My Beauty Best Teacher

Here are my notes and thoughts as I watched President Barack Obama's 2012 State of the Union address:

• All of the conversation on the channels prior to the address centered on how this address is going to be used as a way to launch the President's re-election bid and as a taxpayer financed campaign speech. I've been watching these things for years and although past incumbents running for re-election have used this speech to speak about all their accomplishments, President Obama appears to be the most brazenly partisan in using this speech as a campaign speech.
• I found a list of past 'special guests' who have been invited by the President- Lenny Skutnik in 1982 (saved passanger from drowning plane), Sammy Sosa in 1999 (relief efforts in Dominican Republic and home run chase), Hamid Karzai in 2002 (Afghanistan President), Julie Aigner-Clark in 2007 (founder of Baby Einstein)... and now Warren Buffet's secretary in 2012 (prop to use to try to bring up point of taxing the rich more). Whereas once President's (both Republican and Democrats) celebrated people who had done things, President Obama celebrates someone who has called on other people to do more things (pay more money) and yet has no real accomplishments of her own (no offense- I'm sure she is a fine person).
• It was amazing and wonderful to see Congresswomen Giffords there- she has made such a great recovery and I wish her the best on her future.
• President Obama begins with his foreign policy accomplishments, which he can take credit for, although he should share this credit with George W. Bush, who put in place the foundations and background for many of these accomplishments (the pull-out in Iraq, the groundwork for catching Osama, drones and catching terrorists in the War on Terror, etc).
• Obama next suggests that private citizens should be more like the military and act as soldiers for the state. Citizens should stop fighting one another, stop disagreeing about the direction of the nation, stop pushing for their individual rights and liberties, stop trying to keep their property and the fruits of their labor, and instead citizens should serve the state, citizens should put aside their differences and just follow orders, and people should give up their wealth and property to the state so that it can redistribute it to those people who it favors. This all sounds vaguely familiar and has strong echo's of fascism in it, although I could sugar-coat it if you'd like.
• In 2008, the 'house of cards collapsed'- banks made loans they shouldn't have (which he pushed for a community activist), regulators didn't do their jobs (which they were not held accountable for), bonuses were paid to these banks and government agencies (to which they were never held accountable for)... he is on the wrong side of the ledger here- he was pushing for the collapse and after the collapse did not hold those people accountable.
• "State of the Union is getting stronger"- as if the mounting US debt is to be ignored and we're all just to pretend that trillions of dollars in my children's spending is not damaging the foundations of our nation and creating a time-bomb that will destroy America.
• President Obama says that he can't get anything done without control of every single aspect of our political system- he decries the 'obstructionism' of the GOP controlling one single house of Congress. No one- no one- should ever be elected President who says that he can't get anything done unless he has total power- that is bad for America and bad for democracy.
• "What is happening in Detroit can happen in other industries"- what happened in Detroit was that the auto companies were bailed out, costing taxpayers $80 billion in loans, debts forgiven, pensions guaranteed, and other loans. GM made $6 billion last year in profits- taxpayers should get that back, plus the next $74 billion in profits, and then we'll claim success in saving a company at no cost. Imagine if he were to bail every unprofitable business out at massive losses to taxpayers- what would that sort of economy look like?
• Proposes new tax on multi-national companies, to be redistributed to companies that 'hire here in America'- some sort of new loan to be administered by Obama officials based on conditions that he'd set. The increased taxes on MNC's will be sure to be passed on to consumers in the form of higher prices on goods and services, causing inflation and hitting the poor especially hard. Why does Obama hate poor people so much?
• "We brought trade cases against China at over twice the rate as the previous administration"- but the Chinese just laughed at us because Obama bowed to the Chinese President and begged to borrow trillions more of their money so that he could blow it on his wasteful spending. It's nice that he's suing China though- I'm sure that's employing lots of lawyers.
• President Obama is mystified on why employers don't hire workers- perhaps if he would have had some sort of a job at some point in business or in the private sector or in some sort of productive economic enterprise he'd know that increasing regulations, fees, requirements, red tape, and the such encourage employers not to hire.
• Obama proposes starting a temp agency company... with taxpayer money. This government financed and supported company will compete with all of these Michigan companies.
• Obama is right- good teachers like me matter, and also he's right that teachers like me are attacked all the time- I'm bashed by liberals and progressives who call me all sorts of names. The President's other education policies are pretty- they are nice words that mean nothing since the federal government isn't supposed to be involved in education in any way other than making sure that there is equality in education for different races and sexes (Elementary and Secondary Education Act of 1965).
• It is almost as if the right answer to everything that Obama says is the opposite of what he says. He says that it is wrong for taxpayers to be giving illegal immigrants a paid education and then sending them home at the end- he suggests we should make these people here illegally citizens after investing all that money into them, while I kind of think that taxpayers shouldn't be investing money into people here illegally. Get a work or education visa or something to stay here or pay your own way.
• President Obama attacks inequality in pay between mean and women in work- that's right Obama, tear this straw man up! That straw man can't fight back- I suggest he go after those who want children to work in coal mines next!
• I followed this line... "need more bullet proof vests... computers chips... innovations... industries... energy..." what???
• President Obama claims that our nation needs an "all out all of the above strategy"- it's double-speak though, because in his next line he clarifies that this strategy means less oil, less natural gas, less coal, and less drilling. His 'all of the above' strategy is going to include additional fees, regulations, and rules on companies that he doesn't like. So, in summary, he is pitching a "some of the below strategy".
• On to exploding batteries discussion... Bryan (the guy Obama referenced) used to build luxury yachts, but when government policies that Obama supported (he wanted a higher tax on yachts) destroyed Bryan's company and industry, Obama was there to throw taxpayer dollars at him to get him restarted building taxpayer subsidized wind turbines, and now Obama is some sort of 'good guy.' He's the bad guy in the story, kiddies. Holland-based Energetx Composites LLC, you just got mentioned by Obama in his State of the Union address- that's the kiss of death.
• Proposed more small fees and regulations and burdens on businesses... I missed what sort of scheme it was supposed to pay for in order to be 'budget neutral'.
• I'm caught up now... "we need smart regulations"... "we need rules"... these rules and regulations "make the free market more free"- LOL. Did he just say "I've ordered thousands of federal agents to spend thousands of man-hours to search for useless regulations that waste taxpayer money"- I must have heard this wrong. He's moving on though to proposing new rules and regulations- I guess he was done with the part about getting rid of regulations and rules after he threw the joke out there. Listening to him talk, I feel like he's a joke of a President.
• Someone add up how much all these regulations, agencies, bureau's, rules, and investments are going to cost America... I'll have to look at the transcript, but I'm pretty sure all he does is to propose these things without any sense of cost. A man (or woman) could spend a hundred years undoing all the damage that this guy is doing to our Republic.
• "The recovery is still fragile"- but earlier he said the "State of the Union is getting stronger"- let's square this round issue, folks.
• Did you know that President Obama has cut the deficit $2 trillion? And not raised it $5 trillion like what really happened? BIZARRO WORLD!
• Let's not forget this people- President Obama hates people earning millions and wants to go after them and confiscate their income redistribute it to people making less. Those who are already wealthy can keep it, those who are on the bottom might like it, but there will be no more moving between classes in Obama's America. This guy wants to slap class systems on us and turn our nation into the rich- those who already made their wealth and who have connections with government- and the rest of us poor. "You can call this class warfare all you want" he says- it's class warfare. It's class warfare. It's class warfare. It's class warfare. It's class warfare...
• The partisan divide is getting worse every year he says... especially over the past 3 years. It must be George Bush's fault or something, right? Or maybe it's because you President Obama are the most bitterly partisan figure in the history of our nation and is tearing our nation into serfs and masters. President Obama attacks running a 'perpetual campaign'- but yet he is the worst offender in this, running continually for office in a way that no President in history has ever done, running campaign commercials a year in advance of the general election, and even trotting out his wife to make frequent partisan attacks.
• He just said-"With or without this Congress I will keep implementing laws and putting in place policies that I want, but if Congress went along with what I was already doing it would give me cover and get us all involved." This guy is a bully and a dictator. Maybe I heard him wrong though; I'll go back and re-read the transcript, maybe I got it wrong.
• The speech must be coming to an end- after spending a couple minutes in the beginning to address our military and veterans, we're now going to end with a couple minutes at the end about the military and veterans- I though think that the military shouldn't just be props in Obama's game of 'we're all in this together' meme; maybe he should talk about military programs in the body of his speech that he wants to cut or increase, about what he's been doing as commander-in-chief, etc. The military is not simply there to make Obama look good. "No one thought about politics on that day" Obama says- but yet the photo of Obama in the war room was staged. Nice words Obama, but in your mouth, they are just words, merely words.
• President Obama says that as long as we are all commoners, living like peasants on the land, serving our masters like serfs, than our nation will be strong. He said 'common' several times at the end- but private property, liberty, and protection of life wasn't mentioned.

Under Article II, section 2, clause 2 of the Constitution, the President has the power to fill any vacancies that may happen during when Senate is in recess. Over the past 100 years, a legal and official Senate recess has been interpreted by scores of Attorneys Generals and the Department of Justice (DOJ) from both Republican and Democratic Party's as the Senate being out of town and not conducting any business at all for at least 10–25 days of duration. No one, not even crazy right or left wing professors or lawyers, has ever before even suggested anything of six to seven days might be enough to count as a recess (source).

Right now the Senate is not in a recess. Every three days it opens up a brief session for a half hour or so and then adjourns for three days before it then has another brief 'pro forma' session. This means that officially, technically, and according to the rules and procedures of the United States Senate, it is still in session. This tactic was invented and used first by the Democrats to block President Bush recess appointments, and it was successful, because legally the President can not make appointments while the Senate is in session.

And so it was quite a surprise to me today that President Barack Obama (one-term Democrat), made several recess appointments, illegally and against the laws of our nation. Check out the many stories on this issue on memeorandum found here or here.

President Obama argued that under his and Democrats leadership America has fallen into such a crisis that he no longer has to follow the laws of our nation. He can simply deem that the Senate is effectively in a recess, and thus appoint whomever he wants to whatever he wants, even without Senate confirmation.

Many bloggers and professors and lawyers have jumped to his defense, arguing that the Senate is indeed in a recess, but that's contrary to what the White House memo says- it does not say 'the Senate is in a recess and the President is making several appointments'- nope, the memo says "Senate has effectively been in recess"- in other words, not technically, not officially, not legally, but "effectively", and so Obama was going to technically, officially, and legally make appointments that would be effective immediately.

Many other bloggers and professors are arguing that the President had the right to break the law here because the Senate wasn't advising and consenting and was simply blocking the one appointment of Richard Cordray to lead the Consumer Financial Protection Bureau, but their arguments were again made into useless junk by the President later making further 'recess' appointments to the NLRB, and some of these appointments had been opposed because the Senate opposed the people involved and did not want to give their assent.

Look, there is no defense for breaking the laws of our nation. None. The ends do not justify the means. I don't care if its a conservative, Tea Party Republican, or a socialist, communist Democrat- the President only has the power to make appointments when the Senate is officially in a recess of longer than 10 days. Period. Anything other than that is breaking the law, and is unconstitutional, and deserving of impeachment.

That won't happen though- bit by bit, crisis by crisis, American citizens are learning to tolerate law breaking. Ignoring established bankruptcy laws to 'save the automobile industry' was okay. Pressuring immigration officials to ignore fraudulently filled out forms and security threats in order to increase the number of immigrants in America is okay. Passing a law ordering people to buy a product or face fines is okay. And making recess appointments while the Senate is officially/legally/technically in session and not in recess is okay. Bit by bit, little tyranny by big, we are learning to accept that one man is greater than the system and can destroy it if he thinks by doing so he can save us.

This incident once more reminds me of a post I wrote last year called America is a Republic- It Shouldn't Matter if Most Want to Tax Millionaires More. In it, I wrote:

Our nation is approaching a key election in 2012, much as Rome faced a key turning point in its history when Lucius Sergius Catilina attempted to overthrow the Roman Republic by playing to the lures of democracy and populism. Catiline rallied the poor to his banner by arguing for debt relief for the poor people of Rome, and many supported him because there are always more people who are poor than there are people who are truly wealthy. Because of the destructive policies of the government, which had collapsed the housing market and had taxed and regulated the small farms and small businesses to the brink of destruction, there were many people out of work who listened to the siren song of 'support me, I'll claim majority rule, and take from those who have wealth and give to those who do not.' Thankfully, Rome had an ardent defender of the Republic in a man like Cicero, and the conspiracy was foiled, but I believe that it had come close enough to succeeding to inspire men like Julius Caesar and Pompey to try again soon after, and they were successful in harassing the forces of democracy to institute a dictatorship over the masses.

According to a recent poll by CBS, most Americans believe that taxes on millionaires should be increased in order to reduce the deficit. When asked "should taxes on millionaires be raised in order to lower the the deficit," 64% of those responding to this poll said "yes." This is exactly why our founding fathers rejected a democracy in favor of building a republic.

When our founding fathers built our nation, they knew from history that democracies inevitably fail. Democracies are governments built on majority rule, where the majority has the power to decide what to do with your property, your liberties, and eventually your life. In a democracy, votes are held, and if the majority decides that they want to take more of your money, property, wealth, or business in order to 'lower the deficit', that is exactly what happens. Although those who are voting played no part in you earning this wealth and those who are voting did not expend any effort for you to gain this wealth, they derive their power from the fact that there are more of them than you, and majority rules. On this basis, they feel that they can gather as mobs and demand higher taxes on you and more control over your choices, simply because there are more of them than you. This sort of mob rule is exactly the sort of rule that was common in ancient Greece and common at the end of the Roman Republic, and eventually both of these republics-turned-democracies slide into governments ruled by Caesars and Tyrants.

Our founding fathers knew this was the nature of man and knew that although democracies and majority rule have some favorable aspects to them, the only way that people's lives, liberty, and property could be properly protected is by building a republic. A republic is a government where political power is limited by the law, which sets up a government of limited powers that is frequently checked by separation of powers, checks and balances, and federalism. In a republic, minority rights are protected and the government is unable to threaten your life, liberty, and property because it lacks the power and capacity to do so- it does not rule on majority rule, but rather rules based on the majority properly running a firmly established and defined political entity which performs certain needed tasks well, such as national defense and establishing police services, but which does not have the real power to inject itself into tasks which it can not do well, like setting up social values and controlling the free market of exchange. In a republic, the government lacks the capacity and power to take money from those who earn it simply because they have it- rather, taxes are raised on people because it is argued that those people benefit the most from the services of the state so should pay more. This argument only works to a certain point, and assumes that even the poor pay taxes into the system to a rate comparable to what the services that they receive from the state- it is not just 'loot the rich because they have money and there is more of us than them.'

Our nation is approaching a key election in 2012, much as Rome faced a key turning point in its history when Lucius Sergius Catilina attempted to overthrow the Roman Republic by playing to the lures of democracy and populism. Catiline rallied the poor to his banner by arguing for debt relief for the poor people of Rome, and many supported him because there are always more people who are poor than there are people who are truly wealthy. Because of the destructive policies of the government, which had collapsed the housing market and had taxed and regulated the small farms and small businesses to the brink of destruction, there were many people out of work who listened to the siren song of 'support me, I'll claim majority rule, and take from those who have wealth and give to those who do not.' Thankfully, Rome had an ardent defender of the Republic in a man like Cicero, and the conspiracy was foiled, but I believe that it had come close enough to succeeding to inspire men like Julius Caesar and Pompey to try again soon after, and they were successful in harassing the forces of democracy to institute a dictatorship over the masses.

So, after reading that the majority of Americans believe that taxes on millionaires should be increased in order to reduce the deficit, I once again thankful that our nation is a Republic- if only we can keep it that way.

Via memeorandum, from CNSNews story March Madness: U.S. Gov't Spent More Than Eight Times Its Monthly Revenue:

The U.S. Treasury has released a final statement for the month of March that demonstrates that financial madness has gripped the federal government. During the month of March, according to the Treasury, the federal government grossed $194 billion in tax revenue and paid out $65.898 billion in tax refunds (including $62.011 to individuals and $3.887 to businesses) thus netting $128.179 billion in tax revenue for March. At the same time, the Treasury paid out a total of $1.1187 trillion. When the $65.898 billion in tax refunds is deducted from that, the Treasury paid a net of $1.0528 trillion in federal expenses for March....

....To help pay off its $1.0528 trillion in monthly bills on only $128.179 in monthly tax revenue, the Treasury turned primarily to new borrowing. During the month, according to the Treasury statement, the government sold $786.5 billion in new securities. It also drew down its cash balance from $190.6 billion at the beginning of the month to $118.1 billion at the end of the month. It also reaped $18 billion from the sale of assets in the Troubled Asset Relief Program....

• The federal government is not content to stay in massive debt, is not content to add to the debt at the levels that were unacceptable under Bush (except for his last year, usually under $400 billion), and the federal government is not content to simply add massive amounts of new debt simply during a time of 'crisis' or to 'stimulate' the economy- nope, they want to add ever and ever and every larger amounts of debt.
• This debt is not pretend play money- it is real money that has to come from somewhere. Last month, the federal government soaked up $785 billion in money. That $785 billion could have gone to building new factories, modernizing plants, investing in new technologies, paying off debt that consumers owe, investing in stock markets, bringing homes values back to past values, or as savings for the future. This whole crisis started because of a lack of liquidity- I'm no genius, but I fail to understand how the government soaking up larger and larger and larger amounts of money will lead to a more liquid environment for cash in the private sector.
• $785 billion is a lot of money that should be able to buy a lot of things... and yet, look at our nation. That money is just being burned away, piddled away with little to show with it. In my family budget, when times get rough, we cut out the fancy food and extra amenities and go back to the basics, and yet there is a belief that when times get rough for the government (and I would assert that historic and nation-altering debt levels are rough) it must spend more on extras and fancies and giveaways. Zero accountability with this money being spent.
• Treasuries continue to pay a yield. If the economy in the United States continues to struggle, I don't imagine many are able to buy US Treasury bonds, except the rich, so I'm guessing that most of these bonds are being bought up by non-US actors (banks and states and companies and foreigners), who will then own a piece of the United States. This will restrict and restrain our nation's ability to act according to its interests, and will mean that every month, US taxpayers will be sending taxes to DC, who will then send the foreign holders of our debt a check, which means that our taxpayers are working to provide funding to perhaps tyrannical and immoral governments.
• Democrats are responsible for this mess. On the ballot next year there are Democrats- for me, there is a Democratic President, Senator, and Congressman. I intend to hold them to account for this mismanagement of government, and I hope you do too.

Many people in our nation are unemployed as a result of the liberal policies of Obama and Bush, of Democrats and liberal Republicans, who didn't respect private property rights, who created barriers and limits to our freedom and liberty, and who failed to embrace and love human life in all of its glory. These liberal policies manifested itself in high taxes, cumbersome regulations disguised as 'safety' or 'environmental', new entitlements, increased federal control over disaster relief and education and energy production, increases in barriers to production and investment, and the giving away of taxpayer money that the government doesn't even have to those who haven't earned it.

Unemployment is difficult, and it doesn't look like the situation is going to get a whole lot better, especially if Obama and the Democrats don't extend the Bush tax cuts. In order for jobs to be created though, you have to allow people to make free choices, and what is happening right now with unemployment benefits is not right. The government is using money taken from my children and from my grandchildren (ie, debt) to pay people to sit home and not work. It isn't paying these people enough to really pay the bills or buy any new products (so it isn't 'stimulus payments') and these unemployment benefits can only be earned when people aren't working, so they aren't producing anything for our society. At some point, unemployment benefits must be scaled back or cut off, or else unemployment will simply turn into yet another entitlement program, paid for by debt, acting as a drag on our economy and preventing jobs from being created.

Tough choices have to be made at some point by unemployed- to either get retrained, to switch careers, to retire early at a reduced standard of living, to get a job at a retail chain or fast food joint, or to take a risk on themselves and go into business as an entrepreneur. Of course unemployment is a safety net that people do pay into, and thus should be there for those to cushion their fall and buy them time to recover and readjust, but unemployment should not be a long-term solution, or else it will be come a long-term problem.

That being said, our elected leaders (mainly Democrats in Congress and the Presidency but also some Republicans) are unable to make the tough decisions that need to made regarding unemployment. There are increased calls to extend these benefits, indefinitely I imagine, by many in the media. Via RealClearPolitics, Robert Reich (whose book The Work of Nations: Preparing Ourselves for 21st Century Capitalism was required reading in two of my University classes) is one of these types of people who are unable to make the hard decisions to get American back to work, and writes in the San Francisco Chronicle "Extend benefits for jobless, not tax cuts for rich":

Yet Republicans and some Blue Dog Democrats in Congress say we can't afford another extension of jobless benefits. The deficit is too big.But wait. These are the same members of Congress who say we should extend the Bush tax cuts for the wealthy. Extending the Bush tax cuts for the people at the top would cost more than extending unemployment benefits for struggling families without a breadwinner. These families need the money. The rich don't.

Quick action is needed. About 800,000 unemployed workers will run out of benefits this week. Two million more will stop receiving benefits by the end of December. Millions more after that. The choice couldn't be clearer.

Thomas Sowell put out another brilliant article today, and the title of my post is the title of the headline. Democratic President of the United States Barack Obama is actively and personally trying to create a potential disaster for our nation, and Sowell writes about it in clear and powerful language. Here are some selected parts, although you should read the whole article here:

When that person is the president of the United States, the potential for disaster is virtually unlimited. Many people are rightly worried about what this administration's reckless spending will do to the economy in our time and to our children and grandchildren, to whom a staggering national debt will be passed on. But if the worst that Barack Obama does is ruin the economy, I will breathe a sigh of relief. He is heading this country toward disaster on many fronts...

Nothing has torn more countries apart from inside like racial and ethnic polarization.

This is a president on a mission to remake American society in every aspect, by whatever means are necessary and available. That requires taking all kinds of decisions out of the hands of ordinary Americans and transferring them to Washington elites-- and ultimately the number one elite, Barack Obama himself.

Like so many before him who have ruined countries around the world, Obama has a greatly inflated idea of his own capabilities and the capabilities of what can be accomplished by rhetoric or even by political power. Often this has been accompanied by an ignorance of history, including the history of how many people before him have tried similar things with disastrous results.Moreover, ignorance by itself is not nearly as bad as charging full steam ahead, pretending to know.

While the mainstream media in America will never call him on this, these repeated demonstrations of his amateurism and immaturity will not go unnoticed by this country's enemies around the world. And it is the American people who will pay the price.

We revisit the saga of 'Vulture Funds' with a look at Tony Allen-Mills Times Online piece:

Earlier this year, in a little-noticed, out-of-court settlement, the Brazzaville government paid off its“vulture” creditors, thereby ending almost a decade of legal wrangling that stretched from Bermuda and the Virgin Islands via Paris, New York and Hong Kong to London’s High Court.
It was a startling surrender for a country that has spent much of the past 10 years dodging its creditors, ignoring court orders and pleading to join the debt-relief programme run by the World Bank and the International Monetary Fund. Why give in to the vultures just as world opinion had clearly turned against the hedge funds?

Armed with court-approved powers to subpoena witnesses and with search warrants, the Elliott team[Elliott Associates, a $10 billion (£5 billion) hedge fund] began a journey into the murky depths of the international oil trade. It would subsequently emerge in court that the Brazzaville government had established a network of sham companies (known in French as faux nez, or “false noses”) and bogus executives (“straw men”) in the hope of concealing their oil transactions.

In the NYTimes Lydia Polgreen reports on a countervailing view of 'Vulture Funds':

Organizations that fight corruption argue that those investors are exposing in court the corrupt networks of government officials, providing a much-needed check on mineral-rich states. Beyond that, anticorruption campaigners, like the groups Global Witness and the Publish What You Pay Coalition, contend that when nations win debt relief without becoming more accountable, they will simply repeat old mistakes and end up deep in debt once again.
“If it were not for these vulture funds, we would not know any facts about the way our country’s wealth is being taken away,” said Brice Mackosso, a campaigner for greater transparency in the Congo Republic’s government. “We don’t agree with their ultimate aims, but they are the only ones capable of exposing the truth.”

Emerging Markets reports on SSA debt markets:

If domestic debt markets are to develop, it is also vital to improve local debt management, which has generally lagged behind efforts at debt relief. Countries need a clear debt management plan(pdf) and issuance strategy(pdf), which might include publishing a debt management report, lengthening the yield curve, building benchmark issues as conditions permit and widening the investor base

The limited size of local debt markets means that not all financing needs can be met domestically, and external commercial borrowing may also be cheaper than domestic debt, by removing the inflation and currency risk faced by international investors. Finally, it also fits in with the need to maintain a diversified funding mix. African governments now seem ready to test international investor appetite with sovereign issues, and Ghana’s milestone Eurobond issue in September points the way – the Ghanaian government could not have raised $750 million at a yield of 8.5% in the local market. African companies have also been active in the international market, especially telecoms and banks, and we believe international bond issues will be a significant feature of corporate Africa going forward.

The WSJ writes:

The global credit crunch has shaken the kaleidoscope of the world economy. As sub-prime lending problems ricochet around the world, capital is seeking new places to grow. And it is looking farther afield than ever before -- not just to the well-established emerging economies of China or India, but to "emerging emerging" markets in Africa...Their success has been driven by getting the fundamentals right. Nigeria has benefited from banking and pension reform, a crackdown on corruption, debt relief based on sound fiscal policy and the high oil price. Perhaps more remarkably, Ghana has achieved its success without oil windfalls. A strong technocratic team in the top ministries has pushed through a homegrown reform program which has rationalized the electricity sector, led the development of a domestic debt market, and freed up capital controls. There is nothing to stop the rest of Africa following this lead. And the signs are encouraging: The IMF expects sub-Saharan Africa to grow 6.1% in 2007 and 6.8% in 2008.

Matthew Green at the FT reports on the Nigerian Capital Markets:

Some banking stocks have trebled in the past six months alone – the most spectacular sign of the shift in the country’s status from marginal emerging market play to star performer.
Driven by a combination of government reforms, debt relief and high oil prices at a time of heightened appetite for new types of risk, the gains have revealed a glimpse of untapped potential and looming hazards...A tougher line on money laundering and a newly-awarded BB- sovereign debt rating added to the allure at a time when global funds were turning to Africa as an antidote to dwindling returns in established pastures.
The sheer size of the country’s debt and equity markets has enticed hedge funds that worry about liquidity in smaller sub-Saharan countries, while strong domestic buying insulated Nigeria from a global sell-off in March

Robert Guest writing in the WSJ states:

Simply put, since politics is the quickest route to riches in Nigeria, a lot of crooks go into politics. That makes life tough for those who are trying to clean up the system. Before the elections put everything on hold, Mr. Obasanjo's economic reform team had done a good job of making the central government’s finances more transparent; so much so that Nigeria won debt relief in 2005.
But the reforms did not go far enough, and barely began to drain the swamp of state and local politics. The chief obstacle to any anticorruption drive is that most rich and powerful people in Nigeria have a vested interest in its failure

Ferial Haffajee writes:

Increasingly we must realise that aid is not the answer -- or at least not all of the answer. There is no argument for immediate self-sufficiency. Not for the hungry people of Zimbabwe. Not for the displaced people of Darfur. Aid for humanitarian purposes is and will be necessary in Africa for the foreseeable future. But securing stability and sustainable wellbeing must come through other means.
What might those be? Fair trade and debt relief offer a far more sustainable path towards security and development...This will require much better terms of trade...If the barriers to entry into wealthy markets are lowered, investment could increase and employment could grow...In addition, our continent needs to harness its diaspora as India has done...Remittances should be leveraged: every year a whopping $100-billion is transferred by migrants to their home countries. In some areas, these remittances are paying a development dividend.

Andrew Mwenda makes a case for turning off the Aid spigot:

“The best thing the West can do is nothing,” he says...“White society is being blackmailed. The white world looks at Africa from a position of guilt,” he told a seminar at IPN, the London think tank. The beneficiaries of aid are governments, politicians, the staff of aid agencies and charities, he says. Head in hands in mock despair, he reels off a list of “charities” that sprang into being when the Global Fund to Fight Aids, Tuberculosis and Malaria began to disburse its millions. “There was Children of Hope, there was Hope for Children, there was Help the Children.”

Aid is the problem, not the solution, he says. Debt relief is a Moral Hazard. What is the incentive for country “A” to continue paying interest on its borrowings if country “B” steals the money, defaults and then gets debt relief.

“Countries that are deserving don’t get aid,” says Mr Mwenda. Aid creates the wrong incentives, he argues. It makes objects of the poor, passive recipients of charity rather than active participants in their own economic betterment. Africans don’t need handouts, they need better institutions, land reform and access to cheap mortgages.

Let us not pretend to be suprised by this, a number of assessments have warned about the futility of debt relief policies.

The report by the Washington-based Independent Evaluation Group (IEG) says that in half the countries that received debt relief under the programme known as the Highly Indebted Poor Countries (HIPC) initiative, debt has in fact climbed back up to where it was before the debt relief plan.So far, the HIPC initiative has eased 19 billion dollars of debt in 18 countries, halving their debt ratios. However, the IEG found that in 11 of the 13 countries the report studies, and which graduated from the programme that qualifies them to start receiving debt forgiveness, called the completion-point, external debt has actually risen.

Bhuwan Thapaliya writes "...What is little noticed by the rest of the world is that much of Africa is in the midst of an economic revolution. Though poor by global standards, there is a big chance for Africa to forge its own future...The best thing that America and Europe can do for Africa is not to give it handouts but to reduce trade barriers and buy the products that Africa is capable of producing competitively -- not just agricultural products but also labor-intensive manufactured goods such as textiles...Africa has the trade routes and the potential to industrialize through export-oriented manufactures, but it still faces many formidable difficulties.To join the global economy, for instance, African nations must cut tariffs. These taxes, however, are often a vital source of revenue. In such a situation temporary balance-of-payments support, together with generous debt relief, makes sense..."

Jonathan Elendu's Elendu Reports and Sowore Omoleye's Sahara Reporters are a pointer to the promise of bottom-up methods. More familiar but maverick instruments like Al-Jazeera have been positively disruptive to the social-political fabric of the Middle East and beyond,however their establishment and operational costs have been prohibitive and a barrier to scrappy potential new entrants. Elendu Reports demonstrates the potential of diligent no holds barred investigative reporting for the continent of Africa enabled by the tools of web 1.0 and 2.0 . Recent reports of corrupt goverment officials with the accompanying images of their ill-gotten luxury properties in Western cities is threshold breaking,the denials and obfuscations of the past by the officials is now indefensible the brigandage seemingly more brazen . The effect of this is undeniable, it brings the third dimension of texture to accusations of corruption, in the flesh so to speak, the world can now see what happens to the revenue and resources of some of the most impoverished countries in the world, while the leaders don the caps of debt-relief and aid. This medium yet to include podcasting (sound) and vodcasting (video),are the developing worlds alternatives to '60 Minutes' etc. The erosion of the digital divide and its interactive enabling nature could have an accelerated cleansing effect on the hitherto incorrigibles that rule the roost, accountability and transparency sought so long in Africa's leadership might now be within its grasp.

Richard Dowden writes"...Africa is changing fast. Driving those changes are mobile phones and radio stations and China's appetite for raw materials. The G8's agenda of aid and debt relief may, if delivered, play a secondary role. The external driver is China's search for minerals , particularly oil, which pushes up Africa's mineral prices...The internal driver is the mobile phone revolution that has transformed business and politics in Africa in the past ten years. In 2001, only 3 per cent of Africans had telephones of any sort. Now there are 50 million mobile-phone users, with numbers growing by 35 per cent a year. The phone companies completely misjudged the market - they thought that only the super-rich would buy mobiles. But it turned out that the people who really needed them were small self-employed businessmen, market women, taxi drivers and the casual workers who keep Africa going. In some areas, beer sales have plummeted as people have invested their meagre earnings in mobile phone cards instead. The pace of life has picked up hugely..."
Via Textually.Org

CK Prahalad comments that China and India "...represent 900 million people in poverty, a larger number than the entire population of Africa. There are about 600 million in Africa who live on less than $3 per day. Why, then, do China and India evoke fear and anger, while Africa elicits pity and guilt?...Despite the magnitude of their respective poverty problems, China and India may have a chance of meeting the Millennium Development Goals established by U.N. Their economies are following the lead of other countries that have raised their populations into a middle-class economic base. For example, between 1975 and 2004, GDP per capita in South Korea increased fourfold. Over the same period, Malaysian incomes rose threefold.
On the other hand, in those decades, per capita incomes in Nigeria declined by a tenth. Why? During the period 1955-2004, the West and multilateral institutions invested more than $1 trillion in aid and subsidies in emerging economies. But poverty persists. It would seem, therefore, that we need to challenge the role of aid and subsidies in promoting sustainable economic development. If poverty cannot be eradicated with humanitarian handouts alone, what is the alternative?...The G-8, led by Tony Blair and supported by Jeffery Sachs and Bono, believe that debt relief and a doubling of aid from rich countries to poor, especially in Africa, is the way to go. A less popular alternative focuses on the involvement of the private sector in poverty alleviation through the development of market-based ecosystems.
Irrespective of which route we take, we need to build an infrastructure to deal with poverty. There is an implicit aid overhead. According to Prof. Sachs, out of every dollar of aid given to Africa, an estimated 16% went to consultants from donor countries, 26% went into emergency aid and relief operations, and 14% went into debt servicing. How much of the remaining 40% escaped corrupt officials to benefit the intended recipients is not known..."
Via NextBillion

Chris Ngwodo writes "...we should realize that the current prominence of debt relief in international circles is driven by much more than altruism...debt relief is aimed at altering the social climates that support the spread of extremism and terror all over the third world without altering the global economic balance of power...ongoing campaign for debt relief must be articulated from the perspective of its moral economy. Much of those debts are odious because they were incurred by dictatorships which were unrepresentative of the masses now groaning under the debt burden...debt relief must be accompanied by the institution of justice in the global economic system. The pious hypocrisy of the west in championing free markets in Africa while maintaining subsidies and guarding its own markets strategically is obvious...The willingness of so many western countries and banks to receive stolen funds is as criminal as the original theft itself. The debt issue should be tied to the repatriation of Africa's stolen wealth that has been piling up in foreign vaults...African nations must look inward and tackle decisively the culture of graft that is destroying governance and impoverishing their people. It would be profound to see past leaders and government operatives being put on trial and convicted for economic crimes, theft and embezzlement..."
Via Pambazuka News