Monthly Archives: January 2009

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BANFF 2009: MENSA IN THE MOUNTAINS
 
Eight months from the Banff Regional Gathering (September 2009) and we have a great spectacle in the offing. Combine world-class scenery, the low Canadian dollar and top minds: the result is a memorable occasion. Like music, the fine arts, math, science, politics, games? Add your requests to the mix and book early through Patricia (almostp@shaw.ca) or volunteer to make this Gathering the best ever.
 
Babylon – icon and symbol – stands for what happens when concerted effort flounders. It was supposed to be unique. The tower represented the majesty of which human beings are capable. But it also hearkened back to earlier and happier days when the human enterprise was indivisible, similar – like Eden – to a primitive unity with nature. Mankind strives for the stars, has a plan and fulfills it. That was the hope for Babylon at the centre of the human universe. Though it also evokes more pedestrian themes. In legend, Gilgamesh built the great walls at Uruk, yet he is mere mortal after all as the epic reminds us. Travel though he might across worlds to Utnapishtim, Gilgamesh must die as Babylon must fall and dissolve to dust. Why lament the collapse of the market or the political changes that will follow in their wake? Such is the destiny of the universe, ordained from the beginning. Such is the Second Law of Thermodynamics. Dance while we can, for we are as the mayfly in the August sunlight.
 
The following images are from the Babylon Exhibition at the British Museum:

                            

 The Tower of Babel; 1595, Oil on panel by Lucas van Valckenborch (Mittelrhein-Museum Koblenz )

 
 

       

 Fall of the Tower of Babel, 1547. Etching by Cornelis Anthonisz (The Trustees of the British Museum)

 

                  

 The Map of the World, 6th century BC clay tablet (The Trustees of the British Museum)

 

                 

Dragon Relief, 6th century BC glazed brick panel (Olaf M. Teßmer/SMB-Vorderasiatisches Museum Berlin)
 
 

         

Nebuchadnezzar, 1795/c.1805. Colour print finished in ink and watercolour on paper by William Blake (Tate, London 2008 )

 
                 

Tower of Babel/Der Turm Babel, 2001. Oil on canvas by Michael Lassel (Michael Lassel)

 
Contact us with your comments, articles and queries.

EVENTS

General
 
Feel life is passing you by? Activities with fellow Mensans will turn this around. Think coffees, martinis, movies, dinners, quizzes, anything that ravels up the tired sleeve of care. We’re informal, unstructured and intellectually challenging. Mensa Calgary is a community where members interact, network, support each other, and enjoy each other’s company. For further info, contact Patricia at kathleen4057@yahoo.ca ["There's no pleasure on earth that's worth sacrificing for the sake of an extra five years in the geriatric ward of the Sunset Old People's Home.” (John Mortimore)]
 
 
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Mensa Test
 
Book this January 21 for your Mensa Test. If you work at a post-secondary institution such as U of C, SAIT, or Mount Royal, or if you think potential Mensans are affiliated with your company or organization, post a notice on the bulletin board, send a group email and talk it up. For a notice format, contact Vicki at vherd@shaw.ca or (403) 243-6144. We’ll advertise generally, but also let Vicki have your ideas on this subject. Tell your friends and colleagues about the test.  
 
The testing fee is $90, which covers two tests, receiving feedback on eligibility for Mensa membership, plus the first year’s membership if you qualify. You write two tests so have an enhanced chance to qualify. Full time students pay only $70.
 
A pictorial test is available if your mother tongue is not English and you do not want your test scores to be disadvantaged by language.
 
You need to score in the top 2% of the population in one of the two tests.
 
Contact Vicki with questions about Mensa or the testing, and let her know if you want to write the tests so she can plan resources and give detailed directions to the testing site, likely at meeting Room 2, Basement, W R Castell Central Library, 616 Macleod Trail SE, Calgary.
 
 
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MensaGenerationX
 
Viva the under-30s!! Ideas and participation are welcome. Beat the winter blues by contacting Leslie Joanne at august_83@hotmail.com
 
 
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CoffeeFests
 
Brighten the heart of winter by attending our coffee fest on Thursday, January 15th at 7:00pm. The place is Kaffa (2138-33rd Ave SW, corner of 33rd Ave & 21st St). Parking on 21st. Cash only, a copy of Harry Potter will be at the table, RSVP not required, atmosphere great, munchies superb. Funky to the max. Our second coffee fest will be Friday, January 30th at 7:00pm at Patricia’s house. Email Patricia for more info: kathleen4057@yahoo.ca
 
 
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DinnerNight
 
Feast to your heart’s content on Friday, January 9th, 2009 at 6:00 pm at the Newport Grill (205 – 747 Lake Bonavista Dr SE). This is one of Calgary’s best locations for quality food. RSVP and get more information from Patricia at almostp@shaw.ca.
 
 
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BookClub
 
The January meeting will be held Friday January 23, 2009, hosted by Vicki Herd. We’ll discuss the ripping adventure yarn The Little Prince by Antoine de Saint Exupéry – no, that’s a holdover from December. We’ll talk about that of course, but we’ll also break into The Pillars of the Earth by Ken Follett. Yes, Pillars is the un-put-downable tale, a shoot-em-up or thousand page excursion through the thrilling lives of people we’ll never meet. No holds barred. Please contact Patricia at almostp@shaw.ca for more info.
 
 
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SecondTuesdays(of the Month)
 
Join us for Second Tuesday @ 7:30 PM on Tuesday January 13th, at the home of Vicki Herd (2469 Sorrel Mews SW/Garrison Woods near the Marda Loop Safeway). Contact Patricia at 212-1461 if you have any questions. Vicki plans to invite some previous Mensa members and we also hope that many new faces will make this their first event. Second Tuesday is an open house social evening held the ST of each month, providing an opportunity to mellow out with your peers, fume at the idiocies of the universe, and generally find a sympathetic ear.
 
 
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OtherUpComings
 
Flames Game at Boston Pizza – Saturday January 3, 2009, at 1:00 pm (Flames vs Nashville) or Sunday January 4, 2009, at 5:00 pm (Flames vs. Chicago) – hosted by Robert Conn. Please email your preference to Robert (robertanddiana@telus.net).
 
Mensa Video night is Saturday, January 17th at 7:00 pm at Vicki Herd’s (2469 Sorrel Mews SW). We will be watching a few episodes of Planet Earth, an excellent BBC documentary narrated by David Attenborough. Contact Patricia with your suggestions. You know her email address.

PUZZLES

 
1) Jack wanted everything at his birthday party to go well so he prepared thoroughly. He started by placing a band of narrow red crepe paper, two feet long, on a table. Atop this band, he placed a blue one the same length. Lifting the right and left ends, he taped each together and examined what he’d done. In front of him was a blue ring, its ends taped together, sitting inside a red ring, also with its ends taped together. No, he thought to himself, that’s not sophisticated enough. He tried again, placing a piece of blue paper atop a red one as before, but this time before taping the ends together, he twisted the right ends through 180 degrees. He sat back. Now the taped ends were blue to red, and red to blue. Could he move a pencil all the way around between the inner and outer bands of paper? When Jack gently pulled the nested bands apart, how many pieces did he have?
 
2) Jack always tells the truth. He has rolled a pair of dice and says, “I didn’t roll any fours.” What are the odds that he has rolled a pair of sixes?
 
The answers to December’s puzzles were supplied in the December issue.
 
Here are the answers to this month’s puzzles:
1) Yes, he could move a pencil all the way around, separating the inner and outer bands. But when he gently separated the bands he found there was only a single long one, though it had four half-twists.
 

2) Two dice have 36 possible combinations. Counting them off, eleven of them include at least one four. This leaves 25 possible throws, of which one is the double six we’re looking for. The odds are therefore 1/25.

Feature1 Detroit Bailout

What was the proposed deal?
 
The Big Three American car manufacturers, all based in Detroit, warned they would collapse imminently unless Washington stepped in with a bailout worth $34 billion – although a compromise figure of $14 billion (£9.3 billion) was put to Congress.
 
General Motors, Ford and Chrysler had already received loan guarantees worth $25 billion in September but they came back to Washington this month to beg for more. The heads of the three companies did not help their cause by arriving to ask for the taxpayers’ money in their own separate private jets.
 
GM, which owns Vauxhall in the UK, said it needed $12 billion in loans and another $6 billion line of credit. Chrysler said it needed a loan of $7 billion. Both companies claimed they may not survive the month without the government handout. Ford said they were in a better position but would like $9 billion in loans to use if necessary.
 
The collapse of the companies could mean the end of the US car industry, one of the few remaining blue collar businesses in the country, and the loss of tens of thousands of jobs. More than 5,500 people are also employed by Vauxhall in the UK.
 
President Bush and his successor Barack Obama came out strongly in favour of the rescue package and, in the hours before the Senate vote, Mr Obama was urging both parties to pass the bill.
 
What were the sticking points?
 
The House of Representatives passed the bailout package but it collapsed in the Senate last night when the Republicans blocked the deal, preventing the required 60 votes.
 
The White House attempted to persuade Republicans to back the multi-billion dollar package but any hope of a last minute reprieve failed when talks were deadlocked over the union’s refusal to accept severe cuts in pay and benefits next year.
 
Senator Mitch McConnell, the Republican leader, said: “None of us want to see them go down, but very few of us had anything to do with the dilemma that they have created for themselves.” Many Republicans are loath to use American taxpayer’s money to temporarily prop up industries that they say are bust.
 
What happens next?
 
If the American car industry collapses the shock waves throughout the global economy would be devastating.
 
The desperate bid to save the carmakers from insolvency has seen a number of last-ditch scenarios suggested. The Bush Administration is under pressure to find the money unilaterally in order to keep the industry alive over the next few months.
 
Nancy Pelosi, the House Speaker, called on the administration to transfer funds from the existing $700 billion bailout to carmaker, but Treasury officials insist that the unallocated $15 billion in the fund is required to back up the spending which is propping up the American financial industry.
 
There have also been appeals to the Federal Reserve to step in and help resuscitate the ailing industry. Democrats have argued that it does have the authority to save the carmakers from bankruptcy.
 
It emerged last night that General Motors have already hired a team of lawyers and bankers to consider filing for bankruptcy protection. It is feared that any such move would leave consumers unwilling to risk buying a car with no guaranteed warranty or service in the future thereby finishing off the company.
 
GM and Chrysler issued statements last night insisting that they would continue searching for solutions to keep themselves afloat but without help from Washington their futures look bleak.
 
Ford, the most financially secure of the three, has said that if GM and Chrysler file for bankruptcy protection, it will be dragged down with them.
 

(by nico hines, The Times Online, 12 December 2008)

Feature2 TalebanTax

 
The West is indirectly funding the insurgency in Afghanistan thanks to a system of payoffs to Taleban commanders who charge protection money to allow convoys of military supplies to reach Nato bases in the south of the country.
 
Contracts to supply British bases and those of other Western forces with fuel, supplies and equipment are held by multinational companies.
 
However, the business of moving supplies from the Pakistani port of Karachi to British, US and other military contingents in the country is largely subcontracted to local trucking companies. These must run the gauntlet of the increasingly dangerous roads south of Kabul in convoys protected by hired gunmen from Afghan security companies.
 
The Times has learnt that it is in the outsourcing of convoys that payoffs amounting to millions of pounds, including money from British taxpayers, are given to the Taleban.
 
The controversial payments were confirmed by several fuel importers, trucking and security company owners. None wanted to be identified because of the risk to their business and their lives. “We estimate that approximately 25 per cent of the money we pay for security to get the fuel in goes into the pockets of the Taleban,” said one fuel importer.
 
Another boss, whose company is subcontracted to supply to Western military bases, said that as much as a quarter of the value of a lorry’s cargo went in paying Taleban commanders.
 
The scale of the supplies needed to keep the Nato military operation going is vast. The main British base at Camp Bastion in Helmand province alone requires more than a million litres of diesel and aviation fuel a week. There are more than 70,000 foreign soldiers in the country for whom food and equipment must be imported, mostly by road. The US is planning to send at least 20,000 more troops into Afghanistan next year.
 
Other than flying in supplies, the only overland route is through Pakistan and Taleban-controlled areas of Afghanistan.
 
A security company owner explained that a vast array of security companies competed for the trade along the main route south of Kabul, some of it commercial traffic and some supplying Western bases, usually charging about $1,000 (£665) a lorry. Convoys are typically of 40-50 lorries but sometimes up to 100.
 
Asked whether his company paid money to Taleban commanders not to attack them, he said: “Everyone is hungry, everyone needs to eat. They are attacking the convoys because they have no jobs. They easily take money not to attack.” He said that until about 14 months ago, security companies had been able to protect convoys without paying. But since then, the attacks had become too severe not to pay groups controlling the route. Attacks on the Kandahar road have been an almost daily occurrence this year. On June 24 a 50-truck convoy of supplies was destroyed. Seven drivers were beheaded by the roadside. The situation now was so extreme that a rival company, working south of the city of Ghazni, had Taleban fighters to escort their convoys.
 
“I won’t name the company, but they are from the Panjshir Valley [in north Afghanistan]. But they have a very good relation with the Taleban. The Taleban come and move with the convoy. They sit in the front vehicle of the convoy to ensure security,” said the company chief.
 
The Taleban are not the only ones making money from the trade; warlords, thieves, policemen and government officials are also taking a cut.
 
A transport company owner who runs convoys south on the notoriously dangerous Kabul to Kandahar highway said: “We pay taxes to both thieves and the Taleban to get our trucks through Ghazni province and there are several ways of paying. This goes to a very high level in the Afghan Government.
 
“Mostly the [Afghan] security companies have middlemen to negotiate the passage of the convoys, so they don’t get attacked. They pay on a convoy by convoy basis to let the convoy pass at a certain time. They have to pay each of the Taleban commanders who control each part of the road. When you hear of an attack it is usually because a new small [Taleban] group has arrived on the road.”
 
Lieutenant-Commander James Gater, a spokesman for Nato forces in Afghanistan, said that the transport of Nato supplies was contracted to commercial firms and how they got them into the country was their business.
 
“I can confirm that we use two European-headquartered companies to supply food and fuel, though for contractual reasons it is not prudent for us to name them. They provide their own security as part of that contract. Such companies are free to subcontract to whomsoever they wish.
 
“We are aware they do prefer to subcontract from the countries in which they are operating. In Pakistan they prefer to use Pakistani trucking companies, in Afghanistan they prefer Afghan trucking companies. That is a commercial decision for them.”
 
A representative for the Swiss-based Supreme Global Solutions confirmed that the company held supply contracts with the military in Afghanistan.
 
However, last night the company denied paying protection money. “We categorically reject any suggestion that we now, or have ever, paid money to any individual for the safe passage of our convoys. Furthermore, we do not permit our subcontractors to do so on our behalf,” it said.
 

(by tom coghlan, The Times, 12 December 2008)

Feature3 OmarKhadr

 
Omar Khadr est accusé du meurtre, en 2002, d’un soldat américain en Afghanistan. Les circonstances sont loin d’être claires, le cas d’Omar Khadr (15 ans au moment des faits) peu commun. Mais les interventions de son réseau de soutien n’ont pas réussi, à ce jour, à le faire libérer ni, au moins, à le faire transférer au Canada.
 
La saga de la famille Khadr, djihadiste de père en fils, n’en finit plus. Dernier épisode en date, Omar Khadr est apparu, vendredi 12 décembre en comparution initiale, devant le tribunal militaire de Guantanamo, la base américaine sur l’île de Cuba, où il croupit depuis six ans. Le jeune homme est accusé du meurtre, en 2002, d’un soldat américain en Afghanistan. Les circonstances sont loin d’être claires, le cas d’Omar Khadr (15 ans au moment des faits) peu commun. Mais les interventions de son réseau de soutien n’ont pas réussi, à ce jour, à le faire libérer ni, au moins, à le faire transférer au Canada.
 
Début décembre, Zakri, la fille aînée des enfants de la famille Khadr a certes lancé de Toronto un site Internet "familial" (www.thekhadrlegacy.com). Puis il a fait une grève de la faim devant la Chambre des communes à Ottawa durant la campagne électorale canadienne. En vain. Le gouvernement conservateur refuse de faire rapatrier son jeune frère.
 
Omar est le seul citoyen d’un pays occidental encore détenu dans la prison militaire américaine. Il risque la prison à vie au terme d’un procès dont la date a été repoussée de mois en mois jusqu’au 26 janvier 2009. Une chance peut-être. Six jours auparavant, Barack Obama aura pris ses fonctions à la Maison Blanche. Il pourrait décider durant ce délai de suspendre le procès militaire. Une option réaliste dès lors que que le président élu a promis de fermer Guantanamo. C’est du moins ce qu’espèrent ceux qui soutiennent la cause d’Omar Khadr.
 
Et au Canada, comme ailleurs dans le monde, nombreux sont ceux qui ont pris sa défense, tels que l’ancien garde des sceaux français Robert Badinter, ou le sénateur canadien et ex-général Roméo Dallaire. Une quarantaine d’organismes de défense des droits humains, dont Avocats sans frontières et Amnesty International, font aussi partie du réseau de soutien. Ils ont joué d’influence, lancé des pétitions pour réclamer son rapatriement au Canada, arguant notamment du fait qu’il aurait dû être considéré comme un enfant-soldat, compte tenu de son âge au moment de son arrestation, en juillet 2002. Rien n’y a fait. Le premier ministre canadien, Stephen Harper, oppose toujours son veto à cette démarche. Pour lui, Omar Khadr "est accusé de crimes très sérieux, il doit donc être jugé pour répondre de ces accusations".
 
L’histoire familiale de l’accusé ne plaide sans doute pas en sa faveur. Le père du prisonnier, Ahmed Said Khadr, ingénieur de formation, aurait été l’un des piliers du réseau terroriste d’Oussama Ben Laden. Surnommé "le Canadien", il est mort en octobre 2003 lors d’une attaque contre des combattants d’Al-Qaida, à la frontière du Pakistan et de l’Afghanistan. "Le Canadien" avait quitté l’Egypte dans les années 1970 pour s’installer en Ontario où il rencontre sa future épouse, Maha Elsamnah, d’origine palestinienne. Avec leurs six enfants, dont quatre garçons – Abdullah, Abdul Rhaman, Omar et Abdul Karim -, ils font souvent la navette dans les années 1980 et 1990 : Canada, Pakistan, Afghanistan. Le père gère des camps de réfugiés et des orphelinats au nom d’une organisation non gouvernementale (ONG) canadienne et musulmane, Human Concern International. Chaque hiver, il rentre au Canada et amasse des fonds humanitaires dont on soupçonne qu’ils sont détournés au profit d’Al-Qaida. Après quelques démêlés du père avec la police pakistanaise, la famille se replie sur Kaboul en 1996, juste avant la prise du pouvoir afghan par les talibans.
 
Le fils aîné, Abdullah, part alors pour un camp d’entraînement au djihad. Il aurait ensuite dirigé un camp en Afghanistan. Arrêté au Pakistan en 2004, il passe plus d’un an en prison sans accusation avant d’être rapatrié au Canada fin 2005. Peu après, alors âgé de 24 ans, Abdullah, recherché par la justice américaine, est arrêté par la police canadienne. On l’accuse d’avoir fourni des armes et des munitions au réseau Al-Qaida. Il admet les faits tout en disant avoir agi sur les ordres de son père. En 2005, il revient sur ses déclarations et affirme n’avoir jamais eu de lien avec Al-Qaida. Le jeune homme est toujours en prison à Toronto, en attendant une décision judiciaire sur la demande d’extradition américaine.
 
Son frère Abdul Rahman a plus de chance, d’une certaine façon. Le "mouton noir" de la famille n’échappe pas aux camps d’Al-Qaida. Mais il s’avère une piètre recrue. Il sera tout de même capturé à Kaboul par l’Alliance du Nord (le front afghan antitalibans) en novembre 2001. Après quinze mois en prison, il est transféré à Guantanamo en 2003. Il admet avoir participé à des camps d’Al-Qaida "poussé" par son père. On apprendra plus tard que le FBI et la CIA l’auraient recruté comme informateur à Kaboul, puis à Guantanamo. Sa "couverture" percée à jour par des codétenus, les Américains le renvoient à Kaboul en 2004, "sans argent, ni passeport", dit-il. Il erre de pays en pays avant de rentrer au Canada, fin 2004, avec l’aide de l’ambassade canadienne en Bosnie.
 
Omar, enfin, est lui aussi confié en 2002 à des formateurs d’Al-Qaida par son père. Selon l’acte d’accusation américain, il espionne des convois américains, place des engins explosifs sur leur passage. Lors d’une attaque américaine en juillet 2002, il aurait tué un sergent américain avec une grenade. Pour son avocat aux Etats-Unis, William Kuebler, le sergent a pu être victime d’un "tir ami". Dans Guantanamo’s Child (avril 2008, éditions Wiley, Toronto), la journaliste du Toronto Star Michelle Shephard doute aussi de l’identité du lanceur de grenade.
 
Le sort du fils cadet, Abdul Karim, n’est pas plus heureux. Blessé en même temps que son père est tué en 2003, devenu paraplégique, il attendra de longs mois son transfert d’un hôpital pakistanais vers Toronto, où il rejoint ses grands-parents en avril 2004, puis sa mère et ses deux soeurs.
 
Omar, lui, est toujours à Guantanamo. Il affirme avoir été torturé et menacé de viol par des Américains lors de son séjour à la prison de Bagram, près de Kaboul. Victime de brimades répétées à Guantanamo, il est l’objet d’une saga judiciaire aux Etats-Unis et au Canada. Côté américain, Me William Kuebler tente sans succès d’éviter un procès militaire. En mai dernier, il échoue à faire reconnaître par un juge militaire que la détention de son client "viole les lois américaines et internationales concernant la protection des enfants et des anciens enfants-soldats".
 
Parallèlement, une controverse fait rage à propos du rôle joué par les autorités canadiennes dans les interrogatoires d’Omar Khadr à Guantanamo. Des agents du renseignement canadien lui ont rendu visite, après son transfert d’Afghanistan, se faisant passer pour des diplomates venus l’aider. Ils l’interrogent durement et donnent aux Américains les informations. L’affaire est portée par les avocats du prisonnier devant la Cour suprême du Canada qui reconnaît, en mai, que le Canada a agi "en violation manifeste du droit international et des droits fondamentaux de la personne". Mais en ce vendredi 12 décembre, c’est toujours de sa cellule de Guantanamo qu’Omar Khadr a été tiré, pour comparaître devant ses juges militaires.
 

(by anne pélouas, Le Monde, 13 December 2008)

Feature4 Democracy

 
The apparatchiks of the European Union establishment have one thing, at least, in common with serial rapists. They cannot accept that no means no. These people all want it really, they say. They’re not victims; they’re gagging for it. And they’ll love it really when we get our way with them. What the EU establishment wants, it gets. It takes, regardless.
 
Last week the Brussels nomenklatura once again proved that it won’t accept a no, this time from the electorate of Ireland. In June the Irish voters firmly said no to the European constitution, or rather the Lisbon treaty, or whatever obfuscation the Europhiles dreamt up to bamboozle us. The Irish were not bamboozled; they didn’t want the EU constitution. But no is not acceptable.
 
So last week Brian Cowen, the taoiseach and Europhile, reassured European leaders that he wouldn’t take no for an answer from his people. He has promised to make them vote again on the matter. Dick Roche, his European affairs minister, then opined, in the majesty of his democratic office: “From a constitutional point of view, there’s no other choice than a second referendum.”
 
What can he mean? The truth is the precise opposite. Such deliberate untruth, backing Mr Cowen’s promise to ignore his people’s vote, gives new vigour to the phrase barefaced effrontery. Against such wilful, shameless betrayal of the democratic process it is useless to protest; democracy is being undermined by democratically elected governments that don’t understand a constitutional no and smile benignly, or self-importantly, at our helpless rage.
 
Cowen and Roche should not be singled out for their effrontery. Jose Manuel Barroso, president of the European commission, is guilty of it too. Last week he brought out his weary charm on BBC television to ask, “Who are we to stop the Irish having a second referendum?” European leaders, far from stopping a second referendum in Ireland, have put huge pressure on its prime minister to have one or do something – anything – to deliver up an Irish yes.
 
Barroso must have known this; his question was shamefully misleading. Yet he actually said after last week’s Brussels summit meeting that “Europe has passed its credibility test”. The truth, once again, is the opposite. With its demand for an Irish yes, the EU has passed another incredibility test, in the manner of a deluded rapist.
 
Our own Gordon Brown, and Tony Blair before him, specialises in shameless, undemocratic effrontery, not least about the EU. Everyone knows Labour promised at the 2005 general election to hold a referendum on the proposed EU constitution. Everyone knows Blair and Brown broke that promise. Brown then sneakily signed the Lisbon treaty, knowing full well that most British voters would have said no. But Brown wasn’t having no. He wasn’t having democracy.
 
Brown does not restrict his astonishing effrontery to matters European. One of my favourite examples was his claim, many times repeated, that he had inherited “a broken economy” from the Conservatives. He must have known that the opposite was true, but he kept saying it.
 
I particularly enjoyed the way he and his ministers until recently went about intoning that Britain is one of the best-placed nations in the rich world to withstand the global crisis, since Britain is not overborrowed like other leading countries. The truth is the opposite. Clearly, they think they can get away with it. Perhaps they think we won’t notice or won’t care. Historians may say ’twas ever thus: all politicians lie.
 
I am not so sure. In my adult life I think there has been a growth in barefaced lies and deception in public office, along with a loss of respect for due process and respect for the freedoms of others. Maybe that’s just because, with the information revolution, we know so much more about what public men and women get up to. Or perhaps there has been a real change.
 
It’s an odd coincidence that while democracy and meritocracy have truly spread in the past 50 years, while all sorts of institutions and activities have been opened up to people who used never to get a look-in, political democracy seems to be coming under increasing threat.
 
A perfect example of this is the utterly incurious way Michael Martin, the Speaker of the House of Commons, and his unlucky placewoman Jill Pay, the serjeant-at-arms, were prepared to let the police into the Commons. I don’t believe there was any conspiracy; both were just too ignorant to do their jobs properly and had too little real understanding of the point of parliamentary procedure.
 
It may be snobbish, but it’s true. Neither is really qualified for the post by education or by experience. They both showed an unquestioning deference to the police. The rise of democracy was supposed to be the end of undue deference, yet here were the defenders of the people’s Commons touching their forelocks to the filth.
 
The price of freedom is not just constant vigilance – it must be informed and educated vigilance. And that vigilance is protected by procedure. Yet watchers over us are often less well informed and educated than they used to be.
 
You see small signs of it everywhere. In little committees for local purposes, or in big ones, you see a gradual disappearance of proper procedure. In the past, trade unionists and charitable ladies always used to go by the committee book. Now the tendency is towards friendly consensus, an open show of hands and an indifference to the minutes – to the record, in fact.
 
One of the problems behind Haringey’s first report on the death of Baby P was that the head of children’s services, in having two roles, had conflicts of interest – a serious procedural problem that was ignored. Procedure is deadly, of course, but it’s there to protect the truth-tellers and the vigilant, especially when they face undue pressure.
 
The EU is all too often indifferent to procedure, indifferent to the shameful fact that the auditors have not signed its accounts for years. In ignoring, jointly, the democratic procedures of other countries, it suborns individual Europhile leaders into an equal indifference. Procedure matters: it is there to protect us from, among other things, the barefaced effrontery of totalitarianism.
 

(by minette marrin, The Sunday Times, 14 December 2008)

Feature5 Iceland

 
In the summer of 1783, there was a volcanic eruption in the southeast of Iceland that vomited lava into the Skafta river, which boiled and ran with fire like a mythological Nordic curse. The volcanic gases were toxic and poisoned animals in their byres. Seething clouds of opaque ash plumed into the sky, blotting the sun. Everything that photosynthesised withered and died. There was a famine that killed a fifth of the population — a fifth of the people who had survived the smallpox epidemic that had previously seen off a quarter of all Icelanders.
 
So the penury of the Icelandic banking system, the collapse of its currency, the parlous implosion of its economy that relegated it from being, per capita, the second or third richest nation in the world to being the shivering Big Issue-seller of Europe, bobbing in the queue somewhere behind Albania and Moldova, is not actually the worst thing that ever happened to this island. That would have to be the two occasions when the plague wiped out more than half of everybody. Iceland didn’t have any rats, but they got Europe’s worst case of bubonic deaths without them. That’s unheard of. That’s virtually impossible — but that’s how Iceland’s luck is. It’s said you make your own luck; it’s never said that your luck also makes you.
 
Iceland and Icelanders have been forged on the anvil of hard knocks. The unfair thing about this latest paper calamity is that it happened just when they thought things were going so well. There were restaurants that sold food for people who weren’t hungry, there were international bars for international folk, there were boutique hotels with ambient music, and candles for smell, not illumination. Iceland was chic and cool, not just in a cold way. “This summer,” a pretty girl with a red nose and a pink scarf told me, “everybody was here on a small patch of green in front of the parliament” (which itself is smaller than Elton John’s guesthouse). “We came to cheer and drink, because Iceland had won a silver medal at the Olympics for handball,” she said. “It was huge. We’d never won a medal before.” Who came first? “Who cares? We came second. Everything was going so well.”
 
Reykjavik is littered with the detritus and shells of things that were once going so well and now aren’t going at all. Like the big four-wheel-drives, bought on a promise and the never-never. The biggest is a Babel-ish building site, palisaded by protective cranes, which was hoping to be a music hall, the Sydney Opera House of the far, far north. There is still a visitors’ centre, with a girl on the phone looking for a new job. There’s a toy model of what it is now unlikely to look like. You can peer through a telescope at nobody working. I watched one ancient traffic warden give a ticket to a solitary pick-up, abandoned on a patch of rutted wasteland that was going to be a smart amenity area. This was all financed by Landsbanki, one of the raiding banks that spent like mullered fishermen and borrowed like agoraphobic Vikings, who leveraged the economy into the stratosphere without a Keynesian parachute, along with every other bank in the monetarist world.
 
The difference here was that in every other city centre, they can run home to Daddy Government and have their gambling debts paid off. The Icelandic government is a dozen shepherds and a couple of grocers in Specsavers and M&S suits. One of the reasons they say the financial risk was so precipitous was that the entrepreneurial pool is so small. The bankers and the regulators, the ministers and the judges are all the same people — they’ve known each other all their lives, their wives and their children are friends, and nobody wanted to be the one who said no. And why should they?
 
It was all going so well.
 
Down by the container port, where the derricks droop idly, is a car pound the size of half a dozen football fields, circled by defunct iron boxes. It’s full of hundreds, perhaps thousands of cars. Behind them, across the grey fjord, black pumice crags are scarred with snow. The cars are going nowhere, dumped here at the end of the world: a great, windswept, conceptual monument to the hubris of Mammon, laughed at by black-backed gulls. These testaments to excess are now the most tasteless things to be seen in. They call the puttering Range Rovers “Game-Overs”.
 
Further down the shore is a speculation of modern flats, expensive, insubstantial urban penthouses that may well remain empty for ever. A young man passing by, dressed in the winter uniform of Icelandic youth — skinny jeans, T-shirt with ironic postmodern slogan, Converses and a bit of a useless scarf, hunched shoulders and a general air of thermometer-denial and hungover insouciance — stops and laughs. “Who did we ever think was going to live here? Now we look back and it seems mad. Anyone could have told them. I could have told them.”
 
Outside Reykjavik, there are suburban developments for new commuter suburbs. They put in roads and street lights but the houses have yet to be built, or stand blankly unfinished. Outside, a little girl plays in the gloaming with her sheepdog. It’s a strangely surreal image: the silent cul-de-sac, like a model of the middle-American ’burbs, with just this child, a character snatched from an Edward Hopper painting.
 
Further along a road called End of the World we find a self-employed electrician. His company is called “Why Not Me”. When he has finished here, he is going abroad to find work — “Poland, probably” — and he smiles a crooked Icelandic smile. It’s a joke. There used to be lots of Poles here doing the dirty bits of the economic soft times. Now they have all gone home because the Icelandic krona has become shrapnel in the explosion of free markets.
 
Kaupthing, Landsbanki and Glitnir sound like elf characters from The Lord of the Rings, and there is an element of fairy-tale comeuppance to these three backwater banks. Only when you’re shown their headquarters do you realise how bizarre and unworldly their success was. They look like small city shops, branches of Bradford & Bingley. One of them was run from the floor above a fast-food restaurant. As with every great disaster the world over, the moment after it happened, the scales fell from every eye and all could see that it was inevitable. Where were the white-collar jobs for the commute back from the brave new garden suburbs to come from? Where was the black-tie audience for the opera? How could Iceland have the sharpest cashiers in the world? How could this nation sustain just two main industries: cod-fishing and international high finance? And, most importantly, most damningly, how did they ever think they could buck the Icelandic luck? Now everyone looks back at the road they’ve just travelled and wonders why none of them mentioned it was made of marzipan and Rolexes.
 
The act that tipped the last Icelandic bank off the edge of the cliff was delivered by Gordon Brown, who froze Icelandic assets in the UK using our new, gleaming anti-terrorist legislation. The Icelanders mind that — they’re hurt by that. You see, they always imagined they were one of us, not one of them. But Gordon needed to do something cheap to look competent, so he beat up a smaller kid. Not just a bit of a slap, but a vicious kicking. Showing off to impress the girls. He would never have started it if the banks had been German or French, or even from Liechtenstein.
 
The Icelanders mind about the terrorist thing. They don’t even have an army. They barely have a jail: it’s more of a drop-in centre. The police drive you home if you’re too drunk. This is the most liberal, reasonable, hard-working, decent, moral, amusing and well-educated people on the Continent; a nation who are temperamentally the furthest away from terrorism. Remember that about Brown — the man who said he wanted to prevent the export of terrorism. Remember it when he puts on his Save the World, Mr International Harmony hat. He put an ally into intensive care for the sake of a headline and three points in a weekend poll. Perhaps he didn’t notice. Perhaps he was looking through his glass eye.
 
Let’s just be clear about what Iceland really is. Most people think it’s the size of the Isle of Wight with the population of, say, Holland. It’s bigger than Hungary, bigger than South Korea, which has a population of 50m. There are just over 300,000 people in Iceland. So that’s a country the size of Portugal with the population of Bradford. Those are Mr Brown’s terrorists.
 
Iceland imagined that Europe and America would help it out. After all, it has always helped us out. Keflavik was a vital Nato base between the east coast of America and the west coast of Europe in the cold war. We were all in this together. Except, as they were to learn, we were only in it together if we were fat enough to buy ourselves the solution. The Russians bailed Iceland out: Reykjavik could be a very useful place to launder money and cock a snook. And the Faroe Islands, bless them, population 48,000, lent £34m. Everyone in Iceland signed a thank-you card. And finally the IMF came up with a rescue package.
 
Oh, but Gordon Brown — or you and me, as he is known abroad — leant on that so that fat, stupid English councils could get their greedy noses in the trough before Icelandic children got a banana. That’s not hyperbole — because they have so little foreign currency, imports are graded into three categories: essential, necessary and luxury. Exotic fruit is a luxury, but then in Iceland a tree is an oddity. If you want fruit, eat fish liver or a puffin.
 
Sitting in the happy, healthy organic cafes of downtown Reykjavik where the hippie kids blog (there are more bloggers here than anywhere else) and girls with blond babies laugh at each other, you wouldn’t know this was an economically dead country walking. In the 101, a New York-brittle boutique hotel built and patronised by the bankers and speculators, you couldn’t tell that nobody here has a pension or savings. The groups of svelte and confident girls flick their hair, neck cocktails and make blatant passes at the men with face hair like mangy seals who are downing beer and shots. Icelanders react to bad news the way they always have. It’s the same way they react to good news: they get hammered. Properly Valhallaed. The bars and clubs are full, the booze is expensive, and they toast each other with a grim irony. There are still redundancy payments around — they’re cash-happy. The crunch will come in the New Year when the brass handshakes run out.
 
People may be hurt by Brown and the British, and embarrassed by the gluttony and ineptitude of their own businessmen, and they are angry with their government. They want an election and someone to be Icelandic enough to grasp the blame and responsibility. But about themselves and the future they are remarkably, Nordically sanguine. A very direct woman in a bar said: “All that money, all the things and the stuff, it’s very un-Icelandic. The wanting, the conspicuous consumption, the avarice and ambition, the pathetic jealousy, that isn’t us. A great weight has been lifted now the money and the desires are gone. We can get back to being who we are.”
 
Who the Icelandics are is one of the great enigmas of northern Europe. They speak an ancient, pure Scandinavian. They are horrifically hard-drinking, maudlin and prone to flights of dark nihilism and lengthy bitterness. They are taciturn fishermen and farmers; stoical, practical and moral. They have published more books and produced more chess grandmasters per head than anywhere else. They read more and write more, they sing and play instruments. Everyone here can change a tyre, strip an engine, ride a horse, sail a boat, dress a sheep and cure a salmon. They have grown through a hard Calvinism to a moral atheism while maintaining an open mind about elves.
 
Roads are moved to avoid the homes of the hidden people: elves have to be asked permission before new buildings are built, and country folk see them regularly, not always when drunk. The fairy folk who share this empty island with the humans are Adam’s other children: the unwanted, cloaked by God in invisibility.
 
There is also a deep handmade seam of nostalgia that links all Icelanders. Families are going back to the old ways — to buying the autumn-culled sheep. Traditionally you get an odd number, and the whole family comes to make slatur, a sort of fatty haggis sausage that is boiled and tastes like warm, meaty fat. The warming cabinets of convenience stores offer vacuum-packed, ready-cooked, laterally sliced halves of sheep’s heads, which I’m told are selling like boil-in-the-bag halves of sheep’s heads. The women are going back to knitting rough, tarry wool into the mentally geometric jerseys that feel like wearing St Francis’s wife-beater. A big second-hand shop has become a smart and fashionable place to shop, though not for anything that is fashionable or smart. The contents are commendably and pathetically meagre and practical. The boxes of second-hand records hum the contradictions of Iceland’s long winter. There are lots of romantic choral works, home-grown folk songs from men in third-degree knitting, and heavy metal and prog rock. On the second-hand-magazine rack are piles of practical outdoor-activity manuals and a copy of Hello! commemorating the death of Princess Diana.
 
The designer interior-decorating emporiums that sprung up in the last five years now stand empty and sulky, like party-dressed girls with panda eyes waiting at morning-after bus stops. There’s a large new mall on the outskirts of Reykjavik, neon-bright and desolate. The girl who takes me there says, “A mall — nothing could be less Icelandic than a mall. All this will go,” and waves a mittened fist at the prefab warehouses, the new homes and the loneliness of the long-distance car park with its flapping flagpoles, “and we can stop pretending to be little Americans, or Danes, or British.”
 
There is something invigorating about Iceland at this moment — like being with people waking from a dream. It’s exciting and instructive. It’s a patronising cliché to say that people have wealth beyond mere riches. Nobody is better off for being poor. But this tight-knit, undemonstrative community at the edge of the world has been woven together from sterner stuff than I think we could muster. “We’ll be all right — we’re not going to starve,” a shopkeeper told me. “We have fish and rye and mutton and barley. We can grow the odd tomato in a polytunnel. We have skills — useful skills, practical skills. And, you know, they’re under-heating the pavement outside my shop so it won’t freeze in the winter. All our energy is thermal and free. So maybe I can’t have a new mobile phone, but when I get drunk and fall over, the pavement will keep me warm.”
 
From the 12th century a miraculous thing happened here: one of those eruptions of creation that defy the laws of culture and make civilisations briefly pyrotechnic. A series of books were written to illuminate the dark: sagas, secular stories of life, of mystery and mythology, of lords and farmers, politics and revenge, love affairs and voyages. Stories that were the first to be written as narratives with parabolas of plot and evolving characters. Nobody anywhere else had ever done that before. It is the birth of literature. They are as inexplicably, breathlessly awe-inspiring as the conception of the Renaissance a hundred years later. It was the Icelandic sagas that inspired Tolkien to write The Lord of the Rings, because he wanted Britain to retrospectively have a creation myth. Nobody knows what inspired Iceland or what precipitated this volcano of clear, collected genius. It was just Iceland: out there, sparse and treeless.
 
In the howling gale where the water boils and the volcanoes rumble, and the earthquakes make the ground liquid, and black shores crash and smoke, it is a landscape that fills you with either dread or stories. And it’s shared with the hidden people and the heroic solitude, a brooding presence to measure your height against.
 
Iceland has grasped this weakness, this greed, this business with money, and turned its back to take an unsentimental look at itself.
 
They will be all right. This is the nation that made the first democratic parliament — the Althing — that fought the Royal Navy to make the first sustainable fishery in the northern hemisphere, produced three Miss Worlds and one Nobel literature laureate — then came second at handball. You are measured by how squarely you stand against bad luck. Not how you squander good luck.
 

(by aa gill, The Sunday Times, 14 December 2008)

Feature6 Whoops

 
The leading Goldman Sachs oil analyst, who had been one of the market’s biggest bulls this year, predicting that crude could hit $200 a barrel, has slashed his 2009 forecast to $45, blaming “incredibly weak demand” as the global economy plunges into recession.
 
Arjun Murti, the New York energy analyst for the US investment bank, came to prominence in 2005, when he was among the first to predict accurately a “superspike” in prices to more than $100 a barrel. For each of the successive three years, his forecasts were consistently higher – and usually closer to the mark – than those of most of his peers.
 
However, Mr Murti was left red-faced this autumn when his prediction that prices could reach $200 proved far-fetched. Instead, they nosedived from a high of $147 a barrel on July 11 to $48.50 yesterday.
 
In a research note published late on Thursday, Mr Murti’s team said that it had been compelled to trim its average price outlook for next year to $45, from a previously reduced forecast of $75, because of a “continued deterioration in global oil demand”.
 
The note read: “Global economic conditions are the weakest the world has seen since at least the early 1980s and demand is declining at an accelerating rate.”
 
Mr Murti added that demand for crude was so weak that Opec, the cartel of 13 oil-producing nations, which will meet next week in Algeria, would be unable to force prices higher through further production cuts.
 
“We think that the sharp and sudden collapse in global oil demand exceeds Opec’s ability to, on its own, balance markets, and necessitates sharply lower non-Opec crude-oil supply,” the report said.
 
Nevertheless, Mr Murti also asserted that there were signs that crude prices could be close to a turning point. “We see a growing number of signs that oil markets have entered the bottoming phase of the cycle,” the report said, adding that positive demand growth and shrinking non-Opec supply would push prices to $70 a barrel by 2010 and to $105 by 2012.
 
“We do not believe oil markets are on track for a decade-plus period of weakness like seen in the 1980s and 1990s,” the report said.
 
In a separate study published yesterday, another group of Goldman commodities analysts predicted that world oil demand would fall by 1.7million barrels a day, helping to drive oil prices down to as low as $30 a barrel in the first quarter of next year.
 
“We expect that an additional 2 million barrels per day of Opec supply cuts will be required in 2009, along with a 600,000 barrels per day reduction in non-Opec production, in order to rebalance the market,” the analysts wrote.
 
Goldman Sachs, which is Wall Street’s biggest oil trader, is due to publish its annual results on Tuesday.
 

(by robin pagnamenta, The Times, 13 December 2008)

Feature7 AntiDeflation

 
Central banks are right to flood the world economy with newly printed money – so long as they know when to stop.
 
At long last, the world’s economic leaders are swinging into action. The US Federal Reserve could have done what it did on Tuesday night – slashing US interest rates to absolute zero and announcing that it would print money without limit – two months ago, when the collapse of Fannie Mae and Lehman Brothers turned a localised financial problem into a life-threatening convulsion threatening the entire global economy. But better later than never.
 
The world’s most important economic policymakers now have the bit between their teeth and their counterparts in Britain, Japan, Switzerland and the eurozone will find it impossible not to follow.
 
Politicians all over the world must now stop talking about hard choices – and start taking soft options. That may sound sardonic, but it isn’t supposed to be. The political rhetoric of “hard choices” may sound more appropriate than “soft options”, but a medical analogy makes it clear why pampering, not punishment, is what the world economy now requires. To recuperate from the post-Lehman heart attack, bankers and borrowers needs cosseting in the soft eiderdown of zero interest rates, while consumers and businesses need the emotional reassurance of tax cuts and government guarantees.
 
Without such tender care from central bankers and politicians, the year ahead could easily bring the death-throes of the globalised capitalist economic system. By cutting interest rates from 1 per cent to zero, the Fed opened the door to a completely new world of possibilities where many traditional rules vanish or go into reverse – a sort of economic Wonderland in which money can be distributed free to citizens and where governments can spend and borrow at will, without any increase in borrowing costs.
 
Now that the Fed has blazed the trail, other central banks are likely to follow. The sooner they do this – for the Bank of England it should be at its January monetary policy committee meeting – the greater the chances of averting a depression.
 
Specifically, the Fed’s decision to impose zero interest rates was accompanied by a commitment to “unconventional” monetary measures. In layman’s terms this means a promise to print and distribute money – and to keep printing it – until the US economy has pulled out of its recessionary spiral.
 
This is something that no central bank in any advanced economy has before promised so explicitly. But what, in practice, does it mean? In a modern economy there are three ways to “print money”.
 
The first, most cautious, approach is for the Fed to buy safe assets, such as government bonds, mortgages, student loans and other guaranteed debts that are now owned by private banks, investment institutions or individuals. The Fed will pay for them simply by making electronic transfers into the bank accounts of the people or institutions selling. For every $1 million worth of assets bought, the Fed will transfer $1 million of new money into private bank accounts. This “money” will come literally out of nowhere. It will simply be an electronic blip on the Fed’s computer. Because electronic deposits at the Fed are the ultimate form of legal tender in the US system, the result will be that the US economy has $1 million more money.
 
The problem is that for every $1 million of new money thus “printed” the private sector must give to the Fed $1 million in some form of wealth, such as mortgages or bonds. As a result, the private sector does not feel any richer and might not increase consumption or investment. Because of this, the Fed has promised to go much further.
 
The next option is to buy risky assets – commercial mortgages, bundled-up credit-card loans, perhaps even houses or shares. By making new money available for private sector mortgages, shares or other risky assets, the Fed would be able to drive up their prices making the private sector genuinely richer. Even more importantly, it could make new credit available directly to businesses and homeowners, bypassing the paralysed private banks – an example that the Bank of England and British Government should soon emulate if they have any sense.
 
The most radical option is to send the newly-minted money directly to the US Government. It could then be handed out to citizens via tax relief. This form of monetary expansion would be equivalent to printing money and dropping it from helicopters for people to pick up – a graphically extreme proposal that earned the Fed chairman, Ben Bernanke, his nickname of Helicopter Ben.
 
If there were doubts over whether private citizens would spend the newly-minted dollars, the Fed could agree with the Government on a programme of direct public spending financed by free electronic money, instead of taxes or bond issues. The Fed can literally guarantee that any new money created by this “ultra- Keynesian” approach will increase economic activity and employment. But such certainty comes at a cost.
 
A central bank that prints money to finance large-scale government spending is, in theory, moving into territory occupied by Zimbabwe and Weimar Germany. The Fed can take this risk at present, and is right to do so. Banks, businesses and consumers are so convinced today about the prospect of falling prices – for houses, shares, commodities, cars, washing machines and all kinds of other assets – that far from losing confidence in paper money, they are too eager to keep all their savings in government-guaranteed paper.
 
As a result they refuse to invest in productive assets – and this refusal to invest is causing the slump. Until investors, businesses and consumers regain enough confidence to start spending, the Fed and other central banks can print money with abandon – and must do so. But once private spending resumes they must turn off the printing presses – or risk an inflationary boom that could be worse than the present deflationary crisis.
 
Contrary to conventional wisdom, inflation is much harder and more painful to deal with than deflation. Deflation can always be reversed – all it takes is a central bank willing to print money, supported by politicians who cut taxes, increase public spending and support banks instead of putting them into liquidation.
 
These are politically easy options. It was only because policymakers were so unpragmatic and moralistic, especially in their attitudes to bank regulation and accounting, that the crisis deteriorated so disastrously two months ago. Dealing with inflation is a different matter. Inflation really does demand tough choices – harsh public spending cuts, tax increases and high interest rates.
 
Today the threat is deflation, not inflation. The measures needed to deal with it are relatively painless and cost-free. Central bankers and politicians deserve to be praised when they take these easy options – provided they know when to stop.
 

(by anatole kaletsky, The Times, 18 December 2008)

Feature8 NeedBrainStimulus

 
A federal economic stimulus package will likely lead to a deficit in the $20-billion to $30-billion range for the 2009-10 fiscal year, a Prime Minister’s Office official told CBC News on Thursday.
 
Hours after the announcement, Harper confirmed in a television interview that the Conservative government was planning to take unprecedented action to stimulate the country’s economy.
 
“Some people are talking in the neighbourhood of a five to 10 billion dollar deficit. Our own assessment is frankly that will not be sufficient given the challenges we’re facing,” Harper told CTV News in a year-end interview.
 
“I think what will be more realistic in terms of the kind of stimulus our economy is going to need is going to be in the 20-billion to 30-billion dollar range.”
 
The figure includes the $5-billion deficit the Finance Ministry projected on Wednesday for the next fiscal year, the CBC’s Rosemary Barton reported from Ottawa.
 
It also includes funding for the planned $3.3-billion auto-sector bailout, as well as unspecified amounts for forestry, housing, job retraining and infrastructure investment, the senior official said.
 
The new numbers are a stark contrast to the surplus projections of Finance Minister Jim Flaherty’s economic statement, tabled Nov. 27, and show how quickly the government’s perception of the economy has been changing.
 
In November, the government foresaw surpluses of $800 million in 2008-09, $100 million in 2009-10 and $100 million in 2010-11. Those were to rise to $1.1 billion in 2011-12, $4.2 billion in 2012-13 and $8.1 billion in 2013-14.
 
On Wednesday, the Finance Ministry posted an update of Flaherty’s economic statement on its website that issued new budgetary projections based on fresh private sector forecasts. They indicated deficits of about $5 billion for 2009-10 and $5.5 billion for 2010-11.
 
"The level of nominal GDP is expected to be about $20 billion lower in each of the next two years. This suggests that revenues will be weaker than projected in the November statement," the update said.
 
On Wednesday, Flaherty acknowledged that Canada can’t withstand the turbulence in the global economy.
 
He said three factors are affecting the economy: falling world GDP; an American recession, which the U.S. National Bureau of Economic Research officially recognized on Dec. 1; and a drop in commodity prices.
 
But the opposition parties said it’s about time the finance minister admitted what they’ve known all along.
 
"Finally, they’ve come up with the truth," Liberal finance critic John McCallum said. "They’ve been in deficit denial for weeks or months, and they’ve known this all along that there was a deficit."
 
New Democrat MP Thomas Mulcair said the change in the figures means Flaherty has lost his credibility.
 
"Is there a problem or isn’t there?" Mulcair said from Montreal. "Of course there is, but he’s been denying it up until now and no one believes him anymore."
 
While still projecting a small surplus for the current fiscal year, Wednesday’s update said that the "budgetary balance for the next two years would be about halfway between the average and low scenarios set out in the economic statement."
 
Although the updated documents discuss specifically those two fiscal years, their charts suggest there would also be deficits for 2011-12 and 2012-13 of around $4 billion and $1 billion, respectively.
 
The government won’t see a surplus until the 2013-14 fiscal year, the update chart suggests.
 
The deficits are forecast to occur even if the government proceeds with billions of dollars in asset sales and cost cutting that it has proposed. The projections also don’t take into account any money spent for a stimulus package to boost the economy.
 
The federal government hasn’t run a deficit since 1996-97. In the 2006-07 fiscal year, Ottawa’s surplus hit $13.8 billion.
 

(CBC and Canadian Press, 19 December 2008)

Feature9 AfghanWarWithoutEnd

 
Just two months after the twin towers fell, the armies of the Northern Alliance marched into Kabul. The Taliban fled.
 
The triumph was total in the "splendid little war" that had cost one U.S. casualty. Or so it seemed. Yet, last month, the war against the Taliban entered its eighth year, the second longest war in our history, and America and NATO have never been nearer to strategic defeat.
 
So critical is the situation that Defense Secretary Robert Gates, in Kandahar last week, promised rapid deployment, before any Taliban spring offensive, of two and perhaps three combat brigades of the 20,000 troops requested by Gen. David McKiernan. The first 4,000, from the 10th Mountain, are expected in January.
 
With 34,000 U.S. soldiers already in country, half under NATO command, the 20,000 will increase U.S. forces there to 54,000, a 60 percent ratcheting up. Shades of LBJ, 1964-65. Afghanistan is going to be Obama’s War. And upon its outcome will hang the fate of his presidency. Has he thought this through?
 
How do we win this war, if by winning we mean establishing a pro-Western democratic government in control of the country that has the support of the people and loyalty of an Afghan army strong enough to defend the nation from a resurgent Taliban?
 
We are further from that goal going into 2009 than we were five years ago.
 
What are the long-term prospects for any such success?
 
Each year, the supply of opium out of Afghanistan, from which most of the world’s heroin comes, sets a new record. Payoffs by narcotics traffickers are corrupting the government. The fanatically devout Taliban had eradicated the drug trade, but is now abetting the drug lords in return for money for weapons to kill the Americans.
 
Militarily, the Taliban forces are stronger than they have been since 2001, moving out of the south and east and infesting half the country. They have sanctuaries in Pakistan and virtually ring Kabul.
 
U.S. air strikes have killed so many Afghan civilians that President Karzai, who controls little more than Kabul, has begun to condemn the U.S. attacks. Predator attacks on Taliban and al-Qaida in Pakistan have inflamed the population there.
 
And can pinprick air strikes win a war of this magnitude?
 
The supply line for our troops in Afghanistan, which runs from Karachi up to Peshawar through the Khyber Pass to Kabul, is now a perilous passage. Four times this month, U.S. transport depots in Pakistan have been attacked, with hundreds of vehicles destroyed.
 
Before arriving in Kandahar, Gates spoke grimly of a "sustained commitment for some protracted period of time. How many years that is, and how many troops that is … nobody knows."
 
Gen. McKiernan says it will be at least three or four years before the Afghan army and police can handle the Taliban.
 
But why does it take a dozen years to get an Afghan army up to where it can defend the people and regime against a Taliban return? Why do our Afghans seem less disposed to fight and die for democracy than the Taliban are to fight and die for theocracy? Does their God, Allah, command a deeper love and loyalty than our god, democracy?
 
McKiernan says the situation may get worse before it gets better. Gates compares Afghanistan to the Cold War. "(W)e are in many respects in an ideological conflict with violent extremists. … The last ideological conflict we were in lasted about 45 years."
 
That would truly be, in Donald Rumsfeld’s phrase, "a long, hard slog."
 
America, without debate, is about to invest blood and treasure, indefinitely, in a war to which no end seems remotely in sight, if the commanding general is talking about four years at least and the now-and-future war minister is talking about four decades.
 
What is there to win in Afghanistan to justify doubling down our investment? If our vital interest is to deny a sanctuary there to al-Qaida, do we have to build a new Afghanistan to accomplish that? Did not al-Qaeda depart years ago for a new sanctuary in Pakistan?
 
What hope is there of creating in this tribal land a democracy committed to freedom, equality and human rights that Afghans have never known? What is the expectation that 54,000 or 75,000 U.S. troops can crush an insurgency that enjoys a privileged sanctuary to which it can return, to rest, recuperate and recruit for next year’s offensive?
 
Of all the lands of the earth, Afghanistan has been among the least hospitable to foreigners who come to rule, or to teach them how they should rule themselves.
 
Would Dwight D. Eisenhower – who settled for the status quo ante in Korea, an armistice at the line of scrimmage – commit his country to such an open-ended war? Would Richard Nixon? Would Ronald Reagan?
 
Hard to believe. George W. Bush would. But did not America vote against Bush? Why is America getting seamless continuity when it voted for significant change?
 

(by patrick j. buchanan, Creators Syndicate, 19 December 2008)

N&Q1

 
Indian reports suggest that the Mumbai attackers have links to a western Canada separatist group. An Indian police officer, on terms of anonymity, claimed that all ten attackers had cell phones that malfunctioned during the three-day siege in ways typical of Rogers subscribers in Alberta. “The bloody phones dropped calls, messages disappeared, and you could walk faster than the internet download speed.” Shooting accuracy was another connection to Alberta. “We had 10 attackers who hit 10 sites and killed or wounded nearly 400 people in the face of crack police marksmen. Only terrorists familiar with weapons from childhood could fire so quickly and with such cold discipline. This is characteristic of lawless Alberta, a frontier region which has seethed with separatist and pro-gun sentiment ever since Canada’s national government, controlled by Ontario and Quebec, seized Alberta’s oil 30 years ago. The room-to-room battles were also reminiscent of Alberta, where hardly a weekend passes without road-rage attacks or deaths outside biker bars and drug dens. The sole attacker still alive has said that he has cousins in Calgary and that other of the attackers also had family in Canada.” The police officer said that interrogation was continuing and more ties with Alberta and Canada were expected in the days to come. The Canadian Prime Minister, Steven Harper, has denied any connection between the attackers and Canada. “We’re not affected by the world economic slowdown and everyone here is content except the socialists and separatists,” he said. But Premier Stelmach of Alberta commented that dissatisfied minorities had entered the mountainous province, changed their names, lived on welfare and did whatever they pleased. “We’ll look into it when the provincial legislature reconvenes in the spring.” he said.
 
Like, no kidding.
 

N&Q2 Smart&Happy?

 
Happiness in intelligent people is the rarest thing I know. – Ernest Hemingway,
 
Hemingway, who took his own life in 1961, knew his share of both intelligent people and of unhappiness. He lived through two world wars, the Great Depression, four wives and an unknown number of failed romantic relationships, none of which would help him develop joy in any great degree. As Hemingway’s views arose from his life experience, I will base the following on my own, though in my case both personal and professional (sociologist). Not enough research exists to quote on this subject, but it appears that western society is not set up to nurture intelligent children and adults as it does athletes and similar figures, especially the outstanding ones. While we have the odd notable personality such as Albert Einstein, we also have many extremely intelligent people working in occupations that are considered among the lowest, as may be seen from a review of the membership lists of Mensa (the club for the top two percent on intelligence scales). Education systems in countries whose primary interest is in wealth accumulation encourage heroes in movies, war and sports, but not in intellectual development. Super intelligent people may cope, but few reach the top of the business or social ladder.
 
Children develop along four streams: intellectual, physical, emotional (psychological) and social. In classrooms, the smartest kids tend to be left out of more activities by other children than they are included in. They are "odd," they are the geeks, they are social outsiders. In other words, they do not develop socially as they do intellectually or even physically. Their emotional development, characterized by ability to cope with risk or stress especially over long periods of time, also lags behind that of the norm. Adults tend to believe that intelligent kids can deal with anything because they are intellectually superior. But intelligent kids often have neither the knowledge nor other developmental equipment to match their intellect.
 
Smart kids go through tough times alone. Adults don’t understand that they need help, while other kids don’t want to associate with those stigmatized by social leaders as outsiders. As a result, many highly intelligent people are deficient in social graces or understanding and have trouble coping with common stressors. It should come as no surprise that the vast majority of prison inmates are socially and emotionally underdeveloped or maldeveloped, and we therefore find that a significant percentage fall high on IQ charts. Western society provides the ideal incubator for social misfits and those with emotional problems. When it comes to happiness, people who are socially inept and who have trouble coping emotionally with the exigencies of life would not be among those you should expect to be happy. This may be changing in the 21st century as geeks gain recognition as people with great potential, especially as people who might make their fortune in the world of high technology. Geeks may be more socially accepted than in the past, but unless they receive more assistance with their social and emotional development, most are destined to be unhappy as they mature in the world of adults. People with high intelligence, be they children or adults, still rank as social outsiders in most situations, including their skills to be good mates and parents. Moreover, they tend to see more tragedy in the world than the average person whose primary source of news and information is comedy shows on television. Tragedy seems easier to find than compassion, even where compassion exists in greater abundance.
 

(by bill allin)

N&Q3 Longevity

 
Sir Henry Blackman, of Lewes, on being knighted in 1782, gave a dinner to sixteen friends, with an invitation to them to dine with him annually for forty years; four of them died during the first four years, but twenty-eight years rolled round before another seat became vacant at the festive board. In 1814 two died, aged between eighty and ninety; so that ten remained of the original number at the thirty-third anniversary, held in July, 1815.
 

(from Curiosities for the Ingenious, 1825, with thanks to Patricia Almost)

N&Q4 UrbanLegends

 
Parents may think that sugar makes children hyperactive, but it’s a myth, say researchers who analyzed evidence on this and other festive medical folklore.
 
For the Christmas issue of the British Medical Journal, Dr. Aaron Carroll and Dr. Rachel Vreeman of the Indiana University School of Medicine debunk common holiday myths that have little evidence in scientific studies or online.
 
The pair said they did the study to remind people of the importance of keeping a healthy skepticism.
 
"Only by investigation, discussion, and debate can we reveal the existence of such myths and move the field of medicine forward," they wrote.
 
For example, the idea that sugar from sweets, chocolates and pop makes children hyperactive is most likely in parents’ minds, the researchers said, based on their review of at least 12 studies.
 
Parents were so convinced about the myth that when they think their children have been given a drink containing sugar (when it is actually sugar-free) they rated their children’s behaviour as more hyperactive.
 
"Regardless of what parents might believe, however, sugar is not to blame for out-of-control little ones," the researchers wrote.
 
Another myth they debunked was that people lost up to 45 per cent of their body heat through the head.
 
The myth likely originated in a military study where scientists put subjects in arctic survival suits without hats and measured heat loss in cold temperatures. Participants did lose most heat through their heads, but only because it was the only bare part of the body.
 
A more recent study that repeated the experiment with subjects wearing only swimsuits exposed much of their bodies suggested subjects would have not have lost more than 10 per cent of their body heat through their heads.
 
Carroll and Vreeman recommended keeping all parts of the body warm when out in the cold, but the head does not need special attention.
 
Other myths included:
 
Eating at night makes you fat. False. People gain weight because they take in more calories overall than they burn up, regardless of when the calories are consumed.
Drinking water, taking Aspirin, eating bananas etc. will cure a hangover. False. "A hangover is caused by excess alcohol consumption. Thus, the most effective way to avoid a hangover is to consume alcohol only in moderation or not at all," the pair said.
 
Suicides increase over the holidays. False. Studies conducted worldwide offer no evidence of a Yuletide peak. Suicides are actually more common during warm and sunny times of the year, they said.
 
The study is a follow-up to one the researchers published last year on other medical myths, such as that people should drink eight glasses of water a day and that reading in dim lights ruins eyesight.
 
The pair will publish a book next year on other myths and half-truths about body and health.
 

(CBC, 17 December 2008)

ForYourContemplation1 MakingMoney

 
Friends –
 
From a friend.
 
The issue of how Central Banks create money in a paper fiat money system has been a hard subject for me to grapple with. I’m also a little hazy on why investors would settle for 0% in funds which look likely to lose value. To me it rather sounds like a confidence game, which I have little confidence in. Personally, I’d think gold and silver would be the stuff.
 
But what do I know? Bernie Madoff never explained this part of it so that I understood.
 
For your contemplation.
 
Jim Szpajcher
 
 
 
http://www.webofdebt.com/articles/zero_percent_t-bills.php
 
GROUND ZERO ON WALL STREET:
FED FUNDS AND T-BILLS HIT 0% INTEREST
(by Ellen Brown, December 19th, 2008
 
 
——————————————————————————–
 
“I am more concerned with the return of my money than the return on my money.”
– Mark Twain
 
In the last two weeks, two federal interest rates hit all-time record lows. On December 16, the market was taken by surprise when Fed Chairman Ben Bernanke lowered the federal funds rate (the interest banks pay to borrow the reserves they need to meet their reserve requirement) to zero. The explanation given was that the Federal Reserve was just setting the rate closer to where banks had already been trading with each other for weeks.1 
 
In an even more stunning development, the week before that the federal government itself began borrowing money for free. “We were all watching it agog,” said a Treasury spokesman of the December 9 auction of three-month Treasury bills. Investors were so hungry for Treasury debt that they were snatching up the T-bills at zero percent interest. In the secondary market (investors buying from each other), Treasuries were actually trading at a negative interest rate. That meant buyers were paying more than they would get back when the Treasuries came due. Even at these unprecedented rates of non-return, the Treasury was having trouble keeping up with the demand. Four times as much money wanted in as was sought by the government, indicating much more demand than availability.2
 
What is going on? The credit market remains so tight that state and local governments are being forced to pay interest rates as high as 20 percent. Why is the debt of our insolvent federal government so much more desirable that investors are clamoring to buy it when the return is zero or even negative? The U.S. government is the most indebted nation in the world, with an official federal debt topping $10 trillion. Everyone knows that this debt never can or will be paid off with taxpayer dollars, now or in the future. Commentators have been warning for years that the federal debt would soon be so crippling that foreign investors would flee and the interest alone would be more than the taxpayers could pay. Why are investors now rushing in to buy the U.S. government’s exploding debt, even at a 0% return? Wouldn’t their money be safer and more liquid tucked under the mattress or left in cash in the bank?
 

Why lend money for free?The explanation proffered by commentators is that mattresses are vulnerable to thieves; and the U.S. government, though insolvent, is less likely to file for bankruptcy than either your local bank or your local government. If your bank goes bankrupt, your money will become part of an FDIC receivership. You may get it back eventually, but you could be doing without it for longer than you would like. Another problem with cash, for investors who have a lot of it, is that it can’t be moved from place to place without reporting it; and huge amounts of money are difficult to convert to currency, making it more convenient to just park the funds in Treasuries.

 
What makes the debt of the insolvent U.S. government less risky than that of state and local governments is that the federal government has the power to print its way out of any dollar deficiency. Not that the Treasury actually prints Federal Reserve Notes (dollar bills) – the Federal Reserve does that – but the Treasury can always print more bonds, which the Federal Reserve can then be counted on to buy with new dollar bills (or, more often, with new computer entries in bank accounts).
 
Something more interesting than interest? While that may all be true, it still doesn’t seem to explain a sudden surge of interest in a potentially risky investment that generates zero profit. Or could it be that the profit is coming in other ways than interest? For banks, U.S. Treasuries are highly sought after regardless of interest rate, because the securities are considered “risk-free” for purposes of meeting the “risk-weighted” capital requirement of the Bank for International Settlements. Under the Troubled Asset Relief Program (TARP), banks can bolster their balance sheets by swapping T-bills for riskier “toxic” collateral, including those pesky derivatives that are messing up their books. Banks are allowed to buy Treasuries with their “excess reserves” (the amount by which the bank’s deposits have not been leveraged by a factor of ten or so into new loans). By putting these lendable funds into T-bills, the TARP recipients can remove them from the reach of riskier borrowers. The fact that the Fed is now paying interest on the reserves that banks hold at the central bank could also factor into the equation.4
 
Adding to the heavy demand for federal securities may be competition from the Federal Reserve itself. On December 1, 2008, Chairman Bernanke announced that the Fed could soon be providing “liquidity” to the frozen credit market by buying “longer-term Treasury and agency securities on the open market in substantial quantities.”5 For the Fed to buy U.S. Treasuries with money created on a printing press is actually nothing new. The process is called “open market operations” and is how the Fed has always expanded the money supply. But the Fed is now talking about “substantial quantities,” and today that could mean trillions. The Los Angeles Times reported on November 30 that the loans, commitments and guarantees of the Treasury and the Fed together now come to $8.5 trillion.6 That’s roughly half the gross domestic product of the whole country; yet Congress approved only $700 billion in its latest bailout excursion in October. Where is the other $7-plus trillion coming from? The Fed is obviously just creating it with accounting entries on computer screens.7 A trillion here, a trillion there, as the saying goes, and pretty soon you’re talking real money.
 
What the Fed is doing with all this money-conjured-out-of-nothing, however, remains a state secret. When Bloomberg News sued recently under the Freedom of Information Act to find out who had received $2 trillion in loans and what the collateral was, the Fed refused to disclose the documents, claiming it was protecting “trade secrets.”8 Whose trade and what sort of secrets? We’re not supposed to know which banks are lined up at the trough and how dodgy their collateral is, because that would erode investor confidence. But why should we have confidence in banks engaging in “confidence tricks”?
 
The biggest “trade secret” of the banking business is that banks create the money they lend out of thin air. “The process by which banks create money is so simple,” wrote economist John Kenneth Galbraith, “that the mind is repelled.” Banks simply write “credit” into an account in exchange for the borrower’s promise to repay. In the case of the federal government, the bank that “monetizes” its promise to repay is the privately-owned Federal Reserve; and today the Fed is taking that monetizing power to such dangerous lengths that the currency could be hyperinflated into oblivion.
 
Implications and Possibilities
When you understand this sleight of hand, the way out of the government’s debt trap appears equally simple: Congress could just nationalize the Federal Reserve and print Federal Reserve Notes itself. This government-issued money could then be either spent or lent into the economy to get the wheels of production rolling again. 
 
But isn’t the Federal Reserve already a federal agency? That commonly held misconception was dispelled when the Fed refused to comply with the Bloomberg demand under the FOIA. Most of the documents, said the Fed, are held by the New York Federal Reserve; and the New York Fed is not subject to the FOIA because it is not a federal agency.
 
It is not a federal agency but it should be, because we the people are picking up the tab. The Fed and the banks are creating $8 trillion out of thin air, nearly doubling the money supply; and that means the value of our dollars is being diluted by nearly 50%. If it is our money, we should get the interest, have the right to full accountability, and have control over where the money goes. Instead of pouring money into a massive black hole on the derivatives books of bankrupt banks, Congress could and should be using the national credit card to bolster manufacturing, housing and infrastructure development, either by making low-interest credit readily available to qualified borrowers or by a direct infusion of government-issued dollars into the economy.
 
The objection to the government printing dollars and simply spending them on public projects has always been that it would be inflationary, but that alternative would actually be less inflationary than letting the privately-owned Federal Reserve print dollars and swap them for U.S. debt, as is being done now. This is because Treasury debt, once created, is never paid off. The U.S. federal debt hasn’t been paid off since the days of Andrew Jackson. Instead, U.S. government securities wind up circulating in the economy along with the dollars that were printed to buy them. These securities represent a claim against U.S. goods and services just as dollars do. Indeed, that is why the government’s securities are so highly valued: they are just as good as dollars. They can be cashed in at any time for their dollar equivalent or deposited and borrowed against for an equivalent sum in loans, and they can be swapped for the riskier toxic collateral that is tying up the banks’ capital, preventing the banks from making new loans. Federal securities are particularly valuable to banks, because they can become the “reserves” for generating many times their face value in new loans. If the government were to print dollars directly, the bonds would be taken out of the picture. There would be debt-free, permanent money in circulation, money not subject to perpetual servicing with interest by the taxpayers.
 
Banking with the U.S. Government
The superior safety and security that investors feel when they stash their savings with the U.S. government could be achieved by nationalizing bankrupt banks. This is not a radical idea. Rather than being bailed out with taxpayer money, insolvent banks are actually supposed to be put into receivership under the FDIC (a government agency). It then has the option of taking the bank’s stock (effectively nationalizing it) in return for getting the bank back on its feet. This was done, for example, with Continental Illinois, the nation’s fourth largest bank, when it went bankrupt in the 1990s.
 
In a number of capitalist countries, including Switzerland and India, publicly-owned banks operate right alongside privately-owned banks. Studies in India comparing public and private banks have found that Indian public banks not only are more secure but give superior customer service. In European countries, working for the government is considered more prestigious than working for the private sector, and government employees have better training. Interestingly, the first banks owned publicly in democratic communities were established in the American colonies. It may be time to return to our roots and restore the U.S. banking system to public ownership again.    
 
(Ellen Brown developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest book, she turns those skills to an analysis of the Federal Reserve and “the money trust.” She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her earlier books focused on the pharmaceutical cartel that gets its power from “the money trust.” Her eleven books include Forbidden Medicine, Nature’s Pharmacy (co-authored with Dr. Lynne Walker), and The Key to Ultimate Health (co-authored with Dr. Richard Hansen). Her websites are www.webofdebt.com and www.ellenbrown.com.)
 
 
 
——————————————————————————–
 
“US Rate Futures Spike as Fed Sets Low Funds Target Range,” Reuters (December 16, 2008).
 
Tom Petruno, “Safety Outweighs Negative Yield for Some T-bill Investors,” Los Angeles Times (December 10, 2008); “Treasurys Higher as Bad News Creeps in,” MarketWatch (December 9, 2008).
 
See Chicago Federal Reserve, Modern Money Mechanics (1961, last revised 1992), originally produced and distributed free by the Public Information Center of the Federal Reserve Bank of Chicago, Chicago, Illinois, now available on the Internet at http://landru.i-link-2.net/monques/MMM.pdf.
 
 Mark Felsenthal, “Bailout Bill Gives Fed New Tool to Boost Liquidity,” Reuters (October 3, 2008).
 
Scott Lanman, Vivien Lou Chen, “Bernanke Says Fed May Buy Treasuries to Aid Economy,” Bloomberg News (December 1, 2008). 
 
Jim Puzzanghera, “Bailout: Pay Now, Worry Later,” Los Angeles Times (November 30, 2008).
 
See Ellen Brown, “Oops, We Meant $7 Trillion!”, www.webofdebt.com/articles (November 30, 2008).
 
Mark Pittam, “Fed Refused to Disclose Recipients of $2 Trillion,” Bloomberg News (December 12, 2008).
 
“Bloomberg Picks a Fight With the Federal Reserve,” The Prudent Investor (November 9, 2008).
 

“State Bank of India Ranks Highest in Consumer Satisfaction,” J.D. Power Asia Pacific Reports (2001); Nirmal Chandra, “Is Inclusive Growth Feasible in Neoliberal India?”, networkideas.org (September 2008).