Trevaylor

Unaffordable tax cuts for rich main cause of US deficit shock

According to the non-partisan Center on Budget and Policy Priorities, the curious fondness for extending the tax cuts for the wealthiest Americans is based on voodoo economics with no basis in fact.  The tax cuts did not stimulate growth (growth was lower than trend average over the period), and thus did not raise overall tax receipts.  In fact, by 2019 a major part of the deficit will be attributable to the tax cuts.  They are, in a word, unaffordable.  So why are they still in place?  A mixture of ideology, wishful thinking and old-fashioned greed, I guess.

So hats off to the group of so-called patriotic millionaires who recently wrote to the Congressional Republicans asking that their taxes be raised.

via www.cbpp.org:

Some lawmakers, pundits, and others continue to say that President George W. Bush’s policies did not drive the projected federal deficits of the coming decade — that, instead, it was the policies of President Obama and Congress in 2009 and 2010. But, the fact remains: the economic downturn, President Bush’s tax cuts and the wars in Afghanistan and Iraq explain virtually the entire deficit over the next ten years (see Figure 1).

The 'blundering arrogance' of extraction companies

On our regular Sunday morning walks up the 'Ramos-Horta Hill', a couple of us here in Timor-Leste have been discussing the Woodside debacle, and how it may hold lessons for extractive industries in general, in terms of the best approach for forming strategic partnerships with small countries like TL. Rather than just talk about it, Mandy Whyte actually sat down and wrote it up as a paper, and it has been published on the La'o Hamutuk blog.

I think my only contribution was the phrase 'blundering arrogance', and in case Woodside is looking for someone to sue I thought it would be good to explain what I meant. The 'arrogance' refers to the way these kinds of companies enter into negotiations. I am not sure if shareholders would be alarmed by the idea that extraction companies tend to enter negotiations in a robust manner, confident in the knowledge that the target country needs to enter into agreements with companies that have the technical expertise and access to capital to exploit the natural resource in question.

However, the 'blundering' refers to the way these companies are often ill-prepared for the task in hand, with sketchy information about the country and no interest in learning more. It is not a promising foundation for a future partnership. Woodside also probably made the 'killer assumption' that because Timor-Leste is a poor country, it must be hungry to extract the natural resources as soon as possible. But TL has a sovereign wealth fund and is doing a reasonable job of saving some of the proceeds of the extraction of non-renewable resources (This prudence is by no means guaranteed to continue - about which I will blog separately). Therefore in theory TL can happily leave oil and gas under he sea bed and make as much return as if it were invested in US Treasury stock (a syndrome known as Hotelling's Rule). So Timor-Leste's negotiating position was much stronger than Woodside assumed. Afterall, have you ever tried to buy a house from someone who did not need to sell it?

 

Former Woodside rep blames their "blundering arrogance" for Sunrise impasse

La'o Hamutuk has just published Cowboys, Ogres and Donors: A Decade of Corporate Social Responsibility in Practice by Mandy White, who represented Woodside in Timor-Leste in 2007-2008. The paper sharply criticizes Woodside's "ogres at the helm" and "sycophantic senior staff" for taking a Public Relations approach to Social Responsibility, "not making even tokenistic efforts" to develop Timor-Leste. Whyte describes the company's "blundering arrogance" in the negotiations over the Greater Sunrise  oil and gas fields:  "Woodside steadfastly refused to regard the Timor-Leste Government as a partner in the development of the Sunrise fields, seemingly characterising them not only as a 'thorn in the side,' but also as devious and untrustworthy. ...  [D]riving forward to a final investment decision without the Timor-Leste Government demonstrates an arrogant lack of regard for the relationship."

via laohamutuk.blogspot.com

Writeshop on Investing in Locally Controlled Forestry | Growing Forest Partnerships

London was the venue of the 7th event on Investing in Locally Controlled Forestry. The idea and the need of a two day writeshop was developed as a follow up to the field dialogue in Kenya in December 2010.

Drawing on the results of previous TFD ILCF initiative and the background paper on the principles of ILCF, a group of 15 experts is tasked to develop the structure and describe the main elements of a guide to supporting investment in locally controlled forestry, and plan its completion and implementation.

via www.growingforestpartnerships.org