- China & The US: The 21st Century's "Great Game"
China & The US: The 21st Century's "Great Game"
Tyler Durden
Sat, 08/22/2020 – 00:00Authored by Conn Hallinan via Counterpunch.org,
From 1830 to 1895, the British and Russian empires schemed and plotted over control of Central and South Asia. At the heart of the “Great Game” was England’s certainty that the Russians had designs on India. So wars were fought, borders drawn, and generations of young met death in desolate passes and lonely outposts.
In the end, it was all illusion. Russia never planned to challenge British rule in India and the bloody wars settled nothing, although the arbitrary borders and ethnic tensions stoked by colonialism’s strategy of divide and conquer live on today. Thus China, India, Pakistan, Afghanistan, and Nepal battle over lines drawn in London, while Beijing, Tokyo and Seoul vie for tiny uninhabited islands, remnants of Imperial Japan.
That history is important to keep in mind when one begins to unpack the rationales behind the increasingly dangerous standoff between China and the United States in the South China Sea.
To the Americans, China is a fast rising competitor that doesn’t play by the rules and threatens one of the most important trade routes on the globe in a region long dominated by Washington. U.S. Secretary of State Mike Pompeo has essentially called for regime change.
According to Ryan Hass, former China director on the National Security Council, the Trump administration is trying to “reorient the U.S.-China relationship toward an all-encompassing systemic rivalry that cannot be reversed” by administrations that follow. In short, a cold war not unlike that between the U.S. and the Soviet Union.
To the Chinese, the last 200 years—China does tend to think in centuries, not decades—has been an anomaly in their long history. Once the richest country on the globe that introduced the world to everything from silk to gunpowder, 19th Century China became a dumping ground for British opium, incapable of even controlling its own coastlines.
China has never forgotten those years of humiliation or the damage colonialism helped inflict on its people. Those memories are an ingredient in the current crisis.
But China is not the only country with memories.
The U.S. has dominated the Pacific Ocean – sometimes called an “American lake” – since the end of World War II. Suddenly Americans have a competitor, although it is a rivalry that routinely gets overblown.
An example is conservative New York Times columnist, Bret Stephens, who recently warned that China’s Navy has more ships than the US Navy, ignoring the fact that most of China’s ships are small Coast Guard frigates and corvettes. China’s major strategic concern is the defense of its coasts, where several invasions in the 19th and 20th centuries have come.
The Chinese strategy is “area denial”: keeping American aircraft carriers at arm’s length. To this end, Beijing has illegally seized numerous small islands and reefs in the South China Sea to create a barrier to the US Navy.
But China’s major thrust is economic through its massive Belt and Road Initiative (BRI), not military, and is currently targeting South Asia as an area for development.
South Asia is enormously complex, comprising Afghanistan, Pakistan, India, Bangladesh, Bhutan, Tibet, the Maldives and Sri Lanka. Its 1.6 billion people constitute almost a quarter of the world’s population, but it only accounts for 2 percent of the global GDP and 1.3 percent of world trade.
Those figures translate into a poverty level of 44 percent, just 2 percent higher than the world’s most impoverished region, sub-Saharan Africa. Close to 85 percent of South Asia’s population makes less than $2 a day.
Much of this is a result of colonialism, which derailed local economies, suppressed manufacturing, and forced countries to adopt monocrop cultures focused on export. The globalization of capital in the 1980s accelerated the economic inequality that colonialism had bequeathed the region.
Development in South Asia has been beholden to the World Bank and the International Monetary Fund (IMF), which require borrowers to open their markets to western capital and reduce debts through severe austerity measures, throttling everything from health care to transportation.
This economic strategy – sometimes called the “Washington Consensus” – generates “debt traps”: countries cut back on public spending, which depresses their economies and increases debt, which leads to yet more rounds of borrowing and austerity.
The World Bank and the IMF have been particularly stingy about lending for infrastructure development, an essential part of building a modern economy. It is “the inadequacy and rigidness of the various western monetary institutions that have driven South Asia into the arms of China,” says economist Anthony Howell in the South Asia Journal.
The Belt and Road Initiative (BRI) takes a different tack. Through a combination of infrastructure development, trade and financial aid, countries in Asia, Africa, the Middle East and Europe are linked into what is essentially a new “Silk Road.” Some 138 countries have signed up.
Using a variety of institutions—the China Development Bank, the Silk Road Fund, the Export-Import Bank of China, and the Asian Infrastructure Investment Bank–Beijing has been building roads, rail systems and ports throughout South Asia.
For decades, western lenders have either ignored South Asia—with the exception of India—or put so many restrictions on development funds that the region has stagnated economically. The Chinese Initiative has the potential to reverse this, al;arming the West and India, the only nation in the region not to join the BRI.
The European Union has also been resistant to the Initiative, although Italy has signed on. A number of Middle East countries have also joined the BRI and the China-Arab Cooperation Forum. Saudi Arabia, the United Arab Emirates and Egypt have signed on to China’s Digital Silk Road, a network of navigation satellites that compete with America’s GPS, Russia’s GLONASS and European Union’s Galileo. China also recently signed a $400 billon, 25-year trade and military partnership with Iran.
Needless to say, Washington is hardly happy about China elbowing its way into a US-dominated region that contains a significant portion of the world’s energy supplies.
In a worldwide competition for markets and influence, China is demonstrating considerable strengths. That, of course, creates friction. The US, and to a certain extent the EU, have launched a campaign to freeze China out of markets and restrict its access to advanced technology. The White House successfully lobbied Great Britain and Australia to bar the Chinese company, Huawei, from installing a 5G digital network, and is pressuring Israel and Brazil to do the same.
Not all of the current tensions are economic. The Trump administration needs a diversion from its massive failure to control the pandemic, and the Republican Party has made China bashing a centerpiece of its election strategy. There is even the possibility that the White House might pull off an “October surprise” and initiate some kind of military clash with China.
It is unlikely that Trump wants a full-scale war, but an incident in the South China Sea might rally Americans behind the White House. The danger is real, especially since polls in China and the United States show there is growing hostility between both groups of people.
But the tensions go beyond President Trump’s desperate need to be re-elected. China is re-asserting itself as a regional power and a force to be reckoned with worldwide. That the US and its allies view that with enmity is hardly a surprise. Britain did its best to block the rise of Germany before World War I, and the US did much the same with Japan in the lead up to the Pacific War.
Germany and Japan were great military powers with a willingness to use violence to get their way. China is not a great military power and is more interested in creating profits than empires. In any case, a war between nuclear-armed powers is almost unimaginable (which is not to say it can’t happen).
China recently softened its language toward the US, stressing peaceful co-existence.
“We should not let nationalism and hotheadness somehow kidnap our foreign policy,” says Xu Quinduo of the state-run China Radio.
“Tough rhetoric should not replace rational diplomacy.”
The new tone suggests that China has no enthusiasm for competing with the US military, but would rather take the long view and let initiatives like the Belt and Road work for it. Unlike the Russians, the Chinese don’t want to see Trump re-elected and they clearly have decided not to give him any excuse to ratchet up the tensions as an election year ploy.
China’s recent clash with India, and its bullying of countries in the South China Sea, including Vietnam, Malaysia, the Philippines, and Brunei, have isolated Beijing, and the Chinese leadership may be waking to the fact that they need allies, not adversaries.
And patience.
- Visualizing Where The Next Billion Internet Users Come From?
Visualizing Where The Next Billion Internet Users Come From?
Tyler Durden
Fri, 08/21/2020 – 23:40Internet adoption has steadily increased over the years – it’s more than doubled since 2010.
But, as Visual Capitalist’s Carmen Ang details below, despite its widespread use, a significant portion of the global population still isn’t connected to the internet, and in certain areas of the world, the number of disconnected people skews towards higher percentages.
Using information from DataReportal, this visual highlights which regions have the greatest number of people disconnected from the web. We’ll also dive into why some regions have low numbers, and take a look at which countries have seen the most growth in the last year.
Top 10 Most Disconnected, by Number of People
The majority of countries with lower rates of internet access are in Asia and Africa. Here’s a look at the top 10 countries with the highest numbers of people not connected to the web:
Interestingly, India has the highest number of disconnected people despite having the second largest online market in the world. That being said, 50% of the country’s population still doesn’t have internet access—for reference, only 14% of the U.S. population remains disconnected to the web. Clearly, India has some untapped potential.
China takes second place, with over 582 million people not connected to the internet. This is partly because of the country’s significant rural population—in 2019, 39% of the country’s population was living in rural areas.
The gap in internet access between rural and urban China is significant. This was made apparent during China’s recent switch to online learning in response to the pandemic. While one-third of elementary school children living in rural areas weren’t able to access their online classes, only 5.7% of city dwellers weren’t able to log on.
It’s important to note that the rural-urban divide is an issue in many countries, not just China. Even places like the U.S. struggle to provide internet access to remote or rugged rural areas.
Top 10 Most Disconnected, by Share of Population
While India, China, and Pakistan have the highest number of people without internet access, there are countries arguably more disconnected.
Here’s a look at the top 10 most disconnected countries, by share of population:
There are various reasons why these regions have a high percentage of people not online—some are political, which is the case of North Korea, where only a select few people can access the wider web. Regular citizens are restricted from using the global internet but have access to a domestic intranet called Kwangmyong.
Other reasons are financial, which is the case in South Sudan. The country has struggled with civil conflict and economic hardship for years, which has caused widespread poverty throughout the nation. It’s also stifled infrastructural development—only 2% of the country has access to electricity as of 2020, which explains why so few people have access to the web.
In the case of Papua New Guinea, a massive rural population is likely the reason behind its low percentage of internet users—80% of the population lives in rural areas, with little to no connections to modern life.
Fastest Growing Regions
While internet advancements like 5G are happening in certain regions, and showing no signs of slowing down, there’s still a long way to go before we reach global connectivity.
Despite the long road ahead, the gap is closing, and previously untapped markets are seeing significant growth. Here’s a look at the top five fast-growing regions:
Africa has seen significant growth, mainly because of a massive spike of internet users in the Democratic Republic of Congo (DRC)—between 2019 and 2020, the country’s number of internet users increased by 9 million (+122%). This growth has been facilitated by non-profit organizations and companies like Facebook, which have invested heavily in the development of Africa’s internet connectivity.
India has also seen significant growth—between 2019 and 2020, the number of internet users in the country grew by 128 million (+23%).
If these countries continue to grow at similar rates, who knows what the breakdown of internet users will look like in the next few years?
- Idlib Is Burning: New Proxy War In Deir Ezzor
Idlib Is Burning: New Proxy War In Deir Ezzor
Tyler Durden
Fri, 08/21/2020 – 23:20By SouthFront,
The series of unfortunate events involving the US-led coalition, Turkey and Turkish proxies continues in Syria’s Greater Idlib.
Late on August 19 and early on August 20, the Syrian Arab Army (SAA) shelled positions of Hayat Tahrir al-Sham near Haranabush and al-Sheikh Bahr in southern Idlib with what pro-opposition sources called “long-range rockets”. Despite multiple claims in pro-opposition media about fierce SAA strikes, no casualties were reported. The SAA likely used BM-27 Uragan or BM-30 Smerch heavy rocket launchers. The BM-27 has a range of 37 km, while the more advanced BM-30 can hit targets up to 90 km away.
On the same day, unidentified gunmen destroyed communication towers used by the Turkistan Islamic Party near the town of Ras Elhisn, which is located right on Turkey’s border. The Turkistan Islamic Party, which as well as Hayat Tahrir al-Sham has an al-Qaeda-like ideology, is an internationally-recognized terrorist group mostly consisting of Uyghur militants. The group has a strong presence in northern Lattakia, western and southern Idlib and is one of the main allies of Hayat Tahrir al-Sham. The terrorist group’s main stronghold is Jisr al-Shughur.
Over the previous few days, the Russian Aerospace Forces conducted a series of airstrikes on positions of Hayat Tahrir al-Sham across Greater Idlib punishing the group for the recent IED attack on the joint Turkish-Russian patrol on the M4 highway. Meanwhile, two US combat drones crashed in the region as a result of a mysterious incident that pro-US sources described as a midair collision.
If the situation in Idlib further deteriorates with such speed, the Turkish attempts to stabilize it by deploying additional troops and equipment there will appear to be not enough to keep Turkish al-Qaeda friends under control in the area.
A Syrian pro-government group known as the Popular Resistance in the Eastern Region (PR-ER) has claimed responsibility for the recent rocket attack on U.S. troops in Deir Ezzor. Three unguided rockets landed in the vicinity of the CONICO gas plant, where U.S. forces are deployed, late in the hours of August 18. The U.S. military confirmed the incident without reporting any losses.
The PR-ER said in a statement that the rocket strike was in response to an earlier attack by U.S. forces at a Syrian Arab Army checkpoint near the village of Tal al-Dhahab in the northern al-Hasakah countryside. The U.S. attack left a Syrian service member, Malik Muhammad al-Muhaimid, dead and injured at least two others.
The PR-ER first surfaced over 2 years ago declaring the aim of fighting the US occupation of northeastern Syria. Since then, it has claimed responsibility for several attacks on US forces. However, the group’s activity remained relatively low recently. The intensification of its actions may be linked with the growing tensions between the Syrians and US forces in the region.
Meanwhile, Turkish proxies also entered the game on the banks of the Euphrates. On August 18, the pro-Turkish armed group “Gathering of Rebels in the Land of Deir Ezzor” released a statement threatening Syrian, Russian, Iranian and Kurdish forces in the province with attacks.
It also claimed responsibility for the IED blast that killed a Russian major-general near Deir Ezzor city. The group self-identifies as a unit of the Turkish-backed Syrian National Army (SNA). This was, however, denied by the SNA. Pro-Turkish sources claim that this armed group was created by the Kurds to discredit the Syrian patriots on Turkish paychecks. It’s as if there is something that can done to discredit pro-Turkish groups more than what they have done by themselves.
Deir Ezzor province seems to be becoming a center for the new proxy battle for the Syrian energy resources.
- China Says The World Has "Sour Grapes" About Massive Wuhan Water Park Concert
China Says The World Has "Sour Grapes" About Massive Wuhan Water Park Concert
Tyler Durden
Fri, 08/21/2020 – 23:00Videos and photographs of a massive electronic music concert that took place at a Wuhan water park days ago have sparked outrage from the international community regarding the concert’s lack of social distancing or mask-wearing.
But China says the beef is unjustified. Rather, they said that “critics are just bitter about their own nations’ poor handling of the Covid-19 pandemic,” according to a new report from RT.
The photos of the concert quickly went viral after they were released and while some said they offered hope to a post-Covid world, others were critical of China. For example, the Daily Telegraph in Australia released a front page photo of the party stating: “Life’s a beach in Wuhan as world pays virus price.”
China called the criticisms “foreign sour grapes” in a Global Times article:
Scenes of residents in Wuhan, the city that was put under lockdown for 76 days due to the coronavirus epidemic, dancing to the music while cooling off in a water park amid the summer heat have gone viral on social media including Twitter, but the reaction from foreign netizens exposed overseas “sour grapes” and also prompted some to reflect on epidemic control in their own countries.
Recall, about 24 hours ago, we reported that thousands of concert-goers piled into the Wuhan Maya Beach Water Park last weekend to attend the massive concert.
We noted: “The scene would be considered “unthinkable” in many other parts of the world, yet in Wuhan – who had arguably the strictest lockdowns of any geographic location – life is starting to look like it did pre-pandemic.”
The city had not reported any new cases since mid-May, after lifting a 76 day draconian lockdown in early April.
The Wuhan Maya Beach Water Park reopened late in June and crowds finally began to come out in August.
Despite the turnout for this concert, the water park says it is only doing half the business it did the year prior. The park currently gets about 15,000 daily visitors during weekends and is trying to entice new business by offering half price discounts.
Wuhan was the original epicenter of the coronavirus and accounts for 60% of all cases in the country, according to China.
We concluded:
Whether or not China has been honest with its infection numbers remains to be seen; but maybe the world should take a cue from ground zero relaxing its lockdown measures in what is also likely a nod to the growing body of evidence that the virus may not be as devastating as the world once thought.
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- Exposing The Challenge Of Marxism
Exposing The Challenge Of Marxism
Tyler Durden
Fri, 08/21/2020 – 22:40Authored by Yoram Hazony via Quillette.com,
I. The collapse of institutional liberalism
For a generation after the fall of the Berlin Wall in 1989, most Americans and Europeans regarded Marxism as an enemy that had been defeated once and for all. But they were wrong…
A mere 30 years later, Marxism is back, and making an astonishingly successful bid to seize control of the most important American media companies, universities and schools, major corporations and philanthropic organizations, and even the courts, the government bureaucracy, and some churches. As American cities succumb to rioting, arson, and looting, it appears as though the liberal custodians of many of these institutions—from the New York Times to Princeton University—have despaired of regaining control of them, and are instead adopting a policy of accommodation. That is, they are attempting to appease their Marxist employees by giving in to some of their demands in the hope of not being swept away entirely.
We don’t know what will happen for certain. But based on the experience of recent years, we can venture a pretty good guess. Institutional liberalism lacks the resources to contend with this threat. Liberalism is being expelled from its former strongholds, and the hegemony of liberal ideas, as we have known it since the 1960s, will end. Anti-Marxist liberals are about to find themselves in much the same situation that has characterized conservatives, nationalists, and Christians for some time now: They are about to find themselves in the opposition.
This means that some brave liberals will soon be waging war on the very institutions they so recently controlled. They will try to build up alternative educational and media platforms in the shadow of the prestigious, wealthy, powerful institutions they have lost. Meanwhile, others will continue to work in the mainstream media, universities, tech companies, philanthropies, and government bureaucracy, learning to keep their liberalism to themselves and to let their colleagues believe that they too are Marxists—just as many conservatives learned long ago how to keep their conservatism to themselves and let their colleagues believe they are liberals.
This is the new reality that is emerging. There is blood in the water and the new Marxists will not rest content with their recent victories. In America, they will press their advantage and try to seize the Democratic Party. They will seek to reduce the Republican Party to a weak imitation of their own new ideology, or to ban it outright as a racist organization. And in other democratic countries, they will attempt to imitate their successes in America. No free nation will be spared this trial. So let us not avert our eyes and tell ourselves that this curse isn’t coming for us. Because it is coming for us.
In this essay, I would like to offer some initial remarks about the new Marxist victories in America – about what has happened and what’s likely to happen next…
II. The Marxist framework
Anti-Marxist liberals have labored under numerous disadvantages in the recent struggles to maintain control of liberal organizations. One is that they are often not confident they can use the term “Marxist” in good faith to describe those seeking to overthrow them. This is because their tormentors do not follow the precedent of the Communist Party, the Nazis, and various other political movements that branded themselves using a particular party name and issued an explicit manifesto to define it. Instead, they disorient their opponents by referring to their beliefs with a shifting vocabulary of terms, including “the Left,” “Progressivism,” “Social Justice,” “Anti-Racism,” “Anti-Fascism,” “Black Lives Matter,” “Critical Race Theory,” “Identity Politics,” “Political Correctness,” “Wokeness,” and more. When liberals try to use these terms they often find themselves deplored for not using them correctly, and this itself becomes a weapon in the hands of those who wish to humiliate and ultimately destroy them.
The best way to escape this trap is to recognize the movement presently seeking to overthrow liberalism for what it is: an updated version of Marxism. I do not say this to disparage anyone. I say this because it is true. And because recognizing this truth will help us understand what we are facing.
The new Marxists do not use the technical jargon that was devised by 19th-century Communists. They don’t talk about the bourgeoisie, proletariat, class struggle, alienation of labor, commodity fetishism, and the rest, and in fact they have developed their own jargon tailored to present circumstances in America, Britain, and elsewhere. Nevertheless, their politics are based on Marx’s framework for critiquing liberalism (what Marx calls the “ideology of the bourgeoisie”) and overthrowing it. We can describe Marx’s political framework as follows:
1. Oppressor and oppressed
Marx argues that, as an empirical matter, people invariably form themselves into cohesive groups (he calls them classes), which exploit one another to the extent they are able. A liberal political order is no different in this from any other, and it tends toward two classes, one of which owns and controls pretty much everything (the oppressor); while the other is exploited, and the fruit of its labor appropriated, so that it does not advance and, in fact, remains forever enslaved (the oppressed). In addition, Marx sees the state itself, its laws and its mechanisms of enforcement, as a tool that the oppressor class uses to keep the regime of oppression in place and to assist in carrying out this work.2. False consciousness
Marx recognizes that the liberal businessmen, politicians, lawyers, and intellectuals who keep this system in place are unaware that they are the oppressors, and that what they think of as progress has only established new conditions of oppression. Indeed, even the working class may not know that they are exploited and oppressed. This is because they all think in terms of liberal categories (e.g., the individual’s right to freely sell his labor) which obscure the systematic oppression that is taking place. This ignorance of the fact that one is an oppressor or oppressed is called the ruling ideology (Engels later coined the phrase false consciousness to describe it), and it is only overcome when one is awakened to what is happening and learns to recognize reality using true categories.3. Revolutionary reconstitution of society
Marx suggests that, historically, oppressed classes have materially improved their conditions only through a revolutionary reconstitution of society at large—that is, through the destruction of the oppressor class, and of the social norms and ideas that hold the regime of systematic oppression in place. He even specifies that liberals will supply the oppressed with the tools needed to overthrow them. There is a period of “more or less veiled civil war, raging within existing society, up to the point where that war breaks out into open revolution” and the “violent overthrow” of the liberal oppressors. At this point, the oppressed seize control of the state.4. Total disappearance of class antagonisms
Marx promises that after the oppressed underclass takes control of the state, the exploitation of individuals by other individuals will be “put to an end” and the antagonism between classes of individuals will totally disappear. How this is to be done is not specified.Marxist political theories have undergone much development and elaboration over nearly two centuries. The story of how “neo-Marxism” emerged after the First World War in the writings of the Frankfurt School and Antonio Gramsci has been frequently told, and academics will have their hands full for many years to come arguing over how much influence was exerted on various successor movements by Michel Foucault, post-modernism, and more. But for present purposes, this level of detail is not necessary, and I will use the term “Marxist” in a broad sense to refer to any political or intellectual movement that is built upon Marx’s general framework as I’ve just described it. This includes the “Progressive” or “Anti-Racism” movement now advancing toward the conquest of liberalism in America and Britain. This movement uses racialist categories such as whites and people of color to describe the oppressors and the oppressed in our day. But it relies entirely on Marx’s general framework for its critique of liberalism and for its plan of action against the liberal political order. It is simply an updated Marxism.
III. The attraction and power of Marxism
Although many liberals and conservatives say that Marxism is “nothing but a great lie,” this isn’t quite right. Liberal societies have repeatedly proved themselves vulnerable to Marxism, and now we are seeing with our own eyes how the greatest liberal institutions in the world are being handed over to Marxists and their allies. If Marxism is nothing but a great lie, why are liberal societies so vulnerable to it? We must understand the enduring attraction and strength of Marxism. And we will never understand it unless we recognize that Marxism captures certain aspects of the truth that are missing from Enlightenment liberalism.
Which aspects of the truth?
Marx’s principal insight is the recognition that the categories liberals use to construct their theory of political reality (liberty, equality, rights, and consent) are insufficient for understanding the political domain. They are insufficient because the liberal picture of the political world leaves out two phenomena that are, according to Marx, absolutely central to human political experience: The fact that people invariably form cohesive classes or groups; and the fact that these classes or groups invariably oppress or exploit one another, with the state itself functioning as an instrument of the oppressor class.
My liberal friends tend to believe that oppression and exploitation exist only in traditional or authoritarian societies, whereas liberal society is free (or almost free) from all that. But this isn’t true. Marx is right to see that every society consists of cohesive classes or groups, and that political life everywhere is primarily about the power relations among different groups. He is also right that at any given time, one group (or a coalition of groups) dominates the state, and that the laws and policies of the state tend to reflect the interests and ideals of this dominant group. Moreover, Marx is right when he says that the dominant group tends to see its own preferred laws and policies as reflecting “reason” or “nature,” and works to disseminate its way of looking at things throughout society, so that various kinds of injustice and oppression tend to be obscured from view.
For example, despite decades of experimentation with vouchers and charter schools, the dominant form of American liberalism remains strongly committed to the public school system. In most places, this is a monopolistic system that requires children of all backgrounds to receive what is, in effect, an atheistic education stripped clean of references to God or the Bible. Although liberals sincerely believe that this policy is justified by the theory of “separation of church and state,” or by the argument that society needs schools that are “for everyone,” the fact is that these theories justify what really is a system aimed at inculcating their own Enlightenment liberalism. Seen from a conservative perspective, this amounts to a quiet persecution of religious families. Similarly, the pornography industry is nothing but a horrific instrument for exploiting poor women, although it is justified by liberal elites on grounds of “free speech” and other freedoms reserved to “consenting adults.” And in the same way, indiscriminate offshoring of manufacturing capacity is considered to be an expression of property rights by liberal elites, who benefit from cheap Chinese labor at the expense of their own working-class neighbors.
No, Marxist political theory is not simply a great lie. By analyzing society in terms of power relations among classes or groups, we can bring to light important political phenomena to which Enlightenment liberal theories—theories that tend to reduce politics to the individual and his or her private liberties—are systematically blind.
This is the principal reason that Marxist ideas are so attractive. In every society, there will always be plenty of people who have reason to feel they’ve been oppressed or exploited. Some of these claims will be worthy of remedy and some less so. But virtually all of them are susceptible to a Marxist interpretation, which shows how they result from systematic oppression by the dominant classes, and justifies responding with outrage and violence. And those who are troubled by such apparent oppression will frequently find themselves at home among the Marxists.
Of course, liberals have not remained unmoved in the face of criticism based on the reality of group power relations. Measures such as the US Civil Rights Act of 1964 explicitly outlawed discriminatory practices against a variety of classes or groups; and subsequent “Affirmative Action” programs sought to strengthen underprivileged classes through quotas, hiring goals, and other methods. But these efforts have not come close to creating a society free from power relations among classes or groups. If anything, the sense that “the system is rigged” in favor of certain classes or groups at the expense of others has only grown more pronounced.
Despite having had more than 150 years to work on it, liberalism still hasn’t found a way to persuasively address the challenge posed by Marx’s thought.
IV. The flaws that make Marxism fatal
We’ve looked at what Marxist political theory gets right and why it’s such a powerful doctrine. But there are also plenty of problems with the Marxist framework, a number of them fatal.
The first of these is that while Marxism proposes an empirical investigation of the power relations among classes or groups, it simply assumes that wherever one discovers a relationship between a more powerful group and a weaker one, that relation will be one of oppressor and oppressed. This makes it seem as if every hierarchical relationship is just another version of the horrific exploitation of black slaves by Virginia plantation owners before the Civil War. But in most cases, hierarchical relationships are not enslavement. Thus, while it is true that kings have normally been more powerful than their subjects, employers more powerful than their employees, and parents more powerful than their children, these have not necessarily been straightforward relations of oppressor and oppressed. Much more common are mixed relationships, in which both the stronger and the weaker receive certain benefits, and in which both can also point to hardships that must be endured in order to maintain it.
The fact that the Marxist framework presupposes a relationship of oppressor and oppressed leads to the second great difficulty, which is the assumption that every society is so exploitative that it must be heading toward the overthrow of the dominant class or group. But if it is possible for weaker groups to benefit from their position, and not just to be oppressed by it, then we have arrived at the possibility of a conservative society: One in which there is a dominant class or loyalty group (or coalition of groups), which seeks to balance the benefits and the burdens of the existing order so as to avoid actual oppression. In such a case, the overthrow and destruction of the dominant group may not be necessary. Indeed, when considering the likely consequences of a revolutionary reconstitution of society—often including not only civil war, but foreign invasion as the political order collapses—most groups in a conservative society may well prefer to preserve the existing order, or to largely preserve it, rather than to endure Marx’s alternative.
This brings us to the third failing of the Marxist framework. This is the notorious absence of a clear view as to what the underclass, having overthrown its oppressors and seized the state, is supposed to do with its newfound power. Marx is emphatic that once they have control of the state, the oppressed classes will be able to end oppression. But these claims appear to be unfounded. After all, we’ve said that the strength of the Marxist framework lies in its willingness to recognize that power relations do exist among classes and groups in every society, and that these can be oppressive and exploitative in every society. And if this is an empirical fact—as indeed it seems to be—then how will the Marxists who have overthrown liberalism be able use the state to obtain the total abolition of class antagonisms? At this point, Marx’s empiricist posture evaporates, and his framework becomes completely utopian.
When liberals and conservatives talk about Marxism being “nothing but a big lie,” this is what they mean. The Marxist goal of seizing the state and using it to eliminate all oppression is an empty promise. Marx did not know how the state could actually bring this about, and neither have any of his followers. In fact, we now have many historical cases in which Marxists have seized the state: In Russia and Eastern Europe, China, North Korea, and Cambodia, Cuba and Venezuela. But nowhere has the Marxists’ attempt at a “revolutionary reconstitution of society” by the state been anything other than a parade of horrors. In every case, the Marxists themselves form a new class or group, using the power of the state to exploit and oppress other classes in the most extreme ways—up to and including repeated recourse to murdering millions of their own people. Yet for all this, utopia never comes and oppression never ends.
Marxist society, like all other societies, consists of classes and groups arranged in a hierarchical order. But the aim of reconstituting society and the assertion that the state is responsible for achieving this feat makes the Marxist state much more aggressive, and more willing to resort to coercion and bloodshed, than the liberal regime it seeks to replace.
V. The dance of liberalism and Marxism
It is often said that liberalism and Marxism are “opposites,” with liberalism committed to freeing the individual from coercion by the state and Marxism endorsing unlimited coercion in pursuit of a reconstituted society. But what if it turned out that liberalism has a tendency to give way and transfer power to Marxists within a few decades? Far from being the opposite of Marxism, liberalism would merely be a gateway to Marxism.
A compelling analysis of the structural similarities between Enlightenment liberalism and Marxism has been published by the Polish political theorist Ryszard Legutko under the title The Demon in Democracy: Totalitarian Temptations in Free Societies (2016). A subsequent book by Christopher Caldwell, The Age of Entitlement (2020), has similarly documented the manner in which the American constitutional revolution of the 1960s, whose purpose was to establish the rule of liberalism, has in fact brought about a swift transition to a “Progressive” politics that is, as I’ve said, a version of Marxism. With these accounts in mind, I’d like to propose a way of understanding the core relationship that binds liberalism and Marxism to one another and makes them something other than “opposites.”
Enlightenment liberalism is a rationalist system built on the premise that human beings are, by nature, free and equal. It is further asserted that this truth is “self-evident,” meaning that all of us can recognize it through the exercise of reason alone, without reference to the particular national or religious traditions of our time and place.
But there are difficulties with this system. One of these is that, as it turns out, highly abstract terms such as freedom, equality, and justice cannot be given stable content by means of reason alone. To see this, consider the following problems:
1. If all men are free and equal, how is it that not everyone who wishes to do so may enter the United States and take up residence there?
By reason alone, it can be argued that since all men are free and equal, they should be equally free to take up residence in the United States. This appears straightforward, and any argument to the contrary will have to depend on traditional concepts such as nation, state, territory, border, citizenship, and so on—none of which are self-evident or accessible to reason alone.
2. If all men are free and equal, how is it that not everyone who wants to may register for courses at Princeton University?
By reason alone, it can be argued that if all are free and equal, they should be equally free to register for courses at Princeton on a first come, first served basis. This, too, appears straightforward. Any argument to the contrary will have to depend on traditional concepts such as private property, corporation, freedom of association, education, course of study, merit, and so on. And, again, none of this is self-evident.
3. If all men are free and equal, how can you justify preventing a man who feels he is a woman from competing in a women’s track and field competition in a public school?
By reason alone, it can be said that since all are free and equal, a man who feels he is a woman should be equally free to compete in a women’s track and field competition. Any argument to the contrary will have to depend on traditional concepts of such as man, woman, women’s rights, athletic competition, competition class, fairness, and so on, none of which is accessible to reason alone.
Such examples can be multiplied without end. The truth is that reason alone gets us almost nowhere in settling arguments over what is meant by freedom and equality. So where does the meaning of these terms come from?
I’ve said that every society consists of classes or groups. These stand in various power relations to one another, which find expression in the political, legal, religious, and moral traditions that are handed down by the strongest classes or groups. It is only within the context of these traditions that we come to believe that words like freedom and equality mean one thing and not another, and to develop a “common sense” of how different interests and concerns are to be balanced against one another in actual cases.
But what happens if you dispense with those traditions? This, after all, is what Enlightenment liberalism seeks to do. Enlightenment liberals observe that inherited traditions are always flawed or unjust in certain ways, and for this reason they feel justified in setting inherited tradition aside and appealing directly to abstract principles such as freedom and equality. The trouble is, there is no such thing as a society in which everyone is free and equal in all ways. Even in a liberal society, there will always be countless ways in which a given class or group may be unfree or unequal with respect to the others. And since this is so, Marxists will always be able to say that some or all of these instances of unfreedom and inequality are instances of oppression.
Thus the endless dance of liberalism and Marxism, which goes like this:
1. Liberals declare that henceforth all will be free and equal, emphasizing that reason (not tradition) will determine the content of each individual’s rights.
2. Marxists, exercising reason, point to many genuine instances of unfreedom and inequality in society, decrying them as oppression and demanding new rights.
3. Liberals, embarrassed by the presence of unfreedom and inequality after having declared that all would be free and equal, adopt some of the Marxists’ demands for new rights.
4. Return to #1 above and repeat.
Of course, not all liberals give in to the Marxists’ demands—and certainly not on every occasion. Nevertheless, the dance is real. As a generalized view of what happens over time, this picture is accurate, as we’ve seen throughout the democratic world over the last 70 years. Liberals progressively adopt the critical theories of the Marxists over time, whether the subject is God and religion, man and woman, honor and duty, family, nation, or anything else.
A few observations, then, concerning this dance of liberalism and Marxism:
First, notice that the dance is a byproduct of liberalism. It exists because Enlightenment liberalism sets freedom and equality as the standard by which government is to be judged, and describes the individual’s power of reason alone, independent of tradition, as the instrument by which this judgment is to be obtained. In so doing, liberalism creates Marxists. Like the sorcerer’s apprentice, it constantly calls into being individuals who exercise reason, identify instances of unfreedom and inequality in society, and conclude from this that they (or others) are oppressed and that a revolutionary reconstitution of society is necessary to eliminate the oppression. It is telling that this dynamic is already visible during the French Revolution and in the radical regimes in Pennsylvania and other states during the American Revolution. A proto-Marxism was generated by Enlightenment liberalism even before Marx proposed a formal structure for describing it a few decades later.
Second, the dance only moves in one direction. In a liberal society, Marxist criticism brings many liberals to progressively abandon the conceptions of freedom and equality with which they set out, and to adopt new conceptions proposed by Marxists. But the reverse movement—of Marxists toward liberalism—seems terribly weak in comparison. How can this be? If Enlightenment liberalism is true, and its premises are indeed “self-evident” or a “product of reason,” it should be the case that under conditions of freedom, individuals will exercise reason and reach liberal conclusions. Why, then, do liberal societies produce a rapid movement toward Marxist ideas, and not an ever-greater belief in liberalism?
The key to understanding this dynamic is this: Although liberals believe their views are “self-evident” or the “product of reason,” most of the time they are actually relying on inherited conceptions of what freedom and equality are, and inherited norms of how to apply these concepts to real-world cases. In other words, the conflict between liberalism and its Marxist critics is one between a dominant class or group wishing to conserve its traditions (liberals), and a revolutionary group (Marxists) combining criticial reasoning with a willingness to jettison all inherited constraints to overthrow these traditions. But while Marxists know very well that their aim is to destroy the intellectual and cultural traditions that are holding liberalism in place, their liberal opponents for the most part refuse to engage in the kind of conservatism that would be needed to defend their traditions and strengthen them. Indeed, liberals frequently disparage tradition, telling their children and students that all they need is to reason freely and “draw your own conclusions.”
The result is a radical imbalance between Marxists, who consciously work to bring about a conceptual revolution, and liberals whose insistence on “freedom from inherited tradition” provides little or no defense—and indeed, opens the door for precisely the kinds of arguments and tactics that Marxists use against them. This imbalance means that the dance moves only in one direction, and that liberal ideas tend to collapse before Marxist criticism in a matter of decades.
VI. The Marxist endgame and democracy’s end
Not very long ago, most of us living in free societies knew that Marxism was not compatible with democracy. But with liberal institutions overrun by “Progressives” and “Anti-Racists,” much of what was once obvious about Marxism, and much of what was once obvious about democracy, has been forgotten. It is time to revisit some of these once-obvious truths.
Under democratic government, violent warfare among competing classes and groups is brought to an end and replaced by non-violent rivalry among political parties. This doesn’t mean that power relations among loyalty groups come to an end. It doesn’t mean that injustice and oppression come to an end. It only means that instead of resolving their disagreements through bloodshed, the various groups that make up a given society form themselves into political parties devoted to trying to unseat one another in periodic elections. Under such a system, one party rules for a fixed term, but its rivals know they will get to rule in turn if they can win the next election. It is the possibility of being able to take power and rule the country without widespread killing and destruction that entices all sides to lay down their weapons and take up electoral politics instead.
The most basic thing one needs to know about a democratic regime, then, is this: You need to have at least two legitimate political parties for democracy to work. By a legitimate political party, I mean one that is recognized by its rivals as having a right to rule if it wins an election. For example, a liberal party may grant legitimacy to a conservative party (even though they don’t like them much), and in return this conservative party may grant legitimacy to a liberal party (even though they don’t like them much). Indeed, this is the way most modern democratic nations have been governed.
But legitimacy is one of those traditional political concepts that Marxist criticism is now on the verge of destroying. From the Marxist point of view, our inherited concept of legitimacy is nothing more than an instrument the ruling classes use to perpetuate injustice and oppression. The word legitimacy takes on its true meaning only with reference to the oppressed classes or groups that the Marxist sees as the sole legitimate rulers of the nation. In other words, Marxist political theory confers legitimacy on only one political party—the party of the oppressed, whose aim is the revolutionary reconstitution of society. And this means that the Marxist political framework cannot co-exist with democratic government. Indeed, the entire purpose of democratic government, with its plurality of legitimate parties, is to avoid the violent reconstitution of society that Marxist political theory regards as the only reasonable aim of politics.
Simply put, the Marxist framework and democratic political theory are opposed to one another in principle. A Marxist cannot grant legitimacy to liberal or conservative points of view without giving up the heart of Marxist theory, which is that these points of view are inextricably bound up with systematic injustice and must be overthrown, by violence if necessary. This is why the very idea that a dissenting opinion—one that is not “Progressive” or “Anti-Racist”—could be considered legitimate has disappeared from liberal institutions as Marxists have gained power. At first, liberals capitulated to their Marxist colleagues’ demand that conservative viewpoints be considered illegitimate (because conservatives are “authoritarian” or “fascist”). This was the dynamic that brought about the elimination of conservatives from most of the leading universities and media outlets in America.
But by the summer of 2020, this arrangement had run its course. In the United States, Marxists were now strong enough to demand that liberals fall into line on virtually any issue they considered pressing. In what were recently liberal institutions, a liberal point of view has likewise ceased to be legitimate. This is the meaning of the expulsion of liberal journalists from the New York Times and other news organisations. It is the reason that Woodrow Wilson’s name was removed from buildings at Princeton University, and for similar acts at other universities and schools. These expulsions and renamings are the equivalent of raising a Marxist flag over each university, newspaper, and corporation in turn, as the legitimacy of the old liberalism is revoked.
Until 2016, America sill had two legitimate political parties. But when Donald Trump was elected president, the talk of his being “authoritarian” or “fascist” was used to discredit the traditional liberal point of view, according to which a duly elected president, the candidate chosen by half the public through constitutional procedures, should be accorded legitimacy. Instead a “resistance” was declared, whose purpose was to delegitimize the president, those who worked with him, and those who voted for him.
I know that many liberals believe that this rejection of Trump’s legitimacy was directed only at him, personally. They believe, as a liberal friend wrote to me recently, that when this particular president is removed from office, America will be able to return to normal.
But nothing of the sort is going to happen. The Marxists who have seized control of the means of producing and disseminating ideas in America cannot, without betraying their cause, confer legitimacy on any conservative government. And they cannot grant legitimacy to any form of liberalism that is not supine before them. This means that whatever President Trump’s electoral fortunes, the “resistance” is not going to end. It is just beginning.
With the Marxist conquest of liberal institutions, we have entered a new phase in American history (and, consequently, in the history of all democratic nations). We have entered the phase in which Marxists, having conquered the universities, the media, and major corporations, will seek to apply this model to the conquest of the political arena as a whole.
How will they do this? As in the universities and the media, they will use their presence within liberal institutions to force liberals to break the bonds of mutual legitimacy that bind them to conservatives—and therefore to two-party democracy. They will not demand the delegitimization of just President Trump, but of all conservatives. We’ve already seen this in the efforts to delegitimize the views of Senators Josh Hawley, Tom Cotton, and Tim Scott, as well as the media personality Tucker Carlson and others. Then they will move on to delegitimizing liberals who treat conservative views as legitimate, such as James Bennet, Bari Weiss, and Andrew Sullivan. As was the case in the universities and media, many liberals will accommodate these Marxist tactics in the belief that by delegitimizing conservatives they can appease the Marxists and turn them into strategic allies.
But the Marxists will not be appeased because what they’re after is the conquest of liberalism itself—already happening as they persuade liberals to abandon their traditional two-party conception of political legitimacy, and with it their commitment to a democratic regime. The collapse of the bonds of mutual legitimacy that have tied liberals to conservatives in a democratic system of government will not make the liberals in question Marxists quite yet. But it will make them the supine lackeys of these Marxists, without the power to resist anything that “Progressives” and “Anti-Racists” designate as being important. And it will get them accustomed to the coming one-party regime, in which liberals will have a splendid role to play—if they are willing to give up their liberalism.
I know that many liberals are confused, and that they still suppose there are various alternatives before them. But it isn’t true. At this point, most of the alternatives that existed a few years ago are gone.
Liberals will have to choose between two alternatives:
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Either they will submit to the Marxists, and help them bring democracy in America to an end,
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Or they will assemble a pro-democracy alliance with conservatives.
There aren’t any other choices.
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- Meet Toyko's New Transparent Public Toilets
Meet Toyko's New Transparent Public Toilets
Tyler Durden
Fri, 08/21/2020 – 22:20Having finally solved the grand monetary policy puzzle, Japan has now moved on to other crucial societal problems, like getting people to feel comfortable using public toilets.
At least, that was the thinking behind Tokyo’s new transparent public toilets: to help ease “toilet anxiety”, according to Forbes.
In Japan, where public toilets are held to a higher standard of cleanliness than most other place around the world, the country’s residents still “harbor a fear that public toilets are dark, dirty, smelly and scary.”
That’s why the non-profit Nippon Foundation has now launched “The Tokyo Toilet Project”, which has asked 16 well known architects to renovate 17 public toilets located in one of the busiest areas of Tokyo, the public parks of Shibuya.
The idea was to apply a design that would make public bathrooms comfortable and accessible to everyone. The Nippon Foundation has a goal “that people will feel comfortable using these public toilets and to foster a spirit of hospitality for the next person.”
Pritzker Prize-winning architect Shigeru Ban is the brain-child behind the transparent restrooms. The smartglass they are built with turns opaque when someone is in them. The Nippon Foundation commented: “There are two concerns with public toilets, especially those located in parks. The first is whether it is clean inside, and the second is that no one is secretly waiting inside.”
“At night, they light up the parks like a beautiful lantern,” the Foundation concluded.
- Can Trump Learn From The Last Three Defeated Incumbents?
Can Trump Learn From The Last Three Defeated Incumbents?
Tyler Durden
Fri, 08/21/2020 – 22:00Authored by Myra Adams via RealClearPoliticsa.com,
Since the end of World War II, there have been 18 U.S. presidential elections, 11 of which involved incumbents. Eight of those presidents won reelection, demonstrating the power of incumbency.
Conversely, the familiar tag line “past performance does not guarantee future results,” heard at the end of financial ads, is equally applicable. Subjected to that devastating truth were the last three one-term presidents – Gerald Ford, Jimmy Carter, and George H.W. Bush, all forced to join the “exclusive club” Donald Trump is fervently trying to avoid.
Examining the failed reelection campaigns of 1976, 1980, and 1992 may offer lessons for the current Oval Office occupant.
Election of 1976
Gerald Ford (48% of the popular vote) vs. Jimmy Carter (50.1%)
Electoral College: Ford 240, Carter 297
Why Ford Lost: First, he was an unelected incumbent, and his unpopular pardon of disgraced predecessor Richard Nixon dogged his campaign. (Over the years, however, the pardon decision was viewed more favorably.)
Second, Ford presided over what was perceived as a lackluster economy with high unemployment/inflation and slow growth. In the same vein, Ford’s much-derided Whip Inflation Now initiative still ranks high among domestic policy blunders. (During my after-school job as a Woolworth’s cashier, management pinned a WIN button on my blouse.)
Third, the dramatic fall of South Vietnam occurred on April 30, 1975. The helicopter evacuations from the roof of the U.S. Embassy in Saigon left a devastating image that not only stained Ford’s administration but negatively impacted American foreign policy for decades.
Fourth, even with the economy showing signs of improvement in 1976, Ford could not escape the general feeling that voters thought it was time to put the calamitous Nixon/Watergate/Vietnam years in the rearview mirror.
Enter Jimmy Carter, a little known one-term governor and peanut farmer from Georgia. He was positioned as an unblemished “outsider” when Washington’s leadership represented scandal and failure at home and abroad. With the slogan “A Leader, for a Change,” Carter parlayed that prevailing national attitude to his advantage, while famously saying, “I will never lie to you.”
Ford’s Last Job Approval Rating Before the 1976 Election: 50%.
Ford Campaign Ad: “Peace With Freedom.”
Lessons for Trump:
A similar “time to move on” national attitude must be messaged against, but in a positive, unifying way.
Election of 1980
Jimmy Carter (41% of the popular vote) vs. Ronald Reagan (50.7%)
Electoral College: Carter 49, Reagan 489
Why Carter Lost: A majority of Americans had come to the conclusion that he was a weak leader who was not up to the task.
Voters were fed up with a disastrous negative-growth economy (-0.3 GDP). There was high unemployment (7.2%); hyper-inflation (13.3% in 1979, 12.5% in 1980); record-high interest rates (average mortgage interest rate: 13.7%) and an energy crisis.
All of the above was coupled with seemingly out-of-control international events perceived by voters as rooted in flawed presidential leadership responsible for America’s diminished global standing. The national ego was battered by the Iranian hostage crisis, including a deadly desert rescue debacle; Russia’s invasion of Afghanistan; and America’s absence at the 1980 Moscow Olympics.
The stars were aligned for two-term former California Gov. Ronald Reagan to win in the greatest landslide since Franklin Roosevelt’s 1936 reelection. Reagan presented himself as a strong, principled leader with an optimistic vision of the future. Contributing to Reagan’s success was an ability to connect with Americans through his extraordinary communication skills (especially compared to Carter’s), honed by his years as a Hollywood actor and leader of the nation’s most populous state.
Reagan’s campaign slogan was “Let’s make America great again.” (Sound familiar?)
Most Memorable Campaign Moment: At the end of the only debate between Carter and Reagan, held on Oct. 28, 1980, the challenger looked straight into the television camera and asked, “Are you better off now than you were four years ago?” Since then, that question has been raised in nearly all presidential campaigns by both parties.
Carter’s Last Job Approval Rating Before the Election: 33%
Carter Campaign Ads: Here, here, and here.
Lessons for Trump:
Carter was perceived as reluctant leader, poor communicator, and generally not up to the demands of the job. Forty years later, Trump views himself as strong, tough, and decisive at home and abroad. But there is a YUGE gap between Trump’s perception and that of many voters, which must be bridged if he is to be reelected in this time of grave national crises.
Election of 1992
George H.W. Bush (37.4% of the popular vote) vs. Bill Clinton (43%) vs. Ross Perot (18.9%)
Electoral College: Bush 168, Clinton 370, Perot 0
Why Bush Lost: First, a now-iconic campaign slogan, “It’s the economy, stupid,” was brilliantly hatched and executed by Clinton’s team. The economy was in recession through much of 1992, and Clinton’s message discipline was solid.
Second, Bush’s defeat could be couched as “passing the torch to a new generation.” (A classic phrase from President John F. Kennedy’s 1961 inaugural address.) Clinton was a charismatic Arkansas governor who, at age 46, was the first baby boomer to be nominated by a major party.
Third, Clinton out-campaigned and out-maneuvered President Bush, who had successfully led the nation through the Persian Gulf War. Team Clinton created and implemented “rapid response” messaging along with a “war room.” They hammered the perception that the president was out of touch with the times, including pop culture. But Clinton was “hip,” and when he played the saxophone on “The Arsenio Hall Show,” presidential campaigns were changed forever.
Fourth is the most contested factor that might explain Bush’s defeat — Ross Perot’s role as the third-party candidate. But the enduring question is to what degree, since Perot won nearly 19% of the popular vote. Upon Perot’s death last year, RealClearPolitics elections analyst Sean Trende revisited this quandary in a piece headlined “We Don’t Know Whether Perot Cost Bush in 1992.”
Most Memorable Campaign Moment: In truth, there were few memorable moments from that campaign, but one brief gesture by the incumbent forever enshrined itself in presidential debate history. Here is a U.S. News & World Report headline: “George H.W. Bush Checks His Watch During Debate With Bill Clinton and Ross Perot.” The subhead: “Where Bush appeared impatient, ‘Clinton steps in and empathizes, empathizes, empathizes.’ “
That innocent wristwatch glance crystallized the perception that President Bush’s time was up.
Bush’s Last Job Approval Rating Before the 1992 Election: 34%
Bush Campaign Ad: “Agenda” from October 1992.
Lessons for Trump:
Don’t be outmaneuvered on the campaign “trail,” which is even more challenging this year with no physical “trail.”
Have a clear, concise pitch and institute “message discipline.”
Feel the pain of your people. Bill Clinton mastered that act with Bush perceived as being less empathic to the struggles of average Americans. Trump is plagued with a similar problem as the entire nation struggles to deal with the coronavirus and crippled economy.
Overall Lessons for Trump From the Last Three One-Term Presidents
If the election verdict is “time to move on,” be graceful and accept the will of the people. A hallmark of our nation is its smooth transition of power.
But if defeated, look forward to “doing good” as an ex-president. Americans have a remarkably strong and consistent record of liking their ex-presidents (reelected or not) more than when they were in the Oval Office.
And please never again say, “It’ll end up being a rigged election” or “I should get a third term.” Both statements practically guarantee that Jimmy Carter will personally welcome you to his lonely, exclusive club where he is the only living member.
- Virginia Plans Mandatory COVID-19 Vaccinations For All Residents
Virginia Plans Mandatory COVID-19 Vaccinations For All Residents
Tyler Durden
Fri, 08/21/2020 – 21:40As Friday’s hospitalization numbers across the Sun Belt appear to confirm CDC head Dr. Robert Redfield’s assertion that the American COVID-19 outbreak has peaked and is starting to fade, the State of Virginia is setting a new precedent by seriously discussing forcing Virginians to be vaccinated with whatever rushed-to-marked candidate the FDA approves first.
During an interview that aired on Friday, the state’s health commissioner said he planned to invoke state law to make vaccinations mandatory – once a western product is available, presumably.
Norman Oliver
Here’s more from ABC News 8:
State Health Commissioner Dr. Norman Oliver told 8News on Friday that he plans to mandate coronavirus vaccinations for Virginians once one is made available to the public.
Virginia state law gives the Commissioner of Health the authority to mandate immediate immunizations during a public health crisis if a vaccine is available. Health officials say an immunization could be released as early as 2021.
Dr. Oliver says that, as long as he is still the Health Commissioner, he intends to mandate the coronavirus vaccine.
“It is killing people now, we don’t have a treatment for it and if we develop a vaccine that can prevent it from spreading in the community we will save hundreds and hundreds of lives,” Oliver said.
Pro-medical-choice activists in the state argue that the issue is a matter of medical choice, and that the hasty “expedited” approval process being implemented by the FDA is grounds for concern. State health authorities insist, meanwhile, that they would never mandate a vaccine that hadn’t already proven to be safe.
Virginia Freedom Keepers Director of Communications Kathleen Medaries, a mother of three from Chesterfield, says this is a matter of medical choice.This is not a Republican or Democrat issue. It’s not a pro-vaccine or anti-vaccine issue,” Medaries said. “For me, it’s an issue of being able to assess each vaccine for myself and my family one at a time.”
[…]
“He shouldn’t be the one person to make a decision for all of Virginians,””Medaries responded.
The state’s top medical official is opposed to a bill that has been put forth in the state assembly that would create more exemptions to the mandatory vaccination power, allowing exemptions on religious and other grounds.
Oliver believes that COVID-19 is a public health emergency that should take precedent over everything else, and that vaccine-assisted herd immunity is the state’s best and only real defense.
The decision comes after Massachusetts said it would make the flu vaccine mandatory this year as part of a campaign to protect the state’s medical system. We suspect Virginia and Massachusetts won’t be the only states to discuss mandatory COVID and/or flu vaccination in the coming weeks, as the school year begins.
- "It's Just Absolutely Incredible": What's Going On In The Corporate Bond Market Is Stunning
"It's Just Absolutely Incredible": What's Going On In The Corporate Bond Market Is Stunning
Tyler Durden
Fri, 08/21/2020 – 21:21In a recent report from hedge fund giant Brevan Howard, the investor pointed out the biggest flaw in the policy response to the covid pandemic: “Many businesses face solvency risks that are not addressed by borrowing; a debt overhang cannot be cured by more borrowing no matter how cheap it may be.“
While that statement is absolutely true, and it applies not only to the aftermath of the covid shutdowns but everything that has happened in the past decade, it hasn’t stopped both government and corporations from going on a historic borrowing spree, in the former case thanks to “helicopter money” whereby central banks now directly monetize all the debt government treasurys have to sell, and in the latter as company CFOs take advantage of record low rates to borrow as much as possible before the window closes. This can be seen in the Goldman chart below which shows that both investment grade and high yield leverage is at all time high levels:
The numbers are staggering: on Friday, BofA Chief Investment Strategist Michael Hartnett calculated that US corporate bond issuance is currently annualizing a mindblowing $2.5 trillion this year, between $2.1TN for IG and $0.4TN for high yield. As Bloomberg writes today, while much of that fresh cash – more than $1.6 trillion in total – has helped scores of companies stay afloat during the pandemic lockdown, “it now threatens to curb an economic recovery that was already showing signs of sputtering” as many companies will have to divert even more cash to repaying these obligations at the same time that their profits sink, leaving them with less to spend on expanding payrolls or upgrading facilities in months ahead.
The paradox is that this is all by design: in doing everything in its power to prevent the corporate debt bubble – which was already at a record size before the covid pandemic – from bursting, the US central bank unleashed monetary policies that have terminally decoupled the bond market from all fundamentals, while also arresting default risks by taking over credit risk without punishing investors and moving into lower-rated debt than ever before, which started off the risk-on period as Nordea’s Andreas Steno Larsen writes today and shows in the following chart:
In a sign of just how pronounced the borrowing overhang has become, Bloomberg points out that the average junk-rated company had debt levels relative to earnings that were so high in the middle of the year, according to a new analysis by Bloomberg Intelligence, that they almost would have tripped do-not-touch alerts from banking regulators a few years ago. Those warnings back then only applied to a handful of borrowers. Had regulators not opted to drop these warnings, they could today apply to far more.
Corporations have also been borrowing heavily as the Fed has slashed short-term interest rates to near zero and supported credit markets through, for example, buying company bonds. Lower rates have spurred investors to buy higher-yielding, riskier securities, which has allowed even junk-rated firms to borrow more to tide them over during the crisis. High-grade issuers have already sold more bonds in 2020 than any other full year in history. Junk corporations have surpassed 2019’s total already.
Some specifics: leverage (i.e., the ratio of total debt to Ebitda) for investment-grade companies was 3.53x in the second quarter for the Bloomberg Barclays U.S. Corporate high-grade index. That’s the highest in data going back to 1998, and is up from 3.42 in the first three months of the year, when the impact of the pandemic was only just beginning to show up in earnings. It compares with a 20-year average of 2.65.
For high yield, leverage stood at a record 5.42 at the end of June, up from 4.93 at the end of March and 4.44 at the end of 2019. Avis Budget Group Inc., the car rental company, had debt equal to 27 times earnings as of June 30, up from five times at the end of March, as it burned cash in the second quarter, although that figure could improve later this year as its earnings start to rebound. In 2016, banking regulators pushed back against leveraged buyouts that left companies with ratios above six.
No matter how one slices the data the message is clear: “An overburdened corporate sector is likely to grow less rapidly and that could slow the whole recovery down,” said Kathy Jones, chief fixed-income strategist for Charles Schwab.
Of course, none of that matters now when rates are at all time lows, but fast forward a few years when inflation kicks in and suddenly corporate America is facing another unprecedented crisis as it has to not only rollover record amounts of debt but has to refi into ever higher rates.
Quoting Lale Topcuoglu, senior fund manager at JO Hambro Capital Management in New York, Bloomberg warns that a slower recovery could have wide-reaching implications in financial markets. Many securities prices reflect investors’ expectation that profits will normalize next year, when in fact it could take at least two or three years. Not surprisingly, she believes that many junk bonds as being overpriced.
“It just seems absolutely incredible how much people are closing their eyes and buying,” Topcuoglu said.
The good news is that unlike last year when much of the new debt issuance went to fund stock buybacks, much of the debt sold in recent months has refinanced maturing borrowings allowing companies to lock in even lower rates for the next 5 to 10 years; furthermore many of the companies are holding on to the money they raised as cash and may end up not spending it.
And while the fact that companies managed to stay afloat during the pandemic is “a good thing compared with the alternative of even more corporations having gone bankrupt” not all companies have been able to access that credit, with smaller borrowers often getting shut out as a DoubleLine Portlio Manager wrote WEdnesday in “Large Firms Reap Benefits From Central Bank Easing As Small Ones Suffer.”
To be sure, even the large companies face a day of reckoning or as Bloomberg puts it simply “a hangover” as many corporations were already groaning under their debt loads even before the Covid-19 pandemic, and now will have to work harder to cut borrowings as earnings remain depressed. Even if companies are hanging on to the money they borrowed, they must still pay interest on it, and could eventually use the cash if the pandemic drags on. Many will simply revert to using the debt proceeds to repurchasing their stock and make quick profits for management and shareholders as we pointed out earlier this week. Ultimately it is the economy, and the middle class workers who will suffer the most as chief JPM economist Michael Feroli wrote, warning that with corporations shunting more of their earnings toward paying interest and paying down debt, they will struggle to hire and invest as much as they would at the end of a more conventional recession.” That could translate to a relatively sluggish recovery instead of the fast, “V-shaped” one many investors hope for.
“The debt overhang is going to be a headwind for capital spending and for hiring, not just in the second half of the year but probably into next year as well,” Feroli said.
Another paradox is that as corporate leverage is rising to all time highs, rates continue to sink as investors have no choice but to buy their debt, which in turn forces even more debt issuance, even higher leverage and so on, until the Fed is tasked with yet another corporate debt bailout:
With short-term interest rates having fallen to near-zero levels, borrowing is cheaper for most companies than it was just a year ago. Average yields on U.S. investment-grade corporate bonds touched all time lows of 1.82% earlier this month, and are still hovering near those levels, according to Bloomberg Barclays index data.
As a result of record low rates, even as leverage soars, interest coverage, or EBITDA to total interest expense, has fallen to 5.8 in the second quarter for investment-grade companies, compared with a 20-year average closer to 7. The June 2020 level was the lowest since 2003. For junk-rated companies, the interest coverage ratio fell to 2.3 in June, also the lowest since 2003.
Unlike the 2008 bubble, ratings firms have taken note of the broad downward trend in credit quality, with S&P downgrading more high-yield debt in the second quarter, relative to upgrades, than any time in at least a decade, according to data compiled by Bloomberg. That too has not stopped investors from piling on: just recently junk-rated Ball Corporation sold debt for the lowest ever yield for a “high” yield bond at 2.875%.
Meanwhile, corporate earnings per share fell by about a third in the second quarter from the same period last year, and are likely to fall in the third and fourth quarters as well and may not recover their 2018 levels until the end of 2021. As a result, strategists expect leverage and interest coverage to erode further.
None of this fazes investors who have gone “balls to the wall” buying corporate debt with the Fed’s blessing now that the central bank is buying both investment grade and high yield ETFs and bonds in the open market. To justify the euphoria, investors have given companies a break for about a year and are looking ahead into mid-2021 or even later to evaluate where they will perform after, for example, the world finds and distributes a Covid-19 vaccine. That to Bloomberg explains why cruise companies that are burning cash, such as Royal Caribbean Cruises Ltd. and Carnival Corp., have been able to borrow repeatedly, and have seen most of their new bonds trade well above the price at which they were originally sold.
But even if bond prices are broadly rising, investors need to be cognizant of the risks they’re buying, said Schwab’s Jones.
“This cycle is very different because we’ve had so much support from central banks and we have so much liquidity in the market,” Jones said. “But the old saying ‘liquidity does not equate to solvency’ is something people need to keep in mind when they’re investing.”
Brevan Howard would most certainly agree.
We give the final word to GnS Economics’ founder Tuomas Malinen who today writes that “we have stock markets that have decoupled from real economic activity to an unprecedented degree and a moribund European banking sector practically doomed to collapse. The constant resuscitation and bailouts of the central banks since the last crisis in 2009 have pushed us to the brink of ‘Financial Armageddon’, initiated this time by the repo-market implosion and the coronavirus pandemic.”
His conclusion: “When it truly gets going, as it likely will, do not blame the virus. Blame the reckless central bankers.“
- This Is What A Nation Cut Off From The Rest Of The World Looks Like
This Is What A Nation Cut Off From The Rest Of The World Looks Like
Tyler Durden
Fri, 08/21/2020 – 21:20Submitted by Christopher Dembik of Saxobank
Earlier this morning, there has been a couple of Japanese data releases. Japanese consumer price inflation was unexciting with a rate at 0% YoY. While we see some relative price changes in many countries, the basic story for the moment is that inflation will remain low in most countries. In addition, Japan National Tourism Organization has published its latest data regarding the flow of foreign visitors in July. Basically, it shows what a nation cut off from the rest of the world looks like.
The flow of foreign visitors in Japan published by Japan National Tourism Organization is out this morning.
The country was supposed to welcome an unprecedented number of Olympic fans from all around the world just about now, but the pandemic has turned everything upside down.
Arrivals of foreign visitors plunge 99% YoY in July, at 3,800 individuals (slightly up compared to the previous month, when it stood at 2,600 individuals). For the sake of comparison, at the beginning of the year, the country recorded more than 2.6 million foreign visitors in a month’s time.
Whilst the country expected to draw around 40 million visitors this year, the final number for 2020 might fall to 7-8 million at best, which would represent a drop of 80% compared to the target. Over the past years, the contribution of travel and tourism to GDP has significantly increased, to reach 7% in 2019, on the back of government’s incentives to promote foreign tourism via marketing push overseas and eased visa requirements.
The COVID-19 constitutes a serious setback for the government’s hopes for tourism and it is unlikely that the recent campaign to spur domestic tourism launched on July 22 will offset losses generated by the drop in the flow of foreign visitors. Considering the number of new COVID-19 cases has sharply increased since mid-July and that many countries at global level are facing the acute risk of second wave, the country is not expected to reopen to foreigners anytime soon and will probably postpone initial plans to let foreign students and businessmen return.
Like Japan, many other countries has decided to close borders to fight against the spread of the virus, thus hitting hard the tourism sector. At the start of the pandemic, many economists underestimated the negative ripple effect on tourism.
Now, there is a broad consensus that global tourism will not get back to normal before at least 2022-23, if it ever gets back to normal.
- Black Billionaire Who Paid Off Morehouse Graduates' Loans Under Investigation By IRS
Black Billionaire Who Paid Off Morehouse Graduates' Loans Under Investigation By IRS
Tyler Durden
Fri, 08/21/2020 – 21:00Black billionaire Robert Smith who, along with Floyd Mayweather and Tyler Perry, paid for George Floyd’s extravagant funeral, and who – most famously – once promised to pay off the student loans for an entire class of Morehouse College students at the close of his speech, is fighting a criminal tax inquiry, Bloomberg reports.
The story of the actual fraud is somewhat opaque – not unlike the deed itself, which allegedly saw assets flow through various offshore entities connected to Smith and another businessman who was one of Smith’s early mentors, Robert Brockman (the man who gave Smith some of the early investor capital he used to power). In 2000, Brockman contributed to the $1 billion Smith used to launch his San Francisco-based Vista Partners, a private equity firm.
According to Bloomberg, Smith is trying to convince the DoJ to forgo any criminal charges and instead settle the matter civilly. Given the current climate, the IRS pursuing one of America’s only black billionaires wouldn’t be a great look for the federal government, and the DoJ might have a hard time convincing a jury, especially considering the confusing nature of the investigation, which involves tracing $200 million in assets through a web of offshore entities before they can even establish whether Smith was indeed the beneficial owner of these assets.
Justice Department to forgo criminal charges and resolve his case with a civil settlement, according to three of the people. A conviction could send him to prison and force him out of Vista Equity Partners, a money management firm with $65 billion in assets that has brought him fame and a luxe lifestyle.
Part of his defense rests on a reported pledge by the private equity fund to direct proceeds to charity. If prosecutors determine that the proceeds were designated for charity all along, it could bolster the argument that Smith was never the beneficial owner and not liable for taxes.
Interestingly enough, Bloomberg’s sources claim Smith has talked to prosecutors about the possibility of cooperating in exchange for leniency. Similar to the allegations against Steve Bannon, Smith appears to be only a secondary suspect – and it’s possible that the investigation into Smith was only brought about to pressure him to cooperate.
Whatever the case may be, it’s early days.
The Justice Department has discretion in deciding whom to charge, weighing factors such as the prosecution’s evidence, the strength of the defense and the way a jury would likely respond to the facts. Smith, a prominent Black businessman and philanthropist, may be viewed sympathetically by a jury in a time of protests for racial justice, lawyers said.
“The issue of jury appeal is often considered by prosecutors in cases that are a close call,” said David S. Weinstein, a former federal prosecutor in Miami who isn’t involved in the case. “If 12 jurors believe they want to acquit a defendant based on something other than the evidence, that’s their inherent right. They may believe it’s not the right time or place to bring a case against a particular defendant.”
Smith pledged $34 million to pay off the student loans of an entire Morehouse College class last year, a dedication that earned him a place among Bloomberg’s ’50 People Who Defined 2019″.
But given the nature of the allegations against him, after reading the Bloomberg story, it’s worth wondering: Would Bloomberg’s reporters have been this forgiving if the person at the center of the investigation was anybody but the black billionaire who became a folk hero by paying off a whole class of students’ loans?
- Why 'Smarter Computers' Won't Make Socialism More Workable
Why 'Smarter Computers' Won't Make Socialism More Workable
Tyler Durden
Fri, 08/21/2020 – 20:40Authored by Mark DeWeaver via The Mises Institute,
Austrian economists have traditionally argued against central planning on the grounds that much of the economically relevant knowledge in society could never be made available to a single planning authority. But today, with an unprecedented and ever increasing volume and variety of data now potentially accessible to the planner, it seems that an omniscient government may be possible after all. Has the big data revolution rendered the promarket arguments of Ludwig von Mises and Friedrich von Hayek obsolete?
In chapter 3 of their 1920 bestseller, The ABC of Communism, Soviet theorists Nikolai Bukharin and Yevgeni Preobrazhensky claimed that in the communist society of the future the state would “know in advance how much labor to assign to the various branches of industry; what products are required and how much of each it is necessary to produce; how and where machines must be provided.”
In reality, of course, the Soviet Union never came close to realizing this vision.
Given the impossibility of setting targets for the millions of individual items required by a modern economy, planning at the highest level had to be limited to some sixty thousand aggregate categories, which were then disaggregated at lower tiers of the bureaucracy (see chapter 7 of János Kornai’s The Socialist System for more on planning in the USSR). Contrary to Bukharin and Preobrazhensky’s expectations, the result was a chronic failure to allocate resources efficiently. Shortages of essential industrial and consumer goods became the norm.
Could this failure have been avoided if only more advanced computational capabilities had been available? Nowadays, problems involving millions of variables are no longer insoluble. Might the day have at last arrived when, as Oscar Lange wrote in 1967, the market process “may be considered as a computing device of the pre-electronic age?”
As several authors have recently argued (here and here, for example), in the absence of markets planning would have to proceed without the information on supply and demand conditions revealed by actual transactions. In the short term it might be possible to make decisions about “what products are required and how much of each it is necessary to produce” based on the supply-demand equilibria prevailing in a preexisting market economy, but as the situation changed the plan would quickly lose its relevance to the real world. Sooner or later, the planner would end up “floundering in the ocean of possible and conceivable economic combinations without the compass of economic calculation,” as Mises put it in Economic Calculation in the Socialist Commonwealth.
But in fact an even more fundamental objection can be raised: the market process is nothing like a computing device. As Austrian economists have long emphasized, competition in markets is not simply a mechanism for transitioning to preexisting equilibrium outcomes. It is rather an engine of knowledge creation and entrepreneurial discovery. Running a business is not just a matter of resolving uncertainty about “known unknowns” through an orderly learning procedure. It requires realizations regarding “unknown unknowns” that did not initially play a role in decision-making.
Consider, for example, the famous case of Walmart’s use of data analytics to predict a jump in demand for strawberry Pop-Tarts in areas about to be hit by Hurricane Frances in 2004. As a series of zeros and ones in computer memory, the big data behind this prediction was not in itself information. It had first to be interpreted by a human being with an incentive to answer a particular question and a hypothesis about which variables might be significant. Someone had to have an intuition that an adverse weather event might create a profit opportunity at some particular time and place. Big data and artificial intelligence are tools to enhance the entrepreneurial discovery process, not a substitute for the inspiration of the profit-seeking market participant.
The existence of big databases does not make it any easier to centralize society’s stock of useful knowledge, because local knowledge is necessary to make productive use of data. “Planners,” as Israel Kirzner points out in chapter 2 of The Meaning of Market Process, “simply do not know what to look for: they do not know where or of what kind the knowledge gaps are.” Even if provided with links to every network node in existence, they would still be incapable of replicating the insights of countless individual decision-makers, each with his or her own unique viewpoint and distinct motivation to generate data-driven ideas.
Big data analytics is a means of strengthening the market process by reducing search costs, not a means of replacing it. This technology undoubtedly has important operational implications for individual companies. But it does not make the private firm any less necessary as an institution for efficient resource allocation. Indeed, big data is entirely irrelevant to Hayek’s local knowledge problem, because it does not provide any new means of aggregating the understandings of different individuals. Big data, while covering a wealth of different local situations, is not knowledge. Artificial intelligence software does not “know” anything.
There is thus no reason to think central planning could work any better with bigger datasets and faster processing power than it did during Soviet times, when the planning had to be done with slide rules and primitive mainframes. Smarter devices will not make socialism smarter.
- Suspect In Brutal Portland Head-Kicking Turns Himself In After Manhunt
Suspect In Brutal Portland Head-Kicking Turns Himself In After Manhunt
Tyler Durden
Fri, 08/21/2020 – 20:20A 25-year-old man has turned himself in after Portland police launched a manhunt for him in connection to a brutal Sunday night attack on a man which put him in the hospital.
Marquise Lee Love was booked into the Multnomah County Detention Center on Friday after turning himself in just before 8:30 a.m. according to jail records.
“I am pleased the suspect in this case turned himself in and appreciate all of the efforts to facilitate this safe resolution,” said PPB Chief Chuck Lovell, according to Fox News. “Thank you to all of the members of the public who have provided information and tips to our investigators. Your assistance is very much appreciated.”
Press Release: Update: Assault Suspect Turns Self In, Witness Identified (Photo)
Link: https://t.co/K42t52T82K pic.twitter.com/PhaVFZzRcy— Portland Police (@PortlandPolice) August 21, 2020
Love was caught on video kicking victim Adam Haner in the head. Haner says he was yanked” out of his truck “before I even got my door open,” adding “I was just standing for myself as a citizen.”
This is the moment immediately before. The mob assaults him and makes him sit in the ground while they search his belongings. When he stands up, they brutally beat him. #PortlandRiots #antifa #BlackLivesMatter Video by @livesmattershow pic.twitter.com/tEzpIz6V9U
— Andy Ngô (@MrAndyNgo) August 17, 2020
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“If you can’t do that on a street, then what can you do?”
Haner was seen on video revving the engine of his truck and slowly rolling the vehicle forward until he speeds away — all while people from the group can be seen running up to the vehicle, kicking and shouting at it. Just moments before he drove off, someone from the crowd was seen punching and jumping his girlfriend, who was identified in reports as Tammie Martin.
Shortly before 10:30 p.m. Sunday, police responded to a 911 call from someone who reported that protesters “chased a white Ford” 4×4 truck, which then crashed in the downtown area, according to a department press release. A caller told police an estimated nine to 10 people began “beating the guy,” the caller stated. –Fox News
“Investigators learned that the victim may have been trying to help a transgender female who had some of her things stolen in the area … where this incident began,” police said on Monday.”
Haner was transported to a hospital while still unconscious. He is now recovering at home.
- Navy Seal Credited With Killing Bin Laden Banned From Delta Flights Over Maskless Pic
Navy Seal Credited With Killing Bin Laden Banned From Delta Flights Over Maskless Pic
Tyler Durden
Fri, 08/21/2020 – 20:20In the latest bizarre incident of this ‘lockdown summer’ of COVID-19 social distancing measures and policies, Robert J. O’Neill — the former US Navy Seal who’s long claimed to have taken the kill shot on Osama bin Laden during the famous May 2011 raid on the Abbottabad, Pakistan compound — says he’s been permanently banned from Delta Air Lines for sharing a social media pic.
Specifically, he appeared to brag about flouting Delta’s mandatory mask policy aboard flights in the post. A since deleted tweet and photo showed O’Neill sitting on a Delta flight Wednesday while maskless.
The now deleted photo which got former Navy Seal Robert J. O’Neill in trouble with Delta. Other passengers all around him could be seen with masks, while O’Neill commented in the post, subsequently deleted when it became center of controversy: “I’m not a pu**y.”
“I didn’t delete my tweet. My wife did,” he later wrote. A day later on Thursday, he tweeted, “I just got banned from Delta for posting a picture… Wow.”
“I had my mask in my lap. Everyone has gone crazy,” he stated additionally.
Needless to say the 44-year old who has been frequently featured in the media, especially on Fox News, for his heroism during arguably the US military’s most famous terrorist targeted kill operation in history, set off a firestorm on social media, with other high profile people and even celebrities like Alyssa Milano piling on against him.
Milano and some others went so far as to dramatically claim the veteran and war hero might actually end up killing people by not wearing a mask:
You do realize you may be a-symptomatic and give the virus to other people that could potentially kill them. I think that makes you a sociopath. Besides, pussies are actually so strong that we can deliver human beings out of them. Please, I’m begging you, wear a damn mask.
— Alyssa Milano (@Alyssa_Milano) August 19, 2020
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Weeks prior to the Delta incident, O’Neill vowed to stand his ground against authorities as well as social pressures which he says are ultimately overstepping bounds:
They can’t make you wear masks. They can’t make you take your temperature. They can’t make you quarantine. Wise up.
— Robert J. O’Neill (@mchooyah) July 31, 2020
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He hasn’t backed down, instead going on the offensive against what he’s cast as a fundamental issue of individual liberty.
After his original photo post went viral, in which he also decried the airline’s “dumbass mask” policy, Delta said it would review the matter.
And some supporters on Twitter noted the irony of the whole situation:
I just banned @Delta . Next time someone hijacks one of your planes and flies it into a building, don’t ask Seal Team Six to find who did it.
— West Coast Hockey Bias (@MarcelAndRogie) August 20, 2020
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An official Delta statement cited in The New York Post said subsequently, “All customers who don’t comply with our mask-wearing requirement risk losing their ability to fly Delta in the future.” It’s even possible that Delta was willing to initially let it slide or at least look the other way, but then the social media mob jumped on the issue – led by celebrities – and the rest is history.
- Biden: "I Would Shut Country Down Again If Recommended By Scientists"
Biden: "I Would Shut Country Down Again If Recommended By Scientists"
Tyler Durden
Fri, 08/21/2020 – 20:00Throughout the Democratic National Convention there was a common, if contradictory, theme: on one hand, the Democrats bashed Trump for his response to the covid pandemic while at the same time they lamented the dismal state of the economy, where millions have lost their jobs and countless corporations have gone bankrupt. Well, which one is it, because you can’t have both: if Trump had enacted a more forceful response to the pandemic, the US economy would have been shut down for longer (as Neel Kashkari now urges, seeking another 6 weeks of shutdowns and setting the stage for the next crisis); alternatively the economy would be firing on all cylinders but the fallout from covid would be much more widespread.
On Friday afternoon, in an exclusive interview with ABC “World News Tonight”, Biden revealed on which side of the fence he is saying that as president, he would shut the country down to stop the spread of COVID-19 if the move was recommended to him by scientists.
“I would shut it down; I would listen to the scientists,” Biden told Muir Friday, alongside his running mate, Kamala Harris, during their first joint interview since officially becoming the Democratic Party’s presidential and vice presidential nominees.
“I would shut it down. I would listen to the scientists.”
Joe Biden tells @DavidMuir in an exclusive interview that as president, he would shut the country down to stop the spread of COVID-19 if the move was recommended by scientists. https://t.co/2A9r07d7EC pic.twitter.com/Ib99cshlSI
— ABC News (@ABC) August 21, 2020
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Biden also criticized what he argued is the “fundamental flaw” of the Trump administration’s response to the coronavirus pandemic, that the nation cannot begin to recover economically until the virus and public health emergency is under control, which is strange considering that in isolated cases such as Sweden which did not succumb to the media panic and did not enforce a uniform shutdown – while at the same time not forcing the population to take draconian measures to limit the spread of covid – the economy hit was far less than most of its European counterparts, while the Covid breakout has almost completely faded.
“I will be prepared to do whatever it takes to save lives because we cannot get the country moving, until we control the virus,” Biden added. “That is the fundamental flaw of this administration’s thinking to begin with. In order to keep the country running and moving and the economy growing, and people employed, you have to fix the virus, you have to deal with the virus.”
Biden’s statement brings up one immediate question: which scientists would he listen to? The WHO which, under heavy influence from China, pretended for well over a month that covid was innocuous as the following Feb 23 soundbite from WHO Director Tedros Ghebreyesus confirms:
I have spoken consistently about the need for facts, not fear. Using the word pandemic now does not fit the facts, but it may certainly cause fear. This is not the time to focus on what word we use. That will not prevent a single infection today or save a single life today.
… and only on March 11 – just days before the US announced economic shutdowns – declared the coronavirus outbreak a pandemic (apparently succumbing to “causing fear”). Or perhaps Biden should have listened to scientists like the US Surgeon General Jerome Adams, who on February 29 tweeted “Seriously people- STOP BUYING MASKS! They are NOT effective in preventing general public from catching #Coronavirus.”
Seriously people- STOP BUYING MASKS!
They are NOT effective in preventing general public from catching #Coronavirus, but if healthcare providers can’t get them to care for sick patients, it puts them and our communities at risk!
https://t.co/UxZRwxxKL9— U.S. Surgeon General (@Surgeon_General) February 29, 2020
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Or perhaps he meant listening to scientists like Anthony Fauci who on June 12 said “we know that you don’t need an N95 [mask] if you’re an ordinary person in the street” adding that “masks are not 100% protective.” When confronted with this contradiction in the government’s public-health advice, Fauci said “actually the circumstances have changed,” he said. “That’s the reason why.”
So will Biden shutdown the entire economy, leading to tens of millions more in job losses, just because it is the prevailing
opinioncircumstance at the time that he should do so?Or perhaps what Biden meant to say is that as a leader it is his job to weigh costs and benefits of all policy options, as the catastrophic consequences of another economic shutdown could and likely would outweigh the benefits from a draconian response to a disease which as we showed recently has led to virtually no outsized under-40 fatalities, and yet as Jim Reid said in July, it is the “younger people will be suffering most from the economic impact of Covid-19 for many years to come, we wonder how history will judge the global response.”
We wonder too, especially now that we know that if there is another wave of covid in the US – whether domestic, or imported from China again or some other country – the US will have another full-blown economic shutdown, just as Minneapolis Fed president Neel Kashkari has been urging (we also know who Fed chair would be in a Biden administration).
One final point about science, best laid out on twitter, is that “Science is NOT a magic wand. Especially “science” as it’s practiced today. Bureaucratic science is ALL about consensus. What gets funded is political. What gets published is political.”
Science is NOT a magic wand.
Especially “science” as it’s practiced today. Bureaucratic science is ALL about consensus. What gets funded is political. What gets published is political.Science is about dissent
If i can get cancelled for asking a question science doesn’t exist— Lizzy (@lizzie363) August 21, 2020
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- US Says Maduro Keeping Hundreds Of Americans "Hostage" As They Can't Leave Venezuela
US Says Maduro Keeping Hundreds Of Americans "Hostage" As They Can't Leave Venezuela
Tyler Durden
Fri, 08/21/2020 – 19:40The US State Department says the government of President Nicolas Maduro is blocking US citizens from leaving Venezuela, including dual nationals, after the United States attempted to arrange evacuation flights that Washington says are for “humanitarian” needs.
“We have made offers in the past that would allow U.S. citizens to leave, but all were rejected by Maduro and his cronies,” US State Dept. spokeswoman Morgan Ortagus said in a written statement.
Venezuela state-owned airline company Conviasa, file image. She said the US is currently exploring other options for getting Americans back safely to US soil, though without giving numbers of Americans stuck inside the Latin American country.
Caracas appears to be disputing these claims, however, with Foreign Minister Jorge Arreaza stating on Thursday that the government has offered to return American citizens via flights on state-owned airline Conviasa.
Ironically, the standoff appears centered on the fact that Conviasa remains under far-reaching Venezuela sanctions which have been in effect over the past year.
A US diplomat based in neighboring Colombia alleged that Maduro was keeping the Americans “hostage”. James Story of the State Department’s Venezuela Affairs Unit gave in indication last week that the standoff could involve up to 1000 people or more.
“I have more than 800 people who have asked for my support in helping leave the country,” he said, according to Reuters.
Aftermath of last May’s botched coup attempt by a Florida-based mercenary firm which attempted to enter Venezuela using boats out of Colombia. Image: ABC News So it appears the repatriation issue is centered on the Maduro government finding a creative way and leverage to highlight how destructive the sanctions regimen is on the country in what’s essentially a “use our state-owned airline or else it’s not our problem” moment.
The crisis of the stranded Americans comes as not only sanctions are further crushing the already spiraling socialist economic and system, including derelict public infrastructure, but after the bizarre failed “invasion” attempt of a group of former Green Berets turned mercenaries on May 4. Two Americans were given 20 year prison sentences each, in a plot the Trump administration insists it had nothing to do with.
- Former Green Beret Who Allegedly Spied For Russia Arrested
Former Green Beret Who Allegedly Spied For Russia Arrested
Tyler Durden
Fri, 08/21/2020 – 19:20The latest in what has become a steady drumbeat of arrests of foreign spies and double-agents in the intelligence community continued on Friday when federal prosecutors charged a former Green Beret living in northern Virginia with espionage activity dating back to 1996.
The spy was accused of working with Russian Intelligence, and was even assigned a code name by his Russian handlers, implying that he was a de facto part of their organization. He allegedly signed a statement saying he wanted “to serve Russia.”
It’s already the second arrest this week involving a US official caught stealing and transmitting US secrets to a foreign power. On Aug. 17, an ex-CIA officer was charged in Hawaii. Other cases involving corporate America and academia have cropped up earlier this year as well.
The US attorney who brought the case in released a statement promising to hold service member double-agents “accountable”.
“When service members collude to provide classified information to our foreign adversaries, they betray the oaths they swore to their country and their fellow service members,” said G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia., whose office is prosecuting the case. “As this indictment reflects, we will be steadfast and dogged in holding such individuals accountable.”
Debbins was arrested Friday, prosecutors told the AP. However, online court records remain sealed, so details of the case including related to Debbins’ representation are unclear.
The espionage allegedly occurred between 1996 to 2011, prosecutors say, a period where Debbins served in the US Army Special Forces as a Green Beret.
- AG Barr Throws Cold Water On Possible Trump Pardon Of "Traitor" Edward Snowden
AG Barr Throws Cold Water On Possible Trump Pardon Of "Traitor" Edward Snowden
Tyler Durden
Fri, 08/21/2020 – 19:00Once again President Trump’s anti-establishment and ‘anti-deep state’ instincts look like they’ll be promptly reigned in by those around him. He shocked leaders in Congress and within his own administration when one week ago he mused openly in a New York Post interview that maybe Edward Snowden should be pardoned. In follow-up he said at a press briefing last Saturday “There are many, many people – it seems to be a split decision that many people think that he should be somehow treated differently, and other people think he did very bad things.” And further that: “I’m going to take a very good look at it.”
The president raised eyebrows and anxiety across the D.C. beltway with his unprecedented remarks: “There are a lot of people that think that he is not being treated fairly. I mean, I hear that,” he had initially told NY Post, before adding: “Many people are on his side, I will say that. I don’t know him, never met him. But many people are on his side.” This immediately raised hopes among those that hail the NSA leaker as a whistleblower who exposed deeply unconstitutional surveillance of the domestic populace that he might one day soon see freedom.
But now Attorney General William Barr is throwing cold water on such a bold prospect, saying to the Associated Press on Friday that he’d be “vehemently opposed” to any initiative to pardon Snowden, who remains on the run from US authorities – but given asylum in Russia. If he were to return to the United States he would face severe charges related to the Espionage Act and spilling of state secrets, which would certainly bring life imprisonment.
“He was a traitor and the information he provided our adversaries greatly hurt the safety of the American people,” Barr said in the new comments. Interestingly, Trump’s own view as expressed years ago was that Snowden was a “traitor”.
Barr’s latest comments frame Snowden’s actions as motivated by money and fame, and not of out of a sense of patriotism or concern for upholding the Constitution: “He was peddling it around like a commercial merchant. We can’t tolerate that,” Barr added firmly.
Recall that last year the DOJ under Barr fought to ensure that Snowden wouldn’t see any money generated from US sales of his tell-all book Permanent Record.
Edward Snowden’s book profits must go to the government, judge rules https://t.co/3UYCQ6Xgyi pic.twitter.com/q7WTne7aoD
— The Verge (@verge) December 18, 2019
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Critics have still claimed that Snowden has raked in millions from his online remote appearances at conferences, and in speaking events and interviews.
This whole latest discussion as to the administration’s stance on Snowden had arisen when in the NY Post interview Trump’s former advisor Carter Page was brought up in connection with allegations of abuse and illegal surveillance under the aegis of the Foreign Intelligence Surveillance Act and the secret FISA court.
After years of the whole sordid ‘Russiagate’ saga, it appears Trump has formed a new perspective and appreciation for just what Snowden was exposing, and what the government contractor was up against.
- "These Are Staggering Numbers": Spending By Unemployed Americans Plunges As Fiscal Stimulus Ends
"These Are Staggering Numbers": Spending By Unemployed Americans Plunges As Fiscal Stimulus Ends
Tyler Durden
Fri, 08/21/2020 – 18:40One month ago, with millions of newly unemployed Americans fearful about their future in an economy transformed by the covid pandemic, Deutsche Bank’s Jim Reid made a remarkable observation: “Recessions don’t usually result in personal income soaring, but this one has thanks to government support around the world.” This was shown in the following chart:
This was not a surprise: as Bank of America writes, one of the regular features of US recessions since the 1950s is that they always trigger, with a bit of a lag, an expansion of unemployment benefits. In normal times, benefits in the US are lower than for most other developed market economies, but there is an attempt to close some of the gap during the recession. In recent recessions the additional benefits have tended to be earlier, bigger and last longer. Thus benefits weren’t enhanced until the end of the 2001 recession and provided 13 weeks of additional benefits through Mar 2004. However, for the Great Recession of 2008-9 enhanced benefits were enacted on July 2008, a year before the end of the recession, lasting through December 2013, with the unemployment rate down to 6.7%.
Initially the response to this crisis continued the trend toward stronger responses. Facing a much deeper and faster recession, enhanced benefits were almost immediately implemented and included a large bonus benefit of $600/week. Unfortunately, 4 months later and policy has taken a 180 degree turn: the benefit has been allowed to expire with an unemployment rate still north of 10%. Needless to say, it seems a bit early to declare mission accomplished.
That said, the US is now caught in an unprecedented dilemma – as BofA also notes, “Absent government support disposable income would have fallen the most in history; with that support it has risen the most in history.”
So what’s Congress – and the President – to do?
Well, while the full impact of this economic transformation has yet to be felt across the country, at least for some the government support ended on July 31 when the infamous “fiscal cliff” hit and has yet to be renewed by Congress (executive orders signed by Trump two weeks ago have offset only a modest portion of the stimulus). The group most directly affected are recipients of unemployment insurance (UI) who have seen a notable reduction in income.
To quantify the impact, Bank of America examined spending trends of the population of card holders who receive UI through ACH
(direct deposit) and compared to all other households. What it found was a dramatic divergence as the YOY rate of growth for UI recipients slowed dramatically but increased for the broader population since Aug 1st.By income, over the past two weeks, the YOY growth rate slowed by 12% for the unemployed cohort (formerly) earning under $50K vs. a roughly 5% drop for the middle and upper income cohorts.
Some more math: a closeer look at the US household income statement underscores the resulting hole in household income as a result of the lapsing of the fiscal stimulu. The $600/week benefit was not a small support to the unemployed, it accounted for more than 60% of unemployment benefits in June (Chart 1). As the numbers on the chart indicate, that means a payment equivalent to about 5% of household income just disappeared. We don’t have data yet for July and August, but the daily treasury statement confirms the collapse in payments (Chart 2). In July the average daily outlay was $4.8bn, in the past five working days it has collapsed to $2.3bn, or a drop of more than half from the peak stimulus period.
These charts show just how reliant on the government much of America has become.
To be sure, much has been made about the resilience of the consumer so far in this crisis. Indeed, while services spending remains depressed, retail sales have fully recovered. However, as shown above, this recovery is deeply dependent on fiscal support. The next chart decomposes the various sources of income in recent months-unemployment benefits, other tax and transfer benefits, labor income, proprietors income and other income.
And here is BofA’s remarkable observation: “Absent government support disposable income would have fallen the most in history; with that support it has risen the most in history.” Note that the role of government stimulus is even bigger because the surge in proprietors income was due to another (now fading) federal program-the Paycheck Protection Program.
So just how much of a hit to consumption – which represents 70% of US GDP – is coming?
Well besides the already noted slump in spending by unemployed Americans, it will take time to see the full effect of the lost payments on consumer spending since presumably some recipients have savings or can postpone rent, credit card and other bills. The early evidence suggests “a moderate shock” according to BofA which again notes – see chart 4 above – that among the unemployed, lower income groups were among the hardest hit, with the YOY growth rate slowing by 12% for the cohort earning under $50K vs. a roughly 5pp drop for the middle and upper income cohorts.
While the bank has not done a formal simulation of the impact of the lost fiscal stimulus, a simple illustrative example from the Petersen Institute can give a sense of the magnitude. First, they assume that 20MM people were unemployed at the end of July and that the $600 benefit has a fiscal multiplier of 1.5 (around the midpoint of the CBO’s range of estimates). The expiration of the $600/weekly benefit would therefore remove about $50bn in income from the economy per month. By their estimate, this would result in about a 2.5% decline in GDP, 2MM less jobs over the next year and a 1.2pp increase in the unemployment rate.
As BofA summarizes “while illustrative, these are staggering numbers.” Moreover, based on the latest claims data there were around 15MM people on standard unemployment benefits as of the week ending August 8 with millions more in other programs such as Pandemic Unemployment Assistance (PUA). Thus, the full impact will likely be even more acute than modeled by BofA.
The final question is whether President Trump’s executive orders can offset the shock to incomes.
Let’s look first at the unemployment benefits and then at executive orders as a group. The executive order earmarks the $44bn in remaining FEMA funds for unemployment benefits of $300/week. In addition, initially it required states to provide $100/week in matching funds, but that requirement was dropped as it became clear that it would deter cash-strapped states from participating. Since the program is new it will take time for states to set up the new system, and indeed as we pointed out earlier this week, only 7 states have so far signed up for the $300 unemployment stimulus plan. Hopefully a number of states will have the program up and running by the September 1 launch date. While this new payment cuts the income shock in half, the funds are likely to only be enough to cover a month or so or into early October, one month ahead of the elections. Moreover, the order is backdated to start on Aug 1. So in practice, the funds may be disbursed quickly after states have set up their programs.
The other major executive order is the deferral in the employee component of the payroll tax from September 1 until December 31. Objectively, this will provide very little support to consumer spending, and as we also noted earlier, business lobbies are already complaining that the program is “unworkable” – a letter co-signed by a number of groups including the US Chamber of Commerce, the National Retail Federation, the National Association of Manufactures and others argued that (1) the order would result in a significant tax bill in 2021 for employees, (2) the implementation of the order is unworkable and (3) many members expect to decline to actually adopt the deferral.
Even for workers at firms that do implement the deferral the impact on spending will likely be very small. Households that are not in financial distress will save most of the tax cut in anticipation of a big bill at tax year end. Of course, workers that are in distress due to unemployment will not benefit from cutting a tax they are not paying. That leaves a relatively small group of households that remain cash strapped even though they are still employed. Presumably they will spend a good part of the tax cut.
What happens next?
As we have reported almost every day for the past three weeks, Congressional negotiations seem hopelessly bogged down and furthermore, Congress is currently on recess with funding the post office has become a major distraction. Both parties are having their conventions. Both parties are watching to see if the executive orders work. And an election looms.
As BofA’s economists concludes, while they had hoped for a deal this month, “increasingly it looks like one only comes after Labor Day and after demonstrable pain in the economy.” Unfortunately, in a world in which the market no longer reflects the economy, it is unclear just what signal US politicians will seek to determine that the economy is “in pain.” Ironically this will make the disconnect between the soaring market which just hit a fresh all time high and the economy which is about to double dip, even more grotesque.
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