G20 Meets In Europe

Note From the Editor:

Buckle up everyone! I think its about to get much....much worse as the " world leaders" prepare to meet in London for the G20 summit. I get all warm and fuzzy inside just thinking about the brilliant and oh-so-helpful ideas that will come out of that gathering!

The fun has already started. See Below.



LONDON/BERLIN (Reuters) - Tens of thousands of people marched in capital cities across Europe on Saturday to protest about the economic crisis and urge world leaders to act on poverty, jobs and climate change at a G20 summit next week.

Chanting "tax the rich, make them pay," protesters marched through London waving banners saying "People before Profit," at the start of a week of protests that reflected growing public anger over bankers' pay and their role in the crisis.

Leaders from the world's 20 biggest economies meet in London on Thursday to discuss how tighter regulation of financial markets, billions of dollars in stimulus measures and credit lines for international trade can help the world economy recover from the deepest recession since the 1930s.

In Britain, trade unions, aid agencies, religious groups and environmentalists joined together under the slogan "Put People First" to demand reforms to make the world's economy fairer.

One group carried a traditional Chinese dragon with the head of a devil papered with dollar bills, calling it "The G20 Monster." Others waved signs reading "Jobs, Justice, Climate."

While the atmosphere was generally carnival-like, some marchers jeered when they passed British Prime Minister Gordon Brown's Downing Street offices. Police said up to 35,000 people took part in the march and subsequent rally in Hyde Park.

"This is going to be a summer of rage for the working class," said marcher Bryan Simpson, 20, a clerk from Glasgow.

U.S. Vice President Joe Biden said the protesters should "give us a chance" and listen to what politicians plan to do.

"Hopefully we can make it clear to them we are going to walk away from this G20 meeting with some concrete proposals," he told reporters in Chile.

British Prime Minister Gordon Brown said he understood people's concerns, adding, "That is why the action we want to take (at the G20) is designed to answer the questions that the protesters have today."

BLACK COFFIN

The British protest was mirrored in other major EU nations.

About 15,000 people marched through Berlin with black-clad protestors throwing rocks and bottles at police, setting off fireworks and smashing a police car window. Police said several arrests were made.

Up to 14,000 assembled in Germany's financial capital Frankfurt, police said, as part of a two-city demonstration.

About 6,000 demonstrators, mostly students and trade union members, marched in Rome to protest about a meeting of G8 labor ministers in the city.

Most of the marchers were peaceful, carrying placards and chanting "We won't pay for the crisis" and other slogans, but one small group smashed the glass front of a bank, and daubed "give us our money back" on the wall in red paint.

Fire-crackers were let off and banks, insurance companies and estate agents were also covered in paint.

"There has been a total failure of creative finance and of an economy based on the exploitation of workers, financial speculation and tax evasion," said protester Mario Giannini.

In Vienna, police said some 6,500 marched through the Austrian capital under slogans such as "Make The Rich Pay" and "Capitalism Kills." There was no violence.

In central Paris, a few hundred demonstrators gathered in a protest under the slogan "We will not pay for their crisis."

While some G20 protesters in London have adopted slogans such as "Hang a Banker" and "Storm the Banks," organizers of the London march said they had wanted a peaceful day.

A London police spokesman said there was only one arrest, for drunken behavior. However, police have canceled leave in the capital to cope with further protests planned by anarchists.

U.N. 'Climate Change' Plan Would Likely Shift Trillions to Form New World Economy

By George Russell
Friday , March 27, 2009


A United Nations document on "climate change" that will be distributed to a major environmental conclave next week envisions a huge reordering of the world economy, likely involving trillions of dollars in wealth transfer, millions of job losses and gains, new taxes, industrial relocations, new tariffs and subsidies, and complicated payments for greenhouse gas abatement schemes and carbon taxes — all under the supervision of the world body.

Those and other results are blandly discussed in a discretely worded United Nations "information note" on potential consequences of the measures that industrialized countries will likely have to take to implement the Copenhagen Accord, the successor to the Kyoto Treaty, after it is negotiated and signed by December 2009. The Obama administration has said it supports the treaty process if, in the words of a U.S. State Department spokesman, it can come up with an "effective framework" for dealing with global warming.

The 16-page note, obtained by FOX News, will be distributed to participants at a mammoth negotiating session that starts on March 29 in Bonn, Germany, the first of three sessions intended to hammer out the actual commitments involved in the new deal.

In the stultifying language that is normal for important U.N. conclaves, the negotiators are known as the "Ad Hoc Working Group On Further Commitments For Annex I Parties Under the Kyoto Protocol." Yet the consequences of their negotiations, if enacted, would be nothing short of world-changing.

Getting that deal done has become the United Nations' highest priority, and the Bonn meeting is seen as a critical step along the path to what the U.N. calls an "ambitious and effective international response to climate change," which is intended to culminate at the later gathering in Copenhagen.

Just how ambitious the U.N.'s goals are can be seen, but only dimly, in the note obtained by FOX News, which offers in sparse detail both positive and negative consequences of the tools that industrial nations will most likely use to enforce the greenhouse gas reduction targets.

The paper makes no effort to calculate the magnitude of the costs and disruption involved, but despite the discreet presentation, makes clear that they will reverberate across the entire global economic system.

Among the tools that are considered are the cap-and-trade system for controlling carbon emissions that has been espoused by the Obama administration; "carbon taxes" on imported fuels and energy-intensive goods and industries, including airline transportation; and lower subsidies for those same goods, as well as new or higher subsidies for goods that are considered "environmentally sound."

Other tools are referred to only vaguely, including "energy policy reform," which the report indicates could affect "large-scale transportation infrastructure such as roads, rail and airports." When it comes to the results of such reform, the note says only that it could have "positive consequences for alternative transportation providers and producers of alternative fuels."

In the same bland manner, the note informs negotiators without going into details that cap-and-trade schemes "may induce some industrial relocation" to "less regulated host countries." Cap-and-trade functions by creating decreasing numbers of pollution-emission permits to be traded by industrial users, and thus pay more for each unit of carbon-based pollution, a market-driven system that aims to drive manufacturers toward less polluting technologies.

The note adds only that industrial relocation "would involve negative consequences for the implementing country, which loses employment and investment." But at the same time it "would involve indeterminate consequences for the countries that would host the relocated industries."

There are also entirely new kinds of tariffs and trade protectionist barriers such as those termed in the note as "border carbon adjustment"— which, the note says, can impose "a levy on imported goods equal to that which would have been imposed had they been produced domestically" under more strict environmental regimes.

Another form of "adjustment" would require exporters to "buy [carbon] offsets at the border equal to that which the producer would have been forced to purchase had the good been produced domestically."

The impact of both schemes, the note says, "would be functionally equivalent to an increased tariff: decreased market share for covered foreign producers." (There is no definition in the report of who, exactly, is "foreign.") The note adds that "If they were implemented fairly, such schemes would leave trade and investment patterns unchanged." Nothing is said about the consequences if such fairness was not achieved.

Indeed, only rarely does the "information note" attempt to inform readers in dollar terms of the impact of "spillover effects" from the potential policy changes it discusses. In a brief mention of consumer subsidies for fossil fuels, the note remarks that such subsidies in advanced economies exceed $60 billion a year, while they exceed $90 billion a year in developing economies."

But calculations of the impact of tariffs, offsets, or other subsidies is rare. In a reference to the impact of declining oil exports, the report says that Saudi Arabia has determined the loss to its economy at between $100 billion and $200 billion by 2030, but said nothing about other oil exporters.

One reason for the lack of detail, the note indicates, is that impact would vary widely depending on the nature and scope of the policies adopted (and, although the note does not mention it, on the severity of the greenhouse reduction targets).

But even when it does hazard a guess at specific impacts, the report seems curiously hazy. A "climate change levy on aviation" for example, is described as having undetermined "negative impacts on exporters of goods that rely on air transport, such as cut flowers and premium perishable produce," as well as "tourism services." But no mention is made in the note of the impact on the aerospace industry, an industry that had revenues in 2008 of $208 billion in the U.S. alone, or the losses the levy would impose on airlines for ordinary passenger transportation. (Global commercial airline revenues in 2008 were about $530 billion, and were already forecast to drop to an estimated $467 billion this year.)

In other cases, as when discussing the "increased costs of traditional exports" under a new environmental regime, the report confines itself to terse description. Changes in standards and labeling for exported goods, for example, "may demand costly changes to the production process." If subsidies and tariffs affect exports, the note says, the "economic and social consequences of dampening their viability may, for some countries and sectors, be significant."

Much depends, of course, on the extent to which harsher or more lenient greenhouse gas reduction targets demand more or less drastic policies for their achievement.

And, precisely because the Bonn meeting is a stage for negotiating those targets, the note is silent. Instead it suggests that more bureaucratic work is needed "to deepen the understanding of the full nature and scale of such impacts."

But outside the Bonn process, other experts have been much more blunt about the draconian nature of the measures they deem necessary to make "effective" greenhouse gas reductions.

In an influential but highly controversial paper called "Key Elements of a Global Deal on Climate Change," British economist Nicholas Lord Stern, formerly a high British Treasury official, has declared that industrial economies would need to cut their per capita carbon dioxide emissions by "at least 80% by 2050," while the biggest economies, like the U.S.'s, would have to make cuts of 90 percent.

Stern also calls for "immediate and binding" reduction targets for developed nations of 20 percent to 40 percent by 2020.

To meet Stern's 2050 goals, he says, among other things, "most of the world's electricity production will need to have been decarbonized."

By way of comparison, according to the U.S. Department Of Energy, roughly 72 percent of U.S. electrical power generation in 2007 was derived from burning fossil fuels, with just 6 percent coming from hydro-power and less than 3 percent from non-nuclear renewable and "other" sources. And even then, those "other" non-fossil sources included wood and biomass — which, when burned, are major emitters of carbon.

'Mandatory youth service' bill advances: Has an authoritarian feel

With almost no public attention, both chambers of Congress in the past week advanced an alarming expansion of the Americorps national service plan, with the number of federally funded community service job increasing from 75,000 to 250,000 at a cost of $5.7 billion. Lurking behind the feel-good rhetoric spouted by the measure’s advocates is a bill (HR 1388) that on closer inspection reveals multiple provisions that together create a strong odor of creepy authoritarianism. The House passed the measure overwhelmingly, while only 14 senators had the sense and courage to vote against it on a key procedural motion. Every legislator who either voted for this bill or didn’t vote at all has some serious explaining to do.

Last summer, then-candidate Barack Obama threw civil liberties to the wind when he proposed “a civilian national security force that’s just as powerful, just as strong, just as well-funded” as the regular military. The expanded Americorps is not quite so disturbing, but a number of provisions in the bill raise serious concerns.

To begin with, the legislation threatens the voluntary nature of Americorps by calling for consideration of “a workable, fair, and reasonable mandatory service requirement for all able young people.” It anticipates the possibility of requiring “all individuals in the United States” to perform such service – including elementary school students. The bill also summons up unsettling memories of World War II-era paramilitary groups by saying the new program should “combine the best practices of civilian service with the best aspects of military service,” while establishing “campuses” that serve as “operational headquarters,” complete with “superintendents” and “uniforms” for all participants. It allows for the elimination of all age restrictions in order to involve Americans at all stages of life. And it calls for creation of “a permanent cadre” in a “National Community Civilian Corps.”

But that’s not all. The bill also calls for “youth engagement zones” in which “service learning” is “a mandatory part of the curriculum in all of the secondary schools served by the local educational agency.” This updated form of voluntary community service is also to be “integrated into the science, technology, engineering and mathematics curricula” at all levels of schooling. Sounds like a government curriculum for government approved “service learning,” which is nothing less than indoctrination. Now, ask yourself if congressmen who voted for this monstrosity had a clue what they were voting for. If not, they’re guilty of dereliction of duty. If yes, the implications are truly frightening.

UPDATE:

Between being first officially "reported" to the House and being voted on by the full House, bill managers stripped one whole section of the measure that created a Congressional Commission on Civil Service, thus removing the section that contained the language cited above concerning "a workable, fair, and reasonable mandatory service requirement for all able young people" and a possible requirement for "all individuals in the United States" to perform such service. The section could be restored during the Senate-House conference committee meeting. A new, separate bill containing that language has since been introduced in the House.

U.S. Government Seeks Expanded Power to Seize Firms

The Obama administration is considering asking Congress to give the Treasury secretary unprecedented powers to initiate the seizure of non-bank financial companies, such as large insurers, investment firms and hedge funds, whose collapse would damage the broader economy, according to an administration document.

The government at present has the authority to seize only banks.

Giving the Treasury secretary authority over a broader range of companies would mark a significant shift from the existing model of financial regulation, which relies on independent agencies that are shielded from the political process. The Treasury secretary, a member of the president's Cabinet, would exercise the new powers in consultation with the White House, the Federal Reserve and other regulators, according to the document.

The administration plans to send legislation to Capitol Hill this week. Sources cautioned that the details, including the Treasury's role, are still in flux.

Treasury Secretary Timothy F. Geithner is set to argue for the new powers at a hearing today on Capitol Hill about the furor over bonuses paid to executives at American International Group, which the government has propped up with about $180 billion in federal aid. Administration officials have said that the proposed authority would have allowed them to seize AIG last fall and wind down its operations at less cost to taxpayers.

The administration's proposal contains two pieces. First, it would empower a government agency to take on the new role of systemic risk regulator with broad oversight of any and all financial firms whose failure could disrupt the broader economy. The Federal Reserve is widely considered to be the leading candidate for this assignment. But some critics warn that this could conflict with the Fed's other responsibilities, particularly its control over monetary policy.

The government also would assume the authority to seize such firms if they totter toward failure.

Besides seizing a company outright, the document states, the Treasury Secretary could use a range of tools to prevent its collapse, such as guaranteeing losses, buying assets or taking a partial ownership stake. Such authority also would allow the government to break contracts, such as the agreements to pay $165 million in bonuses to employees of AIG's most troubled unit.

The Treasury secretary could act only after consulting with the president and getting a recommendation from two-thirds of the Federal Reserve Board, according to the plan.

Geithner plans to lay out the administration's broader strategy for overhauling financial regulation at another hearing on Thursday.

The authority to seize non-bank financial firms has emerged as a priority for the administration after the failure of investment house Lehman Brothers, which was not a traditional bank, and the troubled rescue of AIG.

"We're very late in doing this, but we've got to move quickly to try and do this because, again, it's a necessary thing for any government to have a broader range of tools for dealing with these kinds of things, so you can protect the economy from the kind of risks posed by institutions that get to the point where they're systemic," Geithner said last night at a forum held by the Wall Street Journal.

The powers would parallel the government's existing authority over banks, which are exercised by banking regulatory agencies in conjunction with the Federal Deposit Insurance Corp. Geithner has cited that structure as the model for the government's plans.