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Posts Tagged ‘Jeffrey Sachs

To end corruption, start with the US and UK.

They allow the most flagrant corruption ways in broad daylight

The fight against corruption entails no small amount of absurdity, since so much of the corruption these days occurs in broad daylight. The corruption is so blatant, so indefensible, that attempts at justification are necessarily surreal.

Recently, 300 economists, including me, made the point thanks to Oxfam’s mobilization. Prime Minister David Cameron’s job at Thursday’s Anti-Corruption Summit is not to whisper about the corruption of Nigeria or Afghanistan but to end the deep and historic role of the United Kingdom in this sordid mess. Ditto for the US and other major parties to the abuse.

One of the pervasive elements of corruption is the use of shell companies, which are legal entities (called moral entity?) designed purely to protect real owners from disclosure, liability and accountability.

When the Panama Papers were leaked, the law firm at the center of the disclosure, Mossack Fonseca, had this astounding justification:

Finally, the instances you cite in your reporting represent a fraction – less than 1% – of the approximately 300,000 companies that Mossack Fonseca has incorporated in its over 40 years in operation.

This fact shows that the vast majority of our clients use companies we incorporate for legitimate uses and that our due diligence and compliance procedures are overwhelmingly successful in thwarting those who have other intentions.

The very idea that the law firm has done “due diligence” on 300,000 companies, even over 40 years, is beyond ludicrous.

Even over 40 years and 250 working days per year, incorporating 300,000 companies would entail an average of 30 companies per day. Of course there is no due diligence (as the corrupt cases plainly demonstrate). There is blatant abuse of incorporation.

The UK is at the center of this network of impunity, a legacy of the British Empire and a measure of the continuing role of the City of London in transferring tax-free funds around the world.

The British Virgin Islands, a UK oversees territory, has a population of 28,000 people and more than 1m registered companies, roughly 35 companies per resident population.

It is by far the most popular tax haven of the Panama Papers companies. Recent estimates hold that the British Virgin Islands host about 479,000 active companies.

The tentacles of corruption reach deep into the UK (and US) financial systems. Banks in the City of London and Wall Street have paid tens of billions of dollars of fines for insider trading, financial fraud, price rigging and other financial crimes in recent years.

Yet almost no leading bankers have taken a hit for their organization’s malfeasance. It’s hard to escape the conclusion that the major financial firms are part of a global network of organized financial crime.

the tax havens and the bankers certainly have their defenders. That’s the real point. The impunity is so strong that even the most flagrant abuses such as 479,000 shell companies in the British Virgin Islands, lead to little if any action.

Consider the recent statements by Conservative MP Dominic Grieve, who claims that the British Virgin Islands are “entitled” to run their financial haven as they see fit.

Of course this is all the more shocking because Grieve is former attorney general of England and Wales and a member of the Privy Council.

The UK and the US are at center of the system of global abuse. Britain created the modern world of global finance in the 19th and early 20th centuries, and Wall Street became co-leader with the City of London after the second world war.

In both countries, hundreds of thousands of lawyers, bankers, hedge fund operators, politicians, accountants and regulators have consciously built a system of global tax havens of the rich, by the rich, and for the rich that now hosts more than $20tn (yes, trillion) of funds hiding from taxes, law authorities, environmental regulation and accountability (Mind you that the global value of products in a year is barely 5 trillion)

Good that the UK is hosting the Anti-Corruption Summit. But let’s be clear. As serious and tragic as is the corruption in Nigeria, Afghanistan and elsewhere, it has long been facilitated by the UK itself (including through Royal Dutch Shell, not just tax havens). We should distinguish the big and small operators. As the famous old English ditty puts its:

The law demands that we atone

When we take things we do not own

But leaves the lords and ladies fine

Who take things that are yours and mine.

Everybody decided to support science and climate change? Pope included

On June 18, Pope Francis issued the encyclical Laudato Si: On care for our common home.

The letter has been widely praised for supporting the science on climate change.

But it goes much further than many expected in documenting the phenomenal changes that our planet is undergoing, beyond climate.

And the story of how the Pope has integrated science and religion (not always the easiest of companions, let’s face it) indicates, to me at least, a profound shift in world view. (Paradigmatic shift on minding the sustainable issues for survival)

Patsy Z shared this link TED, September 24, 2015 ·
The case for climate action as a moral imperative.
t.ted.com

The Pontifical Academy of Sciences has been bringing together climate scientists, economists and scholars pretty much since Francis’ papacy began in March 2013.

My colleagues, professors Paul Crutzen, Veerabhadran Ramanathan and John Schellnhuber, have been part of a new level of dialogue between Earth system scientists and the Vatican.

In April of this year, I attended a one-day scientific workshop on the moral dimensions of climate change and sustainable humanity.

At that workshop, which included economist Jeffrey Sachs and Sir Partha Dasgupta of Cambridge University, Cardinal Peter Turkson reminded us that “we are traversing some of the planet’s most fundamental natural boundaries.”

Turkson was using language referring to research on planetary boundaries led by my group, the Stockholm Resilience Centre, and carried out together with leading global sustainability scientists across the world.

First published in 2009 (and updated in a paper for Science in January), our work was initiated by growing alarm at the scale of human influence on Earth.

Indeed, humans, predominantly in wealthy nations that consume the most, are now the prime drivers of change in the Earth system.

We are altering the carbon, water and nitrogen cycles; we are changing the chemistry of the ocean. Only last week, researchers announced further evidence that we are in the midst of a sixth mass extinction of life on Earth. (I had published the article on the 6th mass extinction many months ago)

Firmly grounded in this science, Pope Francis’ encyclical suggests — in line with our analysis — that planetary stewardship must now be the foundation of our values, beliefs and economic systems. It is a remarkable document on the moral imperative of climate action, as well as a call for a new journey of hope and dignity for all world citizens.

Again, these moral statements are surprisingly well aligned with scientific evidence. There is now mounting evidence that a grand transformation of our economic system will deliver both greater wellbeing for all and a sustainable future.

As several of us at the April meeting pointed out, it is the current economic model, known as business-as-usual — not sustainable transformation — that presents the high-risk path for humanity.

Business-as-usual stands little chance of delivering wellbeing to a world of perhaps 9 billion people by 2050. It is only by transforming to a sustainable world that Earth has a chance of continuing to support social and economic development to meet rapidly growing demands for health and wealth.

One of the ways to do that is to aim for zero emissions from fossil fuels by around the middle of the century. This is possible; the technology is available and investment in renewables is accelerating.

Pope Francis has made this careful intervention at a critical time. 2015 is unique.

In July, world leaders meet to discuss how to finance sustainable development. In September they meet again to agree on 17 global goals for development. And in December, they come together once more to hammer out a climate deal.

In April, the Earth League, a group of concerned scientists which I have the privilege of chairing, released the Earth Statement outlining the essential elements of a climate deal.

This has been endorsed by Desmond Tutu and members of the World Council of Churches and Religions for Peace. Religious leaders are mobilizing around these global environmental challenges.

2015 is a once-in-a-generation chance to overcome inertia and chart out a sustainable path for all.

The Pope’s intervention adds substantial weight to push for a more positive outcome than previous disappointments. Not least, because the window of opportunity is closing fast.

Plutocracy system in the USA?

A billionaires’ election system?

Since when as the common people actually elected who they knew is right for the job?

Are the Us citizens imagining that they have just elected the new Congress?

In a formal way, they did have. The public did vote.

In a substantive way, it’s not true that they have chosen their government.

 posted this Nov. 11, 2014

Understanding and Overcoming America’s Plutocracy

This was the billionaires’ election, billionaires of both parties.

While the Republican and Democratic Party billionaires have some differences, what unites them is much stronger than what divides them, a few exceptions aside.

Indeed, many of the richest individual and corporate donors give to both parties. The much-discussed left-right polarization is not polarization at all. The political system is actually relatively united and working very effectively for the richest of the rich.

There has never been a better time for the top 1%. The stock market is soaring, profits are high, interest rates are near zero, and taxes are low.  (But real wealth generated by the working people has not materialized in this economy)

The main countervailing forces — unions, antitrust authorities, and financial regulators — have been clobbered.

Think of it this way.

If government were turned over to the CEOs of ExxonMobil, Goldman Sachs, Bechtel, and Health Corporation of America, they would have very little to change of current policies, which already cater to the 4 mega-lobbies: Big Oil, Wall Street, defense contractors, and medical care giants.

This week’s election swing to the Republicans will likely give these lobbies the few added perks that they seek: lower corporate and personal tax rates, stronger management powers vis-à-vis labor, and even weaker environmental and financial regulation.

The richest of the rich pay for the political system — putting in billions of dollars in campaign and lobbying funds — and garner trillions of dollars of benefits in return.

Those are benefits for the corporate sector — financial bailouts, cheap loans, tax breaks, lucrative federal contracts, and a blind eye to environmental damages — not for society as a whole. The rich reap their outsized incomes and wealth in large part by imposing costs on the rest of society.

We can’t actually tote up the total spending on this campaign by the richest donors because, thanks to the Supreme Court, much of the spending is anonymous and unreported. Still, we know that the Koch Brothers, through their complex web of shell groups, put in at least $100 million and probably much more.

Many other billionaires and corporate contributions helped to raise the total kitty to more than $3.6 billion.

The evidence is overwhelming that politicians vote the interests of their donors, not of society at large. This has now been demonstrated rigorously by many researchers, most notably Princeton Professor Martin Gilens.

Whether the Republicans or Democrats are in office, the results are little different. The interests at the top of the income distribution will prevail.

Why does the actual vote count for so little?

People vote for individuals, not directly for policies.

They may elect a politician running on a platform for change, but the politician once elected will then vote for the positions of the big campaign donors.

The political outcomes are therefore oriented toward great wealth rather than to mainstream public opinion, the point that Gilens and others have been finding in their detailed research. (See also the study by Page, Bartels, and Seawright).

It’s not easy for the politicians to shun the campaign funds even if they want to. Money works in election campaigns. It pays for attack ads that flood the media, and it pays for elaborate and sophisticated get-out-the-vote efforts that target households at the micro level to manipulate who does and does not go to the polls.

Campaigning without big money is like unilateral disarmament. It’s noble; it works once in a while; and it is extremely risky. On the other hand, taking big campaign money is a Faustian bargain: you may win power but lose your political soul.

Of course there are modest differences between the parties, and there is a wonderful, truly progressive wing of the Democratic Party organized in the Congressional Progressive Caucus, but it’s marginalized and in the minority of the party.

So many Democrats have their hand in the fossil-fuel cookie jar of Big Oil and Big Coal that the Obama administration couldn’t get even the Democrats, much less the Republicans, to line up for climate-change action during the first year of the administration.

And how do Wall Street money managers keep their tax privileges despite the public glare? Their success in lobbying is due at least as much to Democratic Party Senators beholden to Wall Street as it is to Republican Senators.

Is there a way out?

Yes, but it’s a very tough path. Plutocracy has a way of spreading like an epidemic until democracy itself is abandoned.

History shows the wreckage of democracies killed from within. And yet America has rallied in the past to push democratic reforms, notably in the Progressive Era from 1890-1914, the New Deal from 1933-1940, and the Great Society from 1961-1969.

All of these transformative successes required grass-roots activism, public protests and demonstrations, and eventually bold leaders, indeed drawn from the rich but with their hearts with the people: Teddy Roosevelt, Franklin Roosevelt, and John F. Kennedy.

Yet in all of those cases, the mass public led and the great leaders followed the cause. This is our time and responsibility to help save democracy. The Occupy Movement and the 400,000 New Yorkers who marched for climate-change control in September are pointing the way.

Does foreign aid work?

The answer to this question mostly depends on:

1. How you define aid

2. How you quantify what exactly constitutes foreign aid, and

3. Where you stand in the ongoing debate about the effectiveness — or the lack of it — of foreign aid.

Do you define “Foreign aid is a transfer of money from one country’s government (mostly a developed western country) to another country’s government (mostly a developing country in the global south – Africa, Asia and Latin America), or basically a financial transaction between nations…?”

In this case, the aid is an official bribe to secure “colonial” interests in the underdeveloped States

Is foreign aid an exchange in kind of exporting modern skills and equipment in order to obtain higher “added values” from cheaper labor…?

Is foreign aid a mechanism of funding NGO, indirectly paid by governments, in order to facilitate exchange of skills and setting up programs tailor-made to the mentality of the developed culture…?

Is foreign aid what the international institutions lend to developing countries, such as IMF and World Bank…? Under unbearable restrictions…

Is foreign aid what is directly extended to specific communities at their own initiatives…?

Can we categorize the work extended by UN peace keeping forces as foreign aid?

The-under-developed-countries-are-plagued-with-common-disease, should medical aid and facilities be given priorities? (Read note 1)

Evidences point that development-programs-in-Africa-are-planned-poverty (Read note 2)

There are those who strongly believe that it works, like Bill Gates and Jeffrey Sachs.

And there are those who wholeheartedly believe it simply does not work and actually harms those it seeks to help, like William Easterly and Dambisa Moyo.

Image

If “Foreign aid is a transfer of money from one developed country’s government to a developing country’s government…” then there has been an enormous amount of data lately, which is gaining popularity, proving that aid might actually not work.

Dambisa Moyo, in her famous Dead Aid book about foreign aid in Africa, forcefully argued that aid perpetuates dependency and is unhelpful for accountability in recipient countries since it’s free. She recommended shutting it off and heading to financial markets for capital for those countries in need – and to do it within 10 years!

Recently, the criticism has even spread to the work of NGOs mushrooming in developing countries. In a recent informative and now popular TED talk, Ernesto Sirolli, an Italian former do-gooder, reflected on what he did in Zambia.

In what sounds like confession, Sirolli offers details of the white elephants they built. He puts it bluntly this way:

‘Every single project we set up in Africa failed …… everything we touched we killed’

And offers this advice to prospective do-gooders:

‘Best shut up when you arrive in a community: Never begin with any ideas …. Just learn to first listen’

Some are even going further and questioning the effectiveness and impact of aid in emergency situations, an area long thought to be the only where aid works among its detractors. Take Haiti for example.

The catastrophic earthquake in 2010 struck the island,  killed 316,000 people, injured 300,000 others, and left a million people homeless.

After such a disaster from Mother Nature, whether in poor or rich countries, you would only expect support for aid and solidarity.  Not so.

Haiti, nicknamed the republic of NGOs, attracted a lot of emergency aid immediately after the disaster, but things just don’t seem to improve. Despite billions of dollars in pledges (most of it still unfulfilled – a problem of free gifts), a recent article in The Economist noted:

‘And yet more than 350,000 Haitians are still living in tents in scattered camps; many of those who have moved out have returned to substandard housing in hillside shanties and seaside slums.

A cholera outbreak that has killed more than 7,500 people since October 2010 remains a threat, with cases spiking after each tropical storm. Epidemiologists blame poor hygiene at a military base of the UN peacekeeping mission for the outbreak, though the UN has denied responsibility’.

Another recent article in the Wall Street Journal reckoned the same thing, that charity has not done much for Haiti and charges:

‘…Foreign aid—whether it goes through the governments or NGOs—distorts both politics and commerce, undermining the evolution of market economics. Free resources reduce the pressure on politicians to make the reforms necessary to attract capital. When food and services are given away, entrepreneurs who might serve those markets are shut out’.

Could the lack of improvement be blamed on aid?

Is aid in itself bad or is it the way it’s delivered?

The jury is still out.

Responding to those who are struck by emergencies, and finding the best way to help those in need remains a human imperative to which we must find adequate solutions.

Obadias Ndaba is President of World Youth Alliance

This entry was posted on January 20, 2013, in Global

Note 1: https://adonis49.wordpress.com/2009/02/17/the-under-developed-countries-are-plagued-with-common-diseases-any-resolutions/

Note 2: https://adonis49.wordpress.com/2010/01/19/%E2%80%9Cdevelopment-programs-in-africa-are-planned-poverty%E2%80%9D

Note 3: Apparently, Obadias Ndaba obadiasndaba@gmail.com, claims that this article or part of it is his, and want it removed. Why? . If there are corrections or changes, why not update the article? /

Beyond clichés on “who is a poor”: How poverty can be vanquished? What are the battles facing poverty?

“If a progeny of young colored children (slaves) is brought forth, these are emancipated…”.  This statesman describes the  only way out of slavery condition during colonial periods.

It means that unless the kid of a slave family does not demonstrate mental abilities, skills, and potentials early on, the odd is that this kids will remain a slave…Change the word slave or colored children with “poor kid” and the meaning is the same.

“If a progeny of young Poor children is brought forth, these are emancipated to higher class systems…”  The concept of why someone is cataloged as poor is fundamentally related to this racist ideology, very prevalent even today, that a poor kid is mostly born lacking entrepreneurship abilities, characters for a sense of entitlement, education,…

A few new dimensions were added to the racial discrimination of “who is a poor” such as physical famished conditions, total lack of sanitation facilities…

Discourse on poverty has to bypass the “accepted” traditional clichés, such as viewing poverty as mainly related to famine, no access to direct financial aid, lack of healthcare facilities…

Unless the discourse on poverty is shifted to lack of education and early detection of “what’s wrong” with a baby, a community… there will be no pragmatic alternatives: Traditional public consciousness will end up guiding the non-performing policies and forms of aids…

Poverty cannot be resolved by adopting extreme ideological positions such as “pouring in massive financial aids in order to getting out of this trap…” as advanced by Jeffrey Sachs in “The end of Poverty”, or “aids do more harms than goods for the poor and we should correct and facilitate the forces of the market mechanisms…” as promoted by William Easterly in “The White man burden”

Solutions are not readily available by enhancing UN financial and political potentials, or curtailing liberal capitalism in the medium-term, or deposing despots and oligarchies…

Poverty is related and based on daily actions and activities of the masses.

Poverty eradication requires multiplying efficacious pragmatic programs supported by trained and caring personnel, willing to focus on identifying the problems and tending to the details, and having the courage and persistence to overcome the many daily problems, instead of slapping ready-made traditional solutions that do not correspond to the poverty problem.

Sure money can go a long way when used properly to priority pragmatic programs in education, healthcare, preventive medicine, sanitation, access to small enterprises, job opening…that produce fast positive effects, which do not need to wait for the Big Miracle of market “stimulation”

Sure, money can become a major barrier when not invested properly on projects not targeting essentially the most needy, through various administrative levels of waste, and squandering the good will and efforts of the workers

Any aid should be focused on the details of each program, no matter how long the process in the planning and study take…

It has been proven that educating “poor people” on the value of a facility is Not strictly monetary in nature.  For example, studies have demonstrated that those who received free mosquito nest used it as efficiently as those who could afford to pay for the nest…The usage of the mosquito nest was not as bad from both groups, even though the most poor had never used nest or believed it would make a difference…

The cost of massively offering free mosquito nests is insignificant to the expense of curing a few cases of malaria, polio, and many diseases transmitted by flees…

The contention that education is only efficacious when this need is reclaimed by parents and students is false.

The traditional schooling system is based on the pragmatic colonial exigencies in “colonial lands ” of quickly producing “elites” administrators and functionaries in the colonies.  Consequently, this schooling system focused on the brightest 10% students and ignored the remaining students who ended up dropping pretty fast or not learning anything…

This trend has reinforced the concept with the parents that “If my kid is not showing interest in learning, it is much better to take him out and get him working early on…Either you get the jack pot in education with a promising kid or education is a total waste of time and money…”

Another false concept says: “If there are no job market after the learning period, it is of no use wasting time and money on national education system…”

Fact is, the more the masses learn, the more job openings are created in the market:  The masses will adopt the necessary pressures for alternative political and economic policies…

Fact is, it is not enough to send kids to “school concentration camps“:  while in school, the kid has to learn something. at least learn to read, write and do basic math…

Teaching means enhancing the reflective power in kids, extending to them a sense of entitlement to negotiating with authority (like the teachers, the administrators…), and encouraging kids to be patient in solving problems: The longer time is spent on resolving a problem the easier the learning matter will be approached such as in math, writing, reading...

It is far less expensive in the long-term to focus on every student’s needs and potentials than pouring in money on scoring standard tests and bonuses to teachers and “performing” schools…

If the policy is to educate and train well the teachers, and institute a culture that teaching is the highest prestige in a community, and allow more than one teachers to tend to small classrooms, you’ll reap an educated citizen.

The education system in Finland does not take seriously test scores until way later in secondary higher levels.  Thousands apply to teaching positions and competition is harsh within this culture where teachers are the most respected, although not paid as highly as in other countries…

It is obvious that educated parents have assimilated the precept that preventive medicine programs (like early vaccination…) are far superior to the expensive hospital treatments.  Actually, many poor families forget or don’t take seriously preventative programs, and thus, in developed States, vaccination programs are made obligatory because the States can afford the programs and have the proper trained medical personnel.

In developing countries, forced health preventive programs are not applicable, simply for lack of resources in money, personnel, and medical facilities…

The irony is that in India, parents are refusing polio vaccination.  Why?  

The parents didn’t forget or forgive the Indian government lies for practicing in the 80’s  secret sterilization programs under false vaccination programs https://adonis49.wordpress.com/2011/07/24/rickshaw-or-the-celebration-of-promised-radio-transistor/

As the feeling of security and safety are the most basic needs in individuals, education is the most basic building block for human development indicators and programs.

Without a sense of security and safety within a family and extended community, the individual will be constantly worried for his daily bread to survive…

Without a vast primary and secondary schooling system accessible and affordable to all, the society will be constantly facing daily survival problems, with no light at the end of the tunnel.

Note:  This post was inspired by an interview of Sophie Fay with Esther Duflo in the French weekly magazine “Le novel observateur“.

Esther Duflo is professor at MIT, has published “Rethinking poverty“.  She had published “Human development”, and “The politics of autonomy“.


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