Saturday, April 28, 2007

The Importance of Savings

In an a interesting article on the Austrian School of Economics and the Great Depression, the author contends that what is necessary to resolve a depression or large scale recession is to increase savings, allowing for real investment funds to accrue.

The reality of this is clear that with the Depression and after, until the late 1960's, most Canadians were savers. Today most are in debt. Which means that a serious downturn in the economy is going to be a disaster.

However as the author points out the way to mitigate that disaster is by increasing savings. The savings culture that resulted after the Great Depression attests to this. However in that case it was a harsh lesson learned the hard way. And unfortunately in our easy credit consumer culture it is one that is forgotten in this long boom.


Austrian Business Cycle Theory: A Corporate Finance Point of View

The lesson is that as long as output prices stay up (through Keynesian
policies) and the Monetarists keep interest rates from rising (or maybe push them lower), if input prices are rising (a real resource crunch), we will have a recession. And the only way out is through the painful but necessary liquidation process.

The best means to transform malinvestments into viable economic activities is
through increasing savings. This means that one of the government’s most effective
policies is to cut taxes on the savers. Those who are savers are usually labeled as “the rich.” Unfortunately, the prescriptions of “get government out of the market” or a “tax cut for the rich” tend not to be politically popular. However, the idea of “tax cuts are for the tax payers” has had some success.


And while he praises tax breaks for savers he mistakenly identifies them with the rich. Which is currently true, because only a relative handful of the population in the G20 countries have access to liquid capital. The average person who used to save, such as my parents, now has easy access to credit and thus is leveraged into debt. However to have a successful saver economy you need the masses to have access to enough surplus cash to encourage saving.

Savings by the wealthy elite while larger than the average persons, are not nearly as effective as a mass saver culture, as witnessed by Japanese savings numbers. And while various explanations are given for Japan's long recession, the reality is that what kept it from flat out crashing as bad as the Wall Street Crash of 1929, with the same global impact, was the savings accrued by the average Japanese.

The way to solve this problem of easy credit, and its recessionary effects on the business cycle is not to expand capital gains tax breaks, or give business tax breaks, or even to encourage investments in RRSPs or Income Trusts, but rather to eliminate all taxes on incomes of $100,000 or less.

The real savers, the folks who saved capitalism according to the Austrians, are our parents and grandparents who were cruelly forced to learn this lesson, to save in order to survive.

In order to encourage individual saving in a credit card debt based consumer economy, tax cuts, not tax credits, are required for the working class. Currently tax breaks for most folks put anywhere from a few hundred to a couple of thousand dollars back in their pockets come tax day, which is Monday.

Now imagine if you actually had the income tax from your income, you could invest in saving. Instead of a paltry hundred or even a thousand bucks this could be anywhere from $5000 to $10,000 to as high as $25,000 annually.

Further if EI were run as a joint investment cooperative between Employers and Workers, without the government plundering it for it's surplus costs could be reduced, And with a profitable investment strategy put more money in workers pockets, while also insuring a better and fairer process for collecting EI. This has already occurred with the CPP. Ironically it is the NDP and the Bloc who support this idea of joint ownership and elimination of the government from EI.

Furthermore such a joint cooperative EI program could offer alternative financial opportunities such as micro credit for self employment opportunities, as well as the usual Guaranteed Income that we associate with EI currently. It would allow for broader education and training opportunities, while not costing as much as the current program does, because the government would not have access to the profit, surplus.

Similarly we should eliminate Workers Compensation Boards and replace them with a joint labour employer cooperative, that would not have the government as its arbitrator or with its hands in the pockets of workers and employers as currently occurs.

A failure to come up with adequate support for an injured worker, would result in the option of the worker to sue the employer in civil court, which is currently not available with the state as the arbitrator. WCB payments would then decrease under such a joint management and investment plan.

It is often argued that labour relations is problematic because it is an adversarial relationship between workers and employers, unions and corporations. While this is true, the real advocate of this adversarial relation is the state who wishes to arbitrate between the two parties. Unions are the working classes voice in labour relations with the bosses and their associations and cartels. The state is never neutral, as we saw with the recent CN strike. It interferes in the natural social relationship between workers and their bosses.

In fact one has to ask why we need the government period. We have common laws, we have workers and employers, and they can resolve their conflicts through negotiations, arbitration, strikes, or mediation. They can cooperate as well for mutual aid and benefit, such as with works councils, joint management labour pension and benefit funds, EI, Workers Compensation, etc. The State is not required for a cooperative commonwealth.

As Samuel Gompers pointed out long ago;

The worst crime against working people is a company which fails to operate at a profit

The more thoroughly the workers are organized and federated the better they are prepared to enter into a contest, and the more surely will conflicts be averted. Paradoxical as it may appear, it is nevertheless true, that militant trade unionism is essential to industrial peace.

What we have endeavored to secure in industrial relations is industrial peace. When industrial justice prevails, industrial peace will follow. It is a result and not an end in itself.

We want a minimum wage established, but we want it established by the solidarity of the working men themselves through the economic forces of their trade unions, rather than by any legal enactment. . . . We must not, we cannot, depend upon legislative enactments to set wage standards. When once we encourage such a system, it is equivalent to admitting our incompetency for self-government and our inability to seek better conditions.

To strengthen the state, as Frederick Howe says, is to devitalize the individual. . . . I believe in people. I believe in the working people. I believe in their growing intelligence. I believe in their growing and persistent demand for better conditions, for a more rightful situation in the industrial, political, and social affairs of this country and of the world. I have faith that the working people will better their condition far beyond what it is today. The position of the organized labor movement is not based upon misery and poverty, but upon the right of workers to a larger and constantly growing share of the production, and they will work out these problems for themselves.

It is not the organizations of labor which take away from the workers their individual rights or their sovereignty. It is modern industry, modern capitalism, modern corporations, and modern trusts. . . . The workingmen in modern industries lose their individuality as soon as they step into a modern industrial plant, and that individuality which they lose is regained to them by organization--they gain in social and industrial importance by their association with their fellow workmen.




Also See:

Not Your Usual Left Wing Rant

State-less Socialism

Fair Share



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Friday, April 27, 2007

Heat Not Light

Well the Federal Government has finally caught up with me, I have been using compact fluorescent lights for over a decade.Canada to ban traditional light bulbs But you know what, my electricity bill has not gone down, it has gone up! Because of energy deregulation in Alberta and increasing gas costs.

And these bulbs also contain mercury, so you can't just junk them in the garbage. Efforts to recycle industrial fluorescent bulbs for their mercury is in an infant stage and not yet fully developed as an industry in Alberta. With an increase in use of compact fluorescent bulbs, this becomes an important need that has to be met.

Thus another Conservative plan that produces more ecological problems than it fixes. And one aimed not at industrial responsibility but at consumers.


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Conservative Green Plan: People Pay Not Polluters

Not a polluter pay tax nor is it a carbon tax, rather the Conservative Government in Ottawa gives us a consumer pay tax.

Households, economy to take a hit under Tory green plan

Ouch. The Conservatives version of the NEP aimed at you and me. The Tories Hot Air plan is that you and I should pay for the environmental destruction caused by capitalism.

Canadians will pay more for many of life's necessities under a new environmental strategy that falls far short of the Kyoto accord but reduces greenhouse-gas emissions faster than the Conservative government's first climate-change plan.

It is estimated the new proposal will cost the Canadian economy $7-billion to $8-billion a year.

Environment Minister John Baird, who unveiled the strategy yesterday, reminded Canadians that there are costs associated with turning the corner on global warming.

"The prices for consumer products like vehicles, natural gas, electricity and household appliances could go up. But it's a small price to pay to ensure a lasting environmental legacy for future generations," Mr. Baird told a press conference.

While the major industrial emitters account for half of the country's output of greenhouse gas, they will be required to find just 40 per cent of the expected reductions.






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Minister of P3


Greg Weston of the Sun chain has an excellent piece exposing the insider deals in Public Works to sell off government buildings, which began under the Liberals, and then lease them back. Which makes about as much sense as selling your house and then paying rent.


It was only a matter of time.

The moment Stephen Harper appointed a corporate investment banker to be public works minister in charge of government contracting with thousands of Canadian corporations, political controversy was sure to follow.

The inevitable storm engulfed senator-minister Michael Fortier this past week after a company publicly complained about losing a $400-million contract bid to one of Fortier's former investment banking clients.

While there is no evidence of fiddling by Fortier or his team, the opposition parties are justifiably asking that the newly created Integrity Office review the contract award, if only to lift all suspicion from the minister and reassure the public.

For all the same reasons of probity and protecting reputations, maybe the ethics folks might also want to review what could be the largest government real estate deal in decades.

Fortier announced in March that public works is ready to sell $1.5 billion of federal office buildings that the government would then lease back for the next 25 years.

$6M IN COMMISSIONS

Last September, Fortier's department awarded the contract for the real estate sell-off to the investment banking arms of the Royal Bank (RBC) and the Bank of Montreal (BMO), a deal expected to generate at least $6 million in commissions.

The key player in BMO's winning bid, for instance, was Rick Byers, managing director of the firm's government investment banking group.

Byers is highly qualified for the job as an expert in government privatizations, having had lead roles in projects such as the $1.5-billion spinoff of the air traffic control services at Canadian airports.

But Byers also happens to have been a prominent Conservative party fundraiser and organizer who has twice run for a federal seat under the Tory banner in the Ontario riding of Oakville, and is a candidate for the Ontario PCs in the provincial election this fall.

Byers' political ties to the current public works minister go back to the 1998 Conservative leadership race when Fortier ran against Joe Clark and lost by a mile.

In 2003, the two investment bankers backed Scott Brison's bid for the PC leadership -- Byers was the campaign chairman for Ontario, Fortier assumed the same role for Quebec.

One of Brison's chief fundraisers was another highly respected investment banker named Michael Norris, then head of RBC's investment banking operations and now the firm's deputy chairman.

It all begins with the appointment of investment Banker Michael Fortier to the Senate as the unelected Minister of Public Works and goes downhill from there.

The Public Works changes now throw into disarray the procurement-reform process, which is intended to generate savings of $2.5-billion over five years. The savings have already been built into the government's books and Prime Minister Stephen Harper mandated Mr. Fortier to find the savings.

But before more reforms are made, the minister wants answers on two issues raised by The Globe and Mail this week, a senior Public Works official said: a trip to London by two high-ranking advisers that was marred by missed and cancelled meetings; and a consulting contract with A.T. Kearney Ltd. that was supposed to be worth $15-million over four years but has cost $24-million in only nine months.

“The minister has asked for a full report on the A.T. Kearney contract to see whether we obtained value for money,” the official said. “Why did we spend more in one year than what we had planned over four years? There was obviously a management problem.”

The contract was awarded in November by the previous Liberal government, but most of the cost increases occurred after the Conservatives came to power this year.


The Liberals began the overhaul at Public Works, an initiative known as The Way Forward, which is supposed to save $3.5 billion over five years. The Harper government endorsed the reforms, but Mr. Fortier took a different course from the Liberals, who considered selling much of the government's real estate holdings, and issued a tender call for advisers on how to manage the portfolio. That contract will be awarded soon.

The Tories continued the course started by the Liberals for procurement reform until Mr. Fortier faced a near revolt from small suppliers over a tender call for temporary help agencies that called for the use of reverse auctions.



It turns out that this is another case of the Government commissioning a study that it does not want to share. The study being done by party pals of the government,and Minister Fortier, who would benefit from the sale and leasing of these buildings. It replaces the previous Liberal contract with A.T. Kearny and the Tipple Rotor non report.

The two consultants hired by Fortier will profit from this for their employers, two of Canada's biggest banks, the lucrative fees they make kick backs to stalwart Conservative political operatives.

Public Works Minister Michael Fortier rejected demands from opposition members yesterday to refer a controversial plan to sell off nine federal buildings to the newly created Integrity Office.

Fortier also refused to release a report from two banks giving advice on the prospective sale and lease-back of the buildings, estimated to be worth $1.5 billion.

Those two banks would also earn a commission on the future sale of the federal buildings, Fortier confirmed to a Commons committee yesterday.

Officials would not disclose the details of that commission.


Like the guys who went to England to learn from New Labours P3 failures paid for secretly by the PMO, were hired as government consultants. And thanks to the power of the PMO, their report paid for by taxpayers also remains secret.

Hon. Michael Fortier: Let's deal with the gentlemen and the visit
to London. I had a report from the deputy on what the business trip
was about, and I'll let him talk about this in a second.
With respect to A.T. Kearney, there is no report. They were hired,
as you pointed out earlier, more than 18 months ago through a fair
RFP open process. Big numbers. I totally agree with you. Where I
come from, $19,000 is a lot of money. The original contract was for
$19 million with the ability to go to $24 million. The media reports
talk about the contract being seven or eight or nine or ten times what
it was supposed to be. The reality is it was signed by the former
minister, and the number that he authorized is the number that was
spent.

Ms. Peggy Nash: Excuse me, Mr. Minister, you say there was no
written report that came out of this $24 million contract. What did
come out of it?

Hon. Michael Fortier: They were advising the department in
three or four specific areas. One was to actually look at these savings
and see how they could be generated. They were looking at $20
billion of procurement through 50 to 60 departments, and they were
helping the department literally collect data and strategize on the
reform itself.

The reform is not just about saving money. We've talked about it.
It's about proceeding with procurement in a smarter and more
transparent fashion.

Ms. Peggy Nash: When there were reports of the two
representatives who spent a week in London and cancelled
meetings—I don't know if they actually succeeded in meeting with
anyone there—the media reported that you had asked for a report.
Did that happen?

Hon. Michael Fortier: I spoke with the deputy. The deputy
reported to me on what the situation was.


This is not "New", the Harper Government of Canada really is becoming all too tiresome in its predictability for autarchy and secrecy.

During an appearance before the Standing Committee on Government Operations and Estimates, the Minister refused repeated requests by opposition Members of Parliament for an investigation into this apparent conflict of interest. The review would be conducted by the Public Service Integrity Office, an office created by the minority Conservative government as one of its new "accountability" measures.

"This government talks a good game about accountability, but they apparently forgot to send the memo to their Senator-Minister, who apparently believes he is above oversight," said Mr. Rodriguez.

Kathryn May, The Ottawa Citizen

Published: Wednesday, April 25, 2007

Public Works Minister Michael Fortier says he won't ask the integrity office to investigate complaints that he was in a conflict of interest over the awarding of a $400-million technology contract because he has never been involved in the selection of bidders since he took the job.

"I have not directly or indirectly been involved in the selection and awarding of any contract, not just this contract, since I was sworn in as minister of public works in February 2006," he told the Commons government operations committee yesterday.

Last week, Ottawa-based TPG Technology Consulting raised concerns that Mr. Fortier may be in a conflict of interest over a $400-million contract it lost to competing bidder CGI Group Inc., for which Mr. Fortier worked during his previous career as an investment banker. TPG alleges the bidding process was stacked in favour of CGI, even though it offered the lowest price.


TPG Concerned that Minister Fortier Doesn't Support an Investigation into Suspicious Contract

    OTTAWA, April 25 /CNW Telbec/ - TPG Technology Consulting Ltd.'s
president, Mr. Don Powell, is concerned that a number of recent statements
made by Mr. Michael Fortier, Minister of Public Works and Government Services
Canada (PWGSC), suggest the Minister is turning a blind eye to the
circumstances surrounding the pending award of a $400 million contract for
technical services. Otherwise, his department would be more willing to
investigate the potential conflicts of interests and possible breaches of
protocol surrounding this process.
"The Minister keeps stating that nothing went wrong and that he doesn't
want an inquiry into the process, but an inquiry would give other individuals
the opportunity to come forward and state once and for all what happened,"
said Mr. Powell.
"We thought this new government would welcome whistle-blowers and be
ready to investigate their claims to ensure the fairness and transparency of
the process, but the opposite seems to be happening!" Mr. Powell said.
"How can they say there's nothing wrong without even looking at what we
have? We thought the 'shoot, shovel and shut up policy' wouldn't be part of
the Conservative's agenda."
Mr. Powell said PWGSC has not seen the evidence obtained by TPG, but has
worked hard to discredit TPG's concerns.

Where is the accountability?

Mr. Powell states that he is ready to divulge information to an
independent body that will offer protection to involved individuals so that
they can feel safe in coming forward to share their concerns about this
process.
An independent inquiry is the only way to determine whether this contract
process was conducted in a fair, open and transparent manner.




See:


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Thursday, April 26, 2007

Waiting For Dion

In response to the Conservatives Made In Alberta Green Plan the Liberal Leader was nowhere to be found.

Not on Don Newman's show on CBC or Mike Duffy's on CTV, heck not even on CPAC.

Stephane Dion was absent from the debate.

MIA.

Oh Dion, Dion, where art though Dion?

Why hast thou blown this opportunity?

Because it's like waiting for Godot.

Neither the Tories or Liberals want to deal with the reality of Kyoto being a carbon tax system.



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Holy Kryptonite Superman

It makes sense that a Canadian should discover Kryptonite, since it is Superman's nemesis and Superman was a Canadian invention.

And it further makes sense it should be discovered in Siberia, an allegorical frozen land just like where Superman hid his Fortress of Solitude.

And maybe the meteor from Krypton was the one that crashed into Tunguska, Siberia in 1908.

Siberian mineral spells trouble for Superman

Their findings confirmed Stanley's view that the mineral -- determined to be sodium lithium boron silicate hydroxide -- was new to science, and the team prepared a paper for the European Journal of Mineralogy to report the discovery. The researchers conducted standard searches in the scientific literature to make sure nothing had been previously published about such a mineral composition. Then Stanley -- whom Le Page describes as a particularly meticulous scientist "who likes to check everything" -- did a final Internet search using Google to make sure nothing had been missed.

"And guess what came out?" a chuckling Le Page told CanWest News Service on Tuesday.

Stanley found nothing to suggest other scientists had beaten his team to the punch. But the web search did produce a match with a Wikipedia site about kryptonite, the pretend stuff Superman's enemies -- particularly the diabolical Lex Luthor -- like to use against the world's original caped crusader.

Usually depicted in comics and films as a green, glass-like shard of rock, kryptonite can quickly turn Superman into a grimacing, helpless weakling.

"Towards the end of my research I searched the web using the mineral's chemical formula -- sodium lithium boron silicate hydroxide -- and was amazed to discover that same scientific name, written on a case of rock containing kryptonite stolen by Lex Luthor from a museum in the film Superman Returns," Stanley said in a statement released Tuesday by the Natural History Museum.

"The new mineral does not contain fluorine (which it does in the film) and is white rather than green but, in all other respects, the chemistry matches that for the rock containing kryptonite."

http://www.supermanartists.comics.org/superart/superman139_b3s.jpg


See:

Comics

Comic Books

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Military Humour


Whenever I hear Human Rights I reach for my gun.

Torture coverup alleged
















Also See:

Kandahar


Afghanistan

O'Connor



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Harper the Warlock


The commonly accepted etymology derives warlock from the Old English "oathbreaker".
The Conservative Governments rejection of its international obligations under Kyoto are driven by its ideological messaging that this was a Liberal policy, when in fact it is an international Accord signed by the government of Canada, regardless of the party in power it is binding on the Canadian State.

Not unlike the
Geneva Conventions, which the Harper government is now in violation of and is ignoring. Harper defends actions on Afghan detainees

But unlike Kyoto they cannot blame the Liberals for signing that accord.
Canadian Politics: Canada Ignores Geneva Convention In Afghanistan

Instead Harper like Bush is ignoring Canada's international obligations by deliberately confusing sovereignty with isolationism. Since the Bush regime has ignored both Kyoto and the rule of International law in regards to war by refusing to recognize the ICC. But the US is not signatory to either accord, while the Canadian Government is.

This must be what is 'new' about the Harper government, that it believes it can ignore international commitments made by previous governments.


Also See:

Kandahar


Afghanistan

O'Connor



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A Reply To Joesph Lavoie on City States


Joseph Lavoie at Popular Doctrine has posted on the City State. In order to begin a dialog on this important political economic discussion I reply with this article and its appendix. Since we have such different positions on the question.

Return of the City State

City State APPENDIX




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Yeltsin Schmeltsin

It is whispered,,in fine old Stalinist fashion, that at the passing of the Great Leader Yeltsin nobody knew for sure at first because they thought he was dead....drunk.

Vodka Part II: Sobering Up the USSR by Alexei Bayer

When the Soviet Union finally disintegrated at the end of 1991,

Vodka rationing exposed the true misery of everyday Soviet life — without any alcoholic shock absorber.
Boris Yeltsin — the new Russian leader — decided not to repeat Mr. Gorbachev’s error of restricting access to vodka.

That was to be expected not just on grounds of political smarts. After all, Mr. Yeltsin himself was far from a teetotaler.

From abroad, Mr. Yeltsin might have appeared rather ridiculous. But to Russians, his drunkenness was a hopeful sign that their own love of vodka would never be denied.



A poll done shows 70% of Russians consider Boris Yeltsin a failure and the reason for the collapse of their political economy and social order. He is not their hero.

A poll by the Levada Analytical Centre in December found 70 percent think the Yeltsin era did more harm than good. Half thought he should be prosecuted.


He is however a hero to the Cold War leaders in the West, which is why they showed up at his funeral, while the common people stayed away in droves.

The Legacy of Boris Yeltsin
Corruption, crony capitalism, and Russia's near-demise

The real Yeltsin legacy Far from introducing freedom and democracy, the late president helped discredit them in Russia

While praised for bringing Democracy to Russia he did so in fine old Stalinist fashion by using tanks.

In August 1991, Yeltsin won international plaudits for casting himself as a democrat and defying the August coup attempt of 1991 by hard-line Communists. But he left office widely despised as a desperate, ailing autocrat among the Russian population. As president, Yeltsin's conception of the presidency was highly autocratic. Yeltsin either acted as his own prime minister (until June 1992) or appointed men of his choice, regardless of parliament. His confrontations with parliament climaxed in the October 1993 Russian constitutional crisis, when Yeltsin called up tanks to shell the Russian White House, blasting out his opponents in parliament. Later in 1993, Yeltsin imposed a new constitution with strong presidential powers, which was approved by referendum in December.


All the praise for Yeltsin is misplaced, he was a mere opportunist in the right place at the right time to become America's Man to run in the first American style elections for an American style Presidency, in post cold war Russia. His legacy? Putin.

While some in the media will foist on the public the myth that Yeltsin was some how responsible for the end of the Soviet Union, that too is American wishful thinking.
He will go down in history as a footnote in biographies of Gorbachev.

The Soviet Collapse

The timeline of the collapse of the Soviet Union can be traced to September 13, 1985. On this date, Sheikh Ahmed Zaki Yamani, the minister of oil of Saudi Arabia, declared that the monarchy had decided to alter its oil policy radically. The Saudis stopped protecting oil prices, and Saudi Arabia quickly regained its share in the world market. During the next six months, oil production in Saudi Arabia increased fourfold, while oil prices collapsed by approximately the same amount in real terms.

As a result, the Soviet Union lost approximately $20 billion per year, money without which the country simply could not survive. The Soviet leadership was confronted with a difficult decision on how to adjust. There were three options--or a combination of three options--available to the Soviet leadership.

First, dissolve the Eastern European empire and effectively stop barter trade in oil and gas with the Socialist bloc countries, and start charging hard currency for the hydrocarbons. This choice, however, involved convincing the Soviet leadership in 1985 to negate completely the results of World War II. In reality, the leader who proposed this idea at the CPSU Central Committee meeting at that time risked losing his position as general secretary.

Second, drastically reduce Soviet food imports by $20 billion, the amount the Soviet Union lost when oil prices collapsed. But in practical terms, this option meant the introduction of food rationing at rates similar to those used during World War II. The Soviet leadership understood the consequences: the Soviet system would not survive for even one month. This idea was never seriously discussed.

Third, implement radical cuts in the military-industrial complex. With this option, however, the Soviet leadership risked serious conflict with regional and industrial elites, since a large number of Soviet cities depended solely on the military-industrial complex. This choice was also never seriously considered.

Unable to realize any of the above solutions, the Soviet leadership decided to adopt a policy of effectively disregarding the problem in hopes that it would somehow wither away. Instead of implementing actual reforms, the Soviet Union started to borrow money from abroad while its international credit rating was still strong. It borrowed heavily from 1985 to 1988, but in 1989 the Soviet economy stalled completely.

When the situation in the Soviet Union is examined from financial and hard currency perspectives, Gorbachev's policies at the time are much easier to comprehend (see figure 6). Government-to-government loans were bound to come with a number of rigid conditions. For instance, if the Soviet military crushed Solidarity Party demonstrations in Warsaw, the Soviet Union would not have received the desperately needed $100 billion from the West. The Socialist bloc was stable when the Soviet Union had the prerogative to use as much force as necessary to reestablish control, as previously demonstrated in Germany, Hungary, and Czechoslovakia. But in 1989 the Polish elites understood that Soviet tanks would not be used to defend the communist government.

The only option left for the Soviet elites was to begin immediate negotiations about the conditions of surrender. Gorbachev did not have to inform President George H. W. Bush at the Malta Summit in 1989 that the threat of force to support the communist regimes in Eastern Europe would not be employed. This was already evident at the time. Six weeks after the talks, no communist regime in Eastern Europe remained.


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