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Aimé Étienne Jacquet (born November 27, 1941) is a French football coach and former player, and manager of the France national football team when they won the 1998 FIFA World Cup.
Aimé Jacquet was born in Sail-sous-Couzan, Loire. He began his career as an amateur player for his local club, US Couzan, while working in a factory. Scouted by Saint-Étienne, he joined Les Verts in 1959 and signed his first professional contract in 1961. One of the most successful soccer clubs of the time, Saint-Étienne, won an impressive 5 league titles and 3 French Cups in his 11 years with the club. He also played for the national side, but his international career failed to take off because Les Bleus performed poorly during his years on the team. In 1973, he left Saint-Étienne for bitter regional rivals Olympique Lyonnais , where he ended his career as a player.
A “provisional” manager
Jacquet worked as a manager for clubs around France and gained an impressive list of accolades for Bordeaux during the 1980s, leading them to 3 league titles, 2 French Cups, 2 European semi-finals and 1 quarter-final. Dismissed by President Claude Bez, he left Bordeaux to hone his managerial skills with more modest teams like Montpellier and Nancy.
In 1991, he accepted a position with the National Technical Training Centre (Direction Technique Nationale).
In 1992, he was appointed the assistant to then national team manager Gérard Houllier.
After the French national team was knocked out of the running for the 1994 FIFA World Cup by Israel and Bulgaria, Aimé Jacquet was made the manager of the national team, but only provisionally. After a promising series of friendly matches (notably a victory over Italy in Naples in February 1994), his provisional status was upgraded to permanent.
Jacquet initially selected Eric Cantona as captain and made him the team’s playmaker. Cantona had successfully restarted his career in the FA Premier League and was playing some of the best football of his career, but he kicked a Crystal Palace fan in January 1995, which earned him a year-long suspension from all international matches.
As Cantona was the key playmaker, Jacquet was forced to make major changes to the team in the wake of his suspension. Jacquet revamped the squad with some new blood and built it around Zinedine Zidane and other younger players, while dropping Cantona, Jean-Pierre Papin, and David Ginola. Jacquet’s choice of players for the tournament caused some fans to grit their teeth but he succeeded in helping France qualify for the Euro 96.
Making it all the way to the semi-finals, Les Bleus managed to show they could survive without veterans such as Jean-Pierre Papin, Eric Cantona, or David Ginola. Jacquet himself stated that the team had done well without Cantona, and that he wanted to keep faith with the players who had taken them so far. The team’s good showing in Euro 96 meant that Jacquet stayed in the media’s good graces, for the time-being.
After being criticised, lampooned and even insulted before being acclaimed and eventually adored, AimeJacquet can truly say he traversed the full spectrum of managerial experiences during his four years in charge of the French national team. He took up the reins at a time when the position was regarded as something of a poison chalice, with Les Bleus having spectacularly botched their attempt to qualify for the 1994 FIFA World Cup USA TM.
Once in charge, he soon set his sights on world supremacy and duly accomplished his mission. And then rather than use his success to tout his services to the highest bidder, he simply moved upstairs and took control of France’s national training system before a well-earned retirement came in 2006. Fitting for a quiet man who sent an entire nation into ecstasy in 1998 and whose dignified appearance conceals an intense and studious passion for the game he has made his life.
A natural ability
Long before that unforgettable summer when he guided his country to the top of the world, Jacquet had already enjoyed the sort of playing career that many only dream about. A resilient defensive midfielder, he was part of the great Saint Etienne team of the late 1960s and earned his place in French footballing lore by helping Les Verts win five league titles and three French Cups in his eleven years at the fabled club. In 1973, he finally left the Forez and signed for bitter regional rivals Lyon, with whom he ended his playing career.
Having been heavily influenced by the legendary coaches he worked under at Saint Etienne – men such as Jean Snella, Albert Batteux and Robert Herbin – it was only natural that Jacquet sought to turn his hand to management. His first chance to impose his vision of how football should be played came by the banks of the Garonne, where he took over at Bordeaux. He promptly guided the Bordelais to the most successful decade of their history, during which they were crowned champions three times, picked up the French Cup twice and reached two European semi-finals and one quarter-final. Unsurprisingly, Jacquet became a highly respected figure among both players and peers.
Right man for France
After his stint at Bordeaux, Jacquet opted to fine-tune his theories and training ideas with less illustrious clubs, starting with Montpellier before moving on to Nancy, where a certain Michel Platini first captured the attention of the football world. However, as someone who is by nature discreet, he then decided it was time to withdraw from the limelight and, in 1991, accepted a post with the National Technical Training Centre (Direction Technique Nationale), where he worked to develop French football more or less behind the scenes. On 15 July 1992, however, he was appointed assistant to then national team manager Geard Houllier.
Les Bleus had just completed a disastrous venture to the European Championships in Sweden and one year later would embark on a nightmarish run that saw them blow qualification for USA 94 by capitulating at home to Israel (2-3) and Bulgaria (1-2). After that disaster, public confidence in the team fell to almost subterranean levels, and few believed France would achieve anything of note despite hosting the 1998 FIFA World Cup finals. A new manager was needed, someone who would build afresh and infuse a crestfallen squad with renewed confidence. A mighty task, one that not many could be expected to accomplish. The French Football Federation decided the best course of action would be to hire someone from within their own ranks: Aimé Jacquet stood head and shoulders above anyone else.
He took to this sizable challenge with relish, slowly but surely overhauling the wounded French squad. He showed he knew how to be tough, but also that he was capable of putting a comforting arm around players when required. Whatever approach he opted for, the goal was always the same — to build a better team. The fruit of the new boss’s labours were discernible as early as his first match in charge (versus Italy in Naples on 16 February 1994), when a side playing with new-found heart and verve triumphed 1-0 thanks to a Youri Djorkaeff strike.
Zidane becomes the one
The major foundation of this new French team’s success was, however, laid in late summer of 1994 when, in the 63rd minute of a friendly match that the French were losing 2-0 to the Czech Republic, Jacquet gave an international debut to a 22 year-old Bordeaux player by the name of Zinedine Zidane. Thirty minutes and two goals later, Zidane had untangled Les Bleus from a decidedly sticky situation, turning probable defeat into a creditable draw and introducing himself on the international scene in spectacular fashion.
At that time, the team’s play-making duties were still falling to Eric Cantona, a gifted maverick but one whose character tried the patience of more than one boss. On 18 January 1995, Jacquet took a bold decision and, in the face of much criticism, handed Zidane the place that had hitherto been the preserve of the man Manchester United fans called Le Roi.
At the Euros, building up to 1998
Having topped their qualifying group, France went in to EURO 96 as one of the favourites for overall glory. Though his side somewhat failed to live up to that billing – going out on penalties in the semi-final to the tournament’s surprise package, the Czech Republic – Jacquet learned enough from the English expedition to put out an even stronger side for the 1998 FIFA World Cup.
He used the following two years of friendly matches to do just that. His focus was clear and his moves deliberate, yet a sceptical media poured scorn on his “tinkering”; some press commentators went even further and rather than concentrate on his decisions or technical merits preferred to assail the man for his quiet and introverted personality. Jacquet never sunk to this baiting, and instead continued to work towards his target, which was not just to perform well in “France’s” FIFA World Cup, but to win it.
All the right moves
When the big competition came round, the French had no trouble negotiating their way through the group stage, sweeping aside South Africa (3-0), Saudi Arabia (4-0) and Denmark (2-1). The records may show that they only squeezed past Paraguay in the second round thanks to a Laurent Blanc’s golden goal (sealing a 1-0 win), but the fact is that the hosts controlled the match from start to finish and would have won far more comfortably had their finishing been better. The French steamroller then carried on relentlessly, overcoming Italy (0-0, 4-3 on pens) and Croatia (2-1) to set up a final match showdown with Brazil.
Once there, Les Bleus could not have dreamed of a better outcome, and while it is true that the Seleçao may have been knocked out of their stride by the mysterious affliction that struck Ronaldo on the morning of the game, France’s emphatic 3-0 victory came courtesy of the most complete 90 minutes of football of the Jacquet era.
By guiding his homeland to the top of the world, Jacquet sent all of France into a month-long celebration and then, ever the quiet man, returned to his beloved DTN until retirement in 2006, satisfied with the knowledge that he had achieved what he had set out to do. Without ever shedding his dignity, he had served up the perfect answer to all those who had been so acerbic in their criticisms over the previous years. His finest achievement, however, was to have succeeded in unifying not just a team, but an entire country.
By France 98 Jacquet had honed his innovative 4-2-1-3 system into one of the most solid in the history of the French national team. In front of goalkeeper Fabien Barthez stood a fantastic four-man defence consisting of Lilian Thuram, Marcel Desailly, Laurent Blanc and Bixente Lizarazu. These ‘four musketeers’ deployed a zone-marking method, with Blanc operating as an old-fashioned sweeper. Sitting in front of this four-man blockade were Didier Deschamps and Emmanuel Petit, who mopped up incalculable amounts of possession before knocking the ball to the team’s one central playmaker, Zinedine Zidane. The three attackers consisted of one centre-forward (Stephane Guivarc’h or David Trezeguet) and two wide men (Thierry Henry and Youri Djorkaeff). Jacquet controlled Italy and Brazil in the finals by reverting to the same system he used at the European Championships in 1996 – three ball-winners (Christian Karembeu, Petit and Deschamps) across the midfield.
Federico Fellini is considered one of the top film directors of all time, especially in Italy. His films highlighted artistic fantasy and desire and the line between reality and magic vanished in the scenes that he depicted in his movies, thereby creating the surreal imagery that many Italians, and in fact many playgoers around the world, have come to relish.
Fellini was born in the coastal town of Rimini in the resort city Adriatic on January 20th, 1920. His town drew variety show performers and circuses in large numbers and he was enamored by this, evidence of which can be found in the dream-like characteristics of his movies. In his youth, he abandoned a lot of career streams ostensibly to pursue the ideal job. He enrolled in law and then dropped out, took up a job as a crime reporter only to quit later and in fact did not even join the Centro Sperimentale di Cinematografias. He settled down nicely in his job as a nomadic caricaturist and in 1939, was hired by the popular comic bi-weekly, Marc ‘Aurelio. This bi weekly made many a script writer and a director in the postwar period and hence in a way, helped Fellini launch his career.
It was his good fortune that the Italian culture of those days was very conducive to pursue a career in the movies. His strong points of sketching caricatures and cartoons and acting as a stand up comedian stood him in good stead when he entered cinema. It was indeed a tribute to Fellini that writer Italo Calvino once referred to his cinematic language as a “forcing of the photographic image in a direction that carries it from an image of caricature towards that of the visionary.”
In the year 1943, Fellini married actress Giulietta Masina, with whom he had acted in many films and whom he referred to as a person who has had profound influence on his work.
His various works
The turning point in his film career took place in 1945, when he was asked to co –author the script of Roberto Rosellini’s ‘Open City.’ Three years later, Fellini acted in Rosselini’s ‘Ways of Love’ where he (Fellini) played a tramp. ‘Variety Lights,’ released in 1950, was the first film he directed (in co operation with the famous Alberto Lattuada). In the years to come, he directed critically acclaimed films like ‘The White Sheik’ (A comedy about a woman’s love affair with a comic strip character), and ‘I Vitteloni’ (a story about a group of aimless young wanderers). ‘La Strada’, in 1954, brought him to limelight in the international arena. One of the most memorable movies of all time, this movie is about an innocent young woman sold to a cruel man working in a circus. The movie became a masterpiece and not only Fellini, but Nino Rota’s haunting music and a brilliant performance by Masina, the innocent girl, were responsible for its success. The crowning glory came when the movie won the Oscar prize for the best ‘Foreign language film’ category.
The hallmark works of his career were ‘La Dolce Vita’ and ‘8 1/2’ which he made in 1960 and 1963 respectively. The former was a journalist’s view of the contemporary Italian society and a very controversial movie that thrilled and incensed audiences the world over for its free depiction of sexuality (The Catholic church did not take this kindly) and criticisms aimed at Italy (which did not, naturally, go well with the Italian government). Having given the world a taste of what he was capable of delivering, people eagerly awaited his next movie, ‘8 1/2.’ ‘8 1/2’ was a well-calculated risk which went well among the masses. Having made a successful movie in La Dolce Vita, Fellini was under pressure to deliver. Since he did not know what movie to make next, after much thought, he decided to make a movie about a director who did not know what movie to make next. Fellini brilliantly depicted the mental trials that a film maker in such a state would be undergoing using surreal imagery where there was no distinction between reality and fantasy – a theme he loved most.
Fellini’s first movie in colour was ‘Juliet of the spirits’, which was released in 1965. This movie once again starred Masina, whose career was waning and who had begun to have personal problems with Fellini. Juliet, in this film, explored the mind of a disturbed high class housewife and, for the first time, Fellini got more brickbats for a movie, than bouquets.
‘Satyricon’ is lauded by many as his perfect film. The most fantastical of all his movies, this work of his exposes the obscene escapades of bi sexual characters in a pre-Christian world. Fellini classifies the film as ‘science-fiction of the past’ and true to the tag, there are a lot of scenes in the movie that are left hanging, leaving the audiences guessing what they really depicted. With a variety of elements like Sex (including nudity), an erotic feast (and even an orgy), dwarves, violent action and creatures from the fables, this movie was a visual treat. The critics were divided in their opinion, some non-sparing in their remarks, some describing it to be a path breaking movie which will revolutionise the way films are made.
The gradual decline
Since the time he made this movie, he has been less consistent in gaining praise and acceptance from the people. Later movies like ‘The Clowns(1971)’, ‘Roma(1972)’, and the little-known ‘Orchestral rehearsal(1979)’ did include his central theme of fantasy and dreamlike characteristics, but it was beginning to get evident that his best was past him. ‘Amarcord,’ which he made in 1974, was his best movie after ‘Satyricon’ and it won him his fourth Oscar for ‘Best Foreign Film.’
As the 80’s progressed, he found it increasingly difficult to convince people to fund his films. His final movie was made in 1990 and was titled ‘Voice of the Moon.’
Since the ‘Voice of the Moon’ Fellini slipped into partial retirement and was pursuing other projects. He won an Oscar for ‘Lifetime Achievement in Film making’ in 1994, which he graciously dedicated to Masina. A stroke attacked him in the August of 1994 and he slipped into a coma later that year. At the age of 73, Fellini died. And the fact that his death came a day after his 50th wedding anniversary saddened the event even more for Masina. (Masina died five months later due to cancer). Thousands of people attended the funeral ceremony in his small hometown of Rimini. The casket was taken to the cinema theatres where Fellini had watched his initial films as a small boy.
Such was his fame that the International airport in Rimini has been named after him. There are people who adore him, there are those who say his themes and movie making styles are repetitive, but none would dare challenge the fact that he has been one of the most influential Italian movie directors of all time and his movies have given all lots to think about. And for a man who looks up upon the great film directors like Kurosawa and Bergman, he hasn’t done badly himself either, with four Oscars for best movie under his belt.
THERE ARE NOT MILD AND HEAVY DRUGS .THERE ARE ONLY DRUGS WHICH KILL .DEATH IS NOT HAVING RETURN .
(The Nation) Sasha Abramsky,a freelance journalist and senior fellow at Demos, is the author, most recently, of Breadline USA: The Hidden Scandal of American Hunger and How to Fix It.
If that old adage still holds true, then the nation may soon see a gradual backpedaling from the criminal justice policies that have led to wholesale incarceration in recent decades.
For the most populous state in the union is on the verge of insolvency–partly because it didn’t set aside a rainy-day fund during the boom years; partly because its voters recently rejected a series of initiatives that would have allowed a combination of tax increases, spending cuts and borrowing to help stabilize the state’s finances during the downturn; partly because it has spent the past quarter-century funneling tens of billions of dollars into an out-of-control correctional system. Now, as California’s politicians contemplate emergency cuts to deal with a $24 billion hole in the state budget, old certainties are crumbling.
The state with the toughest three-strikes law in the land and a prison population of more than 150,000 is facing the real possibility of having to release tens of thousands of inmates early in order to pare its $10 billion annual correctional budget. At the same time, an increasing number of the state’s political figures are challenging the basic tenets of the “war on drugs,” the culprit most responsible for the spike in prison populations over the past thirty years; they argue that the country’s harsh drug policies are not financially viable and no longer command majority support among the voting public.
Similar stories are unfolding around the country; in Washington, federal officials are talking about drug-policy reform and, more generally, sentencing reform in a way that has not been heard in the halls of power for more than a generation.
For old-time politicians, who have spent the past three-plus decades navigating the country’s roiling tough-on-crime waters, the changes are almost unfathomable. Onetime California governor and current gubernatorial hopeful Jerry Brown, for example, has spent decades trying to erase the public’s memory of his liberal tenure in the 1970s, when California’s prison population shrank to well below 30,000. As a part of that remodeling, he has assiduously courted the California Correctional Peace Officers’ Association, the trade union representing the state’s prison guards. Now, with his war chest flush with CCPOA funds, Brown won’t do anything to challenge tough-on-crime orthodoxies.
Yet many newer political faces view the current moment as something of an opportunity. For Betty Yee, chair of California’s Board of Equalization–the office responsible for collecting sales tax in the Golden State–the changes, especially around drug-law enforcement, can’t come soon enough.
Sitting at her conference table high up in one of downtown Sacramento’s few sky-rises, Yee has marijuana on her mind. Specifically, she has become an outspoken advocate for legalizing pot for residents older than 21. Her friend Assemblyman Tom Ammiano, a former San Francisco city councilman, is pushing just such a bill in the State Legislature. Yee wants to levy fees on business owners applying for marijuana licenses, impose an excise tax on sellers and charge buyers a sales tax. Do it properly, and the state could reap about $1.3 billion a year, she has estimated. “Marijuana is so easily available. Why not regulate it like alcohol and tobacco?” she says, and gain additional tax revenue into the bargain?
Not so many years back, any public figure who dared to advocate such reforms would have been shunned by much of the establishment. It’s a measure of how much things have changed that Yee and Ammiano’s proposal is being taken seriously across the board. In fact, shortly after I met with Yee, Governor Arnold Schwarzenegger–whose office declined my request for an interview for this article–announced that the state should at least consider the merits of pot legalization. He wasn’t advocating it, he was careful to stress, but he did think the time was ripe to debate the issue.
“The budget is so bad now, the populism of the issue is beginning to work here in the Legislature,” Ammiano says as he paces back and forth in his office, toward the bookshelves with the four martini glasses and Golden Gate Bridge bookends and then away again. On the wall near the receptionist’s desk hangs a huge poster from the movie Milk.
“Everyone thinks it’s Cheech and Chong,” he says with a laugh, describing the marijuana legalization bill. “But there’s a lot of policy wonks” supporting it.
“There’s very conservative support from the oddest sources and locations.” The GOP chair in the state, as well as Tom Campbell, a Republican gubernatorial hopeful, have indicated their support for his bill, Ammiano declares. “When it starts to cost more money than it’s worth even in the eyes of the pooh-bahs, then you can accomplish something.”
Over the past three decades, California has tripled the number of prisons it operates, has more than quintupled its prison population and has gone from spending $5 on higher education for every dollar it spent on corrections to a virtual dead-heat in spending. That puts it in the same boat as Michigan, Vermont, Oregon, Connecticut and Delaware–all of which, according to estimates by the Pew Charitable Trust, spend as much or more on prisons than on colleges. California is also under federal court order to implement costly improvements in the delivery of medical and mental healthcare services in prisons and to release close to a third of the prison population–about 55,000 inmates–to improve conditions for those remaining behind bars.
Schwarzenegger adamantly opposed that ruling by a three-judge panel. Now, though, in the face of fiscal calamity, he is proposing cutting the prison population by tens of thousands. Of course, he is doing that not out of concern for inmates’ well-being, or out of a sense that many sentences are disproportionate to the crime, but simply because the state can no longer pay its bills. Schwarzenegger believes he can save several hundred million dollars by releasing some categories of inmates, in particular nonviolent offenders who are in the country illegally and stand to be deported upon
To save money, he’s also talking about firing hard-working guards (a far better, but costlier, option would be to scale back the prison system and to retrain surplus guards to work in other venues), and he’s asking for close to $1 billion in cuts to vital prison drug-treatment, education and job-training services. At the same time, since this is all about shaving dollars off budgets rather than intelligent criminal justice system reform, there’s no talk of investing in crucial re-entry infrastructure.
In short, it looks like California will go about a necessary scaling back of the correctional system exactly the wrong way. But however grudgingly state officials are approaching the issue, at least they recognize that the magnitude of prison spending is a problem. Down the road, when Californians start thinking beyond the crisis moment, that new understanding will shape policy responses for years to come. It will both feed off and help create a new national sentiment that being “tough on crime” isn’t necessarily being smart on crime.
Tough-on-crime rhetoric, and the policies and institutions that grow from it, emerged from Nixon’s Silent Majority tactics, from his recasting of politics as a series of debates around “values” rather than bread-and-butter issues. And in the same way the 2008 presidential election ended that peculiar chapter in American history, so too did it end the monotone cry that we could incarcerate our way out of deep-rooted social and economic problems. Despite a few halfhearted GOP attempts to accuse Democrats of being weak on drugs and public safety–Obama had, after all, written about his drug use during his teenage and early adult years, which, according to the old calculus, should have made him an easy target for scaremongers–neither presidential candidate played the tough-on-crime card. It was a nonissue for most voters and thus for the candidates.
In fact, recent Zogby polling commissioned by the National Council on Crime and Delinquency suggests that close to eight in ten Americans favor alternatives to incarceration for low-level nonviolent offenders. Another Zogby poll, from last fall, found that just more than three-quarters of Americans felt the “war on drugs” was a failure. The sea change in public opinion holds in California too. In late March the Los Angeles Times ran a column asking readers their opinion on marijuana legalization. So far 4,927 people have replied, and 94 percent of them favor legalization. A Field Poll in April found that 56 percent of Californians favor legalizing and taxing pot.
The new atmosphere is most apparent vis-à-vis the Obama administration’s move away from “war on drugs” rhetoric and toward a harm-reduction strategy. Gil Kerlikowske, the new head of the Office of National Drug Control Policy, has made it clear that he prefers treatment over punishment for drug users, a preference he brings from his time as a reform-oriented police chief in Seattle. Putting money where its mouth is, the new team has increased funding for the Bush-era Second Chance Act, intended to connect released inmates with community services such as housing, family counseling and addiction treatment. Support is also growing for the creation of more drug and mental health courts across the country. Finally, there are the promises being made by drug policy leaders in Washington that state medical marijuana laws will be respected rather than trampled, as they have been for more than a decade.
A related issue involves the infamous discrepancy in sentences for crack- versus powder-cocaine crimes. Vice President Biden was one of the architects of these laws–which is why his repudiation of them in recent years has been so significant. The day after Obama’s inauguration, the president’s website mentioned the importance of eliminating these discrepancies–as well as of promoting needle-exchange programs and expanding the nation’s embryonic network of drug courts. The House recently held hearings on the sentencing discrepancy issue.
For Margaret Dooley-Sammuli, deputy state director of the Drug Policy Alliance in Southern California, sacrosanct legislative underpinnings of the “war on drugs” are starting to look like the Berlin Wall, “up one day and down the next”–seemingly impregnable; in reality, utterly fragile. Over the past few years, an increasing number of localities have dabbled in ways to simply walk away from the “war on drugs.” Initiatives in several states and cities, including Denver; Missoula, Montana; Albany County, Oregon; and Seattle have mandated that law enforcement agencies deprioritize marijuana arrests. Several cities have begun needle-exchange programs. And states like California have passed citizens’ initiatives mandating that first-time drug offenders be channeled into treatment programs in lieu of prisons.
Then there’s Virginia Senator Jim Webb’s legislation creating a blue-ribbon commission on criminal justice reform, with a mandate to put all questions on the table during its eighteen-month tenure–from drug law reform to the restoration of judicial discretion in sentencing, from parole reforms to different approaches to gangs, border patrol, prison architecture and the like. Webb has been pushing for systemic criminal justice reform for years; in 2009, he believes, it will acquire legs. During a telephone interview for this article, Webb said that President Obama “has personally called me on this, and he’s very supportive of the idea of moving forward.” Across the aisle many Republican senators, including senior figures like Lindsey Graham, have also expressed support for the idea.
The bipartisan backing for Webb’s commission is partly a response to the escalating drug-and-gang crisis south of the border. There’s a growing recognition in US policy and law enforcement circles that government dysfunction, phenomenal levels of street violence and the rising power of drug cartels are threatening to move from being a Latin American problem to one that destroys the integrity of the Mexican state and risks spilling over more heavily into the American Southwest. Nobody, no matter their political stripe, wants the Tijuana-ization or Juárez-ization of Phoenix or Los Angeles, of San Diego or El Paso.
“It really is a serious problem in this country,” Webb argues. “The transnational gangs or syndicates are bringing a tremendous amount of drugs into this country.”
To get a handle on that problem involves thinking of ways to neutralize these gangs, which inevitably leads to a discussion of partial drug decriminalization or legalization. Why? Because once the drug market is no longer confined to the shadows–once it is regulated and taxed, as alcohol was after Prohibition ended in 1933–the violence that accompanies struggles for control of that illicit market will disappear. After years of denying this truth and assuming that the country could incarcerate its way out of the drug-abuse epidemic, a number of American politicians, Webb included, are touting that seemingly paradoxical fact. Want to get really tough on crime? Well, do the smart thing: start working out ways to neutralize the drug cartels, start talking about at least limited forms of decriminalization or legalization.
It is, Webb argues, “a fair issue for this commission. Every piece of it should be fair game.”
For an administration like Obama’s that prides itself on thinking outside the box, systemic drug policy reform is an intriguing prospect. An increasing number of law enforcement people and judges have also decided that this is an idea worth running with.
“I’ve never seen so much interest,” says retired Orange County superior court judge James Gray, who has been advocating marijuana legalization since the early 1990s. “My phone is ringing much more than it ever has before.”
“We need to ask, Is there a more sensible approach?” argues Norm Stamper, who, like Kerlikowske, is a former chief of police of Seattle who believes the criminal justice system is broken. “And the answer is prevention and education and treatment.”
After decades of being on the defensive, progressive criminal justice reformers suddenly have a receptive audience. New York, which has closed some of its prisons in the past decade, has spent the last few years unraveling the tangled web created by the 1970s-era Rockefeller drug laws. Michigan, Louisiana and several other states have also scaled back their harshest mandatory drug sentences. The State of Washington is looking at how to redefine low-end drug and property crimes as misdemeanors rather than felonies. And in Michigan, which allows a $100 theft to trigger a four-year prison sentence, legislators are pushing to make the threshold $1,000 instead, so as to reduce the number of low-end offenders pushed into long-term incarceration and hobbled for life by felony convictions.
Meanwhile, correctional system administrators in Georgia, Illinois and Arkansas have started the long, hard task of reforming their systems from within even without a new consensus emerging on the issue.
Howard Wooldridge, a retired police detective from Bath, Michigan, who advocates in DC for criminal justice system reform, says the moment is ripe for change. “I’ve been doing this for twelve years, and this is by far the most perfect storm.”
America isn’t about to abandon all of its “tough on crime” tenets. Nor should it in all instances. The three-strikes law will likely remain in place for violent offenders, as will the growing body of laws limiting where sex offenders may live. Violent crimes will probably continue to trigger longer sentences than they did before the get-tough movement. And while some inmates will qualify for early release, many sentenced to long terms at the height of the tough-on-crime years will stay in prison. But out of economic necessity and because of shifting mores, the country will likely get more selective, and smarter, about how it uses incarceration and whom it targets for long spells behind bars.
This will be especially true for drug policy–the multi-tentacled beast that’s sucking most people into jails and prisons. There, profound changes are likely to develop over the next few years. And when it comes to the mentally ill, momentum continues to build around mental health courts designed to get people medical and counseling help rather than simply to shunt them off to prison. States like Pennsylvania are starting to develop parallel institutions to deal with mentally ill people who run afoul of the law. Many other states will likely follow suit in the near future. Forty years after deinstitutionalization, a new consensus is emerging that prisons became an accidental, de facto alternative to mental hospitals, and that very little good has come from that development.
“I believe that we have a compelling national interest,” explains Senator Webb, referring to systemic criminal justice reform. “That’s a term that is carefully chosen. This is a national commission, but it should not be limited to looking at the federal prison system. You have to look at the whole picture and then boil it down into resolvable issues.”
Original article : http://www.cbsnews.com/stories/2009/06/23/opinion/main5106252.shtml
Faith in art
A glimpse of the emirate’s impressive cultural ambitions
Nov 10th 2010
AT THE Emirates Palace in Abu Dhabi, the sand on the private beach is imported from Algeria, the hostesses at reception are Filipino and the butlers are usually Indian. Representing 50 galleries from 18 countries, the art dealers who participated in the second edition of Abu Dhabi Art, from November 3rd to the 7th, were also an international mixed bag.
The event was less a fair than “a formal introduction to the cultural ambitions of Abu Dhabi,” explained Marc Glimcher from New York’s Pace Gallery. “They’re so big that they transcend a cynical response.” This sentiment was echoed by Hyung-Teh Do of Seoul’s Hyundai Gallery, whose sophisticated stand included works by Ai Weiwei and Lee Ufan. “We are enjoying the unusual circumstances,” he said.
Many dealers brought art that they hoped might end up in the Louvre or Guggenheim being built nearby on Saadiyat Island. What is now nearly 2.5m square metres of sandy construction pits will be, by 2013 or soon thereafter, a world-class cultural destination featuring these two museums, among others. A few American dealers described feeling like they were making a pilgrimage to present their wares to the king. Though it was not entirely clear whom they were meant to impress when it came to acquisitions.
The patron of the art fair was his highness General Sheikh Mohammed bin Zayed Al Nahyan, crown prince of Abu Dhabi and deputy supreme commander of the United Arab Emirates Armed Forces. Art and arms might seem like an unusual pair of responsibilities until one considers the ambassadorial potential of modern art, which can be used as a bridge to the west and a hedge against religious fundamentalism.
The ceremonial duties of the fair were left to the crown prince’s wife, Sheikha Salama bint Hamdan Al Nahyan, and sister-in-law, Sheikha Shamsa bint Hamdan Al Nahyan. The two women glided through the fair with their abeya-clad entourages and presided over sumptuous late-night feasts. They were also active buyers. Sheikha Salama, for example, bought a gold cabinet filled with “diamonds” by Damien Hirst from White Cube, a concave mirror sculpture by Anish Kapoor from Kamel Mennour, and a series of 17 text works called “The Prestige of Terror” by Adam Broomberg and Oliver Chanarin from Paradise Row, a London gallery that specialises in emerging artists.
Beneath the crown prince are a range of “excellencies” in ministerial positions and jobs at the Tourism Development and Investment Company (TDIC), a corporation owned by the government (ie, the royal family). Who does what is difficult to discern, but one person who emerges from the complex layer-cake of committees involved in Abu Dhabi’s art initiatives is Rita Aoun Abdo, the Lebanese-born director of the TDIC’s cultural department. Intelligent and charismatic, Ms Aoun Abdo has a flair for diplomacy and a gift for making policy-speak sound like poetry. Yet she is not the one responsible for weeding through the world’s available Warhols to see which ones the emirate’s museums should acquire.
When it comes to modern and contemporary art, this task would appear to be the burden of a key advisor, Richard Armstrong, the director of the Guggenheim, and his team of top-notch curators (including Nancy Spector, Suzanne Cotter, Valerie Hillings and Reem Fadder, their expert on art from the Middle East). Although the Louvre Abu Dhabi has acknowledged buying 19 works—including depictions of Buddha and Christ as well as an abstract Piet Mondrian from the collection of Yves Saint Laurent—the Guggenheim Abu Dhabi hasn’t gone on the record about acquiring anything at all. An insider admits that the museum will likely have “nudes but no Mapplethorpes,” referring to the controversial American photographer.
Although bureaucratic, Abu Dhabi’s art-acquisition model is smart. The contemporary art market is rife with confidence men and inside traders. Here the museum folk act as a protective buffer from consultants and dealers who, despite their lofty rhetoric, are driven by their own financial interests. Moreover, when embracing edgy art in a historically conservative place, one wants to avoid being swayed by aesthetic fads. Museum curators generally have longer memories than art marketers.
The situation calls for patience on the part of dealers. Saleh Barakat, whose 20-year old Agial Art Gallery specialises in Lebanese and Arab art, was serene. He was at the fair to defend an Arab point of view. “Picasso and Damien Hirst belong in the museum,” he said, “but so do the artists that express the heritage and cultural expectations of the region.”
Galleries exhibiting Arab and Persian art could rely on collectors visiting from Dubai, Sharjah, Kuwait, Tehran and Jedda. Sheikh Sultan Sooud Al-Qassemi, whose Barjeel Art Foundation in Sharjah is committed to promoting Arab art, added five pieces to his collection of 500 works—two by Saudi artists, two by Emiratis and one by a Syrian. Aside from a handful of collectors, including Sheikha Salama, a thirst for art that is neither Arab nor Persian has yet to hit the UAE. However, where princesses lead, others follow.
The fair included a few ghastly dealerships, such as London’s Opera Gallery (whose thoughtless kitsch looks like art to the untrained eye, but is really an assortment of gimmicky design objects). But overall the quality of the stands was ambitious. David Zwirner presented a rigorous exhibition of Minimalist work. Johnson Chang’s Hanart gallery introduced an interesting selection of contemporary Chinese artists. And Patrick Seguin offered an instructive narrative about Jean Prouvé as an architect.
Paul Schimmel, the chief curator of MOCA Los Angeles who was in town to interview Jeff Koons, summed up the fair for both its organisers and dealers: Abu Dhabi Art was “an act of faith in the future of the region.”
Climbing Mount Publishable
The old scientific powers are starting to lose their grip
Nov 11th 2010
TWENTY years ago North America, Europe and Japan produced almost all of the world’s science. They were the aristocrats of technical knowledge, presiding over a centuries-old regime. They spent the most, published the most and patented the most. And what they produced fed back into their industrial, military and medical complexes to push forward innovation, productivity, power, health and prosperity.
All good things, though, come to an end, and the reign of these scientific aristos is starting to look shaky. In 1990 they carried out more than 95% of the world’s research and development (R&D). By 2007 that figure was 76%.
Such, at least, is the conclusion of the latest report* from the United Nations Educational, Scientific and Cultural Organisation, UNESCO. The picture the report paints is of a waning West and a rising East and South, mirroring the economic shifts going on in the wider world. The sans culottes of science are on the march.
GERD is good
Comparisons of the scientific prowess of countries frequently begin with spending. One measure of this is GERD, gross domestic expenditure on R&D. Globally, GERD amounted to $1.15 trillion in 2007 (the last year the UNESCO report measures). That was up 45% compared with 2002. Moreover, in those five years Asia’s share of the total rose from 27% to 32%.
When comparing economies of different sizes, the share of national wealth spent on R&D is also useful—particularly as scientific excellence tends to concentrate itself in small areas of the world, allowing researchers in tiny countries like Singapore to challenge those of larger ones, such as America. In 2007 Japan spent 3.4% of its GDP on R&D, America 2.7%, the European Union (EU) collectively 1.8% and China 1.4% (see chart 1). Many countries seeking to improve their global scientific standing want to increase these figures. China plans to push on to 2.5% and Barack Obama would like to nudge America up to 3%.
The number of researchers has also grown everywhere. China is on the verge of overtaking both America and the EU in the quantity of its scientists. Each had roughly 1.5m researchers out of a global total of 7.2m in 2007. Nevertheless, the number of scientists per million people remains relatively low in China. And India, second only to China in the size of its population, has only a tenth as many researchers. This is a surprising anomaly for a country that has become the world’s leading exporter of information-technology services and ranks third after America and Japan in terms of the volume of pharmaceuticals it produces.
Having lots of boffins does not matter, though, if they are not productive. One indicator of prowess is how much a country’s researchers publish. As an individual country, America still leads the world by some distance. Yet America’s share of world publications, at 28% in 2007, is slipping. In 2002 it was 31%. The EU’s collective share also fell, from 40% to 37%, whereas China’s has more than doubled to 10% and Brazil’s grew by 60%, from 1.7% of the world’s output to 2.7% (see chart 2).
The size of Asia’s population leads UNESCO to conclude that it will become the “dominant scientific continent in the coming years”. But citation of English-language articles in Chinese journals by other publications remains low. This could be because Chinese science is poor or because researchers in America, Europe and Japan have an historical bias towards citing each other. The average American paper was cited 14.3 times between 1998 and 2008, whereas the average Chinese paper was cited only 4.6 times, about the same as papers published in India and less than those published in South Korea.
For science’s aristos, then, much of this suggests the tumbrels await. But the story does not end there. What also counts is the extent to which countries are successful in using the knowledge they generate.
One way of looking at that is to count how many patents a country produces. This can be tricky. A recent report from Thomson Reuters, an information firm that is also the source of much of UNESCO’s data on scientific publications, suggests that between 2003 and 2009 Chinese patent filings grew by 26%—far faster than anywhere else. By this measure China will become the world’s largest registrar of patents in 2011. There is a snag, though. Bureaucrats in Chinese patent offices are paid more if they approve more. As a result there is a mountain of Chinese patents of dubious quality.
UNESCO’s latest attempt to look at patents has therefore focused on the offices of America, Europe and Japan, as these are deemed of “high quality”. In these patent offices, America dominated, with 41.8% of the world’s patents in 2006, a share that had fallen only slightly over the previous our years. Japan had 27.9%, the EU 26.4%, South Korea 2.2% and China 0.5%.
The prospects for R&D investment by business look bright in many of the emerging scientific nations, however. Between 2002 and 2007 business investment as a proportion of GDP has risen rapidly in China, India, Singapore and South Korea (although India’s increase was from a low base). But at least one aristo is fighting back, for investment has risen rapidly in Japan.
Although much of this might seem cause for the old regime to fret, there is one other pattern worth noting: that of growing international collaboration. Thanks to cheap travel and the rise of the internet, scientists find it easier than ever to work together. According to Sir Chris Llewellyn-Smith, the chairman of the advisory group for another report on global science (to be published early next year by the Royal Society, the world’s oldest scientific academy), more than 35% of articles in leading journals are now the product of international collaboration. That is up from 25% 15 years ago—something the old regime and the new alike can celebrate.
European businesses are unlikely to play a significant role at the St. Petersburg Economic Forum, which will begin on June 17. The deteriorating economic situation in the European Union makes Russia seem like an even less attractive investment opportunity for European businesspeople. This is compounded by the fact that most of the investment opportunities available in Russia involve innovation projects, even though demand for the finished products is low in Russia.
On June 17, St. Petersburg will host the 14th International Economic Forum. Russian and foreign investors will discuss prospective investment projects and – under a best-case scenario – sign memoranda and perhaps even contracts.
The focus of this year’s forum will be Russia’s modernization, which is captured in its slogan, “Laying the foundation for the future.” There will be a special emphasis on making deals with energy and high-tech companies, as well as large financial corporations, Presidential Aide Arkady Dvorkovich said during a news briefing at RIA Novosti on June 15.
The plan is to sign more agreements and memoranda with foreign partners at this year’s forum than ever before, Mr. Dvorkovich said.
“We expect that you won’t be able to count the signed investment agreements on even two hands,” he said, adding that European investors plan to announce a “significant expansion” of investment in Russia.
Considering that the European Union’s economic problems are multiplying by the day, it’s unclear whether a significant expansion is possible. Greece is still at a risk of default. The risk is so serious, in fact, that Moody’s Investors Service has downgraded Greece’s credit rating four steps to non-investment grade, or “junk.” Last month Greece agreed to a package of additional austerity measures in order to qualify for loans from the European Union and the International Monetary Fund.
Other EU countries – Ireland, Italy, Portugal, and Spain – have problems servicing their government debt.
Spain was also hit by a liquidity crisis on the interbank market earlier this month. Foreign banks refused loans to a number of Spanish lenders. Spain is likely to follow Greece’s lead and request collective financial assistance from the EU.
Germany and France, the economic powerhouses of the EU, are more concerned with trying to solve the European Union’s economic problems than with finding investment opportunities in emerging economies. They have recently agreed to establish an “economic government” to coordinate the European Union’s economic policy.
Most European business leaders are more concerned with saving their capital than increasing investments. Many do not have money available for development and expansion, and what’s worse, no one is lending. The banking sector has not yet fully recovered after last year’s meltdown. Therefore, Russian businesses should not expect an influx of European investment right now.
Europeans are more likely to bide their time. “Positive gestures and promises are a common practice that will not be abandoned, but it would be unwise to expect any investments to actually materialize,” said Igor Nikolayev, chief strategic analyst at the private auditing firm FBK.
Mr. Dvorkovich indicated which industries would benefit most from foreign investment, and they all seem to involve innovation. The government is prepared to support and even co-finance most of these projects, covering up to 30% of project costs. Foreign businessmen who are truly interested in investing in Russian companies will certainly benefit from the St. Petersburg forum, where they will have an opportunity to discuss projects with Russian business executives and government officials, including the country’s leadership.
Apart from Europe’s internal economic problems, Russia itself is far from an attractive investment at this point. The recession is not yet over, and Russia’s macroeconomic indicators leave much to be desired, especially compared with the other BRIC countries.
The investment climate in Russia does not encourage foreign investment. Russia ranks 120th out of 183 countries on the IFC-World Bank’s Ease of Doing Business Index in 2010, down two steps from last year. Russia finds itself behind Bangladesh, Argentina and Nicaragua in terms of the ease of starting a business, obtaining credit, investor protection, hiring employees, registering property, and paying taxes.
It’s hard to imagine why foreigners should want to invest in Russian innovation projects. Local demand for innovation products is weak due to the lack of competition. Most entrepreneurs realize that developing research-intensive technology is far less efficient than, say, lobbying for corporate interests and government support. This gives businesses in Russia a competitive edge without having to spend on innovations.
One can imagine an investment project that could attract foreign investors, in which high-tech products are manufactured in Russia and sold in the West, where there is demand. But here Russia would face stiff competition, for example from India. Also, it is easier to develop an innovative product where there is demand for it, says Igor Nikolayev.
Therefore, the most likely investors in Russia are not Europeans. From the list of countries represented at the forum, one can expect offers from Chinese, Indian and U.S. businesses.
American pressure for China to revalue the yuan is reviving. Others are less fussed
Jun 17th 2010 | Hong kong and washington, dc
LIKE his leggier boss in the White House, Tim Geithner, America’s treasury secretary, is fond of basketball. In April he called a timeout in America’s long campaign for a stronger Chinese exchange rate, postponing a report that might have accused China of currency manipulation. His objective, he said, was to use his talks with China in May and the G20 gatherings in June to make “material progress” on rebalancing the world economy. The last of those meetings, the G20 summit in Toronto, will take place on June 26th and 27th.
In basketball timeouts provide an opportunity to regroup and substitute players. In politics they give new problems a chance to come into play. The Greek sovereign-debt crisis deflected the world’s attention from China’s currency and sank the euro, which meant the yuan has strengthened overall even as it has remained fixed to the dollar. It also unnerved China’s policymakers, who began to fret again about financial instability and a slowdown in the euro area, their second-biggest export market. This was not the time, they concluded, to fiddle with the yuan.
That sits awkwardly with Mr Geithner’s hopes for global rebalancing. In this vision of the future, American saving would rise as overstretched borrowers repaid their debts. American households have indeed pulled back dramatically if you count their reduced outlays on houses and home improvements, argues Jan Hatzius of Goldman Sachs. The combined spending of American households and businesses now falls short of their income by about 6.8% of GDP. In 2006 spending exceeded income by 3.7% of GDP.
This retrenchment was offset, and made possible, by a dramatic fiscal swing in the opposite direction. But America cannot long maintain a budget deficit of almost 9% of GDP. A sustainable recovery would require America to sell more to foreigners, aided by a cheaper dollar. And surplus countries, living well within their means, would have to buy more.
Things went according to script until the end of last year, but have since reversed. America’s trade deficit has widened notably this year, to a 16-month high of $40 billion in April. Europe’s travails suggest the outlook isn’t much better: it will probably be importing less and exporting more, because of fiscal retrenchment and a lower euro, taking market share from American exporters.
America can take some comfort from a narrowing of China’s current-account surplus, from 11% of GDP at its peak in 2007 to 6.1% last year. China’s imports have ballooned this year, thanks to its prodigious stimulus spending and a rise in commodity prices. It even recorded a trade deficit in March. But in the year to May exports increased by almost half, resulting in a trade surplus of about $20 billion for the month, the biggest since October. The fear is that China’s strong imports of machinery, oil and ores in the early months of this year may simply have gone into one end of a production pipeline, out of which are now emerging excessive volumes of steel and heavy-industrial products that it cannot sell at home. As Janet Zhang of GaveKal Dragonomics points out, China’s steel exports in May were 89% higher than their average over the previous four months.
Criticism of China’s currency has resurged almost as quickly as its exports. In international basketball, only the coach can call a timeout. But in America, any of the players can interrupt the game. American policymaking is equally chaotic. Unlike Mr Geithner, many congressmen believe China has already run out of time. Charles Schumer, a Democratic senator, has introduced a bill that would authorise America to slap duties on imports deemed to benefit from an artificially low currency. He plans to seek a vote within a few weeks.
With no parallel bill in the House of Representatives, Mr Schumer’s proposal is a long way from becoming law. But Senate passage could press the administration into taking a firmer line. The government could formally label China a currency manipulator in the delayed report, due in early July; or it could rule in favour of several companies—including three papermakers—that have requested duties on Chinese imports because of the cheap yuan.
Would a stronger yuan really save America’s papermakers and other struggling firms? Between mid-2005 and mid-2009, China’s real trade-weighted exchange rate appreciated by about 5.5% a year. If instead it had risen by 10% a year, as many in America would have liked, China’s exports would have been about 30% lower by mid-2009, according to a study by Shaghil Ahmed of the Federal Reserve.
But in China a drop in exports does not translate straightforwardly into a drop in the trade surplus. China re-exports a lot of what it imports, turning hard drives into iPods and iron ore into steel. So when its foreign sales fall, its overseas purchases drop as well. Alicia García-Herrero of BBVA, a Spanish bank, and Tuuli Koivu of the Bank of Finland find that a 10% appreciation of the trade-weighted yuan reduces imports of components by about 6%.
America hoped that other G20 members, particularly in the developing world, would rally to the cause of revaluing the yuan. In April the president of Brazil’s Central Bank described China’s currency as a “distortion”. His counterpart in India made some milder remarks, but India’s government has remained silent. It is the co-chair of the G20’s working group on rebalancing. As a rare example of a big Asian economy with a current-account deficit, it cherishes its role as honest broker.
America’s huge trade deficit with China (see chart) sets it apart from many other G20 members. Japan has a surplus of $45.5 billion with China and South Korea $59.1 billion. Even Brazil can boast more than $14 billion. In the past 12 months China has run a trade deficit with the G20 excluding America (even counting the entire European Union as a member).
Getting global imbalances onto the G20’s agenda took some work. China first resisted the idea, fearing the group would put it under too much pressure. But for champions of yuan reform the hope is less that the G20 sides with America against China, more that China feels comfortable enough to use the forum to unveil a policy shift that is in its own long-run interest.
Finance and Economics
Sharply differing attitudes towards privacy in Europe and America are a headache for the world’s internet giants
WATCHDOGS are growling at the web giants, and sometimes biting them. In May European data-protection agencies wrote to Google, Microsoft and Yahoo! demanding independent proof that they were making promised changes to protect the privacy of users’ search history. They also urged Google to store sensitive search data for only six months instead of nine.
In April ten privacy and data-protection commissioners from countries including Canada, Germany and Britain wrote a public letter to Eric Schmidt, Google’s boss, demanding changes in Google Buzz, the firm’s social-networking service, which had been criticised for dipping into users’ Gmail accounts to find “followers” for them without clearly explaining what it was doing. Google promptly complied.
Such run-ins with regulators are likely to multiply—and limit the freedom of global internet firms. It is not just that online privacy has become a controversial issue. More importantly, privacy rules are national, but data flows lightly and instantly across borders, often thanks to companies like Google and Facebook, which manage vast databases.
A recent scandal dubbed “Wi-Figate” exemplifies the problem. Google (accidentally, it insists) gathered data from unsecured Wi-Fi networks in people’s homes as part of a project to capture images of streets around the world. A number of regulators launched investigations. Yet their reaction varied widely, even within the European Union, where member states have supposedly aligned their stance on online privacy. Some European watchdogs ordered Google to preserve the data it had collected in their bailiwicks; others demanded that information related to their countries be destroyed (see table).
Despite such differences within Europe, the gap is much greater between Europe and America, home to many of the world’s largest online social networks and search engines. European regulations are inspired by the conviction that data privacy is a fundamental human right and that individuals should be in control of how their data are used. America, on the other hand, takes a more relaxed view, allowing people to use a patchwork-quilt of consumer-protection laws to seek redress if they feel their privacy has been violated. Companies that handle users’ data are largely expected to police themselves.
Some experts say this dichotomy explains why Silicon Valley firms that strike out abroad have sometimes been the targets of European Union data watchdogs. Jules Polonetsky of the Future of Privacy Forum, a think tank, says that many American firms have yet to learn that showing up in Europe and extolling the virtues of self-regulation is likely to be as ineffective as rightwing politicians denouncing anti-discrimination laws back home.
Transatlantic friction between companies and regulators has grown as Europe’s data guardians have become more assertive. Francesca Bignami, a professor at George Washington University’s law school, says that the explosion of digital technologies has made it impossible for watchdogs to keep a close eye on every web company operating in their backyard. So instead they are relying more on scapegoating prominent wrongdoers in the hope that this will deter others.
But regulators such as Peter Schaar, who heads Germany’s federal data-protection agency, say the gulf is exaggerated. Some European countries, he points out, now have rules that make companies who suffer big losses of customer data to report these to the authorities. The inspiration for these measures comes from America.
Yet even Mr Schaar admits that the internet’s global scale means that there will need to be changes on both sides of the Atlantic. He hints that Europe might adopt a more flexible regulatory stance if America were to create what amounts to an independent data-protection body along European lines. In Europe, where the flagship Data Protection Directive came into effect in 1995, before firms such as Google and Facebook were even founded, the European Commission is conducting a review of its privacy policies. In America Congress has begun debating a new privacy bill and the Federal Trade Commission is considering an overhaul of its rules. David Vladeck, the head of the FTC’s Bureau of Consumer Protection, has acknowledged that “existing privacy frameworks have limitations”.
Even if America and Europe do narrow their differences, internet firms will still have to grapple with other data watchdogs. In Asia countries that belong to APEC are trying to develop a set of regional guidelines for privacy rules under an initiative known as the Data Privacy Pathfinder. Some countries such as Australia and New Zealand have longstanding privacy laws, but many emerging nations have yet to roll out fully fledged versions of their own. Mr Polonetsky sees Asia as “a new privacy battleground”, with America and Europe both keen to tempt countries towards their own regulatory model.
Privacy laws are somewhat more common in Latin America, where countries such as Argentina and Chile boast relatively strict European-style regimes. Mexico, which last year made data privacy a constitutional right, is also pushing through a new federal data-privacy law. The likely outcome is a mix of European and American privacy frameworks, predicts Katitza Rodriguez of the Electronic Frontier Foundation, a privacy group.
Canada already has something of a hybrid privacy regime, which may explain why its data-protection commissioner, Jennifer Stoddart, has been so influential on the international stage. She marshalled the signatories of the Google Buzz letter and took Facebook to task last year for breaching Canada’s data privacy laws, which led the company to change its policies.
Ms Stoddart argues that American companies often trip up on data-privacy issues because of “their brimming optimism that the whole world wants what they have rolled out in America.” Yet the same optimism has helped to create global companies that have brought huge benefits to consumers, while also presenting privacy regulators with tough choices. Shoehorning such firms into antiquated privacy frameworks will not benefit either them or their users.
America’s most profligate states do not owe as much, proportionately, as Greece. But their politics are just as problematic
Jun 17th 2010 | Washington, dc
THE state of Illinois has a rather crude way of coping with its ballooning budget deficit. It stops paying bills. Already, it has failed to pay more than $5 billion-worth. State legislators are paying their own office rent to avoid eviction. Schools and public universities are having their budgets cut.
Illinois owes Shore Community Services, a non-profit agency in suburban Chicago, some $1.6m for services to the mentally disabled. The agency has had to lay off a dozen staff. Jerry Gulley, the executive director, says his outfit’s line of credit could be exhausted soon. The bank will not accept the state’s IOUs as collateral. “That’s how sad it is,” shrugs Mr Gulley.
Comparisons between incontinent American states and Greece are all the rage. Though this is an exaggeration, credit-default-swap spreads, which measure investors’ expectations of default, are wider for some American states than they are for some of the euro zone’s other peripheral economies (see chart).
There are other similarities. Like members of the euro zone, American states may not declare bankruptcy, cannot be sued by creditors and, thanks to America’s federal structure, cannot be forced to behave by a higher level of government. They also do not issue their own currency, so inflating away their debt is not an option. And, like many European governments, state legislatures and governors are reluctant to impose the necessary pain. The Illinois legislature recently passed a budget for the next fiscal year, starting on July 1st, which leaves a $13 billion deficit to be closed.
The parallels with Europe are unfair, though only up to a point. American state and local debt last year was $2.4 trillion, about 16% of gdp. But most of that debt is issued by local governments or state agencies and has specific assets or fees, such as road tolls, earmarked for paying it back. Even in the weakest states, debt that needs to be paid out of general tax revenue was under 5% of GDP last year. Greece’s was 115%. The numbers for deficits show an even greater contrast. California’s deficit, assuming the state fails to close it, would equal only 1% of its GDP, compared with 14% for Greece and 9% for Portugal last year.
Greece and Portugal do not have separate federal and state governments, however. So a fairer comparison would take account of gross American federal debt, which currently stands at 85% of GDP. This underlines the fact that most of America’s debt problem is federal not local. The consequence is that, because states’ refinancing requirements are relatively low compared with their tax revenues, no state faces an imminent liquidity crisis. California’s treasurer, Bill Lockyer, is fond of saying that California will not default unless there is thermonuclear war.
It was not always that way. From 1841 to 1842, in the wake of a series of financial panics and recessions, eight states and Florida (then a territory) defaulted. John Wallis of the University of Maryland says that this first series of defaults led states to set up strong constitutional barriers to debt accumulation. States now commonly require either a referendum or a supermajority vote of the legislature to issue a general obligation bond (one not backed by earmarked revenues). All states, except tiny Vermont, now require their annual operating budgets to be balanced, which limits the racking up of debt over time. Many state constitutions also enforce repayment of debt. In California, for example, only schools can be paid ahead of bondholders. This is one reason that state defaults are so rare; the last was by Arkansas in 1933. In 1975, New York state passed a moratorium on servicing New York City debt unless its holders agreed to a restructuring. The next year the state’s court of appeals ruled it unconstitutional.
Still, the prospect of default is not quite as remote as these comforting comparisons suggest. That New York even tried to force a restructuring on creditors, albeit New York City’s, illustrates that the threat of default is primarily not economic, but political. With revenue plummeting, legislatures and governors are often unable to agree on spending cuts or higher taxes to narrow the gap. California’s dysfunctional politics are a big reason why Moody’s rates California only a few notches above junk. “This is the seventh-largest economy in the world—it’s not an ability-to-pay issue,” says Robert Kurtter of Moody’s.
States are also finding ways round the constitutional barriers to borrowing. New York needs voters to approve any general-obligation bond; so, since 2002, it has relied on bonds backed by personal income-tax revenues which don’t require that approval. In January Illinois issued $3.5 billion in bonds to fund its pension payments, and may issue a similar amount in the coming fiscal year, though pension obligations are clearly an operating expense.
Most troubling of all is the squeeze budgets are facing from their unfunded obligations for civil-service retirement pension and health benefits. The Pew Centre on the States, a research organisation, put these at $1 trillion in 2008. In a report, Joshua Rauh and Robert Novy-Marx, finance professors at Northwestern University and the University of Chicago respectively, note that these liabilities are coming due at an alarming rate. By 2018 Illinois will be paying $14 billion a year in benefits, equal to more than a third of the state’s revenue, compared with $6.5 billion now. Mr Rauh says bondholders should worry because several state constitutions, including those of Illinois and New York, make state pensions senior to bond debt.
Still, the assumption of many investors is that the federal government would never let a state default. It might allow an isolated case, but if a default looked like the start of a wave, the federal government would surely blink—just as Europe did when confronted by Greece.