Today’s News 4th September 2016

With Obama Humiliated, Leaked G-20 Draft Reveals More Fiscal, Monetary Stimulus Coming
With the September G-20 meeting set to begin any moment in Hangzhou, China, a periodic, toothless event which is noting more than an opportunity for world leaders to take photos such as this one (they picked the happiest photo of the batch)…

… the draft communique has already been leaked, in other words the determination of the summit has been made before it even took place.

Of course, the big news of this weekend’s G-20 event was neither the summit, nor the communique, but the unprecedented and prearranged snub by China targeting president Obama, who after an unexpected show of solidarity on Saturday over the global effort to address climate change, was humiliated by China when Obama arrived at Hangzhou Xiaoshan airport, when as reported earlier, first the receiving China delegation made sure there was no staircase for Obama to exit the plane and descend on the red carpet; the president of the world’s most powerful nation was thus forced to use an emergency exit for his final arrival in China as commander in chief.

Then, around the time Obama was exiting through the emergency staircase, a Chinese official attempted to block national security adviser Susan Rice and Deputy National Security Adviser Ben Rhodes after they lifted a blue rope holding back press and walked to the other side of it, closer to Obama. A member of the Chinese delegation began shouting at White House staff, demanding the pool leave the arrival scene. A White House official said Obama was our president and Air Force One was our plane and that the press was not going to move from the designated area. The Chinese official angrily responded “This is our country. This is our airport.”

The scandals continued later, with members of the Chinese and US delegations coming close to throwing punches at each other: as we previously reported, two Chinese officials – one working to assist the American delegation – had to be physically separated after trying to hit each other outside an event.

As the WSJ adds, “the Chinese barred Mr. Obama from including his traveling press contingent in his motorcade. The hosts also have refused a White House request for a joint press conference with Mr. Xi, and they plan to block Mr. Obama’s solo press briefing from airing live on Chinese television.”

In short, the fate of G-20 meeting was fixed: no matter what was decided, it would forever be remember as the event where China snubbed the US president in an unprecedented fashion one final time.

Incidentally, for those wondering why the meeting took place in Hangzho, a city which Chinese authorities literally had to empty out, instead of Beijing, the answer comes from the Twitter account of Beijing Air:

Which is ironic, because as the WSJ also reported earlier, “President Obama and his Chinese counterpart Xi Jinping stood with U.N. Secretary General Ban Ki-moon to announce the U.S. and China’s formal adoption of the international climate change agreement reached in Paris in December 2015. They also detailed a road map to achieving emissions reductions in commercial aircraft and for phasing out hydrofluorocarbons.” Which is completely meaningless, as none of the provisions of the Paris Treaty are enforceable, and Beijing has zero intentions of actually following through with the toothless treaty.

In any case, thanks to Bloomberg, according to the leaked draft G-20 communique, global leaders “should make full use of a range of policy options, including fiscal as well as monetary measures, to revive economic growth that still falls short of desired levels.”

In other words, even more global debt, even more liquidity injections by central banks, even higher asset prices, even more social discontent, nationalistic passions and populism.

Among the other G-20 (pre)decisions in the communique draft seen by Bloomberg:
- Financial market volatility poses downside risks to growth: draft communique
- Fiscal strategies equally important as monetary ones: draft communique
- Excess volatility, disorderly moves in foreign exchange markets hurt stability: draft
- G-20 recognizes excess steel capacity as global issue: draft
- Subsidies can contribute to global excess capacity: draft
- UK vote to leave EU adds to global economic uncertainty: draft
- Terrorism a serious challenge to international security: draft
And so on, and so forth, as yet another meeting of the world’s “best and brightest” leaders leads to absolutely no new ideas how to fix a problem that was caused by debt than just creating even more debt, meaning that the red line shown below is about to truly take off.

We know how it all ends; the only thing we are curious about is if the Chinese will force an already humiliated Obama to fly commercial in his final return to the US… coach class.
"Half The Forms Of Life On Earth Will Be Gone By 2050" Biologist Warns Of "Climate Instability"

Humanity should start saving nature and switch to 80 percent renewables by 2030, otherwise the Earth will keep losing species, and within 33 years around 800,000 forms of life will be gone, conservation biologist Reese Halter told RT’s News with Ed.

Humans have changed the Earth so much that some scientists think we have entered a new geological age.

According to a report in the Science Magazine, the Earth is now in the anthropocene epoch. Millions of years from now our impact on Earth will be found in rocks just like we see fossils of plants and animals which lived years ago – except this time scientists of the future will find radioactive elements from nuclear bombs and fossilized plastic.

RT: Tell us about this new age.

Reese Halter: Yes. There are three things that come to mind.

First of all, imagine you’re back on the football field. Each year in America – America alone – we throw away the equivalent of one football field, a 100 miles deep. That is the first thing.

The second thing, we’ve entered the age of climate instability. That means from burning subsidized climate altering fossil fuels our food security is in jeopardy.

The third thing that is striking is we’re losing species a thousand times faster than in the last 65 million years. At this rate within 33 years, by midcentury – that means 800,000 forms of life, or half of everything we know will be gone. The only way we can reverse this is to two things: save nature now, our life support system, and we do this by switching to 80 per cent renewables by 2030. It is a WWIII mentality. In America we have the technology; we have the blueprint. We lack the political will just right now. But in the next short while we will, because it is a matter of survival.

RT: We’ve just gone through the hottest month on record. There is plenty of data out there to suggest that we truly are entering something our world has never seen in our lifetime. To brand it as a new geological age, what impact is that going to have?

RH: It’s got the impact that humans are here. As I said earlier, we’re talking a 160 percent more than mother Earth can sustain 7.4 billion people. The way to do it is to pull it back to 90 percent. If we were a big bathtub the ring will read: toxicity, toxicity, toxicity. We’ve got to peal that back, because what we do to the Earth, we do to ourselves.

* * *

Truly a greater threat than ISIS, or debt loads, or Zika.

On the bright side, if warmonger Hillary is elected, many of the world's species will no longer exist anyway.
The Dumbed-Down New York Times

A New York Times columnist writes Americans are so “dumbed-down” that they don’t know that Russia “invaded” Ukraine two years ago, but that “invasion” was mostly in the minds of Times editors and other propagandists, says Robert Parry.

Submitted by Robert Parry via Consortium News,

In a column mocking the political ignorance of the “dumbed-down” American people and lamenting the death of “objective fact,” New York Times columnist Timothy Egan shows why so many Americans have lost faith in the supposedly just-the-facts-ma’am mainstream media.

Egan states as flat fact, “If more than 16 percent of Americans could locate Ukraine on a map, it would have been a Really Big Deal when Trump said that Russia was not going to invade it — two years after they had, in fact, invaded it.”

New York Times building in New York City. (Photo from Wikipedia)

But it is not a “fact” that Russia “invaded” Ukraine – and it’s especially not the case if you also don’t state as flat fact that the United States has invaded Syria, Libya and many other countries where the U.S. government has launched bombing raids or dispatched “special forces.” Yet, the Times doesn’t describe those military operations as “invasions.”

Nor does the newspaper of record condemn the U.S. government for violating international law, although in every instance in which U.S. forces cross into another country’s sovereign territory without permission from that government or the United Nations Security Council, that is technically an act of illegal aggression.

In other words, the Times applies a conscious double standard when reporting on the actions of the United States or one of its allies (note how Turkey’s recent invasion of Syria was just an “intervention”) as compared to how the Times deals with actions by U.S. adversaries, such as Russia.

Biased on Ukraine

The Times’ reporting on Ukraine has been particularly dishonest and hypocritical. The Times ignores the substantial evidence that the U.S. government encouraged and supported a violent coup that overthrew elected President Viktor Yanukovych on Feb. 22, 2014, including a pre-coup intercepted phone call between Assistant Secretary of State Victoria Nuland and U.S. Ambassador to Ukraine Geoffrey Pyatt discussing who should lead the new government and how to “midwife this thing.”

U.S. Secretary of State John Kerry, flanked by Assistant Secretary of State for European and Eurasian Affairs Victoria “Toria” Nuland, addresses Russian President Vladimir Putin in a meeting room at the Kremlin in Moscow, Russia, at the outset of a bilateral meeting on July 14, 2016. [State Department Photo]

The Times also played down the key role of neo-Nazis and extreme nationalists in killing police before the coup, seizing government building during the coup, and then spearheading the slaughter of ethnic Russian Ukrainians after the coup. If you wanted to detect the role of these SS-wannabes from the Times’ coverage, you’d have to scour the last few paragraphs of a few stories that dealt with other aspects of the Ukraine crisis.

While leaving out the context, the Times has repeatedly claimed that Russia “invaded” Crimea, although curiously without showing any photographs of an amphibious landing on Crimea’s coast or Russian tanks crashing across Ukraine’s border en route to Crimea or troops parachuting from the sky to seize strategic Crimean targets.

The reason such evidence of an “invasion” was lacking is that Russian troops were already stationed in Crimea as part of a basing agreement for the port of Sevastopol. So, it was a very curious “invasion” indeed, since the Russian troops were on scene before the “invasion” and their involvement after the coup was peaceful in protecting the Crimean population from the depredations of the new regime’s neo-Nazis. The presence of a small number of Russian troops also allowed the Crimeans to vote on whether to secede from Ukraine and rejoin Russia, which they did with a 96 percent majority.

Nazi symbols on helmets worn by members of Ukraine’s Azov battalion. (As filmed by a Norwegian film crew and shown on German TV)

In the eastern provinces, which represented Yanukovych’s political base and where many Ukrainians opposed the coup, you can fault, if you wish, the Russian decision to provide some military equipment and possibly some special forces so ethnic Russian and other anti-coup Ukrainians could defend themselves from the assaults by the neo-Nazi Azov brigade and from the tanks and artillery of the coup-controlled Ukrainian army.

But an honest newspaper and honest columnists would insist on including this context. They also would resist pejorative phrases such as “invasion” and “aggression” – unless, of course, they applied the same terminology objectively to actions by the U.S. government and its “allies.”

That sort of nuance and balance is not what you get from The New York Times and its “group thinking” writers, people like Timothy Egan. When it comes to reporting on Russia, it’s Cold War-style propaganda, day in and day out.

And this has not been a one-off problem. The unrelenting bias of the Times and, indeed, the rest of the mainstream U.S. news media on the Ukraine crisis represents a lack of professionalism that was also apparent in the pro-war coverage of the Iraq crisis in 2002-03 and other catastrophic U.S. foreign policy decisions.

A growing public recognition of that mainstream bias explains why so much of the American population has tuned out supposedly “objective” news (because it is anything but objective).

Indeed, those Americans who are more sophisticated about Russia and Ukraine than Timothy Egan know that they’re not getting the straight story from the Times and other MSM outlets. Those not-dumbed-down Americans can spot U.S. government propaganda when they see it.
"We Just Can't Let The Bad Guys Go" – This Rural Indiana County Sends More People To Jail Than Any Other

Welcome to Dearborn County, Indiana – which sends more people to prison per capita than any other county in the United States.

(click image for interactive version)

As The New York Times reports, Dearborn County represents the new boom in American prisons: mostly white, rural and politically conservative.

A bipartisan campaign to reduce mass incarceration has led to enormous declines in new inmates from big cities, cutting America’s prison population for the first time since the 1970s. From 2006 to 2014, annual prison admissions dropped 36 percent in Indianapolis; 37 percent in Brooklyn; 69 percent in Los Angeles County; and 93 percent in San Francisco.

But large parts of rural and suburban America — overwhelmed by the heroin epidemic and concerned about the safety of diverting people from prison — have gone the opposite direction. Prison admissions in counties with fewer than 100,000 people have risen even as crime has fallen, according to a New York Times analysis, which offers a newly detailed look at the geography of American incarceration.

Just a decade ago, people in rural, suburban and urban areas were all about equally likely to go to prison. But now people in small counties are about 50 percent more likely to go to prison than people in populous counties.

The stark disparities in how counties punish crime show the limits of recent state and federal changes to reduce the number of inmates.

Far from Washington and state capitals, county prosecutors and judges continue to wield great power over who goes to prison and for how long. And many of them have no interest in reducing the prison population.

“I am proud of the fact that we send more people to jail than other counties,” Aaron Negangard, the elected prosecutor in Dearborn County, said last year. “That’s how we keep it safe here.”

He added in an interview: “My constituents are the people who decide whether I keep doing my job. The governor can’t make me. The legislature can’t make me.”

Rural, mostly white and politically conservative counties have continued to send more drug offenders to prison, reflecting the changing geography of addiction. While crack cocaine addiction was centered in cities, opioid and meth addiction are ravaging small communities like those in Dearborn County, where 97 percent of the population is white.

By 2014, Dearborn County sentenced more people to prison than San Francisco or Westchester County, N.Y., which each have at least 13 times as many people.

“It’s government run amok,” said Douglas A. Garner, a local criminal defense attorney.

Mr. Negangard said he wished the county could find more money for drug treatment. But he said about half of all addicts in prison had a criminal mind-set and would keep committing crimes whether they got clean or not.

“We can’t just let the bad guys go,” he said.

Which is ironic, since while Dearborn and other rural conservative counties are sending record numbers to prison, President Obama is on track to commute the most sentences by a president since 1929. But unlike his actions on immigration and healthcare, it's not whether he has the authority to reduce prison stays that's drawing criticism — it’s the type of inmates he's helping. As The Hill reports…

We’re very concerned,” said Steve Cook, president of the National Association of Assistant U.S. Attorneys. “What is happening is he’s undoing a lot of the work we’ve spent the last two-and-a-half to three decades doing.”

So far, Obama has commuted 673 sentences, with 325 coming in August alone. P.S. Ruckman Jr., a political scientist tracking the data, said Obama is likely to eclipse Calvin Coolidge, who commuted 773 sentences. Woodrow Wilson holds the record, with 1,366 commutations.

“There’s more coming before he leaves office,” Ruckman said. “It’s just a matter of how many.”

Only non-violent, low-level offenders, who have served at least 10 years of their federal sentence and demonstrated good behavior qualify for Obama’s clemency initiative. Inmates cannot have a significant criminal history or a history of violence prior to or during their imprisonment.

Cook argues those requirements aren’t being met.

In the last few rounds of commutations, Cook said one inmate was the leader of a drug ring that trafficked in over 10 tons of cocaine, six had previously been convicted of being drug kingpins and another had been convicted of possessing a sawed off shot gun.

Cook was referring to Ralph Casas, John Franklin Banks, Corey Lyndell Blount, Rudy Martinez, Danielle Bernard Metz, Dewayne L. Comer, Dawan Croskery and Alfonso Allen.

“The trend seems to be they get worse and worse,” Cook said. “To say we’re concerned would be an understatement.”

Responding to Cook's claims, an official with the White House said the President does not condone violence of any kind, but believes individuals who have truly paid their debt to society and demonstrated a commitment to not repeating past mistakes should be given a chance to earn their freedom.

In a statement to the News Virginian in August, House Judiciary Committee Chairman Rep. Bob Goodlatte (R-Va.) said the president’s actions were “not, as the Founders intended, an exercise of the power to provide for 'exceptions in favour of unfortunate guilt.'”

Instead, he said, Obama is using his power to commute sentences “to benefit an entire class of offenders who were duly convicted in a court of law — not to mention [his actions are] a blatant usurpation of the lawmaking authority of the legislative branch."
Hugh Hendry Recalls His "Great Monster P&L Trade" That "Murdered" His Counterparty

We’ve heard plenty of fund managers blame the macro environment and the lack of a definitive economic trend for the drought in returns over recent years, but in his latest blast, famed – or perhaps infamous – contrarian Hugh Hendry hold his hands up, admitting his shortcomings and his own losses.

“I fear that our community has overloaded on top of the trend a normative value judgment about how the world is being organized by monetary authorities,” Hendry told Hugh H in an exclusive interview published on Friday. “And the view is rather prejudicial: [our community] doesn’t like it. And I posted a letter saying, we’re dying on the year and we do not blame monetary policy.”

Hendry adds that there have been some outstanding trends in the last few years which he and other major players have missed out on, such as the CNH float in China, which went from 2009 to the first quarter of 2014. “An immense trade, which no-one participated in” Hendry said. He’s also reinvigorated by the “intellectual car crash” that was the Brexit vote, which allowed a reassignment of probabilities for questioning the euro, in what Hendry is calling an immensely interesting time for macro.

Speaking at length in an another discussion with Real Vision TV and Raoul Pal, Hendry said Brexit really offers the chance to escape the confined trajectory contributing to the perceived malaise in the sector over the past four years. The probability of the euro state reneging with 28 members was one thing, with strong forces holding them together, he said, but now there are 27 it’s quite another.

One to thing to note: since Hendry never spends more than four weeks in the same place, (he prefers to test his engagement with the feel of different time zones) the guys at RealVision can be commended for at least getting him to sit still for just over an hour for this interview.

There is more in the full Real Vision video, including his current positions on Mexico bonds, although some of the highlights are captured in the clip above. But it was the “intellectual travesty of Brexit” and an inability to see it coming that really got Hendry animated. He’s focused on the upcoming Italian constitutional referendum and he’s also quite taken with the volatile political picture in Paris, in particular, the likelihood of the president not being endorsed by his party to run again for the first time and France seen as the next candidate for the exit. Hendry explains how he’s going to make money from the discord, investing in the spread between German over Italian BTPs.

“We know that back in 2011, where the market began to associate a non-tail-like probability to the system exploding, that spread blew out to 600 basis points. And then the effectiveness of Draghi brought that into 100 basis points and Draghi has continued to deliver.

“We’ve crossed the rubicon with quantitative ease. And we’ve increased it both in scale and in time. And stubbornly, we haven’t passed the 100 mark, that there seems to be a fundamental qualitative level where participants go, it’s too rich for me at that level.

“So it feels– and we’ll see. Time will test this. It feels a bounded floor. And I would say that each 10% change in probability– like adding a 10% probability of a member country leaving and emulating the UK– I think adds 100 basis points to that spread.

“So if we were to travel over the next 12 months, and we saw – and I think – actually, I think the most likely candidate for a country leaving would be France. France is like the UK. It’s big enough to support itself. There’s just great antipathy for the European project. The economy’s really, really subdued. They don’t like the immigration factor. But of course, as you say, Italy seems more obvious. It doesn’t matter.

Reminiscing about the better days, Hendry pointed to the passage of time as pivotal in the macro business. This was key in the success of his famous trade during the GFC – buying swaptions on the difference between two-year and 10-year US Treasury securities in April/May 2007 – Hendry said he was way out of the money before before generating 50% in October 2008.

“Now again, with the mastery and the art of macro, it is so complex that it’s not just necessary that you’re correct; it is the consequences of being correct. Now, we had a position whereby the other side – the investment banks – they were desperate. They were dying as this thing suddenly came to my strike levels. Blew through my strike levels, started to create this monster of P&L, which was murdered by a monster loss on the other side.

“And so daily we had pleadings. Please, please, please can we remove. So not only had we conceived of a great monster P&L trade the catalyst was adversity. Liquidity came to us, allowing us to monetize and close. That’s macro. That’s macro.

“… I’m hesitating because who am I to pontificate on the mastery and the skill set of other macro managers? But I feel beholden to say that there is a degree of collective responsibility for an element of the drought in returns. Because there had been some immense macro trends over the last four years.”

Throughout the discussion, Hendry laments the absence of external volatility, as he continues to refer to the passage of time as crucial to the macro journey. Hendry admitted that with external volatility on the floor, he was unable to achieve the double digit returns he set out to achieve in the earlier part of this decade, when he was trying too hard to please institutional investors. An interesting side note: Hendry and Pal clash over the use of stops, which Hendry said he has a personal problem with.

“You come back to life and macro as a journey, not a destination. And your journey is being interrupted. You’re being stopped, stopped, stopped. So you keep hitting destination. And believe me, those destinations suck. … You’ve got to let the thing move. Inhale, exhale…There are months where if you’re fully loaded, you could have a 10% monthly drawdown. And it’s no shame on you. It’s saying you’re engaged.”

The last time Hendry spoke with Real Vision TV he warned against a China devaluation, invoking a “Mad Max world“, saying that “tomorrow we wake up, I mean, I would jump out the hotel window if this was the scenario, but we wake up and China has devalued 20%. The world is over. The world is over.”

According to Hendry, all the China bears like Kyle Bass and Mark Hart have been timed out by now (or so he would like to believe) reminding us in the interview that he doesn’t care to look back or reflect on the past these days. Without outsized returns from his side – according to the most recent HSBC hedge fund report, Eclectica was down 6.6% YTD, however, Hendry is still pretty content with the current picture as it’s all part of the journey and not where we will end up.

“With macro, today is not the destination. Today is part of the journey, OK? And to write us off by the supposition that this is where we end up, I think is to miss some immense opportunities…. We’re engaging with the brightest minds. And if the brightest minds are being stuck in neutral for four years– remember it’s stuck in neutral. It’s not losing money; it’s just not making money. It’s not that bad, if you will.”

We hope Hendry, one of the best minds of his generation manages to get out of his dubious funk soon; alas as we have speculated, the reason why he and so many of his peers find themselves at such a dramatic existential crossroad, with increasingly louder speculation that the hedge fund industry is now doomed and will soon be replaced by algos, ETFs, and other cheaper, passive products which will also implode the moment central planning fails, is precisely due to the central bankers they think so highly of. After all, the main skill of Hendry et al, macro investors or otherwise, is to find arbitrage opportunities in global markets. The problem, however, is when there is no longer a market, just one global policy vehicle that must be sustain at if not all costs, then certainly some $200 billion in central bank liquidity injections every month.

Readers can watch the highlights from Hendry’s RealVision interview below, post-midlife crisis haircut and all.

To view the full interview, subscribe to Real Vision Television, which offers Zero Hedge readers a 7-day free trial.
Atlas Is Shrugging & I'm Still Shaking My Head

Ayn Rand’s statement below is so contextually true as we live in an era where people are allowed to do immoral things and escape with little or minimal consequence simply because it’s legal or they have enough money to legally stonewall or escape justice.

"You may know society is doomed when you see that in order to produce, you need to obtain permission from men who produce nothing; when you see that money is flowing to those who deal, not in goods, but in favors; when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you; [and] when you see corruption being rewarded and honesty becoming a self-sacrifice."

-Ayn Rand, "Atlas Shrugged", 1957

Ideally, Hillbent.com's J. Clinton Hill exclaims, our leaders are exalted to positions of authority for the purpose of protecting and serving our society, yet some commit crimes against us.

As a country (Americans), I know that we can and should demand/expect better. If not, then we will continue to splinter. The current GOP campaign is but a prelude of things to come and the Democrats are merely one more election cycle from implosion as well. If America wants its citizens to give their unconditional allegiance to her, then she must be willing to extend hers as well to all of her citizens, instead of a just privileged 1% or 5% or select ethnic or gender group, and etc.

The supreme irony is that both extreme sides of the left and right, of which I am neither, recognize all of the above in some way or another, and yet they stand divided, which leaves me but little option other than shaking my head as the puppet masters continue to deflect and distract.
As Chicago Violence Soars, Officers Told To Stay Home In Protest Of "Continued Disrespect Of Police"

Earlier this week we wrote about how August was the deadliest month recorded in Chicago in 20 years (see "Chicago Records "Most Violent Month In 20 Years""). In fact, YTD Chicago has recorded more homicides than New York City and Los Angeles, combined.

Now, as we head into the long Labor Day weekend, the Chicago Fraternal Order of Police is urging its rank and file members to deny overtime requests this weekend "to protest the continued disrespect of Chicago Police Officers and the killings of Law Enforcement Officers across our Country."

Chicago police Superintendent Eddie Johnson sought to ease concerns of Chicago citizens by assuring the Chicago Tribune that staffing levels for the Labor Day weekend would be adequate. He also seemed to take a shot at the FOP call for protest by saying that the "best way for officers to support one another is to be out there for each other."

"I would never get upset with the FOP for encouraging officers to spend more time with their families because they should spend time with their families," he said. "But having said that, I'll tell you this, the best way for officers to support one another is to be out there for each other."

With crime levels seemingly spiraling out of control in the Windy City, as evidenced by homicides spiking 48% YoY so far through August, we fear the dire consequences that even the mere suggestion of police under staffing could have on violence in the city.

Data per HeyJackass!
Tarmac Altercation Erupts After Obama Lands In China: Official Shouts "This Is Our Country, Our Airport"

Upon arrival on Saturday in China as part of his last visit to Asia as US Commander in Chief for the periodic photo-op that is the G-20 meeting, something unexpected happened: a very undiplomatic greeting when an unusual tarmac altercation involving Chinese and U.S. officials, including national security adviser Susan Rice, devolved into a shouting match by a member of the Chinese delegation.

It all started with the actual landing: as AP reports, the first sign of trouble is that there was no staircase for Obama to exit the plane and descend on the red carpet. So, as the photo below shows, Obama used an alternative exit. Needless to say, a diplomatic fuck up such as this one, was not accidental – Beijing was sending a loud and clear message.

Barack Obama arrives on Air Force One at Hangzhou Xiaoshan International Airport
in Hangzhou in eastern China’s Zhejiang province on Sept. 3 for the G20 summit

Then, around the time Obama was exiting through the emergency staircase, a Chinese official began shouting at White House staff after the traveling American press contingent was brought onto the tarmac. The Chinese official also attempted to block Rice and Deputy National Security Adviser Ben Rhodes after they lifted a blue rope holding back press and walked to the other side of it, closer to Obama.

As Reuters adds, a Chinese official attempted to prevent national security adviser Susan Rice from walking to the motorcade as she crossed a media rope line, speaking angrily to her before a Secret Service agent stepped between the two. Rice responded but her comments were inaudible to reporters standing underneath the wing of Air Force One. It was unclear if the official, whose name was not immediately clear, knew that Rice was a senior official and not a reporter.

Then, according to Politico, the press pool was brought under a wing of Air Force One where the pool was supposed to stay behind a blue rope. However, a member of the Chinese delegation began shouting at White House staff, demanding the pool leave the arrival scene. A White House official said Obama was our president and Air Force One was our plane and that the press was not going to move from the designated area. The Chinese official angrily responded “This is our country. This is our airport.”

A video of the incident was tweeted later by Reuters’ White House reporter Roberta Rampton:

Government official was not happy that reporters were under the wing of AF1. WH press aide would not back down. pic.twitter.com/C3JRVIe37K

— Roberta Rampton (@robertarampton) September 3, 2016

“They did things that weren’t anticipated,” Rice told reporters afterwards.

However, the disagreements between Chinese and American officials did not just stay on the tarmac. At Westlake Statehouse, where the summit was being held, a group of White House staff arriving before Obama was stopped at a security checkpoint. A heated argument between Chinese officials and White House staff, protocol officers and Secret Service, who were trying to enter the building separately from the press, broke out at the security gate.

According to the pool report, U.S. officials could be heard arguing in Chinese with Chinese officials over how many Americans could go through security at one time, how many White House officials were allowed to be in the building before Obama’s arrival, and which U.S. officials were on a security list.

“The president is arriving here in an hour,” a White House staffer was overheard saying in exasperation. A Chinese official assisting the U.S. officials became angered by how the guards were treating the White House staff as the disagreement escalated.

“You don’t push people. No one gave you the right to touch or push anyone around,” he yelled in Chinese at one of the Chinese security officials.

Another Chinese official trying to help White House staff stepped between the two men arguing, as the security official looked like he was going to throw a punch, according to the pool report. “Calm down, please. Calm down,” a White House official said.

“Stop, please,” said a foreign ministry official in Chinese. “There are reporters here.”

Another disagreement occurred when officials and press finally made it inside the building. Chinese officials told White House press officers that only 10 American journalists were allowed in. “That’s not right,” a White House press official said.

Two U.S. journalists were left outside and were not allowed to stand in the room, despite White House press officials insisting there was space. “There’s space. They are print reporters. They would just be just standing,” one White House press officer said. The two reporters were eventually granted access.

The unprecedented show of disrespect for a standing US president and his envoys took place after Obama once again criticized China over the ongoing territorial dispute in the South China Sea. As cited by Reuters Obama said that China needs to be a more responsible power as it gains global influence and avoid flexing its muscles in disputes with smaller countries over issues like the South China Sea, U.S. President Barack Obama told CNN in an interview to be aired on Sunday.

Obama, who meets with President Xi Jinping at a G20 summit next week in China, told CNN the United States supports the peaceful rise of China but that Beijing had to recognize that “with increasing power comes increasing responsibilities,” a quote taken by Obama’s speechwriter from the Spiderman movie.

Obama said Washington had urged Beijing to bind itself to international rules and norms to help build a strong international order. “Where we see them violating international rules and norms, as we have seen in some cases in the South China Sea or in some of their behavior when it comes to economic policy, we’ve been very firm,” Obama told CNN. “And we’ve indicated to them that there will be consequences.”

“If you sign a treaty that calls for international arbitration around maritime issues, the fact that you’re bigger than the Philippines or Vietnam or other countries … is not a reason for you to go around and flex your muscles,” Obama said. “You’ve got to abide by international law.”

So far China not only refuses to abide by international law, showing a clear disregard for US warnings about “consequences”, but with today’s latest diplomatic incident has telegraphed to the world that its respect for the US presidential institution has never been lower.
John Maynard Keynes' "General Theory" Eighty Years Later

Authored by Antonius Aquinas,

To the economic and political detriment of the Western world and those economies beyond which have adopted its precepts, 2016 marks the eightieth anniversary of the publication of one of, if not, the most influential economics books ever penned, John Maynard Keynes’ The General Theory of Employment, Interest and Money. Sadly, even to this day, despite its thorough refutation by lights such as Henry Hazlitt and other eminent scholars, The General Theory, which spawned “Keynesianism” and its later variants, remains supreme in academics, financial markets, and public policy.

Despite its outlandish theoretical flaws and nonsensical economic jargon and the catastrophic empirical evidence of its failure to prevent financial downturns or “stimulate” sustainable growth, Keynesianism remains the ruling paradigm of economic thought.

Why?

A number of trenchant reasons have been given for the General Theory’s continued dominance, however, one stands above all else: Keynesian economics provides the intellectual justification for economists, statisticians, technocrats, bureaucrats, and policy wonks in their exalted positions as “fine tuners” of economies the world over. Since markets are to Keynes and his disciples inherently unstable from erratic investment spending and aggregate demand, it is up to these theoreticians steeped in the knowledge of their master’s teachings to ameliorate any economic fluctuations.

The General Theory came on the scene at a propitious time during the height (or more accurately the depth) of the Great Depression, which in 1936, despite Roosevelt’s New Deal and other Western nation states’ initiatives, had not improved conditions. Keynesianism was actually a “middle way” between all out Soviet-style central planning and that of laissez-faire capitalism. Primarily through fiscal policy, the economy would be kept on an even keel under the astute management of Keynesian-trained economists. Naturally, this appealed to academics and intellectuals the world over who correctly envisioned positions of power and influence in expanded state apparatuses.

As history has shown, Keynesianism was to become more than a remedy for the Depression, but would be applicable after the crisis dissipated. The General Theory was based, in part, on the (false) notion that the capitalist system is inherently unstable and is, therefore, in need of state intervention. Keynes deliberately ignored the scholarship at the time, which demonstrated that the instability was not a “market failure,” but a monetary disorder caused by artificial credit expansion generated by the central banks, especially the Federal Reserve.

The enthusiasm for The General Theory came at first from younger economists while it was (rightly) dismissed by many of their elders as incomprehensible. Yet, its lack of clarity was appealing to the novices, since they would become the Creed’s interpreters.

Not all, however, were entirely overwhelmed by their mentor’s magnum opus as Paul Samuelson candidly admitted:

[The General Theory] is a badly written book: poorly organized. . . . It abounds in mares’ nests of confusions. . . . I think I am giving away no secrets when I solemnly aver – upon the basis of vivid personal recollection – that no one else in Cambridge, Massachusetts, really knew what it was all about for some twelve to eighteen months after publication.*

Despite such an assessment, Keynesianism was never seriously challenged by its adherents, it opened too many lucrative policy making doors to be refuted.

That Keynesianism continues to reign supreme, despite its theoretical and empirical bankruptcy, speaks volumes of the state of Western intellectual and academic life. Instead of the pursuit of truth and the refutation of error, Western intelligentsia is primarily concerned with securing privilege and power for itself. At one time such status was gained by honest inquiry into social questions and issues, now it is obtained in the justification of the expansion of state power. Very few turn down such enticements!

Societies are the product of ideas. Since the release of The General Theory, the Western world has been under the destructive sway of Keynesianism, which has resulted in stagnation, financial turmoil, and eventual collapse. Until Keynes and his nutty theories have been refuted, the economic malaise will continue.