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One-third of biggest UK businesses pay no taxBy Vanessa HoulderPublished: August 27 2007 22:02 | Last updated: August 27 2007 22:02Almost a third of the UK’s 700 biggest businesses paid no corporation tax in the 2005-06 financial year while another 30 per cent paid less than £10m each, an official study has found.

Another successful story was my experience organizing against sweatshops with the Notre Dame Progressive Student Alliance as part of the United Students Against Sweatshops network. We were adequately connected to the network to model our local campaign on those of other groups – and we won.

Little of what we see on television, however, is quite what it seems. Williams had an incentive—the usual one in our republic, money—for overmastering his bashfulness on that occasion. The pharmaceutical corporation GlaxoSmithKline (GSK), through its public relations firm, Cohn & Wolfe, was paying him a still undisclosed sum, not to tout its antidepressant Paxil but simply to declare, to both Oprah and the press, "I've always been a shy person."

It is now clear that the delusional hope that the severe credit and liquidity crunch that hit US and global financial markets would ease has been shattered by the events of the last few weeks. This credit crunch is getting much worse and its financial and real fallout will be severe. The amount of losses that financial institutions have already recognized - $20 billion – is just the very tip of the iceberg of much larger losses that will end up in the hundreds of billions of dollars. At stake – in subprime alone – is about a trillion of sub-prime related RMBS and hundreds of billions of mortgage related CDOs. But calling this crisis a sub-prime meltdown is ludicrous as by now the contagion has seriously spread to near prime and prime mortgages. And it is spreading to subprime and near prime credit cards and auto loans where deliquencies are rising and will sharply rise further in the year ahead. And it is spreading to every corner of the securitized financial system that is either frozen or on the way to freeze: CDOs issuance is near dead; the LBO market – and the related leveraged loans market – is piling deals that have been postponed, restructured or cancelled; the liquidity squeeze in the interbank market – especially at the one month to three months maturities - is continuing; the losses that banks and investment banks will experience in the next few quarters will erode their Tier 1 capital ratio; the ABCP and related SIV sectors are near dead and unraveling; and since the Super-conduit will flop the only options are those of bringing those SIV assets on balance sheet (with significant capital and liquidity effects) or sell them at a large loss; similar problems and crunches are emerging in the CLO, CMO and CMBS markets; junk bonds spreads are widening and corporate default rates will soon start to rise. Every corner of the securitization world is now under severe stress, including so called highly rated and “safe” (AAA and AA) securities.

This is indeed the message that comes from true market prices – that are not indirectly available via the ABX indices. Those prices tell you not only that the mezzanine and equity tranches of subprime CDOs are now worth close to zero; they also tell you that prices for the AAA and AA tranches – that until recently were hovering near par of 100 – are now down to 79 and 50 respectively. Hundreds of billions of subprime RMBS and senior tranches of CDOs are still being evaluated as if they are worth 100 cents on the dollar. What the ABX is telling you is that they are worth much less; thus the losses from subprime alone are an order of magnitude larger than recognized by most firms.  But most firms are not using such market prices – or their proxies – to value their illiquid assets.

Even if times ahead are troubled, the long run is likely to look much more settled. In the short run, a housing slump could well make private investors and central banks outside the U.S. less eager to hold dollars. A survey by the U.S. Treasury Department last year indicates that about third foreign-held U.S. corporate debt consisted by asset-backed securities and about half of that was mortgage-related. Petro-dollars held in the Middle East and Russia are particularly mobile. Once foreign money leaves the U.S., the dollar would fall. In the longer run, U.S. exports would rise, shrinking the huge U.S. trade deficit. Moreover, recession in the U.S. would lead to lower imports, further reducing the trade deficit. At the same time, China may well let the yuan rise against the dollar, leading to a rise in its domestic spending relative to its exports. Once U.S. consumers spend less and Chinese consumers spend more, the large global imbalances, which have cast a shadow on the world economy for the past decade, would begin to disappear.

The "end of the end of history" has many architects. Today, several states (an increasingly assertive Russia and China in particular) embody alternative political models that have come to challenge any notion of liberal-democratic hegemony; others (such as Venezuela and Iran) experiment with forms of rule that too take them further away from its orbit. These models and forms face many problems of their own, but they may not be quite as unattractive - either to the people of these countries or to many observers around the world - as lingering triumphalists in the west might assume.

There has been a tendency to focus the work of democracy-support in very practical ways: toolkits, implementation, strategy and policy. This was and remains essential; but there is also a need to reflect on the underpinnings of these practices in how democracy itself is understood in this new, testing global environment.

The dominance of a liberal-democratic conception with an American accent is reflected in the overwhelming predominance of United States institutions, academics, journals - and ideas - in the democracy-support "industry". Again, this is not in itself a problem: all discourses of democracy are grounded in specific social-political contexts and  power-relations. But the current circumstances of the kind described above - authoritarian challenges, stalled democratic transitions, discontent with democracy, deep and growing economic problems - suggest that an expanded understanding of democracy might be a route towards a healthy redefinition of democracy-support.