Wednesday, September 28, 2016

Europe Shares Open Higher; Oil Markets In Focus

September 28, 2016

European stocks opened in positive territory on Wednesday as investors wait to see if any kind of oil output deal can be salvaged from a meeting of major oil producers in Algeria.

Oil markets are in focus for markets as major oil producers meet on the sidelines of the International Energy Forum in Algeria. The forum is due to end on Wednesday and members of OPEC are expected to hold informal talks at 15:00 London time.

There were hopes that OPEC, alongside other influential non-OPEC producers such as Russia, could agree to a possible production freeze deal that would support oil prices. But crude futures fell about 3 percent on Tuesday after Iran rejected an offer from Saudi Arabia to limit its oil output in exchange for Riyadh cutting supply, dashing market hopes for a compromise.

On Wednesday, oil prices rose, however, as industry data showed a surprise draw in U.S. crude stocks, although worries over a lack of agreement among producers to curb output kept a lid on gains, Reuters reported.

Meanwhile in Asia, markets were mostly lower on Wednesday despite gains in the U.S. market on the back of the first presidential debate and better-than-expected U.S. consumer confidence data. The U.S. Consumer Confidence Index hit 104.1 in September and was notably higher than the 99.0 print economists expected, also underpinned sentiment stateside.

In other business news, the chief executive of Wells Fargo has forfeited $41 million in awards and won't be paid a salary while an investigation is underway into the bank's sales scandal.

In Greece on Tuesday, lawmakers passed reforms sought by the country's lenders to cut pension spending and speed up the privatization process in exchange for financial aid under the country's latest international bailout.

Still disapproving of Greece's third rescue package, former finance minister Yanis Varoufakis told CNBC ‎that the Greek Prime Minister Alexis Tsipras has less power than the leader of a local council.

"The Greek authorities commit to agreeing with institutions. I can assure you that if you were going to sign a contract like that with me you would become my slave."

There are no major earnings or data releases Wednesday.

Article Link To CNBC:

Secular Stagnation Or Self-Inflicted Malaise?

By Hans-Werner Sinn
Project Syndicate
September 28, 2016

Almost exactly eight years ago, the Lehman Brothers collapse plunged the global economy into recession. The interbank market collapsed, and the entire industrialized world was thrown into the worst crisis since the end of World War II. Though central banks have maintained ultra-low interest rates, the crisis hasn’t yet been fully overcome. On the contrary, numerous economies, such as the southern European countries and France, simply aren’t making any headway. And Japan has been on the ropes for a quarter-century.

Some economists believe that this is evidence of “secular stagnation,” a phenomenon described in 1938 by the American economist Alvin Hansen, who drew on Karl Marx’s Law of the Tendency of the Rate of Profit to Fall. Owing to the gradual exhaustion of profitable investment projects, according to this view, the natural real interest rate has continued to fall. Stabilizing the economy thus is possible only by an equivalent decline in policy interest rates.

In view of the huge credit bubble that preceded the crisis in Japan, the United States, and southern Europe, and the aggressive policies pursued by central banks over the last few years, I doubt that this theory is correct. In fact, I find it plausible that a very different mechanism lies behind the post-2008 stagnation, which I refer to as “self-inflicted malaise.”

This hypothesis is best understood in the context of the economist Joseph Schumpeter’s theory of the business cycle. Faulty expectations on the part of market participants regularly cause credit and asset-price bubbles. Investors, expecting prices and incomes to rise, purchase residential and commercial properties, and they take chances on new business ventures. Real-estate prices start to rise, a construction boom occurs, and a new phase of rapid expansion begins, partly sustained by the revitalization of the domestic economy, including services. The growth in incomes increasingly emboldens borrowers, which further heats things up.

Then the bubble bursts. Investment collapses and real-estate prices fall; businesses and banks go bankrupt; factories and residential buildings are vacated; and employees are laid off. Once prices and wages have fallen, new investors step in with new business ideas and establish new firms. After this “creative destruction,” a new phase of rapid expansion sets in.

In the current crisis, however, monetary policy preempted the creative destruction that could have formed the basis for a new upswing in growth. Asset holders talked central bankers into believing that Schumpeter’s economic cycle could be overcome by large-scale bond purchases financed via the printing press, and by corresponding interest-rate reductions.

To be sure, these measures stopped the fall in asset prices halfway and thus saved much wealth. But they also prevented sufficient numbers of young entrepreneurs and investors from risking a new start. Instead, established firms remained in place, keeping themselves afloat but lacking the wherewithal for new investments. In Japan and Europe, in particular, large numbers of such zombie firms and banks survived, and they are now blocking would-be competitors able to drive the next upswing in growth. The resulting economic ossification looks like the secular stagnation that Hansen described; in fact, the malaise is self-inflicted.

And, because low interest rates have reduced asset managers’ returns, some central banks – and the European Central Bank, in particular – have relied on successive interest-rate cuts in an effort to engineer ersatz value gains for assets. The economy is thus caught in a trap, forcing the ECB to engage in ever more radical monetary-policy measures. Its current program of quantitative easing is meant to double the money supply in a very short period. Further guns are being moved into position, such as successively more negative nominal interest rates or so-called helicopter money.

The only way out of the trap is a hefty dose of creative destruction, which in Europe would have to be accompanied by debt relief and exits from the eurozone, with subsequent currency devaluations. The shock would be painful for the incumbent wealth owners, but, after a rapid decline in the dollar values of asset prices, including land and real estate, new businesses and investment projects would soon have room to grow, and new jobs would be created. The natural return on investment would again be high, meaning that the economy could expand once again at normal interest rates. The sooner this purge is allowed to take place, the milder it will be, and the sooner Europeans and others will be able to breathe easy again.

Article Link To Project Syndicate:

Why Even Half The Middle Class Is Living Paycheck-To-Paycheck

By Karol Markowicz
The New York Post
September 28, 2016

It’s an election year so buzzwords like “income inequality,” “the working poor” and “American dream” are ubiquitous. But there’s one thing politicians aren’t brave enough to say to the American people: Stop spending your way to the poor house.

Indeed, amid all the debate over the pace of the economic recovery since the housing bubble burst leading to the Great Recession, we’re arguably ignoring the financial crisis building right under our noses: Americans aren’t saving. And all that squandered cash adds up.

Polly Mosendz writes in Bloomberg about a new study that found, “Close to half of those who earn from $100,000 to $149,999 a year have less than $1,000 in their savings accounts. Some 18 percent of them have socked away absolutely nothing.”

It’s hard to feel sorry for someone who makes six figures and doesn’t manage to have savings, but this is a problem happening in every financial bracket in America. We talk a lot about a “living wage,” but it turns out Americans don’t seem to be able to live on their wage almost no matter what that wage is.

In a May story for The Atlantic, Neal Gabler wrote about the fact that despite being a fairly successful writer, he would be unable to come up with $400 in an emergency. “I never spoke about my financial travails, not even with my closest friends — that is, until I came to the realization that what was happening to me was also happening to millions of other Americans, and not just the poorest among us, who, by definition, struggle to make ends meet,” Gabler wrote.

He’s right: 47 percent of respondents to a 2013 survey by the Federal Reserve Board said the same thing. Gabler quotes research by NYU economist Edward Wolff, who discovered that the average family making about $50,000 a year would be able to keep up their lifestyle for a total of just six days should they suddenly lose their income streams.

The most startling thing was that this included liquidating all of their assets. People are literally living paycheck to paycheck. That the paychecks are sometimes quite large doesn’t seem to change that dynamic at all.

What’s going on?

Gabler attributed his financial woes to ignorance — not knowing how to save or invest money when he had it. Economists continually point to credit-card debt as the culprit for America’s empty bank accounts.

But credit-card debt doesn’t just materialize out of nowhere. And what these explanations miss is that we’re addicted to spending. A 2013 FINRA Investor Education Foundation survey found that 41 percent of Americans admitted to spending more money than they make each month. A Pew study from the same year showed 39 percent of Americans report having unpaid credit-card balances. Meanwhile, the average American household has more televisions than people, nearly 70 percent have smartphones and nearly 90 percent of US households have at least one car.

Gabler disagrees that he was keeping up with the Joneses, but admits, “like many Americans, I wanted my children to keep up with the Joneses’ children.” With college costs being what they are, keeping up with the Joneses’ children might be the most fatal financial mistake Americans can make. The average student who graduated college in 2014 had nearly $30,000 in student-loan debt and many had far more.

No wonder Americans frequently report feeling uneasy about their economic prospects. And they’re not getting much help from politicians who keep insisting that economic stability is purely the product of good luck. The idea that there is little we can do to make ourselves economically secure is a myth that Americans desperately need to shake.

To those wracked by economic anxiety, politicians keep offering income redistribution. But we’re living beyond our means at virtually any income level. Far more beneficial than spreading the wealth would be teaching financial literacy as early as high school, so young adults can hang on to that wealth.

This week a Hudson Valley mansion said to have belonged to Elizabeth Schermerhorn Jones, the original “Jones” of “Keeping up with the Joneses,” was sold. It had been unoccupied for years and had fallen into disrepair. The Joneses had long ago abandoned the house they couldn’t afford, either. Perhaps we should all take their lesson and stop trying to keep up with them.

Article Link To The New York Post:

Does Russia Have A South China Sea Problem?

Russian and Chinese interests always aren’t congruent. 

By Carlyle A. Thayer
The National Interest
September 28, 2016

At the G20 Hangzhou summit earlier this month, China made clear that Russian president Vladimir Putin was a top guest. Both China and Russia claim that their bilateral relations are the “best ever’ and demonstrate an “unprecedentedly high level of trust.” Putin described the relationships as a “comprehensive partnership and strategic collaboration.”

The China–Russia relationship is based on a mutual wish to push back against the United States, for its expansion of NATO in Europe and its rebalance in the Asia–Pacific. Sanctions imposed on Russia by the US and Europe have hurt the Russian economy, and Russia needs markets for its energy exports, especially gas. China has signed a major deal to import Russian gas and it is a large market for Russian manufactured weapons and technology.

However, Russian and Chinese interests always aren’t congruent. Russia is suspicious of Xi Jinping’s ‘One Belt, One Road’, which aims to expand into Central Asia. Moscow also faces the difficult challenge of improving relations with China while at the same time not undermining its traditional ties with India and Vietnam, which both feel pressure from Beijing.

That tension is manifested in Russian positions on the South China Sea. The first is that it takes no side in disputes and supports freedom of navigation, including overflight and the peaceful settlement of disputes directly between the parties concerned on the basis of international law. But Russia concurrently opposes the involvement by third parties outside the region because their involvement, according to Putin, “will only hurt the resolution of these issues… [and] is detrimental and counterproductive.”

Putin supported China’s position on the recent Arbitral Tribunal ruling on the grounds that it was conducted without China being present or China’s views being considered. Putin argued that it was a legal rather than a political matter. In fact, he is ill- informed about (or is choosing to ignore) the procedures established under Annex VII of UNCLOS, Article 9 of which makes clear that the “absence of a party or failure of a party to defend its case shall not constitute a bar to the proceedings.”

The conclusion to be drawn is that Putin’s definitely trying to curry favor with China, even at a cost to its long-standing friends in the region. Russia and Vietnam are in agreement that territorial disputes in the South China Sea should be resolved peacefully by the parties concerned. But Russia hasn’t respected Vietnam’s position that when the interests of third parties in the region are involved, those third parties must be included in discussions. Vietnam takes note of the interests of third parties outside the region, especially relating to freedom of navigation and overflight.

China’s excessive claims in the South China Sea and its artificial islands are aimed at dominating the South China and ultimately restricting the movement of US (and other) naval ships. In other words, China’s actions in both those respects threaten freedom of navigation and overflight by regional and external powers. So Russia is being duplicitous, because in practice the interests of third parties outside the region are the freedom of navigation and overflight threatened by China. Putin supports freedom of navigation for the Russian Navy but is unconcerned if China makes it difficult for the US Navy.

Despite their newfound closeness, both Russia and China have been careful not to use the word alliance to describe their political and military relations. Formal alliances are usually directed at a third party and involve a commitment by the signatories to meet and take joint action in certain circumstances, such as an armed attack on one of the parties. Clearly a China-Russia alliance would be aimed at the US and its allies and would in effect bring about a new Cold War.

And it’d likely be counterproductive. A Russia–China alliance would result in a reinvigoration of the US alliance system in both Europe and in the Asia–Pacific. Individual members of ASEAN would come under great pressure to take sides to bolster their security. Finally, such a hypothetical alliance would likely provoke a global arms race, heighten tensions and raise the risk of conflict in the East and South China seas, where three major powers have material interests.

China and Russia will continue to work together when it suits them, coordinating actions and cooperating on security and strategic matters that affect them, most notably against US ballistic missile defense in Europe and THAAD (Terminal High Altitude Air Defense) in South Korea. But they’ll cooperate with the United States as well if it suits them. Russia and the US are working together to resolve the conflict in Syria (however difficult that may turn out to be), while China and the US cooperate on a wide variety of international issues, from climate change to non-proliferation by North Korea. What we’re seeing can therefore be more accurately described as a transient confluence of limited interests, rather than a deep strategic commitment between Russia and China.

Article Link To The National Interest:

Al Gore Returns With Earth And Election In The Balance

A Democrat who knows a thing or two about third-party challenges, environmental dangers, and the once and perhaps future first family waits in the wings.

The Daily Beast
September 28, 2016

Climate change got only fleeting attention on the debate stage Monday night, but when Donald Trump lied by insisting he’d never said global warming is a hoax perpetrated by the Chinese, his 2012 tweet saying just that was re-tweeted tens of thousands of times.

In the political world, no one is more of an expert on the perils of a warming planet than former Vice President Al Gore, dubbed “Mr. Ozone Man” by President George H.W. Bush during the 1992 presidential campaign.

Gore’s bestseller, Earth in the Balance, on the dangers of global warming, was one of the early alarm bells on an issue that finally seems to be coming into its own with millennial voters. Young voters drove that blizzard of tweets calling out Trump; they’re passionate about the planet, but they’re lukewarm about Hillary Clinton.

“The Clinton campaign seems to have not wanted to involve him up to now, and it appears to be mutual,” a former Gore associate responded to an inquiry earlier this month about when we might see Gore join other Democratic luminaries on the campaign trail.

With polls showing Clinton weak among millennials as younger voters flirt with third-party candidates, Gore’s name is gaining new currency among nervous Democrats because he is uniquely positioned to talk about the dangers of a protest vote. Gore conceded the presidency in 2000 to George W. Bush after 36 days of legal wrangling that ended in Bush’s favor with a Supreme Court decision.

Green Party candidate Ralph Nader got enough votes in Florida to plausibly deny Gore victory, assuming those votes would otherwise have gone to Gore. Nader to this day refuses to accept responsibility for Gore’s loss, but as the polls tighten in battleground states, his name gets invoked and not in a flattering way.

The Clintons and the Gores haven’t been much in touch since those halcyon ’90s, but the Clinton camp has reached out to see where the former veep might “jump in and be helpful in some way,” says a source familiar with the back and forth. He calls Gore “a triple threat” because he can appeal to millennials, speak to concerns about the health of the planet, and make the case from personal experience against casting a protest vote for a third-party candidate.

“His message is you better not throw your vote away,” says Matt Bennett, co-founder of Third Way, a moderate Democratic group. Polls show Libertarian candidate Gary Johnson and Green Party candidate Jill Stein ticking up—and cutting into Clinton’s margins—in several key states, including Colorado. “Both of them are complete clowns in their own clownishness and for them to be spoilers and hand the election to Trump would be the apotheosis of horror,” says Bennett. His message to environmentally-minded folks who are toying with a vote for Stein: “Your vote might matter a whole lot; spoilers can spoil. Don’t be cavalier about it.”

The relationship between the Gore and Clinton camps remains strained 16 years after the 2000 race in which Gore felt Clinton, running for the Senate in New York, took resources from him. Then on election night, there was euphoria in New York while there was gloom and doom in Nashville. Before that, Clinton was a very involved first lady and the vice president’s Reinventing Government initiative had to take a back seat to her health-care proposal, and we know how that turned out.

Adding to the drama, Gore kept President Clinton on the sidelines in the 2000 campaign because of the Monica Lewinsky scandal, which added to the bad feelings. Still, there is a lot of overlap between the two camps, with many of the same people deeply invested in Gore’s climate advocacy and in Clinton’s election. “The red hot center of politics is not something he gravitates to these days,” says the source familiar with Gore’s thinking, but he, more than anyone, knows what’s at stake.

The Clintons may not have been that eager to reach out to Gore, and the feeling is mutual, but with the earth in the balance (the title of Gore’s book, for which he was roundly mocked, and then vindicated), he will do whatever he’s asked.

“I don’t know how it’s going to manifest itself yet,” says the source. “But they’d like to enlist him, and that’s what he’ll do.”

Article Link To The Daily Beast:

Introducing Liberland, Europe's Newest Country

By Stratfor
September 28, 2016

Europe has a new country. Or at least that is what a tiny territory between Serbia and Croatia is claiming. The Free Republic of Liberland (commonly known as Liberland) has failed to get international recognition, but its leaders are actually claiming control of a land that no other country seems interested in owning. While Liberland is unlikely to become anything more than a curious geographic anecdote, its existence raises questions about the meaning of statehood.

Since the Yugoslav wars of the 1990s, Serbia and Croatia have each claimed several territories along their border, including some islands on the Danube River, that have been put to international arbitration. But in early 2015, Vit Jedlicka, a Czech politician and activist, found a small parcel of land on the western bank of the Danube that is not claimed by either side. And so on April 13, 2015 (Thomas Jefferson's birthday), Jedlicka proclaimed the birth of Liberland, Europe's newest nation. Its name may sound impressive, but its territory is not: Liberland’s area is about 7 square kilometers (2.7 square miles) and is mostly covered by forest. It has no residents, and according to local media it has only an old house that has been abandoned for decades.

Jedlicka designed a flag for Liberland, which consists of a yellow background (representing libertarianism) and a black horizontal stripe (representing anarchism). He claims the country will be ruled by only a handful of laws, and taxes will be paid on a voluntary basis. Liberland's website describes its government as a "constitutional republic with elements of direct democracy" under the motto "to live and let live." Through his website, Jedlicka is offering passports from Liberland — open to anybody except Nazis, communists and "extremists" — and inviting people to invest in the new country. He claims to have a plan to turn Liberland into a financial center and a tax haven.

Jedlicka's critics have accused him of creating Liberland as a publicity stunt, and the Serbian and Croatian governments have minimized the issue. But the case is notable because the Serbian government told American media in 2015 that Liberland would not theoretically violate its territory, since the area is not on Serbian land. Croatia has admitted that the area "is still the subject of negotiations" between Zagreb and Belgrade but said it should be awarded to either of the two countries, not to a third party.

Terra Nullius

Liberland bases its claim to existence on the argument that no nation has claimed ownership of the area. This would represent a case of "terra nullius" (nobody's land), a concept that describes a territory that is not under the sovereignty of any state and is subject to acquisition through occupation. The concept has existed for centuries and is widely accepted as a principle of international law. It has, however, created several disputes among countries, in many cases leading to war or international arbitration. What makes Liberland so interesting is that, unlike in most cases of terra nullius, no sovereign state seems to be particularly interested in owning this tiny territory.

A somewhat similar case is Bir Tawil, an area of just over 2,000 square kilometers along the border between Egypt and Sudan. Because of discrepancies in the interpretation of the border between Egypt and Sudan, some territories are claimed by both countries while others, like Bir Tawil, are claimed by neither. Over time, several people have claimed ownership of the area, but because of its inclement weather and hostile geography, most of these claims exist only online. In 2014, however, an American citizen traveled to the area and proclaimed the Kingdom of North Sudan.

According to its website, the Kingdom of North Sudan is "a nation of love and progress" that means to "bring together the world's best scientific minds and concerned global citizens wishing to fund cutting edge scientific advancement in sustainable agriculture, water and energy conservation." To do so, the country launched an online fundraising campaign in 2015. North Sudan has also applied for observer entity status at the United Nations, but so far no relevant international actor has recognized its existence.

Still, that Bir Tawil is unclaimed does not necessarily mean it is unwanted. Tribes from the region often visit the area, leading to accusations of racism against North Sudan's American "king." Unsurprisingly, North Sudan is one of the few "countries" that has recognized Liberland. The Kingdom of Enclava, a patch of land at the border between Slovenia and Croatia that also claims to be Europe's newest country, has recognized Liberland too.

Finders Keepers?

The cases of Liberland, North Sudan and others raise questions about the concept of statehood. A traditional line of thought established that something could be considered a state only if it was recognized by other sovereign states. The Congress of Vienna (1815) was crucial for the development of this position because it decided that future states would require recognition from the existing ones to be part of the international community. In other words, the Great Powers of the 19th century wanted to make sure they decided what could become a state and what could not.

But this theory led to disputes over what "recognition" actually means. After all, acknowledging the existence of a new territorial entity is not the same as granting it formal diplomatic recognition. This line of thought also faces problems in the many cases in which a new entity is recognized by some states but not by others. This remains a valid question to this day, since many states are not fully recognized by the international community. Places such as Kosovo and Palestine are not members of the United Nations but are recognized by several of its members.

A more recent line of thought holds that states need to meet certain criteria, such as a defined territory, a permanent population, a government, and a capacity to enter relations with other governments. From this point of view, the recognition of other states is not a critical condition for statehood. These principles were formally laid out in the Montevideo Convention of 1933, a foundational document on statehood. Some experts on international relations have argued that since Liberland represents a clear case of terra nullius, it could theoretically satisfy Montevideo's requirements.

The Principality of Sealand, arguably the world's most famous self-proclaimed microstate, offers a case study for these issues. In 1967, a British family occupied an offshore platform in the North Sea and declared it an independent state. Though Sealand has not been formally recognized by any states, its government claims to have been de facto recognized by countries including the United Kingdom and Germany (for the simple reason that both governments have acknowledged it exists). Sealand also claims to have a government and a population (even if a caretaker seems to be the only permanent resident), which make it a state according to the Montevideo requirements.

According to the United Nations Convention on the Law of the Sea, however, artificial installations do not possess the status of islands and do not qualify as "territories" in the traditional sense of the word. This has not stopped Sealand from establishing several business operations, most notably an internet hosting facility, or "data haven." Sealand may not be internationally recognized, but it has managed to remain economically viable for half a century.

A Rush And A Push And The Land Is Ours

Liberland, North Sudan and other self-proclaimed microstates will have a difficult time if they truly want to become formal states (whether their self-proclaimed leaders actually have this goal remains a subject of debate). The most basic of the obstacles to formal statehood is to actually occupy the land they claim to own.

The fact that countries have not claimed ownership of certain territories does not mean they are not willing to react if they feel threatened by third parties. Croatia and Serbia may currently consider Liberland little more than a joke, but they would almost certainly take action if there were any real attempts to populate it and establish an independent country. Since the case of Liberland became famous, Croatian police have been deployed in the area and have arrested several people trying to reach it. Egypt and Sudan may look at different maps when they think about their common border, but they would probably not be happy with a new state emerging between them.

Countries dealing with unclaimed territories would reach bilateral solutions on these lands rather than allowing Czech activists or American kings to occupy them. Ironically, this could lead to conflict if the involved governments simultaneously decide that they want to own an area they previously ignored. Most disputed territories have that status precisely because two or more actors claim ownership over them. Liberland is a curious case because, in principle, none of the actors that could claim control over it seems interested in doing so. But this will probably remain a curiosity with negligible consequences at the international level. For the rest of the world's disputed territories, violence and diplomacy will remain the main tools to claim ownership.

Article Link To Stratfor:

The Media Loves Hillary — And It Could Cost Her The Election

By Michael Goodwin
The New York Post
September 28, 2016

Back when I was a pup in the newspaper business, legendary reporter Peter Kihss gave me lifetime advice about covering politicians. Remember, he said, there are no such things as stupid questions, only stupid answers.

Which brings us to Lester Holt and the accusations that the moderator tipped Monday’s debate in favor of Hillary Clinton. Holt’s bias was obvious, but the impact was not inevitable. It mattered largely because, shockingly, Donald Trump was shocked that Holt was in the tank for Clinton.

How could Trump not see that coming? And if he did, why wasn’t he better prepared?

Holt never pressed Clinton with any substantive follow-ups, while Trump repeatedly was asked to defend or explain what he had just said or said in the past.

Holt insisted repeatedly Trump had supported the Iraq War, despite the candidate’s denials, and asked pointed questions about his taxes and the Obama birther issue. Yet Clinton got only one obligatory question on the e-mail scandal, and not a single one about the Clinton Foundation, her Wall Street speaking fees or her health — all of which have figured far more prominently in the campaign than Iraq or the birther issue.

It was outrageous — but no surprise. After all, Holt is part of the Big Media establishment that has uniformly protected President Obama and broken all its own standards to trash Trump and elect Clinton.

Holt even got a warning shot when his NBC colleague, Matt Lauer, was thrashed by the liberal media amid accusations that he was too tough on Clinton and too soft on Trump at an earlier forum.

A second warning shot came just last weekend, when Clinton’s Praetorian Guard carried out a synchronized assault against Trump. The New York Times, The Washington Post, Politico and the Los Angeles Times all carried very similar stories accusing Trump of repeated lies.

To call that a coincidence would be a Clintonian lie. Those articles matched the talking points of her campaign, which also demanded that Holt “fact-check” Trump, which, of course, he did, while leaving her un-checked.

In short, the debate fix was broadcast on the front pages well in advance, yet Trump wasn’t ready for it. Although he didn’t make fatal mistakes and survived Clinton’s best punches, his meandering digressions, along with his failure to demand the answers from Clinton that Holt didn’t, cost him precious time and opportunity. As such, they fall into Peter Kihss’ category of “stupid answers.”

But here’s the other side of the story: Trump won’t suffer much voter pain, certainly not enough to put victory out of reach. His secret weapon is that his core supporters, including many independents, distrust the media nearly as much as they distrust Clinton.

Consider that, while most media professionals said Clinton won the debate, most online polls of viewers had Trump winning.

The split verdict reflects a theme that goes back to the earliest GOP primary debates. Candidates who blasted media moderators for being prejudiced against Republicans got rousing ovations.

The anger has grown more pronounced since Trump, the ultimate outsider, crashed the party to win the nomination. With media bias blatant on a daily basis, it is far more than a sideshow.

My in-box routinely contains letters from readers such as Gayla Chandler, who wrote, “So my vote for Trump is partially FOR Trump, but it is equally against both Hillary and media manipulation.”

Reader David Paler articulated the same sentiment in a broader context, writing, “It occurred to me that this election might actually be a referendum on the media and its role in today’s world events.”

If they are right, it’s possible that anti-media sentiment could help decide the election. The nationwide numbers suggest the possibility.

A recent Gallup survey found a new low in public trust of the media, with only 32 percent of Americans saying they have a great deal or some trust in newspapers, TV and radio “to report the news fully, accurately and fairly.” Trust fell eight points in one year alone and is only 14 percent among Republicans.

In a change election where both candidates have historically high negative ratings, many voters could make their choice for secondary reasons.

Voting against the other candidate is the most likely option, while voting against the media as a proxy for voting against the establishment is emerging as another.

In that case, the news media could be more than part of the story. They could be the story.

Article Link To The New York Post:

Vladimir Putin Resurrects The KGB

The new agency revives the name of Stalin’s secret police and will be larger and more powerful than today’s FSB.

Politico EU
September 28, 2016 

Soon after he was first appointed prime minister back in 1999, Vladimir Putin joked to an audience of top intelligence officers that a group of undercover spies, dispatched to infiltrate the government, was “successfully fulfilling its task.”

It turns out Putin doesn’t do jokes. Over Putin’s years in power, not just the Kremlin but almost every branch of the Russian state has been taken over by old KGB men like himself.

Last week news broke that their resurgence is soon to be topped off with a final triumph — the resurrection of the old KGB itself. According to the Russian daily Kommersant, a major new reshuffle of Russia’s security agencies is under way that will unite the FSB (the main successor agency to the KGB) with Russia’s foreign intelligence service into a new super-agency called the Ministry of State Security — a report that, significantly, wasn’t denied by the Kremlin or the FSB itself.

The new agency, which revives the name of Stalin’s secret police between 1943 and 1953, will be as large and powerful as the old Soviet KGB, employing as many as 250,000 people.

The creation of the new Ministry of State Security represents a “victory for the party of the Chekists,” said Moscow security analyst Tatyana Stanovaya, referring to the first Bolshevik secret police. The important difference is that, at its core, the reshuffle marks Putin’s asserting his own personal authority over Russia’s security apparatus.

Putin, who in 2004 said that “there is no such thing as a former KGB man,” has always had a complicated relationship with the FSB.

On the one hand, Putin has allowed the FSB to absorb pieces of the old KGB, chopped off when Boris Yeltsin tried to dismantle the once all-powerful Soviet security apparatus in the early 1990s. Under Putin, the FSB regained control over Russia’s borders, border troops, and electronic intelligence gathering. At the same time, former KGB men began their takeover of every institution of state, as well as Russian businesses.

But at the same time, Putin has made several attempts to reform and control the FSB. In 2007 he put his close ally Viktor Cherkesov in charge of the Federal Anti-Drug Agency and tasked it with investigating the murky business dealings of top FSB officers. When Cherkesov’s clean-up failed, Putin built up another rival security agency, the Investigative Committee, and tasked it, rather than the FSB, with investigating high-profile political murders like those of journalist Anna Politkovskaya and opposition politician Boris Nemtsov.

"The aim in all cases seems to be to replace old-guard Putin allies with younger, more loyal and less independent figures."

Now, however, Putin seems to have put that divide-and-rule policy into reverse and is instead consolidating power into a pair of super-agencies: the National Guard — created in July, that united internal security troops under the Kremlin’s control — and now the new Ministry of State Security. Putin will personally control these super-agencies.

“On the night of September 18 to 19 … the country went from authoritarian to totalitarian,” wrote former liberal Duma deputy Gennady Gudkov on his Facebook page.

Further evidence of Putin’s gathering of power into his own hands is an ongoing purge launched over the summer that has already claimed the heads of the Federal Narcotics Service, Federal Protection Service (Putin’s bodyguard), the Federal Migration Service and Russian Railways, as well as the president’s Chief of Staff and personal confidant Sergei Ivanov.

The aim in all cases seems to be to replace old-guard Putin allies with younger, more loyal and less independent figures. The same pattern has been repeated among regional governors — four of whom have recently been sacked, and two replaced by Putin’s personal bodyguards.

Protect The Regime

The creation of the Ministry of State Security is part of a “project aimed at replacing old allies with new ones,” said independent Moscow-based analyst Stanislav Belkovsky. Putin “dislikes being surrounded by people who feel untouchable because of their personal closeness to him. He doesn’t want to have anything to do with his old friends, he wants people who can execute his will.”

He’s even selected a hatchet man — Sergei Korolev, head of the FSB’s economic security department — to prosecute and eliminate any independent voices in the new Security Ministry, said Belkovsky.

The deeper significance of all these purges and reshuffles goes beyond just Kremlinology. They are clear signs of a regime bracing for trouble. Ever since oil prices began to tumble in 2013, the Kremlin has been preparing for unrest and discontent — primarily with the help of distractions such as annexing Crimea and the campaign in Syria. But Putin is preparing an iron fist too.

“I can’t remember a time when so many security service guys ascended to power at once” — Dmitry Gudkov, State Duma deputy

“The KGB, it should be remembered, was not a traditional security service in the Western sense — that is, an agency charged with protecting the interests of a country and its citizens,” wrote security analyst Andrei Soldatov, founder of the Agentura.Ru website. “Its primary task was protecting the regime. Its activities included hunting down spies and dissidents and supervising media, sports, and even the church. It ran operations both inside and outside the country but, in both spheres, the main task was always to protect the interests of whoever currently resided in the Kremlin.”

That’s precisely what the Kremlin needs today as inflation remains in double digits and Russian business remains cut off from international financial markets and investment by Western sanctions over Ukraine.

“I can’t remember a time when so many security service guys ascended to power at once,” Dmitry Gudkov, an independent State Duma deputy, wrote of the summer’s purges on his Facebook page. “We don’t know anything about these people’s management expertise. Preparing the guns for battle, closing ranks — this is what these appointments are all about. [The Kremlin] can’t trust anyone but those in uniform.”

‘Terminator 2’

And there’s a final, more personal reason for Putin’s purge and revival of the Ministry of State Security.

“In some ways, this is a sign of Putin’s strength, because he feels confident enough to full, personal, authoritarian rule,” said Belkovsky, who advised the Kremlin in the mid-2000s. “It’s also a sign of weakness because the reason behind it is to defuse the possibility of a palace coup.” Putin is a “man of systems and institutions” according to Belkovsky and, as such, knows his allies are also the greatest threats to his rule.

In creating the super ministry, Putin is completing a full 25-year circle. When Boris Yeltsin came to power in 1991 in the wake of a hardline coup against Mikhail Gorbachev largely sponsored by the KGB and its boss, Vladimir Kryuchkov, Russia’s new leader attempted to create a security agency that would not meddle in politics or society and confine itself strictly to law enforcement.

Yeltsin failed. According to Soldatov, by the mid-1990s “various component parts and functions of the old KGB had begun to make their way back to the FSK, like the liquid metal of the killer T-1000 android in “Terminator 2” … slowly reconstituting itself after having been blown to bits.”

Now those bits have finally coalesced into a full-fledged replica of the original — but with one important difference. The new Ministry of State Security has been designed specifically as a guarantor of Putin’s rule.

Whoever heads the new ministry will certainly be an important political player — but it’s clear that the true head of both the Russian state and its new, consolidated security organs will be Putin himself.

That hasn’t happened since the rule of Yuri Andropov, KGB head-turned general secretary between 1982-84. He presided over a collapse in oil prices, a war in Afghanistan designed to boost the regime’s popularity that quickly turned disastrous, and finally an accelerating economic crisis that no amount of repression or propaganda could prevent from snowballing into collapse and revolution.

Putin is hoping that this time round, harsher repression and smarter propaganda will save him from the same fate.

Article Link To Politico EU:

From The Taliban Frying Pan To The Islamic State Fire

In Afghanistan, survivors from Islamic State-controlled regions speak of a cruel new regime that makes the Taliban look permissive by comparison.

By Heather Barr
Foreign Policy
September 27, 2016

Gales of laughter greeted my question: “So, which is worse, ISIS or the Taliban?”

I was speaking to a room full of women who had recently fled areas in Afghanistan’s eastern Nangarhar province controlled by groups claiming allegiance to the Islamic State. But they didn’t laugh for long.

“ISIS is worse,” one said. “They kill boys, girls, women, men — everyone.”

The life these women described in Islamic State-controlled areas of Nangarhar was so bad they sounded almost nostalgic for those earlier years spent under the Taliban’s thumb. While the Taliban’s abuses were extreme — and deeply resented — the Islamic State has brought a whole new level of suffering to villagers already expert at ranking hurt during Afghanistan’s 38 years of conflict.

Rumors of the Islamic State’s presence in Afghanistan first began to surface in 2014, and initially appeared exaggerated. In early 2015, however, the Islamic State announced plans to expand into what it calls “Khorasan,” an area that includes regions of both Pakistan and Afghanistan. As of mid-2016, the Islamic State’s efforts to establish itself in other parts of Afghanistan have in large part failed, but the group now controls significant portions of four districts of Nangarhar province, which borders Pakistan.

When the Islamic State first popped up in Afghanistan, its fighters formed an uneasy alliance with the Taliban, based on a shared opposition to the U.S.-backed government of President Ashraf Ghani. Some Islamic State recruits were defectors from the Taliban, still bound by the complex webs of kinship and rivalry that see some Afghan families with one foot in the government and one in the insurgency. The relationship quickly soured, however; the Taliban came to see the Islamic State as a threat, and increasingly violent clashes erupted between the two groups.

The Taliban and Islamic State have fundamentally different objectives. The Taliban consistently articulates goals that solely pertain to its quest to regain control of Afghanistan. As the group’s leader wrote on Sept. 9, 2016:

“[O]ur country has been invaded and an anti-Islamic, subservient and surrogate regime has been imposed on us by dent [sic] of tanks, artilleries and bomber aircrafts against the wishes of our religion and independence-loving and independent thought-loving people. An Islamic system and independence of our country is our human and religious right.”

This is in sharp contrast to the global ambitions of the Islamic State, which announced the establishment of its own, global caliphate and called on all Muslims to pledge allegiance to its leader. As Borhan Osman, an Afghan analyst, observed, the Taliban has welcomed foreign militants on the condition that they obey the Taliban on Afghan soil, but Islamic State “is an organisation claiming jihadist supremacy over all militant groups in the world, and would be very unlikely to listen to the Taliban.”

It is somewhat unclear how Nangarhar fits into the Islamic State’s goals of global domination. In interviews, villagers who have encountered Islamic State fighters said that they described a plan to overthrow Afghanistan’s government and rename the country Khorasan. Others suggested that the Islamic State sees Afghanistan as a platform for launching operations in Central Asia, and pointed to the presence of fighters from Central Asia among the group’s ranks in Nangarhar.

Women from the Islamic State-controlled areas of the province said their families had refused to budge from their villages through years of intermittent fighting between the Taliban and the government, and had clung on despite Taliban threats and abuses, only to be dislodged by the Islamic State.

“We came to Jalalabad two months ago,” said Mariam, a 45-year-old mother of 10 whose name has been changed to protect her safety, referring to the provincial capital. “My children are students but [the Islamic State doesn’t] let them go to school. The school closed three months ago. They left letters threatening the school and also bombs.” Mariam said that the Islamic State left night letters telling parents not to send any children to school and ordering villagers to stop going to the mosque to pray. “Then they put a bomb and blasted it [near the school early one morning],” she said. “The people of the village found the bomb and called the police.” Before the police arrived, however, the bomb exploded, she said, fortunately without injuries.

Afghans who have lived under the Islamic State described frequent violence: shootings, beheadings, and bombings. The group has sometimes targeted people associated with the government; other violence is seemingly random. “My sister’s 18-year-old son was beheaded,” an elderly man told me. “People said he was a spy. He was just a farmer.”

“They killed one or two people daily in our village,” one woman said. “Mostly people working for the government.” There were reports of men, women, and children being abducted. A few were ransomed; most were never heard from again.

Daily life all but stopped. “ISIS made women sit in the home,” one woman said. “If you go out they will kidnap you. No one could go out, not even to the nearest shop.” Another said that in her village the mullah even stopped leading prayers at the mosque out of fear.

The Islamic State forces villagers to work for them. “We cooked for ISIS, we were forced to — then they wouldn’t harm us,” one woman said. They described schools sitting empty. Teachers were threatened into staying home, or faced with demands they “donate” their salaries to the Islamic State. At first some parents still sent their children to class, but the situation worsened until there was effectively no school to attend.

Before the Islamic State, schools faced different threats. “The Taliban only had problems with girls,” one woman said. “Girls’ schools were open, but only up to eighth grade.” The Taliban had emerged in her village five or six years earlier and tried to close all girls’ schools, but the community managed to resist and keep some open, she said. A woman from another village described an acid attack by the Taliban there that injured seven or eight girls as they walked to school, prompting many girls — including her daughter — to drop out.

In Jalalabad, which remains under the control of the Afghan government, in spite of worsening security the women are able to educate their children. The government’s department of education has been flexible about allowing parents to register their children in a new school even if they lack the official transfer letter normally required. “They know the situation,” one mother said. “The school was closed but we had the principal or teacher sign a paper. They just wrote on simple paper, and the department of education accepted it.”

Access to education is one bright spot in their otherwise miserable ordeal for people torn away from their homes, jobs, and land they struggle to survive in an expensive city. “We are happy our daughters go to school here,” one mother said. “I want my daughter to graduate from university and become a doctor.”

Their future is uncertain. When we spoke at the end of July, the Afghan and U.S. militaries were fighting to try to clear the Islamic State from parts of Nangarhar. The United States said it killed up to 300 Islamic State fighters in the operation. Media reports from late September, however, suggested that Islamic State fighters were retaking territory.

For displaced parents, being able to educate their children may be a strong push not to go home. “If the situation remains bad in our village, we will not leave Jalalabad,” one woman said. “We like it here because our girls can continue school easily. We are trying to find a job here. We will continue their school. We will never stop. We want our children to get more education.”

Article Link To Foreign Policy:

Clinton Proves It Pays To Prepare

By Margaret Carlson
The Bloomberg View
September 28, 2016

On the biggest stage in politics, Hillary Clinton did to Donald Trump what 16 men failed to do in the primaries: She took command from the moment she strode over to shake Trump’s hand. In 2000, Representative Rick Lazio lost the New York Senate debate when he invaded her personal space. When she invaded Trump’s space, she set herself up for a win.

Have times finally changed? Not really. Clinton still needs to work twice as hard for half the gains of a man, while obscuring her ambition and being pleasant. How many times has Trump been told he just has to be more likeable? Clinton was plenty appealing as she ate his lunch Monday night. It’s Trump who should have taken Republican National Committee Chairman Reince Priebus’ patronizing advice to smile more.

She had done her homework, an activity Trump scoffs at. When there was an opening to question his position or his manhood -- beginning with her claim that his vaunted success started with a $14 million loan from his dad -- she was ready. Trump’s aides were intent on furthering the line that he didn’t prepare for the debate and now we believe them.

He went after her for staying off the campaign trail to get ready for their showdown:

“I've been all over the place," he said. "You decided to stay home, and that's OK."

She was ready: “I think Donald just criticized me for preparing for this debate. And, yes, I did. And you know what else I prepared for? I prepared to be president.”

A woman has to be careful not to step over a blurry line that makes her seem too ambitious and in-charge. She found a way. He managed not to repeat his worst mistakes -- no intemperate comments about Muslims or Gold Star families or his private anatomy -- but he found new ways to offend, while displaying a lack of impulse control that could frighten the horses. Once Clinton rattled his huge yet fragile ego with her calm responses, he couldn’t stop himself from getting louder, more blustery, undisciplined and hectoring (even toward the moderator Lester Holt).

She didn’t have to go all schoolmarm on him to do it because he did much of it to himself. On the Iraq War he kept insisting on the opposite of what’s on tape: he supported the war as the U.S. was getting into it. When he repeated his chest-thumping whopper that he’d done President Barack Obama a favor by getting to the bottom of the birther rumor started by Hillary, she had one of her best comebacks of the night, reprising First Lady Michelle Obama, the most popular figure in politics today: when your critics go low, you go high.

He left himself most open to attack when he spoke of his business practices which, in calmer moments, he’s held up as his principal selling point compared with hacks such as Clinton who have experience, but “bad experience.” He clung to the idea that an audit by the Internal Revenue Service was preventing him from releasing his tax returns, even though the IRS itself has said that’s not an issue. Then, when Hillary pointed out that the info that is in the public record shows that he didn’t pay any taxes some years, he gave himself a pat on the back for being “smart.”

He didn't look quite as smart later when he painted an apocalyptic picture of a "debtor nation" that needs "new roads, new tunnels, new bridges, new airports, new schools, new hospitals. And we don't have the money, because it's been squandered on so many of your ideas."

She was able to respond: “Maybe because you haven't paid any federal income tax for a lot of years.”

His self-labeling as a champion of the little guy was further dented when she brought up the "dishwashers, architects, glass installers, marble installers," who had been "stiffed" by Trump. He could only scoff, suggesting that those he hadn't paid might have deserved it because they didn't "do a good job."

At one point, he interrupted loudly to say he had "a better temperament than she has.” For all women everywhere, Clinton paused, waited a beat, and said, “Whew. OK,” with a hint of a question mark at the end. By then she was so relaxed I wouldn’t have been surprised if, like Jimmy Fallon, she’d gone over and ruffled Trump’s hair.

Trump had a few moments, too, but they were not aimed at the voters he needs to attract but at pleasing the ones he has. He nailed Clinton on the Trans Pacific Partnership -- she brazenly changed her position to appease Bernie Sanders' supporters -- and he tied her to the North American Free Trade Agreement, which he said had destroyed U.S. manufacturing. That’s not supported by economic data but it does appeal to his core voters who have lost jobs.

But like a toreador delivering the coup de grace, she saved her deadliest feint for last, when she turned a question about her stamina (a gender-bending retread of the "low energy" tactic he used against Jeb Bush in the primaries) into a treatise on his relations with women, a key demographic in this election that Trump has gone out of his way to alienate.

After Trump said she “doesn’t have the look,” to be president, she reminded women of his record of disrespect for them.

"You know, he tried to switch from looks to stamina," Clinton said. "But this is a man who has called women pigs, slobs and dogs, and someone who has said pregnancy is an inconvenience to employers."

Then she hit him with the story of Alicia Machado, a former winner of the Trump-owned Miss Universe pageant: "He called this woman 'Miss Piggy.' Then he called her 'Miss Housekeeping,' because she was Latina."

Trump subsequently may have made the hole deeper by explaining on Fox the next day that Machado had been "the worst, the absolute worst" and that she had "gained a massive amount of weight, and it was a real problem."

The one thing Trump absolutely had to do he didn’t -- display the respect for the office he seeks. And he gave up the traditional advantage we viscerally grant men competing for the highest office in the country.

We watch the presidential debates from a kind of primordial crib. We hear the music more than the words. We want to be told everything is going to be all right, that any monsters lurking in the corners will be vanquished. It’s usually a father figure who fulfills this need, a gun-slinging, gruff but caring man at home on horseback, like Ronald Reagan, George W. Bush, or any Roosevelt.

On Monday, it was Clinton who fulfilled that role, showing us what a woman leader could be like. Trump came close to revealing what an immature man in charge would be like. He groaned, he shouted, he wagged his finger, he dissolved. He also sniffled throughout, blaming a defective mike.

The mike was fine. Let’s hope he’s not getting pneumonia or losing his stamina.

Article Link To The Bloomberg View:

Trump’s Losing Debate Strategy

If he had a plan to win the debate against Clinton, it remains as secret as his plan to defeat ISIS.

By Jason L. Riley
The Wall Street Journal
September 28, 2016

If you are Donald Trump, and six weeks before Election Day most voters still view Hillary Clinton as the safer Oval Office choice, you head into the first presidential debate with a simple objective. You must show people that you have the knowledge and temperament for the job.

You know that average voters aren’t the only ones who remain skeptical of your qualifications. So are your peers. Top business executives at the nation’s largest companies backed Mitt Romney in 2012 but are sitting out this year’s campaign or supporting Mrs. Clinton. Well-regarded national security experts, such as former Defense Secretary Robert Gates, are also skeptical. Mr. Gates described you in these pages as “stubbornly uninformed about the world and how to lead our country and government, and temperamentally unsuited to lead our men and women in uniform.” You know that the first debate will draw tens of millions of viewers and provide the best opportunity between now and the election to prove the doubters wrong.

But you also know what’s in store. You know you will be asked about unreleased tax returns, high-profile police shootings and your repugnant birtherism. You know that Mrs. Clinton will come prepared with facts and figures and details and that it would be wise for you to do the same. You know the first female nominee of a major party is likely to bring up, among other things, your past remarks about women. You know she will provoke you but that you shouldn’t take the bait.

If Mr. Trump had a strategy for winning Monday night’s face-off with Mrs. Clinton, it remains as secret as his plan to defeat Islamic State. The Republican nominee looked and sounded frighteningly unprepared. Split-screen shots showed him shifting his weight, rolling his eyes, impatient. Then he would open his mouth and make matters worse with rambling, self-centered responses that often trailed off into incoherence.

The one thing everybody already knows about Donald Trump is that he’s very rich, yet the candidate couldn’t stop reminding us of this fact throughout the evening and no matter the context. Asked about recent racial unrest following police shootings around the country, he began, “When I look at Charlotte, a city that I love, a city where I have investments . . . .”

While discussing gun violence in Chicago, Mr. Trump noted that he owns properties there as well. He even found a way to plug his new hotel, the Trump International in Washington, D.C. And he assured voters that he’s “extremely underleveraged” and has “tremendous income.” The developer said he’s not bragging, just citing his credentials. “It’s about time that this country has somebody running it that has an idea about money,” he said. Apparently, Hillary Clinton is too poor to be president.

Asked why he won’t make his tax returns public, Mr. Trump cited, as he has before, an ongoing audit but said he would release the returns as soon as his opponent “releases her 33,000 emails that have been deleted” from a private server. When Mrs. Clinton asserted that Mr. Trump had taken advantage of loopholes to reduce his tax burden, he interjected, “That makes me smart.” Maybe, but saying so aloud in a nationally televised debate is a rather dumb way to appeal to economically distressed voters searching for a candidate who can relate to their predicament.

Mr. Trump did nothing Monday to help his standing with the women and minority voters who are likely to decide the election. When confronted with past sexist remarks, he remained silent or said the women “deserved” it. Democrats deserve criticism for their treatment of black voters, but it’s hard to take it seriously coming from a man who seems to have discovered black America about 15 minutes ago. Someone on Team Trump ought to inform the candidate that the vast majority of black people in the U.S. are neither unemployed nor living in poverty.

Viewers knew what to expect from Mrs. Clinton, and it’s what she delivered. Her goal was to paint her opponent as reckless, ignorant, petty and tone-deaf, and Mr. Trump went out of his way to help her. When she brought up a Justice Department racial discrimination lawsuit filed against Mr. Trump in the 1970s, he explained that he had settled the case without admitting guilt, not that he hadn’t discriminated against minority tenants. When she accused him of not paying workers what he owed them, including an architect who designed a club house at a Trump golf course, Mr. Trump didn’t deny the charge and responded, “Maybe he didn’t do a good job and I was unsatisfied.”

Trump supporters no doubt felt that way about their candidate after watching the first debate. The surprise is not that Mrs. Clinton prevailed but that she made it look so easy.

Article Link To The Wall Street Journal:

The Judgment Of Aleppo

By Bernard-Henri Lévy
Project Syndicate
September 28, 2016

We must halt the massacre in Aleppo. Whatever the cost, we must stop the massive, random, indiscriminate bombings – and, worst of all, the discriminate ones aimed chiefly at civilians, humanitarian convoys, and hospitals – that the forces of Bashar al-Assad and Russia have resumed with a vengeance in and around what was once Syria’s most populous city.

We must call a halt in the days (if not hours) ahead to the rain of steel, the cluster and phosphorus bombs, and the barrels of chlorine dropped from low-flying government helicopters on the last parts of Aleppo held by moderate rebels. The world, with the democracies out front, cannot fail to respond to the horrifying images, relayed by the few witnesses still there.

Those images are of children’s shriveled, vitrified bodies; of the wounded whose limbs, for lack of drugs, have been amputated by desperate doctors who are soon massacred themselves; of women mown down by rocket fire, as in Sarajevo 24 years ago, while waiting in line to buy yogurt or bread; of volunteers struck down while digging through the rubble in search of survivors; of human beings drained of strength, surviving in filth and waste, saying goodbye to life.

We must smother the columns of fire and smoke.

We must dispel the clouds of flaming gas streaming from the murderers’ unprecedentedly sophisticated weapons.

We must act because we can act.

And we can act because those who are responsible for this carnage, for these war crimes, for an urbicide in which probable crimes against humanity are compounded by the destruction of sites of memory and culture that counted among the world’s vital heritage, are not hiding. They are standing in plain sight as they destroy Syria’s most cosmopolitan, wondrously alive city, doing nothing to hide their acts. We know who they are.

I mean, of course, the regime in Damascus, which years ago we should have begun to deal with as we dealt with Muammar el-Qaddafi’s regime.

I mean, too, the regime’s Iranian and, above all, Russian sponsors. For five years, they have systematically blocked every attempt at a resolution emanating from the United Nations. Russian planes have, in several well-documented instances, openly participated in Assad’s massive campaign against civilians. Indeed, the Kremlin appears increasingly determined to apply to Syria the policy practiced in Chechnya, namely to “kick into the crapper” those whom Foreign Minister Sergei Lavrov is again mendaciously labeling “terrorists.”

Given these facts, there is no dilemma about whether it is necessary to act.

But, because the United States adopted the position it did three years ago, after President Barack Obama chose not to punish Assad for using chemical weapons (a red line that Obama himself had drawn), I fear that the responsibility falls chiefly, if not exclusively, on Europe.

It’s our choice. We in Europe can draw our own red line, warning Russia that, if the line is crossed, we will increase sanctions against it as a state henceforth held to be responsible for the crimes of its Syrian vassal. We can also immediately take the initiative to establish a forum for negotiation and pressure akin to the “Normandy format” that President François Hollande and Chancellor Angela Merkel successfully conceived two years ago to contain the war in Ukraine. In so acting, we can force the aggressor to come to terms.

Or we can do nothing and acquiesce in another Sarajevo, as François Delattre, France’s ambassador to the United Nations, put it; we can run the risk of an Arab Guernica, with Russian aircraft in the role of the German Condor Legion over the skies of Republican Spain in 1936. In that case, we would not only reap dishonor, but also, to paraphrase Winston Churchill, raise to extreme levels all of our present dangers, starting with a dramatic increase in the tide of refugees, most of whom have fled Syria as a direct consequence of the world’s nonintervention.

This is where we stand: Aleppo, besieged and in ruins, exhausted and abandoned by the world, yet defiant – dying with its boots on – is our shame, our crime of omission, our self-abasement, our capitulation in the face of brute force, our acceptance of the worst in humanity. Aleppo, which no longer cries out, is dying and cursing the West. And Europe, on the front line, risks its future and a part of its identity as the people it could not protect press at its borders, asking to be let in.

Will Europe surrender, in Aleppo, what remains of its soul, or will it pull itself together, hold up its head, and do what it must?

If Europe can’t or won’t answer that question, all of the other questions and crises it is facing may well become irrelevant.

Article Link To Project Syndicate:

James Comey’s Clinton Immunity

More questions about the FBI’s special handling of the email case.

By Review & Outlook
The Wall Street Journal
September 28, 2016

FBI Director James Comey appears Wednesday before the House Judiciary Committee, where he’ll get another chance to explain his agency’s double standard regarding Hillary Clinton. His probe of the former Secretary of State’s private email server is looking more like a kid-glove exercise with each new revelation.

House Oversight Chairman Jason Chaffetz on Friday disclosed that the FBI granted immunity to Mrs. Clinton’s top aides as part of its probe into whether Mrs. Clinton mishandled classified information. According to Mr. Chaffetz, this “limited” immunity was extended to former chief of staff Cheryl Mills and senior adviser Heather Samuelson, in order to get them to surrender their laptops, which they’d used to sort through Mrs. Clinton’s work-versus-personal emails.

Why the courtesy? “If the FBI wanted any other Americans’ laptops, they would just go get them—they wouldn’t get an immunity deal,” Ohio Rep. Jim Jordan told Politico. He’s right. The FBI merely had to seek a subpoena or search warrant. By offering immunity, the FBI exempted the laptops and their emails as potential evidence in a criminal case.

Beth Wilkinson, who represents Ms. Mills and Ms. Samuelson, says the immunity deals were designed to protect her clients against any related “classification” disputes. This is an admission that both women knew their unsecured laptops had been holding sensitive information for more than a year. Meanwhile, Mr. Comey also allowed Ms. Mills and Ms. Samuelson to serve as lawyers for Mrs. Clinton at her FBI interview—despite having been interviewed as witnesses and offered immunity.

The FBI also offered immunity to John Bentel, who directed the State Department’s Office of Information Resources Management; to Bryan Pagliano, Mrs. Clinton’s IT guru; and to an employee of Platte River Networks (PRN), which housed the Clinton server. Usually, the FBI only “proffers” immunity deals in return for genuine information. In this case the FBI seemed not to make any such demands. The deals also did not include—as they often do—requirements that the recipients cooperate with other investigating bodies, such as Congress.

Meantime, the FBI waited until late Friday to dump another 189 pages of documents from its investigation, including notes from interviews with Ms. Mills and Ms. Samuelson, Mr. Pagliano, Clinton confidante Huma Abedin, and Platte River Network employees. They raise even more questions.

Was the FBI concerned that Ms. Mills in the fall of 2013 (after Congress began investigating the Benghazi attacks) called Mr. Pagliano to ask about software that could be used for “wiping computer data”? Or that a Platte River Networks employee, after getting instructions from Ms. Mills to begin deleting Clinton emails more than 60 days old, entitled the resulting work ticket the “Hillary coverup operation”? Or that a PRN employee was instructed by the company’s lawyer “not to answer any [FBI] questions related to conversations with” David Kendall, Mrs. Clinton’s personal lawyer?

The FBI documents also disclose that Mr. Pagliano admitted to having, at the beginning of Mrs. Clinton’s tenure, several conversations with unnamed State Department official(s) who expressed concern that her private server posed “a federal records retention issue,” and that it was likely transmitting classified information. When Mr. Pagliano relayed these concerns to Ms. Mills, she ignored them.

We’d also love to hear what the FBI made of the news that Mrs. Clinton maintained a Gmail account. The Democratic presidential nominee has never disclosed this detail. Speaking of revealing, President Obama has publicly said he found out about Mrs. Clinton’s server through “news reports.” Yet the FBI notes reveal that he emailed Mrs. Clinton on her private server under a pseudonym. Ms. Abedin told the FBI that the White House was notified when Mrs. Clinton changed her email address so the President’s secure server wouldn’t exclude her emails. Was Mr. Obama fibbing too?

These columns have long opposed the appointment of special prosecutors, but that depends on the ability of established legal officers to do their jobs without political favor. Mr. Comey’s handling of the Clinton case understandably makes Americans wonder if their government can be trusted to perform this duty. On the evidence of the FBI’s special treat for Mrs. Clinton and her aides, they are right to wonder.

Article Link To The Wall Street Journal:

Maybe Crime's Not Rising, But If Voters Think It Is...

By Megan McArdle
The Bloomberg View
September 28, 2016

At the Republican Convention in July, Donald Trump intoned that “Decades of progress made in bringing down crime are now being reversed by this administration’s rollback of criminal enforcement.” The media rushed to state, equally firmly, that he was wrong. And then this week brought the announcement that violent crime in the U.S. had indeed risen significantly last year, by almost 4 percent. Murder was up even more.

Was Trump right?

First, the data. Violent crime rose 3.9 percent in 2015. Murders were up 10.8 percent, rape 5.1 percent, aggravated assault 4.6 percent. Economic crimes like robbery, burglary and auto theft either decreased or stayed close to flat.

That’s certainly troubling. Any increase in violent crime is, to state the obvious, bad. But America has experienced a stunning decline in crime over the last 20 years. Since it was unlikely that a country of 300 million people was ever going to reach the point where we had no murders, no rapes, no aggravated assaults, we always had to expect that at some point, that decline was going to level off. And when it did, even if it basically stayed level, some years it would rise.

Hmm. "Level"? You may be thinking: "I do not think that word means what you think it means." But we do not live in a textbook model where lines are perfectly straight and humans behave like probability distributions. In the real world, level means “small variations around a flat trend line.”

In some years, people will commit a few more crimes than you’d expect, because an unusual number of places have a local gang war, or simply because individual criminals, for reasons we’ll never know, decided to be a little more active. In other years, things will be a little more peaceful than usual. For example, murders in 2004 were probably a little below the average tendency at the time, 2007 a little higher. But those variations were not much noticed, because the overall direction was down.

As the line flattens out, however, those variations around the average tendency to commit crimes will get noticed, because they’re now the only thing that’s changing. If the trend line ends up truly flat, then all the year-over-year changes will, in retrospect, be dismissed as random noise. And while obviously it would be nice if the line had kept going down until it reached zero, if this is the endpoint where it stabilizes, that will still be a remarkable achievement, with murder down by a third since 1996.

So even a substantial one-year movement in the numbers is not reason to freak out and declare that the Obama administration has let everything go to hell in a hand-basket. For one thing, very little crime policy happens at the national level, meaning Trump was really really wrong when he referred to "this administration’s rollback of criminal enforcement."

For another, this could be simply a blip. At the moment, violent crime remains extremely low. We have not even gone back to the relative disorder of 2012. Crime is just a little higher than its record lows in 2014. Or, to be precise, it was. The data we're talking about is from 2015. By now the crime rate could be well below the flat trend line. Or soaring.

So … at what point should we start to worry? Only if the jump from 2014 to 2015 ultimately turns out to be the beginning of a new, upward trend line. At what point can we go back to dismissing Trump's entire claim? Only when we see evidence that the trend line remains flat or headed downward.

For now, the most responsible reaction to the 2015 crime data is neither “the sky is falling” not “Move along, nothing to see here.” Vigilance for 2016 and beyond is appropriate.

And it’s likely this will play a role in the coming election. Whatever the underlying reality, people are more concerned about crime than they were a few years back, and as politicians discovered in the 1960's, the public is very sensitive to any perceived increase in public disorder. I suspect that those perceptions have more to do with the riots that have filled our television screens in the last two years than they do with a significant increase in the average American's personal danger of being victimized. But whatever the cause, politicians will have to contend with the effects.

Article Link To The Bloomberg View:

Biden: How Short-Termism Saps The Economy

Paying CEO's so much in stocks puts their focus on the share price instead of building for the long run.

By Joe Biden
The Wall Street Journal
September 28, 2016

Short-termism—the notion that companies forgo long-run investment to boost near-term stock price—is one of the greatest threats to America’s enduring prosperity. Over the past eight years, the U.S. economy has emerged from crisis and maintained an unprecedented recovery. We are now on the cusp of a remarkable resurgence. But the country can’t unlock its true potential without encouraging businesses to build for the long-run.

Private investment—from new factories, to research, to worker training—is perhaps the greatest driver of economic growth, paving the way for future prosperity for businesses, their supply chains and the economy as a whole. Without it robust growth is nearly impossible. Yet all too often, executives face pressure to prioritize today’s share price over adding long-term value.

The origins of short-termism are rooted in policies and practices that have eroded the incentive to create value: the dramatic growth in executive compensation tied to short-term share price; inadequate regulations that allow share buybacks without limit; tax laws that designate an investment as “long-term” after only one year; a subset of activist investors determined to steer companies away from further investment; and a financial culture focused on quarterly earnings and short-run metrics.

Consider the evolution in the structure of CEO compensation. In the 1980's, roughly three-fourths of executive pay at S&P 500 companies was in the form of cash salary and bonuses, and the rest in investment options and stock, according to an article in the Annual Review of Financial Economics. The Omnibus Budget Reconciliation Act of 1993 included a provision to link executive pay to the performance of the company. But it didn’t work as intended. By the time I became vice president, only 40% of executive pay was in cash, with the bulk being tied to investment options and stock. Now more than ever, there is a direct link between share price and CEO pay.

Performance-based pay encourages executives to think in the short-term. Ever since the Securities and Exchange Commission changed the buyback rules in 1982, there has been a proliferation in share repurchases. Today buybacks are the norm. According to economist William Lazonick, from 2003-12, companies on the S&P 500 spent 37% of their earnings on dividends and a full 54% on buybacks—leaving less than 10% for reinvestment.

This emphasis on returning profits to shareholders has led to a significant decline in business investment. Total investment as a share of the economy has fallen to about 11% today, down from a high of about 15% in the early 1980s, according to the Bureau of Economic Analysis. With interest rates at historically low levels, and business confidence in the U.S. far ahead of its economic competitors, there should be more investment, not less.

I am not blaming CEOs. The business leaders I’ve met over the course of my career want to build their firms and contribute to the economy, not simply send checks to investors or buy back their own stock. Sometimes they succeed. Other times the pressures to lift the short-run share price are simply too great.

As these short-term pressures mount, most of the harm is borne by workers. As any economist will tell you, productivity is typically the most important driver of increasing wages. But productivity will never flourish without businesses investing in endeavors like on-the-job training, new equipment, and research and development. In short, business investment boosts productivity, which lifts wages.

A continued economic resurgence requires solving the short-termism puzzle. The federal government can help foster private enterprise by providing worker training, building world-class infrastructure, and supporting research and innovation. But government should also take a look at regulations that promote share buybacks, tax laws that discourage long-term investment and corporate reporting standards that fail to account for long-run growth. The future of the economy depends on it.

Article Link To The Wall Street Journal:

Israel's Peres Won Nobel Prize, But His Mideast Peace Dream Remained Elusive

By Jeffrey Heller
September 28, 2016

Shimon Peres, who died on Wednesday at the age of 93, never realized his vision of a new Middle East built upon a 1993 interim peace deal he helped shape with the Palestinians.

But Israel's elder statesman won world acclaim and a Nobel prize as a symbol of hope in a region long plagued by war fueled by deep religious and political divisions.

Peres was hospitalized following a stroke two weeks ago and his condition had improved before a sudden deterioration on Tuesday, doctors said. In announcing his passing, family members said that he did not suffer pain, and as a last act after death, he donated his corneas for transplant.

"Don't forget to be daring and curious and to dream big," Peres urged first-graders at the start of the school year in a posting on his Facebook page earlier this month. The comment seemed to sum up his own credo.

In a career spanning nearly seven decades, Peres, once a shepherd on a kibbutz, or communal farm, served in a dozen cabinets and twice as Labour Party prime minister, but he never won a general election outright in five tries from 1977to 1996.

"I am a loser. I lost elections. But I am a winner -- Iserved my people," Peres, who held the largely ceremonial post of president from 2007-2014, once said in a speech.

He shared the 1994 Nobel Peace Prize with Israel's late prime minister Yitzhak Rabin and Palestinian leader Yasser Arafat for a 1993 accord that they and their successors failed to turn into a durable treaty.

When a far-right Jewish Israeli opposed to the peace deal assassinated Rabin in November 1995, the torch passed to Peres.

But Palestinian suicide bombings that killed dozens of Israelis and an aggressive campaign by Likud battered Peres's rating and he lost the 1996 election to Benjamin Netanyahu by less than 30,000 votes.

In 2000, the failure of final-status peace talks with thePalestinians and the eruption of a Palestinian uprising rife with suicide bombings further damaged Israel's left and Peres's leadership prospects.

In 2005, Peres left the Labour Party to join then Prime Minister Ariel Sharon's new party, Kadima, which had spearheaded Israel's unilateral pullout from the Gaza Strip earlier that year. Following Kadima's 2006 election victory, Peres served as vice prime minister.

Founding Fathers 

Born in 1923 in what is now Belarus, Peres immigrated to British-ruled Palestine with his family a decade later.

Israel's founding father David Ben-Gurion groomed him for leadership. He oversaw arms purchases and manpower in the Hagana, the Zionist fighting force, before Israel's establishment.

Peres is widely seen as having gained nuclear capabilities for Israel by procuring the secret Dimona reactor from France while defense ministry director-general in the 1950s.

As defense minister he oversaw the dramatic 1976 Israeli rescue of hijacked Israelis at Entebbe airport in Uganda.

Peres was popular in his first term as prime minister in 1984-86 as part of a power-sharing pact with Likud. He pulled troops back from Lebanon, normalized relations with Egypt and cut inflation from 445 percent a year to below 20 percent.

Despite his key role in building Israel's defenses, Peres never gained broad popular trust in his security credentials as Rabin, his Labour rival and former army chief, or Sharon enjoyed.

Most Israelis, hardened by frequent conflict, dismissed his vision that a new age for the Middle East was dawning hand-in-hand with peace deals.

He was seen abroad as an urbane diplomat but at home often as an ego-driven manipulator in domestic politics who eroded his party's identity out of a thirst for cabinet posts after election losses to Likud.

Nevertheless, during his last years, the last of Israel's founding fathers saw a rise in his popularity among Israelis. He used the presidency as a pulpit for advocating peace and maintained an active public schedule, encouraging Middle East diplomacy and technological innovation.

He is also known for his stewardship of the Peres Center for Peace, a non-governmental organization focused on building closer ties with the Palestinians, improving healthcare and developing local economies.

Earlier this month, after a series of health scares including a mild heart attack, Peres received an artificial pacemaker.

"I feel great. When can I get back to work already? I'm bored!" he told reporters at the time.

Peres wrote several books including "Entebbe Diary," "The New Middle East" and "Battling for Peace." His wife, Sonia, died in 2011. He is survived by two sons and a daughter.

Article Link To Reuters: