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Items: Hunger Emergency in the UN's Backyard / Airy-Fairy Civil Liberties? / Closing Off the Presidential Papers / Collapse of a Multinational Giant
Hunger Emergency in the UN's Backyard
The Pentagon is unlikely to air-drop supplies, nor should we expect Oxfam to arrive with truckloads of rice and wheat. But, like Kabul and Kandahar, New York City is suffering from what the New York Times calls "a hunger emergency." In an editorial on November 26, the Times revealed that the city's soup kitchens and other charitable programs for the hungry have been overwhelmed by supplicants. The number of the hungry has more than doubled in the past twelve months, according to some sources.
Rising unemployment and sky-high rents have driven hundreds of thousands of people to ask for food, a trend accelerated by the 9/11 events. A report in early November from Food for Survival, the city's largest supplier of emergency food, estimated that more than a million New Yorkers (perhaps as many as 1.5 million) were relying on soup kitchens, food pantries and shelters to avoid going hungry. Organizations like Food for Survival and the New York City Coalition Against Hunger warn that budgets are exhausted and food supplies are now running short. As winter approaches and the number of those without food continues to grow, the organizations may have to turn away hundreds of thousands of hungry people. Starvation in the Big Apple would then be a real possibility.
After years of cutbacks and welfare "reform" measures, at the national, state and local levels, the city's social safety net is a shambles. A report last August by the City Bar Association noted that public assistance rolls dropped by about 45% in the past six years, with nearly a half million people forced off relief programs. Further, the conservative Giuliani administration "actively discouraged" people from applying for the federal food stamps, a program the Times describes as a "crucial tool in fighting hunger among the working poor."
On November 30, the Times reported that tens of thousands of families would lose their federal welfare grants at midnight, having exhausted their five-year welfare limit, imposed by Clinton-era welfare measures. This, in turn, will throw many more desperate people into the strained food relief system. Many are also likely to lose their shelter, evicted for not paying their rent.
One in five New Yorkers is now on the bread line in spite of billions of 9/11 federal emergency assistance, insurance claims and the outpouring of private charity. As the economic downturn accelerates, will the world's richest city stand in six months or a year's time?
UK Home Secretary David Blunkett, the counterpart of US Attorney General John Ashcroft, has proposed harsh new law enforcement measures as part of the Blair government's anti-terror campaign. Blunkett has defended the measures with an attack on human rights advocates as hopelessly naive. The NY Times of November 18 quoted Blunkett as saying: "We can live in a world of airy-fairy civil liberties and believe the best in everybody - and then they destroy us." The Times opined that Blunkett's hard-line views reflect "the new attitude towards civil liberties that is sweeping Europe."
In fact, Blunkett faces fierce opposition in the House of Commons, where a different attitude towards civil liberties appears to be alive and well. On November 20, the Guardian reported a Parliamentary "revolt" against plans to rush through the new anti-terror legislation. "Under a hail of criticism in both Lords and Commons," said the Guardian, "Mr. Blunkett had earlier endured his most grueling parliamentary session since becoming a minister." A number of leading parliamentarians and legal experts have criticized the government measures as too far-reaching, too vague and too broad. In the Commons, a frustrated Blunkett lashed out, saying that the most difficult decision his media critics ever faced was what to buy at the grocery store.
As further evidence that Europe is not rallying to the Blunkett-Ashcroft civil liberties standard, the Spanish government informed Washington this week that it would not extradite 14 persons charged with complicity in the September 11 terrorist attack, unless the accused are tried by regular US courts, not the emergency military courts announced by President Bush. The Spanish Prime Minister, Jose Maria Aznar, said further that his government would also oppose extradition because the suspects would face the death penalty. On November 24, a New York Times story quoted a "senior European Union official" as saying he doubted that any of the 15 EU nations - all of which have renounced the death penalty and signed the European Convention on Human Rights - would agree to extradition that involved the possibility of a military trial.
On November 29, three influential figures in Europe called on all governments to "refram from any excessive steps which would violate fundamental freedoms and undermine legitimate dissent." The statement came from UN High Commissioner for Human Rights Mary Robinson, Council of Europe Secretary General Walter Schwimmer and Gerard Stoudmann, Director of the Office for Democratic Institutions and Human Rights of the Organization for Security and Cooperation in Europe. US Ambassador to the UN, John Negroponte, commented later to reporters that the statement was "misguided" and President Bush staunchly defended his new tribunals in a speech to US prosecutors: "The enemy has declared war on us," he said, "and we must not let foreign enemies use the forums of liberty to destroy liberty itself."
Closing Off the Presidential Papers
A little-commented Presidential Executive Order, issued by the White House on November 1, greatly closes public access to the papers of former presidents. According to an article in the New York Times on November 16 by presidential biographer Richard Reeves, this order rolls back the freedom of information gains of two decades and makes it difficult for scholars and media reporters to access the documents of recent administrations. Reeves stated that he could not have written his own books of recent years under the new laws. Reeves believes that members of the present Bush administration, who also held senior posts under the Reagan and Bush Sr. administrations do not want to have embarrassing papers now comet to light on their activities in Central America, Iran and, of course, Afghanistan.
Collapse of a Multinational Giant
The Enron Corporation, until recently the seventh largest US non-financial company, has suddenly collapsed and may soon file for bankruptcy, amid charges of fraudulent accounting practices, insider deals by corporate management and vastly overstated profits. The New York Times has described the company's demise as "one of the greatest debacles in the history of corporate America." Commentators have noted that Enron's chief executive, Kenneth L. Lay, is a close friend and campaign donor to President George W. Bush. Based in Houston, Texas, Enron's businesses include oil and gas pipelines, electrical power plants, electrical energy trading, and a fiber optic telecom network, with subsidiaries in Asia, Europe and Latin America as well as the United States.
Enron shares, trading above $80 only a year ago, have now plunged to less than $1 and may soon be entirely worthless. The collapsing company caused turmoil in the markets during the week, as it became clear that banks and energy companies will lose billions in unpaid loans and undelivered energy contracts. Banking giants J.P. Morgan Chase and Citigroup each have about $500 million in unsecured loans to Enron. Stockholders have lost tens of billions of dollars, while bondholders are stuck with "junk" level paper that may be redeemable at only pennies on the dollar. Many of Enron's 21,000 workers are likely to lose their jobs and the company pension funds are now nearly worthless.
Not long ago, Enron was the darling of investors with its bold approach to free-market, deregulated energy markets. Governments around the world dismantled their energy regulatory systems based on Enron promises of cheaper and more efficient energy supplies. "Enron was the flagship for deregulation," Carl Wood, a member of California's Public Utilities Commission told the New York Times (November 30).
In 2000, Chief Executive magazine named Enron's Board of Directors as one of the five best corporate boards in the United States. But today, critics are realizing the depth of self-serving and conflict of interest. Two of the directors had consultancy arrangements with the company, including Lord John Wakeham, a former leader of the UK parliament. Wakeham serves as a member of the Enron audit committee while receiving large company payments -- $72,000 last year alone for his "advice" on European operations.
When Enron files for bankruptcy, it will rank as the largest case of this kind by far in US history -- and presumably in world history as well. Analysts have been asking: is this the forerunner of more bankruptcies and economic crisis? At GPF we think the outcome remains uncertain. Many signals in the global economy point to serious trouble. But so far the US economy has not come unglued. Though the experts have now declared a US recession, and deflation fears haunt policymakers on both sides of the Atlantic, US industrial production actually rose last month. Many sectors such as financial services and airlines/tourism face serious losses, but low interest rates are keeping the stock market pumped up and low financing is keeping auto sales and housing sales fairly robust. Will Federal Reserve Chairman Alan Greenspan and his G-7 counterparts keep the infection from spreading in a closely-intertwined global system? If not, Enron's demise may be the beginning of a new and exceptionally painful era.
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