Author Archives: Lila

UK Begins Madoff Fraud Investigation

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LONDON (AP) — Britain’s Serious Fraud Office opened an investigation into the British business operations of Bernard Madoff on Thursday, raising the prospect that the alleged Wall Street fraudster could face criminal charges here.

The fraud office, which is cooperating with its U.S. counterparts, said its investigation would focus on British victims and “any criminal offenses that might have been committed in the U.K.”

Responding to criticisms that it has moved too slowly in the past against illegal activity in London’s huge financial sector, the agency said the inquiry showed its “new, faster approach to tackling fraud.”

From AP.

Scientists Discover How Levitation Can Work….

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 “U.S. scientists have found a way to levitate the very smallest objects using the strange forces of quantum mechanics, and said on Wednesday they might use it to help make tiny nanotechnology machines.They said they had detected and measured a force that comes into play at the molecular level using certain combinations of molecules that repel one another.

The repulsion can be used to hold molecules aloft, in essence levitating them, creating virtually friction-free parts for tiny devices, the researchers said….”

More at Reuters.

Securing The Borders Or Snooping On Joe Citizen?

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 ” I had been curious about what’s in my travel dossier, so I made a Freedom of Information Act (FOIA) request for a copy.
“My biggest surprise was that the Internet Protocol (I.P.) address of the computer used to buy my tickets via a Web agency was noted. On the first document image posted here, I’ve circled in red the I.P. address of the computer used to buy my pair of airline tickets.
(An I.P. address is assigned to every computer on the Internet. Each time that computer sends an e-mail—or is used to make a purchase via a Web browser — it has to reveal its I.P. address, which tells its geographic location.)
The rest of my file contained details about my ticketed itineraries, the amount I paid for tickets, and the airports I passed through overseas. My credit card number was not listed, nor were any hotels I’ve visited. In two cases, the basic identifying information about my traveling companion (whose ticket was part of the same purchase as mine) was included in the file. Perhaps that information was included by mistake.
Some sections of my documents were blacked out by an official. Presumably, this information contains material that is classified because it would reveal the inner workings of law enforcement….”

More at Yahoo travel.

India’s 4th Largest Outsourcer, Satyam Computer Services, Admits to Major Fraud

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NEW DELHI — Satyam Computer Services, a leading Indian outsourcing company that serves more than a third of the Fortune 500 companies, significantly inflated its earnings and assets for years, the chairman and co-founder said Wednesday, roiling Indian stock markets and throwing the industry into turmoil.

The chairman, Ramalinga Raju, resigned after revealing that he had systematically falsified accounts as the company expanded from a handful of employees into a back-office giant with a work force of 53,000 and operations in 66 countries.

Mr. Raju said Wednesday that 50.4 billion rupees, or $1.04 billion, of the 53.6 billion rupees in cash and bank loans the company listed as assets for its second quarter, which ended in September, were nonexistent.

Revenue for the quarter was 20 percent lower than the 27 billion rupees reported, and the company’s operating margin was a fraction of what it declared, he said Wednesday in a letter to directors that was distributed by the Bombay Stock Exchange.

Satyam serves as the back office for some of the largest banks, manufacturers, health care and media companies in the world, handling everything from computer systems to customer service. Clients have included General Electric, General Motors, Nestlé and the United States government. In some cases, Satyam is even responsible for clients’ finances and accounting.

The revelations could cause a major shake-up in India’s enormous outsourcing industry, analysts said, and may force many large companies to investigate and perhaps revamp their back offices.

More at the New York Times.

Dollar Collapse In Two Years?

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“Writing on his blog , Prof Buiter said: “There will, before long (my best guess is between two and five years from now) be a global dumping of US dollar assets, including US government assets. Old habits die hard. The US dollar and US Treasury bills and bonds are still viewed as a safe haven by many. But learning takes place.”

He said that the dollar had been kept elevated in recent years by what some called “dark matter” or “American alpha” – an assumption that the US could earn more on its overseas investments than foreign investors could make on their American assets. However, this notion had been gradually dismantled in recent years, before being dealt a fatal blow by the current financial crisis, he said.

“The past eight years of imperial overstretch, hubris and domestic and international abuse of power on the part of the Bush administration has left the US materially weakened financially, economically, politically and morally,” he said. “Even the most hard-nosed, Guantanamo Bay-indifferent potential foreign investor in the US must recognise that its financial system has collapsed.”

More at the Telegraph.

Developing Countries Subsidise Health Care in Developed Countries

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An article on foreign doctors in the US at Talking Points Memo Cafe from last year caught my eye. 

“TPM Cafe contributor Dean Baker has argued, on more than occasion, that “increased competition from foreign professionals could lead to dramatic reductions in the salaries of workers in the highly paid professions.”

 

In a 2003 study Baker, who is co-director of the Center for Economic and Policy Research, estimates that by adding roughly 100,000 physicians to our current pool of about 760,000, we could pull doctors’ salaries down from an average of $203,000 to somewhere between $74,000 and $126,000. For the average middle-class American family of four he reckons that would lead to savings of $2,200 to $3,700 per year

What he ignores is that, by and large, foreign doctors who work in the U.S. practice in a separate market. Indeed, an analysis of where these doctors work shows they are likely to be found in geographic areas where the physician-patient ratio is low and the rate of infant mortalities is high. Typically, they are found in rural areas where their visas have sent them and in inner cities where they treat the Medicaid patients that many American doctors refuse to see because Medicaid reimbursements are so very low. The fees Medicaid pays vary state by state, but Princeton health economist Uwe Reinhardt gives an example of just how parsimonious the government can be: “federal and state legislators may be willing to pay pediatricians $10 to see a poor child covered by Medicaid, but to pay the same pediatrician $50 or more to see these legislators’ own children in the commercial corner of the market.”

As we noted recently on The Century Foundation’s healthcare blog, Health Beat, even when foreign and American doctors practice in the same area, “medical apartheid” is the rule (see the relevant posts here and here.)

In New York City, for example, well-insured white patients see one set of doctors, while minority and poor patients see another group, many of them foreign-born. Typically those doctors charge less (or are paid less by their employers.) In the late 1990s, when it seemed we had a surplus of physicians in this country, the AMA fretted that doctors emigrating from other countries might pull down physicians’ salaries. Not to worry. While Medicare has put a brake on some doctors’ incomes in recent years, foreign doctors have had little effect. What they charge low-income patients ultimately has no influence on what the market will bear at the high end—and that’s the end that feeds health care inflation.

Moreover, even if a flotilla of foreign docs could bring down medical fees—is it fair to poach physicians from countries where tens of thousands of children are dying of treatable conditions? To put it as bluntly as possible, how many children are we willing to let die each year so that the average middle-class American family can save $2,000 to $3,700?

Baker recognizes and addresses the ethical problem. His solution is to pay for the doctors we are taking: “it would be reasonable to expect that developing countries would want to recoup the costs of educating professionals who have left the country,” he writes, “and it would be reasonable to expect that a rich nation like the United States would be willing to share some of the economic gains that it receives as a result of an increased supply of highly educated workers from poor nations…”

Propaganda Nations: Pre-Gaza PR Offensive

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“The Directorate, which has been up and running for eight months, began planning six months ago for a Gaza operation. A forum with representatives of the press offices of the Foreign and Defence ministries, the IDF Spokesman Unit and other agencies held numerous meetings to decide on the message.

The forum held two system-wide exercises in the past two months, one aimed at foreign media and, last week, one dedicated to the Israeli press.

“One of our lessons from the Lebanon War was that there were too many uniforms in the coverage,” says Yarden Vatikay, director of the National Information Directorate, “and that doesn’t come over very positively.”

The international media were directed to a press centre set up by the Foreign Ministry in Sderot itself so that foreign reporters would spend as much time as possible in the main civilian area affected by Hamas rockets. When the IDF was represented on the international TV networks, it was by Major Avital Leibovich to project a feminine and softer image.

Ministers have been ordered by the Cabinet Secretary not to give interviews without authorisation so as not to repeat the PR disaster of a year ago, when Deputy Defence Minister Matan Vilnai threatened the Palestinians with a “holocaust”. …”

More at Jewish Chronicle.

And some analysis by Juan Cole at Informed Consent:

“Having been treated to these propaganda techniques repeatedly and continuously for 8 years, the US public can suddenly hear the similarity in the assertions of Israeli officialdom and its supporters.

Of course, the Neoconservatives had borrowed a lot of their techniques from the Jabotinsky/ Likud tradition of revisionist Zionism, so what goes around comes around.”

Mobs: Male Consumption Patterns Related to Reproductive Strategy

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And more research vindicating the premise of “Mobs, Messiahs, and Markets,” from the Journal of Evolutionary Psychology. 

“Darwin was initially puzzled by costly traits such as peacock tails that could not be

accounted for by survival advantage; he later concluded that these were features that led to

reproductive advantage (1871). For humans, male displays of wealth may literally be a

costly signal analogue to the peacock’s tail (Miller and Todd, 1998). Displays of

prestigious consumer goods could be an honest signal of male mate value, as they would

indicate available resources as well as skills at acquiring wealth (Colarelli and Dettman,

2003). Veblen (1899/1953) remarked on the relationship between prestige and the

consumption of consumer goods and even suggested that inherited psychological

mechanisms were responsible for this relationship. Colarelli and Dettman (2003) note that

advertisers are well aware of the importance of prestige when marketing products, and will

try to associate a product with prestige even when there is no functional relationship. An

ethnographic study of Amazonian foragers and slash-and-burn farmers found that those

who had greater monetary resources allocated a greater portion of expenditures towards

luxury goods, and this tendency was stronger in men than in women (Godoy et al., 2007).

Male displays of wealth and social status may facilitate mating competition. During

ancestral times, men with greater resource control married younger women, married more

women, and produced offspring earlier (Low, 1998). Males who did not have substantial

resources or status may have been unable to establish long-term relationships. Across a

wide variety of societies, male reproductive success is a function of social and economic

status (Hopcroft, 2006). Even in current foraging societies that are relatively egalitarian,

men with higher status have more mating opportunities (Chagnon, 1992; Hill and Hurtado,

1996).

Several laboratory studies have demonstrated that situational primes making mating

effort salient can induce male intentions to increase economic power as well as allocate

financial resources to conspicuous products. Roney (2003) found that men reported

stronger ambition and desire to earn money when in the presence of attractive women. This

effect was even seen when the men simply viewed photographs of attractive women. In

another study, men who were shown photographs of attractive women had intentions to

allocate more money to conspicuous products, but not inconspicuous products

(Griskevicius et al., 2007). Neither men who viewed photographs of unattractive women,

nor women who viewed photographs of attractive or unattractive men exhibited this

pattern. In a third study, men who viewed photographs of attractive women discounted the

future more so when choosing between small monetary rewards than men who viewed

unattractive women or women who viewed pictures of men (Wilson and Daly, 2004)….”

Comment:

Marketers target our basic drives, where we tend to act with the crowd. For example,  some middle class Americans try to buy the “lifestyles of the rich and famous” in response to aggressive marketing by realtors and bankers.

But once the rise in price begins, even those who’ve adopted a more individual and rational approach are compelled to buy or rish being priced out of the market. In the Indian farming crisis, as well, farmers were lured to buy expensive seeds by very aggressive marketing that played on religious sentiment and dazzled them with the prospect of extraordinary gains. (Link to follow).

One of the things I want to explore is to whether and how libertarian language (about “free choice” and “free speech”) needs to take into account these complexities.