Aletho News

ΑΛΗΘΩΣ

India rebuffs US calls to shun Iran gas talks

Press TV – April 3, 2010

India has rejected a call from the US to shun participation in gas talks with Iran, saying “energy security” is a priority for New Delhi.

Iran and Pakistan signed a deal in March to construct a multi-billion dollar natural gas pipeline connecting the two neighboring countries — a project that was strongly opposed by the US. The deal is part of the long-delayed 7.5-billion-dollar Iran-Pakistan-India (IPI) gas pipeline project.

“We have no comments to make on what the US official has said. But energy security is of prime concern to the government, and the India-Pakistan-Iran pipeline has to be seen in this context,” The Hindustan Times quoted an official with India’s foreign ministry as saying.

“We are in discussions for thrashing out the two issues. One is pricing of the gas, the other is the security of the pipeline that passes through Pakistan,” the official added.

Earlier, India expressed its willingness to resume talks with Iran on the project and also to discuss with Iran an alternative sea-bed pipeline from that would bypass Pakistan.

”We had initiated the trilateral talks in 2007 among the three governments and such discussions are ongoing,” Minister for Petroleum and Natural Gas Murli Deora told reporters at the Consulate General of India in New York.

China is also showing keen interest in investing USD 2.5 billion in the gas pipeline project in order to meet the country’s energy demands.

Islamabad has started negotiations with Beijing over the purchase of technical equipment to be used for extending the gas pipeline to China, informed sources in Pakistan’s oil ministry said, Mehr News Agency reported on Monday.

China’s interest in the extension of the pipeline came after Islamabad’s reluctance to cooperate with New Delhi on the IPI project allegedly due to India’s delay in developing the Peace Pipeline project.

April 3, 2010 Posted by | Economics | Leave a comment

Regulator seeks to rein in energy market trading by big Wall Street firms

By David Cho | Washington Post | April 1, 2010

The nation’s commodities regulator is proposing to limit the vast amounts of oil, natural gas and other vital goods the world’s biggest investment firms can buy and sell, seeking to eliminate the unfettered access these companies have had to energy markets for 20 years.

The rule would also force this highly lucrative trading into daylight, requiring for the first time that the public be told which companies have special permission to trade commodities with virtually no constraints.

By reversing course, the Commodity Futures Trading Commission, under its activist chairman, Gary Gensler, is trying to prevent the concentration of power in the hands of a few large businesses. For example, a single firm, the United States Oil Fund, was able to gain the rights to nearly one-fourth of all the publicly traded crude oil scheduled for delivery during one month last spring, the fund’s head said in an interview.

Advocates of the commission’s proposal have said the influx of Wall Street money has led to violent price swings. In 2008, the price of a barrel of crude oil leapt to a record of more than $147 and within months crashed to below $34. This volatility not only disrupts household budgets but also makes it hard for food manufacturers, airlines and other companies to get the goods they need when they need them, the advocates said.

Traditionally, commercial companies were the main players on the commodities markets, buying contracts for oil, for example, that guaranteed future delivery on a specific date for a locked-in price. But Wall Street banks eventually discovered that they could trade these contracts like financial securities and make money without ever taking delivery of the goods. Before long, the banks won exemptions from federal trading restrictions and were able to speculate on unlimited amounts.

If a majority of the five-member panel approve the commission’s latest proposal, the rule would dramatically scale back the exemptions given to firms such as Goldman Sachs, J.P. Morgan Chase and Morgan Stanley. Although the government keeps the identities of the firms private, financial analysts have figured out some of them.

Separately, the Senate is considering a broad overhaul of the financial oversight system that in part would regulate for the first time the trading of commodities contracts in private transactions, which occur away from the established exchanges and are known as “over the counter.” The legislation would force nearly all of the trading onto public exchanges, undercutting the financial advantage firms get from their ability to keep the prices they pay secret.

This shadow world of private deals exists beyond the purview of regulators, and federal officials estimate that the value of these deals is many times that of transactions conducted on open exchanges. If big financial firms win the right to continue trading huge amounts of oil, natural gas and other goods in private deals, they would simply move their business off the exchanges and maintain their dominance, some commission officials warn.

No company has benefited more than Goldman Sachs, market analysts say. During the financial crisis, when most of the firm’s other business activities were suffering, commodities trading produced “particularly strong results,” according to its annual report. Goldman does not disclose how much it earned from these trades. But along with its bonds and currency divisions, commodities activities generated about half of its net revenue of $45 billion in 2009, Goldman reported.

Financial analysts estimated that these activities in typical years account for about a tenth of the firm’s revenue. The analysts added that the commodities division is one of the bank’s crown jewels, noting that many of Goldman’s top executives emerged from that operation, including chief executive Lloyd Blankfein… Full article

April 1, 2010 Posted by | Corruption, Economics | Leave a comment

Will the Washington Crew Ever Notice the Housing Bubble?

By Dean Baker | The Guardian Unlimited | March 30, 2010

Alan Greenspan, Ben Bernanke and the rest of the crew running economic policy somehow could not see the housing bubble as it grew to more than $8 trillion. It really should have been hard to miss. Nationwide house prices had just tracked overall inflation for 100 years from 1895 to 1995. Suddenly in 1995, coinciding with the stock bubble, house prices began to hugely outpace the overall rate of inflation.

There was no explanation for this run-up in house prices on either the supply or demand side of the housing market. Furthermore, there was no unusual increase in rents, providing further confirmation that fundamentals were not behind the increase in house prices. Finally, in contrast to a story of housing shortages driving up house prices, vacancy rates were at record levels.

But the super-sleuths at the Fed, Treasury and other centers of decision-making just could not see the bubble. They couldn’t even see the flood of bogus mortgages being spit out by the millions and packaged into mortgage-backed securities and more complex instruments.

As a result of this astounding incompetence, we are now living through the worst downturn since the Great Depression. Because Greenspan and Bernanke and the rest messed up, tens of millions of workers are out of work. Close to one in four mortgages are underwater and the baby boom cohort has seen much of its wealth destroyed as they reach the edge of retirement. In short, as Joe Biden would say, this was a f***ing big mistake.

Remarkably, the folks in charge seem to have learned zip. They still have no clue about the housing bubble. How else can anyone explain the Obama Administration’s latest proposal for helping out underwater homeowners?

If the point is to help homeowners then there are two incredibly simple questions that must be asked:

  1. Are homeowners paying less under the plan than they would to rent the same place?
  2. Are homeowners going to end up with equity in their home?

These are the key questions, because if we can’t answer “yes” to at least one of them, then we are not helping homeowners. If we can’t answer “yes” to at least one of these questions, then taxpayer dollars being put into the program are helping banks, not homeowners.

Unfortunately, it seems no one in the Obama Administration has yet been told about the housing bubble. There is no evidence that they ever considered these questions in designing the latest policy to “help” homeowners.

The program will potentially pay banks and loan servicers up to $12 billion to write off principle on mortgages. In exchange, the government will guarantee new mortgages through the Federal Housing Authority (FHA). Those familiar with the housing market will note that house prices are still falling and must fall by close to 15 percent to get back to their long-term trend. If house prices continue to fall, then the vast majority of the homeowners that take part in this program are likely to never accrue any equity in their home.

Furthermore, the FHA is likely to incur substantial losses on these loan guarantees, as homeowners will again find themselves underwater and many will be unable to pay off their mortgages when they sell their home. Because the FHA hugely expanded its role in the housing market in the last two years, without paying attention to falling prices, it now is below its minimum capital requirement. It will suffer additional losses and fall further below its capital requirements as a result of this program. By the way, the losses to the FHA and the taxpayers are money in the pockets of the banks, but no reason to mention that detail.

For anyone who can see an $8 trillion housing bubble, this is all as clear as day. There is nothing complex about a story in which the government buys banks out of bad mortgages. But the Washington policymakers could not see an $8 trillion housing bubble before it wrecked the economy and apparently still haven’t noticed it even after the fact.

It’s great to know that there are good-paying jobs for people with no discernible skills. But do those jobs have to involve running the economy?

Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of False Profits: Recovering from the Bubble Economy. See article on original website.

March 31, 2010 Posted by | Corruption, Deception, Economics | Leave a comment

Venezuela’s proven oil reserves climb to more than 211 billion barrels

Latin American Herald Tribune | March 22, 2010

Venezuela maintained its status as the world’s No.2 holder of proven oil reserves, with a total of 211.2 billion barrels at the close of 2009. That figure includes the 39.9 billion barrels classified as proven reserves during the month of December, the Communications Ministry said in a bulletin.

Worldwide, Venezuela ranked behind only Saudi Arabia (266 billion barrels) and ahead of Iraq (113 billion barrels) and Kuwait (94 billion barrels) in terms of proven reserves at the end of last year. The country’s total proven reserves, however, amount to less than half of the at least 500 billion barrels that are believed to lie within Venezuelan territory.

On January 22, the US Geological Survey released a study indicating that the Orinoco Belt in eastern Venezuela holds 513 billion barrels of technically recoverable crude. The USGS, whose estimate for that 50,000-square-kilometer (19,300-square-mile) area was nearly double the 280 billion barrels of recoverable crude that had been calculated by state-owned Petroleos de Venezuela (PDVSA), said the Orinoco Belt was the largest oil accumulation it had ever evaluated.

*The USGS study, the first to precisely evaluate how much oil can be extracted from the subsoil using current technology, also confirmed that the Orinoco oil is tar-like, heavy crude.

The Chavez government has recently begun the process of developing the Orinoco reserves by signing a series of agreements with a score of foreign oil companies, which must form joint ventures with PDVSA in which the Venezuelan government has a majority stake.

Chavez said in late January that the USGS also “is recognizing for the first time the large quantity of gas associated with that petroleum … and are estimating it at 130 trillion cubic feet. We estimate that (the country’s gas reserves can increase) by another 150 trillion.”

He recalled that one of the world’s largest gas deposits — a 33-square-kilometer (12.7-square-mile) area containing 8 trillion cubic feet of gas — was discovered last September off Venezuela’s Caribbean coast.

PDVSA owns the largest stake in the consortium that will develop the block where the find was made, while Spain’s Repsol and Italy’s Eni will have a 32.5% share each.

March 25, 2010 Posted by | Economics | Leave a comment

Low hope for low carbon

By Andrew McKillop | Excerpts | March 22, 2010

Annexed to the climate change and global warming hysteria that received its political kiss of death at the failed Copenhagen “climate summit” in Dec 2009, the rationale for why everybody sensible has to be so concerned about this threat to humanity is that clean and green energy will save us. Not only “the climate” and “the ecology,” including polar bears, low lying countries from Holland to the Maldives, coral reefs, Himalayan glaciers, people living along tropical storm tracks and all the rest — but also jobs in our cities. Along with green jobs, the new crusade for low carbon energy would cut oil import bills to nothing, balance trade with the rest of the world, improve national finances and strengthen the national currency. Everything is possible!

Green growth strategies flourished in the 2003-2009 period, in the wake of constantly rising oil prices and spiraling hysteria about climate change. The bottom line of the climate change priests and soothsayers was that low carbon green energy, developed as the only way to save us from climate apocalypse, would or could also save the economy.

In fact, only high oil prices and high energy prices can make green energy feasible without depending on government aid, the carbon finance circus, and coming carbon taxes, but this is not a politically correct argument. Preferred approaches are to use public funds to sponsor and when it gets necessary, bail out carbon finance gamblers, and supply a raft of public funds to subsidize the green energy fantasies of the corporate elite.

These fantasies already have a bad track record in the short period since “going green” became big business, from about 2003. Several started with a death wish for early bankruptcy, the most recent and biggest example being US maize-based bio-ethanol fuels production, which rode a boom-bust speculative finance cycle through 2005-2008. Making car fuels from food grains and vegetable oils is not only a way to generate high food prices leading to food riots in poor countries, but an expensive, inefficient, low-yielding method to substitute a small amount of present demand for oil-based car fuels. Today’s production overcapacity for windmills and solar photovoltaic power already threatens a repeat of the epic biofuels boom-and-bust, during which even Bill Gates managed to lose money (about US$44 million). Hard-headed short sellers of bio-fuel company stocks, like Steve Cohen’s SAC Capital LLC made hundreds of millions of dollars on the certain and sure collapse of share prices in this overblown sector during 2007.

Coming soon, really big corporate losses feeding short selling profits for some, huge losses for small investors, and demands for government bailouts from the Too Big To Fail among corporate losers, will be generated by the electric car boom-and-bust.

WHY THE HYSTERIA ?

Climate change advocacy and carbon finance have grown together in the OECD countries with corporate interests frenetically wrestling for the widening range of constantly changing government subsidies, aid, carbon credits, clean development offsets, feed-in tariffs and tax favors to develop alternate energy. Advocacy is necessarily tinted with hysteria of the type “We are saving you from death — You don’t ask the price.”

Politicians, who always appreciate any pitch that captivates the child-brained crowd, quickly warmed to global warming hysteria. This was despite its far-out apocalyptic “message” that unparalleled disasters including Biblical-style floods will strike the planet before the end of this century — unless the People behave. Unless the average car buyer gets to like electric and hybrid cars (despite the braking problems), recycles household rubbish to make it easy grubbing out metals, glass and plastic, buys a bicycle imported from China, rides in buses or trains but patriotically buys a government subsidized oil fueled car, pays more for organic and “bio” food, uses less electricity, saves oil in countless ways, and goes green in every confusing and conflicting way they are told.

Maintaining public angst, and public approval were unfortunately confused as being exactly the same thing by political, media and corporate spin doctors. Constant exaggeration of the invented climate menace was decided necessary. This led the high priests of hype, such as Al Gore, Rajendra Pachauri, James Lovelock, James Hansen and other climate change gravy train riders to desperately rival each other, and babble ever more ridiculous fire-and-brimstone at the microphone. Drifting always further in delirious wafts and spirals of lies, distortion, exaggeration and blatant propaganda, the high priests of hype were too stupid, too arrogant to see the end coming in late 2009.

THE CONVERGING PLANKS

Rising hype on global warming soon overshot into stratospheric data fraud by UN credible (that is IN credible) high level experts on climate change, led by former railway engineer Rajendra Pachauri and failed politician Al Gore. The spin and hype on global warming catastrophe was however welcomed by political elites in 2008-2009 as a handy way to take the tiny public mind off gargantuan meltdowns in the finance, bank and insurance sector, and the massive bailouts for government-friendly corporate thieves, gamblers and fools.

Agitprop was needed because the economy went out of control. Recession did serious damage not only to real people and their real jobs, but collateral damage to the credibility of politicians, running the magic New Economy hands free, with only the fingers of their corporate finance friends on the economic jugular vein. These greedy fingers squeezed a lot too hard in 2008, with the result being the house of cards fell apart, needing strenuous diversionary tactics.

Any faltering of economic growth, any loss of credibility in the ability of exactly the same politicians, and exactly their same corporate friends to magically restore the economy when it temporarily (of course) stops growing are two more menaces, needing energetic response. Credibility for “global warming catastrophe” was worked into the same set of political elite fears, as corporate green energy player fears of a decline in government subsidies for their newest and best boom-bust gimmick.

In such strenuous and stirring circumstances, climate extremism and doomsterism richly larded with fake facts from junk science was a basic need. Governments must have their purse strings prized open, and kept open by the corporate and policy elite. Politicians need to be loved and admired, or at least re-elected for their far-seeing decisions. Media owners and operators who revel in Great Causes which sell newsprint, and like to imagine they still control what Mr and Mrs Average think, were quick to come on board for the climate crisis ride. They also stayed too long, forgetting that Internet and even word of mouth were working against them.

Overcapacity of wind power and solar electric power manufacturing capacities is now widespread in many countries, even in China and India, as the “low hanging fruit” of the best sites, the biggest subsidies, the largest public support and acclaim is used up — and oil prices although rising are still far behind the peak attained in 2008. As the economic rationale declines, huge new green energy ventures shift toward ego-trips for politicians, and become purely prestige. Chinese vice minister for Industry and IT, Miao Wei, described massive wind farms in China as essentially “vanity projects,” March 11, 2010 in part due to probable rapid wear and tear of turbines increasingly located in hostile locations, such as China’s dusty deserts, and increasingly in deep water offshore wind-farms ever further from land.

Staying credible is always most difficult as the curve of public knowledge rises, and the new gimmick does not deliver. Probably the biggest threat to corporate and Big Government low carbon energy and the related fantasy of the sustainable economy, is loss of credibility for the “menace of catastrophic climate change.” If the menace isn’t so dire as it seemed before the massive failure of the Copenhagen climate summit in December 2009, why should governments rack up even more debt, to finance unsure, high cost low carbon energy with public loans, grants and support? This is the question that kills, like a wooden stake for errant low flying vampires.

AL GORE STILL HOPEFUL

Al Gore is not fazed by the Copenhagen rout and continues to announce with eye popping sincerity and conviction (in a February 28 interview with the New York Times) that the world faces “unimaginable calamity” from global warming. He added we must all act now to save human civilization as we know it (perhaps a reference to Afghan war, football, Twitter and Facebook?).

Going further because time is limited to less than a century, the selected, tried and tested members of the global warming hysteria circus, with rich pickings from the corporate and political elite’s full adoption of global warming hysteria, are now fighting to stay up the greasy pole. Following the Copenhagen rout and Climategate, the gravy train riders are likely to go one mile further in their fantasies, and need all the ammunition they can grab. Now joined to their predication of the coming apocalypse, “unimaginable calamity” also includes high oil prices, placed by Al Gore at a price level around $80 a barrel. Even if the consumer herd has forgotten the polar bear’s plight and prefers Haiti quake stories to threats of the Maldives sinking (under a million tonnes of concrete tourist coastal works), they will rise like wounded tigers if gasoline prices rise another 50 cents a gallon. Al Gore hopes !

Al Gore rolls his eyes at the microphone and thunders the killer numbers — the oil bill of the USA costs “hundreds of billion dollars a year.” To be sure, Gore also reminds his uncritical if not brain dead admirers that oil exporter countries are run by dangerous and hostile regimes, uninterested and perhaps not even believing in climate change. And that is dangerous.

The most recent record annual net oil costs of the USA achieved a little more than two of those Al Gore “hundreds of billions,” reaching about $220 billion in 2007. This can be compared with the $1,300 billion US budget deficit for fiscal year 2010 recently announced by Obama, or the cumulative amount of financial bailouts to Wall Street by Paulson, under G W Bush, and Geithner under B H Obama in 2008-2009. This totaled at least $1,500 billion. Similar budget deficits, up to 12% of annual GNP, apply in Europe and state bailouts of corporate financial gamblers in Europe have cost similar amounts as those in USA, well above $1,200 billion in 2008-2009.

* This raft of debt-based spending mostly to bail out reckless gamblers in the finance sector would cover roughly 10 years of total OECD oil import costs at an average $100 a barrel.

Al Gore and the ‘extreme global warming community’ have to stay hopeful, and maintain the hype because signs of flagging interest or “conviction” by political and corporate leaders is starting to show in their careful avoidance of climate crisis sound-bytes, post-Copenhagen. Most OECD heads of state, at least before Copenhagen, vied with each other to beat Al Gore with heart-wrenching appeals to citizen concern, calling the failed and bizarre conference held in a Scandinavian capital in deep winter, “the last chance to save the planet from global warming catastrophe.”

This talk has been glaringly absent since December, suggesting OECD heads of state, notably of the US, Germany, France and UK could soon backtrack on their so-sincere conviction that their voter masses need a politically forced, ultra rapid development of “green energy”. […]

ENERGY TRANSITION AND ECONOMIC ROUT

Debt financing of everything, especially the ever rising and unreal goals set for energy transition by heads of state and political leaders in the big oil importer countries, will continue being needed until and unless carbon taxes and trading attain the annual turnover able to generate the funding needed for the ever larger targets announced by political leaders. Another condition for generating the finance needed for these plans includes a return to economic growth. Present carbon finance and trading are proudly estimated by the World Bank as attaining $126 billion in 2008-2009, but trickle-down and spin-off from trading gains and losses on a raft of complex and ramifying climate change paper, to real spending on real world green energy is low.

Falling credibility of climate change hysteria from extremists like Al Gore and Rajendra Pachauri, and lower-rank members of the climate change circus, such as “Gaia philosophy” writer James Lovelock, James Hansen and Club of Rome intellectuals now suggests falling pay-checks and cheap finance loans for the gambling community. At this time, orating about Apocalypse Now from climate change and always going further in bending the shock figures and statistics could be a losing strategy. The risk is clear: the climate change circus has now talked itself off-stage.

Before the Copenhagen rout, announced goals of energy transition in the OECD countries had attained extreme and impossible highs, for example 80% reductions in CO2 emissions and implied cuts of 80% in the dependence on fossil energy by 2040, as announced with a winning smile by Obama, and the leaders of Germany, France and UK before the climate summit. To keep the public and consumers happy, and make their targets for energy substitution with low carbon yet more fantastic, yet more impossible, these leaders added that total energy production and consumption would keep on growing. Thanks to the green economy, economic growth would not only be restored but also “strengthened.”

Financing needs were never spelled out for these playful fantasies, but can be guessed, and are probably in the 15-30 trillions of US dollars range to 2040, at current dollar values. This can appear possible, but in real terms is impossible. Achieving this kind of long-term transition of the global energy system and forgetting the ideological quest “to save human civilization as we know it,” would need a real Marshall Plan for Energy. More likely, current-crop leaders of the OECD are on track to produce a real Economic Armageddon, becoming more possible each day. […]

Steven Chu, Al Gore, Rajendra Pachauri and many other defenders of a forced march to energy transition either avoid any discussion of cutting energy consumption, or claim that growth in total energy consumption is entirely possible. In the case of Chu however, there is already de facto admission that “greening” electricity supply will need growth of nuclear power, the Smart Grid, and major advances in energy storage. Again in the US case the very fuzzily-defined and technologically fragile domain of “advanced energy storage” is already forecast as needing tens of billions of dollars investment, on top of the tens of billions of dollars that Obama has made available for nuclear power because of its ability to generate constant baseload power. Smart Grid development, to be sure, is also forecast as needing tens of billion dollars investment in the next 10-15 years.

Exactly like national debt, budget deficits and bailouts for “too big to fail” finance sector gamblers, the dozens of billions add on to the hundreds of billions elsewhere. On the ground, almost nothing happens. Apart from the critical and basic lack of realism of most targets and costs of current-crop plans for energy transition, the most basic unreality concerns a very simply question: Who will pay for the Brave New World of soft energy? An even more basic question is: Do we need energy transition?

VHeadline.com oil industry commentator Andrew McKillop can be contacted at: andrew.mckillop@gsoca.com

March 25, 2010 Posted by | Deception, Economics, Science and Pseudo-Science | , , , , | Leave a comment

Researchers find that high-fructose corn syrup prompts considerably more weight gain

By Hilary Parker | March 22, 2010

A Princeton University research team has demonstrated that all sweeteners are not equal when it comes to weight gain: Rats with access to high-fructose corn syrup gained significantly more weight than those with access to table sugar, even when their overall caloric intake was the same.

In addition to causing significant weight gain in lab animals, long-term consumption of high-fructose corn syrup also led to abnormal increases in body fat, especially in the abdomen, and a rise in circulating blood fats called triglycerides. The researchers say the work sheds light on the factors contributing to obesity trends in the United States.

“Some people have claimed that high-fructose corn syrup is no different than other sweeteners when it comes to weight gain and obesity, but our results make it clear that this just isn’t true, at least under the conditions of our tests,” said psychology professor Bart Hoebel, who specializes in the neuroscience of appetite, weight and sugar addiction. “When rats are drinking high-fructose corn syrup at levels well below those in soda pop, they’re becoming obese — every single one, across the board. Even when rats are fed a high-fat diet, you don’t see this; they don’t all gain extra weight.”

In results published online March 18 by the journal Pharmacology, Biochemistry and Behavior, the researchers from the Department of Psychology and the Princeton Neuroscience Institute reported on two experiments investigating the link between the consumption of high-fructose corn syrup and obesity.

The first study showed that male rats given water sweetened with high-fructose corn syrup in addition to a standard diet of rat chow gained much more weight than male rats that received water sweetened with table sugar, or sucrose, in conjunction with the standard diet. The concentration of sugar in the sucrose solution was the same as is found in some commercial soft drinks, while the high-fructose corn syrup solution was half as concentrated as most sodas.

The second experiment — the first long-term study of the effects of high-fructose corn syrup consumption on obesity in lab animals — monitored weight gain, body fat and triglyceride levels in rats with access to high-fructose corn syrup over a period of six months. Compared to animals eating only rat chow, rats on a diet rich in high-fructose corn syrup showed characteristic signs of a dangerous condition known in humans as the metabolic syndrome, including abnormal weight gain, significant increases in circulating triglycerides and augmented fat deposition, especially visceral fat around the belly. Male rats in particular ballooned in size: Animals with access to high-fructose corn syrup gained 48 percent more weight than those eating a normal diet. In humans, this would be equivalent to a 200-pound man gaining 96 pounds.

“These rats aren’t just getting fat; they’re demonstrating characteristics of obesity, including substantial increases in abdominal fat and circulating triglycerides,” said Princeton graduate student Miriam Bocarsly. “In humans, these same characteristics are known risk factors for high blood pressure, coronary artery disease, cancer and diabetes.” In addition to Hoebel and Bocarsly, the research team included Princeton undergraduate Elyse Powell and visiting research associate Nicole Avena, who was affiliated with Rockefeller University during the study and is now on the faculty at the University of Florida. The Princeton researchers note that they do not know yet why high-fructose corn syrup fed to rats in their study generated more triglycerides, and more body fat that resulted in obesity.

High-fructose corn syrup and sucrose are both compounds that contain the simple sugars fructose and glucose, but there at least two clear differences between them. First, sucrose is composed of equal amounts of the two simple sugars — it is 50 percent fructose and 50 percent glucose — but the typical high-fructose corn syrup used in this study features a slightly imbalanced ratio, containing 55 percent fructose and 42 percent glucose. Larger sugar molecules called higher saccharides make up the remaining 3 percent of the sweetener. Second, as a result of the manufacturing process for high-fructose corn syrup, the fructose molecules in the sweetener are free and unbound, ready for absorption and utilization. In contrast, every fructose molecule in sucrose that comes from cane sugar or beet sugar is bound to a corresponding glucose molecule and must go through an extra metabolic step before it can be utilized.

This creates a fascinating puzzle. The rats in the Princeton study became obese by drinking high-fructose corn syrup, but not by drinking sucrose. The critical differences in appetite, metabolism and gene expression that underlie this phenomenon are yet to be discovered, but may relate to the fact that excess fructose is being metabolized to produce fat, while glucose is largely being processed for energy or stored as a carbohydrate, called glycogen, in the liver and muscles.

In the 40 years since the introduction of high-fructose corn syrup as a cost-effective sweetener in the American diet, rates of obesity in the U.S. have skyrocketed, according to the Centers for Disease Control and Prevention. In 1970, around 15 percent of the U.S. population met the definition for obesity; today, roughly one-third of the American adults are considered obese, the CDC reported. High-fructose corn syrup is found in a wide range of foods and beverages, including fruit juice, soda, cereal, bread, yogurt, ketchup and mayonnaise. On average, Americans consume 60 pounds of the sweetener per person every year.

“Our findings lend support to the theory that the excessive consumption of high-fructose corn syrup found in many beverages may be an important factor in the obesity epidemic,” Avena said.

The new research complements previous work led by Hoebel and Avena demonstrating that sucrose can be addictive, having effects on the brain similar to some drugs of abuse.

In the future, the team intends to explore how the animals respond to the consumption of high-fructose corn syrup in conjunction with a high-fat diet — the equivalent of a typical fast-food meal containing a hamburger, fries and soda — and whether excessive high-fructose corn syrup consumption contributes to the diseases associated with obesity. Another step will be to study how fructose affects brain function in the control of appetite.

The research was supported by the U.S. Public Health Service.

###

 Aletho News reported on this issue January 5, 2010:

The saturated fat scam: What’s the real story

March 22, 2010 Posted by | Economics, Science and Pseudo-Science | Leave a comment

Family-farm advocates call for U.S. to ‘bust up big ag’

By Lynda Waddington – 3/12/10

ANKENY, IOWA — Whether they realized it or not, the roughly 250 family farmers, workers and consumers gathered in Ankeny, Iowa, Thursday night fired off their own point-by-point response to a letter from two Republican senators that urged the U.S. departments of agriculture and justice to maintain the existing status quo in the agriculture industry.

The often rambunctious townhall event was organized by a coalition of groups concerned that everyday people do not have adequate opportunity to express their opinions on the agricultural industry at a joint U.S. Department of Justice and USDA antitrust workshop on Friday. And it had one overarching message: “Bust up big ag.”

“We are here today to make sure that the voices of everyday people are heard loud and clear and send a simple but powerful message to our government regulators and elected officials,” said Barb Kalbach, a fourth generation family farmer from Dexter and board member for Iowa Citizens for Community Improvement. “Bust up big ag, pass policies that promote sustainable agriculture and local markets, and put people first during the workshop series by prioritizing public comments and input and adding more family farmers and consumers to panels.”

On Wednesday, however, two Republicans in leadership positions on the Senate Agriculture Committee urged U.S. Attorney General Eric Holder and Secretary of Agriculture Tom Vilsack to do just the opposite.

“We urge you to ensure that these sessions are balanced and reflect the wide array of producers and business operations in modern-day agriculture,” wrote Sens. Saxby Chambliss of Georgia and Pat Roberts of Kansas.

After noting that “American agriculture is responsible for feeding the world,” that many industry “segments have become more vertically-integrated” and “other small and successful agriculture businesses have merged” to meet demands, the senators note that change is often met with frustration.

“Such change has led to better income margins for producers and processors as well as lower prices for consumers,” they wrote, adding that competition issues have been “studied extensively by several entities including the United State Congress and, specifically, the Senate Agricultural Committee.”

Although Chambliss and Roberts appear to call for a wide swath of American agriculture to have representation at the meeting, it is difficult to overlook the key point of their correspondence:

“Beyond our interest in a balanced review, we would hope that no correlation is planned between the upcoming workshops and current enforcement activity in your respective Departments. From recent news of lawsuits to undo mergers to heightened scrutiny of pre-merger activity and other investigative activities with agribusiness companies from a variety of sectors, it is readily apparent that both the Department of Agriculture and Department of Justice are already quite engaged in this area. We are concerned there is potential for your workshops to become venues for further fact-finding or public scrutiny of agricultural businesses that are already subject to existing antitrust laws and in some cases are under investigation or prosecution by the federal government.”

As of 2007, more than 45 percent of U.S. beef cattle are slaughtered by four companies (Tyson, Cargill, Swift and National.) Most U.S. Pork is also processed by just four companies (Tyson, Cargill, Swift and Smithfield). Seed corn is controlled predominately by two companies (Pioneer Dupont and Monsanto), and roughly 40 percent of the U.S. fluid milk supply is controlled by one company (Dean’s Foods).

Rhonda Perry, a Missouri livestock and grain farmer, said 30,000 cattle feed lots went out of business in the last 13 years. During the past 20 years, the nation lost 70 percent of its independent family hog farmers — but managed to keep production levels the same.

“We’ve been told that we have to have consolidation, concentration and vertical-integration in order to give consumers the cheap food they desire,” she said. “The reality is, if you look at the pork industry — a prime example because it has become really vertically-integrated in the last 25 years — that between 1985 and 2008 pork prices to consumers went up by 72 percent. At the same time the hog farmers’ share of that consumer dollar went down by 43 percent. So, somebody in this industry, in this consolidation process, is definitely getting rich. It’s working for somebody, but it is not working for producers and consumers.”

Fred Dowered, a Minnesota farmer, told the audience that when he began farming 34 years ago his state had 50 seed companies. Now, however, there are only four.

“When there were 50 seed companies, the price of seed corn was held to its own. Now they just let it go rampant,” he said.

That’s a situation that Jim Kalbach, an Adair Couty grain farmer, knows all too well.

“Monsanto soybean seed was $31 a bag last year. Now they jumped it up one third to $41 a bag — in one year,” he said. “That’s highway robbery.”

Many of the men and women in the audience also took exception to the belief that the U.S. food supply boasts the most healthy and inexpensive food in the world.

“The two things we are going to hear over and over on Friday is that we’ve got the cheapest and safest food supply in the world. Both of these statements are damn lies” said Gary Klicker, a southern Iowa producer that can trace his family’s agricultural roots to 1666.

Klicker believes that taxpayers will be out “billions if not trillions” of dollars cleaning up rivers, nourishing soil and dealing with abandoned animal confinement facilities.

“Have you ever heard of 19 million pound beef recall in Sweden or Germany or Russia or Cuba or anywhere else? The food isn’t safe. We are eating garbage off the floors of our packing houses. It’s being fed to our kids in schools, and it goes into our grocery stores. Most of the people have no idea what they are getting, and wouldn’t know what real food tastes like if they had it. This is a serious, serious situation — one that we will be paying for 100 years from now. It isn’t safe. It isn’t even cheap.”

Although U.S. Sens. Tom Harkin and Chuck Grassley are on the schedule for Friday, along with U.S. Rep. Leonard Boswell, no federal elected officials attended the townhall meeting in person. A handful of audience members used their very limited comment period to note their disappointment that the officials themselves did not attend, and at least two were openly hostile toward lawmakers who had long-served without providing notable solutions to the competition issues in their industry.

“This was a huge crowd,” Dave Campbell, district representative for Boswell, said following the meeting. “What I’m going to pass on to the Congressman is the fact that were a whole lot of people here who are hurting. He will have an opportunity to hear from both sides, and will hopefully make the best decisions possible.”

John Moreland, staff assistant for Harkin, also said that he would be taking his reflections on the “passion” expressed at the meeting back to his boss.

A notable appearance at the townhall was made by members of the United Food and Commercial Workers International Union. After the meeting Mark Lauritsen, vice president and director of the UFCW Meatpacking Division, explained that his members understand how closely their livelihood is tied to that of the farmer.

“We should have been getting together back in the 1980s and having these discussions. … Our lives are connected with farmers. Our members’ lives are connected to farmers. Our success rises and falls with the American farmer,” he said.

Producers from at least 10 states traveled to Ankeny for the townhall. Many also plan to attend the workshop, and would like opportunity to speak. Since only one hour at the end of the day has been allotted for public comment, however, it isn’t likely that there will be time for them all. That being said, it also isn’t likely that these motivated individuals are going to go away. Wisconsin Dairy producer Joel Greeno said several groups are already gearing up for the June meeting planned in their state, and that other producers are organizing in relation to the workshops planned for Colorado and Alabama later this year.

“The situation in agriculture these days, even though it has been coming on for a long time, is reaching critical mass,” said Frank Jones, a Missouri owner and producer. “I’m afraid that if we don’t have some type of meaningful change in the way business is done that agriculture will be lost forever.”

March 13, 2010 Posted by | Economics, Environmentalism | Leave a comment

Monsanto May Lose Bid to Halt Argentinean Soy Imports

By Stephanie Bodoni | Bloomberg

March 9 — Monsanto Co., the world’s biggest seed company, can’t rely on a European patent for its Roundup Ready soybeans to block imports of Argentinean soy meal, an adviser to the European Union’s highest court said.

The European patent for the trait that makes soybeans resistant to some herbicides doesn’t extend to soy meal made from the patented seeds, Advocate General Paolo Mengozzi of the European Court of Justice said in a non-binding opinion today.

Argentina, the world’s third-biggest soybean exporter after Brazil and the U.S., is one of the few countries where Monsanto doesn’t hold a patent on the herbicide-resistant seeds. A ruling the European patent is enforceable may allow the company to block imports of Argentinean soy meal and related products.

“This is quite a blow to Monsanto,” said Stijn Debaene, a partner at Field Fisher Waterhouse LLP in Brussels who isn’t involved in the case. The advocate general “is quite severe.”

Monsanto said it was “disappointed” by today’s outcome and will wait for the court’s final decision. Rulings tend to follow within six months of an opinion.

“The only reason we have this case is because of a very arbitrary and controversial decision 15 years ago to throw out all existing patent applications in Argentina,” denying the company its local patent on Roundup Ready soybeans, Lee Quarles, a Monsanto spokesman, said in an e-mailed statement. “We have tried to find ways to be properly compensated for quite a while. This was one of those steps.”

Amsterdam harbor

During 2005 and 2006, St. Louis-based Monsanto had shipments of soy meal from Argentina impounded in Amsterdam harbor. Tests showed the products contained some of the patented seed traits and Monsanto sued the importers for infringement. A Dutch court hearing the dispute in 2008 sought the EU tribunal’s guidance.

While Monsanto argued the patented trait in the soybeans remains under its protection after the beans have been processed into soy meal, the importers argued the patent’s scope isn’t that wide under EU biotechnology rules.

“The protection for patents that cover genetic sequences is limited to situations where the genetic information is currently performing the functions described,” Mengozzi wrote. The Luxembourg-based EU court typically follows the advice.

Patent Limits

“There is a limit to how far Monsanto can stretch its patent protection,” said John J. Allen, a partner in the Amsterdam office of law firm NautaDutilh who represented the importers. The suit against the importers “is not the right way to settle Monsanto’s dispute with Argentina.”

Unlike in Argentina, Monsanto is compensated for the use of its patents in other countries, such as in Brazil, because of its patents or accords with farmers. In 2008, 68.5 percent of Argentine exports of soybeans and soy products went to the EU, according to data compiled by the Rosario Cereals Exchange.

“If the court decided that Monsanto can invoke its rights in the EU against soy meal originating from Argentina, nothing could stop it to then use its rights against soy meal coming from other countries,” said Mengozzi.

Ian Karet, an intellectual property lawyer with Linklaters in London who isn’t involved in the case said the opinion could be “quite important” for biotechnology patents because it “has the capacity to restrict significantly the scope of protection for genetic sequences.”

The case is C-428/08 Monsanto Technology LLC v. Cefetra BV, Cefetra Feed Service BV, Cefetra Futures BV and State of Argentina and Monsanto Technology LLC v. Vopak Agencies Rotterdam BV and Alfred C. Toepfer International GmbH.

To contact the reporter on this story: Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net

March 12, 2010 Posted by | Economics | Leave a comment

Death to Obamacare!

“But we have to pass the bill so that you can find out what is in it, away from the fog of the controversy.”
– Nancy Pelosi

Kill Bill

By DAVE LINDORFF | March 10, 2010

When Obama came to my neighborhood this week to press for public support for his health “reform” bill, he wasn’t just greeted by teaparty hecklers. Speaking to a large group of mostly supportive students and local residents at Arcadia University in Glenside, the president at one point mentioned that “people on the left” want “single-payer.” But before he could add that that approach wasn’t going to happen, he found himself drowned out by cheers calling for Medicare for all and single-payer.

That kind of says it all.

I’m with Marcia Angell, editor of the New England Journal of Medicine. The Obama plan for health care “reform”, as well as the two versions passed by the House and the Senate, are all devious disasters that do nothing to solve the nation’s burgeoning health care crisis, and in fact, will make it worse.

The only thing to do at this point is to take the whole stinking pile of paper and put it in the compost heap. Kill it.

This whole effort was never about reform from the day last March when the new president called on Congress to begin deliberations on health care reform. It was about catering to the wishes of the big players in the Medical Industrial Complex–the big pharmaceutical multinationals, the hospital companies, the physicians and, most of all, the insurance industry. People and their health care needs had little or nothing to do with this.

That’s why we’ve ended up with proposals that would do nothing to control costs, that would force healthy young people to buy unregulated, high-cost and high-profit plans that would be money in the bank for the insurance industry, and that would finance any subsidies for the poor by cutting back on benefits for the only group of Americans who currently have a form of single-payer insurance–the elderly with their Medicare.

President Obama began this whole obscene nightmare with a lie, when he said that even though single-payer systems clearly work to open access to all and keep costs down while providing better overall health results in places like Canada and some European countries, they cannot be applied in America “because that would mean starting over from scratch.” He knew when he said it that this was a lie. America already has a well-run and successful single-payer healthcare program in place that is bigger than the entire Canadian health care system, and that’s Medicare, which was established in 1965, and which currently finances the care of 45 million Americans. You just have to be 65 or disabled to be eligible for it.

As Dr. Angell pointed out on a recent Bill Moyers Journal segment, the simplest way to solve America’s health care crisis would be to just start a gradual expansion of Medicare, say by lowering the age of coverage to 55, and then 45, and then 35, until everyone was covered and the insurance industry was pushed out of the health sector. The right-wing couldn’t use their scare tactics about a “government takeover of your medical care,” because the elderly love Medicare, and besides, far from “inserting a government bureaucrat between you and your doctor,” Medicare gives the elderly a freer choice of physician and treatment than any but the most gold-plated private insurance executive health care plan.

Obama continued this lie when he claimed, in his last mention of the issue during his State of the Union address to Congress, that he and Congress had considered every idea. In fact, he and Congress have for the last year, carefully prevented any consideration of the idea of single-payer, or of expanding Medicare to cover every American. Bills that would do that, authored by Rep. John Conyers (D-MI) in the House and Sen. Bernie Sanders (I-VT) in the Senate, were in fact blocked from hearings or votes in both Houses by Democratic leaders, at the White House’s urging, while the White House itself barred single-payer advocates from any of its discussions.

Instead the president met behind closed doors with the lobbyists of the various health care industries, to cut deals with each sector in order to gain their support for his “reform” plan. It was as if the Department of Justice had called meetings with the various crime families of the Cosa Nostra in order to cut deals before developing a plan to “tackle” the Mafia.

The plan being proposed to “reform” health care–actually they long ago stopped calling it health care reform, acknowledging that this was never even contemplated, and started instead referring to what is being contemplated as health insurance reform–is, we are told, going to cost about $100 billion a year. That wouldn’t be bad if what we got in return was universal health care, but we don’t even get that. Instead we have a measure that will reduce access to health care for the middle class by taxing benefits and encouraging higher deductibles, that will force the poor, the young and the self-employed to buy terrible, over-priced plans offering minimal coverage, that will chip away at the coverage provided to the elderly, and that will ultimately lead to higher costs for everyone, and that will still leave nearly 20 million people with no coverage. The US currently devotes 17.5 percent of Gross Domestic Product to health care, and if this “reform” in any of its guises is passed, that share of the economy devoted to health care will quickly rise past 20 percent, with no end in sight.

This is madness. Expanding Medicare to cover everyone, as I have written earlier, would actually save everyone money immediately, and the country as a whole. Consider that the most expensive consumers of health care–the elderly–are already in the system. Adding younger, healthier people to Medicare would cost incrementally much less. That’s why the Canadians spend about 9 percent of their GDP on healthcare, while covering every Canadian, while we spend nearly twice as much and leave 47 million of our citizens uninsured and unable to visit a doctor. How could it be cheaper to add everyone to Medicare? Expanding Medicare to cover everyone would probably cost somewhere between $800 billion and $1 trillion a year. That sounds like a lot of money, until you consider that we already spend $100 billion a year to care for veterans through the Veterans Administration, and $400 billion a year to care for the poor through Medicaid. We also spend $300 billion a year subsidizing hospitals that have to provide “free” charity care to the poor who don’t qualify for Medicaid, too. Since all those people would be covered by Medicare under Medicare-for-All, that’s $800 billion a year in current expenditures saved right there.

So even if my higher figure of $1 trillion for adding everyone to Medicare were correct, we’d only be talking about an extra $200 billion annual expense. And that could be covered by increasing the Medicare tax paid as a payroll deduction. You don’t want to pay more taxes? Well wait. If you were covered by Medicare, you and your employer would no longer have to pay for private insurance, which would mean a savings to workers of thousands of dollars a year, and even more to employers who currently pay the majority of health insurance premiums for employees. The net savings would be enormous.

Nobody has talked about this.

Universal Medicare would make American companies more competitive in the global marketplace, where other companies are not responsible for health care costs of their workers. It would make Americans wealthier, because they would no longer be paying for health care out of their own pockets. It would make everyone more secure, because they would no longer have to fear losing access to health care if they lost their job, and would eliminate most bankruptcies, which are reportedly caused by medical bills.

So we know what needs to be done.

And we know that the current “reforms” on offer don’t do it.

So Dr. Angell is right. Obamacare needs to die.

There is reason to hope that it will die. Republicans oppose it, though not for any decent reason. They want unregulated private insurance and unlimited profits for health care industries. Ditto some conservative Democrats, who are also anti-government ideologues whose wallets are stuffed with health industry swag. But their reasons for opposing the health bill don’t matter. All that is needed is for a few progressive members of the House and Senate to admit that the health bills being considered are not reform, but the antithesis of reform, and to also vote against it, and Obamacare will be dead.

At that point we can start seriously demanding that the Congress and the President act to bring us real health reform in the way that really works: expanding Medicare to cover everyone.

March 10, 2010 Posted by | Economics, Progressive Hypocrite | Leave a comment

Just how low does sterling have to go to boost exports?

By Jeremy Warner | The Telegraph | March 9th, 2010

So much for hopes of an export led recovery. You might have thought that by now the 25 per cent devaluation in sterling seen since the beginning of the crisis would have shown up in a narrowing trade gap, but no, there is still no sign of it whatsoever.

Even allowing for the icy weather, which may have disrupted exports, January’s trade figures make disappointing reading. Britain’s trade deficit, both with Europe and the rest of the world, widened considerably in January to its highest level since August 2008. Exports dropped sharply, and despite the supposed pricing disavantage of the exchange rate, imports were up too. The pound has duly taken another beating. Just how low does it have to go before there is any noticeable effect on trade?

There are a number of explanations for why the devaluation is having so little effect. The charitable one is that slow growth elsewhere makes it difficult for the UK to achieve any improvement in its external balance, however cheap, relative to others, its goods and services become. Yet this doesn’t provide a complete answer. Some emerging European markets are beginning to perform well on the back of strong exports to the eurozone.

As Kate Barker, a member of the Bank of England’s Monetary Policy Committee, pointed out in a speech on Monday, the trouble is that “manufacturing output in the UK has not so far performed any better in the early stages of recovery than has the US, Germany and France”, even though it has the advantage of a devalued currency.

Recent surveys suggest exports should soon be on an improving trend. For example, the February 2010 CIPS/Markit survey of manufacturing suggested that last month export orders grew at their fasterst pace since the survey began in 1996. So there may be a lag effect.

Rather more worrying, however, is the explanation recently ventured by Mervyn King, Governor of the Bank of England, that British companies are merely taking the extra margin in export markets afforded by the lower pound and banking the proceeds, rather than using the advantage to generate sales growth.

This is, unfortunately, what you would expect in the “deleveraging” environment we now find ourselves in. Both companies and individuals are happier to pay down debt and save than invest and spend. The effects of this phenomenon are not entirely negative.

For instance, the City, which does most of its business in dollars and euros but whose costs are largely in sterling, has suddenly found itself fantastically more profitable, so much so that the benefits of devaluation counters the supposed tax disadvantages of being in London by a considerable margin. As long as the pound remains so weak, you’ll not see the mass exodus of top bankers that some have threatened.

Yet it also highlights part of the problem. Britain’s manufacturing base has been run down to such a degree that it struggles to capitalise on the pricing advantages of devaluation. We simply don’t produce enough manufactured goods any longer. And the sort of stuff we do produce, mainly services, is not particularly price sensitive. It becomes more profitable as a result of devaluation, but does not necessarily generate more volume.

The difficulty the UK economy faces is that it is not just the private sector which is seeking to restore balance sheet health. The public sector too is desperate to reduce its deficit. If there is to be no improvement in the UK’s external balance to compensate, then prospects for growth are not good. The only way growth could be achieved is by a further deterioration in household and corporate sector.

March 9, 2010 Posted by | Economics | Leave a comment

Iceland Rejects Icesave Bill in Referendum, Early Results Show

By Omar R. Valdimarsson | Bloomberg | March 6, 2010

Icelanders overwhelmingly rejected a bill that would saddle each citizen with $16,400 of debt in protest at U.K. and Dutch demands that they cover losses triggered by the failure of a private bank, first results show.

Ninety-three percent voted against the so-called Icesave bill, according to preliminary results on national broadcaster RUV. Final results may be published tomorrow morning.

The bill would have obliged the island to take on $5.3 billion, or 45 percent of last year’s economic output, in loans from the U.K. and the Netherlands to compensate the two countries for depositor losses stemming from the collapse of Landsbanki Islands hf more than a year ago.

“Ordinary people, farmers and fishermen, taxpayers, doctors, nurses, teachers, are being asked to shoulder through their taxes a burden that was created by irresponsible greedy bankers,” said President Olafur R. Grimsson, whose rejection of the bill resulted in the plebiscite, in a Bloomberg Television interview yesterday.

Failure to reach an agreement on the bill has left Iceland’s International Monetary Fund-led loan in limbo and prompted Fitch Ratings to cut its credit grade to junk. Moody’s Investors Service and Standard & Poor’s have signaled they may follow suit if no settlement is reached.

‘Obsolete’

Political leaders have already moved on and are trying to negotiate a new deal with the U.K. and the Dutch, making the bill in today’s vote “obsolete,” Prime Minister Johanna Sigurdardottir said on March 4.

“This referendum is very peculiar and without any parallel in Iceland’s history,” said Gunnar Helgi Kristinsson, a professor of political science at the University of Iceland, in an interview.

The Icesave deal passed through parliament with a 33 to 30 vote majority. Grimsson blocked it after receiving a petition from a quarter of the population urging him to do so. The government has said it’s determined any new deal must have broader political backing to avoid meeting a similar fate.

Even so, signs of disunity across the political divide have emerged, prompting concerns that the government may be forging ahead without the backing of opposition parties.

“It’s extremely important that we try in full to complete the negotiations in harmony with the opposition,” Sigurdardottir said. “If that’s not possible, we will have to try to resolve this by ourselves.”

Outrage

Icelanders used the referendum to express their outrage at being asked to take on the obligations of bankers who allowed the island’s financial system to create a debt burden more than 10 times the size of the economy.

The nation’s three biggest banks, which were placed under state control in October 2008, had enjoyed a decade of market freedoms following the government’s privatizations through the end of the 1990s and the beginning of this decade.

Protesters have gathered every week, with regular numbers swelling to about 2,000, according to police estimates. The last time the island saw demonstrations on a similar scale was before the government of former Prime Minister Geir Haarde was toppled.

Icelanders have thrown red paint over house facades and cars of key employees at the failed banks, Kaupthing Bank hf, Landsbanki and Glitnir Bank hf, to vent their anger. The government has appointed a special commission to investigate financial malpractice and has identified more than 20 cases that will result in prosecution.

Economic Impact

The island’s economy shrank an annual 9.1 percent in the fourth quarter of last year, the statistics office said yesterday, and contracted 6.5 percent in 2009 as a whole.

Household debt with major credit institutions has doubled in the past five years and reached about 1.8 trillion kronur ($14 billion) in 2009, compared with the island’s $12 billion gross domestic product, according to the central bank.

Icelanders, the world’s fifth-richest per capita as recently as 2007, ended 2009 18 percent poorer and will see their disposable incomes decline a further 10 percent this year, the central bank estimates.

Grimsson, who has described his decision to put the depositor bill to a referendum as the “pinnacle of democracy,” says he’s not concerned about the economic fallout of his decision.

“The referendum has drawn back the curtain and people see on the stage the matter in a new perspective,” he said in an interview. “That has strengthened our position and our cause.”

To contact the reporter on this story: Omar Valdimarsson in London at valdimarsson@bloomberg.net

March 6, 2010 Posted by | Corruption, Economics | Leave a comment

Obama to close International Labor Comparisons office

By Alec MacGillis | Washington Post | March 3, 2010

Like a scorekeeper for the world, a tiny unit within the Bureau of Labor Statistics tracks globalization’s winners and losers, and the results are not always pretty for the United States. Manufacturing jobs here, for example, have fallen faster since 1979 than in Canada, Germany or Japan. Compensation for those jobs dropped here in 2008 but jumped in South Korea and Australia.

Soon, however, Americans may be spared the demoralization in these numbers: The White House wants to shutter the unit that produces them.

President Obama’s budget would eliminate the International Labor Comparisons office and transfer its 16 economists to expand the bureau’s work tracking inflation and occupational trends. The White House says the cut, estimated to save $2 million, is one of many difficult decisions the president was forced to make to control spending.

“This budget had to make some tough choices and prioritize the nation’s most pressing needs during a challenging economic and fiscal climate,” said Office of Management and Budget spokesman Tom Gavin. But the proposed cut has triggered an outcry from an eclectic group of academics, business leaders and union officials — a reminder that, in the sprawl of the federal government, some seemingly obscure offices have built a loyal following around their discrete missions.

The defenders argue that, given the need to succeed in a global economy, it makes little sense to shut down the office that measures how the country stacks up. There are other sources of foreign data, such as the Organization for Economic Cooperation and Development and the International Labor Organization, but none does as much as the BLS unit to vet and adjust numbers for apple-to-apple comparisons on productivity, unemployment and wage levels, supporters say.

“If you were going to cut this five years after they implemented it 50 years ago, that would be one thing — who cared then about what’s going on in Asia?” said Georgetown University economist Robert Bednarzik, who spent 10 years at the BLS and has started a petition drive to save the unit. “But they’ve picked the worst possible time to try and get rid of it — when we’re all in this together.”

The International Labor Comparisons office dates to the 1960s, when President John F. Kennedy demanded to know whether Western European countries, which were reporting remarkably low unemployment rates, were using a different standard of accounting. The office later expanded to include Asia’s emerging economies.

The biggest challenge was China, where reliable statistics are particularly hard to come by. But in 2004, the office contracted with Judith Banister, a former Census Bureau demographer then living in Beijing, who dug up statistical books in local bookstores that helped produce solid data on the Chinese economy. The unit added Brazil to the mix, and in the near future it plans to release its first reports on India.

Banister, a freelance researcher, said U.S. manufacturers need to know what they are up against overseas — and, in some cases, whether to move work offshore.

Skeptics of free-trade policies criticize the closure for other reasons — the unit’s data, they argue, show just how harsh globalization is for the American worker, a reality that may be inconvenient for an administration generally more trade-oriented than the populist rhetoric of Obama’s campaign suggested. They question if the unit is being closed solely for the budget savings, noting that $2 million is a relative pittance, less than 1 percent of the BLS budget.

“The type of documentation [the unit] is putting out could be detrimental to their efforts” on trade, said John Russo of the Center for Working-Class Studies at Youngstown State University.

Gavin, the OMB spokesman, denied that motivation, saying the closure “wasn’t a reflection of the quality of the work or a reflection of its usefulness so much as a reflection of priorities.”

The budget proposal says the unit’s statistics are “not widely used.” But supporters point out that the unit’s Web site got 1.5 million page views in 2009 — about 4,000 a day.

Congress could yet decide to retain the program. Sen. Sherrod Brown (D-Ohio), for one, is concerned about the closure, said his spokeswoman Meghan Dubyak. “He plans on working with the administration and [congressional] leadership to ensure that we still have data to address offshoring and competitiveness issues,” she said.

Meanwhile, the unit’s close-knit group of workers is waiting to learn their fate. Its director, Connie Sorrentino, who has worked in the unit since the 1960s, said her colleagues were “devastated” when they heard the news but have since been heartened by their supporters.

“What helps us keep our chins up are the people who don’t want to see it go under,” she said. “You find out who your friends are when you’re on the chopping block. Though that’s a heck of a way to do a customer survey.”

March 5, 2010 Posted by | Deception, Economics, Progressive Hypocrite | Leave a comment

« Previous Entries     Next Entries »