Tuesday, May 24, 2016

Tuesday, May 24, Night Wall Street Roundup: Banks And Tech Drive Wall Street Up Over 1 Percent

By Noel Randewich
May 24, 2016

Wall Street surged more than 1 percent on Tuesday and the Nasdaq had its strongest day in three months as investors made peace with the possibility that the U.S. Federal Reserve might soon raise interest rates.

Comments from policymakers in recent days have investors expecting a rate hike potentially in June, much sooner than previously thought, given sluggish economic growth.

Wall Street has benefited from historically low borrowing costs since the 2008 financial crisis and higher rates could choke further gains. But strategists on Tuesday said they were reassured by expectations the Fed would tighten borrowing costs only gradually.

"The market is starting to contemplate the idea that Fed rate hikes this year are A: more likely, and B: not inherently bad in and of themselves," said Bill Merz, an investment strategist with U.S. Bank Wealth Management.

Shares rose in the banking sector .SPSY, which stands to gain from higher interest rates. Bank of America (BAC.N), Citigroup (C.N) and JPMorgan (JPM.N) all rose more than 1.4 percent.

Microsoft (MSFT.O) jumped 3.12 percent and provided the biggest boost to the Nasdaq and S&P 500, while 3M Co's (MMM.N) 1.52 percent rise lifted the Dow.

It was the strongest session since March 1 for the Nasdaq Composite and since March 11 for the S&P 500. So far in 2016, the S&P 500 is up about 2 percent and the Nasdaq is down 3 percent.

Data on Tuesday showed new U.S. single-family home sales surged to a more than eight-year high in April and prices hit a record high, offering further evidence of a pick-up in economic growth.

The Dow Jones industrial average .DJI jumped 1.22 percent to end at 17,706.05 and the S&P 500 .SPX rallied 1.37 percent to 2,076.06. The Nasdaq Composite .IXIC surged 2 percent to 4,861.06.

Gains were broad-based, with all 10 S&P sectors rising and the tech sector .SPLRCT up 2.12 percent.

Late in the day, oil prices extended gains in post-settlement trading after data showed a much bigger-than-expected reduction in U.S. crude inventories.

Also after the bell, Hewlett Packard Enterprise (HPE.N) jumped 9.6 percent after it said it would spin off its Enterprise Services business and merge it with Computer Sciences Corp (CSC.N), which surged 25 percent.

During the session, Homebuilder Toll Brothers (TOL.N) jumped 8.71 percent after quarterly revenue beat expectations.

Twitter (TWTR.N) fell 2.64 percent after brokerage MoffettNathanson downgraded the company's stock to "sell" from "neutral".

About 6.9 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.

Advancing issues outnumbered decliners on the NYSE by 2,324 to 701. On the Nasdaq, 2,210 issues rose and 603 fell.

The S&P 500 index showed 29 new 52-week highs and one new low, while the Nasdaq recorded 87 new highs and 29 new lows.

U.S. New Homes Sales Hit Eight-Year High, Point To Firming Economy

By Lucia Mutikani
May 24, 2016

New U.S. single-family home sales recorded their biggest gain in 24 years in April, touching a more than eight-year high as purchases increased broadly, a sign of growing confidence in the economy's prospects.

Tuesday's report from the Commerce Department, which also showed a surge in new home prices to a record high, offered further evidence of a pick-up in economic growth that could allow the Federal Reserve to raise interest rates soon.

"Consumers are taking the leap and buying the biggest of big ticket items of their lives and this speaks to confidence. The Federal Reserve can raise rates at their June meeting without fear the economy is going to slow," said Chris Rupkey, chief economist at MUFG Union Bank in New York.

New home sales jumped 16.6 percent to a seasonally adjusted annual rate of 619,000 units, the highest level since January 2008. The percent increase was the largest since January 1992.

Data for February and March were revised to show 39,000 more units sold than previously reported. Economists had forecast new home sales, which account for about 10.2 percent of the housing market, rising to only a 523,000 unit-rate last month.

New home sales increased broadly, with the exception of the Midwest. April's increase, however, probably exaggerates the housing market strength given that homebuilders confidence has stagnated since rising in January.

New home sales are extremely volatile month-to-month and preliminary figures are subject to large revisions because they are mostly drawn from building permits data. Still, last month's gain pushed new home sales well above their first-quarter average of 531,667 units.

The new home sales report came in the wake of fairly upbeat data on home resales and residential construction. It also added to retail sales and industrial production reports in suggesting that the economy was gathering speed after growth slowed to a 0.5 percent annualized rate in the first quarter.

Minutes from the Fed's April 26-27 policy meeting, published last week, showed most officials considered it appropriate to raise rates in June if data continued to point to an improvement in second-quarter growth. The Fed raised its benchmark overnight interest rate in December for the first time in nearly a decade.

Housing Shares Rally

The PHLX housing index .HGX hit a one-month high on the new home sales data, with shares in the nation's largest homebuilder, D.R. Horton Inc (DHI.N), increasing 4.3 percent and Lennar Corp (LEN.N) jumping 4.7 percent.

Toll Brothers (TOL.N) shares vaulted 7.6 percent, also boosted by a nearly 31 percent surge in quarterly revenue after the homebuilder sold more luxury homes at higher prices.

The dollar was trading higher against a basket of currencies while prices for U.S. government debt fell.

The housing market is being underpinned by a tightening labor market, which is starting to lift wages, as well as still very low mortgage rates. But a shortage of properties available for sale remains a hurdle and house prices have risen faster than wages, sidelining some first-time buyers.

"The spring home buying season is in full swing as builders have been picking up steam through the first quarter," said Bill Banfield, vice president at Quicken Loans in Detroit.

"While the large jump in new home sales is encouraging, I would look for a normalization in the coming months that shows a slow but steady increase in the health of the housing market."

Last month, the inventory of new homes on the market fell 0.4 percent to 243,000. At April's sales pace it would take 4.7 months to clear the supply of houses on the market, down from 5.5 months in March.

With supply tight, the median price for a new home increased 9.7 percent from a year ago to a record $321,100. The average price rose 13.5 percent from a year earlier to $379,800. New single-family homes sales soared 15.8 percent in the populous South to the highest level since December 2007. In the Northeast, sales jumped 52.8 percent to their highest level since October 2007.

Sales in the West, which have been volatile in recent months, rose 18.8 percent after plunging 15.2 percent in March. The West has seen a sharp increase in home prices amid tight inventories. Single-family homes sales fell 4.8 percent in the Midwest.

Article Link to Reuters:

Tuesday, May 24, Morning Global Market Roundup: Asian Stocks Near 11-Week Lows, Dollar Bounces On Fed Rate View

By Saikat Chatterjee
May 24, 2016

Asian shares stumbled to near 2-1/2-month lows on Tuesday and the U.S. dollar pared some of its recent losses as investors worried about the likelihood of a U.S. interest rate increase in coming weeks.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS slid 0.5 percent, taking its losses to more than 7 percent so far this month and nearing its lowest levels since March 9.

Financial spreadbetters at IG expected Britain's FTSE 100 .FTSE to open 0.3 percent lower, Germany's DAX .GDAXI 0.2 percent and France's CAC .FCHI 0.4 percent.

"The market seems to be taking a cautious stance ahead of the Fed Chair Janet Yellen's speech later this week," said Jung Sung-yoon, a foreign exchange analyst at Hyundai Futures.

A string of comments in recent weeks by Federal Reserve officials and minutes of the last Fed meeting have put a possible rate hike firmly on the table for June or July, reviving the dollar but cooling appetite for riskier assets, even if markets are not totally convinced a tightening will come so soon.

Philadelphia Fed President Patrick Harker said on Monday that a hike in June is appropriate unless data weakens, while St. Louis Fed President James Bullard said holding rates too low for too long could cause financial instability.

With economic growth across emerging markets showing fresh signs of flagging - ratings agency Moody's expects growth in G20 emerging markets to ease to 4.2 percent in 2016 compared to 4.4 percent last year - investors are growing more bearish on the outlook for stocks.

Shares in China .SSEC and Japan .N225 led regional markets down with 0.7 percent losses each, though some investors were wary of chasing markets lower after their recent retreat.

Yang Hai, analyst at Kaiyuan Securities, said trading will likely remain dull for a while as economic sluggishness discourages investor participation.

"The current economic environment doesn't justify a sustainable rebound. In addition, regulators are reducing leverage in the asset management industry so money is not flowing in."

The dollar trimmed some of its losses against the yen after skidding nearly 1 percent in the previous session to a low of 109.12. It was last up 0.04 percent at 109.40 yen JPY=, moving back toward Friday's three-week high of 110.59.

Data on Monday showed Japan posted a trade surplus for the third consecutive month, and a Group of Seven finance ministers' meeting concluded on Saturday with a U.S. warning to Japan against intervention to weaken the yen.

But overall, the dollar was bolstered by growing bets that the Fed was gearing up to raise interest rates sooner than many investors had expected, despite signs of persistent global weakness.

"The yen gained as risk aversion overcame the Fed officials' hawkish views. Upward pressure on the yen was stronger due to weaker stocks and falling commodities," said Junichi Ishikawa, FX analyst at IG Securities in Tokyo.

"That said, the dollar index has stood tall overall amid a significant rise in the two-year U.S. Treasury yield. Trades preparing for a potential Fed rate hike in June are likely to continue."

Fed Chair Janet Yellen will appear at a panel at Harvard University on Friday, a day on which investors will also see the second estimate of U.S. first-quarter growth. Markets also await comments from other Fed officials this week, as well as data on new home sales, durable goods orders and consumer sentiment.

The dollar index, which tracks the U.S. unit against a basket of six major counterparts, was up a shade at 95.33, still within sight of Thursday's peak of 95.520, its loftiest level since March 29.

The euro edged down 0.1 percent to $1.1210 EUR=, holding above last week's low of $1.1180, its weakest since late March.

Crude oil futures stabilized after dropping on Monday as Iran vowed to ramp up output and as the number of rigs drilling for crude in the United States held steady after declining for eight straight weeks.

U.S. crude CLc1 slipped 0.2 percent to $47.91 a barrel, while Brent LCOc1 was off 0.3 percent at $48.21.

Article Link to Reuters:

Hillary Agonistes

Facing a free-wheeling Trump, she is weighted down by tons of baggage.

By Victor Davis Hanson 
The National Review
May 24, 2016

This year was supposed to be Hillary Clinton’s “turn,” after her humiliating loss in 2008 to Barack Obama. She has paid her dues as secretary of state for Obama. And the apparent Republican presidential nominee, Donald J. Trump, is written off by most pundits as a buffoon without a chance in the general election. Yet, Clinton’s campaign continues to be dismal, and is getting worse — to the point where the socialist Bernie Sanders polls better against Trump than does Hillary Clinton. How can that be?

At least eight reasons come to mind — several of them relating to Clinton’s innate character flaws and past scandals.

1) The E-Mail Scandal 

Although the FBI has not finished its investigation and sent its results and recommendations to the Obama Justice Department, most of the media and public have learned enough about the e-mail/server scandal to conclude that had any mid-level State Department or intelligence-agency employee emulated Hillary Clinton’s use of a private unsecured server — along with serial denials and lying about such use — he would have been fired and prosecuted.

Hillary’s exemption so far hinges entirely on the fact that she is the Democratic party’s only viable presidential candidate; her indictment would send the party into crisis, given that the committed socialist Bernie Sanders would be the most deserving to inherit the nomination. So her Sword of Damocles swings with public opinion. What keeps Hillary out of jail, or at least a plea-bargain, is her political viability, first as the likely Democratic nominee, and second as a presumable winner over Trump. But take either likelihood away, and she de facto loses exemption and becomes expendable — a fact that is well known to her and which cannot be an easy reality to face each morning. She is beginning to resemble a Third World caudilla who knows that the minute she loses power, so too she loses her head.

2) The Clinton Cash Shakedowns 

The Clintons left the White House broke, by their own admission, in 2001 and are now worth well over $100 million — lucre apparently predicated on the degree to which corporations and foreign governments believed that the phoenix-like couple would once again return to power, and would remain true to character as punishers of non-contributors and abettors of donors.

The couple founded the Clinton Foundation as a quid-pro-quo money-laundering enterprise designed to sell influence for cash and to keep Clinton, Inc., hangers-on and employees viable in between Clinton presidential runs. The key to the Ponzi scheme was that unlike Carter, Reagan, or the Bushes, the Clinton couple could dangle the idea that Bill was not term-limited by his eight years but could become reincarnated for another two terms under Hillary’s aegis — thus transforming what should have been an emeritus president into a retread with regenerative power to use the office to help or hurt the rich. It would require a suspension of disbelief to assume that companies or foreign governments gave millions of dollars to the Clinton initiative because they wished to help the poor and the sick. All benefactors knew that they were investing in influence, and the Clintons were selling it to the highest bidder in a way never true of any other presidential foundation. Never mind that such coziness with Big Money was antithetical to the progressive pretensions of the Democratic party and the Clintons’ own populist veneer. Each day over the next six months that there is a disclosure about yet another duplicitous donor or yet another pay-to-play scheme, so each day confidence in Hillary’s honesty and integrity erodes further.

3) Our First Female President

Hillary Clinton envisioned her candidacy as a trailblazing presidential precedent in the same way that Obama parlayed his racial ancestry into broad support in 2008. Clinton’s candidacy was to be in antithesis to Trump’s “war on women” crudity. But 2016 is not 1999, and Hillary is being hoist on her own petard by pandering to the new campus ethos that to accuse a man of sexual assault is to convict him — and that to stand by without vocal support for the accuser is an even worse sin. By her own new standards, then, her husband’s goatishness and her enabling of his sometimes coercive sexual behavior prove both guilty in the court of 21st-century gender jurisprudence. In short, Monica Lewinsky, Paula Jones, Juanita Broaddrick, and Kathleen Willey have all dulled the blade of Trump as crude sexist — and have nearly made Hillary’s own trailblazing gender card irrelevant. Unlike Trump’s ego-driven womanizing, which he crassly bragged about, Bill Clinton’s was covered up. And the Clintons reduced women who claimed that they were assaulted to the status of “bimbo,” “floozy,” and “stalker” — or, in the never-retracted words of media darling James Carville, “If you drag a hundred-dollar bill through a trailer park, you never know what you’ll find.”

4) Dorian Gray

Bill Clinton is as undisciplined as Trump, and seems intent on replaying his disastrous Freudian role from the 2008 campaign, when his reckless lecturing made it sometimes unclear whether he was not deliberately trying to sabotage his wife’s candidacy. This time around, he reappears on the campaign trail as a wraith-like Dorian Gray figure, as if all his sins are written on his face and audible in his raspy voice, rather than being confined to a portrait in the attic. One day he can gratuitously trash the Czechs and the Poles, the next Obama himself by references to the good old days of his own administration in comparison to “the last eight years.” He seems at times not so much out to help his wife, as baying at the moon that no one remembers all the great things he once did.

When Hillary channels Bill’s narcissism, she ends up ridiculously promising to turn over the economy to her husband — thereby achieving a threefer gaffe: suggesting that, even as president, she will still need a strong male to run the most important aspect of her administration; that Bill can do what Obama could not the last two presidential terms (why not instead promise to give us more of the supposedly great eight years of Obama economic stewardship?); and that she is not so estranged, after all, from her sexually exploitative husband. (Does she wish to reclaim ¼, ½, or ¾ of Bill Clinton as husband and partner?)

5) Obama

No candidate of the same party as the incumbent president quite knows how to run. The result is often mush, like the 1988 sloganeering of a “kinder, gentler nation” by George H. W. Bush, who yet alone, after Truman, in the postwar era pulled off a twelve-year continuum. In Hillary’s case, she does not seem to want to run on Ben Rhodes’s foreign policy, Jonathan Gruber’s Obamacare, Lois Lerner’s IRS, Lisa Jackson’s EPA, Eric Holder’s Justice Department, or Barack Obama’s racial healing. And yet she needs Obama’s hard-left base. So far she has rejected her 2008 Annie Oakley, Reagan-Democrat schtick, gambling that her Black Lives (alone) Matter and transgenderism pandering can ensure that she will match Obama’s historic share of the minority vote. But so far it seems just as likely that she will lose more voters among the white working class than she can lease from Obama’s core. And, of course, for a while longer, her obsequiousness to the Obama record is not just political calculation but, given her server problem, self-interested legal prudence as well. Finally, Obama nears 50 percent approval in the polls only to the degree to which he withdraws into his accustomed levity and is rarely seen or heard. The ecumenical idea of Obama is tolerable, the reality not so much. When he returns to sermonizing, his polls drop. His help to Hillary is found in being neither seen nor heard.

6) Sanders

Clinton thought Sanders would be a good warm-up fighter, in the fashion that Muhammad Ali used to fight chumps in between his landmark matches. But the 74-year-old Vermont socialist has eroded both Clinton’s youth vote and the proverbial rock-solid upscale single-woman vote. Had Sanders, in self-righteous fashion, not foolishly renounced early on using the legitimate e-mail scandal against Clinton, he might well have achieved a brokered convention.

Bernie Sanders — older, farther to the left, and with less money and insider leverage — remains a constant reminder of just how poor Hillary Clinton is on the stump and just how anti-democratic the Democrats’ superdelegate system has proven. There is a real chance of a street-circus implosion reminiscent of the 1968 Democratic Chicago convention. The feeble way in which the Clintons and ossified figures like Ed Rendell and Barbara Boxer deal with progressive insurrectionists reminds us just how far left Obama has taken the Democratic party and why he will leave office with it largely in shambles, at least in terms of lost senators, representatives, governors, and state legislators over his eight-year tenure. The Sanders candidacy and its focus on the superdelegates can only remind the public once again that Hillary is untrustworthy and fundamentally dishonest — even as he has drawn her further leftward, and with little time to bounce back to the center for the general election.

7) Trump

Trump is many things. But he is not the fascist that neo-cons now rail against (their warnings of constitutional usurpation ironically far better apply to the concrete record of the last eight years, in which Obama has simply suspended enforcement of federal law whenever he found it politically convenient to do so, and either has turned government agencies — IRS, ICE, EPA, NSA, VA, NASA, the Secret Service — into rogue extensions of the White House or staffed them with partisan incompetents). In truth, Trump has no delineated agenda, nor is he doctrinaire in the fashion of a 20th-century European demagogue. Instead, his message is unscripted bombast, and it runs on emotion, not ideology, geared not to some grand autocratic vision but to how to stay ahead of the 24-hour news cycle and channel and exploit the venom Americans feel for Washington elites. Trump has tossed a ball and chain into the wide screen of the political establishment and shattered the glass. No one — not his 16 former Republican rivals nor Hillary Clinton — knows quite how to handle him, since he can say or do anything on any given day that no other candidate would even contemplate.

Older than Clinton, Trump comes across as far more vigorous and vital; he’s a loudmouth, but his voice is not shrill and screeching as is Clinton’s; his political incorrectness both offends and attracts, while her political correctness merely bores and has rendered her a caricature of an opportunistic toady. A wheeler-dealer roguish businessman, Trump is not yet facing criminal indictment; a lifelong government apparatchik, Clinton is courting a rendezvous with the law. Clinton still fakes regional accents; oddly, the orange-haired, combed-over Trump never does. When Trump is caught lying he often just shrugs and says without shame that he has changed his opinions; when Clinton is caught lying, she denies the lying and usually attacks the questioner. In the end, Trump makes it appear that hosting The Apprentice leads to far better political instincts than Yale Law School and the subsequent establishment CV.

8) The Record

Clinton plans to run on having a record of government service, while Trump has none. But this year the government dossier can be a liability as much as an advantage. It is difficult to imagine quite how the former secretary of state could use the war on terror, Russian reset, Syria, or Benghazi to reassure the public. Clinton will not campaign on her strategy against ISIS or the disastrous pullout from Iraq. Nor was she a stellar senator. With Trump we fear what he might do; with Clinton we know all too well what she has done. It is always worse to be sick than to fear becoming sick.

Clinton is waging wars on all fronts. Pundits for nearly a year have assured us that the polls prove Trump cannot win, and that the Republicans blew a historic opportunity to capture all three branches of government. Perhaps. But what is left unsaid is that Hillary Clinton is not only the sole viable Democratic candidate, but perhaps the weakest Democratic nominee in memory, lacking the energy of Hubert Humphrey, the sincerity of George McGovern, the affability of Walter Mondale, the decency of Michael Dukakis, and the emotion of vein-busting Al Gore — losing presidential candidates all.

Article Link to the National Review:

America Made Its Own Bed, Not China

By Stephen Roach
Project Syndicate
May 23, 2016

NEW HAVEN – US politicians invariably bemoan trade as the enemy of the middle class, the major source of pressure on jobs and wages. The current presidential campaign is no exception: Republicans and Democrats alike have taken aim at both China and the Trans-Pacific Partnership, holding them up as the scourge of beleaguered American workers. While this explanation may be politically expedient, the truth lies elsewhere.

When it comes to trade, as I recently argued, America has made its own bed. The culprit is a large saving deficit; The country has been living beyond its means for decades and drawing freely on surplus saving from abroad to fund the greatest consumption binge in history. Politicians, of course, don’t want to blame voters for their profligacy; it is much easier to point the finger at others.

The saving critique merits further analysis. The data show that countries with saving deficits tend to run trade deficits, while those with saving surpluses tend to run trade surpluses. The United States is the most obvious example, with a net national saving rate of 2.6% in late 2015 – less than half the 6.3% average in the final three decades of the twentieth century – and trade deficits with 101 countries.

The pattern also holds true elsewhere. The United Kingdom, Canada, Finland, France, Greece, and Portugal – all of which have large trade deficits – save much less than other developed countries. Conversely, high savers like Germany, Japan, the Netherlands, Norway, Denmark, South Korea, Sweden, and Switzerland all run trade surpluses.

Saving imbalances can also lead to destabilizing international capital flows, asset bubbles, and financial crises. That was the case in the run-up to the financial crisis of 2008-2009, when global saving imbalances, as measured by the disparities between countries with current-account deficits and surpluses, hit a modern record. The asset and credit bubbles fueled by those imbalances brought the world to the brink of an abyss not seen since the 1930s.

Here, too, there is considerable finger pointing. Deficit countries tend to blame the yield-seeking “saving glut” that sloshes around in world financial markets. As former US Federal Reserve Chairman Ben Bernanke put it, if only countries like China had spent more, the bubbles that nearly broke America would not have formed in the first place. Others have been quick to point out that America’s supposed growth miracle probably could not have happened without the capital provided by surplus countries.

The prudent approach would be to strike a better balance between saving and spending. That is particularly important for the US and China, which together account for a disproportionate share of the world’s saving disparities. Simply put, America needs to save more and consume less, while China needs to save less and consume more. To succeed, both countries will have to overcome entrenched mindsets.

On this front, China has been leading the way, with a strategy of consumer-led rebalancing that it introduced five years ago. The results so far have been mixed, as inadequate funding of a social safety net continues to temper the support to household incomes provided by services-driven job creation and urbanization-led increases in real wages. But China has lately shown a commitment to addressing this shortcoming. Its recently enacted 13th Five-Year Plan aims to dampen fear-driven precautionary saving through interest-rate liberalization, the introduction of deposit insurance, the loosening of thehukou residential permit system (which would improve benefit portability), and relaxation of the one-child family planning policy.

The US, however, is headed in the opposite direction. There is no interest in debating the saving issue, let alone implementing policies to address it. A pro-saving US policy agenda should draw on the following: longer-term fiscal consolidation, expanded IRAs (individual retirement accounts) and 401Ks, consumption-based tax reform (such as value-added or sales taxes), and interest-rate normalization. Instead, US politicians continue to focus on keeping the consumption binge going, regardless of its implications for America’s saving imperative.

The asymmetrical response of the world’s two largest economies to their respective saving dilemmas has far-reaching consequences. To the extent that China makes progress on the road to consumer-led rebalancing, it will shift from surplus saving to saving absorption. Already, China’s gross national saving rate has declined from a peak of 52% of GDP in 2008 to around 44% this year. It should fall further in the years ahead.

The US, long locked in a codependent economic relationship with China, cannot afford to ignore this shift. After all, along with reduced current-account and trade surpluses, China’s consumer-led shift to saving absorption likely entails diminished accumulation of foreign-exchange reserves and reduced recycling of those reserves into dollar-based assets such as US Treasuries.

To the extent that America fails to boost its domestic saving, the lack of Chinese capital may well force the US to pay a steeper price for external financing, through a weaker dollar, higher real interest rates, or both. Such are the classic pitfalls of codependency: when one partner alters the relationship, there are consequences for the other.

No country can prosper indefinitely without saving. Holding the world’s reserve currency, America has gotten away with it, largely because the rest of the world let it. After all, the enablers – especially export-led economies like China, along with its resource-dependent supply chain – benefited from America’s consumption binge, as it drove an outsize expansion of global trade.

But those days are numbered. American voters – especially disenfranchised, angry middle-class workers – increasingly recognize that something does not add up. Yet US politicians continue to deflect the electorate’s anger outward, dismissing the growth subsidy that accompanies the “kindness of strangers.” It is time for politicians to own up to the uncomfortable truth: The saving deficit is the single greatest threat to the American Dream.

Article Link to Project Syndicate:

Why Is Obama’s Patsy Trump’s Pal?

By Jonathan S. Tobin
May 24, 2016

Senator Bob Corker went to Trump Tower today to pay court to the new leader of his party and the meeting engendered some understandable speculation from political observers. Was the chair of the Senate Foreign Relations Committee under consideration for the Republican vice presidential nomination? Is he a potential secretary of state in a Trump administration? We don’t know the answer to those questions but it is reasonable to infer from Trump’s apparent comfort with Corker that either post is a possibility for the Tennessee senator. But whether or not Corker gets tapped for veep or the State Department, his influence raises some interesting questions about the future of American foreign policy in a putative Trump administration.

On its face, Trump making nice with a pillar of the Republican establishment in the Senate makes sense. If Trump is looking, as he says he is, for someone who knows how Congress works and can deal with the powers that be, Corker was always going to be among those looked at as being able to fill the bill. He is a generally considered a moderate Republican with a good relationship with most of his colleagues and somebody who works well with Democrats.

But the real reason why Corker is suddenly so cozy with the Donald is that he was among the first members of the GOP establishment to start publicly drinking the Trump Kool-Aid. While most Republicans reacted to Donald Trump’s first major foreign policy speech with incredulity if not open dismay, Corker gave the candidate’s incoherent and largely inconsistent triptych an enthusiastic “atta boy.” But in doing so, he said more about himself and his most important acts during his tenure at the Foreign Relations Committee than about Trump.

In endorsing Trump’s speech, Corker did more than grant a patina of respectability to the mantra of “America First” in which the presumptive GOP nominee provides a rationale for the xenophobic fear mongering that he has been spouting since last summer. He also wholeheartedly embraced the notion that what he called the “foreign policy establishment” needs to be overturned and replaced.

What exactly does that mean? Answering that is as difficult as parsing Trump’s policy prescriptions that embraced at one and the same time, trade wars, an abandonment of American allies and alliances like NATO, appeasement of Russia, withdrawing from the Middle East while also tearing up the Iran nuclear deal and “kicking ISIS’s ass.”

But one thing we do know about it is that it explains some of Corker’s otherwise puzzling behavior last year while being the putative leader of the opposition to that same nuclear deal in the Senate last year. It was Corker, more than any other senator, who laid the groundwork for the defeat of efforts to stop the pact by agreeing to Democratic demands that a vote on the deal would allow it not to be treated as a treaty which the Constitution demands requires a two-thirds vote for ratification. The result of Corker’s machinations was that the most important foreign treaty negotiated by the U.S. since the fall of the Berlin Wall was able to pass via a Senate filibuster.

During the course of the negotiations over that bill as well as the debate over the bill later in the year, Corker gave us an illustration of why an ability to work with people on the other side of the aisle isn’t always a virtue. At the time it appeared that the Democrats and President Obama were playing Corker like a piano at every stage of the battle over the administration’s successful effort to grant international legitimacy to Iran’s nuclear program while making it a near certainty that it would get a weapon once the weak agreement expired in a decade. When Trump and other Republicans complained in the last few months about what a terrible deal the U.S. got with Iran, they also needed to acknowledge that among the guilty men who did the most to ensure this terrible bargain wasn’t stopped was a member of their own party.

The irony was that the biggest break Obama got in spiking opposition to his signature foreign policy achievement was the Republicans’ capture of the Senate in 2014 which meant that Corker moved up to the chairmanship of the Foreign Relations Committee. Until then New Jersey Democrat Bob Menendez who was probably the fiercest opponent of the president’s Iran policy in the Senate had led the committee. Menendez’s relegation to ranking member and then his defenestration due to a timely Justice Department ethics charge resulted in his replacement by the more accommodating Ben Cardin. Neither Corker nor Cardin were eager to confront the president on Iran and what followed during 2015 illustrated what it means when the White House has pliable partners on the Hill.

It was difficult for many Republicans to explain Corker’s behavior. One possible answer was that he was just a fool who was easily manipulated both by his Democratic partners as well as by the White House propaganda machine on Iran that Ben Rhodes has been bragging about recently. But if Corker agrees with Trump’s “America First” blather, then it is also possible that he just wasn’t that upset about the nature of the deal he was lying down for. Of course, Corker said he was against the deal even as he was helping it pass. But just as Trump’s condemnation of the pact as a terrible deal doesn’t square with his neo-isolationist unwillingness to confront Iran in the Middle East, there is some method to the inconsistent madness. Both men are so eager to disavow a more interventionist foreign policy that they are forgetting or just indifferent to the fact that their retreat will aid Iran’s dangerous push for regional hegemony.

The fact that Obama’s patsy is now Trump’s best pal makes sense because, once you discard the obligatory condemnation of the president in Trump’s pronouncements, there is, in some crucial respects, no real difference between their foreign policies or their hubristic faith in the magic of their own personalities.

There may well be other, wiser influences on Trump if he wins in November. Or at least otherwise sensible Republicans who are being good partisan soldiers and lining up behind their party’s candidate ought to hope so. But Corker’s place in Trump’s inner circle, if that’s where he is these days, is as troubling as the inconsistencies in his foreign policy address.

Article Link to Commentary:

Will The Dem Platform Dump Israel?

By Jonathan S. Tobin
May 23, 2016

One of the most absurd moments of the 2012 National Democratic Convention was when officials sought to rectify an omission in the draft of the party’s official platform. The original language, as produced by the platform committee, failed to reaffirm a commitment to supporting Jerusalem being the capital of Israel, prompting a firestorm of criticism from Republicans and pro-Israel groups. But then convention chair Antonio Villaraigosa, acting under orders from the Obama campaign, which was in the middle of an election-year Jewish charm offensive, attempted to insert new language into the platform that simply said, “Jerusalem is and will remain the capital of Israel,” by a voice vote. The arena in Charlotte echoed with shouts of “no!” Villaraigosa tried three times to get the result he wanted before finally — and falsely — declaring that the ayes had it anyway.

But as foolish — and embarrassing — as that moment was for pro-Israel Democrats, what awaits them in Philadelphia this July when they gather for their next convention may be far worse. As the Washington Post reported last week, the Sanders campaign is planning to push for new language in the Democratic Platform that shifts the emphasis away from stalwart support for Israel and toward prioritizing Palestinian rights in an effort to form a more even-handed approach to the Middle East conflict. If they get their way, it will be a clarifying moment that will indicate just how far the party has drifted from its former stance as a dependable defender of the Jewish state. It may also give ammunition to Republicans trying to argue that, despite his widely inconsistent foreign policy statements and stances, Trump is the better choice for president from the perspective of friends of Israel.

That 2012 convention moment epitomized the shift within the Democratic Party whereby much of its liberal base had moved away from support for Israel. The people shouting “no” were not then or even now representative of the opinions of the majority of voters who identify as Democrats. The most recent Pew Research Center poll on American opinion about the Middle East indicated that a plurality of Democrats backed Israel over the Palestinians by a margin of 43 to 29 percent. But those convention delegates were party activists who represent the sort of rank and file left-wingers who go to conventions and provide the legwork and muscle for the Democratic Party around the country. The question facing the party now, however, is how hard the Hillary Clinton camp will fight Sanders on the issue of Israel and whether a convention where the challengers will be both numerous and itching for a chance to teach the nominee and the party establishment a lesson will be able to turn back this attempt to distance Democrats from Israel?

Sanders claims he is “100 percent pro-Israel” and claims that his support for “Palestinian rights” should not be interpreted as an attack on Israel’s right to exist. But Sanders’ approach to the conflict is actually anything but supportive of Israel. His claim that Israel’s counter-attacks against terrorists shooting rockets and using tunnels for cross-border murder and kidnapping raids were “disproportionate” illustrates just how much his stance is influenced by misleading Palestinian propaganda. Those who say that Israel has a right to defend itself but then denounce its attempts to do so and, in effect, grant Hamas terrorists impunity to not only rain down missiles on cities but also to use civilians as human shields are undermining the Jewish state’s existence and the rights of its people.

Moreover, the notion that the U.S. must be “even-handed” with respect to the conflict does not promote peace since the purpose of such a policy is to isolate Israel and force it into concessions that its people rightly reject as suicidal. Such calls for more emphasis on support for the Palestinians also ignore a basic fact of the conflict: only one side wants peace. The Palestinians have repeatedly rejected Israeli offers of statehood and independence that would have given them control of almost all of the West Bank, a share of Jerusalem, as well as Gaza, which already operates as an independent state that is ruled by Hamas in all but name. Their goal, openly expressed by Hamas and guardedly so by the Fatah Party that runs the Palestinian Authority in the West Bank, is the end of the Israeli “occupation.” But by that, they don’t just mean the Jewish presence in the West Bank or even Jerusalem but the “occupation” of all of the country, including pre-June 1967 Israel.

The problem is that any further “daylight” between the U.S. and Israel — the initial goal of an Obama administration that thought achieving more distance between the two allies was the key to peace — merely encourages the Palestinians to be more intransigent, not more accommodating. If the U.S. — or one of its two major parties — were to further embrace an “even-handed” approach to the conflict, it would be a signal to the Palestinians as well as to Islamists in Iran and elsewhere that their efforts to eliminate the Jewish state are gaining ground.

In this context, speaking of “Palestinian rights” isn’t an expression of concern for the people of the West Bank, who live under the despotic rule of kleptocrats that encourage terror, or the people of Gaza, who live under hard-core Islamist terrorists. The only way to advance the cause of these people is to convince them and their leaders to make peace with Israel. But so long as they persist in seeing their national identity as inextricably linked with a century-long war on Zionism, and refuse to recognize the legitimacy of a Jewish state no matter where its borders are drawn, peace is impossible.

If the Democrats and the Republicans (among whom support for Israel runs at a far more lopsided 75 to 7 percent rate) want to express sympathy for the Palestinians they should emphasize their need to make peace with Israel, not issue vague appeals for rights. The only issue that is in question is Palestinian right to try to destroy Israel and to pursue that goal with bloody campaigns of terrorism. Those like Sanders, whose wild smears of the Israeli army exceed even the lies put forward by Hamas, represent a point of view in which Israel is not only unfairly attacked, but its status as the only democratic ally of the U.S. is ignored.

A Democratic platform fight will leave us with two questions.

One is whether the Clinton camp has the strength or the will — despite her status as the certain presidential nominee — to successfully resist Sanders’ pro-Palestinian push. Given the strength and the passion of the left-wingers who will be in Philadelphia fighting for Sanders, that’s far from certain.

The second question is, will a Democratic platform that de-emphasizes support for Israel, or the spectacle of a nasty floor fight over this will have any impact on the election?

Despite her own checkered past with respect to Israel, Clinton has made her differences with Sanders over Israel clear in the past months. If the platform isn’t what she wants, she’ll ignore it the same way presidential candidates — and presidents once they’re elected — always ignore platforms.

Nor would a pro-Palestinian platform have much effect on the votes of most American Jews. The overwhelming majority are liberals and die-hard Democrats. Even those who are not partisans will be less inclined to defect to the GOP in the year of Donald Trump. Clinton’s percentage of the Jewish vote will probably easily exceed the totals won by Barack Obama and move it back into the vicinity of 80 percent after dipping below 70 in 2012.

But even though it probably won’t affect the outcome this year, a platform fight about Israel will be a seminal moment in the history of U.S.-Israel relations. It may be that left-wingers like Peter Beinart are right, and the Democrats are moving inexorably toward nominating an anti-Israel presidential candidate whose positions will conform to the opinions of a liberal base that rejects the Jewish state. In past years, Democrats have accused Republicans of using the issue as a political football by claiming that their party was more supportive of Israel. That charge seemed foolish after Congressional Democrats abandoned Israel on the question of the Iran nuclear deal in order to comply with a partisan litmus test exacted by Obama. But after this summer, it may no longer be possible for Democrats to argue that they are just as supportive of Israel as the GOP. Instead of pointing to their own records, Republicans will be able to just point to the Democratic platform.

Article Link to Commentary:

Trump's Coalition Of The Unwilling

By Margaret Carlson
The Bloomberg View
May 24, 2016

Oh, how the mighty are falling in line, if not in love. The most stalwart Donald Trump deniers among establishment Republicans are clambering to get on board. Support is a depreciating asset: Wait until the train leaves the station at the Cleveland convention and you’ll get little for swallowing your pride, abandoning your conscience and stifling your fears.

A corollary of that is that the higher-placed the opponent, the more valuable the capitulation. That’s why Senator Lindsey Graham getting with the program over the weekend is so important. It’s part of bringing a divided party back together. Without that, it is hard to win. What should worry Hillary Clinton are new polls showing that Trump is within three points of her. More worrying for her is the speed at which the Republicans are coming together: In an NBC-WSJ poll, Trump is winning among Republicans over Clinton 86 percent to 6 percent, up from 72 percent to 13 percent a month ago.

Complete capitulation by Graham is unlikely but acceptance of Trump by the most outspoken Never-Trump senator is a notable step toward a united convention in July. You may remember that Trump lashed out at Graham by giving out his private mobile-phone number, and that Graham responded by destroying said phone in front of TV cameras.

Throughout the campaign, as a conservative in good standing, Graham’s biting criticisms carried weight. He called Trump a "race-baiting, xenophobic, religious bigot" in December. A few weeks later, in January, Graham said he would support neither Trump nor Senator Ted Cruz -- a choice he said was like deciding whether to be "shot or poisoned." By March, when it looked like nothing was working to stop Trump, he threw his weight behind Cruz. Apparently, given the choice, he did prefer one kind of death over another.

Graham’s desperate move to Cruz didn’t work but he stood firm. Even as Trump clinched the nomination, Graham wasn’t having any part of it. As recently as the beginning of this month, Graham said he wouldn't support his party's presumptive nominee. "I do not believe he is a reliable Republican conservative nor has he displayed the judgment and temperament to serve as commander in chief," Graham said, adding that Trump had "conned" the party.

Count Graham now in the conned column. A few moments on his new mobile phone with the Trumpster and Graham wants to let bygones be bygones. The shift started Friday when Graham said on CNN that he had a "cordial, pleasant” call from Trump in which they talked about national security, the scariest of Trump’s governing shortfalls and an area he needs all the tutoring he can get. Graham can’t abandon his past, vivid feelings about Trump altogether and so he didn’t. "My criticism has been wide and it's been deep but we did have a good conversation," he said. "He asked good questions.”

Hmmmmm. That’s not a lot to hang a change of heart on but when you want to come around, any fig leaf will do. The usually sober Senate Foreign Relations Committee Chairman Bob Corker softened after Trump’s first speech on foreign affairs. Trump, who’d pronounced himself his best adviser, did not garner good reviews, with most experts calling the speech incoherent at best, but Corker said it was "very thoughtful." Senator Kelly Ayotte, in a tough re-election race in New Hampshire, hedged her bets by making a distinction without any meaning. She “supports” but is not “endorsing” Trump. And so it goes.

True enough, Clinton will unite her side when the primaries are over. But that comes with an asterisk that Trump doesn’t have to deal with. Trump had no one person among his 16 opponents for the nomination leading a movement. Clinton has one such person, Senator Bernie Sanders, a figure who’s accrued a devoted following among young people. A recent ABC-Washington Post poll shows Clinton is losing 20 percent of Sanders’s supporters. Compare that to the 11 percent of Republicans who supported someone other than Trump for the nomination. It’s not that the 20 percent isn’t going to show up for Clinton. They say they will show up to vote for Trump.

There are holdouts -- the Bush family, Mitt Romney, the freshman Senator Ben Sasse, and the hemming and hawing House Speaker Paul Ryan -- but there’s pressure coming from peace-at-any-cost Republican National Chairman Reince Priebius to come around now.

Within 24 hours of his CNN appearance, Graham’s inclination not to endorse Trump had melted to the point where he was urging others in the party to do so. At a private fundraiser in Florida, Graham urged Republicans to back Trump, saying that any doubts they have should be erased by the greater evil of having a Clinton back in the White House.

Graham’s press secretary, Kevin Bishop, confirmed that the senator attended a fundraiser in Florida on Saturday but didn’t confirm the remarks, though attendees did so to CNN. Bishop said that Graham is not supporting the third-party run some conservatives are organizing, adding that an explicit Graham endorsement wouldn’t necessarily help Trump.

Count among other holdouts some major donors, according to the New York Times, including the very articulate investor Michael Vlock. Explaining his closed wallet, he said of Trump: "He’s an ignorant, amoral, dishonest and manipulative, misogynistic, philandering, hyper-litigious, isolationist, protectionist blowhard."

Graham couldn’t have said it better -- a few weeks ago. As a moth is drawn to the flame, politicians are drawn to power. For his early and flattering remarks, Corker has joined the short list of vice-presidential possibilities. There will surely be more to follow. Little Marco told a Miami radio station that he’d always said he would support the Republican nominee, especially given that the likely Democratic candidate is Clinton. Lyin Ted is having a hard time getting over, well, being called Lyin Ted among other things, and has not yet folded.

But, every day and with greater speed, there will be others who short of falling in love will fall in line.

Article Link to the Bloomberg View:

Trump’s Short List Of Vice Presidential Candidates

By Reuven Fenton and Carl Campanile
The New York Post
May 24, 2016

Donald Trump has begun lining up candidates for the ultimate job interview — his vice- presidential running mate.

The presumptive Republican presidential nominee is considering a list that includes a retired general and some of Washington’s most powerful lawmakers.

One of the most talked-about candidates on the billionaire’s short list is Tennessee Sen. Bob Corker, who met Monday with The Donald at Trump Tower in Manhattan.

Corker emerged from the 80-minute meeting claiming there was no reason to believe he’s on Trump’s short list — exactly what a VP candidate is supposed to say.

“We had actually never met before. . . We had a conversation,” Corker told reporters. “It was a good meeting about foreign policy, domestic issues.”

Corker, who is chairman of the Senate Foreign Relations Committee, said he and Trump discussed US relations with China and Russia. Corker would bolster Trump’s perceived weakness on foreign affairs.

Sources said Alabama Sen. Jeff Sessions — one of Trump’s earliest supporters — also is under consideration. Sessions’ views on immigration match Trump’s.

A surprise name on the list is retired Lt. Gen. Michael Flynn, a national security adviser to Trump who has emerged as one of the most buzzed about veep contenders, sources familiar with the deliberations said.

Flynn retired in 2014 after a 33-year career in military intelligence that included hunting down terrorists as director of the Defense Intelligence Agency.

Flynn would be an out-of-the- box choice because Trump has strongly suggested he would likely select someone connected to Congress or with elective experience to be his veep.

“I think I’ll probably go the political route,” Trump said this month on MSNBC’s Morning Joe. “Somebody that can help me with legislation and somebody that can help me get things passed and somebody that’s been friends with the senators and the congressmen and all.”

But, like Trump, the military man is not afraid to stir up controversy.

In February, Flynn said Hillary Clinton should drop out of the presidential race while the FBI investigated her use of a private e-mail server.

“If it were me, I would have been out the door and probably in jail,” Flynn told CNN.

The Clinton campaign brushed off Flynn’s comments as “silly.”

Trump campaign manager Corey Lewandowski on Monday declined to discuss specific names being considered for vice president.

“We’re not going to go down that route. Mr. Trump is going to be the person making the final decision,” he said.

Lewandowsky emphasized that Trump prefers “someone with elective experience,” which would make Flynn a dark horse.

He said Trump’s meeting with Corker focused mostly on “foreign-policy discussions,” not the vice presidency.

During a recent interview with Fox News host Greta Van Susteren, Trump suggested as many as seven candidates were on his veep list.

He said former Arizona Gov. Jan Brewer and Oklahoma Gov. Mary Fallin could be contenders.

Meanwhile, former House Speaker Newt Gingrich is pushing for consideration in the veepstakes, sources said.

Article Link to The New York Post:

How They Sold Us The Iran Deal

The first lesson from how the Iran deal was sold to the public is that it is important to follow the money.

By Seth J. Frantzman
The Jerusalem Post
May 23, 2016

Eight hundred eleven op-eds. Three hundred fifty- two letters to the editor. Two hundred twenty-seven editorials. That’s the number of “pro-diplomacy” articles that Ploughshares Fund takes credit for helping support as part of its “proactive” media campaign to support the Iran deal last year. They “were published during critical moments of the Iran campaign,” the website of the fund boasts in its 2015 annual report.

The revelations about the work that this one fund did to support the deal is just part of a larger story now being revealed in the US about how the government worked with NGOs to sell the Iran deal. NGO funding went to organizations such as National Public Radio and the “pro-peace” Israel lobby group J Street.

The Iran deal is done. But understanding just how the wool was pulled over our eyes is necessary so that future “deals” of this sort can be challenged at their source. When one looks back at how US public support was influenced, it should serve as both a lesson about how the government works through its non-profit allies and about how public opinion can be manipulated and consent manufactured.

The first lesson from how the Iran deal was sold to the public is that it is important to follow the money. Bradley Klapper at the Associated Press notes, “Outside groups of all stripes are increasingly giving money to news organizations for special projects or general news coverage... Ploughshares’ backing is more unusual given its prominent role in the rancorous, partisan debate over the Iran deal.”

The fund gave money to the Arms Control Association, Brookings Institution, Atlantic Council, J Street, the National Iranian American Council and Princeton University. In short, if you supported the Iran deal in 2015, it might have been a good deal financially. The funding from this one fund may be only the tip of the iceberg of the overall funding that went in to pushing this deal. Kate Gould of the Friends Committee, the lobbying arm of the Quakers (which supported the deal), is quoted as saying that the “Ploughshares campaign is the most high-impact coalition effort I’ve ever witnessed in Washington.”

Everyone should read through the rest of the 2015 Ploughshares annual report to get a glimpse of the network involved in pushing this Iran agenda. It symbolizes the larger phenomenon of how supposedly “non-governmental” civil society actually works to push government policy. It also illustrates how well-funded networks of powerful, influential players work in synergy in Washington policy circles and throughout the media to push agendas.

Citizens of a democracy are in some ways at the mercy of these powerful networks, and when the government and non-governmental groups and media all work in concert to push something like the Iran deal, the average citizen has very little say in the matter. Citizens of a dictatorship, such as Iran, have even less.

Whereas in a democracy there may be pushback and open debate, in Iran there is none. That means there are no non-governmental groups fighting for minority rights, or encouraging peace, or fighting against the daily intolerance, chauvinist nationalism and religious extremism. Women in Iran are harassed by the government for how they dress on Instagram, minorities such as the Baluchis or Zoroastrians and Baha’i face brutal discrimination.

Yet Americans swallowed an agenda that pushed a sugar-coated view of Iran last year.

In the US those opposing the deal were painted as “warmongers.” Chuck Schumer was depicted in a cartoon, titled “shame on Schumer,” as a woodchuck “rejecting the peace deal.” As the “woodchuck” character he is shown with an Israeli flag behind him, with a commentator saying “traitor says what.” The thinly veiled attempt to paint him as a dual-loyalty “traitor” for opposing the deal was only part of the “Iran deal or war” narrative pushed last year.

Americans were told by the Obama administration that “without a deal there will be war.” Lawrence Wilkerson wrote at US News and World Report that “if the US rejects the Iran deal it would be alone in bombing or invading.”

Why was war presented as the overall alternative? How was the strongest nation in the world convinced that if it didn’t do a deal with Iran, it would be “forced” to go to war? By 2015 the US and Iran were already warming relations in their similar views of the threat of Islamist State to the region. There was no talk of war, until the pro-deal agenda told people that no deal would mean war. The real warmongers were those pushing the deal in a carefully constructed narrative, surely focus-grouped, to scare Americans.

It’s a bit like a Mafia protection racket. The very people scaring the American people about war were the ones trying to sell them a “peace” deal, when in fact Iran posed little danger of war and the US administration had never considered war as an alternative.

J Street’s ad in The New York Times said the deal “makes the US and Israel safer.” The decision by J Street to join the pro-deal agenda in retrospect seems carefully orchestrated by the administration.

Obama was quoted by the BBC as saying that “every country in the world, except Israel” supported the deal. Since Israel and pro-Israel groups were against the deal, what better way to neuter them then to use another “pro-Israel” group against them? And it worked phenomenally: the pro-Israel lobby’s antideal efforts were a miserable defeat.

It’s easy to be pro-diplomacy. But who benefits in this case? Iran potentially got billions of dollars, renewed trade and legitimacy and an ability to continue to fund its proxy wars. Remember how the decision to “inspect” Syria’s chemical weapons was lauded as a “landmark diplomatic victory”? A victory for Syrian President Bashar Assad, even though the US took credit for it? On May 17 it was alleged that Syria had once again used sarin gas “for the first time since 2013.”

But wasn’t the deal supposed to dispose of Syria’s chemical weapons? The “victory of diplomacy” narrative always means victory for a regime. When it comes to things like chemical or nuclear weapons or suppression of human rights, diplomacy aids the aggressor. If your neighbor builds a fence on your lawn, the longer you use “diplomacy,” the longer the fence remains.

Iran built a nuclear program, then scared everyone into negotiating with it lest it “go nuclear,” and obtained everything it wanted through this weird “war” blackmail, even as it continued to increase its power. Assad’s only lesson from 2013 is that he can do what he wants and get away with it.

If you still think that the Iran deal was some great diplomatic breakthrough, avoiding war, just read what the Iranians themselves were recorded as saying in secret US diplomatic cables revealed via Wikileaks.

A 2006 cable from the UAE noted that the conservative leaders in Tehran manufactured a nuclear “crisis” to gain political points, and another told US agents that Iran didn’t have the “necessary skill” to build a bomb. Another report to the CIA in 2009 noted, “[Iranian president Mahmoud] Ahmadinejad has decided for a variety of reasons to reduce tensions with the West and to seek some type of nuclear accommodation.”

So, wait – Iran didn’t want war, it wanted accommodation. And the US worked to accommodate it.

Perhaps in the future the public and media will ask tougher questions, rather than allow themselves to be so easily manipulated and their consent so easily manufactured.

Article Link to The Jerusalem Post:

How They Sold Us The Iran Deal

The Jihadis Working At Paris Airports?

As the investigation into the crash of EgyptAir 804 continues, authorities in Paris are wrestling with the problem of potential radical cells among baggage handlers at Paris airports.

By Erin Zalesky and Christopher Dickey
The Daily Beast
May 24, 2016

PARIS — The fear that some of the 85,000 employees working at Paris airports might have terrorist sympathies, or be terrorists themselves, goes back at least a decade.

In December of last year, after attacks at other locations in Paris, about 70 airport employees with access to planes on the ground reportedly had their “red badges” lifted because they fell under police suspicion. And in years past, more quietly, police have broken up several criminal networks among baggage handlers with radical Islamist connections.

Since the crash of EgyptAir 804, which took off from Paris Charles De Gaulle Terminal 1 late last Wednesday night and plunged into the Mediterranean en route to Cairo some three and a half hours later, concerns about such airport ground personnel have grown even more acute. But worries about racial, ethnic and religious profiling, plus the complications of French labor law, make them hard to address.

As one security contractor working with the airports told The Daily Beast privately, “The system in place fights against the police and law enforcement.”

To be sure, as the agonizingly slow EgyptAir 804 investigation proceeds, with no major pieces of wreckage found and neither of the “black boxes” on the plane recovered so far, theories about whether a terrorist somehow took down the plane, and if so, how, remain highly speculative.

As Clive Irving has reported in The Daily Beast, all that’s clear at this point is that data sent automatically from the plane shows “some kind of explosion involving smoke and fire at the front of the cabin … but not in enough detail to give an understanding of the cause.”

A small bomb in one of the E&E, electric and electronics, racks on the Airbus 320 might have caused such a thing, but aviation experts suggest frayed wiring might have done so as well.

Nobody wants to jump to any conclusions at this point, and no responsible official in France or elsewhere wants to point the finger at the ground staff working around the plane in Paris unless investigations turn up solid evidence. But, still, the record of handfuls of radicals working close to aircraft is worrisome—the stuff of which police dramas and spy novels are made.

In fact, one of the first scares came through the pen of the late Philippe de Villiers, a prolific writer of semi-pornographic thrillers whose book Les Mosquées de Roissy, the mosques of Charles De Gaulle airport, was published in 2006.

In a defense of his research, he wrote an article in Le Figaro Magazine that year, citing what appeared to be detailed reports by police and the French internal intelligence service. De Villiers chronicled the development of radical Islamist groups among some of the subcontractors handling baggage at the airport. These tended to come from the same small towns in North Africa, and mixed criminal activities with fundamentalist teachings: a blend common among terrorist enterprises. About 20 members of one gang had been arrested for stealing cell phones out of checked suitcases, De Villiers reported.

Over the years, clearly. French authorities tried to keep track of such activities, and no terrorist attacks took place connected to the airport. But the atrocities of last year, first with the Charlie Hebdo and kosher supermarket attacks in January, then with the devastating slaughter at cafés, a concert hall, and a stadium in November, showed that the police had lost track of many known and suspected terrorists in France and Belgium.

Exactly one month after the November 13 attacks, the chief executive officer of Aéroports de Paris (ADP), Augustin de Romanet, told a television interviewer that “nearly 70 badges” had been taken away from various personnel at the Paris airports.

Romanet said that over the previous month the lockers of 4,000 employees were searched, and while no one employed directly by ADP had what is called a fiche S, a file on the terror watchlist, there apparently were some among the employees of subcontractors, hence the removal of their clearances to work near the planes.

A red badge normally requires at least one background check, and is then given for three years—while radicalization, as we have seen, can take place in a matter of months or even weeks.

In years past, the communist CGT labor union and French law made it difficult to dismiss employees suspected of radical Islamist sympathies. In an effort to support its Muslim members, indeed, the union wanted halal meat served in the company canteen, provoking an uproar among far right-wing politicians.

But by last year, even the CGT leadership expressed concerns about some of its members who were working for Air France. After the November attacks, CGT-Air France secretary general Philippe Martinez told France Info radio that 500 of 2,000 members had been identified as “fundamentalists” and expelled from the union.

French law strictly forbids discrimination on religious, ethnic or racial grounds, as in the United States, but it goes much further and prohibits keeping religious, ethnic or racial data, so all decisions about suspect personnel are based, punctiliously, on behavior and it is hard to identify which actions may be tied to radical religious activities.

As Alain Zabulon, the ADP security director, explained to France Info, if a male employee refuses to say bonjour to a woman because of his religious beliefs, that is not a punishable offense. But if he refuses to obey a superior, that might be.

In the Paris airports there has been rising religious fervor among employees “for several years,” said Zabulon. “But we must distinguish between religious belief and radicalization. Religious practice—reading the Quran during a break, choosing not to eat some kind of food—that doesn’t pose a problem. What does pose a problem are proselytizing and aggressive practices.”

“For example,” said Zabulon, “pressuring other employees of the same faith to respect religious precepts or be apologists for terrorist acts. That attitude needs a response from management. The employee can be taken out of the critical zone at the airport where the planes are, and lose his red badge.”

In such circumstances, to lose a badge is, most often, to lose one’s job. But, one must wonder, what about the employees who show no public signs of religious fervor at all, like many of those connected to the Paris and Brussels attacks in the last few months?

Authorities say the investigations are continuing.

Article Link to the Daily Beast:

Why Bernie's Crushing Trump Head-To-Head

If Sanders were somehow to beat Clinton, he’d be the least vetted, most vulnerable major-party nominee in American history.

By Michael Tomasky
The Daily Beast
May 24, 2016

So Bernie’s still at it, telling George Stephanopoulos on Sunday that he thinks it’s not impossible for him to get 70 percent of the vote in every remaining state. Impossible. If anyone’s likely to hit 70 anywhere, it’s Hillary Clinton in Puerto Rico. Maybe Sanders can do it in the Dakotas, but even that seems ludicrous, because those states have primaries, not caucuses, and he’s never won a primary by that kind of margin except in his home state.

But he does make one argument that is numerically, for the nonce, irrefutable: that he polls better against Donald Trump than Hillary Clinton does. That’s the only argument he has at this point that deserves to be taken seriously. So let’s take it seriously.

Earlier this year, I used to think Sanders was totally unelectable and it was obvious that Clinton was the more electable of the two. I no longer think it’s quite the slam dunk I used to. All of these bullet points will be worth their own column in the coming months, or more than one, but quickly:

• She does have absurdly high negatives. There exists some number of middle-of-the-road voters who just don’t want her to be the president under any circumstances. We don’t yet know how large this group is or whether any of their minds are changeable as the campaign unfolds, but sure this is a problem that no sentient Clinton supporter denies.

• The media, especially cable news, will help Trump. They’ll help spread Trump’s attacks, and the Clinton team will have to think of ways to make the campaign not just “Trump says crazy stuff-cable news repeats-Clinton responds” over and over again, which could kill her.

• The Republicans, however they feel about Trump, are going to go all-in to stop her. Witness the weekend’s news about this scandalous Benghazi committee’s latest timetable to finally release their report, which has been delayed so often that nothing Trey Gowdy says anymore is remotely believable.

Then there’s the FBI, the Foundation, Terry McAuliffe… in sum, among Clinton people I talk to there is no shortage of awareness of her liabilities. And everyone is aware of the current general election polls.

But I don’t know a single person whose opinions I really value, and I include here Sanders supporters I know, who takes these polls seriously. There’s one simple reason Sanders polls better against Trump than Clinton does, which is that no one (yet) knows anything negative about him. He’s gotten the freest ride a top-tier presidential candidate has ever gotten. The freest, bar none.

While he’s all but called Clinton a harlot, she’s barely said a word about him, at least since the very early days of the contest. And while Republicans have occasionally jibed at him, like Lindsey Graham’s actually quite funny remark that Sanders “went to the Soviet Union on his honeymoon and I don’t think he ever came back!”, in far more serious ways, Republican groups have worked to help Sanders weaken Clinton.

That would change on a dime if he became the nominee. I don’t think they’d even have to go into his radical past, although they surely would. Michelle Goldberg of Slate has written good pieces on this. He took some very hard-left and plainly anti-American positions. True, they might not matter to anyone under 45, but more than half of all voters are over 45. And then, big-P politics aside, there’s all that farkakte nonsense he wrote in The Vermont Freeman in the early 70s about how we should let children touch each others’ genitals and such. Fine, it was 40-plus years ago but it’s out there, and it’s out there.

But if I were a conservative making anti-Sanders ads, I’d stick to taxes. An analysis earlier this year from the Tax Policy Center found that his proposals would raise taxes in the so-called middle quintile (40-60 percent) by $4,700 a year. A median household is around $53,000. Most such households pay an effective tax rate of around 11 percent, or $5,800. From $5,800 to $10,500 constitutes a 45 percent increase.

Sanders will respond that your average family will save that much in deductibles and co-payments, since there would be no more private health insurance. And in a way, he’d have a point—the average out-of-pocket expenses for a family health insurance plan in 2015 were around $4,900. But that is an average that combines families with one really sick person needing lots of care with families where they all just go see the doctor once a year, who spend far less. They’d lose out under socialized health, which Republicans would be sure to make clear.

But all the above suggests a rational discourse, and we know there’ll be no such thing during a campaign. It’ll just be: largest tax increase in American history (which will be true), and take away your doctor (which also might be true in a lot of cases). There’s a first time for everything I guess, but I don’t think anyone has ever won a presidential election proposing a 45 percent tax increase on people of modest incomes. And the increases would be a lot higher on the upper-middle-class households that tend to decide U.S. elections.

Bah, you say. Bernie can handle all these things. Plus, he’s going to get all those white working-class votes that Clinton will never get. It’s true, he will get some of those. But every yin has a yang. How is Sanders going to do with black and Latino voters? They won’t vote for Trump, obviously, but surely some percentage will just stay home. This will matter in Florida, Virginia, North Carolina, maybe Michigan—all states were a depressed turnout from unenthused voters of color might make the difference. The media find discussing this a lot less interesting than they do nattering on about the white working class, but it’s real, and Trump is smart enough to get out there and say, “Remember, black people, Bernie said your votes weren’t legitimate.”

General election polls don’t reflect anything meaningful until nominees are chosen and running mates selected—that is, July. They especially don’t reflect anything meaningful when respondents know very little about one of the candidates they’re being asked about. Superdelegates know this, and it’s one reason why they’re not going to change. I don’t blame Sanders for touting these polls; any politician would. But everyone subjected to hearing him do so is entitled to be in on the joke.

Article Link to The Daily Beast:

University Of Missouri’s Paying A Price For Its Lame Response To Last Fall’s Racial Protests

By Post Editorial Board
The New York Post
May 23, 2016

If the University of Missouri thought its concessions to Black Lives Matter radicals would boost its appeal to students, it looks like it made a big mistake.

Six months after the radicals garnered national attention with fiery protests against supposed campus racism — and with Mizzou’s school year set to start in August — the university faces an enrollment drop of nearly 1,500 students. And a potential budget shortfall of $32 million.

“I am writing to you today to confirm that we project a very significant budget shortfall due to an unexpected sharp decline in first-year enrollments and student retention,” interim chancellor Hank Foley said in an e-mail recently.

Just deserts? Seems so. After all, the school’s handling of the protests couldn’t have been worse.

The Black Lives Matter crowd at Mizzou, recall, was piggybacking on national protests over the death of Michael Brown in Ferguson, Mo. But as Jillian Kay Melchior noted on Heat Street and National Review, the rallies didn’t just disrupt lives; they sparked fear.

“I know I’m not alone in saying that I felt very unsafe and targeted when I encountered” protesters, one student wrote the chancellor.

Yet rather than restore order quickly, officials sought to appease the protesters: The demonstrations continued. Protesters took over a campus quad. One (now-fired) professor threatened a student cameraman. President Tim Wolfe and Chancellor R. Bowen Loftin stepped down.

By January, it was clear applications to Mizzou had dipped — and officials themselves cited the November turmoil on campus. Maybe the school learned its lesson, maybe not. Either way, it’s paying a price.

Article Link to the New York Post:

Obama Says Several Vietnamese Activists Prevented From Meeting Him

By Matt Spetalnick and Martin Petty
May 24, 2016

U.S. President Barack Obama said several Vietnamese civil society members were prevented from meeting him on Tuesday and that, despite great strides made by the country, Washington had concerns about the limits it puts on political freedom.

Obama was due to lay out more of his plan for stronger ties with Vietnam on the second day of his visit, after scrapping an arms ban, the last big hurdle between two countries drawn together by concern over China's military buildup.

The removal of the arms embargo, a vestige of the Vietnam War, suggests U.S. worries about Beijing's building of man-made island in the South China Sea and deployment of advanced radars and missile batteries in the disputed region trumped concern about Vietnam's human rights record.

Washington had for years said a lifting of the ban would require concrete steps by Vietnam in allowing freedom of speech, worship and assembly and releasing political prisoners.

Obama met about six activists and said there were "significant areas of concern" about political freedom. He praised those Vietnamese who were "willing to make their voices heard".

Two activists who spoke to Reuters said an intellectual, Nguyen Quang A, had been taken away by unknown men before he had hoped to met Obama, citing his relatives.

Reuters could not verify the information and Vietnam's foreign ministry did not immediately respond to a request for comment.

On Monday, in a joint news conference with Vietnamese President Tran Dai Quang, Obama said "modest" human rights improvements had been made and the decision to end the arms embargo was about the changing dynamic in ties and "not based on China".

But China's Global Times tabloid, run by the Chinese Communist Party's official People's Daily, said that was a lie and made a point of what it said was a U.S. willingness to relax standards on human rights for the sake of containing China.

The White House "is taking advantage of Vietnam to stir up more troubles in the South China Sea", it said.

Mai Khoi, a Vietnamese singer, was one of the people who met Obama and she posted a photo on her Facebook page showing several people attended the meeting.

Obama was flanked by activists on either side at a table. They listened intently as he spoke at the end of the meeting.

Some activists have expressed disappointment that Obama may have given away leverage with the communist leadership.

A U.S. official, speaking on condition of anonymity, said there was evidence engagement had worked in nudging Vietnam to make concessions, like its "unprecedented" commitment to set up independent labor unions under a U.S.-inspired Trans-Pacific Partnership (TPP) trade deal.

In a statement late on Monday, Communist Party chief Nguyen Phu Trong spoke of the importance of building relations of mutual respect while "not interfering in each other's internal affairs".

Trade Push

Obama gave a speech in Hanoi about the development of relations since normalization in 1995 and will champion his signature TPP, which would remove tariffs within a 12-nation bloc worth a combined $28 trillion of gross domestic product.

Vietnam's manufacturing and export-led economy is seen as the biggest TPP beneficiary. Annual U.S-Vietnam trade has swelled from $450 million when ties were normalized to $45 billion last year, and Washington is a big buyer of Vietnam's televisions, smartphones, clothing and seafood.

The TPP is not a done deal, with opposition expected in Washington amid concern about competition and a loss of U.S. jobs. Obama said he was confident the trade pact would be approved by legislators and he had not seen a credible argument that the deal would dent American business.

Obama will on Tuesday fly to Ho Chi Minh City, the country's commercial hub, which was called Saigon until North Vietnamese tanks rolled into the city in April 1975 to bring U.S.-backed South Vietnam under communist rule.

He will meet young entrepreneurs at one of the co-working spaces that host Vietnam's budget tech startups, which have been receiving attention from angel investors and Silicon Valley funds.

Obama spoke of a U.S. intention to work more closely in defense areas with Vietnam, which is keen to build a deterrent against China. Vietnam and the United States last year held coastguard and humanitarian training exercises.

Washington has longstanding defense alliances in the region with the Philippines, which is also at odds with China, and Thailand, and organizes annual war games with both.

U.S. Secretary of State John Kerry attended a ceremony on Tuesday in which a deal was agreed with Vietnam to allow the U.S. Peace Corps to work there.

Tuesday's English-language China Daily said Obama's visit "bodes ill for regional peace and stability", and would further complicate the situation in the South China Sea, and risk turning the region into a "tinderbox of conflicts".

Article Link to Reuters:

Oil Prices Fall Below $48 As Dollar Gains, But Possible Stock Drawdown Supports

By Keith Wallis
May 24, 2016

Oil prices fell in thin trade on Tuesday as the U.S. dollar strengthened, but losses were curbed by a likely drawdown in U.S. crude and gasoline stockpiles.

Brent futures had declined 42 cents to $47.93 a barrel by 0643 GMT, after closing down 37 cents in the previous session.

U.S. crude futures dropped 32 cents to $47.76 a barrel, having settled down 33 cents the day before.

Both contracts had finished with modest losses for a fourth straight session.

The dollar index rose against a basket of currencies on Tuesday, as investors continued to factor in an increased chance of a near-term U.S. interest rate rise.

A stronger greenback makes dollar-priced commodities more expensive for holders of other currencies.

"There's a face-off between investors and traders," said Mike McCarthy, chief market strategist at Sydney's CMC Markets.

"Investors see value in the market. They are met by traders who see the market at the top of the trading range."

That led to volatile plays in the previous session with oil falling by around $1 before retracing much of the day's losses.

"That intra-day volatility has led to a quieter day today," he said, describing trading as "anemic".

U.S. commercial crude oil stocks likely fell by around 2.5 million barrels to 538.8 million in the week ended May 20, a preliminary Reuters analysts' poll taken ahead of weekly industry and official inventory data showed on Monday.

Gasoline stocks probably dropped 1.3 million barrels last week, while distillate inventories, which include heating oil and diesel fuel, likely decreased by a million barrels, the poll showed. The United States is gearing up for its summer driving season.

The American Petroleum Institute (API) is due to release inventory data on Tuesday, while figures from the U.S. Department of Energy's Energy Information Administration (EIA) will come on Wednesday.

Just 2.8 billion barrels of oil was discovered outside North America in 2015, the lowest since 1952, following a sharp fall in exploration and appraisal drilling, consultant IHS said in a report on Tuesday.

Including the United States, that figure rose to 12.1 billion, where the rapid expansion of the onshore shale industry unlocked major resources over the past decade, but was still the lowest since 1952, Morgan Stanley said in a separate report on Monday.

Iraq's total oil output has reached 4.7 million barrels per day (bpd) and exports are running at a record 3.9 million bpd, the state-run Iraqi Media Network reported on Tuesday, citing Deputy Oil Minister Fayadh al-Nema.