Multinational Monitor


Not Kosher: The Ralph Reed-Jack Abramoff Connection.
by Andrew Wheat

The United States, Bolivia, and the Political Economy of Coca
by Gretchen Gordon

The CAFTA Chronicles: Strong-Arming Central America, Mocking Democracy
by Tom Ricker and Burke Stansbury

Thais Take to the Streets to Stop U.S. Trade Agenda
by Martin Khor

Drilling East Timor: Australia's Oil Grab inthe Timor Sea
by Charles Scheiner


Saving $60 Billion: Lawrence Korb's Common Sense Budget Defense Plan
An Interview with Lawrence Korb

The Market for Virtue: The Impact of Corporate Social Responsibility
An Interview with David Vogel


Behind the Lines

The Lobby Reform Fiasco

The Front
Philippines Gets Stomped - EPA Program Off Track

The Lawrence Summers Memorial Award

Names In the News

Book Notes


Behind the Lines

The Growing Income Gap

In most U.S. states, the gap between the highest-income families and poor and middle-income families grew significantly between the early 1980s and the early 2000s, according to a January study by the Center on Budget and Policy Priorities and the Economic Policy Institute.

While income inequality dropped after the burst of the stock market bubble in 2000 - which hurt the rich more than the poor - it is on the rise again, according to the study. The decades-long trend of worsening income inequality in the United States thus appears to have resumed.

The study found that:

  • In 38 states, the incomes of the bottom fifth of families grew more slowly than the incomes of the top fifth of families between the early 1980s and the early 2000s. In only one state - Alaska - did the incomes of the low-income families grow faster than the incomes of the top fifth.
  • In 39 states, the incomes of the middle fifth of families grew more slowly than the incomes of the top fifth of families between the early 1980s and the early 2000s.
  • Within the top fifth of families, the wealthiest families enjoyed the highest relative income growth over the past two decades.

The five states with the largest income gap between the top and bottom fifths of families are New York, Texas, Tennessee, Arizona and Florida. Generally, income gaps are larger in the Southeast and Southwest and smaller in the Midwest, Great Plains and Mountain states.

"A fundamental principle of our economic system is that the benefits of economic growth will flow to those responsible for their creation," says Jared Bernstein, senior economist at the Economic Policy Institute and co-author of the report. "When how fast your income grows depends on your position in the income scale, this principle is violated. In that sense, today's unprecedented gap between the growth of the typical family's income and productivity is our most pressing economic problem."

Bechtel Bows to Bolivia

The Bechtel Corporation in January formally dropped its legal effort to collect money from Bolivia in the wake of its ejection from a private water contract in Bolivia's third largest city, Cochabamba.

In 2000, the people of Cochabamba rose up in revolt over privatization of their municipal water system to a Bechtel-led consortium.

The consortium had forced through rate increases averaging 50 percent and in some cases reaching 400 percent.

When the government and Bechtel refused to reduce rates, the people took to the streets. Tens of thousands mobilized, and Bechtel's continued operation quickly became untenable. The company abandoned Cochabamba - but not its claim to compensation.

Bechtel filed a case against Bolivia at the World Bank's International Center for Settlement of Investment Disputes (ICSID), claiming that it was owed $50 million for lost investments and lost profits.

But instead of finding itself protected by ICSID's closed processes, and a venue that was far away from the Cochabambans, the company discovered it was the center of an international campaign.

Thousands of people contacted the company urging it to drop the case. Protesters in San Francisco blocked the entrance to Bechtel's headquarters, occupied its lobby and draped a banner across its front, and other protests were held around the world. Hundreds of organizations called on ICSID to open up the case to public scrutiny.

Bechtel's retreat, says Jim Schultz of the Democracy Center in Cochabamba, "sets a huge global precedent," showing that the corporate effort to invoke a growing array of global investment protection rules can be turned back.

"Once again, it is clear that the economic rules of the game can be changed," says Schultz. "Six years ago the people of Cochabamba won their revolt over water with courage and commitment. Today we have all won the water revolt's second and final round, with a persistence that was truly global and that could not be stopped."

Wal-Mart to Pay Fair Share

Wal-Mart will have to provide healthcare coverage to its workers in Maryland, thanks to a bill enacted into law in January by the state legislature over a gubernatorial veto.

The Fair Share Health Care Act requires private companies with more than 10,000 Maryland employees to spend at least 8 percent of their payroll on employee healthcare, or to contribute the amount they fall short to the state's Medicaid program.

Wal-Mart is the only employer in the state meeting the size threshold and not spending 8 percent of payroll on health insurance costs.

Wal-Mart insisted that the legislation was not needed, since more than three quarters of its Maryland employees have health insurance.

But supporters of the Fair Share Health Care Act countered that the super-profitable company was sloughing off its costs onto the state, with many Wal-Mart workers forced to get insurance though Medicaid, the state insurance program for the poor.

"It's unacceptable that a company with annual profits of $10 billion has a healthcare plan that covers less than half of its employees," says Andrew Grossman, executive director of Wal-Mart Watch. "We urge Wal-Mart to improve its benefits on its own, but we support legislative remedies until Wal-Mart embraces change for itself."

Wal-Mart claimed the legislation was merely a union-orchestrated attempt to denigrate the company. "This vote was never about healthcare," says Wal-Mart spokesperson Sarah Clark. "This was about partisan politics in the Maryland gubernatorial race. In allowing a bad bill to become a bad law, the General Assembly took a giant step backward and placed the special interests of Washington, D.C. union leaders ahead of the well-being of the people they serve."

More than two dozen states are considering adopting some version of the Maryland Fair Share Health Care Act.

SpongeBob in Trouble

SpongeBob SquarePants has trouble on his hands. In January, a coalition of parents and advocacy groups announced their intent to file suit against Viacom - parent company of Nickelodeon, which airs the SpongeBob cartoon - and Kellogg to stop them from marketing junk food to young children.

The suit is based on an analysis done by the Washington, D.C.-based Center for Science in the Public Interest (CSPI), one of the groups planning on suing Viacom and Kellogg. CSPI found that 88 percent of the food ads aired on Nickelodeon during the group's review were for foods of poor nutritional quality. Nickelodeon magazine full-page food ads were entirely for junk foods during the study period. And Nickelodeon characters appear on junk food packaging for such products as SpongeBob SquarePants Wild Bubble Berry Pop-Tarts.

CSPI analysts also found that virtually all of Kellogg's ads during Saturday-morning television programming targeted at young children were for nutritionally poor foods.

The key legal claim made by the prospective plaintiffs is that children under eight years old are "the most vulnerable market in the country, [and] are intrinsically deceived and abused by encouragement to eat unhealthy junk foods."

The prospective plaintiffs' primary goal is to obtain an injunction prohibiting Nickelodeon and Kellogg from marketing junk foods to kids under eight, including by prohibiting them from advertising or airing ads for junk foods during programs where 15 percent or more of the audience is under 8.

"Nickelodeon and Kellogg engage in business practices that literally sicken our children," says CSPI executive director Michael F. Jacobson. "Their marketing tactics are designed to convince kids that everything they hear from their parents about food is wrong. It's a multimedia brainwashing and re-education campaign - and a disease-promoting one at that."

Drugging Teenaged Boys

Teenaged boys going to the doctor's office in the United States have a one-in-10 chance of being prescribed a psychotropic drug, according to a Brandeis University study in the January issue of the journal Psychiatric Services.

The study found that psychotropic drug prescriptions for teenagers in the United States skyrocketed 250 percent between 1994 and 2001.

"We believe that direct-to-consumer ad-vertising and other marketing strategies are key in encouraging greater use of psychotropics," the study authors contend, "particularly for the increased use found after 1999 [when the federal government allowed direct-to-consumer advertising and looser promotion of off-label use of prescription drugs]. Advertisements for medications for ADHD [attention deficit hyperactivity disorder], social phobia and depression are now common in various public media."

The dramatic increase in psychotropic drug prescription occurred despite the fact that few psychotropic drugs - typically prescribed for ADHD, depression and other mood disorders - are approved for use in children under 18.

The study also found that that a diagnosis of ADHD was given in about one-third of office visits during the study period.



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