US Decline "Faster than government can measure it"

WASHINGTON - The economy is moving in reverse faster than the government can measure.

The contraction for the fourth quarter of 2008 had been estimated at 3.8 percent just a month ago. Then the Commerce Department raised it to an astonishing 6.2 percent Friday - the largest revision since the government started keeping records in 1976. That was the economy's worst showing in a quarter-century and raised the prospect that the nation could suffer its worst year since 1946 "Consumers are just hunkering down and saying game over,' and businesses in response are cutting back on investment and employment," said Brian Bethune, economist at IHS Global Insight. "It's a negative feedback loop."

Now in its second year, the recession is expected to stretch at least through the first six months of 2009, as shoppers slash spending in the shadow of hard times at home and aboard. Companies, in turn, are being forced to cut jobs and production while resorting to other cost-saving measures to survive. The Commerce Department's new report was also weaker than the 5.4 percent drop economists had expected.

The biggest culprit behind the record-breaking revision: Businesses actually cut inventories instead of building them as the government originally thought. That reduced - rather than added to - economic activity. In addition, consumers pulled back even more on their spending - which accounts for about 70 percent of national economic activity. U.S. exports suffered a bigger drop and businesses retrenched further. Many economists lowered their forecast for this year's gross domestic product to show a deeper contraction of at least 2 percent. GDP, the value of all goods and services produced in the United States, is the best barometer of the country's economic health.

White House press secretary Robert Gibbs said the latest GDP figure "underscores the urgency with which the president feels we have to move to improve our economy." The economy has not suffered a decline for a full year since 1991, and that was just by 0.2 percent.

If the new projections prove accurate, it would mark the worst annual showing since an 11 percent plunge in 1946. "The slide in our economy is very severe and very broad across all industries and regions of the country," said Mark Zandi, chief economist at Moody's Economy.com. "It is about as dark an economic time that we've experienced since the 1930s."

Before Friday's report was released, many economists were projecting an annualized drop of 5 percent in the current January-March quarter. Given the fourth quarter's showing and the dismal state of the jobs market, some economists believe a decline of closer to 6 percent in the current quarter is possible.

The nation's jobless rate is now at 7.6 percent, the highest in more than 16 years. The Federal Reserve expects the rate to climb to close to 9 percent this year, and probably will stay elevated into 2011.

On Wall Street, stocks fell Friday as investors reacted to a decision by Citigroup Inc. to turn over a big piece of itself to the government and a move by General Electric Co. to slash its quarterly dividend by 68 percent. Investors also paid close attention to the lower GDP figures. The Dow Jones industrials fell more than 119 points to 7,062.93, its lowest close since May 1, 1997.

The faster downhill slide in the final quarter of 2008 came as the financial crisis - the worst since the 1930s - intensified. Both the new and the old fourth-quarter figures marked the weakest quarterly showing since an annualized drop of 6.4 percent in the first quarter of 1982, when the country was suffering through an intense recession.

For all of 2008, the economy grew just 1.1 percent, weaker than the government initially estimated. That was down from a 2 percent gain in 2007 and marked the slowest growth since the last recession in 2001. In the fourth quarter, consumers cut spending at a 4.3 percent pace. That was deeper than the initial 3.5 percent annualized drop and marked the biggest decline since the second quarter of 1980. Businesses slashed spending on equipment and software at an annualized pace of 28.8 percent in the final quarter of last year. That was deeper than first reported and the worst showing since the first quarter of 1958. Fallout from the housing collapse spread to other areas. Builders cut spending on commercial construction projects 21.1 percent, the most since the first quarter of 1975. Home builders slashed spending at a 22.2 percent pace, the most since the start of 2008.

In the long run, the reduction in new projects should aid the housing market's recovery as fewer properties for sale help increase competition and stabilize prices. But at the moment, a stable housing market appears months away. A sharper drop in U.S. exports also factored into the weaker fourth-quarter performance. Economic troubles overseas are sapping demand for domestic goods and services.

by Jeannine Aversa - Feb. 27, 2009 04:52 PM
Associated Press.

Check out: Europe in Reverse Gear

Arnie Declares State of Emergency

Even Chief Sitting Bull had problems and I guess he too must have declared a state of emergency back in those days but perhaps for different reasons. For rain he did a dance I suppose, so maybe Arnie should try that?

Boat docks sit high and dry at Lake Pillsbury, Calif., 75 miles north of Santa Rosa. Schwarzenegger's declaration of a state of emergency comes after three years of below-average rain and snowfall in the state.

Gov. Arnold Schwarzenegger proclaimed a statewide drought emergency Friday, urging Californians to cut water use by 20% and easing the way for water sales from Northern California to Southern California cities and San Joaquin Valley farms. The proclamation amplifies a drought emergency that Schwarzenegger declared last year in several agricultural counties, where more than 100,000 acres of farmland have gone unplanted for lack of water. The drought declaration stops short of mandatory water rationing. But it asks urban water users to step up conservation efforts. And it directs state agencies to cut back on landscape irrigation, including along highways.

The directive also orders the state to streamline permitting for water projects, such as recycling or desalination operations, and expedite water transfers to needy irrigation districts and urban areas in Southern California. The governor issued the declaration even though a series of February storms have fattened the critical Sierra Nevada snowpack and pushed up reservoir levels in Northern California. "Prepare for the worst and hope for the best," state water resources director Lester Snow said.

Although more rain and snow is predicted in the coming week in Northern California, Snow said it is unlikely the state's giant waterworks will return to normal levels this spring. In a statement, Schwarzenegger called the state's water situation "a crisis, just as severe as an earthquake or raging wildfire." The governor and Republicans in the Legislature have for several years pushed unsuccessfully for bonds to build new reservoirs. Some are calling for construction of a canal to divert water around the troubled Sacramento-San Joaquin delta. Proponents of such projects seized on Friday's drought declaration to bolster support for a fresh round of bond proposals. "I applaud the governor's action today," Sen. Tom Harman (R-Huntington Beach) said. "This emergency underscores, once again, the seriousness of our state's water crisis. I hope that this declaration will spur immediate action in the Legislature to address water storage, conveyance and protection of the delta."

Farmers in the San Joaquin Valley and regional water agencies in Southern California are expected to buy a substantial amount of water from Sacramento Valley irrigation districts through a drought water bank. But Snow said the transfers would make up for only a part of the delivery cutbacks that may occur this year. Officials with the State Water Project, which sends Northern California water to the Southland, have said they may be able to provide only 15% of full allocations. And federal water managers recently warned they may not deliver any water to some big farms in the Central Valley.

Recent storms could brighten that picture, but Snow said he did not expect state and federal water deliveries to increase significantly. Agricultural officials have predicted heavy job losses in Central Valley farm communities and warned that the economic toll of the drought could climb into the billions of dollars this year. This is the third year of below-average precipitation and snowpack in California. The situation has been compounded by court-ordered pumping cutbacks in the Sacramento-San Joaquin delta to protect crashing fish populations.

Los Angeles Mayor Antonio Villaraigosa has called for price increases and restrictions on outdoor watering to ease high summer demand. The Metropolitan Water District of Southern California, the region's major water wholesaler, has said there is a good chance it will have to cut deliveries to local water agencies.

By Bettina Boxall
February 28, 2009

BNP Gaining Ground Up North

There's a spread in today's Independent about the future possibility of the BNP rising to election success in Cumbria during the forthcoming European Elections. Being painted as fascists, racists, and "Little Englanders" by other parties, seems not to have actually done them any harm it appears as their local candidates are making lots of headway in their very own local campaigns for the elections, and are being received practically with open arms. The BNP is actually similar in its ideology to The Northern League in Italy, which became quite a pain in Silvio Berlusconi's side during his own campaign to win back the Italian premiership in 2008 when he had to make certain concessions with the Northern League over immigration and on issues concerning EU membership.

There are other so called far right parties of course spread throughout Europe and most notably I guess, is Dutch MP Geert Wilders party, the PVV , or 'Peoples Party for Freedom' which would be the most prominent due to his stance on Islamic fundamentalism and his Fitna movie which describes in shocking images his views on Islam which hit the headlines recently when he was refused entry to the UK where he'd been invited to discuss his ideas at the House of Lords.

The Independent carries the article; "Is the BNP becoming Cumbria's cup of tea", and places near enough a warning to the three main political parties that they are basically going off the course a fair bit by failing to tee off on the needs of the people, or actually listening to them when it comes to what the people want for their country. I guess again, that we'll all see how the European Elections turn out and whether after the votes have been counted, Cumbria is in any way exemplifying the general mood that Britain has toward the widely acknowledged high levels of unwarranted immigration we are witnessing, along with the unnecessary burdens being placed on the UK by repeated European treaties and yet more treaties and ever deeper integration resulting from consecutive governments having simply refused to listen to the people and in open defiance of the wishes of an undisputed majority who want EU membership which dilutes their own authority to govern and be blamed for the mess, to be brought back down to earth.

I think the moral that you get the government you deserve is a bit weak on this one because in our case, we got a government through no fault of our own other than for the fact that we weren't out on the streets flinging lit bottles through shop windows when our governments were taking all these decisions without asking any of us or stopping to consider our society and the people's needs, our jobs or our schools, or bothering their arses to do anything much about these rising problems whilst at the same time turning deaf ears to the protestations, of many ordinary people they call racists, fascists and "Little Englanders". Who incidentally seem to be growing into "Big Englanders" 'Up North', as well many other places, and also in many of the heartlands belonging to the three main parties , both south as well as north, where the other three have continued to ignore the peoples natural concerns.

I doubt that will remain to be the case much longer. If they don't take notice this time then whatever the political landscape looks like in future, it will be as a result that the people have had enough and have spoken. I think the fact the BNP are campaigning on getting extra bin collections, cleaning roads and mending street lights, tells you something when they're being stopped by ordinary people asking more general questions about what the BNP would do to improve the state of our country and of our membership of the EU, which is the excuse these other parties use for not governing our country. It tells a tale I think, and it tells me that problems, like those the Northern League and PVV highlighted in Italy and the Netherland's, will not simply be swept away by either of the three main parties putting on extra bin collections, mending street lights and sweeping outside their front doors either. I think it needs a deeper imagination than this to catch the people's ear and interest come election time, so needless to say, they had better start to adopt some policies which the people want before it's too late. Although, it may well already be too late despite the constant media attention we have that David Cameron's lot are coming to the rescue. Incidentally, I wonder how UKIP are fairing. I think I'll go take a look.

Check out Europe in Reverse Gear

Here's the article:-

Is the BNP becoming Cumbria's cup of tea?
The Independent
Saturday, 28 February 2009

The far-right party is on its best behaviour in the North-west – and may win its first seat in the European Parliament. But scratch the surface, says Paul Vallely, and the familiar anti-immigrant message shines through.

Alistair Barbour is out canvassing in Carlisle city centre and he is being pretty well-received on the doorstep. In one sense there is nothing surprising about that. The 43-year-old gas-fitter is a local man. With two teenage kids and two step-children, his background is similar to those of the people on whose doors he is knocking. And he has a rough-edged charm and a good sense of when to make an easy joke, or a swift political jibe – or a diplomatic retreat when the door is opened by a bleary-eyed woman in a pink dressing gown who announces: "I'm on nights."

One door is slammed in his face as soon as the woman who opens it catches a glimpse of his rosette bearing the words British National Party. And another voter refuses to take the election envelope he proffers, saying: "I work for the NHS." But most doors are opened and Mr Barbour is given a friendly reception.

For the past six weeks, he has been pounding the streets full-time, talking to the ward's 3,500 voters ahead of a by-election this Thursday. His agenda is restoring weekly bin collections, repairing broken streetlights, filling potholes in the road, tackling litter in the street and cleaning up the dog dirt. But of those who are pleased to see him, almost all want to talk about something else: the BNP's policy of housing British people before immigrants and giving pensioners priority on hospital waiting lists.

Continued.....

90% of VAT "refunded" for Greek businesses but nothing for the UK

ATHENS, FEBRUARY 24 - The Greek government today announced a series of measures aimed at supporting internal tourism. The Finance Minister announced in a circular the immediate refund of VAT paid by companies (travel agencies, hotels, etc.) for the purchase of furniture and improvements to their premises. 90% of VAT will be refunded within 30 days, while the remaining 10% will be repaid following controls which will be made during the financial year. Minister for Tourism Development Costas Markopoulos meanwhile signed the decree to begin the handing out of subsidies for the renovation of the tourist coach park. This decision, says the Ministerial circular, was necessary because of the repercussions of the serious global economic crisis on a strategically important industry for the economy of the country.

ANSAmed

Given the Greek government has done this it must surely place Greek tourism in a more advantaged position than other countries such as Portugal, Italy, Spain for instance. I can't say I blame the Greek government for being protectionist toward their businesses however where does this sit right with other countries which are letting their businesses down by failing to support them because of all this 'global nonsense'?

Less is more: Chomsky - Government for the elite by the elite

Less is more: Chomsky - Government for the elite by the elite

Front Page across America

CNN reports: After nearly 150 years in business, the Rocky Mountain News published its final edition Friday, the victim of a bad economy and the Internet generation. The final front-page headline simply says: "Goodbye, Colorado." "It is with great sadness that we say goodbye to you today. Our time chronicling the life of Denver and Colorado, the nation and the world, is over." The Rocky Mountain News' owner, E.W. Scripps Co., made the announcement to the newsroom at noon Thursday, ending three months of speculation and drama over its fate. The News had been put up for sale in December. The Rocky Mountain News was the latest victim in an era of shutdowns, layoffs and cutbacks plaguing the newspaper industry. "It's in a free fall and nobody knows where the bottom is. It's kind of like water in the toilet swirling around and nobody knows what's left when you're done flushing," media critic Eric Alterman said. Newspapers across the country are under pressure as readership declines, along with advertising revenue, while more and more Americans get their information online. "All newspapers are under great pressure. They'll survive, but they'll survive in different forms, their costs base will have to be dramatically lowered," said Mort Zuckerman, publisher of the New York Daily News, which has the seventh highest circulation in the country. The dramatic decline in advertising dollars in a brutal economy has forced newspapers to cut costs by firing cartoonists, columnists and others, leaving them searching for jobs in a struggling industry.

You know, although it's difficult to leave sentiment to one side here, I guess you have to wonder exactly, whether people would be going online to read news if the news media didn't put it online? Personally, I feel every media source rushed out to stick their stories on the tube, but surely if people were given 'free news', then it was simply a matter of time until they clicked on they didn't have to go buy it? Or is that too simple?

STOP TONY BLAIR AND HIS GLOBALISATION

Did mankind stop in time or did we leave it too late?
Has Tony Blair succeeded with his plan to globalize our world and are we too late to stop him?
By Rugfish

Listening to Tony Blair, you could be forgiven for thinking he knows what he's talking about. His delivery is perfect and his ability to command the attention of large audiences is in no doubt. Heck, let's face it. He once enthralled his audiences and ran a country as a consequence of his arguable success at these things. But the question is still pertinent if we ask ourselves whether he actually knows what he's talking about. He was a trainee barrister wasn't he who then became a politician. He's not a theologian, an economist, an elder statesman who's coped with economic turmoils and an unbalanced world remember. He was given a clean sheet to write on and thus he began to write and then to speak and people began to listen didn't they? So what have they actually been listening too?

In the speech he gives above, which I will place another link on here in a moment where you may read it in full. He talks of 'globalization of politics' and he talks of 'globalization and faith'. I'll come back to the global politics in a moment because that's the area I'm most interested, but I wanted to say something about his Global Faith first, or more aptly named, his 'Global Crusade'.

He simply preaches that all faith's can come together. Think about it, that's an atheists dream. That all men should come together is not however a new call it is a messianic call which as history shows us is fraught with many dangers. Tony turned 'preacher'. Tony was listened to, had an audience, was able to persuade and he was trusted by many, and was able to accomplish these things because he'd once been the Prime Minister of the United Kingdom and could as a simple result of that position continue automatically to command large audiences. He has the stage, he has the ears of people and he has what amounts to a messianic message that all things should be 'global' including mankind, the trade we conduct, the political, economic and foreign policies we have, and all religions. Now at this point my mind is already made up about this message and I have to say I'm against it. In fact if Tony Blair had given such a speech 300 years back he'd very likely have ended his days in the midst of a flaming bonfire or on the stage where the axeman was waiting rather than the cosy one afforded him at Westminster Cathedral for he is undoubtedly not much short than a lay preacher and a bit shorter than a shilling when it comes to knowing what he's talking about.

Do I know what I'm talking about?

Well I had to get that question answered before I could move on. My answer is I don't have to. How's that? Because I'm not the one preaching and I'm not the one who was unhappy with our world before listening to Tony Blair. You see, I'll come back to it here. Tony was handed a clean sheet! There was 'nothing wrong with our world before HE began to change it. Of course you might see it differently than I do but I am none the less right in what I say when talking about politics, economics and faith, for in 1997 we were in fact in a world much different to the 'global soup' we are in now which is as he and the world would say, with problems.

We didn't have terrorism.
We didn't have an economic catastrophe on our hands.
We didn't have global trade making global workers.
We didn't have global corporations chewing up the earth.
We didn't have a global financial system.
We didn't have global warming.

These are a few things but of course there are lots more things we didn't have in our global soup because the global soup was engineered and manufactured by Tony Blair. He was the maker of our world. He persuaded George W Bush to follow his path in Iraq for instance. Recall that the CIA said it acted on information received from the UK and Germany and we were later told the US administration acted on that information when it took us to war. Col Colin Powell made direct reference to weapons of mass destruction and based his references on the CIA report which was flawed. It was wrong and clearly not true no matter how it is painted, and surely this is not a good premise on which to build messages of 'global peace', yet he's out there gathering audiences around the world with his messianic message that somehow in his belief, mankind can obliterate the problems which did not exist before he gained an audience in 1997, by somehow melding the entire human race into one glutinous blob. No doubt Tony Blair is an extremely talented orator however and a quite brilliant political escapist in fact. I give him credit for that as well as his intelligence. But the fact I assume his intelligence led him to where he is today, is what it is, belies a certain perplexity when hearing him attempt to turn the world and all its many historical ways literally on its head, for how on this earth could a person be so stupid not to see there would be problems?

I guess if I were to combat him on the issue of faith alone, I'd firstly be asking what right he thinks he has to speak for all religions as plainly he has none. End of debate then I would say. Next question is, when making his case to globalize economics and financial systems, did he stop to consider that he has no qualification in economics and that economists themselves are in fact unready to accept it will work?

I guess there are some who would run up an argument and base it on some soothsayer such as Nostradamus for instance or the biblical prophesies of Armageddon, which also seems quite certain if he carries on and would perhaps paint him to be the bloke with 666 on his head. But I'm an agnostic and I like to think of myself as a pragmatist and I don't believe in things I can't see. I tend to look at what I see, listen to what people say, and then I decide whether I like it. But I'm rarely if ever influenced by the dreams of another when I have my own, which by a rather strange coincidence includes peace and equilibrium, and control of economics and politics along with a democratic choice to others when considering reshaping the entire world and all that is in it including me. Maybe I'm odd in this respect. Maybe it's just me who loves peace and no depression. I dunno. Maybe Tony Blair was right to invade Iraq, attempt to bring all faiths together with his global multicultural plan, break the generally accepted links between people and state by denying them democracy, loosen the economic rules which led us into depression and basically cause calamity for mankind along with the seeds of Armageddon?

Can we stop it and if so how?

The plain answer to that one is "yes we can". (Now where have we heard that said before)?
Yes we can reverse global meddling but it will take an awful lot of patience and time. Plus, it will involve much frustration and much hardship to come back to reality. The reality being that the only way we can control the aspects of finance and of faith and of politics, democracy and the attachments between people and state, is to actually make these things distinctly based on a respect for diversity rather than trying to make them all fit together into a global framework which fails to put first the essential needs of mankind to retain stability and control and respect for one another, rather than concerning ourselves with what Tony Blair tells us is "inevitable". Nothing is this world is inevitable Mr Blair and any intelligent man would surely know that?

I think it's fair to say we can reverse this global thinking if political leaders take the right steps to adjust foreign policies and world finance. I think it sounds like Obama has made a start with his announcement to withdraw US troops from Iraq. This is a good thing. It remains to see whether world leaders will make the right decisions at the world G20 summit in London in April, but on the face of it, this looks rather like they've not yet fully learned the lesson that globalised finance will bring about globalised depression if they get it wrong. I see it can be achieved another way if leaders simply decide to acknowledge they have given us a massive economic problem which won't go away with more of the same. So in Obama's words again, we need "Change". That change would be on the basis we start to place people before corporations however, and there are that many invested interests at play, I feel it is near impossible to reverse these problems in one meeting in London by the G20 as it's a very complicated matter involving the entire human race and quite rightly we are all deeply concerned about the outcome. All I'd ask, is that someone stops Tony Blair from attending that summit where if he did attend, I'm sure he'd be using his powers of persuasion on a global plan which has already been proven to be completely wrong.

Meanwhile, you might want to watch an alternative viewpoint to that of Tony Blair.

More: "Why are we paying these people"

More: "Globalisation"

More: "Dangerous man"

More: " Link to Blair's full speech"

Why are we paying these people?

The Commission for Finance and Budget in the Belgium Federal Parliament approved a bill in mid 2004 to implement Spahn tax; which had been proposed by Paul Spahn. Spahn tax was a variation of Tobin tax, named after American economist James Tobin b:1918 – d:2002, who had advocated and developed Keynesian economics which were used to revive economies following the Great Depression. Spahn tax however was simply a variation of Tobin tax in that it gave a zero rate and a step rate. The zero rate being more commonly used of course within the Eurozone.

Tobin believed that governments should intervene in the economy in order to stabilise output and to avoid recessions much in the way Keynes did. Tobin devoted much of his academic work, pioneering contributions in studies on investments, monetary and fiscal policies and financial markets, and outside academics he became widely known for his suggestion of placing a tax on foreign exchange transactions designed to reduce currency speculations which he saw as unproductive and being in themselves a possible trigger for recession.

Tobin also suggested that the proceeds of the tax could be used to fund projects for the benefit of third world countries and to support the United Nations, which is similar if not identical to third world funding provided by the World Bank and IMF where players such as America and Britain make contributions.

However, following expanded discussions in 2001, between him and many other economists, the Belgium Federal Parliament approved a bill agreeing instead to implement Spahn tax in the summer of 2004. In 2005 the European Commission decided to reject Tobin's tax in deference to his suggestions and to further calls by Austrian chancellor Wolfgang Schüssel who had called for a European Union Tobin tax on which to base the communities' financial structure 'to make it more stable and independent'. Rather than adopt Tobin tax, the European Commission decided to reject the idea and instead allow currency speculation to continue, which had to all intents and purposes really ignored the possibility of recession occurring by a continuation to permit exchange in foreign currency at low or infinitesimal currency exchange charges of between zero and 0.25% presumably to effect transfers of currency between nations more freely due to a more liberal approach to markets. For the currency speculator it has since been almost currency nirvana as you could say, with large transaction flows freely able to move and in doing so, continuing to place the European Community at unnecessary and possibly greater risk of recession.

I'd question here why a non-elected and unqualified group of commissioners are able to reject the work of professionals who are now seemingly proven to have known better and yet remain to tell us they're in control?

Of course this also begs the question, could the recession have been avoided, and in answering that you would really have to look at the basics of why we have currency speculation at all. After all, who does it actually serve but the speculator?

In Europe in particular, I'm brought to consider other transfers too such as tourism and property speculations, neither of which would be at previous astronomical levels if a 1% Tobin tax had been levied?

I've covered this before but not in real depth for it's only been my assumption, however once I get a thought in my head, it rarely leaves me until I've exhausted it to prove or disprove it, and it's a pity the late James Tobin is no longer around to give his own opinion to it. Yet I feel I'm on to something here when I consider the large amount of personal debt taken on by people outside the Eurozone in places like the UK for instance, seeking holidays abroad in sunny Mediterranean resorts along with apartments and villa's, and of property developers which have speculated on those same entrapments. Again, would they freely have done so if subject to a 1% tax, I think not or at least not so freely. Thus, levels of debt would have been lower than they are and the means most people used to acquire the debt ( mortgages ), would not be so high.

I'm left with a question that we may just have brought about this recession on our own under the misguided thoughts and policies of European Commissioners, who heralded a neoliberal free market the likes of which have not been previously seen in history, and who were stupid enough to ignore James Tobin.

Needless to say, it isn't ALL their fault, because America has its own economy of course where currency speculation in its own currency doesn't occur. You get a dollar for a dollar in America. It gets complicated however once you mix American speculators with UK speculators with Euro speculators and Yen speculators, all reaching for a piece of the property and tourism cake with ever more flights, and ever bigger places to build 'developments' of villas, swimming pools and golf courses with borrowed cash. Again, why are we paying these people? As the current crisis deepens, and begins to affect more people, I feel more people will have time to ask these questions. However, I have more bad news I'm afraid when I ask you to think about the enlargement process, the time taken in meetings, all the hot tempers, the treaties to proceed at pace unknown before, and of the promises made in meeting rooms and chambers between all of our political leaders and of all the back slapping they must have given each other whilst thinking life is wonderful in their liberal world without control?

How does Poland or the Czech republic feel for instance when there's no money to pay for the missile bases they thought they were getting? How does Latvia feel or Hungry or Romania feel I wonder when enlargement is seemingly under threat? How do the Eurozone nations feel which so freely gave our money over to help the enlargement process, when they know there's no economy to pay it back?

Why are we paying these people?

Who's to blame for Sir Fred Goodwin's Pension?

Update HERE on RBS Pension fiasco: 17/03/2009

I am equally aghast at the size of this mans pension which according to news coverage, stands at £16 million and gives him an annual pension of over £650,000 a year despite he's only 50. That said, he has a pension and it was acquired legitimately. Sizeable, mind blowing, hugely over the top, yes, but nonetheless 'legal', and owned by him. Gotten 'rightly or wrongly' as a result of his own efforts and employment in his various roles as chief executive officer, more recently of the Royal bank of Scotland until he was forced to leave. It appears Gordon Brown and government ministers are now in disbelief at the size pension he has for some reason, and have decided to leak to the press, their apparent disgust that he hasn't decided not to take it with him. Comments and letters have gone back and forth between him and government and he was also questioned at serious length only a week ago by the parliamentary financial affairs committee regarding the banks demise and the losses which became apparent after Sir Goodwin left. ( £24 billion is the figure ), and that sum has now landed at the taxpayers doorstep it seems. So what's to do and who's to blame? Is there anything TO blame?

Well firstly, yes of course there's the biggest corporate loss in UK history to consider as one aspect, and the CEO would surely take responsibility for causing that, so too his board and Chairman who went merrily along their way together, carving up chunks of financial securities which they neither understood, couldn't assess in value and didn't bother to look at except to see how much they could make from each portion when they passed them on. Was it legal? - YES most certainly. Was it right? - No but you could only tell that in hindsight. Should it have been allowed to happen? - No certainly not, but since these guys were the Crème de la Crème of finance, only they could say STOP. Ministers are too busy to indulge themselves in any of that and besides, what the fuck do they know they're just politicians?

What they did know however, was that by having a government policy drawn up by Gordon Brown which gives the same meaning to laissez faire as a dead rat would give to a piece of cheese, they stood by and let it happen. So too Sir Fred's pension arrangements. However this is not as simple an incompetence by the government as it may seem at first glance because it was a year ago when the shit hit the financial fan and government knew then about Sir Fred's pension. Not only did they know a year ago but they knew as little time ago as October last year when they asked Sir Fred to sack himself. Further, the government knew at the time Sir Fred was questioned by the financial affairs committee, and they knew right up to the time 'some twat' leaked the information and caused the present focus of attention and filling up of our media about Sir Fred's fecking pension, and how big and 'unfair' it is. Personally, it interests me not. I'm not one of those who shout 'foul' after the goal was kicked in the net in the first half and I've been sat in the dressing room and out again and scored another three, yet government is it seems. Government would have it that they knew fuck all about it, hadn't looked at it last year or in November or last week at the committee hearing, and like us 'have just found out'.

So I've read Sir Fred's letter back to government. The government had of course raised the roof and said it would consider legal proceedings. Sir Fred said fuck off I earned this before I even started at the RBS and there's fuck all you can do. Government says we will 'look into it with our legal advisers'. Sir Fred stays shtum. ( As I would if I didn't have a nice blog to write about it ). Any road, Gordon Brown is now in the thick end of it as he's banging on his drum making noises too, and thus it goes on until someone raises the question to him, "What the fuck were you doing last summer"?

I know what I was doing, like Sir Fred, I was flogging finance. Brown on the other hand was sat looking out his window watching birds fly past, feet on the desk, pencil in his hand, drawing up his plans to outwit the electorate over a certain Lisbon Treaty and feeling all smug with himself that finance sorts itself out because it's all taken care of by markets which were unhappily ripping each other and now us off whilst he wasn't looking. Not to mention this as his biggest error, he has to then go sticking his two big laissez faire feet into both the FSA and the Bank of England by telling them a ) Not to look and b ) Not to say anything to stop it. So who's to blame for Sir Fred's whopping great big unfairly sized pension? The government hasn't formerly nationalised the bank and remains simply a shareholder and thus has no legal authority to stop his pension or force the bank to alter its pension contract with Sir Fred. The government has certainly been culpable in missing its chance to simply take over a bankrupted bank which was unable to meet its commitments, by its action to inject capital rather than nationalise it. If it had nationalised the bank, then Sir Fred's argument could only be addressed by an action brought by him against his former board of directors at the bank which would have been in no position to have met either his claim or his pension, and the government rather than Sir Fred would have gotten away 'Scot Free'. (Pun intended).

Read who else is to blame here.

Meanwhile, here's my usual video to finish it off 'quite literally':

Update: 3rd March 2009

Revealed: Sir Fred Goodwin was still advising the Treasury until five weeks ago

Posted By: Christopher Hope at Mar 3, 2009 at 16:03:47 [General]

Posted in: Politics , Three Line Whip

You could not make it up. Disgraced banker Sir Fred Goodwin was a member of a committee that officially advises the Treasury as recently as five weeks ago.

A senior Labour member of the Commons' Treasury select committee is now saying that it was "regrettable that he was allowed to serve on that council for so long".

Sir Fred, the former chief executive of Royal Bank of Scotland, was originally appointed to the Treasury's High Level Group of advisers just over two years ago.

The group included more than a dozen bankers and other City grandees. Part of its remit was to examine "proposals to reduce administrative burdens of regulation".

Astonishingly Sir Fred was only asked to stand down on January 28, three months after quitting the Royal Bank of Scotland on an annual pension of £693,000 a year.

William Green at the Newcastle Journal reports how Alistair Darling, the Chancellor of the Exchequer, wrote to Sir Fred thanking for his "personal contribution to the committee over the past two years".

He has now been replaced by his successor at RBS Stephen Hester.

Labour MPs are not impressed. Jim Cousins, MP for Newcastle Central, says: "It is clear that Fred Goodwin should have been off that council even before he left RBS.

"It's plain that the mess that RBS was getting into meant that he shouldn't have been advising the Government in that way.

"And it was extremely regrettable that he was allowed to serve on that council for so long."

The group met four times since 2006, with the last meeting in June last year. Treasury sources said that since then the Government had not sought advice from Sir Fred on financial matters.

Ed Balls, the Schools secretary who was City minister at the time and a close adviser to Mr Brown, said today Sir Fred "was an active member of the group".

Asked if Sir Fred should not have been appointed, he told the Newcastle Journal: "It would have been perverse not to appoint the chief executive of the largest institution in Britain and probably one of the largest in the world.

"I think the issue is less about his appointment to the high level group. It is more a question that he didn't do a better job with his directors of running the bank and that regulation wasn't tougher on him at an earlier stage. So that's what I regret about." Is that all you regret Ed?

Hat-tip: The Telegraph's Christopher Hope

HOW IS BROWN HELPING THE POOR?

Am I thinking the unthinkable here when I think of the possible consequences of world depression and the issuance of ration books and food stamps? It seems implausible on first thought, however the idea may not be dismissed so lightly when you consider whether the actual income of households may not really meet their needs. I also don't just 'dismiss' it, I actually believe it could be 'on the cards' so to speak if that pun can be excused, and here's why:-

Firstly, we're using them already. Well America is any way. America's "SNAP" program is the Supplemental Nutrition Assistance Program , which was made law on 1st October 2008 and is commonly known as the "Food Stamps" program. It seeks to ensure people on low incomes and immigrants without work or income, get the essential nutritional food they need to stay alive. i.e. To prevent starvation. It's a Federal Law too so food stamps are obviously already taken most seriously by, and are in place already in America so why not here?

You may right now be sat comfortably thinking "I'm okay, I have a job", or I have savings, or I have other means to survive, but do you really? And what about those who don't?

CHOICE ONE: MONEY

Take one guy who's just been made redundant from his job. He has a mortgage and bills and heating he has to pay for as well as feed himself and his family. Where does he get the money? How will he spend it when he does? Can he be guaranteed to spend it on food when a bailiff is knocking on his door to repossess him because he can't manage the mortgage? How does his family survive without enough money and how does he make the choice between homelessness, heat or food?

CHOICE TWO: RATION BOOK

The government currently have a program in place where some benefit kicks in after 3 months which meets the interest on his mortgage. Does it? Well a guy I was speaking with yesterday told me it isn't that simple. He told me that because his mortgage is one of those 125% type mortgages, he won't get assistance and has been refused. He 'fails to meet the criteria'? I asked him how this can be because I'd been under the apparent misapprehension that people's homes were safe mainly because Gordon Brown told us they were. However on inspection of the actuality, this guy is without help and he'll be repossessed because a ) His remaining equity is insufficient and b ) He's not in a professional role. Come again? - His house is worth less than his mortgage and his face doesn't fit. - Oh right, I have it now, you mean you're being discriminated against by government policy because you're not a solicitor or an accountant and you're poor?

I think Gordon Brown wants to stop lying to people about how he's "helping the poor" in this country. I also think, this guy deserves MONEY and HELP, or food stamps or a ration book so he can stop worrying about how he's going to feed his 3 kids. Nice one Mr Brown, you're a true socialist after all. A pathetic liar and an even more pathetic Prime Minister.

I may add more to this thread as time goes on as I see how this guys plight turn out. That's the guy bye the way not Brown. Meanwhile, I won't blather on about the social consequences of poverty, starvation and homelessness as I think you know already, as does America but not Gordon Brown it seems.

See me on CNN

And if that isn't enough, you want to see what's happening in America too, as they are experiencing the exact same difficulty of government aid not getting through to the people. I wonder how politicians sleep at night?

Experts: housing aid may not help many Arizonans
Experts: Little benefit for those too far 'underwater'
by J. Craig Anderson - Feb. 27, 2009 09:00 AM
The Arizona Republic

Housing Secretary Shaun Donovan has revealed more details of the Obama administration's $75 billion foreclosure-prevention plan, raising early doubts about the program's ability to help homeowners in Arizona.

Most struggling Arizona borrowers are too far upside-down on loans to qualify for refinancing at a reduced loan amount under the program, local real-estate professionals said after learning about provisions discussed by Donovan before Congress on Thursday.

Some called it a step in the right direction, but it would help a limited number of homeowners in Arizona unless the guidelines continue to be modified.

A key element of the plan involves federal subsidies to lenders that reduce the principal balance on loans in which borrowers are up to 5 percent "underwater." Underwater is term meaning a loan's unpaid principal balance is more than the home's current market value.

That program applies only to mortgages held by finance companies Fannie Mae and Freddie Mac, which experts say include less than 20 percent of the nation's distressed home loans.

Another provision would provide subsidies to lenders that modify loan agreements for borrowers who owe up to 50 percent more than the home's value, but those modifications would not have to include reducing the loan's principal.

Full details about the plan are set to be announced Wednesday.

Mateo Garcia, president of Mateo Mortgage Funding in Tempe, said that he fears loan modifications funded by the plan won't be enough to keep most struggling borrowers in their homes.

"In Arizona, Florida, California and Nevada, most borrowers are underwater by more than 50 percent," Garcia said. "I just think Washington is seriously naive to what is going on in the streets on a daily basis."

Bob Bemis, chief executive officer of the Arizona Regional Multiple Listing Service, said that the plan President Barack Obama first announced last week at Dobson High School in Mesa is a positive first step but does not address the bigger problem of plummeting home values.

"A house that was worth $300,000 may now only be worth $150,000 to $180,000 or less," Bemis said. "Even if the bank modifies the loan, extending the term to 40 years and dropping the interest rate to under 5 percent, the homeowner will still never be able to sell the house for what is needed to repay the total debt."

Bob Wasieko, of Phoenix-based Security Mortgage Corp., said that the $75 billion allocated toward preventing foreclosures is "a drop in the bucket" given the total value of distressed home loans in the United States.

"I think it would take over a trillion dollars to truly make a dent," he said.

Letha Martin's concern is that the promise of federal assistance will discourage homeowners in Arizona from taking the steps necessary to improve their financial situation on their own.

"Too many people are placing too much stock in the degree of impact the stimulus plan is, in fact, going to have," said Martin, vice president of Valley loan modification firm the Platinum Group. "This pie-in-the-sky attitude may lull people into a false sense of security."

In other housing news Thursday, the U.S. Department of Housing and Urban Development has reinstated higher limits on Federal Housing Administration mortgage loans that had expired on Jan. 1.

The limit in the Phoenix area returned to the 2008 limit of $346,250 as of Wednesday for a single-family home. It had been lowered to $271,150 for this year.

Jody Davis, chairman of legislative affairs for the Arizona Association of Mortgage Brokers, said that a last-minute lobbying effort is responsible for Arizona's higher FHA-insured loan limit.

"We were worried it was actually going to go down further," he said, explaining that Arizona's median home price, the basis for determining FHA loan limits, fell by $50,000 in 2008.

Lobbyists for the lending industry argued that lowering the FHA loan limit would further slow home sales and economic recovery.

Davis explained that it's difficult and much more expensive for borrowers to obtain mortgages on homes above the FHA limit. Even if a borrower has near-perfect credit, most conventional non-FHA loans require at least a 10 percent down payment and thousands of dollars more in up-front costs, he said.

FHA-insured loans require only a 3.5 percent down payment, and other initial costs such as loan origination fees are greatly reduced.

By reinstating the higher FHA limits, Davis said federal officials have removed an obstacle to reducing the Phoenix area's oversupply of homes for sale, which some analysts estimate to be as high as 86,000 units.

That's more than a year's supply of homes.

"There's just too much inventory," Davis said.

Greek Government sits on Board at Banks -

ATHENS, FEBRUARY 26 - The 28 billion euro plan to guarantee liquidity and loans to small and medium businesses hit by the international financial crisis is in full swing, said to the country's Economy and Finance Minister, Yiannis Papathanasiou, as he presented the names of the representatives who will sit on the boards of those banks participating in the government's plan. The government, added the minister, has decided to guarantee the efficient implementation of the program so that it will have the maximum benefit on the market, and for businesses and families. All of the representatives have been granted veto-power for all decisions regarding the distribution of dividends or bonuses for executives and board members, while having unlimited access to the banks' accounting records.

ANSAmed

60,000 OPEL Workers Protest in France today

Some 60,000 employees of GM subsidiaries in Europe laid down their tools on Thursday to take part in protests aimed at saving their jobs. Huge losses in Detroit threaten to doom the German carmaker Opel, and the workers want a divorce from the parent company.

With American automotive giant General Motors struggling to survive amid the worst car industry downturn since 1982, employees of the company's European subsidiary Opel laid down their tools on Thursday to take part in mass demonstrations in a last ditch effort to save their jobs.

Over 15,000 workers gathered at Opel's flagship factory in the western German industrial city of Rüsselsheim near Frankfurt with a total of 60,000 people joining protests at 14 Opel factories across Europe. "It is no longer five to midnight, the clock has already struck midnight," Klaus Franz, head of Opel's works council, told the gathered workers at Opel headquarters. "There is only one single chance, and that is spinning off Opel from the GM group."

Germany's Foreign Minister Frank-Walter Steinmeier, who will be running against Chancellor Angela Merkel in general elections this September, also attended the Thursday protest, saying he was doing everything he could for Opel. "We all agree that it is up to GM management. GM has long earned good money with Opel. It would be obscene were they now to throw away European factories like a squeezed-out lemon."

In addition to protests in Germany, workers were set to walk out at Saab in Sweden, at the Vauxhall division in Britain and at other factories in Austria, France, Spain and Hungary. Dozens of demonstrators in Germany carried signs evoking Barack Obama's recent successful presidential campaign, reading "Yes We Can, Without GM."

The protests come as GM announced losses in the fourth-quarter of 2008 of fully $9.6 billion (€7.5 billion), bringing the company's minus for the year to $30.9 billion. The Detroit-based giant has said it will cut 47,000 jobs worldwide with 26,000 of those coming outside the US. Company head Rick Wagoner is in talks with Washington about a much-needed capital injection and has also asked foreign governments for $6 billion to prop up its foreign operations.

Partially as a result of GM's troubles, Opel too has been haemorrhaging money, losing $1.9 billion in 2008. The company did, however, manage to sell a record number of cars in January as a result of a German measure aimed at stimulating car sales. The company employs 25,000 workers in Germany along with thousands more at factories in Britain, Belgium, Poland and Portugal.

In Germany, many say that a split from its Detroit parent is the only thing that can save the carmaker. And, as became clear on Thursday, Opel workers are furious with GM for the predicament they currently find themselves in. "They built up overcapacity around the world without regard for losses," Berthold Huber, head of the union IG Metall, told protesters at Rüsselsheim. "And they have built models with the aerodynamics of a barn door and the weight of a small tank." He said that, given high fuel costs and growing unemployment, such cars are "as necessary as freezers at the North Pole."

Berlin is currently waiting for Opel and GM to present a plan to streamline the company, expected on Friday, before deciding how to proceed. Chancellor Merkel said on Thursday that her government would only help if the plan was sustainable. "Only then can we consider what kind of aid is necessary," she said.

According to information obtained by SPIEGEL from government sources on Thursday, it is estimated that Opel would require €9 billion in aid in order to become an independent entity with any chance of a future, €5.6 billion more than estimates circulating for a bailout only a week ago. Until recently, the federal government estimated that it would have to provide Opel loan guarantees totalling €1.8 billion. But SPIEGEL reported only one week ago that the company's liquidity requirements had risen to €3.3 billion.

German news agency DPA also cited unnamed Opel and GM managers who said the company's capital needs would be €8 billion to €9 billion.

Opel boss Hans Demant denied the reports on Thursday. "I don't know anything about this figure -- it is absurdly high," he said at the company's Rüsselsheim plant. Works council chief Klaus Franz also stated the numbers were "nonsense."

Managers from the carmaker as well as representatives of the federal and state governments met on Tuesday to negotiate a possible aid deal. The German government has said one condition of any aid package would be that no money could flow into GM's coffers in the United States.

LINK

10% Fall in Spanish tourism in January -

MADRID, FEBRUARY 24 - The number of tourists in Spain continues to plummet, down by more than 10% in January compared with the same month last year, with 2.6 million foreign visitors. By region, according to figures from an enquiry into the Tourist movements at the borders (Frontur) by the Tourism Ministry, visitors to the Canary islands fell by 7.5% compared to January 2007, mainly due to a fall of 15% of tourists from the UK and Germany. Catalonia, which had 22.3% of the total number of tourists in Spain, saw a fall of 8.4% compared to the same month last year: Madrid and the Balearics are the only regions which saw an increase in foreign tourists, up by 2.6% and 5.9% respectively. Andalusia and the the Region of Valencia both fell by 8%.

AnsaMed

Turkey calls on France to "DOUBLE" Trade -

Turkey's Industry and Trade minister Zafer Caglayan has said the current trade volume between Turkey and France is not at the desired level and should be increased at least twofold. "The current trade volume between Turkey and France stands at around $11 billion. We need to double that figure," Caglayan said on Wednesday at a conference titled Investment Opportunities in Turkey, co-organized by the Lyon Chamber of Commerce and Industry and Turkey's national investment agency. The minister reaffirmed Turkey's commitment to its European Union membership bid. "Turkey's goal on this issue is clear, and it is full membership," he said, as reported by Today's Zaman. Caglayan arrived in Lyon on Tuesday for a series of talks. He met with Jacques Gerault, the prefect of Rhone. During their meeting Caglayan and Gerault discussed relations between Turkey and France, Turkey's EU accession process and the problems of Turkish people living in Lyon.

Yet they just snubbed a purchase of 30 Eurofighters from UK and France?
Where's the sense in this request?

ANSAMed

EU warned of "Corporate Control" and "Social Impacts"

Susan George, of the Transnational Institute, a worldwide group of committed scholar-activists, spoke to MEP's and European Commissioners yesterday 25th February 2009, on the global financial crisis and argued that talk of the dangers of trade protectionism is used by European politicians to obscure the need for protection from transnational corporations whose control of European trade policy continues to cause negative social and environment impacts. The briefing was given in TNI's Debating Europe series.

This is the text of her briefing on 25th February 2009 -

Thank you for being here. Thank you to Gie Goris and the Commission officials and MEP for taking us seriously, as most of the audience comes from the civil society NGO world, so thank you for this dialogue.

I agree with virtually everything that Mr Gaspar Frontini has said. Let me perhaps broaden the framework a little but in support of what he said by quoting someone we all know. In mid-November, this eminent person said:
“The world economy cannot grow beyond the limits of its real production, and feeding it by debt and liquidity may only provoke severe corrections”. That’s the view of Pascal Lamy, only three months ago. My reaction was, “Now he tells us”.

ATTAC, (Association for the Taxation of Financial Transactions for the Aid of Citizens) and various other organisations, have been saying for years that this highly leveraged economy based on credit and on finance that does not reflect what is really produced in the real economy, was necessarily going to lead to this type of a crunch. Now people are sometimes listening to us, just as they are listening to economists like Nouriel Roubini and others who predicted what was going to happen.

For anyone thinking seriously about the global economy and global finance, it was perfectly obvious that you could not go on forever. Marx explained that the economy went from finance to commodities to finance to commodities etc and and that you could not go forever from finance to finance making profits. I wish Pascal Lamy and many others had thought more about this question before November of last year.

Next I’d like to say that when we talk about a subject in Europe, we cannot always respect the lines that are drawn by the various EU Directorates. There’s one for Trade, for Environment, for Energy, for Overseas Development and so on, but one cannot in a situation of crisis entirely respect those lines although one understands the reasons for them.

Now we are faced not just with a financial crisis which has pushed everything else off the front pages but also with a crisis of inequality, that is, a social crisis that has been building up for 25 years or more, from the time that n neo-liberalism became an enormous economic force in the world, dating from the mid eighties.

Eurostat tells us that the shares of capital and labour in value added has shifted seriously between 1985 and now, so that labour was previously receiving 68% of value added and capital the rest, whereas now the share of labour has been pushed down by 10 to 11 points to 57%. Other statistics give even more drastic figures showing that capital in the mid-1970s had a share of 26 percent and now has 40 percent. Economists calculate these value added shares on different bases so let us simply accept Eurostat’s figures showing that that labours share is down from 68% until 57%.

What does this mean?

Obviously it means a compression of demand. Working people are receiving less so there is less demand for the goods that are being produced and traded. As Henry Ford said-- not a very nice man, but right on this point—“ I pay my workers so they can buy my cars”. If you don’t pay your workers well enough that they can buy your cars, or your telephones, or washing machines, etc then you will of course have a crisis of overproduction and that is partly where we are today.

One could give many figures about inequality, both within and between countries. Those figures are serious, they are growing and they are not going to change so long as we continue to practice neoliberal policies.

The second crisis, to me the most important one, is climate change and the environmental crisis which includes biodiversity and all the related phenomena. I will not go into the science which everyone here probably knows, but it is more serious than finance and even more serious than the social crisis, because once it takes hold, it is irreversible. The social, financial and trade crises we can do something about. Climate we can’t - unless we do it now. That’s why I say the climate crisis is most serious and why we must worry about it and integrate it into every single policy in the European Union or indeed elsewhere.

Along with the others comes the food crisis which struck last year and it is largely the result of financial speculation and the very rapid shift into agro-fuels. The oil crisis of last year is also largely a matter of financial speculation, of moving out of one bubble and going into another area seen as more profitable. Or as Gaspar Frontini said, moving away from the developing economies and going towards the dollar, etc etc. These shifts have not been entirely a bad thing for Europe in the sense that euro has gone down in value and this has helped sales of European exports, but we ought to be listening to a wake up call, particularly on climate change and integrate that into trade. More about that in a moment.

When the Director of DG Trade, Mr O’Sullivan or Commissioner Ashton speak about “Trade”, at the most basic level they are talking about the imports or exports of transnational corporations. It is true that DG Trade is more concerned than a few years ago with Small and Medium Enterprises (SME’s), which as Ms Ashton says are 23 million in Europe. They represent 99% of all European business and provide 70% of all European employment but only 8% of them trade and most of that is in intra-European. Only 3% of SMEs take part in trading activity beyond Europe. Since we know that that intra-European trade is more than 70% total European trade, this is an important point.

Recently some programmes for SMEs have been added by DG Trade but on the whole we should be able to agree that since the time of Commissioner Peter Sutherland and Commissioner Leon Brittain, EU trade programmes have been of, by and for the transnational corporations.

These corporations are always mentioned in the same breath as growth and environment and sustainable development, but I think that that is just rhetoric tacked on to what we can show to be their real interests. Some rather obscure American president, I think Coolidge, said “the business of America is business. I would say “the business of the European Commission and the EU is transnational corporate business”.

You may recall that Leon Brittain set up the European Services Forum (ESF) of Transnational Corporations because he was jealous that the Americans had a Services Forum for their transnationals and Europe had none. Recall the fifteen thousand people lobbying here in Brussels. Europe is becoming a laughing- stock with its voluntary registry for lobbyists. Even on the very conservative French TV channel TF1 last night was a segment showing how ridiculous this was in terms of knowing what anybody is spending on lobbying. Recall how thanks to Olivier Hoedeman, present today, we were able to obtain through the EU Ombudsman the correspondence of the EU with the water companies at the time of the GATS’ request offer process. All the correspondence going to the transnationals was asking “what do you want, what openings, what services, what countries?” This resulted in requests made to 73 countries, often quite poor ones, to open up water services to our corporations. There is no parallel concentration on the environment or on worker rights which are completely passed over. .

The newest, highest items on the EU agenda are now market access and access to raw materials. Let me quote Energy Commissioner Piebalgs who was speaking about the Arctic and other environmentally delicate areas. He declared, “You can’t say this is a sanctuary, otherwise it wont work, and if we don’t go in and explore, how are we going to get our energy?” That is generally the attitude. Environmental concerns should not stop commercial activity. The Commission says that the dependency on imported oil and gas is now 54% and likely to become 83 to 94 % by 2030 and we are also very dependent on metals. So access is at the top of the list. Peter Mandelson before he left said we are in “a race to access raw materials” and we are. Other European institutions like the European Investment Bank also emphasise fossil fuels. The EIB has four times more fossil fuel projects than renewables projects and is also concentrating on a great shift into agrofuels. Agrofuels are the EU argument for claiming : “we are becoming very environmental.” But as Paul Crutzen, the Nobel Prize- winning atmospheric chemist showed in a paper published last year, agrofuels in fact, if one considers their whole cycle, create three to five times more greenhouse gases than even fossil fuels, so that is not much of a response from the EU.

Raw material access is a priority, it’s a kind of more polite colonialism; and according to Ms Ashton, Commissioners Gunter Verheugen [Industry] and Louis Michel [Overseas Development] have been closely involved . But there is no development dimension at all in this race for access.

One can confidently predict that unemployment is going to increase with the new EU market access strategy. It is based of course on the WTO, which is in a state of stasis and will probably remain so for a long time, which personally I don’t regret. But employment is not going to increase through the activity of transnational corporations pursuing EPAs, Economic Partnership Agreements, people here know about these. Using the UNCTAD figures, I looked at transnational corporations’ employment practices and in summary they show these corporations in all areas except fast foods, are reducing their total employment while increasing their sales. They rely on much higher productivity which they can summon, they can afford to invest in productivity, to the point that each of their employees, from the CEO down to the floor-sweeper, is responsible for between 300 and 400,000 dollars worth of sales turn over. You cannot get that with an SME. TNCs are not increasing employment. Instead they are very often destroying employment and when they go into weaker, more fragile economies. Obviously they are more efficient and will wipe out the local competition very quickly.

The EU emphasis is not just on market access, but on access to government procurement. This is also an extremely worrisome element of the EPAs and the many bilateral agreements in the pipeline. They are concentrating obviously on “behind borders barriers” although we in Europe are not removing our own behind borders barriers to exports from weaker economies. Let me point out that in the WTO negotiations, we would do well to accept all agricultural products from poor countries as “special products”. It has been calculated that this would only cost Europe about a billion euros a year and it would create a much better climate for trade between the North and the South.

Tax evasion by transnational corporations protected by Europe is an enormous problem. It represents a drain of about 800 billion dollars a year, mostly investment flowing out . What we call “trade” occurs for about 60% between the affiliates of transnational corporations. As has been pointed out here, one Sony telephone may have 25 different arrows pointing to different countries – so how many for a car? According to the best calculations available, such transactions undertaken by transnational corporations account for about 60% of world trade. In Europe, we are protecting these kinds of operations. When one has 25 or more countries involved in so-called “trade” to make a single telephone opens up enormous opportunities for transfer pricing and for avoiding taxes.

Let me quote the accounting firm Ernst and Young, who say, “Transfer pricing affects almost every aspect of a transnational corporation and can significantly impact its worldwide tax burden. Our professionals help MNEs [ multinational enterprises], to address this burden… Our multidisciplinary team helps MNEs SMEs develop transfer pricing strategies, tax effective solutions, and controversy management approaches that best fit their objectives.” If that needs translating, it means that you and I, because we are small people and we have fixed addresses, will be paying our taxes and the transnationals will not. Therefore in both the North and South, national budgets will be much smaller for health, education, and so on.

Let me end by saying that the dread word “protectionism”, I think is a false word, a screen word. If we want to protect ourselves from something or someone, we should not be thinking about other countries, most of which are subject to the dictates of these companies and have very little bargaining power. Enterprise by enterprise, we should rather be protecting ourselves against doing the will of transnational corporations in every regard, because with regard to workers, to the environment, and to democracy - they are a threat to us all.

CIA CONCERNED GLOBAL MELTDOWN - COULD TOPPLE GOVERNMENTS

CIA begins briefing Obama on global economic crisis:
By WARREN P. STROBEL
McClatchy Newspapers Kansas City.com says;

The CIA this week began sending the White House a classified daily briefing on the worldwide economic crisis, CIA Director Leon Panetta said Wednesday, underscoring growing concern the global financial meltdown could topple governments, or lead to sharp swerves in the foreign policies of hard-hit nations. The report for President Barack Obama and other top officials, called the Economic Intelligence Brief, is an effort "to make sure that we aren't surprised by the implications of the worldwide economic crisis," Panetta said in his first meeting with reporters since being sworn in Feb. 13.

"It's beginning to have impacts not only in China and . . . countries throughout Europe," but also increasingly in Latin America, where there are fresh signs of economic instability, Panetta said. He specifically cited Argentina, Ecuador and Venezuela.

The daily report - the first issue was delivered to the White House Wednesday morning - is part of a growing focus on global economics by the U.S. intelligence apparatus.

Director of National Intelligence Dennis Blair, who oversees the CIA and other agencies, told Congress two weeks ago the global crisis is the greatest short-term security threat to the U.S.

One government - Iceland - already has fallen as a result, others face instability while, analysts say, oil powers such as Russia, Iran and Venezuela may find their global influence at least temporarily crimped.

Panetta said the CIA might beef up its cadre of economic analysts, but added, "We've got a pretty good crew."

The agency has long studied the economies of other countries - such as the former Soviet Union and China - but such work has lacked the glamour of fighting communism or tracking terrorists.

"Most people don't realize that CIA analysis has always been multidisciplinary, with a strong economic component. Economic analysis is generally an area of strength for the agency," said John McLaughlin, a former deputy director of central intelligence. "So this doesn't surprise me. It's a resource the government should draw on during the current crisis."

During the hour-long briefing in a conference room near his office in Langley, Va., Panetta pledged the Obama administration would assault al-Qaida and other Islamic militants without pause. He also said, however, restoring the agency's credibility on issues such as treatment of detainees would be a priority.

"There's no question this is a war," Panetta said. "Nothing has changed our efforts to go after terrorists, and nothing will change those efforts."

He rejected suggestions that aggressive U.S. attacks on militants in Pakistan, which he refused to discuss in detail, risk destabilizing that country. "This is a very sophisticated enemy that we're dealing with," he said. "I don't think we can stop."

However, Panetta, a former California congressman and White House chief staff, criticized some of the Bush administration's actions, including its treatment of suspected terrorists detained by U.S. forces and strained relations with Capitol Hill on intelligence matters.

Panetta said he personally sees no need for the CIA to use "enhanced interrogation techniques" that go beyond those permitted by a military interrogation manual. He declined to categorically rule them out, however, noting a review of the techniques is under way.

Panetta repeated the view, which he stated during his Senate confirmation, that CIA officers shouldn't be investigated and prosecuted for conducting interrogations the Justice Department at the time ruled were legal.

Panetta said the CIA would continue to conduct renditions of terrorist suspects to other countries, but with limits. They will only be sent to countries where they won't be mistreated, he said.