Let's continue in the new forum...!!

   

[ ¥»©«³Ì«á¥Ñ ¤j¥Ð­^©ú ©ó 2006-8-16 08:15 AM ½s¿è ]

Monday, August 14, 2006

EDITORIAL/LEADER
World powers must not let Lebanese ceasefire fail



   
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   Guns should fall silent across Lebanon today as a UN Security Council-negotiated ceasefire to bring almost five weeks of fighting between Israeli troops and Hezbollah guerillas takes effect. There is no guarantee that this will happen, of course - rebels are by nature disrespectful of authority and Israel has vowed to answer threats against its civilians with brute force if the truce is not immediately respected.
That stepped-up battles greeted UN Secretary-General Kofi Annan's announcement of the resolution on Saturday could be interpreted as boding ill for peace; he had, after all, coupled the speech with a suggestion that the sides lay down their arms immediately to respect the spirit and intent of the decision.


Such pessimism should be put aside, however, because although the ceasefire has been called to stop the killing of Israeli and Lebanese civilians - more than 1,000 of whom have died already - the ramifications are of a far wider nature. At issue is the credibility of the security council.

For this reason, none of the council's permanent members - Britain, China, France, Russia and the US - can afford to have the truce fail. For the sake of their desire to ensure global stability, they must see the resolution carried out to the letter.

That means bringing the ceasefire into effect as quickly as possible and putting 15,000 foreign peacekeepers and an equal number of Lebanese troops into place in southern Lebanon. Israel must pull back its forces to Israeli territory and the Lebanese government must ensure that Hezbollah militias are disarmed and neutralised. Then, a process to bring permanent peace to the region must begin.

In the weeks leading to Saturday's resolution, such resolve was mostly lacking. Vested interests, disagreement and an absence of will marked the council's initial inaction. Only when international outrage at the loss of civilian life and destruction of Lebanon became overbearing did council members move towards the agreement that they should have swiftly come to at the outset.

Such behaviour is shameful for an organisation claiming to promote the peace and stability of the world's people. While under the UN's watch, hundreds of thousands of lives in Israel and Lebanon have been destroyed or disrupted. Lebanon, a nation that has experienced too much hardship through civil war and conflict with Israel, must again be rebuilt.

With its resolution, the security council has shown that it is not entirely toothless. Now, for the sake of its worth in international eyes, it must do its utmost to ensure the Israeli and Lebanese governments and Hezbollah comply and move towards a lasting peace.

The world's most powerful nations have no choice other than to make their pledge become reality: they owe it to the innocent people in Israel and Lebanon caught up by procrastination and inaction.

http://focus.scmp.com/focusnews/ZZZZM34LQQE.html

i really appreciate your tireless effort... Well Done

¤Þ¥Î:

­ì©«¥Ñ ¤j¥Ð­^©ú ©ó 2006-8-14 08:38 µoªí
Monday, August 14, 2006

EDITORIAL/LEADER
World powers must not let Lebanese ceasefire fail



   
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----------------------------------------------------- ...

Good.  Keep it up!

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­ì©«¥Ñ ¤ë©] ©ó 2006-8-14 09:12 PM µoªí
i really appreciate your tireless effort... Well Done

Thanks for your support...

Tuesday, August 15, 2006

CRISIS MANAGEMENT
How to avoid a public backlash


ANTHONY CHEUNG
   
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The Hong Kong Observatory was criticised for not issuing the No8 signal when Typhoon Prapiroon battered the city this month. Critics said the weather office put public safety at risk: the winds reached over 200km/h in some parts of the city, piles of shipping containers were knocked down at terminals and more than 600 trees were flattened.

Director Lam Chiu-ying defended the observatory's decision not to issue the top level of public warning on scientific and rational grounds.

However, public sentiment was hostile; some even called for his resignation. This is not the first time that the decisions of professionals in government departments have been challenged by the public. During the outbreak of bird flu in 1997 and the severe acute respiratory syndrome epidemic in 2003, both the Department of Health and the Hospital Authority were blasted for their perceived slow reaction. Despite local misgivings, however, Hong Kong was praised by the world health community for performing well in combating bird flu.

Following the Sars crisis, the Hospital Authority was blamed by its own review panel for relying too much on the traditional, evidence-based epidemiological approach, which required full, "hard" data before confirming the state of the outbreak. The panel called for greater weight to be given to "soft" intelligence in order to overcome mental hurdles created by established practice within the medical profession.

Professionals' reliance on hard data may sometimes prevent them from taking a more flexible approach to a situation.

Two lessons can be drawn from this. First, there is no doubt that professional authority is no longer treated as sacrosanct. With the popularisation of knowledge, ordinary people with good educations are prepared to challenge the decisions of experts. The media, too, is keen to expose flaws in professional views and actions.

Second, professionals in government have to recognise that handling public affairs is both a science and an art. Policy decisions must be evidence-based and rationally reached. However, public perceptions and expectations should also be part of the equation. Crisis management often fails simply because of poor communication and different ways of thinking between officials and citizens. But there is no reason why professional excellence must necessarily imply inadequate political good sense.

In Hong Kong, a typhoon signal is not just a scientific indicator. Decades of typhoon signals have conditioned people and businesses alike to use them as the sole guide to behaviour. Thus it's crucial to think about how the signalling system can do a better job of putting people on the alert. The Observatory should constantly review the criteria for issuing typhoon signals; alerts are necessary for specific weather conditions in different parts of the city.

The Observatory should continue to issue typhoon information based on scientific grounds - such as wind force and direction. But it's also necessary to supplement that information with related precautionary advice. Such advice should take account of the changing sprawl of the population, economic activities, local weather and traffic conditions,  as well as special community needs.

Releasing emergency information should be better co-ordinated by the government centre, and not left entirely to scientists.

Anthony Cheung Bing-leung is an executive councillor and founder of SynergyNet, a policy think-tank.



http://focus.scmp.com/focusnews/ZZZU43E1VQE.html

pls keep it up.. your effort is appreciated!!

Wednesday, August 16, 2006

OBSERVER
No laughing matter


ALEX LO
   
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   Doh! The ever-subversive Simpsons, along with other foreign cartoons such as Pokemon, Doraemon, Mickey Mouse and the Teletubbies, are to be banned from the mainland's prime-time television - between 5pm and 8pm - from next month.
Media regulators are concerned that homegrown animation programmes have been losing market shares for years, to the extent that they are becoming dinosaurs - but without the extinct creatures' enduring cartoon appeal. By some estimates, foreign cartoons now command 90 per cent of the market. In other words, mainland cartoon productions "suck big time", as Bart Simpson might say.


Instead of encouraging competition by opening markets - as the mainland has done in so many key industries under World Trade Organisation rules - state media regulators are hinting darkly at the undesirable influence of foreign cartoons on mainland children. Homemade cartoons, they say, such as the Monkey King, should be promoted in their place - they have greater educational value.

This does not bode well for the mainland industry. Thru the Moebius Strip, billed as the mainland's most expensive animated feature to date - at a cost of 130 million yuan - has bombed at the box office this month.


The prime-time ban, issued by the State Administration of Radio, Film and Television, will affect all TV stations. Mainland media pundits, appropriately, are already heaping scorn on the latest example of communist bureaucratic ineptitude. Guangzhou's Southern Metropolis News thundered: "This is a worrying, short-sighted policy and will not solve the fundamental problems in China's cartoon industry."

The irony is that the mainland has an army of talented animators. Most of them, however, are employed by foreign giants such as Disney, Warner Bros. and big-time Japanese studios.

But, like all things on the mainland, there may be a hidden political dimension. Some may think that mainland censors are using the blanket ban as an excuse to get rid of the Simpsons, undoubtedly the most subversive of the lot.

You may remember the controversial Goo Goo Gai Pan, episode 347 of the Simpsons, which was first broadcast in March last year in the United States. I am pretty sure the mainland distributor dropped that one, though I have not been able to confirm this. The episode sees Selma, Homer's older, chain-smoking sister-in-law, going through the menopause and deciding to adopt a baby from China. She is unmarried, but under state laws, only married foreign couples can adopt. So Homer pretends to be Selma's husband when they fly to China.

On his state adoption form, Homer puts down his profession as an acrobat, as an in-joke, until he is asked to substitute for a performer who has recently suffered a "bullet-related death" for questioning the Communist Party. He is told the performance is necessary to forestall a riot brought on by the audience's realisation that the party is not infallible.

Homer is hurt badly in the performance, but they manage to adopt baby Ling from an orphanage. Unfortunately, Madame Wu - the Beijing functionary whose voice is provided by Chinese-American actress Lucy Liu - learns the truth and rolls a tank into Tiananmen Square to stop the family leaving. With her body, Selma blocks the tank from advancing, and reasons with Madame Wu.

The episode also contains some controversial dialogue:

Madame Wu: "Lisa [Homer's young and super-smart daughter], soon you will have a Chinese sister who will surpass you academically."

Lisa: "I don't know. I'm considered pretty smart."

Madame Wu: "Well, Tibet was considered pretty independent. How'd that work out?"

In another scene, the American family visits the embalmed Mao Zedong . Homer: "Ohhoh, look at him, he's like a little angel ... who killed 50 million people, goochee goochee goo! Yes you are!"

Such foreign cartoons simply insult the feelings of the Chinese people.

Alex Lo is a columnist and senior reporter at the Post.

http://focus.scmp.com/focusnews/ZZZSFVE1VQE.html

§V¤O.....

thank you very much.

thank you

Thursday, August 17, 2006

EDITORIAL/LEADER
Bloomberg's welcome initiative on smoking



   
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   As new problems emerge, old ones often get forgotten without being solved. It is thus refreshing to see New York Mayor Michael Bloomberg donating US$125 million of his own money to campaign against a health problem that is considered very much passˆm - smoking.
It is interesting to note that Mr Bloomberg's announcement came as Aids is very much in the limelight. A week-long conference being held in Vancouver has - once again - turned the spotlight on what is still regarded as one of the world's most threatening epidemics. HIV, responsible for causing Aids, was discovered a little over two decades ago, and funding for research to find a cure is ballooning. The Bill and Melinda Gates Foundation, for example, has contributed US$1.9 billion to the fight.



Sars and bird flu are two other newly discovered health issues that are also attracting increasing attention. Amid the frenzy to unravel their mysteries, however, it is all too easy to forget that there are other less captivating, but no less threatening, health problems that remain unsolved. Smoking is one of them. According to the World Health Organisation, tobacco consumption is the single leading preventable cause of death. Every year, it results in the premature deaths of nearly 5 million people. And if current smoking patterns continue, the number of deaths will double to 10 million a year by 2020.

Regrettably, smoking remains widely popular, even though its harmful effects, including second-hand smoke, are already well documented. Nor is its prevention a tardy business. One only needs to summon up the determination to quit. But perhaps so much is known about smoking that it has lost the attention it deserves or the funding required to combat it. Money is needed not so much to find a cure, but to protect children and young people from tobacco, to prevent them from taking up smoking, to support smokers to quit and to protect non-smokers from second-hand tobacco smoke. These preventive measures require dedicated efforts to lobby governments and fight established interests, to pass laws and introduce rules to ban or discourage smoking. Hong Kong's uphill battle to ban smoking in public places is a case in point.

By donating a large sum of money to tackle a problem such as smoking, which has gone off the radar screen of many philanthropists, Mr Bloomberg is doing the world a great service. In 2003, the WHO spearheaded the passage of an international treaty on tobacco control, but its implementation has been slow.

The campaign against smoking is not the only health issue that would benefit from similar donations. For example, malaria remains an endemic problem, particularly in Africa where it kills more than 1 million people a year. The world would be a healthier place if more philanthropists followed Mr Bloomberg's example.


http://focus.scmp.com/focusnews/ZZZ8R9PWXQE.html

thx

Friday, August 18, 2006

EDITORIAL/LEADER
Population policy must strike right balance



  
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   The mainland's population problem is not just one of size, but also of structure. In a worrying development, the structural problems are getting worse even though efforts to control growth are largely a success. The population is still set to increase, from 1.3 billion now to a projected peak of 1.45 billion by 2030, and the structural issues make the task of managing this growth that much more difficult.
Topping the list is the serious imbalance between the sexes, with many more boys born than girls. While the problem is not new, the fact that it is getting more serious despite measures to tackle it is unsettling. To prevent the abortion of female fetuses, the improper use of ultrasound equipment for sex selection has been banned in many parts of the country. Other measures include the Girl Care Project that encourages rural families to value daughters as much as sons and the offer of financial incentives to parents of girls. The last measure is particularly noteworthy, as it strikes at the heart of the problem - the underprovision of social services and lack of retirement protection for the country's mainly rural population.


Although traditional values favouring boys who can carry on the family lineage remain strong, they are fading as modern values of sexual equality permeate the younger generation. But until the countryside is covered by a proper social security system, rural people will continue to hang on to the idea that having a son is the most dependable way of providing for old age.

One encouraging sign is that attitudes towards child-bearing and parenting among the educated and urbanised Chinese are no different from those of their counterparts in the developed world. They are less likely to discriminate against girls and more inclined to have fewer or no children. In Shanghai, for example, declining birth rates have even prompted the city government to encourage the birth of a second child. Much as Hong Kong is fretting about a greying population, Shanghai is worried that its shrinking workforce will put a heavy burden on the young to take care of the elderly.

Currently, only about 42 per cent of the mainland's population is urbanised, and the rate is considered low relative to its level of industrialisation. Perhaps the most effective way of addressing the population's gender imbalance and bulging growth lies in quickening the pace of urbanisation.

To be sure, policymakers have already identified urbanisation as a solution to many ills, notably rural poverty. They regard managing the process of urban growth as a critical challenge. The household registration system that used to bind peasants to their land and bar them from coming to the cities has largely been scrapped. But peasants still face tremendous difficulties being accepted as city dwellers. City governments' means of funding and providing social services have yet to adapt to the reality that migrants from the countryside are a permanent feature that must be provided for.

From a macro perspective, the huge size of the mainland population remains the biggest concern. But the problem manifests itself in various forms in different parts of the country. Some of the structural issues are localised. Presumably, they could be eased by a freer flow of people between the countryside and cities and a significant boost to social services in rural areas. Shanghai may find declining birth rates less of a problem if young blood continues to flow in from other parts of the country and its retirees find relocation to the countryside a realistic alternative.

As Hong Kong tries to map out its own population strategy, the mainland's population trends are instructive. For cultural reasons, our rising number of unmarried women may not desire to pair up with bachelors from the mainland. Our borders with the mainland will, for a long time to come, impede mainlanders from flooding in. But the scenario of those borders coming down sooner than we expect - either by design or pushed by events - is one that we should not ignore.


http://focus.scmp.com/focusnews/ZZZE3DPWXQE.html

let's learn real English everyday

¤Þ¥Î:

­ì©«¥Ñ ¤j¥Ð­^©ú ©ó 2006-8-14 12:38 AM µoªí
Monday, August 14, 2006

EDITORIAL/LEADER
World powers must not let Lebanese ceasefire fail



   
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Thank you!

Monday, August 21, 2006

EDITORIAL/LEADER
Determination needed to solve rubbish crisis



  
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   Garbage is not something we like to think about: after dumping it outside our door, we would like that to be the end of the matter. Given that a garbage crisis looms, with our three landfills nearing capacity, that attitude must quickly change.
Waste disposal is a problem for cities the world over. Hong Kong has the added difficulty of not enough space on which to dump refuse and a government that took up the matter later than it should have.


Even though various measures are now in place, or are being introduced, to deal with waste reduction and recycling, there is no sense of urgency about their implementation. Nor does Hong Kong have the big incinerators other cities use to reduce the amount of material going into landfills; due to a slow legislative process, the high likelihood of legal challenges and lengthy construction time, none is likely to be off the drawing board and in use before our rubbish dumps reach capacity, between the next four and eight years.

Hong Kong people's concern about the air pollution all too frequently blotting out blue skies would seem to indicate a keen environmental awareness. The amount of unnecessary garbage being tossed into tips clearly states the opposite.

The government claims that reversing such a practice is a matter of education. It believes educational campaigns will go a long way to ensuring that 80 per cent of residents will be sorting household rubbish for recycling by the end of the decade. As proof, Environmental Protection Department officials point to the household rubbish recycling rate rising from 8 per cent in 1998 to 16 per cent last year; they expect it to be 20 per cent next year. Projects to increase the convenience of recycling are also seen as the way forward in cutting down waste.

Compared with other big developed cities such as London, New York and Tokyo, we are no better or worse at recycling. Our circumstances are somewhat different, however.

Hong Kong's environmental officials have toured the world and inspected how other cities deal with rubbish. They well know that the solution lies not in a voluntary system or convenience, but in making recycling compulsory, as happens in Taipei and Munich. Even implementing a scheme, as in Vancouver or Sydney, where rubbish will not be collected if it has not been sorted into bags or bins containing recyclable material and other waste substantially boosts rates. Under such systems, residents quickly learn the value of recycling and develop a sense of social responsibility that they would not ordinarily have attained.

Companies in such cities also have to act responsibly by ensuring the goods they produce and sell can be reused as much as possible. They are held responsible for the disposal of hazardous materials and equipment that contains material harmful to the environment.

Our government is just now tackling the latter approach and has a timetable for implementation of laws for the proper disposal of plastics, electrical equipment, batteries, tyres and the like. Given its reluctance to legislate on new restrictions involving business, however, there is a danger that laws will be weakened.

While Hong Kong's household recycling rate is poor considering the urgency of our waste disposal problem, a model system has long been in place when it comes to construction firms: they have to pay for the waste they dispose of in landfills. This encourages them to dump as little as possible by selling reusable material to recyclers and has helped push the city's overall recycling rate to 43 per cent.

As impressive as this figure sounds, it is well below the 70 per cent achieved by many cities in northern Europe and Scandinavia. There, a culture has evolved where caring for the environment goes well beyond what gets put in the garbage.

Other cities have shown that where there is will, a solution to waste problems can be found. That determination is what Hong Kong needs and with the government taking the lead, we can find a way out of our impending mess.


http://focus.scmp.com/focusnews/ZZZ97R7XZQE.html

thank ~ keep going

Tuesday, August 22, 2006

YANTIAN PORT DEVELOPMENT
The threat to Hong Kong's ecotourism


MARKUS SHAW
   
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The more Hong Kong merges with the economy of the Pearl River Delta, the more clearly we see the need for regional planning - and the sustainability it would bring.
One example is the continued development of the Yantian container port in Shenzhen, which is growing enormous. With increasing shipping traffic and port development at Yantian, water-borne rubbish and bilge-oil discharge have become major problems in the waters of Mirs Bay.

On a recent visit to the beautiful beaches of Tai Long Wan (which faces Mirs Bay), I was stunned by the amount of rubbish both on the beach and in the water. Only 10 years ago, these waters were fairly pristine.

The beaches of Tai Long Wan feature in many tourism adverts for Hong Kong: they would do well not to zoom in too closely. The same problems are facing the marine parks of Yan Chau Tong and Tung Ping Chau, which are even closer to Yantian.

These developments put at risk the government's and community's aspirations to turn our northeastern waters and countryside into a conservation and ecotourism zone. Those familiar with the area will know that it is one of the most beautiful and scenic in the world, combining green hills and turquoise waters to stunning effect.

As the Pearl River Delta region becomes increasingly blanketed by concrete and development, so the value of such beautiful countryside increases. Quite simply, it provides a unique opportunity to combine conservation and commercial exploitation in the form of ecotourism. The communities in that area are sitting on a priceless asset, if only they knew it. Now I fear that our own efforts to conserve the northeast and develop a thriving ecotourism industry may be rendered futile in the face of increased pollution - caused by untrammelled development on the mainland side of Mirs Bay.

At the same time, there are longstanding fears of competition to our port from the ports in Yantian, Shekou and Chiwan. Yet Hong Kong's major advantage is that it has the only deep-water port in the area (all the others must be continuously dredged to maintain a shipping channel).

The main difficulty for Hong Kong's port seems to be its distance from mainland factories and the inefficiencies of cross-border traffic. For some time, I have asked whether it would be possible to build a dedicated railway line linking the Hong Kong port with a distribution centre in China. Containers arriving on ships would be placed directly on trains and taken to the mainland distribution centre, and vice versa.

This would increase the speed and efficiency of distribution from the Hong Kong port to mainland destinations. It would eliminate the problem of the huge volume of road and river transport of containers between Hong Kong and the mainland, which contributes significantly to air pollution.

For those in government and the community who are still wedded to the idea of large-scale infrastructure projects, here's a solid proposal that would actually bring some major, sustainable benefits.

Markus Shaw is chairman of WWF Hong Kong.

http://focus.scmp.com/focusnews/ZZZ65GL74RE.html

Thanks!  It is very nice of you!  

Wednesday, August 23, 2006

IRANIAN NUCLEAR CRISIS
The chance for China to shine


KEVIN RAFFERTY
   
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The world has been brought to a dangerous precipice by the Iranian nuclear issue. But Tehran's hostility towards the trade and other concessions offered by the UN Security Council - in return for giving up its nuclear enrichment programme - is also a golden opportunity for China.

Indeed, this could be the defining moment of Beijing's international maturity. Is China prepared to be part of the global government system and to play a leading role in creating much-needed new rules of international behaviour? Or will it continue to play short-sighted, selfish games?

Iran's supporters say possessing a nuclear bomb is the most powerful symbol of a country's modernity, and a guarantee that it cannot be pushed around. The particular problem that Iran poses is that the world should not only worry about proliferation of nuclear weapons to Iran, but also nuclear proliferation from Iran.

The Iranian government is behaving as the natural heir to the Persian imperial tradition, ironically following in the footsteps of the late, unloved shah. When he helped trigger the quadrupling of oil prices in the 1970s, the shah declared that he wanted to use the income to build up his navy so it could patrol the seas between Iran and Australia.

The current Iran of the mullahs sees itself as the messianic sword arm of a crusading Islamic revival. Its support for Hezbollah reinforces the worries that Iran with a nuclear weapon would threaten stability, and not merely in its own backyard.



The five security council members - the United States, France, Britain, Russia and China - plus Germany, must offer carrots as well as sticks to Tehran. An Iran that can be engaged and modernised could become a force for stability in the Middle East. Unfortunately, Iran appears set to press ahead with its controversial nuclear work. This means that the six nations have to consider diplomatic sticks, including the threat of sanctions, as US President George W. Bush has urged.

Unfortunately, sanctions often fail: there is always someone with an interest in doing business with a rogue regime. Beijing has been propping up many oppressive governments, from Myanmar to Sudan and Zimbabwe. Beijing is playing an important role on the Iranian issue, too, as the leading supplier of arms to Tehran. This includes not just tanks and guns, but surface-to-air and surface-to-surface missiles of the kind that Iran has passed on to Hezbollah.

Although no one has firm proof - and it would be forbidden under China's commitments to the nuclear Non-Proliferation Treaty - Beijing has been suspected of passing on nuclear know-how to Tehran.

China has good, selfish, short-term and short-sighted reasons for its support of regimes in Myanmar, Iran and Sudan: notably, its anxiety to secure energy and other natural resources, to underpin its rapid economic growth. And if, at the same time, it pokes the US in the eye, that isn't likely to worry it.

Deng Xiaoping gave the advice that China should "hide brightness and nourish obscurity ... to bide our time and build up our capabilities". It was good advice at the time, but Beijing has since experienced decades of rapid economic growth.

China is now a world economic power - whether its own rulers or Washington like it. And because of that, it is creating a large political footprint, too. It can no longer hide its brightness in obscurity. Nor can Washington - in spite of Mr Bush's best efforts - hope to get its own way, unchallenged, on large international issues.

But this means that China now has responsibilities, too. It is not in Beijing's interests to see the spread of nuclear weapons. It is odd that a government anxious to suppress domestic dissent, and one that looks askance at Hong Kong's wishes for democracy, would welcome nuclear weapons in the hands of an Islamic, revolutionary Iran. The prospect that such weapons might spread to terrorists should be a major worry to a government that has its own discontented Muslims and other suppressed dissidents.

Beijing could play a key, constructive role in pointing out to Tehran the advantages of co-operation rather than confrontation with the rest of the world. If it comes to the need for sanctions, China's support will be essential both in convincing Iran that the rest of the world is serious, and in making sanctions work as never before.

Being a key player on this pressing issue for global co-operation would strengthen China's image immensely. It would also demonstrate to Mr Bush, in a practical way, that there are limits to an imperial US presidency.

Whether China's leaders can respond to the challenge remains an open question. They may head the biggest nation on Earth, with the fastest economic growth the world has seen. But politically, President Hu Jintao and Premier Wen Jiabao have so far shown themselves to be short-term and short-sighted players - with little understanding of the historic opportunity awaiting them and China.

Kevin Rafferty is editor-in-chief of PlainWords Media, a consortium of journalists interested in development issues.



http://focus.scmp.com/focusnews/ZZZW2QHH6RE.html

Thursday, August 24, 2006

US CREDIT BOOM
Spend, spend, spend: the end


ROBERT SAMUELSON
   
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   America is at the end of the credit boom - certainly the six-yearboom, and maybe even the 60-year boom. Has any society ever created so many ways for people to go into hock? In 2003, Americans had 1.46 billion credit cards, or five per person on average. Home mortgages now total US$9 trillion.
In 1946, households had 22 cents of debt for each dollar of disposable income. Now they have US$1.26. Behind these figures lies a profound social upheaval: the "democratisation" of debt. Everyone gets to borrow. But this process may have reached its limits.


Although Americans are routinely stigmatised as credit junkies, that's unfair. Of course, some people do borrow too much, and some financial institutions do lend abusively. Still, the democratisation of debt has generally been a good thing: millions of families can now borrow for university educations, cars and clothes. The biggest boon has been the expansion of home ownership, up from 44 per cent of households in 1940 to 69 per cent today. Three-quarters of household debt consists of mortgages.

At heart, Americans' appetite for credit reflects national optimism. We presume that today's debts can be repaid because tomorrow's incomes will be higher.

The origins of today's credit culture date to the 1920s, with the advent of instalment payments for cars and appliances, says economist Martha Olney of the University of California. In the 19th century, "it was thought that only irresponsible families bought on credit", she says. "By the 1920s, it was only foolish families that didn't buy on credit, and use it while they were paying for it."

After the second world war, credit became part of the mass market. The combination of aggressive merchandising, and laws prohibiting racial and ethnic discrimination in lending, led to a huge expansion of borrowers.


The trouble is that no society can forever raise its borrowing faster than its income - which is what America has been doing. Sooner or later, debt burdens become oppressive. One reason for thinking America has passed that point is that the last spasm of credit expansion was partially artificial. To soften the 2001 recession, the US Federal Reserve embarked on an audacious policy of easy credit. From December 2001 to November 2004, it held its key, short-term interest rate under 2 per cent.

A property bonanza ensued. The frenzy depended heavily on low-interest-rate mortgages. But what the Fed giveth, the Fed taketh away. Since June 2004, it has raised short-term interest rates from 1 per cent to 5.25 per cent. Whether the Fed achieves the vaunted "soft landing" - an economic slowdown that reduces inflation without causing a recession - hinges heavily on how the credit boom of the last few years unwinds. If it ends violently, with a crash in home prices and housing construction, a recession could follow.

This turn of the credit cycle could signal the end of the decades-long rise of personal debt as a proportion of income. It is not just that debt service - interest and principal - is at a historic high, or almost 19 per cent of disposable income. Since 1989, the share of households with debt has risen from two-thirds to three-quarters.

For years, the democratisation of debt stimulated the economy. What happens without that prop? For better or worse, we may soon learn.

Robert Samuelson is a Washington Post columnist.


http://focus.scmp.com/focusnews/ZZZ4677H6RE.html

Friday, August 25, 2006

EDITORIAL/LEADER
A lesson in the changing nature of universal truths



   
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   The International Astronomical Union has spoken and set in stone - until the next debate, at least - the composition of Earth's neighbourhood. But while this may have seemed to have been an argument about whether Pluto is or is not a planet, in reality it has been one of far greater gravitas - the questioning of science itself.
In our fast-changing world, there can be no better lesson for those among us who are reluctant to review and amend our beliefs and practices.


For the majority of us, the thought that Pluto is not what schools have been teaching since its discovery 86 years ago seems quaint. Astrologers and others in the business of star gazing and fortune telling see it much more seriously. To some others, so much fuss about a small rock so far away is absurd. A small number among us, disinterested in what lies beyond the atmosphere or perhaps just poor students or too young to understand, may wonder why a harmless Disney dog is making headlines.

Whatever our feelings, though, in the back of most minds is the sense that familiarity has been tampered with. Like a badly food-stained favourite shirt or well-worn, but comfortable, slippers, Pluto was not something to be so willingly discarded. This was a case of an old friend being in hospital and potentially at death's door.

Scientists are not so emotional. They are forever making discoveries that make previous findings obsolete. No scientific branch is as ever-changing as astronomy, where each new glance at a telescope or gathering of satellite data alters charts. What was in the heavens last night will be added tomorrow. Such change is exciting rather than distressing for astronomers. They know that with each new finding, they are a step - albeit a miniscule one in all but a few rare cases - closer to understanding the universe.

More broadly, though, Pluto has proven a paradigm shift for science. This is a phrase much used but little understood by the general populace - although for the scientific community, it has great meaning. First used by American science philosopher Thomas Kuhn 44 years ago, the term describes a dramatic shift in basic assumptions within scientific theory. In science there are frequently anomalies against a paradigm and when enough accrue, a crisis occurs in the discipline affected. New ideas are floated, debate flourishes and truth is reassessed and if necessary, changed.

That is what happened over Pluto and the scientific community has made its reassessment, which we all will live by until evidence indicates it is time to think otherwise. Upheavals can be destabilising, but sometimes they are necessary - particularly when it comes to banishing complacency. Often, taking stock of what we have can also be refreshing. For those of us in need of change, Pluto should become our new symbol.


http://focus.scmp.com/focusnews/ZZZOCCM79RE.html

too long to see