Today’s News 31st August 2021

• "The Unthinkable Has Become Possible" – Germany Faces A Political Revolution In 4 Weeks
  “The Unthinkable Has Become Possible” – Germany Faces A Political Revolution In 4 Weeks

  In a scenario that nobody could have predicted one year ago, Germany is facing a political revolution in less than a month, on September 26, when the country holds its Federal Elections and where the dynastic CDU/CSU appears on the edge of not just losing, but suffering its worst ever election result.

  But first, let’s back up one week to August 21, which was supposed to be the turning point for Germany’s ruling Christian Democrats  – the day Angela Merkel threw her weight behind the beleaguered party leader Armin Laschet and turned around his flagging electoral fortunes. Instead, as the Financial Times notes, “it was a day of reckoning.”

  A poll that Saturday evening showed that support for the party had slumped to 22%, level with the left-of-centre Social Democrats. Data released earlier today from INSA, suggests the SPD had even pulled ahead significantly, rising to 25% while the CDU/CSU has collapsed to just 20%. This means that if its luck doesn’t turn before polling day on September 26, the CDU could be heading for the worst election result in its history.

  

  So fast forward to today when with less than a month of campaigning to go, the FT reports of a sense of panic spreading through CDU ranks. “The mood is just abysmal,” says one conservative backbencher. “Are we all going to lose our seats now?”

  ‘All’ maybe not… but many, yes because a party that has ruled Germany for 50 of the past 70 years and began to see the chancellery as its natural birthright is now facing the real prospect of being booted out of power. It would, as the FT puts, it, “be a crushing humiliation for one of Europe’s most successful conservative parties.”

  The reason for the party’s dismal plight, according to CDU MPs, advisers and strategists, is clear – its candidate for chancellor, and Angela Merkel’s handpicked successor, Armin Laschet. His approval ratings, never high to begin with, suffered a big drop in July when he was caught laughing on camera while visiting areas devastated by floods. They have never recovered.

  

  Indeed, critics wonder aloud how the CDU, a party with “an unerring instinct for power and a reputation for iron discipline,” could have fielded such a weak candidate in the first place. “CDU people in my constituency say whatever you do, don’t send us any posters with Laschet’s face on them,” said another backbencher. “The fact is he’s a liability, rather than an asset, to our campaign.”

  Some believe it was a fatal mistake to nominate Laschet ahead of his rival Markus Söder, leader of the CDU’s Bavarian sister party, the Christian Social Union, a much more popular politician. “The majority of CDU voters . . . did not want Laschet as chancellor-candidate,” Manfred Güllner, head of pollster Forsa, told the FT.

  But there is another view: that the CDU’s decline has less to do with Laschet than with the end of the Merkel era. “All the time Merkel was in charge, the CDU was defined by its leader, not its policies,” says Jens Zimmermann, an SPD MP. “And now that she’s finally going, there’s this vacuum it just can’t fill — a void where the policies should be. People just don’t know why they should vote Christian Democrat.”

  But one doesn’t have to go back a year to observe the dramatic shift in sentiment: just a few weeks ago, the common wisdom in Berlin was that the CDU/CSU would win the election and form a coalition with the Greens — the first such “black-green” alliance in German history. But the latest polls point to a much messier outcome according to many: an inconclusive election result with no clear winner and a plethora of different potential coalitions. “We will never have had so many government options in Germany’s postwar history,” says Güllner.

  The mess is boosting the chances of a new, left-leaning alliance emerging, under a Social Democrat chancellor — the current finance minister Olaf Scholz. A party that has, for the past eight years served as junior partner in a Merkel-led “grand coalition” may be on the point of capturing the chancellery for the first time in 16 years.

  

  “In the past, people used to smile indulgently when Scholz said he would be Germany’s next chancellor,” Niels Annen, a senior SPD MP and close Scholz ally, told the FT. “But an SPD-led government is no longer a fantasy. It’s a realistic proposition.”

  What would such a political avalanche mean in practice? Analysts are confused by the inherent cross-currents in the various platforms – the SPD and Greens want to introduce a wealth tax and massively increase state investments, but they would probably need a third party in their coalition – the pro-business Free Democrats, who want tax cuts and balanced budgets. Such a “traffic light” coalition – as it is called due to the green, yellow, red colors of the constituent parties – could just end up cancelling each other out, and achieving little according to the FT.

  No matter the final outcome, it will signal the end of an era. “The idea that the CDU might not win the most seats and not form the next government used to be unthinkable,” says Andreas Rödder, a historian at Mainz University. “Now the unthinkable has suddenly become possible”, a possibility made explicit by the latest Insa poll for Bild which showed extending support for the SPD which blimed one percentage point to 25%, pulling further ahead of Merkel’s conservative bloc which loses one point and falls to 20%; the Green party lost 0.5 points to 16.5%, the business-friendly FDP rose +0.5 points at 13.5%, while the far-right AfD was unchanged at 11% and the Left Party gained one point to 7%.

  * * *

  Even before the latest polls, it was clear that this would be an election like no other. Merkel said as much at the CDU/CSU event in Berlin’s Tempodrom, when she endorsed Laschet: for the first time in Germany’s postwar history, an incumbent chancellor was not running for re-election. “The cards are being reshuffled,” she said.

  That has meant more scrutiny of the three individuals running to succeed her than of their policies or manifestos. As the FT details, “mone of them are as instantly recognizable and widely admired as Merkel herself. And for two of them, the media spotlight has been particularly harsh: Annalena Baerbock, the 40-year-old Green leader, spent weeks fighting off accusations of plagiarism and of embellishing her CV: meanwhile Laschet, prime minister of the large industrial state of North Rhine-Westphalia, has found himself attacked and ridiculed at every turn.”

  Frequently, he has only himself to blame. At a recent campaign appearance in the western city of Wiesbaden, he repeatedly referred to the local CDU MP as Ingbert Jung. A murmur went through the crowd. “His name’s Ingmar,” one person shouted.

  “It’s sheer sloppiness — just atrocious,” says a CDU politician who witnessed the incident. “Jung probably wanted to die of shame.”

  Sometimes, the criticism seemed gratuitous. He has been ripped apart on social media for not wearing rubber boots on trips to flood-affected areas, eating an ice cream on the campaign trail and daring to mention hydrogen technology in a chat with Elon Musk. “Laschet is in this negative spiral now, where everything he does is just slammed,” says Rödder. “And once you’re in it, it’s very hard to get out.”

  In contrast, Scholz, who as deputy chancellor steered Germany’s public finances deftly through the pandemic, has not put a foot wrong. “It seems as if voters have already made up their minds about the three candidates,” says one person close to the CDU. “They see Laschet as embarrassing, Baerbock as a fraud and Scholz as the only serious, solid one.”

  Scholz’s message to voters has been simple: he is the natural successor to Merkel, a politician who continues to enjoy sky-high approval ratings even after 16 years in power. It is a bold claim: he is, after all, from a rival party. But it is one that SPD strategists have been quietly pushing for months, and the latest polls suggest it is working.

  The similarities are, indeed, striking. Like Merkel, Scholz is dispassionate, pragmatic and no great orator: his delivery is so robotic he’s been nicknamed the “Scholz-o-mat”. Asked in a recent interview if he lacked emotion he replied that he was “running for the job of chancellor, not circus director”. Yet like Merkel he is widely seen as dependable and trustworthy.

  So transfixed is the potential future premier with piggybacking on Merkel’s halo that Scholz himself shamelessly underscored the similarities by appearing on the cover of the Süddeutsche Zeitung magazine this month with his fingers and thumbs touching to form the Merkel “diamond”, the chancellor’s signature gesture.

  “It was sensational, because it finally put the cliché to bed that he doesn’t have a sense of humour,” says Zimmermann.

  In a recent FT interview, Scholz tacitly acknowledged that he was trying to target Merkel voters. “A lot of people would see me as the best bet, because I have more government experience than any of the other candidates,” he said. “But it’s much more than that: I also have a clear idea of how to ensure Germany’s prosperity and also more respect in society,” he added.

  As the FT explains, the theme of “respect” is at the heart of the SPD campaign, which is built on a battery of simple messages: a €12 per hour minimum wage, more affordable housing and stable pensions.

  The party has been unusually united, avoiding the open bickering between left-wingers and centrists that blighted previous campaigns. And because it nominated its candidate for chancellor much earlier than its rivals — more than a year ago — “we were able to create a customized campaign exactly tailored to Scholz”, says Zimmermann.

  Still, it’s not all smooth sailing, and things could still turn against Scholz, however. Uncomfortable questions have been raised over his role in the two big financial scandals that have rocked Germany in recent years — the fall of digital payments company Wirecard and the cum-ex tax fraud, a controversial set of share trades that robbed the German exchequer of billions of euros in revenue.

  Separately, the Financial Times also notes that SPD critics also increasingly ask whether Scholz really represents his party. A centrist, he lost the 2019 contest for the leadership of the SPD to a pair of leftwingers, Saskia Esken and Norbert Walter-Borjans, who have kept quiet during the campaign but still have a massive fan base in the party.

  “People don’t really know Scholz at all — he’s just a blank canvas they’re projecting all their wishes and desires on to,” says Manuel Hagel, a senior CDU official. “But it’s only a matter of time before he’s subjected to exactly the same scrutiny that Baerbock and Laschet have had to endure.”

  For the moment, however, the polls are clearly going Scholz’s way, and the nervousness in the conservatives’ camp is growing. That was clear when Söder followed Merkel on to the stage of the Tempodrom earlier this month. The CDU/CSU is, he said, facing its hardest election campaign since 1998, the year veteran chancellor Helmut Kohl was kicked out of office by the SPD and Greens.

  “Let’s be honest for a moment — it’s tight,” he said. The Christian Democrats had for months been speculating about which parties they could form coalitions with. “But the question now isn’t how we should govern, but whether we will govern at all,” he added.

  It’s been a painful campaign for Söder. He saw his poll ratings soar during the pandemic, when he emerged as one of Germany’s most effective and decisive crisis managers. Laschet, in contrast, was seen as a poor communicator, unsure what line to take. “His zigzag course really depressed his approval ratings,” says Forsa’s Güllner. Yet in the end, the CDU chose Laschet, the candidate of the party hierarchy, rather than Söder, the favorite of MPs and the party base.

  From the start, Laschet’s campaign for chancellor was faulted for its incoherence and its lack of eye-catching policies. He started off promising voters a “decade of modernisation”. “But then people said — well why didn’t you use your past 16 years in power to modernize the country?” says the person close to the CDU. In recent days the slogan has been quietly dropped.

  That encapsulates Laschet’s problem: he needs to be Merkel’s natural heir while also signalling a fresh start. “He can’t portray himself as some kind of superhero who will save everyone from the government — because the government is the CDU,” says one person close to him.

  Laschet could still save the day by setting out clearly what parts of the Merkel legacy he would preserve and what he would do differently. Some think he could also improve the CDU’s chances by unveiling his dream team — the members of a putative Laschet-led cabinet. “If your top candidate is not performing, you should show the full spectrum of the party,” says the backbencher. “He isn’t doing that.”

  Critics, however, say the CDU/CSU’s problem is its fundamental lack of new ideas. “It’s a Potemkin village,” says Oliver Krischer, a senior Green MP. “There’s nothing left behind the facade.”

  As the concerns grow, some Christian Democrats are pushing for increasingly desperate measures. In a poll published on August 25, 70% of CDU/CSU voters said they wanted Laschet to step aside in favor of Söder, who remains highly popular among the CDU’s rank and file: “A lot of members are still really peeved about the way Söder was sidelined,” says one CDU MP. He says some local party volunteers had warned him at the time that they would not campaign for Laschet if he was chosen as candidate — “and they have kept their word”.

  Then there is history: CDU officials say it would be wrong to underestimate Laschet, a politician renowned for his resilience. “Four weeks before the 2017 elections in North Rhine-Westphalia, the CDU was six points behind the SPD, but we still won,” says Hagel. “It shows you can win when you really fight.”

  Further adding to his chances of a last-minute miracle, is that many German voters remain undecided. And CDU strategists point to polls that show 30% of the German voting public is essentially conservative — a constituency that could swing the CDU’s way on polling day. “We can still turn things around,” says Hagel. “All elections are decided in the last three weeks of campaigning.” But privately, other Christian Democrats are less optimistic. “The fact is, we weren’t able to come up with a candidate who could really convince voters,” says one backbencher. “And now we’re being punished for it.”

  * * *

  Laschet’s chances for a rebound took a turn lower on Sunday night when in the first of three TV debates in the campaign leading up to Germany’s federal election on 26 September, Olaf Scholz scored what may be a devastating victory in his race to succeed Angela Markel.

  While all three debate participants – Laschet, Scholz and Baerbock – essentially delivered, there was only one clear winner according to the New Stateman: Scholz, who triumphed in a snap poll by Forsa. To the question “Who do you tend to trust to lead the country?” fully 47% named the SPD candidate, with 24% for Laschet and 20% for Baerbock. The question of who won the debate itself was slightly narrower but still clear: 36% called it for Scholz, 30% for Baerbock and just 25% for Laschet. Narrowest was the question of which seemed most sympathetic: here Scholz (38%) was only just ahead of Baerbock (37%), with Laschet trailing far behind on a dismal 22%.

  Today’s Bild, a conservative tabloid traditionally close to the CDU/CSU and Germany’s most-read newspaper, is emphatic: “Clear victory for Scholz in TV” runs its front-page headline.

  Tyler Durden
  Tue, 08/31/2021 – 02:45

• No, Nordics Are Not 'Big Government', 'Socialist', 'High Corporate Tax' Nations
  No, Nordics Are Not ‘Big Government’, ‘Socialist’, ‘High Corporate Tax’ Nations

  Authored by Daniel Lacalle,

  A lie is still a lie even if it is often repeated. And claiming the Nordic countries are socialist economies with high taxes for wealth and businesses is a big lie.

  

  Nordic countries are not socialist. They rank at the top in the Heritage Foundation’s Economic Freedom Index 2020 (Denmark,10, Finland, 17, Sweden, 21, Norway, 28). They also rank at the top in the World Bank’s Ease of Doing Business Index 2020 (Denmark, 4, Norway, 9, Sweden, 10, Finland, 20), with simple and limited business regulation and strong support for entrepreneurship.

  They also rank at the highest levels in labor market flexibility. Denmark, 7, and Norway, 15, have some of the most flexible labor markets according to the Employment Flexibility Index 2020, while Finland and Sweden rank in the Top 40 above Luxembourg or Korea.
  The public sector does not dictate the growth pattern or the way in which the economy should be run, this is generated from the private sector, which finances more than 60% of research and development, and government applies private-sector best practices of efficiency and transparency in the management of public services. In addition, public officials do not have a life-long position. The opposite of the political control that populists defend.

  Nordic countries have carried out continued successful privatizations of state-owned sectors, from telecommunications to electricity generation and distribution. Even the postal service in Sweden was placed in a corporate structure and partially privatized.

  In these countries, private education is encouraged through school vouchers, not forced state-run schools.

  Government bureaucracy is extremely limited and civil servants do not have a lifetime job. In fact, the size of the public sector relative to GDP and compared to total public expenditure is very similar to the global and European average, according to the World Bank Bureaucracy Indicators.

  Nordic countries also rank among the highest in Wealth Inequality according to the Credit Suisse Global Wealth Databook 2018, showing that in Sweden, for example, 74.9% of the wealth is owned by the Top 10% and 36.7% to the Top 1%, very similar levels to the United States. In Finland, the Top 1% hold also 36.7% of the total wealth while the Top 10 hold 65.9%

  Yes, Nordic countries do have higher taxes and high public spending, but it does not entail bigger government, more bureaucracy or more state control, as interventionists want. Furthermore, the reason why they have higher taxes is not because of elevated wedges for businesses and capital, but due to a very high VAT (value-added tax, a tax on sales).

  All Nordic countries’ corporate tax rates are lower than the average European Union and United States’ rates. In 2020, with Denmark and Norway at 22%, Finland at 20%, and Sweden at 21.4%. The U.S. tax rate on corporations is slightly higher at 25.8% (federal and state combined).

  Capital gains and dividend taxes are also in line with the rest of the European Union and the United States.

  Norway’s top personal tax rate of 38.2% is lower than the United States’ 43.7%. However, Scandinavian countries tend to impose the top personal income tax rates on up and middle-class earners, not just high-income taxpayers.

  Nordic “high taxes” come mostly from high VAT & social security taxes, not business or capital taxation, which is lower than in many developed economies.

  As the study “Insights into the Tax Systems of Scandinavian Countries” by Elke Asen points:

  “If the U.S. were to raise taxes in a way that mirrors Scandinavian countries, taxes—especially on the middle class—would increase through a new VAT and higher social security contributions. Business and capital taxes would not necessarily need to be increased if policymakers were following the Scandinavian model”.

  Tyler Durden
  Tue, 08/31/2021 – 02:00

• George Soros And China: What A Difference A Decade Makes
  George Soros And China: What A Difference A Decade Makes

  Authored by John Mac Ghlionn via The Epoch Times,

  Billionaire investor George Soros is no stranger to controversy. He has a history of openly criticizing a number of influential Republicans, including former presidents like George W. Bush and Donald Trump. At the same time, Soros has heaped praise on the Chinese regime.

  

  In 2010, for example, he effusively praised the Chinese Communist Party (CCP), claiming, somewhat ludicrously, that China had “a better functioning government than the United States.”

  A decade on, does Mr. Soros still feel the same way?

  The answer appears to be no.

  The recipe for good comedy, we’re told, is tragedy + time. The very same recipe can be applied to China-related commentary, it seems. In a recent op-ed for the Wall Street Journal, Soros called Xi Jinping “the most dangerous enemy of open societies in the world.” According to the 91-year-old philanthropist, the Chinese people are innocent victims, needlessly suffering at the hands of Xi.

  Soros, clearly disturbed by China’s social credit system, is worried that other countries might find it an “attractive” option. His concerns are most definitely warranted. From Africa to South America, the Chinese regime’s surveillance system has many admirers.

  

  People walk by the New York Stock Exchange (NYSE) in an empty Financial District in New York City on June 15, 2020. (Spencer Platt/Getty Images)

  Xi’s “intensely nationalistic” mindset, writes Soros, has seen the Chinese Communist Party morph into “a Leninist party,” with the leader willing to use both political and military power to “impose” his will. Now, according to Soros, Xi’s dictatorial-metamorphosis is fully complete. In modern-day China, with Xi at the helm, “intimidation,” writes Soros, reigns supreme.

  I reached out to the Open Society Foundations, founded by Soros, for comment; none were offered. Nevertheless, the op-ed makes for a refreshing read.

  Remember, this is George Soros we are talking about, a man who once called the United States the “main obstacle to a stable and just world.” Now, though, China appears to be national security threat number one. However, all is far from rosy in Beijing; the Chinese regime is not without problems of its own. Whether or not it manages to overcome them remains to be seen.

  Crouching Tiger, Dying Dragon

  In the words of British statesman Benjamin Disraeli, “courage is fire, and bullying is smoke.” Having lived in the country for an extensive period of time, I speak from experience when I say the following: Although China projects a strong image, underneath all the chest-thumping and harsh rhetoric lies a lot of smoke.

  On an individual level, we are all familiar with the concept of impression management. Humans carefully curate their image, doing everything in their power to project a very specific message. Countries also engage in impression management; some, as you are no doubt aware, are better at it than others.

  In China, the effects of the heavily filtered image are starting to wear off. As the researcher Ryan Hass writes, China is not 10 feet tall. In fact, it’s much smaller than it first appears. Authoritarian regimes, obsessed by the concept of impression management, “excel at showcasing their strengths and concealing their weaknesses.” Hass encourages policymakers in Washington “to distinguish between the image Beijing presents and the realities it confronts.” Don’t be fooled by the wolf warrior-inspired bravado; China, writes Hass, “is at risk of growing old before it grows rich.” It is fast “becoming a graying society with degrading economic fundamentals that impede growth.” By 2050, the country “will go from having eight workers per retiree now to two workers per retiree.” The decline is rapid, and no filter in the world can hide this cold, hard fact. That crouching dragon is crouching for a reason—it’s injured, weak, and in desperate need of assistance.

  The academic Yi Fuxian goes one step further than Hass. He believes China’s “demographic structure is actually much worse than the authorities would have us believe.” An extensive analysis of the country’s “age structure” suggests that China has considerably fewer citizens than is currently being reported. In fact, China’s population might be as low as “1.28 billion,” which would make India the most populous country in the world. What we view as “a fire-breathing dragon,” writes Fuxian, is little more than a “really a sick lizard.”

  With a shrinking, rapidly aging population, the Chinese regime appears to be doing everything in its power to hide its gaping wounds. But the charade can’t go on forever. Although the propaganda machine roars on, the world is starting to see China for what it really is. Behind all the five-year plans, huge investments in infrastructure, and bombastic rhetoric lies problems that are existential in nature.

  Dragons are, after all, a thing of fantasy, much like the Chinese regime’s dreams of world domination.

  Tyler Durden
  Mon, 08/30/2021 – 23:40

• "Absolute Shocker": China's Service Economy Unexpectedly Implodes With 2nd Worst Non-Mfg PMI Print On Record
  “Absolute Shocker”: China’s Service Economy Unexpectedly Implodes With 2nd Worst Non-Mfg PMI Print On Record

  Three months ago when observing the reversal of China’s all-important credit impulse to negative, its first red print in over a year, we warned that China was set to unleash a deflationary wave across the world…

  

  … but first it would be China’s own economy that is impacted.

  And sure enough, the country which first emerged from the covid pandemic it created courtesy of a tidal wave of new debt creation which however collapsed right on schedule in July, when China’s Total Social Financing aggregate printed at the lowest level since February 2020…

  

  … has just seen its service sector contract sharply, because moments ago China’s official Services (non-manucaturing) PMI Index unexpectedly collapsed from a healthy 53.3 to a contractionary 47.5 – the second lowest print on record with just the Feb 2020 peak covid print lower, badly missing the 52.0 Bloomberg consensus, and the largest one-month drop (-5.8)outside of the covid recessionary plunge in February 2020.

  

  While China’s service economy is clearly disintegrating, the silver lining was that the Mfg PMI printed just barely in expansion territory, although at 50.1, not only did it miss expectations of a 50.2 number, but dropped from 50.4 in July, and was the lowest print in this data series since Covid. At this rate, China’s manufacturing sector will also be in recession next month.

  

  The PMIs – and especially the Non-mfg print – were bad. So bad that Bloomberg’s Simon Flint wrote after the number was released that it may “increase concern about the health of the global economic recovery, and slightly dampen risk sentiment” (no worry there, Eminis are actually higher on the news because in this idiot market, the worse things get, the better for the 1%).

  Although the data bode ill for the yuan, the historical read-across has been very mild. Non-manufacturing was an absolute shocker at 47.5. This is more than 5 standard deviations below Bloomberg consensus, outside the entire forecast range, and the first sub-50 reading since the first Covid wave. Factory PMI came in at 50.1, just a fraction below forecast. This amplifies a run of generally worse-than-expected data from the PMIs.

  Over April-July, the average shortfall was 0.3 points for the manufacturing index, and 0.7 for non-manufacturing. That said, PMIs tend to be taken less seriously than the hard data. It’s also possible that the market will look through them given that the slowdown is most likely related to the Covid-19 shock, and the market has a fair degree of confidence in China’s ability to manage the virus.

  Here will just add that the “market” will not give a rat’s ass about the China PMI because the only thing that matters for stonks is how many billions in liquidity will Uncle Jerome inject today.

  As for China, many are scratching their heads why Beijing is taking so long to address the sharp slowdown in its economy. But while the latest China credit – and now PMI – data is flashing a bright red alarm light that the global reflationary wave is not only over but is going into reverse, the good news is that anyone harboring any expectation that the PBOC may tighten to frontrun the Fed’s tapering or hiking, is now crushed.

  Tyler Durden
  Mon, 08/30/2021 – 23:24

• The World Behind Bars
  The World Behind Bars

  The US Department of Justice has decided to temporarily close the notorious Metropolitan Detention Center in Brooklyn, New York due to a slew of shortcomings concerning staffing and general security.

  The New York branch of the facility has been the subject of much scrutiny after Jeffrey Epstein’s death.

  Notable recent inmates included socialite and alleged sex trafficker Ghislaine Maxwell, musician R. Kelly and former Trump lawyer Michael Cohen.

  The 233 people currently held at the facility will be transferred.

  Even though this specific detention center is rather small, the US still leads the world when it comes to prison population per 100,000 residents as Statista’s Florian Zandt shows in the chart below.

  

  You will find more infographics at Statista

  An approximate ratio of 639 of 100,000 US residents are currently spending time behind bars according to data provided by Institute for Crime & Justice Policy Research at the University of London. With El Salvador and Panama, two other countries of the American continent make the top ten at places two and nine respectively.

  The UK’s overseas territories are also represented with two entries, the Virgin Islands and Grenada.

  The latter rounds off the list of the ten countries with the highest prison population rates with a value of 413 inmates per 100,000 residents.

  Tyler Durden
  Mon, 08/30/2021 – 23:20

• The War In Afghanistan Is What Happens When McKinsey Types Run Everything
  The War In Afghanistan Is What Happens When McKinsey Types Run Everything

  Authored by Matt Stoller via BIG Substack,

  Welcome to BIG, a newsletter about the politics of monopoly. If you’d like to sign up, you can do so here. 

  “The Pervasiveness of Over-Optimism”

  An Afghan General blames defense contractors for the collapse of the Afghan army. A government inspector blames the “the pervasiveness of overoptimism” by U.S. generals. It’s all that, and more.

  

  In 2017, Netflix put out a satirical movie on the conflict in Afghanistan. It was titled War Machine, and it starred Brad Pitt as an exuberant and deluded U.S. General named Glen McMahon. A fitness fanatic nicknamed ‘the Glanimal’ by his crew of adoring frathouse henchmen, McMahon is modeled on the real-life military leader Stanley McChrystal, who ran the surge in Afghanistan before being fired for saying disparaging things about Obama administration officials (including then VP Biden) on the record to Rolling Stone magazine.

  In War Machine, McMahan comes to Afghanistan with a spirited can do attitude and a frat house of hard-partying yes-men, after having ‘kicked Al Qaeda in the sack’ running special operations in Iraq. He is obsessed with inspirational speeches and weird bureaucratic box-ticking, under the amorphous concept of leadership. This kind of leadership, though, isn’t actually working with wisdom and foresight, but is more like management consulting. Prior to arriving in Afghanistan, for instance, McMahan created a system, with the acronym SNORPP to coordinate military assets. At night, he cozies down to read books on management excellence, the kind that Harvard Business Review publishes as sort of Chicken Soup for the Executive’s Soul. He is also the author of a fictional book with the amazing title, “One Leg At a Time: Just Like Everybody Else.”

  And yet his mission is unwinnable, which everyone seems to understand except him and his small team. McMahan constantly makes awkward speeches that make no sense, with the tone used by untrusted executives at corporate retreats. “We are here to build, to protect, to support the civilian population,” he told his troops. “To that end, we must avoid killing it at all costs. We cannot help them and kill them at the same time, it just ain’t humanly possible.” His character reflects what the actual government watchdog charged with overseeing the war in Afghanistan called one of the central problems with the U.S. effort, “the pervasiveness of over-optimism:”

  If McMahan himself is a naive fool, he is surrounded by cynical bureaucratic opponents. As he seeks support for his new strategy of putting troops in Taliban-held provinces, he is gently ignored by the President of Afghanistan, who is a drug-addicted hypochondriac, and mocked by State Department and national security apparatchiks, who are striving cynics urging McMahon to just falsify numbers to make the war look a little better and not embarrass President Obama. Troops on the ground are demoralized and confused. No one actually believes in the mission, but dammit, McMahon is gonna get it done, whatever ‘it’ is. When McMahon tries to give an inspirational speech to ordinary Afghanis in Taliban-controlled territory about how the U.S. is going to bring them jobs and schools, one responds by saying he like jobs and schools, but please go away so the Taliban won’t retaliate. “The longer you are here the worse for us. Please go.”

  It’s a hilarious, and extraordinarily dark movie. It also rang true, because it was based on the work of no-bullshit journalist Michael Hastings, who was perhaps the most honest reporter about the military establishment. And, as life is true to fiction, McChrystal, the general who Hastings profiled in Rolling Stone with an embarrassing story that led to his resignation, is now a management consultant (and board member of defense contractors). He runs inspirational ‘leadership training’ at the McChrystal Group, which is McKinsey with military branding.

  In fact, McChrystal and much of our military leadership is tight with consultants like McKinsey, and that whole diseased culture from Harvard Business School of pervasive over-optimism and finance-venture capital monopoly bro-a-thons. McKinsey itself had involvement in Afghanistan, with at least one $18.6 million contract to help the Defense Department define its “strategic focus,” though government watchdogs found that the “only output [they] could find” was a 50-page report about strategic economic development potential in Herat, a province in western Afghanistan.” It turns out that ‘strategic focus’ means an $18.6 million PowerPoint. (There was reporting on this contract because Pete Buttigieg worked on it as a junior analyst at McKinsey, and he has failed upward to run the Transportation Department.)

  I bring War Machine up because of today’s debate over Afghanistan. While there is a lot of back and forth about whether intelligence agencies knew that the Taliban would take over, or what would happen if we left, or whether the withdrawal could be done more competently, all you had to do to know that this war was a shitshow based on deception and idiocy at all levels was to turn on Netflix and watch this movie. Or you could read any number of inspector general reports, leaked documents, articles, talk to any number of veterans, or use common sense, which, polling showed, most Americans did. (Marine vet Lucas Kunce gives a nice rundown of the problem in this interview). I mean, it’s not like a major international media outlet printed a multi-part expose, which became a handy book, detailing the fact that everyone running the show knew it was an unwinnable mess nearly a decade ago. Oh, wait

  In other words, the war in Afghanistan is like seeing management consultants come to your badly managed software company where everyone knows the problem is the boss’s indecisiveness and cowardice, except it’s violent and people die.

  I mean, U.S. military leaders, like bad consultants or executives, lied about Afghanistan to the point it was routine. Here are just a few quotes from generals and DOD spokesmen over the years on the strength of the Afghan military, which collapsed almost instantly after the U.S. left.

  In 2011, General David Petraeus stated, “Investments in leader development, literacy, marksmanship and institutions have yielded significant dividends. In fact, in the hard fighting west of Kandahar in late 2010, Afghan forces comprised some 60% of the overall force and they fought with skill and courage.”

  In 2015, General John Campbell said that the the Afghan Army had “proven themselves to be increasingly capable,” that they had “grown and matured in less than a decade into a modern, professional force,” and, further, that they had “proven that they can and will take the tactical fight from here.”

  In 2017, General John Nicholson stated that Afghan security forces had “prevailed in combat against an externally enabled enemy,” and that the army’s “ability to face simultaneity and complexity on the battlefield signals growth in capability.”

  On July 11, 2021, Pentagon press secretary John Kirby said that the Afghan army has “much more capacity than they’ve ever had before, much more capability,” and asserted, “they know how to defend their country.”

  Basically, look at this photo below, imagine them in camouflage, and that’s the U.S. military leadership.

  

  The Withdrawal Anger Is *Embarrassment*

  There are significant recriminations over the embarrassing media stories on the withdrawal from Afghanistan, tremendous anger that political leaders like Trump and Biden made significant mistakes in how they withdrew U.S. forces. Many of these critiques, coming from Europeans as much as American elites, are in bad faith.

  Nonetheless, rather than weighing in on the merits of these arguments, I think it’s better to look at how the establishment observed a stark portrait of Afghanistan before the withdrawal, to show that the current critiques have nothing to do with operational choices.

  To that end, let’s look at a review of War Machine in Foreign Policy magazine, written by one of McChrystal’s aides, Whitney Kassel, who now works at private intelligence firm The Arkin Group. In this review, Kassel noted the movie made her so upset that she started cursing, because, while there were of course mistakes, the film was totally unfair to McChrystal and demeaned the entire mission of building a safe Afghanistan. Kassel, like most of these elites, didn’t get the joke, because she is the joke.

  

  I see the discourse on the withdrawal as a super-sized version of this Kassel’s review. The ‘Blob,’ that loose network of diplomats, ex-diplomats, generals, lobbyists, defense contractors, fancy lawyers, famous journalists, and insiders see the obvious desire for withdrawal as similar to how Kassel saw the truth-telling of Hastings and the Netflix movie. They are angry and embarrassed that they can’t hide their failures anymore. Their entire sense of self was bound up in the idea of an illusion of an unbeatable all-powerful America, even when they, like General Glen “the Glanimal” McMahon were the only ones who believed it.

  And their embarrassment covers up something even more dangerous. None of these tens of thousands of Ivy league encrusted PR savvy highly credentialed prestigious people actually know how to do anything useful. They can write books on leadership, or do powerpoints, or leak stories, but the hard logistics of actually using resources to achieve something important are foreign to them, masked by unlimited budgets and public relations. It is, as someone told me in 2019 about the consumer goods giant Proctor and Gamble, where “very few white-collar workers at P&G really did anything” except take credit for the work of others.

  Defense Monopolies and the Afghan Army

  It’s fun to act like it was always thus, that this is how empires behave. But in fact, that’s not true. The current Blob is relatively new. And believe it or not, Western forces used to be able to actually win wars.

  Going back to the last significant victory, the allies won World War II in large part for two reasons. First, the Soviet Union sacrificed 27 million people defeating the Nazis, and second, the U.S. military, government, labor, and business leaders were exceptionally good at logistics. The U.S. military had at least a dozen suppliers for each major weapons system, as well as the ability to produce its own weaponry, the government had exceptional insight into the U.S. economy, and New Dealers had destroyed the power of the Andrew Mellon and J.P. Morgan style short-term oriented financiers and monopolists who had controlled the industrial sinews of the country.

  Today, this short-termism has taken over everything, including the military, which is now dominated by McKinsey-ified glory hounds without wisdom and defense contractors with market power. And this leadership class hasn’t just eroded our strategic capacity, but the very ability to conduct operations. Two days ago, Afghan General Sami Sadat published a piece in the New York Times describing why his army fell apart so quickly. He went through several important political reasons, but there was an interesting subtext about the operational capacity of a military that is so dependent on contractors for sustainment and repairs. In particular, these lines stuck out.

  Contractors maintained our bombers and our attack and transport aircraft throughout the war. By July, most of the 17,000 support contractors had left. A technical issue now meant that aircraft — a Black Hawk helicopter, a C-130 transport, a surveillance drone — would be grounded.

  The contractors also took proprietary software and weapons systems with them. They physically removed our helicopter missile-defense system. Access to the software that we relied on to track our vehicles, weapons and personnel also disappeared.

  It’s just remarkable that contractors removed software and weapons systems from the Afghan army as they left. Remember, U.S. generals constantly talked about the strength of the Afghan forces, but analysts knew that its air force – on which it depended – would fall apart without contractors. The generals probably hadn’t really thought about the logistical problems of what dependence on contracting means. It’s just stunning that NATO forces would be trying to stand up an independent Afghan army, even as NATO contractors disarmed that army due to contracting arrangements.

  I suspect the problem isn’t simply related to Afghanistan, because these kinds of problems are not isolated to the Afghan army. Last month, I noted that American soldiers are constantly complaining that bad contracting terms prevent them from fixing and using their own equipment, just as Apple stops consumers from repairing or tinkering with their iPhones. In 2019, Marine Elle Ekman noted that these problems are pervasive in the U.S. military.

  Besides the broken generator in South Korea, I remembered working at a maintenance unit in Okinawa, Japan, watching as engines were packed up and shipped back to contractors in the United States for repairs because “that’s what the contract says.” The process took months.

  With every engine sent back, Marines lost the opportunity to practice the skills they might need one day on the battlefield, where contractor support is inordinately expensive, unreliable or nonexistent…

  While a broken generator or tactical vehicle may seem like small issues, the implications are much larger when a combat ship or a fighter jet needs to be fixed. What happens when those systems break somewhere with limited communications or transportation? Will the Department of Defense get stuck in the mud because of a warranty?

  No one is invading the U.S., so these problems aren’t immediately obvious to most of us. Yet, with the collapse of the Afghan army, now we see an example of what happens when a military is too dependent on contractors, and that support system is removed (which adversaries could do to the U.S. military if they pursue certain strategies.) It turns out that the cost of not being able to repair your own equipment is losing wars.

  More fundamentally, the people who are in charge of the governing institutions in our society are simply divorced from the underlying logistics of what makes them work. Everything, from the Boeing 737 Max to the opioid epidemic to the waste inside most big corporations to war, has been McKinsey-ified. And it’s all covered up with moral outrage, partisanship and culture warring, public relations, and management wisdom bullshit.

  I’ll finish on a note of optimism. This loss in Afghanistan, while hugely embarrassing, could serve as a wake-up call. After the loss in Vietnam, a group of military officers, led by John Boyd, one of the greatest American military strategists in U.S. history, created a military reform movement, to change the way the Pentagon developed and used weapons, and they made enormous progress in restructuring key parts of the defense establishment. (One of the members of Boyd’s “Fighter Mafia,” Pierre Sprey, the man responsible for the remarkable A-10 Warthog, just passed away.) Similarly, the British, after losing the American Revolution, radically reformed their corrupt and antiquated systems of governance. Losing wars is a great spur to reform. It means that we as a society get to look at ourselves honestly. We may choose not to act on what we see, but we do in fact have the opportunity. And that’s not nothing.

  UPDATE: I’d like to apologize to Whitney Kessel. She is no longer at the Arkin Group. After a stint at Palantir, she ended up at Morgan Stanley, where she is now the Head of Cyber Event Management for North America, which is not at all a highly paid fake job full of make work.

  Tyler Durden
  Mon, 08/30/2021 – 23:00

• Starting Sept 1 China Will Require Foreign Vessels To Report In Its "Territorial Waters"
  Starting Sept 1 China Will Require Foreign Vessels To Report In Its “Territorial Waters”

  China barely wasted any time after Biden’s botched evacuation of Afghanistan to telegraph to the world that things will be a little different going forward: in a move that could have ramifications for the free passage of both military and commercial vessels in the South China Sea, Chinese authorities said on Sunday they will require a range of vessels “to report their information” when passing through what China sees as its “territorial waters”, starting from September 1, The Hindu reported.

  Over $5 trillion trade passes through the South China Sea, and numerous US naval vessels cross through contested waters, much to China’s anger. Beijing claims under a so-called “nine dash line” on its maps most of the South China Sea’s waters, which are disputed by several other countries, including the Philippines, Vietnam, Malaysia and Indonesia.

  While it remains unclear how, whether, and where China plans to enforce this new regulation starting Wednesday, the Maritime Safety Administration said in a notice “operators of submersibles, nuclear vessels, ships carrying radioactive materials and ships carrying bulk oil, chemicals, liquefied gas and other toxic and harmful substances are required to report their detailed information upon their visits to Chinese territorial waters,” the Communist Party-run Global Times reported. The newspaper quoted observers as saying “such a rollout of maritime regulations are a sign of stepped-up efforts to safeguard China’s national security at sea by implementing strict rules to boost maritime identification capability.”

  That China’s escalation to claim contested waters happens with US international credibility and reputation – even among allies – in tatters, is hardly a coincidence.

  

  The notice said in addition to those vessels, any vessel deemed to “endanger the maritime traffic safety of China” will also be required to report its information, which would include their name, call sign, current position next port of call, and estimated time of arrival. The vessels will also have to submit information on the nature of goods and cargo dead weight. “After entering the Chinese territorial sea, a follow-up report is not required if the vessel’s automatic identification system is in good condition. But if the automatic identification system does not work properly, the vessel should report every two hours until it leaves the territorial sea,” the notice said.

  The Global Times noted the Maritime Safety Administration “has the power to dispel or reject a vessel’s entry to Chinese waters if the vessel is found to pose threat to China’s national security.”

  How China will enforce these rules remains to be seen, and in which waters of the sea. Indian commercial vessels as well as ships of the Indian Navy regularly traverse the waters of the South China Sea, through which pass key international sea lanes. While China claims most of its waters, marked by the “nine dash line” on its maps, Indian officials say Beijing has generally only sought to enforce its claims in response to the passage of foreign military vessels not in the entire sea but in the territorial waters around the islands, reefs and other features, some artificially constructed, that China claims.

  China’s “nine dash line” is deemed by most countries as being inconsistent with the United Nations Convention on the Law of the Sea (UNCLOS), which only gives states the right to establish a territorial sea up to 12 nautical miles. The requirements of the latest notice will also be seen as being inconsistent with UNCLOS, which states that ships of all countries “enjoy the right of innocent passage through the territorial sea”.

  The MEA told Parliament in 2017 in response to a question on India’s trade in the South China Sea that over US$ 5 trillion global trade passes through its sea lanes and “over 55% of India’s trade passes through South China Sea and Malacca Straits.” “Peace and stability in the region is of great significance to India. India undertakes various activities, including cooperation in oil and gas sector, with littoral states of South China Sea,” the MEA said.

  Tyler Durden
  Mon, 08/30/2021 – 22:40

• Pfizer Board Member Warns Policymakers: "Natural Immunity" Needs to Be Included In COVID Mandate Plans
  Pfizer Board Member Warns Policymakers: “Natural Immunity” Needs to Be Included In COVID Mandate Plans

  Authored by Jack Phillips via The Epoch Times,

  Former Food and Drug Administration Commissioner Scott Gottlieb, who is a Pfizer board member, noted that “natural immunity” gained from a prior COVID-19 infection needs to be included in discussions about policies and mandates.

  “The balance of the evidence demonstrates that natural immunity confers a durable protection,” Gottlieb said during a Monday morning TV interview, referring to a landmark new preprint Israeli study that found prior COVID-19 infection confers much more protection against the virus than any vaccine.

  “It’s fair to conclude that,” he said.

  

  Although Gottlieb said he would “be careful” about concluding whether natural immunity provides better protection against transmitting the virus, officials “should start assimilating that into our policy discussions.”

  “Natural infection confers robust and durable immunity,” he said, citing the Israeli study and others.

  However, whether natural immunity or vaccines are better than one another “isn’t that material” when it comes to policy discussions, Gottlieb added.

  Last week, researchers from Maccabi Healthcare and Tel Aviv University said that individuals who recovered from COVID-19 had superior protection against the Delta variant of the CCP (Chinese Communist Party) virus than those who received the Pfizer mRNA vaccine, the most commonly used shot in Israel.

  “This analysis demonstrated that natural immunity affords longer-lasting and stronger protection against infection, symptomatic disease, and hospitalization due to the Delta variant,” the study concluded, noting their findings came from the “largest real-world observational study” in the world. Their study, which hasn’t yet been peer-reviewed, noted outcomes for a period between June 1 and Aug. 14 of this year.

  When researchers compared cases of prior infection that occurred between March 2020 and February 2021 with vaccinations between January and February 2021, they found that the vaccinated cohort was 5.96 times more likely to contract the Delta variant and 7.13 times more at risk for symptomatic disease compared to those previously infected.

  The results suggest that natural immunity gained from having survived a previous infection of COVID-19 may wane over time against the Delta variant, the authors wrote.

  Those vaccinated were at a greater risk of COVID-19-related hospitalizations compared to those who were previously infected, the authors noted. They said that being 60 years of age or older increased the risk of infection and hospitalization.

  The authors of the research paper said they only observed protection against the Delta variant and not other strains. Meanwhile, they only observed the Pfizer vaccine and didn’t look at other vaccines or the effects of a booster shot.

  Tyler Durden
  Mon, 08/30/2021 – 22:20

• Southern Border Apprehensions At Two-Decade High
  Southern Border Apprehensions At Two-Decade High

  Apprehensions of undocumented immigrants at the Southern U.S. border in 2021 have reached levels last seen in 2001, despite two months still to go in the current fiscal year…

  

  You will find more infographics at Statista

  The inflow of undocumented immigrants from Central America drove numbers up significantly, but, as Statista’s Katharina Buchholz notes, immigration from Mexico has also increased again for the fourth year in a row – together creating another exceptional year at the Southern border that has already surpassed the records set in 2019. The number of individuals apprehended with their families also rose again in 2021, as Central American migrants tend to leave their countries out of fear of violence, often taking their families with them.

  In 2019, Trump era policies of separating migrant children from their parents as well as the practice of keeping those who apply for asylum in tent cities in Mexico caused outrage among some. Both practices had been discontinued under the Biden Administration until the Supreme Court on Tuesday declined to block a Texas judge from ruling for the reinstatement of “Remain in Mexico”. Both President Joe Biden and Vice-President Kamala Harris have made it clear that they strongly discourage migrants from making the journey to the United States, but have done little in practice to effectuate this.

  Historically, immigrants from Mexico made up the largest share of undocumented arrivals to the United States. The arrivals were mostly classified as work migrants, i.e. men arriving without their families at least initially. In the year 2000, Customs and Border Protection records show that more than 1.6 million Mexicans were arrested at the border. This number reached a low of 128,000 in FY2017, before rising again to 500,000 in 2021.

  The number of non-Mexicans apprehended at the border exceeded 774,000 in 2021. Out of these, around 80 percent came from El Salvador, Guatemala and Honduras.

  Immigration from Mexico started to decrease during the Great Recession as work was in short supply. Reasons for this include the economy in Mexico doing better while the country shifts towards an aging population, which causes workers to be more sought after. While this development already flipped again in 2018, the coronavirus pandemic seems to have accelerated the shift as more single adults attempt to leave Mexico for the United States once more.

  Tyler Durden
  Mon, 08/30/2021 – 22:00

• 'Retired' US SpecOps Insiders Detail Chaotic Exit From Afghanistan (Updated)
  ‘Retired’ US SpecOps Insiders Detail Chaotic Exit From Afghanistan (Updated)

  Op-Ed authored by former Trump admin official Emily Miller via Emily Posts,

  I’ve been tweeting updates from my sources on the situation. But since many people don’t have Twitter, I’m switching over to have a hard link where people can get real-time update on what is happening on the ground. To get caught up, read from the bottom. I’ll keep posting on this link with updates that will start after the photo below.

  ---

  Pres. Joe Biden lost the final battle in the Afghanistan war. Americans and Afghan allies were abandoned by the U.S. government in the days before the August 31 departure.

  However, brave and patriotic retired military special operators have taken over the mission to leave no man behind. They are giving me information to expose the crisis so that the politicians in DC will stop working against them. Also, rescue operations are being done by international organizations and other former U.S. military.

  All these sources are giving me details from Afghanistan so that people there can get direction in this chaos and the American public knows the reality.

  SOURCES GUIDE:

  MARK — RETIRED SPECIAL OPERATOR IN THE U.S.

  JOHN – RETIRED SPECIAL OPS IN KABUL

  MATT- RETIRED U.S. ARMY COLONEL ASSISTING SPECIAL OPS, CALLING HIM

  JIM– INTERNATIONAL SAFETY AND SECURITY OFFICER FOR ONE OF THE WORLD’S LARGEST RELIEF ORGANIZATIONS

  JOE – GOVERNMENT CONTRACTOR “JOE” HELPING RESCUE AFGHAN ALLIES

  CHRIS– FORMER EMPLOYER OF THE RET. SPECIAL OPS IN AFGHANISTAN

  (Subscribe and help fund Emily’s work)

  

  Monday night in DC/Tuesday morning in Afghanistan

  I have put together Mark and Jim (NGO) so the special ops can help get out the Americans and green card holders. They are coordinating the rescue efforts.

  I also connected Mark with Joe (government contractor) to help coordinate rescue of the green card holders left in Afghanistan.

  This war is not over just because Pres. Biden pulled the troops today.

  CHRIS

  Thank you for your hard work. My other 1/2 made it out early this morning. They had to leave several thousand, including U.S. citizens. The middle East country they are in — that helped all of the private groups — is now being threatened by the State Department. Whoever is still there is being hunted down and executed now. It’s so sad and unnecessary.

  Monday evening in DC/ Early Tuesday in Afghanistan

  JIM

  My bus with the green card holders? They’ve gone into hiding with friends.

  The four women at the gate made their way to a safe house arranged by someone I’m working with on the ground

  “This is just 100% lie. Not even disingenuous. Just a lie.” – security officer for major NGO working on rescues at airport https://t.co/4vv8l8KcnJ

  — Emily Miller (@emilymiller) August 30, 2021

  https://platform.twitter.com/widgets.js

  MARK

  The 7 buses of American women seen turned away at airport Sunday/Monday — “I was told they are safe.” He said the State Department was involved.

  I talked to my guys and no one can confirm a fire because they said the last US mil flight just took off. He has no eyes in the airport anymore.

  Monday afternoon in DC:

  The retired special ops teams in Afghanistan have millions in private funding and “assets.” But the U.S. government will not work with them. I just spoke to my contact Mark on the phone. This is the latest:

  MARK

  Current situation (4:30pm ET)

  “TB are dismantling 5 AWCC cell towers in and around Kabul (confirmed by one of my sources as well)”

  “GRU (Russian intelligence) are helping TB identify AMCITS and GC (Green Card) holders.”

  On Kabul airport:

  “The Kabul airport is closed except flights for American citizens.”

  “The best option the government can do would be to deploy a Ranger Battalion to extract these people. The Ranger Regiment trains for this exact type of operation.  Rangers could be there in less than 24 hours from go,”

  “The best option the government can do would be to deploy a Ranger Battalion or some special operations unit to extract these people. Special ops train for this exact type of operation.  They could be there in less than 24 hours from go.”

  “But we have the assets to do it. If the government would even assist us, we could do the mission. But we are still encountering obstacles.”

  “We were getting planes in and getting people out as of 3-4 days ago. Since then we haven’t been able to get anything into Kabul.”

  Next options after Kabul airport

  “The Taliban has lists of these peoples names. I think the main people they are looking for now are big generals or big Afghan politicians who didn’t get out because they weren’t high enough. My guys are not directly being hunted yet.”

  “I have all my guys bedded now because it’s too dangerous.”

  Why are retired military in Afghanistan?

  I asked why these retired operators were putting their own lives on the line by going back to Afghanistan.

  “We love those people. I have built a bond with these people and really want to get them to safety.  This is the most important mission that I have ever done in my entire life.”

  “This one Afghan guy trusted me with his life. And even now, he’s still saying, ‘We love America, I’ll risk my life for America.’ I have him still doing work for American citizens and Afghan partners—  even while he’s trying to survive himself.”

  “I have another guy, married to an American citizen, but he’s not a citizen. His English isn’t good so we’re going through his wife. And after talking to his wife for countless hours through text and over calls it breaks our hearts to see them have to go through this catastrophe that could have easily been avoided — and even reversed — if the call had been made even a few days ago.”

  I asked him to find out what happened to the report that there were 7 buses of American women. He said he’s going to reach back out to the various sources on the ground who reported it back to him.

  JIM

  “This was just sent to me – sounds like victory fire come from the airport.” pic.twitter.com/ahuX4HiJWX

  — Emily Miller (@emilymiller) August 30, 2021

  https://platform.twitter.com/widgets.js

  “FYI some of the plane nerds are saying 3 C-17s are inbound. Appears to be the case on flight radar, but they look to be maybe 30 away… no-one knows how long they will be on the ground. My advice remains they should go nowhere near the airport now. It will be festooned with TB once the US leaves.”

  Also – for the fucknuckles trolling you with flight radar screenshots. My western guys on the ground are telling me Badri313 are now in full control of the airport. That video seems to support it and a NOTAM for HKIA went out 6 hours ago saying the airport is now uncontrolled and there is no ATC service (NOTAMs are publicly available). If they prefer to trust an app over official notifications and eyewitnesses then that’s on them.

  JOE

  Source at Fort McCoy in Wisconsin on the Afghan refugees today pic.twitter.com/WLr7r0CJ6l

  — Emily Miller (@emilymiller) August 30, 2021

  Click here to read the rest of the report.

  Tyler Durden
  Mon, 08/30/2021 – 21:40

• "Rental Policy Shock": 750,000 Households Are About To Be Evicted – What Happens To The Economy
  “Rental Policy Shock”: 750,000 Households Are About To Be Evicted – What Happens To The Economy

  With the Supreme Court officially striking down Biden’s eviction moratorium and with most state-level restrictions set to expire over the next month, Goldman has calculated how sharply evictions could rise under current policy in order to estimate the potential impact on the economy.

  First some big picture details:

  • Despite the severe recession, evictions actually declined during the coronacrisis due to the national eviction moratorium, with eviction filings declining 65% in Blue states and 61% nationwide.

  • Using rent delinquency data from real estate companies, the National Multifamily Housing Council, and the Census Pulse survey, the bank estimates that  2½-3½ million households are behind on rent, with $12-17bn owed to landlords.

  • Despite the $25bn dispersed from the Treasury to state and local governments, the process of providing these funds to households and landlords has been slow. Only 350k households received assistance in July, and at this pace, 1-2 million households will remain without aid and at risk of eviction when the last 2021 eviction bans expire on September 30.

  Next, we jump right to Goldman’s findings before digging deeper into the analysis. According to the bank: 

  • The strength of the housing and rental market suggests landlords will try to evict tenants who are delinquent on rent unless they obtain federal assistance. And evictions could be particularly pronounced in cities hardest hit by the coronacrisis, since apartment markets are actually tighter in those cities.

  • Taken together, Goldman believes roughly 750k households will ultimately be evicted later this year under current policy.

  • Goldman expects that a small drag on consumption and job growth will result from an eviction episode of this magnitude, but the implications for covid infections and public health are probably more severe.

  • The end of the moratoriums would also exert downward pressure on shelter inflation as vacancy rates rise. Under our baseline estimates, post-moratorium evictions will raise the vacancy rate by about 1pp, which on its own would lower shelter inflation by 0.3pp in 2022, partially offsetting the intense upward pressure from the housing shortage.

  With that in mind, we next look closer at the underlying causes behind the coming “Rental Policy Shock”, as well as what comes next.

  On Thursday, the Supreme Court overturned the federal eviction moratorium that had constrained the ability of landlords to evict tenants adversely affected by the pandemic recession. As shown in the chart below, because most states do not currently have eviction bans in place and because those that do are also set to expire by September, roughly 90% of the country will lose access to these emergency protections by the start of the fourth quarter.

  

  The coming end of the eviction moratorium will result in a sharp and rapid increase in eviction rates in coming months unless Emergency Rental Assistance (ERA) funding is distributed at a much faster pace or Congress addresses the issue, for example in the upcoming reconciliation package. These key deadlines are summarized in the table below.

  

  The tenant protection policies listed above significantly reduced evictions during the first 18 months of the pandemic, with eviction rates actually falling instead of rising as typically happens during a recession. Because of the legal gray area and income-eligibility requirements of the federal eviction bans, state and local moratoriums have often been more effective in preventing evictions. As shown in the left panel of the next chart, eviction rates plummeted to near-zero while the strictest eviction bans of spring 2020 were in effect, and on average, eviction filing rates remain less than half their pre-crisis pace.

  

  The right panel above shows that eviction filings have generally fallen more dramatically in liberal states and cities adopting more stringent protections like California and New York (-65% across Blue States). These states are also more likely to interpret the federal moratoriums more generously than Red States.

  Economic Impact of the Moratoriums

  The eviction moratoriums primarily affected the real economy through their impact on tenant-occupied housing consumption and consumer cash flows, both of which were highly positive: the housing consumption category continued to rise during the crisis in spite of the surge in unemployment (+0.9% in 2020 and +0.8% in 1H21, real basis). However, the category represents only 2.5% of GDP, so the direct impact on GDP levels through this channel was probably small (0.1-0.2% of GDP).

  Eviction Backlog

  Obviously, the eviction moratorium had extremely favorable consequences for the economy – after all it delayed the realization of true supply and demand at the expense of taxpayers and massive debt monetization. However, this period of involuntary taxpayer generosity is coming to an end and as of this moment, estimates of rental delinquencies run the gamut from under 1mn units to upwards of 15mn, with the wide range reflecting the rapid changes in the labor and rental markets over the last year, as well as the lack of timely and representative data on the subject. Goldman’s estimates, shown below, indicate 1-2mn households at risk of eviction even after next month’s federal aid distributions, of which roughly 750k households would be evicted under the status quo.

  

  As shown in the exhibit above, Goldman estimates that the number of housing units at risk of eviction, based on uncollected tenant revenues in 2021Q2 for large property managers, representing 20mn tenant-occupied housing units, and based on survey data reporting the share of consumers who owe back rent and also “lost employment income” during the pandemic, representing the remaining 25mn units. Because the moratoriums also deferred hundreds of thousands of evictions unrelated to the pandemic, one should also add an additional backlog to reflect these missing filings.

  Together, the bank estimates that 2½-3½ million households are significantly behind on rent and at risk of eviction without policy support. Since roughly half of eviction filings historically result in eviction (47% over 2006-2016), Goldman assumes that barring a new eviction ban from Congress or a much faster pace of ERA distribution, 750k households will face eviction in the fall and winter months. With 8-9 million Americans currently unemployed and emergency unemployment programs winding down, the sudden loss of tenant protections could plausibly generate an eviction episode of this magnitude.

  Translating these figures to a dollar amount of back rent based on the stock and flow of bad tenant debt among residential REITs, implies 4.4 months of rent payments outstanding on average across tenants who are behind on rent. This is consistent with research from the Center for Budget and Policy Priorities estimating average tenant debt at 3 months’ rent. Taken together, some $12-17 billion of bad tenant debt accumulated during the crisis.

   Yet Another Bottleneck

  With $25bn already dispersed from the Treasury to state and local governments and another $20bn available, the size of the Congressional allocation would appear more than sufficient to prevent an eviction crisis. But so far, the process of recovering back rents has been disappointingly slow, in part because doing so requires a significant amount of matching of information from the renter and the landlord. After doubling month-over-month in June to $1.5bn, the pace of distributions plateaued at $1.7bn in July (and $4.5bn cumulatively). Because of this and because utilities and electric bills are absorbing a significant minority of these funds, under current policy, a significant share of the 2½-3½ million households behind on rent could ultimately face eviction later this year.

  As shown in Exhibit 6, at the current monthly processing pace of 350k households, 1-2 million delinquent households would remain without ERA aid at the start of Q4 when the last 2021 eviction bans are set to expire (NY, WA).

  

  At the same time, the strength of the housing and rental market suggests landlords will try to evict delinquent units unless they can obtain federal funding. In fact, as shown in the next chart, apartment markets are actually tighter in cities hardest hit by the coronacrisis. This reduces the incentive for landlords to negotiate with delinquent tenants or wait for federal aid.

  

  Economic Consequences

  The final question is what would the coming surge in evictions mean for employment, consumption, and inflation?

  Here Goldman’s economists write that eviction increases the likelihood of a subsequent unemployment spell by around 2%. Based on 750k units and 1.17 payroll jobs per household, Goldman estimates 20k incremental job losses over the next year as a result of the end of the moratoriums (naturally, that number is far too low).

  While the consumption effects of such job losses would be small for economy as a whole, the end of the moratoriums also means that households who skipped rent payments would need to cut back in other areas. Based on a marginal propensity to consume of 0.7 for delinquent units during Q2, Goldman estimates a ¼% drag on Q4 consumption growth from this channel.

  We conclude by analyzing the inflation implications of these developments. While small in GDP terms, housing rental prices provide the source data for 17% of the core PCE inflation basket and 40% of the core CPI basket. Here Goldman writes that in its view, eviction moratoriums reduced shelter inflation early in the crisis by increasing the prevalence of rent forgiveness: the CPI statisticians impute a 95% price reduction for such housing units. Updating its previous proxy based on city-level rent declines, Goldman estimates rent forgiveness lowered PCE shelter prices by 0.32% during 2020 and by another 0.1% in 2021.

  There is a silver lining: a surge in evictions should create new inventory of available rental housing, partially offsetting rapidly rising housing costs,.

  So looking ahead, the end of the moratoriums will likely boost the market supply of rental units, because evicted tenants often move in with family members or leave the urban rental market entirely. Based on the historical relationship between vacancies and shelter inflation (holding unemployment constant), a 500k rise in vacancies would boost the rental vacancy rate by 1pp and exert 0.3pp of downward pressure on shelter inflation in 2022.

  Despite this “benefit”, based on the continued improvement in the labor market, robust housing market fundamentals, and the sharp pickup in mid-year rental prices, Goldman still forecast PCE housing inflation to pick up from 2.2% currently to 3.5% at year-end and 4.6% in 2022. That means that housing is about to become completely unaffordably to virtually anyone outside of the top 1%. As for the original American Dream (i.e. owning a house), of all those who are about to get evicted, our advice: aim lower…

  Tyler Durden
  Mon, 08/30/2021 – 21:20

• The Only College Rankings That Matter
  The Only College Rankings That Matter

  Submitted by Job Search Intelligence

  In 2013, Educate To Career invented a completely new methodology for ranking colleges. Our system was based on the economic value that colleges created for students. It was not another rehashed list of colleges, sorted by SAT score. This new system was based solely on the colleges ability to provide future earnings value to their students. We statistically valued graduation rates, occupational outcomes (including salaries), student loan repayment rates, labor market attachment, and other factors to score colleges. The ETC College Rankings Index quickly changed the discussion regarding how people valued colleges. Aura or cache became less important and career outcomes rose to the forefront. And college costs became a top consideration. Students, parents, college planners and the like coalesced around the understanding that colleges were fairly assessed by their ability to prepare students for the job market, at a reasonable cost.

  This new ideology immediately began taking hold and was instrumental in improving the college enrollment decisions people made. Since launching our original College Rankings Index, there has been an incremental trend where enrollments are rising at affordable, value oriented colleges. Families became aware of the fact that their local state college provides a good education at a great price, largely because they’ve already paid for that college with your tax dollars. Again, our rankings was not a list of colleges sorted by SAT score, high to low. It was a re-ordering of higher education institutions, based on how well they served their mission of preparing young people for the workforce, and at a reasonable cost.

  The Covid Effect on College Planning

  Prior to Covid, families were making incremental adjustments to their college planning decisions. They were trending away from expensive private schools, while enrollments in public state colleges were ticking up by 1% to 2% annually. At the same time, students were selecting more practical majors, such as: business, engineering, and health. The word was clearly out that STEM studies lead to real jobs. Studying these majors at lower cost state colleges is just good, practical college planning. Families were saving many $thousands on tuitions each year, while their kids were enrolling in career tracking degrees that will lead to jobs that pay double what ‘soft’ degrees pay.

  Then Covid hit. And it hit colleges hard. Covid compressed 5 years of this gradual shift in enrollment trends into 1 year of stark and abrupt change where families became dramatically more cost conscious in terms of the colleges they chose, and the majors in which their kids enrolled. Prior to Covid, the enrollment trend was biasing towards more affordable colleges, and practical majors. The word was clearly out that STEM studies lead to real jobs. Covid radically accelerated the trend that was already underway.  

  With all of this in mind, a conventional college rankings system is less relevant than ever. People will always be curious to know which of Harvard, Princeton or Yale is 1st in a given year; but they realistically concluded years ago that it had no bearing on their own college plans.

  Negotiating Tuitions is Now Easier and More Common than Ever

  College tuitions have been negotiable for over 20 years, though the folks in the admissions offices won’t admit that the practice was becoming more widespread, as they are revenue driven salespeople. The bottom line is this – at almost every college in the U. S., over half of the students are given at least some ‘institutional aid’, which is a fancy name for a discount. The amount of institutional aid being doled out is increasing every year and the number of students receiving institutional aid is increasing as well.

  A key function of our new College Rankings Index is to provide you with data points that highlight the colleges where you have the greatest opportunity to negotiate, and arrive at the lowest possible net tuition.

  A College Rankings System that Reflects the Needs of Students Today

  More recently, shifts in the labor market were necessitating that students become serious about choosing majors that lead to real careers. The evidence is clear that labor markets are evolving rapidly and that technical skills are the future. This is especially true for young people. Employers are seeking people with specific skill sets, and less focused on brand name diplomas.

  Our newest generation College Rankings Index incorporates the aforementioned realities of college, as well as the dynamics of the labor market. This new system represents the academic interests of each individual student, and allows them to create a list of colleges that will enable them to plan their own path through higher education, and to successfully enter the workforce. Key features of the new ETC College Rankings Index includes:

  • Personalization of list – the system will generate a list of colleges that matches academic competencies and interests.

  • Focus on academic major – will help select a major that will lead to a real career with strong earnings.

  • Reduce your tuition – see the tuition discounts given in recent years to help negotiate the lowest tuition possible.

  We proudly release our new ETC College Rankings Index, enabling students to make the most prudent college to career planning decisions.

  A few parting notes regarding the legacy systems for ranking colleges, and the 20+ years of disservice they did to students and families:

  • Harvard, Princeton, Yale, et al, they don’t create winners, they pick them. Drop outs from those colleges are some of the wealthiest people in the world.

  • If you only allow people with an SAT score of 1450 or higher in your doors, you’re starting line up is the top 1%. Congratulations to those colleges for picking ‘all star teams’.

  • If you have an SAT score that is 1450 to 1500, you’ve got about a 5% chance of being accepted by any one of the Ivy League colleges.

  • For the past 20 years, starting salaries for STEM graduates have risen by 3% to 5% annually. During that same timeframe, salaries for graduates with soft degrees have seen 0% to 2% wage gains. By every metric: unemployment rate, labor market attachment, student loan repayment rates, homeownership rates, the list goes on…. graduates with STEM degrees have faired substantially better in the labor market than have their counterparts with soft degrees. The key takeaway here is that the entire college rankings industry has fixated families on expensive (and often unattainable colleges) while neglecting what really matters – the academic major.

  Despite all of the aforementioned facts and data points, various producers of college rankings have continued to peddle systems which are regurgitated lists of the same elite colleges dominating the top spots. Since 2013, our College Rankings Index has provided a tremendous value to students and their families. Our newest system, reflects what students need to know in todays’ labor market to develop their college plans. Given the challenges that students face, our new ETC College Rankings Index is The Only College Rankings That Matter.

  Tyler Durden
  Mon, 08/30/2021 – 21:00

• Fertilizer Prices Hit Near Decade High As Farmers Struggle For Supply
  Fertilizer Prices Hit Near Decade High As Farmers Struggle For Supply

  North American fertilizer prices are nearing a decade high this week as soaring commodity prices allow farmers to expand crop production, boosting demand for nutrients essential to producing food. 

  

  The fertilizer industry is experiencing supply-side constraints while demand is rising. 

  

  Rabobank’s latest commodity note explained that farmers are expanding plantings and dispensing more fertilizer on fields to increase crop yields since ag prices have jumped due to money printing by the central bank, weather-related issues worldwide, and supply chain issues. The Dutch bank warns, higher prices will curb purchases of fertilizers. 

  “Matched against the furor of trade and geopolitics, fertilizer prices will near the equilibrium under which relative value creates demand destruction,” analyst Matheus Almeida said. 

  Bloomberg lists several factors driving up the costs of fertilizer, include “elevated freight rates, increased tariffs, higher energy costs and supply constraints for nitrogen, potash, and phosphate.” 

  It’s unclear how long fertilizer prices will remain at 9-year highs, but increased farming costs will put upward pressure on food prices. So much for the “transitory” narrative the Federal Reserve and mainstream media continue to pedal. 

  In early March, we quoted Citi’s commodity desk who expressed optimism in the agri space. At the time, they pointed out: “We remain positive on all Ag names, and our rank order is MOS, NTR, CF, CTVA, and FMC.”

  Tyler Durden
  Mon, 08/30/2021 – 20:40

• Our Afghan Nightmare: Tanks For Nothin'
  Our Afghan Nightmare: Tanks For Nothin’

  Authored by Victor Davis Hanson via AmGreatness.com,

  Afghanistan has been reinvented as the best-equipped terrorist nation in the world, basking in the prestige of humiliating the world’s superpower…

  

  Joe Biden’s scripted or no-questions press conferences, and the clean-up afterward by Antony Blinken, Jake Sullivan, and Jen Psaki, have been some of the most misleading episodes in modern presidential history—mostly in what was not said rather than was exaggerated, warped, and misrepresented. 

  Biden as Commander-in-Chief

  The more Joe Biden mutters “The buck stops here” or “I take full responsibility,” the more we know he will not – and not just because of his now reduced mental state, but because 1) he repeats the same opportunist messaging that he has for the last 50 years of his political career, and 2) the only true thing he could say was “I ordered a withdrawal in the most reckless manner in U.S. military history.”

  

  When Biden then blames Donald Trump, it raises the immediate questions: 

  1) If the Afghanistan deal was so flawed, why did Biden stick with it, given his other radical departures from what he inherited on the border, on fossil fuels, on the Middle East—on just about everything before January 20, 2021? 

  2) So, was it good or bad to withdraw all U.S. troops? Was Trump wrong to have bequeathed him a policy of graduated withdrawal, but Biden was right to have continued it for a while—only to have accelerated it into surrender and flight?

  3) Why did the violence erupt on Biden’s rather than on Trump’s watch? And was his order for a hasty flight in the dead of night from Bagram Air Base also the inherited Trump departure plan?

  When Joe Biden now threatens al-Qaeda, ISIS-K, and others with revenge, he sounds, unfortunately, more like the ridiculous Joe of “Corn Pop” braggadocio with his weaponized chain, or Joe taking Trump behind the gym to womp on him, or young Joe Biden slamming the mouthy kid’s head on the lunch counter. Speaking softly with a club is preferable to being loud with a twig.

  We have all heard, ad nauseam, too many of Biden’s He-Man stories. The latest rhetoric does not hide the fact that Biden had opposed the Osama bin Laden raid, criticized the termination of Qasem Soleimani, left Afghanistan in the most shameful retreat in U.S. history, and is now begging the Saudis to pump more oil after cutting back on our ample supplies and trashing Riyadh as part of his return to the Obama pivot to Iran. 

  Biden loves appeasement lists. He provided the Taliban with a list of whom we wished to evacuate. (When the Taliban soon knock on the door of an American in Kabul who thinks their message will be, “We’re here to escort you to your flight”?) In the same manner, Biden provided Putin with a helpful list of institutions he wanted Putin’s satellite cyber-criminals to exempt from hacking. 

  The blame for this sordid mess is threefold: 

  1) The media that knew Biden was debilitated and so covered up that fact to carry the candidate across the finish line in November. 

  2) The Democratic apparat that envisioned Biden lasting just long enough (the country be damned) to provide the needed cover of a sharply left-wing agenda. 

  3) The Pentagon’s top brass, active and retired, who for years leaked about and obstructed Trump, sought to toady up to the press in its “wokeness,” and posed as speaking truth to power, but have now gone strangely silent when we need public voices to oppose the present Afghanistan nihilism of the administration.

  Partnering With the Taliban

  The Taliban are to al-Qaeda and ISIS as the Nazis in World War II were to fellow fascists of the Spanish Blue Division, the Hungarian Arrow Cross, and the Romanian Iron Guard—ethnic and ideological variants of the same radical nihilist cause. No act of terror goes on in Afghanistan without someone in the Taliban ordering or allowing it. Their “ring” around the airport is only an obstruction for whom they choose: Americans and their allies. 

  The Taliban may for a moment seek plausible deniability of suicide bombings to hasten the U.S. departure in shame, temporarily disavowing credit for slaughtering Americans as they leave. But as soon as U.S. soldiers are gone, the Taliban will give free rein to its hounds al-Qaeda and ISIS, brag that they drove out the United States, and then resume their accustomed murdering and raping of civilians. We should expect lots of silent, under-the-table Bowe Bergdahl-type swaps, trades, and humiliations for the next year or so. We will likely sell out our former friends in the Northern Alliance, pay cash under the table per hostage head, and lie about a “new” Taliban. 

  So, should we laugh or cry when General Kenneth McKenzie assures us that the Taliban and the U.S. military have the same agenda: Americans exiting Afghanistan as soon as possible? 

  Yes, their agenda is the Pentagon exiting Afghanistan as soon as possible—but with the greatest global humiliation, loss of life, and general sense of defeat. In contrast, our agenda is to leave Afghanistan soberly and methodically, even if that means regaining Bagram for as long as necessary to achieve our own strategic goals.

  The Abandoned Arsenal

  The administration never mentions the vast horde of U.S. weaponry that was simply abandoned to the Taliban. Why? Is it to be “$80 billion here, thousands of machine guns there—no big deal”?

  Estimates of the trove’s value range from $70 billion to $90 billion. The stockpile likely includes 80,000 vehicles, including 4,700 late-model Humvees, 600,000 weapons of various sorts, 162,643 pieces of communications equipment, more than 200 aircraft, and 16,000 pieces of intelligence, surveillance, and reconnaissance equipment, including late-model drones. Especially worrisome are the loss of night-vision equipment, 20,000-plus grenades, and 1,400 grenade launchers, as well as more than 7,000 machine guns—the perfect equipment for jihadist terror operations and asymmetrical street fighting. 

  We can look at this disaster in a number of depressing ways. One would be to compare this giveaway to military aid given to Israel over the last 70 years, which more or less has amounted to about an aggregate $100 billion. In other words, in one fell swoop, the Pentagon deposited into Taliban hands about 80 percent of all the military aid that we’ve ever given to Israel since the founding of the Jewish state. In terms of tactical and operational capability, the Taliban may now be the best-equipped terrorist force in Asia and the Middle East.

  Assume that for the next quarter-century, Afghanistan will become not just the world’s training haven for Islamic terrorists, but an international, no-questions-asked, cash-on-the-barrel arms market for anti-Western terrorist cliques. 

  Or we can assess the damage psychologically. For the immediate future (possibly over the next few days or weeks), American soldiers could face the prospect of being attacked or killed by those who are outfitted in their own mirror image, and they might be blown up by their own former weapons. 

  Yet the media never asked for, nor did the Pentagon volunteer, any explanation of why such stocks were simply abandoned, or at least not destroyed before fleeing, or not later bombed. Since nothing makes sense, we must strain the imagination: was the $80 billion in arms given as de facto bribe money to get our own out? 

  In addition, the beefed-up U.S. embassy in Kabul reportedly cost nearly $1 billion, comparable to America’s most expensive embassy in London. It will now become a Taliban stronghold. Bagram Air Base—originally built with U.S. help and money during the Eisenhower Administration—has been updated with hundreds of millions of dollars of American investment in the last 20 years, in buildings, a new runway, personnel accommodations, detention facilities, and infrastructure. 

  Although it had been the target of several Taliban attacks, Bagram was largely considered defensible. It allowed coalition and Afghan forces to enjoy 100 percent air superiority over the entire country. Biden talks endlessly of the “over the horizon” capability of distant bases and ships, while omitting that he destroyed “right over the target” current capability. Why these vital American investments were simply surrendered in the dead of night to looters first, and Taliban second, will be an object of controversy and investigation for decades to come. To think of anything similar, imagine the British surrender of Singapore in 1942 or a combination of Fort Sumter, the burning of Washington in 1814, and Wake Island, December 1941.

  The End of American Stature

  Regional countries will no longer wish to join the United States in any war on terror because they know they are always just one election from a radical flip-flop in American foreign policy. There is no such thing anymore as bipartisan foreign affairs, since policy is seen as an extension of the revolutionary agendas here at home. Our allies are concluding that the United States is not a bastion of sobriety and careful deliberation that takes its leadership of the free world seriously, but a mercurial, radical leftist country that in a second may self-immolate, as we did in the woke summer of 2020. 

  Donald Trump reportedly offended NATO members and weakened the alliance by his bombast. Perhaps, but the record shows a funny type of allied enervation, because his jawboning resulted in a much larger NATO budget, marked gains in military expenditures on the part of NATO members, and a dramatic increase in those nations finally meeting or nearly meeting their two percent of GDP military investment promises. 

  And during the Trump Administration, NATO nations could claim that they destroyed ISIS in Syria under U.S. leadership, kept Afghanistan safe while reducing troops, frightened Iran, and taught Russians in Syria not to assault U.S. garrisons. For all the graduated withdrawals of the United States from Afghanistan in 2010-2020, not a single U.S. soldier had died in the 12 months prior to the inauguration of Joe Biden.  

  But now? Most of the major NATO nations have condemned the U.S. skedaddle from Afghanistan. They are angry that they were not consulted, and not synchronized in the complex airlift and withdrawal. And they resent the “every man for himself” unilateralism on the part of the United States.  

  We cannot expect the European NATO members to stand with the United States in trying to check Chinese aggression. The alliance will no longer badger Germany to cease its new de facto economic alliance with Russia or to stand firm against Russian bullying of frontline NATO states, or to present a unified skeptical front about reentering the flawed Iran deal. Differing views about assistance to Israel will only acerbate. NATO members, rightly or wrongly, feel they were bullied into Afghanistan by the United States, and 20 years later outnumbered the U.S. contingent by nearly fourfold—only to be left stunned as their supposed spiritual and military leader fled first for the exits, after itself surrendering the country to NATO enemies. 

  The Future

  In an ideal world, Biden would order a nocturnal retaking of Bagram, shift all U.S. evacuation efforts there, and provide air cover for incoming and outcoming flights as well as retaliatory strikes on terrorist enclaves as necessary. He would tell the Taliban that $80 billion of free military stuff was enough of bribes and that any more obstructive efforts will be met with bombs, not more cash and weapons.  

  Joe Biden thinks August 31, 2021, is the “end” of Afghanistan. In fact, it is a new beginning of yet another chapter in the much despised “war on terror.” But this time around, the Taliban are victorious. They have been reinvented as the best-equipped jihadist nation in the world, basking in the prestige of humiliating the world’s superpower, and will take ownership of hundreds of billions of dollars of Western investment in infrastructure in Afghanistan’s major cities. 

  This disaster can be attributed to Biden’s apparent desire for a 9/11 “no more Afghanistan” anniversary parade—itself to be staged to hide his multifaceted border, economy, energy, and foreign policy failures.

  The Chinese are debating now whether to ramp up the assault rhetoric against Taiwan, as more Chinese voices conclude that Biden would support the Taiwanese in meager fashion, as he did U.S. contractors and Afghan interpreters. The Russians are pondering which exposed NATO country or which former Soviet republic might be probed and dissected—in expectation of a tough-guy Biden Corn-Pop lecture but not much else. Kim Jong-un is considering replaying his old role of rocket man, as he calibrates the Biden responses to more missiles launched in Japanese air or water space.  

  Watch Iran especially. The theocracy believes this is the most opportune time in 20 years to announce that it is or will soon be nuclear, to unleash Hezbollah, and to step up global terrorist operations on the assumption that Biden will bow his head and declare “We do not forgive; we do not forget” and then retire for an early nap.

  Tyler Durden
  Mon, 08/30/2021 – 20:20

• China Introduces "Xi Jinping Thought" Into School Curriculum For All Age Groups
  China Introduces “Xi Jinping Thought” Into School Curriculum For All Age Groups

  While Beijing is busy dismantling its crony capitalism socialism with Chinese characteristics socio-economic system, as it unveils new crackdowns, rules and quasi nationalizations against its most successful private (but not for long) industries every day, China is also putting the communist propaganda into overdrive and is set to educate its youth on the version of “Marxist belief” espoused by its president by infusing “Xi Jinping Thought” into the national curriculum, its ministry of education announced last week.

  

  Already enshrined in China’s Constitution in 2018, “Xi Jinping Thought on Socialism with Chinese Characteristics in the New Era” will be taught to thousands of students starting from primary school level up into university, the Independent reports.

  Aimed at indoctrinating Marxist beliefs at a young age as well as loyalty to the ruling Chinese Communist Party, the introduction of “Xi Jinping Thought” in textbooks – similar to what the USSR did – will help strengthen the “resolve to listen to and follow the party”, the state-run Global Times reported, citing an official statement.

  It will also help teenagers gain confidence in the “path, theory, system and culture of socialism with Chinese characteristics”, it said. And with China announcing overnight it would limit children to playing online games for just 3 hours a week, think of just how much more effective China’s communist propaganda will be now in brainwashing its youth.

  The national curriculum will be revised to accommodate the 14-point ideological text and will span basic, vocational and higher education in school. It will also be integrated into various subjects, the report said, quoting a member of the National Textbook Committee.

  At the earliest stage, primary schools will be tasked with helping children cultivate a love for their country, the Communist Party and socialism, the report said. In middle schools, the focus will be on a combination of perceptual experience and knowledge study which will help students shape basic political judgments and opinions, all wrapped by the overarching intellectual prerogatives of communism, or at least “communism” where a handful of party oligarchs are worth billions and everyone else is an aspiring debt slave. Then at the college level, students will learn about theoretical thinking – by this we can only assume students will “learn” how to reverse engineer western scientific achievements.

  The 14-point “Xi Jinping Thought” says that the Chinese Communist Party leadership should be ensured over “all forms of work in China”, the party should take a people-centric approach for the public interest, it should govern China with the rule of law and practise socialist core values like Marxism and communism among others.

  It also says that the Xi Jinping-led party should have “absolute leadership” over the armed forces, and espouses an unerring belief in the One China principle what it comes to the country’s borders.

  The above represents the latest move to cement the Communist Party’s position generally and Xi’s in particular. Which is fitting for a country which three years quietly became a dictatorship: The 68-year-old Xi abolished presidential term limits in 2018, extending his rule indefinitely.

  Tyler Durden
  Mon, 08/30/2021 – 20:00

• Justified Shooting Or Fair Game? Shooter Of Ashli Babbitt Makes Shocking Admission
  Justified Shooting Or Fair Game? Shooter Of Ashli Babbitt Makes Shocking Admission

  Authored by Jonathan Turley,

  Here is my column in The Hill on the recent interview of Lt. Michael Byrd who was the hitherto unnamed Capitol Hill officer who shot Ashli Babbitt on January 6th. 

  The interview was notable in an admission that Byrd made about what he actually saw… and what he did not see.

  

  Here is the column:

  “That’s my job.” Those three words summed up a controversial interview this week with the long-unnamed officer who shot and killed Ashli Babbitt on Jan. 6. Shortly after being cleared by the Capitol Police in the shooting, Lt. Michael Byrd went public in an NBC interview, insisting that he “saved countless lives” by shooting the unarmed protester. 

  I have long expressed doubt over the Babbitt shooting, which directly contradicted standards on the use of lethal force by law enforcement. But what was breathtaking about Byrd’s interview was that he confirmed the worst suspicions about the shooting and raised serious questions over the incident reviews by the Department of Justice (DOJ) and, most recently, the Capitol Police.

  Babbitt, 35, was an Air Force veteran and ardent supporter of former President Trump. She came to Washington to protest the certification of the presidential Electoral College results and stormed into the Capitol when security lines collapsed. She had no criminal record but clearly engaged in criminal conduct that day by entering Capitol and disobeying police commands. The question, however, has been why this unarmed trespasser deserved to die.

  When protesters rushed to the House chamber, police barricaded the chamber’s doors; Capitol Police were on both sides, with officers standing directly behind Babbitt. Babbitt and others began to force their way through, and Babbitt started to climb through a broken window. That is when Byrd killed her.

  At the time, some of us familiar with the rules governing police use of force raised concerns over the shooting. Those concerns were heightened by the DOJ’s bizarre review and report, which stated the governing standards but then seemed to brush them aside to clear Byrd.

  The DOJ report did not read like any post-shooting review I have read as a criminal defense attorney or law professor. The DOJ statement notably does not say that the shooting was clearly justified. Instead, it stressed that “prosecutors would have to prove not only that the officer used force that was constitutionally unreasonable, but that the officer did so ‘willfully.’” It seemed simply to shrug and say that the DOJ did not believe it could prove “a bad purpose to disregard the law” and that “evidence that an officer acted out of fear, mistake, panic, misperception, negligence, or even poor judgment cannot establish the high level of intent.”

  While the Supreme Court, in cases such as Graham v. Connor, has said that courts must consider “the facts and circumstances of each particular case,” it has emphasized that lethal force must be used only against someone who is “an immediate threat to the safety of the officers or others, and … is actively resisting arrest or attempting to evade arrest by flight.” Particularly with armed assailants, the standard governing “imminent harm” recognizes that these decisions must often be made in the most chaotic and brief encounters.

  Under these standards, police officers should not shoot unarmed suspects or rioters without a clear threat to themselves or fellow officers. That even applies to armed suspects who fail to obey orders. Indeed, Huntsville police officer William “Ben” Darby recently was convicted for killing a suicidal man holding a gun to his own head. Despite being cleared by a police review board, Darby was prosecuted, found guilty and sentenced to 25 years in prison, even though Darby said he feared for the safety of himself and fellow officers. Yet law professors and experts who have praised such prosecutions in the past have been conspicuously silent over the shooting of an unarmed woman who had officers in front of and behind her on Jan. 6.

  Byrd went public soon after the Capitol Police declared “no further action will be taken” in the case. He proceeded to demolish the two official reviews that cleared him.

  Byrd described how he was “trapped” with other officers as “the chants got louder” with what “sounded like hundreds of people outside of that door.” He said he yelled for all of the protesters to stop: “I tried to wait as long as I could. I hoped and prayed no one tried to enter through those doors. But their failure to comply required me to take the appropriate action to save the lives of members of Congress and myself and my fellow officers.”

  Byrd could just as well have hit the officers behind Babbitt, who was shot while struggling to squeeze through the window.

  Of all of the lines from Byrd, this one stands out:

  “I could not fully see her hands or what was in the backpack or what the intentions are.”

  So, Byrd admitted he did not see a weapon or an immediate threat from Babbitt beyond her trying to enter through the window. 

  Nevertheless, Byrd boasted, “I know that day I saved countless lives.”

  He ignored that Babbitt was the one person killed during the riot. (Two protesters died of natural causes and a third from an amphetamine overdose; one police officer died the next day from natural causes, and four officers have committed suicide since then.)

  No other officers facing similar threats shot anyone in any other part of the Capitol, even those who were attacked by rioters armed with clubs or other objects.

  Legal experts and the media have avoided the obvious implications of the two reviews in the Babbitt shooting.

  Under this standard, hundreds of rioters could have been gunned down on Jan. 6 — and officers in cities such as Seattle or Portland, Ore., could have killed hundreds of violent protesters who tried to burn courthouses, took over city halls or occupied police stations during last summer’s widespread rioting. In all of those protests, a small number of activists from both political extremes showed up prepared for violence and pushed others to riot. According to the DOJ’s Byrd review, officers in those cities would not have been required to see a weapon in order to use lethal force in defending buildings.

  Politico reported that Byrd previously was subjected to a disciplinary review when he left his Glock 22 service weapon in a bathroom in the Capitol Visitor Center complex. He reportedly told other officers that his rank as a lieutenant and his role as commander of the House chambers section would protect him and that he expected to “be treated differently.”

  • The political tides are turning against the Biden presidency

  • Legal experts welcome sanctions of pro-Trump lawyers, say more needed

  In the Babbitt shooting, the different treatment seems driven more by the identity of the person shot than the shooter. Babbitt is considered by many to be fair game because she was labeled an “insurrectionist.” To describe her shooting as unjustified would be to invite accusations of supporting sedition or insurrection. Thus, it is not enough to condemn her actions (as most of us have done); you must not question her killing.

  Like many, I condemned the Jan. 6 riot (along with those who fueled the unhinged anger that led to the violence) as the desecration of our Capitol and our constitutional process. But that doesn’t mean rioting should be treated as a license for the use of lethal force, particularly against unarmed suspects. The “job” of officers, to which Byrd referred, often demands a courage and restraint that few of us could muster. As shown by every other officer that day, it is a job that is often defined by abstinence from rather than application of lethal force. It was the rest of the force who refrained from using lethal force, despite being attacked, that were the extraordinary embodiments of the principles governing their profession.

  Tyler Durden
  Mon, 08/30/2021 – 19:40

• Beijing's Big Tech Crackdown Causes Private Deal Flow To Dry Up In August
  Beijing’s Big Tech Crackdown Causes Private Deal Flow To Dry Up In August

  Just when market watchers think they’ve seen the last headline about China’s ongoing Big Tech crackdown, Beijing finds some new industry to harass. On Monday, it was the video game industry, as Chinese regulators limited online gaming to just 3 hours per week for minors, while requiring companies to use facial recognition technology and verified accounts to ensure nobody skirts the new rules.

  

  The results have been pretty stark: more than $1 trillion has been wiped off the aggregate market capitalization of Chinese domestic markets, along with China-based companies traded in Hong Kong and the US.

  But it’s not just the public markets that are feeling the impact. Foreign investors have backed away from financing Chinese startups, as the number and value of private equity deals involving foreign investors has fallen in August to its lowest monthly level since the start of the pandemic.

  According to Nikkei, which cited the latest figures from data firm PitchBook, deal flow was set to surpass levels from 2020 – until funding suddenly dried up in August.

  Chinese startups have raised $32.6 billion from 634 deals that included foreign VCs this year as of Aug. 25, compared with $18.9 billion from 453 in the first eight months of 2020. So far in August, however, just $800 million has been raised from 67 deals with foreign participation, down from $4.7 billion in July.

  What else happened around then? The answer should be obvious to most China watchers: Didi’s ill-fated IPO took place at the end of June. With several days remaining in August, $800 million would be a new low, beating the previous low for the pandemic period – $900 million from January 2020 – by $100 million. But even before the Didi IPO, China’s crackdown on its biggest tech firms was already becoming an issue.

  

  Chinese VCs have also scaled back their deal flow in August, though not as dramatically. The value of all deals signed in the country so far this month is $6.6 billion, down from around $9 billion in each of June and July.

  The sudden evaporation of deal flow has certainly gotten the investing community’s attention, but at the end of the day, China is simply too large of a market for PE firms to ignore. So few expect it to last long.

  Jeffrey Lee, a partner at China-focused venture capital firm NLVC headquartered in Beijing, said robotics and manufacturing automation has been an increasingly hot sector. While more caution and strategy shifts are warranted, exiting China entirely would be out of the question, he said.

  “The hard reality is that you can’t find a replacement for the sheer size of the economy, the next phase of its growth and — despite all of the criticism toward the government — the level of institutional development, whether it’s in roads or bridges, or whether it’s in the banking system,” Lee said. “It just doesn’t exist anywhere else in the world.”

  VC interest in consumer-focused businesses that are bearing the brunt of Beijing’s crackdown now is also unlikely to shrivel entirely.

  “Ultimately there are a lot of consumers in China, and a lot of rising middle-class consumers who are willing to spend,” said Joshua Chao, senior analyst at PitchBook. “There’s a strong reason to say that consumer businesses are still gonna do pretty well in China.”

  But the lessons investors have learned about the unique political risks that arise from investing in China will likely linger on. And from here on out, while most expect Chinese firms will continue to go public abroad, Hong Kong will likely replace New York as the preferred venue. That means lower valuations, especially for giant loss-making tech firms with stellar top-line growth.

  That could pull down equivalent private valuations, and there could be a further impact if companies are ultimately steered away from going public via New York’s deep capital markets, toward Shanghai, Shenzhen or Hong Kong.

  “I think there will still be a resumption of overseas IPOs, but that will probably mean, most likely Hong Kong, and not New York,” said Lee.

  Hong Kong’s institutional and retail investors are less keen to back loss-making consumer companies with big long-term ambitions, he said.

  “The best thing about the New York markets was that you could take a company that is generating loss but with great top-line growth and build a narrative that created a very successful public company. That is, with few exceptions, not the case in Hong Kong.”

  This means valuations might take time to recover.

  Tyler Durden
  Mon, 08/30/2021 – 19:20

• The FDA's Credibility Problem
  The FDA’s Credibility Problem

  Op-Ed authored by former Assistant FDA Commissioner Emily Miller via Emily Posts (emphasis ours),

  I asked here in “Emily’s Post” and on social media this week if anyone’s mind had changed about getting vaccinated after the FDA approved the Pfizer vaccine. Not one person replied “yes.”

  

  A year ago, I would have tried to convince people that the FDA was the gold standard for COVID pharmaceuticals.

  Now, I see that the agency needs to fail in order for it to be forced to make radical changes so that the public can trust that the label “approved by the FDA” means its safe.

  Compounding the problem is that the FDA’s credibility gap has created a vacuum in which conspiracy theories and misinformation grow quickly. The result is many people don’t believe that the vaccine was actually approved. They don’t trust that it is safe to be vaccinated. They don’t even know who runs the FDA.

  Had the FDA made the vaccines authorization and later approval process easy to understand by the public, this mess of vaccine distrust would not have happened. But the FDA refuses to work in public, deliver information in terms we all understand or even show their faces.

  And all this could have been avoided if the FDA press office didn’t operate like the Cold War Kremlin. I tried to turn that ship around last year and was thrown overboard for the effort.

  

  My FDA Assignment

  I was hired at the FDA during the pandemic because the Commissioner, Dr. Stephen Hahn, needed someone skilled at handling the press in a crisis at the highest levels of government.

  I was a spokesman for Capitol Hill leadership during 9/11 and a press secretary at the State Department during the wars in Iraq and Afghanistan.

  The strategic communications needed for COVID was no different than the wars. The FDA needed to get as much information as allowed out to the public as quickly as possible and be accessible to reporters 24/7.

  

  Hahn asked the White House to change the Assistant Commissioner for Media Affairs position from a civil servant slot into a presidential appointment so that he could hire outside the government. This is a very rare and difficult move to make, so the White House going to all that effort demonstrated how important communications from the FDA was to Operation Warp Speed. 

  The commissioner told me when we first talked in early June 2020 that he needed to get the public to trust in the COVID vaccines so they would take them after the emergency use authorizations, which were expected in the fall.

  Hahn said that the staff of career civil servants had no experience with the kind of media relations and strategic communications that was necessary for the COVID pandemic.

  I’d worked at the State Department and had high level classified security clearance. So I knew how to share with reporters the information that was for the public and hold back what I knew was classified for security.

  The State press office talked to reporters on the phone all day, every day. There were daily briefings. It was our job to give the media all the information that the public needed.

  In contrast, my “media relations” department at the FDA was staffed with government employees who refused to have much of any relationships with the media.

  The FDA and the media

  Even though he and the chief of staff (Keagan Lenihan) warned me, I was surprised how the FDA was institutionalized not to share information with the public.

  My staff would never talk to reporters on the phone. They emailed back and forth and then would only write a sentence or two of information that had been cleaned by every department in the agency, including the lawyers. I told my staff to stop copying me on emails with reporters and just pick up the phone or tell the reporter to call me. They wouldn’t do it.

  As my former colleague David Gortler wrote in “Forbes” in an opinion piece called “How the FDA’s Lack of Transparency Undermines Public Trust”:

  A huge part of the lack of transparency at the FDA is its press office, (including the fact that it feels like it needs one) and specifically, the press officers the FDA employs, and the sterilized, canned responses it gives to legitimate scientific inquests. 

  Dr. Hahn told me one of his top priorities was to get press releases to stop being pages of tedious scientific terms and make them easy to understand. Even the “beat reporters” at the FDA told me that they didn’t understand some of the press releases As a former reporter myself, I knew that the press skimmed through email story pitches to decide what made the news.

  I implemented a new system in which anything that was going to be seen by the public (including the media) had to be written in layman’s terms and easy to understand. I banned acronyms. I got a couple good press releases through the massive system before I was kicked to the curb.

  ---

  If I asked you to tell me what FDA Acting Commissioner Janet Woodcock looks like, you’d likely draw a blank. That’s because she is never on TV.

  This was a huge frustration of mine when I was at the FDA because, as I told the staff repeatedly, news is visual. We needed press conference- on camera- to get broad TV coverage to reach most Americans. They told me that the FDA just doesn’t do on-camera press conferences. They do conference calls with reporters by phone.

  The FDA stuck to their faceless communications tactic and hid Woodstock behind a phone (see her below.) They even put this phone call on Youtube. It has gotten 18,000 views. I’m sure that is reporters forced to listen to it for answers, but not a single unvaccinated person weighing a decision.

  LIVE NOW: The media call on the first COVID-19 vaccine approval is starting! Stream it here: https://t.co/ZsUebdzRUD

  — U.S. FDA (@US_FDA) August 23, 2021

  I haven’t seen any TV networks use the phone call video of the vaccine approval. More people on YouTube watched a grown man put together a Transformer toy than the FDA commissioner explaining the vaccine.

  All the media coverage visuals of the FDA approval came from Pres. Biden’s press conference. The nation was shown a stuttering, blank eyed president reading a teleprompter that said that the FDA was the “gold standard.” I can’t imagine anyone found him reassuring enough to get a vaccine.

  The FDA is also still phoning it in from home. When I started at the FDA in August 2020, I was shocked that none of my 20 plus person staff came to the office. The coronavirus treatments, tests and vaccines were the biggest things to ever go through the FDA, but there was no standard “war room” to strategize and determine tactics.

  I told my “advisor” Michael that I wanted the staff to come back to work. He said there was no chance. Even worse, Michael – who was “acting” in my role when I was hired and took it back when I left – said he had not left his own apartment in six months. All the White House appointees worked in the office, so this wasn’t a health issue.

  The FDA staff worked 8 hours a day from home and got overtime or paid leave for anything more. In any other job, I would say this is normal, but this is the FDA in a pandemic. I expected more.

  The FDA campus in Silver Spring, MD looks to me like a college. But it was eerily empty whenever I went there. The FDA has to show up and work together to be a functional agency in a crisis. They can’t keep hiding behind their advanced degrees and big titles.

  The Gold Standard Vaccine Strategy

  Hahn and his senior advisors planned that the public would agree to get vaccinated as long as there was no evidence of political interference from the White House. Their belief is that people will get vaccinated after the authorization solely based on the credibility of the FDA.

  The problem with the Hahn/FDA “Deep State” plan to get people vaccinated based on their own credibility is they had no self awareness. They lived in a bubble of their own egos. Over and over, Hahn and the top officials said that the FDA label was a “gold standard.”

  Biden is still using this useless “gold standard” line now.

  Click here to read the rest of the report.

  Tyler Durden
  Mon, 08/30/2021 – 19:00

• The Countries Pledging To Accept Afghans
  The Countries Pledging To Accept Afghans

  In a Joint Statement published by the U.S. Department of State, almost one hundred governments pledged their support in facilitating the free travel of Afghans that have worked with them or that are considered to be at risk.

  According to the statement, the nations “have received assurances from the Taliban that all foreign nationals and any Afghan citizen with travel authorization from our countries will be allowed to proceed in a safe and orderly manner to points of departure and travel outside the country.”

  As Statista’s Martin Armstrong details, notably absent from the list are China and Russia who have said they will work together in assisting the Taliban with the rebuilding of the country.

  

  You will find more infographics at Statista

  Whether in practice these people will actually be able to leave Afghanistan is still in doubt.

  As reported by the New York Times, Michael P. Mulroy, the former United States Deputy Assistant Secretary of Defense for the Middle East said:

  “Most of the guys that we’re tracking now are terrified to even try to go through Taliban checkpoints” adding:

  “So when we’re not there, when the entire focus of the world isn’t on the Taliban, I have zero inclination that they will do anything but probably prosecute, and in many cases execute, people who worked really closely with the U.S.”

  Tyler Durden
  Mon, 08/30/2021 – 18:40

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