China’s forex reserves suffer third-largest monthly decline - Financial Times

December 7, 2015 11:24 am

China’s foreign exchange reserves posted their third-largest monthly decline on record last month, central bank data showed on Monday, renewing worries about capital outflows after reserves had appeared to stabilise.

Forex reserves fell $87bn in November, near the record $94bn decline suffered in August — the same month that the central bank surprised global markets by allowing the renminbi to depreciate by 3 per cent in three days.

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China’s reserves have fallen for nine of 11 months this year and stand at $3.43tn, as investors sell renminbi assets to protect themselves against depreciation and the central bank sells dollars from its reserves to curb renminbi weakness. Falling interest rates in China and expectations of an imminent rate hike by the US Federal Reserve have also fuelled outflows. Reserves rebounded mildly in October, suggesting outflows had diminished.

China’s forex reserves — the world’s largest — have long been seen as the ultimate guarantor of financial stability, since they can be used to hedge against capital flight or to bail out domestic financial institutions struggling with a rise in bad debts.

The unprecedented declines have raised worries that the reserves could quickly evaporate if capital outflows continue and the central bank continues to defend the exchange rate. Most analysts believe the central bank will eventually be forced to curtail its intervention in order to prevent further depletion of its reserves.

The People’s Bank of China has long intervened in foreign-exchange markets to hedge against excessive volatility. Since August, however, such intervention has expanded from the domestic spot market, which covers daily transactions, to include the offshore renminbi market in Hong Kong, as well as both onshore and offshore futures markets, traders say.

Following the devaluation in mid-August, the renminbi rallied in September and October. Devaluation resumed in November, however, and the renminbi closed at its weakest level in three months at 6.4082 to the dollar on Monday.

“Since October many countries around China have experienced some capital outflow, and China has had its share,” said Xie Yaxuan, economist at China Merchants Securities in Shenzhen. “The strengthening dollar is bound to cause some repositioning into dollar assets.” 

Ms Xie estimates that around 40 per cent of the decline in November — about $35bn — is attributable to valuation effects related to the weakening of the euro and other currencies against the dollar in November, rather than outflows. When the non-dollar currencies weaken, the dollar-denominated value of non-dollar assets held in China’s reserves declines.

Martin Shkreli’s Replacement at Turing Pharma Has a Questionable Past - Fortune

Martin Shkreli’s Replacement at Turing Pharma Has a Questionable Past

Posted: 21 Dec 2015 02:21 PM PST

When Martin Shkreli stepped down as CEO of Turing Pharmaceuticals last week—following his arrest for securities fraud—the controversial company named chairman Ron Tilles as interim CEO. Not terribly surprising, even if Tilles has deep ties to Retrophin Inc., a different biotech company at the heart of Shkreli’s alleged transgressions. (Tilles was mentioned in the complaint against Shkreli, but was not charged with any wrongdoing.)
What was strange, however, was how Turing Pharma described Tilles in the press release announcing his appointment:

“Mr. Tilles began his career at Merrill Lynch in 1985 and subsequently worked with several other securities firms. Ron’s experience includes numerous private equity and venture capital positions in the pharmaceutical and medical device industries over the last 20 years.”

Unfortunately, there is no publicly-available evidence that Tilles ever held even a single private equity or venture capital position in the pharma or medical device industries, let alone “numerous” ones. In fact, his official bio on the Turing Pharma website omits any mention of venture capital or private equity work.
Tilles is registered as an active broker-dealer with Robert W. Meredith & Co., although a person who answered the phone at Robert W. Meredith could not confirm his current involvement. According to a document Tilles filed with the Financial Industry Regulatory Authority (FINRA), he previously was registered with six other securities firms—dating back to Merrill Lynch between 1985 and 1987. There are a few short gaps in the history—and a bit of overlap—but the longest lag is well short of a single year:

• Robert W. Meredith: 12/04-present 
• Cripple Creek Securities: 10/04-1/05 
• Condor Securities: 11/93-1/03 
• Yamaichi International : 1/92-8/93 
• LIT America: 4/89-5/91 
• Nikko Securities: 4/88-1/89 
• Merrill Lynch: 9/85-7/87 

In that same document, Tilles writes the following:

“With Robert R. Meredith’s permission, I provide consulting advice on a part-time basis to several privately held companies in the biotechnology industry. These companies are typically financed by venture capitalists and angel investors. I provide introductions on behalf of these early stage companies and receive fees from time to time for these introductions. The work hours devoted to this effort have not averaged more than 20 hours a month at any given time, partially during trading hours, and partially outside of trading hours.”

There is a world of difference between providing part-time consulting to venture-backed biotech companies and holding a “venture capital position” within said biotech company.
Perhaps the Turing press release referred to how Tilles served as Retrophin’s director of business development, a position that sometimes involves venture capital or private equity activities. But Retrophin was hardly an active investor, with S&P Capital IQ showing not a single equity investment in a privately-held company (unless you include a few strategic acquisitions). It also is worth noting that neither Retrophin nor Turing are mentioned by Tilles on his FINRA doc under a section titled “employment history,” which is supposed to cover the past decade.
Tilles is listed as a board member on the website of an enterprise software company called QuantumID Technologies, but his QID email no longer works and phone calls to the company redirect to what seems to be a personal voicemail.
A Turing Pharma spokesman has not returned requests for comment, and an email sent to an alternate address for Tilles has not been returned.

A new Chinese export — recession risk - Financial Times

http://www.ft.com/intl/cms/s/0/486bc716-5af0-11e5-9846-de406ccb37f2.html#axzz3v3KSSdDM

Is a global economic recession likely? If so, what might trigger it? Willem Buiter, Citi’s chief economist and the Financial Times’ erstwhile Maverecon blogger, answers these questions: “Yes” and “China”. His case is plausible. This does not mean we must expect a recession. But people should see such a scenario as plausible.

Mr Buiter does not expect world output to decline. The notion here is a “growth recession”, a period of growth well below the potential rate of about 3 per cent. One might imagine 2 per cent or less. Mr Buiter estimates the likelihood of such an outcome at 40 per cent.

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His scenario would start with China. Like many others, he believes China’s growth is overstated by official statistics and may be as low as 4 per cent. This is plausible, if not universally accepted.

It might become even worse. First, an investment share of 46 per cent of gross domestic product would be excessive in an economy growing 7 per cent, let alone one growing at 4 per cent. 

Second, a huge expansion of debt, often of doubtful quality, has accompanied this excessive investment. Yet merely sustaining investment at these levels would require far more borrowing. 

Finally, central government, alone possessed of a strong balance sheet, might be reluctant to offset a slowdown in investment, while the shares of households in national income and consumption in GDP are too low to do so.

Suppose, then, that investment shrank drastically as demand and balance-sheet constraints bit. What might be the effects on the world economy?

One channel would be a decline in imports of capital goods. Since about a third of global investment (at market prices) occurs inside China, the impact could be large. Japan, South Korea and Germany would be adversely affected. 

A more important channel is commodity trade. Commodity prices have fallen, but are still far from low by historical standards. Even with prices where they are, commodity exporters are suffering. Among them are countries like Australia, Brazil, Canada, the Gulf States, Kazakhstan, Russia and Venezuela. Meanwhile, net commodity importers, such as India and most European countries, are gaining.

Shocks to trade interact with finance. Many adversely affected companies are highly indebted. The resulting financial stresses force cutbacks in borrowing and spending upon them, directly weakening economies. Changes in financial conditions exacerbate such pressures. 

Among the most important are movements in interest and exchange rates and shifts in the perceived soundness of borrowers, including sovereigns. Changes in capital flows and risk premia and shifts in the policies of important central banks exacerbate the stresses. At present, the most important shift would be a decision by the US Federal Reserve to raise interest rates.

As Warren Buffett said: “You only find out who is swimming naked when the tide goes out.” 

According to the Bank of International Settlements, credit to non-bank borrowers outside the US totalled $9.6tn at the end of March. A strong dollar makes any currency mismatches costly. These may start on the balance sheets of non-financial corporations. But the impact will be transmitted via their losses to banks and governments. Thus, reversal of “carry trades”, funded by cheap borrowing, might wreak havoc.

A visible shift is a decline in foreign exchange reserves, driven by deteriorating terms of trade, capital flight and withdrawal of previous capital inflows. 

This might cause “quantitative tightening”, as central banks sell holdings of longer-dated safe bonds. This is one of the ways that these shocks might be transmitted to the high-income countries, including even the US. But this also depends on what the holders of the withdrawn funds do with it and on the policies of affected central banks.

What we might see, then, is a series of real and financial linkages: declining investment and output in China; weaknesses in economies dependent on that country’s purchases or on prices set by its buying; and reversals of carry trades and shifts in exchange rates and risk premia that stress balance sheets. 

How might policymakers respond? China will surely let its currency fall rather than continue to lose reserves, not least because usable reserves are smaller than headline numbers, which include infrastructure investments in Africa and elsewhere that cannot quickly be sold. The policy space of other emerging economies is greater than in the past, but not unlimited. They will be forced to adjust to these shocks rather than resist them. 

Meanwhile, the policy choices of high-income countries are restricted: politics has almost universally ruled out fiscal expansion; the intervention rates of central banks are near zero; and, in many high-income economies, private leverage is still quite high. If the slowdown were modest, nothing much might be done. The best response to a big slowdown might be “helicopter money”, created by the central bank to stimulate spending. But its use seems quite unlikely. The conventional rules.

In brief, a global growth-recession scenario “made in China” is perfectly plausible. If it were to happen, a decision by the Fed to tighten now would come to look downright foolish. We are not talking about the sort of disaster that accompanies a global financial crisis. But the world economy will remain vulnerable to adversity until China has completed its transition to a more balanced pattern of growth, and the high-income economies have recovered from their crises. That is still far away.

martin.wolf@ft.com

Lunch with the FT: Sepp Blatter - Financial Times

Lunch with the FT: Sepp Blatter

Malcolm Moore

His reputation may be spoiled but his legacy remains intact, the suspended president of Fifa insists over ‘Mama Blatter’s salad’ in Zurich

©James Ferguson

Sepp Blatter likes to start the day just before 6am. He skips breakfast but drinks a cup of coffee and does a little dance to stay in shape. “Rhythm, rhythm of life is very important. Also in football, but everywhere,” he says. 

But on May 27, 15 minutes after he woke up, his morning routine was broken by a phone call. Swiss police, acting on extradition requests from the US Department of Justice, launched a raid on Zurich’s Baur-au-Lac hotel and arrested seven senior Fifa officials on suspicion of taking more than $100m of bribes between them. 

The arrests, which were followed by another raid on Fifa’s headquarters on a hill above Zurich, came as hundreds of football officials were gathering in Switzerland for an election to choose a new Fifa president. “I felt like a boxer who was just going into round 12 and said, ‘I’m going to win.’ But then: BONG!” says Blatter, 79, mimicking a knockout blow. 

The effect was seismic: although the vote went ahead two days later, and Blatter was re-elected for a fifth term, he stepped down the week after, claiming he needed to “protect Fifa”. It was not enough. Swiss prosecutors put Blatter under investigation and, on October 8, he was suspended from all football activities and evicted from his office at Fifa. While you can physically remove Blatter from Fifa’s headquarters, separating the man from the organisation he has built in his image for the past 40 years — first masterminding football programmes in Africa, then becoming general secretary and finally president — is a tricky proposition. 

We meet at Sonnenberg restaurant, which in its literature describes itself as the “Fifa Club”, run “under the patronage of Joseph S Blatter” and as a place “where football fans from the worlds of Swiss business, politics and sports meet with their guests for business lunches, exquisite dinners and networking”. I arrive early but Blatter is already waiting, chatting to the restaurant’s head chef, whose white jacket is embroidered with Fifa’s blue logo. We are ushered into a private room with magnificent views over vineyards, then over the city and all the way down to Lake Zurich. 

The door shuts behind us and there is an awkward silence. The man who has served for years as a lightning rod for so many shocking accusations of corruption and backroom-dealing suddenly seems frail as he fidgets with his cutlery and rubs his hands together. It turns out that he has a great deal to get off his chest, and several grenades to toss into the fragile process to find his successor, but it is difficult to know where to begin.

We clink glasses of a Swiss sauvignon blanc and I ask him how he feels now that the end is in sight. In February, he will permanently leave Fifa after a fresh presidential election. Others have told me that it will be an existential crisis for Blatter and hinted darkly that he may not be able to bear it. He freely admits that he is a monomaniac who cannot, and will not, stop thinking about Fifa. 

He lives alone in an apartment in Zurich and works from a “very small” office with a desk, a computer, a football and a picture of the Matterhorn on the wall. “I regret I cannot go back to my office [at Fifa HQ], because my office [there] was a little bit more than an office; it was the ‘salon’ we were living in,” he says in accented and slightly topsy-turvy English (he is most comfortable in German or French but also speaks Italian and Spanish). 

More video

Blatter still wakes early, however, and scans the news for any developments about Fifa. “I answer my personal mail; there is a lot of mail. I am following very carefully what is happening in the office of Fifa and around this office. For the time being, I have not had any possibility to say, ‘Now I go a few days on holiday’,” he says. “I am following everything. I cannot just say I switch off because I am not any longer in the office. Because my office is my memory,” he says, tapping a finger to his forehead.

. . .

A waiter enters with a treat from the head chef: plates of salmon, cucumber and caviar. But Blatter is allergic to seafood, he says, shooing the dish away. “They know this. I do not know why they serve it.” He orders cured beef instead, which he eats with his hands, together with some bread. 

Sepp Blatter interviewed over Lunch with the FT

An edited and condensed transcript of Sepp Blatter’s Lunch with the FT interview at Sonnenberg restaurant in Zurich.

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As we settle into our conversation, he quickly pinpoints the moment when Fifa’s troubles — and his downward spiral — began. “It is linked to this now famous date: December 2, 2010,” he says, referring the day he pulled Qatar’s name out of the envelope as host of the 2022 World Cup. 

“If you see my face when I opened it, I was not the happiest man to say it is Qatar. Definitely not.” The decision caused outrage, even among those who do not follow football. “We were in a situation where nobody understood why the World Cup goes to one of the smallest countries in the world,” he says. 

Blatter then drops a bombshell: he did try to rig the vote but for the US, not for Qatar. There had been a “gentleman’s agreement”, he tells me, among Fifa’s leaders that the 2018 and 2022 competitions would go to the “two superpowers” Russia and the US; “It was behind the scenes. It was diplomatically arranged to go there.” 

Had his electoral engineering succeeded, he would still be in charge, he says. “I would be [on holiday] on an island!” But at the last minute, the deal was off, because of “the governmental interference of Mr Sarkozy”, who Blatter claims encouraged Michel Platini to vote for Qatar. “Just one week before the election I got a telephone call from Platini and he said, ‘I am no longer in your picture because I have been told by the head of state that we should consider . . . the situation of France.’ And he told me that this will affect more than one vote because he had a group of voters.” 

Blatter will not be drawn on motives. He says he has only once spoken to Sarkozy since the vote and did not raise the issue. He does admit that the vote for the World Cup, carried out by a secret ballot of Fifa’s executive committee, was always open to “collusion”. “In an election, you can never avoid that, that’s impossible . . . when you are only a few in the electoral compound.” 

One month after Fifa’s 22-strong executive committee voted 14-8 in a secret ballot in Qatar’s favour, the Arab state announced that it had begun testing French Dassault Rafale fighter jets against rival aircraft for a fleet upgrade. In April 2015, Qatar bought 24 of the jets for $7bn, with an option to buy 12 more. 

. . .

The waiter arrives with our “Fifa salad”, a mix of lamb’s lettuce, croutons, lardons and diced egg. “This is Mama Blatter’s salad,” Blatter says cheerily. “We always made it with whatever greens were in season, and you put some croutons and a little bit of bacon.” 

Blatter is from the small Alpine town of Visp (population: 7,500), about two hours from Zurich by train. A Roman Catholic, he plans to return there this weekend for All Souls’ Day. His father worked in a chemical plant and his only daughter, Corinne, still lives there, teaching English. He has a 14-year-old granddaughter called Selena. Blatter admits that his troubles have hit her hard. “I think she was suffering more than me,” he says, indicating that he lets criticism wash over him while she takes it personally. 

When I ask Blatter what he thinks of Platini, he sits back in his chair, pauses, and then gives a diplomatic, if strained, response. “Platini was an exceptionally good player. He is a good guy. He could be a good successor, yes. It was foreseen, once, that he shall follow [me].” 

Platini is still in the race for the Fifa presidency, but his campaign was effectively derailed following his suspension, at the same time as Blatter, after a SFr2m payment from Fifa to his bank account in 2011 came to light. “You do not need to have a contract written down [ . . .] according to Swiss law,” Blatter says of the Platini payment, adding that even witnesses are not necessary. “Handshake contracts are valid. The Anglo-Saxon system is not the same as the system here in central Europe.” 

Handshakecontracts are valid. The Anglo-Saxon system is not the same as the system in central Europe

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He is correct — Swiss law does provide for oral contracts — but I point out that this is not the way that large companies behave. “But we are a club,” he responds. When I point out that the payment was not accounted for, he shuts down the conversation. 

While Blatter pays lip-service to the idea of reform at Fifa, saying there “must be more than a few changes”, he remains brass-necked about the culture of handshakes, favours and secret deals that he encouraged. “The system is not wrong,” he says, adding that if he had been allowed to remain as president, “then we would be in the right way”. His successor, he believes, should not try to change what he has created.

I ask him about the money, the allegations of bribery and corruption that have dogged him for years. Did he, or people working on his behalf, ever hand out cash to win the support of Fifa’s members? 

He invokes his parents as he denies it all. “We have a principle in our family. The basic principle is to only take money if you earn it. Secondly, do not give money to anybody to obtain the advantage. And the third one is if you owe money, pay your debts. These are the principles I have followed since [I was] 12 years old,” he says. “That is why I am claiming that my conscience, as far as money is concerned, I am totally clear and clean.” 

Is he a rich man? No, he says, he only earns what Fifa pays him — a sum that he refuses to disclose because Fifa releases its leadership payments only in aggregate; last year it paid $39.7m to its “key management personnel”. 

“What do I do with my money? My daughter has an apartment. I have an apartment, one here and one there. That is all. I am not spending money just to show I have money. If you look at the richest Swiss people, I cannot approach the richest 3,000, because they are up to $25m.” 

Sonnenberg

Hitzigweg 15, 8032 Zurich, Switzerland

2 x Passuger sparkling water SFr22

Bottle of Clavien Sauvignon

Blanc SFr73 2 x Fifa salad

(Mama Blatter recipe) SFr30

Veal chop SFr59r

Potato rösti SFr9

Boiled beef with julienned vegetables SFr37

2 x espresso SFr13

Total: SFr243 (plus SFr20 tip)

The waiter returns with our main courses. For me, a surprisingly large veal chop; for Blatter, a plate of boiled beef and julienned vegetables. He picks at it slowly. “I have to tell you that I don’t eat so much because you cannot eat more than you burn,” he says. 

After a pause, he sketches out what he thinks were his two main achievements at Fifa: the Goal project, which sends millions of dollars to the world’s poorest countries and claims to have built more than 700 football facilities since 1998, and the decision to rotate the World Cup around the continents and, especially, to bring it to Africa in 2010.

He bats away my suggestion that the development money was another way of distributing favours and was a source of money for corrupt officials: “There is a percentage, perhaps 2 per cent or 3 per cent, which have not worked.”

His success in maintaining an iron grip on Fifa hangs partly on the support of African countries, which he has courted assiduously. The shadow of colonialism still lingers, and African football officials often feel that Europeans treat them as second-class. Blatter, by contrast, is unwavering in his vocal support for African football and worked tirelessly to bring the World Cup to South Africa. He has also delivered commercial success: in the four years leading up to the 2014 World Cup in Brazil, Fifa had total revenues of $5.72bn. 

In his view, he has created a virtuous circle: Fifa helps kids in developing countries play football by building them pitches and then benefits when they get home and watch big matches on TV. This work, he insists, cannot be undone: “My reputation is spoiled, because I was bitterly attacked, as responsible for everything. But it will not damage my legacy.” With the benefit of hindsight, he wonders whether it might have been better for him to stand down after the high of the 2014 World Cup in Brazil.

When I ask about the ISL case, in which it was revealed in 2008 that a sports agency founded by Horst Dassler of Adidas had paid SFr138m in bribes to senior Fifa officials, Blatter refuses to discuss it. He was not found guilty of any wrongdoing and, he says, the case is now closed and jokes about double jeopardy: “In American law it is said you cannot be condemned twice!” 

I bring up the case in the US in 2006 where Fifa paid a $90m settlement to MasterCard for reneging on a contract in order to sign a more lucrative sponsorship deal with Visa. “We were not very very clever,” admits Blatter. “It was wrong. But sometimes, because you were working hard you make mistakes. You cannot just hang somebody.” 

As we pass over the thorny questions about his wealth, about Fifa’s corruption and secrecy, Blatter is calm. He believes he is a man more sinned against than sinning, and he repeats that he has little control over the behaviour of Fifa’s executive committee, whose members were not appointed by him, but by the six continental football federations. 

“Regrets? I do not regret,” he says. “The only regret I have is that in my life in football I am a very generous man in my thoughts and I think people are good and then I have realised that most of the time I was, let’s say, trapped by people. You trust someone 100 per cent and then you see that all this trust was just to get some advantage. I have done it not only once, I have done it more than once. I have to bear that and I bear it.” 

Meanwhile, he lambasts Switzerland for not protecting him. “I am a Swiss citizen. I was even a soldier! I was the commander of a regiment of 3,500 people. I served my country!” he protests, referring to his service in the 1960s as colonel in command in the army’s supply unit during the cold war. 

These days, he has few allies left. He says he counted on one hand the number of friends he could call on for help when deciding whether to step down after years at the top of football. He admits his reputation has been destroyed. But he cannot stop. He remains proud of his life’s work. “Could somebody else have done it? If he was fool enough to only live for football, then he could have. But it is difficult to find people that have been in the game with not only their body, not only their mind, or with their heart, but with their soul. And I was therein. And if you ask me what I am doing later, I am still therein.” 

We do not order any dessert, simply a cup of espresso and some petits-fours in the shape of small footballs. Blatter is looking forward to the evening, when his girlfriend, Linda Barras, a 51-year-old with two children, is flying in to see him. She lives in Geneva, but Blatter is happy with the situation. 

“The distances are not detrimental to a good understanding,” he says. “Perhaps it is even better for the guy who has devoted all his life to football. When you are 100 per cent in your job and your job is really something you believe in, then obviously even by being a generous man, at a certain time the person living with you cannot be happy,” he says. 

Then he stands up, suddenly small and frail again, signs a football for the restaurant’s manager and disappears into a black Mercedes. 

Malcolm Moore is the FT’s leisure industries correspondent

Women Are Outearning Men in Corporate Finance - Fortune

Women Are Outearning Men in Corporate Finance Posted: 18 Dec 2015 12:51 AM PST Women may be badly outnumbered in the top ranks of corporate America, but at least they aren’t underpaid. Compensation for female chief financial officers at S&P 500 companies last year outpaced that of their male counterparts, according to an analysis by executive compensation firm Equilar and the Associated Press. It follows a similar trend seen with female CEOs in recent years. The median pay for female CFOs last year rose nearly 11 percent to $3.32 million. Male CFO pay rose 7 percent, to $3.3 million. This follows several years of steady gains for both sexes. The gains, for both men and women, are in part a result of the expansion of the CFO role to include far more responsibility and visibility. “The CFO is no longer a bean counter,” said Josh Crist, managing director at executive search firm Crist Kolder Associates. Companies and shareholders became more focused on financial security and regulation after the financial crisis, and corporate finance began to play a bigger role in company strategy, according to Gregg Passin, a compensation expert at consulting firm Mercer. Ruth Porat, became one of the most powerful women on Wall Street while helping steer Morgan Stanley, one of the nation’s biggest investment banks, through the aftermath of the financial crisis. She topped the list of highest paid female CFOs with her $14.4 million pay package from Morgan Stanley for the 2014 fiscal year. Google has since lured her away and will pay her more than $70 million for her first year as CFO there. Investors have warmly welcomed her arrival at Google, where she is expected to bring some financial discipline to what some consider their free-spending ways. The increased responsibility and visibility has helped some women CFOs rise even further, to CEO. Indra Nooyi, CEO of PepsiCo and Lynn Good, CEO of Duke Energy are both former CFOs. “It’s a unique position that has the ability to contribute to day-to-day operations but also on long-term strategic planning,” Good said. She called the CFO position “a critical training ground” for aspiring CEOs. The other top-paid female CFOs, after Porat, include Marianne Lake of JPMorgan Chase, whose compensation package is valued at $9.1 million, Catherine Lesjak of Hewlett-Packard at $8 million, Sharon McCollam at Best Buy at $7 million and Robin Washington of Gilead Sciences at $6.2 million. This ranking reflects only the companies where the CFOs who have served two consecutive years in their particular position. To calculate pay, Equilar adds salary, bonus, perks, stock awards, stock option awards and other pay components. To determine what stock and option awards are worth, Equilar uses the value of an award on the day it is granted, as shown in a company’s proxy statement. The high median pay for female CFOs is partly a result of sample size — there were only 60 female CFOs at the S&P 500 companies that qualified for inclusion in the study during the last fiscal year, compared with 437 men, according to Equilar. It is also a factor in female CEO pay. Median CEO pay for women was $15.9 million last year, according to an analysis done earlier this year by Equilar and the AP, compared with $10.4 million for male CEOs. There were just 17 female CEOs, however. The small group of women in these important roles tended to be focused at the largest companies, where pay is higher. Crist said that he expects more women to take on CFO duties in years ahead but the pay range will broaden as more women join smaller companies. He notes that women have historically been underrepresented in finance overall. That is changing, and helping fuel this shift at the top. Younger women are getting better opportunities at entry levels and these lead to better opportunities down the line. A Crist Kolder study found that the percentage of female CEOs and CFOs has hit an all-time in 2015. Of the 672 Fortune 500 and S&P 500 companies evaluated, nearly 5 percent had female CEOs and 13 percent had female CFOs. “It’s a heck of a trend,” he said. “It has been predominantly white male centric forever.”

How Rich Kids Get a Head Start - TIME

How Rich Kids Get a Head Start

Posted: 18 Dec 2015 08:34 AM PST

Back in 2011, I wrote a TIME cover story on declining social mobility and growing inequality in the United States. The title: “Can You Still Move Up in America?.” My answer back then: “not as easily as in the past.” For some time now, we’ve seen rising inequality in the U.S. And as a result, social mobility has been declining, particularly respective to many of our peer nations.
Today, new Pew Research Center data on the differences in how rich and poor families raise their children has only solidified my view that we’re becoming a two-tier society — one in which who you become depends heavily on who your parents are.
Pew’s survey found that rich parents tend to coddle their kids, creating busy after-school schedules full of soccer games and violin lessons. Working-class kids, however, are left much more to their own devices, given fewer resources and less stroking. According to Pew, that makes them more independent and closer to their parents. Yet it doesn’t help working-class youths climb the socioeconomic ladder. Once they hit their working years, they struggle just as their parents did.
Inequality and a lack of social mobility isn’t a new phenomenon. It’s always been the norm. In the wonderful 2014 book “The Son Also Rises,” University of California academic Gregory Clark shows that birth has accounted for about 50% of people’s success in life across nearly every country and time period. On top of that, Clark found that it takes 10 generations or more for inherited upward mobility to wear off. Even in the U.S., we’re more like the inhabitants of Downton Abbey than we would like to admit.
Why is this? Much of it has to do with education, including better schooling for rich children but also those after-school resources cited by Pew. But there’s a larger factor driving this, too: real estate. Rich kids are more likely to inherit property wealth from their parents, increasingly the fastest way up the economic ladder. Academics like Thomas Piketty have written at length about real estate’s importance in building socioeconomic oligopolies. More recently, former British financial regulator Adair Turner has made a strong case for real estate as the single biggest driving factor in our two-tier economy.

“There is something about a modern economy that is extremely real estate intensive,” Turner, author of “Between Debt and the Devil,” told me in a recent interview. “Living in a ‘nice’ location is a high-income want, as is good education and healthcare.”
These desires are what economists call “elastic” wants. They are constantly in demand, and in lieu of proper price control, their cost can and will spiral almost infinitely (unlike, say, the price of a pair of jeans, shoes, or even a car, which is somewhat bounded).
Just as rising education costs make it harder for the poor to climb the socioeconomic ladder, so too do higher real estate prices. Banks aren’t willing to extend credit to those who can’t put down 30% cash on a new home, but rising rents are making it tougher for people to save. That’s making it harder, if not impossible, for working-class (and even some middle-class) families to buy a home. As an increasing share of global wealth is held in housing, those who lack real estate fall are left behind.
What’s the solution? The price inflation of elastic economic goods like healthcare, housing, and education need to be constrained by smarter policies involving both the public and the private sector. In the case of real estate, some are calling for privatizing Fannie and Freddie Mac, which still underwrite about 90% of the U.S. mortgage market. But that would do nothing to fix the problem. Instead, it would create a more divisive property market, since private companies would have no impetus to create any kind of affordable housing.
The quickest fix would be tax reform that focuses on rewarding people for equity rather than debt. That means getting rid of mortgage interest deductions that allow people to buy McMansions (and create asset price inflation that fuels the cycle of inequality I have outlined above). When only the rich can afford property, and property makes up an increasing amount of global wealth, and a larger percentage of that wealth is kept in the family, then you really do have the makings of a new Gilded Era.

Everything to Know About the Arrested Drug Price-Hiking CEO - TIME

Everything to Know About the Arrested Drug Price-Hiking CEO

Posted: 17 Dec 2015 09:35 AM PST

Pharmaceutical company CEO Martin Shkreli first became notorious after he jacked up the price of a life-saving pill by more than $700 a pop earlier this year. Now, the 32-year-old entrepreneur has been arrested for securities fraud in a case tied to a separate pharma company that he used to run.
Tracing Shkreli’s rise to notoriety— and the many people he angered along the way — is a complex path. Here’s everything you need to know.
Why was Shkreli arrested?
U.S. prosecutors and the Securities and Exchange Commission are accusing Shkreli of misappropriating more than $1 million in investors’ money from his two hedge funds, MSMB Capital Management and MSMB Healthcare, according to an SEC filing. He is also accused of using stock in his biotechnology company Retrophin Inc., which he started in 2011, to pay off debts related to other business deals.
Why do people hate him so much?
In August, the Shkreli-run company Turing Pharmaceuticals bought an older drug called Daraprim. It’s used to treat a parasitic infection that can be deadly for people with HIV or cancer. The company raised the price of the drug from $13.50 per tablet to $750. Many observers saw the move as price-gouging, which Shkreli denied. “This isn’t the greedy drug company trying to gouge patients, it is us trying to stay in business,” he said at the time.
Following a massive backlash, Shkreli said he would lower the price of the drug. But then he changed his mind. After Democratic presidential candidate Hillary Clinton called on Shkreli to lower the price of the drug, he responded with a flippant “lol.”
More recently, Shkreli said at a Forbes conference this month that he would have raised the price higher if given the chance. “My shareholders expect me to make the most profit,” he said. “That’s the ugly, dirty truth.”
How did Shkreli get so rich?
Shkreli was raised in working-class Brooklyn, the son of Albanian and Croatian immigrants who worked as janitors, according to Bloomberg. He dropped out of high school and cut his teeth as an intern on Jim Cramer’s CNBC show Mad Money. Later, he started a pair of hedge funds, Elea Capital and MSMB Capital.

Those endeavors didn’t make him much money, he told the New York Times, but he discovered there was a lot of cash to be made in directly selling pharmaceutical drugs. His pharmaceutical company, Retrophin, sought out old, rarely used drugs and raised their prices—a drug to treat kidney stones, for instance, was raised from $1.50 per pill to $30.
Shkreli was ousted from Retrophin by the company’s board in 2014 and sued on allegations that largely mirror the charges now being brought by federal prosecutors. He then started Turing, the company that sparked a firestorm by boosting the price of Daraprim this fall. He told the Times he had become “very rich” thanks to his Turing stake as well as $100 million he made selling Retrophin stock.
What else should I know about Shkreli?
He’s a really big rap fan. Shkreli spent a reported $2 million in an auction to buy the only copy of the Wu-Tang Clan’s latest album, Once Upon a Time in Shaolin. In a December Bloomberg profile, Shkreli said he hadn’t listened to the album yet, though hardcore Wu-Tang fans are desperate to hear it. He hasn’t indicated that he’ll ever release the closely guarded album to the general population, but he said he would let a celebrity like Taylor Swift listen to it.
Shkreli has also floated the idea of paying the bail for Bobby Shmurda, a Brooklyn-based rapper currently in jail on gun charges. But he says Shmurda would then owe him. He has aspirations to use his wealth to be the next great rap mogul. “Within 10 years, more than half of all rap/hip-hop music will be made exclusively for me. Don’t worry–I will share some of it,” Shkreli tweeted this week.

Fed Raises Key Interest Rate for First Time in Almost a Decade - New York Times

WASHINGTON — The Federal Reserve said on Wednesday that it would raise short-term interest rates for the first time since the financial crisis, a decision it described as a vote of confidence in the American economy even as much of the rest of the world struggles.

The widely anticipated announcement — that the Fed would raise rates to a range between 0.25 percent and 0.5 percent — signals the beginning of the end for the central bank’s stimulus program. Fed officials emphasized that they intended to raise rates gradually, and only if economic growth continues. Short-term rates will rise by about one percentage point a year for the next three years, Fed officials predicted.

Interest rates on mortgages and other kinds of loans, and on savings accounts and other kinds of investments, are likely to remain low for years to come.

“The economic recovery has clearly come a long way, although it is not complete,” the Fed’s chairwoman, Janet L. Yellen, said at a news conference after the announcement.

Exactly seven years ago, the Federal Reserve cut interest rates to almost zero in order to nurse the ailing economy back to health. Today, it is expected to change direction. This is how it works.

The decision “recognizes the considerable progress that has been made toward restoring jobs, raising incomes and easing the economic hardships that have been endured by millions of ordinary Americans,” Ms. Yellen said. The Fed’s announcement came exactly seven years to the day after the central bank cut its benchmark rate nearly to zero.

The Fed is trying to tiptoe between two kinds of danger. It wants to raise rates to improve its defenses against future risks, including higher inflation or another economic downturn. But if it moves too quickly, it risks undermining the current recovery.

It faces the additional challenge of increasing domestic rates while other central banks are holding rates down.

The result, said Mohamed El-Erian, chief economic adviser at Allianz, is a plan for the “loosest tightening” in the Fed’s modern history.

Move too quickly, Mr. El-Erian said, and the Fed could “cause severe market volatility, undermining economic conditions.”

Graphic

Why the Fed Raised Interest Rates

Officials said the economy was strong enough to keep growing with a little less help from the central bank. They said rates would rise slowly, but borrowing costs already have started to climb.

The decision on Wednesday was the most important and riskiest step the Fed has taken since Ms. Yellen became chairwoman in early 2014. Every other developed nation that has raised rates since the end of the financial crisis has been forced to backtrack as growth slowed.

Financial markets took the news calmly. The Standard & Poor’s 500-stock index rose 1. 5 percent to close at 2,073.07. The yield on two-year Treasuries, closely tied to short-term interest rates, closed above 1 percent for the first time since April 2010.

Ms. Yellen will now face the challenge of maintaining an internal consensus over the pace of rate increases amid considerable economic uncertainty and the political pressures of a presidential election year.

Ms. Yellen won the support of all 10 voting members of the Federal Open Market Committee, a victory that reflects the Fed’s tradition of maintaining the appearance of consensus on major decisions.

Three of those officials had argued in recent months that the economy might not be ready for higher rates, a view shared by some economists and by Democrats who argue that the Fed is prematurely curtailing job and wage growth.

The Fed’s Statement

“The committee currently expects that, with gradual adjustments in the stance of monetary policy, economic activity will continue to expand at a moderate pace and labor market indicators will continue to strengthen.”

Universal Standards – A Brief Visit - by JKHC

 https://www.facebook.com/notes/joseph-k-h-cheng/universal-standards-a-brief-visit/992499057474691

Universal Standards – A Brief Visit

Joseph K. H. Cheng·Wednesday, December 16, 2015

( 1 ) Introduction
 It is generally accepted by most people that there exist a set of universal standards by which everyone should abide without exception to make our society a peaceful and fair place to live in. As a matter of fact, the United Nations had adopted such a set of standards embodied in the Universal Declaration of Human Rights and signed by over 48 member countries ( including all major countries ) on December 10, 1948. The full text of this declaration as published in the United Nations official website is reproduced here under ( http://www.un.org/en/universal-declaration-human-rights/index.html ) :- “ Universal Declaration of Human Rights ( adopted by UN on December 10, 1948 )

Preamble Whereas recognition of the inherent dignity and of the equal and inalienable rights of all members of the human family is the foundation of freedom, justice and peace in the world, Whereas disregard and contempt for human rights have resulted in barbarous acts which have outraged the conscience of mankind, and the advent of a world in which human beings shall enjoy freedom of speech and belief and freedom from fear and want has been proclaimed as the highest aspiration of the common people, Whereas it is essential, if man is not to be compelled to have recourse, as a last resort, to rebellion against tyranny and oppression, that human rights should be priotected by the rule of law, Whereas it is essential to promote the development of friendly relations between nations, Whereas the peoples of the United Nations have in the Charter reaffirmed their faith in fundamental human rights, in the dignity and worth of the human person and in the equal rights of men and women and have determined to promote social progress and better standards of life in larger freedom, Whereas Member States have pledged themselves to achieve, in cooperation with the United Nations, the promotion of universal respect for and observance of human rights and fundamental freedoms, Whereas a common understanding of these rights and freedoms is of the greatest importance for the full realization of this pledge,

Now, therefore, The General Assembly, Proclaims this Universal Declaration of Human Rights as a common standard of achievement for all peoples and all nations, to the end that every individual and every organ of society, keeping this Declaration constantly in mind, shall strive by teaching and education to promote respect for these rights and freedoms and by progressive measures, national and international, to secure their universal and effective recognition and observance, both among the peoples of Member States themselves and among the peoples of territories under their jurisdiction.

Article I All human beings are born free and equal in dignity and rights. They are endowed with reason and conscience and should act towards one another in a spirit of brotherhood.

Article 2 Everyone is entitled to all the rights and freedoms set forth in this Declaration, without distinction of any kind, such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status. Furthermore, no distinction shall be made on the basis of the political, jurisdictional or international status of the country or territory to which a person belongs, whether it be independent, trust, non-self-governing or under any other limitation of sovereignty.

Article 3 Everyone has the right to life, liberty and security of person.

Article 4 No one shall be held in slavery or servitude; slavery and the slave trade shall be prohibited in all their forms.

Article 5 No one shall be subjected to torture or to cruel, inhuman or degrading treatment or punishment.

Article 6 Everyone has the right to recognition everywhere as a person before the law.

Article 7 All are equal before the law and are entitled without any discrimination to equal protection of the law. All are entitled to equal protection against any discrimination in violation of this Declaration and against any incitement to such discrimination.

Article 8 Everyone has the right to an effective remedy by the competent national tribunals for acts violating the fundamental rights granted him by the constitution or by law.

Article 9 No one shall be subjected to arbitrary arrest, detention or exile.

Article 10 Everyone is entitled in full equality to a fair and public hearing by an independent and impartial tribunal, in the determination of his rights and obligations and of any criminal charge against him.

Article 11 1. Everyone charged with a penal offense has the right to be presumed innocent until proved guilty according to law in a public trial at which he has had all the guarantees necessary for his defense. 2. No one shall be held guilty of any penal offense on account of any act or omission which did not constitute a penal offense, under national or international law, at the time when it was committed. Nor shall a heavier penalty be imposed than the one that was applicable at the time the penal offense was committed.

Article 12 No one shall be subjected to arbitrary interference with his privacy, family, home or correspondence, nor to attacks upon his honour and reputation. Everyone has the right to the protection of the law against such interference or attacks.

Article 13 1. Everyone has the right to freedom of movement and residence within the borders of each State. 2. Everyone has the right to leave any country, including his own, and to return to his country.

Article 14 1. Everyone has the right to seek and to enjoy in other countries asylum from persecution. 2. This right may not be invoked in the case of prosecutions genuinely arising from non-political crimes or from acts contrary to the purposes and principles of the United Nations.

Article 15 1. Everyone has the right to a nationality. 2. No one shall be arbitrarily deprived of his nationality nor denied the right to change his nationality.

Article 16 1. Men and women of full age, without any limitation due to race, nationality or religion, have the right to marry and to found a family. They are entitled to equal rights as to marriage, during marriage and at its dissolution.

2. Marriage shall be entered into only with the free and full consent of the intending spouses. 3. The family is the natural and fundamental group unit of society and is entitled to protection by society and the State.

Article 17 1. Everyone has the right to own property alone as well as in association with others. 2. No one shall be arbitrarily deprived of his property.

Article 18 Everyone has the right to freedom of thought, conscience and religion; this right includes freedom to change his religion or belief, and freedom, either alone or in community with others and in public or private, to manifest his religion or belief in teaching, practice, worship and observance.

Article 19 Everyone has the right to freedom of opinion and expression; this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers.

Article 20 1. Everyone has the right to freedom of peaceful assembly and association. 2. No one may be compelled to belong to an association.

Article 21

1. Everyone has the right to take part in the government of his country, directly or through freely chosen representatives. 2. Everyone has the right to equal access to public service in his country. 3. The will of the people shall be the basis of the authority of government; this will shall be expressed in periodic and genuine elections which shall be by universal and equal suffrage and shall be held by secret vote or by equivalent free voting procedures.

Article 22 Everyone, as a member of society, has the right to social security and is entitled to realization, through national effort and international co-operation and in accordance with the organization and resources of each State, of the economic, social and cultural rights indispensable for his dignity and the free development of his personality.

Article 23 1. Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment. 2. Everyone, without any discrimination,has the right to equal pay for equal work. 3.Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection. 4.Everyone has the right to form and to join trade unions for the protection of his interests.

Article 24 Everyone has the right to rest and leisure, including reasonable limitation of working hours and periodic holidays with pay.

Article 25 1. Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability widowhood, old age or other lack of livelihood in circumstances beyond his control. 2. Motherhood and childhood are entitled to special care and assistance. All children, whether born in or out of wedlock, shall enjoy the same social protection.

Article 26 1. Everyone has the right to education. Education shall be free, at least in the elementary and fundamental stages. Elementary education shall be compulsory. Technical and professional education shall be made generally available and higher education shall be equally accessible to all on the basis of merit. 2. Education shall be directed to the full development of the human personality and to the strengthening of respect for human rights and fundamental freedoms. It shall promote understanding, tolerance and friendship among all nations, racial or religious groups, and shall further the activities of the United Nations for the maintenance of peace. 3.Parents have a prior right to choose the kind of education that shall be given to their children.

Article 27 1. Everyone has the right freely to participate in the cultural life of the community, to enjoy the arts and to share in scientific advancement and its benefits. 2. Everyone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author.

Article 28 Everyone is entitled to a social and international order in which the rights and freedoms set forth in this Declaration can be fully realized.

Article 29 1. Everyone has duties to the community in which alone the free and full development of his personality is possible. 2.In the exercise of his rights and freedoms, everyone shall be subject only to such limitations as are determined by law solely for the purpose of securing due recognition and respect for the rights and freedoms of others and of meeting the just requirements of morality, public order and the general welfare in a democratic society. 3.These rights and freedoms may in no case be exercised contrary to the purposes and principles of the United Nations.

Article 30 Nothing in this Declaration may be interpreted as implying for any State, group or person any right to engage in any activity or to perform any act aimed at the destruction of any of the rights and freedoms set forth herein. “

 The aim of this essay is to explore the question of whether or not such a set of universal standards can be reasonably supported by facts and principles independent of any particular religion, political ideology or school of ethical principles. After all, the member states of UN are so diverse with regard to religious beliefs and political ideologies that such an universal set of standards for human behaviour must not reflect only the views of some influential member states to the exclusion of the other members. If this vital question cannot be answered in a satisfactory manner the Declaration would just be another political statement reflecting the views of the more influential members states only. If this unfortunate scenario turns out to be the reality the significance of the Declaration as the basis of international and inter-personal behaviour would be drastically reduced or should even be disqualified as guidelines for universal human behaviour.  


( 2 ) First things first
Before answering the question of the acceptability of the Declaration we must ask the question of whether or not a set of universal standards should be put forward in the first place. After all, such standards are meant to set a minimum standard for all human behaviour and individual liberty is always something to be treasured and protected as everyone will agree. Furthermore, as we are trying to assess the aptitude of the universal standards independent of any particular religious belief, political ideology or school of ethical principles we must also find an unassailable criterion to gauge the contents of the universal standards. It seems to me that one such universally accepted and objective criterion can be found in the laws of nature or simply Mother Nature as we usually call it. The laws of nature exists and works like clock work on the physical world and all living beings and objects alike. No one and nothing can resist but must simply obey the laws of nature. This omnipotent characteristic of the laws of nature makes it an indisputable universal criterion to assess all human behaviour. The laws of nature have been working well for millions of years ( over 4 billion years to be exact ) until human misbehaviour and misuse of technology have started to harm the environment. This proves that doing things contrary to the laws of nature has dire consequences as we all agree now. There is, however, a reservation of which one must be aware regarding the supremacy of the laws of nature. That is, people sometimes tend to interpret the meaning of the laws of nature to suit their own selfish and sinister objectives. For example, the evil Nazi leader Hitler had used Charles Darwin's biological evolution laws to justify the massacre of six million Jews during WWII to satisfy his perverted obsession for power. By so doing he had grossly violated the most basic and most important of all human qualities, namely, compassion which differentiates us from wild animals who instinctively follow the laws of the jungle. As human beings are endowed with higher mental faculties by Mother Nature unlike other animals we should know better than resorting to the laws of the jungle to achieve our selfish ends. We know because a world lacking human compassion will mean suffering and confusion for everyone. From Mother Nature we can deduce the concept of Natural Justice. As we are all subject to the same laws of nature which can be harsh at times ( such as natural disasters, etc. ) and as all of us cannot escape the natural processes of pain from birth, ageing, sickness and death it is logical that we should help one another to enable us to stand a better chance of survival and of enjoying a better life ( another basic human right ). At the very least, by standing together we can lessen our common burdens in life. Therefore, it serves our best interest to maintain a smooth and fair society with one heart based on a set of generally accepted universal standards of human behaviour.


( 3 ) The relevant laws of nature
 Equality of all human beings with regard to their basic human right is the centre issue here. Should all human being be equal ? Mind you. They are NOT at all equal in reality but should they be ? That is the sixty four dollar question. I as most decent human beings do think there should be equality for all. However, there are others especially many of those belonging to the privileged class do not hold the same view. They are enjoying their precious and exclusive rights so much that they do not want anyone else to share them even in a fair and square manner. Such dissidents of the “ equality for all “ principle include those politicians and their hang men of any autocratic regime holding power illegitimately and at the same time holding citizens of their countries at their mercy. Another prominent dissident group is the crooked black sheep community of the business world ( the so-called Wolves of Wall Street ) who would steal and cheat to fatten their own pockets at the expense of everyone else as can be seen during the global financial crisis in 2008 the aftermath of which is still being felt worldwide today. The common denominator for these two evil dissident groups is the adoption of double standards – a very loose and convenient set of rules for themselves while a very harsh set of rules for other people. Coming back to the question of equality for all we may resort to an old Chinese saying :- “ Everyone is born with a mother “ implying that we should treat others as kindly as we treat ourselves as we are all human beings. However, the dissidents may say that their mothers may have a better up bringing and more noble birth or blood line ( another outdated feudal notion ) than other people. Well, I guess differences can always be found if we set our minds to it ( the infamous Selection Effect - http://jkhcforum.blogspot.com.au/2011/02/thoughts-to-you-from-yours-truly-57-feb.html ). In today's world where everyone ( is but just a click of the computer button away and is living under the common scourge of terrorism ) and everything ( is environmentally tied together including propagation of sickness and pollution ) is so closely connected that we stand a much better chance of survival if we unite together rather than discriminate against one another for whatever idiotic reason.

To refute the dissidents' argument against the “ equality for all “ principle based on the above fallacious grounds or any other arguments they may put forward we can raise the stakes for our reasoning to the realm of the unassailable laws of nature. All blood lines can be traced back to the origin of life which is still a mystery in science. However, one thing is certain. All life is carbon based and the element of carbon can only be made in the nuclear fusion process occurring in stars like our sun. Every star including our sun is a cosmic nuclear fusion cooking pot. The cooking process starts with the most simple atom which is hydrogen composed of one proton ( with positive electric charge ) and one electron ( with negative charge ). When the star heats up nuclear fusion takes place and two hydrogen atoms fuse or " melt " together to form helium composed of two protons and two electrons. This fusion process progresses until carbon is formed which is composed of 14 protons and 14 electrons by a miraculous process known as resonance without which carbon can never be formed. As everyone knows carbon is the basis for all organic matters so that there would be no life without carbon. This is not the end of our life story which is much more intriguing. The fusion process will progress further until the chemical element of iron with 26 protons and a like number of electrons is formed. Then the process ceases because iron is the most stable element. When all the hydrogen in a burning star becomes iron the nuclear fuel is exhausted and the outward pressure exerted by nuclear fusion reaction will be gone and the force of gravity takes over causing the dying star to collapse upon itself under its own iron mass. The gravitational collapse will result in a tremendous explosion know as a supernova ( meaning new star ) because it marks the beginning of the formation of a new star from the debris of dusts and gas scattered around in space by the supernova. These will coalesce eventually because of gravity until the mass of the debris is dense enough to cause the nuclear fusion process to restart. At this stage a new star is born.

There is still another mysterious twist in the recycling of the cosmic debris created by a supernova explosion. For stars bigger than 8 times the size of our sun the gravitational collapse of the iron core at the end of the nuclear fusion process will be unstoppable and a black hole will be formed. It is known as a black hole because it is infinitely dense so that even light cannot escape. For our earth, the escape velocity of a space rocket leaving the grip of the earth's gravity is about 24,000 km per hour. Light has a velocity of 300,000 km per second. So, one can imagine the density of mass in a black hole. Astronomers cannot see a black hole. Its presence can only be detected by faster than normal movements of stars circulating the black hole as if they are circling nothingness. Most galaxies including our own Milky Way harbour a black hole in their centres. Without the gravitational pull of a massive black hole in the centre our galaxy should have disintegrated long ago judging on the speed of the revolution of a billion stars around the Milky Way centre.

This is the romantic story of our life and humble beginning for creatures both big and small, good and bad. Who or what is the most noble person or creature respectively ? All and none ! All things ( including inanimate matters ) cannot be more equal. So, it is not who or what you are that is important but what you do. If your deeds are in line with the greatest law of all which is the law of nature you are a noble being. Otherwise, you are the anti-hero which is synonymous with the devil if you hurt the environment and its creatures. This applies to all creatures whether they believe in the existence of God or not. The eternal law of nature which is that of cause and effect will ultimately catch up with the devils. I have absolutely no doubt about this. Another vital moral lesson to be learned is that death ( like in a supernova ) is the beginning of life and life death. Therefore, we must accept the inevitable and recognize the achievable. May we all have the wisdom to tell one from the other. Apart from valuable knowledge we can also derive a lot of profound insight and inspiration from astronomy. In my humble opinion, it is an essential subject for all people especially those in power because astronomy can confine politicians' inflated ego to an acceptable level.

After reading the above brief account of the origin of all life I hope it leaves little doubt on the reader's mind about the common and humble origin of all life which is star dust. The question of equality of all global citizens should be beyond dispute by any sane and reasonable human being.

( 4 ) Purpose in life and the universal standards

Some people say that life definitely has a purpose while others may beg to differ. I think this is a very personal question and can only be answered by each individual alone. I belong to the first category of individuals and further believe that each individual is endowed with his or her own talents to achieve their particular purpose in life. Hence, I always do my own soul searching to find out my personal purpose in life.

One of the greatest philosophers of all times, Socrates famously said that :- " The unexamined life is not worth living. " ( one of my own favourite quotations ). After examining life perhaps one will get the truth or at least one's own version of the truth and then the truth will set you free ! Then again, perhaps not in every case as even the great Socrates himself was executed by the state for propagating the truth and accused of misleading the younger generation. Despite the tragic fate of Socrates his protege Plato as well as Plato's student Aristotle all faithfully followed his love for the truth. Aristotle was recorded as having said this about his teacher, Plato :- " Plato is dear to me, but dearer still is truth. " The logic seems to be that by asking WHY ( examining one's life ) it leads to the TRUTH and knowing the truth ( or true purpose in life ) will lead to PEACE of mind. That is why the truth will set you free !

While I totally subscribe to the " why-truth-peace " logic yours truly is a bit more greedy in life. In my humble opinion, knowing your purpose in life is just the " necessary " condition for gaining peace of mind. The " sufficient " condition is to do your utmost to achieve that purpose which is destined for you. Regardless of success or failure in fulfilling that purpose it seems fair to say that trying one's utmost in achieving one's purpose in life is the hallmark of a successful life. Thus, it is abundantly clear to me that everyone can be successful in life if one has tried his or her best to achieve one's own goal in life. Coming back to the subject of the importance of asking why, I will just say this. Without asking why there can be no success in life and no peace of mind when we pass on. It is as simple as that.

As I see it, one of the important purposes in life is to interact with other people so that we can share our knowledge and experience and can enrich our life to our mutual benefit in the course of social interaction to make a better world for all. Human beings are generally social animals that like to communicate with one another. This being the case a set of minimum standards of behaviour is necessary to keep our peace with one another and provide a fair playing field in society as a whole.

( 5 ) People, society and the universal standards

People live in society instead of alone because there is strength in numbers in terms of security, economic co-operation and social interaction which is inherent in human nature as mentioned above. There are always pros and cons to any arrangement. It is a matter of compromise or give and take. To pay for the privilege of living in a society the individual will have to forego some personal liberty and be governed by a political body ( the state ) and obey a set of laws enacted by majority consent to keep society running smoothly, orderly and fairly. This relationship between the individual and the state or government is generally known as the Social Contract in political philosophy.

There are a few different versions of Social Contract as set out here under according to Wikipedia ( https://en.wikipedia.org/wiki/Social_contract ) :- “ In moral and political philosophy, the social contract or political contract is a theory or model, originating during the Age of Enlightenment, that typically addresses the questions of the origin of society and the legitimacy of the authority of the state over the individual.[1] The world's earliest version of the social contract theory is however found in the 2nd Century BC text of earlier Buddhism, Mahāvastu.[2] Social contract arguments typically posit that individuals have consented, either explicitly or tacitly, to surrender some of their freedoms and submit to the authority of the ruler or magistrate (or to the decision of a majority), in exchange for protection of their remaining rights. The question of the relation between natural and legal rights, therefore, is often an aspect of social contract theory. The Social Contract (Du contrat social ou Principes du droit politique) is also the short title of a 1762 book by Jean-Jacques Rousseau on this topic. Although the antecedents of social contract theory are found in antiquity, in Greek and Stoic philosophy and Roman and Canon Law, the heyday of the social contract was the mid-17th to early 19th centuries, when it emerged as the leading doctrine of political legitimacy. The starting point for most social contract theories is an examination of the human condition absent from any political order that Thomas Hobbes termed the "state of nature".[3] In this condition, individuals' actions are bound only by their personal power and conscience. From this shared starting point, social contract theorists seek to demonstrate, in different ways, why a rational individual would voluntarily consent to give up their natural freedom to obtain the benefits of political order. Hugo Grotius (1625), Thomas Hobbes (1651), Samuel Pufendorf (1673), John Locke (1689), Jean-Jacques Rousseau (1762), and Immanuel Kant (1797) are among the most prominent of 17th- and 18th-century theorists of social contract and natural rights. Each solved the problem of political authority in a different way. Grotius posited that individual human beings had natural rights; Hobbes asserted that humans consent to abdicate their rights in favor of the absolute authority of government (whether monarchial or parliamentary); Pufendorf disputed Hobbes's equation of a state of nature with war.[4] Locke believed that natural rights were inalienable, and that the rule of God therefore superseded government authority; and Rousseau believed that democracy (self-rule) was the best way of ensuring the general welfare while maintaining individual freedom under the rule of law. The Lockean concept of the social contract was invoked in the United States Declaration of Independence. Social contract theories were eclipsed in the 19th century in favor of utilitarianism, Hegelianism, and Marxism, and were revived in the 20th century, notably in the form of a thought experiment by John Rawls. “

Regardless of the particular version one will agree to the main aim of the Social Contract is to spell out the citizens' basic obligations to the society or state to which he or she belongs. At the same time , the citizens' rights are equally protected. The central theme of the Social Contract may be summarized as follows:- “ Social contract arguments typically posit that individuals have consented, either explicitly or tacitly, to surrender some of their freedoms and submit to the authority of the ruler or magistrate (or to the decision of a majority), in exchange for protection of their remaining rights. “ ( as set out in Wikipedia above ). More over, the concept of a social contract dates back to the Second Century B.C. and not of the western cultural tradition.

Society did not exist before people feel the need to form such a union for their own mutual welfare. Society exists for the peoples' common good not the other way round as all autocratic regimes claim with a view to legitimizing their total control over every aspect of their citizens' lives. A logical inference from the purpose of forming society is that the efficiency of any state or government can be measured by how much freedom the citizens have to give up in exchange for their citizenship. The less loss of personal freedom is required for the citizens to enable the state or government to operate properly the more efficient is the governing machine.

Given that the governing machine is made up of people who are given a mandate by the majority citizens to run society ( most importantly in the efficient production and fair distribution of economic resources ) these public servants or better known as politicians must be supervised properly because they have been given the privilege to control all resources as well as people's daily lives. ALL people including yours truly here tend to abuse power when this most corrupting thing in this world is given to their care or control ( every one will remember the overpowering effect of the ring on its owners in the famous movie “ Lord of the Rings “ ) This being the case their law abiding obligation and ethical standards should be even stricter than those applicable to ordinary citizens. Furthermore, they are usually given a fat remuneration package and high esteem and even a chance to earn their place in history if they do a good job. All these privileges are not usually enjoyed by ordinary citizens.

As society, governments and international relationship are all run by people a set of minimum standards for human behaviour is vital to ensure a smoothly and fairly run human society as a whole. Therefore, a set of generally accepted universal standards must exist as guidelines to every aspect of human behaviour.

( 6 ) Government, the people and the universal standards
 

( a ) Why do we need the government ?
“ Men is by nature a political animal.” So declared Aristotle. The father of modern China, Dr. Sun Yat San also said that “ politics is everybody's business.” Whenever men gather together there has got to be some organizational mechanism to conduct their daily affairs. Politics is born out of such a basic need. But the human brain which controls our actions is a chaotic system of the most complicated kind hence politics ( handling human affairs ) has become a highly complex, and very often, tricky process. Because we live in a materialistic world and our daily needs are derived from human ( services ) and other natural ( goods ) resources economics comes in. That is why Karl Marx had rightly stated that politics is merely concentrated economics. The dispute between the two basic economic systems, namely, market ( capitalistic ) economy and centrally planned ( socialistic ) economy, on which is the superior system has long been resolved ( since the collapse of the former Soviet Union ) in favour of the former. The only truly socialists systems to be found in the world nowadays exist only in Cuba and North Korea and these are crumbling fast, too. Despite the settlement of the ideological arguments between these two systems, it is still of interest to us to ponder on the philosophical basis upon which the two systems are built. This is because the roots of each system can be found in different assumptions concerning the relative importance of the inborn human rights as compared with that of society as a whole. A clear understanding of the rightful position of the individual in society is and always will be of paramount significance in guiding any present and future public policies. Such policies are ultimately reflected in the enactment of the relevant laws that will directly affect our daily lives and livelihoods, the most important element in social economics. The most enlightening remark on politics, in my opinion, is Abraham Lincoln's statement :- “ No man is good enough to govern another without that other's consent. “ This says it all about the inborn right of the modern citizen wherever he or she might be. It spells out in unambiguous terms the basic political idea of government by the majority mandate of the people. In the very beginning of human history, people lived in isolated and small groups such as families and tribes. Even then, they found it beneficial to every member of the group to co-operate and help one another to face their daily difficulties in a harsh environment. To trade some liberty for safety and strength in number as a group, they were willing to subject themselves to the rules set by the group to which they belonged. Keeping in mind the main purpose of this partial surrender of individual freedom is for the exchange of help and protection from the group, it is both logical and reasonable to conclude that a fair deal should involve only the minimal sacrifice of the individual's right to enable society to function properly and nothing more. If the individual is asked to make a total sacrifice of his right to exchange for just a little benefit, he or she would have been better off living alone. Therefore, the measure of the efficiency of any government is the degree of sacrifice it demands from her citizens. The less sacrifice asked of her citizens in the form of laws and taxes the more efficient is the governing machinery. Of course, there must be a reasonable level of protection and other social services such as health care and financial security that must be provided by the government. Nor is it right for the citizens just to ask for benefits from their government without contribution on their part because all goods and services must be funded by taxes and other financial measures. To square the equation of supply and demand, citizens must also do their part by paying all just taxes and not to abuse their rights to the essential services provided by their government. Furthermore, greater sacrifice may have to be made by the citizens when their own country is under threats of attack by enemies. There is a constitutional duty for all able-bodied citizens to defend their own country in a justifiable war when all other means of settling disputes with the enemies prove to be in vain. Should this unfortunate situation arise we must be wary about the wisdom of the politicians in going to war. Every attempt must be made to question such fateful decision through the legislature to ensure that war is the only option before we should give our support and act on it by our participation in national service.

( b ) Market economy versus Socialist economy
 Coming back to economic issues, it is pretty obvious that the reason for the triumph of market economics over the socialist or centrally-planned economics is the fact that the former system gives due consideration and respect to the rights of the individual while the latter does not. But this is not to say that market economics is the perfect economic system. In fact, its basic motivation is greed which is the second mortal sin ( the first being ignorance ) on my personal list of vices. Therefore, like E.M. Forster's opinion on democracy, I can only manage to give two cheers for capitalism. Like any social system, capitalism must be urgently supplemented by a proper education system to instill the ethics of fairness and compassion into the minds of the citizens especially the younger generation before the capitalistic system can become tolerable. Only with fairness and compassion can mankind survive the less than perfect and, sometimes, greedily evil capitalistic system. You only have to look at the extent of the unfairness and misery brought upon the less developed countries by the overpowering globalization process that is gathering pace at an amazing speed to realize the potential damages and injustice that can be done to the underprivileged.

Despite all these terrible shortcomings, market economics still does a reasonably good job in the effective utilization and distribution of scarce resources by putting a price on any commodities or services through the laws of supply and demand that reflect their true economic value and thereby prevents wastage. To overcome its evil aspects of greed and disregard for humanitarian considerations, we must look to the democratic system of government which can provide check and balance in the ruling government's power. Any irresponsible government must be liable to replacement by another more capable one through a popular and constitutional mandate. This in turn is only possible through the implementation of a fair electoral system supported by a well educated population of voters. The capitalistic system is only a man made system that can and should be changed if and when necessary on humanitarian grounds which is the top priority in any fair economic policy. Therefore, under sound economic policy, the commercial principles should not be applied to basic social services provided by the government. This is the sensible ability to pay and benefits received approach adopted in the area of public finance which is a special branch of economics that deals with public affairs. Under this approach, the pricing of public services such as health care is not based on the normal economic principle of demand and supply but on the individual's ability to pay for such services. For example, patients requiring emergency medical services are asked to pay different rates for the same services depending on their income brackets. Such measures can effectively reflect the different humanitarian considerations applicable to different patients. So, the impact of the undesirable aspects of a capitalistic economy can be kept to a minimum. Furthermore, we must work towards an enlightened form of the market economics by re-aligning our value system ( see my blog here :- http://jkhcforum.blogspot.com.au/2009/04/financial-tsunami-ft-way-forward-20.html ).

 

As regards the failure of the socialist regime, there are three main objections to its theoretical premises. Firstly, no one really knows exactly what the population as a whole need. It is just too complicated to plan in an orderly manner. Secondly, without a price system to fix the real economic value of any goods and services through the laws of supply and demand, nobody can know the true value of the ever scarce resources and that will lead to definite waste. This can be clearly seen in the general lack of efficiency of public and governmental establishments which do not operate on the commercial principles. That is the reason why it is always important for the government to have the smallest possible share of the gross national product ( income ) in terms of its annual financial budget. The private sector is always more efficient economically because inefficient organizations will inevitably be forced out of existence by the powerful law of survival of the fittest which is the driving force in the history of the evolution of life itself. The third reason for the failure of the socialist economic system is its flagrant disregard for consumer choice and by reference to human values and the importance of the consumer as a uniquely functioning and feeling individual for whom society is formed in the first place. Socialist or centrally-planned economy has the usual characteristics of absolute power and discipline as dictated by the ruling hierarchy. This is a key feature of any socialist economic system because without absolute power both the planning itself and the execution of such plans will be compromised. The illogical and lopsided reasoning of this key feature says it all for this failed regime. Instead of finding out and providing for the needs of the people, a socialist economic system asks for and, very often, demands adaptation by the people to the central government's economic plans usually decided by a few bureaucrats who are always supported by an army that has often sworn allegiance only to the ruling party and its leader. The ridiculous part of it all is the fact that without the fixing of the true economic values for the resources by an objective price system that works on the laws of supply and demand, the planners themselves in all their sincerity and honesty ( which is not generally the case ) will be incapable of achieving any efficient distribution or utilis\zation of scarce resources. So, there you have it. It is simply a system based upon illogical philosophical assumptions which ignores basic human rights and unworkable economic principles that cannot achieve the major economic goals of efficient use of resources; fair distribution of income and wealth; full employment; stability of prices and economic growth. It has degenerated into a hideous tool used by power mongers and dictators to enslave the people as most skilfully and satirically highlighted by the famous writer, George Orwell in his world renowned novel, Animal Farm.

( c ) Fallacies of the Socialist argument
 The alleged moral superiority of the socialist system is its fairness to all. Karl Marx set out his ideal motto in this manner ;- “ from each according to his abilities and to each according to his needs.” Despite its theoretical soundness, this motto is quite impossible in practice because of our selfish human nature. It requires almost a saint to do the first part without any financial compensation which was the original Marxist design. As for the second part of the motto, it is a mandate for what we call “ the free lunch”. If the kind of ethical standard that is called for by this motto really exists or is achievable in practice, then our society can operate on any system or none at all. Such is the high degree of moral and ethical standards required before the socialist economic system can be successfully implemented. Nevertheless, I do confess that at my home ( just like Jesus Christ and his apostles, ) I and my family members do practice communism ( the morally higher form of economic system that is actually described by Karl Marx's motto ). The parents make the money while the children just do their part which is receiving education and taking all their daily needs from the family without paying any financial compensation. This is Communism with a capital C, pure and simple and let me tell you unequivocally that it only works within the family unit, period !

Just to clarify the confusing reference to Communism, Karl Marx also felt that his motto as cited above was not easily achievable. Therefore, he proposed the less stringent standards of Socialism as a stepping stone to Communism. Under a socialist system there would again be no private ownership of property but there would be financial reward for labour provided by the citizens of the state based on planned and government approved rates. Ultimately, he anticipated a change over to the ideal state of Communism when the population had been educated to the required perfect moral standards. Under the disguise of all these high sounding ideas the ugly reality is the indisputable fact that socialist systems all go hand in hand with totalitarian political systems that always diminish the individual values of each human being in favour of selfless and total sacrifice of the citizens for the state ( but it is only one way traffic ) which is controlled by a self-interested ruling political party or dictator. To add insult to injuries already inflicted upon individual citizens by such a ridiculous deal , the declared political goal of all such totalitarian governments are always equal rights for all, but as George Orwell said ;- “ Only some are more equal than others.” The some referred to here are, of course, those politicians who hang on to their illegitimate power by hook or by crook.

I could never in my life forget the bloody episode of the Tiananmen Massacre of demonstrating students and workers in Beijing on the 4th of June, 1989. The biggest irony of all is that the killing of the workers who were supposed to be the proletariat that made up the vanguards of the Communist Revolution. The army that carried out such despicable atrocity was none other than the Peoples' Liberation Army. Only this time around, this army of the Chinese Communist Party had truly and literally liberated the people they were supposed to protect into the kingdom of heaven ( however one must bear in mind that the Peoples' Liberation Army swear their loyalty to the party instead of the people – so there you have it ! ). Even more ironic is the fact that such atrocity had taken place in the Square of the Heavenly Peace ( Tiananmen Square ) in Beijing. What greater horrors can absolute power manage to produce ?

So why are we still pondering over this welcomed demise of socialist economics now ? The simple answer is that its demise highlights the triumph of the individual's sacred rights to be free - to make free choices in life on a materialistic, social, intellectual and spiritual levels. Freedom can only be delayed but never denied. A particularly undesirable effect of Socialism ( and Communism alike ) is Karl Marx's materialistic world view and the inevitability of class struggles ( no compromise in this area is possible under Socialism ) which subsequently deteriorated into the evil practice of the end justifies the means. Such extreme philosophical outlook is the source of almost all the evil deeds which are an affront to all humanity including the scourge of our present day- terrorism. That is why the argument for the end justifies the means must be vigorously denounced.

To me, Marx's uncompromising attitude towards class struggle and materialism merely reflects his inability to connect different important aspects of nature, life and humanity. The sanctity and precious nature of life; the harmony and peaceful co-existence of all the elements and living organisms in nature ; and the never ending cycles of change through life and death all point to the possibility and, in fact, the necessity to compromise and to connect among ourselves and Mother Nature. Furthermore, the important elements in nature and life are not made up of things ( ends ) but processes ( means ) as implied by Quantum Theory. Therefore, the means are much more significant than the end because nature itself is the manifestation of never ending cycles of processes - to everything, turn, turn; to every season, turn, turn. In our modern society abound with high technology, everyone demands efficiency and instant results. Whereas it is the process of reaching your destination ( your chosen end ) and sharing that experience with the people you care about that is the ultimate happiness. We have very often mistaken the sign posts for the the destination to our disadvantage and , sometimes, to our own detriment as in the present case of justifying the means by the end. Let us learn this vital lesson before it is too late and heed the warning provided to us by the failure of Socialism to enable mankind to move on in the right direction.

( d ) Putting politicians in their proper places 
 It is incomplete to discuss politics without any reference to the politicians. They are a completely separate breed of human beings. I do not mean it as a compliment. They are most of the time a pain in the neck but, on the other hand, we cannot do without them. That is the absolute truth. Therefore, I have come to the sensible conclusion that the best attitude towards politicians should be this. They are to be tolerated but must always be viewed with suspicion. We cannot totally trust them and yet we must keep ourselves informed of what they are saying or doing because sometimes our livelihood and well being depend a lot on the policies they create in our name. We must do our part to make them toe the line of justice and fairness. Now, let us see if this suspicious and merely tolerating attitude of mine towards politicians and other public servants is justified. First of all, I am only aware of two professions that pay its members a good remuneration and provide the great privilege to their members with the chance to make an everlasting reputation in history. These two professions are the politicians and the entertainers ( including sportsmen and sportswomen ). With regard to making a name in history, the politicians are far ahead of the entertainers because the issues the politicians deal with have far reaching effects on society as a whole. So, it is a rosy deal for all politicians. They get both a good salary for doing their job and the greatest privilege of all that is to get a chance to earn themselves a good reputation which will last for all eternity. As I mentioned before, efforts and reward go hand in hand. Therefore, it is only fair that the politicians should be under close scrutiny and subject to harsh criticism from the public for doing such a privileged job. Politicians cannot have the best of both worlds in the sense that they cannot both have their cake and eat it. They must always remember that society and, hence, the government is formed solely for the purpose of serving the people. Therefore, the people should always be the masters. Politicians and political parties are, in fact, further down the hierarchy as servants or members of the government only. The crazy reality is that all autocratic regimes are treating the leaders of their only ruling party ( politicians ) and their own political party as the masters to enslave their citizens. What a ridiculous proposition this is ! So, politicians please take notice of my comments. You are in the privileged position of being capable of doing great things with the power bestowed upon you by popular mandate if you choose to do the right thing and achieve immortality by putting your names in history for good. Despite their ideal position to do just that, many politicians are unfortunately corrupt and only serve the narrow interests of their own political parties and perhaps their own selfish ends. The hallmark of a politician is, as the Chinese saying goes, grass on top of a wall that bends with the wind. For politicians in general, they very often ignore truth and justice in favour of popularity that can win them the vote to keep them in power which in turn means more fortune. They resort to smart talk and legal technicalities when they are in trouble. My humble advice to politicians is this. Take a good look at this universe. Find your rightful place in it. Assume the correct perspective which is no one is invincible and indispensable. However powerful you are on this earth, the Big Blue Marble is still an ordinary planet in an ordinary solar system situated among billions of similar systems in an ordinary galaxy we called the Milky Way that is 100,000 light years across. The Milky Way Galaxy is in turn just another ordinary island universe among billions upon billions of large and small galaxies in the visible universe which is some 150 billion years old ( earth time ) that started at the Big Bang. There could still be countless galaxies and endless space beyond our visible part of the universe. Even within our visible universe, we cannot rule out the existence of extra-terrestrial intelligence. On top of all these, Strings Theory and Quantum Physics point to the possible existence of numerous universes in different and higher dimensions which scientists have dubbed the multiverse. All these scientific facts should be enough to put our inflated ego which is a very common phenomenon with politicians and other celebrities at bay. On the other hand, these facts do not have to intimidate us into hiding behind our own physical insignificance and to lead us to the negative conclusion that there is nothing much we can achieve in this vast universe. On the contrary, the implications of Quantum Mechanics on the role of human consciousness lend support to the view that our subjective intentions can make a real difference to our future course in life. Therefore, those in power should and must hold a positive attitude to achieving a better future for mankind. Politicians must have the vision and the wisdom to view their public policies in the larger perspective of the whole human race as citizens of our global village and not to dwell on the narrow interests of political parties and their self-interests. Be humble as everyone should. No one is qualified to stay in power forever. Politicians must not immerse themselves in such an unrealistic and unreasonable illusion. Enough is enough. When the people have spoken surrender your political powers graciously. Remember you have been privileged to be given the chance to serve the people and to put your name in history. Cherish and treasure this privilege and never abuse the power that has been conferred upon you by popular mandate. In short, rejoice for having this unique opportunity to make a difference to your own reputation, to this world and to your fellow citizens. Politicians, please put the people as your top priority !

( e ) Universal standards to protect citizens against all governments
As citizens of all countries are constantly under the possible threats of being bullied by their governments ( sometimes even legally through unjust laws and discriminating behaviour ) a set of universal standards must be put in place to prevent this unfortunate situation from arising. To clarify the apparent contradiction in my above statement a government can persecute its citizens by enacting unjust laws which may be against natural justice. This situation most frequently happens in autocratic regimes with a single party dictatorship which can force the passage of unjust laws. Therefore, being legally bullied can actually happen in reality. We must be fully aware of the important difference between legal and fair. What is legal may not be fair in terms of natural justice. Very often autocratic governments use pretexts such as to maintain stability of the state, a perceived foreign threat or simply to treat any different opinion however constructive as subversion of the state to detain or imprison outspoken citizens or group. This can also happen to a lesser degree even with democratically elected governments when the politicians' interest or power is at risk. Power is the most corrupting thing on earth and all those in power will at some time or another abuse the power vested in them by their citizens. “ Power tends to corrupt and absolute power corrupts absolutely “ ( by Lord Acton – British historian [1834-1902] ). This being the case with all governments and politicians a set of universal standards of human behaviour is indispensable. Another tactic adopted by some autocratic governments to delay the implementation of UN's Declaration of Human Rights is to excuse themselves by saying that every country is at a different stage of development. Therefore, the implementation of some part of the Declaration may be delayed till a later stage of the particular country's development which can mean indefinitely. Admittedly, there should be flexibility in the Declaration's implementation but the most basic human rights ( which will be discussed below ) must be put into effect immediately ( which should have been December 10, 1948 when the Declaration was signed and promulgated by 48 member states including all major countries at the time ) regardless of the stage of development of any signatory country. There is, in fact, an annual report by the Human Rights Committee of the United Nations on human rights issues arising in all countries especially those relating to serious human rights violations. Some perpetrator countries very often defend themselves by saying that other founding countries of the UN are also guilty of some human rights violations themselves. This is really a naïve argument. It is just like a murderer saying that he or she is innocent because other offenders have murdered more victims than the subject murderer has done. The fact is that all human rights abuses perpetrated by all countries must cease immediately and all perpetrators are guilty regardless of the number of offenses committed. No excuse whatsoever will be tolerated if we are to live in a humane society.

( 7 ) The most important human rights and putting them into practice
 Which are the most important rights in the Declaration ? The short answer is that all rights spelled out in the UN Declaration are basic human rights and as such they are all important. Comparatively speaking, however, there are a number of rights directly affecting the immediate survival and security of the person which may be considered to have priority over the rest. It is worthwhile to scrutinize each article in the UN Declaration to find out which ones deserve higher priority so that the more urgent aspects of global human rights can be more closely and effectively monitored. Having said that we must not fall victim to the cunning argument by some anti-human rights governments that some rights with less priority can be with held pending better economic progress in less developed countries. I have dubbed this fallacy - “ the fallacy of assumed mutual exclusivity ( http://jkhcforum.blogspot.com.au/2011/02/thoughts-to-you-from-yours-truly-56-feb.html ) “. This is a very common fallacy that affects most of our decisions. Ever so often we find ourselves opposing a proposal, say to allocate a portion of the public budget to the welfare of animals on the ground that we still have many poor citizens that need attention. Behind all such seemingly reasonable arguments there is the implicit assumption that the choices in question are mutually exclusive. This is called the fallacy of assumed mutual exclusivity meaning that we can only have one without the other or that things are all mutually exclusive when we are faced with a choice. This fallacy can lead to excuses that justify inaction while we are morally obligated to do something in the face of injustice. For example, we may feel that we are excused from helping others when we still have some unsolved problems of our own or that we need not help those worse off than us when we are not well off ourselves. This cannot be farther from the truth. It is just an excuse to dodge our moral responsibilities. Next time when we are faced with a choice beware of this very common fallacy that can lead us to wrong conclusions or the shunning of our moral responsibilities.

( a ) Scrutiny of each article
 Now let us examine the articles of the UN Universal Declaration of Human Rights one by one.

Articles ( 1 ) and ( 2 ) deal with the need for equality for all people which has been covered in sections ( 2 ) and ( 3 ) of this essay. There are no specific rights set out therein.

 Articles ( 3 ) is of top priority as it ensures the right to life, liberty and security of person. There cannot be the slightest doubt about the absolute importance of these most basic human rights.

Article ( 4 ) rejects slavery in any form which is already implied in article ( 3 ).

Article ( 5 ) denounces cruelty and torture on any person which is again implied in security of person in article ( 3 ).

Article ( 6 ) and ( 7 ) spell out the equality of all before the law. This is also of top priority as article ( 3 ) with particular reference to the equality before the law. Both articles ( 6 ) and ( 7 ) imply there should be the rule of law in all member countries.

Article ( 8 ) deals with provision of legal recourse to abuses relating to basic human rights which is an extension of articles ( 6 ) and ( 7 ).

Article ( 9 ) is another practical aspect of the rule of law but it stands out alone as being a very important protection against arbitrary arrest and detention. It serves us well to note that it is another especially vital and practical aspect under the rule of law.

Articles ( 10 ) and ( 11 ) deal with the assumption of innocence of any person being prosecuted for alleged criminal offenses under the law. Furthermore, article ( 11 ) rejects back dating of laws and severity of punishment. These two articles are also within the realm of articles ( 6 ) and ( 7 ) regarding their practical aspects.

Article ( 12 ) deals with the sanctity of personal privacy which must not be arbitrarily invaded. Here, there arises a question of the degree of intrusion into personal privacy. Under national emergency situations such as war or natural disasters this right to privacy which may not caused immediate risks to citizens may have to give way for the common good. Suffice it to say that the intrusion must be kept to an absolute minimum and must be provided by law. The ideal arrangement is to allow legal recourse against such invasions when they actually occur.

Articles ( 13 ), ( 14 ) and ( 15 ) concern freedom of movement, allow asylum from persecution by any government as well as entitlement to a nationality. Apart from the entitlement to political asylum which must be granted based on the principle of natural justice both freedom of movement and the nationality issue are not absolute. Immigration control and other legal procedures have to be put in place to make immigration policies workable in practice. This is understandable.

Article ( 16 ) deals with freedom to get marry according to the individual's own choice and wish and equality before marriage laws. Here again, we must take particular cultural traditions into account unless they contravene the basic human rights.

Article ( 17 ) is one of the most important right to own property and the unassailable sanctity of private property ownership. Without protection of private property no one will be willing to work for a fair remuneration because the fruits of his or her hard work is not protected by law. The whole economy will crumble. We should remember from section ( 6 ) ( c ) above on the fallacy of the Socialist economic ideology and recognize that private ownership of property is the most important motivation for human efforts. Here, there is an even greater issue at stake. Without the protection of the sanctity of private ownership of property the state can seize private property at will to the detriment of the whole economy and society.

Articles ( 18 ) and ( 19 ) set out the rights to freedom of religion, thoughts and conscience and the free expression of opinion and ideas. These are important rights but are again not absolute. The ideal situation is again to provide legal recourse in case of government suppression. Article ( 20 ) allows freedom of peaceful assembly and association including freely joining trade unions. Similar comments to articles ( 18 ) and ( 19 ) are applicable.

Article ( 21 ) is an important right for citizens to take part in government of their own country. Most importantly, it guarantees the will of majority citizens shall be the basis for forming the government. In short, any governments must have a popular mandate from the majority of the citizens.

 Articles ( 22 ) , ( 23 ) and ( 24 ) provide the right to social security and employment plus personal development. Protection of fair remuneration and right to minimum rest and leisure. These rights clearly have no set objective criteria. Only comparative standards between countries may be applied. Furthermore, different stage of economic development of different countries can be considered in their implementation.

Article ( 25 ) states the rights to adequate healthy care and living conditions with special care demanded for mothers and children because they are the future of our society. Similar reservations to articles ( 22 ), ( 23 ) and ( 24 ) are in order.

Articles ( 26 ) and ( 27 ) deal with the rights to minimum education and cultural development respectively. Obviously, these rights should be assessed in the context of the stage of economic development of the particular country in question.

 Article ( 28 ) is the general provision that every citizen is entitled to a social and international order that make all the above basic human rights possible.

 Article ( 29 ) on the other hand spells out the obligations of every citizen towards the country or community in which he or she is resident. This is the check and balance of rights and obligations that will ensure a smooth and fair society.

 Article ( 30 ) proclaims that no government, group or individual is allowed to engage in any activity or perform any act aimed at the destruction of the rights and freedoms set out in the UN Universal Declaration of Human Rights.

( b ) The pivotal articles
Based on the above discussion and scrutiny the following articles of the UN's Universal Declaration of Human rights would appear to be the pivotal and most important of all basic human rights :- Article ( 3 ) :- The rights to life, liberty and security of person. Article ( 4 ) :- Freedom from slavery and servitude. Article ( 5 ) :- Freedom from cruelty and torture. Articles ( 6 ) & ( 7 ) :- Equality of all people before the law. Article ( 9 ) :- Freedom from arbitrary arrest and detention. Articles ( 10 ) and ( 11 ) :- Entitlement to presumption of innocence before proven guilty under criminal law and no back dating of laws and punishment. Article ( 17 ) :- The right to own private property without arbitrary deprivation. Article ( 21 ) :- Governments should derive their authority from majority citizen mandate as demonstrated through fair elections.

 

( c ) The importance of rule of law to give effect to Declaration
  Apart from the above pivotal articles the rest are either derivatives from or implied by the above vital rights. Furthermore, we should note that all pivotal rights must be put into effect and protected by the rule of law which must be unbiased and administered by an independent judiciary without fear or favour ( equality before the law ). This will require the separation of the three major branches of government – namely, legislative, judiciary and executive branches which are independent of one another. Clearly, this cannot happen under any autocratic system of government with a single party in power - a ruling party that cannot be replaced or voted out of office by the majority of citizens. As absolute power corrupts absolutely all sorts of vices and abuses of human rights become inevitable. The situation will become unmanageable from the human rights perspective and consequently become most intimidating to all citizens especially when the military machine is under the absolute control of the ruling party to which the military swears its loyalty. The last mentioned scenario is most common in all autocratic governments in reality. Human rights will become a luxury for most citizens under such circumstances and only those allied with the ruling party such as party members and their appointed officials will be able to enjoy all the privileges in terms of public resources.
 

( 8 ) Summary and recapitulation
Society exists for people. Not the other way round. We need a group of people to run our society. These are the government and politicians who derive their authority from the mandate given to them by the majority of citizens. Since power easily corrupts we must supervise the politicians carefully and properly to avoid abuses. Furthermore, as social and political affairs ( including government, international relationship as well as inter personal dealings ) are all conducted by people there must be a set of generally accepted standards of human behaviour to keep society running efficiently and fairly. Based on natural law and natural justice all people are born equal and therefore all should enjoy the same basic human rights. Such basic human rights have been recognized and embodied the United Nation's “ The Universal Declaration of Human Rights “ signed and proclaimed by 48 ( including all major countries ) member states on December 10, 1948. The Declaration sets out the basic human rights that must be protected in 30 articles contained in the Declaration. The most important of these rights include :- “ rights to life, liberty and security of person - freedom from slavery and servitude - freedom from cruelty and torture - equality of all people before the law - freedom from arbitrary arrest and detention - entitlement to presumption of innocence before proven guilty under criminal law and no back dating of laws and punishment - right to own private property without arbitrary deprivation - governments should derive their authority from majority citizen mandate as demonstrated through fair elections “ In order to put the basic rights into effect proper and fair laws have to be enacted to protect the basic human rights of all citizens against the state.

Therefore, the rule of law ( or a healthy, unbiased legal system that must be administered without fear or favour ) is of fundamental importance in the enactment of the relevant laws and protection of basic human rights. Without separating the three main branches of government – namely, the legislative, judiciary and executive branches – to make them independent of one another abuses of power will inevitably occur. Therefore, we must strive by all peaceful means to ensure that our own government must be democratically and fairly elected by the majority of citizens as stipulated in Article ( 21 ) 3. of the United Nations Universal Declaration of Human Rights. In turn, such a democratically and fairly elected government will derive its authority from the majority citizens' mandate to rule that country.

As can be easily seen from the above essay to understand the rationale behind the necessity of putting forward a set of universally accepted standards of human behaviour does not require sophisticated training in political philosophy. Simple everyday common sense will suffice. Only politicians with their own vested interests, political agenda and sinister motive will complicate the issue with a view to fooling the common citizens into letting those in power deny and delay the implementation of these basic human rights to achieve their own lust for power and control over everyone. This is why each and every citizen must learn and understand the rationale in support of The Universal Declaration of Human Rights. If needed we must defend it by all reasonable and peaceful means. Nobel laureate, the late Dr. Martin Luther King said this about people who passively accepts evil :- “ He who passively accepts evil is as much involved in it as he who helps to perpetrate it. “ ( in his book – “ Stride Towards Freedom “ ). This is a very sobering thought indeed.

Joseph K.H. Cheng

 December 15, 2015.