Multinational Monitor

JAN/FEB 2009
VOL 30 No. 1


Wall Street's Best Investment: 10 Deregulatory Steps to Financial Meltdown
by Robert Weissman
and James Donahue


Cleaning Up the Mess: New Rules for Financial Regulation
an interview with
Ellen Seidman

Closing the Regulatory Gap: Derivatives and the Hedge Fund Industry
an interview with
David Ruder

Foreclosed: The Failure to Regulate Abusive Lending Practices
an interview with
Debbie Goldstein


Behind the Lines

Simple Finance

The Front
Chevron Escapes Liability - Ecuador's Debt Default

The Lawrence Summers Memorial Award

Book Note

Greed At a Glance

Commercial Alert

Names In the News


Commercial Alert

More Ads on the Bus

New Jersey school kids may soon be greeted by a large cereal advertisement as they board the school bus each morning. Three separate bills introduced by New Jersey state legislators would allow school districts to sell ads on the sides of school buses in order to raise revenue.

The only banned content would be for alcohol, tobacco or political advocacy.

While New Jersey explicitly banned school bus advertising in 1985, proposals to allow it have been floating through the statehouse ever since 1996.

“We would want to control the messages on the buses,” one school superintendent told Press of Atlantic City, “but I’m not completely turned off by the idea.”

Nationwide, at least 12 states allow some form of advertising on buses. Pennsylvania allows advertisements inside school buses, and New York City allows ads on the right side of buses. A school district in Colorado Springs, Colorado, started placing ads on the sides of school buses in 1993 — rising up to $150,000 a year.

“I do think it’s a decent piece of legislation in tough fiscal times,” said New Jersey Assemblyman John Amodeo,  a cosponsor of one of the bills. “I think that anything that helps the taxpayers out is definitely something we have to look at.”

Pharma’s Promise

U.S. drug makers have promised to start being honest in their advertising.

New (voluntary) standards adopted by the Pharmaceutical Research and Manufacturers Association (PhRMA), the industry trade group, include making it clear when actors are used in commercials and only running advertisements with content “inappropriate for children” during programs that target an adult audience. Proper disclosures of paid-for endorsements by real doctors or celebrities are also included in the guidelines.

The new guidelines also urge drug companies to “consider” issuing a set period of time for “education” between the release of a new drug and launching an advertising campaign. Key Members of Congress have been pushing for a two-year ban on direct-to-consumer advertising of newly released medications.

Congressional supporters of restrictions on pharmaceutical advertising to consumers offered a mixed reaction to the new industry standards.

“On one hand, PhRMA has taken our Committee’s concerns seriously by revising parts of their [direct-to-consumer advertising] code; on the other hand, some of these changes are merely a rewording of prior policy that does nothing to increase consumer protection,” said Representative Bart Stupak, chair of the investigations subcommittee of the House commerce committee. “Our investigation will continue, and we will be keeping a watchful eye on how well the industry follows these guidelines.”

Massachusetts Democrat Edward Kennedy was more critical saying, “Voluntary industry guidelines on direct-to-consumer drug advertising are no substitute for effective enforcement of strong regulatory requirements. Patients deserve no less.”

Haute Cancer

Imperial Tobacco is trying to make cigarettes the newest fashion statement. In Australia, the tobacco giant is bribing high-end boutiques and salons to sell its cigarettes in order to lure a young and hip clientele, according to an investigation by the Sunday Mail.

The investigation revealed that Imperial Tobacco has given cash incentives of up to AUS$2,000 (about $1,300) a year to stores agreeing to sell cigarettes. Free cigarettes were handed out to store personnel, and expensive lunches and even a cruise were held for businesses that sold Imperial’s Peter Stuyvesant brand.

“They’re doing it so they can associate themselves with fashion labels and fashion houses,” Australian Senator Nick Xenophon told the Sunday Mail, “but there’s nothing fashionable about emphysema.”

The investigation found that one retailer was treated by Imperial to a two-hour marina boat cruise. While on the cruise, the retailer was treated to canapés, cocktails, wine and beer, and told to take home as many packets of Peter Stuyvesant cigarettes as he wanted.

Imperial also distributed marketing kits to the fashion outlets describing the cigarettes, nicknamed “Stuyvies,” as being safe and fashionable. “It used to be extremely dangerous,” the material reads. “Now the only danger is you’re not the coolest cat on the block.”

— Jennifer Wedekind

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