Article by Mr Promise Hsu on the best-seller, THE PURITAN GIFT: RECLAIMING THE AMERICAN DREAM AMIDST GLOBAL FINANCIAL CHAOS

The following piece is posted here by kind permission of the author, Mr Promise Hsu. It was originally publishe in Mandarin in VISTA magazine, March 8-17, 2010
and translated from Mandarin Chinese into English by Stephanie Schubmehl

HOW THE BIG CORPORATIONS LOST THEIR WAY
By Promise Hsu
• The Toyota scandal
• The financial meltdown
• The rise of the United States, Japan, and China

What ties these world-shaping events together? Thanks to a lifetime of globe-spanning inquiry, two elderly Brits may have the answer.

“It is critically important for China to distinguish good capitalism from bad”, the 80-year-old William Hopper tells our reporter. With his brother Kenneth, 83, William has been creating a buzz in business and management circles, thanks to their 2007 book, The Puritan Gift: Triumph, Collapse and Revival of an American Dream, named by the Financial Times one of that year’s Top Ten Business Books.

For its 2009 reissue in paperback, the book was re-titled The Puritan Gift: Reclaiming the American Dream Amidst Global Financial Chaos. Not surprisingly, the financial crash has boosted interest this book. In an article for the magazine Strategy+Business, British management guru Charles Handy hailed the new version of The Puritan Gift as one of the top leadership books of 2009. According to Handy, leadership was in short supply in the year-long aftermath of the crisis on Wall Street and the Hoppers’ book served as an ideal reminder of where the business world truly stood.

In the January 2010 Harvard Business Review, executive editor Sarah Cliffe described it as “this astonishing book about American managerial culture.” She added, “I’ve never read a business book that packed so much information, history, and insight into one compact volume.”

Older brother Kenneth, once a department head at Procter & Gamble, has decades of industrial and management consulting experience under his belt. Younger brother William, an investment banker, has served in the European Parliament. The insights their book has to offer, though, are not simply a product of their professional lives. More importantly, the brothers are seeking an ultimate solution to the chaos that has engulfed the corporate and business sectors.

Today the Hoppers are busier than ever, constantly updating their blog, fielding lecture and interview requests, and corresponding with readers. Between February and March 2010, William was blogging almost daily. One item that caught his attention was Toyota CEO Akio Toyoda’s acknowledgment before a U.S. Congressional hearing that the company had “lost its way during a period of rapid growth.” The apology came as no surprise to William. He says Japan’s corporate sector began to lose its way years ago, when it retreated from the corporate system and workplace values imported during the U.S. occupation (1945–1952). “That,” William says, “was good capitalism.”

As for the bad kind, the brothers blame post-war American business schools, particularly after the 1970s. As curricula became dominated by “financial engineering,” profit and performance were prioritized before all else.


A Foreseeable Crisis

When the book’s first edition came out three years ago, William and Kenneth made a point of raising concerns about Toyota. They believed the automaker -- like Sony, Hitachi, Mitsubishi, Panasonic and other Japanese brands once synonymous with quality -- was losing its focus. As William points out, the evidence was emerging long before the brothers completed their book in 2006.

According to James P. Womack, who made a name for himself studying Toyota’s “lean production” practices, the carmaker’s troubles began in 2002. That was the year Toyota rolled out plans to expand its share of the global market from 11 percent to 15 percent. Womack derided the scheme as “just driven by ego,” calling the 15 percent goal “totally irrelevant to any customer.”

William Hopper’s analysis goes a step further. Back in 1993, he says, U.S. auto analyst Maryann Keller was already admonishing Toyota to take a long, hard look in the mirror. Keller’s book criticized Toyota for trimming vital “middle management” positions even as headquarters tightened its control company-wide. A top-down, hierarchical approach replaced what had been a bottom-up, participatory managerial culture; attention to detail and quality suffered as the company’s expansion picked up speed.

Many management experts would stop there, but, for the Hoppers, Toyota is only an example. They have a much broader vision. The Toyota scandal, the achievement and shattering of the American Dream, good and bad managerial cultures, the global financial crisis -- at first glance, it is difficult to see what any of these has to do with a book titled The Puritan Gift. Take a moment to think about what the title is saying, however, or engage more closely with the authors, and the connections become clear. What’s more, this book touches on many aspects of the globalized world we live in -- and more importantly, on our own individual lives.

In a sea of information, history, and concepts, the Hoppers seek the answer to a single question: what factors create a work environment that promotes well-being? In other words, why and how do people work? This is a fundamental question, because without such an environment, no company can experience sound growth. Some, like Toyota, may enjoy a moment of glory, but it will not last.

And so the Hoppers take their readers on a journey across centuries of history. One important conclusion they reach is this: the factors most conducive to the sound, sustained development of a work environment originate with a singular worldview -- one handed down from a group of migrants who left Europe for North America more than 400 years ago.

They were known as Puritans: a people who believed in stripping away man-made conceits and giving oneself over to the will of God. This God was supremely powerful, and as the word of God revealed to mankind, the Bible was the final arbiter in all matters. Puritans crossed the Atlantic in droves during the early seventeenth century, spurred on by their opposition to the way religion was practiced in England and throughout Europe. In North America, they intended to create a new homeland, one that would allow them to do God’s work.

As the Hoppers see it, this endeavor essentially laid the foundation for the modern free-market society. The values inherited from the Puritans are sharply distinct from those of other peoples and places. Despite their relatively small numbers, the influence of the Puritans is felt everywhere from education (they founded the Ivy League schools of Harvard, Yale and Princeton) to organizational management (the Presbyterian Church, republican government, the parliament, the board of directors). Here the authors would seem to be crossing into historical or even theological territory, which may come as a surprise for those accustomed to more traditional business fare. But the Hoppers have much more to show their readers.

The factors most conducive to the sound, sustained development of a work environment originate with a singular worldview—one handed down from a group of migrants who left Europe for North America more than 400 years ago.


Why Do People Work?

Both in their eighties, the brothers believe that the sustained, healthy development of a work environment is a product of spiritual and historical traditions. They learned this first-hand, which may be why the autobiographical portions of their book are so engaging. Kenneth and William are the sons of a chemist. Trained as an engineer, the youthful Kenneth went to work for a branch of Procter & Gamble after a colleague of their father’s touted it as the best-run industrial firm in the U.K.

Kenneth found himself fascinated by P&G’s workplace culture, which contrasted sharply with his experiences in two British firms. Despite the company’s complex structure, decisions on points of detail were handled with great efficiency.
That experience planted the seeds for the book Kenneth would complete at the age of 80. He wanted to find out what was going on in the world. Later, Kenneth’s professional life became what amounted to an extended global tour of workplace cultures. Working in Ireland, he witnessed the rebirth of the Irish economy. He also watched continental Europe rebuild itself after World War-II. In the United States, he had the chance to observe the Golden Age of the American corporation. And he was in Japan as that nation was shaping itself into the world’s second-largest economy.
Throughout his long working life, Kenneth occasionally took time to write about his experiences, whether for newspapers or academic journals. Later, he planned to integrate these pieces into a single work, but health problems prevented him from completing the project. Fortunately, his brother William helped put the book back on the agenda. William’s experience as an investment banker on both sides of the Atlantic, and as a member of the European Parliament, served to broaden Kenneth’s outlook.

He also introduced Kenneth to a friend who would prove critically important to the brothers’ work: Peter F. Drucker, a pioneer in modern management theory. In a letter dated October 3, 1983, Drucker expressed his eagerness to read Kenneth’s forthcoming book, which he intended to order from the publisher as soon as it came out. Kenneth still has the letter. As it turned out, the book would not be completed until after Drucker’s death in 2005. Kenneth still regrets that his friend, who dedicated his life to bettering society, never saw the book in its final version.

Aside from his friendship with the brothers, Drucker contributed indirectly to The Puritan Gift by making a pivotal introduction. It was through Drucker that the Hoppers met three American engineers who had played a central role in Japan’s postwar reconstruction. This gave them the opportunity to examine Japan’s transformation and offered a new perspective on the United States.

Part of the blame for Japan’s corporate crises lies with the curriculum that has dominated American business schools since the 1970s. To an even greater degree, this helped bring about the sub-prime mortgage crisis in the U.S. & Europe.
Another friend whose help shaped The Puritan Gift was American management guru W. Edwards Deming. Deming, too, had helped rebuild Japan after the war, and he is still remembered in the Japanese business world for his role in convincing manufacturers to prioritize the pursuit of quality management.

In the course of discussions with these eyewitnesses and their own work in Japan, the brothers formed a conclusion: it was thanks to the influence of Puritan values that Japan had been able to develop its impressive postwar line-up of quality brands. Furthermore, the social changes that later swept the so-called Asian Tigers and the Chinese mainland signified the spread of these values.

William’s recent blog commentary on the Toyota scandal revisits territory covered in the new edition of the book. The current scandal, he says, is actually a reflection of a much larger crisis, one aspect of which is the decline in “middle management” mentioned earlier. As the Hoppers see it, Japan began to turn away from Puritan values in the 1990s, when many young Japanese were setting their sights on an American MBA degree -- one of them being Akio Toyoda, the face of Toyota’s younger generation, who was 26 when he graduated from a Massachusetts business school in 1982. In contrast to older generations, they had little first-hand knowledge of the industries they were working in.

Part of the blame for Japan’s corporate crises, the Hoppers argue, lies with the curriculum that has dominated American business schools since the 1970s. To an even greater degree, this helped bring about the sub-prime mortgage crisis in the U.S. and Europe. These failures, they go on to explain, began when business education departed from its original Puritan ethos. To a typical Puritan, work was not simply a way to earn a living, to amass wealth, or to display one’s talents; rather, it was a “vocation” or “calling.”

Central to the concept of “vocation” is the idea that people do not work for themselves, or because they have no choice but to work. They do so in order to fulfill a God-given mission, for the good of themselves and of others. As for human needs, the Creator has promised to provide for all those who do His work. Just as the historical influence of the Puritans has spread into every industry, the blessings of this all-powerful Creator extend far beyond what any individual can conceive. Toyota was fixated on becoming the world’s biggest automaker; Wall Street was busy amassing paper wealth through complex feats of “financial engineering.” Viewed in this light, they have been straying farther and farther from their roots.


The Cult of the Business School

Over recent decades, the authors write, business education has lost sight of its own values; as education became increasingly focused on landing a decent job, the big questions were shunted aside. Aware only that the subject was gaining in popularity, students and their instructors had no intrinsic motivation which would tell them why they ought to work, giving rise to professional managers whose only goal was making money.

The Hoppers have dubbed this phenomenon “the Cult of the (so-called) Expert”. Cults, in one form or another, have wrought havoc throughout history. In the political sphere, they have been known to threaten popular wisdom, and the same holds true for economics. Of course, as the Hoppers acknowledge, the business school did not create this cult in and of itself. But as educational institutions, business schools -- along with the entire university system -- are responsible for molding new generations of professionals.

The problem is with the notion that a prestigious business degree is an instant ticket to the top -- when in fact, any job at all presents an opportunity to develop expertise. The dot-com bubble, the Enron scandal and now an epic financial crisis have given the business world a wake-up call. Goldman Sachs, for instance, reduced the proportion of MBA graduates among its new hires in 2000, from 75 percent to 25 percent. The consulting firm McKinsey is also recruiting fewer MBAs.

But it isn’t just the corporate world that’s in trouble, according to Kenneth and William. Corporations are only one facet of society. The Toyota scandal and the Credit Crisis, for example, have something in common. As companies began sacrificing quality in favor of performance and rapid growth, there were insiders who recognized that something was gravely wrong. Yet they failed to bring their concerns to management’s attention, or failed to make management take them seriously. For a worker to deliver bad news directly to a superior requires uncommon courage; character of this sort is rooted in an individual’s fundamental attitude toward work, which in turn is rooted in prevailing social mores.

The Hoppers support a view that Peter F. Drucker came to hold in his later years: fixing the corporate sector will require a society-wide revival of spiritual values. Just as it took nearly two centuries to establish the United States, such a revival will not happen overnight. It took the Hoppers a lifetime simply to write their book. But perhaps their story is cause for optimism: late in their lives, they have given us an extraordinary gift. The Hopper brothers have never forgotten that a society, once it has managed to achieve prosperity, must decide where to turn next. Sphere: Related Content

Private-sector employees versus Government employees

In the USA, it has been fashionable to hit out against government for a very long time.

Sadly, in spite of its intellectual brilliance, McKinsey is captive to that old fashion - at least according to the evidence of a report that it published a few months ago, titled "Improving worker performance in the US government": http://tinyurl.com/344jsjr

According to the article in the McKinsey Quarterly,
"The US federal government lags well behind the private sector in a number of important organizational-performance measures, particularly in fostering employee engagement, talent management, and accountability, a McKinsey survey finds. But the federal government enjoys relative strengths in the elements that deal with the heart of an organization. Government managers—more so than their private-sector counterparts, the survey found—understand and embrace the direction and vision of their organizations and are motivated to make a difference"

On the other hand, according to the same survey, fewer private-sector managers than federal government managers understand and embrace the direction of their organizations (55% versus 60%) and are motivated to make a difference through their work (63% versus 70%).

I should have thought that McKinsey of all organisations would know that excellence in speed, safety and fuel efficiency are not really that useful from the perspective of getting to your destination, if you are going in the wrong direction. Sphere: Related Content

US-China 2nd "Strategic and Economic Dialogue"

The US media would like us to believe that the talks are starting more or less positively, with the news items titled, for example, "China strikes conciliatory note".

Nothing could be further than the truth. The Chinese leadership realises its weak position, and wants to do nothing that will upset the applecart. The US leadership does not understand this, and has done nothing to push China towards any real move that will either benefit the US or the people of China.

1. For example, China has "vowed to spur domestic demand" but China has been vowing to do this ever since the crisis started some 2 years ago. Result so far: zero.

2. China has indulged in more or less equally long-standing talk of the yuan being reformed provided it is done in a way that is " independent, controllable and gradual". ("Indpendent is Chinese code for "don't push us". "Controllable" is Chinese code for "provided it doesn't lessen the hold of the Communist Party in China". And "gradual" is Chinese code for "Don't expect any substantial change").

3. Similarly, when China says that it is working to resolve the concerns of foreign companies about its "indigenous innovation" program that basically cuts foreign companies out of doing technology innovation-related business in China, that is code for "keep looking, because you will look for a long time to see any resolution".

4. What China wants is high-tech exports from the US, on the pretext that this would help balance the US trade deficit - but the correction in the deficit would be relatively small, and it would come at the cost of selling out any possibility of long-term advantage for the US economy over the Chinese economy - in other words, the short-term benefit would come at the cost of permanent long-term disadvantage to the US economy.

5. Neither, it appears, will the US get any movement out of China on North Korea, in spite of the North Koreans sinking a submarine belonging to South Korea.

&. To Beijing's statement that Taiwan is a part of China and that the US should not be selling arms to Taiwan, the Obama administration provided no riposte - at least not in public.

So far, I make that 6 to China, 0 to the USA. Sphere: Related Content

Obama on track for financial reform

Now that the Financial Oversight Bill has been voted through the U.S. Senate, it is time to consider the situation.

Of course there exist TWO versions of US financial reform, the version that was passed by the Senate last week and the version that was passed earlier by the House.

President Obama's administration can cherry-pick which bits they like of which Bill, through the U.S. process that attempts to smooth the differences between the two Bills and present a single version.

Apparently, the President's administration prefers the Senate's version for its treatment of consumer protection, of the too-big-to-fail syndrome, and of the management of systemic risk.

The Obama administration does not like a provision in the House's Bill that seeks to exempt auto dealers from the supervision of the consumer protection agency. Republican senators have a touching concern for the red tape that a consumer protection bureau would create too much red tape - clearly, Republicans are more concerned by the red tape that would result than they are concerned about the protection of consumers. Naturally, it would be better to have consumer protection without red tape. There are simple means of doing so (e.g. banning loans for simple consumption, allowing loans only for investment) but neither of the US parties seems interested in simple solutions. So, as the choice is between consumer protection with red tape, or no consumer protection at all, every sensible person will prefer, even at the cost of red tape, the protection of consumers.

On the other hand, the administration prefers the way the Senate version requires banks to spin off their derivatives trading - though the Treasury has indicated that it is open to a compromise that would permit banks to trade in derivatives as long as those activities were kept separate from deposit-insured banks. How this can be done is difficult to imagine. So XYZ Bank will keep its deposit-taking activities separate from its derivative trading activities, let's say by having two different legal entities within the same overall house - let's call that XYZ House.

Now, will the market/share price of XYZ House be dependent only on its deposit-taking activities? Clearly, the market would not be that stupid, and the market/share price would also be dependent on XYZ's derivative trading activities. Since the volumes and margins involved in derivatives trading are usually many times those involved in deposit-taking, clearly the market- and share-price of XYZ House would be much more dependent on its derivatives trading subsidiary. In effect, therefore XYZ House would be an investment bank with a small deposit-taking function. The investment bank would make huge losses or profits (that's the nature of investment banking), while the deposit-taking function would profit a much smaller steady income. Since the whole matter of whether or not to separate the functions of investment banking and deposit-taking was being discussed as a result of the crisis, which made it clear that one factor causing the crisis was the merging of investment banking and deposit taking, it is not clear how the "division" of the two activities within the same house sorts out the problem. In fact, a glance at European companies, which DO separate the activites should show that the division is not, and has not been, a solution at all.

Summary: the Obama administration has chosen the right options - those that are moral, ethical, just and humane.

Let's hope that the President's administration has the gumption now to drive these through. Sphere: Related Content

Stupid research on the Internet and Happiness

http://www.time.com/time/health/article/0,8599,1989244,00.html

This makes me think of another piece of research:
people who drink moderately are happier than people who don't drink at all; but people who drink to excess are much happier than people who drink moderately; and happiest of all are people who are permanently drunk. Sphere: Related Content

Explanations for the generation-long over-optimism on the part of equity analysts :

According to Harvard Business Review's "The Daily Stat", reporting research by McKinsey, equity analysts have been over-optimistic for a generation:

"For the past quarter century, equity analysts' earnings-growth estimates have been almost 100% too high. Their overoptimistic projections have generally ranged from 10% to 12% annually, compared with actual growth of 6% (excluding the spike in growth from 1998–2001).... Only in strong-growth years such as 2003 to 2006 did forecasts hit the mark".

Neither McKinsey nor HBR explore why this may be so.

I suggest three possibilities:

1. That there is something personally wrong with most equity analysts (only over-optimistic people are attracted to the profession)

2. That there is something the matter with the way they are educated (their education programmes them to be over-optimistic)

3. That there is something awry with the way they are compensated (they are paid for being optimistic, and penalised for being pessimistic or even realistic).

Any other explanations, anyone? Sphere: Related Content

Crunch point in the US debate on financial reform

So the Democrats in the US Senate failed yesterday to muster enough votes from their own party to cut the long-lasting debate and move to voting on the final bill itself.

Is that a good thing or a bad one?

Neither.

It simply means that we are at crunch point regarding what sort of bill will eventually be put to the vote.

In other words, whether all the debates of the last year or so, will produce a reform that is worthwhile or will have been simply a lot of huffing and puffing with no worthwhile change.

On one hand, the delay gives more time for banks to continue lobbying senators; on the other hand, it provides an opportunity for the bill to be toughened .

The most significant toughening lies in Senator Cantwell's amendment that would reinstate the Glass-Steagall Act, so that commercial banking is once again separated from investment banking - which would once again prevent the sort of gambling that took place with ordinary people's pension and other money as well as with the national money of countries such as Greece and Iceland, and with the money of hundreds of municipalities and American and other states that are now therefore either insolvent or on the brink of bankruptcy. Sphere: Related Content

Meeting distortion with distortion

At the Annual Dinner organised by the Confederation of British Industry (CBI), the UK Chancellor (Finance Minister) George Osborne is reported to have declared that the aim of the new UK government "is to create the most competitive corporate tax regime in the G20, while protecting manufacturing industries.”

Here we go again! Which nation will devalue its currency most? Which government will give away the most as subsidies? Which government will tax least? Has the stupidity of such moves not become apparent to all people with common sense yet?!

As long as these "national competitive" policies are followed, we will continue to program the global economy for the sorts of crises that we have seen increasingly since the commencemnet of a global economy (which I date from the fall of the Berlin Wall).

What we need is a global level playing field devoid of subsidies, with much greater currency competition (including many more complementary currencies), with equal taxation and the same provisions for financial regulation, health, safety, environmental responsibility, and minimum guaranteed standards of living for human beings (which I put forward for discussion as: one square meal a day, two sets of clothing suitable for the weather concerned, and minimum adequate shelter).

It is only then that we will have a genuinely free global market. Those who argue for anything less are not real free marketers at all. Sphere: Related Content

Bravo Merkel!

German Chancellor Angela Merkel's move to ban financial gambling (betting on shares and bonds that are not owned, also called "naked short selling") is absolutely the right step.

Even though it would have been better to take the whole of the Eurozone with her, when it became clear that the Eurozone as a whole would not move, Chancellor Merkel has bravely walked ahead alone.

Let others gamble if they want to - and suffer the consequences.

Let those who do not want gambling of the sort that led us into the current crisis join Germany in banning this kind of casinoism.

Though why is the ban on only the 10 most important stocks/Eurozone sovereign bonds and CDS? Why not on all of them? And what about gambling on commodities?

Let those who really believe that prices are going to go up or down buy or sell the actual stocks or bonds or commodities, and not simply gamble on them in financial casinos. Sphere: Related Content

Why the Iranian deal with Turkey and Brazil is and should be welcome

Though the US has announced new multinational sanctions against Iran, which I also welcome given the lack of transparency in Iran, that is a separate matter from the Iran-Turkey-Brazil (ITB) deal.

Under the ITB agreement, Tehran will ship 1,200 kilos (just over half of its supposed uranium stockpile) to Turkey, where it will be enriched under internationally-transparent arrangements to the level necessary for use in radiation therapy and other medical applications.

Iran usually touts, as an explanation for the huge amount of uranium enrichment it carries out, the need for such nuclear medical and other “peaceful research”.

However, if all of Iran's intentions were peaceful, why would it so fiercely resist international inspection? Sphere: Related Content

Another round to common sense

The decision by the new UK Chancellor (or Finance Minister), George Osborne, to avoid tangling with the new EU-wide rules for regulating hedge funds and private equity firms is another victory for common sense.

Though not all is looking rosy on the US front (which needs to be watched closely), the next round in the EU will be the debate in June over plans to create an regulatory system for EU financial services as a whole.

My view continues to be that a patchwork of national or regional (EU) regulatory systems does not make sense, and that we ought to move to a global regulatory system.

However, national and regional systems may be a necessary step in that direction.

Meanwhile, without transparency, the best-designed regulatory systems will fail. So the essential battle continues to be whether or not we will have accounting systems that provide transparency (see my review of the book Unified Financial Analysis by Dr W. Brammertz and others).

I agree of course that rules and regulatory systems (and even transparency) by themselves will not prevent people who are determined to do so from obfuscating and cheating, and that therefore the renewal of morality, and the evaluation of the moral standards of the key players in the financial system remains key to everything.

Which is why it is so distressing that financial services providers continue to resist integrating ethical evaluations even for new recruits.

As I pointed out elsewhere, someone who recently completed his doctoral dissertation on a topic related with this broad field wrote to me as follows:

"Though I was able to graduate, the story of my dissertation is largely the story of research that never took place.... I approached (more than two dozen) banks and investment funds with a proposal to do ethics related research, and was consistently turned down. In my dissertation defense, I compared myself to a fly trying to get through a glass windowpane, (but) the financial world remained forever on the other side."

The parentheses above are mine.

As far as I can work out, his research started at the height of the boom, and he persisted with his efforts to do the research till well after the bust.

Was the refusal of the banks and funds to co-operate with the research mere cussedness, or did the banks and funds know that they should not be letting any research get done on the ethics in their companies? Well, that was then...

Now we are in a new world of transparency and re-regulation. Is this not the right time for ethical testing to be introduced into recruitment for all companies? Sphere: Related Content

On US drone attacks and "American aggression"

On the Independent Institute (USA) website discussing this topic, there is the following:

"Have U.S. drone attacks in Pakistan put Islamic terrorist groups on the run--or have they instead weakened U.S. security by creating more enemies eager to attack American targets? John O. Brennan, the White House's chief counterterrorism advisor, recently defended the drone attacks, claiming that they have degraded the capability of anti-U.S. terrorist groups. In contrast, Independent Institute Senior Fellow Ivan Eland argues that the drone attacks have helped to radicalize Islamists, both strengthening them politically in Pakistan and increasing the likelihood of attacks against Americans in retaliation....It failed to dawn on Brennan that the terrorist attacks wouldn't be occurring in the first place without aggressive U.S. behavior in Islamic lands"

This is simple-minded. Of course there is US "aggression" in many places, some justified and some unjustified. But the question in this particular matter is: what is the definition of "US aggression" according to Islamists?

If it is, as appears to be the case, the existence of Israel, and the existence of US military bases in the Middle East (particularly Saudi Arabia), then it is clear that the US can never stop "aggressing", and that the US will therefore always be under attack by Islamists.

That is what is not understood by those who deride Huntington's thesis regarding the clash of civilisations.

The very ntion of free speech, for example, is anathema to Islamists, as is the very existence of secular states such as India, or Maoist states (such as Nepal) or pseudo-Marxist states such as China.

Islamists will always seek some particular example of excess or wrong on the part of the governments of these countries in order to gain our sympathy. But they will never be satisfied simply by the acknowledgement or correction of excess or wrong on the part of non-Islamists (whether notionally Muslim or otherwise).

What Islamists seek is the imposition of their version of civilisation on the whole of the world. So if universities stop teaching courses on Islam that do not follow the Islamist version, will that satisfy Islmists? No. If Israel stopped existing, would that satisfy Islamists? No. If the US withdrew all its military bases from Saudi Arabia and every other country outside the US, would that satisfy the Islamists? No. Islamists will be satisfied only when their version of Islam is imposed by force on the whole world.

If we do not understand that, we are living in a dream-world that has nothing to do with reality. Sphere: Related Content

American versus Indian philanthropy

Bain & Co reports that, in spite of the number of the super-wealthy in these countries, charitable giving in India and China is just 0.6% and 0.1% of GDP respectively - of which only about 10% comes from individuals, with the rest provided by governments and foreign organizations.

In other words, the super-rich in India contribute only 0.06% of GDP as philanthropy.

Compared to China, where the super-rich give about six times less (only 0.01% of GDP), India looks very good.

But the world's greatest private giving comes from the U.S., where it is 2.2% of GDP. And nearly three-fourths, or 1.155% of GDP, is given by individuals!

In other words, comparatively, American individuals give away nearly 20 times more than we Indians give. Sphere: Related Content

Rounds One and Two to the Public; Round Three to Big Finance

I am not sure whether a day of global mourning should be announced.

The Brown-Kaufman amendment, which would have limited the size and leverage of the largest banks, was defeated in the Senate.

What was galling was not merely the defeat but the size of the defeat: 33-61.

So that was Round Three.

In Round One, a 93-5 majority passed the bi-partisan Dodd Shelby Amendment which dropped the possibility of a $50 billion industry-supported fund to cover the cost of unwinding a firm and ensure shareholders and unsecured creditors bear losses when the government liquidates a business.

In Round Two, a 96-1 majority voted in the Boxer Amendment to bar use of taxpayer funds to rescue failing financial companies (as I have written earlier, what matters is the exact wording of these amendments, and I have not yet had the opportunity of looking at these).

So winning Rounds One and Two was good news; losing Round Three was bad news. Now there is nothing to stop the tendency of the largest players to gobble up smaller banks. There is already a trend toward oligopoly...

However, what is even more important is Round Four: the Kanjorski amendment, which allows the preemptive break up of large financial institutions that – for any reason – pose a threat to financial or economic stability in the United States. The only flaw in the Amendment is that it empowers regulators to do so, rather than instructing the immediate breakup of the six largest banks in the USA which do in fact right now pose such a threat.

If you are a US citizen or know any of the Senators, write and encourage them to do the right thing: approve the Kanjorski amendment, preferably in the tighter form referred to in the preceding para. Sphere: Related Content

The battle now underway in the US Senate

So the finance reform bill is being debated, with voting expected to start today on certain non-controversial clauses.

The main bill is apparently nearly 1,600-pages (I haven't seen them yet!) but it was developed over six months of negotiation between the Democrats and the Republicans.

The very first amendment is expected to be proposed by Democratic Senator Barbara Boxer.

She wants to add a clause or phrase saying that no "taxpayer funds" can be used in future to bail out financial institutions.

This is an idea likely to gain support from both parties.

But the key question is going to be the definition of "taxpayer funds", since money paid by taxpayers is only a very small part of government funding (even if that part provides the base for everything else that the government does).

There are numerous ways which do not involve the direct use of taxpayer funds (e.g. bonds, derivatives, government guarantees/ directives/ nods and winks - as in China!) which would have an effect similar to the actions that were taken by governments to rescue banks at the height of the crisis.

The specific words and the definitions are the therefore the things to watch, in order to determine whether the legislation will be full of holes or (more or less) solid. Sphere: Related Content

Pssst...want an organ transplant?

Apparently, organ transplants are available in a number of Chinese government military hospitals.

There are no receipts and no medical paperwork.

One gets a call from China when an organ is available. One must go immediately. One is picked up in a van from the airport....

The cost is approximately £70,000.

Who do the organs come from?

Why the secrecy?

Why the lack of paperwork?

People who need the transplants do not ask questions.

But do not some questions need to be asked on behalf of those who have provided the organs by dying - or being killed? Sphere: Related Content

IMF proposes two new taxes on all banks and financial services companies

In view of the "too big to fail" syndrome, whether taxes are really the right way to organise the financial sector is a different question, but I will comment on one aspect of the IMF's proposal (two global taxes on financial institutions: a financial-stability contribution on bank LIABILITIES (except deposits, which come under the purview of deposit insurance schemes and are already taxed) in addition to a levy on bank EQUITY).

The IMF has proposed that the tax might be charged initially at a flat rate, changing over time to a charge according to the riskiness and size of the institution concerned.

The flat rate will either be so small as to bother no institution or, more likely, will bother smaller organisations (and therefore disproportionately institutions in smaller countries) more than larger ones.

Conversely, whenever the IMF wants to change the system to a variable rate, the larger organisations are more likely to protest and to seek to obstruct the move to a variable rate.

So the flat tax may be a political calculation that if the wedge is very thin right now, no one is going to protest too much, and the contributions can be ramped up over time.

The contribution should be looked at as a sort of insurance fee. Though in my view it would be much better to leave the job entirely to insurance or reinsurance companies (with insurance and reinsurance companies insuring each other), I recognise that it is the State which is the insurer of last resort and so it is right for the insurance fee to go to the State, provided the State keeps the money in a separate fund, with the adequacy of the contribution being evaluated from time to time either by a quango or by outside advisers.

The good thing is that the IMF wants the taxes to apply to the entire financial sector so as to avoid tempting organisations to change legal form in order to escape the net. Sphere: Related Content

Western Centres for Islam and Democracy

I am most puzzled to find one Center for the Study of Islam and Democracy included in a list of organisations that stand for Democratic Capitalism.

"Islamic democracy" is of course an oxymoron but this is not understood in the West, and Western individuals, organisations and govrnments unfortunately do not merely tolerate but actually promote and even finance such organisations!

Islam cannot accommodate democracy, since it has always been and will always be a theocracy modelled by the Prophet Mohammad and controlled by the Ulema (religious scholars). No real Muslim will accept the principles of democracy since that would allow a Kaffir (unbeliever) to hold political power - an anathema to Islam.

A "liberal muslim" is by definition not a "real muslim" since s/he rejects the model provided by the Prophet Mohammad as well as the essential teaching that Islam makes no distinction between the State and the "Church" of Islam.

The objective of Islam is always to take control of politics in order to re-arrange society in accordance with Islamic precepts including the lower level assigned to women and the even lower level assigned to unbelievers (e.g. not being able to serve in the defence forces or in high civil, business or political office) as well as having to pay a special tax.

As I am from the second-largest Muslim country in the world (India), I am well acquainted with "very good Muslims" who are caught between their desire to be "very good Muslims" and seeing the way their minority is treated in a more truly secular democracy (India) versus the way that Islamic societies conduct themselves as a whole as well as the way that minorities are treated in Islamic societies.

I am not saying that India treats Muslims and other minorities perfectly, merely that inspite of its inadequacies India makes a better job of treating its minorities according to its ideals and that, if India did treat minorities fully in accordance with democratic capitalist ideals, no one would have anything to complain about; whereas the more that Muslim societies treat minorities according to Islamic principles, the more genuine democratic capitalists will be offended and shout for the removal of those principles.

However, I should say that the same criticism applies, though perhaps nowadays not quite as strongly, to the Roman Catholic Church, since that is in principle also theocratic, because Roman Catholicism was at least as deeply shaped by Islam ss it was by the some of the teachings of Jesus: the Pope is like the Caliph, and the equivalent of the Ulema is the College of Bishops - though the political sway of Roman Catholicism extends only to the Vatican while the political sway of Islam reaches to many countries (that is compensated of course by the religious influence of Romanism which reaches many more people, even though Roman Catholics may not realise that Romanism has never repudiated its right to have an army, for instance). In Romanism, as in Islam, there is plenty of contradiction between the ideals that are professed for public consumption versus the principles on which the religion is really run - and therefore the realities of the religion.

Nazism was, in its structure, quite like the Roman and Islamic religions - and many modern Hindu and Buddhist organisations are, regretfully, developing towards similar structures.

The alternative remains truly democratic and secular societies - which are threatened by the sort of debased capitalism that we have seen in the last 30 years. Sphere: Related Content

Why people of faith should stay away from the "Christian Equity Index"

First what the Index is, and then my comments on it.

There are many financial indexes of this sort, some claiming to be ethical, some claiming to be Islamic, this one claiming to be Christian, and so on.

Are such indexes having an impact? Yes, though perhaps not yet as much of an impact as the originators of these indexes hope. But it is early days yet. The first major such indexes started only in the 90s, though there is an older tradition of them, going back at least to the days of apartheid.

Most such indexes take the top-performing companies and subject them to some sort of "screen" in order to eliminate those deemed unsuitable on the basis of certain criteria, for example: pornography, weapons, tobacco, gambling, usury and/ or environmental damage. In other words, only the most profitable of the largest companies avoiding these sorts of things are allowed to be included in the Index.
So investors are saved the trouble of having to screen each company themselves. They simply decide which of the above criteria are important for them, find which of the indexes shares their criteria, then investors can simply lean on the the work done by the screeners who produce that particular index.

However, there is a danger in leaning too heavily on such Indexes: one needs to be vigilant regarding whether the criteria are in fact being followed. For example, most so-called "Islamic" companies do not really eschew usury, they simply find one way or another around it. In the case of the so-called "Stoxx Europe Christian Index", its major difference from the criteria mentioned above is that it adds birth control to the list. In view of that, it is astonishing to find GlaxoSmithKline on the list of companies approved by what is really a Roman Catholic Index, given that GlaxoSmithKline Lamictal, Elogen, Yaz and perhaps other birth control pills.

But why do I say that "people of faith should stay away" from this Index, whether it is Christian or Roman Catholic? Because the Index claims that it includes only those companies whose revenues derive from sources approved "according to the values and principles of the Christian religion".

Leaving aside what is meant by "the" Christian religion (there is no such thing, as Eastern Orthodox, the Roman Catholic, Jehovah's Witnesses, Christian Science, Mormons, and various others all claim to represent "the" Christian religion), there is the question of what the "values and principles" of the religion are, and whether these are adequately represented by the criteria of this particular Index.

In my view, the "Christian Index" is a trivialisation and a travesty, because it leaves out what the Bible calls "the larger matters" of social justice and environmental care.

Most important of all, in typical Roman Catholic fashion, the Index simply "baptizes" the existing economic order and financial system, without any clear standard on the basis of which the system as a whole can be evaluated. For example, the Index bypasses the requirement of relationships which, if nothing else, is central to the teaching of the Bible from the very first chapters of Genesis right to the end of Revelations.

For a much more Biblical approach to the matter of investing, see resources from the Jubilee Foundation, for example "Beyond Capitalism: Towards a Relational economy" http://www.jubilee-centre.org/document.php?id=346&topicID=3. See also: http://www.citylifeltd.org and http://www.creditaction.org.uk.

I conclude that an Index that can reliably be used by people of faith has yet to be invented.

Meanwhile, the best thing to do is to investigate the many businesses that you know personally which are being run by people of faith, and invest in those of them that do meet, in your view, whatever criteria you deem appropriate for an ethical business. Sphere: Related Content

My twins' novels now in Dutch (Nederlands)

My 21-year old twins' series of three fantasy novels, set in their created world called Calaspia, has been translated from the original English and is now being published in Dutch (or Nederlands, as the language is called) by Wereldbibliotheek.

The first volume, DE SAMENZWERING VAN CALASPIA, should be available from next week (see below). The 2nd novel should be available in Dutch in about six months, and then the 3rd.

The first novel is available also in German and Italin; volume 2 is already available in German, vol 3 will be published in German in the Autumn.

Other translations are being considered/ sought.

The twins are now at work on their SECOND SERIES, which will be based in India, and their Agent is looking for the main publisher for that, we hope in the UK and/or USA.

The twins' website is: www.twins.guptara.net

---------- Forwarded message ----------


Today the Dutch edition of CONSPIRACY OF CALASPIA has arrived at our publishing house! The books are beautiful, we will send you two copies a.s.a.p.

We are also finishing our website. We hope you like it!

The book looks even better in "real time", because the "yellow" letters are actually gold and shiny.

DE SAMENZWERING VAN CALASPIA will be in the book stores by next week.

All the best & have a nice weekend!

Eveline & all the other collegues at Wereldbibliotheek Sphere: Related Content

Lecture in Dubai, 5th of May, "The Global Economic Crisis: Is it Past? And what of the Future?"

I argue that the crisis is not past; it is simply that a floor has been put under it by the extraordinary measures that were undertaken. The floor itself comes under threat, and then further measures have to be taken. Meanwhile, the very existence of the floor builds up its own pressures. The future is uncertain, and will feature even greater uncertainty from Europe and the USA right around to China. However, it is still possible to put sensible solutions in place that will produce a global framework for finance and industra, for ecology and humane development. And I put forward key proposals for discussion.

From 7.30 pm to 9.30 pm, at Traders Hotel, on the corner of Abu Baker, Al Siddique & Salah Al Din Road

The event is kindly sponsored by The International Indian magazine/ Expat Media International, and is therefore free of charge. However, you need a (free) ticket to get in. Please ring 265 9888. Sphere: Related Content

The Milesa nd More Frequent Traveller Programme of the Star Alliance Airlines Group

I suggested to Miles and More that it was unnecessary, and embarrassing for members of their frequent flyer programme, to have the experience of being turned away, as I was, at the SAS Lounge in Copenhagen, because of differences in the rules applied by Lounges belonging to different members of the Star Alliance. In other words, according to the rules, I am to be admitted to Lounges run by Austrian, Lufthansa, and Swiss but I am NOT to be admitted to Lounges run by other members of the same Star Alliance, such as SAS.


The following is the response that I received:

Dear Professor Guptara,

Thank you for your email.

As a Miles & More Frequent Traveller card holder you have access to the Lufthansa Business Lounges on production of a valid boarding pass issued on Lufthansa, a Star Alliance partner or a Lufthansa airline partner for the same date and airport of departure.

For SWISS Business Class Lounges and Austrian Airways Business Lounges you need to produce a valid boarding pass issued by our Star Alliance partners for the same date and airport of departure.

However, please understand that we have no influence on the rules and regulations set by other airlines, e.g Scandinavian Airlines, regarding the access to their lounges.

The latest information concerning the benefits of the Miles & More Frequent Traveller status can be found on our website www.miles-and-more.com > The programme > Status and Privileges > Miles & More status levels > The main benefits in brief.

Sincerely,
Your Miles & More Service Team


Here is the response that I have sent to them:

Dear Members of the Miles and More Service Team

Many thanks for your message.

However, I had not asked for information regarding the rules for the use of Lufthansa and Swiss Business Lounges.

What I asked was that you take action to harmonise the different rules and regulations set by your so-called "Partner Airlines", as these differences lead to embarrassment to your passengers. If you have no influence on the rules and regulations set by "other" airlines, why do you have them as Partners in the Star Alliance system? Clearly, the "Alli ance" is meaningless if everyone is free to set their own rules, regulations and standards!

I understand that the Miles and More Service feels unable to do anything about this because this is a matter that is beyond the competence of the Service Team.

However, it is not beyond the competence of the Service Team to raise this matter with the top management of the Alliance.

So my question is: have you, as the Service Team, raised this matter with the top management of the Star Alliance?

Yours sincerely

Prabhu Guptara Sphere: Related Content

Obama fails to soften derivatives reform opposition

That's the headline in today's FT (http://tinyurl.com/y4at5ka) regarding President Obama's meeting with Republican leaders to discuss financial regulatory reform.

The story reports that "the meeting did nothing to improve the tone of an increasingly bitter debate".

Does President Obama really expect turkeys to vote for Christmas? Sphere: Related Content

Swiss Efficiency

The family is in the middle of buying a car (not my favourite activity!).

My son, who has organised everything, told me that we needed to go to the Office which issues the licence plate for the car.

We went this morning and, as I had certain other things to do, wanted to be in and out as early as possible.

The office was supposed to open at 8.00 a.m.

We arrived at 7.55 a.m.

Only to find that, this being Switzerland, SIX other people were ahead of us in the queue!

We had to go to one window to hand in papers et al, and then to another window to actually collect the licence plates.

However, we were out of the office at 8.02 a.m., licence plates in hand.

Long live Swiss efficiency! Sphere: Related Content

China and Oil...

First, I must make clear that I like Chinese and Iranians as people (in fact, I find it difficult to dislike almost any person!). However, I find some of the policies of these (and other) governments not designed to produce freedom and prosperity for their own peoples - let alone for the world as a whole.

So, while I can comprehend the politics at http://tinyurl.com/yyecu9c,
I can't see how China can really have 850,000 barrels superfluous to its own requirements!

What is really going on?

I am enquiring - and, if I come up with an answer, will write again. Sphere: Related Content

Pluralism, Inclusivism, Exclusivism - and Roman Catholicism

A friend sends me a thoughtful piece on Pluralism, Inclusivism, and Exclusivism and asks my view also of Vatican II.

Here is my response:

The piece you attached is a good one, though it focuses on relgions.

So far as I can see, all religions are essentially institutions that work and even fight for their own power, riches and glory (they may do a certain amount of good and a certain amount of harm on the way, but that is incidental).

Vatican II was an interesting experiment for the Roman Church but, as with Chairman Mao's "Let a thousand flowers bloom and a thousand schools of thought contend", it was overtaken by events and by later orthodoxies - in the case of China, by the new orthodoxy of the market and, in the case of the Roman Church, by the old orthodoxy which was brought back by Pope John Paul II.

The current focus of the world on the question of child sexual abuse by Roman Catholic priests and the way that matter is handled will prove much more significant than Vatican II for the future of the Roman Church.

What makes the Roman Church different from other Churches is its claim to be the final arbiter of what is or is not acceptable to God, with the Pope as "Christ's Vicar on earth", and therefore able to determine definitively all matters of faith when he speaks in council ("ex cathedra").

So far as I can see, Jesus the Lord came to earth precisely because of the absolutism, impropriety, inadequacy and corruption of religion - but some who claimed to be his followers made a religion out of what should be a simple matter of a direct relationship with him without reference to priests, popes, churches and the rest. Sphere: Related Content

Ecology and Science as the New Religions of our time

Most interesting: http://tinyurl.com/ybtp7v7 Sphere: Related Content

The latest on Black Money

Guess the three jurisdictions holding the largest non-resident deposits in the world?: The United States holds over $2 trillion, while the United Kingdom, and the Cayman Islands each hold over US$1.5 trillion in private, foreign deposits.

That's according to the latest paper from Global Financial Integrity (www.gfip.org), titled "Privately Held, Non-Resident Deposits in Secrecy Jurisdictions".

Written by Ann Hollingshead, the paper finds that these deposits have been increasing markedly since meaningful data collection efforts began in the 1990s, with current totals standing just under US$10 trillion.

That is, over half of the world's "private, foreign deposits" is, from the smallest to the largest of the three top "secrecy locations", in the Cayman Islands, the UK and the USA.

So who's going to be the first to go after the USA? Sphere: Related Content

The revolution in Kyrgysztan

Kyrgyzstan has less than 6 million people and a per capita income of something like USD 1000. Surprisingly, the differential between rich and poor is "moderate" (latest Gini available (2003) is 30.3). "Only" a third of the population lives below the poverty line.

On all three counts (population, income and Gini) that is a better situation than many other countries in the world.

As Kyrgyzstan was less intolerably governed compared to some other countries, it will not be surprising to see other countries erupt. Sphere: Related Content

There are many kinds of speculation

I see that U.S. Home Prices are rising.

The S&P/Case-Shiller 20-city Composite Index, indictes that U.S. home prices rose for the eighth consecutive month in January 2010 - on a seasonally adjusted basis, by 0.3% month-to-month.

But what was actually expected was a 0.3% decline!

Why was a decline expected? Because of all the housing sector data in recent months, including home sales which show declines ranging from slight to notable.

So why the confounding rise, albeit marginal, in house prices?

Simple: house sellers are putting prices up to test the willingness of buyers to pay more.

Just what I too would do if I had one or more houses to sell.

In fact, all offer prices are a kind of speculation....

But some kinds of speculation are harmless or even beneficial, whereas other kinds of speculation harm the market. Sphere: Related Content

The Reminimbi is BOTH undervalued and overvalued

China's tragedy is twofold.

The first fact is that China's currency is undervalued from a global perspective and it is therefore coming under increasing pressure to revalue it (upwards). As the undervaluation is deliberate (in order to make exports cheaper), the international pressure is understandable. Whether international pressure is going to succeed is a different matter. It may not even be appropriate for the pressure to succeed, given the following.

The second fact, however, is that China's currency is overvalued from a domestic perspective. The Remnimbi's purchasing power inside China is weak (i.e. there is a huge amount of inflation that is disguised or hidden).

So should the Remnimbi revalue or devalue? In fact, it needs to do both. But the Chinese government cannot afford to do either. If it revalues its currency externally, its exports will become more expensive and therefore reduce, becoming perhaps the straw that breaks its back. Meanwhile, the nakedness of the Chinese emperor will become clear to all as its balance of trade suddenly swings to the red in the next few weeks. The elaborate game that China has been playing to make its exports appear larger than they are, will be exposed.

On the other hand, if China moves to bring the value of its currency into line with internal reality, its own people will find that the illusion so carefully maintained will disappear. As a result, China could find its already-great internal pressures growing intolerable.

As such contradictions come home to roost, pray for China's leaders. The decisions they are making right now will make the difference for China's future - and the world's. Sphere: Related Content

His Holiness the Pope, to business leaders in Rome

Apparently, the Pope recently addressed the business leaders of Rome. In his address to them, which my computer calculates as being just under 1100 words in English translation, I do not once see the word "corruption", I do not once see the word "honesty", I do not once see the words "compliance with the law" or "accurate submission of tax returns". Nor do I see any reference to the kind of politics there is in Italy. I do not even see any mention of the Mafia. Sphere: Related Content

Open Letter to The Economist magazine

SIR - It is most interesting to read your report of the research by Dr Lammers and Dr Galinsky (The psychology of power, Jan 21st 2010). Their findings are the more powerful because they fit everyday observation and commonsense understanding.

If one strips away the evolutionary and academic jargon, it is clear that when individuals emerge to positions of leadership, they have one of only two possible explanations to themselves of what has happened to them.

Some leaders actually believe that they have somehow deserved to get to positions of leadership because of their own abilities and exertions - and therefore tend to abuse their power to benefit themselves (and perhaps a small circle around them).

Other leaders really believe that though their abilities and exertions were essential, they have got to positions of power primarily because of luck, destiny or God - and therefore tend to handle their power responsibly.

This reinforces a suspicion that some of us have: that the rise of power-abuse in the West since the 80s is intimately related to loss of belief in God and the rise of belief in philosophies such as those propounded at a sophisticated level by Friedrich Wilhelm Nietzsche and retailed at a fictional level by Ayn Rand.

Naturally, the above discussion tells us nothing about the objective validity of theism or Randism. But the discussion may throw some light on whether theism or Randism is socially more useful.

Professor Prabhu Guptara
William Carey University
Shillong, India Sphere: Related Content

The Zermatt Summit

Do you wish that there could be substantial discussion which could lead to a more humane and environmentally responsible form of globalization?

That is actually the purpose of the first-ever Zermatt Summit, which will address the major economic and ethical issues raised by globalization (the disconnect between the world of high finance and the real economy; the economy itself is not serving the common good as it fails to properly serve the dignity of individual citizens; and, at an individual level, difficult ethical dilemmas emerge which are almost impossible to resolve).

Expected are representatives of academia, business, government, non-governmental agencies (NGOs), trade unionists, performing artists....

Discussion will focus on how the processes of globalization can be changed to serve the common good - exploring and formulating a roadmap of how to navigate the challenges currently facing mankind and help create a better world.

The idea is that people need to be placed at the centre of the globalization process, so that the world of high finance can serve the economy, while the economy serves the common good, and the common good cares for the people, enhancing the prospects of poorer and socially marginalised groups.

For the individual to be able to reach his or her full potential, he or she must be able to blossom within a society which supports the family, community and enterprise in an inclusive political structure. The broader challenge is for a wider realisation of the responsibility of the individual within society and vice-versa.

The manifest failure of economists and politicians to anticipate the recent financial crisis can not be understood without considering the underlying failure to take into account the impact on the individual of the driving process of global capital. Obstacles to creating a better world will remain until you and I play a more significant role in the process of globalization.
The notion of Common good

The rapid process of globalization makes it an even greater challenge to balance the needs of human beings whether they are material, spiritual or emotional with those of society at large. Under these circumstances, using terms such as the ‘common good’ could be very helpful in defining new rules. Implicit in the common good is a full respect for both the individual and collective interests of society while at the same time asking the individual to demand less for herself or himself, and to concentrate more on serving the community.

So the Zermatt Summit will focus on the respective roles and responsibilities of institutions and individuals from the perspective of furthering the common good.

More than that, the three days will be devoted to forming concrete and practical recommendations.

After the Summit has been completed, the Advisory Board, made up of senior business leaders and experts, will formulate recommendations from the Summit, which will be widely published. A progress update on how these recommendations are being adopted worldwide will be presented at the following Summit.

The programme is:


Thursday June 3, 2010

14.00 - 17.00 Welcome and registration

16.30 - 17.00
Welcome address by Christopher Wasserman - President of the Zermatt Summit Foundation

17.00 - 17.30 Piano concert

18.30 - 19.30 Welcome Reception

________________________________________

Day 2
Friday June 4, 2010

09.00 - 09.45 Welcome Address
The world crisis and the change of paradigm by Prof. Philippe de Woot Restoring the Ethical and Political Dimension of the Corporation:
Rebalancing Entrepreneurship, Leadership and Corporate Statesmanship

09.45 - 11.00 Keynote Address 1.1 (Plenary session)
• Revisiting the corporate raison d’être

Keynote Address 1.2 (Plenary session)
• Entrepreneurship and the economic progress

11.00 - 11.30 Coffee break

11.30 - 13.00 Roundtable 1 (Plenary session)
• Finance to serve entrepreneurship and economic progress

13.00 - 14.30 Lunch

14.30 - 15.15 Keynote Address 2 (Plenary session)
• Back to ethics, towards a responsible leadership

15.15 - 15.30 Coffee break

15.30 - 16.30 Workshop 2*
• The responsible supply chain
• The responsible consumption
• Developing responsible leaders

16.30 - 16.45 Coffee break

16.45 - 17.15 Reporting back from workshop (Plenary session)

17.15 - 18.45 Roundtable 2 (Plenary session)
• Ethics and corporate responsibility: Economy to serve
the Common Good

18.45 - 19.00 Break

19.00 - 20.00 World premiere viewing of the film
«Doing Virtuous Business»

20.00 Departure for the «Swiss Night»
(return by 24.00)

________________________________________

Day 3
Saturday June 5, 2010

09.00 - 09.45 Keynote Address 3 (Plenary session)
• Corporate Statesmanship and Common Good

09.45 - 10.00 Coffee-break

10.00 - 11.00 Workshop 3*
• Business and the political debate
• Multi stakeholders initiatives
• Partnering with NGOs and civil society

11.00 - 11.15 Coffee-break
11.15 - 11.30 Reporting back from workshop (Plenary session)

11.30 - 13.00 Roundtable 3 (Plenary session)
• Corporate Statesmanship and Common good: Common Good to serve the person

13.00 - 14.30 Lunch

14.30 - 15.15 Keynote Address 4 (Plenary session)
• Changing hearts and minds: the role of spirituality

15.15 - 15.45 Coffee break

15.45 - 17.15 Roundtable 4 (Plenary session)
Changing hearts and minds

17.15 - 17.45 Concluding Summary:
Towards a new corporate culture
by Prof. Henri-Claude de Bettignies - CEIBS

18.00 End of the Summit
Farewell cocktails



The Zermatt Summit Foundation has been declared a foundation of public interest at both a federal level in Switzerland and at the cantonal level in Valais.

The Board Members are:

• Christopher Wasserman, President
President, Terolab Surface Group
President, Ecophilos Foundation

• Nicolas Michel, Vice President
Professor of International Law at the
Geneva Graduate Institute of International
and Development Studies. Former Deputy
General Secretary for legal affairs of the UN

• H.I. and R.H. Archduke Rudolf of Austria,
of Hapsburg-Lorraine
Founder and Managing Director of Triple A
Gestion S.A.

• Father Nicolas Buttet
Founder and Moderator of the Eucharistein
Fraternity, Founder of Philanthropos
European Institute

• Jean-René Fournier
Member of the Federal States Council (Swiss
Parliament). Former President of the Valais
government

• Theodore Roosevelt Malloch
Chairman and CEO of The Roosevelt Group

• Antonin Pujos
Non-executive director, Adviser
Chairman of the Research Club of the French
Institute of Directors (IFA)

The Foundation's Advisory Board consists of:

• Henri-Claude de Bettignies (Chairman)
Distinguished Professor of Globally Responsible Leadership at the China Europe International Business School Shanghai (CEIBS) AVIVA Chair Emeritus Professor of Leadership and Responsibilty Emeritus Professor of Asian Business and Comparative Management at INSEAD Director of CEDRE (Centre for the Study of Development and Responsibility)

• Elizabeth Sombard
Founder and President Résonnance Foundation

• Philippe de Woot
Professor Emeritus of the Catholic University Louvain
Holder of a PhD in Law and Economic Sciences
Harvard Faculty Associate

• Guido Palazzo
Professor of Business Ethics at HEC University of Lausanne

• Jean Staune
Founder and General Secretary of the Interdisciplinary University of Paris. Professor in Philosophy of Sciences at the MBA of the Ecole des Hautes Etudes Commerciales (HEC) Director of the collection “The Time of Science” at Fayard Editions


Partner institutions of the Summit include, in no particular order:

Ecophilos (www.ecophilos.org)

Entreprise et Progres (www.entreprise-progres.net)

The China Europe International Business School (www.ceibs.edu)

The Yale Center for Faith and Culture (www.yale.edu/faith)

Oxford's Institute for Religion and Society in Asia (http://irsa.co.uk/index.php)

The Globally Responsible Leadership Initiative (www.grli.org)

Transforming Business, the University of Cambridge, UK (www.transformingbusiness.net)

BTW Transforming Business (TB) is co-ordinated by Dr Peter Heslam, Dr Flint McGlaughlin, Dr Rick Goossen, and John Kay and has the benefit of a number of distinguished patrons and advisers, some of whom are listed below.

TB addresses, not surprisingly, research questions that are close to the heart of the Zermatt Summit, such as:

How can the creative forces of free enterprise be effectively applied to the most pressing social, economic, and moral challenge of our time: the elimination of poverty?

How can we best instill and nurture vision, motivation, and values-led entrepreneurial aspirations, especially in young people?

What impact do relational, moral, and spiritual intelligence have on business solutions to poverty?

What is the connection between business success and institutional, spiritual, relational and moral values?

How can competition best foster creativity and innovation?


TB's Patrons and Advisers include:

Prof Helen Alford (Pontifical University, Rome)
Ben Andradi (Servista)
Prof Alan Barrell (Cambridge entrepreneur and academic)
Matthew Bishop (The Economist)
Prof Philip Booth (Institute of Economic Affairs)
Paul Chandler (Traidcraft)
Dr Stephen Copp (Bournemouth University)
Dr Catherine Cowley (Heythrop College, London University)
Prof John Dunning (Reading University)
Anthony Farr (Allan Gray Orbis Foundation)
Larry Farrell (Farrell International)
Prof Ram Gidoomal CBE (Syntel)
Dr Alan Gillespie (Ulster Bank)
Lord Brian Griffiths (Goldman Sachs)
Stephen Green (HSBC)
Dr David Hillson (Risk Doctor)
Dr Kurt Hoffman (Shell Foundation)
Prof Sir John Houghton (Victoria Institute)
Lord Geoffrey Howe (former Chancellor of the Exchequer)
Prof David Jackman (London Financial Academy)
Prof Peter Johnson (Durham University)
Prof Graeme Leach (Institute of Directors)
Prof Jack Mahoney (London University)
Clive Mather (Tearfund)
Dr David Miller (Yale)
Charles Miller Smith (Scottish Power)
Mark McAllister (Fairfield Energy)
Sir Mark Moody-Stuart (Anglo American)
Prof Geoff Moore (Durham Business School)
Sir Jeremy Morse (Lloyds)
Prof Michael Naughton (St Thomas University)
Prof Simon Peyton-Jones (Microsoft)
Dr Jennifer Roback Morse (Acton Institute)
Prof Theodore Roosevelt Malloch (Yale)
Dr Vinay Samuel (Institute for Development Research)
Lynne Sedgemore, CBE (Centre for Excellence in Leadership)
Prof Max Stackhouse (Princeton)
Sir Christopher Wates (Wates Group)
Sir John Whitmore (Performance Consulting)
Prof Paul Williams (DTZ and Regent College)
Prof John Wood, CBE (Imperial College, London University)
Prof Michael Woolcock (Harvard/World Bank)


ends Sphere: Related Content

A new credit card scam

On the Karmayog Yahoogroup, details have just been posted of aa new credit card scam

"This one is pretty slick since they provide YOU with all the information, except the one piece they want.

"Note, the callers do not ask for your card number; they already have it....

"One of our employees was called on Wednesday from 'VISA', and I was called on Thursday from 'Master Card'.

"The scam works like this:

Caller: 'This is (name), and I'm calling from the Security and Fraud Department at VISA. My Badge number is 12460. You r card has been flagged for an unusual purchase pattern, and I'm calling to verify. This would be on your VISA card which was issued by (name of bank). Did you purchase an Anti-Telemarketing Device for $497.99 from a Marketing company based in ... ?'

"When you say 'No', the caller continues with, 'Then we will be issuing a credit to your account. This is a company we have been watching and the charges range from $297 to $497, just under the $500 purchase pattern that flags most cards. Before your next statement, the credit will be sent to (gives you your address), is that correct?'

"You say 'yes'. The caller continues - 'I will be starting a Fraud investigation. If you have any questions, you should call the 1- 800 number listed on the back of your card (1-800 -VISA) and ask for Security.'

"You will need to refer to this Control Number. The caller then gives you a 6 digit number. 'Do you need me to read it again?'

"Here's the IMPORTANT part on how the scam works.

"The caller then says, 'I need to verify you are in possession of your card'. He'll ask you to 'turn your card over and look for some numbers'. There are 7 numbers; the first 4 are part of your card number, the next 3 are the security Numbers that verify you are the possessor of the card. These are the numbers you sometimes use to make Internet purchases to prove you have the card. The caller will ask you to read the 3 numbers to him. After you tell the caller the 3 numbers, he'll say, 'That is correct, I just needed to verify that the card has not been lost or stolen, and that you still have your card. Do you have any other questions?' After you say No, the caller then thanks you and states, 'Don't hesitate to call back if you do, and hangs up.

"You actually say very little, and they never ask for or tell you the Card number. But after we were called on Wednesday, we called back within 20 minutes to ask a question.. Are we glad we did! The *real* VISA Security Department told us it was a scam and in the last 15 minutes a new purchase of $497..99 was charged to our card.

Long story - short - we made a real fraud report and closed the VISA account. VISA is reissuing us a new number. What the scammers want is the 3-digit PIN number on the back of the card, don't give it to them. Instead, tell them you'll call VISA or Master card directly for verification of their conversation. The real VISA told us that they will never ask for anything on the card as they already know the information since they issued the card! If you give the scammers your 3 Digit PIN Number, you think you're receiving a credit. However, by the time you get your statement you'll see charges for purchases you didn't make, and by then it's almost too late and/or more difficult to actually file a fraud report.

What makes this more remarkable is that on Thursday, I got a call from a 'Jason Richardson of Master Card' with a word-for-word repeat of the VISA scam. This time I didn't let him finish. I hung up! We filed a police report, as instructed by VISA. The police said they are taking several of these reports daily! They also urged us to tell everybody we know that this Scam is happening. "
--
ends Sphere: Related Content

Facebook overtakes Google, so....?

At the start of 2008, the percentage of website traffic that resorted to Google was just under 6%, while the percentage of website traffic that resorted to Facebook was around 1%.

The interesting thing is that, as website traffic continued to explode, the percentage of the traffic that resorted to Google barely moved: perhaps it is something like 7% today. Meanwhile, Facebook continued to increase its market share, till it overtook Google a couple of weeks ago.

What possible explanations might be suggested for these facts?

1. More and more people are using the web as a quick and easy way to upload pictures and the like, than are using the web to look for information.

2. As the proportion of web users who use search engines to look for information declines, Google has been unsuccessful in keeping its lead over rival search engines such as Clusty. Sphere: Related Content

Economists on Financial Reform proposals

The National Association for Business Economics' latest semi-annual Economic Policy Survey of its members (mostly private-sector economists), conducted between February 4 and February 22 this year, has just been released:

* Fifty-four percent feel that creating such an agency would not impair safety and soundness regulation; 25 percent believe it would be detrimental

* Forty-three percent of respondents indicate that a consumer financial protection agency would not impair access to credit while 39 percent believe it would.

* Fifty-seven percent believe that barring depository institutions from proprietary
trading and hedge fund operations will reduce systemic risk to the financial sector; 34% believe that it will not

* Fifty-nine percent believe that imposing size restrictions on these companies would not be an effective means of addressing the Too-Big-To-Fail issue. It would have been most interesting if the survey had followed this up with a question to this 59%: what do they believe WOULD be an effective way of addressing the Too-Big-To-Fail issue? Sphere: Related Content

Non-Muslims in Pakistan

The Pakistani Embassy in at least one country is refusing to renew Passports for citizens who are not Muslims, asking them to convert to Islam before the Passport can be renewed.

This naturally makes it impossible for non-Muslim Pakistanis to remain abroad or to travel abroad.

I have not been in touch with any Pakistani official about this matter, as I do not know any Pakistani officials in the country concerned.

But if I was to get in touch, I would expect them to issue a routine denial, as that is not the image of "tolerant Islam" and "multicultural Pakistan" that Pakistan probably wishes to project.

However, experiences are experiences. I am retailing above the experience of someone I know personally.

To counter it persuasively (at least so far as I am concerned), Pakistani authorities would need to produce some facts rather than a mere denial.

What kinds of facts? Perhaps the figures regarding how many Passports of non-Muslims have in fact been renewed in the last year. Sphere: Related Content

March Madness

March Madness is a disease apparently specific to the USA, and specific further to the time-slot March 14 and March 19.

What happens in the USA during these dates? That's when activity surrounding the NCAA basketball tournament is at its height.

What is the NCAA? The National Collegiate Athletic Association.

So does that mean the Association affiliates only colleges? Yes.

Why does the whole nation suffer from "March Madness" because of a basketball championship in which only colleges can participate? That's a good question to ask Americans. I haven't yet received a satisfactory answer....

Is there any other country in the world where a similar "madness" grips an entire nation because some young people choose to leap up and down a marked court, throwing a round bit of leather filled with air? Well, truth to tell, I can't think of any.

So what symptoms does "march madness" display? Never having been in the USA during those months (I haven't actually visited the USA that often, and when I have it has, with one exception, always either for conferences or to give one or more lectures, so I don't speak from first-hand observation), I can only tell you that apparently nearly every worker participates in gambling on the results organised within the office; all the gossip focuses on the matches, teams and players; and everyone is obsessed with watching videos of the matches.

A company called Challenger, Gray & Christmas, Inc. (which describes itself as the USA's "first, oldest and premier outplacement consulting organization") has calculated the "business cost" of the Madness. By "business cost" it means all the salaries paid by employers but not used by employees for the purpose for which they are employed.

What is the "business cost" according to Challenger, Gray and Christmas? $1.8 billion.

That's an impressive figure.

In that calculation, I wonder if they factored in the BENEFITS to the businesses from the team-feeling that is built up by all the gossip, the joint-watching of matches and videos, and so on? Sphere: Related Content

Experiences in Los Angeles last week

If one has a rental car, check what time they allow you to return it, instead of simply assuming on the basis of logic that the relevant office will be open!

Our flight was at 0615 but the rental car office did not open till 0500...

Not only did we miss out on an hour of sleep that we could have had, we were panic-stricken at the possibility of missing the flight. Though the security guard at the office told us he'd been there 11 years and there had never been a problem, that was not much comfort to us as HE was not the person who would have heard about it if someone had missed a flight!

Still, we could not do anything about it

We did think that we'd drive to the Terminal, check in first and then return the car.

But we were defeated by the absence of road signs to the Terminal from the Car Rental Area - the road signs are otherwise plentiful and clear all across California!

So we consoled ourselves with a tea and pancakes at the Dennys nearby....where a helpful fellow-customer pointed the directions to a gas satation where we could fill up the car tank - the TomTom refused to show us any gas stations in that vicinity!

Having eventually returned the car, the shuttle got us efficiently to the Terminal, so we were quite shocked when the machine check-ins told us that it was too late to check in for the flight

the ladies at the baggage-drop counters indicated that we should check in further to our left, but as we rushed in that direction we could see nothing that looked like check in counters, so we asked the man just a bit further along who was checking paassports, but he just pointed us back in the direction of the machine terminals and seemed to have no idea of what we wanted or needed - his job was to check paassports and he knew about that but apparently not anything so exotic as passengers wanting to check in without using machine terminals

When we did find the check-in counters (further along from the man at Passport Control), the lady there was efficient and helpful and we were able to proceed without problems.... Sphere: Related Content

How bad is the recession in the USA?

At a diner in LA, a fellow customer mentions that he is a security guard but has been out of work for 8 months

Someone I meet somwhere in southern California last week says his parents house was woth 210K before the recession and is now worth maybe 90K

at one of my lectures, someone says that everyone in the US personally knows at least one person in financial difficulty because the have been laid off or have lost money in business: "It has never been so bad in living momory: Our parents used to tell us about conditions like this during the 30s, but we've never experienced anything like this till now" Sphere: Related Content

Ethics at banks and investment funds

Someone who has recently completed his PhD on a topic related with this broad field writes to me as follows:

"Though I was able to graduate, the story of my dissertation is largely the story of research that never took place.... I approached (more than two dozen) banks and investment funds with a proposal to do ethics related research, and was consistently turned down. In my dissertation defense, I compared myself to a fly trying to get through a glass windowpane, (but) the financial world remained forever on the other side."

The parentheses above are mine.

As far as I can work out, his research started at the height of the boom, and he persisted with his efforts to do the research till well after the bust.

Was the refusal of the banks and funds to co-operate with the research mere cussedness, or did the banks and funds know that they should not be letting any research get done on the ethics in their companies? Sphere: Related Content

the crash of the Euro - predicted 7 years ago - and now at hand?

The question - have consistently raised over all these years is: how long will the German taxpayer continue to pay for the Euro?

It looks as if the Germans are finally going to withdfraw the carpet from under the Euro

Expect initially a devaluation of the Euro, then of the PIGS currencies as well as of the Chinese

Expect all commodities (including gold) to decline substantially following the Chinese currency down, and loss of demand

At present, it is difficult to see where stability is to be found.

What comes to mind, as - have said rarlier, is the dollar, the Swiss Franc and perhaps the Indian Rupee (possibly also the British Pound - though the decline of the Euro may happen too fast to really benefit it). Sphere: Related Content

Dr Arun Gadre wins this year's Maanav Adhikaar Paaritaushik (Human Dignity Award)

NEWS RELEASE

The winner of this year's Maanav Adhikaar Paaritaushik (Human Dignity Award) of Rupees One Lakh in memory of Professor M. M. Guptara, is:
Dr Arun Gadre, of Pune, Maharashtra.

Arun Gadre is a doctor and a writer.

The citation reads:

"Dr Gadre worked for some 20 years in a rural part of Maharashtra as a gynaecologist: instead of working in a major city where he would have received a reasonable income and a comfortable quality of life, he chose rather to invest the best years of his life to helping rural women. As the only MD within a radius of 50 km, in a draught prone and poor area, with much more irregular electricity than in our cities, with scarcity of water, paucity of trained assistants, no blood transfusion facilities, and no one to assist, he conducted around 5500 deliveries as well as other major surgeries.

"In spite of his heavy duties in the challenging environment, Dr Gadre somehow found time to exercise his gift for writing, to produce in fact many different books. Two of them are due to be published soon, one on ante-natal care and one on HIV/ AIDS counselling. However, he has 14 books which are already published - three for semi-literate people on medical subjects, two medical textbooks, one on premarital counseling, one is a work of philosophy, one is autobiographical, and six are novels.

"Many of the books have won awards. His philosophical work, BHAVA PESHI, won the Shenolikar Puraskar for the best book of the year in philosophy from the Maharashtra Sahitya Parishad Pune, as well as the Marathwada Sahitya Mandal Puraskar. His novel, EK HOTA FENGADYA, won the Shankar Patil Puraskar for the best novel of the year, from the Maharashtra Sahitya Parishad, Pune. His novel GHATACHAKRA won the H. N. Apte Puraskar from Maharashtra State as well as the VS Khandekar Puraskar for the best novel of the year from the Maharashtra Sahitya Parishad Pune. His latest novel, VADHASTAMBH, won the Vikhe Patil Puraskar, as well as the Vaman Malhar Joshi Puraskar for the best novel of the year from Maharashtra Sahitya Parishad Pune. His latest book, a biography of the (now practically unknown) founder of modern India, William Carey, has just been published under the title: “Ase Hote William Carey” (Rajhans Prakashan, Pune).

"We probably have many people in our country who have put in decades of medical work in poverty-stricken, resource-poor and ill-connected rural areas, but there are hardly any who have combined that with outstanding literary work– and all of Dr. Gadre's works, whether philosophical, biographical, fictional or medical, provide evidence of a deep commitment to humane values which seem to be under threat in our world. We hope that the award will inspire many people to follow Dr Gadre's example of self-sacrice, and of the triumph of the human spirit over adverse circumstances, and that it will therefore inspire even more people to serve our rural areas with distinction".

Dr Gadre is the second winner of the Maanav Adhikaar Paaritaushik (Human Dignity Award). The first winner was Dr John Dayal, a Member of the Indian National Commission for Minorities.

Recognising that the award is only a token, the Guptara family deeply appreciates Dr. Gadre's lifetime of outstanding service to our country.

Dr Gadre is available for interview. Please email Professor Prabhu Guptara for contact details. Sphere: Related Content

Having seriously damaged its own economy, the UK ....

is now being encouraged to resist global initiatives to prevent continuing such damage, both in the UK and in other countries:

in a report published today, the European Union committee of the House of Lords (the upper chamber of the British Parliament) has urged the UK to withhold its consent to European Union rules regulating the hedge fund and private equity industries!

I hope that the House of Lords will have the good sense to reject such moves, which will only add to pressures that are steadily taking us towards increasing the likelihood of wars around the world, if globalisation continues to unravel. Sphere: Related Content

visit to Shanghai and Changxing

Shanghai: the temperature is only 7 degrees but does not feel too cold as there is hardly any breeze

We landed, were greeted, whisked through customs, and escorted to a small 11-seater bus, two side-by-side, with an aisle down the middle, each seat with a foldaway tables, except for the front seat which has a spacious fixed desk in front of it to signal the importance of the Leader

The smooth and swift drive to Chongxing takes about 2 hrs though we are fogged out throughout - maximum visibility about 400yds, but most of the time more like 150yds

Our translator is from another province, with the first foreign language French, but quite competent English

In the translator's generation there is the beginning of a move now away from the larger cities to smaller cities, on the basis of better quality of life in the smaller cities, but I wonder whether the rwality in China is not rather that everyone has to work equally hard in every part of the country

In any case, I am interested to learn that the translator orders clothes on the internet and gets them 2 or 3 days later; and that, according to the translator, one should be able to get delivery evem in the remotest parts of China in 4 days: the delivery cost is about 6 Yuan in this part of the world, and about 10 Yuan for the remotest parts

Apparently, two months ago a drunken driving rule was introduced throughout the country - penalty 2 weeks jail - but perhaps the rich may still find that money facilitates a way out?

On arriving in Chongxing, we are taken to a huge hotel of the sort that one might have in Delhi or Agra: it is almost empty

the Tea Tribute Tea House from the 8th century, restored to its former glory recently, has to be specially opened for our small delegation - the advantage of being official guests!

Why is everything so deserted? Partly because this is winter: most Chinese and most foreigners prefer Chongxing between Spring and Autumn. And yes, they do get plenty of national and foreign visitors apparently. The newly built Exhibition Cente is very appropriate both for its scale and for its technical wizardry in view of the purpose for which it is designed: impressing foreigners so as to attract investment as well as impressing the best-qualified Chinese so as to attract them here as workers. The descriptive plaques here are in Mandarin, though the Tea House has everything in English as well

I am interested that in the hotel's welcome fruit basked there is a rather outsize (from the Indian point of view) version of a wild fruit that we call "Baer" in Hindi; this Chinese version may be cultivated?

On the tour of the Exhibition Centre, there is more than one reference to a "golden spike" which, I discover, refers to "the only standard of global stratigraphic division and correlation in in chronostratigraphic research". It is not golden, and it is not a spike in the normal sense of that word....

Changxing is still a relatively sleepy little town becuase most of the land around was occupied by the army. For some reason the army appears to have relinquished this land and moved elsewhere, when leases were taken by unknown (to our colleagues) parties, who developed the land in cooperation with the government which built the school, hospital, administrative centre, roads and high-speed railway (the last to be completed end-2010). The privately-developed houses, buildings and flats are available for sale to private individuals or western companies (though land itself cannot be sold in most or all of China). How much of these developments in China have actually been sold or rented cannot be discovered so far with any degree of reliability.

This applies also to the highly-impressive area of Pudong in Shanghai, which continues to become even more impressive each year. Though rumour has it that the buildings here are sinking because the land is marshy, that rumour is also impossible to establish or refute. Perhaps, to play safe, anyone who is interested in seeing this modern wonder should haste here in case it becomes like Venice. We don't get much time to be tourists, but the Bund is certainly a most interesting viewing platform to look on to Pudong. However, we do have time to look at one of the more fashionable bars and one of the most impressive restaurants, and I can assure my readers that Shanghai is as "cosmopolitan" (or "decadent", depending on one's point of view) in terms of culture, design and lifestyle

The city bustles away, very much on the make, with a population that apparently tops 20 million. In spite of that, traffic moves impressively swiftly on all the new roads that have been built.

There seems to be some competition between Shanghai and Beijing, in the same way as there is between Oxford and Cambridge, or between New York and Washington DC: when the 2008 Olympics were held in Beijing, there was no reference to them in Shanghai; and there is no reference in Beijing to the 2010 World Expo being held in Shanghai!

We visit one university, which is most impressive for its size and facilities. The city as a whole appears to be doing its best to maintain green spaces inside the city (much better than the smaller Swiss towns seem to be doing on that matter!).

Fascinating mixture of architectural styles, from some (too few!) traditional buildings, through the lovely the French-style colony called the French Concession, and early 20th century buildings (e.g. the neoclassical HSBC Building and the art deco Sassoon House) to the more eccentric modern buildings.

Too short a visit, but it is always most interesting to return to a city that has grown and grown since the 90s, and seems to be continuing to grow apace inspite of the current crisis. Sphere: Related Content

President Obama's Proposals for a Second Fiscal Stimulus

President Obama's budget for 2010-2011 proposes a US$200 billion fiscal stimulus focused mainly on small businesses.

Does the proposal stand up to scrutiny?

Well, if one considers that it will put the American government (and therefore the American citizen) deeper in national debt, it is of course not a good idea.

However, the fact that such a "second stimulus" package has been proposed acknowledges that the first stimulus has not worked.

As I had predicted, it has placed a "floor" under the crisis so that there is not a complete collapse, but it has not and it cannot sort out the mess, let alone provide a substantial basis for growth; meanwhile, the propoganda machinery is in full swing trying to pretend that real growth is taking place in China - when that bubble is pricked, it will be terrible; but let us return to the topic of this post.

My reading of the situation is that the US Government now recognises that the effectiveness of the earlier stimulis package is coming (or will soon come) to an end, and that is why this second stimulus is needed.

The problem is that President Obama and the US Congress are focusing on the buzzwords "job creation" and trying to get the 2nd package through on that basis.

Job creation is of course very good in itself in nearly all circumstances, provided it is the creation of *real* jobs and not merely make-believe jobs.

The problem is that the 2nd stimulus package is unlikely to lead to the creation of even make-believe jobs.

What the 2nd stimulus package will do (assuming that the President can get at least this proposal successfully through the labyrinth of government) is that the package will provide at least some further minimal stabilisation for the economy, and particularly for that very important part of the economy (small- to mid-size companies) which have already suffered so hugely and will come under even more pressure before there is any chance of this current crisis passing.

So the package is at least some minimal good news for the economy and for the small business sector.

The package is, however, bad news for the small-business sector as a whole, bad news for the economy, and bad news for President Obama.

Why bad news for the sector as a whole? Because it is not enough to prevent the sector going down, and because it will therefore politicise the sector: if there is not enough money to go around, someone (read: someone in political power, and therefore a political appointee) will have to decide who gets the money and who does not, with consequences that are clear to see (politicisation of the small business sector)...

Why bad news for the econmy as a whole? Because increasing the public debt sizably while not really sorting out the crisis means that its net contribution to sorting out the crisis will be pretty close to zero.

And finally, why bad for President Obama? Because he is already being perceived as an "empty suit", having ducked the opportunity for genuine global leadership with the issue of climate change, and having failed with the issue of healtcare reform, he has now nailed his flag to the mast of job creation - which is precisely what will not be delivered by a mere 200 billion.

Of the 8 million jobs which have been lost during this recession in the US alone, President Obama would have to "bring back" if not all 8 million, then at least 4 million, or even 3 million to claim any reasonable degree of credit.

The $200bn in the 2nd stimulus package should certainly staunch the losses, so that the rate of loss does not get any worse. It may even improve that, so that the further losses will not be steeper. Will the package actually "recover" any of the jobs? Perhaps. I certainly hope so. Will the package recover 8 million jobs, or 6 million jobs, or 4 million jobs, or even 3 million jobs? I seriously doubt it.

Most small companies which get any financing as a result of the 2nd package are going to do exactly what the big companies have done as a result of the 1st package: in order not to run into bankruptcy, they are going to bolster their credit position and their ability to trade; adding jobs will be their last priority.

I seriously hope that I am totally wrong and the President Obama's will be able to add not merely 3 million jobs, or 4 million jobs, but 8 million jobs, or even more.

But if any of that happens, it will happen not because my (rather superficial) analysis above is wrong. It will happen not because the 2nd stimulus package has been up to the job. It will happen only because of a divine miracle.

As a follower of Jesus the Lord, I pray for a divine miracle, which is the only thing that can save that many jobs.

I pray for a divine miracle which is the only thing that can prevent the slow slide into much worse economic, social and political trouble (which I have written about elsewhere).

And I pray for a divine miracle which is the only thing that will save Obama's term as President from becoming wholly ineffective and at least partly tragic.

Is there anything short of divine miracles which will be good for job creation, good for the small business sector, good for the economy as a whole, and good for President Obama?

Yes, the creation and implementation of global standards in health and safety, pensions and environmental standards for industry and commerce. That will mean the creation of a genuinely level playing field at least in these matters.

A fully level playing field may be too much to hope for, because that would also involve imposing fiscal and monetary guiidelines for admitting countries to the WTO - and that may be too much to hope for. But if at least the minimum can be achieved, there is some hope.

Failing even that minimum, it does not matter how many "stimulus packages" are produced out of the thin air, the US will continue to lose investments and lose jobs - at present, primarily to China. Sphere: Related Content

Euro breakup chances

I am interested to see that Professor Nouriel Roubini has now joined the debate regarding whether the Euro might break up.

Someone who has been following my lectures, broadcasts and writings may perhaps care to inform him that I have been consistently pointing out over the years that the Euro is a historically unprecedented and untested currency. It has escaped testing till now because of the artificially-induced boom into which the Euro was born. Now it is starting to face its first real test.

No one sensible builds in an unsound way or on unsound foundation. The Euro is a child of the same kind of thinking that produced the boom of the last couple of decades.

Dr. Roubini points out that Greece is merely a "problem" for the eurozone, because it is a very small economy. But what is bigger than a mere "problem" is Spain, the Eurozone's fourth-largest economy, which has an unemployment rate just shy of 20%, and a domestic banking system much weaker than that of Greece. "The eurozone could drift essentially with a bifurcation, with a strong center and a weaker periphery and eventually some countries might exit the monetary union", he opines.

This is the most positive possible outlook. It ignores how the market would respond to even the smallest country exiting the Euro. Further, it ignores the fact that the Euro has basically been paid for by the German taxpayer, and that it remains to be seen how long the German taxpayer has the ability and willingness to continue to fund this Frankensteinian creation. Well, I am being ungenerous. In spite of its defects-at-birth, the Euro has played a very positive role (not least for German industry). The question is: are we now at the start of the historical time-frame of its demise. Sphere: Related Content