Monday, May 9, 2016

Monday, May 9, Night Wall Street Roundup: Higher Health Stocks And Falling Oil Leave S&P 500 Flat

By Noel Randewich
May 9, 2016

Wall Street ended mixed on Monday after a rally in Allergan Plc and other healthcare companies offset a decline in energy shares.

Five of 10 S&P sectors ended higher, led by the health sector's .SPXHC 1.13 percent increase, while energy .SPNY and materials sectors .SPLRCM both tumbled 1.25 percent.

Allergan (AGN.N) surged 5.98 percent. Teva Pharmaceutical Industries Ltd (TEVA.TA) (TEVA.N) said it still expected its $40.5 billion acquisition of Allergan's generic drug business to close in June.

Chevron Corp (CVX.N) fell 1.48 percent as U.S. crude prices dropped 2.8 percent and traders assessed the impact of wildfires on Canada's oil output and a build in inventory.

A bigger-than-expected drop in China's imports and exports in April pointed to weak demand in the world's second-biggest economy and weighed on materials stocks. Caterpillar (CAT.N) dropped 3.52 percent, weighing the most on the Dow industrials.

Investors remain cautious about corporate earnings. With first-quarter reports almost all in, earnings at S&P 500 companies, on average, fell 5.5 percent while revenue was down 1.9 percent, according to Thomson Reuters I/B/E/S.

"I would give this earnings season a C or C-. While most of the companies were able to step over a greatly reduced bar of expectations, overall sales growth remains disappointing," said Alan Gayle, senior investment strategist at RidgeWorth Investments in Atlanta, which has $50 billion in assets under management.

The Dow Jones industrial average .DJI ended down 0.2 percent at 17,705.91 points while the S&P 500 .SPX edged up 0.08 percent to 2,058.69.

The Nasdaq Composite .IXIC added 0.3 percent to 4,750.21, helped by a 2.45-percent rally in the Nasdaq biotech index .NBI.

After the bell, solar panel company SolarCity (SCTY.O), co-founded by technology billionaire Elon Musk, offered a first-quarter report that disappointed investors, sending its stock down 13 percent.

During the session, Krispy Kreme Doughnuts Inc (KKD.N) jumped 24.32 percent to after agreeing to be taken private for $1.35 billion.

That made investors hungry for other restaurant stocks, including Kona Grill (KONA.O), up 8.18 percent, and Pollo Loco (LOCO.O), up 5.02 percent.

Shares of Lending Club Corp (LC.N) tumbled 34.93 percent. The chief executive officer of the world's biggest online lending platform resigned following an internal probe.

Wayfair Inc (W.N) jumped 10.17 percent after the online furniture retailer reported first-quarter sales that beat analysts' estimates.

Declining issues outnumbered advancing ones on the New York Stock Exchange by 1,594 to 1,407. On the Nasdaq, 1,486 issues rose and 1,322 fell.

The S&P 500 index showed 33 new 52-week highs and four new lows, while the Nasdaq recorded 47 new highs and 53 new lows.

About 6.8 billion shares changed hands on U.S. exchanges, below the 7.2 billion daily average for the past 20 trading days, according to Thomson Reuters data.

Article Link to Reuters:

Bernie Sanders’s Next Revolution

How can he continue to harness the enthusiasm that defined his candidacy beyond the time-limited scope of a campaign?

By Brian Beutler
The New Republic
May 9, 2016

Bernie Sanders spent the better part of three decades in national politics trying to bring ideas that would strike most of the democratic world as fairly conventional into the mainstream of American politics.

From 1990 through 2015, the congressman-then-senator from Vermont had to content himself with a cult following on the progressive left and a reputation for decency that eludes most politicians. Largely unavailable to him were the conventional tools factional and party leaders use to advance their causes. Sanders was a relatively infrequent guest on national news programs. He seldom campaigned outside his home state for Democrats, and when he did, it wasn’t to a mass of supporters fanning out toward the horizon.

Sanders’s first fleeting taste of national fame came, as so many moments in the spotlight do these days, on social media, when he protested President Obama’s 2010 decision to temporarily renew regressive George W. Bush-era tax cuts by occupying the Senate floor and delivering an eight-and-a-half hour oratorical remonstration against inequality and oligarchy in America. The performance was a sensation among denizens of the online left, and later became the basis of a book titled The Speech: A Historic Filibuster on Corporate Greed and the Decline of our Middle Class. But by that time, the Bush tax cuts had been extended and Sanders had returned to relative obscurity, resurfacing only once, to promote the idea of a progressive primary challenge ahead of Obama’s re-election campaign. Democrats rebuffed him overwhelmingly.

It’s not that Sanders’s vision for the country was denied a hearing because it was fringe—promoters of ideas far more extreme are received warmly in the media all the time. Sanders wasn’t on the news often because he was often unable to make news. He was a political independent, for one thing. Moreover, activist progressives like him lacked the numbers and organizational prowess to force their ideas on the Democratic Party the way movement conservatives have done to Republicans for decades.

It took a relentless and phenomenally underestimated presidential primary campaign for his message to finally break through to the masses, and as it turns out the receptive audience was enormous. Over the course of a year, Sanders has hosted dozens of rallies the size of small cities, won 19 caucuses and primaries so far in states large and small (with another expected in West Virginia on Tuesday), and compiled a massive list of supporters, comprising millions of people who together donated north of $100 million to his campaign.

But like many insurgents who came before him attempting hostile takeovers—the Eugene McCarthys, Jesse Jacksons, Howard Deans—Sanders is not going to secure the Democratic Party’s presidential nomination. In the near term—between the end of the primaries in June and November 8, 2016—this confronts him with the narrow question of how aggressively and passionately to campaign for the person who beat him.

"The danger is that Sanders’s challenge to Democratic orthodoxy could have no more lasting impact on the party than those of the insurgents who’ve come before."

But beyond this election, Sanders’ newfound clout will confront him with a much different set of questions, stemming from this basic challenge: How can he continue to harness the enthusiasm that defined his candidacy beyond the time-limited scope of a campaign? How can he avoid the common traps that have ensnared so many other reformers with national followings—like becoming subsumed into the system he wants to change, or allowing the followers he’s nurtured to disengage from politics?

The dream scenario for Sanders Democrats is that he’ll end up, like Barry Goldwater, sparking a movement that eventually comes to dominate his party. The danger is that his challenge to Democratic orthodoxy could end up having no more lasting impact on the party than those of the insurgents who’ve come before him.

There’s a playbook Sanders could follow that would end in tears for his supporters. The Sanders campaign bears more than a passing resemblance to Dean’s, which never translated into anything like the kind of revolution Sanders wants to foster. Though Dean forced a course correction on a Democratic establishment that had become a dangerously pliant enabler of the George W. Bush administration, he only moved his party to the left incrementally. But, happily for Sanders backers, it’s the differences between the Dean and Sanders phenomena that offer hope that the Sanders moment could endure. For his campaign to pay continuous progressive dividends, he will have to exploit the qualities that distinguished his crusade from the crusades of other Democrats.

Dean, it’s important to remember, came to national prominence because congressional Democrats supported the invasion and occupation of Iraq, and had more generally bungled post-September 11 national security politics. His campaign was the first in history to use digital tools to raise money and organize, and might have succeeded had it not been beset by internal dysfunction. But Dean lost the 2004 Democratic primary—to a candidate who had supported the war, no less—and the Dean machine diffused into the liberal ether. That isn’t to say it disappeared, but it became attenuated, thinly spread, and was ultimately largely subsumed into the machine that Sanders now sets up as a foil.

Deaniacs brought scale and professionalism to the grassroots group They worked for progressive candidates and members of Congress. They joined the labor movement. They created a social media and fundraising model that Barack Obama would eventually use to greater effect. And they converted the campaign itself into the advocacy group, Democracy for America, which backs progressive causes and politicians, including Sanders, to this day. But their victories accumulated slowly. In 2006, with Dean chairing the Democratic National Committee, Democrats won the midterm elections in a landslide—a “thumpin’,” as President Bush so memorably described it. And over time, Dean’s critique took hold within his own party, as Democrats began disavowing the war they had helped to start. But the Iraq War persisted through the Bush era, and much of the Obama era, and despite the official termination of Operation Iraqi Freedom, it continues in some ways to this day.

Here is where the differences begin to pile up. Sanders’s campaign was better-run and more successful than Dean’s. But more critically, its animating cause wasn’t acute or ephemeral like an unjust war. Sanders isn’t a critic of a single, massive policy error, or of liberalism cowering briefly to neoconservatism in the wake of a national panic, but of the very foundation of the American political economy. Sanders seeks nothing less than the wholesale transformation of the Democratic Party into a vessel for social-democratic politics.

Sanders’s critique will continue to appeal to his cohort of liberal supporters—many of whom came of political age amid the devastation of a massive failure of Western capitalism—at least until the economy becomes healthier and more equitable. He built his following through a shared sense that inequality, oligarchy, and income stagnation are moral failings of a corrupt or indifferent political system. The breadth of these injustices will theoretically give Sanders supporters more focal points for activism than Dean’s supporters had.

But as they grapple with how to prevent the enthusiasm for his candidacy from fizzling out, they will need trusted leadership, and Sanders has been vague about how or whether he will marshal the forces he’s unleashed. The Democratic Party won’t be fully remade in Sanders’s lifetime—he is 74, after all—but it probably won’t happen at all without his early involvement. To succeed where others failed, Sanders can’t simply become a functionary, working to reform the Democratic establishment from within. The inside game will be a big part of the project, but not the only part. Sanders must keep the apparatus he’s built largely intact, but refocused on lobbying for progressive policies and promoting and financing progressive candidates—and making establishment Democrats fear the price of opposing both. Part, channeling grassroots enthusiasm for progressive causes; part Heritage Action, forcing conformity upon Sanders’s party.

Such an operation will lose momentum quickly if Sanders is not its key spokesman and final decision-maker. It will also lose momentum if long stretches of time pass without big progressive causes to champion, and here Sanders can use his status as a sitting senator to his advantage. It is feasible that Democrats will reclaim the Senate in 2016, and if they do, Sanders is in line to chair the Budget Committee, a panel with limited formal jurisdiction, but vast agenda-setting potential. A congressional budget lacks the force of law, but often serves as a statement of the majority party’s governing objectives: Who are we going to tax, how much, and to what end?

It was from the helm of the House Budget Committee that now-Speaker Paul Ryan was able to rally Republicans around a radical agenda that has formed the basis of nearly every GOP candidate’s platform since its introduction. Should Sanders use his chairmanship in a similar way, he will extend the intra-liberal debate he sparked during the primary about the ideal scope and architecture of social policy into governing season. He’ll keep pressing the question: What should a country provide its citizenry, and should it provide those things to all, or only to some, on the basis of need?

"Sanders’s movement should be part, channeling grassroots enthusiasm for progressive causes, and part Heritage Action, forcing conformity upon his party."

Like a Ryan of the left, Sanders will have an opportunity to cajole (and if need be, push) Democrats in a more progressive direction, but he can also serve as a bulwark against regressive policy making, the same way conservatives have time and again stopped Republican leaders from consorting with Democrats on any measure that carries a whiff of liberalism. If and when President Clinton forges illiberal compromises with Republican leaders, Sanders will be one of the only people in Congress with a constituency wide enough to make other Democratic members consider rebelling against the leader of their party.

The toughest task for the Sanders movement may ultimately be the most important: finding enough talented progressive politicians to run for office, financing them well enough to compete in the money-drenched world of modern politics, and getting them elected in parts of the country that aren’t already reliably progressive. For Sanders to turn his national constituency into mutable political leverage, he will need acolytes who adhere to fairly strict ideological criterion—and win. The lesson of right-wing Republican politics, from Goldwater to Gingrich to the Tea Party, has been that imposing purity tests on candidates can lead to embarrassing failures (such as the candidacies of Sharron Angle, Christine O’Donnell, and others), but also that fielding ideologically committed candidates can pay huge dividends, both electorally and in expanding the scope of substantive debate. (It isn’t an accident that by today’s standards, Ronald Reagan would be considered a moderate Republican.)

But moving the Democratic Party leftward in a similar way, far beyond the liberalism of Clinton and Obama, will be expensive, and thus require a fundraising machine that picks up where the Sanders campaign leaves off. Money is a foregone conclusion for most conservative candidates. But while Sanders famously proved that millions of people will contribute an average of $27 a pop to finance his campaign, we still don’t know how extensive that largesse really is. How many of those donors have the means to support multiple candidates simultaneously, at a similar level of giving?

The obstacles are considerable, but it is possible to imagine Sanders breaking the mold of previous Democratic insurgents and converting the machine he’s built into a movement whose influence and power nobody questions. Progressives have compiled big lists before, only to be reminded that they are just one faction among many in Democratic politics. Until Sanders came along, they weren’t even a particularly formidable one. We’ll know before too long if that has changed.

Article Link to the New Republic:

WSJ: Japan and South Korea May Soon Go Nuclear

The longtime status quo is crumbling and plutonium stockpiles are rising.

By Henry Sokolski 
The Wall Street Journal
May 9, 2016

On Friday North Korean dictator Kim Jong Un praised his country’s recent hydrogen bomb test and satellite launch as “unprecedented” achievements that will “bring the final victory of the revolution.” Such rhetoric is nothing new, but North Korea’s nuclear-weapons program and a growing sense that security arrangements with the U.S. aren’t sufficient has eroded the Japanese taboo against nuclear weapons. On April 1, Prime Minister Shinzo Abe’s cabinet announced that Japan’s constitution did not ban his country from having or using nuclear arms.

Meanwhile, South Korea’s ruling-party leaders have urged President Park Geun-hye to stockpile “peaceful” plutonium as a military hedge against its neighbors. A Feb. 19 article in Seoul’s leading conservative daily, the Chosun Ilbo, went so far as to detail how South Korea could use its existing civilian nuclear facilities to build a bomb in 18 months.

Japan and South Korea are party to the Nuclear Nonproliferation Treaty, and Tokyo’s antinuclear-weapons stance dates to 1945 and the nuclear devastation the U.S. wreaked on Hiroshima and Nagasaki. But that won’t necessarily stop either country from joining the nuclear club—or at least positioning themselves to do so quickly—if they feel the U.S. “nuclear umbrella” is folding.

Japan already has stockpiled 11 tons of plutonium, separated from fuel used in its nuclear-power reactors. A bomb requires roughly five kilograms (or 1/200th of a ton). The old shibboleth, popular with the nuclear industry, that such “reactor-grade” plutonium is unsuitable for weapons, is essentially irrelevant for a technologically advanced country. Japan also has built—but not operated—a large reprocessing plant of French design that can separate about eight tons of plutonium a year.

The shutdown of Japan’s power reactors following the 2011 Fukushima disaster means there are no reactors online that can use this plutonium. But Japan says it will proceed with reprocessing anyway, putatively to keep open the distant possibility of fueling a new generation of so-called fast-breeder reactors. Japan’s nuclear cooperation agreement with Washington allows it to do this with U.S.-origin fuel. South Korea’s agreement prohibits this without U.S. approval, something Seoul chafes at. It sees itself the equal of Japan. Should Japan operate Rokkasho, as it plans to do late in 2018, it will be impossible politically to restrain South Korea from following suit.

China, meanwhile, is negotiating with France to build a reprocessing plant similar to Japan’s. One might discount the security significance of this; Beijing already has nuclear weapons. But a large reprocessing plant would allow it to expand its nuclear arsenal far beyond its present size. The Chinese are clearly aware of the military significance of nominally civilian plutonium. Consider their loud and repeated complaints about Japan’s plutonium stocks.

The Asian goal of stockpiling plutonium to launch a new generation of plutonium-fueled fast-breeder reactors is one shared with nuclear enthusiasts in the West. But fast reactors are so much more expensive than conventional uranium-burning reactors that they, and the reprocessing of spent fuel they require, have never made economic sense. In Tokyo, Seoul and Beijing there are government officials and advisers who understand this and the security risks of commercializing plutonium. But their concerns have been trumped by nationalistic demands not to fall behind in plutonium technology.

The obvious fix, which would be economically beneficial for Japan, South Korea and China, is a collective pause in the rush toward civil plutonium. For the U.S. to credibly broker this, Capitol Hill needs to support the Energy Department’s February decision to terminate the construction in South Carolina of a plutonium plant designed to fuel U.S. power reactors that is billions over budget and years behind schedule.

An Asian-U.S. plutonium pause has support within the administration and Congress. Energy Secretary Ernest Moniz recently told the Journal’s Beijing office: “We don’t support large-scale reprocessing.” He said a large commercial Chinese reprocessing plant “certainly isn’t a positive in terms of nonproliferation.”

At a March hearing of the Senate Foreign Relations Committee, Sens.Bob Corker (R., Tenn.) and Ed Markey (D., Mass.), both backed a “time out” on East Asian plutonium recycling. Assistant Secretary of State Thomas Countryman agreed: “I would be very happy to see all countries get out of the plutonium reprocessing business.” In the House a plutonium timeout has been championed by Reps. Brad Sherman (D., Calif.), Jeff Fortenberry (R., Neb.) and Adam Schiff (D., Calif.).

They understand that a collective plutonium timeout would calm East Asia and save our Asian allies, China and the U.S. hundreds of billions of dollars. President Obama, with less than a year in office to make a lasting contribution to nuclear nonproliferation, should feel comfortable backing this proposal.

Article Link to the Wall Street Journal:

Why Change In Lebanon Is Impossible

The victory of established political parties in the Beirut municipal elections confirms that many Lebanese are still governed by tribal political loyalties

By Hussain Abdul-Hussain
May 9, 2016

The sweeping victory of Mr. Saad Hariri’s Sunni ticket in Beirut’s municipal elections, yesterday, was little surprise. Still, change hopefuls were disappointed as they pondered this question: How could the majority of the Lebanese — given a chance to change their miserable state of affairs at the ballot box — reelect the same old oligarchy that has run Lebanon into the ground? The answer is complicated.

In theory, while Lebanon looks like a modern state, it is in fact a congregation of tribes, known as sects, that have been running their affairs the same way over the past few millennia. This pre-Enlightenment tribal code makes the Lebanese system irresponsive to change the way change happens in post-Enlightenment countries, like in North America and Western Europe.

In pre-Enlightenment, individuals are subjects whose livelihood depends on their leaders. The industrial revolution in Europe, however, made capital seek labor and value merit. When European individuals became economically independent of their feudal lords, they demanded rights and became citizens who took ownership of their state. Thus, Europe’s leaders were transformed from lords to civil servants.

The Arab world has yet to experience such a transformation. In fact, the Arab world (and Iran) became even more medieval with the advent of oil. History has rarely witnessed wealth generated out of thin air. The oil wealth was handed to the de facto rulers whose only knowledge of public administration is the tribal code. Thus, oil has helped further entrench pre-Enlightenment tribalism across the region, including in Lebanon. As long as this oil-funded configuration holds, change can only come in the form of tribal reshuffle, but never in the form of transformation into modern society and state.

In practice, America tried to construct a post-WWII empire on the cheap. Where old empires stationed vast armies to protect trade routes and markets around the world, American leaders reasoned that if the newly created sovereign states can be molded in the shape of industrial countries, peace will prevail and trade will flourish. The newly created states — especially Arab countries — believed the American scheme, until one day they woke up and discovered that the joke was on them. Their states were figments of imagination glued together by brutal gangs, like Baathists in Iraq and Syria.

Growing up in Lebanon, I belong to a generation that blamed imperialism for all the ills of the Arabs. Imperialism usurped Palestine, installed Saddam Hussein in Iraq to paralyze the strongest Arab country, and — with the help of protégé Gulf countries — obstructed Egypt’s Gamal Abdul-Nasser, and even poisoned him.

Then in 2003, America suddenly reversed course and toppled Saddam. I cheered for that and bet on Iraq’s “one million engineers” to build a new democratic Iraq, only to discover that Iraq had no engineers, but only looters, charlatans and mobs.

Then Israel pulled out of Gaza in 2005. For the first time in 38 years, the Palestinians were somehow in control of their own territory, no matter how small. What did the Palestinians do? Hamas began executing Fatah supporters, bringing to the fore an inter-Palestinian feud that makes their conflict with Israel look like a school fight.

And in April 2005, the Lebanese trounced 29 years of Assad’s occupation of their country. Change was in the air. Yet in May, the anti-Syrian forces under Hariri and Druze leader Walid Jumblatt entered into an electoral alliance with the very same pro-Syrian forces that they had revolted against.

In fact, Hariri’s 2005 politics turned out to be his style. Hariri often agitates supporters against his opponents. After each time one of Hariri’s supporters was killed for fighting the good fight, Hariri caved and changed course. In yesterday’s election, Hariri helped half a dozen of his March 8 opponents beat 24 March 14 activists.

The problem with Hariri is that many mistook his tribal politics for change. Turns out Mr. Hariri prefers to be a Sunni leader rather than a Lebanese one, or else, how can non-Sunnis or non-Beirutis follow him if the man declares himself as the leader of Sunnis and Beirut.

Economy shapes society and society shapes the state. Lebanon’s current socio-economic configuration cannot sustain change, or a modern state. Many of us, supporters of Beirut Madinati, knew what to expect. Many others felt surprised and disappointed.

Yet most of the Beirut Madinati supporters have nowhere else to go. They have to keep fighting for change, even if they realize that it will never come. They will have to keep running for election, no matter how rigged the system is. After all, a tribal Lebanon with elections is by far better than a tribal one without them.

North Carolina Sues Federal Government Over Law Blocking LGBT Rights

By Josh Gerstein, Kimberly Hefling, and John Lauinger
May 9, 2016

North Carolina officials set the stage Monday for a high-stakes court battle with the Obama administration by suing the federal government over the Justice Department's demand that they stop implementing a state law blocking LGBT legal protections, particularly bathroom access for transgender individuals.

North Carolina filed the suit in federal court in Raleigh, N.C. seeking “declaratory and injunctive relief” from the federal government. The suit names the Justice Department, Attorney General Loretta Lynch and the head of Justice’s Civil Rights Division, Vanita Gupta, as defendants.

The Justice Department says the North Carolina measure, known as House Bill 2, violates Title VII of the Civil Rights Act of 1964, which prohibits discrimination in the workplace, and Title IX of the Education Amendments of 1972, which prohibits discrimination based on gender in schools and school activities. The Justice Department last week gave the state and the University of North Carolina System a Monday deadline to stop enforcing the bill or face a federal lawsuit.

“The department’s position is a baseless and blatant overreach," North Carolina's suit said.

The suit also charged that the Justice Department's effort to force North Carolina's hand “is an attempt to unilaterally rewrite long-established federal civil rights laws in a manner that is wholly inconsistent with the intent of Congress and disregards decades of statutory interpretation by the courts.”

House Bill 2 made North Carolina the first U.S. state to require transgender individuals to use bathrooms that align with the gender on their birth certificate as opposed to their gender identity. It also bars local governments from providing LGBT individuals with protections while using public accommodations, such as shops and restaurants. It was passed in March in a single-day special session of the state’s Republican-controlled legislature and immediately triggered intense protest and became a flashpoint on the campaign trail.

North Carolina risks the potential loss of up to $2 billion in federal education aid. The 17-campus UNC system alone could be stripped of more than $1.4 billion in federal funding.

In 2014 the Obama administration specified that transgender students were protected under Title IX. On Friday, POLITICO reported that in coming weeks the Obama administration will reinforce its position that the law protects transgender individuals, a step that LGBT advocates have long sought.

President Barack Obama has called the North Carolina bill “wrong” and urged its repeal — an opinion shared by civil liberties and LGBT groups, scores of business leaders, entertainers and fellow politicians, including presumptive Republican nominee Donald Trump. A handful of businesses have scaled back operations in the state; some associations have refused to hold conventions there, and Bruce Springsteen and Pearl Jam, among other musical acts, canceled concerts.

Supporters of the measure, including social conservatives and former Republican presidential candidate Ted Cruz, argue the measure protects women and children from being molested by sexual predators in public restrooms.

McCrory, in an appearance on “Fox News Sunday,” criticized the Justice Department for “trying to define gender identity.” He argued against the Obama administration’s view that federal civil rights law protects transgender individuals as well as prohibiting racial discrimination. “We can definitely define the race of people. It’s very hard to define transgender or gender identity,” he said.

North Carolina's suit was assigned to U.S. District Court Judge Terry Boyle, a Reagan appointee and former aide to Sen. Jesse Helms.

Article Link to Politico:

North Carolina Sues Federal Government Over Law Blocking LGBT Rights

The Wisdom to Know Which Causes of Inequality Can Be Changed

By Megan McArdle
The Bloomberg View
May 9, 2016

“Equality,” wrote Balzac, “may be a right, but no power on earth can convert it into a fact.”

Just ask any schoolchild who has watched some classmates breeze four grades ahead in the math curriculum as others struggle to complete their daily assignments. Life is rife with inequality: Some people are good looking and others plain, some clever and others slow, some soar to popularity while others long to be noticed.

No wonder we are so preoccupied with inequality, and no wonder our conversations about policy solutions leave off many of the inequalities that most worry us. The world is full of problems, but public policy recognizes only those for which there’s a reasonable chance the government might attempt a solution. Any other other “problem” is simply a sad fact, and will remain so.

If we want to have a public discussion about inequality, the first thing we have to do is define which sorts of inequality meet the definition of a “problem.” We then need to decide which of these problems should be solved. Not every problem qualifies.

The history of public policy is littered with “solutions” that turned out to be worse than the problem they were supposedly solving -- the political equivalent of the proverbial fool who blows his own head off to cure his headache.

These steps are quite obvious, and yet quite often forgotten. Some eye-popping figure about inequality is cited; anecdotes are sprinkled hither and thither; some dire predictions are made; and the whole thing closes with a moral exhortation to do something.

Over the next few months, Bloomberg View will be contributing to this conversation on inequality -- how government policies contribute to it, whether government policies can and should reduce it -- so let’s start at Step 1 and proceed to Step 2.

We’ll begin by excluding the “sad facts”: the large swathes of inequality that the government probably won’t attempt to solve, because the possible solutions would be politically impossible or morally abhorrent. The government isn’t going to find you friends, nor can it get you a loving spouse or a better singing voice. On the other hand, the government is pretty good at moving money around, so we tend to spend a lot of time talking about income inequality.

Yet even income inequality turns out to be surprisingly ill-defined. It is a melting pot into which we throw wealth inequality, wage inequality, inequality of opportunity, inequality of political power, and often rigidity of socioeconomic class. Frequently, we also toss in the absolute, rather than relative, difficulties of a life in poverty. Yet no matter how hard we stir, these things cannot all be made into a single issue called “inequality.” They do not arise from the same sources, nor would they be eliminated by the same solutions. Fixing one will not necessarily fix another, and there is no comprehensive solution that will fix them all.

So which ones should we try to fix, and how?

I would cross income inequality itself off the list of priorities. Far greater concerns include: absolute suffering among those with low incomes; a socioeconomic structure that seems to be ossifying into a hierarchy of professional classes; and a decline in income mobility, which is to say, in equality of opportunity. It doesn’t really matter whether Bill Gates has some incomprehensible sum of money at his disposal. It does matter a great deal whether there are Americans in desperate want. And of course, it matters whether anyone with the aptitude and motivation can become the next Bill Gates, or only a handful of privileged people who are already well off.

I also submit that the importance of the issue is inversely proportionate to the ease of solution. The government is very good at taxing income of some Americans and writing checks to others. (Whether you think it should do this is, of course, a different question.) It is very bad at preparing someone to live a solid and fulfilling life of work and community, which is one reason we mostly leave that job to parents.

Government is also not well suited to creating a lot of satisfying and remunerative jobs. It can contribute to productivity and help companies to flourish, for example through basic research and by maintaining a competent legal and regulatory system. And it can directly create a few jobs providing government services; these have been, for many communities at many times, a stepping stone to the middle class.

But there are limits to how many jobs the government can create without choking off the productive economy that funds the government (not least, the current financial limits imposed by state budgets already deeply overstrained by financial promises made to previous generations of workers). For the most part, the best the government can do is to avoid stepping on the creation of satisfying and remunerative jobs; no nation on earth seems to have figured out how to generate “good jobs” for everyone.

All this means is that there is no silver bullet for the government to guarantee full employment and solve structural inequality. Government can do something -- but it remains to be seen exactly what, and how much.

Over the coming months, my colleagues and I at Bloomberg View, along with outside contributors and readers, will be exploring how government adds to inequality, and what government could do to reduce it. We’re not crazy enough to think that we’re going to solve all of America’s problems. But we may be able to identify some that are solvable, and avoid some “cures” that would be counterproductive.

Article Link to the Bloomberg View:

Report: Facebook Omitted Conservative Topics From Trending List

By David McCabe 
The Hill
May 9, 2016

Employees who worked as “curators” for Facebook’s trending topics section, which can bring significant attention to news stories, regularly didn’t include stories trending among political conservatives, according to a Monday report from Gizmodo.

A former employee told Gizmodo that when he or she would log on, they would see that topics popular with conservatives were not included on the list. The employee, a conservative, speculated that the person running the list “didn’t recognize the news topic” or was biased against a conservative figure involved.

The employee said that Lois Lerner, the Internal Revenue Service official who has been a in the crosshairs of Republicans for allegedly targeting conservative groups; the Drudge Report; and Gov. Scott Walker (R-Wis.), who ran for president last year, were among the topics not included on the list.

The “Trending” section appears on the right side of Facebook’s home page, next to the News Feed. Gizmodo has reported in the past that the topics are selected by human curators based on a Facebook-generated algorithm of the stories being discussed and shared by users.

Another former employee told Gizmodo that if a story originated on a conservative news website, curators would look for a link to the story from a neutral outlet.

Gizmodo reported that it could not determine whether curators took the same steps for stories from liberal news outlets. A Facebook spokesperson did not immediately offer an on-the-record comment.

Employees also told the blog that the people running the "Trending" feature could insert a topic into the list even if it was not among the most-discussed topics on Facebook.

The story is likely to cause a headache for the mammoth social network. Facebook has always insisted that its platform is politically neutral when critics have speculated that it could use its power over the flow of information to influence users.

That claim has come under increased scrutiny in light of two recent stories.

Facebook chief executive Mark Zuckerberg criticized "fearful voices calling for building walls" in a shot a Donald Trump, now the presumptive Republican presidential nominee, during a conference last month.

Gizmodo later reported that a Facebook employee had submitted a question for a discussion with Zuckerberg asking what responsibility the company had to “prevent President Trump in 2017.”

Facebook is already involved in electoral politics, but insists it does so in a neutral way. The company has sponsored lounges at different presidential debates and regularly reminds users to vote. It also does outreach to political campaigns to get them to use the company's products.

The company has also attracted its fair share of political advertising. A team of employees sells ads to campaigns up and down the ballot as Facebook seeks to capture some of the money poured into political advertising.

Article Link to The Hill:

Jindal: I’m Voting Trump, Warts and All

I stand by all my criticisms of the New Yorker, but the stakes for the country are too great to elect Clinton.

By Bobby Jindal
The Wall Street Journal
May 8, 2016

Some of my fellow Republicans have declared they will never, under any circumstances, vote for Donald Trump. They are pessimistic about the party’s chances in November and seem more motivated by long-term considerations. They think devotion to the “anybody but Trump” movement is a principled and courageous stance that will help preserve a remnant of the conservative movement and its credibility, which can then serve as a foundation for renewal.

I sympathize with this perspective, but I am planning to vote for Donald Trump. Why? Because the stakes for my country, not merely my party, are simply too high.

I was one of the earliest and loudest critics of Mr. Trump. I mocked his appearance, demeanor, ideology and ego in the strongest language I have ever used to publicly criticize anyone in politics. I worked harder than most, with little apparent effect, to stop his ascendancy. I have not experienced a sudden epiphany and am not here to detail an evolution in my perspective.

I believe this presidential election cycle favors Republicans, due more to President Obama’s shortcomings than to any of our virtues or cleverness. I also believe that Donald Trump will have the hardest time of any of the Republican candidates in winning. He has stubbornly stuck to the same outlandish behavior and tactics that have served him so well to date. Mr. Trump continues to have the last laugh at the expense of his critics and competitors, myself included.

I think electing Donald Trump would be the second-worst thing we could do this November, better only than electing Hillary Clinton to serve as the third term for the Obama administration’s radical policies. I am not pretending that Mr. Trump has suddenly become a conservative champion or even a reliable Republican: He is completely unpredictable. The problem is that Hillary is predictably liberal.

There will be none of her husband’s triangulation. Republicans are fooling themselves if they think this President Clinton would sign into law policies like Nafta, the crime bill, welfare reform, or the deficit reduction packages that marked Bill’s tenure. While Bill felt compelled to confront Sister Souljah—and less directly Jesse Jackson—to appeal to moderate voters, Hillary is more responsive to pressure from Black Lives Matter and the far left. I have no idea what Mr. Trump might do, while Mrs. Clinton is predictable. Both are scary, the former less so.

The next president will make a critical appointment to the Supreme Court, who will cast the tiebreaking vote in important cases that will set precedents for years to come. Issues like the sanctity of innocent human life, constitutional protections for religious liberty and Second Amendment rights, and limits on the unelected federal bureaucracy hang in the balance.

In my lifetime, no Democrat in the White House has ever appointed a Supreme Court justice who surprised the nation by becoming more conservative, while the opposite certainly cannot be said for Republican appointments. Mr. Trump might not support a constitutionalist conservative focused on original intent and limits on the court’s powers. He may be more likely to appoint Judge Judy. However, there is only a chance that a President Trump would nominate a bad justice, while Mrs. Clinton certainly would.

The current president has abused his executive powers to implement ObamaCare and to grant de facto amnesty for illegal immigrants, in defiance of Congress and the courts. The next president will make critical decisions on whether to renew these executive orders or issue new ones repealing past abuses, and will make key appointments who will decide whether to continue bending the law to prop up ObamaCare.

Repealing and replacing ObamaCare will require congressional action. But President Obama has proven how much can be done by a determined executive. I admire his tenacity, though not his goals or disregard for constitutional limits. Mr. Trump has had a decidedly mixed record of both supporting and opposing more government involvement in health care. Mrs. Clinton has been much more consistent in favor of a big-government approach, dating to her own failed efforts in the 1990s.

If elected, Mrs. Clinton will continue hindering affordable domestic energy, increasing dependence on government and the growth of welfare programs, growing the nation’s debt and weakening America abroad. She will more firmly establish a culture of victimhood and identity politics, further dividing Americans rather than uniting us, and will continue promoting redistribution and government interference rather than growth and freedom.

I do not pretend Donald Trump is the Reaganesque leader we so desperately need, but he is certainly the better of two bad choices. Hardly an inspiring slogan, I know. It would be better to vote for a candidate rather than simply against one. If current trends hold, I will be among the many complaining this fall about my choices.

I understand why so many of my Republican friends are in denial, while many of my Democratic friends gleefully anticipate and applaud defections. The media is poised to reward those “courageous” Republicans ready to do the “right thing” and endorse Hillary. Count me out.

Article Link to the Wall Street Journal:

Pentagon Report Reveals Confusion Among U.S. Troops Over Afghan Mission

By Josh Smith
May 9, 2016

Amid fierce fighting after the Taliban captured the northern Afghan city of Kunduz last year, U.S. special forces advisers repeatedly asked their commanders how far they were allowed to go to help local troops retake the city.

They got no answer, according to witnesses interviewed in a recently declassified, heavily redacted Pentagon report that lays bare the confusion over rules of engagement governing the mission in Afghanistan.

As the Taliban insurgency gathers strength, avoiding enemy fire has become increasingly difficult for advisers, who have been acting as consultants rather than combatants since NATO forces formally ceased fighting at the end of 2014.

In the heat of the battle, lines can be blurred, and the problem is not exclusive to Afghanistan: questions have arisen over the role of U.S. troops in Iraq after a U.S. Navy SEAL was killed by Islamic State this month.

"'How far do you want to go?' is not a proper response to 'How far do you want us to go?'" one special forces member told investigators in a report into the U.S. air strikes on a hospital in Kunduz that killed 42 medical staff, patients and caretakers.

That incident was the biggest single tragedy of the brief capitulation of Kunduz to Taliban militants, and there is no suggestion that the mistake was the result of a lack of clarity over the rules of engagement.

But the 700-page report, much of it blacked out for security reasons, sheds light on how the rules are not fully understood, even by some troops on the ground, compromising the mission to stabilize the nation and defeat a worsening Islamist insurgency.

The issues exposed in the report are likely to be considered by the new U.S. commander in Afghanistan, General John Nicholson, as he prepares to makes recommendations in the coming weeks that may clarify or expand the level of combat support the U.S.-led training mission can provide.

"It's not a strategy and, in fact, it's a recipe for disaster in that kind of kinetic environment," said the soldier, who, like others in the report, was not identified.

He added that his unit, whose role was to advise and assist Afghan forces without engaging in combat, asked three times for commanders to clarify the rules governing their mission.

"Sadly, the only sounds audible were the sounds of crickets ... though those were hard to hear over the gunfire."

U.S. Mission Under Review

While acknowledging a lingering "lack of understanding in the West" about the U.S. and NATO role in Afghanistan, U.S. military spokesman Brigadier General Charles Cleveland denied there was confusion among troops over the broader mission.

More than 9,000 U.S. soldiers were "retrained" on the rules of engagement following missteps in Kunduz, in an effort to reduce future misunderstandings, he said.

Critics say the confusion comes from political expediency, because U.S. leaders are keen to portray the Afghan operation as designed mainly to help local forces fight for themselves.

"The rules of engagement are trapped in the jaws of political confusion about the mission," a senior Western official told Reuters.

"Nobody in Western capitals seems willing to admit that Afghanistan is a worsening war zone and ... that their troops are still battling out a combat mission on a daily basis," added the official, who declined to be named.

Until the end of 2014, when their combat role officially ended, NATO forces in Afghanistan peaked at more than 130,000 troops, most of them American. NATO's presence today is a fraction of the size.

Different Operations Can Merge

Around 10,000 U.S. troops are divided between the NATO train-and-assist mission called Resolute Support and a U.S.-only counter-terrorism operation against militant groups that include al Qaeda and Islamic State but not the Taliban.

Under publicly declared rules of engagement, U.S. advisers in Resolute Support generally cannot attack Taliban targets except in self defense.

As government forces have struggled, however, the definition of "self defense" has appeared less sharply defined, with some U.S. air strikes conducted to defend partnered Afghan units.

The Kunduz report indicates at least some U.S. troops have been sent into battle with questions unanswered.

The Green Beret complained that failure to provide clear guidance represented "moral cowardice", and that political leaders intentionally keep the mission vague.

That allows them to "reap the rewards of success without facing the responsibility of failure," he added.

Soldiers pleaded for "clearer guidance" and more clarification of overly complicated rules, according to investigators.

The Pentagon has not fully publicized rules governing the use of force by U.S. troops, who may be called upon to act under either type of mission, sometimes in the same battle.

In the four days leap to the hospital attack, U.S. special forces called in nine close air support strikes under the authority of counter-terrorism, and 13 under Resolute Support, according to the report.

As part of self-defense, coalition troops have "some latitude" in calling air strikes on militant targets that may not be directly attacking them, but could soon pose a threat, Cleveland said.

Last year the Pentagon announced that Afghan forces could be helped under extreme conditions.

Additionally, under a "Person with Designated Special Status" classification, Afghan units operating closely with international advisers can be protected by air strikes as if they were coalition forces, according to Cleveland.

Who Is The Enemy?

Further complicating matters are counter-terrorism rules that allow strikes against al Qaeda, as well as militants linked to Islamic State which did not exist when the U.S. military intervened in Afghanistan in 2001, but not the Taliban.

In recent weeks U.S. commanders in Afghanistan have reported that al Qaeda and the Taliban are working more closely together, signaling that the dominant Taliban group could once again be attacked by more air strikes.

Calling the authorities in Afghanistan "exceptionally complex," previous training had failed to prevent confusion, the Kunduz report found.

Prior to deploying to Afghanistan, commanders made clear that "combat operations was mostly a thing of the past," another special forces soldier said in the report.

On the ground, however, things were more complicated.

The second officer said he went into the Kunduz operation unsure of which authorities his unit would be operating under.

The lack of explicit instructions led the officer to choose his "default" of Resolute Support authorities, which he described as "just the safe bet."

Article Link to Reuters:

Oil Jumps On Canada Wildfire Outages, Markets Eye Saudi Reshuffle

By Amanda Cooper
May 9, 2016

Oil rallied on Monday as Canada's most destructive wildfire in recent memory knocked out over a million barrels in daily production capacity, but caution among investors prevented a return to late April's 2016 price highs.

The lost capacity is equivalent to well over a third of the country's typical daily production, and almost all of Canada's crude from oil sands is exported to the United States.

U.S. crude futures CLc1 rose 91 cents to $45.57 a barrel by 0910 GMT, up for a fourth day in a row, while Brent crude futures LCOc1 rose 72 cents to $46.02 a barrel.

The fire, which broke out on May 1, has forced three major oil firms to warn they will be unable to deliver on some contracts for Canadian crude.

The impact of the production loss has been far more marked in the U.S. crude market, where prices for West Texas Intermediate oil for delivery in July CLN7 are now above those for Brent.

Investors now hold more bets on a rising oil price than at any time in history, which analysts say might mean there is less scope for Brent to rally after having gained 25 percent in a month. [CFTC/] [O/ICE]

"Positioning has been already very stretched in the oil market ... Some must have taken the opportunity to exit, so that’s one angle that momentum is slowing down," Barclays Capital commodities strategist Miswin Mahesh said.

"There is a slight fear that prices have recovered too quickly, and we risk repeating the same price trajectory seen around Q2 2015, where the rally slowed down the market balancing process," he added.

Canadian officials on Sunday showed some optimism as favorable weather helped fire fighters, driving the flames away from the oil sands town Fort McMurray, but there was no timeline for a restart of operations at evacuated sites.

"The market is close to balanced ... when we consider the large amount of supply offline in Canada and elsewhere, which could last for months," Morgan Stanley said.

U.S. shale oil output is in decline and production is also falling in Latin America, Asia and Nigeria, eroding a 1-2 million barrels per day supply overhang that pulled down oil prices by 70 percent between 2014 and early 2016.

Markets were also watching Saudi Arabia, the world's biggest oil exporter, where a government shake-up over the weekend included the appointment of Khalid al-Falih as head of the new Ministry of Energy, Industry and Mineral Resources.

"Changes in Saudi Arabia oil leadership only underscore the shift in strategy to one focused on market share over price," Morgan Stanley said.

Article Link to Reuters:

Monday, May 9, Morning Global Market Roundup: Yen Falls After Tokyo Warning

By Patrick Graham
May 9, 2016

The dollar hit a 10-day high against the yen on Monday after Japan's finance minister said outright that Tokyo was ready to intervene in the currency market if yen moves are volatile enough to hurt trade and the economy.

In a mixed day for stock markets, the yen's falls helped generate some limited gains for the Nikkei, while a strong batch of industrial orders numbers out of Germany helped European shares recover from their worst week since mid-February.

But Shanghai .SSEC sank almost 3 percent after worse-than-expected Chinese trade numbers. Those added to the more general doubts about the pace of global growth and the likelihood of rises in interest rates this year generated by Friday's U.S. jobs data.

An almost 15 percent surge for the yen has been the big currency story of the past six months and traders remain skeptical over the chances of Tokyo making good on repeated threats to counter the move in the absence of global support.

Japan is the developed world's most consistent interventionist on markets over the past two decades as it strives to find a way out of a cycle of low growth and low inflation.

But previous bouts of yen selling have tended to come with at least tacit blessing of its international partners and this time Washington seems opposed.

"Finance Minister Aso stated strongly that sudden yen strength or weakness is bad and that Japan has the means to intervene," said Lee Hardman, a currency analyst with Bank of Tokyo-Mitsubishi UFJ in London.

"He also attempted to alter market expectations that US opposition will prevent Japan from intervening. Overall, the comments do not significantly change our view that direct intervention to dampen yen strength remains unlikely in the near-term."

The dollar, which hit an 18-month low against the yen last week JPY=, was up almost half a percent in morning trade in London at 107.60 yen. That is down from 123 yen last December.

Wild Fire

World oil prices gained for a third straight day on worries over problems with supplies due to devastating wildfires in Canada.

The recovery in the value of crude this year has tended to be a positive for stock markets, encouraging hopes that consumer prices will also start rising again, easing the burden of debts weighing on companies and governments and allowing more investment.

Against that is the impact on oil companies' operations of shutdowns caused by the fires. Dealers said that European-listed oil majors were shielded by the impact being chiefly on Canadian operations, with BP (BP.L) shares up 0.2 percent.

German industrial orders also offered some reason for optimism, rising more than expected and by the steepest rate in nine months, due to strong foreign demand especially from countries outside the euro zone.

The pan-European FTSE 300 index .FTEU3, Germany's DAX .GDAXI and France's CAC.FCHI all rose by more than 1 percent.

Article Link to Reuters:

Trumpism Meets Its First Defeat ...In London

By Pankaj Mishra
The Bloomberg View
May 9, 2016

Donald Trump became last week the presumptive Republican nominee in the U.S. presidential elections. But those condemned to agonizing suspense and anxiety until November should note that Trumpism, or the politics of hate and fear, also suffered a major defeat last week.

I refer to the election of former human rights lawyer Sadiq Khan as London’s mayor. That the son of a Pakistani bus driver, whose campaign team included gay men and Jewish women, should become the mayor of a great European city would at any time have signaled hope for our irrevocably mixed societies. Its significance in this era of politically expedient bigotry cannot be overestimated.

For, as Khan said a day after his remarkable victory, his Conservative opponents set out "to divide London’s communities in an attempt to win votes," using "fear and innuendo to try and turn different ethnic and religious groups against each other -- something straight out of the Donald Trump playbook."

Zac Goldsmith, the Conservative candidate, repeatedly tried to taint Khan by linking him to Muslim extremists and accusing him of endangering the security of London. Prime Minister David Cameron himself accused Khan in Parliament of sharing a platform with a sympathizer of Islamic State; the supposed sympathizer later turned out to have Tory links. Cameron’s ministerial colleagues kept up a barrage of allegations about Khan’s complicity with extremists.

No tactic was deemed too ghastly in what even senior leaders within the Conservative party now call a "poisonous" and "outrageous" campaign to persuade white and non-Muslim voters to reject a Muslim mayor. I was one of the London residents with Hindu-sounding last names who received a letter from the British prime minister exhorting "our community" to vote for Goldsmith.

The letter mentioned Cameron’s and Goldsmith’s warm relationship with India’s Hindu nationalist Prime Minister Narendra Modi and their joint attendance at Modi’s mass rally at Wembley Stadium last year. It went on to warn us, apparently like-minded Hindu devotees of Modi, that we were about to become "lab rats in a giant political experiment" conducted by the "dangerous" Khan.

Similar letters from the prime minister referring to "your community" went out to Sikhs and Tamils (none, as far I know, were addressed to Muslims). A retired biochemist called Barbara Patel, white and Jewish, and married into a Muslim family, also received one, thereby revealing the ham-fistedness as well as malevolence of ethnic-religious profiling.

Goldsmith then wrote an article in the tabloid Daily Mail, which has in the past been notorious for, among many other things, its open-mindedness about anti-Semitism and Nazism. Goldsmith’s column alleging that Khan had "repeatedly legitimized those with extremist views" was accompanied by a picture of a London double-decker bus destroyed in the terrorist attacks of July 7, 2005.

The attempt to conflate "extremism" and "terrorism" with "Muslim" in the voter’s mind, or to import the sectarian passions of the Indian subcontinent to Britain, was a treacherous move in itself. But much more dangerous was the message young Muslims (an alienated community, to put it mildly) could have easily drawn: Even their engagement with mainstream democratic politics would not clear the suspicion that they are hostile aliens.

Trumpism of course first reared its head in politics with the extraordinary insinuation that the White House occupant with the middle name "Hussein" was a fifth columnist. As mainstream politics everywhere go into a tailspin, demagogic practices these days cross-pollinate faster. Thus, Vladimir Putin inspires right-wing parties across Europe. The anti-Islam organization Pegida in Germany links up with the Netherlands’ ultra-rightists. Looking East, Hungary’s Viktor Orban cites Turkey under the authoritarian leadership of Recep Tayyip Erdogan as an inspiring "success."

And, in the most bizarre twist of all, the ruling party in one of the world’s oldest democracies chose to replicate Trump’s strategy at the risk of fatally undermining the trust and goodwill of a large section of the British population. There is something unbelievable about the whole sordid episode; it is why relief at its termination is great and widespread.

Certainly, the size of Khan’s mandate -- the biggest-ever for a politician in British electoral history -- exposed the recklessness and folly of plagiarizing from Trump’s playbook in the city that immigrants have made the world’s most cosmopolitan. One can only hope that, come November, xenophobic Trumpism receives a final and spectacular comeuppance in the country actually built by immigrants.

Article Link to the Bloomberg View:

Trumps Clown Car of Veep Volunteers

It will be months before Trump announces who will be joining him on his ticket. But a slew of people have already slowly walked away from that risky bet. And the volunteers to fill the space aren’t exactly in demand to do anything else.

By Gideon Resnick
The Daily Beast
May 9, 2016

It seemed like 2008 all over again.

Sarah Palin, the former governor of Alaska and a, so far, not-so-effective surrogate for Donald Trump, floated the idea of being the presumptive nominee’s vice presidential pick during a CNN interview on Sunday.

“I think I’m pretty much as vetted as anyone in the country could be vetted already,” Palin, the infamous former running mate of John McCain said when asked if she’d give it another go this election cycle.

After pumping her fist and humbly suggesting that there were other candidates out there who were well-suited for the job, Palin demurred and said “I want to help and not hurt.”

“I am such a realist that I realize there are a whole lot of people out there who would say, ‘Anybody but Palin.’ I wouldn’t want to be a burden on the ticket, and I realize in many, many eyes, I would be that burden,” Palin said acutely aware of the baggage her name carries.

Her suggestion, likely striking fear into the hearts of any casual establishment Trump supporters and delight among political observers, comes less than a week after a majority of Trump’s short list ran for the hills.

Governor Nikki Haley? Busy running South Carolina

Ohio Sen. Rob Portman? No time. Running for re-election

Governor Susana Martinez? New Mexico needs her more.

Sen. Marco Rubio? Pass.

Still, for as long as Donald Trump has been the presumptive Republican nominee—all of six days—the chatter about his vice presidential pick has been incessant. The rumor mill has enveloped everyone from former Speaker of the House Newt Gingrich, who has expressed interest despite being north of 70 and rounding out the two-man ticket to a six-wives one, to Trump’s former primary opponent, and recent dropout, John Kasich.

The fuel for the speculation is obvious; Trump is a wild card who has defied political logic and made the Republican party his own playground for the last ten months. But some of his allies don’t want to swing from the monkey bars.

Rick Scott, the cone-headed governor of Florida, cut off the idea at the pass before even being asked. “I’m going to pass,” he told Erin Burnett on CNN this week.

Similarly, New Jersey Governor Chris Christie, has said he has a “hard time believing” he’ll be able to translate his position as Trump hostage to vice president.

Everyone from Ben Carson to Maine Governor Paul LePage (whose chances at selection were as good as this reporter’s) have opted out, leaving a resilient few waiting on the bench for their time to shine.

But Palin was only the latest figure in the Trump orbit, who seems to have little to chance, to offer herself up for the figurehead position. Former gubernatorial candidate and current collector of reporters’ addresses Carl Paladino was hankering for the job as far back as October.

And on Sunday, former Arizona Governor Jan Brewer, who shares Trump’s fondness for immigration crackdowns, also leapt at the opportunity to join the ticket.

“Of course I would be!” Brewer said mere minutes after Palin spoke on CNN. “I would be willing to serve in any capacity that I could be of help with Donald on. But that’s a tremendous list of people to choose from,” she said referring to a list of candidates presented on a newsroom monitor.

“They’re all very wonderful people, well-qualified. I certainly think that Newt [Gingrich], I’ve known him for a long time, we all have experienced what he can get done in Washington, D.C. And Marco Rubio would be terrific. Mary Fallin would be terrific.”

An advisor for Rubio (the artist formerly known as “Little Marco”) categorically denied that he would accept the position. Oklahoma Governor Mary Fallin, however, said she’d be happy to consider the spot. Trump in turn seemed interested in the prospect of bringing on a fellow immigration enforcer who could also maybe make some headway with female voters, a bloc that looks poised to reject Trump outright.

But there’s been no indication from Trump and his campaign that they will go outside the box on this important choice.

If anything, the reality television star has indicated that he wants someone with experience; someone to help continue rebuilding bridges Trump has burned with the Washington establishment he scorns.

“Somebody that can walk into the Senate and who’s been friendly with these guys for 25 years, and people for 25 years and can get things done,” is the way the straw-haired mogul described his ideal candidate to The Washington Post in April.

This one line—if it is to be taken at its word—chopped many of Trump’s closest political allies out of contention including former presidential candidate Ben Carson, who privately lobbied for the plum spot in March.

After volunteering himself as early as February, at which point Carson was still in the race, the former neurosurgeon changed his tune. Now he’s reportedly going to be on a committee to help Trump make the decision, which according to Carson could include potential Democrats, but according to Trump will only include Republicans. A spokesman for Carson would not expound on his role in the process to The Daily Beast.

Trump is not rife with options for people that fit the 25-year experience parameters. His friends in Washington are few and far between and as he continues to try and wrest away whatever power Speaker of the House Paul Ryan still has, Trump isn’t making it easy for people to like him.

That being said, there’s a veteran of the force who has been forthright about his Trump love: Alabama Senator Jeff Sessions.

But he too is allegedly not touching the VP spot with a ten-foot pole.

"we’ve got enough problems,” Sessions told The Washington Examiner when asked this week. He added that Trump “needs to get somebody who can help him win this election. And that’s what I support. And I’m not sure who that is, but I’m sure it won’t be me.”

To his point, Alabama is not a state that is at major threat for Trump in the general election and it’s not like Sessions is the most lauded man in Washington. It’d be like adding a side of mashed potatoes to a plate of fries; more of the same.

The only other feasible person that can offer the experience Trump purports to want, while actually being in a uniquely perfect position to accept the optics risk of the job is none other than Newt Gingrich.

Gingrich has been an early and feverish Trump cheerleader, privately lobbying GOP insiders to learn to love the firebrand demagogue and singing his praises on network television.

Despite saying in April that Trump would need “psychiatric help” if he chose him, Gingrich has been more bullish on the idea recently, ready to return to the spotlight he once had for suggesting the country create a moon colony.

“Look, I have no idea what his thinking is right now,” Gingrich said in an interview with a local Atlanta television station this week. “I don’t have any interest in the sense that I’m going to go out and try to become his vice president. I would obviously have to listen carefully if he called. He’s an old friend and I think any time a potential president calls a citizen, a citizen owes them an obligation.”

A spokesman for Gingrich has not returned a request for further comment.

Trump has also made it painfully clear that running against Hillary Clinton means he’s going to relitigate the 1990s, dragging each and every skeleton out of the closet into the warm glow of the social media era.

“She’s married to a man who got impeached for lying,” Trump said of Clinton in Washington state on Saturday. “He was impeached and he had to go through a whole big process and it wasn’t easy. He was impeached for lying about what happened with a woman.”

Who better to have on your team than one of the leaders of that very impeachment?

Gingrich, then the Speaker of the House, was a major force in trying to oust President Bill Clinton for lying under oath about his sexual impropriety. Ironically, Gingrich himself was carrying on an affair at the time, something which he later admitted before launching his own presidential campaign in 2012. (A Trump-Gingrich ticket may seal the deal for the most marriages on a single platform in the history of presidential politics).

Even though the conversation is swirling now, and people are already dropping like flies, Trump has said that he will announce his pick at the Republican National Convention in July as part of the pizzazz-filled spectacle he promises.

Still all early signs point to one person.

“Too early to hear anything serious,” a source close to the Trump campaign told The Daily Beast.

“My early money is on Newt.”

Article Link to the Daily Beast:

Why Middle Eastern Leaders Are Talking to Putin, Not Obama

Russia’s less dominant militarily but more willing to act, and that has changed the dynamics in the region.

By Dennis Ross
May 9, 2016

The United States has significantly more military capability in the Middle East today than Russia—America has 35,000 troops and hundreds of aircraft; the Russians roughly 2,000 troops and, perhaps, 50 aircraft—and yet Middle Eastern leaders are making pilgrimages to Moscow to see Vladimir Putin these days, not rushing to Washington. Two weeks ago, Israeli Prime Minister Benjamin Netanyahu traveled to see the Russian president, his second trip to Russia since last fall, and King Salman of Saudi Arabia is planning a trip soon. Egypt’s president and other Middle Eastern leaders have also made the trek to see Putin.

Why is this happening, and why on my trips to the region am I hearing that Arabs and Israelis have pretty much given up on President Barack Obama? Because perceptions matter more than mere power: The Russians are seen as willing to use power to affect the balance of power in the region, and we are not.

Putin’s decision to intervene militarily in Syria has secured President Bashar Assad’s position and dramatically reduced the isolation imposed on Russia after the seizure of Crimea and its continuing manipulation of the fighting in Ukraine. And Putin’s worldview is completely at odds with Obama’s. Obama believes in the use of force only in circumstances where our security and homeland might be directly threatened. His mindset justifies pre-emptive action against terrorists and doing more to fight the Islamic State. But it frames U.S. interests and the use of force to support them in very narrow terms. It reflects the president’s reading of the lessons of Iraq and Afghanistan, and helps to explain why he has been so reluctant to do more in Syria at a time when the war has produced a humanitarian catastrophe, a refugee crisis that threatens the underpinnings of the European Union, and helped to give rise to Islamic State. And, it also explains why he thinks that Putin cannot gain—and is losing—as a result of his military intervention in Syria.

But in the Middle East it is Putin’s views on the uses of coercion, including force to achieve political objectives, that appears to be the norm, not the exception—and that is true for our friends as well as adversaries. The Saudis acted in Yemen in no small part because they feared the United States would impose no limits on Iranian expansion in the area, and they felt the need to draw their own lines. In the aftermath of the nuclear deal, Iran’s behavior in the region has been more aggressive, not less so, with regular Iranian forces joining the Revolutionary Guard now deployed to Syria, wider use of Shiite militias, arms smuggling into Bahrain and the eastern province of Saudi Arabia, and ballistic missile tests.

Russia’s presence has not helped. The Russian military intervention turned the tide in Syria and, contrary to Obama’s view, has put the Russians in a stronger position without imposing any meaningful costs on them. Not only are they not being penalized for their Syrian intervention, but the president himself is now calling Vladimir Putin and seeking his help to pressure Assad—effectively recognizing who has leverage. Middle Eastern leaders recognize it as well and realize they need to be talking to the Russians if they are to safeguard their interests. No doubt, it would be better if the rest of the world defined the nature of power the way Obama does. It would be better if, internationally, Putin were seen to be losing. But he is not.

This does not mean that we are weak and Russia is strong. Objectively, Russia is declining economically and low oil prices spell increasing financial troubles—a fact that may explain, at least in part, Putin’s desire to play up Russia’s role on the world stage and his exercise of power in the Middle East. But Obama’s recent trip to Saudi Arabia did not alter the perception of American weakness and our reluctance to affect the balance of power in the region. The Arab Gulf states fear growing Iranian strength more than they fear the Islamic State—and they are convinced that the administration is ready to acquiesce in Iran’s pursuit of regional hegemony. Immediately after the president’s meeting at the Gulf Cooperation Council summit, Abdulrahman al-Rashed, a journalist very well connected to Saudi leaders, wrote: “Washington cannot open up doors to Iran allowing it to threaten regional countries … while asking the afflicted countries to settle silently.”

As I hear on my visits to the region, Arabs and Israelis alike are looking to the next administration. They know the Russians are not a force for stability; they count on the United States to play that role. Ironically, because Obama has conveyed a reluctance to exercise American power in the region, many of our traditional partners in the area realize they may have to do more themselves. That’s not necessarily a bad thing unless it drives them to act in ways that might be counterproductive. For example, had the Saudis been more confident about our readiness to counter the Iranian-backed threats in the region, would they have chosen to go to war in Yemen—a costly war that not surprisingly is very difficult to win and that has imposed a terrible price? Obama has been right to believe that the regional parties must play a larger role in fighting the Islamic State. He has, unfortunately, been wrong to believe they would do so if they thought we failed to see the bigger threat they saw and they doubted our credibility.

Indeed, so long as they question American reliability, there will be limits to how much they will expose themselves—whether in fighting the Islamic State, not responding to Russian entreaties, or even thinking about assuming a role of greater responsibility for Palestinian compromises on making peace with Israel. To take advantage of their recognition that they may need to run more risks and assume more responsibility in the region, they will want to know that America’s word is good and there will be no more “red lines” declared but unfulfilled; that we see the same threats they do; and that U.S. leaders understand that power affects the landscape in the region and will not hesitate to reassert it.

Several steps would help convey such an impression:

⧫ Toughen our declaratory policy toward Iran about the consequences of cheating on the Joint Comprehensive Plan of Action to include blunt, explicit language on employing force, not sanctions, should the Iranians violate their commitment not to pursue or acquire a nuclear weapon;

⧫ Launch contingency planning with GCC states and Israel—who themselves are now talking—to generate specific options for countering Iran’s growing use of Shiite militias to undermine regimes in the region. (A readiness to host quiet three-way discussions with Arab and Israeli military planners would signal we recognize the shared threat perceptions, the new strategic realities, and the potentially new means to counter both radical Shiite and Sunni threats.)

⧫ Be prepared to arm the Sunni tribes in Iraq if Prime Minister Haider al-Abadi continues to be blocked from doing so by the Iranians and the leading militias;

⧫ In Syria, make clear that if the Russians continue to back Assad and do not force him to accept the Vienna principles (a cease-fire, opening humanitarian corridors, negotiations and a political transition), they will leave us no choice but to work with our partners to develop safe havens with no-fly zones.

Putin and Middle Eastern leaders understand the logic of coercion. It is time for us to reapply it.

Article Link to Politico:

Get Ready for U.S. Politics to Reach New Lows

By Albert R. Hunt
The Bloomberg View
May 9, 2016

Americans may need to bring in the kids; the presidential election promises to get ugly, a race to the bottom.

Hillary Clinton and Donald Trump both arouse strong passions, many of them negative. Both play tough.

She is a policy wonk, but Trump has little interest in a wide-ranging debate on issues. In the Republican primaries, Jeb Bush, Marco Rubio and Ted Cruz all tried at times to challenge him on substance; he brushed them aside with pointed personal rejoinders. It worked remarkably well.

But a campaign dominated by personal invective and political mudslinging exacerbates polarization and makes governing tougher, say knowledgeable veterans of other campaigns and administrations.

"If campaigns are not thoughtfully policy-oriented it makes it harder for those who have to govern," says Andrew Card, who was chief of staff to George W. Bush and now is president of Franklin Pierce University.

"Your ability to claim a mandate is affected by the dialogue on issues during the campaign," notes Stephanie Cutter, deputy campaign manager of President Barack Obama's 2012 re-election campaign and a former top White House aide.

There isn't much reason to be optimistic about thoughtful dialogue in this general election. Both sides are girded for a negative, no-holds-barred slugfest.

This will be compounded by outside groups, including operatives with close ties to the two candidates: Roger Stone and David Brock.

Stone is a longtime Trump political adviser who helped bring his former partner, Paul Manafort, in to direct the campaign. From his perch outside the official campaign, Stone makes no secret of his intent to eviscerate Clinton.

Political etiquette won't be an impediment. He has written books charging that Lyndon Johnson ordered the murder of President John F. Kennedy and that the Bush family is tied to international criminal conspiracies. And he has peddled an allegation that Bill Clinton isn't the father of his daughter, Chelsea.

On the other side, Brock, once a harsh Clinton critic who changed camps, is close to top Clintonites and runs a political action committee supporting her. Like Stone, he is no stranger to political invective. As a right-winger, he attacked Anita Hill, the lawyer who testified against the Supreme Court nominee Clarence Thomas, as "a little bit nutty and a little bit slutty."

In the current Democratic primary, he blasted a Bernie Sanders ad featuring Iowa supporters -- they were mostly white, as is the state: "It seems black lives don't matter much to Bernie Sanders." He's also questioned the physical fitness of the Vermont socialist.

Stone v. Brock, the matchup boggles the mind.

Trump will focus on what he charges is Clinton's failed record as secretary of state. Her use of a private e-mail server also will be fodder, regardless of the outcome of any inquiry. And Republicans claim to have collected a plethora of new damning material on the Clinton Foundation and its donors. Presumably this will be shared with the Trump campaign.

But the New York billionaire instinctively, often effectively, gravitates to personal critiques. He already has declared that Bill Clinton's sexual past is "fair game," criticized Hillary Clinton's appearance and even said her going to the bathroom during a debate break was "disgusting." Republicans and Democrats alike expect the tone to worsen.

The Clinton camp can recycle some of the knocks that rivals such as Bush, Rubio and Cruz leveled against the Republican front-runner, though they had little impact. Democrats have collected a large Trump dossier including, they say, material that hasn't been public.

Both Trump and Clinton believe they can turn an ugly tone to their advantage. Maybe. But starting Jan. 20, the just sworn-in 45th president will pay a price.

Article Link to the Bloomberg View: