Newsnotes 2009 03

Notes On The News

by Gwydion M Williams


Tax Gaps [Tax Havens]

China: Hillary Clinton kowtows

Klaustrophobia [European Union]

Criminalising Islam.doc

Parasitism in Afghanistan

The Perils of Journalism [Anna Politkovskaya]

Dawn of the E-books [Kindle]

Chimps and us



Having come to power in 1979 at a time of uncertainty, the grocer’s daughter created a new economic system in which most of the remaining independent grocers have vanished, as have other small shopkeepers. Labour was always hostile to such people: the Tories used to give them some protection. But not under Thatcher, nor afterwards. The ‘little guy’ is ruthlessly ploughed under to suit the needs of the rich. A few of the ‘little guys’ and ‘little ladies’ can ascend into the ranks of the rich, but for the rest there is no security.

Thatcherism was hostile to ordinary life, and this attitude has been taken over by New Labour, is still accepted by Cameron’s Tories. The slogan is ‘equality of opportunity’ – meaning a lack of concern at gross inequality of outcome. There was also no concern that some parents could buy a large advantage for their children. Or that a lot of success is based on dishonest methods.

Thatcherism was way of evading social problems caused by the ‘Cultural Metamorphosis’ of the 1960s. Mainstream Tories were led to believe that it was welfarism that had led to the collapse of traditional values. This has been tested on a large scale and found to be false. The society had been kept in line by authority and by religious belief, both of which were decaying. Nothing was done about the break-down of the old order, so naturally things got worse.

Radical rejection of authority over people’s personal lives easily spilled over into a rejection of the Mixed Economy, the system of heavily regulated capitalism that had been put in place after the defeat of Nazi Germany. Back then, people knew that Nazism had flourished because it met the human needs of millions of Germans who had been let down by Classical Liberalism. There was indeed great enthusiasm for both Mussolini’s Italy and Hitler’s Germany in Britain and the USA, for as long as they didn’t seem like a threat to the Anglo hegemony.

The Anglo hegemony looked like it was solidly established in 1991, after the Soviet Union fell apart. Under wiser leadership it might have been. Instead there was a foolish vendetta against Saddam Hussein, who represented the only viable prospect for Westernisation in Iraq. There was also continuous deregulation, with each successive crisis blamed on not having deregulated enough. Only in 2008 did things really fall apart.

Despite which, the people in charge seem to want to get ‘back to normal’ as soon as possible. This would ensure another and worse crisis in a few years time, if they get away with it.


Tax Gaps [Tax Havens]

Thatcher and Reagan offered ‘liberation from taxes’, but neither of them actually shrunk the state or the overall tax take that the society needed to fund the state. What they did do was provide cover for a big shift of necessary taxation off of the rich and big corporations and onto the working mainstream of the society.

Now everything is falling to pieces, and it is being noticed how tax havens are also used to shelter various sorts of financial fraud. When Madoff was exposed in January, lots of people said there were more to come. This month, it has been Sir Allen Stanford with his base in Antigua, a micro-state which should never have been allowed to be the nominal home of a whole host of tax-avoiding international corporations.

It looks as if Brown and Obama have decided that it’s all become too blatant. They may also have been warned about some of the additional fraudsters who will probably be revealed to the public over the next few months. They won’t all involve micro-states, Madoff did not, but a lot of them will. And even when it isn’t fraud, tax avoidance is costing plenty.

“A worldwide crackdown on tax havens, from Switzerland to the Cayman Islands, will be spearheaded by Gordon Brown as the world’s richest nations use the global economic downturn to close loopholes that are costing them hundreds of billions in lost revenues.

“As he embarks on a mini-tour of EU capitals in advance of the G20 summit in London in April, the prime minister announced yesterday that he was negotiating with fellow world leaders the terms of a tough regulatory system on tax and banking that will cover every country.

“Speaking at his monthly press conference in Downing Street, Brown said: ‘We want the whole of the world to take action. That will mean action against regulatory and tax havens in parts of the world which have escaped the regulatory attention they need. The changes we make will have to apply to all jurisdictions around the world.’

“The global crackdown envisaged by Brown follows the Guardian’s special series, the Tax Gap, which highlighted the ways a range of Britain’s biggest companies have employed secretive tax arrangements to reduce their liability. HM Revenue & Customs estimates that the size of the tax gap, which has seen companies shift ownership of brands to offshore tax havens, could be anything between £3.7bn and £13bn.

“The prime minister, who will meet the Italian prime minister, Silvio Berlusconi, today in Rome before a mini-summit of the four EU leaders in the G20 in Berlin on Sunday, declined to be drawn on the specifics of his plan. But the Guardian understands that he is taking a particular interest in Switzerland, while Barack Obama singled out the Cayman Islands during the US presidential election campaign.

“The other members of the G7 – plus the 13 other slightly less affluent members who make up the G20 – lose similar amounts. This means that the world’s main industrialised countries could be losing in excess of £100bn in tax revenues a year.” [A]


China: Hillary Clinton kowtows

“China’s near $2,000bn (£1,380bn, €1,560bn) in reserves, the world’s largest, are often viewed outside the country as a great strength – an insurance policy against economic turbulence. But within China, they are increasingly seen by the public and even some policymakers as something of an albatross – a huge pool of resources not being used at home that will plunge in value if the US dollar collapses. Why, people ask, should such a relatively poor country bankroll such a rich one?…

“The official total is $1,950bn, but Brad Setser, of the Council on Foreign Relations, a New York-based think-tank, who tracks China’s foreign assets, puts the real figure at nearer $2,300bn – equivalent to more than $1,600 for every Chinese citizen… Within China, a popular backlash against the scale of these investments in the US has been building for some time.” [B]

The USA was expecting that the Internet would undermine the authority of the Chinese Communist Party. The opposite has happened: a popular nationalism has grown up that swamps China’s small number of Western-orientated liberals. The pressure would be on the government to be less cooperative, though in fact China has done very nicely out of the relationship. They have had three decades of very fast growth – though they were already growing fast under Mao, as I detailed last month. China has become a major manufacturer of basic goods, the sort of things people won’t be able to give up however deep the recession. China might even gain market share, as people go for cheaper options. China just now must be paying less for the oil and raw materials that had been experiencing a boom. They are also thinking strategically, trying to buy up a chunk of Rio Tinto Zinc and other valuable properties.

The balance of power has shifted – the USA needs China much more than China needs the USA.

“Clinton, who wrapped up her trip on Sunday, sought repeatedly to reassure her hosts she wanted to spend her 40 hours in Beijing focusing on ways to work together, not debating their differences such as on human rights.

“Clinton did meet with Chinese women’s rights advocates at the US embassy and said she raised the issue in private with China’s leaders.

“But her comments that she would not let human rights stand in the way of co-operation on issues of major global importance, such as the economic crisis and climate change, drew criticism from activists in China and abroad.” [C]

“The Beijing leg of her trip gave her fewer chances to break out of the diplomatic bubble, as she had done earlier in the week in Tokyo and Jakarta. However, she did meet a representatives from Chinese civil society, including Gao Yaojie, a 82-year-old Aids activist…

“Activists said Mrs Clinton’s businesslike tone over the weekend was very different from the approach she took as a presidential candidate last year, when she suggested President George W. Bush should boycott the Olympics opening ceremony in protest over the clampdown in Tibet and other human rights abuses.”[D]

Traditional China repressed its women, and the Western-style Chinese Republic did very little for them. Mao did a vast amount to liberate Chinese women, albeit in a manner that rather suppressed their femininity. There was some regression under Deng, while women in the West got access to jobs that had previously been denied them outside of the Communist countries. The Chinese leadership now maybe want to move ahead again.

As for Aids, China may have been slow to accept it had a problem, but has now faced up to it:

“AIDS is believed to have been introduced to China in 1982. Three years later, the government announced the first death from the disease.

“The government launched a nationwide policy of ‘four frees, one care,’ in 2003 for all HIV carriers and AIDS patients.

“The four frees are: free HIV testing; free counselling and treatment for carriers in rural regions; free medication for all pregnant HIV carriers, and free education for AIDS orphans. The ‘care’ is for impoverished AIDS patients and the elimination of AIDS-related discrimination.” [E]

The general expectation is that China’s economy will grow in 2009, and India may also grow, while the rest of the world suffers shrinkage. Respect for the West among educated Chinese maybe peaked in the late 1980s and has been falling ever since. There will be problems over Chinese migrant workers not getting jobs, but that should be containable:

“Localised disturbances are a common occurrence and these are only likely to multiply in the months ahead. But Chinese workers focus their anger first on the factories and bosses that fire them, with local government officials quick to adopt an empathetic and supportive pose when disputes flare up.

“Equally important, the Chinese state’s ability to sniff out and suppress the stirring of a more ambitious labour movement remains formidable.

“‘I don’t really see a huge threat to social or political stability,’ says Han Dongfang, director of the China Labour Bulletin in Hong Kong.

“‘First they are not together; second they are not organised; and third they are [busy] looking for jobs.'” [F]


Klaustrophobia [European Union]

“Members of the European parliament walked out in protest yesterday after Vaclav Klaus, the Czech Republic president, said the institution suffered a ‘democratic deficit’ and likened its workings to those of eastern Europe during the communist era.

“In his first address to the parliament, Mr Klaus characterised the institution as one that alienated voters and offered no credible opposition. He argued that decision-making powers should be pushed out of Brussels and back to individual member states.

“Mr Klaus said: ‘Here, only one single alternative is being promoted and those who dare thinking about a different option are labelled as enemies of European integration. Not so long ago, in our part of Europe we lived in a political system that permitted no alternatives.’

“Members could be seen throwing up their hands and streaming towards the exits.” [G]

As I said last month, the Czech Republic has a hopeless collection of leaders. The ‘Charter 77’ bunch counted for little, while Klaus himself managed to work for the Communist state up to almost the end, before smoothly transferring to the new regime. His schemes for privatisation were very like those that tipped Russia into poverty, but the Czechs were lucky enough to be at the core of the expanded European Union and thus looked after.

Having been a notable ‘inactivist’ when it might have mattered, Mr Professor Klaus (to give him his proper title) currently seems to have no ideas except to compare anyone he dislikes to the former Soviet regime. The European Union is of course imperfect – but supposing it had not been there? The Soviet Bloc did at least suppress the wars that had damaged Europe in the first half of the 20th century. The European Union’s grand achievement was to achieve the same end without political repression


Criminalising Islam.doc

“The government is considering plans that would lead to thousands more British Muslims being branded as extremists, the Guardian has learned. The proposals are in a counterterrorism strategy which ministers and security officials are drawing up that is due to be unveiled next month.

“Some say the plans would see views held by most Muslims in Britain being classed by the government as extreme.

“According to a draft of the strategy, Contest 2 as it is known in Whitehall, people would be considered as extremists if:

“They advocate a caliphate, a pan-Islamic state encompassing many countries.

“They promote Sharia law.

“They believe in jihad, or armed resistance, anywhere in the world. This would include armed resistance by Palestinians against the Israeli military.

“They argue that Islam bans homosexuality and that it is a sin against Allah.

“They fail to condemn the killing of British soldiers in Iraq or Afghanistan.” [H]

This would be an astonishing list, if it becomes official policy. After all, the West supported ‘Jihad’ when the Soviets were the target. Most Christian and Jewish religious authorities insist that their own faith bans homosexuality, which is exactly what all of the scriptures say. Homosexuality is illegal in many of the Arab states allied to the west, including Kuwait and Afghanistan.[J] In Egypt, there is no specific law but ‘public morality’ laws criminalise it. In Saudi Arabia, the death penalty applies – as it once did in Britain. We chose to change the rules for secular society, but religious people should be just required to abide by the law, not to agree with it on everything.

Incidentally, homosexuality has been legal in China since 1997. This wasn’t mentioned in the Western media, at least nowhere I saw. I only discovered it while checking a diatribe by Peter Tatchell on Tibet and the 2008 Olympics. Why wasn’t he condemning China’s mistreatment of gays? It turned out things had changed and no one saw fit to mention it till recently (when there were a few demonstrations calling for gay marriage in China). [R]

The West currently finds it unbearable for the rest of the world to have opinions of its own. During the Cold War they had to work with anyone who was not positively against them. When the Soviet Union fell, they began picking off their less obedient allies: Mobutu in Zaire, Suharto in Indonesia, Ceausescu in Romania, the very concept of a Federal Government in Yugoslavia. There was also the surprising fall of the Christian Democrats in Italy. It seemed like everyone was to be brought into line.

Then there was Saddam in Iraq, and that was an intervention too far. It should have been obvious that it was impossible to remove Saddam without destroying most of what was westernising in Iraq. Bush and Blair didn’t listen and got stuck in an unwinnable war. ‘Islamic extremism’ makes a handy target, but the blunders were theirs.


Parasitism in Afghanistan

“Chronic mismanagement and profligacy are blighting reconstruction efforts in Afghanistan, international aid officials have warned, wasting up to a third of the $15bn (£10.55bn) in funding already delivered and deepening local resentment towards foreign troops stationed there.

“Senior British, US and local aid workers have described a number of problems including bribery, profiteering, poor planning and incompetence. The overall effect has been to cripple the development effort structured under the Bush administration’s insistence on an unregulated and profit-driven approach to reconstruction.

“‘The major donor agencies operate on the mistaken assumption that it’s more efficient and profitable to do things through market mechanisms,’ a senior American contractor working in Afghanistan told the Guardian on condition of anonymity. ‘The notion of big government is a spectre for American conservatives and this [the reconstruction process] is an American conservative project.’

“The contractor said the original plan was to get in, prop up Karzai, kill al-Qaida, privatise all government-owned enterprises and get out. It wasn’t a development project, that wasn’t a concern. Development was an afterthought.

“‘The process of directing aid and development resources is completely haphazard. The right hand doesn’t know what the left hand is doing.’

“The contractor, who has worked across the governance, security and development sectors of the reconstruction process, also said the lack of tangible development had hampered Nato’s effort to win the support of Afghans.

“Amid blast barriers, checkpoints and foreign troop patrols, the badly finished schools, crumbling clinics and sinking roads stand as monuments to the shortfalls of reconstruction. There have been notable improvements in education and healthcare, but despite the billions dispersed in aid the majority of Afghans still lack access to safe drinking water and sanitary facilities. The country’s child mortality rates remain among the highest in the world, with more than 25% dying before their fifth birthday, according to Unicef.” [K]

Meantime the thriving opium trade is a clear case of a self-regulating self-repairing market. A state that’s just a bundle of rival warlords is hardly likely to fix it. And yet Obama has committed himself to winning that war. That in itself will doom his Presidency, unless he does a quick U-turn.


The Perils of Journalism [Anna Politkovskaya]

Trial by jury is a precious and a sacred thing, except when a jury gives a verdict you don’t like:

“A Moscow jury on Thursday returned a not guilty verdict in the trial of three men accused in the 2006 slaying of journalist Anna Politkovskaya, provoking a storm of protest from her family and former colleagues.

“The trial of the three men over the murder of Ms Politkovskaya, who was shot to death on October 7 2006 in the entrance to her Moscow apartment building, has been the highest-profile political murder case in Russia over the past decade. Neither the killer, nor whoever ordered the contract-style killing, have been found…

“Ms Politkovskaya’s colleagues admit that the case against the three men was weak, based primarily on the testimony of one man, who is in a secret witness protection programme.” [L]

The Western media are using the issue to cast slurs at the Russian government. Actually Russian liberalism is so weak and discredited that no one in the Kremlin would have reason to care. On Channel 4 News, the woman’s sister rejected the idea it had anything to do with the Russian government, saying it was people in the Caucasus. Much what I suspected from the start.

People in the Caucasus have been the biggest losers from the bungled reforms of the former Soviet Union. The old system kept the various rival nationalities from fighting each other. Lots of people must be bitter, and resentful at journalists who have learnt nothing and forgotten nothing.

Meantime you don’t get the same attention paid in the West to the death of journalists in Nepal. It gets noticed mostly in the Republic of India:

“Nepal’s media came under attack from the 90s, after the Maoists began their ‘People’s War’ with the target of establishing a communist republic. Security forces, especially the army, were behind most of the attacks on journalists, who were affiliated to the rebels or merely suspected of being so. The state atrocities included murder, rape and torture in custody.

“However, though the civil war ended three years ago and Nepal became a democratic federal republic, it still remains deadly for journalists. At least four have been killed after the signing of the peace pact in 2006 and several more threatened.

“Besides the Maoists, now innumerable armed groups on the rampage in the Terai are also targeting media institutions and individuals. The responsibility for Uma Singh’s killing was taken by a littleknown group called the Terai Ekta Parishad.” [M]


Dawn of the E-books [Kindle]

Back in the 1960s, we were being told that the ‘paperless office’ was coming and also that books would be replaced soon by electronic readers. Actually it took a long time to reduce the amount of paper used – I’ve not yet seen an office that is truely paperless. And useful e-books have only just arrived.

It has for years been possible to read books on a laptop computer. Possible, but not convenient. The machines are heavy and the batteries run out. Now in Britain we have the Sony E-book, and that is something else. The display is much more readable, authentic ‘electronic paper’. The machine is light and the power demand is small, so it lasts a lot longer. It’s still not as convenient or readable as a book, but it solves the problem of what to read on holiday: you can store more than a hundred books. Some are sold as downloads, but all of the out-of-copyright free books at Project Guttenburg [N] will download very nicely.

The main drawback I found was that it takes time to format a new book, though the pages then ‘turn’ very fast. There is no keyboard or notes, but you can place bookmarks, if there’s something you want to quote or look up later.

Then there’s the Amazon Kindle, which is said to be better and which does allow notes. The improved second version is now out – but only in the USA.

“Despite legions of British fans wishing that they could get their hands on the Kindle 2, Amazon’s second-generation ebook reader, the company is staying resolutely silent on its UK launch. Some websites have suggested it could arrive by the end of this year – but that would mean overcoming a series of problems.

“The first hurdle is a technical one that comes as a result of Kindle’s wireless technology, Whispernet. The system allows you to update your Kindle over the air, buy books and get subscriptions updated automatically.

“It is basically a built-in 3G mobile connection, except that it is not 3G as we know it in the UK. It is something called EV-DO (Evolution Data Optimised) and that technology runs on the CDMA network, which is not supported in Europe.

“That means no Whispernet – and no Kindle. It’s not a difficult job to replace the system with something we could use in Britain, but it does mean that the company can’t just start selling the same gizmo on a different continent….

“In an interview with the Bookseller magazine last year, Amazon UK’s managing director, Brian McBride, admitted the legal complications were holding back a Kindle launch in Britain.

“‘If you need agreement with the carriers in the US, there is one carrier. In Europe it is a minefield as there are so many operators,’ he said. ‘If you buy a Kindle in the UK and want to read it on the beach on holiday in Spain, unless we have signed deals in Spain it is not going to work on that beach.’

“That’s not strictly accurate – it would only be Whispernet that didn’t work, not the Kindle – but Amazon doesn’t want to sell you the gadget if it can’t sell you books as well. Even if it manages to overcome the technical and legal issues, there’s still the question of actually managing a worldwide release. Could the company keep up with demand?” [P]

In a few years time there will undoubtedly be much better stuff around. Flexible devices are promised, though I’ve seen many promises over the years and most fail to appear. For now, the Sony E-Book is good enough.


Chimps and us

The uphappy shooting of a rampaging chimp in the USA is another example of something I’ve talked about a lot in these Newsnotes. When we split from the chimps, our brains got bigger and our bodies got less robust. We also must have acquired a lot of self-control, much as wolf-sized dogs have become much safer than wolves, while giants like the St Bernard are utterly placid. Chimps can do a lot of human tasks, but they remain wild animals.

“For years, Travis had been a local celebrity in his hometown. He featured often on TV adverts, and would pose for photographs performing his favourite tricks: tucking into a filet mignon, dressing himself or using a computer.

“But yesterday the pet chimpanzee went berserk, attacking a friend of his owner’s and causing terrible facial injuries before turning on a police officer who shot him in self-defence.

“The frenzied assault by the chimp led to a police response and subsequent press coverage normally reserved for gun rampages. ‘Furious George!’ was the New York Post’s punning headline, a take on the popular US children’s book series about a precocious primate named Curious George.

“Aged 14, and weighing a formidable 200 pounds, Travis had been brought up to all intents and purposes a human. His owner, Sandra Herold, aged 70, who had raised him since he was an infant, trained him to water the flowers, drink wine, brush his teeth and watch baseball

“As soon as the neighbour arrived, Travis turned on her, maulling her and biting her face, causing serious injuries.

“Herold tried to save her friend by attacking her beloved pet with a kitchen knife, but Travis then went on to attack a police officer in his car. The officer, fearing for his own life, shot several times. Travis limped away.

“By then about a dozen police cars had descended on the scene. Officers traced the animals steps by a trail of blood, and found him back in his cage where he had already died.” [Q]

Interesting to note that the chimp was kept in a cage, despite being able to act the human on occasions. Our closest relatives are much stronger and more robust. Also stupid and vicious.

What’s distinctive about humans is not that we sometimes fight each other but that we mostly don’t, despite living right on top of each other. Another exceptional human trait is that the leader of a group may not be the biggest or strongest, and that a weak old person may be in charge, or at least have considerable authority. The comic-book vision so popular in the USA is of superior humans being superior individual fighters. It has an appeal, obviously – we are not that far from the chimp. But it is a bad misunderstanding of what humanity is about.



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