A Difficult Financial Year?

Business conditions have weakened as concern increases about the global economy, drought, and slower retail sales; mining and agribusiness continue to struggle, but construction and manufacturing are still strong. The Treasurer warned that  Australia faced a difficult year, as several of the world's major economies are still weak. [Morgan Mellish, AFR 13.11.02]

Australian Growth

Australia's Treasurer, Peter Costello, has presided over an economy that has grown strongly over the past five years, unaffected by slumps among its trading partners in America and Asia. A review in November is expected to show a slower growth rate for the next financial year, but Australia still boasts the highest growth rates among rich countries. [The Economist 2.11.02]

Fall In Business Confidence

Domestic conditions remain robust, but may be topping out due to the "flow on" of the drought, and deteriorating external conditions. The fall in business confidence appears broadly based and reflects general global uncertainty, the drought, and some easing back in the recent rapid expansion in the retail sector. There is also a marked weakening in the  employment situation. [National Bank's October 2002 Survey ]

Australia's Progress: From Foreign Landlords to Foreign Executives

Nearly two thirds of Australia's highest paid executives work for companies, which earn most of their income offshore. The irresistible trend towards globalisation .has led to an explosion in salaries at the top end of corporate Australia. Of the 180 companies surveyed by The Australian Financial Review nearly half recorded salaries over a million dollars... but many of the executives named in the top 40 don't reside in Australia. [Damon Kitney and Lachlan Johnston, in AFR 6.11.02]

Keeping Good Company

Companies and their executives, often motivated by little more than base greed, have been able to exploit and abuse these structures and processes to the detriment of others, particularly shareholders... Many companies have gone to share options, which are so easily abused by the CEO or the board... There is now a considerable amount of investor dissatisfaction in these areas, which is driving governments to seek to remedy some of these corporate and governance failures by increased regulation... It is not just up to governments and regulators to improve the circumstances. Corporations have a very important role to play through self-regulation, ensuring ethical managers and the correct ethical culture... [John Hewson, Dean of Macquarie Graduate School of Management, in AFR 25.10.02]

Top Of The Pops

The chief executives of Australia's top listed companies received an average pay rise of only 1.8% this year to $1.68 million. This compares with an increase of 13.4% in 2001, and 22% in 2000.... The highest paid package this year was to News Corporation's chief executive, Peter Chernin, at $31.6 million, followed by News chairman Rupert Murdoch, at $16.3 million. Westfield Holdings chairman Frank Lowry received $11.9 million, and Leighton's chief executive, Wal King, was paid $9.03 million. The leaders of the 183 companies surveyed collected an average pay rise of 7.1%, to $1.79 million. Qantas chairperson Margaret Jackson defended the levels of executive remuneration in Australia, claiming they were modest compared with international benchmarks. [Lachlan Johnston and Damon Kitney, in AFR 6.11.02]

Millionaire Managers

The average salary of Australia's top 100 chief executives has topped $2 million for the first time - 38% higher than last year. That is $38,461 per week - about 85% of the average annual wage... It means that the average top 100 CEO salary has gone from 34 times average weekly earning in 2001, to 44 times this year. [Alan Kohler, AFR 6.11.02]

Migration

Out of a list of 17 countries, the OECD calculates that Australia has the highest proportion of immigrants - 24.6%, followed by Canada, with 19.2%. The lowest is Japan, with 0.2%... The USA is in the middle, with11.7%. The Economist (2.11.02) notes: Countries that accept change will be rewarded with a more vibrant and better-off society, even if they have to accept social changes that they may not welcome. Immigration is always a gamble, but when it goes right, everyone wins; 40% of migrants to Australia are workers, the highest proportion in the OECD.

Australia More Vulnerable?

According to ASIO's latest annual report Australia's involvement in the US-led war on terrorism has increased the risk of attacks.... There have been several visits by key members of the radical Islamic group suspected of being behind the Bali bombings... The report says last year's September attacks on the US have profoundly changed Australia's security environment, as it is more likely to become a terrorist target... The most significant security threat is Islamic extremists who retain their capability to undertake terrorism around the world.[Mark Davis, AFR 25.10.02]
 

Terrorist Group Establishes Presence in Australia

The Director General of ASIO, Dennis Richardson said further attacks were certain, and that al-Qaeda was behind the Bali bombing... ASIO has come under criticism for allegedly heavy-handed tactics during raids on homes in search of evidence of the JI terrorist group operating in Australia. He denied that the raids were a publicity stunt, defended his officers, and said the founder of the JI group had visited Australia eleven times to establish a presence. [Cynthia Banham, SMH 1.11.02]

Islam Resurgent? Australia Independent?

Indonesia is the fourth largest country in the world and is 87% Muslim... Its economy is nose diving... Globalisation means it is exposed to the flow of causes and people from the Middle East...Anti-Americanism is on the rise; ... book stores are filled with Islamic texts, and many Indonesians are being trained in  al-Qaeda's Afghanistan camps.... Australia needs to keep a cool head and support Indonesian democracy, moderate Islam, and foster new levels of bilateral cooperation. There is one indispensable rule to achieve this: we need to be an independent nation making our own independent assessments. We cannot be seen as America's little echo in S. E. Asia... we need to redefine our partnership with the USA. [Paul Kelly, The Australian 2.11.02]

The Wisdom of Ex-Prime Ministers

Malcolm Fraser said:
If the USA attacks Iraq, Australia should not only refuse to join in. It should also withdraw in protest RAN ships and personnel already in the region... I don't think President Bush quite understands how much damage he would do to the system of international relations if he decides to go it alone. [SMH 1.11.02]

Inside The Law

Australia's insider-trading laws catch very few villains. Each year the Australian Stock Exchange refers about 30 cases of unusual trading patterns to the Australian Securities and Investments Commission... After months - or years - of painstaking investigation by ASIC, only a handful of cases gets to court... but four prominent cases are pending, involving stockbrokers, real estate agents, and company directors. [Lucinda Schmidt, BRW Oct.24-30, 02]

Money Laundering, Conspiracy, & Hedge Fund Trimming

On the last day of the 1997 financial year there was pandemonium in the offices of a leading Australian law firm, according to a Supreme Court Judge, Justice Clifford Einstein... At stake were high tech investments in New Zealand worth $72 million, tax deductions worth tens of millions, and profits of up to $2 billion for an elite group of Australian investors, including prominent lawyers, accountants, and businessmen. In a recent Supreme Court judgement, Justice Einstein said that investors were so concerned with immediate tax benefits, as to ignore careful consideration of the transaction... Some investors failed to investigate the real nature of the business... At the end of a six-week trial, New Zealand investment banker John Reid was cleared of misleading conduct, but three investors were ordered to pay $44 million in damages... The big losers are Geoffrey Morgan of Balmoral, and Andrew Banks of New York - the founders of Morgan & Banks whose investment companies have been ordered to pay $20 million in damages, interest, and costs... Electrical engineer Alan McLean's companies are up for $24 million... The tax department has ruled the scheme was for tax minimisation, and has billed all the investors for the millions they saved on tax...  Reid and three others were charged with money laundering and conspiracy to defraud the Inland  Revenue [Ben Hills, Australian 26.10.02]

Inside the Insiders

George Soros, the financier who made his fortune playing chicken with governments on the world financial markets, found himself on the receiving end of a state attack when he went on trial in Paris for insider trading. Prosecutors allege he took advantage of inside information to make seven million pounds buying and selling in the French bank Societé General... His alleged insider trading occurred in the midst of one of the gravest financial scandals in French history. But the fact that it has taken more than a decade to bring him to trial has prompted critics to say that the rich live by their own set of rules. [Daily Telegraph, London, reported in SMH 9.11.02]

Speak Up Or Pay Up

Major listed companies are using technical readings of the Corporations Act to avoid disclosing sensitive information of significance to investors, according to an ASIC submission to the HIH Royal Commission. ASIC noted the reluctance of auditors to report breaches of a serious nature, and called for greater protection, including on the spot fines and infringement notices for companies in breach of their disclosure obligations. [David Brearley, Australian 2.11.02]

Insider Trading And Suborning Witnesses

The HIH Royal Commission heard sensational evidence from Rodney Adler's former business partner Brad Cooper. It included possible insider trading, and attempting suborning of a witness relating to the $5 billion collapse of the company. It was also alleged that Adler offered to buy his Balmoral house for half a million dollars more than it was worth, if he would change his evidence on the alleged insider-trading deal. ["Navigator" in AFR 19.10.02]

Banking On It - Uncommon Wealth?

The Commonwealth Bank board was under fire for lack of disclosure surrounding the $4.65 million long service bonus paid to chief executive David Murray. Shareholders attending the meeting applauded a representative of the Australian Shareholders' Association, who labelled the payment "a black mark for disclosure and corporate governance". Murray received a total remuneration of $6.99 million last year, including the bonus. [David King, Australian, 2.11.02]

High Rollers

The Australian Tax Office is trying to claw back $918 million or more, from 24 individual taxpayers in a dramatic escalation of a crackdown on some of the country's richest people... In the early 1990s the ATO looked at 80 individuals worth more than $30 million each - it found they had taxable incomes of less than $20,000 in 1992-3... There are approximately 600 taxpayers in the High Wealth Income program, which generally includes taxpayers owning or controlling wealth of over $30 million... The Tax Office does not reveal details of individuals under investigation... The ATO now has power to divulge confidential taxpayer information to ASIO. John Howard and Peter Costello may end up reaping the rewards of a Labor crackdown on the big end of town.   [Allesandra Fabro, AFR 1.11.02]

Tax Avoidance

Tax Commissioner Michael Carmody has set his sights on the cash economy and tax avoidance. He said the tax office put an extra $4 billion on the books last year because of improved compliance activities. Over half of this was raised from audit verification activity into compliance by large businesses and high net wealth individuals... Around 20,000 businesses can expect a visit this year. The construction industry is high on the list, followed by used car dealers, commercial fishermen, liquor retailers, dealers in gold bullion, antiques, and art; and tourist operators. [Anne Lampe, SMH 14.11.02]

Surprise - Free Markets Lead to Inequality!

The Australian Government's free market approach to innovation has led to growing inequality between Australia's rich and poor regions, according to the latest State of the Regions report, commissioned by the Local Government Association. The executive director, Dr. Peter Brain said there was abundant evidence to suggest that the rich were getting richer, and one way to correct the trend was to devolve more political power to local governments. This meant providing them with more resources, more responsibilities and more accountability.  It also meant encouraging them to work with State and Federal governments in areas that span jurisdiction, such as transport, infrastructure, education and industry development. [Cherelle Murphy, AFR 30.10.02]

Blueprint For A Living Continent

It is time to give something back to the landscape and to the people who manage it. Our land management practices over the past 200 years have left a landscape in which fresh water rivers are choking with sand, where top soil is being blown into the Tasman Sea, where salt is destroying rivers and land like a cancer, and where many of our native plants and animals are heading for extinction. [Wentworth Group of concerned scientists, convened by World Wide Fund for Nature, Australian branch, AFR 11.11.02]

Australia Dry

Dam levels are at /or near historic lows leading to water restrictions in many places... In Queensland over half the irrigation schemes cannot get even half their requirements...In NSW six of the state's 13 dams have announced zero allocations this year... In Victoria irrigators in the Wimmera will receive no water... Towns are facing various degrees of water restrictions. [Asa Wahlquist, The Australian, 22.10.02]

Water Crisis

The repair bill to solve Australia's water crisis may be $20 billion over the next decade, and could be paid for by a small environment levy, according to the nation's top scientists. A "carrot and stick" approach would help restore the nation's choking rivers and scarred landscape. The immediate task is to fix the dysfunctional system of water licenses for farmers, halt our third world style of land clearing practices; and use the savings from new irrigation technologies to put water back into the Murray River. The report, from the Wentworth Group of scientists, says our continent is falling apart, and it is not caused by drought, but by poor policies and management. [George Megalogenis and Asa Wahlquist, The Australian, 2.11.02]

Seeing The Light?

In his new book, Common Ground, Malcolm Fraser emerges as a stern but caring Old Testament prophet, questioning and condemning the follies of economic and social ideologues who nowadays call themselves Liberals... He recognises that economic globalisation has created both great wealth and great inequities, and thinks "there must be some form of global corporate legal regime that is binding and enforceable so as to tame globalisation as capitalism was tamed". He warns that the war against terrorism cannot be used to "blind us to the gross injustices that exist within the world"... He supports an apology to Aboriginal Australians, and attacks the demonising of boat people... He believes in Australia's future with a passion that surpasses those anxious Liberals whose fear of the world drives them deeper into the arms of powerful allies, and away from their moral obligations to all humanity. [Geoffrey Barker, reviewing Fraser's book in AFR 1.11.02]

Money Talks

The Australian Broadcasting Authority is investigating corporate sponsorship involving radio broadcasters John Laws and Alan Jones... In question is whether they broke the broadcasting standard, which requires them to disclose sponsorships while discussing sensitive issues... Three years ago both were embroiled in the cash-for-comment scandal that exposed secret sponsorship deals within the radio industry. [Bernard O'Riordan, AFR 30.10.02]
 

Bias Towards Private Schools?

Most areas in Sydney still support a government-based education... I no longer wish to read articles about GPS rugby, but about the many glowing achievements by students and teachers in government schools. [Letter from Sharon McGuinness, SMH 29.10.02]

Reforming Australian Universities

Australian universities have become overly focussed on their own business performance. They have lost sight of their academic mission and character... This gravely limits Australia's potential in the global knowledge economy... Their excellence has now faltered... participation has stagnated, and the social equity of higher education is at risk... The capacity of universities to attract and hold the brightest staff has diminished: Salaries are at 60-65% of US levels in purchasing power terms. Workloads are much higher than in the US or Western Europe... Research assistance is weaker... Solutions to the problems...have three broad elements:
1) Change the respective roles of federal and state governments.
2) New funding arrangements.
3) A new relationship between universities and Vocational and Training institutions.
[Simon Marginson, What's Wrong with the Universities? In Australian Fabian Society Pamphlet No. 59,  Arena Publications, Blue Book Number Four, 2002]

Packing It In

At the quarterly meeting of Publishing and Broadcasting Ltd., a woman challenged the board's gender gap - it has 11 men and one woman, Rowena Danziger, the recent helms woman at Ascham... The annual exercise in democracy was presided over again by James Packer... He fielded queries on corporate government audits, the $6 million housing loan to director Peter Yates, and the matter of non-executive fees of $45,000 for four meetings a year... There was no dissent... we do acknowledge the neatness of a speech, a couple of resolutions, six inquisitors, and two maverick mobile phone intrusions - all wrapped up in 50 minutes. [Kate Askew, SMH 1.11.02]

Dr. Tom Uren

The University of Sydney awarded Tom Uren an honorary degree as a doctor of science in architecture. In his acceptance speech he said he had a love affair with the Harbour since he lived in Manly in his teens. Even now, in his 80s, he says when he feels a little low, he takes a ferry ride to Manly "to get himself back on track". He said that his 40 year commitment to protect the harbour foreshores was inspired by Niels Nielsen, who was Minister for Lands in the 1910 McGovern Labor government. Tom said:
Nielsen's long term vision was to progressively acquire harbour foreshore land to maximise access for ordinary people... His vision remains with me and will never leave me. [ Manly Daily 9 Nov.2002]

A Good VOICE - Sadly Missed

Voice: The Australian Independent Monthly was founded and edited by Harold Levien 50 years ago -  a time of great political ferment here and overseas. The ALP split to form the DLP, there was a Royal Commission on Espionage, and any critic of the existing system was accused of being a communist...Levien said the catalyst for Voice was the desire to help shape a more rational society; it was initially funded by him, with some donations... A wheat farmer, Alan Manning provided significant initial financial assistance, as did the professor of Chemistry at Melbourne University, Geoffrey Leeper... It had significant influence, being quoted by the intelligent press and leading commentators... Ironically its best recruiting agent was B. A. Santamaria, who savagely attacked it... One of its most distinguished supporters was Dr. Coombs, Governor of the Commonwealth Bank... The challenge for the future even more than then,  is whether the community's interests shall take precedence over the interests of powerful corporations and other sectional interests. [Harold Levien, Arena Magazine, Oct-Nov.2002]

Media Power

Media power is twofold. First, there is the increased size and scope of media corporations... second, is the power of the news gatherers and transmitters themselves, and of the ethos which they cultivate... they have huge power to influence, if not dictate, cultural and political preferences... The late French sociologist, Pierre Bourdieu, said:
Media professionals live in a state of dual consciousness: a practical view which prompts them to get as much as they can... out of the possibilities offered by the medial tool at their disposal; and a theoretical view, moralising and full of indulgence towards themselves, which leads them to deny what they do, to mask it even from themselves. We question...political, economic, military and social power. But we rarely interrogate one of the greatest powers in the modern world - the media...We need to make sure that the media take themselves seriously as social actors, because they have a lead part...to develop mechanisms for interrogating the interrogators...[John Lloyd in AFR Review, 25.10.02]

Saundering Around Mind Control? Who Pays?

The original professor Peter Saunders is director of the Social Policy Research Centre at the University of NSW, where he has been for 20 years... The new Professor Saunders, a former professor at the University of Sussex, is now director of social policy research at the Centre for Independent Studies, a privately financed think-tank. The "new" Saunders is challenging what he calls the "old style socialist thinking" favoured by the "old" Saunders... He has published a harsh review of the old Saunder's recent book The Ends and Means of Welfare. He claims it promotes "one-eyed ideological analysis", and argues that social policy should be about encouraging self-reliance, not fostering dependency on welfare payments. Old Saunders claims disadvantage is increasing; new Saunders claims it remains constant. [Bettina Arndt, SMH 25.10.02]

Lapping It Up

Strip clubs make more money per square foot than any other legitimate business, except gambling, according to Brad Keiller, a former Texan lawyer. Known as the Lord of the Lap Dance, he hopes to open some of his clubs in Australasia soon. He is puzzled by Australian laws that allow brothels, but prevent patrons coming in contact with table top dancers. He says the laws mean I can't have a girl sit on my lap in Australia, but I can pay to have sex with her in a brothel. [Michael Cave, AFR 25.10.02]

Naked Truths

How does a girl get ahead in Hollywood? If you want a career that's important, there are three things you must do. Be persistent, diligent, and take off your clothes. [Actress Julianne Moore, speaking at the Women in Hollywood lunch in Los Angeles last month, Weekend Australian 2.11.02]

Performing Arts

Pay for performance is at the heart of the successful capitalist system. The key mischief is when people get paid a lot of money for not performing. [Chris McKay, chief executive UBS Warburg, cited in BRW, 6.11.01]

Some More Important Terms

The Bible  - a magazine called The Economist
Royal Commission - a form of paint once known as whitewash. Popular in the building industry... but also used for insurance companies, police forces and other corrupt entrepreneurial organisations. [Slithershanks, in BRW 6.11.02]

A.G.G.: Alcoholic Governors General.

According to Gough Whitlam, his appointment of Sir John Kerr was a mistake, and he apologised to the Queen for recommending him. He said he should have asked any judge of the NSW Supreme Court, who would have told him Kerr had a drink problem... In his book, The Truth of the Matter, he wrote that Sir John was like Caligula "weaving his way down from the imperial box (at the horse races) and making his merry remarks to the owner, the fascinated crowd, and a million viewers who may have thought that the horse would have been a better proconsul". [Tony Stephens, SMH 1.11.02]

The Golden Rule

The UN operates by and large, according to the golden rule: those who have the gold make the rules. Those without are left to fend for themselves... The UN's structures are outmoded, its methods are undemocratic, and its record of restoring, defending or establishing democracy around the globe is weak. Like any multilateral institution, the resolutions that emerge from it reflect the balance of power of those within it. As globalisation has accelerated over the past decade...we have seen the ascendancy within the UN of the representatives not of nations, but of capital. [Gary Young, Guardian Weekly, 14.11.02]

Globaloney ?

Global institutions do exist and they do act, but the UN depends on its member nations to do the work. And when the IMF or World Bank supports a troubled economy it lends to a government... But the fundamental unit for the management of human affairs is not any globalised body...it is the nation state... Some nation states are too weak to operate these functions... Poverty, weak institutions, and corruption can make weak states vulnerable to terrorist networks and drug cartels within their borders... It is in the interest of successful states to help the weaker ones become fully competent and successful. [Peter Hartcher, AFR 25.10.02]

You Can't Bank On It

The golden age of the World Bank was from the late 1960s to the early 1980s. Under Robert McNamara, US Secretary of Defence, who directed it from 1968-81, loans rose from one billion US dollars a year to thirteen billion. Its staff increased fourfold, and its administrative costs tripled... He raised almost a hundred billion dollars in loans on national money markets. According to Mander & Goldsmith [eds The Case against the Global Economy (Sierra Club Books, San Francisco, 1996)], McNamara was responsible for more deaths during his time at the bank than he was as Secretary of Defence... He decided he could save his soul by saving the poor via the World Bank... He pressed third world countries to accept World Bank conditions for loans... No longer destroying villages to save them, he was destroying whole economies. Today the countries that went along with him are saddled with silted-up mega dams, crumbling roads to nowhere, empty high-rise office buildings, ravaged forests and fields, and the overwhelming unpayable debt. [Jean Ziegler, Le Monde Diplomatique, Oct. 2002]

Globalisation and Its Discontents

Globalisation presents itself first and foremost as a politico-economic phenomenon. Not surprisingly, political economists working within the Marxian tradition have studied it within an analytical framework in which the capital-labour relationship is central. This yields fruitful insights...However, additional insights can be gained by moving from this "economistic" perspective to one that embraces nature and culture... The key role of land is an important bridge here - land use is a down-to-earth dimension of economic and social changes such as those wrought by "globalisation". Ownership of land is a major means by which part of the economic surplus is captured... there is an obvious link here with the concerns of indigenous people... What can be done to reverse the trend for these collective assets being privatised? Ideas from Henry George, Karl Polanyi and various environmental analysts need to be set alongside Marxian political economy if we are to develop a fuller understanding of globalisation...[Frank Stilwell, Globalisation and its Discontents, Report on the Vancouver Conference]

International Labour Fronts Up To International Capital

 The ACTU president, Sharan Burrow, is helping to lead a labour counter attack on the policies of the World Bank and the International Monetary Fund. She was among a delegation of international union leaders who held private meetings in Washington with the heads of the World Bank and the IMF... She said "business shakes with terror at the mention of the so-called Tobin tax on international financial transactions...but we take it seriously...we have watched the social cost of the Asian financial crisis which was driven by speculative capital inflows. We want to see some regulation of these". [Mark Skulley, AFR 25.10.02]

America Uber Alles

The Bush government belongs to a cynical elite long used to buying opinions and politicians, at home and abroad. The regime includes fanatical Protestant fundamentalists, convinced that the USA is playing a preordained part in a Biblical epic of good against evil, confident of America's right to command. President Bush grasps an essential aspect of American capitalism, its integration of the entire public sphere in the market. His business allies (and his father, active as investor, lobbyist, even salesman) are involved in arms, financial services, petrochemicals and technology. Bush put their representatives in command of the Federal agencies and departments. ...The vacuity of Bush's ideology is combined, however, with authentic mastery of the considerable repressive apparatus of the American State... [Norman Birnbaum, Le Monde Diplomatique, 10.10.02].

Getting Used To American Hegemony: The End Of History?

Two aspects of globalisation are irresistible. One is that the world is becoming more interconnected... the other is that the US is becoming more economically influential. The US is 21% of the world economy and contributes 40% of its growth...Fukuyama's message is, get used to American hegemony: there is little prospect of a global democratic system or of any significant constraint on US action. Instead, individual countries should pursue the liberal democratic ideal and become more like America. [David James in Business  Review Weekly, 16.11.02]

Selective Democracy?

In its present role as the world's hegemonic superpower, the undeniable fact remains that the US uses the great power at its command to pursue its national interests, including, as with Chile's  Allende government, the overthrow of democratically elected regimes not to its liking...What kind of... police force asks first, "what's in it for me?" before pursuing the bad guys? [Brian Victoria, Centre for Asian Studies, University of Adelaide, in AFR l.11.02]

Reaping A Whirlwind

What has happened in the past year is an awakening across the world to the true rapacity of dominant American power. It is the opposite of what the propagandists wish; as John Berger wrote: "Never again will a single story be told as though it is the only one". [John Pilger, New Statesman, 9.9.02]

Progressive Global Capitalism?

With the end of the Cold War and the demise of the Soviet Union, transnational capital has revised its state theory and practice. In the new climate, the brutal dictatorships that characterised the free world regimes of the periphery, with their naked repression, mass murders, torture, and extortionist attitudes towards business activity within their territories, are no longer required. They are costly, inefficient from a business point of view, and tend to crystallise mass opposition. Such opposition can be repressed only at significant cost and the risk of promoting mass movements which adopt anti-capitalist ideologies, because repression and foreign capital control are widely understood as linked. Better to have democratic governments, managed by local élites who are committed to transnational capitalists' globalised vision. In this way, well meaning democratically elected governments enforce IMF austerity... Once the threat of revolution recedes, a local business class is a better partner for transnational capital than a rent-seeking military regime. [ William K. Tabb, "Progressive Capitalism" in Monthly Review, N.Y. 1999]

America's Ailing Economy

Consumer confidence is at a nine year low... Chain-store sales remain weak... vehicle sales are at their lowest level since April 98... Americans are saving more and consuming less... Gloom about stockmarket losses...
may explain some of the unease. But the biggest concern is probably jobs, and the signals from the labour market are not good...Net private jobs fell by 29,000 in October...the amount of time for which people are unemployed is rising... Pessimists fear a renewed recession. [The Economist, 9.11.02]

Noblesse Oblige?

Corporate responsibility... matters because the executive class has fundamentally undermined a large part of society's social contract: that in times of pain, such as globalisation and the liberalisation of economies, the pain of adjustment should be shared by all... These supposed leaders have said to their societies... that sharing the pain is not on their agenda. In fact they are happy to cost some people their jobs basically as part and parcel of getting their own fingers deeper into the till. That is not corporate leadership, and they know it. The huge public backlash against globalisation and liberalisation has meant that some real attempts at corporate responsibility are being made, nevertheless. More companies have realised that reporting on their environmental and social impacts is a critical part of their obligation to the communities in which they live. One of the biggest concerns of many people about globalisation is that companies have moved beyond and become separate from the discipline of the societies to which they should belong. [Louise Sylvan, Consuming Interest, Spring 2002]

Global Banking Crisis?

We are in a global banking crisis which has just begun. Corporate bankruptcy figures are at record highs in USA, Japan, and Germany. Worldwide defaults on corporate boards have reached the highest level yet ($140 billion); 28 countries have not been able to meet their debt service. Investment banks in Europe and the US are set to write off more than $130 billion in loan losses - the highest level ever recorded...  Top rating agencies  have downgraded most of the large German banks... Morgan Chase's market capitalisation has declined by 69%, Schwab's by 82%, and Merrill Lynch's by 60%. [Citizens Electoral Council Newsletter No. 13, 17.10.02]

USA Returns To The Gilded Age

We are now living in a new Gilded Age, as extravagant as the original. Mansions have made a comeback - some architects are now specialising in designing houses for the super-rich - some are not much smaller than the White House. Armies of servants are back - so too are yachts. The distribution of income and wealth in the US has seen tectonic shifts... Few people are aware of just how much the gap between the very rich and the rest has widened over a relatively short period of time... Corporate leaders now expect to be treated like ancien regime  royalty...  there is simply no comparison between what executives got a generation ago, and what they are paid today... Income inequality has returned to the levels of the 1920s. Given time we will grow ourselves a hereditary élite... just set apart from ordinary Americans. [Paul Krugman, professor of economics at Princeton University in The Times, London, 26.10.02]

Transatlantic Row Over Financial Regulation

America's corporate scandals have done more than anything to speed up the cumbersome process of European Union Lawmaking. A new directive is going at speed through the legislative hoops in Brussels and Strasbourg...  European companies are happy with the present form of the directive. But the Americans are not - forcing them to adapt would increase their cost of doing business in Europe. [The Economist 19.10.02]

World Depression?
According to a senior European banking executive we are in the early phase of a world depression... the core of the problem is that the Anglo-American paradigm, now adopted also by Japan, has destroyed the key economic-financial buffers of previous decades. Not since WWII have the banking financial systems of the three major economic powers - USA, Japan, and Germany - experienced such crises simultaneously. These systems possess about half the assets of the world banking system. The breakdown conjuncture of these interconnected banking systems defines a crisis point of the world financial system. [Richard Freeman, Citizens' Electoral Council Newsletter, No.15, 31.10.02]

Deja Vu?

 Germany is in the middle of the worst market crash since the Depression... German companies are facing difficult financing conditions at a time when they are having to deal with a less competitive currency and faltering demand from abroad. The heavy toll of bankruptcies is helping to push up unemployment, which in turn is undermining consumer confidence and household spending. [Stewart & Denny in Guardian Weekly 24.-30 Oct.02]

End Of The Japanese Miracle?

Since the late 1990s production capacity in manufacturing has been moving overseas - most of it going to China...  Last year 69 major manufacturing firms shut down 120 factories, and employment shrank by 5.5%...  The consequence is a declining labour force of around one per cent each year. Consequently, with a contracting labour force, Japan's potential growth rate is now only about one per cent p.a. [Ross Gittins, SMH 28.10.02]

Japanese Over The Top

Japan's economic decline seems to be driving a trend to long hours of work. Over 25% of workers clock up 80 hours overtime a month. Eighty hours is regarded by government ministries as the danger zone where death from overwork can result...  The group facing the greatest risk is males in their late 20s and 30s. Government figures show that 85 workers died from karoshi (overwork) last year. Workers in information technology, doctors, teachers, and taxi drivers were most at risk. Courts are now showing a willingness to force companies to pay compensation to bereaved families. [Shane Green, SMH 29.10.02]

Japanese Financial Collapse?

What is really going on in Japan is probably the biggest crash since the 1930s... more money has been lost by more people than we have seen in a decade. Probably every real estate company in Tokyo is on its way to massive difficulty - likewise every insurance company. [Ken Courtis, Vice-Chairman, Goldman Sachs, Asia, cited in Era newsletter, Nov/Dec.02]

The End Of The Fossil Era? Or The Good Oil Comes To An End?

Virtually every aspect of modern existence is made from, powered with, or affect by fossil fuels...  Experts are now suggesting that global oil production could peak and begin a steep decline at the end of this decade...  Rising oil prices will plunge developing countries even further into debt...  Looming oil shortages make industrial life vulnerable to massive disruptions and possibly even to collapse...  The fossil fuel era brought with it centralised energy infrastructures that favoured the few over the many. Now, on the cusp of the hydrogen age, it is possible to imagine a decentralised energy infrastructure that could support a democratisation of energy supply... [Jeremy Rifkin, AFR 1.11.02]

Pollution In Canada

Two decades of above average temperatures have left prairie farmers counting crop losses from droughts. In the Arctic region melting sea-ice and permafrost portend an altered life for northerners... A rise in summertime smog has brought an increase of asthma among children...  So Canada, it might seem has every reason to back measures to halt global warming. Yet the Liberal government of Jean Chreien, the Prime Minister is struggling to win agreement to ratify the Kyoto Protocol on climate change. [The Economist 2.11.02]

Corrupt Corporate Capitalism

Credit Suisse Boston (CSFB) has been charged with issuing fraudulent research, and Martha Stewart ("home making queen") has been told she faces charges amid allegations of insider trading. Pricewaterhouse Coopers was implicated in the financial shenanigans at Tyco International. Massachusetts Securities regulators filed civil charges against CSFB, and claimed its research was "tainted" by conflicts of interest between its analysts and investment bankers. The Secretary of State in Massachusetts, William Galvin, said investment banking "completely" controlled CSFB's research, and singled out the head of the bank's global technology group, Frank Quattrone. Galvin said Quattrone and his team exercised "enormous control" over analysts that ultimately resulted in the dissemination of fraudulent information into the market place. Massachusetts regulators are seeking penalties close to US$2 million. [Luke Collins, AFR 23.10.02]

The Big Dry

The big dry spreading across rural Australia has begun to take its toll on the nation's well being - it is the worst dry spell in a century, and is not expected to break until early next year...  You get a drought every decade, 1974, 1983, 1995, and 2002. The impact of the drought is not limited to agricultural stocks... The equipment hire business in the bush is affected. Road building is also affected, as compaction equipment is water operated. One benefit is fewer road accidents and hence healthier profits for insurance groups...  But livestock producers are selling stock, and grain growers are in debt...  The full impact of drought on earnings will not be realised until rural industry stocks deliver their 2002-3 results.[Allison Jackson, Scott Rochfort, and Jean Eakin, in SMH, 18.11.02]