Fundamental Human Rights

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Posts Tagged ‘oil’

Black Holes Suck!

Posted by terres on June 12, 2008

One Day Soon, A Tiny Wall Street Black Hole Will Suck In the Rest of Your Assets! —TERRES

Casinos on Wall Street

by Ralph Nader
June 10, 2008

Move over Las Vegas. The big time gamblers are on Wall Street and they are gambling with your money, your pensions, and your livelihoods.

Unlike Las Vegas casinos, these big investment banks, commercial banks and stock brokerage houses are supposed to have a fiduciary relationship with your money. They are supposed to be trustees for the money you have given them to safeguard, and tell you when they are making risky investments.

Because Washington, D.C. has increasingly become corporate-occupied territory, the Wall Street Boys have been taking even greater risks with your money. The more they produce cycles of financial failure, the more they pay themselves through their rubberstamp boards of directors.

With each cycle of failure, the burden of government bailouts grows larger, meaning debt, deficit and your tax dollars. The Savings and Loan collapse in the late Eighties—costing before the bailout instruments are paid off at least $500 billion, looks small by comparison with what is going on today.

Why is it that these financial bosses never learn? Because they never pay for their gambling. They may be let go, as happened recently to the CEOs of Merril Lynch and Citigroup, but they ride away from their managerial wreckage loaded with compensation and severance gold. Some of it is clearly hush money from those buddies they left behind.

Now comes the latest installment of disastrous management that has been running the venerable Wall Street investment bank, Lehman Brothers. With its stock plummeting because of avaricious risktaking with other people’s money, mixed up with their huge pay packages, Lehman Brothers’ employees look to their leader, Richard S. Fuld. For some time, he and his fellow executives would exude confidence about their ability to manage their risking financial instruments compared to their tanking competitors.

This week, the Lehman Emperor really had no clothes. Mr. Fuld reported a staggering $2.8 billion loss in the second quarter, exceeding the most dire forecasts. Even the hedges that Lehman used to temper the losses from its mortgage investments soured, adding to the losses.

It was just last April that Mr. Fuld announced his belief that “the worst is over” in the markets. For this type of management, he got paid $40 million last year, or nearly a million dollars a week, not counting vacations.

The Wall Street Boys, like all charlatans, develop words and phrases to dress up their megagambling practices. They say they are trying to avoid a “crisis of confidence” when these proclaimed capitalists go to Uncle Sam for a socialistic bailout. That only increases the “moral hazard”—another euphemism—and sets the stage for another round of reckless Wall Street Goliaths being deemed “too big to fail”.

One of Wall Street’s sharpest analysts—Henry Kaufman—believes that the “too big to fail” phenomenon undermines market discipline and encourages the smaller firms to merge with the larger companies to avail themselves of Washington’s bailout criteria.

Writing in the Wall Street Journal last August, Mr. Kaufman acutely traces the growth of ever more complex, abstract financial instruments, removed from their empirical underpinnings in the economy, accelerated by the lightening speed of computerized transactions. He called for “increased supervision over financial institutions and markets.”

“Supervision” was once called federal regulation. Call it what you will, Mr. Kaufman is not expecting anything soon. He writes: “In today’s markets, there is hardly a clarion call for such measures. On the contrary, the markets oppose it, and politicians voice little if any support. For their part, central bankers [read, the Federal Reserve] do not posses a clear vision of how to proceed toward more effective financial supervision.”

Though couched in polite, non-normative language, this is a very troublesome indictment of corporate intransigence and regulatory paralysis. Since August 2007, the situation has gotten worse with the Wall Street Boys producing more huge losses and phony asset valuations.

A few weeks ago, former Federal Reserve Chairman, Paul Volcker, delivered an address in New York voicing similar worries and calls for “supervision,” as did Mr. Kaufman, though in his own inimitable style.

Other astute, former men of Wall Street, have raised alarms about the stock and derivatives marketplace, including former SEC chairman, Arthur Levitt and William Donaldson. Long before anyone came cautionary wisdom of John Bogle, who pioneered stock market indexing and launched Vanguard Fund. (See his new book, The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns)

Still, there is no regulatory action in Washington which doesn’t even move on behalf of consumers to regulate the New York Mercantile Exchange where rampant speculation, not supply and demand, decides what you are paying for gasoline and heating oil.

With the politicians sleepwalking in Washington, while their campaign pockets are filled by Wall Street cash, isn’t it time for the people of America to rouse themselves civically and politically? Act before the financial sector, using your money, shreds itself under the weight of its own top-heavy greed and cliff-hanging mismanagement.

For starters, start demanding more from your politicians, much more!

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Fueling Food Shortages

Posted by terres on April 27, 2008

Fueling Food Shortages
By Ralph Nader

Where is Harry Chapin when you need him? The popular folk singer (Cat’s in the Cradle), who lost his life in an auto crash 27 years ago, was an indefatigable force of nature against hunger—in this country and around the world.

To hear Harry speak out against the scourge of hunger in a world of plenty was to hear informed passion that was relentless whether on Capitol Hill, at poverty conferences or at his concerts.

Now the specter of world hunger is looming, with sharply rising basic food prices and unnecessary food shortages sparking food riots in places like Haiti and Egypt. Officials with the U.N.’s World Food Program (WFP) are alarmed. The WFP has put out an emergency appeal for more funds, saying another 100 million humans have been thrown into the desperate hunger pits.

Harry would have been all over the politicians in Congress and the White House who, with their bellies full, could not muster the empathy to do something.

Directly under Bush and the Congress is the authority to reduce the biggest single factor boosting food prices—reversing the tax-subsidized policy of growing ever more corn to turn into fuel at the expense of huge acreages that used to produce wheat, soy, rice and other edibles.

Corn ethanol is a multifaceted monstrosity—radiating damage in all directions of the compass. Reducing acreage for edible crops has sparked a surge in the price of bread and other foodstuffs. Congress and Bush continue to mandate larger amounts of subsidized corn ethanol.

Republican Representative Robert W. Goodlatte says: “The mandate basically says [corn] ethanol comes ahead of food on your table, comes ahead of feed for livestock, comes ahead of grains available for export.”

Corn growing farmers are happy with a bushel coming in at $5 to $6—a record.

A subsidy-laden, once-every-five-years farm bill is winding its way through Congress. The bill keeps the “good-to-fuel” mandates that are expanding corn acreage and contributing to a rise of global food prices.

Of course, more meat diets in China, futures market speculation, higher prices for oil and some bad weather and poor food reserve planning have also contributed to shortages and higher prices.

But subsidized corn ethanol gets the first prize for policy madness. It not only damages the environment, soaks up the water from mid-west aquifers, scuttles set asides for soil conservation, but its net energy equation qualifies for collective insanity on Capitol Hill. To produce a gallon of ethanol from corn requires almost as much energy (mostly coal burning) as it produces.

Designed to alleviate oil imports, hold down gasoline prices and diminish greenhouse gases, corn ethanol has flopped on all three scores.

Princeton scholar Lester Brown, an early sounder of the alarm of global food shortages and higher prices, writes in Science Magazine “that the net impact of the food-to-fuel push will be an increase in global carbon emissions—and thus a catalyst for climate change.”

Can Congress change course and drop its farm subsidy of corn ethanol this year? Observers say, despite the growing calamities and the real risk of severe malnutrition, even starvation in Africa, Congress will do nothing.

Farm subsidies, once installed, are carved in stone—unless there is enough outcry from food consumers, taxpayers and environmentalists. They are paying from the pocketbook, from their taxes and health. That should be enough motivation, unless they need to see the distended stomachs of African and Asian children on the forthcoming television news.

Unless we wake up, we will continue to be a country stuck in traffic—in more ways than one.

Don’t rely on the election year political debates to pay attention to destructive corn ethanol programs. For years I have been speaking out against this boondoggle, while championing the small farmer in America, but no one in positions of Congressional leadership has been listening.

They must be waiting for the situation to get worse before they absorb a fraction of Harry Chapin’s empathy and care.

END.
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Posted in America, ecosystems, environment, ethanol, food riots, human rights, hunger, poor, UN, Uncategorized | Tagged: , , , , , , , , , , , , , | 5 Comments »