Economist Dean Bellows on the logic of the debt ceiling increase and possible default. Dean Bellows argues that the downgrade of the United States’ credit rating did not cause the recent losses on Wall Street: Time to beat up on really really bad news reporting. The stock market doesn’t tell people why it does what it does. We have commentators who bloviate on what they think caused the market to rise or fall, but they don’t really know and they could be completely wrong. That is why it was incredibly irresponsible for NPR to tell listeners in its top of the hour news segment that the market plunged because Standard and Poor’s downgrade of U.S. debt. NPR does not know this to be true and it certainly is not obviously the case. The market that should have been most immediately affected by the S&P downgrade was the U.S. bond market. However bond prices soared in the trading immediately following the downgrade and continued to rise through Wednesday. If there was greater fear that the U.S. would default because of the downgrade, then bond prices should have plunged as investors demanded a higher risk premium. This did not happen. The most obvious alternative explanation for the plunge in the market is the risk that the euro could break up as the debt crisis spread from relatively countries like Greece and Ireland, to the euro zone giants, Spain and Italy. The prospect of a euro zone break-up raises a real risk of a Lehman-type freeze up of the world financial system. It is far more plausible that this prospect led to the plunge in the stock market than the downgrade by one of three major credit rating agencies. Bellows and others, including Acting Assistant Secretary for Economic Policy John Bellows , have pointed out that the original rationale S&P used to argue for the downgrade was based on $2 trillion calculation error. When this error was pointed out to them BEFORE the downgrade was issued, S&P effectively ignored it. According to Bellows: The impact of this mistake was to dramatically overstate projected deficits—by $2 trillion over 10 years. As anybody who has followed the fiscal discussions knows, a change of this magnitude is very significant. Nonetheless, S&P did not believe a mistake of this magnitude was significant enough to warrant reconsidering their judgment, or even significant enough to warrant another day to carefully re-evaluate their analysis. S&P acknowledged this error – in private conversations with Treasury on Friday afternoon and then publicly early Saturday morning. In the interim, they chose to issue a downgrade of the US credit rating. Independent of this error, there is no justifiable rationale for downgrading the debt of the United States. There are millions of investors around the globe that trade Treasury securities. They assess our creditworthiness every minute of every day, and their collective judgment is that the U.S. has the means and political will to make good on its obligations. The magnitude of this mistake – and the haste with which S&P changed its principal rationale for action when presented with this error – raise fundamental questions about the credibility and integrity of S&P’s ratings action. When further confronted over the decision to make the downgrade, S&P representatives, talked about their decision being transparent , while hiding information about the decision: S&P won’t say who at the company made the decision to downgrade U.S. debt from its AAA rating to AA+, only that it was made by a panel of five to nine executives. But company president Deven Sharma defended S&P in a CNBC interview yesterday. Said Sharma: “Our role is to call the risks effectively and transparently, and that’s what we have done.” S&P’s response to a math error? Acknowledge it and then keep the bad decision based on the error. Their response to questions about that decision? Claim to be transparent while saying that the decision was made by an indeterminate number of anonymous people. Something smells fishy…
Continue reading …Filling in for host Martin Bashir during the 3 p.m. ET hour on MSNBC on Thursday, left-wing Washington Post writer Jonathan Capehart outrageously compared British Prime Minister David Cameron to deposed Egyptian dictator Hosni Mubarak for asking UK law enforcement to disrupt social media communication among criminals planning violent riots. Capehart ranted: If shutting down social networking, or even the internet, over fears that it's used to organize and possibly bring about civil unrest sounds familiar, it should… when things hit a boiling point in Egypt earlier this year, the entire internet was unplugged for fear that people were using it as a tool to bring about the revolution they so badly desired. And how did that attempt at censorship work out, Prime Minister? Not so well. [Special thanks to MRC intern Alex Fitzsimmons for providing video of the segment after the break]
Continue reading …Pfizer pays compensation to families of four children after 15-year legal battle over controversial drug trial in state of Kano The parents of four Nigerian children who died of meningitis have become the first winners of a 15-year legal battle against Pfizer over a fiercely controversial drug trial. The world’s biggest research-based pharmaceutical company announced on Thursday that it had made payments of $175,000 (£108,000) to each family. More such compensation settlements are expected to follow. Pfizer was sued after 11 children died in a clinical trial when the northern state of Kano was hit by Africa’s worst ever meningitis epidemic in 1996. A hundred children were given an experimental oral antibiotic called Trovan, while a further hundred received ceftriaxone, the “gold-standard” treatment of modern medicine. Five children died on Trovan and six on ceftriaxone. But later it was claimed that Pfizer did not have proper consent from parents to use an experimental drug on their children and questions were raised over the documentation of the trial. Legal action filed against the company alleged that some received a dose lower than recommended, leaving many children with brain damage, paralysis or slurred speech. US-based Pfizer had argued that meningitis and not its antibiotic had led to the deaths of 11 children and harm to dozens of others. But in 2009 it reached a tentative out-of-court settlement with the Kano state government worth $75m. The families of four of the children each collected cheques for $175,000 from a compensation trust fund, after submitting DNA samples to show that the dead were their offspring. The compensation was the first given out by the Healthcare/Meningitis Trust Fund. The decision over who is compensated and for how much is being managed by an independent board of trustees in Kano, not by the government or Pfizer, the company has said. “We are pleased that these four individuals, the first group of qualified claimants of the Healthcare/Meningitis Trust Fund, have received compensation,” said a spokesman. “This is the first step in a multiphase review process by which the independent board of trustees that manages the funds will deliver payments to all other claimants. “We thank them for their commitment and dedication to seeing this process through in the most timely and transparent way possible.” But one parent who lost a daughter said the process was still dogged by local factionalism and he had no idea when he would receive money. “I talked to my attorney this week,” said the man, who did not wish to be named for legal reasons. “They are still in contact with Pfizer as to when I will get paid. We are just crossing our fingers.” He added: “We are fed up with this case. Our children are dead and some are maimed. We want to end this matter now, but some people are being opportunist for riches.” Pfizer said in February it had settled all outstanding lawsuits involving accusations that it tested the experimental antibiotic Trovan on children. The pharmaceutical giant also agreed to sponsor health projects in Kano as well as creating a fund of $35m to compensate those affected. But last year a US diplomatic cable uncovered by WikiLeaks revealed that Pfizer hired investigators to look for evidence of corruption against the Nigerian attorney general in an effort to persuade him to drop the legal action. The cable reported a meeting between Pfizer’s country manager, Enrico Liggeri, and US officials at the Abuja embassy on 9 April 2009. It stated: “According to Liggeri, Pfizer had hired investigators to uncover corruption links to federal attorney general Michael Aondoakaa to expose him and put pressure on him to drop the federal cases. He said Pfizer’s investigators were passing this information to local media.” There is no suggestion that the attorney general was swayed by the pressure. Pfizer had planned to sell Trovan in the US and Europe after the trials on African children. However, its licence was withdrawn in Europe because of concern over liver toxicity. Nigeria Africa Pfizer Pharmaceuticals industry David Smith guardian.co.uk
Continue reading …Cameron’s insistence that cuts will go ahead amid top officers’ fury over criticism set him on collision course with police David Cameron is on a collision course with the police after the government used an emergency Commons debate on the English riots to issue a point-by-point dissection of the police’s “insufficient” tactics during the week. The prime minister praised the bravery of the police but said they had made a major miscalculation when violence first erupted in Tottenham on Saturday night after a demonstration over the shooting of Mark Duggan. Cameron said: “Police chiefs have been frank with me about why this happened. Initially the police treated the situation too much as a public order issue – rather than essentially one of crime. The truth is that the police have been facing a new and unique challenge with different people doing the same thing – basically looting – in different places all at the same time.” But a few hours later the home secretary, who opened the lengthy Commons debate on the riots on Thursday, warned that the failure of the police to contain violence in the early part of the week jeopardised a core British tradition. “Policing by consent is the British way,” Theresa May told MPs. “But the police only retain the confidence of the wider community if they are seen to take clear and robust action in the face of open criminality. On Monday night it was clear that simply there were not enough officers on duty.” May identified a series of mistakes. These included failing to put enough officers on the streets of London until Tuesday night, leading to the police losing control of some areas; appearing reluctant to be “sufficiently robust” in breaking up groups; containing suspects in a “specified area”, rather than arresting them, thereby allowing them to commit criminal damage and steal; failing to do enough to harness and share intelligence gleaned from social networking services such as BlackBerry Messenger. The government also refused to reconsider plans to cut £2bn from police funding over the next four years – despite calls from Boris Johnson, the Police Federation and Labour. Senior police officers quickly made clear their anger with ministers. “David Cameron blamed the police for not having a crystal ball and not anticipating the most serious set of circumstances ever seen,” one senior police source said. “The confidence of the police leadership in the government is at an all-time low. Cameron dumps on the police when it suits him, to deflect blame from himself.” The Met defended itself in response to the criticisms. Deputy assistant commissioner Steven Kavanagh said in response to criticisms of the policing on Monday night: “It certainly stretched us. It is clear we did not have the numbers on duty to deal with that despite having mobilised the same number of officers as the total staff of West Midlands police. Our officers did the very best that they could, they did it bravely and they put themselves in danger to do what they could for the safety of London. They showed discipline and professionalism, which should never be seen as a sign of weakness.” The tensions flared after Cameron delighted the Tory right with a series of hardline measures to avoid a repeat of the “most appalling scenes” in English cities: • Police will be given discretion to remove face masks from people on the street “under any circumstances where there is reasonable suspicion that they are related to criminal activity”. • No “phoney human rights concerns” about publishing CCTV images of suspects involved in rioting would be allowed to “get in the way of bringing these criminals to justice”. • Rioters could face eviction from social housing as rules on benefits are tightened. At the moment tenants can be evicted if they riot in their locality. This will be widened to include other areas. • The government would work with the police, the intelligence services and industry to look at whether it would be possible to stop people communicating via social websites to plan disorder, violence or criminality. • Police should be allowed to examine “all available technologies”, the prime minister said after the Tory MP Andrea Leadson asked for rioters to be sprayed with indelible chemical dye. • May will work with Iain Duncan Smith, the work and pensions secretary, to produce a cross-government action programme on gangs. This would be a “national priority”. May would report to parliament in October amid evidence that gangs co-ordinated some of the attacks on the police and some of the looting. • The army could be used for guarding duties if there were a repeat of such widespread riots in order to free up police to deal with violence. • Any homeowner or business person whose property was damaged could seek compensation under the Riot Damages Act even if they were uninsured. The home secretary said: “I know that [MPs], like members of the public, are concerned about the speed and quality of the police response. That response has changed over the course of the last five days and has been different in different parts of the country. We need to appraise it honestly, bluntly and learn the lessons where things have gone wrong.” The country’s most senior police officers were furious at the criticism of their operational tactics on the ground. As well as May’s comments about the Met, it is understood Cameron made open criticism of Greater Manchester police during a Cobra meetingon Thursday, suggesting their decision to withdraw officers who were faced with 1000-strong gangs in Salford on Monday needed to be examined to see if lessons could be learned. Chief Constable Peter Fahy had already made clear publicly that the rioters in Salford were very different to those elsewhere in the city or the rest of the country, as they were largely made up of organised crime gangs seeking payback after major operations against them by the police and that his officers withdrew in order to regroup and tackle the gang again. But senior officers have been surprised also by May seemingly offering them support – commenting on the police’s bravery and commitment in private and in public. Some sources see this as more positive than what they say is Cameron’s “political posturing.” Paul McKeever, president of the Police Federation, said Cameron’s stance on police cuts was indefensible. “He is like a scientist who has a pet theory which has been completely debunked by exposure to reality. But he refuses to face that. The 16000 officers who have been on the streets in London are the number he wants to cut – that is the reality.” But Cameron was adamant that the cuts, which he said would amount to 6% in cash terms, would go ahead. Introducing efficiencies would ensure no fall in the number of frontline officers. He said: “Over the next four years we are looking for cash reductions in policing budgets. Once you take into account the fact there is a precept, that helps fund the police, [the actual cash reduction of 6% over the next four years] is totally achievable without any reductions in visible policing. A growing number of police chiefs are making that point. “Today we still have 7,000 trained police officers in back office jobs. Part of our programme of police reform is about freeing up police for frontline duties. That is why I can make this very clear pledge to the house. At the end of this process of making sure our police budgets are affordable we will still be able to surge as many police on to the streets as we have in recent days in London, in Wolverhampton, in Manchester. I do think it is important people understand that.” Nick Clegg endorsed the prime minister’s stance on police cuts. But there were signs of tensions within the coalition as Liberal Democrat sources indicated they felt uncomfortable with the prime minister’s decision to revive his pre-election theme of “broken society”. The Lib Dems are also uncomfortable about plans to introduce elected police commissioners, though they recognise this is in the coalition agreement. Yvette Cooper, the shadow home secretary, accused ministers of unsettling the police by declining to say whether the extra police costs over the last week would be funded from the reserve or from existing police budgets. It is understood that the costs will be funded from the reserve, though the Treasury and Home Office are squabbling which of their reserves will be hit hardest. UK riots Conservatives Liberal-Conservative coalition Police Nicholas Watt Sandra Laville Vikram Dodd guardian.co.uk
Continue reading …First, to be fair to Associated Press reporter Christopher Sherman, because there is no equivalent reference in the 3:34 p.m. version of his report on Rick Perry's immigration positions, the headline which will follow the jump does not appear to be of his doing. But whoever at the wire service decided on the headline to use at Sherman's piece definitely has a problem with anyone who questions the need for amnesty, is against the granting of in-state tuition for illegal-immigant college students, or supports robust border enforcement: One supposes that cooler heads might prevail at the AP in due course. But in the meantime, a Google News search on the exact headline in quotes done shortly after 4 PM ET indicates that it has already appeared in 102 places. Here are several paragraphs from Sherman's report : For all of his rock-solid conservative credentials, Texas Gov. Rick Perry may have an Achilles' heel: immigration. If Perry runs for president, as is widely expected, he will undoubtedly focus on Texas' relatively healthy economy and its low taxes and his record in creating jobs in the 11 years he's been governor. What he may have to explain on the stump is how illegal immigrants have contributed to that success, adding as much as $17.7 billion a year to the state gross product and enjoying such benefits as in-state tuition at public universities. … “Gov. Perry is very eager to appear tough on illegal immigration, but upon closer inspection he's part of the problem,” complained William Gheen, who runs the North Carolina-based political action committee Americans for Legal Immigration. The group intends to educate conservative groups about candidates' positions on that issue. … Texas remains welcoming to immigrants in ways some other states are not. Illegal immigrants can get in-state tuition at Texas universities. Neither employers nor state agencies are required to run job applicants through a federal database to determine their legal status. Illegal immigrants have access to services for drug treatment, mental health and children with special health care needs. The fact is, despite the pronouncements from Democrats in Washington, illegal immigration is deeply opposed by at least a significant pluralities of Democrats and moderates as well as a majority of conservatives. One small example which shows majorities across the board comes from from May of last year : A strong majority of Americans support Arizona's controversial new immigration law and would back similar laws in their own states, a new McClatchy-Ipsos poll found. Sixty-one percent of Americans — and 64 percent of registered voters — said they favored the law in a survey of 1,016 adults conducted May 6-9. Strikingly, nearly half of Democrats like the law, under which local law enforcement officers are tasked with verifying people's immigration status if they suspect them of being in the country illegally. While the Democratic Party generally is regarded as more sympathetic to illegal immigrants' plights, 46 percent of Democrats said they favored the law for Arizona and 49 percent said they'd favor the law's passage in their own states. More than 8 in 10 Republicans and 54 percent of independents favor the law. Given that so-called “comprehensive immigration reform” aka amnesty was rejected by the Senate in 2007 after a wave of public pressure, maybe the AP's headline writer delusionally believes that the World's Greatest Deliberative Body is also dominated by the far right. Zheesh. I wonder how many times the term “far left” has ever appeared in an Associated Press headline, at least in the past decade? Cross-posted at BizzyBlog.com .
Continue reading …Stephen Colbert’s Super PAC is no joke. It’s just made its first endorsement in the 2012 presidential race. The comedian has kicked off his satirical presidential campaign season with an ad from his “Americans for a Better Tomorrow, Tomorrow” Super PAC (which has official approval from the Federal Election Commission, by the way). Colbert’s launched
Continue reading …The Energy Department-appointed task force also recommends that drillers disclose the mix of chemicals they’re injecting into the shale to free up gas. In fact, it’s a laundry list of recommendations for voluntary compliance, and since the task force was dominated by the very industry it’s examining, it’s very unlikely to any regulations or legislation will come out of this. Well, we all know how well regulatory capture worked in the Japanese nuclear power industry, so why wouldn’t it work for this? Natural-gas companies risk causing serious environmental damage from hydraulic fracturing unless they commit to the best engineering practices , a task force named by Energy Secretary Steven Chu concluded. Regulations to protect public health will work best when drillers embrace techniques that avoid “undesirable consequences,” according to a draft report today by a subcommittee of the Secretary of Energy Advisory Board. The increased use of fracturing, or fracking, which forces water and chemicals into rock, raises the potential for a “serious problem,” the panel found. The report offered recommendations for companies such as Chesapeake Energy Inc. and Southwestern Energy Co. (SWN) to follow, and guidelines for state regulators that oversee drilling. “While many states and several federal agencies regulate aspects of these operations, the efficacy of the regulations is far from clear,” according to the report. “Effective action requires both strong regulation and a shale-gas industry in which all participating companies are committed to continuous improvement.” The Washington-based Environmental Working Group, which advocates for clean air and water, questioned the findings of a panel it said was dominated by the gas industry. To resolve the concerns, the panel recommended creating an industry organization “dedicated to continuous improvement” of practices, such as measuring and reporting air pollution, minimizing water use and improving well casing and cementing. The subcommittee urged reducing emissions of ozone precursors and called for a national database at a start-up cost of $20 million to link sources of public information on fracking. Yes, because industry organizations have done such a bang-up job to date in protecting the public in virtually every market. Oh wait, I think I was still dreaming…
Continue reading …The Dadaab camps in Kenya, where the people interviewed for this project reside, is home to more than 400,000 refugees, making it, in effect, Kenya’s third biggest “city” Christine Oliver Simon Jeffery Xan Rice
Continue reading …Mass protests expected in response to regime’s sustained crackdown as 10 people die in raids on Qusayr and Deir Ezzor Pro-democracy protesters in Syria pledged defiance on Thursday as security forces killed at least 10 more people in raids and repression continued, despite widespread international condemnation. Mass demonstrations are expected across the country on Friday – being called a day of “not kneeling” by organisers. The Facebook group The Syrian Revolution 2011 said in a defiant message on the internet: “We only kneel before God.” Seven died after tanks entered Qusayr, near the border with Lebanon, and three others in Deir Ezzor in eastern Syria – both incidents reported by the London-based Syrian Observatory for Human Rights. Tanks and troop carriers were also seen moving into the town of Saraqeb in northwestern Idlib province bordering Turkey, it said. Activists used Twitter to describe a mass rally in Idlib, with calls for the overthrow of the Assad regime. There was no sign of a let-up in a security crackdown that started on the eve of Ramadan 11 days ago. The opposition Local Co-ordination Committees said it had counted 257 dead since then – one person killed every 50 minutes. The US has estimated that 2,000 people have been killed since the uprising began in March. Syrian state media sought to convey a very different impression, showing pictures of troops leaving Hama after “restoring order” in the third largest city. On Wednesday, security forces reportedly shot dead 18 people in the Baba Amro area of nearby Homs, where heavy machine gun fire was heard on Thursday. A video posted on YouTube , an important means of communication for the Syrian opposition, showed four local men lying dead or badly injured on a street. Others showed a man said to have been run over by a tank and two men with horrific injuries. Residents reported all communications with the city had been severed. In Qusayr, security forces and Shabiha militiamen were described as looting and destroying shops while mosques were closed and calls for prayer banned. The latest attacks came a week after the UN security council called for an “immediate” halt to the Syrian violence. The council was told in a briefing on Wednesday that there had been no decrease in the deaths of protesters. Diplomats from western countries warned that the council would have to consider “further action” if events did not improve. The US is poised to demand explicitly and unconditionally that President Bashar al-Assad leave power. US secretary of state, Hillary Clinton, and UN envoy Susan Rice have said that Assad has lost his legitimacy to rule, but Washington has so far resisted issuing a direct call for him to step down. US and British diplomats were looking at detailed reports of Wednesday’s talks in Damascus between Assad and the Turkish foreign minister, Ahmet Davotoglu, which lasted for nearly seven hours and covered many “substantive points” including the demand that Syrian security forces be withdrawn from cities. Ignoring international outrage, the Syrian leader has pledged a relentless battle against “terrorist groups” he says are fomenting a popular uprising. On Wednesday, Assad reportedly admitted that his security forces had made “some mistakes” in battling protests, during talks with the deputy foreign ministers of Brazil, India and South Africa, which have all opposed tougher UN action against Syria. Syria Middle East Protest Arab and Middle East unrest Bashar Al-Assad Ian Black guardian.co.uk
Continue reading …Mass protests expected in response to regime’s sustained crackdown as 10 people die in raids on Qusayr and Deir Ezzor Pro-democracy protesters in Syria pledged defiance on Thursday as security forces killed at least 10 more people in raids and repression continued, despite widespread international condemnation. Mass demonstrations are expected across the country on Friday – being called a day of “not kneeling” by organisers. The Facebook group The Syrian Revolution 2011 said in a defiant message on the internet: “We only kneel before God.” Seven died after tanks entered Qusayr, near the border with Lebanon, and three others in Deir Ezzor in eastern Syria – both incidents reported by the London-based Syrian Observatory for Human Rights. Tanks and troop carriers were also seen moving into the town of Saraqeb in northwestern Idlib province bordering Turkey, it said. Activists used Twitter to describe a mass rally in Idlib, with calls for the overthrow of the Assad regime. There was no sign of a let-up in a security crackdown that started on the eve of Ramadan 11 days ago. The opposition Local Co-ordination Committees said it had counted 257 dead since then – one person killed every 50 minutes. The US has estimated that 2,000 people have been killed since the uprising began in March. Syrian state media sought to convey a very different impression, showing pictures of troops leaving Hama after “restoring order” in the third largest city. On Wednesday, security forces reportedly shot dead 18 people in the Baba Amro area of nearby Homs, where heavy machine gun fire was heard on Thursday. A video posted on YouTube , an important means of communication for the Syrian opposition, showed four local men lying dead or badly injured on a street. Others showed a man said to have been run over by a tank and two men with horrific injuries. Residents reported all communications with the city had been severed. In Qusayr, security forces and Shabiha militiamen were described as looting and destroying shops while mosques were closed and calls for prayer banned. The latest attacks came a week after the UN security council called for an “immediate” halt to the Syrian violence. The council was told in a briefing on Wednesday that there had been no decrease in the deaths of protesters. Diplomats from western countries warned that the council would have to consider “further action” if events did not improve. The US is poised to demand explicitly and unconditionally that President Bashar al-Assad leave power. US secretary of state, Hillary Clinton, and UN envoy Susan Rice have said that Assad has lost his legitimacy to rule, but Washington has so far resisted issuing a direct call for him to step down. US and British diplomats were looking at detailed reports of Wednesday’s talks in Damascus between Assad and the Turkish foreign minister, Ahmet Davotoglu, which lasted for nearly seven hours and covered many “substantive points” including the demand that Syrian security forces be withdrawn from cities. Ignoring international outrage, the Syrian leader has pledged a relentless battle against “terrorist groups” he says are fomenting a popular uprising. On Wednesday, Assad reportedly admitted that his security forces had made “some mistakes” in battling protests, during talks with the deputy foreign ministers of Brazil, India and South Africa, which have all opposed tougher UN action against Syria. Syria Middle East Protest Arab and Middle East unrest Bashar Al-Assad Ian Black guardian.co.uk
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