www.heritage.org by Stephen Johnson Executive Memorandum #841

November 20, 2002 |  |

On December 10, President George W. Bush will meet with the president-elect of Brazil, Luis Inacio Lula da Silva, a populist who has professed admiration for Cuban dictator Fidel Castro and Venezuela's authoritarian president Hugo Chávez. During his campaign, Lula blamed free-market reforms for Brazil's economic slump, condemned the proposed Free Trade Area of the Americas (FTAA) as a plan to annex Latin America to the United States, and suggested that Brazil might abandon the Nuclear Non-Proliferation Treaty, which it signed in 1998. After his landslide win on October 26, however, Lula backed off on reviving Brazil's nuclear weapons program and said he would work with the United States on trade. These contradictions in Lula's post-electoral conciliatory stance and his anti-American and anti-free market campaign rhetoric suggest the need to engage him with caution.

President Bush's agenda for the upcoming meeting with Lula should focus on what would be considered an unwarranted return to nuclear weapons development, Brazil's potential support for non-democratic regimes in the region, the need to continue internal reforms, its needed participation in counterterrorism and counterdrug operations, and mutual efforts to lower barriers to bilateral and hemispheric trade.

A Nation at a Crossroads. Brazil, which rivals the United States in geographic size, has Latin America's largest economy, with a gross domestic product (GDP) of $800 billion. After ending military rule 17 years ago, Brazil began opening its markets and expanded its exports from primarily coffee to cars and aircraft. However, it also shielded businesses from competition and created a large public sector, which in 2001 consumed 20 percent of GDP.

Brazil aspires to be a regional power but is suffering from slow growth and mounting debt that now approximates one-third of GDP. It has received three loans from the International Monetary Fund (IMF) in the past four years, including a $30 billion bailout approved last September 9. By comparison, Mexico grew out of its last debt crisis in 1995 through trade, even paying off loans early. Its economy--half as big as Brazil's--now exports twice as much as Brazil's does. Lula must make similar pro-market choices to secure Brazil's footing as an economic leader in the 21st century.

Lula's Appeal. The former union organizer, who tried three times to win Brazil's presidency, finally did so this year by appealing to growing numbers of poor (46 million out of 170 million Brazilians) and blaming economic stagnation on outgoing President Fernando Henrique Cardoso's tentative steps to embrace capitalism. Lula promised to create 10 million new jobs through public-private partnerships and to double the minimum wage of $53 a month. To appeal to the armed forces and to restore Brazil's flagging self-esteem, he also suggested that abandoning Brazil's secret nuclear weapons development program in the mid-1990s was a mistake and promised to build up Brazil's military and technological prowess.

Lula favors strengthening the four-country Southern Cone Common Market known as MERCOSUR (MERCOSUL in Portuguese)--which Brazil dominates--through a subregional parliament and common monetary policies, rather than pursuing the U.S.-backed hemispheric FTAA. But if his approach is enacted, it would pile on more debt, divert attention from the real threats of crime and terrorism, and discourage trade with external markets, not just for Brazil but for MERCOSUR members Argentina, Paraguay, and Uruguay as well.

Rays of Hope. Current economic and political realities leave Lula little room to impose a radical agenda. Lula had to choose a moderate running mate and tone down his anti-free market campaign rhetoric after it caused Brazil's currency to devalue by some 30 percent. The other MERCOSUR partners, with their own economic troubles, are not likely to agree to a regional parliament run by Brazil. Nor would an alliance of all of Brazil's leftist parties provide enough votes to pass huge public spending programs in either house of congress.

Despite its roots on the left, the Workers' Party (Partido dos Trabalhadores, or PT) that Lula helped found 22 years ago has pursued a reform agenda of its own. In the states and municipalities where the PT has been in control, it has combined a concern for the poor with grassroots decision-making, leading to more open, accountable, and democratic governance.

Toward Commonsense Relations. Although Lula's campaign rhetoric may be part bluster, he should still be engaged with caution. He is untested in high office, and his lingering admiration for Castro and Chávez could portend aid to those regimes. To keep Brazil's ship of state afloat, he should be encouraged to continue his predecessor's market-oriented reforms. In his upcoming meeting with Lula, President Bush should promote U.S. interests and good relations with Brazil by making clear that the United States will:

• Condition continued U.S. support for emergency assistance to Brazil, such as IMF loans, on its adherence to the Nuclear Non-Proliferation Treaty; restraint from directly aiding non-democratic or authoritarian regimes, such as those in Cuba or Venezuela; and continued progress on efforts to establish the rule of law and open its markets;
• Support Brazil's leadership on regional security priorities if it forgoes nuclear pretensions to help the region's democracies counter the threats of international crime, drug trafficking, and terrorism; and
• Work with Brazil to lower global trade barriers as well as to develop a common position before the World Trade Organization (WTO) on steel and agricultural products, to establish a mutually beneficial bilateral trade accord, and to advance the FTAA.

Conclusion. "Order and Progress" has been Brazil's motto since 1889. Order is helpful only when it promotes free choice, and progress is possible only when opportunity is available to all. President Bush should encourage President-elect Lula to uplift Brazilians and make Brazil a hemispheric power through free markets and less burdensome government while working with other nations in the region to defeat their common threats.

--Stephen Johnson is Policy Analyst for Latin America in the Kathryn and Shelby Cullom Davis Institute for International Studies at The Heritage Foundation.

www.heritage.org by Stephen Johnson WebMemo #181

December 20, 2002 | WebMemo | 

Two neighbors in Latin America are on the brink of implosion. Government collapse in Haiti could unleash a flood of refugees on American and Caribbean shores, while crumbling democracy in Venezuela is already threatening oil supplies at a moment when Washington contemplates military action in the Middle East.

In both countries, powerful populist presidents have stoked class warfare, creating deep divisions between regime supporters and opponents instead of promoting consensus and equality before the law. Efforts to expand their own authority have weakened legislative and judicial institutions to the point that they no longer function.  Corruption has spread, their economies have faltered, and opponents have taken to the streets to force their resignation.

In one of the largest demonstrations in Haitian history, 15,000 protesters gathered in the city of Cap Haïtien on November 17 to demand President Jean-Bertrand Aristide’s resignation. Elected in 1990 and then ousted by a military takeover when he failed to organize a functional government, he was restored to power in 1994 by a U.S.-led multi-national invasion force. Since then, Haiti has had a make-believe democracy.

After the end of his first term in 1995, Aristide ruled through President René Préval, a submissive proxy, until he could be elected again in 2000 through a vote boycotted by opponents. Since 1997, the country has been without a legitimately elected parliament. Hundreds of millions of aid dollars were wasted on projects Aristide failed to support, prompting donors like the United States to suspend direct assistance. Now pro-Aristide gangs with names like “Cannibal Army” and “Asleep in the Woods” roam the streets to suppress dissent.

Meanwhile in Venezuela, some 2 million citizens marched on December 14 to urge the resignation of President Hugo Chávez, fearing that he would use emergency powers to establish a Castro-style dictatorship. The one-time coup plotter and cashiered army officer was elected in 1998 promising to help Venezuela’s 80 percent poor majority and clean up corruption.  Riding a wave of popular support, he rewrote the constitution to expand presidential powers and extend his term in office.

But instead of helping the downtrodden, he diverted government funds to military cronies to buy loyalty and to organize armed, partisan street gangs called “Bolivarian Circles.” Unconstitutional decrees to curb property rights and hobble private enterprise led to a rebellion last April, temporarily toppling him from power. Since then, the breech between Chávez and opponents has widened with a series of national strikes, one of which paralyzed the government’s cash cow—the state-owned petroleum industry—in turn affecting oil exports to the United States and other neighboring countries. On December 15, Chávez claimed his orders could not be overriden by the courts.

Years ago, U.S. officials could have nudged events in a different direction. In Haiti, they might have planned for an extended international presence until it became truly self-governing. And over the years, they could have made effective democratic governance an engagement priority in Venezuela.  Now, it has fallen to the Organization of American States (OAS) to resolve these crises with meager tools.

A deliberative body, the OAS has no aid to offer as a lever. And its one-year-old Inter-American Democratic Charter can only be used to promote mediation or suspend the membership of non-democratic states. Without a two-thirds vote among members, suspension can’t be approved and, even if applied, suspended states can turn around and kick out the mediators. Nonetheless, it is a starting point.

Indeed, the United States and other member states should invoke the charter to recognize the political breakdown in each country. In Haiti, President Aristide has violated the letter and spirit of the 1987 constitution by manipulating the electoral process and failing to protect human rights. President Chávez has subverted his charter through arbitrary decrees, by usurping the authority of local officials, and actions to block the courts and National Assembly.

With respect to Haiti, the United States and other international parties could leverage aid. Because of Haiti’s faltering economy, Aristide has been lobbying for a bailout. The Bush Administration, in coordination with other donors should offer to restore direct assistance, but only if Haitian leaders accept a U.S.-led donor oversight commission to provide for supervised elections and long-term direction in salvaging and rebuilding democratic institutions.

Venezuela is more complicated. Since the government controls the lucrative state petroleum industry, aid is not a factor. Many in the opposition want new elections as a way of replacing the entire administration. But that would require an extraconstitutional deal between contentious elites or an unlikely and cumbersome change to the national charter.

Chávez could also be removed by a referendum halfway through his term—next August. But, Vice-President José Vicente Rangel—the brains behind him—would become president, posing new problems. Although the National Assembly has the power to impeach Chávez at any time and schedule new elections, half of the Assembly is out on strike and Chávez could declare marshal law and suspend the body before they act.

While the Bush Administration might favor an electoral solution in principle—it should refrain from a specific proposal that, absent a Venezuelan consensus, could lead all sides to blame the United States for any failure. It should bring pressure to bear on Chávez and his opponents to allow a constitutional solution and once agreed, press for international supervision of the process to guarantee the rights and free expression of all participants. In the meantime, U.S. and allied diplomats might encourage opposition parties to develop a plan for how they would govern in case Chávez leaves or is recalled from office.

In the interests of regional stability and security, the United States should redouble lagging efforts to back those struggling for democracy and help guarantee space for its practice to flourish. Diplomacy and coordinated action with hemispheric allies is a good place to start.

Stephen Johnson is Policy Analyst for Latin America in the Kathryn and Shelby Cullom Davis Institute for International Studies at The Heritage Foundation.

www.heritage.org by Stephen Johnson WebMemo #205 February 10, 2003 |  |

On February 11, Ecuadoran President Lucio Gutierrez will visit with President George W. Bush in Washington. While the newly installed Ecuadoran leader will likely ask his counterpart to support continued multilateral loans and development aid to his nation, President Bush should use the opportunity to cement U.S.-Ecuadoran security ties, to encourage deeper democratic and market reforms to enhance Ecuadoran stability, and say no to excessive dependence on international assistance.

Fractious nation President Gutierrez leads a country with a history of power struggles between contentious interest groups and on-again/off-again democracy. Ecuador has had 17 constitutions since independence and a divided oligarchy controls most of the commodity-based economy. In the last seven years, Ecuador has had six presidents—two of whom, Abdala Bucarám and Jamil Mahuad, lasted a year or less before their ouster. In January 2000, it was army colonel Lucio Gutierrez who led indigenous protesters in marches that forced out Mahuad, considered ineffective in fighting corruption and who proposed dollarizing an economy plagued by runaway inflation. His vice-president and successor, Gustavo Noboa, dollarized it anyway.

Now in Carondelet Palace himself, Gutierrez will face an assembly representing the highland elites, coastal landowners, and Ecuador’s indigenous population. Just 17 percent of the 100-seat unicameral body is loyal to his Patriotic Society Party coalition.  Although democratic and market-based reforms are ongoing, elites have resisted opening the economy to competitive enterprise. Instead, social spending, subsidies, and price controls were meant to help Ecuador’s 50 percent poor compensate for restricted access. Over-reliance on commodity exports such as petroleum and bananas has limited growth to pay back loans that support such programs.

Troubled neighborhood Potential civil war in Venezuela, drug trafficking, and terrorist groups operating in Colombia and in the confluence of the Argentine, Brazilian, and Paraguayan borders threaten trade and impact neighbors with refugees. Narcoterrorists such as the Revolutionary Armed Forces of Colombia (FARC) still operate in 70 percent of Colombia’s territory and have infested Ecuador’s northern Sucumbíos department. Peru also faces a resurgence of drug trafficking and terrorism. Two weeks after Gutierrez was inaugurated, a group called the Peoples Revolutionary Militia took responsibility for a bomb that exploded at an American Airlines office in Quito.

Good intentions A political novice, Gutierrez was elected with 54 percent of the vote in a runoff election on November 24, 2002. Although he once led a coup and counts radical Indians as his base of support, Gutierrez said he wants to be president of all Ecuadorans, and promises to fight poverty and corruption while preserving dollarization and allowing continued use of Ecuador’s Manta air base for the U.S.-backed Andean counternarcotics effort.  

On the domestic front, he supports decentralizing the Ecuadoran state, devolving authority over local affairs to local jurisdictions. He would like legislative bodies to more effectively represent their constituents. And he has proposed creating a fourth branch of government to audit public spending and the banking sector. Regarding foreign affairs he shuns taking part in any “triangle” or “axis” involving Cuba’s Fidel Castro or Venezuela’s leftist president Hugo Chávez. Yet, he said he would help Colombia solve its narcoterrorism threat by opening Ecuador’s borders and pursuing peace with its Marxist guerrillas. “Guerrillas are human beings too,” he said in Washington last November.

Some of these ideas are clearly impractical. In October, Ecuadoran voters approved a measure to eliminate 23 at-large congressional seats, reducing the national assembly to 100 members. Gutierrez would like to chop that number to 60. Without changes to make assembly members stand for actual districts, another reduction would decrease representation, not enhance it.  A fourth branch of government to audit accounts unnecessarily duplicates functions normally carried out by the legislative and judicial branches. And easing border controls with Colombia would invite more border incursions by violent guerrillas in Ecuador’s poorly patrolled northern provinces. Ecuador’s 35,000 police and small, 600-member counternarcotics unit would be quickly overwhelmed.

Tough love The United States needs stable allies in troubled South America. Despite inexperience and concerns over his past, Lucio Gutierrez appears to understand that Ecuador’s future depends on accountable governance and open markets. That should be enough of a start for President Bush to forge friendly working realtions with him. But for collaboration to be fruitful, President Bush should:

Encourage Ecuador’s support for U.S.-aided regional counternarcotics and counterterrorism efforts by its securing borders and helping Colombia pressure its narcoterrorists into laying down arms. Appeasing such groups will only prolong the violence and invalidate the $22 million President Bush has requested in FY 2003 security assistance for Ecuador in his Andean Regional Initiative.  *

Advocate strengthening representative government. Washington should tailor existing U.S. assistance to leverage changes allowing legislators to stand for districts within their departments and municipalities. Such aid should also support tax reforms allowing localities to collect revenue to fund programs administered under their own authority. *

Urge less dependency on multilateral credit such as recently announced $200 million standby loan being negotiated with the International Monetary Fund, in favor of measures that promote diversified exports, small and medium-sized business creation, ongoing judicial reforms, and stronger protection of private property.  *

Enlist Ecuador’s backing for the Free Trade Area of the Americas (FTAA). Through the FTAA, Ecuador would gain greater access to developed markets and foreign investment, helping to further stabilize its economy.  

Conclusion Ecuador may only have 12 million citizens and do $3.4 billion worth of trade with the United States, but it is an important supplier of petroleum (100,000 barrels per day) and has worked hard to keep itself relatively free of the kind of coca production, trafficking, and money laundering that has plagued its northern neighbor. Despite a past that suggests military rigidity, President Gutierrez appears open to ideas, has selected several experienced cabinet members, and generally favors a democratic, pro-market agenda. President Bush should encourage his counterpart to help defeat the twin scourges of drug trafficking and terrorism in the Andean region, and offer support for strengthening Ecuador’s democracy and market economy—a work still in progress.

Stephen Johnson is Senior Policy Analyst for Latin America in the Kathryn and Shelby Cullom Davis Institute for International Studies at The Heritage Foundation. The author wishes to thank intern Raymundo Morales for his contribution to this Web Memo.

www.fool.com

With gas prices surging and the threat of war looming, Americans may feel the need to bunker down to endure the long winter weeks ahead. But you can be proactive in battling the bills and the blues.

Today on Fool.com, Jeff Fischer reminds us that the media's daily barrage of gloom and doom should be taken with a grain of salt. And personal finance expert Robert Brokamp suggests 18 (yes, 18!) ways to cut fuel costs this season.

Six more weeks of winter? Bah! Are you gonna let a pesky groundhog get you down? We didn't think so.

In today's Motley Fool Take:

• J&J Snags Scios
• Quote of Note
• Cut Your Fuel Costs
• Shameless Plug: Help With Taxes and More
• SBC Fights for Hughes
• Discussion Board of the Day: UPS
• Quick Takes: ExxonMobil, IBM, Sun Microsystems, The Interpublic Group, more
• And Finally...

J&J Snags Scios

Affirming rumors, Johnson & Johnson (NYSE: JNJ) will indeed buy drug company Scios (Nasdaq: SCIO) for $2.4 billion in cash. When word of the deal leaked Friday, shares of Scios rose 22% to $42.20, and are up again today almost 4% to $44. Scios shareholders will get $45 a share from J&J. From its 1999 lows of just above $2 a share, it has been quite a ride.

Johnson & Johnson will acquire Scios to boost its drug pipeline. Much has been made of the smaller company's two-year-old congestive heart failure treatment, Natrecor. Scios expects the drug to generate sales of $160 million to $170 million in 2003, and it may eventually ring up $500 million in annual sales.

The more interesting story, though, is a drug awaiting approval. Scios' experimental rheumatoid arthritis treatment, SCIO-469, is in phase II trials and could be years away from approval. However, should the drug's promise hold up, sales could one day eclipse those expected for Natrecor.

Rheumatoid arthritis is an autoimmune disease in which the body's own defenses turn against it and attack the sufferer's joints. It's a crippling and incredibly painful illness with no cure.

SCIO-469 is creating a good deal of buzz because of the way it works. The drug blocks the p38 kinase enzyme responsible for stimulating inflammation-causing proteins, such as TNF and COX-2. Other companies are also attempting to create a p38-inhibiting drug, but this one is in the most advanced testing stages.

Another great thing about SCIO-469, compared to existing rheumatoid arthritis treatments, is its dosage. Amgen's (Nasdaq: AMGN) Enbrel, J&J's own Remicade, and Abbott Lab's (NYSE: ABT) Humira are all given as injections. SCIO-469 would likely be approved in pill form, a huge advantage.

One thing must be underlined, though. SCIO-469 hasn't been approved, and similar drugs in the past have been shot down because of safety concerns. Still, J&J will get ahold of an existing successful drug and a potentially promising one -- a healthy dose of optimism for the drug maker.

Quote of Note

"My problem lies in reconciling my gross habits with my net income." -- Errol Flynn (1909-1959), actor

Cut Your Fuel Costs

Americans are paying an average of $1.60 per gallon of gas, according to the Lundberg survey of more than 7,000 gas stations nationwide. That's an 11-cent increase over the past two weeks, and the highest price since June 2001.

The causes are clear: strikes in Venezuela, a possible war with Iraq, and the failure of the controversial "Turn your teenager's face into oil profits" program.

You can't control the cost of a barrel of crude, but you can take steps to cut your heating bills. Here are a few tips:

1. Properly insulate your house. Check the attics, walls, and basement/crawl space, especially the spaces between the floorboards and joists.
2. Seal the leaks. Go around the outside walls of your house with a candle, particularly the windows, doors, electrical outlets, and baseboards. If the flame flickers, it might be due to a tiny crack that lets hot air out and cold air in. Seal it with caulk or weather stripping.
3. Warm your windows. Anywhere from 25% to 40% of heat loss is due to windows. One solution: Put a blanket or, better yet, a sheet of plastic or a shrink-wrap product (available at hardware stores) around the window. This will block drafts and create an insulating pocket of air.
4. Humidify the house. Moist air feels warmer than dry air.
5. Give your furnace a checkup. Clean filters can make a furnace 10% more efficient. Also, if the heating ducts are in an unheated area (such as the attic), they should be insulated.
6. Install a digital thermostat. By turning down your thermostat when you go to work and turning it back up when you get home, you could save $300 this year. A digital thermostat -- which costs about $30 and is a breeze to install -- can regulate the temperature for you.
7. Close crawl space vents. If you have a crawl space, there are probably vents around the foundation of your house. Close 'em up for the winter, but make sure you reopen them in the summer to prevent moisture from accumulating.
8. Turn on ceiling fans. Since hot air rises, a fan on low will circulate the heat throughout the room.
9. Move to Cuba. We hear Guantanamo Bay is very popular these days.

Read the full Take to learn 9 more ways to save on your gas bills....

Shameless Plug: Help With Taxes and More

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SBC Fights for Hughes

Who's getting Hughes (NYSE: GMH)? Another company's hat is in the ring today, after SBC Communications (NYSE: SBC) is said to be considering a $10 billion bid for the DirecTV owner.

General Motors (NYSE: GM) owns 80% of Hughes. After regulators quashed EchoStar's (Nasdaq: DISH) $18 billion bid, the auto maker has been trying to sell off all or part of the satellite TV unit. Rupert Murdoch's News Corp. (NYSE: NWS) has long-lusted after Hughes like a money-hungry girl for Joe Millionaire, and SBC's move could throw a serious kink into its plans.

SBC is the country's second-largest local telephone provider. What does it want with a satellite TV company? SBC hopes Hughes and DirecTV can help it compete more effectively against cable companies like Cox (NYSE: COX) and Comcast (Nasdaq: CMCSK), which are increasingly stepping on the toes of local phone companies. Additionally, as core business revenues decline (SBC anticipates 2003 sales will drop off by a low, single-digit percentage), DirecTV could give the company other much-needed revenue streams.

With declining revenues and more than five times as much long-term debt as cash, though, now might not be the time for SBC to branch out into the satellite market. Besides, it's common knowledge that Murdoch and Co. don't give up easily when they've got their minds set on something. Like another episode of Celebrity Boxing, this fight could get ugly.

Discussion Board of the Day: UPS

After its announcement that pink slips are in the pipeline for pilots, can United Parcel Service bounce back, or is this just a clever yet cruel negotiation ploy between the company and its pilots union? Can its strength in international business cover for its domestic shortcomings? All this and more -- in the UPS discussion board. Only on Fool.com.

Quick Takes

With the Middle East being much more of a hot spot than usual, oil companies are looking elsewhere for oil (for example, Alaska). The England-based oil giant BP (NYSE: BP) aims to invest more than $4 billion in what will be Russia's third-largest oil company -- a firm formed by the merger of three smaller oil companies. It would be one of the world's top 10 producers. Meanwhile, ExxonMobil (NYSE: XOM) plans to spend some $10 billion developing new oil resources in West Africa.

Did you know that when you use a credit card overseas, you get slapped with currency-conversion fees and other surcharges by Visa, Mastercard, and many card-issuing banks? Apparently, many people were unaware, and a suit has been filed against Visa and Mastercard. In a preliminary decision, a judge involved ruled against the card companies, raising the possibility that they'll be forced to refund $500 million or more.

Heating oil prices spiked up some 20% last week, and with the vast majority of U.S. heating oil households in the Northeast, Sens. John Kerry and Edward Kennedy have asked President Bush to release $100 million in Low Income Home Energy Assistance Program funds to follow $200 million released a few weeks ago.

While IBM (NYSE: IBM) and Hewlett-Packard (NYSE: HPQ) try to eat its lunch, Sun Microsystems (Nasdaq: SUNW) is fighting back. Sun launched a new technology called "blades," along with some new, aggressively priced hardware. It also boosted the strength and lowered the price of some of its existing products. According to Dow Jones, blades technology involves building computers "out of many small circuit boards, known as blades, that are placed in racks vertically -- like books on a shelf -- instead of larger boards that are stacked horizontally."

The Interpublic Group (NYSE: IPG), the advertising company and parent to McCann-Erickson WorldGroup, Lowe Group, and more, is facing the prospect of its debt being reduced to "junk" status. In order to prevent this and prop itself up, it has put on the block its NFO WorldGroup unit, hoping to close a deal by March. Early bidders include the U.K.'s WPP Group (Nasdaq: WPPGY), parent of Young & Rubicam and Ogilvy & Mather, which offered up to $400 million for the company. Fool analyst Bill Mann wrote positively about WPP Group in Stocks 2003, our guide to many promising companies for the year ahead -- check it out.

And Finally...

Today on Fool.com:

• For updated stories throughout the day, bookmark our ever-changing News section.
• Bombs Away, Everyday: The media's fear factor may be hurting our economy. Jeff Fischer says enough's enough.
• UPS delivers pink slips to pilots. Will the package specialist shape up or ship out?
• The battle over taxes on Internet commerce heats up.
• Matt Richey explains why a portfolio of eight to 10 stocks might be your best bet for beating the market.
• In Fool's School, what's the point of renter's insurance, and is it necessary?

Contributors: Bob Bobala, Robert Brokamp, Jeff Fischer, Tom Jacobs, LouAnn Lofton, Bill Mann, Selena Maranjian, Rex Moore, Rick Munarriz, Matt Richey, Jackie Ross, Reggie Santiago, Dayana Yochim

The Motley Fool is investors writing for investors. To view a writer's current stock holdings, check out his or her online personal profile.