Wednesday, September 14, 2016

European Stocks Open Higher As Markets Watch Central Banks, Oil

By Arjun Kharpal and Holly Ellyatt
CNBC
September 14, 2016

European stocks opened higher on Wednesday shrugging off market jitters over central bank uncertainty and a renewed drop in oil prices.

The pan-European STOXX 600 was up 0.41 percent.

European bucked the negative trade seen in Asia and the U.S. on Tuesday where uncertainty over central banks' next moves worried investors.

The U.S. Federal Reserve meets next week on September 20 although the chances of a rate hike remain slim. Market expectations for a Fed rate hike next week were 15 percent Tuesday, according to the CME Group's FedWatch tool.

U.S. stocks were also hit Tuesday by a decline in oil prices after the International Energy Agency (IEA) warned in its latest market update that it may take longer for oil markets to re-balance.

On Wednesday, however, prices rebounded in Asian trade as data from an industry group showed a smaller-than-expected build in U.S. crude stocks.

The American Petroleum Institute (API) reported a crude build of 1.4 million barrels for the week ended September 9, smaller than the 3.8 million-barrel rise expected by analysts, Reuters reported. The U.S. government will issue official inventory data on Wednesday. Oil prices were higher in London trade however.

In business news, chemicals and healthcare group Bayer is poised to announce the acquisition of U.S. seeds company Monsanto on Wednesday for more than $66 billion, clinching the biggest deal of the year, people familiar with the matter said, Reuters reported.


Article Link To CNBC:

Three Ships Chartered To Troubled Hanjin Shipping Sold

By Brenda Goh and Keith Wallis 
Reuters
September 14, 2016

Three ships chartered to Hanjin Shipping Co Ltd (117930.KS) have been sold, the first of dozens of vessels expected to be hawked following the failure of the world's seventh largest container shipper.

Around $14 billion of cargo has been tied up globally as ports, tugboat operators and cargo handling firms worried about not being paid refuse to work for Hanjin, which filed for receivership in a Seoul court on Aug 31.

Three bulk carriers, used for carrying commodities such as iron ore, coal and grain, have been sold for a total of almost $39 million, according to data from ship valuation firm VesselsValue.

The largest, the 180,000 deadweight tonne (DWT) capesize Hanjin Matsuyama, was bought by Singapore-based Winning Shipping for $22.75 million, according to the data.

A man who identified himself as the head of the purchasing department in the Qingdao branch of Winning Shipping but declined to give his name said the deal had been agreed but not yet completed.

"We began talking about the deal before the news about Hanjin began emerging, we were already in the process of buying it."

The five-year old ship was sold charter-free, meaning it is no longer chartered by Hanjin Shipping, a sale and purchase broker told Reuters.

The two smaller 37,000 DWT handyside vessels have been sold to Greek buyers.

"After news of (Hanjin's) collapse they were redelivered early to financiers and sold charter free," the broker added.

With ship prices already depressed by over-capacity, the values achieved were in line with recent similar sales and estimates from shipping services firm Clarkson.

Shipbrokers expect more Hanjin ships to be put on the market although uncertainty about the company's future could delay progress.

Over-Capacity To Remain


While uncertainty around Hanjin Shipping has caused a spike in freight prices, few expect it to last.

Cargo ships of around 257.8 million DWT, equal to about 14.6 percent of the global fleet, are due for delivery from now to around 2019 and global seaborne trade growth is just 2.4 percent, Clarkson data shows.

That points to little short-term improvement in the shipping markets with no real return to profitability until 2019-2020, at least, analysts say.

Low scrap values and freight rates higher than operating costs mean there is little incentive for owners to scrap.

"The industry needs to break the trend of halting demolition activity as soon as the Baltic Dry Index (a basket of freight rates) improves marginally," said Peter Sand, chief shipping analyst at shipping lobby group BIMCO.

The fleet of 63 ships Hanjin owns is worth around $1.76 billion, VesselsValue estimates, well short of the $5.5 billion in debt the company reported as at the end of June, 2016. It charters a further 78 vessels.

Around two-thirds of the total are not operating properly, including vessels seized, barred entry to ports or terminals, denied services or moving slowly, according to Hanjin Shipping data on Monday.

The chairman and former chairwoman of parent company Hanjin Group on Tuesday transferred around $45 million to help unload cargo stranded on the troubled shipper's vessels.

However, Hanjin estimates at least $100 million more is needed to clear the cargo and regulators have warned securing further funds from Hanjin Shipping shareholders could take "considerable time."

South Korea has said no government or central bank money would be directly injected into the firms restructuring in the ailing shipping and shipbuilding industries, though it is helping small-to-medium sized businesses hit by the restructuring.


Article Link To Reuters:

Can OPEC Remain The Ultimate Energy Superpower?

An upcoming meeting will only highlight the cartel’s growing divisions.


By Luay al-Khatteeb
The National Interest
September 14, 2016

The 2016 OPEC (Organization of the Petroleum Exporting Countries) meeting in Algiers later this month has received undue importance from market analysts hoping that Kingdom of Saudi Arabia and non-OPEC producer Russia are seeking a freeze on production. Both have been fighting for market share in China, with Saudi Arabia unusually offering large volumes on the spot market as long-term contracts become more difficult to obtain from buyers. Iran, Iraq and Saudi Arabia have been undercutting each other for market share in India over the past six months. Given the scenario of OPEC members fighting each other for market share, it seems unlikely that an agreement will be reached, although mounting GCC fiscal deficits, which could reach $900 billion by 2021, may focus their attention, especially as rumors suggest that Saudi Arabia and other GCC members are now working near full production capacity.

Excess supply has led to a buyer’s market, driving prices down. Meanwhile, investors and analysts are grasping at straws, looking for a comment from an oil minister or any economic indicator to justify talking up the future price, leading to more price volatility while painting a picture of OPEC having the upper hand.

Reality is somewhat different. The rapid growth of non-OPEC production, especially since 2013, has led to OPEC producers losing market share. OPEC production had been relatively static between 2013 and 2015, after which it began to increase. Faced with tumbling oil prices and growing public deficits, the major OPEC producers have opted to increase supply, but failure to invest in production capacity over the years has given them limited scope to do so.

Historically OPEC members have, at the behest of Western superpowers, kept prices relatively high, allowing Saudi Arabia to act as a swing producer to maintain prices. The high prices enabled others to develop their high-cost offshore oil fields in places such as the North Sea, the Gulf of Mexico and Brazil, and develop unconventional varieties such as tar-sand and shale oil. High initial development costs have become sunk costs, and the marginal cost of one barrel of oil from many of these sources is now competitive with OPEC oil, whose costs are now rising. Old oil fields are either coming to the end of their life or else require substantial refurbishment and upgrades, due to a lack of investment in maintenance and infrastructure. Furthermore, the quality of many OPEC producers’ oil is not as good as that of the new producers. At the same time, these OPEC members are facing an ever-increasing demand for energy from their own growing populations, which has taken up much of their scope to increase export production of oil and gas.

OPEC members have little room to maneuver. Saudi energy minister Khalid al-Falih may express the wish to “restore balance between supply and demand to support oil prices,” but he has also claimed that Saudi Arabia will not cut production, as he knows it will be replaced by another producer’s increase in production. In reality, a freeze would be self-defeating for OPEC, which would only lose further market share. Meanwhile Iran will attend the meeting, having doubled its exports of oil and gas this year to 2.7 million barrels per day, but has no intention of signing up to a quota until its production and market share reach pre-sanctions levels. Iraq is about to bring back into production some of its northern fields, and so may return to its January peak output of 4.5 million barrels per day. OPEC’s newest member, Ghana, has brought a new field into production this month, and Libya is hoping to recoup some of its lost production, so it is unlikely we will see a freeze in OPEC production. In reality, OPEC is in a weak position to influence the market for oil.

The rapid growth in non-OPEC production since 2013 has led to OPEC’s demise, but this scenario began in the 1970s, when non-OPEC production overtook OPEC production.

The United States is now the largest gas producer and the second-largest oil producer in the world. The rapid rise of its crude oil and associated oil products production has been a game changer equivalent to an increase of six million barrels per day since 2010, while world oil demand has only increased by a similar margin. Meanwhile, Canada, China, Russia and other non-OPEC producers have increased their oil output substantially. Exploration and research has shown that the “peak oil” theory was a myth, and that world oil reserves of both conventional and unconventional supplies are on the increase. Supply growth is still running ahead of demand growth, and excess supply in the market is judged to be between one and two million barrels per day, which is a marginal difference when total demand is ninety-five million barrels per day. Events such as Canadian forest fires and Nigerian civil unrest have seen price rebounds in 2016, which suggests that there is only a small imbalance in the market. Any sudden decline in production by one producer will quickly affect the market, but the power to replace that supply is now more likely to come from a non-OPEC producer than an OPEC producer, given the current growth rates in output. Also, given the high rate of stockpiling over recent months, any shortage in the market will have little impact upon price or the major economies.

The major influence on prices in 2016 will come from the expected fall in non-OPEC output to 56.4 million barrels per day, with production declines occurring in the United States, China, UK, Kazakhstan and Colombia, though some of this decline may be offset by other non-OPEC producers and OPEC increasing its output. Today the market is likely to be influenced more by the actions of the major non-OPEC producers than by OPEC members, who fight amongst themselves for market share rather than act as a cartel. The only factor that unites OPEC’s member countries, with their divisive interests, is the single common goal of short-term revenue maximization, to offset their rapidly rising fiscal deficits.

OPEC members are now paying the price for always seeking short-term profit maximization by keeping prices high and neglecting production planning. Despite significant cost advantages, their policies have fostered the rapid expansion of non-OPEC production and their loss of market share and power.

The OPEC meeting in Algiers is unlikely to have any impact upon the price of oil and will only increase the angst of its members regarding their mounting budget deficits, while regretting that they have never acted as a true cartel. Maybe they should have looked more to the traditional economic theory of oligopoly and the working of cartels, rather than the modern “greater fool theory” that states that the price is determined not by its intrinsic value of the object, but by irrational beliefs and expectations of market participants.


Article Link To The National Interest:

Now The Saudis Have Killer Drones, Too

Saudi Arabia has got a horrible human rights record and a bloody war next door. And now it’s about to get its own fleet of flying, death-dealing robots.


The Daily Beast
September 14, 2016

Saudi Arabia is the world’s newest drone power. And that could be a problem, since the Saudis are in the midst of a rather nasty war.

Riyadh has signed a contract with Chinese firm Chengdu for an unspecified number of Pterodactyl drones, Saudi media reported in late August and early September.

The 30-foot-long, propeller-driven Pterodactyl, which Chengdu apparently modeled on America’s iconic Predator and Reaper drones, can fly for hours at a time carrying cameras and missiles. Operators on the ground control the unmanned aerial vehicle via satellite.

As far as killer drones go, the Pterodactyl probably isn’t terribly sophisticated—and its sensors are certainly less capable than U.S.-made models—and that can mean the difference between life and death for innocent people caught in the crossfire as flying robots hunt militants on the ground.

Just ask people in Iraq. The Baghdad government acquired rudimentary CH-4 killer drones from China in late 2015. On one of the type’s very first missions against suspected ISIS terrorists in January, the drone’s operators accidentally targeted pro-government militamen, killing nine fighters and wounding 14.

The Saudi drone acquisition, for it’s part, could mean is “grim news, especially for Yemenis,” Andrew Cockburn, author of Kill Chain: The Rise of the High-Tech Assassins, told The Daily Beast. Saudi Arabia’s Sunni regime has been bombing Shia rebels in Yemen for years, with a major escalation beginning in March 2015. The Saudi air campaign has killed thousands of civilians and destroyed irreplaceable ancient sites.

Riyadh wants the drones to help improve its targeting. But robotic aircraft don’t always make air strikes more ethical. They can even have the opposite effect.

Able to fly for hours or even days at a time because they don’t have to support an onboard pilot, drones can provide military commanders reams of valuable intelligence. But when it comes to separating combatants from civilians, unmanned technology often falls short.

The grainy footage the drones shoot is open to misinterpretation by human analysts. A farmer carrying a hoe might appear to be a militant shouldering a rifle. A funeral can look like a gathering of terrorist plotters.

“Over the years we’ve seen a heavy toll in civilian casualties from U.S. drone strikes… thanks in large part to deficiencies in sensor fidelity of the Predators and Reapers employed by CIA and [Joint Special Operations Command],” Cockburn said. “The Chinese knockoff is definitely worse in that area.”

“Given the apparent indifference to collateral damage already displayed by the Saudis in their ongoing air operations, we can expect a lethal fallout from this development.”

Saudi Arabia has wanted drones for at least six years. In February 2010, U.S. an Ambassador to Saudi Arabia Jame Smith met with Prince Khaled bin Sultan—then the kingdom’s assistant minister of defense and aviation—to discuss intelligence-sharing.

“The ambassador highlighted [U.S. government] concerns about providing Saudi Arabia with satellite imagery of the Yemen border area absent greater certainty that Saudi Arabia was and would remain fully in compliance with the laws of armed conflict during the conduct of military operations, particularly regarding attacks on civilian targets,” the U.S. embassy reported, according to a diplomatic cable released by Wikileaks leaked in 2011.

Smith referred to an apparent Saudi air strike on a building that the United States believed to be a Yemeni medical clinic. “If we had the Predator, maybe we would not have this problem,” bin Sultan said.

But the United States has, as a matter of policy, refused to sell killer drones to Saudi Arabia. Recipients of U.S. unmanned aerial vehicles “are to use these systems in accordance with international law, including international humanitarian law and international human rights law,” the U.S. State Department explained in a 2015 statement.

Saudi Arabia apparently doesn’t meet that criterion. The State Department’s most recent assessment of the kindgom’s human-rights violations highlights widespread violence against women, human trafficking, discrimination and abuses by law enforcement and security personnel. “Lack of governmental transparency and access made it difficult to assess the magnitude of many reported human rights problems,” the State Department added (PDF).

That said, Saudi Arabia’s human-rights record has not barred it from buying manned warplanes from the United States, including scores of cutting-edge F-15s. The State Department treats drones as a special case, owing to what Peter W. Singer, an analyst at the New America Foundation in Washington, D.C. and author of Wired for War: The Robotics Revolution and Conflict in the 21st Century, described as the “unique politics” of killer robots.

In other words, armed drones in Saudi hands are more unsettling than armed F-15s in Saudi hands.

Barred from buying American drones, Saudi Arabia turned to China. There were reports as early as 2014 that the kingdom would acquire Pterodactyls, but it apparently took another two years for the sale to become official. It’s not clear when Saudi Arabia’s Chinese-made drones might become operational.

Saudi Arabia is not the only country that has looked to China to meets its killer-drone needs. “China sells to a number of states that the U.S. either would not—or it would be highly problematic getting it through our system,” P.W. Singer told The Daily Beast., an analyst at the New America Foundation in Washington, D.C. and author of Wired for War: The Robotics Revolution and Conflict in the 21st Century, told The Daily Beast.

Besides Iraq, Nigeria too has become a major customer for Beijing’s armed robots. Like Saudi Arabia, Nigeria has a human-rights problem. Like Saudi Arabia, Nigeria is conducting an intensive air war against militants—in Nigeria’s case, from the Boko Haram Islamist group.

Thousands of civilians have died in Nigeria’s war with Boko Haram.

But Singer said it’s not fair to blame widespread civilian deaths on drones or any other technology. “Bad regimes tend to use technology in bad ways,” Singer said. “Regimes that care about human rights tend to use technology in way that respects human rights.”

By that line of reasoning, don’t expect Chinese drones to make Saudi Arabia’s military intervention in Yemen any less horrific. Indeed, once the Saudis can park armed robots over Yemen practically around the clock, their war in Yemen might even get worse for civilians.


Article Link To The Daily Beast:

Divorce In The Land Of The Super Rich

In a pretty principality, it can get ugly.


Politico EU
September 14, 2016

The little courthouse resembling an ice cream cake perches high atop the Mediterranean just a few hundred yards from the royal palace. It looks like another Instagram-ready shot from the world’s most photogenic principality, a beautiful blur of pastel villas, chic beach clubs and gleaming, million-dollar yachts on a shimmering port.

But don’t be mistaken. It can get ugly at this pretty court which often handles big personalities with lots of money. Divorce laws in the principality are intended to protect the super-wealthy, ensuring that they don’t lose their assets in case of a split. And matrimonial laws do not favor women in Monte Carlo.

“Let’s put it this way,” said Judd Burstein, a high-powered New York lawyer who is trying to move a current Monaco divorce case to New York. “If a rich man married a poor woman in Monaco and all she owned at the time of the marriage was a horse, she’d be left like Lady Godiva when the marriage ended. Naked with a horse. The guy would get everything.”

Monaco has no laws governing separation of assets, and the only wealth that is divided in a divorce is that which was commonly created. The advisory website Monaco Wealth Management says the laws are designed to keep out “gold diggers.”

Lainie Crane, an American woman in her 60s who’s lived in Monaco for more than 35 years, says wives still end up with the short end of the stick when they go to court.

“They don’t know to say, ‘hey honey-bunny can I have my own checking account or can you put my name on the deed?’ By the time the s*** hits the fan, it’s too late” — Lainie Crane


“The women who marry these rich guys are not the brightest — they think their youth and beauty will last forever,” she said. “They don’t know to say, ‘hey honey-bunny can I have my own checking account or can you put my name on the deed?’ By the time the s*** hits the fan, it’s too late. They’re supposed to get half — but half of what? These guys keep a little something in HSBC. But the rest is in Turks and Caicos or Guernsey.”

As rough as divorce can be on women with ties to Monaco, it can be a challenge in other European countries where a wide variety of rules govern matrimonial break-ups.

Monaco lies just a few kilometers from Italy, where the process may take up to ten years. For one thing, courts mandate a three-year separation period for “reflection and possible reconsideration” on mutual petitions. The legal separation before the divorce itself has a slew of conditions that need to be met before the court grants it. Further south in Malta, it wasn’t even possible to get a divorce until five years ago and the country still has some of the most restrictive laws in Europe.

The EU’s Brussels II convention was meant to harmonize divorce laws so that a divorce filed in one country would be accepted in another. But the 2001 convention, which holds that the first court to process the divorce is the one to hold jurisdiction, may have had the unintended effect of highlighting differences between countries, leading to ‘divorce tourism’ with couples filing in countries with quicker, cheaper or more generous terms for divorce.

For example, if you head to Romania, divorce is cheap and quick, and lawyers have found a way around the provision that one needs to be a resident. Romanian courts also recognize de facto separation, so divorce proceedings are fairly straightforward if the couple can convince the court that the spouses have already been living separately for six months.

Bucharest, however, can’t top London, which is known as the divorce capital of the world. An investigation by the Times a few years ago found that, when huge sums of money were at stake, around half of divorce cases involved international couples. While getting divorced in the U.K. is both expensive and arduous, it is generally preferred by financially weaker spouses who may gain more there than elsewhere. British courts often award former spouses, particularly wives, with maintenance for life. Family law firm Pannone describe British laws as too “wife-friendly.”

Which is why some British women who find themselves living in Monaco with their husbands try to find a way to get back to the U.K. if a divorce is in the offing.

Camilla, a 41-year-old British national, lived in Monaco with her British banker husband and their three children. When Camilla discovered that her husband was having an affair, she knew she wanted to file for divorce — but not in Monaco.

“I told him the kids were unhappy at their school in Monaco and that we should move back to the U.K.,” said Camilla, who spoke on condition that her last name not be used. “He believed me, so we packed up and moved back.”

Within six months, Camilla had filed for divorce in London, getting a better deal than would have been possible in Monaco where divorce law dictates that all the deeds and bank accounts remain with the person whose name they were under before marriage. Courts are known to be stingy with alimony, believing in the individual’s capacity to “bounce back.”

“Justice belongs to the spouse with the most money here” — Elisabetta Agusta

“Justice belongs to the spouse with the most money here,” said Elisabetta Agusta, a 66-year-old Austrian national who was married to a wealthy Italian count. Her divorce, she said, took 17 years to wend through the courts in Monaco and Milan, and when it was over, she was left with almost nothing. “The men just think, ‘how do I get rid of my wife without giving her any money.’ If you’re naïve as I was, God help you.”

Last fall, Maurice Amon, 65, heir to a multi-million dollar Swiss banknote ink fortune, filed for divorce from Tracey Hejailan-Amon in Monaco where the couple owns a $40 million home. In response, his wife hired Burstein, who represented Donald Trump in his divorce from Ivana in 1992, in a bid to move divorce proceedings to New York.

Hejailan-Amon, then 39, had met Amon at a New Year’s Eve party in Gstaad, not long after her marriage had ended. The couple were eventually married in Hong Kong and reportedly maintained homes in London, Paris, Gstaad, Monaco, and New York during their eight-year marriage.

“I wasn’t seeking out a bank account when I married Maurice,” said Hejailan-Amon, adding that she was devastated when her husband sent her an email in October worded like a business transaction, informing her that he had just filed for divorce in Monaco. The email came after Amon had quietly taken $25 million in artwork from the couple’s Fifth Avenue apartment, which he had placed in her name, Burstein said.

It’s not the first contentious divorce for either. Hejailan-Amon, who is originally from California, was previously married to a Saudi businessman and fought a five-year battle to get her two children out of the Kingdom.

Amon, for his part, graced the pages of the New York tabloids in 2005 under headlines such as “DIVORCE OF HEADSPLITTING NASTINESS” when he separated from his former wife Roberta. The couple had split their time between Switzerland and the U.S. and Roberta, like Hejailan-Amon, fought to have the divorce heard in Manhattan.

Amon’s lawyer, Peter Bronstein, who also represented his client during his divorce from his previous wife, has called Hejailan-Amon a “gold-digger” who can’t show she’s lived in New York for the required two years needed to start a divorce action there. Photos of her overflowing shoe closet in Monaco were splashed all over the media after Bronstein filed the pictures in court to show she maintained her residence there.

Burstein, though, says he can prove the Amons spent a lot of time in New York and that Amon’s claim of being a resident of Monaco was just a way to evade taxes.

Though a Monaco law introduced in 2007 was meant to even the playing field among couples, there are still laws on the books that allow a spouse to take back any gifts or “donations” made during the marriage — like the estimated $70 million in jewelry Maurice gave his wife.

A New York judge has said he will rule on whether or not Hejailan-Amon can move her divorce case to Manhattan this month.

“We built a life together,” says Hejailan-Amon. “My two kids loved him and I thought he loved them. Maurice didn’t want me to work but I contributed to the marriage. I decorated our homes,” she said. “I’m not a gold digger and I married Maurice for love.”


Article Link To Politico EU:

Trump’s Reckless Spending Spree

By Noah Rothman
Commentary
September 14, 2016

On Tuesday, the Trump campaign released the preliminary details of his plan to compel private enterprise to provide new mothers with no fewer than six weeks of paid maternity leave. This is only the GOP nominee’s latest pander to voters that also sacrifices core conservative principles. Trump’s proposal would allow mothers to collect six weeks of unemployment benefits following the birth of a new child, but the candidate will also pledge to re-write the tax code—no simple thing—to allow families to deduct childcare expenses.

Populist Republicans, who have long lamented that conservatism is a tough sell, are apt to see Donald Trump as a savior sent from on high. Here is a self-described Republican who has cast aside the austere facade of fiscal conservatism in favor of any and every spending proposal that crosses his transom. Promising the electorate the world in the campaign with every intention of working out the details after the election is hardly a new phenomenon, but it used to be one that Republicans rejected. Today, under Trump’s corrupting umbra, the GOP has become the party of wild assurances and cascading spending proposals with no intention of ever making good on them.

Those predictable voices who have branded bootstrap conservatism a dead letter will rejoice over this “compassionate” proposal. Their ranks will doubtlessly include those Republicans who furiously denounced something virtually identical to it in Barack Obama’s 2015 State of the Union address. Integrity and consistency are luxuries not afforded Trump’s water carriers. But there are still a few conservatives concerned with minor details like how Trump plans to pay for these promises. They will be disappointed to learn that the Republican nominee hasn’t devoted more than a moment’s thought to fleshing out realistic policy proposals.

In the case of Trump’s maternity leave pledge, the campaign promised to offset the costs of a spike in new beneficiaries by eliminating “fraud” on the unemployment rolls. That’s not a plan; it’s an insult. The old canard of “waste, fraud, and abuse” is the last refuge for the politician who has no idea how to pay for his or her policy preferences—at least, not without unpopular tax hikes.

This is not the first time that Trump has appealed to the notion that all things in Heaven and Earth can be paid for if only the IRS were expanded and given the tools necessary to root out corruption. Last week, Trump promised to augment the Pentagon’s budget by repealing the portions of the Budget Control Act of 2011 (aka, “Sequester”) that imposed limits on defense spending. To offset those costs, Trump said he would ask Congress to “eliminate government waste and budget gimmicks” and “improper government payments,” i.e. waste, fraud, and abuse.

Trump has called for “more funding” for the Department of Veterans Affairs to augment job training, research on traumatic stress, brain injury, and suicide prevention, and to hire more service providers at VA hospitals. The Republican nominee promised a massive $500 billion public works program that you dare not call a “stimulus,” which he proudly boasted would spend more than double what Hillary Clinton has pledged to refurbish America’s infrastructure. Where is the money coming from?

There is Trump’s immigration plan, which consists of the ill-defined but surely costly augmentation of America’s immigration and naturalization forces. Some estimates indicate that it would cost approximately $300 billion to round up and deport America’s illegal immigration population—a depopulation of the U.S. that would strip $1 trillion from America’s real GDP virtually overnight.

And, of course, there is the wall. Trump insists that it will cost a mere $8 billion to build that 1,000-mile barrier of ever-increasing height, but structural engineers have estimated that the materials costs alone would exceed $17 billion. That is before environmental impact studies are conducted, property disputes are resolved in the courts, and project labor is contracted to actually do the work.

To pay for all this, Trump has promised precisely nothing. He has pledged not to raise taxes, although he insists the benefits of programs like his childcare cost tax deduction would be unavailable to the nation’s highest income households. He has attacked as cold-hearted the idea that America’s entitlement state must be curtailed and reformed—a massive expenditure that already consumes nearly two-thirds of the nation’s annual outlays. Trump has promised to cut taxes on middle-income Americans and businesses with the expectation that such a move would spur growth. He is, however, coupling this proposal with crippling trade protectionism, a forcibly truncated workforce, and crushing public spending that would stifle any growth he expects to catalyze.

This is all Anti-Conservatism 101. None of this is alien to anyone who followed politics prior to June 2015 when the reality television host descended his gilded escalator in Manhattan to seize control of an American political party. Republicans have conveniently forgotten the laws of fiscal gravity while wrapping their arms around this unreconstructed Democrat. In seeking the presidency, Trump has written more bad checks than any liberal in recent memory. God save Trump’s coterie of flatterers if they ever find themselves having to make good on all these promises.


Article Link To Commentary:

Why Did Clinton Hide Her Pneumonia? Because She’s A Woman.

By Kathleen Parker 
The Washington Post
September 14, 2016

She didn’t want to say she was sick.

Hillary Clinton, that is, who recently has suffered coughing fits followed Sunday by a near-collapse during New York’s 9/11 memorial ceremony. She left the ceremony early, claiming over-heatedness, and appeared to weave, lose her footing and pitch forward as she approached her car, as captured on a cellphone video.

Later in the day, Clinton’s campaign announced that the Democratic candidate has pneumonia.

Most by now are familiar with the fallout — speculation about her health, concerns about her transparency in not reporting her illness sooner — all amid the furor over Clinton’s weird comment at a fundraiser about half of Donald Trump’s followers belonging in a “basket of deplorables.”

Say what?

Other than being one of the strangest combinations of words ever uttered, where did Clinton come up with such verbiage?Here’s the partial quote in question: “You know, to just be grossly generalistic, you could put half of Trump’s supporters into what I call the basket of deplorables. Right? The racist, sexist, homophobic, xenophobic, Islamophobic — you name it.”

Since when does she like to use such words, which don’t sound at all like Clinton? She’s too studied and cautious to randomly toss out a phrase that, in addition to being offensive and inevitably problematic, has a somewhat poetic edge. A-tisket, a-tasket, are those deplorables in your basket?

Perhaps the phrase, certain to become a campaign metaphor for “uh-oh,” evolved during a brainstorming session with folks who wouldn’t dare censor their boss: Basket of deplorables, hilarious! OMG, you should use that!

Clinton’s basket may as well have been delivered to Trump with a bottle of champagne and a bow. As she began apologizing for speaking too broadly about too many Americans — suffering the inevitable comparison to Mitt Romney’s “47 percent” — Trump glided along the unfamiliar terrain of the high road.

Rather than harp on the already popular trope that Clinton isn’t physically strong enough to be president, he said he hopes she recovers soon so that they can meet in debate. About this, Trump didn’t have to feign sincerity, figuring he’d have a better shot at defeating Clinton than he would Joe Biden, Tim Kaine or some other sudden substitute. But mainly, he calculated — or had been instructed — that attacking a woman when she was literally down would get him nowhere.

Then again, it’s hardly necessary to point out Clinton’s physical frailties, temporary though they are, when the woman is so plainly suffering. Replay after replay shows the coughing fit and then the weave-and-bob of her 9/11 episode. Anchors and commentators hit auto-pundit to produce the question du jour: Can this woman handle the presidency? Please. This woman has a bad cold. She needs rest. She’ll be fine.

Another question also arose, at least in many women’s minds: Would anyone ask the same question about a man under similar circumstances? Here’s the more pertinent question: Why do women feel they can’t admit to being sick? You know the answer. It’s because women fear showing any sign of weakness lest others presume the worst — that she’s not as good as a man.

As the weaker sex, which is only true as concerns upper-body muscle mass (about 40 percent less) and significantly less testosterone (hence less invading, marauding and pillaging), women tend to hide anything that might suggest “weaker sex.” This is absurd on its face, but it also happens to be true.

Thus, Clinton soldiered on, trying to keep to schedule despite probably feeling awful, and paid a high price for denial. Her silence about the pneumonia wasn’t so much a lack of transparency, as news-gazers have extrapolated, as it was a valiant attempt to stay the course and preclude exactly what happened. People began to wonder about her health. Critics found it easy to conclude: She’s weak; she’s frail; she’s a woman, after all.

When did it become a liability to be sick, which all of us are from time to time? For women, it began when they entered the male-dominated workplace en masse a generation ago and worked twice as hard to be as good as a man. This likely is why Clinton would rather suffer in silence than endure further scrutiny about her ability to serve — a deplorable reality deserving of its own basket.


Article Link To The Washington Post:

Trump’s Obsession With Putin Should Be A Red Flag

The Russian autocrat doesn’t deserve such admiration from the Republican nominee.


By Jason L. Riley
The Wall Street Journal
September 14, 2016

The most disturbing aspect of Donald Trump’s sustained man crush on Russian President Vladimir Putin may be that Mr. Putin seems to be the only foreign dignitary that Mr. Trump much respects—something to ponder while choosing the next leader of the free world.

If there are other heads of state that the Republican presidential nominee admires, he doesn’t spend much time talking about them. But Mr. Trump simply won’t shut up about the Russian autocrat, even though it is clear that he’s playing the role of Mr. Putin’s useful idiot.

Listening to a presidential candidate laud an adversary of America is galling and ought to be disqualifying. But the businessman’s musings also suggest that a Trump presidency could look a lot like President Obama’s third term when it comes to U.S. military engagement.

During the 2012 presidential race, you’ll recall, Mitt Romney criticized Mr. Obama for going too easy on Russia and playing down the global threat posed by Mr. Putin. Republicans rightly cheered the line of attack, and subsequent events have vindicated Mr. Romney. Today we have a Republican nominee in Mr. Trump who hasn’t only been steadfastly uncritical of Moscow but can’t stop praising Mr. Putin’s leadership skills.

In recent weeks, Mr. Trump has explained to voters that Mr. Putin is worthy of admiration because he “has very strong control over a country” and “says great things about me.” In December the New York billionaire said, “he’s running his country and at least he’s a leader, unlike what we have in this country.” What we have in this country, according to U.S. intelligence officials and news reports, is mounting evidence that Russia has been hacking the Democratic National Committee and other groups in an effort to manipulate the November elections.

Mr. Trump, however, is unpersuaded. In an interview with Larry King on a Russian TV network controlled by Mr. Putin, he defended the former KGB lieutenant colonel, said it was “unlikely” that Russians stole files from DNC servers, suggested that his political opponents concocted the story—“maybe the Democrats are putting that out, who knows”—and complained about the “dishonesty” of the U.S. media. Is Mr. Trump trying to put Russian propagandists out of work?

The next commander in chief’s first priority will be combating radical Islam, and Mr. Trump has noted that Islamic State was born of the Obama administration’s premature withdrawal from Iraq. Still, the nominee has spent much more time debasing U.S. military leaders than he has spent providing details on how he would address Islamic terrorism going forward. When asked about other global hot spots, his default position has been closer to the current administration’s strategy of “leading from behind” than Mr. Trump and his supporters want to admit.

Republicans, for example, have faulted the president for not doing more to stop Russian aggression in eastern Ukraine, while Mr. Trump has called for less U.S. involvement in the conflict and more reliance on European allies. “I think maybe we should do a little following and let the neighbors take a little bit more of an active role in the Ukraine,” Mr. Trump told MSNBC in December.

The GOP candidate cites Mr. Putin’s high approval rating as another praiseworthy accomplishment, notwithstanding the fact that Mr. Putin runs a country with no independent legislature or judiciary and restricted press freedoms. When your political opponents wind up dead or imprisoned, people tend to tell you what you want to hear.

In Garry Kasparov’s recent book “Winter is Coming: Why Vladimir Putin and the Enemies of the Free World Must Be Stopped,” the Russian chess champion turned democracy activist details the Putin leadership style that Mr. Trump holds in such high regard. After Mr. Putin first became president in 2000, democratic reforms were “steadily rolled back” and the “government launched crackdowns on the media and across civil society.”

The suppression of pro-democracy groups was especially harsh. “The Kremlin’s domination of the mass media and ruthless persecution of all opposition in civil society made it impossible to build any lasting momentum” for reform, writes Mr. Kasparov. “Jump forward to the beginning of 2015 and Putin is still in the Kremlin. Russian forces have attacked Ukraine and annexed Crimea, six years after invading another neighbor, the Republic of Georgia. Just days after hosting the Winter Olympics in Sochi in February 2014, Putin fomented a war in Eastern Ukraine and became the first person to annex sovereign foreign territory by force since Saddam Hussein in Kuwait.”

This is the record that has led Mr. Trump to call Mr. Putin a “better leader” than our current president. Mr. Obama should take that as a compliment. Mr. Trump should have his head examined—and release the results.


Article Link To The Wall Street Journal:

What Clinton Missed In Her 'Basket of Deplorables'

By Ramesh Ponnuru
The Bloomberg View
September 14, 2016

Hillary Clinton made a mistake when she put half of Donald Trump’s supporters in a “basket of deplorables.” She had already given her big speech on Trump’s ties to the alt right. And she had talked before about some of his supporters being “deplorable.”

You could even read her remarks as an attempt to persuade liberals to have more sympathy for Trump voters: Some of them, she was saying, were not racists, homophobes and so on, but rather felt let down by their government and stressed by the economy.

(Oddly, the possibility that a significant number of Trump voters might be neither bigots nor economically anxious -- that they might just favor Trump because they usually vote Republican -- seemed to escape her.)

This time her words became controversial and gave the Trump campaign an opening -- because she assigned “half” his supporters to the bad basket. Trump and his running mate, Mike Pence, said that Clinton had slandered millions of Americans.

So her remark was impolitic. Was it mistaken in any deeper sense? That depends on the answer to two questions: How racist, sexist, etc., are Trump’s supporters? And how deplorable does that make them?

Some commentators have cited surveys to defend the accuracy of Clinton’s remarks. Polls have found that most Trump supporters believe President Obama is Muslim. A Reuters-Ipsos poll taken over the course of the spring found that nearly half of Trump supporters consider blacks more violent than whites. Most Republicans polled during the primaries favored a temporary ban on Muslim immigration. Also during the primaries, a poll found that nearly 20 percent of Trump supporters, shockingly, regretted the Emancipation Proclamation.

Sounds pretty ugly. But there are a few things to keep in mind. First: Not all of those polls can be taken at face value. That last one should be interpreted very cautiously. As Tim Carney pointed out, the wording was sufficiently confusing that 10 percent of Sanders supporters, 6 percent of Clinton supporters and 5 percent of blacks chose the pro-slavery answer.

Second: Some of these views may not be rooted in prejudice. The response that blacks are more violent, for example, may just reflect statistics showing that blacks commit more violent crimes in proportion to their population than, say, whites do. This fact doesn’t justify suspicion of the vast majority of law-abiding black people. But it may help explain why more than 30 percent of Clinton supporters, too, view blacks as more violent. (How many of Clinton’s defenders are willing to say that about a third of her supporters are deplorable, too?) Nor is confusion about Obama’s religion per se bigoted, given that the press has had no qualms about calling his “Muslim roots.”

Third and most important: You can hold deplorable views without being a deplorable person in general. David Duke is deplorable, even if Mike Pence can’t bring himself to say so. But deplorable or misguided views aren’t always defining ones. That a Trump supporter, when asked, says blacks are more violent than whites does not necessarily mean that’s why he is supporting Trump, or even that racial differences are a topic that he thinks about much at all.

The view that our government is naïve about violent Muslim extremism -- a view that a lot of political rhetoric, including some from Clinton, reinforces -- could lead someone to answer yes to a pollster’s question about banning Muslim immigration. But you might be able to convince some of those people that a ban is a bad idea (as I believe). You might appeal to the better angels of their nature. If you have written them off as terrible people, on the other hand, you’re not going to try.

Bill Clinton understood this point. Racism in the United States has been declining for decades, so we can assume that a large percentage of his voters in 1992 and 1996 -- to say nothing of his voters in Arkansas before that -- held racial views worse than the ones surveys have shown to prevail among Trump voters. (Check out the trend lines on views about housing discrimination and about interracial marriage.)

Clinton saw that a lot of white voters had some legitimate concerns -- about crime and welfare, for example -- mixed up with some worse impulses. He spoke up for racial tolerance and addressed the legitimate concerns, and refrained from condemning millions of people for harboring prejudices that he must have deplored.

While progressives these days disapprove of many steps Bill Clinton took in the 1990s, particularly on racially fraught issues, that was the right approach. And his wife was right to clarify and apologize.


Article Link To The Bloomberg View:

The Closing Of The World Economy

By Satyajit Das
The Bloomberg View
September 14, 2016

Pundits and policymakers everywhere are bemoaning the rise of a new, inward-looking populism. Led by the likes of Donald Trump and Nigel Farage, those who've felt only globalization's ill effects, not its benefits, have mounted a fierce counterattack. Border-hopping elites fret that the whole process of opening up and knitting together the world through trade, capital flows and immigration may soon go into reverse.

They're missing the point. Support for freer trade and greater openness had in fact begun to falter well before economic nationalists like Trump and Farage took center stage. The same governments that count themselves among globalization's greatest champions have been rolling it back steadily since the global financial crisis.

Their excuses are innocent-sounding and several: to protect national industries and iconic businesses; to secure export markets and competitive advantage; and above all, to prop up employment and incomes.

Despite oft-repeated warnings about avoiding the beggar-thy-neighbor policies of the 1930s, these governments allowed global trade talks -- the so-called Doha Round -- to stall as early as 2008. Nations including the U.S. have instead pursued narrower bilateral and regional deals where they don’t have to satisfy so many different negotiating partners and can continue to protect key sectors. If these pacts are better than nothing, they more or less foreclose the possibility of a more ambitious multi-lateralism.

Meanwhile, between 2009 and 2015, three times as many discriminatory trade measures were introduced as liberalizing ones. In the first 10 months of 2015 alone, the latest Global Trade Alert database recorded 539 such initiatives adopted by governments worldwide that harmed foreign traders, investors, workers or owners of intellectual property -- a record.

Efforts to control trade flows have grown increasingly sophisticated. Most governments no longer impose tariffs or other crude roadblocks that would violate World Trade Organization rules. Instead countries from the U.S. -- with the auto bailouts -- to the U.K., China, Brazil, Canada and several European Union members have funneled aid to domestic industries. State procurement rules -- which in China, say, forbid buying strategic and defense technology from abroad -- favor domestic suppliers, as do “buy local” campaigns like the ones launched since 2009 in the U.S., U.K. and Australia.

New safety and environmental standards have served as well to block foreign products. The U.S.’s long-running resistance to Mexican trucks, based in part on safety and environmental concerns, was one egregious example. The restrictions many countries place on various food imports are another.

Financial policy has become a trade weapon. In the U.S., Europe, U.K. and Japan, a combination of artificially low interest rates, quantitative easing and direct intervention in money and foreign-exchange markets have implicitly targeted currency levels to gain a competitive advantage. Devaluation has reduced the purchasing power of foreign investors holding the devaluing nation’s debt.

Volatile and potentially destabilizing inflows have prompted countries as varied as Switzerland, China, Brazil, South Korea and India to restrict capital in one form or another -- something the International Monetary Fund has implicitly endorsed, reversing years of economic orthodoxy. Several places, including Canada, Hong Kong, Singapore and Australia, have introduced special taxes or other restrictions on overseas property buyers.

Nations such as Spain and Portugal with high levels of debt have sought to channel funds domestically to support financial institutions and economic activity. The U.S., U.K., the Euro zone countries and others have used regulations and political pressure to encourage banks and investors to adopt “patriotic” balance sheets, purchasing national government bonds or prioritizing lending to domestic borrowers. According to Standard and Poor's, banks have doubled their holdings of their own states' debt since 2008.

The underlying drivers behind these trends are clear. In an environment of tepid economic growth, governments have good reason to try and maximize their share of a shrinking pie. At the same time, countries that face painful structural adjustments have been reluctant to bear the pain. Nations such as China, Germany and Japan have resisted abandoning an economic model reliant on export-driven growth, placing pressure on their trading partners.

Governments have grown frustrated with the way globalization undercuts the effectiveness of national policies: Fiscal expansion designed to support domestic demand, for instance, may be dissipated through financial leakage, boosting imports rather than promoting domestic activity. Rivals are able to undermine domestic tax policies, as Ireland’s attempts to lure companies such as Apple have shown.

All this was true before the U.S. presidential campaign gained steam and Britons voted to leave the EU. Now that major party leaders in the U.S. and U.K. have positioned themselves as champions of the dispossessed, railing against trade and threats to national economic sovereignty, what were once surreptitious anti-globalization efforts have simply gained new legitimacy.

The process threatens to gain an unstoppable momentum. Already the suspicion of global trade talks has spread to all trade deals: The U.S.-led Trans-Pacific Partnership is on life support, while its transatlantic counterpart appears stillborn. Policies such as negative interest rates will require progressively tighter controls to prevent capital flight.

Governments have done enough damage already. Unless they can quickly recover the cooperative spirit they demonstrated in response to the financial crisis and convince voters of their ability to ensure an equitable sharing of the benefits and costs of globalization -- a difficult ask at the best of times -- tomorrow’s economies are certain to be even less open than today’s.


Article Link To The Bloomberg View:

To Break The Teacher Protection Racket

By Betsy McCaughey
The New York Post
September 14, 2016

Bad teachers — we’ve all had one. Now a Connecticut judge is ordering the state to protect students from that ordeal.

State Superior Court Judge Thomas Moukawsher ruled last week that Connecticut must overhaul how it evaluates and pays public school teachers and expedite firing the worst performers.

Connecticut claims 98 percent of its public-school teachers are competent. The judge smelled a rat. How can that be, he asked, when only 10 percent of Bridgeport’s high-school graduates — yes, graduates — are deemed ready for college or a job?

Connecticut’s teacher-protection racket is similar to what’s going on in most other states. In New York, desperate parents are also suing. The courts are their last resort, because state pols — intimidated by the powerful teachers unions — refuse to reform the system. Never mind the little children who never learn to read.

Reform is mostly a state issue. But Donald Trump is putting a national spotlight on it, taking a stand for “merit pay” and against paying the “bad ones” as much as the “good ones.” Hillary Clinton is endorsed by the unions and wedded to the status quo, giving voters in November a chance to weigh in against the unions’ chokehold on their kids’ schools.

That chokehold is costing Connecticut taxpayers a bundle. The state pays the third-highest teachers’ salaries in the nation.

It’s irrational, says Moukawsher, when teacher pay isn’t in any way linked to teacher quality. Teachers are paid based on seniority and whether they have a master’s degree. Yet there’s no evidence — none — that after the first few years, teachers continue to get better the longer they’re on the job, or that a master’s degree makes a difference.

“Good teachers are the key to a good school system,” Moukawsher argues. He calls the teacher-evaluation system in Connecticut a farce — like “cotton candy in a rainstorm” — virtually nonexistent.

Moukawsher’s ruling also compels Connecticut to adjust the allocation of money among rich and poor school districts. But his key insight is that spending on teachers without evaluating them is money down the rat hole.

Across the country, parents who have watched their own children set back by an awful teacher are going to court challenging teacher-protection laws.

In Minnesota, parents are fighting against granting tenure after a mere three years and shielding teachers with the most seniority from layoffs. Quality needs to be part of the equation.

Quality is never considered in our state. New York and California adhere to a wacky rule called LIFO — “last-in-first-out” — that requires a recently hired teacher to be laid off before a lousy teacher with more seniority.

And in New York City, even after a teacher is tagged unfit, the chances of getting fired are only 5 percent. Yes, it’s that hard to get rid of a bad teacher.

No wonder New York parents’ groups are suing. One plaintiff, the mother of a little girl forced to repeat second grade, explains that “her daughter fell behind due to an incompetent teacher who didn’t assign homework and didn’t help her child read.”

These parents have quit asking politicians to act. They know lip service is all they’ll get.

In his January 2015 State of the State address, Gov. Cuomo ridiculed the notion that over 98 percent of public-school teachers are rated effective or highly effective. He called that “baloney,” and promised teacher evaluations based on independent observers (not the school principal) and student test scores. But now he’s backing away.

It’s the same story everywhere: unions and their Democratic Party allies blocking reform. The biggest victims are poor children, whose parents rarely have an option except their local school.

Donald Trump, who backs school choice and merit pay for teachers, calls it a civil-rights issue: “The Democratic Party has trapped millions of African American and Hispanic youth” in failing schools.
Indeed. And it’s time to put the kids first.


Article Link To The New York Post:

Crisis Of Un-Work: More And More Men Skip Jobs, Watch TV Instead

By John Podhoretz
The New York Post
September 14, 2016

There was a remarkably good piece of economic news on Tuesday: After a long period of stagnation, average wages rose by more than 5 percent in 2015. President Obama trumpeted the fact in a campaign-like speech, and it’s fair to speculate that his surprisingly high job-approval numbers (the most recent poll had him at 58 percent) derive from it.

But there’s a distressing truth hiding in plain sight: Your wages only improve if you have wages. A shocking number of American men don’t. As the demographer Nicholas Eberstadt reveals in his relentlessly eye-opening and profoundly depressing new book, “Men Without Work,” one in six American males of prime age (25-54) are not merely unemployed but have withdrawn from the labor force entirely. That’s 7 million people.

Eberstadt’s “Men Without Work” is the social-science ballast to the powerful impressionistic account offered in J.D. Vance’s bestselling “Hillbilly Elegy,” the book of the year.

Eberstadt puts statistical meat on Vance’s rhetorical bones. His subject isn’t the unemployed but the not-employed, not men looking for work but men who have stopped looking for work. Those looking for work are counted as part of the labor force.

Here the news is good: Their wages are rising at last, perhaps because the unemployment rate fell in 2015 from 5.7 percent to 5 percent and then dipped below this year.

Generally, experts explain the departure of these 7 million men from the workforce as a combination of factors — the Great Recession, globalization, the entry of women in the workforce and increased immigration. Eberstadt acknowledges the crucial role played by these phenomena, but he makes it unambiguously clear that this is a 50-year trend.

Men have been withdrawing from the workforce across two generations in a steady downward pattern that continues no matter the economic circumstances of the moment. They have left the workforce even though work itself has gotten easier — hours shorter, labor less physically taxing.

Make no mistake; these aren’t “discouraged workers.” They’re un-workers. Only “about 15 percent of the prime-age men who did not work at all in 2014 stated they were unemployed because they could not find work. In other words, five out of six of prime-age men gave reasons other than a lack of jobs for their absence from the workplace.”

OK, so maybe they’re taking care of their kids while their wives work, or elderly relatives, or doing community service. Nope: They do less of this than either unemployed or fully employed men.

Eberstadt: “These men appear to have relinquished what we think of ordinarily as adult responsibilities not only as breadwinners, but as parents, family members, community members and citizens. Having largely freed themselves of such obligations, they fill their days in the pursuit of more immediate sources of gratification.”

Primary among these is watching TV and movies. They spend an astounding five and a half hours a day at it — three and a half more than working men and two and a half more than unemployed men.

How do they do it? They live off the employed, or on food stamps, or get themselves on disability somehow (63 percent of non-working men lived in homes that received these forms of social support). “Today’s no-work life is hardly a pathway to economic success,” Eberstart writes, but “neither does it consign the growing numbers of no-work men to a life of destitution and ruin.”

One key point in relation to this year’s most contentious debate: Immigrants work. “Foreign-born males made up more than one-fifth of prime-age job holders in 2015, but less than one-sixth of the un-workers.” And since 85 percent of the un-workers aren’t even bothering to look for jobs, saying that the jobs they don’t seek have been stolen by illegals is logically nonsensical.

What do the un-working have in common? They’re not married. They’re largely undereducated. And, most telling, they have a history of entanglement with the criminal-justice system. As Eberstadt notes, “we do not have a clue” about how to integrate those with a criminal record into the world of work. But we must get one, and fast.

We can only diagnose an illness when we acknowledge its existence and see it clearly. Then, and only then, can we try to cure it.

The crisis of the un-working, so crushingly depicted in Eberstadt’s remorseless charts and facts, is a spiritual disease that has been slowly building within the American body politic and is beginning to rot us from within.


Article Link To The New York Post:

The Left Is Weaponizing Sports

What happens when a culture loses its last neutral ground?


By David French
The National Review
September 14, 2016

Striking the latest blow for pregnant and “chestfeeding” men, the NCAA has mounted its righteous high horse and is pulling seven championship events from North Carolina venues. The Tar Heel State, you see, has the hateful audacity to mandate that its citizens use the public bathrooms that correspond to their biological sex. The NCAA’s decision comes on the heels of the NBA pulling its all-star game from Charlotte, and in the midst of a rolling series of small-scale (though much-hyped) national-anthem protests at NFL football games.

Before I turn to the larger issues, can we just take a moment to ponder the pathetic absurdity that is the NCAA? This is an organization, mind you, that reaps billions of dollars of rewards off the labor of disproportionately poor and minority students while imposing on them — as a condition for even participating in college sports — economic restrictions not imposed on any other college student. So-called student-athletes don’t own their time, or even the rights to their own names. The vast majority of them don’t go on to play pro sports, so they’re effectively prevented from making money during the time when their earning potential is at its highest. But the NCAA is now suddenly discovering social justice? Please.

While the NCAA — as perhaps the peak representative of progressive hypocrisy and cheap virtue signaling — is an easy target, its action raises a much more significant concern. Simply put, there are not many cultural spaces remaining where Americans can meet on more or less neutral ground — where Americans of all faiths and political beliefs can meet, unite, and share a positive communal experience.

Our political polarization is but one symptom of our increasing Balkanization. When I speak, I sometimes challenge audiences to name one significant cultural force or trend that is binding Americans together, rather than pulling them apart.

Social media? It might be the single most divisive new development of the last half-century. Faith? Few communities are polarizing and separating faster than our faith communities, with polar opposites — the “nones” and Evangelicals — enjoying the best prospects for long-term growth. Our neighborhoods and cities are cocooned, often so much that they lack the ideological diversity of the average suburban mega-church. Television shows are frequently micro-targeted, so red and blue Americans watch very different things.

The result is clear: Not only do Americans believe different things, they dislike their political opponents more than at any other time in recent memory. Indeed, the dislike is so strong that Americans tend to despise the other side more than they like their own side.

Sports are perhaps the only significant cultural force to counter this troubling trend. America still watches the Super Bowl. The opening days of March Madness still cripple workplaces across the land. And when a home team wins a championship, the explosion of collective civic joy completely swallows politics — just ask the inhabitants of “Believeland” after their miracle comeback against Golden State.

But it’s more than just the events themselves. Sports carry with them an entire culture through which fans can meet, form friendships, and establish lifelong bonds. Some of the most meaningful friendships of my life were formed through my law-school fantasy-baseball league. More than two decades later, we still have the league and we still love each other like brothers, despite our vast political differences. Sports give us the opportunity to connect and to dig deeper than politics or ideology — to know a person as something other than a collection of political positions.

Social-justice warriors, however, can’t leave well enough alone. Is the trend now that major sporting events can only occur in progressive-approved locations? Will we now be subject to a parade of progressive-approved (and only progressive-approved) player demonstrations? And spare me any argument that our sporting culture is opening itself up to free expression. I’m glad neither the NFL nor the San Francisco 49ers are punishing Colin Kaepernick, but just ask Curt Schilling how much the progressive sports elite values dissent from the social-justice orthodoxy.

I don’t mind if individual players or owners express themselves, so long as it is clearly understood that all viewpoints are welcome. I mind, however, when the sporting elite decides to turn professional and college athletics into a sweatier version of a progressive college campus, speech codes and all. I mind when social-justice warriors try to wield the awesome economic power of sports — built via the pocketbooks of all Americans — to punish conservatives, especially Christian conservatives.

To do that is to play with fire. The NCAA’s decision and Kaepernick’s protest have immense power now precisely because sports has always been neutral ground. The NBA salary cap skyrocketed in part because live sports is one of the most valuable properties in television. End the neutrality, and you will — over time — narrow your audience. ESPN is already struggling with lost revenue due to cord-cutting. It turns out that when consumers can truly choose their channels, they often don’t choose ESPN.

The more ESPN acts like MSNBC, the more consumers will look elsewhere. The more the NCAA acts like Oberlin, the more good will it loses with fans and — crucially — the legislators and other government officials who prop up its insane and unjust business model. Not that most progressives really care. Unity? Fun? Those are meaningless concepts when social justice is at stake.


Article Link To The National Review:

On The Cusp Of An A.I. Revolution

By Marc Benioff
Project Syndicate
September 14, 2016

Over the last 30 years, consumers have reaped the benefits of dramatic technological advances. In many countries, most people now have in their pockets a personal computer more powerful than the mainframes of the 1980s. The Atari 800XL computer that I developed games on when I was in high school was powered by a microprocessor with 3,500 transistors; the computer running on my iPhone today has two billion transistors. Back then, a gigabyte of storage cost $100,000 and was the size of a refrigerator; today it’s basically free and is measured in millimeters.

Even with these massive gains, we can expect still faster progress as the entire planet – people and things – becomes connected. Already, five billion people have access to a mobile device, and more than three billion people can access the Internet. In the coming years, 50 billion things – from light bulbs to refrigerators, roads, clothing, and more – will be connected to the Internet as well.

Every generation or so, emerging technologies converge, and something revolutionary occurs. For example, a maturing Internet, affordable bandwidth and file-compression, and Apple’s iconic iPhone enabled companies such as Uber, Airbnb, YouTube, Facebook, and Twitter to redefine the mobile-customer experience.

Now we are on the cusp of another major convergence: big data, machine learning, and increased computing power will soon make artificial intelligence, or AI, ubiquitous.

AI follows Albert Einstein’s dictum that genius renders simplicity from complexity. So, as the world itself becomes more complex, AI will become the defining technology of the twenty-first century, just as the microprocessor was in the twentieth century.

Consumers already encounter AI on a daily basis. Google uses machine learning to autocomplete search queries and often accurately predicts what someone is looking for. Facebook and Amazon use predictive algorithms to make recommendations based on a user’s reading or purchasing history. AI is the central component in self-driving cars – which can now avoid collisions and traffic congestion – and in game-playing systems like Google DeepMind’s AlphaGo, a computer that beat South Korean Go master Lee Sedol in a five-game match earlier this year.

Given AI’s wide applications, all companies today face an imperative to integrate it into their products and services; otherwise, they will not be able to compete with companies that are using data-collection networks to improve customer experiences and inform business decisions. The next generation of consumers will have grown up with digital technologies and will expect companies to anticipate their needs and provide instant, personalized responses to any query.

So far, AI has been too costly or complex for many businesses to make optimal use of it. It can be difficult to integrate into a business’s existing operations, and historically it has required highly skilled data scientists. As a result, many businesses still make important decisions based on instinct instead of information.

This will change in the next few years, as AI becomes more pervasive, potentially making every company and every employee smarter, faster, and more productive. Machine learning algorithms can analyze billions of signals to route customer service calls automatically to the most appropriate agent or determine which customers are most likely to purchase a particular product.

And AI’s applications extend beyond online retail: Brick-and-mortar stores still account for 90% of retail sales, according to the consultancy A.T. Kearney. Soon, when customers enter a physical store, they will be greeted by interactive chat-bots that can recommend products based on shopping history, offer special discounts, and handle customer-service issues.

Advances in so-called “deep learning,” a branch of AI modeled after the brain’s neural network, could enable intelligent digital assistants to help plan vacations with the acumen of a human assistant, or determine consumer sentiments toward a particular brand, based on millions of signals from social networks and other data sources. In health care, deep-learning algorithms could help doctors identify cancer-cell types or intracranial abnormalities from anywhere in the world in real time.

To deploy AI effectively, companies will need to keep privacy and security in mind. Because AI is fueled by data, the more data the machine gains about an individual, the better it can predict their needs and act on their behalf. But, of course, that massive flow of personal data could be appropriated in ways that breach trust. Companies will have to be transparent about how they use people’s personal data. AI can also detect and defend against digital security breaches, and will play a critical role in protecting user privacy and building trust.

As in past periods of economic transformation, AI will unleash new levels of productivity, augment our personal and professional lives, and pose existential questions about the age-old relationship between man and machine. It will disrupt industries and dislocate workers as it automates more tasks. But just as the Internet did 20 years ago, AI will also improve existing jobs and spawn new ones. We should expect this and adapt accordingly by providing training for the jobs of tomorrow, as well as safety nets for those who fall behind.

AI is still a long way from surpassing human intelligence. It has been 60 years since John McCarthy, a computer scientist and nominal father of AI, first introduced the term during a conference at Dartmouth College, and computers have only recently been able to detect cats in YouTube videos or determine the best route to the airport.

We can count on technological innovation to continue at an even more rapid pace than in previous generations. AI will become like electrical current – invisible and augmenting almost every part of our lives. Thirty years from now, we will wonder how we ever got along without our seemingly telepathic digital assistants, just as today it’s already hard to imagine going more than a few minutes without checking the 1980s mainframe in one’s pocket.


Article Link To Project Syndicate:

Brexit And The Pound In Your Pocket

By Barry Eichengreen
Project Syndicate
September 14, 2016

The early returns on Brexit are in, and contrary to what some have been claiming, they’re not good. In July, following the referendum, consumer confidence collapsed at its most rapid rate since 1990. Surveys of manufacturing and construction dropped precipitously. While August’s data were better, it is too soon to say whether the improvement was just a “dead cat bounce.”

In this topsy-turvy post-referendum world, the one piece of good news is sterling’s fall on the foreign exchange market. A lower exchange rate will make British exports more competitive. Faced with higher import prices, consumers will shift their spending toward domestic goods. This, too, will give a boost to the British economy.

The question is how big a boost. Skeptics caution that Britain relies heavily on exports of financial services, which are not especially price-sensitive, and that the scope for growth of merchandise exports is limited by the subdued global demand.

Britain has been here before, so this is a question on which history can shed light. In 1931, when the UK abandoned the gold standard, sterling plummeted by 30%. Like now, the country relied heavily on exports of services – not just banking services but also shipping and insurance. And the external environment was even more unfavorable than it is now.

Yet, despite these headwinds, the merchandise trade deficit fell by a quarter between 1931 and 1932. By 1933, the services balance was strengthening as well. At this point, the economy was on the road to recovery.

Three circumstances made this possible. First, excess capacity enabled companies to ramp up production. Second, Britain was able quickly to put in place a set of favorable trade deals, negotiated with Commonwealth countries at the Ottawa Conference in 1932. Third, political uncertainty fell sharply, as the Labour government, widely blamed for the 1931 crisis, was replaced by a Conservative-dominated cabinet with broad popular support.

Clearly, none of these conditions is present today. Excess capacity in traded-goods sectors is low. In today’s more complicated legal environment, it will take years to negotiate trade deals with the EU and then other partners. Political uncertainty is high, and there is no prospect of a general election to resolve it anytime soon. Investors have every reason to adopt a wait-and-see attitude.

In 1949, Britain found itself in the same position, with a trade deficit vis-à-vis the United States and weak investor confidence. In September of that year, sterling was again devalued, as it had been 18 years before, by 30%.

Because pressure for higher wages was subdued, British exports became more competitive. The trade deficit with the dollar area, made up of the US and other countries that used its currency to settle international payments, contracted sharply. The current account of the balance of payments swung from deficit in 1949 to surplus in 1950, and GDP rose strongly.

Again, three things made this possible. First, there was robust demand in the US, which was recovering from its 1948-1949 recession. Second, the outbreak of the Korean War in 1950 created demand for exports of all kinds. Third, with the creation of the European Payments Union, the UK and its European partners agreed to dismantle controls on trade with one another.

Here, too, the current situation could not be more different. US growth is far from robust, and EU countries have made clear that they are in no hurry to negotiate a trade deal with the UK.

A third precedent is the 1967 devaluation of sterling, again after an interval of 18 years. The balance-of-payments crisis of 1966-7 reflected the tendency of British wages to grow faster than productivity, the consequent trade deficits, and foreign investors’ reluctance to finance a position they saw as unsustainable. This time, however, it took two years for the external accounts to improve. With unemployment already low, that much time was needed to reallocate resources from non-traded to traded-goods sectors.

In the interim, foreign investors remained reluctant to finance Britain’s deficits. Seeing the difficulty of the adjustment, they worried that sterling would collapse. The UK, unable to attract short-term capital inflows, was forced to borrow from the International Monetary Fund.
This history suggests that exchange rates matter for competitiveness, and that sterling’s depreciation should help by enhancing the competitiveness of British exports. But policymakers shouldn’t expect too much. The external environment is unfavorable. It will take time to reallocate resources toward the production of traded goods. And a new set of trade deals will not be concluded overnight.

Meanwhile, British leaders must resolve the lingering political and policy uncertainty. They must use not just monetary policy, but also fiscal tools, to support spending and strengthen the incentive to invest. Until now, they have shown little awareness of the urgency.


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Clinton’s Stealthy Single-Payer Gambit

The ‘public option’ could be implemented around the country—without congressional approval.


By Scott Gottlieb
The Wall Street Journal
September 14, 2016

It looks like 2017 will be ObamaCare’s worst year yet. The three major insurers, along with many smaller plans, are largely exiting the health-insurance exchanges, leaving more than half of U.S. counties with only one or two health-plan choices, according to the Kaiser Family Foundation. Nearly 36% of ObamaCare regions may have only one participating insurance carrier offering plans for 2017, according to health-care analytics firm Avalere Health. Data from analysts at Barclays and Credit Suisse project that health-insurance premiums are expected to rise at least 24% in 2017.

To rescue President Obama’s health-care law, Hillary Clinton has proposed resurrecting the “public option.” This failed idea—a government-run health-care plan to compete with private insurers—can’t save ObamaCare. But introducing it across the country would move the U.S. much closer to the single-payer system progressives have always longed for.

Mrs. Clinton positions the states as vehicles for the public option, and this isn’t because she discovered a late-in-life appreciation for federalism. Section 1332 of the Affordable Care Act, a little-known provision, allows states to renounce almost all of ObamaCare’s dictates. That includes the law’s politically sacred rules governing the medical benefits consumers are promised and the subsidy structure that helps pay for them. States only need to develop alternative schemes that can achieve the same level of similarly priced coverage that they would attain under ordinary ObamaCare.

In 2011 Vermont tried to use this waiver process to introduce a public option, only to abandon it three years later when it became clear that the scheme would yield skyrocketing taxes on small businesses. Minnesota, Maine and Rhode Island are proposing variations of this scheme for implementation after 2017. Maine’s proposed law boasts of its intent to use “federal funds to the maximum extent allowable under federal law.” Colorado is using the 1332 waiver to pursue its own single payer through an initiative on the ballot this November.

The real juice is the funding. To pay for these schemes, the 1332 waivers let states pocket the aggregate subsidies—including premium tax credits, cost-sharing subsidies, and small-business tax credits—that they would otherwise receive under ObamaCare. This federal slush fund could give states billions of dollars annually to subsidize their own publicly run health plan.

The process gives the executive branch broad authority to coax or even coerce states to pursue the creation of these public options—without congressional consent. ObamaCare requires that any new scheme be “deficit neutral” relative to the cost of the law. So long as the new public option won’t add to ObamaCare’s costs, the state can use the law’s subsidies to pay for government-run plans. The waivers give states ample ability to use savings claimed by setting price controls on medical care as a way to meet the budget goals.

Federal regulators would approve new public options based on White House budget office estimates of the program’s cost and impact on a state’s existing insurance market. The Obama administration has abused this broad discretion before: Officials manipulated “budget neutrality” by allowing states like Arkansas to expand their Medicaid programs under ObamaCare.

The U.S. Government Accountability Office in 2014 criticized the Obama administration over its “lack of transparency in the basis for approved spending limits” and “assurances that demonstrations would be budget-neutral to the federal government.” It is hard to imagine that a Clinton White House would be any more responsible.

Minnesota provides an example for how this might work. The state already pushes Medicaid enrollees into one of the state-directed Medicaid HMOs. Under one of the state’s new proposals, it could use the 1332 waiver to market similar low-cost plans on the ObamaCare exchange. The Minnesota scheme could use the state’s existing Medicaid price schedule to set provider rates under this public option.

Forcing providers to accept Medicaid-like rates could make these state-run public options an ostensibly cheaper alternative to the current ObamaCare plans. The end result? A federally subsidized, single-payer health-care system run by the states—complete with government authority to set prices. These government plans would have so many competitive advantages through federal subsidies and price setting that they would force the private plans out of the exchange market.

ObamaCare used the law’s vast authority to get control over the design and composition of health benefits. ClintonCare will try to use these same administrative riggings to get power over the pricing of these products and services. After moderate Democrats came out against the public option, it seemed like it would never be ushered into law. Yet the policy doesn’t need congressional approval. Mrs. Clinton apparently understands the law’s vices better than those who voted for it.


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