Undernews For July 5, 2009

THE PROGRESSIVE REVIEW
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5 July 2009

WHY BANKERS AREN'T WORTH WHAT THEY THINK THEY ARE

BBC - Some of the most arresting analysis of the causes and consequences of the financial crisis is being made by Andrew Haldane, the executive director of what the Bank of England calls - with no hint of irony - "financial stability".

His latest speech, "Small Lessons from a Big Crisis", is grist for those who believe top bankers are being paid far too much (although this is not a conclusion he draws himself).

Haldane looks at the returns generated by UK banks and financial institutions since 1900, to see whether shares in the financial sector have performed better than the market in general.

What this shows is that from 1900 to 1985, the financial sector produced an average annual return of around 2% a year, relative to other stocks and shares.

So for 85 years investing in bank shares was "close to a break-even strategy" (his words), nothing special.

But in the subsequent 20 years, from 1986 to 2006, returns went through the roof: the average annual return soared to more than 16%, which was the best performance by financial-sector shares in UK financial history.

And it's no coincidence that the pay of top bankers also zoomed up to the stratosphere. Which at the time upset only a few, because the bankers seemed to be enriching the owners of the banks, their shareholders (millions of us through our pension funds).

That, of course, is not the whole story.

The collapse of banks' share prices in the past two years has wiped out most of those gains: to March this year, when the low point was touched, the fall in UK bank share prices was more than 80%, an all-time record plunge.

What this means is that in the full period from 1900 to the end of 2008, the annual average return on financial shares was less than 3%, almost identical to the market as a whole.

Which is what common sense would predict should have happened, since banks are to a large extent a utility, serving the needs of the wider economy, and its difficult to see how banks in general can therefore grow significantly faster than the wider economy.

MAINE LIBRARIES TURNING REFERENCE ROOMS INTO CAFES

Kennebec Journal, ME - On a bleak rainy day, the homey smell of freshly brewed coffee wafts out of the reference room at the Kennebunk Free Library. Inside the room, people sit at tables talking while nibbling on muffins and scones. Not a single hushing librarian is in sight. That's because the librarians have turned the reference room into the Reference Room Cafe, where beverages, snacks, sandwiches and salads are on sale every day during library hours. Library Director Stephanie Marshall Limmer and her staff want people to chat. They don't care about the crumbs.

They are even looking for ways to open up the cafe to teenagers as a coffeehouse. "The hope is the reference collection becomes more of a browsing collection," said Janet Cate, assistant director.Kennebunk Free Library, which opened its cafe June 17, is among a number of public libraries in the state that are going into the coffee shop business. Libraries across Maine are adding cafes for a new source of revenue and as a way to entice customers away from the national bookstore chains that have long offered such services.

REPORT SUGGESTS DUNCAN'S CHICAGO SCHOOL IMPROVEMENTS A MIRAGE

Chicago Business - Chicago Public School reform largely has failed, with the vast bulk of students either dropping out or unprepared for college and apparent gains at the grade-school level more perceived than real.

That's the bottom line of a blockbuster report by the Civic Committee of the Commercial Club, a report that directly challenges the legitimacy of one of Mayor Richard M. Daley's major claimed accomplishments. . .

Half of the students drop out by high school, and of those who remain until 11th grade, 70% fail to meet state standards, the report says. In fact, "In the regular (non-magnet) neighborhood high schools, which serve the vast preponderance of students, almost no students are prepared to succeed in college."

The report directly challenges widespread claims by current and former CPS officials that local students have shown substantial progress over the last decade on standardized tests.

For instance, it notes a 2006 letter from then schools CEO Arne Duncan, now U.S. secretary of education, stating that the share of CPS students meeting or exceeding state standards had leapt 15 points in one year.

In fact, it says, the change occurred because of a change in the test, not because of real educational gains. As a result, it points out, while a test cited by local officials showed that 71% of 8th graders met or exceeded state standards in 2007, a national test taken here the same year showed just 13% were up to par.

Similarly, while the test employed locally reported that the share of 8th graders meeting math standards grew from 32% to 71% from 2005 to 2007, the national test, sponsored by the U.S. Department of Education, showed scores effectively flat, moving from 11% to only 13%. . .

A spokeswoman for the Chicago Teachers Union said she hopes the report spurs more cooperation between school management and teachers. "We know what's needed," she said.

GRAVEYARD OF EMPIRES UPDATE

NY Times - The mood of the Afghan people has tipped into a popular revolt in some parts of southern Afghanistan, presenting incoming American forces with an even harder job than expected in reversing military losses to the Taliban and winning over the population.

Villagers in some districts have taken up arms against foreign troops to protect their homes or in anger after losing relatives in airstrikes, several community representatives interviewed said. Others have been moved to join the insurgents out of poverty or simply because the Taliban's influence is so pervasive here. . .

"We Muslims don't like them - they are the source of danger," said a local villager, Hajji Taj Muhammad, of the foreign forces. His house in Marja, a town west of this provincial capital that has been a major opium trading post and Taliban base, was bombed two months ago, he said. . .

"Now there are more people siding with the Taliban than with the government," said Abdul Qadir Noorzai, head of the Afghan Independent Human Rights Commission in southern Afghanistan.

Mathew Parris, Times, UK - In the fog, remember: victory is impossible in Afghanistan It's easy to be blinded by the valiant effort, as well as the acronyms and euphemisms. But the harsh truth does not change

It's important not to understand. It's important not to learn. In the total buggeration into which the world's help for Afghanistan has now descended, it's important not to know too much. Accept that somebody some day may understand, but it isn't going to be you. Somebody some day may grab the Gordian knot and cut it, but it isn't going to be us. Know only that. To know more is to know less. . .

I'm here as the guest of the International Security Assistance Force, which sort-of is NATO and sort-of isn't - and, no, don't try to resolve this: it can't. . . . And yesterday I forgot my glasses. As I stared unfocused at my notes the acronyms swam forward, their small-print meanings swam away, and I saw only acronyms.

And in the meaninglessness I suddenly saw meaning. It is this. The entire operation is up its own bottom, lost in committees, strategies and initiatives. Forget what these monstrous letters stand for. Grasp, instead, the essential incoherence.

AFPAK, ANCOP, ANDS, ANP, ANSF, APPS, ASNF, AAQ/FF, APP, CARD, CDC, CISCA, CISTICA, CJTF, CN, CNPA (ANP), COMISAF, CPCC, CSOFC, CSTC, ECC, EUPOL, FDD, FTD, GPI, HIG, HIGHK, ICPT, IDLG, IGLC, INFO-OPS, IRCTA, ISAF, IU, MCN, NDCS, NDS, OCCC, OEF, OMLET, OPDIESEL, PC, PRT, SITC, UNODC, UNPOL, TB . . .

Acronyms are not the only refuge. Others lullaby their brains to sleep swathed in the acrylic blankets of a new language now suffocating the ministries, missions and shirt-sleeved development-wallahs in shiny white Toyota 4x4s: a hideous hybrid of NGO-speak, Whitehall-chic, political pap and military jargon . . .

Across the piece, agent for change, alternative livelihoods, asymmetric means of operation, capability milestones, civilian surge, conditionality, demand- reduction, drivers of radicalisation, fixed-wing assets, fledgeling capabilities, injectors of risk, kinetic situation, licit livelihoods, light footprint, lily pads, messaging campaign, partnering- and-mentoring, capacity-building, strategic review, reconciliation and reintegration, rolling out a top-down approach, shake - clear - hold - build, upskilling.

INTERSTATE HIGHWAY REST STOPS AN ENDANGERED SPECIES

Wall Street Journal - Later this month, cash-strapped Virginia plans to barricade entrances and switch off the plumbing and electricity at nearly half its highway rest areas. Other states also are lowering budgetary axes on the public pit stops that have lined the interstate highway system since its creation in 1956. . . Truckers, blind merchants and a dogged historian are fighting to preserve them. If the battle is lost, every long-distance motorist will need "a strong rear end and a strong bladder" to hit the road, warns John Townsend, an official with the American Automobile Association in Washington.

There are about 2,500 rest areas along the interstates. State governments build and maintain them. Most have remained steadfastly utilitarian: a parking lot, a simple building with toilets, a few picnic benches, and maybe some vending machines. Because many of the interstates bypassed cities and towns, travelers often had no other options when they needed to pull off the road.

But over the years, big clusters of gas stations, fast-food outlets and motels have sprung up just off interstate exits in all but the most remote parts of the country. A national directory lists nearly 2,500 privately owned truck stops, each with at least 10 parking spaces and two showers. Even Wal-Mart Stores Inc. -- which permits overnight stays by recreational vehicles at most of its more than 4,000 locations -- offers a popular alternative to old-fashioned rest areas. . .

New Hampshire was set to shutter some of its rest areas but shelved the plan a few weeks ago amid local opposition. . . A few states, particularly those still boasting wide-open spaces, are bucking the trend and have spent money on a new generation of rest-area projects. Texas shut down about half a dozen older rest areas but opened two new ones in December featuring interactive kiosks, playgrounds, surveillance cameras and a police outpost. All of the state's close to 100 rest areas have been outfitted with wireless Internet hot spots in recent years.

BRAZIL GIVES TENS OF THOUSANDS OF IMMIGRANTS LEGAL STATUS

Agence France Presse - Brazilian President Luiz Inacio Lula da Silva issued a law giving tens of thousands of undocumented immigrants legal status and criticized rich nations for taking a tough stance against illegal migrants.

He also once again blamed the global economic crisis on "men with blue eyes," a controversial accusation that he first leveled during a meeting in March with British Prime Minister Gordon Brown. His advisors have said the expression was a "metaphor."

"Blame for the crisis that was provoked by men with blue eyes must not fall on the blacks, the Indians, and the poor of the world," Lula said during a speech in Brasilia on Thursday.

He also accused European countries, without naming any in particular, of toughening immigration rules, which he deemed "unjust."

"In our eyes, repression, discrimination and intolerance do not address the root of the problem," he said.

FBI: NO TRUTH TO REPORTS OF PALIN INQUIRY

LA Times - A day after Alaska Gov. Sarah Palin resigned, a federal official in her home state dismissed one potential explanation for her sudden and unexpected resignation: a rumored FBI investigation into the former Wasilla mayor on public corruption charges.

Despite rumors of a looming controversy after the Republican governor's surprise announcement Friday that she would leave office this month, some of them published in the blogosphere, the FBI's Alaska spokesman said the bureau had no investigation into Palin for her activities as governor, as mayor or in any other capacity. . .

"There is absolutely no truth to those rumors that we're investigating her or getting ready to indict her," Special Agent Eric Gonzalez said in a phone interview Saturday. "It's just not true." He added that there was "no wiggle room" in his comments for any kind of inquiry.

The FBI has been active in mounting corruption investigations in Alaska, some to see whether local, state and federal lawmakers illegally received favors, money or free construction work from businesses or people seeking favors.

Sarah Palin's attorney: To the extent several websites, most notably liberal Alaska blogger Shannyn Moore, are now claiming as "fact" that Governor Palin resigned because she is "under federal investigation" for embezzlement or other criminal wrongdoing, we will be exploring legal options this week to address such defamation. This is to provide notice to Ms. Moore, and those who re-publish the defamation, such as Huffington Post, MSNBC, the New York Times and The Washington Post, that the Palins will not allow them to propagate defamatory material without answering to this in a court of law. . . . These falsehoods abuse the right to free speech; continuing to publish these falsehoods of criminal activity is reckless, done without any regard for the truth, and is actionable.

FORMER CONGRESSWOMAN REMAINS IMPRISONED BY ISRAELIS

Channel 11, Atlanta - Former Georgia Congresswoman Cynthia McKinney, who was taken into custody by the Israeli Navy on Tuesday with 20 others while trying to sail through a navy blockade to deliver humanitarian supplies to Gaza, has refused Israel's initial offer to release her from custody. According to her supporters in Atlanta, McKinney refused the offer because she would have been required to sign an admission of guilt that she violated Israel's blockade.

"At issue is the fact that Ms. McKinney was in international waters" when the Israeli Navy stopped the group's boat, according to a statement from the Rev. Dr. Joseph Lowery and the Atlanta-based Coalition for the People's Agenda.

Israel disagrees, insisting that the Palestinian Authority and the rest of the international community long ago agreed to the off-shore blockade to prevent arms smuggling into Gaza. . .

"The Israelis hijacked us because we wanted to give crayons to the children of Gaza. . . We have not committed any crime. We have been detained," McKinney said. . .

Soon after Israel seized McKinney and the others and their boat, the government promised to deliver all of the humanitarian supplies that were on the boat, but would deliver them by the ground routes into Gaza that Israel has been permitting international aid groups to use.

NY STOCK EXCHANGE QUIETLY CHANGES RULES TO ALLOW BIG TRADES TO BE SECRET

Raw Story - The New York Stock Exchange quietly announced last week that it would end its practice of requiring companies to report all their program trading - a move that helps shield large investment banks, particularly Goldman Sachs, from public scrutiny.

The new rule means the public will no longer be able to tell if large investment banks are manipulating the stock market for their own gain, says Matt Taibbi, the journalist whose Rolling Stone article on Goldman Sachs’ role in asset bubbles over the past century has rocked the financial world.

According to previous NYSE rules, any company that carried out program trading - essentially, large computer-automated trades worth more than $1 million - had to report the trades to the NYSE, which then made the information publicly available. . .

OBAMA'S HEALTHCARE PLAN WOULD BRING IN $36 BILLION IN FINES AGAINST NON-PARTICIPATING CITIZENS

Obama and his center right coalition in Congress are planning a healthcare bill that would assess fines of around $1,000 a year for anyone who doesn't help subsidize the healthcare industry by purchasing insurance. The fines are estimated to bring in $36 billion over ten years.

To read details on this bill - bizarrely complicated primarily because of its obeiscence to the medical insurance industry - check out the Congressional Budget Office's letter to Ted Kennedy.

posted by TPR | 5:00 AM | 0 Comments

BREVITAS

ECO CLIPS

Daily Green - A new analysis by a geophysicist at the Centre for Ice and Climate at the Niels Bohr Institute at the University of Copenhagen, using everything from ice cores and tree rings to the logs of 16th century ocean voyages, concludes that the extent of ice in the Arctic is lower today than at any time in the last 800 years. The new record stretches back to the 13th century, when Genghis Khan was spreading war (and his seed) across Asia.

Tree Hugger - Gas prices in Turkey are among the highest -- if not the highest -- in the world. . . The SAHI.MO is a hydrogen-powered car built by students from Sakarya University in northwestern Turkey. Last year, it was voted the third-most fuel-efficient vehicle in the 26th Shell Eco Marathon, an annual race across Europe. . . The SAHI.MO cost $170,000 to build and weighs just 110 kilograms. The 40-member SAI.TEM team previously created a solar-powered Grand-Prix-style race car called the SAGUAR and has also experimented with solar-powered boats.

ON CAMPUS

Neiman Watchdog -The Aug. 1 implementation date for the new, Post-9/11 GI Bill is fast approaching.. . . Brian Hawthorne, D.C. Director for the advocacy group Student Veterans of America, said. . . a number of veterans, he said, held off on entering college until the new bill took effect. The Department of Veterans Affairs has projected a 20 to 25 percent increase in participants in its academic programs, and anticipates that up to 460,000 veterans will use the Post-9/11 GI Bill in its first year. . . Nearly 700 colleges voluntarily signed on to the program before its mid-June sign-on deadline. In agreeing to the Yellow Ribbon Program, colleges enter into a dollar-for-dollar matching agreement with the federal government, and can select what portion of the remainder they will fund.

MEDIA

Tip to the Orlando Sentinel: better fire this reporter before he gets in trouble. . . Walter Pacheco, Orlando Sentinel - Boys growing up with popular names such as Michael, Joshua and Christopher have a good chance of leading law-abiding lives. But young men named Kareem, Walter or Ivan could run afoul of the law. That's according to a recent study that claims the more unpopular, uncommon or feminine a boy's first name, the greater the chance he will end up behind bars.

Reporters Committee for Free Press - Starting in September, Michigan jurors will no longer be allowed to send text messages, tweet or engage in other forms of electronic communication during trials. The Michigan Supreme Court established the new rule in an attempt to prevent distraction and outside information from influencing trial outcomes, according to the National Law Journal. The new rule requires that jurors be instructed ahead of time that electronic devices like Blackberrys and iPhones may not be used in the jury box or during deliberations.

TORTURE

NY Times - Current and former top Central Intelligence Agency officers have appeared before a federal grand jury in Virginia as part of an 18-month investigation into the agency's destruction of 92 videotapes depicting the brutal interrogations of two Qaeda detainees. The witnesses recently called by the special prosecutor, former government officials said, include the agency's top officer in London and Porter J. Goss, who was C.I.A. director when the tapes were destroyed in November 2005. . . The court appearances are tied to a criminal investigation led by John L. Durham, whom the Justice Department appointed in January 2008 to investigate the destruction of the tapes. The tapes had shown C.I.A. officers using harsh interrogation methods, including waterboarding. . . Mr. Durham has shrouded his investigation in a level of secrecy rare even by the normally tight-lipped standards of special prosecutors, and after 18 months it is still difficult to assess either the direction or the targets of his investigation.

DRUG BUSTS

New Scientist - Tough policing of the illegal drugs market may have the perverse effect of making drugs more affordable and thereby encouraging people to use them, according to a new model of the dynamics of this market.

KETV - The Nebraska Supreme Court ruled in favor of a man fired for using marijuana off duty from his job as Department of Corrections employee.
John Ahmann had a spotless record. But a random drug test he took came back positive for marijuana. He was then fired from his job. The court ruled that the firing was wrong, citing Ahmann's willingness to stop using the drug and because he used it off-duty, which required his employer to consider other discipline.

GREAT MOMENTS IN THE LAW

The Recorder - In case it wasn't clear before, walking into the 60-foot Burning Man effigy isn't a safe thing to do. Just ask Anthony Beninati, who got literally burned in 2005 after venturing too close to the giant wooden fellow while on his third trip to the Burning Man festival in Nevada's Black Rock Desert. Beninati sued for damages. But San Francisco's 1st District Court of Appeal doused his hopes after finding that the "college-educated" man had assumed the risk of harm by walking directly into the effigy while remnants of it were still burning. "The risk of injury to those who voluntarily decide to partake in the commemorative ritual at Burning Man is self-evident," Justice Ignazio Ruvolo wrote. Justices Timothy Reardon and Patricia Sepulveda agreed.

HEALTH & SCIENCE

Marc Abrahams, Guardian, UK - Scientists who struggle to get their reports published, or to get anyone to pay attention to them, might consider the path blazed by Dr Mohamed El Naschie. El Naschie found an appreciative science journal editor. The editor subsequently published hundreds of El Naschie's studies, and also made El Naschie a glamorous figure - featuring him in lavish photo-spreads in the company of famous scientists and powerful world leaders. The science journal is called Chaos, Solitons & Fractals. Its founding editor-in-chief is Dr Mohamed El Naschie. A 19-page pictorial in the August 2005 issue shows El Naschie in the company of numerous Nobel laureates, and also of many medals, plaques, certificates and floral arrangements. . . Recently, and suddenly, El Naschie became former editor-in-chief. The journal's publisher, Elsevier, announced laconically on its website that "Dr MS El Naschie has retired" and that "for the moment, we are not accepting any new submissions to the journal Chaos, Solitons and Fractals".

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