In Foreign Policy mag, so more intended for overseas audiences than Chicago pols.
While many corrupt countries have remained mired in poverty, some of the great economic success stories of the past half-century have also been the most corrupt economies on the planet - to the great discomfort of development economists.
By the end of President Suharto's 30-year rule in 1998, Indonesia ranked as one of the half-dozen most corrupt economies on the planet, according to Transparency International (TI). Yet in those three decades, the country also experienced growth in per capita income of 6 percent per year, a rate almost unparalleled in recorded human history. The past 30 years have seen comparable economic progress in China: since the 1976 death of Mao Zedong, the Chinese economy has eclipsed even Suharto-level growth rates despite also holding position 79 in TI's latest ranking, tied with Burkina Faso.
This is not to say that corruption has been good for Indonesian and Chinese incomes (though many would argue it has been) - perhaps they'd be even richer otherwise. But it certainly suggests that not all corruption is created equal. This week's trial of four Rio Tinto employees on bribery and corruption charges in China may not bode well for the relatively orderly and benign style of corruption that allowed China's great leap forward into economic progress.
Why might corruption be damaging to economic growth? On some level, it is no different from a tax, albeit one that gets deposited in a bureaucrat's pocket rather than the state treasury. Just as high tax rates can discourage business entry and growth, so too will a bribe "tax" on business.
Taxes - though subject to the vagaries of politics and populism - are at least in theory codified in law. But in some countries, bribe payments are also common knowledge - a Moscow newspaper, for example, famously published in 2008 the going rates for everything from buying a court verdict to instigating a police raid. In other instances, the requisite payment remains ambiguous, with grasping politicians or bureaucrats trying to squeeze as much out of each individual business as possible. Creating further uncertainty, while tax payments are recorded and required by law, bribes, by definition, happen under the table, so it's harder to ensure that one's partner in crime makes good on his commitment to provide a favorable ruling or delivery of a license as promised.
In an orderly, predictable - yet corrupt - system, businesses can at least calculate expected returns and plan accordingly. Paying bribes to an unstable or unpredictable government, on the other hand, requires a leap of faith and a quick exit strategy. This will reduce the overall level of investment and also shift the types of projects toward those that generate a quick buck rather than a long-term payoff.
The most troubling aspect of the recent Rio Tinto case is that it might be signaling to foreigners that they are entering a new era of uncertainty over the rules that govern their interactions with Chinese bureaucrats. It may be that Rio Tinto executives crossed an invisible tripwire that protected the interests of domestic steel firms in paying bribes for preferential market information. If that is well-understood by market participants, then the long-term impact on investment may not be so great: Those that break the rules in a well-enforced and predictable system should indeed be punished.
But this line might not always be visible to the foreign investors whose dollars and expertise have helped fuel China's explosive growth. While corruption always poses risks for investors, these perils are much greater when the rules of bribery are unclear. If Chinese leaders wish to keep the dollars coming in, they might do well to stamp out the corruption and bribery that keeps some investors away. But failing that, they should at least make sure that grasping bureaucrats take their share in an orderly and predictable manner.
Posted by: Bobby ||
03/29/2010 15:55 ||
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Doesn't this have to do more with two states who threw off the artificial hindrance of communism, thereby achieving in a shorter burst what they should have had all along? (and with a much smaller body count?)
#2
The past 30 years have seen comparable economic progress in China: since the 1976 death of Mao Zedong
And with great help from the U.S. policy-makers and industry looking for cheap labor and to a large extent at our expense. I also think that somewhere along the line, decisions were made to have our "dirty industries" do their manufacturing somewhere else. Getting away from governmental regulations in the U.S. has also been a factor in having industry move offshore.
By popular demand, a comprehensive list of expired Obama statements...
HEALTH CARE MANDATES
STATEMENT: “We've got a philosophical difference, which we've debated repeatedly, and that is that Senator Clinton believes the only way to achieve universal health care is to force everybody to purchase it. And my belief is, the reason that people don't have it is not because they don't want it but because they can't afford it.' Barack Obama, speaking at a Democratic presidential debate, February 21, 2008.
EXPIRATION DATE: On March 23, 2010, Obama signed the individual mandate into law.
HEALTH CARE NEGOTIATIONS ON C-SPAN
STATEMENT: “These negotiations will be on C-SPAN, and so the public will be part of the conversation and will see the decisions that are being made.' January 20, 2008, and seven other times.
EXPIRATION DATE: Throughout the summer, fall, and winter of 2009 and 2010; when John McCain asked about it during the health care summit February 26, Obama dismissed the issue by declaring, “the campaign is over, John.'
Go read them all.
Posted by: Mike ||
03/29/2010 13:52 ||
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The Onion, ruthless as ever
CHICAGO--In an effort to streamline unethical practices and boost illegal profiteering, Mayor Richard M. Daley announced sweeping new plans Monday to overhaul his city's "antiquated" system of graft.
According to Daley, Chicago's once-great fraudulent institutions have grown obsolete, and City Hall is no longer bilking taxpayers out of as much money as it once did.
"It's been business as usual for too long in Chicago, and now it's time to find more efficient ways to misuse authority for personal gain," said Daley, who has served as Chicago's mayor since 1989. "We must modernize our illegitimate activities right now, today, before it becomes impossible for public officials to act in my best self-interests."
Telling City Council members it was inexcusable that Chicago still used such outdated methods as pen and pencil to falsify financial records and conceal kickbacks, Daley called for the purchase of some 10,000 overpriced computers, which he said would allow the city to digitize no-bid contracts, electronically transfer misappropriated funds, and keep better track of who's on the take....
Posted by: Mike ||
03/29/2010 10:14 ||
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If Chicago would just subcontract its financial record-keeping to Goldman Sachs, they would really make out like THOSE bandits.
Posted under "seedy politicians" even though it's from a blog; who do you think is responsible for these abominable numbers?
Today we learn from the Wall Street Journal that Personal Income is in decline and Ben Bernanke tells us the future looks "dark".
It all kinda makes one mindful of the not-so-distant past, when things weren't nearly so dismal. Not that one would know this by listening to the mindless, chattering Left Wing Media or our Blame Duck President.
There are a few little-regarded truths that have been buried under the relentlessly spewed pile of lies that were used to demonize George W. Bush and the Republican Congress from the day Al Gore failed to carry his own home State in the 2000 Election until... well... it's still pretty much a leftist pastime.
The horror of "the last 8 years" has become its own self-perpetuating meme. The problem is that it's a meme without meaning. Two of those eight years -- now stretched to three out of the last nine -- saw fiscal and regulatory policies determined by the Democrat Congressional majority, elected in 2006. Every economic indicator available shows that this is where America's recent tribulations began.
The real horror -- the years since the Democrat Congress rose to absolute power -- hasn't seen much discussion. It's "all Bush's fault", as they say. But as the last ten years recede into the rear view mirror, we can see them in context. And 20/20 hindsight can often be quite revealing.
Here are a few helpful factoids and graphs to help the TEA Party, GOP, RNCC and ALL Republican and Independent candidates beat the living snot out of Socialism every day from now until November.
And beyond.
[Hit the link for the graphs; he doesn't seem to have a homepage as such.]
Via Powerline.
Posted by: Barbara Skolaut ||
03/29/2010 15:15 ||
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Sorry for the crappy formatting, mods - preview won't work here (it's the computer network, not Rantburg). Everything after "And beyond." should have yellow highlighting.
Also forgot to say: "our Blame Duck President" - I am so stealing that. :-D
Posted by: Barbara Skolaut ||
03/29/2010 15:25 Comments ||
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A business owner told me it is hard to find people to work now. One guy has been approved for unemployment 9 times in a row. He is a welding shop and looses money when he hires one of these people. They are slow, they want to be fired so they can qualify for Obama benefits. Now they will get free health care and unemployment checks.
#1
Good reporting would make that distinction crystal clear. The committee has requested that the monies be returned to the committee and that the story be corrected so that it is accurate.
Posted by: Bobby ||
03/29/2010 16:04 Comments ||
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Not hearing good things about Steele as Chairman of the RNC.
#3
Michael Steele used to have a great, infectious smile and a whip-smart humorous wit back when he and Bob Erlich, (R) Gov, MD were a team. Since then; no $1M smile. Steele has become all GOP biz and no wit. IMHO, still a good man.
#4
Don't know about the latest MSM bullsh*t. But, Steele has been completely ineffective at communicating a GOP vision, countering Democrat / MSM spin and effectively using new media to bypass the the MSM. He needs to be replaced.
After US Diplomats were killed recently just across the border, Obama said he was going to work with Mexico to relentlessly go after the drug gangs. Another Lie from the junior Senator from Chicago. And the consequences are horrifying
When black SUVs trail school buses around here, no one dismisses it as routine traffic. And when three tough-looking Mexican men pace around the high school gym during a basketball game, no one assumes they're just fans.
Fear has settled over this border town of 1,700, about 50 miles southeast of Ciudad Juarez, Mexico, epicenter of that country's bloody drug war. Mexican families fleeing the violence have moved here or just sent their children, and authorities and residents say gangsters have followed them across the Rio Grande to apply terrifying, though so far subtle, intimidation.
The message: We know where you are.
At schools in Fort Hancock and nearby Texas towns, new security measures and counseling for young children of murdered parents have become a troubling part of the day.
"I have friends with fathers who've been annihilated," said Israel Morales, a junior at Fort Hancock High School. "They just hug you and start crying. It just traumatizes you."
He said school doesn't always feel safe.
"I try to be stoic," Morales said. "But it still worries the heck out of me."
Mexican drug gangs have not fired a single shot in Fort Hancock, and no one has disappeared. But as drug violence continues unabated in and around Ciudad Juarez, residents of Texas border towns fear it will spread their way.
"There's been incidents of school buses followed, and threats to some of the students and threats to some of the staff," Hudspeth County Sheriff's Lt. Robert Wilson said. "It's caused us to really go on high alert."
Three mysterious men walked into the Fort Hancock High School gymnasium last month during a basketball game, setting off worries that they were drug cartel members sent to deliver a message. Parent Maria Aguilar said "a panic" swept through the gym and only subsided when they left.
"They walked in and they were laughing," Aguilar said. "They were probably like, 'We'll just scare everybody.'"
Paul said he thinks Tijuana families are running further north from the violence.
But back in Fort Hancock, Modesta Morales said the violence has already come to them. "Sometimes you feel helpless. They saw their dad shot, in the head," Morales said. "What do you tell a 10-year-old that sees that?"
#1
"What do you tell a 10-year-old that sees that?"
How about telling them we're sending in a Brigade of the 82nd Airborne to cross the border and wipe out the bad guys. We need a thousand horses with saddles, along with mounted, armed and ready volunteers. Pack for a 30 day exercise. Stronger message to follow.
#2
Oh, you mean BO is not focusing like a laser beam on the problem? You mean he was justing blowing smoke up our collective arses again. As long as there is a demand for illegal drugs and illegal immigrants (cheap labor) in the U.S. and there are huge untaxed profits to be made by the Mexican cartels, there is going to be a problem here. Couple what was just said with a border that is uncontrolled and porous and there is a huge problem here. I don't see anyone in the Federal government really getting serious about this. So long as (illegal immigrants = unregistered voters for which ever party can capture that vote), there is not much interest in fixing the problem. Control is a policy problem more than a Border Patrol or police problem.
#6
I don't know what affect legalizing marijuana would have on drug trafficking or for that matter our society. I believe it would have effects. We are moving towards de facto legalization of pot in the U.S. whether it is good or bad. BO has said growing and selling pot in California is not a Federal enforcement issue. California has the legalization of pot on the ballot in November. Washington, D.C. is considering allowing people to grow "medical" marijuana for personal use. We have Mexicans around Tennessee who have been caught in the National Forests growing marijuana. They don't speak a word of English. Probably their families are being threatened back in Mexico. The criminality of marijuana trafficking leads to a great deal of violence. Personally, I think alcohol, cigarettes, crack, cocaine, heroine, and meth can horribly waste lives. I'm not sure pot is in the same category. For some, pot is a gateway drug to harder drugs. For most others, pot is a not a gateway drug to harder drugs. Many things can be addicting such as sex, risk-taking, religion, and other kinds of behaviors that we tend to get obsessive about; all such things cannot be controlled by a government. I do think marijuana tends to make people studid although users would probably tend to disagree with me. Forty years ago, one of the jobs I had was counseling teenagers with problems. Most but not all used drugs; mostly marijuana. Most of them were relatively good kids--not seriously disturbed or criminal--a few were. I'm not certain I have contribute much to this conversation. I do think our borders need to be controlled. I do think we need to address the drug problems we have in our country; everything from illegal drugs to medically prescribed drugs to which people get dependent. I think we need to stem the flow of illegals to our country. Pot, I'm not so sure about as the degree of a problem it causes in this country. I know we spend a lot of money chasing marijuana growers, marijuana users, and keeping some of them incarcerated. In Tennessee we had a law on the books that required marijuana growers and dealers to buy a tax stamp. That was about a worthless law because no one was going to step forward and purchase such a stamp. I think the law got struck down because it was unconstitutional base of the Constitution--self-incrimination issues and the Fifth Amendment.
A report from a national coalition of mayors urges President Obama to adopt dozens of gun registration and confiscation measures, including the creation of a federal interstate firearms trafficking unit. Just ignore that pesky Second Amendment, Mr. President, we all know you want to ...
After months of waiting in vain for gun control supporters in Congress to take aggressive action against semi-automatic firearms, gun shows and NRA-supported restrictions on the abuse of instant background check records and firearm trace information, New York City Mayor Michael Bloomberg is urging President Obama to make 40 changes to federal gun law interpretation and enforcement on his own-without congressional approval. Why not, he's doing lots of other stuff without congressional approval ...
Bloomberg conveyed his recommendations to the president through the euphemistically named anti-gun coalition he heads, Mayors Against the Constitution Illegal Guns, the NRA reports.
Titled "A Blueprint for Federal Takeover Action" and released only in response to requests under the Freedom of Information Act, the 51-page Bloomberg battle plan takes another cue from the military in calling for its mission to be carried out jointly by seven federal departments and agencies: the departments of State, Justice and Homeland Security, the FBI and Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE), the White House Office of Management and Budget and the Consumer Product Safety Commission (CPSC). The first six agencies are wholly under President Obama's command, while the CPSC is an independent agency headed by commissioners nominated by the president. There's another recess coming up, Mr. President, just saying ...
The "Blueprint for Federal Action," a copy of which was obtained through a Freedom of Information Act request, presents 40 recommendations that would dramatically curtail firearms freedoms.
The proposed changes could be accomplished within existing laws through agency reforms, regulatory moves and better funding, the report said. The strategies grew out of academic and government research, an analysis of firearms prosecutions and talks with government and law enforcement officials.
"The mayor's coalition created this document for policy discussion," said Jason Post, a spokesman for Bloomberg's office. There were no plans for public release of the document, which was distributed to key members of Obama's administration and agencies affected by the recommendations. I'll just bet they didn't want it released to the public. Who are the little people to complain about what their betters do, anyway?
The 51-page document suggests a handful of strategies that would tighten ATF oversight of thousands of gun shows held annually. The study noted that a 2007 inspector general's probe concluded the "ATF does not have a formal gun show enforcement program." That may be because Congress didn't want the ATF to have a formal gun show enforcement program, but we've already established that Obama should just go around these things ...
ATF agents at gun shows should "develop undercover integrity tests" to determine whether felons or out-of-state residents are making illegal purchases.
The report also calls for a better approach to crime gun tracing, the process that tracks a seized weapon back to its first retail sale. The ATF lacks the structure or resources to "fully realize its power," the report says, and information is not regularly shared with field offices, and state and local law enforcement.
To this end, the study wants ATF to be funded to create a new "Office of Tactical Trace Analysis," which would replace the current crime gun analysis branch.
You go, guy!
Fed up with federal ownership of more than half the land in Utah, Republican Gov. Gary Herbert on Saturday authorized the use of eminent domain to take some of the U.S. government's most valuable parcels.
Herbert signed a pair of bills into law that supporters hope will trigger a flood of similar legislation throughout the West, where lawmakers contend that federal ownership restricts economic development in an energy-rich part of the country.
Governments use eminent domain to take private property for public use.
The goal is to spark a U.S. Supreme Court battle that legislators' own attorneys acknowledge has little chance of success.
But Utah Attorney General Mark Shurtleff and other Republicans say the case is still worth fighting, since the state could reap millions of dollars for state schools each year if it wins.
More than 60 percent of Utah is owned by the U.S. government, and policy makers here have long complained that federal ownership hinders their ability to generate tax revenue and adequately fund public schools. Utah lawmakers contend the federal government should have long ago sold the land it owns in the state. Because it hasn't, the federal government has violated a contract made with Utah when statehood was granted, they say.
Eminent domain would also be used on parcels of land where Interior Secretary Ken Salazar last year scrapped 77 oil and gas leases around national parks and wild areas. Hee hee hee....
Posted by: Barbara Skolaut ||
03/29/2010 13:04 ||
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Utah is an interesting case. They have a lot of state land that is in an school trust. Each year, parcels of this land are sold to the public to raise money for the education budget.
Most if it is just scrabble or sagebrush with no water but sometimes a really nice piece becomes available.
A multi-volume chronology and reference guide set detailing three years of the Mexican Drug War between 2010 and 2012.
Rantburg.com and borderlandbeat.com correspondent and author Chris Covert presents his first non-fiction work detailing
the drug and gang related violence in Mexico.
Chris gives us Mexican press dispatches of drug and gang war violence
over three years, presented in a multi volume set intended to chronicle the death, violence and mayhem which has
dominated Mexico for six years.
Rantburg was assembled from recycled algorithms in the United States of America. No
trees were destroyed in the production of this weblog. We did hurt some, though. Sorry.
By the end of President Suharto's 30-year rule in 1998, Indonesia ranked as one of the half-dozen most corrupt economies on the planet, according to Transparency International (TI). Yet in those three decades, the country also experienced growth in per capita income of 6 percent per year, a rate almost unparalleled in recorded human history. The past 30 years have seen comparable economic progress in China: since the 1976 death of Mao Zedong, the Chinese economy has eclipsed even Suharto-level growth rates despite also holding position 79 in TI's latest ranking, tied with Burkina Faso. 
Taxes - though subject to the vagaries of politics and populism - are at least in theory codified in law. But in some countries, bribe payments are also common knowledge - a Moscow newspaper, for example, famously published in 2008 the going rates for everything from buying a court verdict to instigating a police raid. In other instances, the requisite payment remains ambiguous, with grasping politicians or bureaucrats trying to squeeze as much out of each individual business as possible. Creating further uncertainty, while tax payments are recorded and required by law, bribes, by definition, happen under the table, so it's harder to ensure that one's partner in crime makes good on his commitment to provide a favorable ruling or delivery of a license as promised. 
Jim Geraghty, National Review
