every turn. As Mbeki sells his New Partnership for Africa’s Development (NEPAD), which is founded on good governance, he fights tooth and nail to defend one of Africa’s most despotic leaders, Robert Mugabe. Amidst these activities, South Africa’s economic policies need serious attention. Just in case President Mbeki is listening, here is my Christmas wish list for the government.

More on this story here.


While proposed changes are still up for debate, one option would be to impose tax on overseas investments which are now virtually tax-free. And some investors would find themselves paying tax even if their overseas investments lose money. Time to ask a few questions. Whatever the Government eventually does, it appears determined to do something.

More on this story here.


According to the proposals put forward in an Inland Revenue consultation paper, a series of new rules could mean that taxpayers face a variety of different rates on pensions. Lump sums paid by pension schemes using “open-annuit”q plans, which allow investors to draw an income and pass surplus funds on to their heirs, could pay over 40%, according to tax experts. The tax rate is expected to apply from April 2005, and will affect payments made where the investor was over 75 when they died.

Many observers view the proposals as the government’s way of forcing pensioners to turn capital into income when they retire, in order to prevent pensions from being used as tax saving vehicles.

More on this story here.


The Guernsey Financial Services Commission has adopted the standard embodied in the Financial Action Task Force recommendations on money laundering, which were revised in June. The standard applies to the provision of information to financial businesses in respect of introduced business. Businesses must, as a minimum, receive written confirmation from the introducer, who must provide a certificate or summary sheet detailing the necessary information. Businesses must also take adequate steps to satisfy themselves that copies of the relevant information specified in FATF recommendation nine are made available without delay.

More on this story here.


Many of the former Soviet republics and nations of Eastern Europe are taking the notion of Personal Retirement Accounts (PRAs) seriously as a way to strengthen their public pension programs. Jose Pinera, the architect of Chile’s groundbreaking reform, is working to bring PRAs worldwide. Witness the letter from Slovakia’s Minister of Labor and Social Affairs.

More on this story here.


From Warsaw to Cyprus, concern is growing among the 10 countries scheduled to join the European Union in May that they are about to enter a deeply troubled organization. They note the failure of the 15 present EU members to agree on a constitution or voting system, the apparent determination of France and Germany to dominate the grouping, and talk about a “two-speed” system of assimilation that would make the new members “second-class Europeans,” according to one view from Poland. Above all, prices continue to rise in the 12 countries that have adopted the euro as their common currency, dramatically so in some countries such as Greece.

More on this story here.


Profits are certainly without honor among the intelligentsia. The very word produces negative reactions, even from people who cannot give you a single reason why money carrying that label is worse than money called by other names. Some claim not to be against profits, as such, but against “obscene profits”. Yet they offer no clue as to how we are to tell obscene profits from R-rated profits or PG-13 profits.

The unspoken assumption -- and fallacy -- is that high profits mean high prices. If profits were just extra costs arbitrarily added on to the costs of production, then non-profit institutions or whole countries that operated without profit, such as the Soviet Union, would have had lower costs. Almost invariably, however, enterprises that operate without the incentive of profit have had higher costs, not lower costs. It was not a free-market think tank, but Soviet economists, who pointed out that Soviet industry used far more inputs to produce a given output than did market economies like the United States. Economically illiterate people -- which, unfortunately includes much of the intelligentsia -- have never understood the role of profit as an incentive to keep costs down.

In a hugely complex world, there is no way for the average person -- or any person, for that matter -- to be knowledgeable about even half the things that affect their lives. Most of us are necessarily ignorant of many fields, from botany to brain surgery. We can simply avoid discussing such things and we would not dream of working in those fields or advising those who do. But people who know nothing about economics often voice opinions on the subject nevertheless. Misconceptions about profits are just one symptom of this lack of understanding of economics. Some people even think that policies based on their uninformed notions should be imposed by the government. But no one would dream of imposing uninformed policies on those engaged in botany or brain surgery.

However, we cannot opt out of economic issues. Every citizen and every official they elect has an affect on the economy. Our only options are to be informed or uninformed when making our choices in the economy or in the voting booth. Unfortunately, those who are uninformed -- or, worse yet misinformed -- when it comes to economics include the intelligentsia, even when they have Ph.D.s in other fields.

More on this story here, here, and here.


Premier Alex Scott said many lawyers had told him there were legal, constitutional avenues which could be pursued following the decision to appoint a non-Bermudian Chief Justice, Englishman Richard Ground, but he had not decided to take any. When asked last night by The Royal Gazette if the row had pushed independence on to the Government agenda, Mr. Scott said: “I haven’t gone that far. ... Tomorrow I will probably make a broad strokes outline about the significance of the decision and what it may mean, but stop short of recommending a way forward.”

More on this story here.


Prime Minister and Minister of Finance, Dr. Denzil Douglas said commercial banking in St. Kitts and Nevis continues to make remarkable strides, as reflected by the strength of its asset base. Liquidity in the commercial banking system increased as the ratio of loans and advances to deposits fell further to 70.2%.

More on this story here and here.


The budget proposes an 18% increase in government spending, which the administration has earmarked for investment in the health, education and other public services. However, the aggressive spending will result in the government approaching the Caribbean Development Bank to borrow an extra $7.2 million.

More on this story here.


A British-based businessman and Labour party donor has been convicted in Switzerland of laundering tens of millions of dollars in bribes for General Sani Abacha, the late Nigerian dictator, who plundered an estimated $5 billion during his five-year rule. The judgment of Israeli-born British businessman Uri David by the attorney-general of the Canton of Geneva, also raises the possibility that UBS, the Swiss bank that held the funds, knew the account was being used by the Abacha family, an allegation the bank strongly denies. About $86 million from the account, opened on the instruction of Mr. David, has been returned to Nigeria.

Mr. David was found guilty of aggravated professional money laundering, forgery and support of a criminal organization. He was fined SF400,000 ($318,000) and lost nearly $1 million in profits he made from the laundering scheme. However, Mr. David escaped a jail sentence because he co-operated fully with the investigation and was judged to have shown “sincere contrition”. Last year, Swiss banking regulators publicly reprimanded UBS for failing to conduct proper checks in the case.

More on this story here.


The office of the Chief Minister of Gibraltar has asked the UK government to clarify the facts surrounding Spain’s reported objection to the involvement of Gibraltar in a future External Frontiers Regulation, effectively banishing the jurisdiction from the EU’s internal borders. “Such exclusion would be wholly unacceptable to Gibraltar and would be incompatible with any expectation that Gibraltar could continue to accept the burdens of EU membership while being excluded from fundamental elements of the EU structures,” said the government statement.

More on this story here.


The US Treasury on Monday announced the issuance of final regulations simplifying the rules governing capitalizing costs incurred in the acquisition or creation of intangible assets. In addition, the IRS also released a notice explaining that the government intends to propose new regulations clarifying the treatment of expenditures to repair, improve or rehabilitate tangible property.

More on this story here.

IRS eyes IP gifts.

In a statement, the IRS revealed that it is aware that some taxpayers transferring patents or other intellectual property to charitable organizations are claiming charitable contribution deductions in excess of the amounts to which they are entitled.

In particular, the IRS signalled its awareness of purported charitable contributions of intellectual property involving: 1) transfers of non-deductible partial interests in intellectual property; 2) the expectation or receipt of benefits in exchange for transfers; 3) inadequate substantiation of contributions; or 4) overvaluation of intellectual property transferred.

More on this story here.

Court rules that the IRS can demand information from nonprofits.

A federal appeals court has upheld a law requiring some nonprofit political groups to report contributions and expenditures to the IRS, saying the Constitution does not guarantee what amounts to a tax subsidy. The decision reverses a Mobile, Alabama federal judge’s ruling last year that said requiring such groups to report income and expenses unconstitutionally restricts free speech.

Mobile attorney Jim Zeigler, who represented a group of conservative activists who sued to block the law, said he was disappointed in the ruling but was not surprised because the U.S. Supreme Court ruled two weeks ago in favor of even broader restrictions on campaign donations. “Ever since that point, I’ve been afraid they would apply similar reasoning” to the Alabama case, Zeigler said.

More on this story here.


Conservation easements are permanent deed restrictions that limit some types of intrusive development -- such as dense subdivisions or strip mines -- while often permitting limited construction. Landowners “donate” the easements to a nonprofit land trust or a government agency that, in effect, certifies that the restrictions are meaningful and provide some public benefit, such as preserving open space or protecting wildlife. That allows the donor to seek federal income tax deductions for the reduction in the land’s market value.

Without question, conservation easements have done much good. Conservationists credit them with making preservation the fastest-growing arm of the environmental movement, fueling a boom in land conservation and helping to protect more than 6 million acres nationwide. Easements have helped safeguard fragile ecosystems, critical watersheds, land bordering national parks and some of the nation’s most stunning vistas.

But as easements have proliferated, so have problems and abuses. Although the development restrictions are publicly described as lasting “in perpetuity”, conservationists privately fret over whether this is true, partly because easements continue to face court challenges. Enforcement is also a problem. Meanwhile, companies and individuals claiming huge write-offs face little risk of audit because of competing priorities at the IRS.

More on this story here and here.


Purchases of U.S. debt from offshore central banks surged to another new record in the latest week, possibly helped by suspected dollar buying by Japanese monetary authorities as the dollar slid to a three-year low against the yen. The breakdown of the Fed’s custody holdings showed central banks bought $8.5 billion of Treasuries, taking their total holdings to $842.1 billion. They also bought $3.0 billion of agency debt, taking those holdings to $214.6 billion.

Foreign central banks, mostly from Asia, have been major purchasers of U.S. debt this year as part of efforts to prevent an export-damaging rise in their currencies.

More on this story here.


Through Treasury’s FinCEN, federal law enforcement agencies can reach more than 29,000 financial institutions to locate accounts and transactions of persons or groups that may be involved in terrorist financing or money laundering. The information-sharing system provided data for federal law enforcement for 64 terrorism and terrorist financing cases and 124 money laundering cases from February through November. The leads resulted in three indictments, 21 subpoenas, 11 search warrants and 407 grand jury subpoenas.

More on this story here.


At present we find America the most worried nation on earth about increasing trend of global money-laundering, though the very term “money laundering” originated in America at the time of the notorious gangsterism that arose originally out of prohibition -- the banning of alcoholic drinks. Several mechanisms were used to disguise the origins of the large amount of money generated by the import and sale of alcohol and other “rackets”. The major headache that gangsters faced was that the money was cash, often in small denomination coins. If the coins were put into bank, the questions would be asked. But, the storage of large amounts of money in low value coins is a storage nightmare. So they created businesses, one of which was a slot machine, and another of which was laundomats -- so, it is said, that the term “money laundry” was born.

A fairly comprehensive introduction to the subject (albeit in somewhat mangled English) follows.

More on this story here.


Two years after the United Nations Security Council designated nearly 300 people as terrorist financiers, most continue to elude authorities. Some are running lucrative businesses in Europe, including a hotel in Milan, and traveling without regard to a travel ban, according to a recent U.N. report by the council’s investigators. “Many of the al-Qaida sources of funding remain uncovered and al-Qaida continues to receive funds it needs from charities, deep-pocket donors and business and criminal activities, including the drug trade,” the U.N. report states.

Another recent report by the General Accounting Office, the investigative agency of the U.S. Congress, found that the federal government’s law enforcement agencies do not “systematically collect and analyze data” on the variety of ways that terrorists fund their attacks. Taken together, the two reports expose troubling vulnerabilities in the federal government’s struggle to choke off funding to terrorist groups such as al-Qaida, lawmakers and terror finance experts say.

Jonathan Winer, who investigated terror financiers as the former deputy assistant secretary of State for international narcotics, said the U.N. report was especially troubling because it showed that governments around the world are not enforcing global sanctions intended to stop the money flowing to terrorists.

More on this story here.


China’s Communist party formally called for protection of private property to be written into the country’s constitution along with references to the political theory of former president Jiang Zemin. Constitutional protection for private property is widely seen as vital to help create a more complete legal framework for entrepreneurial activity, which has already become a driver of the national economy despite operating in something of a legal twilight zone.

Private businesses complain of red tape and government interference, with even the most successful and admired entrepreneurs often falling victim to crackdowns on corruption or tax evasion.

More on this story here.

What China badly needs is market Taoism.

Serious institutional incompatibilities still exist in China’s market-socialist economy, reflecting the uneasy mix of plan and market. Those inconsistencies must be resolved in favor of the free market if China is to achieve stable long-run growth and prosperity. The crux of the problem is that hard-liners still cling to state ownership in order to protect their power base, while the market requires clearly defined and enforced private property rights. Resolving that tension requires constitutional and political reform.

The Soviet system failed because it disregarded reality; namely, that the way of the market, not the plan, is most consistent with human nature and thus with individual rights to life, liberty and property. What China needs is not market socialism. Rather, it needs market liberalism, or what could be appropriately called market taoism, the economic version of one of the great underlying principles of Chinese thought -- the natural way (tao) of freedom and non-interference.

More on this story here.


Recently, to the dismay of many on both the right and the left, the Supreme Court of the United States, in its infinite wisdom, held that the newly passed campaign finance laws were constitutional. Apparently, stating one’s political views prior to an election are no longer deemed to be a constitutionally protected right. Supporters of this new legislation argue that such measures are necessary in order to prevent “powerful interest groups” from controlling politicians. This must imply that our elected officials are easily bought and sold. If this is so, why would we trust those politicians who are so easily corruptible with enacting legislation to prevent this very problem?

Perhaps some are fearful that these ads will “mislead” the voters, especially since many voters do not follow politics until just a few weeks prior to the elections. This seems to be more of a problem of an uninformed electorate than a “burden” of free speech. Besides, who stands to benefit from these ads not reaching the vast majority of voters? Yep, you guessed it, the incumbent politicians. It seems we have come full circle; the politicians who could not be trusted with the previous campaign finance laws have apparently devised a “fairer” method that just “coincidentally” strengthens their already high re-election rates. It is so reassuring to know that they are looking out for our well-being.

It is absolutely ridiculous to assume that restraining speech during election campaigns will somehow result in citizens of the Untied States obtaining more influence over their representatives. The only sensible alternative is to completely remove all barriers to campaign finance, with the exception of foreign contributions for obvious reasons, and require a full disclosure of all contributors and the amount they gave to be made public and be easily accessible.

More on this story here.

Lenny Bruce wins posthumous pardon.

Lenny Bruce, the obscenity-slinging comic icon of the 1960s, became a free-speech hero Tuesday when Gov. George Pataki granted him the first posthumous pardon in New York state history. Pataki called the action, almost 40 years after Bruce was charged with the misdemeanor of “Giving an Indecent Performance”, “a declaration of New York’s commitment to upholding the First Amendment.” The governor added in a written statement: “Freedom of Speech is one of the greatest American liberties, and I hope this pardon serves as a reminder of the precious freedoms we are fighting to preserve as we continue to wage the war on terror.”

Bruce was convicted in 1964 on obscenity charges stemming from a performance in Greenwich Village. He used more than 100 “obscene” words during the act, undercover detectives who attended testified before a judicial panel. Critics say the three judges overlooked the fact that patrons were at the club of their own free will, in a free America, in an even freer, bohemian, New York.

More on this story here.


An expansion of the federal immigration screening process will require international visitors to give high-tech fingerprints and to be digitally photographed when entering the United States beginning Dec. 31. While U.S. Rep. Candice Miller (R-Michigan) said the new process will provide more security against terrorists, civil rights groups warn of an invasion of individual rights, misuse of data and damage to the nation’s economy.

Imad Hamad, regional director of the Arab-American Anti-Discrimination Committee in Dearborn, warned that the procedures will hurt the American economy by discouraging visitors.

More on this story here.


The head of India’s election commission has described the country’s politicians as poorly educated, impolite cheats. James Lyngdoh, who leaves office in two months, told the BBC that not one of them was committed to democracy. The plain-speaking commissioner has been widely credited with holding a largely peaceful and fair election in Indian-administered Kashmir last year.

Mr. Lyngdoh told BBC that the Indian political system was under threat of being “killed” by its elected representatives. “They are cheating all the time,” he said. “Democracy means basically individual freedom and that you respect individual freedom to the utmost extent. I can’t think of any [politician] who is that involved in individual freedom,” he said

More on this story here.


The consumer culture has pushed America’s personal saving rate to record lows in recent years and to among the lowest in the developed world, a situation seen by many economists as one of the most serious structural weaknesses in the economy. “Clearly if you look at the bankruptcy rate, the (payment) delinquency rates, there are some worrisome signs,” said Wells Fargo chief economist Sung Won Sohn.

The government revealed last week the dearth of savings is worse than first thought. Revised Commerce Department data showed Americans saved just 2.3% of every dollar earned after taxes in 2002 -- not the 3.7% previously reported and less than a third of the 7.7% in 1992. While the falling saving rate does not take into account wealth accumulated through rising property values or stock portfolios, it compounds the problem of the burgeoning budget deficit being chalked up by the government.

“I don’t know of any other major economy with a savings rate as low as ours,” said Sohn. “Take Japan, for example. The government runs huge budget deficits but the consumers save so much that not only can they take care of their own budget deficits, but they take care of quite a bit of ours as well.”

More on this story here.


In a windowless room, in a nondescript house on the other side of the world, Rupert Sessions glimpsed his fortune. It was a metal suitcase, choked with $100 bills and protected by armed guards and a combination lock. The money had brought Sessions all the way to the Persian Gulf. He and a West African associate were there to collect the $21.5 million in the case. But he was concerned because the bills looked discolored.

Don’t worry, officials told him. That is just a security measure. We can clean up the cash. Finally, Sessions thought, it is ours.

There was, of course, no $21.5 million. Sessions, a 73-year-old retired electronics specialist, had been fleeced by what may be the most widespread fraud on Earth. He had poured more than $300,000 into a Nigerian 419 scam, the label describing the legendary e-mails that promise millions but deliver nothing. For more than a year, he gave virtual strangers every dollar he had. Sessions spent so much that he now fears losing his home.

More on this story here.


Government and the market today are inextricably enmeshed, and for this reason, trade is not free. Trade is regulated to the hilt, so that many corporations are now incorrigibly corrupt rent seekers. In this mixed-economy milieu, trends like exporting jobs, and importing cheap labor with visas that do not require employers to give hiring preference to Americans, do not epitomize the classical liberal idea of laissez faire.

Those who say they champion laissez faire must understand this, and stop confusing current reality with their proclaimed ideal. Rather than endorse the mixed-economy mess in our labor markets, they must uphold a principled alternative. Government involvement with the commercial life of the community must be eliminated.

The right of exit -- the ability to take one’s money and run -- must be inviolable. But conversely, the immigration aspect of the job quagmire ought to become fair game for libertarians. America’s immigration policy manifests the transfer society at its worst. And as long as we have a profligate welfare state, there is nothing wrong in stopping would-be parasites at the border.

More on this story here.


A persistently weak dollar and growing opportunities in China have many portfolio managers predicting that 2004 will be the year of the big multinational stock. A steady rotation away from riskier small caps and tech stocks and into large-cap value companies has helped drive the Dow Jones industrial average and the Standard & Poor’s 500 index to 19-month highs this week.

As those indexes rise, the tech-heavy Nasdaq Composite and the Russell 2000 index, which focuses on small-cap stocks, have turned sluggish. Small stocks are those with market capitalizations -- calculated by multiplying the number of shares outstanding by the price per share -- of between $300 million and $2 billion. Pundits say blue-chip dividend-payers are more fairly priced than the small-cap and tech companies that have led the rally since March.

More on this story here.


Government agencies that oversee the activities of portfolio managers in some of the largest European fund markets have begun investigations into whether funds in their jurisdictions have allowed preferred investors to engage in frequent trading and late trading to the detriment of other shareholders. Such problems are at the heart of the American controversy.

Many companies under investigation in the United States have big operations internationally. Companies that are found to have broken trading rules, either in funds sold in the United States or abroad, are bound to lose business from large foreign investors like pension funds, and from financial advisers who steer small investors into funds, European advisers and consultants said. That would compound the difficulties that these companies face in the United States, consultants warned.

More on this story here.


There is no question that China is growing at a very fast pace. The recent official statistics tell us that the GNP has been growing at somewhere around 8%. Given that the “official” statistics have always been fudged to suit the current purpose of the government, it is entirely possible that they are still being fudged (in this case downwards), to avoid the backlash in relation to a huge trade surplus with the rest of the world. As such, they may have shown a slower growth than actually has been taking place. I suspect that the actual growth rate is closer to 12% to 14% than to the reported 8%.

What most people probably do not know is that China’s current boom is unsustainable because it is based on a massive expansion of credit (i.e., it is financed by debt). This should sound familiar because the same situation has existed in the U.S., only on a much larger scale. The latest figures show that China’s M2 money supply grew by 21.6% over the past 12 months. At some point over the next year or so China’s government will be forced to take serious steps to curtail the credit expansion. When this happens there will probably be a very sharp downturn in growth.

More on this story here.


The Far Eastern Economic Review surveys and ranks the performance of companies in Asia and explores what lies ahead for business in Asia. In line with official forecasts of stronger growth for Asia, more than 63% of all readers surveyed believe that business will be better in 2004. For the ninth straight year, readers ranked software giant Microsoft as the top multinational with widespread admiration for its long-term vision and financial soundness. Given that Japan has endured a decade of stagnation, it is not surprising that Japanese readers are less optimistic about business prospects with just over 53% surveyed believing business will be better in 2004. By way of contrast, more than 74% of Chinese readers expect a better business climate in 2004.

More on this story here.


Yep, America’s future is here; Japan has a very docile populace. The public seem to rarely question the news. People do and think as they are told. People do not question the government or corporate line; because the nail that sticks out, gets pounded down. Could America be far behind?

The Japanese mass media is completely and totally run by a handful of corporations. A good example of this is Japanese Top 40 music. The top music charts here are all run by a few companies who decide for you what “artist” is going to be famous next. It is great for all involved; Don’t think, be like everyone else! Everyone else is buying this new record. You should too! (You would hate to lose friends by listening to something different.) The American Pop Music Industry aspires to become all that Japanese pop music already is: Corporate state swill shoved down the throats of the masses.

Working in Japan is often kind of like working in a real life Fantasy-land; It is very safe, nothing seems real, and the whole world is as cute as hell. And the way the United States seems to be going now, I really wonder if it is far behind.

More on this story here.


People try tenacity for a while, but then go on to other characteristics that do not impose such boredom. But tenacity is crucial. Consider the career of Walter Rothschild, to whom Arthur Balfour addressed his famous letter, “Dear Lord Rothschild,” the letter that announced what became known as the Balfour Declaration (Nov. 2, 1917). The result, a little over three decades later, was the establishment of the State of Israel. This seems to be fame enough for any man, but Walter Rothschild is not famous because of Balfour’s letter. He is famous because of smaller things -- millions of them.

More on this story here.
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