Exploring the Connections

Salvadorans paid 10 cents to sew $80 NFL jerseys

By Thomas C. Fox
NCRonline Feb 07, 2010

I don't want to throw beer on your popcorn and potato chips today. But I want to share with you some information that seems timely and troubling.

According to a recent study, women trapped in Salvadoran sweatshops are paid 10 Cents to Sew $80 NFL football jerseys.

The jerseys have been sewn under illegal sweatshop conditions at the Chi Fung factory in El Salvador for at least the last four years, according to a new report by the National Labor Committee.

Often forced to work 12-hour shifts, workers were at the factory 61 to 65 hours a week, including 12 to 15 hours of obligatory overtime, which was unpaid. The workers were paid a below-subsistence wage of just 72 cents an hour, which meets less than a quarter of a family's basic subsistence needs for food, housing, healthcare and clothing.

An assembly line of 28 workers had a mandatory production goal of completing 2,300 NFL jerseys in the regular nine-hour shift, from 7:00 a.m. to 5:00 p.m. The production goal was 255 jerseys per hour, which meant that each of the 28 workers in effect had to sew nine jerseys per hour, or one jersey every 6.6 minutes. The workers were paid just 10 cents for each $80 Peyton Manning NFL jersey they sewed. This means that their wages amounted to just a little more than one-tenth of one percent of the jersey's retail price.

"It does not have to be this way," said National Labor Committee director Charles Kernaghan. "If the NFL and Reebok doubled the wages, so the workers and their families could climb out of misery and at least into poverty, the direct labor cost to sew the Peyton Manning jersey would still be just 20 ½ cents, or less than three-tenths of one percent of the shirt's retail price."

"The $250 million NFL-Reebok licensing mega-agreement has done nothing to lift workers across the developing world who sew NFL garments out of abject poverty," said Kernaghan.

"We always knew they were cheating us," one Salvadoran woman told the NLC. "We knew they weren't paying overtime, but we don't have any other choice …many of us were trapped without any alternatives."

Any of the NFL-Reebok workers daring to exercise their legal right to organize a union would be immediately fired and blacklisted.

Cutting and running would only further punish the workers, who have already suffered enough. Reebok and the NFL should keep their production in Chi Fung and use their considerable power and influence to improve factory conditions.

"If the NFL showed half as much concern for human and worker rights as they do about the counterfeiting of their jerseys, this factory could be cleaned up overnight," Kernaghan said. "There is not a consumer in the United States who does not believe that if the NFL and Reebok really wanted to clean up the factory, it would be done quickly and correctly. If great athletes like Peyton Manning would speak out, it would have a tremendous impact."

ENGLAND: Church sells shares in Vedanta mining company on ethical grounds

by Matthew Davies
Episcopal Life Online, February 5, 2010

[Episcopal News Service] The Church of England announced Feb. 5 that it has sold its £2.5 million ($3.9 million) shares in Vedanta Resources because of the company's human rights record and its controversial plans to construct a bauxite mine and alumina refinery in Orissa, India.

The church's Ethical Investment Advisory Group (EIAG) advised divestment (referred to as disinvestment in the U.K.) because its engagement with the mining company had produced no substantive results, the church said in a press release. "We are not satisfied that Vedanta has shown, or is likely in future to show, the level of respect for human rights and local communities that we expect of companies in whom the church investing bodies hold shares."

The church's investment portfolio, managed by the Church Commissioners, is valued at approximately £4.4 billion (US$6.87 billion). The church recently wrote off £40 million ($78 million) in a failed Manhattan property investment.

Survival International, a U.K.-based organization that supports tribal people worldwide, has been lobbying the Church of England to divest from Vedanta for more than a year.

In a press release, Survival noted that in 2009 Vedanta was publicly rebuked by the U.K. Government "for failing to respect the human rights of India's Dongria Kondh tribe ... The government said that 'a change in the company's behavior' was 'essential.'"

Stephen Corry, Survival International director, said: "The church's unprecedented and very welcome decision sends a strong signal to companies that trample on tribal peoples' rights: we will not bankroll your abuses. Anybody that has shares in Vedanta should sell them today if they care about human rights."

Allegations about Vedanta's controversial mining plans were brought to the church's attention in June 2009 and the EIAG "has been examining the issues carefully since and has discussed them in a process of engagement with the company," the church's release said.

John Reynolds, EIAG chairman, said: "I am a passionate advocate for engagement with companies when we have ethical concerns. We have an excellent track record of getting our concerns heard and acted upon by the companies in which the church investing bodies hold shares. In these circumstances the Ethical Investment Advisory Group advised that it would be inconsistent with the church investing bodies' joint ethical investment policy for the investing bodies to remain invested."

The Survival press release noted that the Church of England is not the first organization to divest from Vedanta on ethical grounds. "In 2007 the Norwegian Government sold its US$13 million stake, saying 'there is little reason to believe that the company's unacceptable practice will change in the future,'" the release stated. "In addition, Martin Currie Investments sold their £2.3 million (US$3.6 million) stake last year, and BP's (formerly British Petroleum) pension fund reduced its holdings in Vedanta due to 'concerns about the way the company operates.'"

Survival International says it is lobbying other shareholders, including the Rowntree Foundation, to reconsider their investments.

Meanwhile, EIAG said it understands that the Indian government is still considering whether to give final approval for the mine project.

"We respect the Indian democratic system," Reynolds said. "Our concern is that a company registered and listed in the U.K. should conform to the established environmental, social and governance norms expected in the London market -- or at least reassure its shareholders that it is committed to the journey."

The EIAG said it will maintain contact with Vedanta. "We will be pleased to review our recommendation to the church investing bodies if the company addresses the concerns we have raised," Reynolds said.

Vedanta has not yet commented about the church's decision.

~~ Matthew Davies is editor and international correspondent of the Episcopal News Service.

NORTHERN IRELAND: Church leaders hail political agreement

by Ray McMenamin
Episcopal Life Online, February 8, 2010

[Episcopal News Service] Church leaders in Ireland have welcomed an agreement concluded between the two largest political parties in Northern Ireland, which will see the completion of a process of devolving power from the British government.

The Roman Catholic Primate of All Ireland Cardinal Sean Brady hailed news of the agreement reached on Feb. 5, saying, "My prayer is that everyone in our society will reflect on what has been agreed today with a spirit of generosity and concern for the good of the whole community." Brady also expressed his hopes for a resolution of issues concerning sectarian parades, which have in past led to violent confrontations.

"I want to express my particular hope that efforts to address the issue of parades will be met with generosity, sensitivity and a willingness to go beyond old ways of approaching each other on all sides," said the cardinal.

His (Anglican) Church of Ireland counterpart, Bishop Alan Harper, said, "I most warmly welcome the news that agreement has been reached on a way forward on the devolution of justice and policing powers to Northern Ireland, together with the other issues that have been taken into account in the recent protracted negotiations."

For many years in summer, Protestant groups such as the Orange Order have marched through streets in Northern Ireland to commemorate the victory of King William III, a Protestant, over King James II, a Catholic, at the Battle of the Boyne in 1690. Many Catholics consider the parades as offensive.

The two largest parties in the province of Northern Ireland -- the Democratic Unionist Party, that draws its support from the Protestant community, and the mainly Catholic-supported Sinn Fein party -- had been locked in a months-long standoff over the issue of police powers, and a process to bring them under local control. Until now, they have been under British control.

Under the terms of the Belfast Agreement signed on Good Friday, April 10, 1998, responsibility for a wide range of government departments was transferred to a Northern Ireland executive and assembly. The First Minister and deputy First Minister must come from the two political traditions in Northern Ireland which have been bitterly opposed to one another -- the mainly Roman Catholic nationalist community and the predominantly Protestant community which has favored union with Britain.

Various government departments were established and headed by ministers in the executive, and are responsible for areas such as finance, health, education, the environment and agriculture. The 1998 agreement provided for the devolution of authority over the policing and justice systems but specified that this would only take place "with the broad support of the political parties."

The Feb. 5 agreement will see authority over the Northern Ireland policing and justice systems devolved on April 12, more than 12 years after the original agreement was signed. A cross-community vote, requiring a majority of both nationalists and unionists, will take place to effect this on March 9.

Psalm 68: "We Long for the day when God will take over our land"

Leslie F. Brandt. Psalms Now. Concordia Publishing House, 1974, pp.112-113.

We long for the day when God will take over our land,
      when wickedness will be suppressed
         and selfishness subdued,
      when people will begin to care for one another.

There will be clean air to breathe
      and pure water to drink.
There will be better schools for the young,
      hospitals for all who are ill,
      and jobs for those who seek them.
Everyone will feel needed and loved—;
      the child, the laborer,
      the executive, the senior citizen.
There will be dignity and freedom and equal rights
      no matter our ethnic or economic background.
There will be homes to live in
      and parks to play in.
There will be libraries and theaters
      and halls of learning
There will be a place for everyone to live
      and work and rest and play.
And people will have time for one another

O how we will praise God in such a land!
Our voices will join a great chorus of celebration.
Daily we will offer thanksgiving to our God
      who rules over our land.
And everyone will have time for one another

But God does not rule over our land.
Our streets are pregnant with crime.
The poor and dispossessed gather at
      shelters and food banks.
Our schools are overcrowded and inadequate.
We choke on the air we breathe.
We stumble on our own litter and waste.
We neglect the old and ignore the young.
We rush pell-mell from appointment to appointment.
And no one cares for one another.

You seek, O Lord, to rule over our land.
You have given us pure air and green hills
      and great forests and clean rivers.
You have showered us with Your abundant gifts—
      all that we need to make our land splendid.
And You have given us Your love
      and the command to care for one another.

We have failed you, O God.
      We have sucked to our individual bosoms
         the gifts of your love,
      but we never really learned
         how to care for one another.

You have rebuked us for our selfishness. O Lord.
We are smothering in the waste
      of our self-centered living.
Deliver us, O God.
      Restore to us a land worthy of Your habitation.
      And teach us, O loving God,
         how to care for one another. 

Archbishop of Canterbury opens Trinity Institute conference

By Lynette Wilson, EpicopalLife Online, January 28, 2010

[Episcopal News Service] Theology's contribution to economic decision-making goes beyond simply raising the question of "common good"; it also offers a framework into what is being assumed – human motivations -- promoted through economic practices, said Archbishop of Canterbury Rowan Williams during a Jan. 28 lecture at the 2010 Trinity Institute.

"If we find, as a good many commentators and researchers have observed in recent years, that working practices regularly reward behavior that is undermining of family life -- driven or obsessional, relentlessly competitive and adversarial -- we have some questions to ask," he said.

Williams' lecture "Theology and Economics: Two Different Worlds?" opened day two of the Trinity Institute's 40th National Theological Conference --"Building an Ethical Economy: Theology and the Market Place," exploring the intersection between economics and theology, held at Trinity Wall Street in New York's financial district Jan. 27-29. The conference officially began Jan. 27 in the evening with a Holy Eucharist, where Williams celebrated and Archbishop of Burundi Bernard Ntahoturi preached.

"Economic activity is something people do, one kind of activity among others; and as such it is subject to the same moral considerations as all other activities. It has to be thought about in connection with what we actively want for our humanity," Williams said.

Following his opening remarks, Williams was joined by a panel of theologians and economists: Kathryn Tanner, a theology professor at the University of Chicago Divinity School; Partha Dasgupta, an economics professor at the University of Cambridge; and Susan Lee, an economist and award-winning journalist who has covered economics for the Wall Street Journal and the New York Times.

In exploring the intersection between economics and theology, the conference seeks to explore questions and themes including: "Is capitalism a belief system?"; "What is wealth and how should it be measured?"; "constructive models of economics and consumerism"; and "envision ways to build an economy that is both ethical and just." The conference includes presentations, panel discussions followed by Q&A sessions and theological reflection groups.

Over the past few years, Williams said, he has repeatedly noted that the word "economy" is at its root a term for "housekeeping," which has implications as to where the discourse belongs.

"A household is somewhere where life is lived in common; and housekeeping is guaranteeing that this common life has some stability about it that allows the members of the household to grow and flourish and act in useful ways," he said. "A working household is an environment in which vulnerable people are nurtured and allowed to grow up (children) or wind down (the elderly); it is a background against which active people can go out to labor in various ways to reinforce the security of the household; it is a setting where leisure and creativity can find room in the general business of intensifying and strengthening the relationships that are involved.

"Good housekeeping seeks common well-being so that all these things can happen; and we should note that the one thing required in a background of well-being is stability," he said.

"'Housekeeping theory' is about how we use our intelligence to balance the needs of those involved and to secure trust between them," Williams said. "A theory that wanders too far from these basics is a recipe for damage to the vulnerable, to the regularity and usefulness of labor and to the possibilities human beings have for renewing (and challenging) themselves through leisure and creativity."

The same kind of damage, Williams said, results in an economic climate where everything is reduced to the search for maximized profit and unlimited material growth."

"The effects of trying to structure economic life independently of intelligent choice about long-term goals for human beings have become more than usually visible in the last 18 months, and one reason for holding this conference is the growing force of the question 'what for?' in our global market. What is the long-term well-being we seek? …" he said.

In addition to clergy and lay participants attending in New York, the conference is taking place at partner sites around the United States and the world.

In his sermon Jan. 27, Ntahoturi spoke about the importance of partnerships and proper use of "talents." Using the Gospel reading, Matthew 25:14-30, he said it was possible to expand on the definition of talents to include skills, abilities and resources.

"God has given everyone abilities of various kinds and no one is untalented in the kingdom of God. This story encourages us to use our gifts wisely for the common good. Reminding us about our accountability before God … it's not about how much we invest, but the quality of our investment," he said.

Williams said during his lecture: "It is really to claim that our job as human beings is to imagine ourselves, using all the raw material that science or psychoanalysis or economics can generate for us – in the hope that the images we shape or discover will have resonance and harmony with the rhythms of how things most deeply are, with what Christians and others call the will and purpose of Almighty God."   

During the panel discussion, Williams mentioned having been "moved" the previous day during a visit to St. Ann's Episcopal Church in the South Bronx, particularly when he heard that a high school near Vancouver, British Columbia, Canada, sends volunteers to the church annually.

Prior to the conference, Williams also participated in a panel and gave the address at an event organized by the office of the Anglican Observer at the United Nations Jan. 26 and held at the Desmond Tutu Center on the campus of The General Theological Seminary. He also took part in discussions at the United Nations and, along with Presiding Bishop Katharine Jefferts Schori, met with U.N. Secretary General Ban Ki-moon.

~~ Lynette Wilson is an ENS staff writer and editor.

MLK and the Supreme Court: Why Campaign Finance Reform is a Civil Rights Issue

by Myrna Pérez, God's Politics 'Blog, 01-22-2010

This week started off by honoring Martin Luther King Jr. and is ending with a Supreme Court decision, Citizens United, giving corporations unprecedented ability to affect election outcomes by declaring unconstitutional certain limitations on corporate expenditures on electioneering.

The connection between the two might not seem obvious.  Campaign finance reform is seldom considered as a civil rights issue.  These laws are not about discrimination based on characteristics like race, gender, or sexual orientation.  In fact, limitations on corporate expenditures are not even about people, but are instead about state-created institutions — corporations — which can have perpetual life without conscience or soul.  But at their core, campaign finance rules are about power imbalance.  And power imbalance was something about which MLK was deeply concerned.

The connection between the two might not seem obvious.  Campaign finance reform is seldom considered as a civil rights issue.  These laws are not about discrimination based on characteristics like race, gender, or sexual orientation.  In fact, limitations on corporate expenditures are not even about people, but are instead about state-created institutions — corporations — which can have perpetual life without conscience or soul.  But at their core, campaign finance rules are about power imbalance.  And power imbalance was something about which MLK was deeply concerned.

Appeals to moral obligations and the duties of citizenship rarely come up in discussions of campaign finance regulations of corporations, however, and it is no wonder.  The emergence of MLK’s themes about power flow from what MLK calls the “supreme unifying principle of life” — love.  But of course, being creations of law and society, and not people, MLK’s unifying principle of life does not apply to corporations.  Appeals to fairness or guilt or patriotism do not work on something without a conscience, and they seem unlikely to move corporate decision-making.

The only things that control or limit the behavior of corporations are laws.  The Bipartisan Campaign Reform Act (BCRA) was such a limiting law; it prohibited corporations from expressly advocating the election or defeat of particular candidates or broadcasting election communications within the period before federal elections in which those advertisements would have the greatest impact on the election outcome.  BCRA did not attempt to regulate how corporations made their money, nor did it deprive corporations of the opportunity to pursue dominance in the market.  It did, however, seek to prevent a corporation’s dominance in the market from turning into dominance in politics.

In Citizens United, in addition to gutting part of BCRA, the 63-year-old ban on corporate independent expenditures first set forth in the Taft-Hartley Act was also removed from the law.  The Court’s 5-4 decision eliminated any meaningful separation between the market and politics. It seized the role of protector of unfettered speech rights of those corporations Justice Kennedy called the “voices that best represent the most significant segments of the economy.”  The judicial branch’s assertion of this role stands in stark contrast to the role played by the judicial branch which earned praise by MLK in 1957 for being the only government branch accepting any real responsibility for protecting the citizenship rights of the men and women who were marginalized and disenfranchised in this country.

Jim Wallis soberly observes in his new book Rediscovering Values: On Wall Street, Main Street, and Your Street—A Moral Compass for the New Economy that “[t]he market has trumped all else and replaced much of the moral space of society.”  The Supreme Court’s decision Thursday cemented that triumph of the market over the “moral space” in our country.

Myrna Pérez is Counsel in the Democracy Program at the Brennan Center for Justice at NYU School of Law.

Greed is God: Exporting the Values of America’s Prosperity Heresy

by Sondra Shepley, God's Politics 'Blog, 1-27-2010

America, dominating the global economy, imports more goods than it exports. What is less tangible, but possibly more important, is how America exports its values to a rapidly interconnecting global society.

Arguably, most wars that America has fought aim to export U.S. values of freedom and democracy.   However, a major lesson from Vietnam reveals that military intervention as a means to change values and political ideology can often backfire with indefatigable resistance. Today, we see Islamic extremists using terror as a means to communicate their values in opposition to Western ideals. However, if terrorism is fundamentally a form communication, what values do we represent when we respond militarily? We have chosen to speak their “language” of violence, and only time will tell if we will dominate the conversation.

Changing global values through the economy, however, is a completely different matter.  We are winning this fight; we are changing how the world fiscally relates.  What economic credo are we exporting to the rest of the world, you might ask?

Jim Wallis names that credo, “greed is good,” in his new book Rediscovering Values: On Wall Street, Main Street, and Your Street—A Moral Compass for the New Economy. Wallis rightly assesses the current global financial crisis as primarily a moral crisis with severe economic consequences.

But McDonalds, Nike, Coca Cola, along with all other major U.S. corporations, have not been alone in the trenches winning this global values shift.   I am particularly embarrassed to say that they have received significant help from one of the very establishments that should confront this immorality — American Christianity.

Perhaps one of America’s biggest exports of the 20th and 21st centuries is the prosperity gospel.  Growing like wildfire internationally, this brand of Christianity says that every believer is entitled to any material possession they desire — if prayed in the name of Jesus.

The prosperity gospel has such transnational appeal because it taps into the universal self-interest of the human heart.  However, when repackaged in a theological context greed is not merely good, it’s God.

Ironically, the prosperity gospel has found its most fertile ground in developing nations, where conspicuous and bloated consumption is the least realistic.  Poorer nations are more susceptible to this lie not out of greed per se, but because of its inherent germ of truth: God does want us to be prosperous.  God’s emphasis, however, is on us, not just me.  Probably the most quoted Bible verse among Evangelical Christians is John 3:16.  It says, “For God so loved the world that he gave his only son…”  God’s heart is for the entire world, not just for me, my family, or my country.  In other words, prosperity achieved through social justice is the theological corrective to the prosperity gospel.

In the absence of a global gospel witness that includes social justice, poor nations will eagerly receive a false prosperity gospel hungering to hear the incredible sliver of truth: God cares about them!  All of them, not just their soul, but their whole physical and spiritual well-being.

The gravitational center of Christianity is shifting in our world.  By the year 2050, the Center for the Study of Global Christianity estimates that the Christian population in the global South will nearly triple that of American and European Christians.  This century, the global South is poised to radically reshape the international face, witness, and history of Christianity.   In many ways the Church should highly welcome this enormous shift, freeing itself from its historical captivity to Western culture.   However, as scripture says, you ‘sow what you reap’, and I wonder what will sprout from the greedy gospel we planted among our sisters and brothers in the global South?

Our exported American lie, based on our value of greed, is a sin of global proportions.  May we repent, and may God forgive us for the mass production of our immoral values.  May we also confess and seek the forgiveness of the nations to whom we sold this bill of goods.

Sondra Shepley is the speaking events manager for Sojourners

Demonising Haiti, ignoring slavery

by Spencer Dew, Ekklesia News Service, Jan 21, 2010

In what has now become a much-circulated clip, tele-evangelist Pat Robertson makes sense of the catastrophic Haitian earthquake as the latest in a string of curses delivered by God to Haiti’s people. Robertson’s interpretation of this catastrophe, whether we find it repellent or compelling, offers an excellent example of one of the ways religion functions: Robertson reiterates a reassuring framework of meaning in the face of experiences which call such frameworks into question.

The earthquake, rather than evidence of the random and senseless nature of human existence, provides for Robertson evidence of God’s existence and ongoing, partisan involvement in human history. Robertson’s theology provides comfort, too, in its categorisation of the victims of this tragedy as deserving of their fate, insulating Robertson from the agony of identifying too closely with these wounded, mourning, homeless, and hungry fellow humans.

Robertson may be moved by this suffering – his remarks were delivered as the Christian Broadcasting Network raised money for earthquake relief – but his religious anthropology renders this suffering, in his words, “unimaginable,” a stark contrast to anthropologies that urge empathetic relations.

For Robertson, the Haitian people are markedly 'other', a tone that carries through his version of the nation’s history: “They were under the heels of the French,” he says, “You know, Napoleon III, or whatever. And they got together and swore a pact to the devil. They said, we will serve you if you’ll get us free from the French. True story. And so the devil said, OK, it’s a deal. And they kicked the French out. You know, the Haitians revolted and got themselves free. But ever since, they have been cursed by one thing after the other.”

This story is, of course, far from true. Robertson offers here a typical demonisation of the Voodoo religion and a Christian distortion of the legend of the 1791 Bois Caiman ritual. Yet Robertson, one imagines, finds animal sacrifice and blood vows repellent, and he has no reason to be accepting of any religion other than his own, ruling them all false and therefore damnable.

In the clearly defined narrative Robertson insists upon, the followers of God can expect rewards while to the followers of the devil, come destruction, blood, and wailing. The troubling aspect of Robertson’s remarks, however, is not the myths he offers to make sense of the world, but what he leaves out of his thumbnail history of Haiti: Unmentioned in his summary is the word “slavery.”

The “true story” that Robertson occludes is that Haiti, the first country to be founded by former African slaves, owes its origin to armed uprising. What began as raids on plantations became full scale revolutionary war, with people who had been regarded as chattels claiming their liberty via the blood of their former 'masters.'

From Nat Turner to Fred Hampton, the armed, independent black person has remained a nightmare image to those who benefit from white privilege in America, an image, indeed, not unlike Cotton Mather’s description of Satan incarnate in New England, that “Black Man” with the power to destroy the social order.

Haitian Independence was an event interpreted by much of the white, slave-owning world of the time as catastrophic. That 'they' would dare – and be able – to seize power called into question pre-existing systems of meaning-making as surely as any earthquake.

The image of black slaves shedding their chains and taking up arms contributes far more than any hobgoblins of the evangelical imagination to the historical 'curses' that have kept Haiti poor and troubled. The history of American relations with Haiti has been indelibly tainted by America’s true devil – the lingering effects of our own schizophrenic founding as a nation insistent on liberty, yet practicing slavery.

Just as racist terror helped shape the stereotype of Voodoo as devil worship, so too, racist attitudes have dominated the history of American relations with Haiti, from the fearful to the patronising, from clandestine political machinations to occupation by military force. It is to be hoped that the current attention on Haiti (for those of us who reject dismissive metaphysical explanations such as Robertson’s) will prompt Americans to examine the racism embedded not just in foreign and domestic political history but, indeed, in our own minds.

Without honest confrontation of the legacies of our past as a slave society, some 'they' will always be demonised and some 'devil' will always be imagined as a mask for our earthly hatreds and fears.

----------

(c) Spencer Dew is an instructor in the department of theology at Loyola University, Chicago, USA.

With grateful acknowledgements to Sightings, and the Martin Marty Center at the University of Chicago Divinity School, Illinois, USA.

How Retirees Saved the Banks

New York Times, Editorial, January 17, 2010

If you’re a retiree who relies on interest income, you know that the tap is running dry. In fact, many investors in certificates of deposits, savings accounts and money market accounts are losing money once taxes and inflation are subtracted from today’s extremely low yields.

Less well known is that measly savings yields are central to the government effort to buy time for the banks to earn their way back to health. It is important to rebuild the banks. But more attention must be paid to the collateral damage from that effort.

Here’s what’s happening: By lowering the short-term interest rate it controls to virtually zero and creating lending programs, the Federal Reserve has enabled banks to borrow cheaply. The banks re-lend that cheap money, but not necessarily to consumers and businesses. They can, for example, lend it to back to the federal government by buying Treasury securities, and earn a nice spread between their cost of funds and Treasury yields.

At the same time, banks are awash in deposits, much of it from investors who have pulled their money out of riskier investments. With money rolling in, big banks don’t need to compete with one another for savers, which further depresses the interest on offer.

The result is presumably healthier banks and certainly poorer savers. Or, as William Gross, the legendary bond investor told The Times’s Stephanie Strom: “It’s capitalism, I guess, but it’s not to be applauded.”

The situation is especially tough on retirees who depend on interest income to supplement their Social Security. Some will have to spend their capital to make ends meet. Some will probably take on more risk by investing in stocks or bonds, or will have to live on less. Some, as Ms. Strom reported, have taken out reverse mortgages to increase their income — another example of how Americans’ wealth is being sapped. Reverse mortgages allow people who are 62 and older to convert the equity in their homes into cash, with the loans usually repaid by selling the house after the owner dies.

Regulators have put safeguards in place to combat abusive lending on government-insured reverse mortgages, about 90 percent of the market. (They include prohibitions on cross-selling, whereby a lender urges borrowers to use the money from the mortgage to buy other investments from the lender.) Given the nation’s recent experiences — and the vulnerability of many elderly people — regulators will have to be vigilant.

The effect of the financial crisis on retirees — and planning for retirement — has been largely overlooked. It deserves a high place on policy makers’ agendas.

Taxpayers 'may fund child slavery' under new Government proposals

by Staff Writers, Ekklesia News Service, January 18, 2010

Pressure groups have accused the government of putting business interests above human rights and environmental concerns, saying taxpayers may end up funding child labour or slavery under new proposals.

It comes after the Export Credits Guarantee Department (ECGD), the creditor and insurer of many multinationals' projects in poor countries, proposed to ease tight standards on underage workers that it adopted six years ago after a political outcry.

Amnesty International UK, The Corner House, Jubilee Debt Campaign and WWF UK criticised the Government's plans, which they say would water down the human rights and environmental standards employed by the ECGD.

The groups fear that the changes would represent "a giant step backwards" for minimising UK companies' impacts on human rights, poverty and climate change in developing countries.

Of particular concern to campaigners is that the absolute prohibition on "harmful child labour" and forced labour will be replaced with a discretionary ban, where considered appropriate.

The moves are believed to follow heavy lobbying from UK exporters, who argued last year that the 'Business Principles' should be "modified, if not scrapped altogether", in a submission which campaigners call "short-sighted".

But campaigners warn this must not happen at the expense of increasing poverty, environmental destruction and human rights abuses around the world. Even with the current standards in place, they argue that the ECGD is effectively a taxpayer subsidy to the arms sector, fossil fuel industries and aerospace sector - which historically has comprised 75% of ECGD's custom.

They warn that a further watering down of standards would seriously undermine Britain's claim to be a 'force for progress' in the world.

Peter Frankental from Amnesty International UK said: "The upshot of these proposals is that British taxpayers' money could end up funding child labour and forced labour overseas. Lord Mandelsson needs to realise that people in the UK simply won't stand for this.

"The government should be sending out a clear signal to companies that child exploitation is never acceptable - not putting up the funding to help them do it. It's time the government accepted the need for UK companies to respect human rights in all their business operations abroad."

Nick Dearden from Jubilee Debt Campaign said: "the overwhelming majority of debt repayments paid by developing countries to the UK are based on ECGD projects - including arms loans for dictators and useless projects that did nothing to benefit ordinary people. These changes will unleash similar projects in future, and poor countries will spend another 20 years paying for our mistakes."

The ECGD is a government department which supports UK businesses exporting and wanting to invest in areas considered too risky to receive financial support from the private sector. It uses taxpayer's money to guarantee payment in the event of a default. Ramping up this system of 'export credits' is seen by the government as a key way of stimulating UK industry, especially during the current recession.

The ECGD asked Ekklesia to stress that "this is a consultation, that no decision has been made, and that if anyone wants us to do something different to our proposals they will need to respond to the consultation."