In the past few days, I’ve heard things from family members and friends that are very disturbing about the tornadoes that have devastated the nation over the weeks of April this year.
It is unacceptable. The ideas presented to me were plainly wrong. There were over 300 people whose lives were lost in the tornadoes that blasted across Alabama, and other states of the South just two days ago. The days and weeks before that have shown all of us, homes that were leveled, towns decimated and lives lost and shattered. There is no excuse for it to be that way. It is 2011.
One of the excuses I heard is that it is “2012 when the world ends that is here early in 2011” and to fight it would be senseless. Another idea repeated to me from three different people, is that there is no way to control winds, storms, things like the jet stream and tornadoes – that to do so we would have to be God. Other ideas explained to me were repeated from various broadcasts of the am radio talk shows and other online information sources who say there is no way that anyone can do anything about any of these things since it is part of the “end times” and can be expected to get worse, not better. And, along with explanations on many business shows, business journals, business and financial blogs and tv broadcasts – there are a multitude of quotes to explain how America is falling and that we cannot expect to stand up again as number one in the world. Now, wait a minute . . .
Just hold the gd phone.
Back it up and rewind that entire set of conversations. I don’t know who told these family members and friends that to do something is to not accept our place as human beings and try to do what only God can do. I don’t know exactly, although I have a pretty good idea, where these people in my life got these lines of thinking which say there is nothing that anyone can do about all this and nor should we make the effort to do so. I don’t know how the excuse that “it is the end of the world anyway,” means we are all supposed to throw up our hands and tend to our own momentary satisfactions without seeking to do much else about anything. And, I don’t care, either – where these people got these ideas. I do know they are wrong.
When it rains, we put an umbrella over our heads. We don’t just stand out there in the rain without doing anything about it simply because “God” sent rain. We make lightning rods to go on our homes and businesses, which were designed by a brilliant man in our nation’s history who saw a problem and found a way to provide a naturally based principled solution. It has saved lives, homes, families, businesses and communities where people at one time in history believed that there was no way to stop lightning – that it was what amounted to an “act of God” which no human could expect to change, alter or do anything to provide safety against. Those people were not considering even finding a way to do something about it, but one man did and now we have lightning rods on damn near every single building, structure, skyscraper, and everything else that is built to withstand the natural elements.
The building industry has known for well over a thousand years, that the basic protection for people’s lives during storms with tornadoes forming and reeking havoc, is for structures, homes, buildings, restaurants, malls, schools, hospitals, and living spaces to have a basement or storm cellar. It is not rocket science. It is a known quantity which works. At some point, the building industry, cities and towns policy makers, developers and other decision makers decided to not require basements and storm cellars for every single home and every single structure built in their communities. Well, that was wrong.
We put dams and levees up to control flooding. We don’t just sit back and say – well, if the place floods, then it was meant to be. That is called, “engineering” and is why we have those multitudes of engineering disciplines to this day. We have architectural and structural engineering disciplines that create to a better standard than throwing up a few sticks and calling it a house. And, the homes in these recent tornadoes yielded NO real harbor or safety from the storms. They acted as what they’ve become, pasteboard and brittle sticks rather than a reinforced, flexible and safe structure to protect the families and lives housed within them. That is unacceptable.
And, I don’t know what we’ll have to do – if it is to incorporate some type of polymer dip for the framing wood to give them more strength and flexibility, add re-bar to the core of brick facades which are held together by unreinforced masonry, create better building methods generally to withstand these types of extreme events, or find a way to cut those tornadoes in half and dissipate them in some manner before they get on the ground tearing up the place – but I do know that requiring basements and storm cellars to be built into every single structure is a known successful defense against loss of life.
I do know that we could do that everywhere in short order – retrofitting existing structures with storm cellars and below ground level basements – including homes, businesses, county buildings, schools, industrial plants, everything. And, I do know it isn’t just required in Kansas anymore – which has been evidenced for a long, long, long time. Why these 300 lives were lost a couple days ago, within seconds as their homes were obliterated – is no longer an acceptable excuse. And, the world has ended at least 8 or 9 thousands times according to various religious predictions across history. It isn’t an excuse to sit idly by while solutions could be applied to save lives, communities and families from known dangers with known outcomes by using either known solutions or engineering new ones that work.
And, there is no excuse whatsoever for anyone living in a mobile home or trailer staying in it believing there is some protection from a severe storm, extreme or damaging winds, and tornadoes. Especially in these housing types and their mobile home parks, on their individual private property where mobile home owners have set up housekeeping, and in mobile home communities – there absolutely has to be an enforceable code by every town, city and county requiring a storm cellar be added on site. For mobile home parks and communities, central community storm shelters in an underground basement at their community clubhouse or something must be required of those community owners with enough storm cellar or basement space to protect all of the people with all of their family members who live there. It has to be close enough to walk to it and get into it within a couple minutes – not sitting hundreds of yards away from significant portions of the residents’ homes.
The attitudes expressed to me over the past few days demanding that none of us give a damn about all this and insisting that no one can or should try to do anything about this – are attitudes commonly repeated and still wrong. They are based in someone not thinking through what they were saying – we do have homes because they were engineered solutions to our need as humans for protection from the elements. We did not – “just not give a damn about it” and sit out in the fields and woods never making something of a solution to protect ourselves as a species. We did, in fact – create many solutions to it and meshed solutions from many different people to have more than nature gave us in the first place. Or else we would all still be standing out in the rain without an umbrella or house in existence at all.
AND – people need to vote with their dollars by NOT BUYING any house or business structure that doesn’t have a basement, cellar or storm cellar in it.
When that happens, builders will start adding basements to protect people’s lives and building inspectors / county codes will require either basements or storm cellars in every structure and home in America as it should’ve been in the first place knowing what we know about tornadoes, storms, hurricanes and extreme wind events.
From what I can tell, the homeowners’ associations in many communities could have made a central storm safe space available – most have expensive clubhouses that are rarely used by anybody. They’ve paid for swimming pools – they’ve charge association fees. Surely they could add something more useful along with it – like public announcements throughout the neighborhood when tornado spawning storms are coming – or at the very least, provide a basement for people in the neighborhood to come and have some protection from those events.
But, sooner or later – there are still two parts which need serious workable solutions – one is to stop the tornadoes from spawning in the first place or after the conditions have developed to make them likely. And, as much as I appreciate the magnitude of these forces – we, as a people have changed all kinds of things in the landscape – which could just as easily also be changed to provide “wind breaks,” special heating or cooling zones in the landscape to help dissipate the storms’ power or alter them, some kind of lateral slicing through the tornado kind of thing that would act the same way as sticking a hand laterally through a whirlpool in the bathtub when the drain makes one, and/or sculptured land planning in the same manner as the buildings and heat zones of and altered air foils of cities with their skyscrapers, parking lots, freeways, streets and buildings change the likelihood of storms producing tornadoes.
Although cities are hit with tornadoes from time to time, it is far less frequently and with less running distance of damage that is somehow changed by virtue of the ways cities are constructed and contain heat or alter wind patterns and wind shear. Maybe the tall buildings force eddies in the air currents which change the dynamic or push them down or around in dividing ways – that principle which is working around cities could be used and applied for tornado development zones. But, not just in Kansas – the dust bowl thinking of people stuck in 1930 something has got to stop. The Southern States have suffered inordinately high numbers of tornadoes for many years with the recent outbreaks of weather patterns differing in the severity and multiple development fronts. There is no reason that any state of the South should have any homes without basements in this day and age. There is no reason they couldn’t apply the massive knowledge our scientists and universities have discovered into tangible solutions – whether wind breaks or satellite looks at re-interpreting some parts of the landscape to dissipate these damaging winds when they do get started.
These things could be done.
The second thing that needs to be done – is to make our houses into safe harbors for human lives. They are not that now. It is inexcusable that our homes have become (and that includes apartments, condos, workplaces, some buildings, shopping areas, and large industrial workspaces under thin metal sheeting, etc.) – nothing but pasteboard and brittle sticks – no matter what they seem to look like on the outside. That is unacceptable.
Every structure needs to be retrofit in some way to be substantially safer along with adding basements or storm shelters/ storm cellars to all of them.
There are Geotextiles now and polymer / carbon nano fiber based fabrics that never existed before. There is a man who designed homes for hurricane prone areas which are glued and screwed rather than to allow the wind getting up into the structure tearing it apart as it goes. There are new types of cement and retrofitting systems to make unreinforced masonry into reinforced, strong but flexible structures. There are building materials, knowledge, science, engineering, materials science, structural engineering knowledge and research which 30 years ago, didn’t even exist.
Strides have been made in collecting data and information, analyzing the data and understanding the results. It has been public information available to everyone. Out of all that – it is far past the time to take it and weave new practical solutions from it to apply throughout our nation for the safety of families, children, people, young lives and old – there is no excuse for what has just happened to take these lives from all of us and from our communities by tornadoes damaging structures which weren’t much more protection than a cardboard box would’ve been. It is not acceptable for it to keep being that way.
And, where building techniques were known a hundred years ago or in 1930 something which worked to keep lives safe, but in our modern world were abandoned – those need to be brought forward and used as well.
That includes – if a house doesn’t have a basement or storm cellar – don’t buy it. Life is too precious to put up with it – there are no savings financially by getting a house or business without a basement. Dead or maimed from a tornado because there was nowhere in the house safe from it – is not a financial advantage no matter how good that house looks on the outside.
President Obama visits Alabama’s storm ravaged areas today – (CNN)
Tuscaloosa, Alabama (CNN) — President Barack Obama arrived in Alabama on Friday, the hardest-hit of six states ravaged by a series of storms and tornadoes that killed nearly 300 people and left entire neighborhoods in ruins.
Obama was scheduled to meet with families affected by the storms as well as government officials.(etc.)
Photos: Nightmare scenes in Alabama after deadly storms sweep South – (CNN)
There is a 25 percent chance the pump price will exceed $4 a gallon from June through August, the agency said, compared with a 10 percent probability gasoline could fall below $3 during the same period.
My Note –
I think they need to review their math skills at the agency where they made this projection. It is wrong.
The price of gasoline is already at or over $4.00 a gallon in Chicago, it has been reported. And, it is over $4 a gallon in California, Denver and probably anywhere Spring Break destinations are used to having a captive audience.
Summer will be even more so. My guess is that the price of gasoline will go up substantially higher than that because the traders and speculators driving the prices per barrel are already trying to figure out how to offload what they’ve purchased and make a bigger profit from it. They likely figure this is one of those once in a lifetime deals where they can really make a killing. That would be my guess. It will stagger through the economy faster than the contracts that will get delivered because that is how it has done in the past (2008, 1970’s) as companies try to get ahead of the upswing in costs to have a buffer.
On a personal note, as I have noticed in the stores when I stopped buying cereal – it the boxes that cost nearly $5 already get any skinnier – we can use them as postage stamps instead. I don’t know how they get away with it. Many foods now look like something from a child’s play kitchen set with little in it at all. That is going to be even more so as the commodities prices have been driving upwards by the traders on the exchanges and now add the increased price of oil, gasoline, shipping and increased cargo charges to them. It is not going to work.
The law of supply and demand would naturally bring these prices down or the quantities up because there cannot possibly be as many people buying these things at these prices for the amount of product offered. But, the free market doesn’t exist in America in that sense. It is unnaturally supported in the manner middlemen including the commodities traders are driving the prices. The losses can be written off and it doesn’t yield any incentive to meet the market demand where it is and price competitively to it at the real value.
Oh well. If we had a better deal on the oil that is being pulled out of the ground in America, like Libya’s foul leaders got from the oil industries – we wouldn’t even be having this problem.
They only give away 12% of the profits and charge a “sign-on” bonus over a billion dollars each to the oil companies (and they are glad to get it.) Damn ridiculous while we are subsidizing the oil companies and begging them to do whatever they will to get our oil out of the ground so they can profit at our expense. Damn ridiculous.
From the article – everyone needs to read it in America, including my children and parents, aunts, uncles, friends, acquaintances and anyone reading this durn blog –
At least it explains why the price of oil is going up and why when it does go up for contracts that won’t be delivered for three – four months, that we still watch the little sign at the gas station go up three to four times a day upwards –
(and prices of everything else quickly accommodate that despite none of them having bought any gasoline or jet fuel at those prices yet.)
A couple bits of this article (from the link above) –
Power plants, gas stations, fuel distributors, and oil companies across the globe paid close attention to this rarefied casino, watching carefully for any price changes that would determine how much they would pay for fuel and what they’d charge their customers, the ordinary consumer. Newspapers and television networks trumpeted Nymex’s prices as the holy gospel, beaming them throughout the continents for all to follow—banks, hedge funds, Wall street investors, even the top-producing oil nations of Saudi Arabia, Iran, Russia, and Norway.
D’Agostino: No. OPEC only sets the oil supply. . . . The price of oil is actually set in New York. . . .
O’Reilly: Is there a guy who says $125 a barrel?
D’Agostino: No. There’s a huge market. It’s filled with hedgers. It’s filled with speculators. It’s filled with moms and dads, average Americans. It’s a big market that sets the price.
O’Reilly: somebody has to put the $125 on the barrel. Who does it?
(an excerpt from the Bill O’Reilly show included in the text, the first paragraph is from the author of the article and book that serves as its basis) – well worth reading the whole thing, my note.
As I was responding to this question, it was obvious that it would make a better post where I can expand it a bit with more links –
It is about what people can do to stop the flow of funds to Mubarak and Qaddafi (Gaddafi), find their hidden assets and wealth, what to do with the information once it is found and what American taxpayers can do to stop brutal, vicious dictators like them from being supported with American taxpayer money –
This is the question from Michelle that I had been answering –
Submitted on 2011/03/08 at 4:31 am
What can American taxpayers do to help them out?
Japan freezes assets of Libya’s Gaddafi, others | Reuters
Submitted on 2011/03/08 at 4:59 pm | In reply to michellefrommadison
Specific to Mr. Qaddafi and his sons – their financial wealth is being located and frozen. However, since the Qaddafi regime is still in place and intends to continue in the style to which they have become accustomed, there are actually some things that US citizens can do about that.
First, make sure that there is nowhere on this planet that doesn’t know what kind of human beings they are.
Second, make sure that the wealthy who have hosted them, fawned over them, treated them like gods, and partied with them understand that none of us think that is okay nor acceptable.
Third, let our government leaders know that trading off our principles in order to do business with those insatiably cruel, malicious regimes is unacceptable and that our tax dollars are not to be used to support any such thing.
And, fourth – make sure that the strength of our conviction about it is heard everywhere around the world including at the tables of the IMF, at the World Bank, at the European Parliament, at the tables of the United Kingdom leadership, at the United Nations, at the policy-making foundations and organizations throughout the US and around the world, at the treasuries of every national decision-making body and at the NGOs, Industries, Corporations, Businesses and Political Parties that have in the past, supported them. It is not “kind of okay.” It is not okay at all.
If there is anything that you find online about the Qaddafi regime, the Libya Investment Authority, the Qaddafi sons and their shenanigans or where they have met with anyone in the past – and you stumble over it while looking at something online in the news or in some investors’ information, or looking at some public relations or consulting firm or Wall Street firm that has bragged about it in the past – then ship it over to the UN Secretariat with the link and to the US State Department. It only takes a few minutes to do that and then if it is something they haven’t known already, they can find those resources and take charge of them for the Libyan people. The same thing is true for the Mabarak fortune which is still being tracked around the world. These things are simple enough.
It is time to say that we aren’t going to put up with it anymore.
And, if you find any photos online of Qaddafi and his regime members, family members, sons and daughter being worshiped by our business leaders, our political leaders, our industry members, our corporate CEOs, our wealthiest and powerful, our political party members – then publicly share those and the links where they can be found. If you find evidence in written materials from the past, and photos of the brutality, cruelties and torture of these regimes, publish it, forward it, blog about it and tell others where the information can be found.
The ICC and UN Secretariat among other international groups, including Interpol are working to locate some of these things and keeping them current information rather than lost in something from 1986 somewhere – will be helpful when they start to look for it as they build these cases against this brutality.
I had originally started with this part – in response to Michelle – (and turned it around when posting it here) –
The first thing American taxpayers can do is to say something. When our money goes to put sophisticated military hardware in the hands of the brutal regimes around the world that are known to be psychotic, authoritarian, abusive, torturing their own people, sponsoring terrorism around the world and denying basic universal human rights to their people, then the people of the world believe that we, as Americans are supporting those horrors in their lives and in their nation.
Saying something about it to our legislators, to the public, to fellow citizens, to our churches, to our NGOs, to our State Department, to our President, to our family members and to our communities of friends is first.
The second thing Americans can do is to tell legislators on the appropriations committee when those appropriations are being made and send emails or make phone calls to the Congressional and Senate members on the foreign relations and appropriations committees as well as the government oversight committee. (wait a minute and I’ll look it up.)
However, most of the real policy decisions are being made in the party policy-making committees at the Republican and Democratic Party using their networks of resources and through their headquarters eventually. Those policy decisions are then enacted through their Party representatives serving in the Congress, Senate or in state governments and local governments.
These policy-makers draw on information provided to them from their favored think-tanks and academics as well as from the policy-making industry which act as consultants to them all that have arisen over the years. There is actually a school or two within our universities who specialize in government and policy that are commonly consulted by both sides of these issues. And, the special interest groups, lobbyists and international serving consultant firms are also influencing the policies and the applications of those policies through their individual and collective efforts.
Overall, the staff of the Congressional and Senate offices are more likely to be involved in sorting out the varied approaches to different issues like this one which will tend to include information from other sources in the reports they provide to the Congressmen and Senators. That information can include information from the Energy Committee for instance, that may overwhelmingly support (as in the case of Libya) a trade-off in foreign policy principles in order to satisfy the desires of the petroleum industries who want to harvest the oil reserves in that country, engineering firms who want to do business there, equipment manufacturers who want their products to be used there, the Chamber of Commerce representing businesses generally and the Petroleum Institute who serves to promote the overall interests of their industry.
These reports and briefs are put together, sometimes by think-tanks and academic institutions for the legislators and the party policy-makers as well, or analyzed by the special interest groups and policy consultant firms that hover around Washington. Sometimes, these are provided in their entirety to the Congressional members and Senate offices, and sometimes (probably more often) they are offered as a bullet list focused brief with the analysis condensed and simplified with back-up charts and data which seem to support whatever position offered. Normally, these provide intellectual arguments and data to sully support for any other position at the same time intentionally swaying the reader to think in their desired terms – most are very one-sided supporting whatever position that is in their best interest.
So, the third thing that American taxpayers can do is to find these sources of policy online and discuss it with them. Let the academics, think-tanks, political party policy-makers, policy consulting firms and special interest groups understand what we want or don’t want our money to be doing. Or, to explain to these policy sources that we expect both the things to get done that need to get done while at the same time honoring those principles upon which our nation is founded. The policies set forth by legislators as well as by businesses, industries, special interest groups, and policy-makers in our political parties can be set up to do both. It appreciably gets lost in the mix if none of us are saying anything to them about it directly.
Fourth, the other thing that people can do in America is to put a stop to it entirely. We can solve problems in other ways which are allowing our nation to be put at the mercy of other nations whose brutality we don’t want to support. That means using something other than gasoline, for instance. Those political parties and specific legislators who trade off our national principles for the support of brutal dictators for any reason can be publicized for those decisions and voted out of the seat they are warming. The special interest groups and industry representatives that are supporting those kinds of trade-offs can be publicized in that light and then removed from the list of those places where our money is donated. And, if it turns out that money we are giving to one special interest group is going eventually into supporting another group whose influence intentionally supports denying our founding principles and social responsibilities – then we can publicize that fact and stop giving them our money, our churches’ money, our charitable moneys, and enter a discussion with the initial organization funneling money into another one about our concerns. And, tell others about it.
When people give to support veterans’ needs, that money should not end up going eventually into another pool of money that abrogates programs for the veterans whether it is the Tea Party, the conservatives, the Republican Party or whatever else they funneled that money to finally. Those trails can be located through their websites and tell others about it. If all else fails, and reasonable discussions are not making any difference, then suits can be filed against them to explain that money can’t be taken for one thing and then used to do exactly the opposite. For that, they are responsible in how those funds are used and where they end up going and what gets supported when the final analysis is done.
Fifth, as fun as it is as a way to meet others, supporting protests about these things if an extreme and questionable choice but certainly does feel better than sitting at a computer engaging in discussions about it with people who basically are getting paid to serve the support of whatever policy position in order to get paid for what they do.
It would probably be easier to twitter that, “this jackass just voted to support including arms sales to psycho whomever that slaughtered 43,000 people last year. pass it on.”
I don’t know.
Specific to Mr. Qaddafi and his sons – their financial wealth is being located and frozen. However, since the Qaddafi regime is still in place and intends to continue in the style to which they have become accustomed, there are actually some things that US citizens can do about that. First, make sure that there is nowhere on this planet that doesn’t know what kind of human beings they are. Second, make sure that the wealthy who have hosted them, fawned over them, treated them like gods, and partied with them understand that none of us think that is okay nor acceptable. Third, let our government leaders know that trading off our principles in order to do business with those insatiably cruel, malicious regimes is unacceptable and that our tax dollars are not to be used to support any such thing. And, fourth – make sure that the strength of our conviction about it is heard everywhere around the world including at the tables of the IMF, at the World Bank, at the European Parliament, at the tables of the United Kingdom leadership, at the United Nations, at the policy-making foundations and organizations throughout the US and around the world, at the treasuries of every national decision-making body and at the NGOs, Industries, Corporations, Businesses and Political Parties that have in the past, supported them. It is not kind of okay. It is not okay at all.
If there is anything that you find online about the Qaddafi regime, the Libya Investment Authority, the Qaddafi sons and their shenanigans or where they have met with anyone in the past – and you stumble over it while looking at something online in the news or in some investors’ information, or looking at some public relations or consulting firm or Wall Street firm that has bragged about it in the past – then ship it over to the UN Secretariat with the link and to the US State Department. It only takes a few minutes to do that and then if it is something they haven’t known already, they can find those resources and take charge of them for the Libyan people. The same thing is true for the Mabarak fortune which is still being tracked around the world. These things are simple enough. It is time to say that we aren’t going to put up with it anymore.
And, if you find any photos online of Qaddafi and his regime members, family members, sons and daughter being worshiped by our business leaders, our political leaders, our industry members, our corporate CEOs, our wealthiest and powerful, our political party members – then publicly share those and the links where they can be found. If you find evidence in written materials from the past, and photos of the brutality, cruelties and torture of these regimes, publish it, forward it, blog about it and tell others where the information can be found. The ICC and UN Secretariat is working to locate some of these things and keeping them current information rather than lost in something from 1986 somewhere – will be helpful when they start to look for it as they build these cases against this brutality.
Computer, at that point, was a job title, not a machine. Long before the sisters were businesswomen, community activists, mothers or grandmothers, they were recruited by the U.S. military to do ballistics research. They worked six days a week, sometimes pulling double or triple shifts, along with dozens of other women.
The weapons trajectories they calculated were passed out to soldiers in the field and bombardiers in the air. Some of their colleagues went on to program the earliest of general-purpose computers, the ENIAC.
( . . . )
The war ended in 1945, but within a couple months of arriving in Philadelphia, Bartik was hired to work on a related project — an electronic computer that could do calculations faster than any man or woman. The Electronic Numerical Integrator and Computer, created by Penn scientists John Mauchly and J. Presper Eckert Jr., weighed more than 30 tons and contained about 18,000 vacuum tubes. It recognized numbers, added, subtracted, multiplied, divided and a few other basic functions.
Men had built the machine, but Bartik and her colleagues debugged every vacuum tube and learned how to make it work, she said. Early on, they demonstrated to the military brass how the computer worked, with the programmers setting the process into motion and showing how it produced an answer. They handed out its punch cards as souvenirs. They’d taught the massive machine do math that would’ve taken hours by hand.
But none of the women programmers was invited to the celebratory dinner that followed. Later, the heard they were thought of as models, placed there to show off the machine.
How many teachers in schools across America know that some of the greatest mathematicians in their classes of students are the girls?
How many classrooms of students hold the greatest scientists and engineers that happen to be the girls in the class rather than the boys alone? How many of our educators know that as they face that class and work with those students?
Sometimes I wonder.
It was great finding this article. There are four pages to it which is a little hard to notice because the next page numbers are below some ads and rather small – but definitely take a look at all four pages. It is absolutely amazing.
and there is even more about women in the first programming languages of computers, too. We wouldn’t have the computers we have today, had it not been for the efforts of the women who participated in the process along the way.
Which I read and then copied over to the document. And, then popped over to another tab with the pdf from about the Commerce Department from a link on that page while going to the nice slide/share page from the White House where the link for comments had taken me on the original tab.
Here is the other link to the Commerce Department request for comments –
Then I made a comment – which, as usual posted without one paragraph marked in it as seems to happen on every one of the government sites for some reason.
And, of course – in order to share my comment on the slide/share site, I had to sign up for it through Facebook and allow the two to do their sharing of informational content – and I just plain decided, what the hell – it hardly matters at this point, so I did that such that my comment could actually go to them. (more or less – my guess is that they all have other things to do besides reading my comments on the matter.)
But, here is what I wanted to share with them and posted there –
I appreciate the need to study what research is being done in light of what is being most productive or most effective, but I really think that is part of the problem. The way it is set up now, our government and state resources are going into studying studies on top of studies of studies of things that had already been studied in their measure in the first place. Not only, to get funding are the basis and benefits of the research provided but, also as the research continues to its peer reviews and eventually into the investment community and the marketplace. Throughout that process, there are multiple stages at which the usefulness of the research is having to be justified and then at every opportunity there are more Science Foundation, State, Federal and International funds being put into studying whether it was worth doing the studies and research in the first place. All of those funds could have been spent to do something else valuable including taking that research being done originally into a manufacturing context for our nation’s businesses to be built with it – or something.
It reminds me of the filters that were researched and engineered to put on smokestacks of various industries many years ago which would have cost about $200 each to place on the polluting facilities – but industries and businesses didn’t want to do it. So, to save money and not be told what they could or could not do, they insisted that the government put money into studying the problem and that the states and academic research groups study whether the initial studies and engineering were valid. And, then they studied it some more and paid a team of lawyers and many years of lobbyists and pr firms to keep from even the suggestion of installing those filters. And, then at the point at which it would have cost about $2500 each to install those filter systems, they did the same thing again and didn’t install them at that point either. But, a multitude of studies were made again and new studies made along with new lobbying and pr campaigns. Eventually, the filters were either placed on the smokestacks at a cost of (more or less) $25,000 a piece or the companies moved what they were doing to another country which is putting up with them polluting whatever population is in that country where they are now.
The amount of money, time and efforts spent on the example above far exceeds what could have been done with that situation in the first place if the original science and engineering had been accepted and several hundred filters had simply been placed on the smokestacks. And, beyond that least costly choice – further updates to the science and engineering could have built forward in better efficiency and better opportunities for our nation in the meantime with cleaner air, better health in our population and better quality of life.
This is a long-winded way of saying that some of the problems we have now with innovation and seeing those innovations to the marketplace, of creating startup businesses and having opportunities for all Americans to start a business, if they want to do that – are literally problems built into, not only the mindset, but the ways that things are being done currently and for the better part of the last thirty years in America.
In a way, it could be said, (to be fair), that doing things in the manner described in the example above does yield a number of businesses and opportunities that simply breed out of doing it that way, but the cost of it has been to have wasted years and dollars with no greater nor timely solutions to show for it. And, to do it that way has made us look foolish in the eyes of the world and to have wasted time, national resources and the efforts of many great minds, great engineers, a great deal of money, talents, knowledge, resources and great science on innovations and research being used that way. Part of the losses in opportunity costs is that our nation’s leaders and business decision-makers have been doing things this way without yielding a wider array of solutions to a great many things that really needed their attention and that continue to need our nation’s intellectual assets applied to them.
We are already a nation of studying the studies of the things we’ve already studied. To do any more of that is just a waste. Either the rational justification to fund the study was appropriate enough to have funded it in the first place or it wasn’t. Our efforts need to be re-focused to use those innovative discoveries that have resulted from the research our national assets have already paid to produce and get those into applications in the marketplace.
I would say what is required to start a business from where I sit in America and the absolutely impossible hindrances, obstacles and obscene legislated requirements and complexities that have been set in the way for nearly every American to start a business, but it is just about enough to fill an entire book. It is no wonder that people get disgusted with it – the playing field is not level, the competition within the US is not fair, the risks are massive and the returns are questionable at best.
And, then even if everything is done right and goes well, its only purpose is to provide a profitable exit strategy for any number of investors who want to pull their money out plus a 3-5 times return on it within two or three years of having funded it. What is the point in that?
Thanks for asking though.
My Note here –
They had these four questions on the Commerce Department document which I read before contributing my comment above and really only had an interest in the first two questions right now –
Government research and development: How can the economic impacts of basic research funding (e.g., NSF, NIH) be better measured and evaluated? What methods can the Federal Government use to prioritize funding areas of basic research, both within an area of science and across areas of science? How can existing Federal government institutions (not just organizations, but also programs, policies, and laws) devoted to basic research and innovation be improved? Are there new institutions of these types that are needed to achieve national innovation goals? How could the government increase support for industry-led, pre-competitive R&D?
Entrepreneurship: Through what measures can government policy better facilitate the creation and success of innovative new businesses? What obstacles limit entrepreneurship in America, and which of these obstacles can be reduced through public policy? What are the most important policy, legal, and regulatory steps that the federal government could take to expand access to capital for high-growth businesses?
Intellectual Property: What are the key elements of any legal reform effort that would ensure that our intellectual property system provides timely, high-quality property rights and creates the best incentives for commercial innovation? How can the intellectual property system better serve the dual goals of creating incentives for knowledge creation while also ensuring that knowledge is widely diffused and adopted and moves to its best economic and societal uses?
Education: How important is catalyzing greater interest and training in science, technology, engineering, and mathematics (STEM) fields? What strategies can be most effective on this score? Can educational technologies be better utilized to this end? What are the critical opportunities and limitations to the creation and adoption of effective education technologies? How can investments in community colleges better leverage public-partnerships to better train Americans for the jobs of today and tomorrow?
There has to be a better way to prioritize Federal and State research dollars than to study the studies again and again and again. It has made an entire industry of studying without ever doing anything with any of it at this point.
That is one thing. The other is that I’ve noticed in China, Japan, and a few other nations, they are investing in R&D with an eye to get results, returns and revenues from them in twenty years from now, or in fifty years from the time money was put into it, and in some cases, maybe even longer periods of time. By doing that, they have been able to reap returns and revenues from those things very quickly – say in two-five years. That is because they are putting a lot of money into it and into continuing the funding of it in an ongoing basis without expectations that it must show any immediate returns to be taken out of it as justification for it to continue.
The advantage of doing it that way and at one time in this country we had done it that way is in being able to cull the harvest from it quickly when those discoveries and breakthroughs are made. There is enough money underwriting it for the science to get done, for the engineering to get done, for the confirmation of results to be made, for safety considerations to be checked and for market applications to be designed as well as creating the manufacturing systems to mass produce whatever it is.
In the manner that the US has been doing it for the last thirty – fifty years, if a product cannot justify itself or if an avenue of research cannot justify itself within a very short period of time (usually less than two years) with a substantial return of profitable revenues, then it is dropped and not proceeded further. That is costing us.
Those patents and research avenues are being sold in fire sales by brokers and corporations just to get rid of them and the profits they would have made for the US and our national business community is lost.
Investors want a short term return. Companies want a short term guaranteed return. Corporations and banks want short term guaranteed returns. And, innovation by its very nature is not guaranteed by the successes of what has come before it. As an example, the track record of auto sales generally cannot begin to prove to a banker, investor or corporate entity that innovative electric cars or hybrid cars will be guaranteed sales. So, therefore – the tendency is to put all the resources in cookie cutter fashion into what has already been proven over that which has not.
There has also been a tendency toward very shady, inappropriate strategies in many industries and businesses to grab up those innovations that are available intending no use for them whatsoever to simply keep them out of the marketplace where others might use those things in competition with them. The invention of a battery system heavy duty enough for commercial vehicles, small trucks, light duty transportation uses and long-range passenger cars was available for a number of years and could have been incorporated into all manner of vehicles but the patent was tied up by one of the large automotive companies (Dodge, I think it was) so that it couldn’t be used in competition with them. There are a number of situations like that which have hindered, and halted innovations being applied in the marketplace. In America, that is considered the way to do good business. And, I suppose it is except for the long-term costs of doing it that way.
When the monopoly thinking takes over, it doesn’t seem to hurt anything in the immediate experience. There are profits. Others can’t compete effectively (at least using that one avenue.) And, everyone appears to be happy – shareholders are happy, Wall Street is happy, business magazines and colleges telling about it seem happy, the customers aren’t being hurt in any way and generally, everything seems good and okay about it. But, the reasons that we have had laws about it and particularly, against many of those business practices in our history is because those strategies do cause harm, not only in the long-run but to our national interests, as well. Our nation is reeling from the disadvantages of doing many, many things that way.
Now, rather than having a multitude of small businesses selling gasoline, for instance, with its variety of Mom and Pop shops, we have national and international companies, franchises and huge conglomerates with all of those resources and revenues. Well, it was a trade-off and we let those big companies monopolize the marketplace. We are living with the results of what we traded-off to get, for better or worse. We are suffering those disadvantages, one of which was watching the gas prices go up every fifteen or twenty minutes on the retail gas outlets when the prices speculators were pushing for barrels of crude oil went higher in the summer of 2008 and then when the barrel prices went down, the retail prices started to shuffle downwards sometimes weeks later by a few pennies at a time.
That is a disadvantage. And, companies, families, communities, distributors, small businesses, medium-sized businesses, food suppliers, retailers, truckers and even airlines (eventually) suffered for it. And, many of the other disadvantages and obstacles that have been created in our marketplace for Americans to start their own businesses, innovate, invent, create or grow their own businesses have been caused by some of the same kinds of choices made by businesses too big to fail, but too small not to lobby.
In fact, imagine what happens when I want to create a business. There is a need that I see for a person to be able to go into any store and buy something which would show up at another store in another state or another location across town. I know their computers are tied together and they are part of the same corporate entity. But, I also know that they are sometimes franchise stores, that their inventory systems are not necessarily the same in every state and that their financial systems do not integrate from store to store. I think this could be fixed with a bit of software which could be designed and then sold to the store’s corporate headquarters to do this job for them. It would serve their customers. It would serve my needs and my family’s needs when we want to buy groceries or formula for for a daughter or son or grandbaby or friend or someone somewhere in some other state. It would allow us to purchase a fan or heater or air conditioner here where we live that they could go to their local store and simply pick up to have it right now on the same day. We could buy tires for their car when the tires are so bald that they aren’t safe anymore and pay for them to be picked up near the college where they are living or in the state where they decided to runoff to in order to have some freedom from us.
It is true, that between what I know and what other people who can do programming know, that we could create the software to do this. That is a fact. It is a good innovation. That is also a fact. I can even write a business plan to show how it would make money and project revenues for it with something less than a lie and fairly close to the reality of what costs it would have and sales it could make. However, then what happens? The state where I live wants to have a number of registrations for who I am and what I am doing with it in a business sense. The local municipalities want a business license to be registered. To protect the concept, I have to not tell anybody but in some way protect it through the intellectual property registrations that are available. I have to give it a snappy name that is easy to remember and not over two syllables. I would need to be able to tell somebody about it in 30 seconds using what amounts to about two sentences of very easy to remember information that includes where they can get it. And, then I have to go over to the SBA, the banks, the angel investors, or some group of family members, none of which think I can get my socks on right, let alone do something with a business effectively. And, here I would sit with that nice software designed to do a specific, much needed, very commercial, innovative thing with its snappy name and 30 second spiel to tell someone about it. Then, with another $250,000 to run around the country and pitch it to every chain store – I would have some sales of it or licensing for it to those stores, maybe. If they didn’t simply tell me they weren’t interested and then get on the phone after I leave and have somebody over at the nearest college design it for them to use while I’m on my way home.
And, I didn’t even mention that my credit would have to be sterling, which it isn’t, my character would have to have proof of being sterling for the last fifty years out of fifty two, which it isn’t and everything else that would need to be done correctly would have to be done correctly before anyone would begin to want to put money into it to get it going. I mean, that trademarks for the name and copyrights purchased, any patents required would have to have at least provisional patents applied for and all the legal things of being a business generally. And, then – the investors, potential partners or anyone else getting into it would want guarantees that they would get substantial returns for using their money. Then in two years, they would want their money back plus the returns they were told to expect or more. And, at that point – either more money to keep it growing would have to be located or the whole thing would go bankrupt and end up sold for pennies on the dollar.
It wasn’t on that list of things above – but there is also money required to market, to tell people about it, to promote it, to have a website about it, to tell industry leaders about it, to go sell it, to go pitch it to companies and industries that might use it, to run around networking with others who might tell others about it, and to have a team of attorneys fight to keep my ownership of it, because whether another company or group actually has the same thing before I did or not, they can say they did and then it is my responsibility to prove them wrong in courts. Oh yeah – and I’d have to have collateral to put up such as property or a huge savings account or stocks or bonds or who knows what and I don’t have any of that. And, if I did have any of that I wouldn’t need to borrow money to put a business together in the first place.
Oh yeah – and one other thing, right off the top of my head – when the stores would use the software that I and a team designed that my business is selling and they do end up collecting information about their customers who are using it and then the store sells that information – it could very well be a liability against the software manufacturer rather than against the retailer’s behavior and choices which would also take a team of lawyers to fix. The fact that things like that could tie up resources and time and efforts and public goodwill in courts and fooferrah makes it a possibly risky choice even after doing everything right, if everything to satisfy the law is done and everything else required actually works.
And, don’t even get me started about the tax code . . .
My email response back to family members (to line of thought below it that was sent to me) and the information I had sent to them originally –
No, ___ – that is wrong. Using the technology described in the article would not mean what you said. And, the profits from producing it wouldn’t go where you said, either.
Just as with anything, from those high-tech hydrofoil boats to nanoparticle finishes on sunglasses, the technology from Cella Energy in the UK could be “purchased” as rights to use it by leasing the rights, or licensing. That would give the right to produce fuel with what they discovered. The plant to produce it could be in the US with US workers, paying US taxes, distributing it through US owned businesses and distributors, and selling it around the world from the US companies where it is being produced. The business revenues and profits would be in the US. The people working in all those companies involved with it would be people in the US and the owners of the companies that license the fuel technology to produce it would be US owners / US business people. The corporate taxes and fuel taxes paid on it would go to the US.
Now, at what point, do you not realize that the best way to make a real dent in the deficit is by rebuilding our economy, rather than by cutting everything keeping it stable to shreds. That is partly how we got here in the first place. New businesses were not built or they were pushed out of business, they decided to go elsewhere or they couldn’t compete in the US marketplace if they were based here. A wealthy country can simply pay off that debt. In oil rich Kuwait, the citizens are all provided for by the revenues from the oil resources being harvested there. None of them have to work at anything, unless they just want to and the government provides absolutely everything. Many societies get more from their natural and national resources for their federal budgets than our nation does. We have been robbed. And, as much as that is the truth of it – what we do now as Americans matters even more.
We can pay a fee to license any technology, any new technology, any new discovery from anywhere in the world, from any university in the US or around the world, any existing patent and newly discovered whatever and use it by license to create new businesses that provide fuels in a different way, that provide light for our homes in other ways, that neutralize the chemical pollution of our cities, that provide a better concrete, that makes a better way to build sidewalks to allow water to seep through rather than to flood streets, and vast other things. Those businesses built on these things, pay a small fee to the licensing but otherwise, produce for America all the revenues and profits and employment and support of other businesses around them that they create.
And, don’t let that number fool you or your friends about the amount of money owed – it just means that we each need to create one good piece of software to sell around the world and it can be paid off. Or, vote to use Yucca Mountain as a massive server farm leasing space to servers from governments around the world instead of using it for radioactive waste to be stockpiled there. In India, there are physicists that have created a process to more completely use the radioactive materials with a process of fission combined with fusion which they are going to be licensing and Russia is using reprocessing radioactive materials as a revenue generating industry for their own economy. We could be doing that too. We could be doing a lot of things as Americans, including building new businesses that are based on the solutions to real problems we face as a nation.
Yes, both London and Wall Street financed and insured both sides of most wars, most military assets, many paramilitaries, most governments, many businesses and many more corporations. That is how they have been making their money. Apparently, they’ve already figured out how to do that well and make money going in both directions at the same time. In their estimation, it has nothing to do with conscience – it has to do with being “fair” by supporting all sides with financing at the same time, they are satisfying their corporate goals of being profitable. It has yielded and supported some pretty horrific things but they are playing by the rules they set – so either we get in the game by those rules and outdo them or simply stay indebted to them and other powers in the world, give them all our money and resources, or watch our money and resources be devalued to nearly nothing and still have to pay them for borrowing their money.
Personally, I think it would be better to rise up in our efforts rather than to muck about fussing with who is right about what a mess it is now. I noticed that a lot of those sites you visit are not inclined to have told you that when nations and people from around the world can buy something they need or want, only from America – then they spend money here which becomes ours to use for our nation’s needs, our states’ needs, our local communities’ needs, our education systems, our community businesses, our employment opportunities, our futures, our individual needs, and all those other things we think are important.
And, after seeing that the US gave Egypt $150 Billion Dollars since 1950 for military needs – as in “gave them $150 Billion Dollars” plus countless sweet contracts on equipment and several billion for education and other civil society things, even over the past few years – And, seeing that there are entire programs to give huge grant funds to people in the Middle East, set up by President Bush administration – for starting businesses, creating innovation, expanding businesses, etc. – And, other things of a similar nature – it occurs to me that if all expenditures being given to every other nation on the planet from the US taxpayers’ money were to completely stop – we wouldn’t have a deficit at all . . .
—– Original Message —–
From: family members
Sent: Sunday, January 30, 2011 2:26:38 AM
Subject: Re: New fuel that can be used in existing cars – trucks – engines – at $1.50 a gallon – from Oxford
That is good news, but the moneys for the fuel still would go to England.
We need moneys being made here to keep the moneys here so we can pay the debt that the government has assigned to us as taxpayers. That is unless you can figure how everyone in the population can come up with $200,000 average per person to pay off this horrible tax debt they have set up.
Right now if the tax rate were raised to 100%, we still could not pay the interest on the present debt loan, and the African born, so called, president (completely illegal under our constitution), wants to increase the National Debt Limit. It is kind of like killing a person by shooting them with $200,000 and wanting to shoot them with another $200,000.
I would say “what is wrong with these people”, but I think I know. He wants to set up a communist New World Order. There is a war going on “to destroy your freedom”.
PS: He calls it “World Order”. And the big bankers that are directing the actions here and around the world are centered in England.
Subject: New fuel that can be used in existing cars – trucks – engines – at $1.50 a gallon – from Oxford
UK-based Cella Energy has developed a synthetic fuel that could lead to US$1.50 per gallon gasoline. Apart from promising a future transportation fuel with a stable price regardless of oil prices, the fuel is hydrogen based and produces no carbon emissions when burned. The technology is based on complex hydrides, and has been developed over a four year top secret program at the prestigious Rutherford Appleton Laboratory near Oxford.
Early indications are that the fuel can be used in existing internal combustion engined vehicles without engine modification.
According to Stephen Voller CEO at Cella Energy, the technology was developed using advanced materials science, taking high energy materials and encapsulating them using a nanostructuring technique called coaxial electrospraying.
No virus found in this message.
Checked by AVG – www.avg.com
Version: 10.0.1204 / Virus Database: 1435/3411 – Release Date: 01/29/11
My Note –
So, what I want to say is this –
The one who was calling for a “New World Order” wasn’t our current President – it was President H.W. Bush (Sr.) – there are taped clips from a number of events and speeches where he used the term. However, he probably didn’t come up with it himself and no telling where it originated, but I’m sure someone knows. I think at one point there was a speech at the League of Nations which also contained it, but I think I read the transcript of that speech somewhere online, (a site with historical references and official documents from government sources and official sources from organizations that served the basis for current organizations.)
To see that the thing I sent to my family members, didn’t inspire them or yield even a thought about what could be done with it – is rather horrifying. It is as if any simple thing serves to simply add to the argument they’ve already bought made by those who have none of our best interests at heart. When I found so many of the right wing websites and even radio broadcasting, are owned by gold and silver traders, hosting revenue generating ads from a multitude of arms dealers and militia-oriented equipment and training along with using themes to intentionally incite fear, instigate violence, and make their sales based upon fear, hate and intolerance – I didn’t like it. There is no point to it but to sell those things by virtue of instilling fear and intolerance in their participants, listeners, readers and audience members.
Most of our loss of freedoms and quasi-legal denials of our guaranteed rights under the Constitution have happened over the last thirty years under the conservative run Republican administrations that have been in power across the Federal level and in almost every state. They gave sovereign immunity to states. They divided our nation into fifty sovereign nation states rather than us being one great nation indivisible. They did those things. And, they have fit us into the “New World Order” which was done in the manner they conceived of it that now makes us look like a nation in decline who owes fealty to literally every other nation on the earth. Our tax money has been spent to freely give around the world by hundreds of billions and even in the trillions of dollars, while any of us in America couldn’t even have the support of our own agencies to build a business, start a business, grow a business or market a business or support our own education systems and communities. That is what they have left to us.
They didn’t want efficient rapid transit, because their personal incomes and organizational incomes were deriving benefit from petroleum industries – so electric trolley systems were devolved, train systems were decimated, underground subway systems weren’t built (such as in Los Angeles early on), gas guzzling automobile and truck engines weren’t made competitive with the rest of the world, electric and alternative fueled vehicles were busted rather than being manufactured and promoted, and now our cities, towns and rural areas across America look like industrial cesspools in air quality, in the soil readings, in available water sources and in every other thing it has touched.
(Yes, that is quite a sentence – just don’t even get me started.)
The budget deficits we are paying for today, came from the failed economic policies of thirty years under the rule of conservative Republicans who failed to see what the real world around them was becoming at their hands. And, the interest payments we are required to pay today, were made on terms they created, with dollar values they devalued, after leaving our nation desolate from every natural resource being raped, pillaged and plundered by the outside corporate interests who gave us nearly nothing for them compared to the profits they received from them. Not even Saudi Arabia would allow that, but our nation’s leaders did – long before President Obama and his current team ever had the chance to be in the office.
When I wrote the America the Beautiful Show idea on paper in my home, and then posted it on my blog once I realized that I personally was not in a position to have the freedom to do it, and then last August as I posted the idea on a website of its own (an my daughter put a flash website together for it) – I had really genuinely believed that it was a good idea that others could pick up and do across the United States. I believed that people would want to do things to help rebuild our economic freedoms and help one another to do that. And, then I saw the right wing websites filling the internet, the airwaves, and my family’s older members own emails and posts they were, and are shipping all over the country to people they know. And, I realized how much money is in it – and how much they are willing to give to it, and how much all their friends are giving into it while they sit at home and say they don’t want to be bothered with the news, or the news in the world, or to “think” about anything.
But, they “think” about those things they hear on the right wing broadcasts and read on those right wing websites and emails sent from them enough to repeat those things without regard for thinking to see if it makes sense, or to find out if parts of it have twisted interpretations of facts or if it has out and out falsehoods in it. They just repeat them and send money to support what they believe are efforts to return our nation to “I don’t even know what” – but it isn’t good. I think they believe the conservatives and the conservative right wing politicians in general will return the nation to a time of their youth when all was right with the world. But, after having watched the situation in Egypt over the past few days, and finding out how much of our money has put sophisticated military hardware in the hands of a bunch of sadistic lunatics running Egypt’s government – I would have to say that it wasn’t safe, protected, stable and right in the world (nor in the US) even when they were young.
Looking at how much money we’ve spent to subsidize electric cars and the existing car industries being able to re-tool to produce them, having paid for most, if not all of the research on them and the battery technologies for them, and having noted the literally hundreds of billions upon billions given to the various industries over the years in grants, incentives, tax breaks, property, expansion grants, subsidies, research done for them, analysis done for them, distribution infrastructures built for them and paid for by us – I keep thinking that just about any American citizen could’ve been able to do the same thing had we been allowed in the action. Or am I to believe that if I had been given $3.2 billion dollars and all the research on it, a factory building and property for a dollar as many states have done and no taxes on the money made – that I couldn’t have produced a few thousand electric cars for a retail price of $42,000 each? Oh yes I could.
Anyone could do better than that with those kinds of resources given to them, (among massive other things that were made available to these businesses, corporations and industries from America’s taxpayers’ coffers.)
Federal Lanham Act Remedies for False Advertising –
1. Historical Background –
Section 43(a) of the Lanham Act prohibits any false description or representation of goods. Although this section was originally construed narrowly, to reach only “passing off” and other behavior resembling trademark infringement, modern cases regard the statute as providing a federal remedy against false advertising.
2. Standing: Who May Invoke Section 43 –
A plaintiff seeking injunctive relief under § 43(a) must show a likelihood of economic injury due to the defendant’s conduct in order to be entitled to relief. If the plaintiff seeks damages, it must demonstrate an actual loss of sales (and / or loss of revenue, my note – actual money, but can include lost opportunity costs.)
3. What Constitutes a False Description or Representation –
Any falsehood with a tendency to mislead or deceive is actionable under section 43(a), provided it is material. The plaintiff need not prove that the defendant acted intentionally.
(from – “Capsule Summary”)
pp. 20 – 21, also pp. 148 – 150
Unfair Trade Practices & Intellectual Property,
author – Roger E. Schechter,
Black Letter Series, West Publishing Co., St. Paul, Minn.; 1986
Hmmmm . . . . – wonder if those laws still exist? After watching the Goldman Sachs hearings in the Senate committee yesterday, when investors are told that a thing is good investment securities, when they know it is not – isn’t that applied to laws like this? Or rather, aren’t laws like this applied to situations like that?
I found another section of this book which had this sentence – “Nonetheless, some courts will impose a duty to pay if the equities of the situation require it to prevent unjust enrichment.” – What constitutes “unjust enrichment”?
English unjust enrichment law is a developing area of law in unjust enrichment. Traditionally, work on unjust enrichment has been dealt with under the title …
en.wikipedia.org/wiki/English_unjust_enrichment_law – Cached – Similar
English unjust enrichment law is a developing area of law in unjust enrichment. Traditionally, work on unjust enrichment has been dealt with under the title of “restitution“. Restitution is a gain-based remedy, the opposite of compensation, as a loss-based remedy. But the event it responds to is the “unjust enrichment” of one person at the expense of another.
Hazell v. Hammersmith and Fulham LBC  2 AC 1. Banks paid councils a lump sum (for Islington, £2.5m). The councils then paid the banks back at the prevailing interest rate. Banks paid councils back a fixed interest rate (this is the swap part). The point was that councils were gambling on what interest rates would do. So if interest rates fell, the councils would win. As it happened, interest rates were going up and the banks were winning. Islington was due to pay £1,354,474, but after Hazell, it refused, and waited to see what the courts said. At first instance Hobhouse J said that because the contract for the swap scheme was void, the council had been unjustly enriched with the lump sum (£2.5m) and it should have to pay compound interest (lots) rather than simple interest (lots, but not so much). But luckily for local government, three law Lords held that Islington only needed to repay with simple interest. There was no jurisdiction for compound interest. They said this was because there was no ‘resulting trust’.
Westdeutsche Landesbank Girozentrale v Islington LBC  AC 669, the council had no authority to enter into a complex swap transaction with the German bank. So the House of Lords held that the council should repay the money they had been lent and a hitherto unknown ‘unjust’ factor was added to the list. Birks argued that the better explanation in all cases is an ‘absence of basis’ for the transfer of property. Searching through or adding to a list of open ended unjust factors simply concludes on grounds of what one wishes to prove, grounds that ‘would have to be constantly massaged to ensure that they dictated an answer as stable as is reached by the shorter ‘non basis’ route.’ (Birks (2005) 113)
The following eleven categories are examples of “unjust factor” (or what Peter Birks argued could be unified under one principle of a basis of a right being absent) which may ground a claim of restitution for unjust enrichment.
Unjust enrichment is a developed and coherent field in continental civil law systems. Continental lawyers say someone is unjustly enriched when there is no basis for their possession or title to some right or property. A more correct way of saying it is that someone has been “unjustifiedly enriched”. In German, the term is Ungerechtfertigte Bereicherung (§812 BGB) and in France the term is Enrichissement sans cause. English lawyers, however, have been accustomed to identify an “unjust factor”. The difference between “unjust factors” and “absence of basis” as a unifying principle has generated a lot of debate, particularly since Peter Birks changed his mind in his second edition of Unjust Enrichment (2005) in the Clarendon Law Series, and argued that the continentals had got it right.
The two leading theorists that have revived unjust enrichment were Lord Goff, who produced Goff and Jones on Restitution and Professor Peter Birks.
Black Letter Series, West Publishing Co., St. Paul, Minn.; 1986
(excerpt – )
To constitute “unfair” conduct, an advertisement or commercial practice must pose a risk of substantial, unmitigated, unavoidable consumer injury.
(further – )
These advertisements may be deceptive, however, if analyzed under the historic definition of that term. Under the classic test, an advertising claim is deceptive if it has any tendency to deceive a significant number of consumers.
(also found on pp. 225 – )
2. True. The original version of the statute [VIII. Federal Trade Commission Regulation of Unfair and Deceptive Practices] only dealt with “unfair methods of competittion.” The 1938 Wheeler-La Amendment added the “unfair and deceptive acts and practices” language.
(and on pp. 228)
4. True. Such statutes have been applied against defendants who were making casual sales of used goods.
(and therefore, why shouldn’t it be applied to investment firms, banks, hedge funds and others in the investment community who engaged in deceptive and misleading practices that would’ve been illegal in any other context, including as the laws and statutes are applied to regular Americans being involved in casual sales of goods that were unlikely to have created the huge ramifications that the Wall Street players caused, my note.)
Unjust enrichment is a legal term denoting a particular type of causative event in which one party is unjustly enriched at the expense of another, and an obligation to make restitution arises, regardless of liability for wrongdoing.
Liability under the principle of unjust enrichment is wholly independent of liability for wrongdoing. Claims in unjust enrichment do not depend upon proof of any wrong. However, it is possible that on a single set of facts a claim based on unjust enrichment and a claim based on a wrong may both be available. A claim based on unjust enrichment always results in an obligation to make restitution. A claim based on a wrong always results in an obligation to make compensation, but may additionally result in an obligation to make restitution and on the other hand it will result in an obligation to make reimbursement which will allow the normal citizen to the courts for its wrongdoing which it never intended to do so. For discussion of restitution for wrongs, see the page on restitution.
At common law, a claim based on unjust enrichment can be submitted to five stages of analysis. These can be summarized in the form of the following questions:
Was the defendant enriched?
Was the enrichment at the expense of the claimant?
There are two established approaches to this issue. Traditionally, common law systems such as those of England and the US have proceeded on the basis of what may be termed the ‘unjust factor’ approach. Traditionally, civil law systems such as those of France and Germany have proceeded on the basis of what may be termed the ‘absence of basis’ approach. More recently, many common law systems have showed signs of a possible move towards the ‘absence of basis’ approach (see for example the law of North Dakota in the section on the United States below). Both approaches will be discussed.
The ‘unjust factors’ approach requires the claimant to point to one of a number of factors recognized by the law as rendering the defendant’s enrichment unjust. English law clearly recognises at least the following unjust factors:
‘Absence of consideration’ is particularly controversial because the cases that support its existence as an unjust factor can also be used to support the view that English law has begun to favour the ‘absence of basis’ approach (see next paragraph).
The ‘absence of basis’ approach does not deal in individual unjust factors. Instead it seeks to identify enrichments with no legitimate explanatory basis. Imagine that A contracts with B that A will pay $150 up front for B to clean his house. A pays the money. B’s enrichment has a legitimate explanatory basis – he was paid under a valid contract. However, let us now change the example and assume that the contract was in fact void. This is discovered after A has paid the money but before B cleans the house. B’s enrichment no longer has a legitimate explanatory basis so B must repay the $150 to A.
Notice that in the example just given, exactly the same conclusion would be reached using the ‘unjust factors’ approach. Under that approach, A would not be able to point to an unjust factor provided that the contract was valid, but could point to the unjust factor of total failure of consideration once we assume that it was void. In the vast majority of cases, a properly developed ‘unjust factors’ approach and a properly developed ‘absence of basis’ approach will reach the same result.
 What remedies are available to the claimant?
It is necessary to distinguish personal remedies from proprietary remedies. A personal remedy asserts that the defendant must pay the claimant a sum of money. By contrast, a proprietary remedy asserts that some property in the defendant’s possession belongs to the claimant, either at common law or in equity. There are several arguable examples in the English case law of the courts giving a proprietary remedy in an unjust enrichment claim. However, some commentators maintain that, in English law, unjust enrichment only ever triggers a personal remedy.
There are several reasons why it may be important for the claimant to seek a proprietary rather than a personal remedy. The most obvious is that showing that one is entitled to a proprietary interest in some property means that one need not compete with the defendant’s unsecured creditors in the event of his insolvency. It is also generally accepted, although with little justification, that a claimant who is entitled to a personal remedy only will be restricted to simple interest, while a claimant who is entitled to a proprietary remedy can get compound interest. The availability or non-availability of a proprietary remedy may also have consequences for limitation periods and for the conflict of laws.
English law gives effect to restitutionary proprietary interests (assuming that it does at all) through a number of devices. One of these devices will be discussed and another two will be mentioned briefly.
It doesn’t matter if you are a “market maker” or not, such as Goldman Sachs and about 2000 others are – they still can’t store explosives under their desks because they must abide by the laws which apply to that just as we all do, and they still can’t engage in failing to meet OSHA standards for a work place, nor can they be exempted from the regulations, statutes and laws governing the rest of us and the business laws that generally apply to everything.
I know yesterday during the hearings, the term “market maker” was used as a declaration of why “we get to get away with doing it this way, by law – because we qualify as a market maker.” That doesn’t mean everything else in the law and in international law doesn’t apply to them. It does not exclude their businesses, their business participation, their business practices and decisions, their business processes and their marketing practices from the laws governing everything else.
An Icelandic 1000-krónur note. The value of the Icelandic króna declined significantly during 2008.
Economic growth in Iceland, Denmark, Norway and Sweden from 2000 to 2007. Iceland is in red.
The 2008–2010 Icelandic financial crisis is a major ongoing economic crisis in Iceland that involves the collapse of all three of the country’s major banks following their difficulties in refinancing their short-term debt and a run on deposits in the United Kingdom. Relative to the size of its economy, Iceland’s banking collapse is the largest suffered by any country in economic history.
In late September 2008, it was announced that the Glitnir bank would be nationalised. The following week, control of Landsbanki and Glitnir was handed over to receivers appointed by the Financial Supervisory Authority (FME). Soon after that, the same organisation placed Iceland’s largest bank, Kaupthing, into receivership as well. Commenting on the need for emergency measures, Prime MinisterGeir Haarde said on 6 October, “There [was] a very real danger … that the Icelandic economy, in the worst case, could be sucked with the banks into the whirlpool and the result could have been national bankruptcy.” He also stated that the actions taken by the government had ensured that the Icelandic state would not actually go bankrupt. At the end of the second quarter 2008, Iceland’s external debt was 9.553 trillion Icelandic krónur (€50 billion), more than 80% of which was held by the banking sector. This value compares with Iceland’s 2007 gross domestic product of 1.293 trillion krónur (€8.5 billion). The assets of the three banks taken under the control of the FME totaled 14.437 trillion krónur at the end of the second quarter 2008.
The financial crisis has had serious consequences for the Icelandic economy. The national currency has fallen sharply in value, foreign currency transactions were virtually suspended for weeks, and the market capitalisation of the Icelandic stock exchange has dropped by more than 90%. As a result of the crisis, Iceland is currently undergoing a severe economic recession; the nation’s gross domestic product decreased by 5.5% in real terms in the first six months of 2009. The full cost of the crisis cannot yet be determined, but already it exceeds 75% of the country’s 2007 GDP. Outside Iceland, more than half a million depositors (far more than the entire population of Iceland) found their bank accounts frozen amid a diplomatic argument over deposit insurance. German bank BayernLB faces losses of up to €1.5 billion, and has had to seek help from the German federal government. The government of the Isle of Man will pay out half of its reserves, equivalent to 7.5% of the island’s GDP, in deposit insurance.
( . . . )
On 24 October, it emerged that Norway’s semi-public export credit agencyEksportfinans had made a complaint to Norwegian police concerning the alleged embezzlement of 415 million Norwegian kroner (€47 million) by Glitnir since 2006. The Icelandic bank had acted as an agent for Eksportfinans, administering loans to several companies: however Eksportfinans alleges that, when the loans were paid off early by borrowers, Glitnir kept the cash and merely continued with the regular payments to Eksportfinans, effectively taking an unauthorized loan itself.
OMX Iceland 15 closing prices during the five trading weeks from September 29, 2008 to October 31, 2008
Trading in shares of six financial companies on the OMXNordic Iceland Exchange was suspended on 6 October by order of the FME. On Thursday 9 October, all trading on the exchange was frozen for two days by the government “in an attempt to prevent further panic spreading throughout the country’s financial markets”. The decision was made to do so due to “unusual market conditions”, with share prices having fallen 30% since the start of the month. The closure was extended through Monday 13 October due to continuing “unusual market conditions”.
The market reopened on 14 October with the main index, the OMX Iceland 15, at 678.4, which corresponds to a plunge of about 77% compared with 3,004.6 before the closure. This reflects the fact that the value of the three big banks, which form 73.2% of the value of the OMX Iceland 15, had been set to zero. The values of other equities varied from +8% to –15%. Trading in shares of Exista, SPRON and Straumur-Burðarás (13.66% of the OMX Iceland 15) remains suspended. After a week of very thin trading, the OMX Iceland 15 closed on 17 October at 643.1, down 93% in króna terms and 96% in euro terms from its historic high of 9016 (18 July 2007).
Trading in the shares of two financial services companies, Straumur–Burðarás and Exista, resumed on 9 December: together the companies account for 12.04% of the OMX Iceland 15. The values of the shares in both companies dropped sharply, and the index closed at 394.88, down by 40.17% on the day. Trading in shares in SPRON and Kaupthing remains suspended, at prices of ISK 1.90 and ISK 694.00 respectively.
Ratings of Icelandic sovereign debt
(long-term foreign currency)
The four credit rating agencies which monitor Iceland’s sovereign debt all lowered their ratings during the crisis, and their outlook for future ratings changes is negative. The Icelandic government had a relatively healthy balance, with sovereign debt of 28.3% of GDP and a budget surplus of 5.5% of GDP (2007). Debt is now 90 percent of GDP with a budget deficit.
In addition, the value of foreign currency bonds which mature in the remainder of 2008 is only $600 million, and foreign currency debt service in 2009 is only $215 million, well within the government’s ability to pay. However the agencies believe that the government will have to issue more foreign currency bonds, both to cover losses as the banks’ overseas operations are liquidated and also to stimulate demand in the domestic economy as Iceland goes into recession.
On 24 October, the IMF tentatively agreed to loan €1.58 billion. However the loan had still not been approved by the Executive Board of the IMF on 13 November. Apparently, UK and the Netherlands had halted IMF’s aid to Iceland as the Icesave dispute had not been resolved. Due to the delay Iceland found itself caught in a classic catch-22 situation, loans from other countries could not be formally secured until the IMF program had been approved. The Icelandic government spoke of a $500M (€376M) gap in the funding plans. Dutch finance ministerWouter Bos stated that the Netherlands would oppose the loan unless agreement was reached over deposit insurance for Landsbanki customers in the Netherlands.
The IMF-led package of $4.6bn was finally agreed on 19 November, with the IMF loaning $2.1bn and another $2.5bn of loans and currency swaps from Norway, Sweden, Finland and Denmark. In addition, Poland has offered to lend $200M and the Faroe Islands have offered 300M Danish kroner ($50M, about 3% of Faroese GDP). The Icelandic government also reported that Russia has offered $300M. The next day, Germany, the Netherlands and the United Kingdom announced a joint loan of $6.3bn (€5bn), related to the deposit insurance dispute.
In 2001, banks were deregulated in Iceland. This set the stage for banks to upload debts when foreign companies were accumulated. The crisis unfolded when banks became unable to refinance their debts. It is estimated that the three major banks hold foreign debt in excess of €50 billion, or about €160,000 per Icelandic resident, compared with Iceland’s gross domestic product of €8.5 billion. As early as March 2008, the cost of private deposit insurance for deposits in Landsbanki and Kaupthing was already far higher (6–8½% of the sum deposited) than for other European banks. The króna, which was ranked by The Economist in early 2007 as the most overvalued currency in the world (based on the Big Mac Index), has further suffered from the effects of carry trading.
Coming from a small domestic market, Iceland’s banks have financed their expansion with loans on the interbank lending market and, more recently, by deposits from outside Iceland (which are also a form of external debt). Households also took on a large amount of debt, equivalent to 213% of disposable income, which led to inflation. This inflation was exacerbated by the practice of the Central Bank of Iceland issuing liquidity loans to banks on the basis of newly-issued, uncovered bonds — effectively, printing money on demand.
In response to the rise in prices — 14% in the twelve months to September 2008, compared with a target of 2.5% — the Central Bank of Iceland has held interest rates high (15.5%). Such high interest rates, compared with 5.5% in the United Kingdom or 4% in the eurozone for example, have encouraged overseas investors to hold deposits in Icelandic krónur, leading to monetary inflation: the Icelandic money supply (M3) grew 56.5% in the twelve months to September 2008, compared with 5.0% GDP growth. The situation was effectively an economic bubble, with investors overestimating the true value of the króna.
As with many banks around the world, the Icelandic banks found it increasingly difficult or impossible to roll over their loans in the interbank market, their creditors insisting on repayment while no other banks were willing to make fresh loans. In such a situation, a bank would normally have to ask for a loan from the central bank as the lender of last resort. However, in Iceland the banks were so much larger than the national economy that the Central Bank of Iceland and the Icelandic government could not guarantee the repayment of the banks’ debts, leading to the collapse of the banks. The official reserves of the Central Bank of Iceland stood at 374.8 billion krónur at the end of September 2008, compared with 350.3 billion krónur of short-term international debt in the Icelandic banking sector, and at least £6.5 billion (1,250 billion krónur) of retail deposits in the UK.
The Icesave logo, advertising it as “part of Landsbanki, Reykjavik, Iceland”
The situation was made worse by the fact that Icesave was operating as a branch of Landsbanki, rather than as a legally independent subsidiary. As such, it was completely dependent on the Central Bank of Iceland for emergency loans of liquidity, and could not turn to the Bank of England for help. The UK Financial Services Authority (FSA) was aware of the risk, and was considering imposing special liquidity requirements on Icelandic deposit-taking banks in the weeks before the crisis. However the plan—which was never implemented—would have forced the Icelandic banks to cut interest rates or stop taking new deposits, and might even have sparked the sort of bank run it was designed to prevent. The Guernsey authorities were also planning on bringing in restrictions on foreign banks operating as branches and on transfers of funds between Guernsey subsidiaries and parent banks (“parental upstreaming”). Landsbanki operated in Guernsey through a legally independent subsidiary.
The existence of a bank run on Landsbanki accounts in the UK in the period up to 7 October seems confirmed by a statement from the bank on 10 October, which said “Landsbanki Íslands hf. transferred substantial funds to its UK branch during this time to fulfil its Icesave commitments.” The transfer of funds from Landsbanki Guernsey to Heritable Bank, a Landsbanki subsidiary in the UK, also suggests a bank run in the UK. A transfer of “substantial funds” from Iceland to the UK would have been a significant downward push on the value of the króna, even before the effects of any speculation.
The current economic climate in the country has affected many Icelandic businesses and citizens. With the creation of Nýi Landsbanki, the new organisation which replaces the old Landsbanki, around 300 employees will lose their jobs due to a radical restructuring of the organisation which is intended to minimise the bank’s international operations. Similar job losses are expected at Glitnir and Kaupthing The job losses can be compared with the 2,136 registered unemployed and 495 advertised vacancies in Iceland at the end of August 2008.
Other companies have also been affected. For example, the private Sterling Airlines declared bankruptcy on 29 October 2008. The national airline Icelandair has noticed a significant slump in domestic demand for flights. However, the airline states that year-on-year international demand is up from last year. Guðjón Arngrímsson, a spokesman for the airline, said “we’re getting decent traffic from other markets… we are trying to let the weak [króna] help us.” He has also stated that it is impossible to predict whether the company will be profitable this year.Morgunblaðið, an Icelandic newspaper, is cutting some jobs and merging parts of its operations with the media corporation 365. The newspaper 24 stundir has ceased publication due to the crisis, resulting in the loss of 20 jobs.
Importers are particularly hard hit, with the government restricting foreign currency to essential products such as food, medicines and oil. The €400 million loan from the central banks of Denmark and Norway is sufficient to pay for a month’s imports, although on 15 October there was still a “temporary delay” which affected “all payments to and from the country”.
The assets of Icelandic pension funds are, according to one expert, expected to shrink by 15–25%. The Icelandic Pension Funds Association has announced that benefits will in all likelihood have to be cut in 2009. Iceland’s GDP is expected by economists to shrink by as much as 10% as a result of the crisis, putting Iceland by some measures in an economic depression.Inflation may climb as high as 75% by the end of the year.
Unemployment had more than tripled by late November 2008, with over 7000 registered jobseekers (about 4% of the workforce) compared to just 2136 at the end of August 2008. As 80% of household debt is indexed and another 13% denominated in foreign currencies, debt repayment is going to be more costly. Since October 2008, 14% of the workforce have experienced reductions in pay, and around 7% have had their working hours reduced. According to the president of the Icelandic Federation of Labour (ASÍ), Gylfi Arnbjörnsson, these figures are lower than expected. 85% of those currently registered as unemployed in Iceland stated that they lost their job in October, after the economic collapse.
Over £840 million in cash from more than 100 UK local authorities was invested in Icelandic banks. Representatives from each council are meeting to try to persuade the Treasury to secure the money in the same way that customers’ money in Icesave was fully guaranteed. Of all the local authorities, Kent County Council has the most money invested in Icelandic banks, currently £50 million.Transport for London, the organisation that operates and coordinates transport services within London, also has a large investment at £40 million. Local authorities were working under government advice to invest their money across many national and international banks as a way of spreading risk. Other UK organisations said to have invested heavily include police services and fire authorities, and even the Audit Commission. It is hoped that about one-third of the deposited money will be available fairly rapidly, corresponding to the liquid assets of the UK subsidiaries: liquidation of other assets, such as loans and offices, will take longer.
In an emergency sitting of Tynwald on 9 October, the Isle of Man government raised compensation from 75% of the first £15,000 per depositor to 100% of £50,000 per depositor. The Chief Minister of the Isle of Man, Tony Brown, confirmed that Kaupthing had guaranteed the operations and liabilities of its Manx subsidiary in September 2007, and that the Manx government was pressing Iceland to honour this guarantee. Depositors with Landsbanki on Guernsey found themselves without any depositor protection.
On 11 October, an agreement was reached between the Icelandic and Dutch governments on the savings of about 120,000 Dutch citizens. The Icelandic government will cover the first €20,887 on savings accounts of Dutch citizens held by Landsbanki subsidiary Icesave, using money lent by the Dutch government. The total value of Icesave deposits in the Netherlands is €1.7 billion. At the same time, Iceland and Britain reached an agreement on the general contours of a solution: Icesave deposits in the UK total £4 billion (€5 billion) in 300,000 accounts. The figure of €20,887 is the amount covered by the Icelandic Depositors’ and Investors’ Guarantee Fund (DIGF; Tryggingarsjóður in Icelandic): however, the DIGF had equity of only 8.3 billion krónur at the end of 2007, €90 million at the exchange rates of the time and far from sufficient to cover the Dutch and British claims.
The cost of deposit insurance in the UK is not completely clear as of November 2008. The Financial Services Compensation Scheme (FSCS) paid around £3 billion to transfer deposits from Heritable Bank and Kaupthing Singer & Friedlander to ING Direct, while the UK Treasury paid an additional £600 million to guarantee retail deposits that were higher than the FSCS limit. The Treasury also paid out £800 million to guarantee Icesave deposits that were higher than the limit. A loan of £2.2 billion to the Icelandic government is expected to cover the claims against the Icelandic DIGF relating to Icesave, while the exposure of the UK FSCS is expected to be £1–2 billion.
The crisis also prompted the Ministry of Foreign Affairs to reduce its foreign aid to developing nations, from 0.31% to 0.27% of GNP. The effect of the aid cut was greatly amplified by the falling value of the krona, leading the Icelandic International Development Agency (ICEIDA) to see its budget fall from $22 million to $13 million. Since Iceland’s foreign aid is targeted in sectors for which the country has particular expertise (e.g. fisheries, geothermal power), the cutbacks will have a substantial impact in countries which receive Icelandic aid – most noticeably in Sri Lanka, where ICEIDA is pulling out altogether.
On February 27, 2009, the Wall Street Journal reported that Iceland’s new government is trying to raise $25 million by selling its ambassadorial residences in Washington, New York, London and Oslo.
On August 28, 2009, Iceland’s parliament voted 34-15 (with 14 abstentions) to approve a bill (commonly referred to as the Icesave bill) to repay the United Kingdom and the Netherlands more than $5 billion lost in Icelandic deposit accounts. Initially opposed in June, the bill was passed after amendments were added which set a ceiling on the repayment based on the country’s Gross Domestic Product. Opponents of the bill argued that Icelanders, already reeling from the crisis, should not have to pay for mistakes made by private banks under the watch of other governments. However, the government argued that if the bill failed to pass, the UK and the Netherlands might retaliate by blocking a planned aid package for Iceland from the International Monetary Fund (IMF). Under the deal, up to 4% of Iceland’s Gross Domestic Product (GDP) will be paid to the UK, in sterling terms, from 2017-2023 while the Netherlands will receive up to 2% of Iceland’s GDP, in euro terms, for the same period. Talks between Icelandic, Dutch and UK ministers in January of 2010 dubbed as “Icesave” did not result in any specific actions being agreed upon. 
In April 2009, Iceland’s state prosecutor hired Eva Joly, the Norwegian-French investigator who led Europe’s biggest ever fraud investigations into bribery and corruption at oil group Elf Aquitaine, as special consultant to a 20-member ”economic crime team” to “investigate suspicions of criminal actions in the period preceding the collapse of the Icelandic banks” which may involve several Iceland’s business and banking leaders. Joly stated that the investigation will require a minimum of 2–3 years to build up enough evidence to secure prosecutions.
In an interview Joly stated that:
“Finding proof will start at home in Iceland, but my instinct is that it will spread. If there are things relevant to the UK we will get in touch with the Serious Fraud Office. If there are things relevant to Germany we will get in touch with their authorities. In Iceland, there is more than enough for a starting point for the investigation, given all the talk about market manipulation and unusual loans. If these are proved they are embezzlement and fraud. The priority is tracing any flow of assets from the banks and getting them back.”
The investigation is expected to focus on a number of questionable financial practices engaged in by Icelandic banks:
Almost half of all the loans made by Icelandic banks were to holdings companies, many of which are connected to those same Icelandic banks.
Money was allegedly lent by the banks to their employees and associates so they could buy shares in those same banks while simply using those same shares as collateral for the loans. Borrowers were then allowed to defer paying interest on the loan until the end of the period, when the whole amount plus interest accrued was due. These same loans were then allegedly written off days before the banks collapsed.
Kaupthing allowed a Qatari investor to purchase 5% of its shares. It was later revealled that the Qatari investor “bought” the stake using a loan from Kaupthing itself and a holding company associated with one of its employees (i.e. the bank was, in effect, buying its own shares).
Scrutiny of Icelandic business leaders
Since the crisis began, many of Iceland’s business leaders, who had previously been considered financial gurus who greatly developed Iceland’s economy, are now under intense public scrutiny for their roles in causing the financial crisis:
Reportedly, all of those under scrutiny are now rarely seen in public and some have apparently left the country. They are also reportedly the subjects of an ongoing investigation to determine if any of their business practices warrant criminal prosecution.
Statements from former politicians
Former Prime Minister Davíð Oddsson has claimed that Iceland needs to investigate “unusual and unconventional loans” given by the banks to senior politicians during the years before the crisis.
Björn Bjarnson, the former Minister for Justice and Ecclesiastical Affairs, has started a blog detailing the problems with the business sector and the efforts to cover them up. This was cited as an example of how politicians and businessmen, who traditionally held a tight grip over the Icelandic media, have lost this control and that dozens of similar blogs have been created. Björn stated that:
“I have written a lot about problems in the business sector over the last 14 years, and I can only compare some parts of it to Enron. Here companies have been playing a game, using the media and publishing to make themselves look good. We only hope that the foreign media will soon begin to understand what has been going on.”
Some of the 6000 protesters in front of the Alþingishús, seat of the Icelandic parliament, on 15 November 2008.
Parts of the Icelandic public have arranged protests against the Central Bank, the Parliament and the government’s alleged lack of responsibility before and after the crisis, attracting between 3000 and 6000 people (1–2% of Iceland’s population) on Saturdays.
And a little about the Freedom of Information Act and financial firms –
§ 38:249 (US Code)
K. Eighth Exemption: Reports by Financial Institutions
1. In General
§ 38:249 (US Code) Introduction
5 USCS § 552(b) (8) provides an exemption from FOIA disclosure for matters that are contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of an agency responsible for the regulation or supervision of financial institutions.
Accordingly, a number of federal offices and agencies, including the Treasury Department, the Comptroller of the Currency, the Federal Reserve System, and the Pension Benefit Guaranty Corporation have promulgated regulations affirmatively applying Exemption 8 to relevant information in their possession.
Some regulations, however, such as those of the Federal Deposit Insurance Corporation, may contain provisions for the discretionary release of reports that are otherwise exempt.
As stated in the legislative history of the FOIA, Exemption 8 is designed to insure the security and integrity of financial institutions, since the sensitive details collected by government agencies which regulate financial institutions could cause great harm if they were to be indiscriminately disclosed. A major concern is that the disclosure of such reports containing frank evaluations of investigated banks might undermine public confidence in the soundness of such institutions and cause unwarranted runs on banks.
A secondary purpose behind the enactment of Exemption 8 is to safeguard the relationship between the banks and the supervising agencies. There was concern that if bank examinations are freely made available to the public and to the banks’ competitors, the banks will be less likely to give the agencies their full co-operation – (which they don’t do now, my note).
The courts have indicated that Exemption 8, like the other FOIA exemptions, must be narrowly construed, but this does not mean that the plain meaning of the language of the exemption can be overlooked.
Practice pointer: Although reports prepared by bank regulatory bodies are beyond the scope of FOIA disclosure, such reports might nevertheless be subject to discovery in the course of litigation.
Exemption 8 does not create independently any evidentiary privilege, its effect being only to permit the withholding of such information from the public generally.
If, however, the federal banking agency forbids the bank to disclose a report of an examination without agency approval, discovery of examination reports must be sought from the agency and not from the bank as part of pretrial discovery in litigation involving the bank. (or financial investment, financial brokerage, stock market records, or investment “auction” facility, my note).
(from pp. 256 – 257, 15 Fed Proc, L Ed; )
§ 38:250. What “financial institutions” are governed by
The term “financial institution” has been interpreted to include banks and other related institutions.
Thus, two sets of federal regulations, those of the Comptroller of the Currency and the Federal Reserve System, indicate that the exemption is applicable to reports relating to the affairs of any bank or affiliate thereof, bank holding company or subsidiary, broker, finance company, or any person engaged, or proposing to engage, in the business of banking, extending credit, or managing or controlling banks.
It has been held that examination reports of federal savings institutions are also exempt from disclosure. Although some fears have been expressed that if Exemption 8 is construed literally, the records relating to a closed bank will be perpetually sealed, it has been held that such records come within the scope of Exemption 8, at least where the bank has only recently been closed and where the records have not yet been turned over to GSA.
One question is whether national securities exchanges are considered to be “financial institutions” within the meaning of Exemption 8.
In one case, a Securities and Exchange Commission staff study on an off-board trading problem raised by a rule of the New York Stock Exchange, as well as of the transcripts made and documents received by the SEC in the course of its investigation, were held not? to be exempted from FOIA disclosure by reason of Exemption 8.
But it has been held that an SEC report regarding an inspection of one of the lesser stock exchanges is exempt as pertaining to a financial institution.
(and from pp. 259, 15 Fed Proc, L Ed)
§ 38:252 Other exempt information
Other types of information that have been held to be exempted from disclosure under 5 USCS § 38:252 (b) (8) include reports of the Comptroller of the Currency concerning the policies of a national bank, reports of FDIC examiners, and reports of the Federal Home Loan Bank Board concerning the financial conditions of savings associations.
Information concerning disciplinary proceedings involving specific stock exchange members, since it is of value to SEC supervision of the stock exchange, is protected by Exemption 8.
Freedom of Information
Federal Procedure, Lawyers Edition; 1990
§ 38:249 (US Code)
§ 38:250 (US Code)
§ 38:252 (US Code)
Volume 15, § 38:1 – 38:600
So much for the concept of transparency. It seems that is simply a term to be used in public displays of political arena working and not an application used in fact, in process, nor in financial services processes.
Conflict of Laws –
Entry, pp. 1085, Vol. 4, Encyclopedia Britannica, 1978
The law of conflict of laws has to do with the resolution of problems that result from the fact that there exists in the world a multiplicity of different sets of courts and different systems of private laws; that is, law dealing with relations between persons. As the earth is presently organized, its surface is divided among nations that are independent of each other and that have no world government above them. Each of these nations maintains its own set of courts in complete independence of every other nation, and each nation has its own set of laws, written or unwritten.
The Law of Conflict of Laws: Function and Sources –
While in such countries as France, Sweden, Peru, or Japan, one single system of law obtains for the whole country, diversity exists in many others, especially nations organized upon a federal pattern, such as the United States, Canada, and, to a minor degree, West Germany, Switzerland, Mexico, or Soviet Union [today, Eastern European nations and Russia]. ( . . . )
Even in countries whose political structure is of the unitary rather than the federal pattern, differences can be found. In the United Kingdom, for example, considerable difference exist between the laws of England, Scotland, the Isle of Man, the Channel Islands, and Northern Ireland. (I’m not sure the extent to which that is true today, my note).
Diversity of laws exists frequently between a country and its colonies. (etc.)
Diversity of laws develops where a country is divided. (etc.)
Diversities of law within one country may also exist on an ethnic or religious basis. (etc.)
Because of the spread of Western civilization over the entire planet, the laws of modern nations, at least insofar as they are concerned with relations between private individuals, present a considerable measure of uniformity. (to some extent, my note).
They are sufficiently different, however, to make it important to know to what situations one ought to apply the law of one country, state, region, or group rather than that of another, especially when dealings are carried on between persons of different law units.
This question of determining which of the world’s numerous laws is the proper one to apply in a particular situation is in itself a legal question.
Those rules of law by which such questions of choice of law are determined constitute a major part of that field of the law that is known as private international law or the law of conflict of laws.
Other parts of this field of the law are concerned with the problem of jurisdiction — that is, the problem of determining in what cases the courts of a particular country or state are, or are not, to go into action — and, furthermore, with the problem of stating what weight, if any, is to be given in one country or province to the judgments and other decisions of the courts or other agencies of other countries or provinces.
In countries adhering to the French legal tradition it is customary to regard as parts of private international law also those rules that deal with nationality and with the legal position of aliens and nonresidents.
In accordance with usage in countries of the English legal tradition, however, the present article will be limited to jurisdiction, foreign judgments, and choice of law.
The name private international law, which is generally used in countries of European-continental tradition, and occasionally also in England, seems to indicate that it is a part of international law — that is, that system of law that is superior to all sovereign states and that, at least in theory, is uniform throughout the world.
This view was commonly held for many centuries, and when the name private international law was coined in the 19th century it was meant to signify that the supranational body of international law consisted of two parts, public and private international law.
While the former would determine the proper conduct of sovereign nations toward each other in both peace and war, the latter would, in a uniform way, tell all nations in what cases their courts ought or ought not to take jurisdiction, under what conditions foreign judgments were to be enforced or otherwise recognized, and in what cases the laws of one nation were to be applied rather than those of another.
pp. 1087, Vol. 4 (same entry – Conflict of Laws)
In the United States, the Constitution provides that “full faith and credit shall be given in each state to the public acts, records and judicial proceedings of every other state.”
Under this clause, the states, and by statute, the territories, are obliged mutually to enforce their money judgments and to recognize the res judicata and law-changing effects of their judicial acts, provided the state by which the judgment was rendered was acting within the scope of its jurisdiction as defined by the Supreme Court of the United States.
The only other defenses that might be raised are grave irregularity of the proceedings in which the judgment was obtained and, in certain cases, lack of finality.
In countries that follow the general principles of the common law, a foreign judgment usually is willingly enforced and otherwise recognized unless (1) the country by which it was rendered lacked jurisdiction according to the notions prevailing in the place where recognition is sought, or (2) the proceedings in which the judgment was obtained were tainted with fraud or were otherwise grossly unfair, or (3) the recognition or enforcement of the foreign judgment would seriously interfere with an important public policy of the country or state where recognition or enforcement is sought.
In addition to these requirements, most civil-law countries (except, of course, those few in which foreign judgments as such are not enforced at all) also demand that reciprocity with the country whose judgment is sought be recognized. (. . . )
Nowhere will a foreign judgment be enforced or recognized unless the country by which it was rendered had jurisdiction to do so under the notions obtaining where recognition is sought. These limits are sometimes wider, however, than those that a country will concede to others for the exercise of their jurisdictions.
pp. 1088, Vol 4
The greatest difficulties have arisen in the field of contract. Many courts and writ have held that problems of the law of contract are generally to be decided under the law of the place where the contract was made.
Under a refinement of this theory (1978, my note), problems concerning performance are to be decided under the law of the place where the contract was to be performed.
But where is a contract made when it was concluded by the exchange of letters between Tokyo and Paris, or San Francisco and Chicago? Where is the contract of sale to be performed when the seller has to obtain the goods in New Orleans and ship them from New York to Amsterdam, and the buyer, a business firm in Oslo, has to pay the price at a bank in London?
furthermore, what intrinsic connection with the parties’ relationship does the place of contracting have at all, if, as frequently happens, the contract was made at a place at which quite accidentally the parties’ minds met. Should German law really be applied to a contract concluded by a Dane and an Italian while they were flying over Germany in an airplane?
The view most widely followed by the courts of both civil-law and common-law countries is that problems concerning an alleged contract are to be decided in accordance with that law which the parties expressly agreed to be applicable, or which is recognizably that law upon the basis of which the parties negotiated and made their contract.
Theoretical objections to this practical view still carry some weight, especially in the United States. Where no particular law can be discovered as the one upon the basis of which the parties transacted their business, detailed differentiations must be made depending on the kind of contract in question (sale, insurance, transportation, contract for services, suretyship, etc.) and on the particular problem to be decided.
Although the field of contract is the most important for international and interstate trade, it is the one beset with the most uncertainties as to choice of law. Fortunately, the substantive laws do not widely differ from one another, and business has learned to avoid many of the difficulties through resorting to arbitration and appropriate drafting. Through skillful draftsmanship the experienced international lawyer can prevent many of the difficulties that can so easily arise under private international law.
(out of the order offered in the text – but important here)
The notion that the courts of a country should ever have to decide problems under foreign law rather than invariably deciding all problems coming before them under the law of their own country is by no means self-evident.
It has its rationale mainly in the thought that it would be unjust to teh parties concerned if a problem were decided under a law that they did not know might cover their situation when they began the transaction that led to the subsequent litigation. (but does not apply to false advertising, misrepresentation, fraud and other illusory, illegal, fraudulent, corrupt, unfair, unscrupulous or criminal business practices, my note, because even at a very basic level, those engaging in it know by its nature to be wrong and likely to fail the merits of any legal test of acceptable practices. – cricketdiane)
(further, on pp. 1088, Vol 4 – Conflict of Laws)
The necessity to apply the law of a foreign country or province, however, constitutes an inconvenience to the court and the parties. Although judges are familiar with the law of their own country, they cannot be expected to be familiar with the laws of the whole world. (but they can read at least as good as I can, my note.) Foreign law must therefore be especially pleaded and proved, often at considerable inconvenience and expense.
European and American scholars of the late 19th centuries attempted to reduce the whole field of choice of law to a few principles that could be expressed in a small number of highly generalized maxims.
Their results, however, proved impractical. Since the problems of choice of law are almost as manifold as those of substantive private law, these efforts turned out to constitute oversimplifications.
Mid-20th-century writers and courts regard it as their task to elaborate patiently those detailed rules of narrow application that are necessary to do justice to the infinite variety of actual life.
Some U.S. scholars also stress the interests of states to implement their policies over divergent policies of other states. The results of the manifold efforts can be found in the works listed in the bibliography. Here no more can be done that state some overall approaches, which must not be regarded as rules of immediate applicability. (their note, not mine.)
(also out of order from the text – )
In their general approach to the problem of jurisdiction, the common-law countries still proceed from the long-obsolete notion that no civil suit could be commenced in any way other than by the defendant’s arrest by the sheriff. Consequently, an action can still be brought in any place in which the defendant is personally served with process, (or in which they own property or have conducted business, my note), even though he may be there only for a few minutes to change airplanes.
In modern times it has come to be widely held, however, that personal service upon the defendant is no longer an indispensable requirement of jurisdiction and that an individual may be sued in the country or state of his residence, even if the summons is not personally pressed upon him. a corporation can always be sued in the country or state in which it has been incorporated.
(and, also out of order – but very interesting – )
As another example, the courts of New York regard themselves as an “inconvenient forum” for suits between nonresidents concerning a tort committed outside New York.
With few exceptions, Anglo-U.S. courts will not try controversies concerning title to, or trespass upon, land situation outside the state. (my note, but this changes when it involves money, securities, exchange of securities, fraud, fraudulent business practices, currency manipulation or currency forms as the property in question.)
(etc. – lots more good information here, but I need to lookup something else.)
Encyclopedia Britannica, 1978
pp. 1085 – 1088; Vol. 4, “Conflict of Laws”
Essentials of Business Law, Second Edition –
1984, 1986, West Publishing Company, St. Paul, Minn.
authors – Smith, Mann, Roberts
pp. 700 – 701, 702 – Part Nine, Regulation of Business
Figure 39 – 3 Restraints of Trade
Restraint – Standard
Price fixing … Per se illegal
Market allocations … Horizontal: per se illegal
Vertical: rule of reason
Group boycotts … per se illegal
Tying arrangements … per se illegal (* if seller has power in tying product or a not insubstantial amount of interstate commerce is affected in the tied product.)
However, in the text –
Economic analysis indicates that a monopolist will use its power to limit production and increase prices. Therefore, a monopolistic market will produce fewer goods at a higher price than a competitive market. Addressing the problem of monopolization, Section 2 of the Sherman Act prohibits monopolies, attempts to monopolize, and conspiracies to monopolize.
Thus Section 2 prohibits both agreements among businesses and, unlike Section 1, unilateral conduct by one firm.
Although the language of Section 2 appears to prohibit all monopolies, the courts have not interpreted it in that manner. Rather, they have required that in addition to the mere possession of market power there also must be either the unfair attainment of the monopoly power or the abusive use of that power once attained.
It is extremely rare to find an unregulated industry with only one firm, so the issue of monopoly power involves defining what degree of market dominance constitutes monopoly power. Monopoly power is the ability to control prices or to exclude competitors from the marketplace. The courts have grappled with this question of monopoly power and have developed a number of approaches, but the most common test is market share.
A market share greater than 75 percent generally indicates monopoly power, while a share less than 50 percent does not. (but what constitutes the actual market base is subjectively determined, my note). A 50 to 75 percent share is inconclusive (1986).
Market share is the fractional share possessed by a firm of the total relevant product and geographic markets, but defining the relevant markets is often a difficult and subjective project for the courts.
The relevant product market, as demonstrated in the case which follows (at the bottom of pages 701 – 702), includes products that are substitutable for the firm’s product on the basis of price, quality, and adaptability for other purposes. For example, although brick and wood siding are both used in buildings as exteriors it is not likely that they would be considered as part of the same product market. On the other hand, Coca Cola and Seven-Up are both soft drinks and would be considered part of the same product market.
The relevant geographic market is the territory in which the firm sells its products or services. This may be at the local, regional, or national level. (or in the cases we have today – in the international arenas, my note.)
For instance, the relevant geographic market for the manufacture and sale of aluminum might be national, whereas that of a taxi company would be local. The scope of the relevant geographic market will depend on such factors as transportation costs, the type of product or services, and the location of competitors and customers.
If sufficient monopoly power has been proved, it must then be shown that the firm has engaged in unfair conduct. The courts have not yet agreed on what constitutes unfair conduct (that is not true even when it was written and certainly not now – my note).
One judicial approach is that a firm possessing monopoly power has the burden of proving that it acquired such power passively or that it had the power “thrust” upon it. An alternative view is that monopoly power, when combined with conduct designed to exclude competitors, violates Section 1. a third approach requires monopoly power plus some type of predatory practice, such as pricing below marginal costs (among others, my note.)
(from – )
Essentials of Business Law, Second Edition –
1984, 1986, West Publishing Company, St. Paul, Minn.
authors – Smith, Mann, Roberts
pp. 700 – 701, 702 – Part Nine, Regulation of Business
excerpt from “Operations Management, Strategy and Analysis” by Krajewski, Ritzman: 1993, Addison-Wesley Publishing Co.
(pp. 296 – 299: also pp. 300 about diseconomies of scale, found below first reference passages and Managerial Practice 8. 1 “The Agony of Too Much – And Too Little – Capacity”)
Capacity is the maximum rate of output for a facility. The facility can be a work station or an entire organization. The operations manager must provide the capacity to meet current and future demand or suffer the consequences of missed opportunities.
Capacity plans are made at two levels. Long-term capacity plans, which we describe in this chapter, deal with investments in new facilities and equipment. These plans look at least two years into the future, but construction lead times alone can force much longer time horizons.
Currently, U.S. investment in new plant and equipment is $550 billion annually (1986). Service industries account for more than 64 percent of the total. Such sizable investments require top-management participation and approval because they are not easily reversed.
Short-term capacity plans, which we discuss in later chapters, are constrained by long-term plans. Short-term plans focus on work-force size, overtime budgets, inventories, (short-term capital plays, etc., my note), and the like, rather than on capital investment decision.
Capacity planning is central to the long-term success of an organization. Too much capacity can be as agonizing as too little, as Managerial Practice 8. 1 demonstrates. When choosing a capacity strategy, managers have to consider questions such as, should we have one large facility or several small ones? Should we expand capacity before the demand is there or wait until demand is more certain? A systematic approach is needed to answer these and similar question and to develop a capacity strategy appropriate for each situation.
Capacity planning requires a knowledge of current capacity and its utilization. A statistic often used to indicate the degree to which equipment, space, or labor (or throughput of product, my note) is currently being utilized is the average utilization rate, calculated as follows:
Average Utilization Rate = Average Output Rate divided by Capacity
and expressed as a percentage. The average output rate and the capacity must be measured in the same terms, that is, time, customers, units, or even dollars.
Output Measures – are the usual choice of product-focused firms. Nissan Motor Company confidently states its capacity to be 450,000 vehicles per year at its Tennessee plant. Capacity is well understood as an output rate because customization is low.
For multiple products, however, the capacity measure must recognize the product mix. For example, ( . . . )
Input Measures – are the usual choice of process-focused firms. For example, managers of a job shop think of capacity as machine hours or number of machines. Just as product mix can complicate output capacity measures, so also can demand complicate input measures.
Demand, which invariably is expressed as an output rate, must be converted to an input measure. Only after making the conversion can a manager compare demand requirements and capacity on an equivalent basis.
(pp. 297 – Managerial Practice 8. 1)
The Agony of Too Much and Too Little Capacity
Too Much Capacity –
The commercial real estate market in most major U.S. cities is sick, (1993) caused in part by the recession in the early 1990s. At the same time many tenants, especially those in the financial industry, are undergoing restructurings expected to cut demand for office space for years to come.
The vacancy rate of office space is 26 percent in Miami, Oklahoma City, Phoenix, and Dallas alike; it is 20 percent nationwide. Values have declined as much as 30 percent in some markets, and the capacity glut hurts everyone. For example, the CenTrust Tower in Miami, a 47-tower building built by a failed thrift for $165 million, was recently sold for only $38 million.
To make matters worse, the real estate industry is suffering from a virus becoming known as the “rollover risk.” Tenants from well-planned and pricey buildings are being lured to cheaper, empty buildings.
With the exception of the credit squeeze, rollover risk may be the single greatest obstacle to the recovery of the real estate market.
“There isn’t a tenant in Washington who pays the rent who isn’t getting two calls a week from brokers asking the tenant to break the lease and move into cheap space elsewhere,” says a banking consultant in Washington, D.C. “The entire market is being cannibalized.”
Too Little Capacity –
In the late 1980s the world’s airlines re-equipped their fleets and vied to buy a record number of commercial passenger jets. Orders for Boeing, Airbus, and McDonnell Douglas surged to more than 2600 planes.
Douglas alone had a backlog of some $18 billion in firm orders for its MD-80 and new MD-11 widebody. That’s enough to keep its plant fully utilized for more than three years.
Despite the number of orders, Douglas’ commercial aircraft division announced a startling loss, Airbus had yet to make money, and even the mighty Boeing fought to improve subpar margins.
The large number of orders caused many problems. For one, Douglas’ suppliers in the metal forging industry were unable to keep pace with sales. Another problem was with its own work force: In two years, Douglas’ work force doubled, but training periods were abbreviated and the new hires were much less productive than seasoned employees.
Plant managers tried to keep on schedule by pushing planes along the assembly process, even if all the work at one particular station had not been completed.
Work was also subcontracted to other plants, including a sister plant that makes combat planes and a leased plant owned by the U.S. Air Force.
Because of the capacity shortage, costs skyrocketed and profits plummeted. By the start of the 1990s, the capacity pressure was relieved because American had cut back on the hypergrowth strategy that had set the pace for the entire airline industry in the 1980s.
Sources: “Office Buildings, Under Pressure Already, Face Threat to Their Leases,” Wall Street Journal, September 27, 1991; and “Planemakers Have It So Good, It’s Bad,” Business Week, May 8, 1989.
(from pp. 297, Operations Management, Strategy and Analysis, 1993)
Diseconomies of Scale –
New Rules Breed Wasteful Mergers – Law in the News pp. 705, Part Nine – Regulation of Business, Essentials of Business Law, Second Ed., 1986
New Rules Breed Wasteful Mergers by Herman Schwartz
Public policy is always fertile ground for irony. Today, for example, the economic landscape is strewn with merger fiascos, but current antitrust policy toward these combinations is increasingly lenient. “economic efficiency” is now the “only goal” of merger policy, according to a former Justice Department official.
As a result, the merger wave of the 1980s surges ahead, reachinng a new peak last week with the Allied Corporation’s $5 billion plaanned union with the Signal Companies, the largest industrial merger ever (outside the oil industry).
This preoccupation with economic efficiency ignores Congressional intent and judicial precedent. The legislative history of the antitrust laws contains almost no mention of efficiency, production or price. Rather, there is an insistent Jeffersonian concern for the small entrepreneur – for social, not economic reasons.
Thus, the Supreme Court has always ruled that efficiencies cannot save an otherwise illegal merger.
Steel mergers were supposed to “rationalize” a sick industry. But LTV, for example, is having so much trouble digesting Republic that, even though LTV’s own steel sales rose substantially in the first quarter of 1985, it lost $156 million and operated less efficiently than the other top steelmakers; before the merger LTV had been among the most efficient.
Elsewhere, the once-voracious ITT will spin off 12 industrial technology acquisitions in its third major asset sale in eight months, with more to follow. G.E. has shed Utah International, after a loss of perhaps $3 billion.
Du Pont’s acquisition of Conoco was described by one market analyst as “dead weight pulling Du Pont down all the time.” And the history of railroad mergers like that of Penn Central (permitted in the name of “efficiency”) is dismal: in 1979, Forbes magazine concluded that 14 out of 17 rail mergers were unsuccessful.
At least some of these deals would have been blocked by an antitrust policy more consistent with Congressional intent and established law. ( . . . )
One merger consultant estimated that 70 percent fail.
(out of order in the content of the article – )
Nevertheless, when the Administration (1985 article, my note), took office, William F. Baxter, then the Assistant Attorney General in charge of anti-trust, promptly redrew Federal guidelines to ease restrictions on mergers between competitors. The guidelines further legitimized virtually any “vertical” merger — between customer and suppliers — or between companies in neither a directly competitive nor supply relationship.
Soon, deals — such as the proposed Allied-Signal merger — were proposed “that never would have been . . . before the Reagan Administration took office,” as one businessman put it. (etc. Last June, the Antitrust Division further softened the guidelines.
Experience shows that the supposed benefits of a merger are often illusory.
( . . . ) Today, Mobil is trying to spin off Montgomery Ward, after pouring over $600 million into it, and is taking a $500 million charge against earnings. Exxon has written off a $1.3 billion investment in Reliance Electric. . . . And Arco’s divestiture of its refining and retailing operations shows that vertical integration may yield not efficiencies, but trouble.
pp. 705, Essentials of Business Law, 2nd Ed.
inset article from New York Times Company, 1985
Managerial Considerations in Job Design and Work Measurement pp. 279 – 281, Operations Management, Strategy and Analysis
Compensation Plans –
Compensation plans based on work measurement typically involve incentive schemes. Those used most often are piece rate and individual incentive plans.
Piece Rate Plans – piece rate is a compensation plan based on the number of units processed during a day or week. (my note – that is whether it is stocks, bonds, investment “deals”, seams in a pair of blue jeans or what management must specify as a “fair day’s work.” – that last part came from the text.)
Individual Incentive Plants – sometimes, incentive plans are used to motivate workers. Such plans reward output that exceeds a predetermined base level. (etc.)
Quality and Compensation Plans – the purpose of incentive pay is to encourage high levels of output from employees. However, a high rate of output may be achieved at the expense of quality. What is the advantage to a company if a worker produces at 115 percent of standard but has a 20 percent defective rate?
In Chapter 3, when we discussed total quality control, we argued that quality at the source is critical for achieving world-class quality performance. Incentive plans that do not recognize and reward quality may not motivate the worker to produce high-quality goods.\
Two basic approaches are used to recognize quality in incentive pans. The first is the autocratic approach, which docks the worker’s pay for defective production or requires the worker to repair all defects at a lower rate of pay.
The second is the motivational approach, which is based on the concept of extra pay for extra effort. (etc.)
Many variants (including game theory popular in the last twenty-five years whereby the extreme levels of compensation, rewards, perks and bonuses of the executives are used as a motivating carrot for all mid-level performs who would be enticed to think they could have that eventually too, my note) of the motivational approach of including quality in work measurement are used in practice. the important point is that quality should be clearly recognized when compensation plans are being developed.
(Apparently, there also needs to be a standard set for what represents “quality” especially in the financial investment industries – because not every deal qualifies as “the deal” nor should it be, as exemplified by yesterday’s Senate hearings with the mid-level management / decision makers of the Wall Street investment firm, Goldman Sachs, – 04-27-10, Senate investigations committee.)
It has resulted in the collapse of large financial institutions, the bailout of banks by national governments and downturns in stock markets around the world. In many areas, the housing market has also suffered, resulting in numerous evictions, foreclosures and prolonged vacancies.
It contributed to the failure of key businesses, declines in consumer wealth estimated in the trillions of U.S. dollars, substantial financial commitments incurred by governments, and a significant decline in economic activity.
Many causes have been proposed, with varying weight assigned by experts. Both market-based and regulatory solutions have been implemented or are under consideration, while significant risks remain for the world economy over the 2010–2011 periods.
And on pages 300 – 301 of the same book – Operations Management, Strategy and Analysis, 1993 -in the section titled “Economies of Scale”
there is also – Diseconomies of Scale
. . . Historically, many organizations have subscribed to the concept of economies of scale. The concept seems simple: Increasing a facility’s size (or scale) decreases the average unit cost.
But in reality, it’s not at all simple. At some point a facility (or business, corporation, bank or conglomerate, my note) becomes so large that diseconomies of scale set in. Excessive size can bring complexity, loss of focus, and inefficiencies, which raise the average unity cost. (etc.)
muckety map - good example of diseconomies of scale - AIG / Goldman Sachs / Wall Street bailouts
(Figure 8.1 found on page 300 of the book below – not really applicable)
Figure 8.1 also shows a second dimension to the concept. Not only is there an optimal size for a facility but also an optimal operating level for a facility of a given size. Economies and diseconomies of scale are represented not just between cost curves but also within each one.
As the output rate approaches a facility’s best operating level, economies of scale are realized. Beyond that level, diseconomies set in.
pp. 300 – 301, Operations Management, Strategy and Analysis
My Note – I had another chart or two about these general concepts and some online information that I found awhile back, however – by the time I find it in my computer – it could be awhile. Therefore, I’m going to take a break, start a new blog entry and check online for the ones I was trying to find, which would have to be easier.
Share in GDP of U.S. financial sector since 1860 - must not include derivatives - Leonard N. Stern School of Business at New York University - Thomas Philippon, The future of the financial industry
Derivatives were suggested to be over $600 Trillion dollars – I don’t think that is included in the GDP . . .
(of anywhere, now that I think about it, my note) – cricketdiane
On Tuesday, January 12, 2010, a major earthquake struck southern Haiti. Many U.S. residents and organizations are generously donating food, water, medicines, and other supplies to aid in the relief efforts. In order to facilitate the movements of these goods, we offer the following guidance that applies to any goods not requiring a license, such as food, clothing, and medicines.
Schedule B Numbers
There are four Schedule B numbers that can be used when exporting humanitarian goods. Those numbers are found in Chapter 98 of the Schedule B book, under subheading 9802.
9802.10.0000 Food products
9802.20.0000 Medicinal and pharmaceutical products
9802.30.0000 Wearing apparel (including footwear and headwear)
9802.40.0000 Donated articles, not elsewhere specified
Any shipment valued over $2,500 per Schedule B number or that requires a license must be filed in the AES. However, if the shipment is valued less than $2,500 per Schedule B number and does not require a license, then the low value exemption (NOEEI FTR 30.37(a)) can be used. In this case, food, clothing, and medicines do not require a license; however, medical equipment and tools may require an export license.
The Export Information Code to be reported is “CH” for shipments of goods donated for relief or charity.
The value to be reported is the market value. If that value is not known, estimate how much you would receive if you sold the goods. The value should be consistent with the goods being exported, to avoid confusion and possible delays with U.S. Customs & Border Protection officers at the port of export.
There are different ways to file your export information. The most common is to report through the Census Bureau’s free Internet based filing system calledAESDirect. We have provided training videosto help you get started with AESDirect. Another option is to file with a forwarder or agent who may be more familiar with export licensing and regulations.
U.S. Exports to China
November Trade Data Released
Posted by Global Reach on January 12, 2010 06:02:16 AM 0
The Nation’s international trade deficit in goods and services increased to $36.4 billion in November from $33.2 billion (revised) in October. The increase in the deficit occurred as exports rose less than imports. The rise in exports was the seventh consecutive monthly increase.
U.S. exports to China in November ($7.3 billion) were a record high, beating the record set last month ($6.9 billion) by $469 million. While the last two months have been record highs the year-to-date exports to China ($61.2 billion) are still down from last year ($64.6 billion). Check back next month to see if December exports manage to climb high enough to make the 2009 figures beat 2008 Below are a few commodities driving the export figures:
* Soybeans have more than accounted for the increase in exports to China for the last two months. Soybean exports to China totaled $2.0 billion this month, 27% of U.S. total exports to China. This increase is being caused in part by a shortage of soybeans in Argentina due to a drought.
* Semiconductor exports to China are down by $1.5 billion so far this year, accounting for almost half of the year-to-date decrease in exports to China. Semiconductor exports to China are still considerable totaling $4.6 billion through November; they are the second largest commodity export to China, behind soybeans with $7.5 billion. Aircraft is the third largest export to China at $4.5 billion.
* You can find more commodity by country detail our website.
U.S. Exports to China
Read more: November Trade Data Released
Welcome to Electronic Export Filing
Welcome to Export Regulations
Posted by Global Reach on January 6, 2010 05:12:54 AM 9
In the world of exporting, it’s important to be proactive, instead of reactive. Not knowing is not an excuse Whether you are a small business, first time exporter, or a large multinational corporation, you are in control of your company’s compliance as it pertains to exporting laws and requirements.
As the Trade Ombudsman for the U.S. Census Bureau, I travel the nation and work with all types of companies involved in the exporting process. I offer advice and clarifications on the Foreign Trade Regulations (FTR), solutions to problems regarding the Automated Export System (AES) and assist with a wide range of other topics. However, one of the most important messages I convey is that the Foreign Trade Division (FTD) of the U.S. Census Bureau is available to assist you with your exporting questions and concerns. Our goal is to provide you with tools and resources to maintain export compliance. We reach out to the trade community through various methods to provide a better understanding of your roles and responsibilities in the export transaction. Our outreach efforts include, but are not limited to:
Read more: Welcome to Export Regulations
« Global Reach Main Page
* Foreign Trade Web Site
* About Global Reach
* Blogger Biographies
* Comment Policy
Commodity Analysis Branch
(Menu Option 2)
Classification Systems, Schedule B changes; Data analysis and review; Obtaining Harmonized Commodity Code for Imports and Exports: Non-Durable Goods (Food, animals, wood, chemicals,plastic articles, textiles and wearing apparel, linens and minerals) or Durable Goods: (Metals, machinery, vehicles, measuring and testing equipment, furniture and miscellaneous manufactured articles)
** PLEASE include your full telephone number (area code, country code, etc.) with your message ***
Special Projects Branch
State data; Profile of U.S. exporters
Methodology Research & Quality AssuranceBranch
Process Coordination Staff
All staff members not listed:
Any staff member not specifically listed above can be located using the U.S. Census Bureau’s staff search.
E-mailing contacts: The link on each of the contact names is set up to open your browser’s e-mail program, open a new message and address that message. If you click on that link and nothing happens (i.e. no blank message opens), manually open your e-mail program and use the e-mail address listed under NOTES.
(from – )
The goods data are compiled from the documents collected by the U.S. Customs and Border Protection and reflect the movement of goods between foreign countries and the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, and U.S. Foreign Trade Zones. They include government and non-government shipments of goods, and exclude shipments between the United States and its territories and possessions, transactions with U.S. military, diplomatic and consular installations abroad, U.S. goods returned to the United States by its Armed Forces, personal and household effects of travelers, and in-transit shipments. The General Imports value reflects the total arrival of merchandise from foreign countries that immediately enters consumption channels, warehouses, or Foreign Trade Zones. Imports for Consumption measure the total of merchandise that has physically cleared through Customs either entering consumption channels immediately or entering after withdrawal for consumption from bonded warehouses under Customs custody or from Foreign Trade Zones.
For imports, the value reported is the U.S. Customs and Border Protection appraised value of merchandise; generally, the price paid for merchandise for export to the United States. Import duties, freight, insurance, and other charges incurred in bringing merchandise to the United States are excluded.
Exports are valued at the free alongside ship (f.a.s) value of merchandise at the U.S. port of export, based on the transaction price including inland freight, insurance and other charges incurred in placing the merchandise alongside the carrier at the U.S. port of exportation.
Monthly data include actual month’s transactions as well as a small number of transactions for previous months. SITC and country detail data are not revised monthly. These data are revised annually to eliminate carry-over (that portion of the monthly statistics that arrives too late for inclusion in the transaction month) and to include errata (corrections to the published monthly data).
Methods of Classification
The export statistics are initially collected and compiled in terms of commodity classifications in the Schedule B, Statistical Classification of Domestic and Foreign Commodities Exported from the United States. Schedule B is a U.S. Bureau of the Census publication and is based on the Harmonized Commodity Description and Coding System (Harmonized System).
Harmonized Tariff Schedule of the United States Annotated for Statistical Reporting Purposes (HTSUSA)
The import statistics are initially collected and compiled in terms of commodity classifications in the Harmonized Tariff Schedule of the United States Annotated for Statistical Reporting Purposes (HTSUSA) [Not a Census web site], an official publication of the U.S. International Trade Commission. The HTSUSA is the U.S. import version of the Harmonized System.
Standard International Trade Classification (SITC)
The SITC is a statistical classification of commodities designed by the United Nations. It is designed to provide the commodity aggregations needed for purposes of economic analysis and to facilitate the international comparison of trade by commodity. The Harmonized System and SITC Revision 3 are interrelated. For more details, see What is the SITC classification system? at: http://www.census.gov/foreign-trade/www/sec2.html#sitc.
The HTSUSA and Schedule B classifications are summarized into six principal end-use categories and further subdivided into about 140 broad commodity groupings. These categories are used in developing seasonally adjusted and constant dollar totals. The concept of end-use demand was developed for balance of payments purposes by the Bureau of Economic Analysis.
Steel 201 Remedy in Effect
To facilitate positive adjustment to competition from imports of certain steel products, in March 2002 the President signed into law a relief program for the domestic steel industry. This program has come to be known as Steel 201 named after Section 201 of the Trade Act of 1974. For more information on Section 201 Steel Products, see the United States Trade Representative (USTR) steel section at: http://www.ustr.gov/sectors/industry/steel201/background.htm [Not a Census web site].
U.S./Canada Data Exchange and Substitution
The data for U.S. exports to Canada are derived from import data compiled by Canada. The use of Canada’s import data to produce U.S. export data requires several alignments in order to compare the two series.
* Coverage — Canadian imports are based on country of origin. U.S. goods shipped from a third country are included. U.S. exports exclude these foreign shipments and excludes certain Canadian postal shipments.
* Valuation — Canadian imports are valued at point of origin in the United States. However, U.S. exports are valued at the port of exit in the United States and include inland freight charges, making the U.S. export value slightly larger. Canada requires inland freight to be reported.
* Reexports — U.S. exports include reexports of foreign goods. Again, the aggregate U. S. export figure is slightly larger.
* Exchange Rate — Average monthly exchange rates are applied to convert the published data to U.S. currency.
* Other — There are other minor differences which are statistically insignificant, such as rounding error.
Effective with January 2001 statistics, the current month data for exports to Canada contain an estimate for late arrivals and corrections. The following month, this estimate will be replaced, in the press release tables only, with the actual value of late receipts and corrections. This estimate will improve the current month data for exports to Canada and treat late receipts for exports to Canada in a manner more consistent with the treatment of late receipts for exports to other countries.
SOURCE: U.S. Census Bureau, Foreign Trade Division, Data Dissemination Branch, Washington, D.C. 20233
MY Note –
See all of these tables for each year through 2009 from 1985 on the link below the charts. There is no real trade imbalance until the H.O.P.E. tariff incentives and a variety of economic development funds poured into Haiti from the United States and International communities.
Trade with Haiti : 1994
NOTE: All figures are in millions of U.S. dollars, and not seasonally adjusted unless otherwise specified.
‘TOTAL’ may not add due to rounding.
Table reflects only those months for which there was trade.
MORE DATA: Data for all countries are available online in a zipped Excel file. [Excel] or the letters [xls] indicate a document is in the Microsoft® Excel® Spreadsheet Format (XLS). To view the file, you will need the Microsoft® Excel® Viewer available for free from Microsoft®. This symbol indicates a link to a non-government web site. Our linking to these sites does not constitute an endorsement of any products, services or the information found on them. Once you link to another site you are subject to the policies of the new site.
Source: FTDWebMaster, Foreign Trade Division, U.S. Census Bureau, Washington, D.C. 20233 Location: MAIN: STATISTICS:COUNTRY DATA: TRADE BALANCE Created: 12 January 2010 Last modified: 12 January 2010 at 08:32:14 AM
My Note – there are some obvious disparities in the numbers between raw materials shipped in and completed metric tons shipped out of Haiti. (That disparity is irreconcilable in its numbers among other things including the amount of money sent by the United States Departments of Commerce and Foreign Trade offices through economic development programs and funding grants along with those from the UN and international community for the same purpose. Obviously, the final target of improving the infrastructure, education, adult education, hospitals, roads, schools and general quality of and safety of life for Haitians was abrogated, diverted for private interests or something . . . I’m not sure what, but I do know there is precedent for clawbacks on that money through US treaties and International law. This includes going to the Grand Cayman and Swiss banks, the hedge funds and investment brokerage groups to relieve them of manipulating the previous windfalls of economic and charitable money for Haiti and to insure that it isn’t diverted or hijacked for profiteering and embezzlement this time.
– cricketdiane, 01-23-10
But there’s more –
eHam.net – Amateur Radio (Ham Radio) Community
Earthquake Net Frequencies — 7045, 3720 kHz:
from CQ / WorldRadio Online Newsroom on January 12, 2010
View comments about this article
Earthquake Net Frequencies — 7045, 3720 kHz:
All radio amateurs are requested to keep 7045 kHz and 3720 kHz clear for possible emergency traffic related to today’s major earthquake in Haiti.
International Amateur Radio Union (IARU) Region II Area C Emergency Coordinator Arnie Coro, CO2KK, reports that as of 0245 UTC on January 13, nothing had been heard from radio amateurs in Haiti, but that the above frequencies were being kept active in case any Haitian hams manage to get on the air, and in case of other related events in surrounding areas, including aftershocks and a possible tsunami.
The following is from an e-mail from CO2KK:
A few minutes after the earthquake was felt in eastern Cuba’s cities, the Cuban Federation of Radio Amateurs Emergency Net was activated, with net control stations CO8WM and CO8RP located in the city of Santiago de Cuba, and in permanent contact with the National Seismology Center of Cuba located in that city.
Stations in the city of Baracoa, in Guantanamo province, were also activated immediately as the earth movements were felt even stronger there, due to its proximity to Haiti. CO8AZ and CO8AW went on the air immediately , with CM8WAL following. At the early phase of the emergency, the population of the city of Baracoa was evacuated far away from the coast, as there was a primary alert of a possible tsunami event or of a heavy wave trains sequence impacting the coast line at the city’s sea wall …
Baracoa could not contact Santiago de Cuba stations on 40 meters due to long skip after 5 PM local time, so several stations in western Cuba and one in the US State of Florida provided relays. CO2KK, as IARU Region II Area C Emergency Coordinator, helped to organize the nets , on 7045 kHz and also on 3720 kHz, while local nets in Santiago de Cuba and Baracoa operated on 2 meters.
As late as 9,45 PM local time 0245 UTC we have not been able to contact any amateur or emergency services stations in Haiti.
Amateurs from the Dominican Republic, Puerto Rico, Venezuela were monitoring the 40 meter band frequency, that I notified to the IARU Region II executive Ramon Santoyo XE1KK as in use for the emergency, requesting that 7045 kHz be kept as clear as possible …
We are still keeping watch on 7045 kHz hoping that someone in Haiti may have access to a transceiver and at least a car battery to run it.
All information that has so far come from the Cuban seismologists tell us of a very intense earthquake, and also of the possibility of other events following.
Following the advice of the geophysicists, we are keeping the 7045 and 3720 kiloHertz frequencies active until further notice.
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Earthquake Net Frequencies — 7045, 3720 kHz:
by N2KI on January 13, 2010 Mail this to a friend
Does anyone in the affected area know to be transmitting on the target frequencies?
Earthquake Net Frequencies — 7045, 3720 kHz:
by W8VZM on January 13, 2010 Mail this to a friend
Any stateside organizations handling health and welfare inquiries into Hati? I have a friend who is unable to get through on phone of course. I have recently relocated and do not have HF up at this time.
Earthquake Net Frequencies — 7045, 3720 kHz:
by WA2FDU on January 13, 2010 Mail this to a friend
SALVATION ARMY TEAM EMERGENCY RADIO NETWORK
North American Command
Full Alert Level DELTA III for Haiti Earthquake Emergency. All nets active. 14.265 MHz Primary Daytime. 7265 and 3977.7 KHz evening and night
RE: Earthquake Net Frequencies — 7045, 3720 kHz:
by KB3HOG on January 13, 2010 Mail this to a friend
LETS GET OFF OUR CHAIRS, OPEN OUR POCKETS AND OUR HEARTS AND HELP THESE POOR PEOPLE IN HATI.
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