Monday, October 20, 2008

Single Party Rule and the Free Market...Or, It's Only Class Warfare If The Poor Demand A Share, If It's The Rich Getting Richer It's God's Will...Hmmm


Idiom Definitions for 'A rising tide lifts all boats'


This idiom, coined by John F Kennedy, describes the idea that when an economy is performing well, all people will benefit from it.

A rising tide lifts all boats

From Wikipedia, the free encyclopedia

The aphorism "a rising tide lifts all boats" is associated with the idea that improvements in the general economy will benefit all participants in that economy, and that economic policy, particularly government economic policy, should therefore focus on the general macroeconomic environment first and foremost. The phrase is said to have been coined by Seán Lemass, the Irish Taoiseach (Prime Minister) in 19591966.[1] [2] Lemass himself attributed the phrase to John F. Kennedy.[3] Kennedy employed the expression to combat criticisms that his tax cuts would benefit mostly wealthy individuals.[4][5][6]

The expression also applies to free-market policies, in that comparative-advantage production and subsequent trade would theoretically increase incomes for all participating entities. It is a favorite proverb of former U.S. Treasury Secretary Robert Rubin.

The substantive aspect of the statement is that economic growth which raises the GDP of the entire economy will also raise the incomes of all of the individuals within the economy. However, not all industries track the overall economy, and the creative destruction process of capitalism requires inefficient industries to yield to more efficient industries. For the aphorism to be strictly true, one would never expect to see a 'going out of business' sign during a rising economy. There many examples in economic history in which an increase in GDP per capita did not raise the incomes of large groups of individuals in the society. According to the US Census, the real per-capita GDP in the United States increased by 71% between 1980 and 2006, but median household income increased by less than 20%[citation needed].

See also

References

  1. ^ "Speech by Martin Cullen TD, Minister for Transport at the South East 2020 Conference". Department of Transport, Ireland (24 June 2005).
  2. ^ "Speech by Mr. Callanan". Seanad Debates, Vol. 182, No. 4. Office of the Houses of the Oireachtas (7 December 2005).
  3. ^ "Speech by Mr. Lemass". Dáil debates, Vol 208. Office of the Houses of the Oireachtas (15 April 1964). Retrieved on 2008-08-13.
  4. ^ John F. Kennedy (October 3, 1963). "Remarks in Heber Springs, Arkansas, at the Dedication of Greers Ferry Dam.". The American Presidency Project. Retrieved on 2007-04-07.
  5. ^ Gene Sperling (December 18, 2005). "How to Refloat These Boats", Washington Post, p. Page B03. Retrieved on 2007-04-07.
  6. ^ Thomas E. Nugent (July 28, 2006). "A Rising Tide...In More Ways than One:The wisdom of the JFK-Reagan-Bush tax-cut model". National Review Online. Retrieved on 2007-04-07.

External links

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Federal No-Bid Contracts On Rise
Use of Favored Firms A Common Shortcut

By Robert O'Harrow Jr.
Washington Post Staff Writer
Wednesday, August 22, 2007; A01

Under pressure from the White House and Congress to deliver a long-delayed plan last year, officials at the Department of Homeland Security's counter-narcotics office took a shortcut that has become common at federal agencies: They hired help through a no-bid contract.

And the firm they hired showed them how to do it.

Scott Chronister, a senior official in the Office of Counternarcotics Enforcement, reached out to a former colleague at a private consulting firm for advice. The consultant suggested that Chronister's office could avoid competition and get the work done quickly under an arrangement in which the firm "approached the government with a 'unique and innovative concept,' " documents and interviews show.

A contract worth up to $579,000 was awarded to the consultant's firm in September.

Though small by government standards, the counter-narcotics contract illustrates the government's steady move away from relying on competition to secure the best deals for products and services.

A recent congressional report estimated that federal spending on contracts awarded without "full and open" competition has tripled, to $207 billion, since 2000, with a $60 billion increase last year alone. The category includes deals in which officials take advantage of provisions allowing them to sidestep competition for speed and convenience and cases in which the government sharply limits the number of bidders or expands work under open-ended contracts.

Government auditors say the result is often higher prices for taxpayers and an undue reliance on a limited number of contractors.

"The rapid growth in no-bid and limited-competition contracts has made full and open competition the exception, not the rule," according to the report, by the House Oversight and Government Reform Committee.

Keith Ashdown, chief investigator at Taxpayers for Common Sense, a nonpartisan watchdog group, said that in many cases, officials are simply choosing favored contractors as part of a "club mentality."

"Contracting officials are throwing out decades of work to develop fair and sensible rules to promote competition," Ashdown said. "Government officials are skirting the rules in favor of expediency or their favored contractors."

In the case of the counter-narcotics office, a spokesman for the Homeland Security Department said it was not unusual for a contractor to tell agency officials how to arrange no-bid contracts because contractors sometimes know federal procurement regulations better than federal program managers.

Chronister and the former colleague, consultant Ron Simeone, declined to be interviewed for this article. The director of the counter-narcotics office, Uttam Dhillon, defended his office's decision to use the consultants, saying ethics officials at the Department of Homeland Security had been informed of the arrangements and approved them, as long as Chronister did not supervise his former colleagues.

Contracting officials at the department also determined that the no-bid arrangement was okay because Simeone and his subcontractor were uniquely qualified to do the work, in part because they intended to replicate some work they had done for the White House drug office, he said.

"Every step of the way, we followed the advice and guidance of our ethics officer," Dhillon said. "We did everything we're required to do by law and then some."

Dhillon said he was comfortable hiring Simeone after Chronister and another office official described the consultant as a counter-narcotics expert. He said the firm performed well.

"My goal was to get this done as quickly and efficiently as possible," he said. "He obviously had experience with this and was knowledgeable about this."

Homeland Security's counter-narcotics office was formed in 2004 to develop policies that unify various drug-enforcement programs. With fewer than a dozen employees, the office has struggled with deadlines for its budget, annual reports and the development of a system for measuring the effectiveness of drug-control efforts, Dhillon said.

After Dhillon was confirmed as the office's director in May 2006, he made the development of the measure system "one of my highest priorities," he said. He said Congress and the White House had made multiple requests for information that the office could not provide.

A senior manager at the counter-narcotics office had been assigned to the task. But Dhillon said he "came to the conclusion the office was not really in a position" to finish the work.

In July, Chronister asked Simeone for help in developing a system to measure the impact of government interdiction efforts. Simeone in turn decided to hire another consultant, John Carnevale, for help.

Chronister, Simeone and Carnevale had worked together over the years, including at the White House's Office of National Drug Control Policy.

Chronister later worked as a senior policy analyst at Carnevale Associates, a policy consulting firm owned by Carnevale, before joining the counter-narcotics office.

Simeone, too, worked at Carnevale Associates. He is listed as chief scientist, on the firm's Web site. At the same time, Simeone ran his own company, Simeone Associates. Carnevale is listed on that company's Web site as a senior associate.

Carnevale said Chronister sought the meeting with Simeone last July "to explain the problems they were having related to pulling together a performance-measurement system and asked him for advice."

"Simeone suggested an approach, which he turned into a sole-source proposal," Carnevale said in an e-mail.

On Sept. 20, about a week before the contract was awarded, Chronister was given responsibility for overseeing the work, according to an e-mail obtained by The Washington Post.

That changed five days later, when Chronister first told Dhillon about his ties to the consultants, Dhillon said in an interview. On advice from ethics officials at the department, Dhillon told Chronister not to work with Carnevale.

"Chronister was walled off from dealing with the contractor and subcontractor before the contract was signed," Dhillon said. "We made the decision with an abundance of caution."

But contact didn't cease between Chronister and the contractors.

Dhillon eased the prohibition on Chronister's contact with Simeone when the office expanded the demands of the contract, and Dhillon asked the contractor to also help prepare the office's annual report to Congress, which was months overdue. He said an ethics official approved the arrangement.

An Oct. 18 e-mail shows that Chronister was also included in communication involving the original project and a planned conference that included Simeone and Carnevale.

In November, the office organized a meeting with other drug enforcement agencies to present an outline of its plan, called "Performance Measures for United States Counternarcotics Enforcement Efforts." Both Simeone Associates and Carnevale Associates are listed on the documents.

Carnevale said he did not answer to Chronister for his work, which focused on budget matters. "Technically and legally speaking, Simeone was my supervisor," Carnevale said.

Chronister and Carnevale also maintained a close professional tie outside the office: They are listed as the authors of a March 2007 paper, "An Assessment of the U.S. Drug Control Budget." Chronister is listed on the paper as working at Carnevale Associates, and it includes an e-mail address for him at the firm.

Carnevale said the paper was actually written in 2004. He said Chronister was listed as a Carnevale employee because that was his job at the time. Carnevale said Chronister is no longer a paid employee.

Oh, yes, and who paid for this plum:

June 19, 2008

Deals With Iraq Are Set to Bring Oil Giants Back

BAGHDAD — Four Western oil companies are in the final stages of negotiations this month on contracts that will return them to Iraq, 36 years after losing their oil concession to nationalization as Saddam Hussein rose to power.

Exxon Mobil, Shell, Total and BP — the original partners in the Iraq Petroleum Company — along with Chevron and a number of smaller oil companies, are in talks with Iraq’s Oil Ministry for no-bid contracts to service Iraq’s largest fields, according to ministry officials, oil company officials and an American diplomat.

The deals, expected to be announced on June 30, will lay the foundation for the first commercial work for the major companies in Iraq since the American invasion, and open a new and potentially lucrative country for their operations.

The no-bid contracts are unusual for the industry, and the offers prevailed over others by more than 40 companies, including companies in Russia, China and India. The contracts, which would run for one to two years and are relatively small by industry standards, would nonetheless give the companies an advantage in bidding on future contracts in a country that many experts consider to be the best hope for a large-scale increase in oil production.

There was suspicion among many in the Arab world and among parts of the American public that the United States had gone to war in Iraq precisely to secure the oil wealth these contracts seek to extract. The Bush administration has said that the war was necessary to combat terrorism. It is not clear what role the United States played in awarding the contracts; there are still American advisers to Iraq’s Oil Ministry.

Sensitive to the appearance that they were profiting from the war and already under pressure because of record high oil prices, senior officials of two of the companies, speaking only on the condition that they not be identified, said they were helping Iraq rebuild its decrepit oil industry.

For an industry being frozen out of new ventures in the world’s dominant oil-producing countries, from Russia to Venezuela, Iraq offers a rare and prized opportunity.

While enriched by $140 per barrel oil, the oil majors are also struggling to replace their reserves as ever more of the world’s oil patch becomes off limits. Governments in countries like Bolivia and Venezuela are nationalizing their oil industries or seeking a larger share of the record profits for their national budgets. Russia and Kazakhstan have forced the major companies to renegotiate contracts.

The Iraqi government’s stated goal in inviting back the major companies is to increase oil production by half a million barrels per day by attracting modern technology and expertise to oil fields now desperately short of both. The revenue would be used for reconstruction, although the Iraqi government has had trouble spending the oil revenues it now has, in part because of bureaucratic inefficiency.

For the American government, increasing output in Iraq, as elsewhere, serves the foreign policy goal of increasing oil production globally to alleviate the exceptionally tight supply that is a cause of soaring prices.

The Iraqi Oil Ministry, through a spokesman, said the no-bid contracts were a stop-gap measure to bring modern skills into the fields while the oil law was pending in Parliament.

It said the companies had been chosen because they had been advising the ministry without charge for two years before being awarded the contracts, and because these companies had the needed technology.

A Shell spokeswoman hinted at the kind of work the companies might be engaged in. “We can confirm that we have submitted a conceptual proposal to the Iraqi authorities to minimize current and future gas flaring in the south through gas gathering and utilization,” said the spokeswoman, Marnie Funk. “The contents of the proposal are confidential.”

While small, the deals hold great promise for the companies.

“The bigger prize everybody is waiting for is development of the giant new fields,” Leila Benali, an authority on Middle East oil at Cambridge Energy Research Associates, said in a telephone interview from the firm’s Paris office. The current contracts, she said, are a “foothold” in Iraq for companies striving for these longer-term deals.

Any Western oil official who comes to Iraq would require heavy security, exposing the companies to all the same logistical nightmares that have hampered previous attempts, often undertaken at huge cost, to rebuild Iraq’s oil infrastructure.

And work in the deserts and swamps that contain much of Iraq’s oil reserves would be virtually impossible unless carried out solely by Iraqi subcontractors, who would likely be threatened by insurgents for cooperating with Western companies.

Yet at today’s oil prices, there is no shortage of companies coveting a contract in Iraq. It is not only one of the few countries where oil reserves are up for grabs, but also one of the few that is viewed within the industry as having considerable potential to rapidly increase production.

David Fyfe, a Middle East analyst at the International Energy Agency, a Paris-based group that monitors oil production for the developed countries, said he believed that Iraq’s output could increase to about 3 million barrels a day from its current 2.5 million, though it would probably take longer than the six months the Oil Ministry estimated.

Mr. Fyfe’s organization estimated that repair work on existing fields could bring Iraq’s output up to roughly four million barrels per day within several years. After new fields are tapped, Iraq is expected to reach a plateau of about six million barrels per day, Mr. Fyfe said, which could suppress current world oil prices.

The contracts, the two oil company officials said, are a continuation of work the companies had been conducting here to assist the Oil Ministry under two-year-old memorandums of understanding. The companies provided free advice and training to the Iraqis. This relationship with the ministry, said company officials and an American diplomat, was a reason the contracts were not opened to competitive bidding.

A total of 46 companies, including the leading oil companies of China, India and Russia, had memorandums of understanding with the Oil Ministry, yet were not awarded contracts.

The no-bid deals are structured as service contracts. The companies will be paid for their work, rather than offered a license to the oil deposits. As such, they do not require the passage of an oil law setting out terms for competitive bidding. The legislation has been stalled by disputes among Shiite, Sunni and Kurdish parties over revenue sharing and other conditions.

The first oil contracts for the majors in Iraq are exceptional for the oil industry.

They include a provision that could allow the companies to reap large profits at today’s prices: the ministry and companies are negotiating payment in oil rather than cash.

“These are not actually service contracts,” Ms. Benali said. “They were designed to circumvent the legislative stalemate” and bring Western companies with experience managing large projects into Iraq before the passage of the oil law.

A clause in the draft contracts would allow the companies to match bids from competing companies to retain the work once it is opened to bidding, according to the Iraq country manager for a major oil company who did not consent to be cited publicly discussing the terms.

Assem Jihad, the Oil Ministry spokesman, said the ministry chose companies it was comfortable working with under the charitable memorandum of understanding agreements, and for their technical prowess. “Because of that, they got the priority,” he said.

In all cases but one, the same company that had provided free advice to the ministry for work on a specific field was offered the technical support contract for that field, one of the companies’ officials said.

The exception is the West Qurna field in southern Iraq, outside Basra. There, the Russian company Lukoil, which claims a Hussein-era contract for the field, had been providing free training to Iraqi engineers, but a consortium of Chevron and Total, a French company, was offered the contract. A spokesman for Lukoil declined to comment.

Charles Ries, the chief economic official in the American Embassy in Baghdad, described the no-bid contracts as a bridging mechanism to bring modern technology into the fields before the oil law was passed, and as an extension of the earlier work without charge.

To be sure, these are not the first foreign oil contracts in Iraq, and all have proved contentious.

The Kurdistan regional government, which in many respects functions as an independent entity in northern Iraq, has concluded a number of deals. Hunt Oil Company of Dallas, for example, signed a production-sharing agreement with the regional government last fall, though its legality is questioned by the central Iraqi government. The technical support agreements, however, are the first commercial work by the major oil companies in Iraq.

The impact, experts say, could be remarkable increases in Iraqi oil output.

While the current contracts are unrelated to the companies’ previous work in Iraq, in a twist of corporate history for some of the world’s largest companies, all four oil majors that had lost their concessions in Iraq are now back.

But a spokesman for Exxon said the company’s approach to Iraq was no different from its work elsewhere.

“Consistent with our longstanding, global business strategy, ExxonMobil would pursue business opportunities as they arise in Iraq, just as we would in other countries in which we are permitted to operate,” the spokesman, Len D’Eramo, said in an e-mailed statement.

But the company is clearly aware of the history. In an interview with Newsweek last fall, the former chief executive of Exxon, Lee Raymond, praised Iraq’s potential as an oil-producing country and added that Exxon was in a position to know. “There is an enormous amount of oil in Iraq,” Mr. Raymond said. “We were part of the consortium, the four companies that were there when Saddam Hussein threw us out, and we basically had the whole country.”

James Glanz and Jad Mouawad contributed reporting from New York.

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