Environmental reporters ought to be more responsible too. By "eric"
Real Climate, Jan 03, 2009
At RealClimate, we have more than once been accused of being imbalanced — criticizing those who would deny the basic science of climate change, while leaving inflammatory statements by what might be called the "environmentalist side" without comment. It's not an entirely a fair criticism, because there is a world of difference between the willful obfuscation of science and the naive exaggeration of it. There are however plenty of silly, and sometimes outrageous, claims made - see e.g. the Telegraph on Jan. 3rd — and we probably ought to do a better job of calling these out, particularly when they show up in prominent places. So to inaugurate the New Year, I humbly offer a rant about a minor but illustrative example that I happened to notice because there was a link to it on Nature Reports Climate Change.
The subject of the linked article, in the British online newspaper The Independent, is the decline of various bird and butterfly species in England. The article, entitled Changing climate devastates UK species, reports that "insects in particular, and creatures that feed on insects…were sharply reduced in numbers" due to a "cold late spring, a wet summer, with few sunny days, and the long dry autumn…." Now I have no reason to doubt the accuracy of the claim that 2008 was a hard year for UK insects and insectivores. But this is weather we're talking about, not climate. And while it is true that at least one prominent study shows that there has been an overall increase in rainfall in the latitude band that includes the UK, and that climate models reproduce this trend (see e.g. the Zhang et al. article in Nature, in 2007), one cannot, as we are fond of pointing out, attribute a single, or even several individual extreme weather events to "climate change".
Indeed, Peter Stott, a co-author on the Zhang et al. study noted, in reference to 2007 (the wettest summer on record in the UK) that "This latest study cannot make the link between climate change and what we have experienced so far this summer." Moreover, most projections actually suggest drier summers in the UK in the future, though with increased convection (so less total precipitation, but bigger rainstorms).
Another thing that bugs me about the Independent article is the suggestion that climate is becoming "more unpredictable". I suspect what is meant here is that we used to know what a mean season and normal variations were, and now we don't. That's valid, since the baseline climate is changing. But saying it this way — that "climate is becoming more unpredictable" is misleading. In fact, climate may, if anything, become more predictable as anthropogenic forcing becomes even more dominant (as greenhouse gas concentrations increase), relative to natural forcing and variability. And what is definitely not the case — but might be inferred from the article — is that weather is becoming more unpredictable. Weather prediction is based on observations just a few days in advance — climate and climate trends have nothing to do with it.
The point here is not that we shouldn't be concerned about the fate of insects and birds in the UK (that would be the kind of conclusion that only the most willfully ignorant would draw.) They have been in decline for a long time (mostly due to land use change and pesticides) and there is little doubt that climate change will continue to add insult to injury. But it is simply wrong to confuse a year or even two years of unfavorable weather with a change in climate, and it is irresponsible to headline an article that is really about weather with the provocative juxtaposition of "climate" and "devastates". Doing so gives the average reader the sense that their personal observations about "weird weather patterns" or fewer sightings of Parus caeruleus represent definitive manifestations of climate change. The fact is, climate changes are — so far — small enough in most places, relative to the natural variability, that one's personal experience is a very poor guide to what is happening over the long term (observations of sea ice changes by those that live in the high Arctic notwithstanding).
Monday, January 5, 2009
Sunday, January 4, 2009
Mary Schapiro Will Protect Investors the Same Way Willie Sutton Protected Banks
Mary Schapiro Will Protect Investors the Same Way Willie Sutton Protected Banks. By Dan Solin
Huffington Post, January 4, 2009 03:24 PM (EST)
We don't have to guess how Mary Schapiro, named by President-elect Obama to head the SEC, will protect investors. As the CEO of the Financial Industry Regulatory Authority (FINRA), she had been a strong advocate of the mandatory arbitration system which requires investors to arbitrate all disputes with their brokers before a panel selected by FINRA and governed by its rules.
How has this worked for investors?
Here is a recent example. It is a true story. You can't make this up.
A 60 year old doctor invested $100,000 he had in an IRA with a FINRA broker.
The broker put the funds into an after-tax account, triggering a $35,000 tax liability.
Over the next 14 months, during which time the S&P 500 increased in value, the portfolio lost a whopping $86,000, reducing its value to $14,000.
This is not surprising given the amount of trading by the broker. His commissions were so huge that the account would have had to earn 31% just to break even! The broker used margin to generate even more trades.
The stocks in the portfolio were 600% more volatile (risky) than the S&P 500.
Before any Judge or jury, the investor would have recovered his losses and most likely would have received a meaningful award of punitive damages.
Not before the FINRA arbitration panel.
They found that the broker had to pay back only the tax liability caused by the transfer of the IRA to a taxable account.
Now for the unbelievable part.
This "impartial" FINRA arbitration panel concluded that the broker did nothing else wrong. No unsuitability. No excessive trading. They gave him a clean bill of health.
Just another day at the office, ripping off investors with impunity. Instead of being drummed out of the industry, he is happily back in his office high fiving his fellow brokers.
So much for FINRA "self-regulation."
This shameful process is "supervised" by the SEC, the very agency Ms. Schapiro will head if she is confirmed.
"Real change" would be to put an investor advocate, and not an industry shill, in charge of the SEC.
"Real change" would be to abolish the FINRA mandatory arbitration system and expose it for the farce it is.
"Real change" would be give investors their constitutional right to a trial by jury.
Do you think Mary Schapiro will represent "real change" at the SEC?
Do you think Willie Sutton protected banks?
Huffington Post, January 4, 2009 03:24 PM (EST)
We don't have to guess how Mary Schapiro, named by President-elect Obama to head the SEC, will protect investors. As the CEO of the Financial Industry Regulatory Authority (FINRA), she had been a strong advocate of the mandatory arbitration system which requires investors to arbitrate all disputes with their brokers before a panel selected by FINRA and governed by its rules.
How has this worked for investors?
Here is a recent example. It is a true story. You can't make this up.
A 60 year old doctor invested $100,000 he had in an IRA with a FINRA broker.
The broker put the funds into an after-tax account, triggering a $35,000 tax liability.
Over the next 14 months, during which time the S&P 500 increased in value, the portfolio lost a whopping $86,000, reducing its value to $14,000.
This is not surprising given the amount of trading by the broker. His commissions were so huge that the account would have had to earn 31% just to break even! The broker used margin to generate even more trades.
The stocks in the portfolio were 600% more volatile (risky) than the S&P 500.
Before any Judge or jury, the investor would have recovered his losses and most likely would have received a meaningful award of punitive damages.
Not before the FINRA arbitration panel.
They found that the broker had to pay back only the tax liability caused by the transfer of the IRA to a taxable account.
Now for the unbelievable part.
This "impartial" FINRA arbitration panel concluded that the broker did nothing else wrong. No unsuitability. No excessive trading. They gave him a clean bill of health.
Just another day at the office, ripping off investors with impunity. Instead of being drummed out of the industry, he is happily back in his office high fiving his fellow brokers.
So much for FINRA "self-regulation."
This shameful process is "supervised" by the SEC, the very agency Ms. Schapiro will head if she is confirmed.
"Real change" would be to put an investor advocate, and not an industry shill, in charge of the SEC.
"Real change" would be to abolish the FINRA mandatory arbitration system and expose it for the farce it is.
"Real change" would be give investors their constitutional right to a trial by jury.
Do you think Mary Schapiro will represent "real change" at the SEC?
Do you think Willie Sutton protected banks?
James Hansen's open letter to Michelle and Barack Obama
Thanks to the people on my e-mail list for all the suggestions (more than 100!) about my draft
“Tell Barack Obama the Truth – the Whole Truth”. Most frequent criticism: the need for an
executive summary. Two people suggested: put a summary in the form of a letter to Michelle
and Barack Obama. I like that idea. They are equally smart lawyers, and if we can get either
of them to really focus on the actions that are needed, the planet has a chance.
The letter turned out to be four pages. Sorry. But I wrote a note to John Holdren, which can
serve as an executive summary. John has promised to deliver the letter, but cannot do so
prior to the inauguration. That delay is a problem for one of the three recommendations: tax
and dividend. Thus I am making the letter available at
http://www.columbia.edu/~jeh1/mailings/20081229_DearMichelleAndBarack.pdf
and the revised “Tell Barack Obama the Truth” at
http://www.columbia.edu/~jeh1/mailings/20081229_Obama_revised.pdf
in hopes of getting the information to people who continue to push for “goals” and “caps”.
“Goals” for percentage CO2 emission reductions and “cap & trade & dividend” are a threat to
the planet, weak tea, not commensurate with the task of getting CO2 back to 350 ppm and
less. Note:
(1) There must be a tax at the mine or port of entry, the first sale of oil, gas and coal, so every direct and indirect use of the fuel is affected. Anything less means that the reduction of demand for the fuel will make it cheaper for some uses; e.g., people will start burning coal in their stoves. Peter Barnes’ idea to push the cap upstream to the extent possible is not adequate nor is a ‘gas tax’ suggested by NY Times and others. A comprehensive approach is needed.
(2) “Cap & trade & dividend” creates Wall Street millionaires and complex bureaucracy. The public is fed up with that – rightly so. A single carbon tax rate can be adjusted upward affecting all activities appropriately. With 100% dividend the public will allow a carbon price adequate to the job, i.e., helping us move to the postfossil-fuel world.
(3) Supply ‘caps’ cannot yield a really big reduction because of the weapon: ‘shortages’. All a utility has to say is ‘blackout coming’ and politicians and public have to cave in – we are not going to have the lights turned out. Will the public allow a high enough tax rate? Yes, dividends will exceed tax for most people concerned about their bills.
(4) A tax is not sufficient. All other measures, such as building codes, are needed. But with millions of buildings, all construction codes and operations cannot be enforced. A rising carbon price provides effective enforcement.
(5) Wouldn’t it be cheaper to let people burn the dirtiest fuel? No. The clean future that we aim for, including more efficient energy use, is not more expensive. For example, you may have read about passively heated homes that require little energy and increase construction costs only several percent. Such possibilities remain the oddball (with high price tag), not the standard construction, unless the government adopts policies that make things happen.
Some of you suggested that I should only explain the urgency of the climate crisis, the need
to get back to 350 ppm CO2 and less. Politicians are happy if scientists provide information
and then go away and shut up. But science and policy cannot be divorced. What I learned in
the past few years is that politicians often adopt convenient policies that can be shown to be
inconsistent with long-term success, given readily available scientific data and empirical
information on policy impacts.
Jim Hansen
“Tell Barack Obama the Truth – the Whole Truth”. Most frequent criticism: the need for an
executive summary. Two people suggested: put a summary in the form of a letter to Michelle
and Barack Obama. I like that idea. They are equally smart lawyers, and if we can get either
of them to really focus on the actions that are needed, the planet has a chance.
The letter turned out to be four pages. Sorry. But I wrote a note to John Holdren, which can
serve as an executive summary. John has promised to deliver the letter, but cannot do so
prior to the inauguration. That delay is a problem for one of the three recommendations: tax
and dividend. Thus I am making the letter available at
http://www.columbia.edu/~jeh1/mailings/20081229_DearMichelleAndBarack.pdf
and the revised “Tell Barack Obama the Truth” at
http://www.columbia.edu/~jeh1/mailings/20081229_Obama_revised.pdf
in hopes of getting the information to people who continue to push for “goals” and “caps”.
“Goals” for percentage CO2 emission reductions and “cap & trade & dividend” are a threat to
the planet, weak tea, not commensurate with the task of getting CO2 back to 350 ppm and
less. Note:
(1) There must be a tax at the mine or port of entry, the first sale of oil, gas and coal, so every direct and indirect use of the fuel is affected. Anything less means that the reduction of demand for the fuel will make it cheaper for some uses; e.g., people will start burning coal in their stoves. Peter Barnes’ idea to push the cap upstream to the extent possible is not adequate nor is a ‘gas tax’ suggested by NY Times and others. A comprehensive approach is needed.
(2) “Cap & trade & dividend” creates Wall Street millionaires and complex bureaucracy. The public is fed up with that – rightly so. A single carbon tax rate can be adjusted upward affecting all activities appropriately. With 100% dividend the public will allow a carbon price adequate to the job, i.e., helping us move to the postfossil-fuel world.
(3) Supply ‘caps’ cannot yield a really big reduction because of the weapon: ‘shortages’. All a utility has to say is ‘blackout coming’ and politicians and public have to cave in – we are not going to have the lights turned out. Will the public allow a high enough tax rate? Yes, dividends will exceed tax for most people concerned about their bills.
(4) A tax is not sufficient. All other measures, such as building codes, are needed. But with millions of buildings, all construction codes and operations cannot be enforced. A rising carbon price provides effective enforcement.
(5) Wouldn’t it be cheaper to let people burn the dirtiest fuel? No. The clean future that we aim for, including more efficient energy use, is not more expensive. For example, you may have read about passively heated homes that require little energy and increase construction costs only several percent. Such possibilities remain the oddball (with high price tag), not the standard construction, unless the government adopts policies that make things happen.
Some of you suggested that I should only explain the urgency of the climate crisis, the need
to get back to 350 ppm CO2 and less. Politicians are happy if scientists provide information
and then go away and shut up. But science and policy cannot be divorced. What I learned in
the past few years is that politicians often adopt convenient policies that can be shown to be
inconsistent with long-term success, given readily available scientific data and empirical
information on policy impacts.
Jim Hansen
In TNYT: Should Congress Put a Cap on Executive Pay?
Should Congress Put a Cap on Executive Pay? By Robert H. Frank
TNYT, January 4, 2009, BU5
It's no wonder that voters’ outrage over exorbitant executive pay is mounting. After all, the government just had to bail out financial firms that paid big bonuses last year to many of the same executives who helped precipitate the current financial crisis.
Nor is it any wonder that Congress is considering measures to limit executive pay — not just in the financial industry, but economywide. So far, the only formal legislative proposal is “say on pay,” which would require a nonbinding shareholder vote on executive pay proposals. But critics complain that this would have little impact and are hungry for stronger measures.
One popular proposal would cap the chief executive’s pay at each company at 20 times its average worker’s salary. But while Congress may well have compelling reasons to limit executive pay in companies seeking bailout money, voter anger is not a good reason to extend pay caps more generally.
To be sure, executive pay in the United States is vastly higher than necessary. Executives in other countries, whose pay is often less than one-fifth that of their American counterparts, seem to work just as hard and perform just as well. The same was true of American executives in the 1980s.
So why not limit executive pay? The problem is that although every company wants a talented chief executive, there are only so many to go around. Relative salaries guide job choices. If salaries were capped at, say, $2 million annually, the most talented candidates would have less reason to seek the positions that make best use of their talents.
More troubling, if C.E.O. pay were capped and pay for other jobs was not, the most talented potential managers would be more likely to become lawyers or hedge fund operators. Can anyone think that would be a good thing?
In large companies, even small differences in managerial talent can make an enormous difference. Consider a company with $10 billion in annual earnings that has narrowed its C.E.O. search to two finalists. If one would make just a handful of better decisions each year than the other, the company’s annual earnings might easily be 3 percent — or $30 million — higher under the better candidate’s leadership. That same candidate couldn’t possibly make as much difference at a company with only $10 million in earnings.
That’s why companies where executive decisions have the greatest impact tend to outbid others in hiring the ablest managers.
Critics complain that executive labor markets are not really competitive — that chief executives appoint friends to their boards who approve unjustifiably large pay packages. But C.E.O.’s have always appointed friends, so that can’t explain recent trends.
One reason for these trends is that companies themselves have become bigger. As the New York University economists Xavier Gabaix and Augustin Landier argue in a 2006 paper, C.E.O. pay in a competitive market should vary in direct proportion to the market capitalization of the company. They found that C.E.O. compensation at large companies grew sixfold between 1980 and 2003, the same as the market-cap growth of these businesses.
Beyond growth in company size, executive mobility has also increased. In past decades, about the only way to become a C.E.O. was to have spent one’s entire career with the company. With only a handful of plausible internal candidates, pay was essentially a matter of bilateral negotiation between the board and the chosen. Increasingly, however, hiring committees believe that a talented executive from one industry can also deliver top performance in another.
A celebrated case in point was Louis V. Gerstner Jr. Having produced record earnings at RJR Nabisco, he was hired by I.B.M., where he led the computer giant, then struggling, to a dramatic turnaround in the 1990s.
This new spot market for talent has affected executive salaries in much the same way that free agency affected the salaries of professional athletes.
If the market for executive talent is competitive, critics ask, why are C.E.O.’s in an industry paid about the same, regardless of performance? That’s because no one knows with certainty how a particular executive will perform. But most hiring decisions are based on well-researched predictions, and always with hope for success. Executives whose record predicts good performance command a high rate. Their leash, however, has grown shorter.
In the past, a C.E.O. could often stay in the job for many years despite lackluster performance. Today, a C.E.O. who fails to deliver is often dismissed after a year or two.
In short, evidence suggests that the link between pay and performance is tighter than proponents of pay caps seem to think. Since the fall of the former Soviet Union, no one has seriously challenged the wisdom of relegating a high proportion of society’s most important tasks to private markets. And the market-determined salary of a job generally offers the best — if imperfect — measure of its importance.
The financial industry, however, may be an exception. A money manager’s pay depends primarily on the amount of money managed, which in turn depends on the fund’s rate of return relative to other funds. This provides strong incentives to invest in highly leveraged risky assets, which yield higher average returns. But as recent events have shown, these complex assets also expose the rest of us to considerable systemic risk.
On balance, then, the high pay that lures talent to the financial industry may actually cause harm. So if Congress wants to cap executive pay in financial institutions receiving bailout money, well and good.
Elsewhere, however, the more prudent response to runaway salaries at the top is to raise marginal tax rates on the highest earners, irrespective of occupation. Again, relative salaries drive job choices. The jobs with the highest pretax salaries will still offer the highest post-tax salaries, just as before, so this step will not compromise the price signals that steer talented performers to the most important jobs.
In answering voter outrage about executive pay, Congress should recall the words of Marcus Aurelius: “How much more grievous are the consequences of anger than the causes of it.”
Robert H. Frank, an economist at Cornell, is a visiting faculty member at the Stern School of Business at New York University.
TNYT, January 4, 2009, BU5
It's no wonder that voters’ outrage over exorbitant executive pay is mounting. After all, the government just had to bail out financial firms that paid big bonuses last year to many of the same executives who helped precipitate the current financial crisis.
Nor is it any wonder that Congress is considering measures to limit executive pay — not just in the financial industry, but economywide. So far, the only formal legislative proposal is “say on pay,” which would require a nonbinding shareholder vote on executive pay proposals. But critics complain that this would have little impact and are hungry for stronger measures.
One popular proposal would cap the chief executive’s pay at each company at 20 times its average worker’s salary. But while Congress may well have compelling reasons to limit executive pay in companies seeking bailout money, voter anger is not a good reason to extend pay caps more generally.
To be sure, executive pay in the United States is vastly higher than necessary. Executives in other countries, whose pay is often less than one-fifth that of their American counterparts, seem to work just as hard and perform just as well. The same was true of American executives in the 1980s.
So why not limit executive pay? The problem is that although every company wants a talented chief executive, there are only so many to go around. Relative salaries guide job choices. If salaries were capped at, say, $2 million annually, the most talented candidates would have less reason to seek the positions that make best use of their talents.
More troubling, if C.E.O. pay were capped and pay for other jobs was not, the most talented potential managers would be more likely to become lawyers or hedge fund operators. Can anyone think that would be a good thing?
In large companies, even small differences in managerial talent can make an enormous difference. Consider a company with $10 billion in annual earnings that has narrowed its C.E.O. search to two finalists. If one would make just a handful of better decisions each year than the other, the company’s annual earnings might easily be 3 percent — or $30 million — higher under the better candidate’s leadership. That same candidate couldn’t possibly make as much difference at a company with only $10 million in earnings.
That’s why companies where executive decisions have the greatest impact tend to outbid others in hiring the ablest managers.
Critics complain that executive labor markets are not really competitive — that chief executives appoint friends to their boards who approve unjustifiably large pay packages. But C.E.O.’s have always appointed friends, so that can’t explain recent trends.
One reason for these trends is that companies themselves have become bigger. As the New York University economists Xavier Gabaix and Augustin Landier argue in a 2006 paper, C.E.O. pay in a competitive market should vary in direct proportion to the market capitalization of the company. They found that C.E.O. compensation at large companies grew sixfold between 1980 and 2003, the same as the market-cap growth of these businesses.
Beyond growth in company size, executive mobility has also increased. In past decades, about the only way to become a C.E.O. was to have spent one’s entire career with the company. With only a handful of plausible internal candidates, pay was essentially a matter of bilateral negotiation between the board and the chosen. Increasingly, however, hiring committees believe that a talented executive from one industry can also deliver top performance in another.
A celebrated case in point was Louis V. Gerstner Jr. Having produced record earnings at RJR Nabisco, he was hired by I.B.M., where he led the computer giant, then struggling, to a dramatic turnaround in the 1990s.
This new spot market for talent has affected executive salaries in much the same way that free agency affected the salaries of professional athletes.
If the market for executive talent is competitive, critics ask, why are C.E.O.’s in an industry paid about the same, regardless of performance? That’s because no one knows with certainty how a particular executive will perform. But most hiring decisions are based on well-researched predictions, and always with hope for success. Executives whose record predicts good performance command a high rate. Their leash, however, has grown shorter.
In the past, a C.E.O. could often stay in the job for many years despite lackluster performance. Today, a C.E.O. who fails to deliver is often dismissed after a year or two.
In short, evidence suggests that the link between pay and performance is tighter than proponents of pay caps seem to think. Since the fall of the former Soviet Union, no one has seriously challenged the wisdom of relegating a high proportion of society’s most important tasks to private markets. And the market-determined salary of a job generally offers the best — if imperfect — measure of its importance.
The financial industry, however, may be an exception. A money manager’s pay depends primarily on the amount of money managed, which in turn depends on the fund’s rate of return relative to other funds. This provides strong incentives to invest in highly leveraged risky assets, which yield higher average returns. But as recent events have shown, these complex assets also expose the rest of us to considerable systemic risk.
On balance, then, the high pay that lures talent to the financial industry may actually cause harm. So if Congress wants to cap executive pay in financial institutions receiving bailout money, well and good.
Elsewhere, however, the more prudent response to runaway salaries at the top is to raise marginal tax rates on the highest earners, irrespective of occupation. Again, relative salaries drive job choices. The jobs with the highest pretax salaries will still offer the highest post-tax salaries, just as before, so this step will not compromise the price signals that steer talented performers to the most important jobs.
In answering voter outrage about executive pay, Congress should recall the words of Marcus Aurelius: “How much more grievous are the consequences of anger than the causes of it.”
Robert H. Frank, an economist at Cornell, is a visiting faculty member at the Stern School of Business at New York University.
A Century of Chlorination
Perspective on a Century of Chlorination
Jan 04, 2009
Article originally from American Chemistry magazine.
For an industry expert’s perspective on the 100th anniversary of the chlorinationof U.S. drinking water, the American Chemistry Council (ACC) interviewed Dr. James P. Brennan, Technology Manager with Arch Chemicals in Smyrna, Ga., who has worked extensively with water chlorination chemistry for more than 30 years.
“The chlorination process has long been the conventional method of disinfection for municipal water and wastewater, due to its low chemical cost and consistent performance,” he says.
Beyond drinking water, chlorine disinfection is an important component to healthyswimming pools, schools, daycare centers, and restaurants. As Brennan puts it, chlorine and the chlorination process are used for everything from preventing the transmission of disease to reducing spoilage in freshly harvested fruits and vegetables.
“Chlorine had a marvelous effect on public health during the first 50 years of use,” hesays. “Through the chlorination process, the average lifespan went from 49 to 70 years.”
During that time, he adds, the basic principle of cleaning and sanitizing had already begun; and because of the concepts of good hygiene, the population as a whole benefited.
Chlorine can be applied to water as a gas (elemental chlorine), a liquid solution (sodiumhypochlorite), or in several dry forms. A granular form of dry chlorine (calcium hypochlorite), introduced 80 years ago, was stronger and had a longer shelf life. This product also evolved and is now easier to handle and store than ever.
“One success begets another, and chlorine evolved in its uses and its forms,” says Brennan.
More recently, he says, this product has become available in consistent tablet forms with delivery systems designed to provide dosage control and convenience, resulting in higher-quality treated water.
Calcium hypochlorite is also used in municipal water treatment plants and for sanitizing pools and spas. Private owners of pools and spas can conveniently transport and store it, and plant operators can easily apply it directly to the source, which is imperative for stopping the transmission of diseases.
Over the past 30 years, Brennan’s career has taken him from the laboratory bench to field locations throughout the U.S. and, more recently, around the globe. Most interesting and rewarding to him has been the opportunity to educate others about the chlorination process, particularly in underdeveloped areas in Asia and South America, where he has traveled in efforts to improve public health by emphasizing the importance of safe drinking water and how to treat it efficiently and reliably.
"We are teaching sustainable methods to treat water,” he says. “We want to keep the process simple and teach people how to use the products and protect their water sources.”
Looking ahead, Brennan says he believes improvements to the chlorination process are always evolving, especially in ways to make it more available and reliable.
And for the enormous effect chlorine has had on everything from public health to ensuring safe drinking water, he says, “Job well done.”
Jan 04, 2009
Article originally from American Chemistry magazine.
For an industry expert’s perspective on the 100th anniversary of the chlorinationof U.S. drinking water, the American Chemistry Council (ACC) interviewed Dr. James P. Brennan, Technology Manager with Arch Chemicals in Smyrna, Ga., who has worked extensively with water chlorination chemistry for more than 30 years.
“The chlorination process has long been the conventional method of disinfection for municipal water and wastewater, due to its low chemical cost and consistent performance,” he says.
Beyond drinking water, chlorine disinfection is an important component to healthyswimming pools, schools, daycare centers, and restaurants. As Brennan puts it, chlorine and the chlorination process are used for everything from preventing the transmission of disease to reducing spoilage in freshly harvested fruits and vegetables.
“Chlorine had a marvelous effect on public health during the first 50 years of use,” hesays. “Through the chlorination process, the average lifespan went from 49 to 70 years.”
During that time, he adds, the basic principle of cleaning and sanitizing had already begun; and because of the concepts of good hygiene, the population as a whole benefited.
Chlorine can be applied to water as a gas (elemental chlorine), a liquid solution (sodiumhypochlorite), or in several dry forms. A granular form of dry chlorine (calcium hypochlorite), introduced 80 years ago, was stronger and had a longer shelf life. This product also evolved and is now easier to handle and store than ever.
“One success begets another, and chlorine evolved in its uses and its forms,” says Brennan.
More recently, he says, this product has become available in consistent tablet forms with delivery systems designed to provide dosage control and convenience, resulting in higher-quality treated water.
Calcium hypochlorite is also used in municipal water treatment plants and for sanitizing pools and spas. Private owners of pools and spas can conveniently transport and store it, and plant operators can easily apply it directly to the source, which is imperative for stopping the transmission of diseases.
Over the past 30 years, Brennan’s career has taken him from the laboratory bench to field locations throughout the U.S. and, more recently, around the globe. Most interesting and rewarding to him has been the opportunity to educate others about the chlorination process, particularly in underdeveloped areas in Asia and South America, where he has traveled in efforts to improve public health by emphasizing the importance of safe drinking water and how to treat it efficiently and reliably.
"We are teaching sustainable methods to treat water,” he says. “We want to keep the process simple and teach people how to use the products and protect their water sources.”
Looking ahead, Brennan says he believes improvements to the chlorination process are always evolving, especially in ways to make it more available and reliable.
And for the enormous effect chlorine has had on everything from public health to ensuring safe drinking water, he says, “Job well done.”
On Griggs v. Duke Power: Implications for College Credentialing
The Toll of a Rights 'Victory', by George F. Will
Washington Post, Sunday, January 4, 2009; B07
Like pebbles tossed into ponds, important Supreme Court rulings radiate ripples of consequences. Consider a 1971 Supreme Court decision that supposedly applied but actually altered the 1964 Civil Rights Act.
During debate on the legislation, prescient critics worried that it might be construed to forbid giving prospective employees tests that might produce what was later called, in the 1971 case, a "disparate impact" on certain preferred minorities. To assuage these critics, the final act stipulated that employers could use "professionally developed ability tests" that were not "designed, intended or used to discriminate."
Furthermore, two Senate sponsors of the act insisted that it did not require "that employers abandon bona fide qualification tests where, because of differences in background and educations, members of some groups are able to perform better on these tests than members of other groups." What subsequently happened is recounted in "Griggs v. Duke Power: Implications for College Credentialing," a paper written by Bryan O'Keefe, a law student, and Richard Vedder, a professor of economics at Ohio University.
In 1964, there were more than 2,000 personnel tests available to employers. But already an Illinois state official had ruled that a standard ability test used by Motorola was illegal because it was unfair to "disadvantaged groups."
Before 1964, Duke Power had discriminated against blacks in hiring and promotion. After the 1964 act, the company changed its policies, establishing a high school equivalence requirement for all workers and allowing them to meet that requirement by achieving minimum scores on two widely used aptitude tests, including one used today by almost every NFL team to measure players' learning potential.
Plaintiffs in the Griggs case argued that the high school and testing requirements discriminated against blacks. A unanimous Supreme Court, disregarding the relevant legislative history, held that Congress intended the 1964 act to proscribe not only overt discrimination but also "practices that are fair in form, but discriminatory in operation." The court added:
Thus a heavy burden of proof was placed on employers, including that of proving that any test that produced a "disparate impact" detrimental to certain minorities was a "business necessity" for various particular jobs. In 1972, Congress codified the Griggs misinterpretation of what Congress had done in 1964. And after a 1989 Supreme Court ruling partially undid Griggs, Congress in 1991 repudiated that 1989 ruling and essentially reimposed the burden of proof on employers.
Small wonder, then, that many employers, fearing endless litigation about multiple uncertainties, threw up their hands and, to avoid legal liability, threw out intelligence and aptitude tests for potential employees. Instead, they began requiring college degrees as indices of applicants' satisfactory intelligence and diligence.
This is, of course, just one reason college attendance increased from 5.8 million in 1970 to 17.5 million in 2005. But it probably had a, well, disparate impact by making employment more difficult for minorities. O'Keefe and Vedder write:
"Qualified minorities who performed well on an intelligence or aptitude test and would have been offered a job directly 30 or 40 years ago are now compelled to attend a college or university for four years and incur significant costs. For some young people from poorer families, those costs are out of reach."
Indeed, by turning college degrees into indispensable credentials for many of society's better jobs, this series of events increased demand for degrees and, O'Keefe and Vedder say, contributed to "an environment of aggressive tuition increases." Furthermore they reasonably wonder whether this supposed civil rights victory, which erected barriers between high school graduates and high-paying jobs, has exacerbated the widening income disparities between high school and college graduates.
Griggs and its consequences are timely reminders of the Law of Unintended Consequences, which is increasingly pertinent as America's regulatory state becomes increasingly determined to fine-tune our complex society. That law holds that the consequences of government actions often are different than, and even contrary to, the intended consequences.
Soon the Obama administration will arrive, bristling like a very progressive porcupine with sharp plans -- plans for restoring economic health by "demand management," for altering the distribution of income by using tax changes and supporting more muscular labor unions, for cooling the planet by such measures as burning more food as fuel, and for many additional improvements. At least, those will be the administration's intended consequences.
Washington Post, Sunday, January 4, 2009; B07
Like pebbles tossed into ponds, important Supreme Court rulings radiate ripples of consequences. Consider a 1971 Supreme Court decision that supposedly applied but actually altered the 1964 Civil Rights Act.
During debate on the legislation, prescient critics worried that it might be construed to forbid giving prospective employees tests that might produce what was later called, in the 1971 case, a "disparate impact" on certain preferred minorities. To assuage these critics, the final act stipulated that employers could use "professionally developed ability tests" that were not "designed, intended or used to discriminate."
Furthermore, two Senate sponsors of the act insisted that it did not require "that employers abandon bona fide qualification tests where, because of differences in background and educations, members of some groups are able to perform better on these tests than members of other groups." What subsequently happened is recounted in "Griggs v. Duke Power: Implications for College Credentialing," a paper written by Bryan O'Keefe, a law student, and Richard Vedder, a professor of economics at Ohio University.
In 1964, there were more than 2,000 personnel tests available to employers. But already an Illinois state official had ruled that a standard ability test used by Motorola was illegal because it was unfair to "disadvantaged groups."
Before 1964, Duke Power had discriminated against blacks in hiring and promotion. After the 1964 act, the company changed its policies, establishing a high school equivalence requirement for all workers and allowing them to meet that requirement by achieving minimum scores on two widely used aptitude tests, including one used today by almost every NFL team to measure players' learning potential.
Plaintiffs in the Griggs case argued that the high school and testing requirements discriminated against blacks. A unanimous Supreme Court, disregarding the relevant legislative history, held that Congress intended the 1964 act to proscribe not only overt discrimination but also "practices that are fair in form, but discriminatory in operation." The court added:
"The touchstone is business necessity. If an employment practice which operates to exclude Negroes cannot be shown to be related to job performance, the practice is prohibited."
Thus a heavy burden of proof was placed on employers, including that of proving that any test that produced a "disparate impact" detrimental to certain minorities was a "business necessity" for various particular jobs. In 1972, Congress codified the Griggs misinterpretation of what Congress had done in 1964. And after a 1989 Supreme Court ruling partially undid Griggs, Congress in 1991 repudiated that 1989 ruling and essentially reimposed the burden of proof on employers.
Small wonder, then, that many employers, fearing endless litigation about multiple uncertainties, threw up their hands and, to avoid legal liability, threw out intelligence and aptitude tests for potential employees. Instead, they began requiring college degrees as indices of applicants' satisfactory intelligence and diligence.
This is, of course, just one reason college attendance increased from 5.8 million in 1970 to 17.5 million in 2005. But it probably had a, well, disparate impact by making employment more difficult for minorities. O'Keefe and Vedder write:
"Qualified minorities who performed well on an intelligence or aptitude test and would have been offered a job directly 30 or 40 years ago are now compelled to attend a college or university for four years and incur significant costs. For some young people from poorer families, those costs are out of reach."
Indeed, by turning college degrees into indispensable credentials for many of society's better jobs, this series of events increased demand for degrees and, O'Keefe and Vedder say, contributed to "an environment of aggressive tuition increases." Furthermore they reasonably wonder whether this supposed civil rights victory, which erected barriers between high school graduates and high-paying jobs, has exacerbated the widening income disparities between high school and college graduates.
Griggs and its consequences are timely reminders of the Law of Unintended Consequences, which is increasingly pertinent as America's regulatory state becomes increasingly determined to fine-tune our complex society. That law holds that the consequences of government actions often are different than, and even contrary to, the intended consequences.
Soon the Obama administration will arrive, bristling like a very progressive porcupine with sharp plans -- plans for restoring economic health by "demand management," for altering the distribution of income by using tax changes and supporting more muscular labor unions, for cooling the planet by such measures as burning more food as fuel, and for many additional improvements. At least, those will be the administration's intended consequences.
Saturday, January 3, 2009
Ban Voices Concerns Over Threats Against Iranian Nobel Peace Prize Laureate
Ban Voices Concerns Over Threats Against Iranian Nobel Peace Prize Laureate
UN, New York, Jan 3 2009 12:10PM
Secretary-General Ban Ki-moon today expressed his great concern over reports that Iranian lawyer, human rights activist and Nobel Peace Prize laureate Shirin Ebadi has been threatened recently.
It has also been reported that her Center for the Defense of Human Rights has been broken into and materials taken, and that hostile crowds have gathered outside her office and home.
Mr. Ban "calls on the Iranian authorities to take immediate measures to prevent any further harassment and to ensure Shirin Ebadi''s safety and security," according to a statement issued by his spokesperson.
Jan 3 2009 12:10PM
________________
For more details go to UN News Centre at http://www.un.org/news
UN, New York, Jan 3 2009 12:10PM
Secretary-General Ban Ki-moon today expressed his great concern over reports that Iranian lawyer, human rights activist and Nobel Peace Prize laureate Shirin Ebadi has been threatened recently.
It has also been reported that her Center for the Defense of Human Rights has been broken into and materials taken, and that hostile crowds have gathered outside her office and home.
Mr. Ban "calls on the Iranian authorities to take immediate measures to prevent any further harassment and to ensure Shirin Ebadi''s safety and security," according to a statement issued by his spokesperson.
Jan 3 2009 12:10PM
________________
For more details go to UN News Centre at http://www.un.org/news
Obama Address On Economic Recovery
American Recovery and Reinvestment, by Dave Rochelson
Obama-Biden Transition Team, Saturday, January 3, 2009 06:00am EST
In this week’s weekly address, President-elect Barack Obama lays out the challenges that face us in the new year, and his plan for taking them on.
“We need an American Recovery and Reinvestment Plan that not only creates jobs in the short-term but spurs economic growth and competitiveness in the long-term,” he says. “And this plan must be designed in a new way—we can’t just fall into the old Washington habit of throwing money at the problem. We must make strategic investments that will serve as a down payment on our long-term economic future. We must demand vigorous oversight and strict accountability for achieving results. And we must restore fiscal responsibility and make the tough choices so that as the economy recovers, the deficit starts to come down. That is how we will achieve the number one goal of my plan—which is to create three million new jobs, more than eighty percent of them in the private sector.”
Watch the full address or read the text here.
Obama-Biden Transition Team, Saturday, January 3, 2009 06:00am EST
In this week’s weekly address, President-elect Barack Obama lays out the challenges that face us in the new year, and his plan for taking them on.
“We need an American Recovery and Reinvestment Plan that not only creates jobs in the short-term but spurs economic growth and competitiveness in the long-term,” he says. “And this plan must be designed in a new way—we can’t just fall into the old Washington habit of throwing money at the problem. We must make strategic investments that will serve as a down payment on our long-term economic future. We must demand vigorous oversight and strict accountability for achieving results. And we must restore fiscal responsibility and make the tough choices so that as the economy recovers, the deficit starts to come down. That is how we will achieve the number one goal of my plan—which is to create three million new jobs, more than eighty percent of them in the private sector.”
Watch the full address or read the text here.
Taking Detainees: As the Obama Effect Fades
As the Obama Effect Fades, by Abe Greenwald
Contentions, Commentary Blog, Jan 03, 2009
On December 23, the Associated Press reported that European nations were newly open to the U.S.’s request that EU countries resettle some Guantanamo Bay detainees. The AP’s taunting coverage went, predictably, like this:
The willingness to consider accepting prisoners who cannot be returned to their home countries, because of fears they may be tortured there, represents a major change in attitude on the part of European governments. Repeated requests from the Bush administration that European allies accept some Guantanamo Bay detainees received only refusals.
The Bush administration “produced the problem,” Karsten Voigt, coordinator of German-American cooperation at the German Foreign Ministry, said in a telephone interview. “With Obama, the difference is that he tries to solve it.
The very next day, EU Business reported soberly:
Europe reacted cautiously Wednesday to the idea of resettling terror suspects released from Guantanamo Bay, with some countries seeking a concerted European approach and others already opposed to the idea.
The Netherlands went furthest, ruling out accepting any newly freed inmates, despite broad European support for US president elect Barack Obama’s promise to shut down the notorious military detention centre.
A story in New York Times nearly completes our round-trip journey from reality to fantasy and back:
Australia said Friday that it would not agree to American requests to accept more detainees from the prison at Guantánamo Bay, and Britain signaled reluctance to take in significant numbers of former inmates, underscoring the difficulties both the departing and incoming administrations in Washington face in trying to close the camp, which has stirred bitter controversy around the world.
So, what the truth? Some spokesman at the German Foreign Ministry saw an opportunity to give the outgoing American president a dig and he took it. Sure, Germany and Portugal say they’d think about taking in detainees if Obama closes down Gitmo. And that’s good. But it’s predicated on a pretty big “if.”
Industry Views On The Race for Chemical Security
The Race for Chemical Security
Jan 03, 2008
Article originally from American Chemistry magazine.
For some in Washington, D.C., the issue of chemical plant security seemed resolved when Congress passed legislation just prior to the 2006 election recess. However, for the American Chemistry Council (ACC) and its member companies, passage of the legislation was not a checkered flag that ended the race. In reality, there will be lots of hard work ahead and many decisions to be made. Fortunately, thanks to the efforts of ACC and its members, the foundation for the future was laid by the Responsible Care® Security Code.
The quest for legislation
Since 2003, ACC has led the charge for a strong, effective chemical security law. It worked with Congress, testified at hearings, and made sure the final bill took into account the importance of protecting the business of chemistry for the good of the nation. The measure signed into law last October reflected many of ACC’s views and met the nation’s needs. It granted the Department of Homeland Security (DHS) the authority to establish national performance standards for chemical facility security, to enforce those standards through inspection, as well as the power to require corrective action.
Of course, that was only one aspect of ACC’s leadership. Following the terrorist attacks of Sept. 11, 2001, without waiting for legislation or other federal directives, ACC initiated its mandatory RCSC to protect member company communities, employees, products, and facilities. The code covers site, cyber, and transportation security. Its four essential components require member companies to:
Out of the starting gate
Typically, rule making of this kind involves a broad exchange of ideas among stakeholders and agency experts, and this process has been no exception. It is clear DHS is already incorporating elements drawn from the RCSC. In particular, DHS regulations will prioritize facilities, requiring “high-risk” sites to undertake vulnerability assessments and develop and implement site security plans proportionate to its risk level.
Defining what constitutes high risk and determining which facilities cross that threshold will be among the greatest challenges faced by DHS. Ted Cromwell, ACC’s Senior Director for Security, explains that DHS is utilizing a four-fold risk model that encompasses:
ACC’s formal comments on the rulemaking supported the overall effort and offered guidance on specific issues. Full comments can be downloaded from www.americanchemistry.com/security. DHS will issue its final regulations on April 4.
A change in attitude?
Throughout the chemical security legislative and regulatory process, Cromwell and his colleagues at ACC and its member companies have seen a significant change in Washington’s view of the chemical industry.
“The most refreshing aspect of our new relationship with the government is that our products, facilities, and role in society are seen as assets to be protected, not just liabilities to be regulated,” he says.
This growing awareness on the part of the nation’s officials is not an accident, but rather, the result of a focused education and outreach effort by ACC and member companies, including the widely praised essential2 ® campaign, CHEMTREC®, TRANSCAER®, and Responsible Care® programs. It is also thanks to long hours of hard work by officials in industry-government relations, communications, and regulatory affairs.
“It’s still early in the race for chemical security,” Cromwell notes. “The government, ACC, and our members are well-positioned, and if we all do our part, the real winners will be the people, the communities, and the customers who depend on chemistry every day.”
Jan 03, 2008
Article originally from American Chemistry magazine.
For some in Washington, D.C., the issue of chemical plant security seemed resolved when Congress passed legislation just prior to the 2006 election recess. However, for the American Chemistry Council (ACC) and its member companies, passage of the legislation was not a checkered flag that ended the race. In reality, there will be lots of hard work ahead and many decisions to be made. Fortunately, thanks to the efforts of ACC and its members, the foundation for the future was laid by the Responsible Care® Security Code.
The quest for legislation
Since 2003, ACC has led the charge for a strong, effective chemical security law. It worked with Congress, testified at hearings, and made sure the final bill took into account the importance of protecting the business of chemistry for the good of the nation. The measure signed into law last October reflected many of ACC’s views and met the nation’s needs. It granted the Department of Homeland Security (DHS) the authority to establish national performance standards for chemical facility security, to enforce those standards through inspection, as well as the power to require corrective action.
Of course, that was only one aspect of ACC’s leadership. Following the terrorist attacks of Sept. 11, 2001, without waiting for legislation or other federal directives, ACC initiated its mandatory RCSC to protect member company communities, employees, products, and facilities. The code covers site, cyber, and transportation security. Its four essential components require member companies to:
- prioritize facilities;
- assess vulnerabilities, using rigorous methodologies developed or approved by experts at Sandia National Lab and the Center for Chemical Process Safety (CCPS);
- implement security enhancements commensurate with risks, and;
- verify physical enhancements through local officials or other credible third parties.
Out of the starting gate
Typically, rule making of this kind involves a broad exchange of ideas among stakeholders and agency experts, and this process has been no exception. It is clear DHS is already incorporating elements drawn from the RCSC. In particular, DHS regulations will prioritize facilities, requiring “high-risk” sites to undertake vulnerability assessments and develop and implement site security plans proportionate to its risk level.
Defining what constitutes high risk and determining which facilities cross that threshold will be among the greatest challenges faced by DHS. Ted Cromwell, ACC’s Senior Director for Security, explains that DHS is utilizing a four-fold risk model that encompasses:
- off-site consequences, based on the types of chemicals, their quantities, and
proximity to population centers; - sabotage and the threat posed by contaminated products;
- theft and the potential use of stolen products to harm people and property, and;
- economic consequences to national security or the region, due to lost production and reduced accessibility of chemical products.
ACC’s formal comments on the rulemaking supported the overall effort and offered guidance on specific issues. Full comments can be downloaded from www.americanchemistry.com/security. DHS will issue its final regulations on April 4.
A change in attitude?
Throughout the chemical security legislative and regulatory process, Cromwell and his colleagues at ACC and its member companies have seen a significant change in Washington’s view of the chemical industry.
“The most refreshing aspect of our new relationship with the government is that our products, facilities, and role in society are seen as assets to be protected, not just liabilities to be regulated,” he says.
This growing awareness on the part of the nation’s officials is not an accident, but rather, the result of a focused education and outreach effort by ACC and member companies, including the widely praised essential2 ® campaign, CHEMTREC®, TRANSCAER®, and Responsible Care® programs. It is also thanks to long hours of hard work by officials in industry-government relations, communications, and regulatory affairs.
“It’s still early in the race for chemical security,” Cromwell notes. “The government, ACC, and our members are well-positioned, and if we all do our part, the real winners will be the people, the communities, and the customers who depend on chemistry every day.”
Unraveling Judicial Restraint: Guns, Abortion, and the Faux Conservatism of J. Harvie Wilkinson III
Unraveling Judicial Restraint: Guns, Abortion, and the Faux Conservatism of J. Harvie Wilkinson III, by Nelson Lund & David B. Kopel
December 1, 2008
Abstract:
Writing in the Virginia Law Review, a distinguished federal judge maintains that true conservatives are required to substitute principles of judicial restraint for an inquiry into the original meaning of the Constitution. Accordingly, argues J. Harvie Wilkinson, III, the Supreme Court's Second Amendment decision in District of Columbia v. Heller is an activist decision just like Roe v. Wade: "[B]oth cases found judicially enforceable substantive rights only ambiguously rooted in the Constitution's text." In this response, we challenge his critique.
Part I shows that Judge Wilkinson's analogy between Roe and Heller is untenable. The right of the people to keep and bear arms is in the Constitution, and the right to abortion is not. Contrary to Judge Wilkinson, the genuine conservative critique of Roe is based on the Constitution, not on judicial "values." Judge Wilkinson, moreover, does not show that Heller's interpretation of the Second Amendment is refuted, or even called into serious question, by Justice Stevens' dissenting opinion.
Part II shows that Judge Wilkinson himself does not adhere to the "neutral principle" that he claims to derive from "judicial values." Under the principle of judicial restraint that he articulates, many now-reviled statutes, including the Jim Crow laws of the twentieth century, should have been upheld by the courts. Judge Wilkinson does not accept the consequences of his own supposedly neutral principle, preferring instead to endorse or condemn Supreme Court decisions solely on the basis of his policy preferences. That is not judicial restraint. It is judicial lawlessness.
December 1, 2008
Abstract:
Writing in the Virginia Law Review, a distinguished federal judge maintains that true conservatives are required to substitute principles of judicial restraint for an inquiry into the original meaning of the Constitution. Accordingly, argues J. Harvie Wilkinson, III, the Supreme Court's Second Amendment decision in District of Columbia v. Heller is an activist decision just like Roe v. Wade: "[B]oth cases found judicially enforceable substantive rights only ambiguously rooted in the Constitution's text." In this response, we challenge his critique.
Part I shows that Judge Wilkinson's analogy between Roe and Heller is untenable. The right of the people to keep and bear arms is in the Constitution, and the right to abortion is not. Contrary to Judge Wilkinson, the genuine conservative critique of Roe is based on the Constitution, not on judicial "values." Judge Wilkinson, moreover, does not show that Heller's interpretation of the Second Amendment is refuted, or even called into serious question, by Justice Stevens' dissenting opinion.
Part II shows that Judge Wilkinson himself does not adhere to the "neutral principle" that he claims to derive from "judicial values." Under the principle of judicial restraint that he articulates, many now-reviled statutes, including the Jim Crow laws of the twentieth century, should have been upheld by the courts. Judge Wilkinson does not accept the consequences of his own supposedly neutral principle, preferring instead to endorse or condemn Supreme Court decisions solely on the basis of his policy preferences. That is not judicial restraint. It is judicial lawlessness.
The Politics of Fat
The Politics of Fat, by Andrew Ferguson
The Weekly Standard, Jan 05, 2009, Volume 014, Issue 16
On December 15, the city council of Binghamton, New York--every member a proud progressive--unanimously passed an ordinance making it a crime to discriminate against fat people. The next day, David Paterson, the famously progressive governor of New York, proposed a special "fat tax" on soda pop because soda pop makes people fat.
When it comes to obesity, the authorities in New York have put their citizens on notice: We will get you coming and going.
Supporters make clear that each move is only preliminary to even greater reforms. Several legislators are interested in a statewide "weight-based" discrimination law, and fat taxes on other foods may prove irresistible.
Obesity is very today, very right now. Obesity is the new smoking. "What smoking was to my parents' generation," Paterson says, "obesity is to my children's generation." He means this in two ways. One is that kids today--these kids today!--eat fatty foods with as much ardor as their grandparents smoked tobacco. The other is that government intends to eradicate the first vice with the same ruthlessness as it did the second. And it's not an idle threat. The campaign against smoking was progressivism's greatest recent success. Over a span of 20 years, an ancient human weakness once enjoyed by nearly half the population and quietly tolerated by the other half became virtually outlawed.
The anti-smoking campaign shows how to turn a private vice requiring tolerance and indulgence into a public offense demanding regulation and official censure. Paterson is following the campaign step by step. First comes the misappropriation of the language of epidemiology. The terms are liberated from their scientific meaning and then attached to a widely shared activity or condition. The condition, in this case obesity, is renamed a "disease," suggesting that some kind of contagion is making the rounds. Then the disease inflates into an "epidemic," suggesting an urgency that only the foolhardy would ignore. "We find ourselves," says Paterson, "in the midst of a new public health epidemic, childhood obesity." Any libertarian qualms are quickly overridden, since not even the most hollow-eyed anarcho-capitalist would deny that government is obliged to guard against runaway disease.
To intensify the urgency, Paterson deploys neutral statistics from sources that are already on his side. The statistics are always improbably exact. Unnamed public health researchers at Harvard have discovered that obesity is "associated" with 112,000 deaths in the United States every year; not 113,000, and not 111,000. Each can of soda pop "increases the risk" of making a child fat by 60 percent. Not 59 percent. Not 61 percent. An increase of $1.25 in tobacco taxes saves more than 37,000 lives and $5 billion in health care costs. And Paterson's 18 percent tax on sugary soft drinks will reduce consumption by 5 percent. Not four.
From here the rest of the argument tumbles like dominoes, clack clack clack. Fat people are not merely drawn to eating unhealthy food; they are "addicted." As addicts, they are rendered helpless by their addiction. Helpless, they deserve the status of victims. Like all victims, they must be victimized by something. By unhealthy food? No: Not food merely, for food and commercial marketing combine to create the TFE--the "Toxic Food Environment." The TFE is everywhere in today's America; it is today's America. It emanates from the seductive advertising of food, from the media's quasi-pornographic obsession with food, from the scandalously low price of food, from the ubiquitous sale of food in such unlikely places as gas-station minimarts. (In simpler times, Americans got gas when they ate food; now they eat food when they get gas.) Created by cynical corporations, the TFE is the ghastly miasma in which we live and move and have our being, swelling with every Frito.
Thus a private failing becomes a public menace.
This is the point in the argument where the city council of Binghamton jumps in. Actually, they perked up at the mention of the word "victims." Victims are citizens who have gone limp. They require the paternal care and protection of public officials. Researchers from Yale (no less) "found that obese adults were 37 times more likely"--not 36 times more likely, and not 38 either--"to report weight-based employment discrimination compared to 'normal' weight adults." Nonprogressives from places other than Binghamton might find this statistic less than eye-popping. Who else but fat people are going to suffer discrimination against fat people? But the very idea of such unregulated bigotry moved the city council to act. Specifically, it outlawed what has elsewhere been called weightism: "weight-based" discrimination in housing, employment, education, and public accommodation. The bill's sponsor explained the law by saying, "It is the human thing to do."
Well, it's certainly the progressive thing to do. Those same Yale researchers fleshed out the reasoning, if you'll forgive the expression. "Weight bias exists," they explained, because weightist bigots believe that "the only reason people fail to lose weight is because of [they're not teaching grammar at Yale these days] poor self-discipline or a lack of willpower." This wrongheaded notion "blames the victim rather than addressing environmental conditions that cause obesity."
The city council takes care of the first part of this incorrect thinking. Its new law reinforces the view that obesity, like sex or race, is an unchangeable condition deserving civil rights protection. The governor aims for the second part, by making the initial move toward taxing those "environmental conditions" out of existence; he will, in other words, directly attack the TFE and, if all goes well, cure the obesity epidemic.
The governor and the Binghamton city council acted independently, of course, but together they've concocted a perfectly progressive two-pronged approach, a one-two punch, a regulatory pincer movement designed to eliminate, all at once and simultaneously, not only discrimination against the obese but also the obese themselves.
One problem does suggest itself. If the government is to declare our hefty brothers and sisters a protected class, if they are to become a legal caste that cannot be singled out because of their weight, how can the government continue to go after their favorite foods? A "fat tax" on sugary soda pop punishes fat people by making the foods they love more expensive--merely because fat people love them. One tactic violates the other. It's only a matter of time before fat people will be able to sue the state of New York on grounds of discrimination for imposing a fat tax. And then where will we be?
I don't want to give anybody any ideas, but I have noticed an alarming number of dangerously skinny people drinking diet soda. It's like an -epidemic.
Andrew Ferguson is a senior editor at The Weekly Standard.
The Weekly Standard, Jan 05, 2009, Volume 014, Issue 16
On December 15, the city council of Binghamton, New York--every member a proud progressive--unanimously passed an ordinance making it a crime to discriminate against fat people. The next day, David Paterson, the famously progressive governor of New York, proposed a special "fat tax" on soda pop because soda pop makes people fat.
When it comes to obesity, the authorities in New York have put their citizens on notice: We will get you coming and going.
Supporters make clear that each move is only preliminary to even greater reforms. Several legislators are interested in a statewide "weight-based" discrimination law, and fat taxes on other foods may prove irresistible.
Obesity is very today, very right now. Obesity is the new smoking. "What smoking was to my parents' generation," Paterson says, "obesity is to my children's generation." He means this in two ways. One is that kids today--these kids today!--eat fatty foods with as much ardor as their grandparents smoked tobacco. The other is that government intends to eradicate the first vice with the same ruthlessness as it did the second. And it's not an idle threat. The campaign against smoking was progressivism's greatest recent success. Over a span of 20 years, an ancient human weakness once enjoyed by nearly half the population and quietly tolerated by the other half became virtually outlawed.
The anti-smoking campaign shows how to turn a private vice requiring tolerance and indulgence into a public offense demanding regulation and official censure. Paterson is following the campaign step by step. First comes the misappropriation of the language of epidemiology. The terms are liberated from their scientific meaning and then attached to a widely shared activity or condition. The condition, in this case obesity, is renamed a "disease," suggesting that some kind of contagion is making the rounds. Then the disease inflates into an "epidemic," suggesting an urgency that only the foolhardy would ignore. "We find ourselves," says Paterson, "in the midst of a new public health epidemic, childhood obesity." Any libertarian qualms are quickly overridden, since not even the most hollow-eyed anarcho-capitalist would deny that government is obliged to guard against runaway disease.
To intensify the urgency, Paterson deploys neutral statistics from sources that are already on his side. The statistics are always improbably exact. Unnamed public health researchers at Harvard have discovered that obesity is "associated" with 112,000 deaths in the United States every year; not 113,000, and not 111,000. Each can of soda pop "increases the risk" of making a child fat by 60 percent. Not 59 percent. Not 61 percent. An increase of $1.25 in tobacco taxes saves more than 37,000 lives and $5 billion in health care costs. And Paterson's 18 percent tax on sugary soft drinks will reduce consumption by 5 percent. Not four.
From here the rest of the argument tumbles like dominoes, clack clack clack. Fat people are not merely drawn to eating unhealthy food; they are "addicted." As addicts, they are rendered helpless by their addiction. Helpless, they deserve the status of victims. Like all victims, they must be victimized by something. By unhealthy food? No: Not food merely, for food and commercial marketing combine to create the TFE--the "Toxic Food Environment." The TFE is everywhere in today's America; it is today's America. It emanates from the seductive advertising of food, from the media's quasi-pornographic obsession with food, from the scandalously low price of food, from the ubiquitous sale of food in such unlikely places as gas-station minimarts. (In simpler times, Americans got gas when they ate food; now they eat food when they get gas.) Created by cynical corporations, the TFE is the ghastly miasma in which we live and move and have our being, swelling with every Frito.
Thus a private failing becomes a public menace.
This is the point in the argument where the city council of Binghamton jumps in. Actually, they perked up at the mention of the word "victims." Victims are citizens who have gone limp. They require the paternal care and protection of public officials. Researchers from Yale (no less) "found that obese adults were 37 times more likely"--not 36 times more likely, and not 38 either--"to report weight-based employment discrimination compared to 'normal' weight adults." Nonprogressives from places other than Binghamton might find this statistic less than eye-popping. Who else but fat people are going to suffer discrimination against fat people? But the very idea of such unregulated bigotry moved the city council to act. Specifically, it outlawed what has elsewhere been called weightism: "weight-based" discrimination in housing, employment, education, and public accommodation. The bill's sponsor explained the law by saying, "It is the human thing to do."
Well, it's certainly the progressive thing to do. Those same Yale researchers fleshed out the reasoning, if you'll forgive the expression. "Weight bias exists," they explained, because weightist bigots believe that "the only reason people fail to lose weight is because of [they're not teaching grammar at Yale these days] poor self-discipline or a lack of willpower." This wrongheaded notion "blames the victim rather than addressing environmental conditions that cause obesity."
The city council takes care of the first part of this incorrect thinking. Its new law reinforces the view that obesity, like sex or race, is an unchangeable condition deserving civil rights protection. The governor aims for the second part, by making the initial move toward taxing those "environmental conditions" out of existence; he will, in other words, directly attack the TFE and, if all goes well, cure the obesity epidemic.
The governor and the Binghamton city council acted independently, of course, but together they've concocted a perfectly progressive two-pronged approach, a one-two punch, a regulatory pincer movement designed to eliminate, all at once and simultaneously, not only discrimination against the obese but also the obese themselves.
One problem does suggest itself. If the government is to declare our hefty brothers and sisters a protected class, if they are to become a legal caste that cannot be singled out because of their weight, how can the government continue to go after their favorite foods? A "fat tax" on sugary soda pop punishes fat people by making the foods they love more expensive--merely because fat people love them. One tactic violates the other. It's only a matter of time before fat people will be able to sue the state of New York on grounds of discrimination for imposing a fat tax. And then where will we be?
I don't want to give anybody any ideas, but I have noticed an alarming number of dangerously skinny people drinking diet soda. It's like an -epidemic.
Andrew Ferguson is a senior editor at The Weekly Standard.
Our Oil Reserves Are Depleted; It's Time for Utopia
Our Oil Reserves Are Depleted; It's Time for Utopia, by Jim Schumacher and Debbie Bookch
Huffington Post, December 25, 2008 02:13 PM (EST)
Last week at a Christmas party in the hills of Umbria, we were part of a captive audience listening to an American businessman holding forth on an ever-popular expat subject - the dismal exchange rate of dollars to euros. He informed his listeners that they needn't worry: In just a couple of years, he said, America will have pulled out of the recession and the economy will be growing strong; Europe, on the other hand will still be facing the ripple effects of the global meltdown - and will be suffering.
"You'll see," he said blithely, "the dollar and the euro will be at par."
Although the conversation took place in Italy, it could have as easily occurred in a Wall Street boardroom. Despite the ongoing economic meltdown, the dominant, "business as usual" wisdom is that the ascendancy of the American model of global capitalism can only continue. It's just a matter of time before the good ship USS Free Enterprise rights itself and we have smooth sailing ahead.
But exactly what resources will the U.S. call upon to fuel the economic recovery that our American businessman and millions of others like him continue to believe in? Our longtime economic paradigm - growth fueled by cheap oil - has no future. Even when it did, it was a flawed concept because the constant growth required under the "grow or die" capitalist paradigm demands that we relentlessly exploit natural resources - how else to increase profit margins and pay investors their ever-greater dividends?
This paradigm has brought us to the brink of ecological disaster, with a planet so over-heated that even the most optimistic climate experts are doubtful whether we will be able to prevent cataclysmic disruptions unless worldwide carbon emissions are drastically reduced in the coming years - an unlikely scenario given the unwillingness of most governments to enact tough standards and regulations.
Not only has the planet been brought to its knees as a result of this capitalist ethos, but we humans haven't fared so well either. Can we really say we're succeeding as a human race when half of the world's population is starving, or lacks adequate access to potable water, or is suffering from preventable diseases? Even in the U.S., our "high standard of living" leaves much to be desired, not only for the 45 million people who have no health insurance but for the tens of millions who work 40-80 hours a week and find themselves with little time to socialize, go for a walk, prepare and enjoy a meal with friends, or read a book - in short, have less free time and a lower standard of living than their parents did.
With oil virtually at an end, what better time to re-examine the economic paradigm that allowed us to think we could use up finite resources and just "grow" forever? Isn't it time to rethink our blind embrace of the "grow or die" philosophy that led us down this self-destructive path?
In her recent post, "Laissez-Faire Capitalism Should Be as Dead as Soviet Communism," Arianna Huffington suggests that the collapse of our financial system as a result of deregulation proves that this form of deregulated capitalism should be relegated to the dust bin of history. But is it just deregulation, or is it capitalism itself that needs to be junked? Inherent in the capitalist ethos is the endless exploitation of natural resources. Indeed, not only the exploitation of nature, but the exploitation of individuals by individuals is a guiding principle of modern capitalist society. You needn't travel to 19th century England to understand this; it's not just the exploitation of workers in factories anymore. As capitalism colonizes the realm of interpersonal relations, we've ceased to become human to each other and instead become "resources" (think "networking") to be exploited for one type of gain or another.
Considering the tremendous advances in labor-saving technology in the last century, isn't it time for a new form of social organization? One that prizes mutual aid over competition, collective stewardship of nature over its rapacious exploitation, and recognition that "life, liberty and the pursuit of happiness" must include the provision of basic necessities for all, regardless of status: shelter, food, free healthcare. Even better, imagine if we could recognize that ultimately human beings are capable of much more than just earning money? It's time to use our immense powers of reason to ask ourselves: What does it mean to build a truly civilized world? History has shown us that Leninist Communism - itself a form of state-sanctioned exploitation of nature and human beings - wasn't the answer. But neither has capitalism allowed us to fully realize our potential as free, creative beings.
We stand on a threshold. Will we use our extraordinary technology, science and rationality to create a just, humane and truly free society? Or will we continue down the path of domination - of each other and of the natural world - destroying our environment and ourselves?
The great utopian, Murray Bookchin, said: "If we do not do the impossible, we shall be faced with the unthinkable." When he said those words, more than a quarter of a century ago, the notion that capitalism could bring the world to the brink of destruction was ridiculed by almost every mainstream intellectual. Yet here we are on the precipice, confronted with the unthinkable. The only course left to us, is to do the impossible - to abandon the paradigm of capitalism that has defined our cultural, political and economic life for the past 250 years, and whose supremacy has led inexorably to the despoilation of our planet and demeaning of human existence.
Let us choose to end the domination of each other and the unthinking exploitation of nature, and find a more human, decent form of social organization, one that prizes true, decentralized democracy, basic decency and the common good.
The oil is almost gone. The hourglass is about to run out. It's time to create a utopia.
Huffington Post, December 25, 2008 02:13 PM (EST)
Last week at a Christmas party in the hills of Umbria, we were part of a captive audience listening to an American businessman holding forth on an ever-popular expat subject - the dismal exchange rate of dollars to euros. He informed his listeners that they needn't worry: In just a couple of years, he said, America will have pulled out of the recession and the economy will be growing strong; Europe, on the other hand will still be facing the ripple effects of the global meltdown - and will be suffering.
"You'll see," he said blithely, "the dollar and the euro will be at par."
Although the conversation took place in Italy, it could have as easily occurred in a Wall Street boardroom. Despite the ongoing economic meltdown, the dominant, "business as usual" wisdom is that the ascendancy of the American model of global capitalism can only continue. It's just a matter of time before the good ship USS Free Enterprise rights itself and we have smooth sailing ahead.
But exactly what resources will the U.S. call upon to fuel the economic recovery that our American businessman and millions of others like him continue to believe in? Our longtime economic paradigm - growth fueled by cheap oil - has no future. Even when it did, it was a flawed concept because the constant growth required under the "grow or die" capitalist paradigm demands that we relentlessly exploit natural resources - how else to increase profit margins and pay investors their ever-greater dividends?
This paradigm has brought us to the brink of ecological disaster, with a planet so over-heated that even the most optimistic climate experts are doubtful whether we will be able to prevent cataclysmic disruptions unless worldwide carbon emissions are drastically reduced in the coming years - an unlikely scenario given the unwillingness of most governments to enact tough standards and regulations.
Not only has the planet been brought to its knees as a result of this capitalist ethos, but we humans haven't fared so well either. Can we really say we're succeeding as a human race when half of the world's population is starving, or lacks adequate access to potable water, or is suffering from preventable diseases? Even in the U.S., our "high standard of living" leaves much to be desired, not only for the 45 million people who have no health insurance but for the tens of millions who work 40-80 hours a week and find themselves with little time to socialize, go for a walk, prepare and enjoy a meal with friends, or read a book - in short, have less free time and a lower standard of living than their parents did.
With oil virtually at an end, what better time to re-examine the economic paradigm that allowed us to think we could use up finite resources and just "grow" forever? Isn't it time to rethink our blind embrace of the "grow or die" philosophy that led us down this self-destructive path?
In her recent post, "Laissez-Faire Capitalism Should Be as Dead as Soviet Communism," Arianna Huffington suggests that the collapse of our financial system as a result of deregulation proves that this form of deregulated capitalism should be relegated to the dust bin of history. But is it just deregulation, or is it capitalism itself that needs to be junked? Inherent in the capitalist ethos is the endless exploitation of natural resources. Indeed, not only the exploitation of nature, but the exploitation of individuals by individuals is a guiding principle of modern capitalist society. You needn't travel to 19th century England to understand this; it's not just the exploitation of workers in factories anymore. As capitalism colonizes the realm of interpersonal relations, we've ceased to become human to each other and instead become "resources" (think "networking") to be exploited for one type of gain or another.
Considering the tremendous advances in labor-saving technology in the last century, isn't it time for a new form of social organization? One that prizes mutual aid over competition, collective stewardship of nature over its rapacious exploitation, and recognition that "life, liberty and the pursuit of happiness" must include the provision of basic necessities for all, regardless of status: shelter, food, free healthcare. Even better, imagine if we could recognize that ultimately human beings are capable of much more than just earning money? It's time to use our immense powers of reason to ask ourselves: What does it mean to build a truly civilized world? History has shown us that Leninist Communism - itself a form of state-sanctioned exploitation of nature and human beings - wasn't the answer. But neither has capitalism allowed us to fully realize our potential as free, creative beings.
We stand on a threshold. Will we use our extraordinary technology, science and rationality to create a just, humane and truly free society? Or will we continue down the path of domination - of each other and of the natural world - destroying our environment and ourselves?
The great utopian, Murray Bookchin, said: "If we do not do the impossible, we shall be faced with the unthinkable." When he said those words, more than a quarter of a century ago, the notion that capitalism could bring the world to the brink of destruction was ridiculed by almost every mainstream intellectual. Yet here we are on the precipice, confronted with the unthinkable. The only course left to us, is to do the impossible - to abandon the paradigm of capitalism that has defined our cultural, political and economic life for the past 250 years, and whose supremacy has led inexorably to the despoilation of our planet and demeaning of human existence.
Let us choose to end the domination of each other and the unthinking exploitation of nature, and find a more human, decent form of social organization, one that prizes true, decentralized democracy, basic decency and the common good.
The oil is almost gone. The hourglass is about to run out. It's time to create a utopia.
Friday, January 2, 2009
Rob Riemen: An Open Letter to President-Elect Obama
An Open Letter to President-Elect Obama, by Rob Riemen
January 2, 2009
Dear Mr. President-elect,
Your interest in the presidency of Franklin D. Roosevelt demonstrates an admirable historic consciousness, an awareness that wisdom can be found among those who, like yourself at this moment, are confronted with an immense challenge and responsibility.
But in the many books on your great predecessor, one crucial conversation has erroneously vanished, not just because it was extremely influential on the third inaugural address of President Roosevelt -- and thus on his presidency during the war years that would be so decisive for the future of America and Europe -- but also because it is this specific conversation that is of such importance for our time.
As you compose your first inaugural address, I fervently hope that you will not pass over the exchange of ideas between a great president and a great intellectual in the White House on the chilly morning of January 14, 1941.
War is raging in Europe, the consequences of the Depression are still present, and America is sharply divided about her role in the world. With only a week to go before he is to give his inaugural, Roosevelt consults the European writer and Nobel Prize winner, Thomas Mann. They first met in 1935 when Mann, partly on the advocacy of Roosevelt, was awarded an honorary doctorate from Harvard. Roosevelt appreciated the writer as the intellectual and moral conscience of Europe, while Mann saw the antithesis of Hitler in this American president. Four days before the election Mann wrote in his journal: "Roosevelt's reelection is of the greatest importance for the further course of history. However, the current era makes this unlikely..." As soon as it is clear that, contrary to his expectation, Roosevelt is reelected, he confides in his journal, "This is the first joy, the first victory in more than seven years, which have brought nothing but disappointment and rage." He sends a congratulatory telegram. Two months later, Mann is invited to the White House.
The conversation between Roosevelt and Mann can be reconstructed through Mann's journal notes, two of his lectures in Roosevelt's possession, and the inaugural address itself.
The evening of January 14, 1941 Mann writes in his journal: "Lively conversation. Political-moral vision priority over economy. [...] Gave him a copy of War and Democracy and dedicated it: 'To F.D.R. President of the U.S. and of a coming better world.''' Mann's gift is a twenty-five page booklet. This booklet contains a more detailed treatment of a theme he discussed in February 1938 in 'a coast-to-coast lecture tour of the U.S.A' to an audience of sometimes more than ten thousand Americans: The Coming Victory of Democracy. Mann's arguement in these two lectures can be summarized as follows.
Never should anything of value be taken for granted. America, too, will have to keep reflecting on what democracy really means if she does not want to be lost, as Nazi Germany is lost. Because, in the end, politics has to do with fundamental values, and as democracy is not merely a way of governing and representation, it is a political duty to make society aware that "democracy is that form of government and of society which is inspired above every other with the feeling and consciousness of the dignity of man." These are big words and Mann is quite aware of how small man can be in "his self-centeredness, cruelty, cowardice, and stupidity." But that is precisely why we must not forget that "The great and honorable in man manifest themselves as art and science, as passion for truth, creation of beauty and the idea of justice." True democracy honors man as a spiritual being, focuses on cultivating human greatness, "It wishes to elevate mankind, to teach it to think, to set it free. It seeks to remove from culture the stamp of privilege and disseminate it among the people -- in a word, it aims at education."
When we forget this, the anti-democratic forces, which are always and everywhere present, will grab for power. To them, human beings are not oriented toward truth, freedom, and justice, but are thoughtless creatures, yearning for physical and material gratification only. They would rather cultivate ignorance than the intellectual life. The anti-democrats do not know what the essence of freedom is. Or freedom is reduced to an exclusively economic phenomenon (Mann: "The perhaps natural egotism of the great private business which at a time of universal conscription insists on its own absolute freedom..."). Or else freedom is threatened by fanatics who do not believe in freedom but rather in "force, high explosive bombs, and bestiality." And this latter danger, the determination to destroy humanity is reinforced by the fact that, when "face to face with fanaticism incarnate, a freedom that through sheer goodness and humane skepticism no longer believes in itself will be irrevocably lost". Nazi Germany is the most harrowing example of anti-democracy but, Mann warns, this force can manifest itself all too readily in the US as well. True democracy can only continue to exist as long as it is an expression of the true ideal of freedom: the cultivation of nobility of spirit, and the determination to defend itself against its deadly enemies.
Six days after his conversation with Thomas Mann, President Roosevelt begins his third inaugural address with the observation that it is important for the Americans "to rediscover what we are and what we may be. If we do not, we risk the real peril of inaction." This, he continues, is all the more important because there are those who claim that democracy no longer has a future. However, that is not true. Not only were matters dealt with democratically in difficult times ("We acted quickly, boldly, decisively"), but there is also "a better understanding that life's ideals are measured in other than material things." The fact that America is able to survive her crisis is, in fact, due to democracy. Democracy is not dying and must not die, "as it is the most humane, the most advanced and in the end most unconquerable of all forms of human society." What is fundamental is the awareness that: "A nation, like a person, has something deeper, something more permanent, something larger than the sum of all its parts. It is that something which matters most to its future -- which calls forth the most sacred guarding of its present. [...] We all understand what it is -- the spirit -- the faith of America." That spirit has always been an ideal of freedom and this freedom must never be reduced to a merely economic phenomenon: "The hope of the Republic cannot forever tolerate either undeserved poverty or self-serving wealth." We must build a society that is safe and offers everyone an opportunity. However: "It is not enough to clothe and feed the body of this Nation, and instruct and inform its mind. For there is also the spirit. And of the three, the greatest is the spirit." America will manage to survive her crisis and will set the example for the rest of the world if she remains true to her spirit, true to the true democracy, true to what George Washington proclaimed the destiny of America to be in his first inaugural address: "The preservation of the sacred fire of liberty [...] entrusted to the hands of the American people." That is why, as Roosevelt concludes his address: "Our purpose is to protect and to perpetuate the integrity of democracy. For this we muster the spirit of America, and the faith of America."
Thus President Roosevelt eloquently articulated the content of a conversation that Thomas Mann summarized that same evening as: "Lively conversation. Political-moral vision priority over economy."
Mr. President-elect, the problems and challenges that confront you are undoubtedly no fewer than those of President Roosevelt. Neither is there any doubt that you will have to act and, like President Roosevelt you will "act quickly, boldly, decisively." But the historic conversation in the White House of 14 January 1941 teaches us that there can be no doubt either that mere economic and policy actions are insufficient. In the spirit of Roosevelt, Thomas Mann warned after the war that "no conference, technical measure, or juridical institution, nor even a world government, can possibly bring the new society one step closer if it is not preceded by a different spiritual climate, a new receptivity to the nobility of spirit".
The wisdom that President Roosevelt and Thomas Mann bestow on us is that America will survive the present crisis but only if the awareness prevails that the true spirit of America, the true democracy, is none other than "that form of government and of society which is inspired above every other with the feeling and consciousness of the dignity of man."
It is an awareness that has been forgotten for too long.
For too long we have been hearing that "It's the economy, stupid!" or "country first," and we have forgotten that the hallmark of a civilized society is human dignity for all.
For too long there has been a culture of money and there never would have been a financial crisis had we not forgotten the wise words of the philosopher Socrates: "My very dear friend... Are you not ashamed that you give your attention to acquiring as much money as possible, and similarly with reputation and honor, and give no attention or thought to truth and understanding and the perfection of your soul."
For too long there has been a culture of total ignorance and anti-intellectualism, and we have forgotten what Mann said in America as early as 1938: "In a democracy which does not respect the intellectual life and is not guided by it, demagogy has free play and the level of national life is depressed to that of the ignorant and uncultivated."
For too long education has been discussed in terms of 'useful' and 'practical,' and we have forgotten that the liberal arts are there to help us express our emotions, articulate our experiences; that true liberal education is there to liberate us from stupidity, prejudice, blind desire, and thus helps us to live in truth and cultivate our soul.
For too long the danger of fanatics who hate the true democracy has been underestimated.
Mr. President Elect, the mere fact that you have been elected is a hopeful indication that the spiritual climate is changing. That the young have played a decisive role in your election is an equally hopeful sign. But the true change, the only change that can offer us a real prospect of a better world to come is a renewed awareness of the true meaning of one word only: freedom.
I am writing you in the hope that an unjustly forgotten conversation of long ago and the example of a great president will be an inspiration to you and encourage you to place your presidency, too, in the renewed conquest and defense of that freedom and the nobility of spirit without which it cannot exist.
I wish you great courage and wisdom for the years to come.
Yours sincerely,
Rob Riemen,
Author of Nobility of Spirit. A Forgotten Ideal (Yale University Press
January 2, 2009
Dear Mr. President-elect,
Your interest in the presidency of Franklin D. Roosevelt demonstrates an admirable historic consciousness, an awareness that wisdom can be found among those who, like yourself at this moment, are confronted with an immense challenge and responsibility.
But in the many books on your great predecessor, one crucial conversation has erroneously vanished, not just because it was extremely influential on the third inaugural address of President Roosevelt -- and thus on his presidency during the war years that would be so decisive for the future of America and Europe -- but also because it is this specific conversation that is of such importance for our time.
As you compose your first inaugural address, I fervently hope that you will not pass over the exchange of ideas between a great president and a great intellectual in the White House on the chilly morning of January 14, 1941.
War is raging in Europe, the consequences of the Depression are still present, and America is sharply divided about her role in the world. With only a week to go before he is to give his inaugural, Roosevelt consults the European writer and Nobel Prize winner, Thomas Mann. They first met in 1935 when Mann, partly on the advocacy of Roosevelt, was awarded an honorary doctorate from Harvard. Roosevelt appreciated the writer as the intellectual and moral conscience of Europe, while Mann saw the antithesis of Hitler in this American president. Four days before the election Mann wrote in his journal: "Roosevelt's reelection is of the greatest importance for the further course of history. However, the current era makes this unlikely..." As soon as it is clear that, contrary to his expectation, Roosevelt is reelected, he confides in his journal, "This is the first joy, the first victory in more than seven years, which have brought nothing but disappointment and rage." He sends a congratulatory telegram. Two months later, Mann is invited to the White House.
The conversation between Roosevelt and Mann can be reconstructed through Mann's journal notes, two of his lectures in Roosevelt's possession, and the inaugural address itself.
The evening of January 14, 1941 Mann writes in his journal: "Lively conversation. Political-moral vision priority over economy. [...] Gave him a copy of War and Democracy and dedicated it: 'To F.D.R. President of the U.S. and of a coming better world.''' Mann's gift is a twenty-five page booklet. This booklet contains a more detailed treatment of a theme he discussed in February 1938 in 'a coast-to-coast lecture tour of the U.S.A' to an audience of sometimes more than ten thousand Americans: The Coming Victory of Democracy. Mann's arguement in these two lectures can be summarized as follows.
Never should anything of value be taken for granted. America, too, will have to keep reflecting on what democracy really means if she does not want to be lost, as Nazi Germany is lost. Because, in the end, politics has to do with fundamental values, and as democracy is not merely a way of governing and representation, it is a political duty to make society aware that "democracy is that form of government and of society which is inspired above every other with the feeling and consciousness of the dignity of man." These are big words and Mann is quite aware of how small man can be in "his self-centeredness, cruelty, cowardice, and stupidity." But that is precisely why we must not forget that "The great and honorable in man manifest themselves as art and science, as passion for truth, creation of beauty and the idea of justice." True democracy honors man as a spiritual being, focuses on cultivating human greatness, "It wishes to elevate mankind, to teach it to think, to set it free. It seeks to remove from culture the stamp of privilege and disseminate it among the people -- in a word, it aims at education."
When we forget this, the anti-democratic forces, which are always and everywhere present, will grab for power. To them, human beings are not oriented toward truth, freedom, and justice, but are thoughtless creatures, yearning for physical and material gratification only. They would rather cultivate ignorance than the intellectual life. The anti-democrats do not know what the essence of freedom is. Or freedom is reduced to an exclusively economic phenomenon (Mann: "The perhaps natural egotism of the great private business which at a time of universal conscription insists on its own absolute freedom..."). Or else freedom is threatened by fanatics who do not believe in freedom but rather in "force, high explosive bombs, and bestiality." And this latter danger, the determination to destroy humanity is reinforced by the fact that, when "face to face with fanaticism incarnate, a freedom that through sheer goodness and humane skepticism no longer believes in itself will be irrevocably lost". Nazi Germany is the most harrowing example of anti-democracy but, Mann warns, this force can manifest itself all too readily in the US as well. True democracy can only continue to exist as long as it is an expression of the true ideal of freedom: the cultivation of nobility of spirit, and the determination to defend itself against its deadly enemies.
Six days after his conversation with Thomas Mann, President Roosevelt begins his third inaugural address with the observation that it is important for the Americans "to rediscover what we are and what we may be. If we do not, we risk the real peril of inaction." This, he continues, is all the more important because there are those who claim that democracy no longer has a future. However, that is not true. Not only were matters dealt with democratically in difficult times ("We acted quickly, boldly, decisively"), but there is also "a better understanding that life's ideals are measured in other than material things." The fact that America is able to survive her crisis is, in fact, due to democracy. Democracy is not dying and must not die, "as it is the most humane, the most advanced and in the end most unconquerable of all forms of human society." What is fundamental is the awareness that: "A nation, like a person, has something deeper, something more permanent, something larger than the sum of all its parts. It is that something which matters most to its future -- which calls forth the most sacred guarding of its present. [...] We all understand what it is -- the spirit -- the faith of America." That spirit has always been an ideal of freedom and this freedom must never be reduced to a merely economic phenomenon: "The hope of the Republic cannot forever tolerate either undeserved poverty or self-serving wealth." We must build a society that is safe and offers everyone an opportunity. However: "It is not enough to clothe and feed the body of this Nation, and instruct and inform its mind. For there is also the spirit. And of the three, the greatest is the spirit." America will manage to survive her crisis and will set the example for the rest of the world if she remains true to her spirit, true to the true democracy, true to what George Washington proclaimed the destiny of America to be in his first inaugural address: "The preservation of the sacred fire of liberty [...] entrusted to the hands of the American people." That is why, as Roosevelt concludes his address: "Our purpose is to protect and to perpetuate the integrity of democracy. For this we muster the spirit of America, and the faith of America."
Thus President Roosevelt eloquently articulated the content of a conversation that Thomas Mann summarized that same evening as: "Lively conversation. Political-moral vision priority over economy."
Mr. President-elect, the problems and challenges that confront you are undoubtedly no fewer than those of President Roosevelt. Neither is there any doubt that you will have to act and, like President Roosevelt you will "act quickly, boldly, decisively." But the historic conversation in the White House of 14 January 1941 teaches us that there can be no doubt either that mere economic and policy actions are insufficient. In the spirit of Roosevelt, Thomas Mann warned after the war that "no conference, technical measure, or juridical institution, nor even a world government, can possibly bring the new society one step closer if it is not preceded by a different spiritual climate, a new receptivity to the nobility of spirit".
The wisdom that President Roosevelt and Thomas Mann bestow on us is that America will survive the present crisis but only if the awareness prevails that the true spirit of America, the true democracy, is none other than "that form of government and of society which is inspired above every other with the feeling and consciousness of the dignity of man."
It is an awareness that has been forgotten for too long.
For too long we have been hearing that "It's the economy, stupid!" or "country first," and we have forgotten that the hallmark of a civilized society is human dignity for all.
For too long there has been a culture of money and there never would have been a financial crisis had we not forgotten the wise words of the philosopher Socrates: "My very dear friend... Are you not ashamed that you give your attention to acquiring as much money as possible, and similarly with reputation and honor, and give no attention or thought to truth and understanding and the perfection of your soul."
For too long there has been a culture of total ignorance and anti-intellectualism, and we have forgotten what Mann said in America as early as 1938: "In a democracy which does not respect the intellectual life and is not guided by it, demagogy has free play and the level of national life is depressed to that of the ignorant and uncultivated."
For too long education has been discussed in terms of 'useful' and 'practical,' and we have forgotten that the liberal arts are there to help us express our emotions, articulate our experiences; that true liberal education is there to liberate us from stupidity, prejudice, blind desire, and thus helps us to live in truth and cultivate our soul.
For too long the danger of fanatics who hate the true democracy has been underestimated.
Mr. President Elect, the mere fact that you have been elected is a hopeful indication that the spiritual climate is changing. That the young have played a decisive role in your election is an equally hopeful sign. But the true change, the only change that can offer us a real prospect of a better world to come is a renewed awareness of the true meaning of one word only: freedom.
I am writing you in the hope that an unjustly forgotten conversation of long ago and the example of a great president will be an inspiration to you and encourage you to place your presidency, too, in the renewed conquest and defense of that freedom and the nobility of spirit without which it cannot exist.
I wish you great courage and wisdom for the years to come.
Yours sincerely,
Rob Riemen,
Author of Nobility of Spirit. A Forgotten Ideal (Yale University Press
Heritage: Toward an Alternative Strategic Security Posture
Toward an Alternative Strategic Security Posture, by Baker Spring
Heritage WebMemo #2183
On December 12, the Congressional Commission on the Strategic Posture of the United States released its interim report.[1] The commission is charged with guiding policy for a strategic posture for the United States that meets today's security needs. This guidance will define the future of U.S. strategic nuclear, strategic conventional, and strategic defense forces.
Currently, there is no consensus in Congress on an appropriate strategic posture. As an interim report, the commission's tentative recommendations do not provide such a consensus. However, the report does describe an alternative policy that would recognize the essential role of nuclear weapons in providing for U.S. security while establishing a defense-oriented strategic posture and seeking the circumstance where comprehensive nuclear disarmament becomes a real possibility.
The final report is due on April 1, 2009. If the tentative and general recommendations in the interim report can be translated into this alternative strategic policy, then a strategic posture that is broadly supported in Congress should result.
Global Nuclear Disarmament
Individuals both within the commission and outside it fervently desire to rid the world of nuclear weapons.[2] The commission recognizes, however, that this goal is "extremely difficult to attain and would require a fundamental transformation of the world political order."[3] This means those favoring nuclear disarmament have recognized that their preferred outcome is not appropriate under present circumstances and that there is no direct path to nuclear disarmament at this time. Implicit in this understanding is that these same individuals will abandon unilateral steps aimed at atrophying the U.S. nuclear weapons infrastructure. They will, for example, have to abandon immediate steps to de-alert U.S. nuclear forces, cease efforts to curtail all programs for modernizing the nuclear force, put off ratification of the Comprehensive Test Ban Treaty, and cease efforts to impose changes on the declared policy governing the use of U.S. nuclear weapons.
Strategic Defenses, Conventional Superiority, and the Prospect of Nuclear Disarmament
The commission's recommendations regarding global nuclear disarmament are not only qualified; they are conditioned on taking other steps regarding the broader strategic posture of the U.S. Included in these are steps to field robust missile defenses and preserve U.S. conventional superiority. In this context, those who strongly favor nuclear disarmament should recognize that robust strategic defensive measures--including ballistic missile defenses--and conventional superiority can create a circumstance where nuclear disarmament is appropriate.
In this context, the commission should support a longer-term approach for strengthening strategic defenses and strategic conventional forces, along with select steps for nuclear modernization, that recognizes that neither is provocative under the right circumstances. This option would use U.S. diplomacy to convince other states (starting with China and Russia) that a "protect and defend" strategy will serve their interests as much as those of the U.S.
Such an effort should encourage the principle of non-aggression and reducing and ultimately eliminating those strategic weapons that pose the greatest threat to civilian populations, vital national institutions, and infrastructure. This policy would start by focusing on controlling high-yield nuclear weapons that are mounted on inaccurate delivery systems and offer little or no defensive value. For its part, the U.S. should produce lower-yield weapons mounted on highly accurate delivery systems and hold at risk those weapons that pose a threat of widespread destruction to itself and its allies. While nothing is certain, the adoption of fundamentally defensive strategies by these three nations may lead to a direct path to nuclear disarmament.
Strengthening Strategic Defenses
Regarding strategic defenses specifically, the interim report states, "Missile defenses appropriate to defend against a rogue nuclear nation could serve a damage-limiting and stabilizing role in the US strategic posture, assuming such defenses are perceived as being effective enough to at least sow doubts in the minds of potential attackers that such an attack would succeed."[4] Limiting the strategic defensive posture to missile defenses, however, is too narrow. Accordingly, the final report should expand this recommendation to cover the other means of delivering strategic attacks on the U.S. and its allies.
Further, the commission warns against fielding defenses that might provoke China and Russia. This point should be qualified in two ways. First, it must identify an objective standard for what might provoke China or Russia. Otherwise, any claim of China's or Russia's provocation would be seen as legitimate. Second, the commission should describe how the diplomatic and arms control options toward both China and Russia described earlier will cause both to see America's defensive measures as not provocative but stabilizing, reinforcing their security against attack.
An Alternative Vision
If the proponents of nuclear disarmament on the commission honor the qualifications and conditions described here and convince Congress to do likewise, then the proponents of fielding robust strategic defenses should offer an alternative vision for the U.S. strategic posture. This alternative vision points to a future circumstance where the U.S. and other states could consider direct steps to nuclear disarmament. It would represent the indirect path to global nuclear disarmament. All concerned, however, need to recognize that the consensus outlined here does not mean an end to the debate. It will only serve to define the parameters of the debate from here forward. The fact of the matter is that substantive differences of opinions regarding the appropriate strategic posture of the United States will remain.
Baker Spring is F.M. Kirby Research Fellow in National Security Policy in the Douglas and Sarah Allison Center for Foreign Policy Studies, a division of the Kathryn and Shelby Cullom Davis Institute for International Studies, at The Heritage Foundation.
References
[1] Congressional Commission on the Strategic Posture of the United States, "Interim Report," December 11, 2008, at www.usip.org/strategic_posture/sprc_interim_report.pdf (December 17, 2008).
[2] See George P. Shultz, William J. Perry, Henry A. Kissinger, and Sam Nunn, "A World Free of Nuclear Weapons," The Wall Street Journal, January 4, 2007, p. A-15; Shultz, Perry, Kissinger, and Nunn, "Toward a Nuclear-Free World," The Wall Street Journal, January 15, 2008, at http://online.wsj.com/public/article_print/SB120036422673589947.html (December 18, 2008).
[3] Congressional Commission on the Strategic Posture of the United States, "Interim Report," p. 9.
[4] Ibid., p. 10.
Heritage WebMemo #2183
On December 12, the Congressional Commission on the Strategic Posture of the United States released its interim report.[1] The commission is charged with guiding policy for a strategic posture for the United States that meets today's security needs. This guidance will define the future of U.S. strategic nuclear, strategic conventional, and strategic defense forces.
Currently, there is no consensus in Congress on an appropriate strategic posture. As an interim report, the commission's tentative recommendations do not provide such a consensus. However, the report does describe an alternative policy that would recognize the essential role of nuclear weapons in providing for U.S. security while establishing a defense-oriented strategic posture and seeking the circumstance where comprehensive nuclear disarmament becomes a real possibility.
The final report is due on April 1, 2009. If the tentative and general recommendations in the interim report can be translated into this alternative strategic policy, then a strategic posture that is broadly supported in Congress should result.
Global Nuclear Disarmament
Individuals both within the commission and outside it fervently desire to rid the world of nuclear weapons.[2] The commission recognizes, however, that this goal is "extremely difficult to attain and would require a fundamental transformation of the world political order."[3] This means those favoring nuclear disarmament have recognized that their preferred outcome is not appropriate under present circumstances and that there is no direct path to nuclear disarmament at this time. Implicit in this understanding is that these same individuals will abandon unilateral steps aimed at atrophying the U.S. nuclear weapons infrastructure. They will, for example, have to abandon immediate steps to de-alert U.S. nuclear forces, cease efforts to curtail all programs for modernizing the nuclear force, put off ratification of the Comprehensive Test Ban Treaty, and cease efforts to impose changes on the declared policy governing the use of U.S. nuclear weapons.
Strategic Defenses, Conventional Superiority, and the Prospect of Nuclear Disarmament
The commission's recommendations regarding global nuclear disarmament are not only qualified; they are conditioned on taking other steps regarding the broader strategic posture of the U.S. Included in these are steps to field robust missile defenses and preserve U.S. conventional superiority. In this context, those who strongly favor nuclear disarmament should recognize that robust strategic defensive measures--including ballistic missile defenses--and conventional superiority can create a circumstance where nuclear disarmament is appropriate.
In this context, the commission should support a longer-term approach for strengthening strategic defenses and strategic conventional forces, along with select steps for nuclear modernization, that recognizes that neither is provocative under the right circumstances. This option would use U.S. diplomacy to convince other states (starting with China and Russia) that a "protect and defend" strategy will serve their interests as much as those of the U.S.
Such an effort should encourage the principle of non-aggression and reducing and ultimately eliminating those strategic weapons that pose the greatest threat to civilian populations, vital national institutions, and infrastructure. This policy would start by focusing on controlling high-yield nuclear weapons that are mounted on inaccurate delivery systems and offer little or no defensive value. For its part, the U.S. should produce lower-yield weapons mounted on highly accurate delivery systems and hold at risk those weapons that pose a threat of widespread destruction to itself and its allies. While nothing is certain, the adoption of fundamentally defensive strategies by these three nations may lead to a direct path to nuclear disarmament.
Strengthening Strategic Defenses
Regarding strategic defenses specifically, the interim report states, "Missile defenses appropriate to defend against a rogue nuclear nation could serve a damage-limiting and stabilizing role in the US strategic posture, assuming such defenses are perceived as being effective enough to at least sow doubts in the minds of potential attackers that such an attack would succeed."[4] Limiting the strategic defensive posture to missile defenses, however, is too narrow. Accordingly, the final report should expand this recommendation to cover the other means of delivering strategic attacks on the U.S. and its allies.
Further, the commission warns against fielding defenses that might provoke China and Russia. This point should be qualified in two ways. First, it must identify an objective standard for what might provoke China or Russia. Otherwise, any claim of China's or Russia's provocation would be seen as legitimate. Second, the commission should describe how the diplomatic and arms control options toward both China and Russia described earlier will cause both to see America's defensive measures as not provocative but stabilizing, reinforcing their security against attack.
An Alternative Vision
If the proponents of nuclear disarmament on the commission honor the qualifications and conditions described here and convince Congress to do likewise, then the proponents of fielding robust strategic defenses should offer an alternative vision for the U.S. strategic posture. This alternative vision points to a future circumstance where the U.S. and other states could consider direct steps to nuclear disarmament. It would represent the indirect path to global nuclear disarmament. All concerned, however, need to recognize that the consensus outlined here does not mean an end to the debate. It will only serve to define the parameters of the debate from here forward. The fact of the matter is that substantive differences of opinions regarding the appropriate strategic posture of the United States will remain.
Baker Spring is F.M. Kirby Research Fellow in National Security Policy in the Douglas and Sarah Allison Center for Foreign Policy Studies, a division of the Kathryn and Shelby Cullom Davis Institute for International Studies, at The Heritage Foundation.
References
[1] Congressional Commission on the Strategic Posture of the United States, "Interim Report," December 11, 2008, at www.usip.org/strategic_posture/sprc_interim_report.pdf (December 17, 2008).
[2] See George P. Shultz, William J. Perry, Henry A. Kissinger, and Sam Nunn, "A World Free of Nuclear Weapons," The Wall Street Journal, January 4, 2007, p. A-15; Shultz, Perry, Kissinger, and Nunn, "Toward a Nuclear-Free World," The Wall Street Journal, January 15, 2008, at http://online.wsj.com/public/article_print/SB120036422673589947.html (December 18, 2008).
[3] Congressional Commission on the Strategic Posture of the United States, "Interim Report," p. 9.
[4] Ibid., p. 10.
Gaza Conflict Threatens Regional Peace and Stability, UN Official Cautions
Gaza Conflict Threatens Regional Peace and Stability, UN Official Cautions
New York, Jan 2 2009 3:10PM
The future of the Middle-East peace process, the stability of the region and the safety of ordinary people in the Gaza Strip have been seriously jeopardized by the “irresponsibility of Hamas rocket attacks” and the “excessiveness of Israel’s response,” a senior United Nations envoy to warned today, as diplomatic efforts to resolve the conflict intensify.
On the seventh day of Israeli bombing raids on Gaza and with more than 400 Gazans reportedly killed and thousands wounded, Robert Serry, UN Special Coordinator for the Middle East Peace Process, called for the international community to step up its attempts to end the growing humanitarian crisis.
“Much of Gaza’s infrastructure has now been destroyed. The death and injury toll in Gaza continues to mount. Hamas rockets are now reaching 40 kilometres into Israel,” Mr. Serry said via video-link from Jerusalem.
Israel has cited rocket and other attacks by militants in Gaza against Israeli civilians as the reason for its military offensive and closing crossings into Gaza for much of the previous two months.
With Israeli tanks on Gaza’s border, the envoy underscored the urgency and importance of an immediate and lasting cessation of hostilities to avoid an even deeper and deadlier conflict.
He said that he will join a number of Arab leaders slated to arrive in New York next week to find a solution to the crisis.
“Diplomatic efforts are underway involving many players, including the United States, the European Union (EU), the Arab League, Turkey and others, and we believe the roles of the Quartet [comprising the UN, EU, Russian and the US] and the Security Council are going to be very important.”
While a ceasefire is vital, a return to the previous situation would not be enough to maintain security or find a durable peace, Mr. Serry said.
He stressed the need for the uninterrupted reopening of crossings into Gaza with a commitment from both sides to fully respect a ceasefire, including an end to all rocket attacks from Gaza and weapons smuggling into the Hamas controlled territory.
“It will also require bringing Gaza back into the fold of the Palestinian Authority through arrangements on the ground and renewed efforts to reunited Gaza and the West Bank,” he said, adding that “it is more vital than ever that Israeli-Palestinian peace is achieved. The underlying issues must be addressed: end of conflict, end of occupation and the creation of the Palestinian State alongside a secure Israel.”
Meanwhile, the UN World Food Programme (WFP) has been distributing bread to families in the hardest-hit areas of Gaza, and said today that it urgently requires $9 million to meet additional food needs caused by the upsurge in fighting.
The bombing raids over the last week have greatly worsened the already harsh humanitarian situation in Gaza, which is home to an estimated 1.5 million people facing severe shortages of food, fuel and cooking gas.
“The current situation in Gaza is appalling and many basic food items are no longer available on the market,” said Christine van Nieuwenhuyse, WFP Representative in the occupied Palestinian territory.
Yesterday, the agency started handing out bread to around 15,000 people in the northern city of Beit Hanoun – one of the poorest areas in Gaza and the most heavily affected by the conflict.
However, the recent Israeli offensive has prevented WFP and its partners from operating at full capacity and has delayed the regular distribution of food to nearly 270,000 people in the region.
“We are responding to the immediate food emergency needs as much as we can, but the destruction of local infrastructure and the shortages of basic utilities such as fuel and gas means that more people will fall into poverty, and have no other option than to be assisted by the international community,” said Ms. Nieuwenhuyse.
WFP’s 3,300-ton food stockpile will run out during the next month as distributions resume, security permitting, with more food convoys expected to replenish the supplies.
Due to the scarcity of wheat, most of the mills and bakeries in Gaza have stopped working and there is an acute shortage of bread, the staple food for Palestinians.
In a related development, a group of independent UN human rights experts said today that it was “deeply alarmed” at the continuing violence in Gaza and called on all parties to end attacks putting civilian lives at risk.
“Both air strikes by Israeli Government forces and rocket attacks from Gaza into Israel are resulting in inexcusable loss of life and placing the civilian populations in the affected areas in extreme danger,” said Asma Jahangir, chairperson of the experts’ coordinating body, said in a statement.
She stressed that international human rights law “imposes binding obligations on all parties in situations of armed conflict.”
The chairperson said that neither Israel’s use of disproportionate force, missiles launched from Gaza, nor the general disregard for the safety of non-combatants can justify either side’s aggression.
The UN experts voiced particular concern at the impact of the current violence and destruction of vital infrastructure on the already dire humanitarian situation in Gaza and called on all parties to ensure access for humanitarian relief efforts and supplies.
Independent experts, known as special rapporteurs, serve in an autonomous unpaid capacity and report to the UN Human Rights Council in Geneva.
Jan 2 2009 3:10PM
________________
For more details go to UN News Centre at http://www.un.org/news
New York, Jan 2 2009 3:10PM
The future of the Middle-East peace process, the stability of the region and the safety of ordinary people in the Gaza Strip have been seriously jeopardized by the “irresponsibility of Hamas rocket attacks” and the “excessiveness of Israel’s response,” a senior United Nations envoy to warned today, as diplomatic efforts to resolve the conflict intensify.
On the seventh day of Israeli bombing raids on Gaza and with more than 400 Gazans reportedly killed and thousands wounded, Robert Serry, UN Special Coordinator for the Middle East Peace Process, called for the international community to step up its attempts to end the growing humanitarian crisis.
“Much of Gaza’s infrastructure has now been destroyed. The death and injury toll in Gaza continues to mount. Hamas rockets are now reaching 40 kilometres into Israel,” Mr. Serry said via video-link from Jerusalem.
Israel has cited rocket and other attacks by militants in Gaza against Israeli civilians as the reason for its military offensive and closing crossings into Gaza for much of the previous two months.
With Israeli tanks on Gaza’s border, the envoy underscored the urgency and importance of an immediate and lasting cessation of hostilities to avoid an even deeper and deadlier conflict.
He said that he will join a number of Arab leaders slated to arrive in New York next week to find a solution to the crisis.
“Diplomatic efforts are underway involving many players, including the United States, the European Union (EU), the Arab League, Turkey and others, and we believe the roles of the Quartet [comprising the UN, EU, Russian and the US] and the Security Council are going to be very important.”
While a ceasefire is vital, a return to the previous situation would not be enough to maintain security or find a durable peace, Mr. Serry said.
He stressed the need for the uninterrupted reopening of crossings into Gaza with a commitment from both sides to fully respect a ceasefire, including an end to all rocket attacks from Gaza and weapons smuggling into the Hamas controlled territory.
“It will also require bringing Gaza back into the fold of the Palestinian Authority through arrangements on the ground and renewed efforts to reunited Gaza and the West Bank,” he said, adding that “it is more vital than ever that Israeli-Palestinian peace is achieved. The underlying issues must be addressed: end of conflict, end of occupation and the creation of the Palestinian State alongside a secure Israel.”
Meanwhile, the UN World Food Programme (WFP) has been distributing bread to families in the hardest-hit areas of Gaza, and said today that it urgently requires $9 million to meet additional food needs caused by the upsurge in fighting.
The bombing raids over the last week have greatly worsened the already harsh humanitarian situation in Gaza, which is home to an estimated 1.5 million people facing severe shortages of food, fuel and cooking gas.
“The current situation in Gaza is appalling and many basic food items are no longer available on the market,” said Christine van Nieuwenhuyse, WFP Representative in the occupied Palestinian territory.
Yesterday, the agency started handing out bread to around 15,000 people in the northern city of Beit Hanoun – one of the poorest areas in Gaza and the most heavily affected by the conflict.
However, the recent Israeli offensive has prevented WFP and its partners from operating at full capacity and has delayed the regular distribution of food to nearly 270,000 people in the region.
“We are responding to the immediate food emergency needs as much as we can, but the destruction of local infrastructure and the shortages of basic utilities such as fuel and gas means that more people will fall into poverty, and have no other option than to be assisted by the international community,” said Ms. Nieuwenhuyse.
WFP’s 3,300-ton food stockpile will run out during the next month as distributions resume, security permitting, with more food convoys expected to replenish the supplies.
Due to the scarcity of wheat, most of the mills and bakeries in Gaza have stopped working and there is an acute shortage of bread, the staple food for Palestinians.
In a related development, a group of independent UN human rights experts said today that it was “deeply alarmed” at the continuing violence in Gaza and called on all parties to end attacks putting civilian lives at risk.
“Both air strikes by Israeli Government forces and rocket attacks from Gaza into Israel are resulting in inexcusable loss of life and placing the civilian populations in the affected areas in extreme danger,” said Asma Jahangir, chairperson of the experts’ coordinating body, said in a statement.
She stressed that international human rights law “imposes binding obligations on all parties in situations of armed conflict.”
The chairperson said that neither Israel’s use of disproportionate force, missiles launched from Gaza, nor the general disregard for the safety of non-combatants can justify either side’s aggression.
The UN experts voiced particular concern at the impact of the current violence and destruction of vital infrastructure on the already dire humanitarian situation in Gaza and called on all parties to ensure access for humanitarian relief efforts and supplies.
Independent experts, known as special rapporteurs, serve in an autonomous unpaid capacity and report to the UN Human Rights Council in Geneva.
Jan 2 2009 3:10PM
________________
For more details go to UN News Centre at http://www.un.org/news
The Diversification Challenge in Africa's Resource-Rich Economies
Rowing Against the Current: The Diversification Challenge in Africa's Resource-Rich Economies
John Page, Distinguished Visiting Fellow, Global Economy and Development, The Brookings Institution
Global Working Papers No. 28
For a growing number of countries in Africa the current commodity boom is a huge opportunity. But if the economic history of resource-rich, poor countries—especially in Africa—is any guide, rather than bringing prosperity, the resource boom may drive them into what Paul Collier (2007) in his influential book The Bottom Billion terms the “Natural Resources Trap.” In Africa, countries dependent on oil, gas, and mining have tended to have weaker long-run growth, higher rates of poverty, and higher inequality than non mineral-dependent economies at similar levels of income.
Two recent studies suggest both the potential and the risks of resource extraction. Alekseev and Conrad (2008) show the potential—resource wealth has tended to make countries better off. They find that in the long run resource-rich countries have significantly higher levels of income than other countries. However, Collier and Goderis (2007, 2008) suggest that this may be due only to the income generated by resource rents rather than to the growth of output. In resourcerich economies—unlike those with more diversified economic structures—production and income may diverge substantially. Collier and Goderis ask whether a commodity boom helps an economy to produce more output. They find that for the first few years following an increase in the price of commodity exports output increases relative to what it would otherwise have been, but usually the growth of output is not sustained. After two decades the typical resource extracting economy is producing less than it would have done in the absence of the boom. Collier and Goderis simulate the outcome of the current commodity boom and find that, if history repeats itself, after two decades output for the typical African commodity exporter will be around 25 percent lower than it would have been without the boom. This is the resource curse.
But geology is not destiny. Natural resource wealth can be an effective driver of growth. Chile, which has been the fastest growing Latin American country for the past 15 years, has relied almost entirely on exports of natural resource products. Botswana has been among the world’s fastest growing economies for the last 30 years, and Indonesia and Malaysia have used their natural resource wealth to diversify and grow their economies. From the global evidence Collier and Goderis find that although a decline in production is the norm, it is by no means inevitable. Some societies have succeeded in harnessing commodity booms for sustained increases in production, while others have not. The consequences of resource-riches, they argue, depend upon choices.
This paper is about one important set of choices faced by Africa’s resource-rich economies, whether and how to diversify production beyond the natural resource sector. Following this introduction, Section 2 examines the role of natural resource exports in Africa’s recent growth recovery. Using a new methodology developed by Arbache and Page (2007) it finds that Africa’s growth acceleration after 1995 has been driven mainly by avoiding the policy mistakes that led to sharp economic contractions in the past and by a strong surge in growth in the resource-rich economies. This makes Africa’s long-run growth prospects vulnerable to the natural resource curse.
Section 3 introduces the main theme of the paper: Africa’s resource exporters are rowing against the current as they attempt to diversify their economies. The relative price changes that occur in a resource exporting economy—symptoms of the “Dutch disease”— place Africa’s natural resource-rich countries at a disadvantage with respect to two drivers of industrial change and economic growth. Because Dutch disease discourages the development of new tradable goods producing activities, it inhibits the diversification of the manufacturing sector and limits the potential for increases in the sophistication of manufacturing production and exports. Both diversity and sophistication have been linked in recent literature to higher incomes and faster growth. In addition, research on the impact of agglomeration economies on production costs and international competitiveness strongly suggests that late-comers to industrialization, such as Africa’s natural resource exporters, suffer from a competitive disadvantage linked to the spatial distribution of global industry. It is far easier to expand an existing industrial agglomeration than to start a new one. Not surprisingly, then, the data show that Africa’s mineral rich economies trail both the Africa regional average and the least developed countries in general in key indicators of industrial dynamism.
Section 4 draws on the experience of three successful natural resource exporters—Chile, Indonesia and Malaysia—to make the point that geology is not destiny. Each of these economies had rising income growth accompanied by increasing diversity of their manufacturing and export structure between 1980 and 2000. Successful diversification away from dependence on natural resources was the consequence of different public policies to mitigate the impact of the Dutch disease. In the cases of Indonesia and Malaysia, government policies successfully targeted moving into new more sophisticated manufacturing sectors. In Chile public policy favored the expansion into new, knowledge-intensive natural resource based exports.
Some options for policy choices are set out in section 5. The basic theme of the section is that governments—through improvements in the investment climate and public expenditures—can mitigate the worst consequences of the Dutch disease. Section 6 concludes and offers some ideas for further research.
A document-based 318-year record of tropical cyclones in the Lesser Antilles, 1690–2007
Lesson of the Lesser Antilles
World Climate Report, December 30, 2008
Excerpts:
Our interest in the Lesser Antilles was heightened by a recent article in Geochemistry, Geophysics, Geosystems by Chenoweth and Divine who managed to secure funding for the research from the Norwegian Research Council and NOAA’s Climate and Global Change Program. They note that “In the Atlantic basin, the Caribbean region has several centers of continuous European settlement dating from the early 1500s in the Spanish colonies and the 1600s in other European colonies. Hence, there is strong potential for estimation of tropical cyclone activity in this region at least three centuries back in time.”
The pair of scientists cleverly compiled information on hurricanes from ship logbooks, newspaper accounts, state reports, official government gazettes, meteorological registers, consulate office reports, and more commonly relied-upon meteorological observations. From all the archival material and meteorological observations, they were able to produce the graphic below (Figure 2) showing hurricanes and tropical storms over a 318-year period. If you see no upward trend, join the world of reality! Despite all the claims to the contrary by the global warming advocates, there is zero evidence that hurricane activity is increasing over the three centuries of recorded events. Furthermore, it is far more likely to miss a hurricane 300 years ago compared to today, and this under-representation in the past should have produced a clear upward trend in the data.
[Graphs in the original article]
In describing the results, Chenoweth and Divine note “There is no evidence of trend significant at the 5% level for the entire record or for shorter segments (such as 1899–2007 and 1970–2007) but there is multidecadal variability that produces peaks and troughs in counts of up to 50% from the long-term average.” Furthermore, “The number of hurricanes passing through declined in the 20th century on the order of ~20%. Tropical storm numbers show little change over time. The net result is a nonstatistically significant decline in tropical cyclone frequency in the Lesser Antilles region. This decline is present even in the undercounted ocean areas north of the islands and we conclude that the actual decline is even larger than depicted in this area.”
It gets even better as they state “Major hurricane numbers over 12–18°N (the most accurately and reliably sampled sector) were 20 from 1701 to 1800, 19 from 1801 to 1900 and 16 from 1901 to 2000 and none have passed through since 2000.” They say “For whatever reason, fewer tropical cyclones reached hurricane intensity along 10–25°N 61.5°W in the past century than in previous centuries.”
They summarize noting “We find no evidence of statistically significant trend in the number of tropical cyclones passing through the region on any time scale. While tropical cyclone numbers show no statistically significant trend hurricane frequency is down about 20% in the 20th century compared to earlier centuries. This decline is consistent with the 20th century observed record of decreasing hurricane landfall rates in the U.S.” How about this line … “Although there is no significant long-term trend since the beginning of the series the period 1968–1977 was probably the most inactive period since the islands were settled in the 1620s and 1630s.”
[...]
Reference
Chenoweth, M., and D. Divine (2008). A document-based 318-year record of tropical cyclones in the Lesser Antilles, 1690–2007. Geochemistry, Geophysics, Geosystems, 9, Q08013, doi:10.1029/2008GC002066.
World Climate Report, December 30, 2008
Excerpts:
Our interest in the Lesser Antilles was heightened by a recent article in Geochemistry, Geophysics, Geosystems by Chenoweth and Divine who managed to secure funding for the research from the Norwegian Research Council and NOAA’s Climate and Global Change Program. They note that “In the Atlantic basin, the Caribbean region has several centers of continuous European settlement dating from the early 1500s in the Spanish colonies and the 1600s in other European colonies. Hence, there is strong potential for estimation of tropical cyclone activity in this region at least three centuries back in time.”
The pair of scientists cleverly compiled information on hurricanes from ship logbooks, newspaper accounts, state reports, official government gazettes, meteorological registers, consulate office reports, and more commonly relied-upon meteorological observations. From all the archival material and meteorological observations, they were able to produce the graphic below (Figure 2) showing hurricanes and tropical storms over a 318-year period. If you see no upward trend, join the world of reality! Despite all the claims to the contrary by the global warming advocates, there is zero evidence that hurricane activity is increasing over the three centuries of recorded events. Furthermore, it is far more likely to miss a hurricane 300 years ago compared to today, and this under-representation in the past should have produced a clear upward trend in the data.
[Graphs in the original article]
In describing the results, Chenoweth and Divine note “There is no evidence of trend significant at the 5% level for the entire record or for shorter segments (such as 1899–2007 and 1970–2007) but there is multidecadal variability that produces peaks and troughs in counts of up to 50% from the long-term average.” Furthermore, “The number of hurricanes passing through declined in the 20th century on the order of ~20%. Tropical storm numbers show little change over time. The net result is a nonstatistically significant decline in tropical cyclone frequency in the Lesser Antilles region. This decline is present even in the undercounted ocean areas north of the islands and we conclude that the actual decline is even larger than depicted in this area.”
It gets even better as they state “Major hurricane numbers over 12–18°N (the most accurately and reliably sampled sector) were 20 from 1701 to 1800, 19 from 1801 to 1900 and 16 from 1901 to 2000 and none have passed through since 2000.” They say “For whatever reason, fewer tropical cyclones reached hurricane intensity along 10–25°N 61.5°W in the past century than in previous centuries.”
They summarize noting “We find no evidence of statistically significant trend in the number of tropical cyclones passing through the region on any time scale. While tropical cyclone numbers show no statistically significant trend hurricane frequency is down about 20% in the 20th century compared to earlier centuries. This decline is consistent with the 20th century observed record of decreasing hurricane landfall rates in the U.S.” How about this line … “Although there is no significant long-term trend since the beginning of the series the period 1968–1977 was probably the most inactive period since the islands were settled in the 1620s and 1630s.”
[...]
Reference
Chenoweth, M., and D. Divine (2008). A document-based 318-year record of tropical cyclones in the Lesser Antilles, 1690–2007. Geochemistry, Geophysics, Geosystems, 9, Q08013, doi:10.1029/2008GC002066.
US Treasury Report to Congress Pursuant to Section 102 of the Emergency Economic Stabilization Act
US Treasury Report to Congress Pursuant to Section 102 of the Emergency Economic Stabilization Act
Dec 31, 2008
This report fulfills the requirement under section 102 of the Emergency Economic Stabilization Act (EESA) for the Treasury Department to report to Congress within 90 days of the passage of the bill on the insurance program established under Section 102(a).
Asset Guarantee Program
Treasury is exploring use of the Asset Guarantee Program to address the guarantee provisions of the agreement with Citigroup announced on November 23, 2008. Under the agreement, the Treasury Department will assume the second-loss position after Citigroup on a selected group of mortgage-related assets.
As required by section 102(a), Treasury established the Asset Guarantee Program (AGP). This program provides guarantees for assets held by systemically significant financial institutions that face a high risk of losing market confidence due in large part to a portfolio of distressed or illiquid assets. This program will be applied with extreme discretion in order to improve market confidence in the systemically significant institution and in financial markets broadly. It is not anticipated that the program will be made widely available.
Under the AGP, Treasury would assume a loss position with specified attachment and detachment points on certain assets held by the qualifying financial institution; the set of insured assets would be selected by the Treasury and its agents in consultation with the financial institution receiving the guarantee. In accordance with section 102(a), assets to be guaranteed must have been originated before March 14, 2008.
Treasury would collect a premium, deliverable in a form deemed appropriate by the Treasury Secretary. As required by the statute, an actuarial analysis would be used to ensure that the expected value of the premium is no less than the expected value of the losses to TARP from the guarantee. The United States government would also provide a set of portfolio management guidelines to which the institution must adhere for the guaranteed portfolio.
Treasury would determine the eligibility of participants and the allocation of resources on a case-by-case basis. The program would be used for systemically significant institutions, and could be used in coordination with other programs. Treasury may, on a case-by-case basis, use this program in coordination with a broader guarantee involving one or more other agencies of the United States government.
Justification
The objective of this program is to foster financial market stability and thereby to strengthen the economy and protect American jobs, savings, and retirement security. In an environment of high volatility and severe financial market strains, the loss of confidence in a financial institution could result in significant market disruptions that threaten the financial strength of similarly situated financial institutions and thus impair broader financial markets and pose a threat to the overall economy. The resulting financial strains could threaten the viability of otherwise financially sound businesses, institutions, and municipalities, resulting in adverse spillovers on employment, output, and incomes.
Determination of Eligible Institutions
In determining whether to use the program for an institution, Treasury may consider, among other things:
1. The extent to which destabilization of the institution could threaten the viability of creditors and counterparties exposed to the institution, whether directly or indirectly;
2. The extent to which an institution is at risk of a loss of confidence and the degree to which that stress is caused by a distressed or illiquid portfolio of assets;
3. The number and size of financial institutions that are similarly situated, or that would be likely to be affected by destabilization of the institution being considered for the program;
4. Whether the institution is sufficiently important to the nation's financial and economic system that a loss of confidence in the firm's financial position could potentially cause major disruptions to credit markets or payments and settlement systems, destabilize asset prices, significantly increase uncertainty, or lead to similar losses of confidence or financial market stability that could materially weaken overall economic performance;
5. The extent to which the institution has access to alternative sources of capital and liquidity, whether from the private sector or from other sources of government funds.
In making these judgments, Treasury will obtain and consider information from a variety of sources, and will take into account recommendations received from the institution's primary regulator, if applicable, or from other regulatory bodies and private parties that could provide insight into the potential consequences if confidence in a particular institution deteriorated.
TARP Accounting and Treasury's Loss Position
Treasury generally achieves a greater impact per TARP dollar absorbed by taking an early loss position over a narrow interval of losses rather than a late loss position over a larger range of losses.
Treasury's purchasing authority under TARP is reduced by the total value of the guaranteed asset less the cash premium received, where the premium is equal to the expected loss on the guaranteed asset. If the Treasury collects a non-cash premium . for example, preferred shares - the TARP purchasing authority is reduced by the entire value of the guarantee until the preferred shares are sold and converted to cash.
These accounting rules imply that if guarantees for two assets of different values have the same expected loss, the larger asset will be more TARP-intensive to insure. For example, suppose Treasury has the choice between guaranteeing two different assets, one of which is worth $50 and has a 10 percent chance of losing all of its value and the other of which is worth $10 and has a 50 percent chance of losing all of its value. For the sake of simplicity, the premium in this example will be paid in cash. If the premium received equals the expected value of the losses to TARP from the guarantee (thereby meeting the statutory requirement), Treasury would collect a $5 premium for guaranteeing either asset. However, the TARP purchasing authority would be reduced by $45 for the guarantee on the first asset (the $50 covered minus the $5 premium) and just $5 for the guarantee on the second asset (the $10 covered minus the $5 premium). Although the net expected payouts of the two guarantees are equal, the second guarantee is more valuable per dollar of TARP absorbed: covering the first asset uses $9 of TARP per $1 of expected loss, whereas the second asset uses only $1 of TARP per $1 of expected loss.
Because of this feature of TARP accounting under Section 102 of the EESA, Treasury in using the AGP will generally take a relatively early loss position over a narrow range of losses to provide the greatest protection per TARP dollar absorbed.
Other Potential Asset Guarantee Programs
Treasury is reviewing options for the development of other programs to insure troubled assets pursuant to the legislation. Two design considerations will be important factors for any potential program developed under Section 102:
(1) Accounting under the TARP purchasing authority: The TARP purchasing authority is reduced dollar-for-dollar by the amount guaranteed less the premiums received; the expected net payout from the program is not considered for this purpose. This means that insuring an asset under section 102 has almost an equivalent impact on the TARP purchasing authority as purchasing the same asset (Section 102.c.4).
(2) Adverse selection: Information on the credit risk underlying a particular asset, notably complex assets such as mortgage backed securities, can often be understood only through intensive research.and even then, the risk will ultimately depend on outcomes such as future home price appreciation that can be forecast only imperfectly. If an insurance program were to offer a set premium for a specific asset class - even one that is narrowly defined - it could well be the case that only the holders of assets for whom the premium was either appropriate or underpriced would buy insurance. By construction, the credit risk associated with the securities that would actually be insured at any given premium would be higher than the premium would cover. Individually pricing the assets - a resource-intensive endeavor . is the only way of achieving an expected net payout of zero. In practice, this means that setting the pricing of the insurance premiums will inevitably require particular assumptions and judgments; the ex-post financial outcome involved with the guarantees could deviate substantially from the ex-ante actuarial analysis-for better or for worse.
To assist in the consideration of programs under Section 102, the Treasury issued Federal Register Notice (Docket # TREAS-DO-2008-0018 posted 10/16/2008). Treasury asked for comment on programs consistent with Section 102 of the Emergency Economic Stabilization Act of 2008 (EESA). Treasury particularly invited comments on the appropriate structure for such a program, and whether the program should offer insurance against losses for both individual whole loans and individual mortgage backed securities (MBS), as well as the payout and triggering event, estimation of losses, and setting the appropriate premium. A summary of the comments received is attached next as an Appendix to this report.
Dec 31, 2008
This report fulfills the requirement under section 102 of the Emergency Economic Stabilization Act (EESA) for the Treasury Department to report to Congress within 90 days of the passage of the bill on the insurance program established under Section 102(a).
Asset Guarantee Program
Treasury is exploring use of the Asset Guarantee Program to address the guarantee provisions of the agreement with Citigroup announced on November 23, 2008. Under the agreement, the Treasury Department will assume the second-loss position after Citigroup on a selected group of mortgage-related assets.
As required by section 102(a), Treasury established the Asset Guarantee Program (AGP). This program provides guarantees for assets held by systemically significant financial institutions that face a high risk of losing market confidence due in large part to a portfolio of distressed or illiquid assets. This program will be applied with extreme discretion in order to improve market confidence in the systemically significant institution and in financial markets broadly. It is not anticipated that the program will be made widely available.
Under the AGP, Treasury would assume a loss position with specified attachment and detachment points on certain assets held by the qualifying financial institution; the set of insured assets would be selected by the Treasury and its agents in consultation with the financial institution receiving the guarantee. In accordance with section 102(a), assets to be guaranteed must have been originated before March 14, 2008.
Treasury would collect a premium, deliverable in a form deemed appropriate by the Treasury Secretary. As required by the statute, an actuarial analysis would be used to ensure that the expected value of the premium is no less than the expected value of the losses to TARP from the guarantee. The United States government would also provide a set of portfolio management guidelines to which the institution must adhere for the guaranteed portfolio.
Treasury would determine the eligibility of participants and the allocation of resources on a case-by-case basis. The program would be used for systemically significant institutions, and could be used in coordination with other programs. Treasury may, on a case-by-case basis, use this program in coordination with a broader guarantee involving one or more other agencies of the United States government.
Justification
The objective of this program is to foster financial market stability and thereby to strengthen the economy and protect American jobs, savings, and retirement security. In an environment of high volatility and severe financial market strains, the loss of confidence in a financial institution could result in significant market disruptions that threaten the financial strength of similarly situated financial institutions and thus impair broader financial markets and pose a threat to the overall economy. The resulting financial strains could threaten the viability of otherwise financially sound businesses, institutions, and municipalities, resulting in adverse spillovers on employment, output, and incomes.
Determination of Eligible Institutions
In determining whether to use the program for an institution, Treasury may consider, among other things:
1. The extent to which destabilization of the institution could threaten the viability of creditors and counterparties exposed to the institution, whether directly or indirectly;
2. The extent to which an institution is at risk of a loss of confidence and the degree to which that stress is caused by a distressed or illiquid portfolio of assets;
3. The number and size of financial institutions that are similarly situated, or that would be likely to be affected by destabilization of the institution being considered for the program;
4. Whether the institution is sufficiently important to the nation's financial and economic system that a loss of confidence in the firm's financial position could potentially cause major disruptions to credit markets or payments and settlement systems, destabilize asset prices, significantly increase uncertainty, or lead to similar losses of confidence or financial market stability that could materially weaken overall economic performance;
5. The extent to which the institution has access to alternative sources of capital and liquidity, whether from the private sector or from other sources of government funds.
In making these judgments, Treasury will obtain and consider information from a variety of sources, and will take into account recommendations received from the institution's primary regulator, if applicable, or from other regulatory bodies and private parties that could provide insight into the potential consequences if confidence in a particular institution deteriorated.
TARP Accounting and Treasury's Loss Position
Treasury generally achieves a greater impact per TARP dollar absorbed by taking an early loss position over a narrow interval of losses rather than a late loss position over a larger range of losses.
Treasury's purchasing authority under TARP is reduced by the total value of the guaranteed asset less the cash premium received, where the premium is equal to the expected loss on the guaranteed asset. If the Treasury collects a non-cash premium . for example, preferred shares - the TARP purchasing authority is reduced by the entire value of the guarantee until the preferred shares are sold and converted to cash.
These accounting rules imply that if guarantees for two assets of different values have the same expected loss, the larger asset will be more TARP-intensive to insure. For example, suppose Treasury has the choice between guaranteeing two different assets, one of which is worth $50 and has a 10 percent chance of losing all of its value and the other of which is worth $10 and has a 50 percent chance of losing all of its value. For the sake of simplicity, the premium in this example will be paid in cash. If the premium received equals the expected value of the losses to TARP from the guarantee (thereby meeting the statutory requirement), Treasury would collect a $5 premium for guaranteeing either asset. However, the TARP purchasing authority would be reduced by $45 for the guarantee on the first asset (the $50 covered minus the $5 premium) and just $5 for the guarantee on the second asset (the $10 covered minus the $5 premium). Although the net expected payouts of the two guarantees are equal, the second guarantee is more valuable per dollar of TARP absorbed: covering the first asset uses $9 of TARP per $1 of expected loss, whereas the second asset uses only $1 of TARP per $1 of expected loss.
Because of this feature of TARP accounting under Section 102 of the EESA, Treasury in using the AGP will generally take a relatively early loss position over a narrow range of losses to provide the greatest protection per TARP dollar absorbed.
Other Potential Asset Guarantee Programs
Treasury is reviewing options for the development of other programs to insure troubled assets pursuant to the legislation. Two design considerations will be important factors for any potential program developed under Section 102:
(1) Accounting under the TARP purchasing authority: The TARP purchasing authority is reduced dollar-for-dollar by the amount guaranteed less the premiums received; the expected net payout from the program is not considered for this purpose. This means that insuring an asset under section 102 has almost an equivalent impact on the TARP purchasing authority as purchasing the same asset (Section 102.c.4).
(2) Adverse selection: Information on the credit risk underlying a particular asset, notably complex assets such as mortgage backed securities, can often be understood only through intensive research.and even then, the risk will ultimately depend on outcomes such as future home price appreciation that can be forecast only imperfectly. If an insurance program were to offer a set premium for a specific asset class - even one that is narrowly defined - it could well be the case that only the holders of assets for whom the premium was either appropriate or underpriced would buy insurance. By construction, the credit risk associated with the securities that would actually be insured at any given premium would be higher than the premium would cover. Individually pricing the assets - a resource-intensive endeavor . is the only way of achieving an expected net payout of zero. In practice, this means that setting the pricing of the insurance premiums will inevitably require particular assumptions and judgments; the ex-post financial outcome involved with the guarantees could deviate substantially from the ex-ante actuarial analysis-for better or for worse.
To assist in the consideration of programs under Section 102, the Treasury issued Federal Register Notice (Docket # TREAS-DO-2008-0018 posted 10/16/2008). Treasury asked for comment on programs consistent with Section 102 of the Emergency Economic Stabilization Act of 2008 (EESA). Treasury particularly invited comments on the appropriate structure for such a program, and whether the program should offer insurance against losses for both individual whole loans and individual mortgage backed securities (MBS), as well as the payout and triggering event, estimation of losses, and setting the appropriate premium. A summary of the comments received is attached next as an Appendix to this report.
Gaza: UN Human Rights Experts Express Shock at the Scale of Combat
Gaza: UN Human Rights Experts Express Shock at the Scale of Combat
New York, Jan 2 2009 1:10PMA group of independent United Nations human rights experts today said it was “deeply alarmed” at the continuing violence in Gaza and called on all parties to end attacks putting civilian lives at risk.
“Both air strikes by Israeli Government forces and rocket attacks from Gaza into Israel are resulting in inexcusable loss of life and placing the civilian populations in the affected areas in extreme danger,” said Asma Jahangir, chairperson of the experts’ coordinating body, said in a statement.
She stressed that international human rights law “imposes binding obligations on all parties in situations of armed conflict.”
The chairperson said that neither Israel’s use of disproportionate force, missiles launched from Gaza, nor the general disregard for the safety of non-combatants can justify either side’s aggression.
“They constitute clear violations of international human rights and international humanitarian law,” she said.
The UN experts voiced particular concern at the impact of the current violence and destruction of vital infrastructure on the already dire humanitarian situation in Gaza and called on all parties to ensure access for humanitarian relief efforts and supplies.
“Independent human rights monitoring, including by the various UN Special Procedures, is particularly crucial in these circumstances which result in an exceptionally broad range of human rights violations.”
Independent experts, known as special rapporteurs, serve in an autonomous unpaid capacity and report to the UN Human Rights Council in Geneva.
Jan 2 2009 1:10PM
________________
For more details go to UN News Centre at http://www.un.org/news
New York, Jan 2 2009 1:10PMA group of independent United Nations human rights experts today said it was “deeply alarmed” at the continuing violence in Gaza and called on all parties to end attacks putting civilian lives at risk.
“Both air strikes by Israeli Government forces and rocket attacks from Gaza into Israel are resulting in inexcusable loss of life and placing the civilian populations in the affected areas in extreme danger,” said Asma Jahangir, chairperson of the experts’ coordinating body, said in a statement.
She stressed that international human rights law “imposes binding obligations on all parties in situations of armed conflict.”
The chairperson said that neither Israel’s use of disproportionate force, missiles launched from Gaza, nor the general disregard for the safety of non-combatants can justify either side’s aggression.
“They constitute clear violations of international human rights and international humanitarian law,” she said.
The UN experts voiced particular concern at the impact of the current violence and destruction of vital infrastructure on the already dire humanitarian situation in Gaza and called on all parties to ensure access for humanitarian relief efforts and supplies.
“Independent human rights monitoring, including by the various UN Special Procedures, is particularly crucial in these circumstances which result in an exceptionally broad range of human rights violations.”
Independent experts, known as special rapporteurs, serve in an autonomous unpaid capacity and report to the UN Human Rights Council in Geneva.
Jan 2 2009 1:10PM
________________
For more details go to UN News Centre at http://www.un.org/news
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