It is almost an optical illusion: looming on Japan's horizon, and on Europe's and on America's, is a pension crisis. The problem is real, though exaggerated. The main question is whether privatising pension systems, as George Bush has proposed for social security in the United States, would solve the problem or merely make matters worse.
By itself, privatisation is clearly not the solution. America's troubled private pension system--now several hundred billion dollars in debt--already appears to be heading for a government bail-out. There was a time when privatisation--allowing individuals to set up individual savings accounts--seemed better than social security, which invests in lower-yielding Treasury bills (government bonds). Advocates of privatisation argued that funds would do much better if invested in stocks, predicting a return of 9%.
But the stock market does not guarantee returns; it does not even guarantee that the stock values will keep up with inflation--and there have been periods in which they have not. America's social security system insulates individuals against the vagaries of the market and inflation, providing a form of insurance that the private market does not offer.
It does so with remarkable efficiency. The costs of managing the social security system are far smaller than those likely to be associated with privatised accounts. This is understandable: private investment firms spend an enormous amount on marketing and salaries.
It is possible that to reduce these transaction costs, Bush will propose restricting choice, which was the main argument for privatisation in the first place. But these limited kinds of choices--for example, a T-bill fund with 90% in T-bills and 10% in an indexed stock fund--could easily be introduced into the public social security system.
Bush says that reform is urgently needed, because the system will be insolvent in about a quarter of a century. But the problem depends on America's growth rate: if the growth rates of the late 1990s return, there is no problem. Even if there is a problem, it can easily be fixed: spending a fraction of the money that went into Bush's two tax cuts would have fixed social security for 75 years; slight benefit cuts, adjusting the age of retirement, or minor adjustments in the level of contributions could fix the system permanently.
Moreover, Bush's proposals won't fix social security--unless they are accompanied by drastic benefit cuts. For how could they? He proposes diverting almost a third of the social security tax to private accounts. That means less money coming in. If benefits are not reduced, the gap between receipts and expenditures will increase.
So privatisation would not protect retirees against the social security system's insolvency; it would merely add enormously to today's fiscal deficit, because partial privatisation entails diverting money to private funds that would have been used to close the gap between government expenditures and revenue.
America and the world should remember: Argentina's privatisation of its pension system was at the centre of its recent fiscal woes. Had Argentina not privatised, its budget would have been roughly in balance. The US is starting on its privatisation venture with a fiscal deficit of 4% of GDP.
Joseph Stiglitz, professor of economics at Columbia University and a Nobel prize winner
COMMONDREAMS.ORG

A person holds one of the first Polish printed pictures of the new elected Pope Benedict XVI in a bookshop in central Warsaw, April 22. (Reuters Photo)

Within minutes of the media announcement that Cardinal Ratizinger was selected Pope Benedict--I refuse to call a process whereby less than 1% of 1% can vote an election--I received an email asking if I was going to switch churches or wait to be excommunicated! My friends laughed and said “A progressive American Catholic is now a double oxymoron!”
The first Pope joke is already racing around Rome. When gregarious and generous Pope John XXIII was made pope, his first words were “Be not afraid!” Now when Pope Benedict is sworn in his first words will be “Be afraid! Be very afraid!”
For those of you who are not Catholic, selecting Cardinal Joseph Ratzinger as Pope is a lot like selecting Attorney General John Ashcroft as President. Ratzinger has been the enforcer of orthodoxy for years. No women priests. No gay unions. No questioning authority. Fall in line.
As a progressive American Catholic I feel uncomfortably out of place--both in country and in church. While the last Pope spoke passionately about poverty and peace and solidarity--these principles were undercut by the practices of protection of the all-male clerical hierarchy.
Likewise, we have a president who speaks boldly about freedom and democracy and opportunity--yet these same principles are undercut by practices of global military and economic domination and widespread denial of social and human rights at home and abroad.
Yet I, and millions of others, are not leaving--country or church.
Millions refused to give up and go to Canada when our current fundamentalist president was elected.
And we millions are not leaving the catholic church just because the fundamentalists have assumed power there as well.
Our church and our country have wandered far away from the principles of respect and justice and equality that are supposed to be the foundations of each. Yet, we will not leave.
It is time to stand and struggle for the soul of church and country--and, I am afraid, more frequently than I would like, to struggle with both our church and country to force them to stand consistently for their principles.
If our country will not stand up for justice for civilians in Iraq, prisoners here and abroad, a living wage, racial justice, quality public schools, fair healthcare, and reigning in national and international corporate power--then it is up to us to do it. Our country is the one of Harriet Tubman, Patrick Henry, Eleanor Roosevelt, Cesar Chavez, and Martin Luther King. They inspire us and they give us hope to push forward in these times.
If our church will not stand up for women leaders, accountability for abuses, democracy in our institutions, healthy sexuality, equality for people of all orientations, and real respect for all life--including the born--then it is up to us to do it. Our church is the one of Archbishop Oscar Romero, Joan of Arc, Philip Berrigan, Dorothy Day and Francis of Assisi. They inspire us and give us hope to push forward in these times.
Benedict and George--we are not leaving. It is our church and our country. We are going to stay and struggle for the soul of both, with love and justice for all.
Bill Quigley,
a lifelong Irish Catholic US citizen who teaches at Loyola University New Orleans, School of Law
COUNTERPUNCH.COM

Italian Prime Minister Silvio Berlusconi smiles before speaking to reporters after a meeting with Italian President Carlo Azeglio Ciampi at Quirinale Presidential Palace in Rome, April 22. (Reuters Photo)

The new pope was not the only leader whose future had been in the balance in Rome last week. Across the Tiber, Italy's prime minister, Silvio Berlusconi, handed in his resignation on April 20th, bringing to an end the longest-serving government in Italy since 1945. Not that Mr Berlusconi was planning to leave office. Under the constitution, a change of government is required before any big shake-upÑwhich is what two of his key centre-right allies have been demanding for the past week.
At the root of the crisis was the centre-right's disastrous showing in Italy's recent regional elections. On April 3rd and 4th, it lost in all but two of 13 regional votes. Last week, it was defeated in a 14th, Basilicata. Italy's voters are clearly telling the government it is on the wrong track.
The prime minister's first response to the regional elections was to propose a minor cabinet reshuffle. That was not enough for the Union of Christian Democrats (UDC), the third-biggest party in government. The UDC's leader, Marco Follini, one of Mr Berlusconi's two deputies, urged a clean break to show voters that the government was changing direction. With hesitant support from Gianfranco Fini, the other deputy prime minister and leader of the second-biggest coalition party, the formerly neo-fascist National Alliance, Mr Follini demanded that the prime minister resign, rewrite his programme, reshape his cabinet, and go back to parliament for a fresh vote of confidence.
When Mr Berlusconi refused, the UDC leadership said on April 15th that it would pull out of the cabinet, though it would continue to support the prime minister in parliament.
After a hectic weekend, Mr Berlusconi agreed, at a meeting of party leaders, to hand in his resignation to President Carlo Azeglio Ciampi. He set off to do this, only to emerge with an impish grin and a statement that he had changed his mind. His about-turn snapped the patience of Mr Fini, who said that he would pull his party out of the government unless Mr Berlusconi gave way.
This battle has been largely over tactics, but the surface hides layers of substance. One question is the real aim of the UDC, long the most suspect of Mr Berlusconi's allies. The earthquake that shook Italian politics in the early 1990s scattered the Christian Democrats into rival camps.
Mr Follini and his friends sided with Mr Berlusconi; others chose to ally with the left. The prime minister's followers have long feared that Mr Follini's ambition is to reunite the wings of Christian Democracy into a movement that could recapture the middle groundÑperhaps after a Berlusconi defeat and a spell in opposition.
Italy's halting progress towards a more liberal economy and a two-party, or at least two-sided, democracy on Anglo-Saxon lines may thus be in question, since both would be blocked by the re-creation of an all-embracing Christian Democrat party. The UDC, like the National Alliance, is rooted in the poorer, more welfare-dependent, south where fears about Mr Berlusconi's agenda have been heightened by another part of his programme: a constitutional reform that would boost the autonomy (and also the resources) of the richer, more entrepreneurial north.
Although it may not seem like it at first, Italy's political crisis in part reflects the wider debate over how far to go in replacing Europe's social model with American-inspired free-market principles. The debate has real substance. Not that that will stop Mr Berlusconi thinking Mr Follini is a rat. Or Mr Follini from fearing that he may be re-boarding a sinking ship.
ECONOMIST.COM

US President George Bush is a master tactician. Israeli Prime Minister Ariel Sharon is a master strategist. The two met last week and both accomplished their respective objectives.
Sharon’s goals have been clear for many years now. He is unilaterally drawing the permanent borders of the State of Israel, to secure its future as a Jewish state. A long-time advocate of the “Jordan is Palestine” school, he has seen the writing on the wall. A Palestinian state in parts of Mandatory Palestine is inevitable because the international community demands it, the US supports it, and Israel needs it for reasons related to both security and demographic realities.
The only problem that remained for Sharon was how to limit the definition of the Palestinian state and how, at the same time, to maximize Israeli territorial advantage. To resolve this issue, Sharon made the determination, early on, to act unilaterally. He took advantage of Israel’s strength, its close partnership with a preoccupied and supportive US administration, and the Palestinian’s powerlessness and political paralysis.
Along the way, a few obstacles appeared in Sharon’s path. His decision to unilaterally disengage from Gaza and some areas of the West Bank faced stiff domestic opposition from his former settler allies. A newly elected Palestinian leadership, despite overwhelming difficulties, has been able to provide sufficient enough control on the ground to emerge as an internationally recognized “partner” in peace negotiations.
At the same time, the US, needing European and Arab support for its Iraq and broader Middle East initiatives and the “war on terror,” has resumed efforts to re-engage the “road map”-based peace process, embraced the new Palestinian leadership and cautioned Israel against unilateral measures that would weaken the Palestinians and compromise the US relations with its allies.
To this Sharon responded, first by cleverly playing domestic coalition politics to isolate and defeat his opponents. He further strengthened his position at home by building a West Bank wall/barrier that both unilaterally helped to demarcate the route for future Israeli control over huge West Bank settlement blocs and large swathes of West Bank land. Additionally, he announced major expansions of Beit-ul-Moqaddas area settlements to build up Israeli control not only over the city and its environs, but also over the strategic middle of the Palestinian territories.
Finally, Sharon worked to reduce tension with the US, Israel’s major ally, while attempting to discredit the ability of Palestinian President Mahmoud Abbas, in an efforts to ensure Israel’s right to continue to take these unilateral actions, forcing the Palestinians to accept or react to them--as the only show in town.
While I don’t want to be unduly cynical, I also will not be na•ve and uncritical. That is why I see both Sharon and Bush as having emerged from the Crawford meeting as winners. Unfortunately, the Palestinians were the only losers.
Despite Bush’s criticism of Israel’s settlement expansion plans and his stated commitment to the “road map,” Sharon left Crawford unscathed. Bush’s criticisms may have played well in Europe and some Arab capitols desperately looking for good news, but Sharon was undeterred. “We agree to disagree,” he might have said to his Israeli supporters. To a close associate he did say, “Why seek friction with the entire world? The settlement blocs will be in our hands and territorial continuity will be maintained between them and Israel.”
James Zogby
ARABNEWS.COM

My friend Nicki is leaving London to live in France. It's not just the lure of long Burgundian summers, or that cheap Chinese imports are hurting her husband's furniture design business, that has prompted such drastic life changes. Like increasing numbers of professional Britons, she feels that her young family would be better off virtually anywhere other than on these shores.
She is not hanging around for the likely return of Tony Blair to Downing Street for a third term in office--not that she is politically biased. She hates all politicians of whatever persuasion equally. It's just that she feels increasingly alienated from the land of her birth.
"It's like living under the Sheriff of Nottingham. The moment you leave your front door you're constantly reminded in a very unpleasant way that the pavement underfoot belongs to the government and not to you."
People live in fear of crime and Arab-inspired terrorism and while such threats are not without foundation, they appear to have been exaggerated by an executive determined to further enhance its own powers.
This state of fear also draws attention away from Labour's own policy failures, particularly its mismanagement of immigration, which under conservative estimates will add an additional 2 million to the population every decade. It has become the great unmentionable uppermost in the minds of many of the electorate. Fifty-eight per cent of British voters believe that tighter restrictions are necessary, according to a recent MORI poll.
There are surveillance cameras on virtually every urban street, but they haven't curbed the tide of rising violent crime, let alone rude Britannia with its noisy neighbours, road rage and lager louts. Instead, they have merely helped swell the coffers of local authorities with revenue raised from fining motorists for parking and minor traffic offences, while more serious crimes go undetected.
As people feel more disempowered, they look for scapegoats and the asylum seeker has now replaced the single mother as society's bogeyman. They resent the rising tax burden of paying for the extra council resources needed to house and educate their children.
Like China and other densely populated corners of the globe, England is discovering that rapid societal change and unprecedented population growth, partly from immigration as well as political and economic centralisation, is not necessarily compatible with democracy, especially on a small island like ours.
Nor is democracy likely to flourish in a society where a policy of multiculturalism has exacerbated cultural differences rather than shared common values.
We already have the 2005 Prevention of Terrorism Act, which allows the government to detain foreigners and British citizens under indefinite house arrest without charge--an act more appropriate to Burmese dictators than a democracy.
There is no need for Blair to emulate his friend George Bush with Patriot Act-style legislation. We tried detention without trial at the height of the IRA terror campaign and it was an unmitigated disaster for the then Tory government.
Instead New Labour should begin by addressing its own policy failures; its inability to control Britain's borders and its failure to distinguish between genuine asylum seekers and those who are merely here to exploit the system.
If it does not, then the exodus of people like my friend Nicki is likely to reverse the trend in the other direction.
Jane Renton
THESTAR.COM