December 2012


IF YOU’VE ever suspected politics is increasingly being run in the interests of big business, I have news: Jeffrey Sachs, a highly respected economist from Columbia University, agrees with you – at least in respect of the United States.

In his book, The Price of Civilisation, he says the US economy is caught in a feedback loop. ”Corporate wealth translates into political power through campaign financing, corporate lobbying and the revolving door of jobs between government and industry; and political power translates into further wealth through tax cuts, deregulation and sweetheart contracts between government and industry. Wealth begets power, and power begets wealth,” he says.

Sachs says four key sectors of US business exemplify this feedback loop and the takeover of political power in America by the ”corporatocracy”.

First is the well-known military-industrial complex. ”As [President] Eisenhower famously warned in his farewell address in January 1961, the linkage of the military and private industry created a political power so pervasive that America has been condemned to militarisation, useless wars and fiscal waste on a scale of many tens of trillions of dollars since then,” he says.

Second is the Wall Street-Washington complex, which has steered the financial system towards control by a few politically powerful Wall Street firms, notably Goldman Sachs, JPMorgan Chase, Citigroup, Morgan Stanley and a handful of other financial firms.

These days, almost every US Treasury secretary – Republican or Democrat – comes from Wall Street and goes back there when his term ends. The close ties between Wall Street and Washington ”paved the way for the 2008 financial crisis and the mega-bailouts that followed, through reckless deregulation followed by an almost complete lack of oversight by government”.

Third is the Big Oil-transport-military complex, which has put the US on the trajectory of heavy oil-imports dependence and a deepening military trap in the Middle East, he says.

”Since the days of John D. Rockefeller and the Standard Oil Trust a century ago, Big Oil has loomed large in American politics and foreign policy. Big Oil teamed up with the automobile industry to steer America away from mass transit and towards gas-guzzling vehicles driving on a nationally financed highway system.”

Big Oil has consistently and successfully fought the intrusion of competition from non-oil energy sources, including nuclear, wind and solar power.

It has been at the side of the Pentagon in making sure that America defends the sea-lanes to the Persian Gulf, in effect ensuring a $US100 billion-plus annual subsidy for a fuel that is otherwise dangerous for national security, Sachs says.

”And Big Oil has played a notorious role in the fight to keep climate change off the US agenda. Exxon-Mobil, Koch Industries and others in the sector have underwritten a generation of anti-scientific propaganda to confuse the American people.”

Fourth is the healthcare industry, America’s largest industry, absorbing no less than 17 per cent of US gross domestic product.

”The key to understanding this sector is to note that the government partners with industry to reimburse costs with little systematic oversight and control,” Sachs says. ”Pharmaceutical firms set sky-high prices protected by patent rights; Medicare [for the aged] and Medicaid [for the poor] and private insurers reimburse doctors and hospitals on a cost-plus basis; and the American Medical Association restricts the supply of new doctors through the control of placements at medical schools.

”The result of this pseudo-market system is sky-high costs, large profits for the private healthcare sector, and no political will to reform.”

Now do you see why the industry put so much effort into persuading America’s punters that Obamacare was rank socialism? They didn’t succeed in blocking it, but the compromised program doesn’t do enough to stop the US being the last rich country in the world without universal healthcare.

It’s worth noting that, despite its front-running cost, America’s healthcare system doesn’t leave Americans with particularly good health – not as good as ours, for instance. This conundrum is easily explained: America has the highest-paid doctors.

Sachs says the main thing to remember about the corporatocracy is that it looks after its own. ”There is absolutely no economic crisis in corporate America.

”Consider the pulse of the corporate sector as opposed to the pulse of the employees working in it: corporate profits in 2010 were at an all-time high, chief executive salaries in 2010 rebounded strongly from the financial crisis, Wall Street compensation in 2010 was at an all-time high, several Wall Street firms paid civil penalties for financial abuses, but no senior banker faced any criminal charges, and there were no adverse regulatory measures that would lead to a loss of profits in finance, health care, military supplies and energy,” he says.

The 30-year achievement of the corporatocracy has been the creation of America’s rich and super-rich classes, he says. And we can now see their tools of trade.

”It began with globalisation, which pushed up capital income while pushing down wages. These changes were magnified by the tax cuts at the top, which left more take-home pay and the ability to accumulate greater wealth through higher net-of-tax returns to saving.”

Chief executives then helped themselves to their own slice of the corporate sector ownership through outlandish awards of stock options by friendly and often handpicked compensation committees, while the Securities and Exchange Commission looked the other way. It’s not all that hard to do when both political parties are standing in line to do your bidding, Sachs concludes.

Fortunately, things aren’t nearly so bad in Australia. But it will require vigilance to stop them sliding further in that direction

Sourced & published by Henry Sapiecha

AUSTRALIA is the most charitable nation on earth, a new study shows, with Greece being the meanest.

The Charities Aid Foundation World Giving Index ranked Australia first followed by Ireland, Canada, New Zealand and the US.

The pressure on the household budgets of Greeks was reflected in most of the 146 nations surveyed, with the aftershocks of the 2008 financial crisis reducing the amount of time and money people were willing to devote to charity. The survey showed 28 per cent of people gave money to charity last year compared with almost 30 per cent in 2007.

”In large parts of the world, household incomes are being squeezed, prices are rising and job insecurity is on the increase, with the result that many simply have less time and money to spare,” John Low, the chief executive of the group, said.
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In Greece, the share of people donating to charity fell to 5 per cent from 7 per cent in 2010.

Still, 3 per cent of Greeks volunteered time to charitable causes, unchanged from a year earlier, and 30 per cent said they had helped a stranger compared with 28 per cent.

About 165 million Indians, 143 million Americans and 126 Indonesians donated money, the survey showed.

Women donated more money than men last year around the world, although men were more likely to volunteer time and help a stranger, the charity said.

Gallup interviewed more than 155,000 people in 146 countries on behalf of the group, which provides financial services and social finance to charities

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Sourced & published by Henry Sapiecha



A substitute teacher in California is the likely heir to a trove of gold coins worth over USD$7 million uncovered by a cleaning crew in the home of a recently deceased relative.

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The National Post reports that Arlene Magdon is believed to be the sole remaining heir to the treasure amassed over many years by Walter Samaszko Jr., Magdon’s first cousin and a quiet recluse who passed away earlier this year at the age of 69.

Samaszko had resided in the Nevada capital of Carson City since the late 1960’s and led a quiet and frugal life. Records indicate he would withdraw only $500 a month from his stock accounts for the payment of modest costs.

Following Samaszko’s death genealogical researchers were unable to find any living family members in Carson City and were compelled to search further afield. Arlene Magdon is believed by them to be Samaszko’s last living heir.

A clean-up crew enlisted by Alan Glover, the Carson City Clerk-Recorder, following Samaszko’s death discovered a staggering trove of gold bullion in his garage. According to Glover the gold coins, many wrapped in foil and plastic cases, are numerous enough to fill two wheelbarrows.

A report filed by appraiser Howard Herz several weeks ago lists a total of 2,695 coins estimated to be worth over $7.4 million in total.

According to Herz Samaszko, far from being a reclusive crank, was in fact a canny bullion investor.

“What some individuals have called a hoard of gold is, in fact, a quite well-thought-out investment in gold,” wrote Herz in his report.

Sourced & published by Henry Sapiecha


The University of Johannesburg has successfully registered patents for a new device which is capable of identifying rocks that contain diamonds.

Business Day reports that the MineralPET machine employs techniques applied in nuclear medicine to determine whether diamonds are present within rock formations.

The machine makes use of gamma-rays to ascertain the structure of carbon matter within rocks, and can differentiate diamond from graphite, coal and other mineral types.
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The device was developed by the University of Johannesburg in collaboration with both the University of Witwatersrand and engineering firm Bateman Engineering. Project leaders say they are currently in the process of commercializing the new technology, which they believe will reduce the both cost and environmental impact of diamond mining.

Sourced & published by Henry Sapiecha