Wealth International, Limited (trustprofessionals.com) : Where There’s W.I.L., There’s A Way

W.I.L. Offshore News Digest for Week of February 18, 2008

This Week’s Entries : This week’s W.I.L. Finance Digest is here.


One hears that more Americans than ever are considering or planning to move overseas, or have already done so -- many with no intention of ever returning. How does this anecdotal evidence translate into real numbers? According to a Zogby International poll, as many as 10% of American households are "seriously" looks to leave the U.S.

1.5 million U.S. households are preparing to move out of the U.S. The vast majority of emigrees are in their 20s, 30s and 40s. And some may never return. No, we are not talking about the next major deployment of National Guard units to the Middle East. In fact, none of the emigrants are government workers or corporate employees leaving for temporary overseas assignments. This is a group of malcontents and adventurers. They consist entirely of private citizens and their families packing up and leaving the good ol' USA solely at their own initiative.

This news comes from a Zogby International poll of 115,000 Americans conducted over the past two years. Bob Adams, CEO of New Global Initiatives, commissioned the poll when he realized that no reliable database tracks the movement of Americans out of the country. A recent Barron's article, written by Bob Adams, breaks down the Zogby/New Global Initiatives data as follows: Adding it all up, some 10% of all U.S. households are looking to leave the country, while another 11% are considering living outside the U.S. at least part time.

... I reached Bob one evening at his home in Panama. "It's happening," says Adams when asked about this new wave of emigration. "And we really cannot say exactly why." While Adams's survey includes destinations anywhere in the world, his personal area of interest is in Panama. While there has always been a permanent American presence in Panama, Adams says the recent immigrants are different from previous ones. Ten years ago, the typical American ex-pat in Panama was likely to be a retiree who had previously been in the country. ... These older ex-pats frequently used the words "tropical paradise" to describe why they moved to Panama.

Regarding the type of immigrants arriving in Panama, a change has occurred in recent years. Adams says today's immigrants tend to be a lot younger, professionally employed and more likely to meld into the international community than earlier transplants. When asked, these folks generally say they moved to Panama for adventure, a lower cost of living, or to escape the growing intrusiveness of the American or European political and legal systems.

Adams's interest in the topic of American emigration is the result of serendipity. Having lived and worked overseas for four decades, Adams decided it was time to settle down. He identified Panama as the best candidate. As he was preparing to move, he noticed the poor quality of Web sites catering to potential immigrants to Panama. So he set up his own site, RetirementWave.com. He intended to create an impromptu guide to assist likeminded people in the decision to move to Panama. But it quickly turned into an unpaid job responding to inquiries from interested parties worldwide. Adams realized he may reach an audience that extends beyond Central American real estate investors.

Why do people leave home for strange foreign lands? While a handful might claim to leave for political or religious reasons, most seek greater economic opportunity. ... CNBC anchor Erin Burnett recently interviewed Adams. "In the last 10 years, the amount of pasture accessible to Americans has greatly increased, and it is a lot greener than it ever was," said Adams. A replay of this interview is available on the New Global Initiatives Web site. ...

If people emigrate to find economic opportunity, might Adams's survey portend bad news for the U.S.? Current U.S. GDP is $44,000 per person versus Panama's $8,000. It seems unlikely that people are leaving for immediate financial gains. Still, Panama is a young country demographically, with a median age of 26. Panama's GDP grew at an 8% clip last year. It does not have the U.S. baby boomers' $55 trillion unfunded pension liability. Neither is it involved in difficult, expensive Middle East nation building. There may be quite a few 20-40-year-old Americans willing to sacrifice current income for future opportunity in countries like Panama. Only time will tell ...


If the U.S. were on fiscally sound financial footing, a lot of the warnings we at W.I.L. make directly or publish in our blogs would be essentially abstract for most people. It is the nature of the government beast to try and steal a little more today than it did yesterday, and a little more still tomorrow. But if you are already fat and happy, your greed for more resources and power is somewhat countervailed by a fear of pushing things too far and upsetting the whole scam. Thus the proclivity is towards piecemeal, quasi-stealthy, theft rather than knocking over the whole neighborhood via armed robbery.

On the other hand, with government finances out of control and deteriorating further our warnings should command more focus. It is the difference between living in a hurricane-prone location and a receiving a hurricane warning -- time to set aside theory and get ready for some serious practice. In a fiscal death spiral, the fine points regarding plucking feathers from the goose without inducing a squawk devolve to grabbing as many feathers as you can while the goose is still around. Coming up for air from the whirlpool of metaphors: The likelihood of government policies such as capital controls, hyperinflation, more taxes, etc. -- and thus the need for active asset protection measures -- is related to the soundness of its finances.

Here, PrudentBear.com's Martin Hutchinson provides a superbly pithy abstract that encompasses fiscal policy theory, public choice theory as it applies to taxation and government spending, and a history of U.S. federal taxation and government finances. He follows that up with some guessing about possible paths from here -- from the known disaster of the U.S. under the Bush Administration to each of the three major presidential candidates left standing.

It was revealed [the end of January] that the George W. Bush administration intends to present a budget showing deficits of $400 billion for each of the fiscal years to October 2008 and October 2009, at a time we are close to an economic peak. Given a normal recession, that means the next "trough" deficit will probably be over $1 trillion. The final report card can now be written on the fiscal management of the Bush administration, the primarily Republican Congresses since 2001 and the Federal Reserve Chairmen of the period. One's only regret in writing it is that no grade lower than F has been discovered.

Budgetary management in a democracy is damn difficult, to be fair. The voting public gets only the most vague and generalized benefit from spending cuts, while the affected lobbies and interest groups are energized to their maximum squawking intensity by the idea that their precious budget handouts or tax reliefs might be removed. On the other side, tax cuts are inevitably skewed towards the wealthier taxpayers, since they pay most of the tax in the first place, but no amount of electoral juggling can lead the wealthy to form an electoral majority.

If taxation and government spending had no economic effect, as people believed between the 1950s and the 1980s, and elections determined the share of output retained by the state, the equilibrium political state would be something like Sweden, in which the state takes around 60% of GDP and doles it out in an egalitarian manner in health, education, pensions, disability payments and other benefits. The private sector would be limited to food and consumer goods in which there was no plausible rationale for state management (even alcohol is a state monopoly in Sweden, for example, and is inordinately expensive).

However in practice, increasing the size of government damages economic output, in three ways. First, resources are diverted from the economically optimized (by the price mechanism) private sector) to an area where decisions are made on a political basis, so are generally nowhere near economically optimal. Second, increasing marginal tax rates is subject to a severe law of diminishing marginal returns on the supply side. At low rates a small increase will produce only modestly less than would be expected by a linear analysis. But a high marginal rate, above 40% or so, a sharp increase has repeatedly been shown to be counterproductive in terms of revenue raised, often producing a reduction in revenue where an increase had been expected. Third, institutions that are subject not to the disciplines of the market but to the imperfect controls of a large government bureaucracy become corrupt, and that corruption, which is proportionate to the resources controlled, represents pure loss of output to the economy as a whole.

Thus even in honest pious Scandinavia the big government nirvana has been proved suboptimal, and in a country with a U.S. or Mediterranean level of graft it would quickly descend into chaos. The problem is then that the adverse economic effect of a large public sector is inchoate and diffuse, whereas the forces tending to enlarge it are ever-present and powerful. The Founding Fathers, almost all of them wealthy men, were very aware of this problem and attempted to limit the expansion of the federal government, partly by making the income tax unconstitutional. 19th Century economists helped by establishing a consensus that budget deficits were bad, thus limiting the ability of government to grow without inflicting immediate pain upon the taxpayers.

However in the early 20th Century, the progressives, economically more or less illiterate but appalled by the sight of nouveau-riche businessmen consuming conspicuously, removed these barriers. First they passed the Sixteenth Amendment, allowing an income tax. Then they discovered the joys of Keynesian economics, which de-linked revenues and expenditures, allowing budget deficits and spending to be justified as economic "stimulus" whenever the economy was performing at less than 105% of capacity. Control of the Federal Reserve System enabled them to remove the short-run monetary constraints that had previously prevented over-expansion, and the road to larger government was cleared. The Great Depression and intermittent wars fueled the increase. Expansions of government that would have been impossible in peacetime were justified as emergency measures, and then embedded in the system, so as to persist after the emergency ended.

By the late 1970s the economic costs of ever-increasing government had become obvious both in Britain and the U.S., and the political consensus in favor of it was defeated by two determined leaders, Margaret Thatcher and Ronald Reagan. [Reagan's reputation here is far greater than deserved, but he certainly talked a good game.] That defeat was only temporary however, as demonstrated by the failure of their successors John Major and the Bush family and the rise to prominence of supposed "Third Way" leaders in Tony Blair, Bill Clinton and, as it turned out, George W. Bush.

Blair and Clinton discovered simultaneously that much of the cost of increasing government could be disguised for many years, if it was done gradually and combined with an excessively loose monetary policy. They were assisted providentially by the Internet communications revolution, which allowed an increasing proportion of the world's consumer goods to be produced in low wage economies at declining costs -- this prevented the surge in consumer price inflation which would otherwise have been inevitable.

Bush came to office promising a reduction in the size of government and in particular a tax cut, both traditional Republican policies strengthened by Reagan's success in the 1980s. Instead Bush, recently described by his former chief speechwriter Michael Gerson as a "large-hearted man" -- at least with other people's money -- indulged in an orgy of feel-good social policy. Notably there was the "No Child Left Behind Act" of 2001, which vastly increased the federal government's intrusion into education without noticeable positive results and the Medicare Part D of 2003, which was also hugely expensive since it lacked effective cost controls. The largeness of Bush's heart even extended to his Congressional colleagues, whom he allowed to carry on veto-free in an orgy of pork-barrel spending and outright corruption without precedent in the history of the Republic.

Even Bush's tax changes had little or no supply side effect. His 2001 bill lowered top rates of tax only modestly, while including so many sops to populism that its effect was at best that of an equivalent sized Keynesian stimulus. In 2003 he passed a genuinely supply side measure, reducing the top rate of personal tax on dividends to 15% and thus their total taxation to around 50% from the exorbitant corporate plus personal rate of 61% they had previously borne. Even then, he did it wrong. He should have made dividends fully tax deductible at the corporate level, which would have leveled the playing field between different types of investors and removed almost all the incentives to business tax evasion. If he had done that, paying for it by capping the deductibility of home mortgage interest at around $10,000 per annum, and perhaps closing a few other corporate tax loopholes, he would have truly have increased the value and productivity of U.S. business, while quelling the speculative boom in housing that is proving so unbearable to unwind.

Now Bush is running into the next downturn proposing a mindless Keynesian fiscal stimulus, with an unrealistic economic forecast of almost 3% economic growth in 2008 and 2009 and deficits in those years at close to record levels. Since the swing in the budget deficit from 2000 to 2004 was over $600 billion, and the U.S. economy is bigger now, it seems inevitable that the bottom of the recession will see a federal budget deficit of over $1 trillion, with all the financing difficulties and economic distortions that will cause. In short, whatever the size of George W. Bush's heart, it is clearly bigger than his brain.

As the primary season has proceeded, we are beginning to see into the future. The picture is not entirely negative. On the Republican side, the likely winner is John McCain, a man with innumerable drawbacks and unpleasantnesses but one pretty solid virtue: He appears to be more fiscally responsible than the incumbent, harking back beyond the supply-side showboating of the 1980s (which was always to some extent smoke and mirrors as far as fiscal balance was concerned) to the successful budget-trimming Presidency of Gerald Ford. McCain's solution to soaring medical costs is to reduce them through increased competition. His solution to expanding the military is to reduce the gold-plating and log-rolling in the Pentagon. Faced with a trillion dollar deficit, his likely solution would be to cut back spending sharply and impose a [punishing] tax increase. Faced with inflation rocketing into double digits his likely solution would be to fire Ben Bernanke. One can live with such an approach, uncomfortable though it would be.

On the Democrat side, the picture is less clear. Hillary Clinton, the front-runner, appears to have her husband's vice of sharp practice without his virtue of fiscal prudence. While she might save some money in Iraq she would spend all of it and more on social programs. Faced with a trillion dollar deficit, her twin solutions would doubtless be to impose a tax increase that was as redistributive as possible, albeit with loopholes for her campaign donors, and to hire Wall Street to push the envelope of deficit financing techniques through securitizing the Washington Monument. Double digit inflation would be pushed into the future and blamed on others, as it was from 1973-79.

Then there is Barack Obama. On the surface, his policies are almost as expensive as Clinton's, though he might be more determined in reining back overseas military adventurism, thus achieving a larger saving there. On the other hand, his principal economic advisor Austan Goolsbee is a senior business professor at the University of Chicago, so presumably has a good economic grasp. Interestingly, Obama has now been endorsed by Paul Volcker, in 1979-87 the only really useful Fed Chairman ever, who killed (but alas not permanently, thanks to his feckless successors) the double digit inflation of the 1970s. Assuming Obama listens to his advisors and the most eminent of his supporters one can thus have some confidence that his solutions to a trillion dollar deficit and double digit inflation would be intelligent, but not what they would be.

Looks like a two out of three chance for a decent solution, or thereabouts. But even minimally competent and forward-thinking economic management, in both the administration and the Fed, would have avoided the problems in the first place.

With Ron Paul's chances having been reduced from tiny to infinitesimal, there is no candidate left who promises to implement a truly constructive approach to the whole giant mess. Moreover, none of those left have included in their platforms the halting, never mind the reversal, of the destruction of civil liberties.

Keep one hand on your wallet. And, ideally, the wallet should only contain spending cash. Too many want to take it from you, and too few will help you retrieve it if taken.


The British housing bubble was by some measures, e.g., price increases, even wilder than the one in the U.S. Some specifics are different, but in the end the source of the bubble was the same as for all bubbles: Excessive credit fueling asset prices. The peak, broadly speaking, came a little later in than in the U.S., but the outcome sure looks the same: collapsing housing prices, fatally wounded lending institutions, and revelations of the fraud that happened during the recent easy-money times.

Britain's housing market is a "house of cards" that is set to implode after years of reckless mortgage lending, chronic oversupply of new flats and widespread fraud, a leading analyst said ...

Has a familiar ring to it.

"We believe it is payback time for years of speculation and sharp practice," Alastair Stewart, of Dresdner Kleinwort Wasserstein, said in a note to clients issued at the start of British housebuilders' results season. The warning came amid rising fears of endemic fraud in the housing market.

The Financial Services Authority (FSA) said ... that it had banned a further two mortgage brokers for submitting false applications to lenders, in what appears to be a growing trend. The action ... came after a speech last week by Philip Robinson, director of the FSA's financial crime unit, in which he urged the housing industry to tackle the problem. He said dozens of lenders had contacted the FSA with 200 allegations of mortgage fraud and more were coming in every week.

The bans were against Amjad Malik and Tahir Mahmood, of Abbaci Associates. They were charged with submitting, on behalf of clients, applications that contained false information relating to the clients' incomes and jobs. Apart from such individual cases of mortgage fraud, Mr. Robinson said there was a far greater threat of organised rings attempting property fraud.

Mr. Stewart, in his research note, advised shareholders in housebuilding companies to "take advantage of the recent bounce [in share prices] and head for the exit." He said that housebuilders' results would show the market was "hitting a wall" as forward orders for new homes collapsed. Mr. Stewart said there was a bubble in the market for new urban flats, which looked "in line for a full-scale crash. ... Overbuilding, overlending and more than a whiff of fraud have in our view led to 'mini-Floridas' in cities from Leeds to Leicester."

So where were all these prophets of doom before the fact? Did any of the housing analysts preserve at least some measure of honor by warning their clients with words to the effect of, "Possible bubble. Speculate at your own risk. Enter your mental stop loss sell points"?


With the tax preference afforded to dividends under the current U.S. tax regime, we are seeing schemes designed to convert non-dividend income into dividend income. Some of these schemes channel funds through offshore jurisdictions for reasons that look like they include obfuscation. Is a virtual lock that rabidly anti-offshore Senator Carl Levin will highlight the "offshore" element of any such scheme -- especially if the jurisdiction is the Cayman Islands, which are the favorite whipping boy of the anti-offshore crowd these days.

Wealthy Americans dodge more than $100 billion a year in taxes by hiding assets in the Cayman Islands and other offshore tax havens, [Senator Carl Levin (D-Michigan)] said last week ... Under legislation he is offering with presidential hopeful Senator Barack Obama, Senator Carl Levin of Michigan said it would become easier for federal authorities to pursue possible tax evaders by putting more onus on them to show that offshore shelters are legitimate. ...

The Michigan Democrat chairs the Senate Permanent Subcommittee on Investigations. He said subcommittee investigators, who have done a number of ground-breaking tax probes in recent years, are focused on the issue. He acknowledged reports about a new probe into a Cayman Islands scheme. "It has been described in the media that there is a tax avoidance scheme involving dividend tax shelters. I don't want to deny that," he said, declining to provide details.

Citigroup, Lehman Brothers, Morgan Stanley and UBS AG have received subpoenas relating to the probe, The Wall Street Journal reported last month. The Journal said the probe targets offshore hedge funds doing derivatives deals with investment banks that allow the funds to avoid paying taxes on U.S. stock dividends. Officials at Citigroup, Lehman, UBS and Morgan Stanley declined to comment.

A thriving business in tax dodges, many of them involving complex offshore financial transactions, has grown up in recent years on Wall Street, with some purveyors even seeking U.S. patent protection for their off-the-shelf schemes. Levin; Obama, an Illinois Democrat who is campaigning for his party's nomination for president; and Senator Norm Coleman, a Republican from Minnesota, last year introduced a bill to crack down on tax evasion strategies. It would ban patenting them, change the legal standards underlying how they are defended and target 34 offshore tax havens, including the Cayman Islands, Bermuda, Grenada, Aruba and The Bahamas.

Under the bill, the Treasury Department could slap offending tax havens with the same penalties it places on money laundering centres, while it would also stiffen penalties in the U.S. for promoting abusive tax shelters.

"There is a lot of money involved. We have got people paying taxes in this country who are middle-income, working families and, at the same time, people avoiding paying taxes who are making millions of dollars a year," Levin said at the summit. "The public knows about it. They are unhappy with it. I think it is going to be an issue in the campaign, by the way. I hope it will be. I hope we can get some legislation passed."


Swiss financial privacy is not what it used to be, but it is still pretty good. Here, the chairman of the Swiss Bankers Association is alleged to have said the Swiss will not stand on privacy issues when money laundering, terror financing or tax evasion is involved. Traditionally the Swiss have required that the subject of an investigation have been suspected of a crime under Swiss laws -- under the accusing country's laws alone has been insufficient. Their definition of tax crimes has been more stingent than most, so how much fire there is behind this puff of smoke remains to be seen.

Swiss banks known for maintaining stringent privacy laws for their customers across the world have assured the Indian authorities that they are ready provide any information on any customers to check money laundering, terror financing and tax evasion.

"We do respond to the queries of the governments all over the world to provide information on various kinds of criminal finance. We have certain procedure which a government of a country needs to follow to receive any information on the customers of the Swiss banks. We have dealt with the Indian government authorities on a similar footing," said Pierre G Mirabaud, chairman, Swiss Bankers Association.

However, he refused the comment on the development involving Swiss major UBS whose branch licence approval has been withheld by the Reserve Bank of India (RBI) for allegedly not cooperating with the Indian authorities to probe an money laundering instance by an Indian national. "I wouldn't comment on the individual bank," he said adding that Swiss banking is 99.99% safe and does not allow shady financing deals.

Mirabaud is visiting the country along with a team of bankers to meet the various financial authorities in Mumbai and Delhi to lobby for easy government regulations facilitating higher Swiss investment Indian capital Markets and entry of Swiss banks into the country.

"We want more liberalization in banking and investment norms to allow more banking players and higher inflow investment by Swiss-based institutional investors and hedge funds in capital market. Indian capital market is any more an emerging market but can treated like a developed market. In Asia, after Hong Kong and Singapore we are interested in India," said Mirabaud.


Liechtenstein has privacy and other client protection laws that are considered among the best of all offshore jurisdictions. Be that as it may, there is no such thing as a "silver bullet" against the prying eyes of governments and other parties. A case in point is that in Liechtenstein recently, a bank employee stole client records and threatened to publish the data. Not surprisingly, this is a very serious offense, which does not mean that some sufficiently greedy or angry insider might not attempt it.

Liechtenstein-based Bank LLB has been the target of a blackmail campaign since 2003 after an employee threatened to publish the secret account details of German clients, LLB said in a statement on [February 11]. "A former employee blackmailed the bank with used, internal documents concerning German bank clients," said LLB, or Liechtensteinische Landesbank. "He threatened to circulate the documents."

LLB said the employee was arrested and sentenced in 2004 -- and still remains in prison -- but that an accomplice continued the blackmail campaign. One person was arrested in September and remains in investigative custody in Germany, LLB said. The statement follows an article in German magazine Der Spiegel that said LLB had paid out €9 million ($13.11 million) as part of the blackmail affair, which affected hundreds of German clients who stashed savings in secret accounts in the tiny Alpine enclave. "We cannot comment beyond the statement. This is an ongoing investigation," said an LLB spokesman.

Sandwiched between Austria and Switzerland, the principality of Liechtenstein is home to three mid-sized private banks -- Swiss-listed LLB and VP Bank and the unlisted LGT Bank in Liechtenstein -- and scores of small wealth managers who boast discreet banking services for international clients. Liechtenstein's bank secrecy laws are considered even more strict than those in Switzerland, the world's largest offshore banking center. "The bank clients who have been affected have been informed," LLB said.

Liechtenstein Prince Hits Back at German “Attack”

The blackmailer of the article above followed through by selling some of the stolen data containing information on German clients to the German government. While clearly the purchase was a very sleazy move by the Germans, we failed to experience any astonishment over the incident. First of all, the biggest criminal organization of all -- government -- using criminal methods to enforce its rules is not shocking. Second of all, we bet the German government will probably recover the purchase price of the information (not disclosed so far), and who can resist a good deal? Lastly, by helping damage the credibility of Liechtenstein, and the whole idea of using foreign finance centers to avoid taxes, the government gains further.

Prince Alois of Liechtenstein has issued a strongly-worded statement defending the Alpine jurisdiction against what he termed "attacks and allegations" by the German authorities, as the investigation into alleged tax evasion by wealthy Germans widens. At a press conference on 19th February, Prince Alois and Deputy Prime Minister Klaus Tschutscher condemned the German government for reportedly paying for a stolen computer disk which contained confidential data on more than 1,000 German clients of a Liechtenstein bank, who have reportedly transferred sums on money into trust vehicles to avoid German taxes.

Tschutscher, who is also Liechtenstein's Minister of Justice, stated: "We decisively reject the methods used by the German government and its authorities. If the media reports are correct, then the German Minister of Finance and other public officials have paid several million euros to a convicted criminal in return for stolen data. Such methods would be legally completely unthinkable in Liechtenstein. ... In Liechtenstein, fiscal interests cannot trump the rule of law."

It is surprising that he should be surprised. In Liechtenstein and other offshore financial centers, fiscal interests and the rule of law happen to coincide fairly closely. But those who see themselves as weak players in this game, as Germany does with Liechtenstein, can be expected to bend the rules if losing starts looking inevitable.

According to the statement, Liechtenstein law enforcement authorities have initiated investigations against "unknown perpetrators for violations of business secrets for the benefit of a foreign party". "The Liechtenstein Constitution places great value on the protection of privacy. This includes bank client secrecy. Liechtenstein believes in the principle of basic trust in all citizens," the statement added.

Tschutscher continued: "As Minister of Justice, it is my responsibility to ensure that our citizens and the people with economic links to the companies and institutions in our country can enjoy legal certainty. In our legal order, legal certainty includes respect for privacy. This privacy can only be lifted if there is a justified suspicion of a criminal act. If this legal certainty -- which constitutes an essential cornerstone of the rule of law in Liechtenstein -- is endangered by third parties, then this undermines the sovereignty of our country and our law. My responsibility as Minister of Justice is also to ensure legal certainty for investors and business partners."

Liechtenstein remains on the OECD's so-called "blacklist" of uncooperative tax havens. However, its government insisted that the jurisdiction has taken the necessary steps to ensure the financial center's compliance with international standards, for the prevention of money laundering and organized crime, such as the creation of the Financial Intelligence Unit (FIU) in 2002 and the Financial Market Authority (FMA) in 2005.

The government also pointed out that Liechtenstein prosecutors and investigating judges have successfully worked together with their German colleagues "in countless cases in recent years". However, Prince Alois stated that: "Liechtenstein cannot and will not build up an overregulated system of control. Spying on citizens is unthinkable in Liechtenstein, and certainly not across national borders."

The statement added: "With its attack on Liechtenstein, Germany will be unable to solve the problem it has with its taxpayers. As the German media reported yesterday, an international study has ranked the German tax system as the worst in the world -- even behind Haiti. ... Germany would do better to use its tax revenues for the improvement of its tax system, rather than spending millions on stolen data, the legal use of which is questionable."

He concluded: "As Head of State of the Principality of Liechtenstein, I am deeply concerned about the recent developments. We will consider additional legal steps to protect our citizens as well as the investors who put their trust in us from such investigation methods, which are illegal in Liechtenstein. We will inform you of our next steps in the coming days."


"Conservative" French President Nicolas Sarkozy objected, during his election campaign, to a windfall profits tax on, among other companies, French oil behemoth Total. It turns out his objections were largely pragmatic. Demonstrating a certain sophistication about the accounting opportunities available to multinational companies, he apprehended that Total could well have then chosen to move profits (and employees?) elsewhere. Ah, but if he could get an transgovernmental organization such as the IMF to help tax the "windfall profits" of all the oil companies, well then his objections fade away entirely.

French President Nicolas Sarkozy has reportedly asked the head of the International Monetary Fund to study the feasibility of a global windfall tax on the profits of oil companies. Finance Minister, Christine Lagarde told cable television channel LCI ... that Sarkozy had asked the new IMF chief, Dominique Strauss-Kahn, a fellow Frenchman, to consider a tax that would affect oil companies worldwide.

The President's request comes after some of the world's largest oil companies announced record-breaking profits after a year of record-high oil prices. Total, the largest French company by market value, and the world's 4th largest oil firm, reported ... that net profits for the 4th quarter of 2007 were up by 62% to €3.6 billion ($5.23 billion). Royal Dutch Shell, Europe's largest oil company, saw profits rise by a similar margin in the fourth quarter, to $8.47 billion, while earlier in the month, Exxon Mobil announced an annual profit of $40.6 billion -- the largest ever in U.S. corporate history.

During last year's election campaign, Sarkozy rejected a proposal for a French windfall tax by his socialist rival, Segolene Royal, arguing that companies like Total will simply repatriate profits elsewhere. However, according to Lagarde, Sarkozy wants "to think on a global level about a kind of tax that would allow those countries that have the least energy to benefit from these exceptional earnings."

"If we go in that direction it has to be at global level. We can't penalize just Total to the benefit of other big oil groups who would not be subject to this constraint," Lagarde added.


In his new book, John Strausbaugh claims everyone in America has been “sissified,” including the 2008 presidential contenders.

Largely lost in the debate on what is the appropriate degree of ceding of civil liberties and general kowtowing before government diktats in the face of the terrorist threat, is the question: What ever happened to America's ... well ... balls? It goes well beyond the post-9/11 cowering, argues author John Strausbaugh. For example, being politically incorrect has gone from being a social faux pas to a thought crime. The Marxian dialecticians could not use PC violations as ammunition to suppress their philosophical rivals if not for the antecedent meme that offending someone was a grave offense. Why is offending someone an offense? Because you hurt the poor baby, and he/she may never recover. Bad! Strausbaugh elaborates, in an interview in Salon.

John Strausbaugh admits that his latest book was written as an act of provocation. In Sissy Nation: How America Became a Culture of Wimps and Stoopits, a former editor at the New York Press who is now a frequent contributor to the New York Times argues that creeping "sissitude" has rendered Americans incapable of thinking for themselves or acting as individuals. Shooting from both hips, Strausbaugh assails both political parties, most of the 2008 presidential candidates, the obese, global warming activists, people who use iPods, religious fundamentalists, Al Gore, Jimmy Carter and George W. Bush. The provocation seems to have worked, if the fight that nearly broke out in the audience at a recent Sissy Nation reading broadcast by C-SPAN is any measure. Recently, Salon asked Strausbaugh to explain how and why everyone in America became a sissy. The interview was conducted, sissy fashion, by telephone. ...

We have slid into a situation where our public discourse is so excruciatingly polite and euphemistic that we avoid saying anything. So once in a while just to pop off is not such a bad thing. And then it gave me the opportunity to say this is not a book about gay men. This is about our loss of spine and guts. It has nothing to do with bulging biceps. I am certainly not saying women are specifically sissies. So it gave me the opportunity to take that old term and turn it on its head, which is a rhetorical trick. ...

We have become a sissy culture. I do not mean sissy in the old style of manly man vs. girly man or male vs. female or big guy vs. little guy. Sissy does not have anything to do in my definition with your biceps. It has got to do with your brains and your commitment and your conviction and your ability to stand up as an individual. We have become, I think, a herd of Holsteins. Soft, lazy, stupid, knee-jerk, head-bobbing, fundamentalist, high-brained, less-than-human humans now. We are becoming that way. We are not all uniformly and thoroughly sissified yet, but we are working on it. The book is to raise my hand and say this is kind of a problem and we need to think about this. I think the genius about the American experiment in democracy is to create this social environment where each and every one of us has the opportunity as individuals to achieve what we can, to be as happy as we can, to live as fulfilled a life as we can, and we are getting away from that by identifying ourselves by which pack of Holsteins we have to be members of. ...

We all swim in this sea of sissitude, and so none of us is unaffected by it. I have been watching the primaries and it strikes me, on both sides, as sissy candidates for a Sissy Nation. I remember a time that when you were running for president, you were relatively a larger-than-life character. You may have been an enormous scoundrel or an enormous idiot, but you were enormous. You were much larger than life. And these folks, Huckabee looks like he is the type of guy you would go into a Pep Boys to buy two radial tires from and he would sell you four because he is such a nice guy. Hillary just seems like a corporate lawyer. Barack Obama seems like a really nice guy, like your high school class president, but none of them seem like large characters, none of them seem to have large visions. The ones who do seem to have some vision, actually, are the outsiders, who do not have a snowball's chance in hell of getting anywhere. The Ron Pauls and the Kucinichs. And I always like those sort of characters because, since they know they are not going to win and they are just running to get their ideas out there, they don't grovel for our votes, they don't lie to us, they tell us what they think, because they know they are not going to win anyway. ...

[McCain] has clearly been through stuff that an awful lot of the rest of us cannot even imagine, so you got to give him that. But to me, it is not as important whether any of them are personally sissies, because I don't know [McCain], I don't know Hillary, and I don't know Barack. It is about whether they play sissy politics as usual. I wrote them all a letter and we sent them all a copy of the book, not that I expect any of them to actually read it. What I say to them, whoever you are, basically it would be great, being such a public figure, if you would provide us an example of un-sissitude. We do not need you to lead us out of our sissitude, but we could use some good examples. In the end you would be doing us a better service that way than by wooing our votes for sissy in chief. ...

Politics has become almost entirely a politics of things that we fear, things that make us anxious, so it is illegal aliens, it is war, it is terrorism, you know, I cannot afford my taxes, it is healthcare, which I think is used more as a scare tactic than some socialized medicine vision of the future. And none of them, with the possible exception of Obama, because he does give good speeches, are inspiring us to take charge of our own lives, our own happiness, our own fulfillment, our own sort of being the best human being each one of us can be. I am not saying that politicians have ever encouraged us to do that. But I think we have gotten to such a low point in our sissitude that we could really use someone to encourage us to think for ourselves. ...

I think the descent begins sometime around the time of Jimmy Carter and I remember thinking it then. Jimmy seemed much smaller than the guys who had gone before him. For all his flaws, Reagan was a larger-than-life character. That is all he was. He was our logo. He was like having one of the Pep Boys for president, but he was larger than life. This president stupid we have had for the last eight years, oh my god, that guy, you would not even buy the radial tires from that guy. ...

There [are] a lot of problems with the Founding Fathers as individuals, but what was amazing, what was a watershed in human history, was the ideal that they placed in front of us and that all of us have failed to live up to. But it is a great ideal. But I think we have come through the last 30 years of being told how awful our Founding Fathers were and what terrible victims we all are. If we do not even trust that ideal anymore, then that is too bad. ...

A whole lot of different kinds of trends and impacts have converged to create Sissy Nation. Suburbanization is one of them, because in the suburbs we were able to create these perfect fantasies, virtual reality, virtual communities. People in the suburbs do not know each other, they do not even know their neighbors quite often. They live in their identical houses, they drive their identical cars, wearing their identical mall clothes to their identical office cubicles or their identical schools, and come back in their identical cars, sit down in their identical living rooms, and watch their identical TV shows. So one of the things that did was reinforce a trend that had been going on for some time, since at least the 1880s, where we were moving from what had been the earlier idea of capitalism, the entrepreneurial idea, the craftsman, the individual, to the corporate ideal, where we have all become worker bees and consumers and cogs in the giant corporate maw. By the '50s, exponential numbers of us were being sucked up into that corporate maw. And at the same time the suburbs were being created, so they reinforced each other. ...

What Al [Gore] has become in my opinion is a high priest of the secular apocalyptic religion of global warming. There are people who believe that global warming is happening and a lot of people who believe in global warming the same way that fundamentalist Christians believe in the Bible and fundamentalist Muslims believe in the Quran. Al's movie, I thought, was preaching to those fundamentalist global warming converts. ... There are some people who do not just believe that global warming is happening, they believe in global warming. It has become an apocalyptic secular religion for them. In some ways, those people love the fact that there is global warming. "Oh my god, the world's going to end and it is our fault." ...

There have been, over the years, secular apocalyptic sects. Look how nuts everybody went over Y2K and that crap. In a way, people do enjoy scaring themselves, and collecting their bottled water and their Saltines for the end of time. It is a powerfully attractive horror story for people. .. [I]t is one thing to believe that it is happening and another thing to fervently believe in it and reject anybody who raises his hand and questions it as a blasphemer and the antichrist, which is the way true believers in global warming do react to those people who do not believe in it. ...

There are people out there who are not basing their opinions on the data. They are receiving the wisdom and running with it. And I think we do that a lot. A part of it is that there is too much data out there for anyone to absorb anymore. And we are so poorly educated in America, that among the industrialized nations we are below average and falling lower all the time in reading, math and general problem-solving skills. We are not studying the data on anything and basing our decisions on it. ...

I am not saying global warming is not happening, but I am saying there is room for debate about how it is happening, why it is happening and what to do about it, and there are global warming fanatics, just like there are fanatics for a lot of other things, like Republicans who believe all Democrats are the antichrist. And fanatical Democrats. And fanatical feminists who go batshit when Ted Kennedy comes out for Barack Obama. There are fanatics everywhere. And what they are fanatical about is a type of fundamentalism.

Is there anyway to get around or above the preponderance of sissitude?

The start, which is one of the main reasons I wrote the book, is to realize it. Like the people say at AA, the first step is to admit you are an alcoholic, and the first step in Sissy's Anonymous is to admit you are a sissy. And then to look to yourself and look to ways you are not speaking your own mind when you could be, you are not standing up for yourself when you could be, when you are acting, when you are being politically correct, when you are being knee-jerk, when you are being a fundamentalist, when you are fearing the entire world around you. I mean we are afraid of sunshine now, we are afraid of air, we are afraid of water, we are afraid of dirt. I think the first step is to realize it in yourself and then it is up to you to decide if you care, and if you care, I don't think it is that hard to start catching yourself being a sissy and stop.


Our country is barely smarter than a fifth grader -- no wonder it is drowning in religious fundamentalism and political ideologues on both sides, argues Susan Jacoby.

Concomitant with the "sissifying" of America described in the piece immediately above is the general decline in intelligence of the average American. It stands to reason that a people that cannot rationally digest and bring their understanding to the facts (and uncertainties) at hand can be "easily manipulated by flimsy symbolism," as Susan Jacoby expresses it.

One can easily ascertain from the title of Jacoby's new book, The Age of American Unreason, what and who she might be targeting. By default one may well suspect that the book is yet another instance of an idealogue of one persuasion lambasting his or her opponents for being "irrational". Apparently not. The reviewer from Salon notes that "Jacoby takes care to point out that the political right and left have both indulged in anti-rationalism, and this is one of her book's strengths. Intellectuals themselves often come in for a drubbing at her hands." A further reading of the review indicates that any deserving target that appears in her sights comes under fire.

For an author of serious nonfiction, success can lead to some surprisingly disheartening encounters with the reading public. Susan Jacoby's 2004 history of American secularism, Freethinkers, was among the first in the recent wave of welcome books protesting the growing influence of religion in civic life, and universities and other institutions soon began asking her to deliver lectures. Jacoby jumped at the chance, only to find that wherever she spoke, "my audiences were composed almost entirely of people who already agreed with me." Instead of participating in the great public debate that she envisions as central to American culture, she was preaching to the choir. What is more, she learned, "serious conservatives report exactly the same experience on the lecture circuit."

A couple of years later, put up in a student dormitory after giving another talk, she found her environs "eerily quiet." Gone were the "high level of noise and laughter," the "late-night and all-night" conversations she remembered from her own undergraduate years. Instead, everybody was "on line or in an iPod cocoon." To top it all off, when she was invited back to her alma mater, Michigan State University, to receive an honorary award, she struck up a conversation with an honors student in the College of Communications Arts, only to find that the young woman had never even heard of Franklin D. Roosevelt's fireside chats. Apparently, even when students felt like talking they did not know enough about their own disciplines to be worth talking to.

Such are the little disillusionments that vex a public intellectual's soul. Furthermore, as Jacoby sees it, they are telling the same story as those shocking polls that show most Americans cannot list the rights guaranteed by the First Amendment or find Iraq on a map. All of it confirms her suspicion that "the scales of American history have shifted heavily against the vibrant and varied intellectual life so essential to a functioning democracy."

Richard Hofstadter's 1963 classic, Anti-Intellectualism in American Life (a clear inspiration for this book), described anti-intellectualism as "older than our national identity" and deeply rooted in our history. Jacoby thinks the old American distrust of those who devote themselves to "ideas, reason, logic, evidence, and precise language" has been worsened by the conditions of contemporary life. There is, she writes, "a new species of semi-conscious anti-rationalism, feeding on and fed by an ignorant popular culture of video images and unremitting noise that leaves no room for contemplation or logic." People never read books, they can not concentrate on anything significant for more than a minute or two, and as a result they do not really think anymore. Lulled by the "pacifier" of "infotainment," their civic and political decisions emerge from a confused welter of laziness, reckless emotion and prejudice.

The ultimate goal of Orwellian doublespeak and thought control is, deeper than brainwashing people with ideas they would otherwise reject, to hamstring their ability to think critically at all. Information overload, specialization, and general dumbing down have been efficacious in achieving the same end.

The chief manifestations of this newly virulent irrationality are the rise of fundamentalist religion and the flourishing of junk science and other forms of what Jacoby calls "junk thought." The mentally enfeebled American public can now be easily manipulated by flimsy symbolism, whether it is George W. Bush's bumbling, accented speaking style (labeling him as a "regular guy" despite his highly privileged background) or the successful campaign by right-wing ideologues to smear liberals as snooty "elites." Unable to grasp even the basic principles of statistics or the scientific method, Americans gullibly buy into a cornucopia of bogus notions, from recovered memory syndrome to intelligent design to the anti-vaccination movement.

The Age of American Unreason veers unevenly between well-argued debunkings of assorted crackpot claims and litanies of gripes that come dangerously close to diatribes. ... Jacoby can certainly formulate concise ripostes to the likes of former Harvard president Lawrence H. Summers, who suggested that the underrepresentation of women among the top ranks of the hard sciences must be due to innate gender traits. "What places Summers' speculative statements within the realm of junk thought," she writes, "is not the idea that there might be some differences in aptitude between men and women but his unsupported conclusion that such disparities if they exist, are more important than the very different cultural messages girls and boys receive about whether they can expect to succeed in science."

Jacoby takes care to point out that the political right and left have both indulged in anti-rationalism, and this is one of her book's strengths. Intellectuals themselves often come in for a drubbing at her hands. She reproaches those deluded American leftists who defended Soviet communism in the 1930s and '40s, long after it had become obvious that Stalin and his successors presided over a brutally oppressive regime. (She also points out that the influence of such figures on American culture at large has been vastly overstated by both their friends and their enemies.) She quotes goofy feminist theorists from the 1980s, academics who likened Isaac Newton's laws of mechanics to a "rape manual" and called Beethoven's Ninth Symphony "horrifyingly violent."

Although Jacoby scolds culture warriors like Allan Bloom, author of The Closing of the American Mind, for both misunderstanding and misrepresenting the upheavals on American campuses during the 1960s and '70s, she also deplores many of the leftist remedies for those conflicts. Women's and African-American studies departments, she argues, only "ghettoize" the subject matter they champion, and further Balkanize and provinicalize university students. Not coincidentally, the creation of those departments generated more faculty jobs without pressuring traditional professors to reassess their curricula ...

Jacoby, who covered education for the Post during the '60s, sees herself as a "a cultural conservationist, committed, in the strict dictionary sense, to the preservation of culture." She believes in the classics (whether of literature, music or the visual arts), and at the same time sees no reason why they cannot be expanded to include great works by people (women and racial minorities) previously excluded from the canon. It is not a zero-sum game. Hers is a moderate, sensible, well-founded position, shared by many Americans, yet it somehow rarely got voiced amid the raging hyperbole of the culture wars.

Fundamentalism, however, is the real red-hot center of American irrationality, and Jacoby calls religious assaults on the theory of evolution "a microcosm of all the cultural forces responsible for the prevalence of unreason in American society today." She notes that in the summer of 2005 nearly two-thirds of Americans told pollsters that they believed creationism should be taught in schools alongside Darwinian evolution. The poll revealed what Jacoby characterizes as "an intellectual disaster as grave as the human and natural disaster unfolding in New Orleans" at the same time.

It is hard to quarrel with her on that one, and compounding the mess is the fact that most Americans do not even understand the religion they want to see defended: "A majority of adults, in what is supposedly the most religious nation in the developed world, cannot name the four Gospels or identify Genesis as the first book of the Bible." ...

[Jacoby] sees the triumph of video-based culture as the primary source of America's mental decay. ... This argument, which soon bogs down in too-sweeping indictments of TV and the Internet, is the weakest portion of The Age of American Unreason, and Jacoby (to her credit) knows it. ... As a literary critic, I too worry about the dwindling numbers of Americans who read for pleasure. Furthermore, like Jacoby ... I believe that reading fosters a particular mental stamina, discipline, creativity and flexibility that cannot be acquired from other media. In a future dominated by complex social systems, technology and science, only people who can think in this fashion will have enough understanding of how the world works to actually run it. And to remain truly democratic, America should be made up of citizens who are able to think that way.

Nevertheless, Jacoby has a hard time separating her legitimate worries about America's eroding attention span from simple disagreements of taste and generational preferences. She dismisses certain forms of popular art out of hand, automatically presuming that her readers will agree. But I, for one, see no reason why newspaper articles on "the newest trends in hip-hop" should be written off as no more than craven pandering to distractible young readers; the subject is interesting, and worthy, in its own right. I might not equate Bob Dylan with Milton, as some overzealous rock critics have apparently done, but I am also aware that the pop fluff of one era (the operas of Puccini, for example) often becomes the classical repertoire of the next. ...

Recognizing the merits of James Baldwin need not detract from the admiration due to Shakespeare, a sentiment Jacoby herself would probably second. Just so, valuing the wit of The Colbert Report or the intricacies of The Wire does not automatically imply a depreciation of War and Peace. Each form has its own artistry and makes its own demands on creator and audience, and new forms (such as the novel in the 18th century) arise to speak to new audiences in a new way. Jacoby rightly considers Al Gore to be an example of the sort of serious, studious public figure who gets unfairly written off as "arrogant and patronizing" in the dumbed-down politics of today. But she carefully avoids acknowledging that Gore managed to break through the public's indifference to the issue of global warming by figuring out how to present his ideas visually, first in a PowerPoint presentation, and later in a movie, demonstrating that it is possible to do justice to complex issues in those forms.

Likewise, Colbert's deft dispatch of Westmoreland (getting the man to betray himself, no less) conveys the sleaziness of this type of "values" crusader more persuasively and conclusively than any number of written jeremiads by left-wing commentators. ... You can waste hours parsing the relative greatness of various artworks in different media, and that would be time much better spent watching Project Runway.

The real problem with TV, and to a lesser extent the Internet, is that while some of it is excellent, much of it is not -- and all of it has become ubiquitous. As Jacoby astutely points out, reading does not "constitute a continuous invasion of individual thought and consciousness ... printed works do not take up mental space simply by virtue of being there; attention must be paid or their content, whether simple or complex, can never be truly assimilated." Unless you make a point of turning off the TV and putting the computer to sleep, they can easily fill up your day and mind, gradually atrophying the mental muscles uniquely exercised by reading. Abstaining, for many people, turns out to be as easy as bypassing a cupboard stocked with chips and cookies and snacking on carrot sticks instead. To hope that the American public will pick the nutritious but difficult over the easy and tasty is to bet on a losing horse.

No wonder that the concluding chapter of Jacoby's book is so gloomy. All we have to count on, she writes, is the fortitude of "parents and citizens determined to preserve a saving remnant of those who prize memory and true learning above all else. Adult self control, not digital parental controls, is the chief requirement for the transmission of individual and historical memory" to the next generation.

But wait -- is it really that bad? The current crop of leading presidential candidates not only are not dumb, they are not even trying to appear dumb ... Perhaps we are better able to assess the "reality-based" consequences of putting a fundamentalist in the White House than we once appeared to be. The problem is, when push comes to shove, we do not always feel like facing reality.

The missing factor in Jacoby's formula is just that: In addition to being capable of rationality, we also have to want to be rational. Intellect, copious reading and education by themselves are no guarantee of reasonable or even sensible behavior, as the neo-conservative true believers responsible for the Iraq war have amply demonstrated. Yet this is one aspect of American religiosity that does not seem to interest Jacoby much. In considering the Second Great Awakening, the outburst of religious revivalism that swept through the nation in the early 19th century, she kicks around some possible causes (the "unsettled" social conditions following the Revolution, the difficulties of life on the frontiers, etc.) in a desultory fashion. Then she writes, "in any event, the reasons why fundamentalism triumphed over 'rational' religion in the American spiritual bazaar are less important than the fact that fundamentalism did succeed in capturing the hearts of large numbers of Americans."

It is hard to imagine what could be more central to Jacoby's subject than the motivations of those Americans who chose what she describes as "willed ignorance" over reason. Is it not likely that the recent resurgence of that ignorance arises from similar needs and desires? If there were some other way to address those needs (or fears), perhaps fundamentalism would be less appealing, and perhaps reason could be made more so. However, that would require admitting that people who are capable of reason will nevertheless sometimes pick an irrational course of action or belief. Rational people do this all the time, of course -- even [??] intellectuals. But rationality has its own ideology, and one of its tenets is the conviction that, if given a fair chance, reason must always carry the day.

If you believe that, then you can only arrive at one conclusion, Jacoby's: It is not that Americans will not be rational, but that we cannot. There is enough evidence of our poor schooling, susceptibility to pseudoscientific hucksterism and general cluelessness to justify that opinion, to be sure. But if that is really the case, then it really is down to a few brave souls, committing to a doomed battle to preserve that "saving remnant" and fighting the dying of the light.

The Age of American Unreason obviously touches on a deep issue. The Salon reviewer, Laura Miller, rightly challenges the author's dismissal of the relevance of the motivations of those who willfully chose ignorance over reason. Just two weeks ago, discussing a review of Kevin R.C. Gutzman's The Politically Incorrect Guide to the Constitution, we raised the question of why the citizens of the U.S.A. have allowed a long series of Supreme Court rulings and usurpations -- which are just words, in the end -- that clearly overrode the original intent of the Constitution to go unchallenged.

Some of the answer undoubtedly includes being too busy and being too far from Washington to be bothered. But, we suspect, the justices' solemn black robes and highfalutin words were (and are) another example of "flimsy symbolism" by which the citizenry was "easily manipulated". And this cuts to the heart of government and, indeed, human culture itself. So much of what passes for "reality" is not substantive in any real sense but rather a structure woven out of consensus. What is right and wrong and good and bad, what happens if you do X, "the way things are," are matters of agreement alone. If everyone truly exercised their critical faculties, we would all end up in the mindset described in this Mencken quote:

The most dangerous man, to any government, is the man who is able to think things out for himself, without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane and intolerable, and so, if he is a romantic, he tries to change it. And even if he is not romantic personally he is very apt to spread discontent among those who are.

One could just as well be talking about culture as government, given the arbitrariness of so many prevailing superstitions and taboos. One might posit that given the cognitive dissonance that human beings have to live with just to function in a populous and crowded society, that confining one's critical thinking to a limited domain is a natural reaction. That leaves mattersn outside that domain up for grabs, amenable to manipulation. The outcome we observe today then seems a plausible one.

Lest that be the final word, we should add that Mencken also said: "A society made up of individuals who were all capable of original thought would probably be unendurable."


Andrea Cordingly, writing for Really Linux, a "website for beginning Linux users," describes the pains and pitfalls of Windows and offers some candid advice.

What an odd thing it is to find so many people still questioning the merits of moving to a Linux Desktop. It is almost as though those of us who have been extensively using Windows for years now have some sort of problematic memory issue. Perhaps the proper psychology term is something like ST-PiT-MR also known as Short term pain in the tush memory relapse syndrome. We use Windows and the experience leaves us disappointed, or in some cases distraught, like being slapped with a wet rag that smells of rot. Then the next day we boot-up as if nothing happened. As if it is all new and all well and we should just get on with it again.

Raise your hand if you are sick and tired of this sadistic self flagellation? I raise both of my arms and cheer. Because it does not have to be so. The word is out. The truth is said. The desktop we have used at home and in our office is not the best option, nor the easiest tool. Based on this fact I thought it important to consider the options.

Now that I have used Linux, it is utterly clear that Linux desktops offer real alternatives that work and more importantly, stay out of your way so you can work. Take your pick, choose your way: KDE, Gnome, Xfce, etc. I do not care which you choose, because they are all offering me something Windows simply can not.

I want a desktop that works for me. I want a desktop that conforms to my needs, rather than tries to forcibly bend me down until I submit to its way because the alternative is too painful. Am I being overly dramatic? You be the judge as we look at how Windows handles a USER'S NEEDS, then compare it with a popular Linux desktop like KDE. ...

Now that I have used KDE on Linux, it is almost impossible for me to go back and use the barbaric design of the Windows start menu. I can use shortcuts fine, but every now and then I go back through the menu process and absolutely find it detestable that someone designed Windows to perform a timed delay before opening each subsequent menu list. ...

As I use to work on my Windows system, I could almost hear the ringing of that childhood song: "I think I can, I think I can, I think I can ..." There was a time when the processing power in my laptop ran NASA, now it can barely act on a few mouse movements. Ah, but that is the key is it not. Windows was not designed for me, it was designed for them, or it, or something else.

Thankfully, this is no longer a cause for concern. Instead, I completely removed Windows and replaced it with the latest Linux/KDE version. Now I enjoy not only being back in control of my system and my work, but also the benefit of having some very nice people to help me each step of the way. Besides, I think Linux-loving guys are much nicer.


Microsoft Office is an expensive, bloated, propriety, insecure morass. Microsoft periodically tries to force Office users to upgrade by inducing file format incompatibility between recent and older versions. This has just happened again, as by updating Office 2003 with Service Pack 3, users will no longer be able to open files in 24 older file formats. A hack can be used to unblock that denial of access ... this time. Finally, Microsoft is no friend of freedom or free enterprise.

OpenOffice.org is free and far more secure than Office, and its source code is openly published. It is bloated like Office, but at least addressing this over time is a priority. (Bloat-reduction has never, ever been a priority for Microsoft.) It is a cooperative endeavor among commercial and purely voluntary interests. Solveig Haugland, from a Web site called "Fanatic Attack" -- which promotes itself as being "about entrancement, entertainment, and an enhancement of curiosity" -- has written a how-to for setting up OpenOffice.org, and effecting a transition from Office.

It is time to switch. You have been thinking about it for a while. You have seen the PDF converter and sighed longingly. You have blushed before the skeptical glances of your open-source and anti-Microsoft friends who say "You are still using Microsoft Office?" You are looking at your budget and wondering why you would pay to get Microsoft Office 2007. And you have received Word 2007 files and have not been able to open them, so you know there are going to be some file format issues no matter what you do.

But you have not switched over to OpenOffice.org. Quite yet. I am here to help. Think of this as a virtual guide, the written version of me coming over to your house on a Sunday afternoon to help get to know OpenOffice.org and figure out all the things you are not quite sure about. Sit down with this article this weekend and in a few hours you will feel refreshed, open sourced, and able to hold your head high when you run into those roving gangs of open source supporters.

Why switch? You have your own reasons: price, or principles, or you are setting up a nice cheap Linux laptop for your daughter to use at school. Here are a couple things I like to talk about.

Spend your money on something important.

I realize that since I am targeting this article at individuals, that the upgrade or full price of Microsoft Office might not make or break you. But if it is you and your family, your small business, your volunteer organization that feeds homeless families, now you even more seriously need to look at the right way to spend your money. Microsoft Office is a habit, and many people do not even think about whether they need it. Here is your opportunity to rank it in comparison to other things you could spend $100 or $500 on, multiplied by the number of licenses.

You can do it. Don't fear the interface.

When you have been using Microsoft Office since the mid 90s, it is easy to think that learning another product will be too annoyingly difficult. Trust me. You can learn this. You have to learn new products all the time, whether it is the new bug entry system at a new job, or starting a job at Sun where all of a sudden you are using Solaris instead of Microsoft Windows, it is going to have to happen. There are differences, sure, but do not let that mental speed bump of fear let you think for a second you are not going to be able to figure it out. ...

What This Article Is About

What can I write in a finite article about how to use OpenOffice.org? I cannot cover everything you will need to know about how to use the program. But what I can do, in a lot less space, is give you what you need to make getting to know OpenOffice.org easier. I can give you settings to apply that will keep you from having problems in the first place. Not all of them, of course, but with a limited amount of information on how to set up the program, I can help you have a smoother, more enjoyable experience with the program. So that is what this is: setting up OpenOffice.org to make it work for you.


Swiss Cantons Plot to Lure UK’s Non-Domicileds

With the UK's announced plans to tax non-doms more highly, and with the Swiss cantons' history of happily cutting tax deals in order to lure rich expats, it is to be expected that the cantons will be among those hoping to grab some of the UK exiles-to-be. The UK has already given signs of backtracking on the proposals. But is it too late?

The Swiss cantons are jostling to attract key groups of high earning non-domiciled executives to exploit their dissatisfaction with the UK government's planned tax crackdown on well-heeled foreigners.Switzerland’s government this month convened an expert committee to examine measures to improve the country's attractiveness as a financial centre with an agenda featuring tax changes to boost competitiveness, particularly to win back hedge fund managers from London, the Financial Times reports.

Pierre Jaquier, head of Geneva’s economic promotion office, told FT his organization had stepped up marketing in the UK because of the latest uncertainties. Jaquier confirmed Geneva, one the most popular areas for rich foreigners and Switzerland's heart of private banking, had strengthened its efforts "for specific niches" such as hedge fund managers.

Cyprus May Cease to Be Capital Gains Tax Haven for Indians

The party may soon be over for investors coming into India from Cyprus. The double taxation avoidance agreement (DTAA) between the two countries is all set to lose the capital gains tax exemption benefit.

Both the governments are understood to have concluded negotiations on amendments to the tax treaty, following which residents, both individuals and companies of Cyprus, would have to pay capital gains tax at the rate of 10%. A limitation on benefits clause to ensure ineligible entities cannot get a benefit under the tax treaty is also proposed to be inserted. The changes in the treaty were likely to be notified soon, sources said.

Cyprus does not impose capital gains tax on its residents, and with India exempting the capital gains under the treaty, investors could avail of the benefits similar to the India-Mauritius DTAA. The dividend income is also exempt from withholding tax. The India-Cyprus tax treaty was notified in 1995. ...

India is ... trying to renegotiate its tax treaty with the island nation of Mauritius. With tax treaties with the UAE and Cyprus losing their tax concessions, it would be easier for New Delhi to wield pressure on Mauritius for amending the agreement. Interestingly, Mauritius, which is lobbying hard for continuing the tax treaty, has renegotiated the agreement with China and removed the tax concessions. Preventing abuse of tax treaties weighs high on the Indian government's agenda. The tax havens are used by investors to avail tax benefits by routing their investments through shell or paper box companies registered there.

India could presumably unilaterally "amend" the agreement with Mauritius, but so far has seen fit to "negotiate" instead.

Record Tax Revenues May Lead to Tax Rate Cuts in India

Every year, before the presentation of the Union Budget, people from different economic segments in [India] voice their demand to the Finance Minister (FM) and expect him to give some sops. This year the demand for a tax-cut from a vast majority of salaried people and corporations has become more intense as the government is sitting a on a huge pile of cash

The expectation of a moderation in tax rates gathered momentum as the Finance Ministry officials are expecting that country's gross tax revenue collection will double in 2007-08. Based on nine months tax collection data through December 2007, the government is likely to mop up Rs 600,000 crore in 2007-08 as against Rs 304,958 crore in 2004-05. At this level the gross tax income will be a record 13% of country’s GDP.

Main contributors to the bulging tax revenue are personal income tax, corporate tax and service tax. As per the Finance Ministry figure, the corporate tax collection during April to December 2007 jumped up by 40% to Rs 127,683 crore from the same period previous year. Personal income tax too grew by 50% to Rs 77,380 crore.

A closer look at trends in tax collection reveals that except excise duty, all other direct and indirect taxes are likely to exceed budget estimates. A booming economy, leading to larger corporate profits and higher personal income, was the main reason behind the sharpest growth in tax collection.

Tax experts feel that if Mr. Chidambaram is sitting so comfortably on a huge cash pile, he should loosen his purse string a bit for those who were instrumental in contributing to the booty. Even the FM himself has hinted that there could be cases for moderation of tax rates.

India's economy has been stifled by overbearing, socialist governments for generations. Several government coalitions of the last decade have relented enough on that failed approach to allow India to be a genuine force in the world economy, using its huge, English-speaking, educated work force as a lever. With recent signs of success of the overall approach such as much higher than expected tax collections, will the current government try a little "supply side" medicine by cutting rates?

Some of Saudi Prince’s Assets Frozen in U.S. Court

A federal judge ... ordered frozen some of the assets in the U.S. of Prince Bandar, former Saudi ambassador to Washington, who has been hit by a lawsuit by BAE Systems shareholders ... The British defense group since June has been the subject of a criminal investigation in the U.S. of possible anti-corruption law violations related to its activities in Saudi Arabia.

Britain's Serious Fraud Office announced in 2006 that it was halting an investigation into claims that BAE Systems set up a slush fund for some members of the Saudi royal family during the giant 1980s Al-Yamamah deal. Press reports said BAE paid $2 billion in bribes to the prince with staggered payments, a furnished Airbus A340 and a honeymoon for his daughter. BAE has not denied the payments and in September U.S. shareholders saying they had been injured filed suit against BAE executives and Prince Bandar.

Plaintiffs, after learning Bandar might sell some of his U.S. properties, asked authorities to ensure that profits from any such sales were not allowed to leave the country. ... Judge Rosemary Collyer, who is handling the case in a Washington federal court, granted their request. The prince can sell his properties as he likes but the product of any sale would remain in a U.S. account in his name, she ordered.

The legal manoeuvring described is fairly standard, although the players involved are clearly not.

Analysts Expect Cut in South Africa Corporate Tax Rate

Companies can look forward to a reduction in corporate tax rates as the country moves from a system of secondary tax on companies (STC) to one of withholding tax on dividends, say tax analysts.

Finance Minister Trevor Manuel might cut the corporate tax rate from 29% to 28% in next week's budget, Billy Joubert, a tax director at Deloitte, said at a briefing in Sandton yesterday on tax predictions for the budget.

Ernie Lai King, head of Deneys Reitz Tax Services, said SA's corporate tax rate was still high by international standards, but as the tax system moved from STC to a withholding tax the rate would drop.

The South African Revenue Service (SARS) collected R120.1 billion in corporate tax for 2006-07, nearly R23.8 billion more than the original estimate, as corporate income tax rose to 24.2% of overall revenue, up from a 20% average over the past four years.

Companies are taxed at a basic rate on income of 29%, including an additional secondary tax of 12.5% on profit declared. If a company distributes 100% of earnings as a dividend, an effective rate of 36.9% applies.

In a surprise move two years ago, the finance minister cut the company tax rate one percentage point to 29%. Joubert said that even after that reduction, company tax remained above that of international levels. The emphasis internationally is on stimulation of companies. Most countries changed corporate tax rates to reduce the burden on businesses. ...

Joubert said that withholding tax on dividends was a more conventional sort of tax, and would be more familiar to prospective investors in SA. The tax would be levied on the shareholder rather than the company distributing the dividends, though it would continue to be the organization that withholds the tax when it pays out dividends and pays the tax to SARS.

The corporate tax rate of 28% is high in the current era of low, flat tax rates.

Guyana Government Eyes Offshore Banking

Government is examining the feasibility of developing Guyana as an offshore financial center (OFC) and has sought the support and input of the Guyana Association of Bankers (GAB). ... In order for the assessment to be carried out effectively, collaboration between multiple government agencies -- the Bank of Guyana, the Financial Intelligence Unit and the Guyana Office for Investment -- and the close involvement of key stakeholders in the private sector is required. ...

OFCs exist to provide financial services such as banking, insurance and asset management to mainly non-resident individuals and entities. The OFCs generally offer to investors, distinct benefits including favorable tax and regulatory regimes, and the ability to make deposits in foreign currencies. They also offer highly confidential services.

Guyana has been running this flag up the pole for a while now to see who salutes. These days, as much as than favorable laws it takes a concentration of qualified personel to make an OFC competitive. Having the resources and backbone to stand up against pressure from the high-tax brigade also helps.