News Release

* Fed Rate * World Bank Reform? * Homeland Profits? * Free Trade in Canadian Drugs and Internet Music

ELLEN FRANK
Professor of economics at Emmanuel College in Boston and author of the forthcoming Money Illusions: The Rise of Finance and the End of Economic Policy, Frank said today: “The fact that this Fed has cut rates this low indicates that they are concerned about a prolonged economic slump setting off deflation. If prices start declining, this would exacerbate the economy’s weakness by making it very difficult for people to repay their debts. While the Fed’s action is welcome, the federal government’s policy has not been helpful, for example letting the states sink. Globally, there’s a dearth of international economic policy coordination, though Japan and Germany both face serious economic slumps.”
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SOREN AMBROSE
The administration has just formally announced President Bush’s trip to Africa. Ambrose is a senior policy analyst with 50 Years is Enough, a group which scrutinizes the policies of the IMF and World Bank. He said today: “A memo has surfaced from Carole Brookins, the U.S. representative to the World Bank, which indicates the U.S. is using its leverage at the Bank to try to quash mild reforms. These reforms, most notably giving Africa slightly more voice on the Bank’s board, have been demanded for years. For the first time, there may be enough support to get them implemented, so the U.S. is responding to the slightest shift in voting power with a pre-emptive strike to prevent it from even being discussed at an informal board meeting on Monday.”
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WAYNE MADSEN
Madsen wrote the article “Homeland Security, Homeland Profits.” He said today: “The Congress just allocated $29 billion for homeland security. However, as with the Pentagon budget, much of this money will be spent on congressional pork barrel projects and in programs wired for funding by corporate lobbyists and revolving door politicians.”
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DEAN BAKER
Co-director of the Center for Economic and Policy Research, Baker said today: “In the same week, the news has been filled with stories about efforts to crack down on patients going to Canada to buy low-cost drugs and music listeners downloading music over the Internet. Remarkably, the supporters of ‘free trade’ have largely endorsed these actions. Both patents and copyrights are forms of protection — interference with a free market — left over from the feudal guild system. These forms of protectionism impose far heavier costs on consumers and the economy than other tariff or quota barriers since they raise prices by several hundred percent above their free market levels. It is necessary to support bio-medical research in the case of drug patents, and creative work in the case of copyrights. However, these patents and copyrights are extremely inefficient means of supporting this work. Unfortunately, the power of the pharmaceutical industry and the entertainment industry is so great that they have largely prevented public debate on more efficient mechanisms to support this work.”
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For more information, contact at the Institute for Public Accuracy:
Sam Husseini, (202) 347-0020; or David Zupan, (541) 484-9167