When Bolivian President Evo Morales announced plans to nationalize his country's oil and natural gas resources in early May, he did more than lay out a promising path for development. He also provided an ideal opportunity to illustrate how large segments of the U.S. and British press have adopted roles as watchdogs for corporate globalization. Since Bolivia's energy exports go to Brazil and Argentina rather than the United States, and since the nationalization is unlikely to significantly alter the price of natural gas on international markets, the direct impact on our country is minimal. Yet in the weeks since Morales took action, we have been treated to a wealth of hysterical commentary.
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New York's Newsday also worked up a rabid editorial assault. There, columnist James Pinkerton derided Bolivia as “a country that is nationalizing, or, if you prefer, stealing, foreign-owned assets.” The paper's editorial page then grouped Bolivia with Cuba and Venezuela in an “Axis of Idiocy” and asserted that “nationalization of major industries has proved to be a road to economic ruin in an era of globalization.”
Given that little nationalization of major industries has occurred in this era of globalization, Newsday left readers wondering about how this idea has been “proven”—at least to anyone who wants evidence instead of just blind market ideology. Nor did the paper give any indication why an increasing number of Latin American countries are inviting sure “failure” by bucking the policies of neoliberal globalization. For its part, the Los Angeles Times gave some insight by remarking, “It's true that [Bolivia's] resources have long been exploited by foreigners with little benefit to the indigenous population.” But it nevertheless contended that “sending in the army to take over the gas fields isn't the answer to Bolivia's problems.”
What the alarmist viewpoints lack most is context. In predicting economic disaster for a re-nationalized Bolivian energy sector, the editorials turn a blind eye to the two-decade disaster known as neoliberalism. In the 1980s Bolivia was on the cutting edge of the trend toward privatization, adhering to an International Monetary Fund (IMF)-recommended structural adjustment program. The pro-corporate reforms proved profitable for the multinational energy companies involved, but they utterly failed to benefit the Bolivian people. Today 64% of the population lives in poverty, with a majority of people scraping by on less than $2 per day. A March 2006 report by the Center for Economic and Policy Research shows that, according to the IMF's own data, real per-capita gross domestic product (GDP) in Bolivia is lower now than it was 27 years ago.
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For all their professed concern about democratic reform, this is a point that the critics consistently miss. Morales was elected in a landslide on a platform vowing nationalization. That he actually kept a campaign promise may seem bizarre to the watchdogs of corporate globalization, but it's something that should be lauded. With their commentaries filled with alarm, too few papers took note of a remarkable development: This time, when democracy and neoliberal economics collided, democracy won.
Administration and litigation costs in our system are indeed very high, but the vast majority of the claims in the study were properly decided: the patients who suffered injury due to medical errors were compensated and those who weren't, weren't.
About 150 [out of about 1500] of the cases involved patients who received compensation even though there was apparently no medical error.
236 of the cases involved patients who received no compensation even though they suffered injury due to medical error.
U.S. hospitals could certainly do with a little global competition. For years, their share of the national heath-care bill has grown at a rate far faster than inflation, and today they gobble up a third of all medical expenditures. At current rates, the U.S. will be spending $1 of every $5 of its GDP on health care by 2015, yet more than 1 in 4 workers will be uninsured. The ingrained inefficiency of most hospitals doesn't help. "A lot of them still don't know how to schedule their operating rooms efficiently," says Reinhardt. "They've never had to. They always get paid, no matter how sloppy they are."
"This has the potential of doing to the U.S. health-care system what the Japanese auto industry did to American carmakers," says Reinhardt.
The Home Depot board has awarded him $245 million in his five years there. Yet during that time, the company's stock has slid 12 percent while shares of its archrival, Lowe's, have climbed 173 percent.
Why would a company award a chief executive that much money at a time when the company's shareholders are arguably faring far less well? Some of the former Home Depot managers think they know the reason, and compensation experts and shareholder advocates agree: the clubbiness of the six-member committee of the company's board that recommends Mr. Nardelli's pay.
Two of those members have ties to Mr. Nardelli's former employer, General Electric. One used Mr. Nardelli's lawyer in negotiating his own salary. And three either sat on other boards with Home Depot's influential lead director, Kenneth G. Langone, or were former executives at companies with significant business relationships with Mr. Langone.
In addition, five of the six members of the compensation committee are active or former chief executives, including one whose compensation dwarfs Mr. Nardelli's. Governance experts say people who are or have been in the top job have a harder time saying no to the salary demands of fellow chief executives. Moreover, chief executives indirectly benefit from one another's pay increases because compensation packages are often based on surveys detailing what their peers are earning.
To its critics, the panel exemplifies the close personal and professional ties among board members and executives at many companies — ties that can make it harder for a board to restrain executive pay. They say this can occur even though all of a board's compensation committee members technically meet the legal definition of independent, as is the case at Home Depot.
The Administration has opposed legislation supported by the United Mine Workers and Democrats in Congress that would require stronger standards on oxygen availability for mine emergencies, mine rescue teams, communications and tracking devices; require immediate notification of accidents and rapid emergency response; set mandatory minimum penalties for egregious and repeated violations; and prohibit the use of dangerous conveyor belts to ventilate work areas.
[...]
The Administration's ties with the mining industry are catalogued in a report issued in January by Democratic Representative George Miller, the leading mine-safety advocate in Congress. According to the report, the Administration has brought in mining industry insiders to stack the Mine Safety and Health Administration (MSHA), which oversees the nation's coal mines, and the Federal Mine Safety and Health Review Commission (FMSHRC), which settles disputes involving the Federal Mine Act.
[...]
Since taking office, according to the Miller report, Bush has proposed cuts (in real terms) in the MSHA budget each year. Between 2001 and 2005 the MSHA staff was reduced from 2,357 to 2,187, with the bulk of the cuts occurring in coal mine safety enforcement staff. The Administration has also dramatically reduced the number and size of fines, as well as the number of criminal prosecutions and convictions, compared with the Clinton era. Bush's appointees have weakened regulations requiring ventilation in coal mines, proposed rules that would allow mine operators to increase coal dust in the mines and delayed implementation of a Clinton-era rule improving air quality standards.
Moreover, in response to industry complaints, the Administration has demoted and transferred MSHA staff who have aggressively sought to enforce safety rules and blown the whistle on policies that jeopardize mine safety. In one example of blatant pro-industry bias, the Administration interfered with MSHA investigations of a coal sludge spill at a mine owned by a Massey Energy subsidiary that dumped 300 million gallons of toxic waste into Kentucky and West Virginia waterways.
The Montana-based Foundation for Research on Economics and the Environment (FREE) and George Mason University's Law & Economics Center previously said corporate money does not pay for the judges' seminars or declined to disclose their donors.
But documents released by the Community Rights Counsel, a nonprofit Washington law firm, show that corporations including Exxon Mobil, Philip Morris and R.J. Reynolds Tobacco have contributed tens of thousands of dollars toward these programs. The new information comes as judicial trips are receiving increased scrutiny on Capitol Hill, where bills would either outlaw such trips or create an inspector general for the judicial branch.
Opponents of these seminars -- often held at pleasant places with plenty of time to do pleasant things, such as play golf and ride horses -- is a way to lobby powerful judges who often decide cases that change industries and roil markets. The groups generally pay for judges' travel, lodging, food and tuition expenses, and together have funded 1,158 trips for 349 federal judges between 1992 and 2004, according to the Community Rights Counsel.
"How does it look? It doesn't look good," said Pete Geddes, FREE's executive vice president. But he said that despite what the Exxon Mobil documents say, corporate money does not go to reimburse federal judges who attend the seminars, which provide a free-market perspective in solving the nation's environmental problems.
Corporate money, he said, is used for rent, salaries and overhead, not for reimbursing judges for their expenses. He acknowledged that that might be a distinction that makes little difference. "We try to do the best we can," he said. "Everyone understands money is fungible."
McGovern needs a lesson from Alexander Hamilton, with some help from John Quincy Adams to Eugene Debs to Amartya Sen. What each of these seemingly disparate-minded people had in common was they knew how to grow a just and equitably based nation and how to sustain such a nation. McGovern should crawl back under whatever rock he was under.
As the federal minimum wage falls further and further behind the cost of living, more states are raising their state minimums above $5.15. Counting Arkansas, Michigan and West Virginia, 21 states and the District of Columbia now have or will soon have higher minimum wages. Six states and the District of Columbia currently have a minimum wage at or above $7, led by Washington at $7.63, Oregon at $7.50 and Connecticut at $7.40.
Contrary to myth, raising the minimum wage helps business and boosts the economy. As Dan Gardner, commissioner of Oregon's Bureau of Labor and Industries, puts it: "Overall most low-wage workers pump every dollar of their paychecks directly into the local economy by spending their money in their neighborhood stores, local pharmacies, and corner markets. When the minimum wage increases, local economies benefit from the increased purchasing power."
Studies by the Fiscal Policy Institute and others show that states with minimum wages above the federal level have had better employment trends, including faster small business and retail job growth. A new report by the Center for American Progress and Policy Matters Ohio shows that the number of small businesses grew more in states with higher minimum wages and jobs in small retail businesses grew three times faster in higher wage states.
Let's be clear, if Tom DeLay needed to go, so does Jefferson...
Putting aside the bribery probe, Jefferson has a horrific record of breaking with his Democratic colleagues to sell out his constituents, his country and the poorest people in the world. He may be a Democrat, but on the issues that really matter Jefferson has served the Bush administration and Wall Street more diligently than a number of Republicans.
Jefferson's has been one of the steadiest Democratic votes for the president's foreign policy agenda. The Louisianan voted to authorize Bush to use force against Iraq, consistently supports emergency "supplemental" spending to maintain the occupation of that country, and favors deployment of the "Star Wars" Strategic Defense Initiative. He voted for the USA Patriot Act when it was rushed through Congress in 2001, and was a big backer of Vice President Cheney's national energy policy. And, though his record on social issues is mixed, Jefferson has on a number of occasions cast his lot with the White House and its social-conservative allies to help enact restrictions on abortion, school prayer initiatives and a Constitutional amendment banning same-sex marriage.
But Jefferson's deepest loyalty is not to the Bush administration. Rather, it is to big business. In a Congress where there are plenty of Democrats who are friendly to the legislative agenda of corporate America, Jefferson is devoted to it. This Democrat puts more than a few responsible Republicans to shame when it comes to doing the bidding of Wall Street.
If wage gains are already slowing, or at best just noodling along at a meager 2.5% rate (about half the headline inflation rate) what will they do if the economy does downshift to what the Fed considers a more "sustainable" (i.e. noninflationary) pace? Ouch. But if economic growth doesn't slow, or doesn't slow enough, will oil and other commodity prices keep rising -- pushing up headline inflation and making those 2.5% wage gains seem even more inadequate? Double ouch.
Theoretically, as well as ideologically, the stock market doesn't give a flying fuck about the plight of the worker -- as long as the sales growth needed to keep earnings growth perking along comes from somewhere. Shitty wage growth is good news. It boosts profit margins, and only dumb old Keynesians worry about how those underpaid workers are going to buy all that stuff they've been making (not to mention all the stuff being shipped in from China.)
But I think it's finally dawning on the equity cowboys (as it usually does after the Fed has been bumping rates up for a while) that the end result of a tightening cycle isn't likely to be positive for earnings, even if it doesn't lead to a full-fledged recession.
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if the commodity bubble and the housing bubble both deflate at the same time, and economic growth slows and the Fed takes too many quarter-point stutter steps (or has taken too many already) then things are probably about to go from bad to worse to really rotten, at least as far as the overwhelming majority of American consumers and workers are concerned. And if they're unhappy (I mean really unhappy) the stock market isn't likely to get much joy out of life either.
"The total net worth of all Americans in 1989 was $25 trillion (in 2004 dollars). Of that amount, the top 1 percent owned 30 percent, or $7.775 trillion. The bottom half owned 3 percent of the total, or $763 billion. Fifteen years later, in 2004, the total wealth of all Americans had doubled to $50.25 trillion. The top 1 percent of the population now owns 33.4 percent of the total, or $16.774 trillion. Their percentage share of the total has increased by more than 3 percent in fifteen years. At the same time, the total wealth owned by the bottom 50 percent increased to $1.278 trillion, but its percentage of total wealth declined from 3 percent to 2.5 percent in the same time period. Thus the wealth of the top 1 percent was ten times the wealth of the bottom 50 percent in 1989. Fifteen years later, the wealth of the top 1 percent was thirteen times the wealth of the bottom 50 percent.
Examining the type of wealth owned by each group, the SCF reports that the top 5 percent of the population owns 85 percent of closely held business assets in the country, 79 percent of the publicly traded stocks and 70 percent of mutual funds. At the bottom of the scale, the story is far different. While many reports have claimed that about 50 percent of households own some stocks or shares in mutual funds (either directly or through IRAs or company pension plans), the actual amount held is quite small. According to the SCF, the bottom 50 percent own less than 1 percent of business assets, stocks and mutual funds--so much for President Bush's claim that we need to reduce taxes on dividends and capital gains because we are an "ownership society" with so many Americans owning shares. The principal asset of the bottom 50 percent is the value of their homes, usually heavily mortgaged. "
According to Friedman, "the reason for this change is not difficult to discern. Beginning with the reduction of income tax rates in the Reagan Administration (from a high of 70 percent for the richest taxpayers in 1980 to 35 percent now), Congress has steadily reduced tax rates. It has reduced and is seeking to eliminate the estate tax altogether. In 2003 Congress lowered the tax on dividends to 15 percent, rather than treat it as ordinary income subject to the highest tax rate of 35 percent. It also reduced taxes on capital gains from 20 percent to 15 percent. Necessarily, these changes greatly benefited the households at the top of the wealth ladder.
BAGHDAD (AFP) - At least 20 people were killed in insurgent violence, 13 of them in a Baghdad restaurant bombing, as Iraq's new national unity government met on its first full day in office. Another 18 people were wounded when the blast ripped through the crowded diner in the upmarket Karrada district, highlighting the importance of plans set out by Prime Minister Nuri al-Maliki for a special security force for the capital.
WASHINGTON - The inauguration of Iraq's new government marks a new era in relations with the country that the U.S. has occupied for more than three years, President Bush said Sunday.
"The formation of a unity government in Iraq is a new day for the millions of Iraqis who want to live in peace," Bush said. "And the formation of the unity government in Iraq begins a new chapter in our relationship with Iraq."
Bush briefly spoke to reporters from the White House with his wife, Laura, at his side, to highlight the political development without mentioning the violence that still rages in Iraq.
The president did not speak of the spree of bombing, mortar rounds and a drive-by shooting that killed at least 18 Iraqis and wounded dozens — most of them hit by a suicide bomber who targeted a Baghdad restaurant during Sunday's lunch hour.
Like so much that has defined the course of the war, the realities on the ground in Iraq did not match the planning in Washington. An examination of the American effort to train a police force in Iraq, drawn from interviews with several dozen American and Iraqi officials, internal police reports and visits to Iraqi police stations and training camps, reveals a cascading series of misjudgments by White House and Pentagon officials, who repeatedly underestimated the role the United States would need to play in rebuilding the police and generally maintaining order.
As Mr. McCain came to the lectern, dozens of students and professors stood and turned their backs on him. Many waved their fliers.
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Mr. McCain seemed uneasy, but stuck to his script and did not acknowledge the barbs. As [. . .] predicted, he spoke about the importance of civil discourse, and he reiterated his defense of the war.
"I believe the benefits of success will justify the costs and risks," he said. The protests grew louder and more frequent as he spoke. Some graduates walked out. Others laughed. When Mr. McCain returned to policy after briefly quoting Yeats, someone shouted, "More poetry!"
At another point, someone yelled, "We're graduating, not voting!"
The heckling continued when Mr. Kerrey returned to the lectern, with one audience member shouting, "You're a war criminal!"
The American people like this president," White House political guru Karl Rove said last week. "People like him. They respect him. He's somebody they feel a connection with. But they're just sour right now on the war. And that's the way it's going to be. And we will fight our way through."
Rove said he based his confidence on a private poll done for the Republican National Committee that showed Bush's personal approval rating higher than 60 percent, far above his job approval. "The polls I believe are the polls that get run through the RNC," Rove said. "I look at the polls all the time."
The Republican National Committee wouldn't release a copy of the poll. Spokeswoman Tracey Schmitt said she couldn't explain why public polls show a decline in Bush's personal popularity except to say that, "you can ask a poll question four different ways and get four different answers."
Six public polls in recent weeks showed the opposite of Rove's account - that Bush's personal approval ratings have dropped since he was re-elected in 2004:
A recent Gallup poll for USA Today showed that 39 percent had a favorable opinion of Bush, while 60 percent had an unfavorable opinion. In mid-November 2004, 60 percent had a favorable opinion and 39 percent unfavorable.
Pollster John Zogby found 42 percent with a favorable opinion and 55 percent unfavorable. In November 2004, it was 58 percent favorable, 40 percent unfavorable.
A poll for CBS and the New York Times showed that 29 percent had a favorable opinion of Bush, while 55 percent had an unfavorable opinion.
Third World countries are instructed to “globalise”, to “liberalise”, to “open up” their economies to foreign direct investment (FDIs), to remove price controls and subsidies, and to reduce public expenditure by selling to the private sector all state companies and other public businesses.
This, it is said, will bring about the much needed development in these countries, Zimbabwe included. The IMF and the World Bank force down the throats of all developing countries the socalled structural adjustment programmes if they are to be assisted by these institutions, which, by the way, are controlled by the USA and its allies. These structural adjustment programmes have never worked for the majority in any country anywhere in the world. Instead they have made developing countries semicolonised, seen poverty spreading and deepening among the majority, but giving more power, authority and huge profits to the foreign multinational corporations that buy public enterprises in developing countries for their private shareholders back in the USA and the EU for a song.
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the International Labour Organization (ILO) has reported that global economic growth is increasingly failing to translate into new and better jobs that lead to a reduction in poverty. The ILO report says “That currently, half the world’s workers still do not earn enough to lift themselves and their families above the US$2aday poverty datum line.”
‘The ILO report found that for every one percentage point of additional GDP growth, total global employment grew by only 0.30 percentage points between 1995 and 1999 . . . For millions of workers, new jobs often provide barely enough income to lift them above the poverty datum line, or are far below any adequate measure of satisfying and productive work.’
The question then becomes: When are we going to see the socalled globalisation benefiting the workers and their families? And the answer from the sponsors of this new colonialism is most likely that the masses must learn to wait, they should be patient enough. But while the masses take heed of this advice, the upper classes of the USA and the EU cannot wait to pocket as much as they can from the mines, banks and sweat factories in the developing countries. “Prosperity for all is around the corner, the masses are told, but they have to wait.
Leaders of the transitional government said they have warned U.S. officials that working with the warlords is shortsighted and dangerous.
"We would prefer that the U.S. work with the transitional government and not with criminals," the prime minister, Ali Mohamed Gedi, said in an interview. "This is a dangerous game. Somalia is not a stable place and we want the U.S. in Somalia. But in a more constructive way. Clearly we have a common objective to stabilize Somalia, but the U.S. is using the wrong channels."
Many of the warlords have their own agendas, Somali officials said, and some reportedly fought against the United States in 1993 during street battles that culminated in an attack that downed two U.S. Black Hawk helicopters and left 18 Army Rangers dead.
"The U.S. government funded the warlords in the recent battle in Mogadishu, there is no doubt about that," government spokesman Abdirahman Dinari told journalists by telephone from Baidoa. "This cooperation . . . only fuels further civil war."
U.S. officials have refused repeated requests to provide details about the nature and extent of their support for the coalition of warlords, which calls itself the Alliance for the Restoration of Peace and Counter-Terrorism in what some Somalis say is a marketing ploy to get U.S. support.
According to the lefty zealots, the white Christians who hold power must be swept out by a new multicultural tide, a rainbow coalition, if you will. This can only happen if demographics change in America.
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An open-border policy and the legalization of millions of Hispanic illegal aliens would deeply affect the political landscape in America. That's what The New York Times and many others on the left want. They might get it. And that's the "Memo."
Adding drug coverage as part of ordinary Medicare would also have saved a lot of money, both by eliminating the cost of employing private insurance companies as middlemen and by allowing the government to negotiate lower drug prices. This would have made it possible to offer a better benefit at much less cost to taxpayers.
But while a straightforward addition of drug coverage to Medicare would have been good policy, it would have been bad politics from the point of view of conservatives, who want to privatize traditional social insurance programs, not make them better.
Moreover, administration officials and their allies in Congress had both political and personal incentives not to do anything that might reduce the profits of insurance and drug companies. Both the insurance industry and, especially, the pharmaceutical industry are major campaign contributors. And soon after the drug bill was passed, the congressman and the administration official most responsible for drafting the legislation both left public service to become lobbyists.
So what we got was a drug program set up to serve the administration's friends and its political agenda, not the alleged beneficiaries. Instead of providing drug coverage directly, Part D is a complex system of subsidies to private insurance companies. The administration's insistence on running the program through these companies, which provide little if any additional value beyond what Medicare could easily have provided directly, is what makes the whole thing so complicated. And that complication, combined with an obvious lack of interest in making the system work, is what led to the disastrous start-up.
"The bottom line is that inequality hasn't been this severe since the 1920's. As for alternative paths, the Clinton era, with higher marginal tax rates and less government spending, saw faster growth with fairer distribution. And that, at base, is the question. Do you believe growth should accumulate to the rich, or be shared across society? Jumping up and down about the 1970's is silliness, it's like blaming 9/11 on Rudy Giuliani. After all, the economy kicked ass under FDR and Lyndon Johnson, so theirs should hardly be a discredited economic vision. The question isn't about growth, or employment, or anything else (all those metrics do better under Democrats, by the way). This is about the distribution of growth, and about the level of acceptable inequality. I myself am not a big Gilded Age fan, but reasonable people disagree."
"Indeed, executive pay may be taking its place alongside outsourcing, corporate downsizings and trade accords as a source of public frustration with the state of the economy, according to some political consultants.
'It's a symbol of corporate excess at the expense of workers,'said Mark Mellman, a Democratic pollster. 'It's a symbol of companies that are only self-interested and no longer have loyalty to workers, to communities, even to the country.'"
The National Security Agency has been secretly collecting the phone call records of tens of millions of Americans, using data provided by AT&T, Verizon and BellSouth, people with direct knowledge of the arrangement told USA TODAY.
The NSA program reaches into homes and businesses across the nation by amassing information about the calls of ordinary Americans - most of whom aren't suspected of any crime. This program does not involve the NSA listening to or recording conversations. But the spy agency is using the data to analyze calling patterns in an effort to detect terrorist activity, sources said in separate interviews.
The fundamental flaw of the Massachusetts law is that it does little to reduce health care cost inflation. The bill attempts to improve coverage by funneling money through the bloated insurance industry. Insurance companies allocate roughly 20 percent of their revenue to cover their administrative costs (which include marketing, telling doctors how to practice medicine, providing dividends, and financing high management salaries). That is 10 times the overhead of Medicare, which allocates only 2 percent of its expenditures to overhead, and about 20 times that of Canada’s single-payer system, which allocates 1 percent. Moreover, a system of multiple insurers drives up the administrative costs of clinics and hospitals. This is especially true if all or most of the insurers practice managed care.
The failure of the Massachusetts law to cut health care costs will be aggravated by its method of reducing the number of uninsured: It requires all Massachusetts residents to buy health insurance. Health insurance, in other words, will be treated like car insurance—you have to have it or you’ll be in violation of state law and subject to a fine.
This provision, known as an “individual mandate,” is supported primarily by Republicans. AFL-CIO president John Sweeney characterized it as a regressive measure that only Gingrich Republicans would support. “Forcing uninsured workers to purchase health care coverage or face higher taxes and fines is the cornerstone of Mr. Gingrich’s health care reform proposals,” Sweeney said. “It is unconscionable that Massachusetts has adopted this misguided individual mandate.”
To meet their obligations under the mandate, most employed Massachusetts residents will continue to buy health insurance from their employer. But because the law does little to reduce premium inflation, employer flight from the health insurance market will continue, forcing more and more employees to purchase insurance on their own. In Massachusetts today, it costs employers about $4,000 per year to insure an employee without dependents and $11,000 a year to insure an employee with dependents.
So, how will the state’s uninsured be able to afford such a big-ticket item? The law requires the state to pay the entire premium for those under the federal poverty level (about $10,000 in annual income for an individual), and to provide sliding scale subsidies for those between poverty level ($20,000 for a family of four) and 300 percent of poverty (about $29,000 for an individual). Unfortunately, it is impossible from reading the law to know what the minimum level of coverage will be, how much insurance companies will charge for it, and how much the subsidy will be for any given income level.
A panel of Nigerian medical experts has concluded that Pfizer Inc. violated international law during a 1996 epidemic by testing an unapproved drug on children with brain infections at a field hospital.
That finding is detailed in a lengthy Nigerian government report that has remained unreleased for five years, despite inquiries from the children's attorneys and from the media. The Washington Post recently obtained a copy of the confidential report, which is attracting congressional interest. It was provided by a source who asked to remain anonymous because of personal safety concerns.
The report concludes that Pfizer never obtained authorization from the Nigerian government to give the unproven drug to nearly 100 children and infants. Pfizer selected the patients at a field hospital in the city of Kano, where the children had been taken to be treated for an often deadly strain of meningitis. At the time, Doctors Without Borders was dispensing approved antibiotics at the hospital.
Pfizer's experiment was "an illegal trial of an unregistered drug," the Nigerian panel concluded, and a "clear case of exploitation of the ignorant."
The test came to public attention in December 2000, when The Post published the results of a year-long investigation into overseas pharmaceutical testing. The news was met in Nigeria with street demonstrations, lawsuits and demands for reform.
Pfizer contended that its researchers traveled to Kano with a purely philanthropic motive, to help fight the epidemic, which ultimately killed more than 15,000 Africans. The committee rejected that explanation, pointing out that Pfizer physicians completed their trial and left while "the epidemic was still raging."
"I think it borders on the criminal that the large pharmaceutical companies, both here and in Europe, are using these poor, illiterate and uninformed people as guinea pigs," Lantos said.
Lantos said he expected to introduce a bill requiring U.S. researchers to give regulators details of tests they plan in developing countries.
"It's the only ethical thing to do," Lantos said. The bill is similar to one his committee approved in 2001 that did not make it out of the House. "There should be a lot of bipartisan support for it. This outrages people."
I think we've gotten used to -- here in Washington especially people have gotten used to the idea that people have elections in South America, and it doesn't make any difference what the candidates promise, what people vote for, that there just going to go ahead and do the same things, whatever Washington wants, what the foreign companies want. And in the last five or six years, it's really a very changed picture.
The first globalization crashed because of inherent financial fragility. Banking systems lacked modern safety nets such as deposit insurance and lenders of last resort, and the gold standard was also intrinsically fragile because countries could demand payment in gold. Consequently, the system was vulnerable to panics, and the danger increased as financial markets and banking systems grew because the supply of gold, the backing asset, was fixed. Once panic started, it was near impossible to stop. Banking systems collapsed, bankruptcy and deflation set in, and the rest is history.
This history suggests that if today’s globalization crashes it will also be because of economic factors, but those factors will differ from the past because the system is different. The New Deal era created a system that remedied earlier financial fragility by restricting private ownership of bullion, and creating deposit insurance and lenders of last resort. It also created a new social democratic mass consumption economy in which income was more broadly shared owing to unionization, minimum wages, and social security provisions. However, a social democratic mass consumption economy is expensive for individual capitalists, giving them an incentive to evade its costs. That has been driving force behind globalization since 1980, and that is the contradiction in today’s system.
Business has a private incentive to escape the system to countries with lower costs. Yet, it still needs mass consumption. The system needs a solid middle class, but is also driven to hollow out that middle class. This contradiction has been papered over by consumer borrowing provided by deregulated financial markets and a 25-year asset price boom. The problem is that such borrowing risks proving unsustainable if incomes are hollowed out, and if it stops the economic merry-go-round may also stop. If that stoppage produces an economic crash, globalization may crash, too. This is because it lacks political support, having been a primary cause of middle class hollowing out.
