Tuesday, October 31, 2017

OAS-IACHR, dare opine on a violation of human rights in the economy (and the environment)

The Charter of the Organization of American States establishes among its principles that "the elimination of poverty ... is the common and shared responsibility of the American States (Art: 3f)… And also to “devote their utmost efforts ... to achieve equitable distribution of national income”; (Art. 34.b)

The American Convention on Human Rights (1969) states (Art: 26) that "States parties undertake to ... achieving progressively the full realization of the rights implicit in the economic, social and educational, scientific and cultural standards set forth in the Charter of the OAS ... to the extent of available resources, through legislation or other appropriate means ".

And in the case of "Discharged and Retired Employees of the Comptroller vs. Peru" (2009) case law has been established, when in the judgment we read that the Commission on Human Rights "is competent to decide whether the State has committed a violation or breach ach of any of the rights recognized in the Convention, including with regard to Article 26 of the same ".

OAS has yet to define though what it means with a violation or breach of economic, social and educational, scientific and cultural standards. That is sad. Had it done so, much unnecessary human suffering could have been avoided.

For instance there are some economic policies or economic crimes that causes such harm to so many humans, so as these should classify as punishable violations against human rights.

I can think of corruption; of loony foreign exchange systems; of runaway monetary policies causing hyperinflation… and of course, of Venezuela’s domestic gas prices.

In the international market gas is sold at about $1.60 per gallon, in Norway, another oil country, it is sold domestically at US$ 8.40 per gallon, and in Venezuela, where people are dying because of lack of food and medicines, it is given away, at US$ 1 cent per gallon.

In Venezuela this horror is not discussed. The political price for proposing to correct it is perceived way too high by both those in government as by those in the opposition.

If gas were sold there at the price it could fetch in international markets, the reduction in the demand would allow much more gas to be exported, and much more food and medicines to be imported.

Would the prices be even higher, and all new revenues shared out directly among Venezuelans, then the incentives in the fights against inequality and against climate change would even be aligned.

So, can you imagine how much more sanity could prevail if the Inter American Commission of Human Rights declared gas giveaways to be a violation of human rights; something which could cause anyone directly responsible for such criminal policy to be hauled in front of an International Court of Human Rights… or even just in front of a local judge?

And, can anyone doubt the fact that the regressive fuel subsidies are de facto also a crime against the environment?

I tried to do something about this in 2009. No chance! I denounced this to OAS’ IACHR or OEA’s CIDH in July 2015. I am still waiting for a response.

Can somebody lend me a hand?

PS. December 2017: If gasoline was sold in Venezuela at current world market prices (0% tax) then between eliminating its smuggling and reducing its local demand, one could easily obtain US 10 million a day. At US$2 per day, that would help feed five million people, one sixth of Venezuela’s population.


Sunday, October 22, 2017

Like sales taxes are considered regressive, aren’t corporate taxes too?

Sales taxes are considered regressive because they take a larger percentage of income from low-income taxpayers than from high-income taxpayers.

Does that not apply equally to corporate taxes? I mean they tax income that is going to poorer shareholders with fewer shares with the same rate they tax the income of those with millions of shares?

But then again that might just be me hating corporate taxes, since I believe that the only ones to should pay taxes to the government are we the citizens… so that governments have no doubt about who they work for.

Wednesday, October 11, 2017

World Bank, please dare tackle the issue of what could be considered punishable economic crimes against humanity

Could we challenge the World Bank, as the world’s premier development bank, to put on its agenda to try to qualify which economic policies could be so egregious so as to qualify as punishable economic crimes against humanity?

For instance in a country where people are dying for lack of food and medicines, could selling gas at less than US$ 1 cent per gallon be such a crime?

An Executive Director of the World Bank answered me with: “We already name and shame those who engage in outrageous subsidies of fuel”

That is good, but far from enough! That the World Bank names and shames, is sometimes in some shady circles even taken as evidence of good behavior. No, I am referring to the possibility of having an energy minister face charges in the International Court of Justice in Hague.

Tuesday, October 10, 2017

If one were to construe a systemic risk that could bring bank systems down, this is one way

First: Make capital requirements for banks based on perceived risk. More risk more capital, less risk less capital. That would allow banks to leverage more with The Safe than with The Risky. That would allow banks to earn higher risk adjusted returns on equity lending to The Safe than when lending to The Risky.

Second: Allow banks to use their own risk models to decide what is risky and what is safe and therefore how much capital it needs. Alternatively allow some very few human fallible credit rating agencies to decide what is safe and what is risky.

Third: Sit down and wait for banks lending too much against too little capital to The Safe, like sovereigns, the AAArisktocracy and mortgages; within an economy weakened by too little lending to The Risky, like to SMEs and entrepreneurs.

But, oops, hold it there! Someone already did that! I think it was the Basel Committee for Banking Supervision.

Thursday, October 05, 2017

Who should lead the Fed? There’s one initial and essential screening of the candidates.

Fact: Banks are allowed to leverage more with assets considered safe, like loans to sovereigns, the AAArisktocracy and mortgages, than with assets considered risky, like loans to SMEs and entrepreneurs.

So ask the candidates:

Does that mean “the safe” have even more and easier access to bank credit than usual and “the risky” have even less and on more expensive terms access to bank credit than usual?

If the answer is no, disqualify the candidate.

If the answer is yes, then ask: 

Do you think that might dangerously distort the allocation of bank credit to the real economy?

If the answer is no, disqualify the candidate.

If the answer is yes, then ask: 

In terms of what can pose the greatest risk to the bank system, would you agree with Basel II’s risk weights of 20% for what is rated AAA to AA and 150% for what is rated below BB-?

If the answer is yes, disqualify the candidate.

If the answer is no, then ask: 

Do you agree with a 0% risk weighting of sovereigns?

If the answer is yes, the candidate should be classified as an incurable statist and accordingly dismissed.

If the answer is no, you can then proceed with the rest of the tests.

Good luck!

PS. How many of those currently in the Board of Governors of the Federal Reserve System, would pass this test?

Tuesday, October 03, 2017

Boredom is great for great thinking

I translate the following from Helena Henschen’s (1940-2011) marvelous book "In the shadow of a crime”, 2004

"Sometimes it is necessary to expose yourself to the boredom of loneliness… I welcome the winter power outages.

It is as if the psyche must have silence and time in order to be able to activate and initiate a creation process. I have to get away from everyday life with ever-inbound data that occupies space, a stream of impressions that flows inwards and requires sorting, valuation, and action. It is only when the noise of outer life ceases that a conversion occurs. The power switches direction. From boredom, an opposite outward movement grows.

It seems that boredom and creativity have to do with each other; as well as the listening to nothing.

When the electricity goes out again, a filled kerosene lamp is on the table next to the sofa. I look for the matchbox that I have put next to it, and curl up with a block and a pen in my pocket. I'm prepared; no time is going to be wasted. 

The power outage can last forever, but I do not fall asleep. The brain is on high, the spirits have woken up ..."

P.S As we are left with less and less free unused attention span, we also have less and less time for reflection.

P.S. Filling up their, when awake, 24x7 scarce attention span, deprives our children from that vital educational/forming tool known as boredom; that which inspires them to be creative and teaches them patience. (When I was young, I had to wait for a whole week before the next chapter of Bonanza) 

Below the original text in Swedish 

"Ibland känns det nödvändigt att utsätta sig för ensamhetens tråkighet… jag välkomnar vinterns elavbrott. 

Det är som psyket måste ha tystnad och tid för att kunna aktiveras och sätta igång en skapandeprocess. Jag måste bort från vardagslivet med ständig inkommande data som upptar utrymmet, en ström av intryck som forsar utifrån och in och kräver sortering, värdering och åtgärd. Det är först när slamret från det yttre livet avstannat som de uppstår en konvertering. Strömmen växlar riktning. Ur tråkigheten växer en rörelse från motsatt håll, inifrån och ut. 

Det verkar som om tråkigheten och skapande har med varandra att göra liksom lyssnandet på ingenting."

När elektriciteten bryts igen, står en fylld fotogenlampa på bordet intill soffan. Jag trevar efter tändsticksasken som jag har lagt bredvid den och kryper upp med ett block och en penna i fickan, jag är beredd och ingen tid får förspillas. 

Elavbrottet kan vara hur länge som helst men jag somnar inte. Hjärnan är på högvarv, andarna har vaknat…

"I skuggan av ett brott", 2004 Brombergs

PS. Jag hade turen att veta om denna bok tack vare min Mamma Ingas kära vän Marjorie Cronstedt. Hon sa till mig en gång ”den boken bör du läsa Per”, och i den kopian jag då hittade stod det: “‘Ett litet arv’ från Marjorie. För en lugn stund så småningom. 29/8-06”  Den är nu för mig, ett mycket kärt arv.

Monday, October 02, 2017

Would not those willing to cut taxes belong to the anti-Sheriff of Nottingham party?

Sir, E.J. Dionne JR refers to the Republican Party that “only knows how to cut taxes for the very rich”, as “The anti-Robin Hood party”, Washington Post October 2, 2017.

I do not want to enter the discussion of whether taxes should be lowered or raised, but I do believe there could exist some fundamental mistake in the terminology used.

As I best remember it was the Sheriff of Nottingham who served as Prince John's chief enforcer, collecting unlimited taxes from the people of Nottingham, and forcing Robin Hood and Little John to take refuge in the Sherwood Forest, where they did no one harm, much the contrary, ask friar Tuck.