May 2nd 2009


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Articles from this issue:

CANBERRA OBSERVED: Labor's 'people overboard' fiasco

EDITORIAL: Human rights consultation hijacked?

TRADE: Government pushes China free trade agreement

FIJI: Australia and NZ silent as China bankrolls military junta

NATIONAL AFFAIRS: From Baghdad to Beijing: Labor's dodgy dealings

TRADE UNIONS: WA unions host Cuban ambassador... Why?

ILLICIT DRUGS: Australia's $10 billion industry - organised crime

GLOBAL WAR ON TERROR: A desperate fight to the death

THAILAND: Land of smiles descends into turmoil

PRE-SCHOOL: Conscripting our toddlers for political activism

OPINION: Legislative assault on freedom of conscience

POLITICAL IDEAS: Crisis of credibility that has shaken the world

AS THE WORLD TURNS: Productive investment vs. financial speculation / Free speech curtailed for the sake of pluralism

Human rights hearings (letter)

Australia to import food? (letter)

Telstra (letter)

ETS to cost billions (letter)

CINEMA: Katyn - Sombre depiction of unpunished WW2 crime

BOOKS: REFUGEES AND REBELS: Indonesian Exiles in Wartime Australia, by Jan Lingard

BOOKS: GIRLS LIKE YOU: Four Young Girls, Six Brothers and a Cultural Timebomb, by Paul Sheehan

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AS THE WORLD TURNS:
Productive investment vs. financial speculation / Free speech curtailed for the sake of pluralism




News Weekly, May 2, 2009
AS THE WORLD TURNS

Productive investment vs. financial speculation

When the bore at a cocktail party says, "My house is the best investment I ever made", he means he paid less than it is now worth. But his house does not create a cash flow. It is merely a consumption item whose value has gone up. We have a semantic problem: the word "investment" has come to mean two different things, and this confusion played a part in creating the bubble whose explosion will end up costing many of us our jobs.

Look at the archetypal "investment" of the past 30 years: the leveraged buyout. Private equity firms find a company with a steady cash flow, put up a little money, borrow lots more, and then use that company's own cash flow to fund its takeover. They load a healthy firm with tons of debt, using existing cash flow to pay the interest. Retained profits, which the firm could have used for R&D, building new plants, hiring new workers, or productive investment, are sacrificed to service new, unproductive debt.

These leveraged buyout artists call themselves investors, but what they do is the opposite of investment. They are asset-strippers.

Traditional investors take savings created by deferred consumption and use it to create productive capacity for the future. Private equity firms take existing productive capacity, monetise it, and use it to fund their luxurious current consumption. Investment is supposed to mean sacrificing now to make the future richer. These pirates sacrifice the future to consume more today. ...

The current crisis gives us an opportunity to rethink the link between the financial and real economies. For too long, those working in the productive economy of goods and services have subsidised bankers and traders who have done little to make the rest of us richer or more productive. Since we are bailing out their stupid bets, let us insist that from now on their investments serve our common future. We can no longer afford paper "investments" that merely represent a hope that since asset prices have gone up in the past, they will continue to do so forever.

- from Tom Streithorst, "The wealth delusion: how Americans forgot the meaning of investment", The American Conservative, April 6, 2009.
URL:
http://www.amconmag.com/article/2009/apr/06/00023/

;
Free speech curtailed for the sake of pluralism

Ever since 2006, when Muslims worldwide rioted over newspaper cartoons picturing the prophet Muhammad, Western countries, too, have been prosecuting more individuals for criticising religion. The "Free World", it appears, may be losing faith in free speech. ...

History has shown that once governments begin to police speech, they find ever more of it to combat. Countries such as Canada, England and France have prosecuted speakers and journalists for criticising homosexuals and other groups. It's the ultimate irony: free speech curtailed for the sake of a pluralistic society. ...

Not only does this trend threaten free speech, freedom of association and a free press, it even undermines free exercise of religion. Challenging the beliefs of other faiths can be part of that exercise. Countries such as Saudi Arabia don't prosecute blasphemers to protect the exercise of all religions but to protect one religion. ...

After years of international scorn, the United States can claim the high ground by supporting the right of all to speak openly about religion. Otherwise, free speech in the West could die with hope of little more than a requiem Mass.

- from Jonathan Turley, "The free world bars free speech", Washington Post, April 12, 2009.
URL: http://www.washingtonpost.com/wp-dyn/content/article/2009/04/09/AR2009040903155.html
 




























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