G20 means plenty for some
Last Thursday’s G20 meet saw little new initiative. The $1.1 trillion stimulus package was largely from already announced packages. This totals up to US$5 trillion in bailout economics worldwide, appx 7% of the planet’s GDP of US70 trillion (purchasing power parity exchange rates).
The ‘name and shame’ tax haven policy development will dwindle once Gordon Brown’s poll bounce is over. Hopefully the policy focus doesn’t dwindle, but the writing is on the wall with the ignorance of ‘automatic information exchanges’ between tax jurisdictions.
The hype over the Financial Stability Board, set up to monitor CEO largesse and hedge fund trickery will be another talkfest with false teeth. They have no policy parameters. George Monbiot will be more likely to keep them honest.
As usual, the press uses the diversionary headlines of the above to channel attention away from the tragedy of these talks – the expansion of the IMF’s powers. It’s budget tripled. The bermuda triangle of economic policy was enhanced, with the bailout economics playbook now extending to one of the world’s most controversial institutions. The expansion of the IMF’s Special Drawing Rights means it can expand it’s quantitative easing – AKA printing money AKA Mugabe economics AKA hyperinflation.
But what about the policy reform no one dared mention? The one that would address both asset price bubbles and environmental devastation?
Cycles, Stats and Set Ups
photo credit: Gustty
Renegade Economists Podcast 83
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As broadcast on April Fools Day, 2009 via the almighty www.3CR.org.au
Show Notes
Cycles, Stats and Set ups – Louis Christopher from SQM Research provides background on the state of the housing market. G20 standoffs, shareholder activism and some thought provoking music as always. Anything in italics below is our commentary
Download Louis Christopher interview (10mins, 9MB)
G20 – London sets up barricades (more fear-mongering PR)
Medvedev Talks Up Super Currency
“The globo” + ** Wayne Swan pulls into Japan to sell our Govt bonds
Retail sales slide:
Retail sales dipped 2%, seasonally adjusted, in February, the largest monthly drop since July 2000. Economists expected a 0.5% fall.
Landlords do deals as sales slide:
…an unconfirmed story of a Westfield tenant who’s been offered a 15% reduction after the tenant gave notice that they didn’t want to renew the lease. Yes, Westfield – a mob with a fearsome reputation for being prepared to ruthlessly suck tenants dry
Banks Walk Away from Foreclosures
With over 19 million, yes 19 million vacant homes in the US, many suburbs are looking even more like a war zone than usual.
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Tax Breaks for Mining Companies must stop
photo credit: Rui Almeida (Portugal)
Those who read our recent post on Papau New Guinea will find this important reading. A new report entitled Breaking the Curse: How Transparent Taxation and Fair Taxes can Turn Africa’s Mineral Wealth into Development. The conglomerate of aid agencies behind the report state:
For example, Zambia’s mining law allows the minister in charge to give mining rights to a company without consulting anyone. “Surely the minister is open to corruption because these contracts are not subject to any form of scrutiny. This paves way for non-transparent transactions,” a senior official in the country’s environment ministry told IPS on condition of anonymity.
Similarly, the report is critical of mining laws adopted under pressure from the World Bank, which pushed for low tax rates to attract foreign investment in mining. “African governments have enacted laws giving tax subsidies to the industry and mining companies have been pushing for tax breaks in secret mining contracts, amounting to an aggressive tax avoidance strategy,” says the publication.
It cites Ghana and Tanzania, where low royalty rates cost treasuries 68 and 30 million dollars respectively in 2008. For South Africa, the figure is 359 million.
Tax breaks granted in Malawi cost the treasury 16.8 million dollars; in Sierra Leone eight million. The tax exemption on a single mining contract in the DRC may have cost the treasury 360,000 dollars a year.
“The same governments continue to borrow almost to alcoholic proportions from the developed world; they borrow in order to finance education, water and sanitation. They borrow actually to provide basic services,” observed Brian Kagoro, the policy manager for ActionAid International.
Let’s hope more stakeholders read Fred Harrison’s The Silver Bullet, on sale at our bookshop for just $20.
Obama’s surface commentary on bankers
photo credit: telemetry9
Max Keiser sums it up in rapid-fire succession:
So let me get this straight. Banking elite, and other government insiders, defrauded savings accounts, pension funds, charitable funds and municipal funds here and around the globe by trading in worthless financial instruments; they manipulated markets and destroyed legitimate businesses along the way; and THEN, when that wasn’t enough, they plundered the public purse in the chaos and panic surrounding the crash that they themselves caused.
And the President asks them to kindly refrain from buying new carpet?
These people are not titans. These people are racketeers. And should be treated accordingly. Or at the very least, not be invited to sit in on privileged government meetings determining bailout policy that they then profit from!
As the more than US$2 trillion in bailout money (TALF & Geithner plan) fail to bounce the market for more than a few days, one wonders when we will see a deep-rooted policy change?