The End of Innovation?

A new and unnecessary law restructures the U.S. patent system for the worse

by Richard A. Epstein 

This past week, patent lawyers were feverishly preparing reams of new patent applications to be filed under the 2011 America Invents Act (AIA), which took effect on March 16, 2013, a year and a half after Congress passed that unwise measure. The AIA replaced the old First-to-Invent standard with a First-Inventor-To-File standard. To the outsider, that shift in legal rules may seem like no big deal. But there are firms to which patent priority is worth many millions of dollars. Under the new paradigm, firms must ensure that they “file as early and as completely as [they] can!”

Structuring a patent system is no easy business, for it requires a delicate balance between two competing imperatives. The first is to give inventors the incentive to create new products; the only reliable device here is the exclusive right to market the product for a limited period of time. The second is to ensure that the invention is disseminated widely, which requires limiting the scope and duration of the inventor’s monopoly. In general, the first function is more important for it incentivizes innovation. After all, it is not possible to widely disseminate inventions that were never made.

In large measure, the huge political fight over the AIA (in which I participated for my client DataTreasury on the losing side) is over the calibration of that balance. The powerful industry coalition in favor of the AIA sought to displace the more property-protective Patent Act of 1952, which the AIA supporters denounced in these harsh terms:

Much-needed reforms to our patent system are long overdue. The last major patent re­form was nearly 60 years ago. Since then, U.S. innovators have developed cell phones and launched the Internet. And yet the laws protecting the technologies of today are stuck in the past.

Our outdated patent system has been a barrier to innovation, unnecessarily delaying American inventors from marketing new products and creating jobs for American workers. It takes over three years to get a patent approved in the U.S. American innovators are forced to wait years before they can hire workers and market their inventions. Meanwhile, our competitors are busy developing new products that expand their businesses and grow their economies. . . . We need a system that ensures patent certainty, approves good patents quickly and weeds out bad patents effectively.

This overheated rhetoric cannot withstand any scrutiny.

A Brief History of Patent Law

To see how and why the AIA will flounder, it is useful to understand the history of patent law in the United States.

The creation of a national patent law in the United States virtually coincides with the founding of the country. One of the enumerated powers that the Constitution conferred on Congress is “the power . . . To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

MIT Develops Meltdown-Proof, Nuclear Waste-Eating Reactor

A trillion dollar industrial market

By Brian Westenhaus 

Transatomic, a Massachusetts Institute of Technology spinoff is developing a nuclear reactor designed to overcome the major barriers to nuclear power.  For the anti-nuclear folks the design offers to burn up the existing spent fuel from the world’s fleet of nuclear reactors in a design that doesn’t offer a chance for a meltdown.  That should be nirvana for those alarmed about atomic energy and weapons proliferation.

For everyone else, the first offering is we would see a reduction in spent fuel containment costs and get electrical energy, lots of it, instead.  The second is the design would be factory produced cutting build costs in a huge way and the reactors would be larger than the currently trendy Small Modular Nuclear Reactors (SMNRs) offering the chance to install at existing locations saving on the generation and grid connection costs.

Transatomic, founded by a pair of very smart and innovative young nuclear engineers, has updated the molten-salt reactor, a reactor type that’s highly resistant to meltdowns. Molten-salt reactors were demonstrated in the 1960s at Oak Ridge National Lab, where one test reactor ran for six years.  What remains is raising $5 million to run five experiments to help validate the new basic design.

Russ Wilcox, Transatomic’s new CEO estimates that it will take eight years to build a prototype reactor at a cost of $200 million.  The company has already raised $1 million in seed funding, including some from Ray Rothrock, a partner at the venture capital firm Venrock.

The cofounders, Mark Massie and Leslie Dewan, who we met here in April last year, are still PhD candidates at MIT. Yet the design has attracted some top advisors, including Regis Matzie, the former CTO of the major nuclear power plant supplier Westinghouse Electric, and Richard Lester, the head of the nuclear engineering department at MIT. 

The new reactor design called the Waste-Annihilating Molten Salt Reactor (WAMSR) so far exists only on paper.  Ray Rothrock says the company will face many challenges. “The technology doesn’t bother me in the least,” he said. “I have confidence in the people. I wish someone would build this thing, because I think it would work. It’s all the other factors that make it daunting.”  We’ll get to those daunting factors in a moment.

King Coal looks set for a long, long reign

Coal Is the Fuel of the Past and the Future

By Llewellyn King 

Hal Quinn, president of the National Mining Association, says coal in 2016 will again be the world’s favorite carbon fuel, pushing out petroleum as the world's largest source of energy.

This may seem especially surprising at a time when the use of coal in the United States is in decline, edged out by cheap natural gas and increasingly strict regulations from the Environmental Protection Agency. Yet a rising tonnage of coal is being used for electric generation worldwide.

The Third World is hungry for coal, as it increases electricity production. In the developed world, nuclear setbacks -- most notably the aftereffects of the Fukushima-Daiichi nuclear power plant accident, when a tsunami wave knocked out six reactors -- have helped boost the commitment to coal. The accident has forced the Japanese to burn more coal and the Germans to begin phasing out their nuclear power plants. Other European countries are dithering, and the cost of building nuclear plants is rising.

If you do not have an abundance of natural gas, as here in the United States, then coal is your default choice. It is shipped around the world in larger and larger quantities. The more the world has resisted the burning of coal, the more it has had to fall back on it. Alternative energy, attractive in theory, is yet to make its mark.

Because coal has always had an environmental price, it has always been under attack, and at the same time it has proven stubbornly hard to replace. King Edward I of England, who reigned from 1239 to 1307, was the first known major opponent of coal. He banned it in 1306.

Tales of why he did this vary. One story goes that his mother, Queen Eleanor of Provence, when staying at Nottingham Castle, was so affected by the coal fumes from the town that she had to move out.

Wood was hard to come by in towns, and it does not heat like coal. Anyway England was a cold place and wood was in short supply, so the ban was not very effective, despite the fact that the death penalty was standard for disobeying royal orders.

Two and a half centuries later, Queen Elizabeth I tried to ban coal with not much effect. The prospect of a coal ban was even more draconian then as her father, Henry VIII, had largely denuded the English forests to build his navy and she was even more committed to sea power.

Le Monde Headline "No, France is Not Bankrupt"

Today France, tomorrow, the world!

By Mike "Mish" Shedlock

This amusing headline story by Bruno Moschetto, a professor of economics at the University of Paris in the French newspaper Le Monde has me laughing out loud this morning: "No, France is Not Bankrupt" 

 No, France is not bankrupt ... The claim is untrue economically and financially. France is not and will not bankrupt because it would then be in a state of insolvency.

A state cannot be bankrupt, in its own currency to foreigners and residents since the latter would be invited to meet its debt by an immediate increase in taxation.

In abstract, the state is its citizens, and the citizens are the guarantors of obligations of the State.

In the final analysis, "the state is us." To be in a state of suspension of payments, a state would have to be indebted in a foreign currency, unable to deal with foreign currency liabilities in that currency.

Economic Illiteracy

Economic illiteracy is nearly everywhere you look and that article is a prime example. Bruno Moschetto suggests France is not bankrupt because the state is not indebted in a foreign currency.

Actually, France does have its debts in a foreign currency, euros. Note that France cannot print euros at will to pay its debts (the very essence of a foreign currency).

Moschetto says citizens would be "invited" to help France meet its obligations. Invited? The same way citizens of Cyprus were "invited" to bail out Cypriot banks?

The ability to tax citizens to death to bail out the state is hardly a reasonable measure of non-bankruptcy. I suggest having to confiscate the wealth and savings of citizens to bail out the state is proof of bankruptcy. Greece is a nice example. 

Hollande has tried 75% taxation.  He has tried government takeover or threats of takeover of various auto manufacturers. Hollande also seeks financial transaction taxes.

Many French citizens have had enough of Hollande and his socialist policies and have fled to Belgium, the UK, and Switzerland.

The French economy is imploding as I type. 

Thought of the Day

France is Bankrupt, and it is the policies of socialist fools that put France in that state.

The thought of the day comes from reader "PTCruiser" who chimed in with "Aujourd'hui, la France. Demain, le monde entier."... Today France, tomorrow, the world! 

The Global Financial Pyramid Scheme By The Numbers

The dominoes are starting to tumble, and nobody is immune

By  Michael Snyder

Why is the global economy in so much trouble?  How can so many people be so absolutely certain that the world financial system is going to crash?  Well, the truth is that when you take a look at the cold, hard numbers it is not difficult to see why the global financial pyramid scheme is destined to fail.  In the United States today, there is approximately 56 trillion dollars of total debt in our financial system, but there is only about 9 trillion dollars in our bank accounts.  So you could take every single penny out of the banks, multiply it by six, and you still would not have enough money to pay off all of our debts.

Overall, there is about 190 trillion dollars of total debt on the planet.  But global GDP is only about 70 trillion dollars.  And the total notional value of all derivatives around the globe is somewhere between 600 trillion and 1500 trillion dollars.  So we have a gigantic problem on our hands.  The global financial system is a very shaky house of cards that has been constructed on a foundation of debt, leverage and incredibly risky derivatives.  We are living in the greatest financial bubble in world history, and it isn't going to take much to topple the entire thing.  And when it falls, it is going to be the largest financial disaster in the history of the planet.

The global financial system is more interconnected today than ever before, and a crisis at one major bank or in one area of the world can spread at lightning speed.  As I wrote about yesterday, the entire European banking system is leveraged 26 to 1 at this point.  A decline in asset values of just 4 percent would totally wipe out the equity of many of those banks, and once a financial panic begins we could potentially see major financial institutions start to go down like dominoes.

We got a small taste of what that is like back in 2008, and it is inevitable that it will happen again.

Anyone that would tell you that the current global financial system is sustainable does not know what they are talking about.  Just look at the numbers that I have posted below.

The following is the global financial pyramid scheme by the numbers...

-$9,283,000,000,000 - The total amount of all bank deposits in the United States.  The FDIC has just 25 billion dollars in the deposit insurance fund that is supposed to "guarantee" those deposits.  In other words, the ratio of total bank deposits to insurance fund money is more than 371 to 1.

-$10,012,800,000,000 - The total amount of mortgage debt in the United States.  As you can see, you could take every penny out of every bank account in America and it still would not cover it.

-$10,409,500,000,000 - The M2 money supply in the United States.  This is probably the most commonly used measure of the total amount of money in the U.S. economy.

-$15,094,000,000,000 - U.S. GDP.  It is a measure of all economic activity in the United States for a single year.

-$16,749,269,587,407.53 - The size of the U.S. national debt.  It has grown by more than 10 trillion dollars over the past ten years.

-$32,000,000,000,000 - The total amount of money that the global elite have stashed in offshore banks (that we know about).

-$50,230,844,000,000 - The total amount of government debt in the world.

-$56,280,790,000,000 - The total amount of debt (government, corporate, consumer, etc.) in the U.S. financial system.

-$61,000,000,000,000 - The combined total assets of the 50 largest banks in the world.

-$70,000,000,000,000 - The approximate size of total world GDP.

-$190,000,000,000,000 - The approximate size of the total amount of debt in the entire world.  It has nearly doubled in size over the past decade.

-$212,525,587,000,000 - According to the U.S. government, this is the notional value of the derivatives that are being held by the top 25 banks in the United States.  But those banks only have total assets of about 8.9 trillion dollars combined.  In other words, the exposure of our largest banks to derivatives outweighs their total assets by a ratio of about 24 to 1.

-$600,000,000,000,000 to $1,500,000,000,000,000 - The estimates of the total notional value of all global derivatives generally fall within this range.  At the high end of the range, the ratio of derivatives to global GDP is more than 21 to 1.

Are you starting to get the picture?

Just when you thought it was safe…

Bailing out Cyprus was always going to be tricky. But it didn’t have to be like this

By The Economist

EVEN by the standards of European policymaking, the past week has been a disaster. In the early hours of March 16th, nine months after Cyprus first requested a bail-out, euro-zone finance ministers, led by the Germans, offered a €10 billion ($13 billion) deal, well short of the €17 billion needed. Who ordered whom to do precisely what is not clear, but the Cypriots then said they would raise a further €5.8 billion by imposing a levy on depositors—of 9.9% on savings above the €100,000 insurance-guarantee limit, and 6.75% for deposits below it. Chaos ensued, not least among the many Russians (reputable or not) who have parked their money in the lightly regulated island. On March 19th, with crowds in the streets and all the banks firmly shut, the Cypriot parliament rejected the bail-out package (see article). As The Economist went to press, the scene had shifted to Moscow, where the Cypriots were trying to persuade Vladimir Putin and his cronies to contribute some money in exchange, perhaps, for future gas revenues.

Cyprus is a Mediterranean midget, with a GDP of only $23 billion. But this crisis could have poisonous long-term consequences. Eight months after the European Central Bank appeared to have restored stability by promising to do whatever it took to save the currency, the risk of a euro member being thrown out has returned. It has increased the chances of deposit runs (if Cyprus can grab your money, why not Italy or Spain?). And it has revealed the lack of progress towards a durable solution to the euro’s troubles. Ideally, all this will prompt the Europeans to push ahead with reforms, but with a German election in the autumn that seems unlikely.

Cyprus is broke. Its debt, if it took on its banks’ liabilities, would hit 145% of GDP. This newspaper suggested recapitalising Cypriot banks, on a case-by-case basis, directly through the European Stability Mechanism (ESM), thus breaking the vicious circle where weak sovereigns bail out weak banks. We also argued for depositors and senior bondholders to be spared—not out of any particular love for rich Russians, but because of the fear of bank runs in larger weak euro economies. The Europeans instead decided to lend the money directly to the Cypriot government; and the Cypriots, perhaps bullied by some creditors, then decided to clobber all the banks’ depositors, even the insured ones.

Why Europe Must Play Hardball with Cyprus

A Game of Chicken

by Christian Rickens

The Cypriot rejection on Tuesday night of the euro-zone bailout package for the country's ailing banks has triggered a power struggle between the island nation and the European Union. If Brussels gives in, future efforts to save the euro will be made more difficult. All hopes are now on Russia.

Efforts to save the euro have long been criticized for being undemocratic, with bailout packages being assembled behind closed doors in Brussels. But after Tuesday evening's vote in the Cypriot parliament, that critique will be difficult to maintain. Not a single parliamentarian in Nicosia cast a vote in favor of the bailout package, one which foresaw a mandatory levy on accounts held with Cypriot banks.

Thirty-six lawmakers voted against the deal and 19 abstained, including those belonging to President Nikos Anastasiades' center-right DISY party. With their veto of the expropriation plan, parliamentarians in the island nation showed that representatives of a small European Union member state can indeed block euro-zone efforts to save the common currency.

Anastasiades, of course, didn't exert much effort to find a majority for the deal, even though he had agreed to it in Brussels. On the contrary, even before the parliamentary debate began, he said the package was unlikely to pass -- a virtual invitation to lawmakers to reject it. The move could even be a tactical one. Anastasiades can now return to Brussels in the hopes of leveraging better conditions out of Cyprus' euro-zone partners by highlighting his country's rebellious parliament.

It could also be useful as a lever in Moscow. On Wednesday morning, all eyes were on Russia in the hopes that the country might jump in to provide Nicosia emergency aid. Russian investors have parked billions of euros in Cypriot bank accounts -- indeed the presence of Russian money is one reason why Cyprus' banking sector holds assets worth more than seven times the country's annual gross domestic product. According to media reports, Anastasiades spoke with Russian President Vladimir Putin immediately following the failed parliamentary vote and the Cypriot finance minister flew to Moscow on Tuesday night.

Bullied from Abroad

In the coming negotiations, the Euro Group must be careful as it seeks to maintain its credibility. The vote on Tuesday evening made one thing clear: The main concern in Nicosia was not in fact those who held smaller sums in Cypriot accounts. By Tuesday morning, the original deal had been changed to exempt from the bank levy those holding less than €20,000 in their savings accounts. That the parliamentary veto was nonetheless unanimous shows that lawmakers are primarily interested in maintaining Cyprus' role as a low-tax paradise and offshore business haven. It also shows that Cypriots are unwilling to be bullied from abroad, particularly not by the Germans.

Cyprus's High-Stakes ECB Gamble

A Mediterranean Jonestown

By SIMON NIXON

The euro zone is used to brinkmanship. But since the Cypriot parliament refused to sanction a tax on bank deposits, a vital condition of its proposed €10 billion ($13 billion) bailout, the currency bloc is in uncharted territory.

What happens next depends on the response of the European Central Bank. The Cypriot parliament is gambling that the ECB is bluffing when it says it will withdraw Emergency Liquidity Assistance from the country's banks, thereby precipitating their likely financial collapse.

True, the ECB has blinked before. It had originally threatened to withdraw permission for the Central Bank of Cyprus to provide ELA on Jan. 21. But it backed down because it believed that there was the prospect of a bailout deal that would recapitalize the country's broken banking system once the presidential election was out of the way in February. At that point, it said it would review its decision after two months, a deadline that expires this Thursday.

During Friday's marathon negotiations over the current bailout proposal, ECB executive board member Jörg Asmussen made clear to President Nicos Anastasiades that failure to agree on a deal that weekend would make it impossible for the ECB to provide a further extension of ELA. After all, ECB rules don't allow national central banks to lend to insolvent banks.

But any actual decision to withdraw ELA is a matter for the ECB's Governing Council, and that needs two-thirds of the council's members to vote in favor.

The Cypriot parliament may be calculating that it can count on enough Governing Council members to block any move to withdraw ELA. After all, the ECB's rules say it can only withdraw a national central bank's right to provide ELA to protect the monetary integrity of the euro zone.

If Governing Council members wanted reasons not to withdraw ELA, they could always argue that a possible Cypriot euro exit would do more damage to euro-zone monetary integrity than keeping its banks alive. Besides, even if ELA eventually replaced the entire €70 billion of Cypriot deposits, it would make little difference to overall euro-zone money supply.

But this is complacent. Even if Cyprus is small, the ECB must consider the precedent it would create if it allowed the Central Bank of Cyprus to continue providing ELA in the absence of a deal.

The more likely outcome is that the liquidity provision continues beyond Thursday, dependent on two conditions: First, that it receives credible assurances that there is a realistic prospect of an alternative deal. Second, that the banks remain shut until that deal is concluded to minimize the low-level bank run that is already under way as Cypriots continue to empty automatic cash machines.

Whether Cyprus can meet these conditions is an open question. Any deal will require Cyprus to find €6 billion from its citizens to help pay for the bank recapitalizations. That must be done to keep the cost of the euro-zone bailout below €10 billion and the government's debt sustainable—an essential condition for International Monetary Fund involvement, which is, in turn, an essential condition for the German government and parliament to agree to a deal.

So the banks will have to stay shut and the Cypriot parliament keep voting until it comes up with the "right" answer or decides to quit the euro. Sound familiar?

The ECB Just Gave Cyprus Its Drop Dead Date

Next Monday is the drop dead date by Cyprus

If Cyprus doesn't have a deal in place by then, the ECB will not provide its banks the emergency liquidity assistance they need to continue to operate.

Earlier this week, the Cypriot parliament rejected a plan that would have recapitalized the country's banks by imposing a one-off tax on all depositors.

Since then the government has been scrambling to come up with the nearly 6 billion euros that the country must supply to save its banks.

Below the dotted line is press release the ECB just put out, where in the central bank says that assistance will be cut off unless there's a deal.

-------------------------------------------------------------------

21 March 2013 - Governing Council decision on Emergency Liquidity Assistance requested by the Central Bank of Cyprus

The Governing Council of the European Central Bank decided to maintain the current level of Emergency Liquidity Assistance (ELA) until Monday, 25 March 2013.

Thereafter, Emergency Liquidity Assistance (ELA) could only be considered if an EU/IMF programme is in place that would ensure the solvency of the concerned banks.

ECB Re-Bluffs To Cyprus Bluff

"Prepared To Let Cyprus Go"

By Tyler Durden
When the market briefly surged yesterday, following the cryptic note from the ECB that it would "provide liquidity within existing rules" we urged to ignore the kneejerk algorithmic exuberance (although with only algos left trading that was obviously self-defeating) which interpreted this as an indication the ECB would provide unconditional liquidity now and forever, and that this was hardly a bullish sign because "the last thing the ECB wants is to appear weak, and fold letting every other broke deadbeat country to demand the same equitable treatment and diluting Germany's political might." Today, Reuters has picked up on this coming out with its own analysis that the

"The European Central Bank is prepared to cut off funding to Cyprus and let the Mediterranean island succumb to financial meltdown if it has to, confident it has unlimited firepower to protect the rest of the euro zone."

It is unclear how much of the article is actual analysis, and how much interest-driven propaganda to put the ball back in Cyprus court with the imputed knowledge that the ECB will not fold and thus cave to Troika deposit haircut demands, but fundamentally the logic is there as, once more, the ECB will hardly want to appear weak and cave in to a "recalcitrant" and unyielding Cyprus. Of course, what happens if indeed Cyprus decides to pull the € plug, should Russia provide an unlimited backstop and in the process subjugate a part of European territory without firing a shot, and the precedent that Europe can and will let members go, nobody knows but one thing is certain: stocks will go, as always, up.

From Reuters:

Cyprus propelled the 17-nation bloc into uncharted waters on Tuesday by rejecting a proposed levy on bank deposits as a condition of a 10 billion euro ($12.9 billion) EU bailout.

Without the aid, much of it to recapitalize Cypriot banks, the ECB says they will be insolvent, and it requires banks to be solvent for them to receive central bank support.

Denied these funds, Cyprus would be left staring into a financial abyss.

For the rest of the euro zone, the ECB has a suite of policy tools at its disposal to prevent contagion - with bond purchases and unlimited liquidity offers to the fore.

Not Out of The Woods Yet

Despite Progress, Euro Crisis Is Far From Over

by Christian Rickens

The Greek debt cut worked and the rescue package has gone through. So is the euro crisis over? By no means. The situation in Greece will take a turn for the worse again in a few weeks. The other euro nations will have to use the time until then to get their own houses in order -- especially Germany.

For a change, everything has been going according to plan in the fight to save the euro in recent weeks. On Wednesday, euro-zone finance ministers gave the green light to the €130 billion ($170 billion) second rescue package for Greece. It's a pure formality after a satisfyingly large proportion of creditors agreed to a debt cut for Greece. Perhaps the most significant success of recent days is that even though the debt cut was deemed a so-called credit event, triggering the payment of the financial contracts known as credit default swaps, hardly anyone seemed to care.

For more than two years, the international financial lobby had been warning the public and governments that these credit default swaps must under no circumstances be triggered, because that would cause a disaster similar to the meltdown that followed the 2008 collapse of Lehman Brothers. Their message, effectively, was that taxpayers should cover all the losses, rather than private-sector creditors. But the CDS horror scenario has failed to become reality.

So has Greece been rescued and financial markets been tamed? Is the euro crisis a thing of the past? Unfortunately not. With their successes in the last few days, euro-zone politicians have done little more than bought themselves time. They must use this window to brace themselves for the next wave of the euro crisis which is about to crash down on Europe.

It's already clear that the Greek economy can't survive with a government debt to GDP ratio that will -- at best -- still be at 117 percent in 2020, especially given the record pace at which the country's GDP is contracting. There is still no coherent strategy for making Greece competitive again inside the euro zone, or for raising the capital for the huge investments needed -- let alone for the wholesale revamp of the country's entire public administration.

Greek Crisis Will Escalate Again

And so Greece is likely to report the next set of disappointing budget figures in a few months, and the wrangling over a new debt cut and a new rescue package will start shortly afterwards. Maybe the next wave of the crisis will hit us even sooner: Greece is scheduled to hold an election on April 22 which is expected to produce a left-wing majority deeply opposed to the strict austerity program imposed by Brussels.

Adopt a polar bear?

How did the polar bear, a vicious killing machine that is thriving, become the poster boy of climate-change alarmism?

by Rob Lyons 

Save the whale? That’s so 1970s. Now it’s the mighty polar bear that has become the poster child of the environmental movement. But are polar bears really facing extinction, or are they just a photogenic vehicle for promoting alarm about global warming?

‘Adopt a polar bear’, suggests the green NGO, WWF. WWF will even give you a cuddly toy polar bear for signing up. ‘Many scientists believe polar bears could be gone from most of their current range within 100 years’, says the WWF website, citing climate change as the major threat to the bears. Earlier this month, the US tried - and failed - to persuade the Convention on International Trade in Endangered Species (CITES), to ban cross-border trade in polar bears and their parts. The US lists the polar bear as a ‘threatened’ species, while the International Union for the Conservation of Nature lists it as a ‘vulnerable’ species.

The major claim is that climate change is causing the sea ice in the Arctic to melt earlier and refreeze later. As the press release for a new paper in the Journal of Animal Ecology, released today, suggests, this makes life harder for polar bears. The paper’s researchers tracked female polar bears in the western Hudson Bay area of Canada from 1991 to 1997, and again from 2004 to 2009. According to the lead researcher, Dr Seth Cherry: ‘The data suggest that in recent years, polar bears are arriving on shore earlier in the summer and leaving later in the autumn. These are precisely the kind of changes one would expect to see as a result of a warming climate and may help explain some other studies that are showing declines in body condition and cub production.’

But before we start getting into a lather about the future of nature’s greatest land-based killing machines (sorry, I mean big furry canaries in the climate-change coalmine), it is worth noting that there are more optimistic voices around. Susan Crockford, an adjunct professor at the University of Victoria in Canada, has just produced a short paper for the Global Warming Policy Foundation (GWPF) called Ten Good Reasons Not To Worry About Polar Bears.

Treating workers like unthinking primitives

The idea that workplaces should root out employees’ ‘unconscious biases’ is patronising and illiberal

by Para Mullan 

In the human resources (HR) field in which I work, there is currently a lot of discussion about people’s unconscious biases in the workplace. You know the type of thing: unconscious bias against women; unconscious bias in favour of men; unconscious bias against people with different ethnic backgrounds, and so on.

So when an email dropped into my inbox urging me to test my unconscious bias using the ‘implicit association test’, I was intrigued. For the next few minutes, I tested myself to see if I was ‘gender prejudiced’, typing certain letters to indicate positive or negative associations with particular statements.

Then came the results: ‘Your data suggest a moderate association of Male with CAREER and Female with FAMILY, compared to Female with CAREER and Male with FAMILY.’

What a huge non-surprise. Does it matter if my ‘unconscious bias’ makes me mildly disassociate females from careers? Surely what is more significant than my ‘unconscious bias’ is my conscious judgement. That is, I consider myself an objective, rational person, and when I recruit new staff, my decisions are based on criteria that apply to all candidates. If I were to let any ‘prejudice’ show, my fellow interviewers would put me right.

Unfortunately, many in the HR profession have bought into this concept of dealing with ‘unconscious bias’ and are offering training and education to fellow professionals. A report published by Business in the Community (BITC) at the end of 2012 claimed that recruitment of ethnic minorities has increased in organisations where employers have been educated about their ‘unconscious bias’.

Now, it does not take a rocket scientist to work out that if an organisation is focusing on recruiting ethnic minorities, then the number of ethnic-minority recruits will increase, just as the number of women in management positions will increase if you implement gender quotas. What these methods do not establish, however, are the benefits of ‘unconscious bias’ training.

It may be practically ineffective, but ‘unconscious bias’ training is successful in one regard: it suggests to HR departments that people’s unconscious thought processes are more important than their conscious ones. It encourages managers to view their employees less like humans and more like animals. But unlike animals, we think, we reason and we act. We make decisions and judgements. But unconscious bias theory pays no heed to any of that.

Cyprus: The ghost of the West yet to come

Cyprus offers a grim glimpse of a possible future for the wider western world

By John Phelan

When the European Union (with German money) mounted its most recent bailout of Greece, one of the conditions was a 75 percent write down of Greek government debt. For the Cypriot banks, which had made loans to the Greek government totalling 160 percent of Cyprus’s GDP, this was disastrous.

With their capital bases smashed the Cypriot government felt obliged to bail them out. Lacking the funds to do so (in 2011 the IMF reported that the assets of Cypriot banks totalled 835 percent of GDP) it turned to the European Union (in reality Germany again) for a bailout.

The Germans are reluctant to lend money without conditions. If the terms of the bailout are accepted by the Cypriot parliament, in return for the €10 billion corporation tax will rise from 10 percent to 12.5 percent and interest on bank deposits will be subject to a withholding tax.

But the most controversial aspect is the proposal that bank deposits will be subject to a one off “solidarity levy”, amounts under €100,000 at a rate of 6.75 percent and those over €100,000 at 9.9 percent. 

This is the eurozone crisis at its most extreme but it only differs from events in Ireland, Greece, Spain, Italy, and Portugal, by degree. And in as far as  government eventually has to tailor its outgoings to suit its income it is really just an extreme version of the situation which will also eventually face Japan, Britain, and the US, probably in that order.

So what lessons does Cyprus hold for those who still have all this to come?