Catalyst

"Read my lips: Higher taxes will rescue globalization."

Recently, pro-globalization advocates from both sides of the political spectrum (including both economist Matthew Slaughter, who recently left President George W. Bush's Council of Economic Advisers, and Larry Summers, Clinton’s Treasury Secretary, to name a few)  have started calling for heavier taxes on the rich. And reports have shown that their views are in sync with not only the feelings of the US public, but also with the top levels of corporate America.

Shocked? Don’t be. Lest you believe that these recent views represent a sudden awakening to the reality of inequality and the ethical implications for those in a position to give more, think again.  The comments, at all levels, actually seem to be responding to a range of surveys and research that show the severity of the backlash against globalization. In essence, the globalization promoters are calling for higher taxes as a defense—a tactical concession, if you will—against the rising angry sentiment as the world’s citizens experience the negative effects of globalization.

The IMF, in the last World Economic Outlook, admits that due to globalization the place of the unskilled worker has diminished and so, comparatively, have his/her wages. This is not only a recent trend--the report admits that “there has been a clear decline [of unskilled labor in labor share] since the early 1980s across developed economies.” In advanced countries (primarily the United States, Canada, Europe, Japan, and Australia) the gap between the earnings of a skilled worker and an unskilled worker has grown, with the unskilled worker receiving 25% less income than a skilled worker.            

A study released by the OECD a few months ago highlighted that globalization could "permanently increase" job insecurity for workers and that salaries had been shrinking as a proportion of national income in the US, Japan and Europe, perhaps reflecting the weakened bargaining position of workers in pay negotiations. In 16 out of 19 OECD member countries for which data were available, the earnings of the best-paid 10 per cent grew faster than those of the lowest-paid 10 per cent between 1994 and 2005.

A study released by Merrill Lynch and Capgemini last June showed a growing gap between the super-rich and those who would normally consider themselves wealthy. In other words, a relatively very small number of people is controlling an ever growing amount of wealth globally, a fact closely associated to the financialization of the global economy. According to the report, for instance, the assets of those with more than $30m dollars to invest expanded by 16.8 per cent while people with assets of $1m-$5m saw their wealth grow by 6.4 per cent. Economist Alan Blinder, a longstanding “free trader,” predicted recently that in America, some 40 million jobs may be lost to offshoring.

In the context of renewed fears about globalization, calls for more progressive taxation seem to be a tactical concession, rather than a dramatic change of mind. This concession is bluntly summed up by Larry Summers, who says that addressing income disparities will be critical in winning support for further liberalization of free trade.

In a society everyday more familiar with the concept that “government should get out of the way,” the calls to ensure that the rich pay their share of taxes by those regarded as the most eminent voices are undoubtedly a welcome development. But it is also one case of good outcomes for the wrong reasons. In this case, the discussion around taxes attempts to prevent discussion of the dubious value of globalization. Once one removes the thin veil of novelty, what is below this support for progressive taxation is the old and familiar defense of the theory underpinning economic globalization while continuing to refuse an open dialogue on the empirical evidence.

The globalization supporters want to talk about taxation. Why not question free trade and free capital flows? Why not question privatization and deregulation? Why not question the well-demonstrated impact that these processes, themselves, have on making taxation more difficult? After all, these issues have just as equal a claim to being a source of inequality as the lack of a more progressive tax system.

Aldo Caliari is Director of the Rethinking Bretton Woods Project at Center of Concern.

Fairness and the Farm Bill Cano

As every American farmer probably knows, the U.S. House of Representatives passed their version of a new farm bill a couple weeks ago -- the “Farm, Nutrition and Bioenergy Act of 2007” (as the House Ag Committee titled it). If most other Americans were not paying attention, my guess is that the rest of the world did take note. And they’ll continue to pay attention as the Senate takes up the bill in September. Canada, Mexico, the EU, Brazil, China – the list continues around the globe – know that U.S. ag policy tremendously affects world grain supply and world food prices. My question is: did the rest of the world agree with House leadership that the new farm bill was “a critical first step for reform” in U.S. commodity subsidies? Or did they see this as a sham – as did sustainable ag and rural development groups here in the States?

Commodity programs and support payments represent the molten core of the farm bill. If you mess with that, prepare for the heat. In the beginning (1930s), there was good reason for such supports – a “farm safety net”. But in recent decades (1970s onward), U.S. policy is blatantly set to export major commodities at below our cost of production. Subsidies are not the cause of that; subsidies partially compensate farmers who get caught in that policy trap. The truly subsidized beneficiaries are the corporate buyers of corn, soybeans, wheat, cotton and rice who get dirt-cheap prices on every bushel and pound.

Farmers around the world complain – heck, farmers in the American heartland complain – about this sham. But corporate agribusiness profiteers spin it as efficient, competitive and the workings of a free market. Somehow our House of Representatives, who should know better, let another opportunity go by without correcting the price problem of our basic farm commodities.

An opinion piece in an Iowa paper (Iowa has its mix of big commodity producers and populist farmers – you’ll readily guess which one this represents) posed a key question for the presidential candidates now touring the state: “Do you favor selling our farm products at below cost of production, exporting at a loss in order to destroy farmers around the world, and continue subsidizing multinational corporations and foreign countries that buy our grain?” That’s a mouthful, but it’s a better question than the usual one: “Do you support our farmers?”

Here’s the rub: The U.S. still needs to support our farmers. When some good intentioned social justice groups call for switching support payments out of the Commodity Title and into conservation, rural development, food assistance and the like, they may not realize how tightly the farm subsidy system is wrapped around the cash-flow cycle of farm production. Banks only loan to farmers with back-up government supports; that’s how the system works. So until we fix the price problem, we still need the subsidy fix. A critical first step for reform, then, is setting a tight payment limit of no more than $250,000 for a farm operation per year. That’s what some Senators are proposing. The heartland populist in me says make it $50,000.

Posted by Robert Gronski, Policy Coordinator with the National Catholic Rural Life Conference (www.ncrlc.com)

No End in Sight—and Spiraling toward a Black Hole

Friday was opening night for the Sundance Prize-winning documentary, No End in Sight. Written and directed by Charles Ferguson, a former senior fellow at the Brookings Institution, the film is one that can’t be discarded by critics as “one of those liberal anti-war films.” In fact, by interviewing an impressive array of high-level government officials, military personnel, academics, and journalists, the film uses the words of the very people who were involved in post-invasion policy to build the case for his main point: that bad U.S. policy during the post-invasion period caused the Iraqi insurgency that has since plunged the country deep into an abyss of chaos, death, and destruction.

Some highlights from the film:

• ORHA administrator General Jay Garner and Ambassador Barbara Bodine, tasked with reconstruction efforts and the creation of a new Iraqi government, tell of looted offices, scandalously insufficient staff, and nonexistent funds which, from the beginning, ensured their efforts would end in failure.
• Director of Strategic Policy for the U.S. Occupation Col. Paul Hughes describes how, after the invasion, Iraqi military commanders were literally knocking on his door offering the services of tens of thousands of Iraqi troops. Days later, Paul Bremer announced the dismantling of the Iraqi military and de-Bathification. Hundreds of thousands of young men were left without work. The Defense Department had not consulted anyone in making this decision.
• Robert Hutchings, Chairman of the National Intelligence Council, tells how, soon after the insurgency began, his Council produced a National Estimate on the State of the Insurgency, offering steps and suggestions for how to deal with the insurgency. He described his feeling of disappointment when the president did not read even the one-page summary on the report, calling it “guesswork.
• NGO Manager and Georgetown University Lecturer Ray Jennings illustrates the filling of green zone positions with inexperienced political supporters by telling a story of running into a recently graduated undergraduate student in Iraq. Upon expressing surprise at seeing her, she shared that she couldn’t believe her luck—just out of school, he had been put in charge of creating Baghdad’s entire traffic plan.
• Marine Lt. Seth Moulton describes how he and a fellow soldier worked with Iraqis on some rebuilding projects—while U.S.-funded contractors’ projects nearby were built shoddily and at a snail’s pace—for ten times the cost.

Despite the fact that the film assumes that with different policies, the war might have succeeded (which is debatable), it’s a film worth seeing. One compelling reason is for the simple fact that remembering and owning up to the mistakes of history is certainly necessary if there is any chance of things ever turning around. It is often said that the policymakers who make the biggest mistakes are the ones who forget history—who somehow begin acting as if current events happen in a vacuum, unconnected and removed from the context and history of the situations about which they are making policy. Identifying what has gone wrong and how it went wrong is an essential step in figuring out how to make things go right.

Some policymakers are urging our leaders to return to the assessments and recommendations that have long been available but largely ignored. This move to return to the Iraq Study Group report and recommendations is a positive step forward. Others are seeking out new experts. Some are calling for new words of wisdom from moral leaders. On June 28, fourteen Democrats sent a letter to the U.S. Catholic bishops urging them to speak out about Iraq anew. (They published previous messages in November and January.) The bishops have agreed to meet with the letter’s authors and have also requested a meeting with the Republicans, emphasizing that ending the war must be a bipartisan effort.

I hope that the Democrats and Republicans who meet with the bishops will be overwhelmed by a new sense of moral responsibility to end the war—quickly and responsibly. But I also hope they’ll watch this film. Putting this quagmire in context can’t hurt—and it might even help.

Posted by Jill Rauh, Education for Justice Project, Center of Concern

Rewriting History: Rage and Praise

Part One:  Rage

In the last 4 days, I have read 2 revisions of history on the Op Ed page of The Washington Post that evoked completely opposite and strong emotional responses.

Michael Gerson (The Washington Post, June 13, 2007) described the distancing of the Republican presidential candidates from President Bush as “fleeing the [political] Center.”  He refers to Bush’s campaigning as a “compassionate conservative,” his positions on the role of government, education, medicaid prescription coverage, and immigration reform, and his assertions of “solidarity” with the poor and seeking the “common good” as “policies . . . borrowed . . . from Catholic social thought. . . .”

To paraphrase Lloyd Bentsen’s celebrated retort to Dan Quayle in 1988, “I know Catholic social thought, I am a friend of Catholic social thought, and George W. Bush is no proponent of Catholic social thought!”

Any real friend of Catholic social thought will be insulted and indignant at the claim!

Candidate Bush may have made some moderate-sounding claims in the 2000 campaign (thanks to the speech writing of Michael Gerson), but President Bush has governed as a right-wing ideologue employing the politics of division and derision so doggedly only a Rovian or a Machiavellian could admire him.  His clear and consistent option for the rich, embrace of preemptive war, record-setting use of the death penalty as governor, sending thousands of Americans to fight an unjust war on the basis of a lie and without adequate protections, hiding the human costs of the war for both Iraqis and Americans from the American people and then cutting veterans benefits on top of that, the Administration’s corruption and tolerance for corruption, its cynical attitude toward truth, law and integrity . . . .  (This is too easy; the list grows all by itself.)  “Centrist”??  “Catholic social thought”??

If he cares to encounter a more authentic presentation of policies inspired by Catholic social thought, Gerson should go back and reread the Democratic Convention keynote speech of Mario Cuomo (whom he dismisses as a purveyor of “liberal fundamentalism.”)

Security Alert: Code Red – There will be many more efforts like this to rewrite history in the months and years ahead.  It is a serious threat to the real security of this nation and the world community – just as the Bush presidency has proved itself to be.

Stay tuned for Part Two, the kind of rewriting of history that we desperately need.

Posted by Jim Hug, SJ, President, Center of Concern.

Climate Change the Only Real Change Coming Out of This Year's G8 Summit

Last weekend the Group of Eight leaders of industrialized countries (G8) held their annual summit in the city of Heiligendamm, Germany. But, even as G8 Summits go, this one couldn’t have been more boring…or depressing.

Take the issue of debt. Earlier this year, a “vulture” fund—a fund that specializes in buying debt at market prices and enforcing in court, or otherwise pressing the debtor government into paying its full value—bought Zambian debt for 4 million and then was able to enforce in court a claim for more than 15 million.  This could have been much worse absent heavy civil society mobilization. Zambia, a beneficiary of debt relief, is just one of many countries that have been stripped of their debt service savings by “vulture” funds.  Vulture funds have been preying on developing country debts for more than 10 years.  The savings Zambia was forced to pay to the fund could have been used to build hospitals or pay nurses. The practice is quite unjust and you would think it’s time for action. The G8 didn’t.

Or take hedge funds-unregulated funds that pursue high-risk strategies to obtain higher-than-average returns in financial markets. The German government was bent on seeing some regulation of hedge funds (which some government officials have dubbed as “locusts” preying on the economy). Since every year the host country holds large sway over the G8 agenda—and with many reports showing large parts of all markets and all citizens exposed to the predatory hedge funds (yes, mutual funds and government funds increasingly invest your money in hedge funds)-- there seemed to be a fair chance of regulatory progress. Central bankers on both sides of the Atlantic spoke in favor of regulation. Even US lawmakers sent a letter to President Bush bringing to his attention hedge funds’ impacts on the long-term prospects of U.S. companies and jobs. And yet, the G8 did nothing.

And that commitment to double aid by 2010 that grabbed headlines at Gleneagles in 2005? Guess what. This year aid is not only not on track, but has actually fallen compared to the year before. You may ask, “Didn’t Tony Blair have all G8 leaders sign personally?” Well, five of those leaders are now out of office.  The incoming leaders were actively debating whether they would recommit to the target or not (they finally did).

In this dismal context, it is no surprise that the mere commitment to negotiate within the United Nations a successor to the Kyoto protocol was hailed as the biggest success. No commitment to prevent temperatures rising, no commitments to binding frameworks of any sort to stop emissions, and certainly no commitments to what would actually happen  in the context of the UN.

This is the fate of our shared planet Earth, our very lives, and all they could agree upon was a commitment to negotiate within the UN.   In the face of such a global issue that can only be solved through international cooperation, a negotiation at the UN seems like something to be taken for granted,  a starting point, rather than something to be shown as the biggest achievement reached at the end of intense negotiations. Apparently it was naïve to expect so.

It’s a sad day for the G8 when agreeing to negotiate at the UN is the biggest achievement. 

For a longer analysis of the last G8 Summit please visit http://www.coc.org/index.fpl/1090/article/10796.html.

Posted by Aldo Caliari, Director, Rethinking Bretton Woods Project.

Are You Being Left Behind?

Does it come as a surprise to find out that the media misrepresents religion and religious values to the American public?  A new report by Media Matters, "Left Behind: The Skewed Representation of Religion in Major New Media,” documents how the religious right and its spokespersons are overrepresented and progressive religious voices are underrepresented in both the print and TV media.  To quote Rabbi David Saperstein, Director of the Religious Action Center of Reform Judaism, “The overwhelming presence in the news media of conservative religious voices lead to the false implication that to be religious is to be conservative, and worse, that to be progressive is to lack faith or even to be against faith.  Nothing could be further from the truth.”

As we find ourselves already plunged into the candidates’ debates for the 2008 elections this is a timely and important report for the close to 90 percent of Americans who identified themselves as religious.  Who speaks for them on which religious values?  Do they speak for you? 

Read the report: www.mediamatters.org/LeftBehind  and watch the news release clip: http://youtube.com/watch?v=-l_DYuuOqLo

Posted by Maria Riley, OP, Coordinator, Global Women’s Project, Center of Concern

Exit Wolfowitz: Drama or Farce?

The painful, bitter, pathetic (but hardly tragic) departure of President Paul Wolfowitz from the World Bank––widely unlamented––is marked by irony piled upon irony, but may hold out the hope that such a situation can be avoided in the future.

The first irony is that Wolfowitz, who had been criticized by some for having changed the Bank’s program emphasis from fighting poverty to fighting corruption, should be charged with one of the crudest forms of corruption, i.e., nepotism. The specific offense, of course, was the compensation package for Shaha Ali Riza, variously described as his woman friend, girl friend, companion, romantic interest, and even “neoconcubine.” Her secondment to the State Department, in accordance with Bank rules, paid her more, at $193,000 (up from her Bank salary of $133,000), than the Secretary of State; and it is tax free. A British citizen of Tunisian descent, she worked on Middle East issues under Vice President Cheney’s daughter at the State Department. Some Bank personnel felt that her salary was far out of line and was based on favoritism.

Was there a “clear breach of ethics” here? Did he, as some Bank people alleged, “place his own personal interests (including appeasing a very angry Ms. Riza) opposed to the interest of the institution?” Or, as another critic suggested, is it ”like getting Al Capone for tax evasion?” Was there a “smear campaign against” Wolfowitz? Was it all a “power play” by “craven European governments opposed to his efforts to cleanse a corrupt and hidebound institution?” Why did he hire a celebrity lawyer and allegedly search for a leadership coach? There will probably always be some questions, but as the Bank panel ambivalently concluded, “A number of mistakes were made by a number of individuals.” Will it ever be known whether the famous pay package, his past identification with the Iraq War, or his administrative style drove the final nail?

The second irony is precisely that “administrative style.” Wolfowitz made no secret of his disapproval of the “ entrenched culture of the Bank. He demonstrated this, in part, by bringing two young aides with him from the Defense Department, paying them high salaries, and relying on them to carry his messages and decisions––and sometimes orders–– to senior Bank officials. The hostility he provoked among the staff was so massive that during the process of his ouster thousands of bank workers wore blue ribbons (“for wisdom and honesty”) to express their “burgeoning collective venom.” He seemed to presume that people who opposed him were incompetent or corrupt and often failed to consult them before making decisions that affected their projects. Even some of his defenders did not see him as a model of good governance. One of them said that despite his intellectual gifts, “he couldn’t run a two-car funeral.”

The third irony applies more to the Bank than to Wolfowitz and has been rather lost sight of in the controversy. Critics have said that for Wolfowitz to leave the Bank would impair its reputation and its credibility. Others have worried that his staying on would have the same result. The underlying fact, however, is that although the 63-year-old institution, whose full name is International Bank for Reconstruction and Development (IBRD), may have performed the first of these two processes effectively, reconstruction ended within a decade of its founding, leaving only development, not clearly defined, as its mission. That mission’s latest definition is the elimination of poverty, preferably through the application of a set of neo-liberal policies, led by privatization, deregulation, and total reliance on the “free market” to achieve a globalized economy in which all countries take part. This is the core of the so-called Washington consensus, which is the Bank’s prescription for ending poverty. Although accepted by most of the world’s economists, who have been educated in the industrialized North, the observation that relatively little of the more than $2.3 trillion devoted to development assistance (foreign aid) over more than a half century appears to have trickled down to the poor people who need it has begun to weaken the ranks of its supporters. (The United Nations continues to put the number of people who do not have access to an adequate human diet at about 850 million––about one seventh of the human race.) The poor are more numerous, hungrier, and more miserable––and the gap between them and the rich is greater than ever - and growing. The Bank may not be “a black hole of indolence and bureaucracy,” but it now begins to appear that its Washington consensus may have peaked and that more mainstream economists are moving beyond it.

The World Bank panel that handled the Wolfowitz case concluded that it had two questions to deal with: The first was whether Wolfowitz could continue to provide appropriate leadership for the institution; that one is now answered. The second conclusion was to “undertake a review of the governance framework of the World Bank Group with the aim of ensuring that it is capable of effectively dealing with the challenges raised for the institution.” One can hope that this second question will focus even more broadly on the Bank’s structure and operations. Where did the $2.3 trillion go, one might ask. From bureaucracies and consultants in the North to bureaucracies, often less competent and/or more corrupt, in the South. Do we call it corruption when less educated and experienced bureaucrats in the South deal with the phalanxes of bureaucracies from the North? Or when the donated funds are used to increase the profits of the North’s multinational corporations? Is it justice for an institution to fight poverty when more than 1,400 of its 10,000 employees earn more than the U.S. Secretary of State? Yes, indeed, there is reason, and perhaps opportunity now, to hold the World Bank to account.

And what can we expect from the central character in this farcical drama? Why is he staying until the end pf the fiscal year, if he is not going to make policy or personnel decisions, or attend meetings? Will he return to academe (e.g., Johns Hopkins) and fade away? Or revive PNAC (Project for the New American Century)––the neocons’ jihad? Or write the books and make the speeches about Iraq and Middle East policy that the Bank would not permit him to publish? Or perhaps manage a one-car funeral?

Posted by Martin McLaughlin, Adjunct Associate, Food Security Project.

Darfur Mothers: Caught in the Conflict

How does one begin to understand the plight of mothers who are living in areas of conflict, war, great poverty?  How does one truly relate to a mother who has no food to give her crying, starving baby?  How does one stand in solidarity with a mother who can be prosecuted if she gives birth to a child that resulted from rape by her enemy, but who bravely births and then cares for her child?  In Darfur we find many of these mothers.

The Darfur mother may be a member of the semi-nomadic cow herding Arab Hotia tribe or the nomadic Arab Abala tribe.  For centuries these tribes lived in harmony with one another.  Then in February 2003, rebels took up arms against the Sudanese government, complaining that almost none of Sudan’s wealth was being distributed to the Darfur region.  In response, the government mobilized Arab militias, called Janjaweed.

Thus the lives of so many Darfur women changed.  The Darfur mother  is often confused by the politics and cannot relate to human rights organizations who fired the first shot.  Following murderous attacks on her village in which huts, animals and household belongings are torched, men are killed, and women are often raped, the Darfur mother treks, with her children,  many days across the barren desert, fleeing the enemy and arriving at a refugee camp where upwards of 15,000 are often gathered.  Thus she joins  the 2.5 million people who have been displaced during the past four years.

The Darfur mother at the refugee camp must start with scraps of plastic and cloth to construct a new home, which is not much more than shelter from the hot burning sun.  She awaits the arrival of trucks that bring basic food rations to feed her family, but even these trucks are often ambushed.  She can no longer rely on a few chickens or goats nor even a few vegetables from a garden plot to feed her family.  She has lost all she has and now is completely reliant on humanitarian aid for survival.  Water is a scarce commodity that also implies danger.  To access water, she must often go outside the relative safety of the refugee camp in order to go to a river or well.  Along the way, she may be captured by enemy forces, raped and branded.  The 12 liters per day that she is strong enough to carry is enough only for basic drinking and cooking, not for washing clothes nor bathing away the sweat of the day.

The Vatican, U.S. Catholic Bishops and world leaders have called on the Sudanese government to allow peacekeepers to enter the region.  As a result of these negotiations Sudan has agreed to an expansion of a small peacekeeping force of the African Union.  Special UN envoy to Sudan, Jan Eliasson reports that the regional government of southern Sudan plans to bring together Darfur rebel factions for a meeting in preparation for future peace talks with Sudan’s central government.  Eliasson at the same time expressed concern about three developments:   “land grabs, infighting among Sudanese tribes, and a radicalization and taking up of arms by refugee camp residents.  The U.S. government is considering the expansion of an airfield in Chad which borders the Darfur region.  [For more information refer to www.washingtonpost.com/world]

As the governments of the world consider their next steps, the women and children of the region remain vulnerable.  Perhaps putting a face on the situation – entering into solidarity with the Darfur mother – can quicken the process of intervention, which has been painfully slow and unproductive for many, especially the very real people being impacted each day by our delay.

Sources: ”Talks May Help Unite Rebel Forces in Darfur”, Nora Boustany, The Washington Post, May 17, 2007;  Oxfam America, Human Rights Watch, UN Office for the Coordination of Humanitarian Affairs, Amnesty International, Physicians for Human Rights.

Posted by Sr. Janet Cashman, SCL - Intern, Center of Concern

Undocumented Immigrants are People Too

I spend Tuesday evenings at a community organization teaching a class on citizenship and advocacy to Latino immigrants in preparation for their naturalization exams. Recently, we had a class discussion about one of the most important responsibilities of a citizen—using one’s time to make positive changes in his or her community. I asked the students, “What do you want to change in your community?” Some of their answers included:

“I want to get the trash on our streets cleaned up.”
            “I want my neighborhood to be safer and quieter.”
            “I want to help people who don’t know English.”
            “I want people to be able to get jobs who need them.”
            “I want there to be more special classes at school to help kids with disabilities.”
            “I want to help older persons in my community.”

Having worked with (and lived in the same neighborhood as) immigrants for several years, I sometimes reflect on how these hard-working people, who often overcame significant struggles in their homelands be fore arriving in the U.S., are such inspiring symbols of hope for a country that prides itself on being a land of opportunity.

Different perceptions about immigrants are revealed through the words spoken by various parties. When the Catholic Church talks about immigrants, it talks about persons, filled with dignity and deserving of respect. In the U.S. Catholic bishops’ Justice for Immigrants Campaign literature, one of the 5 principles that the bishops say should guide immigrant reform is respect for human dignity: 

Persons who enter a nation without proper authorization or who over-stay their visas should be treated with respect and dignity. They should not be detained in deplorable conditions forlengthy periods of time, shackled by their feet and hands, or abused in any manner. They should be afforded due process of the law and, if applicable, allowed to articulate a fear of return to their home before a qualified adjudicator. They should not be blamed for the social ills of a nation.

Clearly, the focus is on the fact that above all else, the immigrant is a person, made in God’s image. Three out of the other four principles also focus on the immigrant as a person: persons have a right to find opportunities within their homeland; persons have a right to migrate to support themselves and their families; and refugees and asylum seekers should be given protection. The final principle, that sovereign nations have a right to control their borders, is tempered by the notion that they also have “an obligation to the common good” and that “nations should seek to accommodate migration to the greatest extent possible.”

The bishops urged Congress to consider these five principles above all when they begin discussions on compromise immigration legislation the week of May 14. In the case that the negotiations fail, there will be two options on the table about which the bishops have made their position clear.

The STRIVE Act (The Security Through Regularized Immigration and a Vibrant Economy Act of 2007) allows undocumented persons an eventual path to residency and later, citizenship; provides visas for a temporary worker program; legislates wage and worker protections for some industries; reduces the huge backlog of applications for family members to come to the U.S.; provides more legal assistance for the detained; and requires the U.S. to assist Mexico in addressing some of the root causes of why immigrants come. The bill is not perfect: none of these improvements could be made before border security is strengthened, and punishments against the undocumented and those who assist them would be stricter, are two examples.

But STRIVE seems golden when compared to the White House plan, which creates a prohibitive cost burden for immigrants who want to apply for work permits and later, citizenship; does not provide enough visas; has no labor protections for workers; and stipulates the creation of the 370-mile border fence on the southern border before any changes can be made. 

For this reason, the bishops are urging principles of comprehensive immigration reform to be considered in negotiations next week. But if those fail and the choice is between STRIVE and the White House plan, the former wins out by a long shot.

Complicating the situation is that radical anti-immigrant organizations like the Federation for American Immigration Reform (FAIR) use fear of the "other" as a main component their anti-immigrant website rhetoric and are trying to scare congresspersons into security-only immigration reform. The worst part is that they pretend to represent a majority of the public when they make assertions that:

• More immigrants means more violent crime.
• “Illegals” are an “enormous drain on public funds."
• Their presence in the U.S. “furnishes an opportunity for terrorists to blend into the same shadows while they target the American public for their terrorist crimes.”
• There are three major components of immigration control: “deterrence, apprehension and removal,” and these must be strengthened “if effective control is ever to be reestablished.”

The striking thing about this type of literature is the absolute inability (or perhaps unwillingness) to recognize undocumented immigrants as real persons with real needs. And of course, there is no acknowledgment of the root causes of immigration. (See my Nov. 2006 blog for a discussion of aid, trade and debt policy as structural factors that need to be addresses in any real immigration debate.)

Interestingly, recent polls of actual public opinion in the U.S. show that FAIR’s ideas of reality are not how most Americans see things. Here are some interesting results from polls posted on the National Immigration Forum website:

• In a Washington Post/ABC News poll in April, 62% of respondents thought undocumented immigrants should be allowed to keep their jobs and eventually apply for legal status, as opposed to being deported.
• A New York Times/CBS poll in March showed 59% of respondents agreeing that the undocumented should be allowed to keep their jobs and apply for legal status.
• In a Gallup/USA Today poll, also in March, 59% answered that the undocumented should be able to stay if they meet certain requirements over a period of time.

The results of these polls reveal that most Americans, like the U.S. bishops, actually do see immigrants as real persons. They, perhaps, would not be so surprised to enter my Tuesday night class and see Latino immigrants eagerly raising their hands to answer questions about U.S. history, Constitutional rights, and the duties of citizens. I don’t know about you, but I’m ready to help more of the immigrants in my community move out of the shadows and into a space where they can fulfill some of their dreams for better schools, cleaner streets, and safer neighborhoods—as citizens. Join with the bishops and call your congressperson today to ask for comprehensive—not fear-driven—immigration reform.

by Jill Rauh, Senior Program Associate, Education for Justice

The Three C’s of World Bank Practice: Corruption, Clientelism, and Cronyism

The Spring meetings of the World Bank and the IMF (April 14-15) were completely overshadowed this time by the corruption scandal engulfing World Bank president, Mr. Paul Wolfowitz. At issue is the role Mr. Wolfowitz played in securing a promotion and a substantial pay rise for his domestic partner, Ms. Shaha Riza (former World Bank press officer) when she transferred to the State Department in 2005. The scandal brewed for nearly a month, prolonged by Mr. Wolfowitz’s various attempts to mislead inquiries about the situation. 

It was only on Friday April 12 that Mr. Wolfowitz apologized about the situation and offered to release all documentation, including a memo detailing the instructions he actually provided to the Bank’s head of human resources. While a forced resignation seemed unavoidable over the weekend, the Board of Directors continues to review the matter. 

Several aspects of the situation –beyond those that make it suitable tabloid material—are worth highlighting.

First, the scandal exposes the risks and flaws of the current process for selecting the leadership of such an influential institution. Leadership for the World Bank and International Monetary Fund are chosen by majority vote in the Board.  Seems fair in theory, but the EU and US have such a disproportionate number of votes that they have final say. Through a “gentleman’s agreement” the US chooses the President of the Bank and the European governments choose the head of the IMF.  As you’ll recall, the decision to appoint Mr. Wolfowitz was made by the current US administration after limited consultation.

Critics have called for an open and competitive process where several candidates are formally considered and required to defend their credentials and visions for the institutions. If anything, the ongoing scandal is illustrative of the need for a thorough and public review and scrutiny of the character and credentials of candidates.

Second, in an ironic twist, shortly after taking over his duties Mr. Wolfowitz launched an anti-corruption drive, pushing for making good governance and the fight against corruption a critical element of the World Bank activities. Understandably, the events of this year’s Spring meetings, unveiling corruption and mismanagement at the top of the Bank itself, inspired in many thoughts of “poetic justice.” Indeed, there hardly could have been a more straightforward way to expose the contradictions inherent in the claim by the Bank to have the authority to judge corruption and governance in poor countries

Third, the investigation of the affair has brought to light what seem to be ingrained corruption problems in the Bank. The investigation continues to unearth evidence that the Wolfowitz scandal, rather than an isolated event that can be purged by removing him, is just the tip of an iceberg in terms of corruption and clientelism at the Bank. While requests for inquiries on Mr. Wolfowitz have already expanded beyond the affair, some have pointed out that a culture of preferential hiring of family members and those with contacts at the Bank is one that the Bank perpetuates—with Mr. Wolfowitz’s situation being just one more example of it. The role of the Board is also implicated. In fact, can the Board justify its own lack of due diligence? Granted, Mr. Wolfowitz did not follow the Board advice but, reportedly, when the Board learned of the final arrangement for Ms. Riza it said “the conflict of interest had been dealt with appropriately.” An anonymous employee complaint on the same matter, in January 2006, was equally dismissed by the Board. It is impossible not to draw analogies to the scandal around the “oil for food” program in the context of the UN. In that case, the Security Council had overseen all contracts for whose handling the former Secretary General of the UN, Kofi Annan, was being questioned. Yet, governments holding decision-making and even veto power in the Security Council were those very same governments showing the toughest stance on Mr. Annan’s behavior.

The passionate response Mr. Wolfowitz has unleashed inside the Bank is also prompting many questions. Last week one of his two Managing Directors (effectively a number two at the Bank), appointed by him, called for his resignation. Staff at the Bank is deeply divided. The risks that his continuation may result in a permanent state of “civil war” within the commonly perceived monolithic institution, and the repercussions on the Bank’s ability to carry out normal business, are becoming a new source of preoccupation and definitely feature in the calculations of those charged with providing some closure to the affair. No doubt the staff reaction has to do with Mr. Wolfowitz’s controversial background: his role as a close advisor in the Bush Administration, his support of the Iraq invasion, his insistence in surrounding himself with a close-knit group of highly influential advisors linked to the Bush Administration and, finally, what some describe as a slowness to act and lack of vision that has brought the Bank into paralysis.

It is only fair to ask how much of the vitriolic staff reaction is no more than what one might expect from the cadres of any organization who see long held and condoned nontransparent and clientelist practices challenged by an outsider empowered to overhaul them. Should this hypothesis prove right, what are the implications for the nature of past World Bank loans? As corruption hits home, will the Bank continue to assume no responsibility for loans of questionable use to known dictatorial and corrupt regimes? More worrisome, what is the moral of the story for a reform of World Bank practices? What is the lesson for future would-be reformers of the Bank? In fact, in an institution where the general incentive is to move money around and the individuals’ promotions and incentives are linked to that same imperative, taking a hard stance on corruption may be something that can only happen “against great odds”, or not at all.

Finally, the crisis comes at the pressing time of replenishment of the World Bank coffers that lend to the poorest countries. Given the debt cancellation deal of 2005, where the developed countries canceled the debts of some of the most highly indebted developing countries, the pressure is on to raise 165 percent of what it raised last time around. The scandal at the highest level of the Bank structure significantly undermines the credibility of the Bank efforts at this critical time. While reducing the pot of money for poor countries may be of little importance to the US government – its policies have consistently promoted a downsizing of multilateral development institutions—it is certainly a matter of concern to other donors.

Mr. Wolfowitz’s departure increasingly seems not a way out of the problem, but just the lesser of two evils. Whether Mr. Wolfowitz stays or goes, the future standing of the Bank will never be the same.

Posted by Aldo Caliari, Director, Rethinking Bretton Woods Project.