The blessings of the free market, pt. 246.

[In Italy,] a TV report on the seven-figure sums earned by some high-profile bosses generated a public outcry. [..]

Report, a hard-hitting investigative journalism programme on state broadcaster RAI [..] revealed that Alitalia chief Giancarlo Cimoli's yearly salary was 2.8 million euros [..]. It said Cimoli could expect a severance cheque of eight million euros when he leaves Alitalia later this month.

The show said the figures were all the more astonishing given Alitalia's troubled finances - the carrier is on the brink of bankruptcy with losses forecast to exceed 220 million euros this year.

[At national railways Ferrovie dello Stato (FS)], Elio Catania resigned in September, receiving a severance package of five million euros from the railway company, Report said.

During his two-year stint at the company, Catania was on just under two million euros a year. Although he was called in to turn the company around, when he left it was in the red to the tune of 1.6 billion euros.

Report also cited the case of Paolo Scaroni, the CEO of energy group Eni whose annual salary is 1.5 million euros and whose severance pay will amount to three years' worth of wages. [..]

It said that before being appointed Eni CEO, Scaroni was the chief executive of electricity giant Enel, which he left with a severance deal of almost 6 million euros.

The Report expose' not only generated outrage and calls for reform but also a judicial probe. [..] Rome prosecutors [..] are focusing on the large severance packages received by several top managers despite the disastrous results of the companies they were responsible for.

Some parliamentarians and consumer rights' groups are now calling for managers' earnings to be linked to company performance. The Italy for Values party [..] said that "an end must be put to these 'golden' severances and salaries which cost more in a day than a pensioner earns in a year and a half and which have no connection to the achievement of company targets".

World's richest 1% own 40% of all wealth, UN report discovers

· First ever study of global household assets
· 50% of world's adults own just 1% of the wealth

December 6, 2006
The Guardian

The richest 1% of adults in the world own 40% of the planet's wealth, according to the largest study yet of wealth distribution. The report also finds that those in financial services and the internet sectors predominate among the super rich.

Europe, the US and some Asia Pacific nations account for most of the extremely wealthy. More than a third live in the US. Japan accounts for 27% of the total, the UK for 6% and France for 5%. [..]

The global study - from the World Institute for Development Economics Research of the United Nations - is the first to chart wealth distribution in every country as opposed to just income, for which more comprehensive date is available. It included all the most significant components of household wealth, including financial assets and debts, land, buildings and other tangible property. Together these total $125 trillion globally. [..]

The report found the richest 10% of adults accounted for 85% of the world total of global assets. Half the world's adult population, however, owned barely 1% of global wealth. [..]

"These levels of inequality are grotesque," said Duncan Green, head of research at Oxfam. [..] The good news is that redistribution would only have to be relatively small. Such are the vast assets of the rich that giving up a small part of their wealth could transform the lives of millions." [..]

nimh, Maybe it's not a bad thing for the 1% to own 40 percent of the world's wealth. Looking at it from the standpoint of currency/wealth stability, it would be impossible for those 1% to demand/spend their wealth in their lifetimes, and the economies of the world can proceed with more stability.

What do you think?

* Overcrowded trains

If you want something more down to earth, all you need to do is turn to De Telegraaf. Its front-page news is that there's chaos on the Dutch railroads because of overcrowded trains. The situation has got so bad since the railways introduced a new timetable late last year that "squashed passengers are passing out, getting panic attacks and even into fights".

De Volkskrant reports that there was a train yesterday that was so packed that it had to be stopped and evacuated after passengers, who were starting to have difficulty breathing, actually tried to force the doors open. Not surprisingly, a consumersNULL organisation has described the situation as "unacceptable". But a spokesman for the railroad company says there is a shortage of carriages and so "we just have to make the best of it".

I think most of the wealthy are generous donors to the needy. If Gates and Buffett are examples of current generation mogals, I believe they do much good in this world.

Home Office promises review after private prison exposé

The Guardian
16 April 2007

The British Home Office has pledged to review the management of a privately run prison, Rye Hill, where an undercover BBC reporter uncovered routine bullying of staff by prisoners. It also found that prisoners had easy access to drugs and mobile phones.

The report comes after the jail had already been heavily criticised by inspectors over the murder of an inmate and the "avoidable" suicides of prisoners.

Prison experts say the film demonstrates why the government should rethink its enthusiasm for privately run jails. Rye Hill is run by the private firm Global Solutions Limited (GSL). Half of the new 8,000 prison places pledged by home secretary Reid are expected to be privately provided.

Frances Crook, director of the Howard League for Penal Reform, said: "The private sector experiment has been an abject failure in prisons. There continues to be deaths in them. They are more expensive [and] they have not impacted on reoffending rates".

"The argument was always that private prisons were going to be beacons of good practice. But staffing levels are low and staff are paid less [than those in publicly run jails] which means there is more risk that they are bribed or bullied. They also don't have a union to back them up."

She added: "Rye Hill is a terrible shambles. But the trouble is that the government has got locked into a contract they cannot get out of."

Stephen Nathan, editor of Prison Privatisation Report International, said, "The failures at Rye Hill are systemic. The pursuit of profit is incompatible with rehabilitating prisoners and providing adequate working conditions for staff."

Brian Caton, the general secretary of the Prison Officer Association, said: "This is just another glaring example of why prisons shouldn't be privatised. [..] In order to make profit from prison [private companies] cut down on the biggest expenditure which is staff: staff training, staff pay and staff pensions.

"It is so important that we maintain a high standard of training and support for staff working with these very violent [..] individuals. If we don't do that then we should not be surprised if, as a society, we end up with huge amounts of corruption, fraud and the kind of things [exposed in] this programme."

Conservative shadow home secretary David Davis said: ""It is bad enough that chronic prison overcrowding means offenders are constantly uprooted and not allowed to settle, drastically cutting their chances of completing their training or drug rehab courses.

"It is beyond belief that ministers are turning a blind eye to the prevalence of drugs, drink [and] weapons, [..] despite being warned [..] by Her Majesty's Inspectorate.

"Ministers need to realise that prisons are not only a place to lock up offenders. They should play a crucial role in rehabilitating offenders and thus reducing reoffending and overall crime levels."

Labor Department investigation says MSHA was negligent in protecting Crandall Canyon miners

The federal agency charged with overseeing mine safety was negligent in protecting workers at the Crandall Canyon Mine, the Labor Department's own Inspector General says in a new report.

The Mine Safety and Health Agency also could not ensure that its approval of the mining plan at the Utah mine was free of undue influence by the mine's operator, Murray Energy, the Inspector General says in a report issued Monday. [..]

The IG did not probe the cause of the disaster that claimed six miners -- still entombed some 1,900 feet in the mine -- and killed three would-be rescuers in August. [..] A report recently published by the Senate Health, Education, Labor and Pensions Committee called for the Justice Department to launch a criminal probe into actions by Murray Energy surrounding the Crandall Canyon disaster. [..]