Wednesday, 27 October 2010

Interest Rates Set to Rise as Economy Recovers

THE DAILY TELEGRAPH: Interest rates will start to rise sooner than expected after official figures showed the economy growing at its fastest rate for a decade, economists have said.

Growth over the past six months reached 2 per cent, the fastest pace of expansion over two consecutive quarters since 2000, according to the Office for National Statistics.

The economy received a further significant boost when Standard & Poor's, the ratings agency, revised its outlook on Britain from negative to stable and confirmed the country's AAA credit rating[.] >>> Andrew Porter and Philip Aldrick | Tuesday, October 26, 2010

THE DAILY TELEGRAPH: Greece reignites Europe debt woes: Europe's debt woes have returned to the fore after Greek premier George Papandreou threw open the door to fresh elections and vowed to liberate the nation from "slavery and surveillance". >>> Ambrose Evans-Pritchard | Tuesday, October 26, 2010

We have remarkable recessions and depressions these days. They used to last for years. Now, if we listen to the so-called specialists, they last for a mere few months! It seems like only yesterday that the UK economy was in danger of losing its AAA credit-rating. Now, its superb credit-rating is not in any doubt. Hmm! What is going on here? Surely Osborne's economic remedies cannot have kicked in yet. They have barely been announced. Methinks the people are being manipulated; methinks they are trying to pull the wool over our eyes. Hype it up, why don't you? – © Mark

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Tuesday, 26 October 2010

George Osborne's Recovery Plans Receive Double Boost as UK Rating Upgraded

THE DAILY TELEGRAPH: George Osborne's recovery plans have received a welcome boost with better than expected third quarter growth figures and a crucial upgrade in the rating of the UK economy.

Gross domestic product (GDP) grew by 0.8 per cent between July and September - less than the 1.2 per cent surge in the previous three months, but double the growth predicted by most economists.

Growth over the past six months has now hit 2 per cent, which is the fastest pace of expansion seen over two consecutive quarters for 10 years.

The data eases fears of a double dip recession and will reinforce government hopes that the private sector will pick up the slack created in the economy by mammoth public spending cuts.

Ratings agency Standard & Poor's added to the cheer by revising its outlook on the UK to stable from negative and confirming the UK's AAA rating. >>> | Tuesday, October 26, 2010

THE DAILY TELEGRAPH: Banks should be broken up, Bank of England Governor Mervyn King warns: Mervyn King, Governor of the Bank of England, has thrown his weight behind breaking up the banks as part of wider reforms to protect the taxpayer from another financial industry meltdown. >>> Philip Aldrick, Economics Editor | Monday, October 25, 2010
EU Plans for Direct Tax Would Lead to British Referendum

THE DAILY TELEGRAPH: The European Union's plans to levy direct taxes on Britons and those in other member countries would amount to a "transfer of sovereignty" that would force the Coalition Government to hold a Europe referendum.

Janusz Lewandowski, the European budget commissioner, has told The Daily Telegraph that his recent proposals to finance the EU through VAT, carbon, aviation or financial transaction taxes would touch on "holy" elements of national sovereignty.

So sensitive is the plan, tabled last week, to move from payments made by national treasuries to giving the EU "own resources" through direct European taxation, that it would have to be "ratified" in every country, the commissioner admitted.

"It needs ratification because it is prerogative of a national state to set its own taxes. No taxation without representation – it must be ratified," said the commissioner. "This is a sacred prerogative of national parliaments."

Under the Coalition Government's promised "referendum lock" any transfer of powers, such as tax raising powers, from Westminster to Brussels would be subject to a popular vote by Britons at a time when public hostility to the EU is growing. >>> Bruno Waterfield in Brussels | Monday, October 25, 2010

Sunday, 24 October 2010

Pound Forecast to Tumble on 'Insane' Spending Cuts

THE SUNDAY TELEGRAPH: Britain's spending cuts have been branded as "absolutely insane" by one of the world's leading currency traders, who expects the pound to tumble beyond the low it has set this year.

"I think what Britain is doing is absolutely insane" John Taylor, the founder of the $8bn FXConcepts fund, told The Sunday Telegraph. "The Conservatives will lose their stomach for this."

Reducing Britain's £156bn budget deficit is the cornerstone of the government's plan for restoring the economy's health. George Osborne, the Chancellor of the Exchequer, told Parliament last week that the £81bn in spending cuts would pull "Britain back from the brink."

Although Mr Osborne's plan has won support from many economists, there remains concern that it will damage a recovery that is already showing signs of faltering.

"The last retail sales numbers were pretty ugly and then we have to go through the VAT hit," said Mr Taylor, who at 67 is one of the oldest operators in the foreign-exchange markets. The pound will fall below 1.40, possibly this year, he expects. Sterling reached 1.43, its weakest against the dollar this year in May.

The Bank of England has publicly welcomed sterling's decline since the financial crisis erupted in 2008, but the central bank is not alone. Having already yanked hard on monetary and fiscal levers, an increasing number of governments are eyeing a weaker currency as a way of securing their share of an uneven global recovery. >>> Richard Blackden in New York | Sunday, October 24, 2010

Since when do currency traders understand economics? – © Mark

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Saturday, 23 October 2010

Bankers 'Caused Credit Crisis for Kicks'

THE TELEGRAPH: Forget the thorny problems of risk, regulation and even reward: bankers blew up the financial system for the thrill of it, according to one British academic.

A New York trader holding his head in his hands in 2008, as the Dow Jones dropped below 9,000 for the first time in five years Photo: The Telegraph

With a theory that will alarm Business Secretary Vince Cable, Dr Paul Crosthwaite of Cardiff University has argued that bankers and other investors took on excessive risks not just to make money but for the "desire" and "exhilaration" of destruction.

"For its participants and speculators alike, the crash is not simply an object of fear or anxiety, or even of mere fascination, but also of an inchoate but urgent desire," Dr Crosthwaite wrote in an article published in Angelaki: Journal of the Theoretical Humanities. Continue reading and comment >>> Louise Armitstead, Chief Business Correspondent | Saturday, October 23, 2010

I believe that these irresponsible gits should be jailed for causing such pain to others. The fact that they get such huge bonuses for their destruction just adds insult to injury. Fie on them all! – © Mark

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Wednesday, 20 October 2010

Euromillions £113m Ticket Claimed

BBC: The winner of the UK's largest ever lottery ticket has been claimed and paid out, Camelot has announced.

The record-breaking £113m Euromillions Lottery jackpot prize followed a draw on 8 October.

The winner beat odds of more than 76 million to one to pick the winning numbers which were nine, 30, 35, 39, 46, with lucky stars six and eight.

The previous largest lottery winner in the UK was an anonymous player who scooped £84.4m in May.

Nigel Page and Justine Laycock, from Barnsley, Gloucestershire, previously broke the record in February after winning £56m on Euromillions.

According to the Sunday Times Rich List 2010, the ticket-holder could become the 589th wealthiest person in Great Britain. [Source: BBC] | Wednesday, October 20, 2010

So you’ve won the jackpot. What happens next? >>>
Spending Review 2010: £83 Billion Sounds a Lot – But These Cuts Are Nowhere Near Enough

THE TELEGRAPH: The Government is making a weak start in its attempt to deal with the deficit, says Simon Heffer.

There will be something new, we must be sure, to be announced today in the Chancellor’s review of public spending, even though so much of it has been leaked already and, of course, the defence review was announced yesterday. We are meant to be awed by the £83 billion reduction in the deficit planned over the next four years, but should doubt this attempt (which will probably be reasonably successful in the short term) to grab the favourable attentions of the markets will be enough.

Before George Osborne took office I had grave reservations about his understanding of economics and, more to the point, his understanding of why exactly we are in this mess. Nothing he has said since May, and nothing leaked in the last few days, has altered this view. Maybe we shall be pleasantly surprised by his genius today, but we should not be banking on it.

Rather, we should have reservations about what we have been told is proposed. The reduction of £83 billion sounds like a lot of money, but it still represents a £92 billion increase in public spending by 2014-15. It will leave a state that is still too large, that is too much of a drain on the productive areas of the economy, and that is undertaking functions that could be done more efficiently and cheaply if transferred to the private sector. It will also leave a level of debt that will impoverish us steadily as interest rates rise, as one day they must. More should have been cut, and there should have been no shame in having an ideological ambition to take the state out of people’s lives as far as possible. After all, it is part of the Liberal Democrat intellectual heritage to do that, isn’t it? Continue reading and comment >>> Simon Heffer | Tuesday, October 19, 2010

Tuesday, 19 October 2010

Protesters to Hit France en masse

THE TELEGRAPH: Protesters are due to hit the streets in France en masse in the sixth such demonstration in two months against Nicolas Sarkozy's unpopular pension reforms.

Airport staff, bus and train drivers, teachers, postal workers and armoured truck drivers who stock cash machines will join refinery workers and others in a day of nationwide strikes against Mr Sarkozy's plan to raise the retirement age.

Fuel shortages will worsen as refinery strikes go into an eighth day, and the authorities will be alert for any escalation of sporadic violence on Monday in some cities, with small groups of troublemakers torching vehicles and scuffling with police.

A school in Le Mans, northwest France, burned down in the early hours of Tuesday after an apparent arson attack but it was unclear if the apparent arson attack was linked to the protests.

Michele Alliot-Marie, the justice minister, told Europe 1 radio the situation was not a crisis, but warned protesters that "the right to demonstrate does not mean the right to smash things up."

Tuesday's protests are a last-ditch challenge to the centre-right government before a final Senate vote this week on the pension bill, which the government says is vital to rein in a ballooning pension shortfall as the population ages. >>> | Tuesday, October 19, 2010
Let's Make CEOs Justify Their Wages

THE GUARDIAN: If business leaders had to explain why they are worth their extravagant salaries, we might see an end to corrosive inequality

When an economy is booming, unjustifiable inequalities in pay can easily escape our attention. In these straitened times, with big cuts in public services about to hit the most vulnerable, it is time to look more carefully at how work is rewarded in our society. We need to realise that recognising the significance of incentives should not lead to acceptance of the daylight robbery that passes for executive compensation today. A good place to start is by looking at corporate governance.

The facts about income inequality in the UK are nothing less than mind-boggling. The average income of a FTSE 100 chief executive, according to the most recent Guardian survey of executive pay, is over £3m per year, including bonuses and pension contributions. This is more than 100 times median household income. It is not uncommon for CEOs to run 200 or 300 times as much as the median pay of their employees or, in the case of Terry Leahy's final year at Tesco, for a CEO to be paid 500 times the average take-home pay of his colleagues.

Moreover, executive pay continues to march relentlessly upwards, unconnected to skill, judgment or underlying profitability. While the FTSE lost a third of its value in the year to September 2009, executive pay rose 10% during the same period. According to the Work Foundation, the ratio of average CEO pay to average UK earnings rose from 10:1 in 1980 to 75:1 in 2006 (and has continued to grow since). In short, the gains of economic growth are becoming increasingly concentrated in a small number of hands, while the wages of ordinary people have stagnated.

Should we care? New Labour's answer, famously encapsulated by Peter Mandelson, is that we should be "intensely relaxed about people getting filthy rich". Looking at runaway top-pay with a clear eye on its social and political consequences, Mandelson's claim looks as short-sighted as it is wrong-headed. Read on and comment >>> Martin O’Neill | Tuesday, October 19, 2010

Whatever happened to conscience? No responsible chief executive would feel good about siphoning off the cream for himself and leaving the worker bees with the crumbs. But these days, it seems that 'responsible' and 'CEO' are mutually exclusive concepts.

Taken to the extreme, this situation could eventually lead to revolution. History shows this to be so. Revolutions occur where extreme wealth and extreme poverty collide. The British are very complacent people, especially by comparison with the French, who have currently taken to the streets. But even a worm will turn. The élite shouldn't push their luck.
– © Mark

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Swiss Village Cuts Tax Rate to Attract More Hedge Funds from London

THE GUARDIAN: Pfäffikon is already one of the two headquarters of Man Group, the world's largest publicly traded hedge fund, and UBS recently built a base in the Alpine enclave

One-in-four hedge fund managers have moved from London to Switzerland. Photograph: The Guardian

A peaceful Swiss village that has become an unlikely rival to Mayfair is cutting its income tax rate to attract more hedge fund managers from London.

The Swiss area of Höfe in Schwyz, which includes the village of Pfäffikon, plans to cut its basic tax rate to 15% from 17% next year. It hopes to attract hedge funds that are angered by higher taxes in Britain and the public outcry against the banking industry.

Surrounded by hills and meadows, Pfäffikon is already one of the two headquarters of Man Group, the world's largest publicly traded hedge fund, otherwise based in London. The Swiss bank UBS has also recently built a base in the Alpine enclave, near Zurich.

"We know that many London-based funds are not happy with rising taxes in Britain, so this is a reminder that Switzerland and Pfäffikon are positioning themselves as a hedge fund hub," said Marcel Jouault, of the business promotion department at Pfäffikon. "Many office buildings will be completed in 2011 and 2012. Lowering taxes will attract more businesses."

The village, once mostly dependent on agriculture, has registered more than 300 businesses so far this year, including Avis Asset Management, Commodity Partners, Fargill Investments, Sussex Partners, Hadrian's Wall Capital, Highland Capital Management and Twelve Capital.

Support businesses such as bookshops, travel agencies and beauty centres have proliferated. The city is also building a centre to host smaller hedge funds. >>> Elena Moya | Monday, October 18, 2010

Monday, 11 October 2010

German Politician Inflames Immigration Debate

THE GUARDIAN: Horst Seehofer calls for halt to immigration for Turks and Arabs, claiming they find it hard to integrate

Horst Seehofer has refused to apologise for saying Germany should not accept any more Turkish or Arab migrants. Photograph: The Guardian

A leading German politician has stoked a debate about foreigners and the workplace after calling for a halt to immigration for Turks and Arabs, citing the difficulties they have in integrating.

Horst Seehofer, premier of the conservative southern German state of Bavaria, stressed the urgent need to stem the flow of immigrants from Arab lands, and focus instead on cultures more similar to Germany's.

Seehofer, a member of the Christian Social Union, the Bavarian sister party of Chancellor Angela Merkel's Christian Democrats, told a German magazine it was time for the country to look elsewhere for qualified workers at a time when many parts of the labour market are facing grave shortfalls.

"It's clear that immigrants from other cultural circles like Turkey, and Arab countries have more difficulties. From that I draw the conclusion that we don't need any additional foreign workers from other cultures," he said.

He added that Germany should first "deal with the people who already live here" and "get tougher on those who refuse to integrate" before opening itself up to further immigration. >>> Kate Connolly, Berlin | Monday, 11. October 2010

Sunday, 10 October 2010

US Physics Professor: 'Global Warming Is the Greatest and Most Successful Pseudoscientific Fraud I Have Seen in My Long Life'

When I first joined the American Physical Society sixty-seven years ago it was much smaller, much gentler, and as yet uncorrupted by the money flood (a threat against which Dwight Eisenhower warned a half-century ago). Indeed, the choice of physics as a profession was then a guarantor of a life of poverty and abstinence—it was World War II that changed all that. The prospect of worldly gain drove few physicists. As recently as thirty-five years ago, when I chaired the first APS study of a contentious social/scientific issue, The Reactor Safety Study, though there were zealots aplenty on the outside there was no hint of inordinate pressure on us as physicists. We were therefore able to produce what I believe was and is an honest appraisal of the situation at that time. We were further enabled by the presence of an oversight committee consisting of Pief Panofsky, Vicki Weisskopf, and Hans Bethe, all towering physicists beyond reproach. I was proud of what we did in a charged atmosphere. In the end the oversight committee, in its report to the APS President, noted the complete independence in which we did the job, and predicted that the report would be attacked from both sides. What greater tribute could there be?

How different it is now. The giants no longer walk the earth, and the money flood has become the raison d’être of much physics research, the vital sustenance of much more, and it provides the support for untold numbers of professional jobs. For reasons that will soon become clear my former pride at being an APS Fellow all these years has been turned into shame, and I am forced, with no pleasure at all, to offer you my resignation from the Society.

It is of course, the global warming scam, with the (literally) trillions of dollars driving it, that has corrupted so many scientists, and has carried APS before it like a rogue wave. It is the greatest and most successful pseudoscientific fraud I have seen in my long life as a physicist. Anyone who has the faintest doubt that this is so should force himself to read the ClimateGate documents, which lay it bare. (Montford’s book organizes the facts very well.) I don’t believe that any real physicist, nay scientist, can read that stuff without revulsion. I would almost make that revulsion a definition of the word scientist. Read on and comment >>> James Delingpole | Saturday, October 09, 2010

Friday, 8 October 2010

John Maynard Keynes: Horror at Government's Economic Illiteracy

Watch Telegraph video here
Niall Ferguson: Warburg on Banks, Bonuses and Morality

Watch Telegraph video here
Niall Ferguson: Warburg's European Foresight

Watch Telegraph video here

Wednesday, 6 October 2010

Child Benefit: I Should Have Warned You, Admits PM

THE TELEGRAPH: David Cameron hasapologised for failing to warn voters before the election that his government would cut child benefit for millions of households.

In an attempt to stop the row overshadowing his first party conference speech as Prime Minister, Mr Cameron expressed regret at the surprise announcement of a policy which will penalise stay-at-home mothers. >>> Robert Winnett, Andrew Porter and James Kirkup | Tuesday, October 05, 2010
Liberal Democrats Call for Draconian Tax on Bank Bonuses

THE GUARDIAN: • Lord Oakeshott calls for immediate tax
• £7bn expected to be paid out in bonuses this year
• RBS chairman says regulation the only route to reform

A new, more draconian tax on bonuses should be slapped on banks, a leading Liberal Democrat said tonight after the Royal Bank of Scotland chairman admitted that regulation was the only way to restrain the annual bonanza for bankers.

Amid estimates that the City would pay out £7bn in bonuses this year, Lord Oakeshott said the moment had now come to reintroduce a tax on bonuses which, when imposed on the banks last year, brought in £3.5bn for the exchequer.

Oakeshott, a Lib Dem Treasury spokesman, said that the situation was so grave that the government would need to act ahead of the report next year by its independent commission on banking – chaired by Sir John Vickers.

Speaking after David Cameron acknowledged the public's "anger" over bonuses, Oakeshott said: "As the prime minister has made clear, the banks are still paying ever bigger bonuses and not lending to small businesses.

"The answer must be to take immediate action on bonuses and the obvious way is to have a much tougher bonus tax than Labour's feeble feather-duster and much stricter net lending targets to small and medium-sized businesses while we wait for the banking commission to recommend more radical reform." >>> Jill Treanor | Tuesday, October 05, 2010

Tuesday, 5 October 2010

Let the Banks Collapse!

THE TELEGRAPH: More taxpayer support is needed to ensure global financial stability despite the billions already pledged, the International Monetary Fund has warned, as banks remain the “achilles heel” of the economic recovery.

Lenders across Europe and the US are facing a $4 trillion refinancing hurdle in the coming 24 months and many still need to recapitalise, the Washington-based organisation said in its Global Financial Stability Report. Governments will have to inject fresh equity into banks – particularly in Spain, Germany and the US – as well as prop up their funding structures by extending emergency support.

“Progress toward global financial stability has experienced a setback since April ... [due to] the recent turmoil in sovereign debt markets,” the IMF said. “The global financial system is still in a period of significant uncertainty and remains the Achilles’ heel of the economic recovery.” Banks' $4 trillion debts are 'Achilles’ heel of the economic recovery', warns IMF >>> Philip Aldrick, Economics Editor | Tuesday, October 05, 2010

THE TELEGRAPH: Warren Buffett says in future Wall Street chiefs should go broke - and their wives: Warren Buffett, the billionaire investor, has hit out at pay practices on Wall Street, attacking the lack of reform despite two years passing since the financial crisis struck. >>> Richard Blackden, US Business Editor | Tuesday, October 05, 2010
Are Cameron and Osborne Too Rich to Know How the Middle Classes Feel About Child Benefit?

David Cameron and George Osborne too rich to understand? Photo: The Telegraph

THE TELEGRAPH – BLOG – DAVID HUGHES: Out of the smouldering wreckage of the child benefit announcement is emerging a view of the Tory leadership that will, if it takes hold, be immensely damaging. It is that they are so well-heeled that they simply do not have a clue about how most people live their lives. David Cameron and George Osborne have never had to worry about money, ever. It has never impinged on their charmed existences. Read on and comment >>> David Hughes | Tuesday, October 05, 2010

Monday, 4 October 2010

Now That’s Really Dumb, George!

THE TELEGRAPH: Middle class parents who take time out from work to look after their children will lose out on thousands of pounds of Government handouts under a reform of child benefit announced by George Osborne.

In a move designed to save a billion pounds a year, the Chancellor annouced that higher-rate taxpayers will no longer be eligible for the benefits.

However the way the system is calculated threatens to put families with just one breadwinner at a disadvantage relative to households where both parents work.

This is because families with a combined income of £87,000 where both parents earn just under the higher-rate tax threshold of £44,000 are still entitled to the benefit while those with just one breadwinner earning £45,000 are not.

If the withdrawal of the benefit is not tapered, it could also mean that parents earning just below the threshold could be penalised if they get a pay rise.

The system relies on higher rate taxpayers declaring whether anyone in their household is claiming the benefit which can then be deducted from their earnings.

Mr Osborne defended the plan by pointing out that the costs of conducting a means test on every family would eat up much of the savings from cutting the benefit payouts. He claimed that the average income for households with one higher rate taxpayer is £75,000.

Speaking in an interview on ITV's Daybreak this morning he described the move as "a tough but fair decision."

He added: "It's just not fair to ask someone who's on £15 or £20,000 a year to be paying for the child benefit of someone who's on £50,000 or even more."

"At any other time, I wouldn't do this. But Labour left us with a heck of a mess." Stay-at-home parents to lose out in child benefit reform >>> James Kirkup, Political Correspondent | Monday, October 04, 2010

BENEDICT BROGAN: Child Benefit: What's fair about taxing stay-at-home mums? >>> | Monday, October 04, 2010

Friday, 1 October 2010

Global Employment Crisis Will Stir Social Unrest, Warns UN Agency

THE TELEGRAPH: Global employment will not recover to pre-crisis levels until 2015 if current policies are pursued, creating social tension, the International Labour Organisation has warned

Rubbish bins burn in central Barcelona during the general strike. Photo: The Telegraph

The United Nations work agency said it was putting back by two years from 2013 its previous assessment of the time needed to create the 22 million jobs still needed to regain the pre-crisis level - 14 million in rich countries and 8 million in developing states.

The global economy has started to grow again with encouraging signs of employment recovery especially in some Asian and Latin American emerging economies, the ILO said in its annual World of Work report.

"Despite these significant gains ... new clouds have emerged on the employment horizon and the prospects have worsened significantly in many countries," it said.

Raymond Torres, lead author of the report, told a news conference that job losses since the crisis started had totalled some 30-35 million. The ILO has forecast global unemployment this year of 213 million, a rate of 6.5 per cent.

For the United States - where persistent unemployment has become one of the main issues in this November's elections - the number of jobs still needed to regain pre-crisis levels is 6.9 million, Steven Tobin, ILO economist, said.

The extended loss of employment and growing perceptions of unfairness risked increasing social tension, the ILO said. >>> | Thursday, September 30, 2010
Ed West: The Equality Act Is the Triumph of Identity Politics and Possibly the Worst Law in English History

THE TELEGRAPH – BLOGS – ED WEST: We’ve finally reached rock bottom, with Harriet Harman’s Equality Act, which comes into force today. Where do I begin? (Quotations are from the Telegraph report.)

“An employee who had been disciplined for taking a lot of sickness leave could also claim they had been treated unfairly.

“The Equality Act will make it easier for staff to claim they were discriminated against because of a disability. This is because they no longer have to prove they were treated less favourably than non-disabled colleagues.

“The new law also stops colleges from preventing teenage girls at school who are pregnant or who have had a baby from taking their A-levels.”

Now I dare say that when historians of the 25th century come to write about the downfall of European civilisation this law will be used to illustrate how Western thinking lost its way, and how a perverse ideology that took hold of universities in the 1960s came to dominate politics.

It is ironic that when anti-discrimination laws were first brought in they were supposed to ensure that people were judged by their abilities; now the triumph of identity politics is complete with an “anti-discrimination” law that ensures that to judge a person by their character is illegal.

“The Government also expects discrimination claims from dyslexic workers who have been barred from carrying out tasks because of tendency to make spelling mistakes.”

Perhaps unconsciously mirroring the seven deadly sins of Christianity, the law tackles seven types of discrimination, including: Continue reading and comment >>> Ed West | Friday, October 01, 2010