Steal from the Poor, Give to the Noncompetitive

It should be no surprise coming from Cato, but it’s good to see others coming to the realization that trade protectionism is nothing more than a regressive tax on the poor. It’s like a perverted Robin Hood: steal from the poor, and give to noncompetitive US businesses.

We all understand that those who have wealth should be willing to give their fair share for public health, clean streets, basic education, etc. You don’t have to be a socialist to realize that the budget for basic services has to come from somewhere, and taxes that disproportionately affect the wealthy are generally perceived as a fair solution.

But trade protectionism is aimed at cheap products and basic commodities, not luxury goods. Tires, food, clothes are all products that poor people desperately need. Raising tariffs in a recession is a disastrous policy that takes from the poor when they are least able to pay.

SEBI Asked BSE to Set its House in Order before Planning a Listing !!

Sebi has asked BSE to set its house in order before planning a listing

The Securities and Exchange Board of India (Sebi) asked BSE to set its house in order before planning a listing.

Of late, BSE has planned to list on the exchange for sometime and had approached Sebi for permission to list without an initial public offer.

Sebi, however, also has to formalize norms for regulating self-listed companies while in order to sell their shares, some BSE members were eager on the listing of the exchange.

Moreover, the market regulator communicated its position to the stock exchange informally and BSE started steps to develop its technology platform.

In addition, BSE acquired Marketplace Technology (MT) in order to offer back-office solutions for brokers estimated at Rs 43 crore.

On the other hand, BSE, over the years has regularly lost out to NSE on the technology front and new players like Financial Technologies are trying to ride the technology path setting up exchanges such as Multi-Commodity Exchange (MCX) and MCX Stock Exchange.

Further, BSE has lost the top slot in terms of turnover even though it has more companies listed on it .

It will also be re-launching its derivatives trading and a new marketing campaign which is likely to help it popularize the product.

The move comes at a time when others such as MCX-SX are trying to enter the space.

Was Adam Smith Wrong?

Here’s an article I originally wrote for the Prometheus Institute.

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Disagreeing with a man whose face appears on the necktie of many a freedom-lover is perhaps dangerous, but sound reason can’t be sacrificed on the altar of great men – and Smith was a great man.

Indeed, Adam Smith, in his depiction of the division of labor in a pin factory and his timeless prose on the invisible hand and the self-interest of the butcher, offers some of the greatest explanations and defenses of capitalism ever written, even some 230 years later. I consider Smith a great thinker, and a hero of liberty. That doesn’t mean he was never wrong; particularly when it comes to the question of value.

Smith’s thoughts on the derivation of value in his Wealth of Nations laid the groundwork in this area for later thinkers like David Ricardo (another brilliant mind who was right about many other things) and eventually Karl Marx. In the case of the latter we have clearly seen how bad ideas can have horrific real-world consequences. As John Maynard Keynes famously remarked,

“Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist.”

I might add too the bad ideas of otherwise good economists.

Smith essentially, though somewhat confusedly, argued that the value of any good was ultimately derived from the amount of labor it took to produce. Money or commodity prices reflected only the nominal but never the real value of a good. In this way he described the different prices of different goods as a simple formula:

“If among a nation of hunters, for example, it usually costs twice the labor to kill a beaver which it does to kill a deer, one beaver should naturally exchange for or be worth two deer.” (The Wealth of Nations, Book I, Chapter VI)

Smith elaborated further by describing other costs of producing a good, including the role of the entrepreneur and capitalist and the profits they require. Unlike Marx, Smith never denigrated the role of the capitalist or the profits they earned, but his conception of value resulting from the cost of production (ultimately labor) opened the door for the idea that anything charged or earned above the cost of real inputs is unnecessary; excellent fodder for anyone anxious to obtain power by appealing to an envious middle class.

The problem with Smith’s analysis is not that the cost of production has no link to the value or money price of a good – indeed, the two are closely connected. He merely had the relationship backwards.

In reality, prices reflect the money equivalent of the value a buyer places on a good. That is to say, an individual who wishes to have a good places an entirely subjective value upon that good as compared to other goods, and the difference is typically expressed in terms of money. If in Smith’s example no one cared for beavers, the cost of killing a beaver wouldn’t matter; the beaver would sell for little or nothing. There is no one value of a good, but each individual values each good differently, as compared to other goods. It is the same for Smith’s supposedly changeless measure of value, labor. An hour of the same kind of labor may be valued (or disdained) to different degrees by different people.

It is for this reason that price is merely the reflection of the amount of money an individual was willing to give up to obtain a given good in the most recent exchange.

However, Smith was correct in seeing a relationship between the cost of production and price: Once a producer or entrepreneur has an indicator of what someone was willing to pay for a good, he can speculate how much others will be willing to pay in the future. He may be incorrect, but he will start with an estimate based on past experience and hope to get an equal or higher price. It is the estimated price (which reflects the value others place on the good) that will dictate how much he can spend on production. If a producer expects a good to sell for $1, he will be willing to spend up to $0.99 to produce it. (This is obviously a simplification, as he may be willing to take short term loss if he expects long term gains, he may want more than a $0.01 profit, etc.) In other words, the amount of labor and other costs of production flow from the expected sale price of the good, not the other way around. No one will spend more to produce an item than they believe others will be willing to pay to buy it.

Smith correctly saw that the various costs which go into production must be paid by the sale price of the final good. What he failed to see is that the costs of production do not create the price of the final good or imbue it with some objective value, but that the subjective value that each consumer places on the good sends signals backwards to producers and tells them how much they can expend on production without suffering a loss.

That Smith saw the factors which go into the production of a good as the cause of the price, rather than the effect, may seem like a small error. But economics, like all attempts to study the behavior of human beings, is a subtle science which requires great attention to the correct logical progression of actions. A misunderstanding between cause and effect can be fatal.

A slight adjustment to the angle of a satellite signal can, when extrapolated over thousands of miles, result in a beam nowhere near its target location. Likewise, looking at an economic phenomenon, such as the price of a good, from an even slightly incorrect angle can result in consequences far greater than imagined when spread over time and by different minds in different cultures. I would never single-handedly blame Adam Smith for the horrors of socialism. But his backwards theory of value contributed, over time and space, to a set of ideas which laid the theoretical groundwork for socialism – a philosophy completely contrary to the views of Smith.

I still admire and respect Adam Smith as one of the world’s great minds and a positive force in the battle for liberty. His conclusions and prescriptions were correct, even though his methodology was sometimes flawed. However, the lessons to be gleaned are to never let admiration for a great mind blind you to areas in which they are in error; and that even correct conclusions, if based on incorrect reasoning, can be dangerous.

How did we get here?: A Century of Banking to the Present Crisis

This post is intended for students of the economy and finance to learn something about the banking system, its supervision and how the regulations came to be undone.  By standards of the normal post, this is quite long and intense in its subject matter.  However, I hope it brings a little insight on the history of banking and the financial crisis we’re facing in 2009.  Getting out of the crisis will require different approaches from those taken during the last spectacular economic crisis that some among us still have a memory of, the Great Depression.

Bank Numbers

Currently, there are roughly 8,000 banks in the United States.  The number of banks was once as high as 30,000 at the beginning of the 1920s.  However, that number shrank to about 15,000 banks by 1933 as a result of the large number of bank failures that occurred during the early years of the Great Depression.  The number of banks stayed relatively constant at that level through the late 1980s.  Since then the number of banks decreased to the current number of 8,000.

U.S. banks and bank holding companies were restricted to operating within a single state.  No interstate banking was allowed.  In addition, many states did not allow banks to open branch offices throughout a given state.  So if a community needed a bank to finance economic activity, a new bank would likely need to be created with its own charter to operate instead of an existing bank coming into the community and opening a branch office.  This largely explains the large number of banks within the United States in the thousands compared to a few hundred in other major nations or even a handful of banks in less populous countries.

The Roaring ’20s and The Great Depression

At the turn of the twentieth century, Wall Street was not a place for the ordinary, risk averse investor.  There was not a great deal of information about public companies available to the public and what information that was available was likely to be in the hands of a few stock market manipulators.  One group of the market manipulators was the large “money center” banks that operated in New York City where the major stock exchanges were located.  These banks had the advantage with regard to information on many public companies because they engaged in investment banking services that sold the securities, both stocks and bonds, to the public.  By working with the companies to sell their securities, the banks got to know their client companies very well and they could use the information they attained to sell and purchase securities at opportune times that the rest of the investing community could not.  And to encourage the purchase or sale of securities, these banks regularly made loans to securities investors, speculators, and dealers, often for the full amount of the transaction and without any collateral to protect the bank in case a transaction suffers losses.

Despite having the deck stacked against them, investors nevertheless purchased equities during the “Roaring ’20s” in one of the greatest asset bubbles in U.S. history.  And not only were equity prices rising at a then unimaginable pace, but the price of real estate in places like Florida also was leaping.  Of course, this was made possible by the credit that was extended to these investors and mortgage holders by commercial banks.  Moreover, as these asset prices increased, the banks extended even greater amounts of credit  because the equity value in both stocks and real estate gave these borrowers more “collateral.”

Needless to say, all good things must come to an end.  In October of 1929 saw the beginning of one of the greatest asset deflations ever.  Real estate values plummeted and equity prices lost almost 90 percent of their former value.  With the value of their homes and securities having fallen in value, people understandably wanted to raise cash to assure that they had enough to pay bills and debts that might come do.  So they raided the banks to take out their deposits.  However, the banking system works on a fractional reserve system, meaning that only a small part of the deposits are kept by the banks and the rest is used to provide loans.  The banking system continues to work so long as most depositors do not make withdrawals at the same time.  But once too many depositors ask for withdrawals at the same time, the banks will need to recover at least some of the cash that they loaned to borrowers at a time when the borrowers may not be able to pay back the loan.  The inability to convert assets such as loans into cash will make a bank insolvent no matter how secure the loans made were.  This was the situation depositors faced in the early 1930s as they attempted to pull out their funds en masse in what are called bank runs.  And as they tried to raise enough cash to keep themselves in business, the banks stopped extending further credit to otherwise good credit risks for fear they may not get the money back.  This had a further depressing effect on economic activity.

As a result of the devastation of the financial system of the 1930s, the Congress enacted several pieces of legislation that were meant to protect bank depositors and securities’ investors and make the banking system and the securities industry among the most heavily regulated in the economy.  Specifically with regard to the banks, the Congress passed the Banking Act of 1933, which is better known as the Glass-Steagall Act after its sponsors.  Among the provision in the law, the Glass-Steagall law:

1. Separated commercial banking from investment

2. Prohibited national banks from underwriting insurance products except for certain safe lines of business, such as life insurance, that are approved by state insurance regulators

3. Gave the Federal Reserve the power to set the maximum interest rates it could pay on deposits

4. Limited the debt securities that banks could purchase to those that are approved by bank regulators

In addition, the federal government insured a certain amount of deposits held at the banks so that depositors would have confidence in the safety of the banks.

Foreign Competition

Following the Second World War the United States was the largest economy on earth and the engine of growth for most of a war-ravaged world.  U.S. businesses wanted to help nations devastated by the war to rebuild and foreign businesses wanted to sell to American consumers who, after the war, would start families as American service-people returned from conflict abroad and could now start buying the goods and services that were not available because of the wartime restrictions.  With U.S. businesses selling and operating overseas and foreign businesses selling and operating in the U.S., it is not surprising to find that foreign banks became competitors to U.S. banks.  These foreign banks wanted to get at least some of the business of U.S. companies operating within their home territory as new clients and they also wanted as much of the business of their current clients operating in the U.S.

Imagine, if you will (to borrow a line from the TV series The Twilight Zone), two gladiators battling in the Roman Coliseum in a fight to the death and one of the gladiators has one arm tied behind his back so that he cannot hold a shield to protect himself from the blows of his opponent.  This was essentially the situation facing the U.S. banks at the start of the second half of the twentieth century.  Because foreign banks are chartered and domiciled outside the U.S., they escaped the financial regulatory framework that affected the U.S. banking industry for many years.  In other words, foreign banks could offer services within the U.S. that their American counterparts could only dream of offering.  These included interstate bank branching, investment banking operations to sell securities for their U.S. clients, and insurance products.  In addition to these advantages, foreign banks operating in the U.S. did not have U.S. deposit insurance, so they avoided the expense of the deposit insurance premiums, and they were not required to hold a portion of their American deposits on reserve with the Federal Reserve System, allowing them an opportunity to lend out more credit per dollar of deposits than their U.S. counterparts.

Clearly, the banking industry was outraged.  They were at a competitive disadvantage against foreign banks and they demanded that the situation be redressed by the U.S. Congress.  The result was the passage of the International Banking Act (IBA) of 1978.  The IBA of 1978 addressed a number of the iniquities between U.S. and foreign banks operating in the United States.  Among the provisions it included were:

1. The allowance of federal chartering of foreign banking facilities

2. The prohibition of multiple state banking activities of both domestic and foreign banks

3. The imposition of reserve requirements and federal deposit insurance on the U.S. deposits of foreign banks

4. Subjecting the U.S. operations of foreign banks to the non-banking provision of the Bank Holding Act.  Specifically, all banks, foreign and domestic, must adhere to intrastate and interstate bank branching restrictions

While the IBA of 1978 did much to even the playing field in the U.S. banking industry, foreign banks operating in the U.S. nevertheless escaped regulatory oversight from U.S. banking authorities.  This lack of supervision was a reason for the spectacular collapse of the Bank of Credit and Commerce International (BCCI).  The scandal that followed the BCCI’s collapse led to the enactment of the Foreign Bank Supervision Enforcement Act (FBSEA) of 1991, which gave the Federal Reserve the authority to oversee the activities of all foreign banks operating in the U.S. and examine each U.S. office of a foreign bank each year.

Domestic Competition

Domestic banks weren’t only facing competition from foreign banks.  In the 1980s and 1990s deposit growth slowed as a result of better returns that were being provided by very safe and short-term money market funds and by more risky but more highly rewarding equities (common stocks).  The growth in deposits was further impeded by the development and growth of the mutual fund industry at around that time.  With mutual funds, savers and investors did not require large amounts of funds to purchase these securities individually.  Instead, they could deliver their money to a mutual fund that would invest the proceeds by purchasing the securities for them in exchange for shares of ownership in the mutual fund.

Instead of seeing their deposit base deteriorate, many banks established their own mutual fund companies through non-bank subsidiaries.  Furthermore, banks came to offer brokerage services so that investors might purchase stocks and bonds through the banks rather than through a traditional brokerage firm.  The move toward offering securities not traditionally associated with banks was given greater impetus when in 1987 the Federal Reserve allowed banks to offer investment banking services as long as such services make up a small fraction of the banks’ revenues.  Investment banks are firms that aid corporate and government clients to package and sell securities so they may be able to raise funds.  By offering investment banking services, the banks could earn underwriting (selling) fees that did not depend on their traditional business of collecting interest on the loans made with depositors’ funds.

Even though these were not intended to be major operations of the bank, the inclusion of mutual funds, brokerage services, and investment banks did represent a major erosion of the intent of the Glass-Steagall Act to prohibit commercial banks from selling investment securities to the public.  In addition to offering investments to the public that were not traditional to banks, the banks also were making incursions into the management of risk by offering insurance products.  A firm underwriting insurance is required to keep enough reserves on hand to maintain the solvency of the firm in case a significant amount of insurable claims must be paid out.  If it were to sell insurance policies, a bank is required to keep reserves on hand for the needs of depositors and separate reserves for their insurance operations.  Together this represents a large capital commitment on the part of banks that many of them may not have been prepared for.

The Financial Services Modernization (Gramm-Leach-Bliley) Act

The incursions that foreign banks were making in the United States, the competition for cash that mutual funds and other financial institutions were forcing upon the financial industry, and the responses to those threats by the banking system seemed inevitably to erode much of the restrictions on the activities of banks that were imposed in the wake of the Great Depression.  Indeed, by the late 1990s the industries that were threatening the banks, such as mutual funds, securities brokers, investment banks, and insurance companies claimed to be threatened by the banks.  This was because since the Great Depression it had been national policy for the federal government to assure the solvency of the banks and the protection of bank depositors.  No other group of financial institutions had comparable protections in place and these other institutions started to say “if the banks are allowed to compete against us, why can’t we compete against the banks?”

Since the late 1970s the mood of the country had been shifting away from an attitude favoring regulation of certain industries, in which the firms within these industries had little to no discretion on specific aspects of the firms’ operation to allowing more discretion and risk taking by the managers within these firms.

With firms within the financial services industry complaining about the competition and incursions being made by the other firms within the industry, perhaps it was a matter of time that the financial services industry was going to be “deregulated” by those who favored continued regulation and “unshackled” by those who favored the removal of most of the regulation of financial services.  The removal of most of the regulations came in 1999 with the Financial Services Modernization Act (FSMA).  Also called Gramm-Leach-Bliley Act after its congressional sponsors, the FSMA was enacted to allow U.S. financial institutions to offer the kinds of services and activities that were available at “universal” banks that exist in much of Europe and Asia.  Specifically, the FSMA was designed to restructure the financial services industry by creating what are called financial holding companies (FHCs) that are able to offer a wide range of services that they were previously prohibited from offering.  As a result of the FSMA, firms that previously offered one type of financial service (banking, mutual funds, brokerage services, etc.) became free to engage in providing services and other activities that had been the province of different types of financial firms.

Aftermath of Financial Deregulation

For most of the twentieth century, there were clear lines in which financial institutions were to operate:

1. Commercial banks and savings institutions were to be engaged in traditional banking services

2. Investment banks were to raise funds by selling new securities for their corporate and governmental clients

3. Brokerage firms were to arrange the exchange of existing securities in the securities markets

4. Insurance companies were to engage in providing risk control products and services in exchange for payment of premiums

But toward the close of the century the financial landscape became terribly blurred with any provider of one financial service now able to offer other services that were the specialty of a different type of financial services firm.  If this was confusing for the consumer of financial services, the near free-for-all in the financial services industry appeared to be equally confusing for the financial services regulators.  Who regulates a financial institution that engages in banking, selling and trading securities, insurance, and real estate?  Even though the FSMA gave the Federal Reserve the power to oversee these new financial conglomerates, its traditional emphasis on the banking system left it ill equipped for the task.

Moreover, the last twenty years of the twentieth century were dominated by presidents of the United States who were more sympathetic with the efficacy of the free markets to regulate themselves than at any time since the first third of the century.  Thus, when the competition within the financial services industry became heated, the firms within the industry attempted to make up for any decline in the profitability of a dollar’s worth of assets by taking on more leverage, either in the traditional way of borrowing money or by taking on added risk of loss on certain securities in the hope that returns would be substantially greater.  And while the financial services industry was taking on this added leverage, the financial regulators either sat on their hands because of their dogmatism or were in paralysis from doing anything because of bureaucratic turf wars.

Now we are in a situation in which the American public has lost confidence in the integrity of the U.S. financial system and the free market option of leaving it alone is no longer an acceptable solution when the financial collapse is affecting industries and people well removed from the financial centers.  Thus we now hear calls for re-regulation of the financial services industry.  However, it would be a mistake to think that the past is prologue.  The financial services industry at the beginning of the twenty-first century is very different from what it was at the beginning of the twentieth century when much of the current regulatory structure was formed.  The services provided by the firms are more diverse and complex, requiring a team approach to regulating the industry in which the separate regulatory authorities must join forces to regulate firms that engage in more than one financial activity.  In addition, the reach of these financial firms are now global in nature as many are engaged in provided financial services across national borders.  This aspect of the modern financial landscape now requires that the regulators from different nations need to coordinate their efforts and set common financial standards to make sure of the safety and integrity of multinational financial enterprises.

Just as during the Great Depression, the current financial crisis was a failure of the system to maintain its integrity by making sure the institutions were adequately supervised and capitalized.  But the current financial environment is such that the measures taken in the past are not likely to work in the present.  The financial system is too broad and too complex to be treated either in a segmented fashion or by one country’s regulatory efforts alone.  Coordinated regulatory efforts within and among countries are what is needed to make sure such a catastrophe doesn’t happen again in our lifetimes.

Tỷ giá hối đoái

Tỷ giá hối đoái (thường được gọi tắt là tỷ giá) là sự so sánh về mặt giá cả giữa hai đồng tiền của hai nước khác nhau. Cũng có thể gọi tỷ giá hối đoái là giá của một đồng tiền này tính bằng giá của một đồng tiền khác.

Các nhân tố ảnh hưởng đến tỷ giá hối đoái :

• Mức chênh lệch lạm phát giữa các quốc gia.
• Mức độ tăng hay giảm thu nhập quốc dân giữa các nước
• Mức chênh lệch lãi suất giữa các nước.
• Những dự đoán về tỷ giá hối đoái.
• Tình trạng cán cân thanh toán quốc tế.
• Sự can thiệp của chính phủ.
• Can thiệp vào thương mại quốc tế.
• Can thiệp vào đầu tư quốc tế.
• Can thiệp trực tiếp vào thị trường ngoại hối.
• Các nhân tố khác:Khủng hoảng kinh tế, xã hội, đình công,thiên tai…
  

Planta de Carbon Mineral en Haina No Tiene Justificacion

Con recursos abundantes de viento, luz solar, y tierra, y una Ley de Incentivos a las Energias Renovable que ya ha atraido mas de US $2 billones en proyectos de energia eolica, energia solar termica, produccion de modulos solares, etanol, y biodiesel, se habia supuesto en la Republica Dominicana que nuestro mensaje a los combustibles fosiles (petroleo, carbon, y gas natural) era claro. Con todo el movimiento que se esta viendo en la surgiente industria de energia renovable y el paro del proyecto de carbon de 1,200MW que la CDEEE queria implementar, es claro que el pais ha entendido que quiere un futuro energetico donde nuestras necesidades energeticas sean suplidas domesticamente, sin contribucion al cambio climatico, y con la creacion de cientos de miles de nuevos empleos. Pero recientemente, la empresa Korea Electric Power Corp (KEPCO) termino un acuerdo con la generadora electrica de Haina para construir una planta a base de carbon mineral de 240MW por un valor de US$500 millones, lo cual es plenamente una contradiccion al interes nacional de crear trabajos y combatir el cambio climatico mediante la creacion de una industria de energia renovable dinamica.

Es interesante analisar esta inversion del punto de vista economico de la empresa Koreana. Sin discutir el impacto del carbon mineral en las emisiones de gases de efecto invernadero en el pais, es facil ver que esta es una inversion sin justificacion economica. La Ley de Incentivos a las Energias Renovables ofrece un marco legal para las energias renovables que les da prioridad sobre cualquier otra fuente de energia. En otras palabras, la red electrica del pais y los distribuidores de combustibles tienen como obligacion aceptar energia (electricidad o combustible) proveniente de recursos renovables antes de aceptar energia derivada de combustibles fosiles. Como va la situacion con las energias renovables (tomando en cuenta que el gobierno aun no ha aprobado el reglamento a la Ley de Energias Renovables), la matriz energetica del pais sera abastecida con energias renovables en 10-20 años.

Poco despues de la aprobacion de la Ley de Energias Renovables, inversiones superando los US $2 billones fueron anunciadas, con una capacidad electrica de 1,600MW y una produccion de combustibles de mas de 100 millones de galones anuales en diversos proyectos. Hoy, la capacidad electrica del pais, basada en gran parte en petroleo, es de alrededor de 3,500MW, mientras que el consumo de combustibles es alrededor de 900 millones de galones anuales (incluyendo la gasolina, el gasoil, y el gas natural). A este ritmo de inversion en energias renovables, es razonable concluir que las energias renovables son el futuro de la matriz energetica del pais y que sacaran a los combustibles fosiles de nuestra matriz energetica. Si la empresa Koreana entendiera esto, no veo como creen que van a recuperar su inversion cuando requieren 20 años de operacion.

Alrededor del mundo, desde los Estados Unidos a Malasia, le gente estan demonstrando su oposicion al carbon mineral por su contribucion al cambio climatico (que ya esta afectando a la Republica Dominicana y puede eliminar nuestra industria turistica con la subida del nivel del mar), su impacto en los ecosistemas montaneros de donde se extrae el carbon mineral, y el maltrato de los empleados de empresas de carbon mineral (quienes tienen que trabajar largas horas en condiciones gravemente peligrosas). En la Republica Dominicana, debemos aclarar nuestra oposicion al carbon mineral tambien. Debemos organizar demonstraciones, dar a conocer sobre los impactos negativos del carbon mineral a la poblacion mediante la prensa y el Internet, y pedirle a nuestro gobierno que apruebe legislacion que impida la construccion de plantas electricas basadas a carbon mineral.

Los argumentos relacionados a los bajos precios del carbon mineral ya no pueden dominar la discusion sobre la matriz energetica. El precio del carbon ha subido por mas de 50% en los ultimos anos, de US $55 por tonelada a mas de US $100 por tonelada. Ademas, el precio que tiene el carbon mineral en su quema por la emanacion de dioxido carbono es muy alto. Las tormentas tropicales Noel y Olga y la sequia que asota al pais son advertencias de lo que ha de venir.

Con nuevos anuncios de los cientificos mas reconocidos del mundo de que las masas de hielo se estan derritiendo mas rapidamente de lo pensado y que el mundo debe moverse mas rapidamente para eliminar las emisiones de gases de efecto invernadero, es claro de que el cambio climatico lleva una urgencia dramatica que nos impide seguir usando combustibles fosiles sin consecuencias catastroficas. A riesgo esta nuestra industria turistica que se basa en nuestras costas y nuestro sector agricola. Como uno de los paises mas importantes del Caribe, es nuestra obligacion enviar un mensaje al resto del mundo de que nosotros queremos evitar las consecuencias del cambio climatico y desarrollar una industria de energia renovable que nos lleve hacia el desarrollo sostenible.

Como ciudadanos, es nuestra obligacion asegurar de que nuestro pais envie este mensaje. Debemos comunicar este mensaje a la poblacion y asegurar de que el gobierno Dominicano impida la construccion de proyectos de carbon mineral en el pais. Tambien es nuestra obligacion asegurar de que el gobierno avanze con sus promesas de aprobar el reglamento que regira las energias renovables bajo el marco legal de la Ley de Incentivos a las Energias Renovables. Con el precio del petroleo superando los US $115 por barril, no tenemos tiempo que perder. Tenemos que movernos rapido en el desarrollo de una industria de energia renovable que pueda crear muchos empleos, proveer nuevas oportunidades a nuestras areas rurales, y asegurar nuestro crecimiento economico continuo y equitativo.

PetroQuest Energy and Century Aluminum Gain - WSJ.com

Rex Energy surged 1.36, or 21%, to 7.81 after Thomas Weisel started coverage of the stock at overweight, saying the State College, Pa., exploration and production company is among “the most highly leveraged companies to the Marcellus Shale, which may prove to be the biggest and best of the North American gas-shale plays.”

via PetroQuest Energy and Century Aluminum Gain – WSJ.com.

BofA suspends ACORN commitments: report

(Reuters) – Bank of America Corp has suspended its current commitments to ACORN Housing, an affiliate of Association of Community Organizations for Reform Now (ACORN), a scandal-hit U.S. liberal grassroots group, the Wall Street Journal said on Monday.

The banking company "will not enter into any further agreements with ACORN or any of its affiliates," pending assessments of the organization's operations, the paper quoted a Bank of America spokesman as saying.

ACORN Housing has worked with Bank of America and other large banks on foreclosure-prevention efforts, the Journal said.

Earlier this month, both houses of the U.S. Congress passed legislation that would cut off federal money to ACORN, after a conservative activist secretly filmed Acorn employees giving tax and housing advice to a couple who said they wanted to set up a brothel cash advance payday loan.

"Bank of America takes recent allegations made against ACORN and ACORN Housing Corporation employees very seriously," the paper quoted bank as saying in a statement.

Michael Shea, executive director of Acorn Housing, told the paper: "We're not surprised that our lending partners like Bank of America want assurances that this won't happen again."

Bank of America and ACORN could not be immediately reached for comment by Reuters outside regular U.S. business hours.

(Reporting by Ajay Kamalakaran in Bangalore; Editing by David Holmes)

BofA suspends ACORN commitments: report

Congratulations to the Free Democrats (of Germany)

Germany held its election today.

The left-wing Social Democrats plummetted; the far-left Left Party gained by too meager an amount to make up for the rejection of the center-left.  Meanwhile, the Green Party (more a centrist option in Germany than anywhere else on the planet) ticked up slightly.

This may surprise some, but the “winner” – the center-right Christian Democrats (a.k.a. the Social Christian Union in Bavaria) actually slipped a little in support.

The big winner, the folks who scored enough to oust and replace the SDP as the coalition partner for the CDU/SCU was the small-l libertarian Free Democratic Party, who scored their highest vote percentage in history – and did it with a platform of major tax cuts (Bloomberg).

Something for American politicians to note . . .

Tok Pisin with Isuzu Lu: Hey, Poro!

Isuzu Lu: Hey, Poro

Lu: “Hey, Poro … Mobeta yu baim wanpela Isuzu Utility … Ol i strongpela moa … inap long karim ol kain kain kago long baksait … Yu traim, laka!?!”

Lou: “Hey, Friend … You’d do better to buy an Isuzu Utility … They’re stronger … enough to carry all kinds of cargo in back … Try it, okay!?!”

This is a scan from a faded old photocopy of a cartoon ad by Bob Browne for New Guinea Motors in the Papua New Guinea Post-Courier, 1976. I’ve got a lot more, but I’ll have to limit my scanning to just a sample because I see that the author/illustrator has published a collection of these cartoons. I just bought the last copy of Isuzu Lu Book 5 available on Amazon.com.

Surprise And Surprise…

In 2004, the American wages fell by $7.6-billion. Since then, how many of our American workers have had to take less paying jobs (at minimum wage). These wage reductions came from the manufacturing sector because of Free Trade. How about a (5%)  decrease in a poor man’s wage?

If trade accords along with national subsidies shielding certain sectors of agriculture and protections for the intellectual properties of business, including patent protections, they can include enforceable labor and environmental standards. At over 300 million souls the American Workers are a Society and not just an Economy.

Therefore, undermining American job security for lower prices on imports is a formula that favors the interest of capital over labor.  (This is not Responsible Capitalism…This is Greed)!

We are exploiting human and natural resources through the back door of globalization. Must be Financial Murder and the destruction of the Middle Class everywhere?

Notes: Because of “free trade agreements,” American companies are moving their R&D functions, production and marketing overseas at an acceleration pace. Foreign companies now account for 50 percent of all U.S.-owned manufacturing output…

And this just in: Ford is building a (450 + million dollar auto plant) in China. Financial Murder and the Greed of Destruction and…

(ENVIRONMENT) READ: Gizmos' Energy Draw Alarms Experts...

(Newser Summary) – All around the house, electronic gadgets are blinking, buzzing, computing—and drawing on an immense amount of energy, the New York Times reports. Worldwide, they take up 15% of household power, and will likely consume three times as much by 2029, making it harder to combat global warming. Two hundred and thirty nuclear plants would be needed to fuel that demand, the International Energy Agency says.

Most experts say regulations are needed to limit gadgets’ energy draw, but manufacturers have resisted such mandates. A federal attempt to limit the power draw of TVs—flat-screens are the biggest energy offender—died in the 1990s due to industry opposition. But Congress has done it before, limiting the energy use of appliances like refrigerators and washers. “Standards are one of the few ways to cheaply go after big chunks of energy savings,” one advocate says.

—Neal Colgrass

Source: New York Times

Ecological debt

It was good to see the concept of ecological debt get some coverage yesterday. World goes into ‘ecological debt’, said the Telegraph, Recession barely dents ‘eco-debt’ said the BBC, while the Guardian warned of a Day of reckoning.

This is all the work of the new economics foundation, whose report ‘The Consumption Explosion’ came out on the same day, their third UK interdependence report. I read the last one two years ago. It was one of the most eye-opening reports I read all year, and I became a nef supporter off the back of it. I’ll be reading the latest one this week and I’ll tell you more about it in due course. Join me, and we can discuss it – you can download it here.

-The gobal warming war

        The difficult part of the climate debate is that everyone is so damn sure — on both sides of the issue. While there is no question the world is warmer today than it was 100 years ago, there are legitimate questions about the relative importance of several possible causes.
        The human production of CO2 may be one cause, but how relatively important is it? No one knows for certain. Only 500 years ago we were in an ice age. Why? No one knows for certain. Did the sun emit less radiation? Did the solar system travel through a dusty part of the galaxy? Did volcanoes spew dust particles? Was there a different mix of plant life that more effectively shaded the ground? Were ocean currents better able to bring cold water in contact with air? Are any of these likely to happen again, soon?
        No one knows, but if any did happen, would a repeat of the ice age be more or less devastating than global warming?
        The history of the earth involves constant and profound change. For mankind to attempt to hold the earth’s temperature exactly where it is, seems like a fool’s mission, supported by human hubris.
        And is it a worthwhile effort? On balance, would global warming be more or less beneficial than global cooling or even no change?
        I’ve read of many possible negative global warming effects: flooding, changes in rain patterns, loss of polar bears and other species, spread of certain diseases. But what about the possible benefits: Longer growing seasons, increased habitat for certain species, opening of ice-bound waterways, antidote to natural cooling effects. A return to the greatest evolutionary explosion in history? Who has made the evaluation?
        The human species evolved through much warmer periods than this, and through colder periods. We did better during the warmer periods. Would that be true, again?
        Without answers to these questions, what makes everyone so damn sure?

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

New Scientist Opinion: Enough of Us Now

Are we about to reach a Malthusian limit to population growth?

By 2050 there may be about 35 per cent more people on Earth than there are today.

snip:

Nowadays it is understood that the key population-related issue is the destructive pressure human activity is exerting on our life-supportsystems, posing a growing threat to the sustainability of civilisation. Of course, this is not all because of human numbers; it also has to do with how much each of us consumes. That’s why, in our view, the US with its population of over 300 million and high per capita consumption should be seen as Earth’s most overpopulated nation. It is also why the emergence of “new consumers” constitutes a major additional assault on global life-support systems. Moreover, the 2.3 billion people likely to be added to the human population by 2050 will undermine those systems much more seriously than did the previous 2.3 billion, as each additional person will, on average, have to be supported by scarcer, lower-quality resources imposing ever greater environmental costs.

snip:

Yet many people still assume that humanity will easily manage to support more than 9 billion people in 2050 and beyond. Such confidence ignores some grim possibilities. There are only two ways by which population can stop increasing: a falling birth rate or rising death rates. We have already seen a rise in death rates in southern Africa and Russia, and there may well be further increases in death rate ahead, especially as disruption to the global climate increasingly destabilises agricultural systems. Even today, more than a billion people are going hungry.

Economist.com articles on economics failures

What went wrong with economics
And how the discipline should change to avoid the mistakes of the past.
The other-worldly philosophers
Although the crisis has exposed bitter divisions among economists, it could still be good for economics. Our first article looks at the turmoil among macroeconomists. Our second (see article) examines the foundations of financial economics
Efficiency and beyond
The efficient-markets hypothesis has underpinned many of the financial industry’s models for years. After the crash, what remains of it?

I find it truly dissapointing that The Economist completely ignores Austrian School of Economics. All of the articles are more or less concerned with the failure of modern economics to see the current crisis coming, however there is nothing about the predictions Austrians made years before.

Bankruptcy: Learning Lessons From The Big Boys

There are many things that can cause a business to go bankrupt. If you care about the longevity of your business try to find ways to avoid bankruptcy all together. As a small business, sometimes you can learn lessons from the the big boys: major corporations.

Many times it may seem like they have it all together but behind the scenes things are not so good. Then come to find out the companies that you thought were doing good are now going into bankruptcy. In conjunction with a bad economy & to no avail, many people are being forced into bankruptcy which causes problems in their business.

In 2008 many big companies filed for bankruptcy like Circuit City, Bally Total Fitness, Linens n’ Things etc… For 2009 many may be looking to file such as Hertz Rent-A-Car, Sprint, Macy’s, Textron, Goodyear, Chrysler etc…

Take a look at the Chrysler corporation, after trying many options to negotiate it’s debts, they have filed for bankruptcy in 2009 in an effort to reorganize & become more viable. According to the Reuters Report, Chrysler’s Chapter 11 filing is the first bankruptcy by a major U.S. automaker.

Sometimes bankruptcy can be caused by bad financial management or circumstances beyond the owners control. To help avoid this problem try to seek out wise financial counseling for yourself and your business.

Business bankruptcy is serious business & at some point in time in your small business you may run into financial problems. But with a little creativity and strategic planning, you can stop a small financial problem from turning into an outrageous financial crisis.

Sometimes bankruptcy serves as a relief to business owners who are financially stressed & they’re unable to find a way out or as a way to reorganize their operations in attempts to become viable after tough times.

Would reorganization or relief through bankruptcy benefit a small business?

It is imperative for a business owner to find ways to overcome the financial problems that occur due to poor planning and lack of finance.  Then find ways continue to run your business until it turns profitable.

At the end of the day when you take a look at it all, regardless of how good your product, how established your brand name, how valuable your plant and machinery or how dedicated and competent your staff; a negative cash flow could cause your business to crash & burn.

Let Me Be Clear

I have never been among the “rich.” Last year, I made 34k in 11 months. Then I lost my job (the Monday before Thanksgiving) in such a way that I was ineligible for unemployment benefits. I went till June before getting a short-term temporary job. That means December till mid-June, I had zero income whatsoever and I had to depend mostly on my mother and sister for food. The second half of July and the first half of August, I was again without a job and without unemployment. I now have a temporary job which should last six months, at barely above Ohio minimum wage, a fifty percent plus cut in pay.

When I lost my job, I lost my health insurance that I had for nearly nine years. I still have no health insurance and I cannot afford to pay the debts on my credit. I lost my Jeep Commander. And I am four-square against the taxpayers buying my health insurance or anything else.

What the current Democrats and Obama (who I don’t consider a Democrat) are trying to foist on the citizens of this great country is so anti-American it makes me sick and very angry. It has been the Democrat policy for the past 40 years or more that has crippled this country. And Obama’s socialist/fascist/totalitarian agenda is the logical extrapolation of that policy.

The fact that millions of otherwise quiet people have taken to the streets in Tea Parties, Town Hall meetings and the DC 912 gathering (which was upwards of 1.5 million, not the 70 thousand the “in the bag” mainstream media claims) shows that real America is not willing to be subjects but prefer citizen status, as prescribed in the Constitution and Declaration.

It is the populace who embodies patriotism, and not the anti-Constitution Pelosi-Reid-Obama faction of the far-left Democrat party who now hold court in this rapidly-becoming-banana-republic.

Pakistan : Behind the scenes (sugar crisis)

WASHINGTON DIARY: Behind the scenes (sugar crisis)

by Dr Manzur Ejaz, USA

Courtesy: Wichaar.com, September 23rd, 2009

In Pakistan, the same people or families produce goods, make laws about the production of those goods and then implement them. Therefore, the system is not structured for a free market economy

Bulleh Shah famously said:

Kitay Ramdas kitay Fateh Mohammad, eho qadeemi shor

Nipat gia dohan da jhag’ra, wichon nikal pia koi hor

(At one place, his name is Ramdas, and at another, Fateh Mohammad. This is the ongoing dispute since antiquity. When their dispute was dealt with, something else emerged.)

Following Bulleh Shah’s wisdom, every Pakistani thought that once terrorism was dealt with and the jihadis and Taliban suppressed, Pakistan would again become a paradise. But now that the terrorists are being pushed back, Pakistanis are discovering that their problems lie elsewhere too. Newspapers are reporting every day cases of land-grabbing by the rich and powerful and corruption cases being dropped by the accountability authorities, among other things.

Bulleh Shah’s verses haunted me while thinking about the crisis related to sugar shortages. The prices of sugar skyrocketed overnight and the government did not take any notice. When Lahore High Court took suo moto notice and fixed the price at Rs 40 per kilo, sugar producers refused to accept the court verdict. They challenged the LHC’s decision in the Supreme Court of Pakistan and when the highest court refused to reverse the decision, federal and provincial governments came out to protect the sugar producers. The government’s behaviour has exposed the ruling elites, who are not only running the government, but sugar mills too.

The question about courts’ jurisdiction is highly debatable. Similar questions were raised when the Lahore High Court was asked about its authority to fix commodity prices, and which institution was responsible for it. If I was asked this question by the court, I would have said that in free capitalism, being practiced in Pakistan, the market under the rules of supply and demand, determines prices. The honourable judge would then ask me why there are shortages, in a market-led system, when sugar is plentiful; how can a few players hoard and manipulate the market?

The answers are complicated.

In a free market, hoarding becomes impossible because of multiple reasons. First, producers cannot form cartels and collude to fix prices because of anti-trust and anti-monopoly laws. Second, if a few producers start hoarding, other suppliers jump in to grab market share forever. Third, by the time the producers take their goods to the market, they will have paid every factor (raw materials, supplies, labour, middlemen etc) and borrowed capital from the banking sector. They would be under pressure to pay back the banks and therefore would be keen to sell their products as soon as possible.

In Pakistan, hoarding is easy because producers can delay payments to suppliers, labourers and distributers. In addition to the piles of money they already have, they can get millions from banks and then have it written off. Therefore, producers in Pakistan have immense power to hold back supplies and manipulate the market.

There are no effective institutions against collusion and price-fixing. In short, Pakistan lacks the legal framework that is necessary for the smooth functioning of the free market system. Even the United States ran into problems in the last two decades because the Republicans killed or watered down the regulation regime necessary to guard against market manipulators. Nonetheless, the markets corrected themselves in the US by crashes in the real estate, commodity and financial markets. Such corrections are not possible in Pakistan.

In Pakistan, apart from capitalism and socialism, all kinds of ‘isms’ exist. The same people or families produce goods, make laws about the production of those goods and then implement them. Therefore, the system is not structured for a free market economy. The exploitative classes have started playing their games again and very openly. In addition, sections of the ruling classes that were out of favour with the Musharraf regime or were suffering during that period are trying to make up for their losses, and have jumped head-first into the markets to plunder. It is not clear how the courts will deal with this army of dragons.

I have stated several times in this space that the Taliban have provided the perfect shield for the exploitative classes of Pakistan by hogging attention: no one was looking at what the rich were up to during the time when religious extremism was on the rise.

Now that Ramdas and Fateh Mohammad’s dispute is settled, something else has started to emerge.

The writer can be reached at manzurejaz@yahoo.com

Source – http://www.wichaar.com/news/294/ARTICLE/16397/2009-09-23.html

Secret DC Think-Tank Report: "Alarmimg and Disturbing"

by Pooky, this blog economics journalist

Just as the massive global stimulus and bailouts is making headway, a secret DC think tank, still was able to imagine a scenario the sees another crisis down the line that will make the current crisis about 20% critical mass in size.

The DC think tank report is called “Alarming and Disturbing” by those who have read it. The think tank is a key advisor Obama and reportedly Obama have studied the report. Sources told this blog there is no immediate reaction from Obama.

The source said however, many important and large investors are positioning themselves to benefit from this crisis, if it emerges.

This blog can only guess that it may be related to the financial situation in the US, particularly the staggering federal deficit the US is still carrying on all fronts, with little hope of ever being able to cover it apart from strong growth for many years, and it must start soon. State wise, the situation is also as critical, with many on the verge of defaults.

Then complicating the picture is the trade and fund flow imbalances. Then the medical bill and the US military expenses. Then adding to the mix is the changing global economic structure.

All in all it spells difficult finances, in a difficult time, when availability of funds for last resort is perhaps maxed out. Simply stated, the US is extremely over-extended.

But all of the above is just this blog’s guess of the content of the report.

On the bright side, however, the US still have many rich allies in Europe and still have close relationship with many rich Middle East countries, who could provide help to the US, if the crisis do hit. From what this blog heard, estimates put this future bailout anywhere from US$8 trillion to US$12 trillion.

Our advice is to continue as normal and hope for the best. Like we said, we think the report verges on being too imaginative. If you are in the stock market, just buy a few futures contract covering the long end, just in case and they are really cheap at the moment. I figure 2-5% of your investment will be about right for this insurance.

If it hits, there is little one can do anything about it. And as far as benefiting from it big times, you got to have some serious purchasing power that you can sit on, to position yourself for it, as the people we are talking about are not just the super-rich, but the ultra-rich.

The Hidden Effects of the Public Option

Author’s note: For the purposes of this discussion, the term “health insurance” will refer to all health care plans.  True health insurance is nearly impossible to find.  Most people actually have “health maintenance.”  For expediency, the term “health insurance” will cover all health care plans.

One of the most important aspects of economics is the concept of incentive:  Give people an incentive to do something, and by and large they will do it.  Give them an incentive to not do something, and generally people will not do that thing.  This concept has ruled the interaction of creatures since the first multi-celled organisms began eating each other to survive:  The organisms that developed the sense to get away from the carnivore creatures survived, and the rest were consumed.  Incentives can be both positive and negative:  Positive incentives encourage us to do something.  The sweetness of an apple encourages us to eat it, while the oily, three-leafed appearance of some plants tells us to stay away!

This concept of incentive drives us in our everyday lives:  We avoid committing crimes for fear of punishment and work jobs for the incentive of salaries so that we can obtain the necessities and comforts of life.  We wait to shop until products are on sale or rebates are being offered.  Incentives drive the actions of individuals and, in aggregate, entire societies.

This concept of incentive is one of the important factors to consider when examining the health care “reform” proposals.  One of the most talked-about but least understood parts of these proposals is the requirement of employers to offer health insurance to their employees, or to pay a penalty to help fund the government-offered “public option” plan.  Let us examine the effect of this one aspect of the current health “reform” proposals.

Some time ago, I received a statement in the mail.  This statement encompased my total compensation received from my employer at the time, including my published salary, benefits including health insurance and 401(k) and FICA taxes.  In total my benefits increased my total compenasation to 126% of my established salary.  Six percent consisted of bonuses paid for the company’s performance that year.  Another 7.5% was my company’s contribution to my FICA taxes, which fund Social Security and Medicare.  The remaining 12.5% included sick leave, life insurance, AD&D, travel and my company’s contribution to my health insurance plan.

Without going into detail, let me say that by far, I was at the low-end of employer contributions as a percentage of my salary.  In other words, the majority of employees’ company health insurance contributions certainly constituted a far larger percentage of their salaries than did mine.  The aggregate statistic of June 2009 for employee health insurance contribution was 7.8% of salaries is heavily skewed by the higher-salary employees who also receive this benefit.  With some companies, the lowest-skilled, lowest-paid employees could receive 12-15% of their base pay in employer-funded health insurance compensation.

This is where the proposed health reform plan fails on the concept of incentive: With a surcharge on salaries for companies that do not offer health insurance, those companies with large numbers of unskilled, low-wage workers have a strong financial incentive to drop such plans.  This includes retail enterprises, restaurants, warehousing and shipping, light manufacturing and any other business where the majority of employees have few skills and low wages.

Let us consider the ramifications of the proposed reform bill, H.R. 3200.  It proposes an 8% surcharge on companies that do not offer health insurance to help fund a “public option” plan.  On the surface, this seems like a good incentive:  The average company pays just 7.8% of base salary for its contribution to health insurance.  An 8% penalty seems to be an incentive for companies to offer health insurance.  Most companies would rather pay the average 7.8% of salaries than 8%, so those that do not already offer such plans will begin offering them.

Right?

No.  In fact, the penalty will have the opposite effect.  First, all businesses have already set aside a certain amount of their yearly budget for labor.  If the companies that do not already offer health plans are forced to offer health insurance, these companies will be forced to cut labor costs elsewhere.  The easiest, most likely place to cut is head count:  They will lay-off employees to cut total costs.

Second, many companies average health insurance costs far higher than 7.8% of labor costs.  As discussed above, companies and individuals with higher average compensation skew this statistic.  Companies with volumes of unskilled, low-wage labor can have insurance costs as high as 12-15%.  These companies will actually have a strong incentive to drop their employees from a company-sponsored health insurance plan.

Retail enterprises are likely to be one of the major beneficiary groups of such a program.  Dropping health insurance, forcing employees onto the “public option” while exchanging health insurance plans for a lower-cost “penalty” allows these businesses to lower their labor costs without reducing head-count.  It is no wonder Wal-Mart has endorsed this plan!

Essentially, the “penalty” is not a penalty at all:  It is an incentive for businesses that utilize large amounts of unskilled labor to drop their insurance plans, forcing millions of people who cannot afford to buy private health insurance onto the government-offered “public option.”

The result of this is catastrophic: Instead of covering the roughly 12 million legal residents who do not have insurance and do not already qualify for other programs, the “public option” will be forced to cover many millions more.  Instead of most people keeping their health coverage and a few million more being added to the “public option,” the result will be tens of millions of people dropped from their employer-sponsored plans and added to the government rolls.

Consider the ramifications of major retailers dropping their health insurance plans in favor of the 8% penalty:

In 2007, 21 million people (14.4% of employed persons) worked in wholesale and retail trade and 11 million more (7.5%) are employed in leisure and hospitality (Statisitc Abstract Table 600), which are among the largest consumers of unskilled labor.  These companies are less likely to offer employer-sponsored health insurance.  If just 10% of these workers were forced onto the “public option,” 3.2 million people would be added to its rolls, forcing its costs to grow by several billion dollars per year.  This number represents just two major segments of our economy that total just 22% of our labor force.

Apply this line of reasoning across the labor force, the consequences for a the health insurance penalty are dire.  The incentive for many busiensses to drop their employer-sponsored health insurance plans will be too great a siren call to resist, costing taxpayers billions, perhaps trillions of dollars in the long run.

Cross-posted at RedState.

Yes, It Is a Tax

By RICARDO ALONSO-ZALDIVAR, Associated Press Writer Ricardo Alonso-zaldivar, Associated Press Writer – Mon Sep 21, 7:55 pm ET

WASHINGTON – Memo to President Barack Obama: It’s a tax. Obama insisted this weekend on national television that requiring people to carry health insurance — and fining them if they don’t — isn’t the same thing as a tax increase. But the language of Democratic bills to revamp the nation’s health care system doesn’t quibble. Both the House bill and the Senate Finance Committee proposal clearly state that the fines would be a tax.

And the reason the fines are in the legislation is to enforce the coverage requirement.

“If you put something in the Internal Revenue Code, and you tell the IRS to collect it, I think that’s a tax,” said Clint Stretch, head of the tax policy group for Deloitte, a major accounting firm. “If you don’t pay, the person who’s going to come and get it is going to be from the IRS.”

IMCX-India's Fourth National Commodity Bourse, To Be Launched Soon:)

International Multi Commodity Exchange (IMCX)

Commodity trading in India has a long history & was started much before it started in many other countries.

Today, apart from numerous regional exchanges, India has three national commodity exchanges namely, Multi Commodity Exchange (MCX), National Commodity and Derivatives Exchange (NCDEX) and National Multi-Commodity Exchange (NMCE).

THE RISING WAVES

These commodity exchanges have been performing extremely well in these years.

The turnover of commodity exchanges in India surged by 31% in the April-August period, led by a surge in trading of farm goods.

Total value of trading at the Commodity Exchanges during the fortnight from 16th August 2009 to 31st August 2009 was Rs. 3,04,651.88 crore.

NEED OF THE HOUR

In India, futures’ trading in commodities is zooming.

India’s commodity exchanges have witnessed major action this year and are getting into investing and managing new commodity bourses.

Another commodity exchange may help using the opportunities better ; thereby improving trading volumes of specific contracts & be more efficient is the price discovery, which in turn will attract a wider constituency of participants from the entire commodity value chain i.e. government, producers, marketers, importers, exporters etc.

THE FIRST STEP

A new commodity exchange, International Multi Commodity Exchange is going to launch very soon under the market regulator Forward Markets Commission (FMC).

IMCX is promoted by Indiabulls Financial Services Ltd (IBFSL) and India’s biggest state-run trading firm, MMTC Ltd, and part-owned by more institutions.

The exchange is planning to start operations next month as the country’s fourth national commodity bourse & is ready to grab its share of a futures market that is growing 30% a year.

BUILDING TECH – PLATFORM

The US-based exchange services provider Millennium Information Technology (MIT) has been awarded the contract for implementing the technology platform for the aforesaid exchange.

The US-headquartered MIT provides application solutions to financial and telecom industries.

THE PILLARS OF FOUNDATION

IMCX will be the first commodity bourse in India to comply with the criteria of revised ownership criteria that makes the participation compulsory of public sector units or cooperatives.

Currently, Indiabulls Financial Services Ltd. (IBFSL) holds 40% of the exchange, state-run MMTC Ltd. holds 26%.

Forward Markets Commission rejected the United Stock Exchange of India’s (USE’s) 10% stake buy in the bourse, on the grounds that the stock exchange is yet to be fully recognized.

So far, Indiabulls has diluted 24 per cent to HDFC Bank, Yes Bank and Indian Potash Ltd & IDFC + Krishak Bharati Cooperative Limited (KRIBHCO) have purchased a stake of 5% each in Indian Commodity Exchange, which was to be sold to the USE earlier.

BUSINESS OPERATIONS

The exchange will start operations by launching 10-12 contracts in bullion, metals, energy and agricultural commodities with some uniqueness in contracts to attract more volume.

·The exchange will launch gold mini and gold 1 kilogram contracts in the bullion segment. The gold contracts will have multiple delivery centers in five-six cities.

· In base metals, it is planning to offer copper, zinc and lead or nickel futures, and in the energy segment it will launch crude oil and natural gas contracts. Delivery-based contracts will be launched in the base metal segment, where contracts are mostly non-deliverable at other exchanges.

·The exchange has also tied up with several logistic providers for warehouse facilities, & in the next phase of expansion, the exchange may create its own warehouses

·Guar seed, rapeseed, refined soyoil, soybean and turmeric will be among the agricultural contracts.

Many Talented Foreigners No Longer See America as the Place that Rewards Achievement

While there is considerable disagreement regarding the value of low-skilled immigrants (especially with regards to whether illegals deserve amnesty), almost everybody agrees that the United States is a big beneficiary when highly skilled workers, investors, and entrepreneurs from around the world come to America. So it is a bit troubling that USA Today is reporting that many Indians and Chinese are deciding that they can achieve more by going back home. It is too soon to make sweeping pronouncements about the public policy implications of this demographic shift, but this preliminary evidence of a reverse “brain drain” certainly suggests that the big-government policies of Bush and Obama have made the American economy less vibrant and less dynamic:

More skilled immigrants are giving up their American dreams to pursue careers back home, raising concerns that the U.S. may lose its competitive edge in science, technology and other fields. “What was a trickle has become a flood,” says Duke University’s Vivek Wadhwa, who studies reverse immigration. …”For the first time in American history, we are experiencing the brain drain that other countries experienced,” he says. Suren Dutia, CEO of TiE Global, a worldwide network of professionals who promote entrepreneurship, says the U.S. economy will suffer without these skilled workers. “If the country is going to maintain the kind of economic well-being that we’ve enjoyed for many years, that requires having these incredibly gifted individuals who have been educated and trained by us,” he says. …Multinational companies that belong to the American Council on International Personnel tell Executive Director Lynn Shotwell that skilled immigrants are discouraged by the immigration process, she says. Some can wait up to a decade for permanent residency, she says. “They’re frustrated with having an uncertain immigration status,” she says. “They’re giving up.”

NBER: 'The rise in American inequality has been exaggerated both in magnitude and timing'

Northwestern University economist Robert J. Gordon has written a new paper on behalf of the NBER titled ‘Misperceptions About the Magnitude and Timing of Changes in American Income Inequality.’ Below is the abstract:

The rise in American inequality has been exaggerated both in magnitude and timing. Commentators lament the large gap between the growth rates of real median household income and of private sector productivity. This paper shows that a conceptually consistent measure of this growth gap over 1979 to 2007 is only one-tenth of the conventional measure. Further, the timing of the rise of inequality is often misunderstood. By some measures inequality stopped growing after 2000 and by others inequality has not grown since 1993. This cessation of inequality’s secular rise in 2000 is evident from the growth of Census mean vs. median income, and in the income share of the top one percent of the income distribution. The income share of the 91st to 95th percentile has not increased since 1983, and the income ratio of the 90th to 10th percentile has barely increased since 1986. Further, despite a transient decline in labor’s income share in 2000-06, by mid-2009 labor’s share had returned virtually to the same value as in 1983, 1991, and 2001.

Recent contributions in the inequality literature have raised questions about previous research on skill-biased technical change and the managerial power of CEOs. Directly supporting our theme of prior exaggeration of the rise of inequality is new research showing that price indexes for the poor rise more slowly than for the rich, causing most empirical measures of inequality to overstate the growth of real income of the rich vs. the poor. Further, as much as two-thirds of the post-1980 increase in the college wage premium disappears when allowance is made for the faster rise in the cost of living in cities where the college educated congregate and for the lower quality of housing in those cities. A continuing tendency for life expectancy to increase faster among the rich than among the poor reflects the joint impact of education on both economic and health outcomes, some of which are driven by the behavioral choices of the less educated.

What You Should Think About Health Care

“Expensive medicines are always good:  if not for the patient, at least for the druggist.”

–Russian proverb

I recall, as a libertarian-minded youngster, becoming upset that media coverage of reforms advocated by Bill and Hillary Clinton referred to “the American health care system.”  I noted a fact as true today as it was then — this nation does not have a systematic approach to health care provision.  It bothered to think that the implication of a “system” was misleading people into believing there was some sort of problem in need of a solution.

Today I remain concerned about use of the phrase “health care system.”  As a grown man with knowledge of the world books alone cannot convey, I understand the grotesque inhumanity of American policy as relates to the provision of medical services.  It is a real and grave problem, a problem every other prosperous civilized nation has already solved within its own borders.  Arguments about the precise number of uninsured citizens only distract from the reality that tens of millions of Americans have no practical alternative to emergency medical services.

For some, this means sicknesses and injuries are only addressed in moments of desperation, with inefficient use of precious resources.  For some, this means sicknesses and injuries are endured despite protracted or even lifelong suffering.  According to [warning: PDF link] a recent Harvard study, for around 45,000 people each year, this leads to death.  Effective universal health care policy could save as many American lives as preventing one 9/11-magnitude attack every forty days!

Perhaps it is unfair to compare Republican party leaders with the leaders of Al Qaeda.  Yet the scope of preventable deaths brought about by human choices begs the question — to whom is that comparison unfair?  Are working class families caught in the gap between Medicaid and affluence somehow less innocent than the final occupants of the World Trade Center?  If expense is the real issue, why does solving the much more deadly problem of health care access warrant so much less support than the problem of terrorist attacks?

At a disturbing nexus of ignorance and irony, proponents of universal health care have been cast as villains who pose a threat to the American way of life.  That ignorance stems from some notion that it is unconstitutional for the federal government to see to the general welfare of the American people.  Never mind that the Article 1, Section 8 explicitly provides Congress with that power.  Never mind that the very first sentence of the Constitution articulates that duty as on fundamental purpose of our government.  As with so many other areas of debate, many critics of reform are unwilling to be swayed by even the most obvious facts.

If there has been any betrayal of the American way of life, it has been the institutionalization of political dogma holding that government action impedes private sector solutions.  While political leaders in the opposition party have either failed inexcusably in their duty to be informed or deliberately shirked their duty to serve the public interest, their followers are typically less villainous.  A month or so ago, one well-meaning and apparently patriotic woman shouted out that “the good hearts of the people” should be given a chance to address this problem.

As long as the problem has existed, public goodwill has had unfettered opportunity to provide relief to the sick and downtrodden.  In the early 1990s, it was already clear that philanthropy was inadequate.  In spite of enormous tax breaks for wealth Americans in the interim, our nation has only seen more and more of our citizens uninsured or underinsured.  The notion that government cannot play a constructive role is repudiated not only by dozens upon dozens of foreign realities, but also by our own increasingly bleak public health reality.

Yet narrow interests remain zealously defended.  Some say that universal access to health care would somehow inhibit the development of new drugs and other medical technologies.  Does our nation lose nothing greater from tens of thousands of deaths (not to mention uncounted lost hours of productivity) brought about by inadequately treated medical conditions?  If medical innovation really suffers somehow from the provision of universal access, how much blood must be spilled in its name?

Yet even that is a false dichotomy.  Several European nations are each home to large thriving medical research enterprises.  Heck, even Cuba, in spite of scant national resources, manages to develop lifesaving new drugs at an impressive pace.  The idea that America, with so much raw wealth and so much intellectual capital, cannot meet the needs of its own people and still outshine the inventiveness of those other nations is a very strange assertion for a self-identified patriot to voice.

If there is any valid grounds for criticism of reformers, it would be a widespread willingness to compromise with a political movement utterly at odds with facts.  In months of high profile public debate, few voices have been raised to ask just what profit-based health insurance actually accomplishes.  Clearly there is no national consensus to shirk the Constitution’s directive to see to the general welfare of the American people.  In effect, these institutions serve as private sector death panels, yet instead that term has come to resonate based on the fictitious and absurd notion that rationing no public official has ever proposed would end the lives of Americans no one wishes to see dead.

Certainly there are times and places where compromise is in order.  When good faith efforts to get at the facts yield inconclusive results, bold action may be unwise.  Regarding the state of American health care today, it is only efforts made in bad faith that prevent widespread clarity about a national body count caused by a cutthroat economic paradigm applied to health care policy (not to mention monumental losses to productivity suffered by survivors of that same blight.)

Perversely, even as national media outlets are assault by propagandists, they continue to indulge purveyors of misinformation.  Again and again, transparent lies and the unrepentant dissemblers behind them are put on equal footing with earnest informed advocates.  As with the disastrous plunge into Iraq, this critical political decision is being shaped by dialogues that equate major league national scoundrels with genuinely wise national leaders.  Yet whatever wisdom exists to promote reform, it seems unable to bring our nation anywhere near the kind of sweeping overhaul that would marginalize a single parasitic industry, to the great benefit of each and every other enterprise that employs American workers.

Neither conservative nor libertarian thinking is without wisdom of its own.  This wisdom becomes folly when it relies on misinformation and hostile emotion.  Every day, more of our own citizens die because this particular folly continues without remedy.  If a few thousand dead Americans justifies enormous changes to our way of life, on what basis do we refuse lesser change in to prevent the deaths of so many thousands more?

Money Demand In Real Life

I part ways with Scott Sumner largely on the source of the 2008 surge in money demand. Scott seems to think of it as somewhat unidentifiable while I see it as a natural consequence of the subprime implosion.

In January 2008 I wrote.

A while back I suggested that smart homeowners were loading up their HELOCs before the door was shut. Turns out the door is being shut on Monday. Calculted Risk reports that both Chase and Countrywide are placing new limits on how much consumers can borrow.

Without access to Mortgage Equity can the consumer continue. Moreover, consider the on going possibility that high US consumption is being driven by a minority of consumers who have been drawing on heavily on home equity. With the door shut on those high spending consumers we could see a dramatic realignment in the US savings rate and with that a global recession.

Indeed, in the weeks after that I had a conversation with a real estate broker friend of mine on this issue. We calculated that the carrying cost of cash taken out of a HELOC was likely to be around 1% and maybe less if you found the right Certificate of Deposit. We concluded that we would not only max out our home equity lines (I had a different bank)  and stuff the proceeds in savings but he would look for anyone who hadn’t shut the door yet and get us more out.

For all to examine

“A document for all to examine: economists, historians, and the general reader alike,” the 1936 German edition of Keynes his General Theory. (Yes that is unabbreviated usage for fun, or to escape s’ or s’s, heh).

“One can read whole reams of economic literature written by both fervent followers of John Maynard Keynes and his attackers as well and never know that there was a German language edition of his profoundly influential General Theory late in 1936, for which Keynes wrote a special foreword addressed solely to German readers. By that time the National Socialist regime of Adolf Hitler was four months short of four years in power in Germany.”

“Since the 2003 US-led invasion, Iraq has witnessed a dramatic rise in the cultivation and trafficking of drugs.” Hmm, insert CIA and… as the CIA is Wall Street, Wall Street is the CIA (read Crossing The Rubicon, get it here). Brown Brothers Harriman, George H. W. Bush, and on and on. Wonder why certain Wall Street firms are ‘too big to fail’, and how making the drug trade illegal (for some) serves as a great way to stifle competition and create a cartel…

Sen. Bernie Sanders: Is the Recession Over?

Just the other day, Federal Reserve Chairman Ben Bernanke said, Iit is very likely that the recession has ended.”

Well, let me just suggest to Mr. Bernanke that today we have about 17 percent of our workforce – 26 million Americans – who are either unemployed, have given up looking for work because they no longer think a job is possible, or they are working part time when they want to work full time. That’s 17 percent of our population.

For those folks, I don’t think they believe this recession is over.

In fact, what they believe is that they are mired in the worst economic mess since the Great Depression.

One of the really disturbing statistics out there is that it is taking unemployed people a lot longer to find a job than used to be the case. On average, it’s taking about six months.

But it’s not just losing your job or working part time. People are losing health insurance, losing their homes, losing their pensions. What it’s about is slipping out of the middle class and into poverty and not having the capability of sending your kids to college. That’s what the economy is about today.

So to my mind, most importantly, we have got to stay focused on the reality that because of the greed, the irresponsibility, and the illegal behavior of people on Wall Street, we are plunged into a real economic mess, and we’re going to have to work together and we’re going to have to think real hard about how we get out of that mess.

I’ve talked before about some of the ideas we’re working on, but let me just reiterate what some of them are.

We need to get a handle on Wall Street so that they do not go back to the horrendous ways of the past. They are spending millions of dollars right now on lobbying and campaign contributions to make that happen. What we must demand – and this is enormously important – is a new Wall Street, not designed to make hundreds of millions of dollars for their CEOs, but a Wall Street designed to help increase manufacturing in the U.S., create decent jobs, help small businesses, do something for the productive economy.

Another area that we need to return to is our disastrous trade policies which allow corporate America to throw American workers on the street, move to China, pay people 50 cents an hour, and then bring those products back into the country.

So there is a lot of work ahead of us in terms of the economy. Let’s stay focused on this issue, and don’t believe anybody who’s telling you “the recession is over.”

Link to Article

The Campaign Blitz Begins- Read My Lips II

So our President is going on all the Ministry of Truth Talk shows and even Late Night Talk Shows to do his latest campaign swing, instead of leadership.

President Obama will appear on a record five TV networks on Sunday — the morning talk shows of ABC, NBC, CBS and sit for interviews with CNN and Spanish-language network Univision.

But he won’t go anywhere near the “right wing”.

But Big Brother doesn’t talk to the unpeople.

But now the President will not stop the racism talk:

“Are there people out there who don’t like me because of race? I’m sure there are,” Obama told CNN. “That’s not the overriding issue here.”

“The president does not believe that the criticism comes based on the color of his skin,” Gibbs said.

Only some of them.

And now you add in dear old elitist Michelle Obama, who they trotted out for a carefully choreographed speech, because they wouldn’t want a repeat of the Zanesville,OH incident during the first campaign, ““We left corporate America, which is a lot of what we’re asking young people to do,” she tells the women. “Don’t go into corporate America. You know, become teachers. Work for the community. Be social workers. Be a nurse. Those are the careers that we need, and we’re encouraging our young people to do that. But if you make that choice, as we did, to move out of the money-making industry into the helping industry, then your salaries respond.” (NRO)

Don’t strive to do better, just let the government do it for you.

But now she  enters a new spectre into the debate: You’re a SEXIST!!!

Michelle Obama said women are being “crushed by the current structure of our health care” because they often are responsible for taking care of family illnesses, arranging checkups and monitoring follow-up care.

“We all know that women are more likely to work part time or to work in small companies or businesses that don’t provide any insurance at all,” Obama said. “Women are affected because, as we heard, in many states insurance companies can still discriminate because of gender. And this is shocking to me.”

So now, not only are you a racist, and “unamerican”, now you’re a SEXIST pig also!

And the Ministry of truth is just gushing all over her…

“What she’s doing is putting a personal and human face on the issue … there’s nothing more crucial,” said Washington Post columnist Sally Quinn. “Everybody gets sick, and everybody has someone in the family that gets sick.”

“I think if you can humanize it and personalize it, it suddenly brings it home to people — especially those who are screaming and yelling about the government taking over,” Quinn said.

Gloria Borger, a CNN senior political analyst, agreed.

“I think she’s always been a great asset to him,” she said. “She can help in this health care debate by not getting involved in the minutiae of the bills, but essentially emphasizing the reason we need health care reform. And that’s what she will stick to.”

On Friday’s CBS Early Show, White House correspondent Bill Plante highlighted President Obama’s latest media blitz on health care reform and touted a new piece of the PR arsenal: “The President does have a new partner in his nonstop effort to sell health care, it’s the First Lady….Michelle Obama will be more like a stealth weapon in the battle for health care, giving it a softer touch.”

So using her “motherly” influence and her sex is not manipulation…

And that’s why Journalism has died. Long Live The Ministry of Truth!

But the answer  to why we haven’t heard  from Michelle Obama might lie in the administration trying to keep her old job at the non-profit University of Chicago Hospital out of the limelight because it is clear her job was part of the problem regarding health care costs and not part oft the solution. Michelle Obama having been part of the problem could actually be something the administration could use to their advantage if they were willing to be honest about it,  but asking most politicians to be honest is like asking a dog not to bark and Obama might view it as politically embarrassing. Probably because Michelle Obama’s job as a “hospital administrator” had nothing to with medicine and nothing to do with administrating.  It was all about PR. Her official title was Vice President for External and Community Affairs. But that title and that job was so unnecessary, that , it not only didn’t exist before she got it, when she resigned the position  to campaign with her husband, no one was ever rehired to fill it, and the job itself was terminated after she resigned…

Don’t do as I do, do as I say.

Rasmussen Poll:

Fifty-six percent (56%) of voters nationwide now oppose the health care reform proposed by President Obama and congressional Democrats. That’s the highest level of opposition yet measured and includes 44% who are Strongly Opposed.

Just 43% now favor the proposal, including 24% who Strongly Favor it.

But the overall picture remains one of stability. While the numbers have bounced a bit following nationally televised appearances by the president to promote the plan, opposition has generally stayed above 50% since early July. Support has been in the low to mid 40s.

The number who Strongly Oppose the plan has remained above 40% and the Strongly Favor totals have been in the mid-20s. This suggests public opinion is hardening when it comes to the plan that is currently working its way through Congress.

“The most important fundamental is that 68% of American voters have health insurance coverage they rate good or excellent … Most of these voters approach the health care reform debate fearing that they have more to lose than to gain.”

If the plan passes, 26% of voters say the quality of care will get better, and 51% say it will get worse. In August, the numbers were 23% better and 50% worse.

Gallup 7/27/2009:

Nearly half (48%) say they personally have a good understanding of the issues involved, while only 27% say so about members of Congress.

But, despite all this the Political Elite want what they want because they want it.

Regardless.

The race for 60 votes is on.

If they can get 60 votes they cram it down your throat.

If they don’t, they can use “reconciliation” a legislative tactic to cram it down your throat.

But, don’t worry, they are listening to We The People.

Also, don’t worry, it will cost $900 billion or more but not raise the deficit “not one dime” or Obama won’t sign it.

“…And here’s what you need to know. First, I will not sign a plan that adds one dime to our deficits — either now or in the future. I will not sign it if it adds one dime to the deficit, now or in the future, period.” ‘Not one dime…”

Doesn’t that fill you will confidence.

Remember “Read My Lips” 

They are going to pay for a new government entitlement with the “waste fraud and abuse” of other government entitlement programs.

Hurrah!

Medicaire is bankrupt

Medicaid is bankrupt

Social Security is bankrupt

The Post Office is bankrupt

But if you pass National Health Care it will do what no programs has ever done.

Promise.

And we’ll use the abuses from the previous programs to pay for it.

“Not one Dime”  (just trillions or other dimes )

Orwell is having an orgasm right about now.

Huffington Post:

Yet another late complication, according to several Democrats, is the president’s statement that he will not sign a bill “if it adds one dime to the deficit, now or in the future, period. And to prove that I’m serious, there will be a provision in this plan that requires us to come forward with more spending cuts if the savings we promised don’t materialize.”

The $900 billion target is “very difficult,” Rep. Charlie Rangel, D-N.Y., chairman of the House Ways and Means Committee, said Tuesday. “This is reducing coverage for poor and working people.“

Rangel spoke of other “restrictions the president has given in his speech,” commenting after senior House Democrats pressed top administration officials in a private meeting for an explanation of Obama’s $900 billion price tag.

Reducing coverage? On your “free” government “competition” that will cost $900 billion+ but not add to the deficit “one dime”??

I’m not sure that’s a magic trick even Chris Angel could pull off!

Does anyone smell large tax increases?

To pay for that “fair” “competition”? Even if you aren’t on their plan…

Naw…They’d never do that now would they….

Perbankan : Jangan Ada Misteri Terkait Bank Century

Jangan Ada Misteri BPK Periksa Pengawas Bank BI Terkait Bank Century

KOMPAS, Sabtu, 19 September 2009 | 03:02 WIB

Jakarta, Kompas – Presiden Susilo Bambang Yudhoyono meminta investigasi terhadap pengucuran dana pemerintah ke Bank Century dilakukan secara transparan. Namun, Presiden juga meminta semua pihak memahami konteks situasi saat keputusan itu diambil.

Presiden Yudhoyono mengungkapkan hal itu, Kamis (17/9) malam, seusai berbuka puasa bersama wartawan di Istana Negara, Jakarta.

”Jangan ada yang sifatnya misterius pada urusan Bank Century dan penyelesaiannya. Semua pihak saya minta bisa menjelaskan akuntabilitasnya. Saya ingin tetap transparan. Sakit kalau yang berkembang di negara ini suasana buruk sangka,” ujarnya.

Presiden menjelaskan, ia menghormati proses investigasi atas kasus Bank Century yang saat ini sedang dilakukan oleh Badan Pemeriksa Keuangan (BPK). Ia memesankan agar dipastikan tak ada kejahatan yang lolos dari jeratan hukum pada penanganan Bank Century.

”Kalau ada aset harus dibekukan, tidak boleh kita melakukan sesuatu atas kejahatan orang-orang tertentu yang selama ini melakukan langkah-langkah yang ceroboh bahkan cenderung jahat,” ujar Presiden Yudhoyono.

Akan tetapi, Presiden juga mengingatkan agar keputusan yang diambil pemerintah dan Bank Indonesia atas Bank Century tidak dilepaskan dari konteks kondisi perekonomian nasional dan global saat itu.

”Dunia dan negara kita saat itu sedang dalam situasi tegang, khawatir krisis ini menjadi bola salju yang menggoyang sistem perbankan, sistem keuangan, sistem perekonomian. Jadi, jangan membayangkan situasi akhir tahun lalu sama dengan situasi sekarang, akhir 2009,” ujarnya.

Presiden menuturkan, kasus Bank Century meletup saat ia mengikuti pertemuan puncak Kelompok 20 (G-20) di Washington DC, AS, bulan November 2008. Mendapat laporan kondisi dalam negeri, Presiden memerintahkan Menteri Keuangan segera pulang menangani agar masalah itu tidak meluas.

”Wapres di Tanah Air dan kalau saya di luar negeri, saya keluarkan perintah resmi pada Wapres untuk menangani permasalahan,” ujar Presiden Yudhoyono.

Namun, sesuai dengan pernyataan Wapres M Jusuf Kalla, beberapa waktu lalu, meskipun saat itu ia berada di Indonesia, pihaknya sama sekali tidak dilibatkan dalam penanganan Bank Century. Diakui, tanggal 25 November 2008, ia baru dilaporkan Menkeu Sri Mulyani Indrawati dan Gubernur Bank Indonesia (BI) Boediono, yaitu setelah Komite Stabilitas Sistem Keuangan (KSSK) mengambil keputusan untuk menalangi Bank Century dan lembaga penjamin simpanan (LPS) telah mengucurkan dana talangan Rp 6,7 triliun.

Secara terpisah, Wapres terpilih Boediono saat dikonfirmasi mengenai pemeriksaan dirinya oleh BPK terkait kebijakan penyelamatan Bank Century pada Rabu (16/9) lalu tak mau berkomentar. ”Menjelang Idul Fitri, nanti saja,” kata Boediono.

Periksa pengawas bank

Deputi Gubernur Senior Bank Indonesia Darmin Nasution mengatakan, saat ini BPK telah melakukan pemeriksaan kepada pengawas bank terutama kepada yang membuat penelitian dan kebijakan di bidang perbankan.

Terkait tudingan BPK bahwa Bank Indonesia sempat menolak diaudit, Deputi Gubernur Bank Indonesia Muliaman Hadad mengatakan, tidak ada keinginan BI untuk menghambat karena memang tidak ada yang harus ditutup-tutupi.

”Hubungan kedinasan BI dan BPK berjalan baik. Bahkan, BI termasuk yang paling tinggi tingkat penyelesaian terhadap temuan audit BPK,” katanya.

Menurut Muliaman, BI hanya sekadar memerhatikan peraturan yang ada agar proses investigasi dapat berjalan lancar.

Berdasarkan tata cara audit, BPK hanya dapat melakukan audit investigasi berdasarkan permintaan DPR. Permintaan DPR ke BPK dilayangkan pada 27 Agustus 2009.

Anggota Komisi Keuangan dan Perbankan DPR, Maruarar Sirait, meminta BPK melakukan audit dan penilaian atas seluruh persoalan Century, termasuk keputusan KSSK menyelamatkan bank tersebut.

”BPK harus menilai apakah keputusan KSSK menyelamatkan Century benar atau salah. Jika tak ada penilaian, BPK meninggalkan area abu-abu,” katanya. Area yang abu-abu sangat rentan menjadi polemik berkepanjangan. (HAR/DAY/FAJ)