Opinion

The Great Debate

The verdict that shook Iran and Europe

They say a good news story is like an onion. The more one peels it, the newer and fresher are the layers that surface. If depth and longevity are the gold standards for a news story, then the assassinations of four Iranian opposition members at the Mykonos Restaurant in Berlin in September 1992 surpasses that standard. That story is more like a cluster bomb: 20 years later, it continues to explode. The verdict that was issued in Germany five years after the killings, and the subsequent decision by the European Union to cut ties with Tehran in 1997, achieved what perpetual threats of war have not.

What was the achievement? To a multitude of Iranian exiles, first and foremost, it was the bestowing of an elemental human gift – safety. Since the establishment of the Islamic Republic of Iran in 1979, Ayatollah Khomeini’s henchmen were methodically killing a list of 500 dissidents – artists, writers, intellectuals and opposition members – against whom the Ayatollah had issued fatwas. These “anointed” individuals were not safe whether they were in Washington, Rome, Paris or Geneva.

As European governments turned a blind eye, the assassins crossed border after border and accomplished their diabolical missions one after another. With dozens dead, a generation of patriotic and brilliant future leaders was lost. Until the Berlin court’s 1997 verdict, which implicated Tehran’s top leadership in masterminding the killings, the luxury of European Union safety belonged only to its native citizens.

What followed safety was dignity. Disaffected Iranian immigrants, who in Germany and elsewhere in Europe had forever felt dispensable and invisible, were empowered by the court’s nod of acknowledgement. They were able to step out of the shadows, and many invested in notions of citizenship and civil participation in their adopted communities. They were far more inclined to fully stop at the red light when the protection of the law extended to them in their adopted lands.

Western policymakers and non-governmental organizations have spent millions of dollars in efforts to circumvent Tehran and fund individuals and NGOs inside Iran to cultivate a democratic movement there. But most of these convoluted and ultimately questionable attempts never accomplished what the Mykonos trial did in its elegant simplicity.

The Mykonos case gave its spectators a glimpse of how real democracy works. Among the audience members at the trial were former Iranian political prisoners whose own trials, which had banished them to years of incarceration, had begun and ended within an hour. Their lives and dreams of an ideal society had been transformed by three and a half years of spectatorship. These dreams of an ideal society were given voice by attorney Otto Schily, later Germany’s interior minister from 1998 to 2005, who, in his closing remarks to the court, said: “For much too long, European governments have watched Iran’s violent behavior. A regime that touts terror and even commands it must not be the recipient of our loans or red carpet receptions.” Schily had hoped the judges would realize that “we all have a shared duty. All of us – citizens, men and women, and even those who are our guests – must live in safety and without fear.” The judges ruled that the Iranian government was responsible for the 1992 murders in Berlin.

We can see how effective the Mykonos verdict was simply by looking at Tehran’s treatment of it. A regime that never fails to boast (it annually marks the 1979 seizure of the U.S. embassy with great fanfare and has printed portraits of terrorists, such as the assassin of Egyptian President Anwar Sadat, on postal stamps) has kept mum about the Mykonos case. When Tehran’s spin doctors saw that they could not spin this one, they did their best to bury it altogether. But they did not fail to register its magnitude.

The verdict that was issued in Germany in 1997, five years after killings in Berlin of four Iranian opposition members, and the subsequent decision by the European Union to cut ties with Tehran in 1997, achieved what perpetual threats of war have not. Join Discussion

Why doesn’t Mitt Romney contribute to his own campaign?

Lately, Mitt Romney has been so consumed with fundraising that his aides have had to defend his absence from the stump. Like his foe, the Republican nominee is in the midst of a frenzied financial arms race. But one hugely wealthy individual has not yet been persuaded to part with much cash to support the Republican cause: Mitt Romney himself.

Mitt Romney is hardly the first wealthy individual to seek the White House. John F. Kennedy once quipped he had received a telegram from his father: “Don’t buy another vote. I won’t pay for a landslide.” But Romney, for whatever reason, has failed to use his personal wealth to pay his campaign’s bills. His refusal to self-finance is one of the mysteries of this campaign.

After all, if Romney were to help fund his own bid, he would have ample company. In 1976, the U.S. Supreme Court ruled that it would violate the First Amendment to limit what candidates can spend on their own behalf. Ever since, wealthy office-seekers commonly have ponied up. John Kerry lent more than $6 million to fund his Iowa caucus drive in 2003. Hillary Clinton lent her campaign over $11 million four years later. Steve Forbes gave his 1996 campaign $32 million, and spent nearly $37 million four years after that. Ross Perot spent $63 million to finish strongly in 1992, back when that was real money.

In fact, four years ago the former governor gave his own campaign nearly $45 million. He even donated a Winnebago trailer.  “I’m not beholden to any particular group for getting me into this race or for getting me elected,” ABC News quoted him as saying. “My family, that’s the only one I’m really beholden to — they’re the ones who let their inheritance slip away, dollar by dollar.”

The Romney boys can sleep easy: Their dad’s assets are worth nearly $250 million, according to financial disclosure forms. But he has put only $150,000 into this year’s run, through a joint gift with his wife Ann to a Republican committee last spring.

Romney’s campaign surely could use the money. His summer fundraising was less robust than it appeared, since much of it was committed to party committees not controlled by him. His campaign borrowed $20 million as a “bridge” loan to keep ads on the air before the general election began. Even the super PACs have less on hand now than seemed likely just a few months ago. His strategist Ed Gillespie bemoaned the time Romney must spend fundraising. “I don’t think anybody considers Utah to be on the target state list, but it was an important event for us,” he said of a recent fundraiser held in Salt Lake City, according to BuzzFeed.

So why Romney’s reticence? Maybe this is a classic “dog that didn’t bark,” where inaction tells us more about the candidate than he wants us to know.

In this year's presidential contest, one hugely wealthy individual has not yet been persuaded to part with much cash to support the Republican cause: Mitt Romney himself. Join Discussion

COMMENT

I doubt Romney (or the people who manage his finances) are “confused” about how to self-fund just because there are new funding alternatives for third parties. But I do wonder if there is a tax consequence, as in, funding your own political campaign is not deductible or triggers some other kind of penalty.

I honestly don’t know, but that is where I would begin my inquiry. Paging David Cay Johnston!

Posted by johncabell | Report as abusive

Romney’s campaign into oblivion

Willard Mitt Romney was born with a silver foot in his mouth.

It is possible to forgive it as a congenital trait. After all, his Dad, the genial George Romney, successful head of the American Motor Corp and governor of Michigan (1963-69), lost his bid for the Republican nomination for the presidency in 1968 by setting a world record for the mass manufacture of gaffes. He had such a penchant for saying one thing and then retracting it, the reporter Jack Germond announced he was fixing his keyboard so that one keystroke produced “Romney later explained…” It was charming for a time to hear what George had said lately, but when he came back from a look at the Vietnam War, he announced he’d had “the greatest brainwashing anyone could get.” His rival Eugene McCarthy cracked that a light rinse would have been enough to relieve George’s neurological condition, but this time George had gone a gaffe too far. Some American prisoners released by the Chinese had renounced their U.S. citizenship, saying they’d been brainwashed, and primary voters had no enthusiasm for electing a president who might turn out to have been the Manchurian candidate. So we got Nixon and Agnew instead. Thanks, George.

Mitt was on a similar jag through the nomination process. “I like being able to fire people who provide services to me… My wife drives a couple of Cadillacs… I’m not concerned about the very poor, we have a safety net…” Men and women who’ve been looking for work for a year are supposed to appreciate the irony when he opens up: “I should tell my story. I’m also unemployed.”

It’s tough getting through the Great Recession when your net worth is just a few hundred million. Mitt doesn’t understand why there should be an intake of breath across the continent when in a televised debate argument about a healthcare detail with Republican Governor Rick Perry he says: “I’ll tell you what, ten thousand bucks? $10,000 bet?” His attempt to cozy up to followers of Nascar races is: “I have some friends who are Nascar owners.” Arriving in Britain for the Olympics, of course, his tin ear wins a tin medal for finding the organization “disconcerting.”

These gaffes have been seen as evidence of the insensitivity of a man who inhabits a parallel world, embarrassments all round rather than manifestations of ineptitude disqualifying him from high office. He undoubtedly has the managerial competence for that. For all the left’s demonization of Mitt’s venture capital company, Bain, he showed he could chart a future for dying companies and create a thriving new one (like the Staples stationery chain) just as he turned a corrupt shambles of the Utah Winter Olympics into a showcase. He will never be the president who can figure out bipartisan deals with the opposition, as Reagan did regularly over drinks with his “old buddy” Speaker Tip O’Neill (neither can Obama). Nor will he be a bumbling Warren Harding, captive of corrupt, whisky-sodden cronies. Mitt is squeaky clean. And it can fairly be said that while Obama is a very likable president who inherited a financial catastrophe, he has not exactly excelled as a Reagan-style rejuvenator. He gave priority to Obamacare over jobs, failed to retain convincing economic counsel and unwisely delegated his vital stimulus package to a pork-barrel Congress. He is seen more now as a caretaker of decline, rather than a healer of the planet, a pacifier of the oceans.

This is where Romney’s latest excursion into unreality is so maddening to Republicans with only seven weeks to voting, less in early voting states. A select few wealthy men and women were present at the dinner where Mitt asked for their donations, but the videotape, made in May, is now being viewed by millions of voters as the secret unveiling of the portrait of Dorian Gray, Mitt revealing his dark soul. See, Democrats are saying nationwide in a swelling chorus, see his contempt for half the population, the other half, the ordinary decent Americans. You there in the 47 percent whom Mitt says will vote for Obama are lazy good-for-nothing moochers. You must be. You don’t pay any income tax, you gorge on food stamps, you “believe you are entitled to healthcare, to food and housing, you name it.” No amount of retouching can change the image: not Mitt bounding on stage a day later to say this election is about the 100 percent; not the energized hard-right Tea Party activists whose views are flecks of foam on the Internet websites (“The bastards should be paying taxes like the rest of us…”); not Donald Trump telling him he has nothing to apologize for.

Mitt may have quelled the anxieties of the right that at heart he was still a closet liberal, the governor of Massachusetts whose healthcare law was a model for Obama’s, but at what a price! His conflation of the 47 percent who pay no federal income tax with feckless Obama voters is also offensive to millions of his own voters who don’t earn enough to pay federal tax but do pay state and payroll and sales taxes and pride themselves on their sense of responsibility – among them, the elderly, the military, the disabled, the young and the poor but proud Hispanics.

A tendency to misspeak during campaigns is something that Mitt Romney arguably inherited from his father. But his failure to capitalize on Obama's weaknesses speaks to far greater problems than a gaffe or two. Join Discussion

COMMENT

If you notice the amount of money Mitt made in 2011 off $250 million– somewhere around 4%? Either the guy is a moron, which I do not believe, or most of his money is invested overseas in tax havens that we poor middle-class voters do not get the option of using. he owns up to two years of his taxes, because that’s when he was running for office. He can’t release the rest, because there is too much to hide. It is just too obvious. And this man is the best the GOP had to offer? No, just the only one that the Tea Party would let into the ring, hence, the GOP will never win a presidential election again until it restructures itself. Romney could have been a good candidate if he was the Romney that was the governor of Mass. But he is not that man anymore, perhaps he never was.

Posted by Expatbrit | Report as abusive

Is the payday loan business on the ropes?

Payday lenders have a lot in common with pawn shops, their close cousins: They depend on lending money to desperate people living close to the edge with nowhere else to turn. They first surfaced about 20 years ago in the South and Midwest, often as small mom-and-pop shops. Now the industry is dominated by large national chains, with some 20,000 storefronts nationwide. Coming out of the shadows of cyberspace, however, are Internet lenders, which are like storefront lenders on steroids.

The average payday loan is tiny, about $400, and in the benign view of the industry, it gives customers with trashed credit scores, who lack other credit options, emergency cash until their next paycheck arrives. But according to the Center for Responsible Lending, lenders charge a mind-boggling 391 to 521 percent interest for loans that have to be paid off in two weeks, often triggering a toxic cycle of debt, as borrowers take out fresh loans to cover the old ones. Internet loans are bigger, generally charge a higher annual percentage rate and, consequently, are more expensive than their storefront counterparts.

As non-banks, payday lenders have so far escaped federal regulation, leaving a hodgepodge of state laws as the only bulwark against these usurious loans. If the storefront lenders have been hard to regulate, Internet lenders have been even harder to find, as they make loans to lenders in states where they’re banned by setting up servers offshore or in states where they are legal. Industry experts put the number of online lenders in the hundreds, so far, but one website can reach many more people than a storefront. A January report from San Francisco-based JMP Securities estimated that market share for Internet lenders would hit 60 percent by 2016.

Some attorneys general in states with payday bans, like New York and West Virginia, have sued individual lenders for targeting residents in their states. A 2009 settlement by then-Attorney General Andrew Cuomo with two out-of-state Internet lenders was one of the few cases to force lenders to make restitution to scammed borrowers — 14,000 of them. But the lenders simply resurfaced in some other form.

Richard Cordray, chief of the new Consumer Financial Protection Bureau, has pledged to focus on the industry and held a public hearing on payday lending last January in Birmingham, Alabama. Yet he has been mum on new enforcement plans as the politically besieged bureau sets it sights on more mainstream products such as mortgages, credit cards and student loans.

But could the Federal Trade Commission come to the rescue? Established in 1913, the FTC has recently watched the CFPB steal some of its thunder, but it may be on the verge of not only holding these lenders accountable but also possibly shutting them down.

The FTC began suing cyberspace lenders about five years ago in a flurry of cases, mostly related to fraud or failure to disclose loan terms. Websites came with deceptively labeled buttons that led you to falsely advertised products. One wrong move with your mouse and you just paid $54.95 for a debit card with a zero balance when you thought you were getting a payday loan, witness FTC vs. Swish Marketing. One of the most spectacular examples is the FTC’s recent suit against call centers in India, such as American Credit Crunchers, LLC, that harassed people to repay Internet payday loans they had never even taken out — sometimes even threatening people with arrest. The FTC alleged that the defendants fraudulently collected more than $5.2 million in payments on these phantom loans.

The FTC's suits against Internet payday lenders – from Kansas to India – could strike the industry at its heart: the ability to extract payments by means of electronic funds transfers that unexpectedly extend the life of the loan while fees rapidly mount. Join Discussion

COMMENT

Lenders are not looking to “escape federal regulation.” In fact, we are one of the few industries asking for it.

The bipartisan Consumer Credit Access, Innovation and Modernization Act will establish a federal charter that clearly defines a set of transparent national standards, allowing lenders to provide more credit alternatives with lower costs as well as flexible payback periods and loan amounts.

Nonbanks operating under a federal charter will have to comply with all federal laws and regulations applicable to other bank lenders, including the consumer protection authority of the Consumer Financial Protection Bureau. We are asking every lawmaker to seriously consider this legislation so that millions of Americans will have access to the kinds of innovative financial options that they’re demanding.

Meanwhile, the Online Lenders Alliance will keep working to stop deceitful and fraudulent practices.

Since OLA was established in 2005, we have been working with the FTC and law enforcement agencies to protect our customers. In fact, we helped the FTC bring down an agency that collected phantom short-term loan “debts” that consumers did not owe. And we also hired Freeh Group International Solutions, a global risk management firm, to investigate fraudulent practices reported to OLA.

It isn’t about a perception problem; it’s about doing right by those who use our products.

Lisa McGreevy
President & CEO
Online Lenders Alliance

Posted by LisaMcGreevy | Report as abusive

The radical right-wing roots of Occupy Wall Street

If there’s one thing that united Occupy Wall Street with the Tea Party movement from the very beginning, it’s a virulent aversion to being compared to each other.

The Tea Partiers started sharpening their knives before the Occupation even began. Two weeks before last year’s launch Tea Partisan blogger Bob Ellis wrote a post entitled “Socialists Plan to Rage Against Freedom on Constitution Day” – all but daring the lamestream punditry to compare the “infantile” plans of “spoiled children” to “throw tantrums” and “thumb their nose at the American way of life” to the beloved movement that “sprang up from nothing a little more than two years ago in the face of a Marxist president and Marxist congress.”

In reality, of course, no political movement springs “from nothing.” Indeed, both of them have roots in the same man. Fifty-five years earlier that fall, the Tea Party movement’s direct ancestors met in Indianapolis to launch their first bid to rally citizens against the “dedicated, conscious agent of the Communist conspiracy” occupying the White House, Dwight Eisenhower. But when their beloved anti-communist Barry Goldwater was buried in the 1964 presidential election, the Republican Party moved swiftly to officially renounce the “radical organizations” that had sullied its public image. Then the most radical of the right-wing radicals, Goldwater’s beloved speechwriter Karl Hess, moved into a houseboat, renounced politics altogether and dedicated the rest of his life to peacefully protesting the concentration of political and economic power in the hands of the new aristocracy he dubbed “the one percent.”

You read that right: The first guy to call the 99 percent to arms was the author of a speech that claimed: “Extremism in the defense of liberty is no vice.” Goldwater had fondly referred to Hess as “my Shakespeare.”

Hess had also worked as a professional union buster, an informant to Joe McCarthy and J. Edgar Hoover; a regular contributor to the Wall Street-based red-baiting newspaper Counterattack, and an amateur arms trafficker who sent contraband napalm to the plotters of a Bacardi-backed coup attempt against Cuba’s then-dictator Fulgencio Batista. He’d also been a founding editor of the National Review and a full-time ghostwriter for the famous Texas oil oligarch and John Birch Society financier H.L. Hunt.

Both the Occupy and Tea Party movements can trace their origins to the same man: Karl Hess, who moved from being the most radical of right-wing Goldwater Republicans to a left-wing libertarian railing against the hold of the superrich on America. Join Discussion

COMMENT

Thank you for this very informative (if almost tl;dr) piece.

Good to know that, whatever their substantive policy differences, OWS and TEA have some common genetic material. Combined, they could muster like 75% public approval – a force that cannot be denied its will. Unfortunately, they only agree on one issue – but that one is enough:

The forces of the status quo must be overthrown. If they could manage to unite on a package of electoral reform, and just a few other related things, there might be hope. Everything else can, and must, wait for that.

Posted by MrRFox | Report as abusive

How financial lawsuits muzzle free speech

Imagine some political group runs an advertisement accusing a politician of misleading statements and covering up his true voting record. Instead of denouncing the attack or countering with a favorable ad, however, the candidate sues the political group for billions of dollars, launching a six-year, scorched-earth legal and public relations campaign.

Even though the legal battle collapses and the candidate spends about $100 million, the gambit works: The politician’s future elections are assured, because no rival or reporter dares publicly criticize the candidate lest they be sued.

An absurd example, no? Everyone knows it couldn’t happen here, in the home of the First Amendment and a free press. Yet a publicly traded company using its working capital to battle critics in court is an increasingly regular occurrence in the capital markets. Substitute a Canadian insurance conglomerate called Fairfax Financial Holdings for the politician, and you have an excellent example of the above scenario.

In July 2006, Fairfax sued a group of hedge funds and analysts over what it alleged was a conspiracy to drive down its share price. On Sept. 12 the last remnant of its once far-reaching suit was effectively tossed out of New Jersey Superior Court (though Fairfax has said it plans to appeal).

The courtroom debacle was ultimately an aside: For an estimated $100 million in legal and public relations fees over six years, Fairfax’s efforts drove its share price up, forced shorts to cover their trades and, save for a few reporters, ceased virtually all media investigation into the company’s operations. (To be fair, Fairfax’s share price was helped by a turnaround in the firm’s insurance businesses and billions of dollars in profit from a remarkably timed 2007 bet against subprime financial companies.)

I am not a passive observer to this situation. It was my reporting that Fairfax said prompted its lawsuit, and several months ago I published a story disclosing new documents that, I maintain, prove the company still has substantial liability for some tax moves it made in 2003. I also reported extensively on another Canadian company, Biovail Corp, which launched a nearly identical suit in 2006. Biovail met an ignoble fate, eventually admitting to fraud and paying hundreds of millions of dollars in settlements and penalties.

Although Fairfax has much crow to eat, its lawyers at Kasowitz, Benson, Torres & Friedman and its outside PR firm, Sitrick & Co, were relentless in promoting the erstwhile victimhood of Fairfax and Biovail, also a client, to media, regulators and politicians – the numbers make clear that suing critics can bear fruit.

A publicly traded company using its working capital to battle critics in court is an increasingly regular occurrence in the capital markets. Join Discussion

COMMENT

John Stuart Mill proved long ago that the benefit of freedom of speech is that it assures the continuing growth and relevance of our most cherished institutions:
“The peculiar evil of silencing the expression of an opinion is that it is robbing the human race; posterity as well as the existing generation; those who dissent from the opinion, still more than those who hold it. If the opinion is right, they are deprived of the opportunity of exchanging error for truth: if wrong, they lose, what is almost as great a benefit, the clearer perception and livelier impression of truth, produced by its collision with error.”

Posted by kafantaris | Report as abusive

Murders in the forest

Since Apr. 26, a crusading forestry activist, a muckraking journalist and a 14-year-old girl have been killed in Cambodia because they tried to safeguard the country’s dwindling land reserves. They are all victims of a decade-long battle over Cambodia’s ecological future, a fight that in the past two years has turned more bloody and corrupt. Their deaths offer the world a stark vision of how crony capitalism has replaced totalitarianism as the threat to human rights in Southeast Asia. In Cambodia, the price of a human life pales in comparison with a blank check.

I worked at the Cambodia Daily in Phnom Penh for one year (2011-2012), covering the oil business, land evictions, the environment and forestry. That’s why I was with Chut Wutty, the nation’s foremost forest conservationist, on Apr. 26 when he was killed. On the third day of an investigation into illegal logging in Cambodia’s Cardamom mountains, we stopped at what Wutty said was a military-controlled illegal logging outpost. There, he was shot dead during a confrontation with soldiers who were protecting the site and preventing us from leaving. A soldier was also shot dead under mysterious circumstances in the firefight, although Wutty did not fire any shots. When the murderers began concocting a cover-up, a colleague and I were threatened with death. “Just kill them both,” they icily said within earshot of us. After six hours of paralyzing fear and pacing at the scene of the murder, we were transferred from police custody into the care of our editor in chief as night fell.

We were lucky. Less than three weeks later, government security forces fatally shot 14-year-old Heng Chantha during an armed siege against villagers resisting a land eviction by a well-connected agricultural company.

Now, the latest victim is Hang Serei Odom, 42, a reporter for a small Khmer-language newspaper who wrote in early September about military collusion in the deforestation of a lush region on Cambodia’s northeast border with Vietnam. His killing was ghastly: He was found dead from two ax wounds, one to the back of his head, the other to his forehead, and stuffed in the trunk of his car. A military police officer and his wife have been charged with premeditated murder after the victim’s shoes were found in and around the couple’s home.

The state-sponsored violence in Cambodia is a local calamity with global repercussions. It underscores the ravenous behavior of China as it scours every corner of Southeast Asia for rare luxury timber and industrial-purpose woods to feed its booming economy. Although demand is high for all timber, luxury wood, which differs from industrial-grade logs due to its elegant appearance, physical makeup and species of origin, is incredibly valuable, raising the stakes for those harvesting it. Around the world, 700 activists and others have been slain in the past decade as they fought to preserve the few scraps of forest and ancestral land that have not yet been clear-cut by often disreputable multinational corporations.

China’s hunger for wood is insatiable. It is the number one global importer of timber, both legal and illegal. According to UK-based think tank Chatham House, it shipped $3.7 billion in stolen logs in 2008. Cozying up to corrupt politicians and offering millions in no-strings cash, Chinese lumber concerns have decimated vast swaths of Cambodia and since 2000 have imported large amounts of illegally procured timber from Russia, Papua New Guinea, Malaysia and Indonesia. In all, 6,200 square kilometers of forest –an area twice the size of Rhode Island – have been gutted in Cambodia in the past two decades, and the Chinese are behind the most extravagant development projects.

In Cambodia, the market for blood wood is destroying more than trees. Join Discussion

COMMENT

The chinese are ridding the world of everything in our ecology system to satisfy their warped hunger of things exotic. Everything that are beautiful and to be admired end up killed an hung in their living room or stocmach to satisfy an eccentric needs — from killing of elephants, tigers, leopards, bears, sharks and now trees. This thievery of this earth precious lifeforms must stop or we need to ban any export from China (yes, they are already using countries like Vietnam to fake out the “made in china” tag).

Posted by Tobymax | Report as abusive

Europe risks going the way of Japan

(The views expressed by former British prime minister Gordon Brown are the author’s own and not those of Reuters)

The good news is that Europe is no longer going the way of Greece. The sad news is that it is threatening to go the way of Japan.

After years of hesitation punctuated by panic, Europe has finally accepted the compelling logic that a single currency needs a lender of last resort. Pro-euro voters in the Netherlands have clearly been impressed as the President of the European Central Bank (ECB), Mario Draghi, braved the scowl of the ever-cautious Bundesbank and led his ECB directors to a pledge of unlimited – if conditional – short-dated bond-buying to avert another currency crisis.

The ECB acted in the nick of time; the fuse was set for an explosion next month with the market chaos of both a Greek and Spanish crisis. President Obama has been spared a Eurozone spanner in his campaign for re-election and the chances are we won’t have a pre-November Greek euro exit or Spanish bankruptcy, plus a run on Italy and a French financial crisis just for good measure.

Indeed, now that the ECB is ready to intervene to level short-term bond rates for economies intent on reform and the German Constitutional Court has removed its objections to a bailout fund, there need be no European bust-up over who pays for it.

So far so good – but it is not far enough.

The net effect of the intervention is to halt contagion, not to end the recession; to stop disintegration, rather than start a recovery that would reverse Europe’s downturn. In the week after the market euphoria at the Bank’s decision, private investors, worried about who is first to be repaid in a crisis, are not rushing to return and the ECB still has to address the moral hazard it has created by appearing to guarantee ‘last resort’ funding to countries still likely to go off track. They will now find it difficult to refuse a country support or to push them into an IMF programme.

The good news is that Europe is no longer going the way of Greece. The sad news is that it is threatening to go the way of Japan. Join Discussion

COMMENT

I am not very well versed in the art of politics and yet it does seem to me that the rush, surge even by European manufacturers to have their high profile products made in ‘China’, may well have begun to backfire. Bosch of Germany for example are already feeling the strain for many people would not buy a Bosch electric drill no matter if it were made in China, Germany or on one of the south sea islands. The people have lost confidence in the brand name that was once held in high esteem! Many other manufacturers are now also feeling the results of their flirtation with China.

Posted by deadrabbit | Report as abusive

The Middle East needs its activist moment

Photo

Two days after the death of U.S. ambassador Christopher Stevens in Benghazi, Libya, protesters continue to mass outside of U.S. embassies in Egypt and Yemen. The protesters are apparently reacting to a low budget, anti-Muslim video made by Americans that was distributed in a trailer-like segment on YouTube. The murder of Stevens and three of his aides in Libya seems to be the work of a paramilitary group using the protests for cover. That group may or may not be affiliated with al Qaeda.

In the West, this all sadly reads as another example of Islam proving unable to deal with the consequences of free speech. It recalls the threats surrounding the publication of Mohammad in a political cartoon in a Danish newspaper, the murder of Dutch filmmaker Theodoor van Gogh and the late 1980s fatwa (death sentence) decreed by Iran’s Ayatollah Khomeini against the novelist Salman Rushdie. The strictest adherents to Islam will tolerate no heresy, even from outsiders. Meanwhile, in the U.S. and Europe, prevailing law largely gives individuals the right to be as offensive as they want.

This is a particular problem as the pace of liberalization in the Middle East quickens. New democracies are forming. Minority voices that had been oppressed by dictators in Egypt and Libya are now being heard. More tolerant governments are replacing regimes that once tightly censored media and the Internet. More than ever before, the Muslim world is on a collision course with ideas that many of its people will find offensive, if not blasphemous.

In the U.S. and Europe, the religious faithful are exposed to such ideas all of the time, and yet we have not seen the pronouncements of death sentences, the tearing down of embassies or the murder of filmmakers. We’re all human, so it seems unlikely that a citizen of Sana, Yemen would be more prone to violent outbursts than a citizen of Cupertino, California. Islam also doesn’t seem to condone violence much more or less than any ancient religion, where the founding texts were born in violent times.

The difference between the U.S. and Europe and the emerging Middle East was identified in Johns Hopkins professor Michael Mandelbaum’s 2007 book Democracy’s Good Name. Mandelbaum argued that for democracy to take hold, a country needs a fully functional civil society. This is more than just clear laws and good governance. It’s chess clubs and trade organizations and non-defamation leagues.

The problem is that in places like Libya, Iraq and Egypt, which have been subject to long decades of totalitarian rule, people are unlikely to form religious advocacy groups that also function as lobbyists for various causes and as a hub of communications and information for the faithful. One of the insidious effects of living under the watch of secret police is that your neighbor or co-religionist is also a potential informant.

Religious people in the U.S. are no less likely to take umbrage at expressions of heresy than people in the Middle East. For example, the right-wing Catholic League for Religious and Civil Rights, run by William Donohue, has launched numerous peaceful protests over the years, including of Martin Scorsese’s film adaption of The Last Temptation of Christ, of episodes of The Simpsons and South Park, and of the display of a portrait of the Virgin Mary covered in elephant dung at the publicly funded Brooklyn Museum. As much as I abhor Donohue’s tastes, I think the world would be better off if fundamentalist Islam were to adopt his tactics of boycotts and rhetoric to counter speech that they find offensive. I might not like that Donohue can bully Comedy Central into canceling an episode of a cartoon, but my beef there is more with Comedy Central than with Donohue, who is merely expressing his preferences.

In the U.S. and Europe, well-established interest groups that have sway in the marketplace give people influence well in advance of the need for any violence. But these groups were not allowed to assemble under dictatorships. Without such assets, Egypt’s devout have no good mechanisms for registering their offended feelings, and some groups have obviously taken to violence to fill the vacuum. Join Discussion

COMMENT

And what does that say about Islam if you are murdering innocent people for it’s sake. And just because of dumb film. If anything, that makes you look dumber. This has nothing to do with neocolonialism, anti-Islam Western imperial power, being attacked daily, etc. That’s pure b.s.! No, it’s just pure DUMB. And let it be known the law of Cause and Effect is very strict no matter what religion you profess to follow.

Posted by Tmrw2044 | Report as abusive

It’s time for the candidates to offer a strong education strategy

In the late 1960s, a Stanford University psychologist began conducting his now famous “marshmallow test” to understand “delayed gratification” – the ability to wait.

He would place a 4-year-old alone in a room with a single delicious marshmallow, promising to give him two marshmallows after a short wait. Some children succumbed to temptation, while others held out for the bigger reward. The children who could control their impulses went on to become better, higher-achieving students.

Why do we bring up this iconic experiment now, in the midst of the 2012 election season?

We believe that helping American children get access to a great education is a two-marshmallow political test. In contrast to relatively quick fixes like even more quantitative easing by the Federal Reserve or temporary deficit spending fiscal policies, addressing the challenges facing U.S. schools and students cannot be achieved over the course of a quarter (or even an election cycle). But underperforming labor markets and the alarmingly high 8.1 percent unemployment rate make the goal of improving our public schools even more obviously critical to America’s future. Making smart fixes to the public education system now, as outlined in our recent Council on Foreign Relations report, will pay off later.

Consider the context: America’s gross domestic product today is at its highest level ever – but we are accomplishing this level of output with about 4.6 million fewer workers than at the top of our last economic expansion. Today, the unemployment rate of people with a college degree or higher is 4.1 percent, compared with 12.7 percent for people with less than a high school degree. Demand at home and globally for low-skilled workers is falling, and the only way to address this long-term trend is through education.

The discussion of education is all the more important today because the political strategy of the moment seems to be one of benign neglect – a perilous pattern. We know from experience that when the public, press and politicians ignore mounting problems, already struggling schools and students fall further behind and our country further damages its prospects. In short, when education reform is not a major part of the discussion, the powerful private parties that control the system – especially the bureaucrats and unions – are able to have their way, thus protecting a status quo that isn’t adequately serving our kids.

In contrast to relatively quick fixes like even more quantitative easing by the Federal Reserve or temporary deficit spending fiscal policies, addressing the challenges facing U.S. schools and students cannot be achieved over the course of a quarter (or even an election cycle). Join Discussion

COMMENT

Education doesn’t need to be “reformed”! It needs to be supported. There will always be bad teachers, some good teachers, and mostly average teachers. just like any other profession. The performance rating of teachers and so called other reforms are nothing more than the right-wing attacks on labor unions.
The very powerful and rich right wing would like everyone to believe the problems in society reside everywhere but with them and there relentless pursuit of more power.

Schools are starved for funds leading to larger class sizes, evermore dilapidated school buildings, decreased salaries and benefits for teachers.

I left the profession many years ago, but whenever I considered returning, I saw nothing but a road paved with frustration. I know many others left and never returned for the same reason. Let’s stop blaming the schools and the teachers for the malaise this country is in.
Until the issues of wealth inequality and income inequality
are addressed, nothing else will make any difference.
.

Posted by lottakrap | Report as abusive
  •