Today’s News 5th March 2019

• New Zealand's "Bumbling Jihadi," Known For Inadvertently Tweeting His Location, Caught In Syria

  The 42-year old New Zealand native and globally designated terrorist Mark Taylor, who became known as the “bumbling” Islamic State recruit for the fact that he angered ISIS commanders for posting tweets with the location on, has been captured in Syria by US-backed Syrian Democratic Forces (SDF) and could be transferred back to New Zealand where he will likely face trial and prison time. 

  He’s long been on the US terror watch list after he “used social media, including appearing in a 2015 Isis propaganda video, to encourage terrorist attacks in Australia and New Zealand”, according to the US State Department. Taylor had entered Syria to join ISIS when the so-called “caliphate” was at the peak of its power and territory in 2014. 

  

  True to his media bestowed moniker of “bumbling jihadist” (and sometimes called “Kiwi Jihadi”), Taylor reportedly surrendered to SDF forces after fleeing ISIS in December because he was “in a pickle” with no money or resources to survive.

  He told Australia’s ABC, who spoke to him while in a SDF prison in northern Syria: “There was no food, no money, basic services were pretty much collapsed.” He described further, “I was in a pickle myself and had to make a final decision, which was to leave.”

  New Zealand prime minister Jacinda Ardern also confirmed on Monday that Taylor had been detained by SDF fighters, but it’s as yet unclear what the country’s next step will be. While in Syria Taylor had repeatedly called upon ISIS followers and sympathizers to conduct terror attacks in Australia and New Zealand, including knife attacks against police officers, as was the case in one well-known YouTube video he made. 

  But perhaps the most ironic element to Taylor’s time in Syria is that he was actually jailed three times for running afoul of Islamic State rules. “I had [become] more resentful towards the security of the Islamic State more than anything else. I was threatened with torture and jailed on suspicion of being a spy,” he said to the ABC journalists who interviewed him in his jail cell.

  Referencing his third stint in ISIS prison, he said, “The last time was quite ridiculous. I was accused of drinking and making alcohol and smoking hashish.”

  He was thrown in Islamic State prison another time after an October 2015 incident in which he gave away the location of ISIS positions on Twitter when he forgot to turn off the geotagging function. By his own admission he spent 50 days in jail for the blunder. 

  

  In 2015 Mark Taylor tweeted his location inside Syria multiple times. 

  New Zealander ISIS fighter accidentally tweets secret location http://t.co/F8YVF1tcTv

  — TIME (@TIME) January 2, 2015

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

  “The Twitter account got suspended, and on the ninth of January 2015 I was given a letter by one of the officials and told to have a meeting,” he said. “They took me into a room, took my weapon off me and anything else, like my mobile phone, which I never see again, and say ‘you’re under suspicion for 12 GPS locations around the Islamic State’.”

  After the incident came to light in international press he was mocked and the object of scorn even among fellow jihadis.

  But his one main regret? He told ABC: “To buy a slave, you’re looking at least $4000 American to buy an older woman, at least past 50-years-old.”

  Absurdly and sickeningly he still laments not being able to afford a “decent” slave while in ISIS territory. “And to buy a decent one, at least (USD) $10,000 or $20,000.” he said. 

  And apparently even his own ISIS wives could stand him, via the ABC report: 

  “I was married to one Syrian lady from Deir Ezzor. Her name is Umm Mohammed. She begged me to leave and go to Idlib, then onto Turkey,” he said.

  “One month after that I married another Syrian woman who was pro-Islamic State — much younger lady — but I divorced her. She didn’t want to stay in my house; she wanted to move to another area and be close to her friends, not her husband.

  “I had to explain to her on several occasions that she had to stay home and obey her husband.”

  Taylor, aptly called the “bumbling jihadist,” holds active New Zealand citizenship, making the issue of his return tricky and subject of a New Zealand investigation and debate. 

  Prime Minister Ardern said of the case that New Zealand “has an obligation not to make people stateless,” however she also added, “He would need to make his own way to a country where New Zealand has consular representation — something that, in his current situation, will be difficult to do.”

  So it’s unclear if he would be formally transferred as a US or SDF prisoner back to New Zealand anytime soon, or if as the prime minister suggests, he would have to “make his own way” back to New Zealand. In this case he would likely simply be detained indefinitely by US forces. 

  

• US Conservatives Pursue A "Ben Option" Of Global Ramification

  Authored by Alastair Crooke via The Strategic Culture Foundation,

  Are we ‘Rome’? The question has weighed heavily on the minds of American conservatives, libertarians and Catholics at their various conferences. Is America headed the way of the Roman empire? Bureaucratic decay, massive public debt, an overstretched military, a political system seemingly incapable of responding to challenges – “the late Roman empire suffered these maladies, and so, some fear, does contemporary America”, notes The American Conservative, a journal which has been pursuing this ‘line’ diligently, and with a growing constituency, over a number of years. (Note that this is not the constituency of Vice-President Pence who represents an Evangelical, fundamentalist, literal insistence on imminent Redemption, with its ‘Rapture’ politics).

  

  The American Conservative rather warns:

  “If libertarians on the Right worry about structural collapse – cultural and religious conservatives add a moral and spiritual dimension to the debate. Rising hedonism, waning religious observance, ongoing break-up of the family, and a general loss of cultural coherence — to traditionalists, these are signs of a possible Dark Age ahead”.

  And this is their narrative in response to these fears: Around the year 500 (CE), a generation after the Franks deposed the last Roman Emperor, a young Umbrian man (i.e. hailing from a rural province in Italy), was sent to Rome by his wealthy parents to complete his education. However, disgusted at ‘Rome’s decadence, he fled to the forest, to pray as a hermit.

  His name was Benedict. And he went on to found a dozen monastic communities, and wrote his famous ‘rules’ which are credited with having helped an earlier culture and its values survive in needy times. Professor Russell Hittinger summed up Benedict’s lesson to the Dark Ages like this: “How to live life as a whole. Not a life of worldly success, so much as one of human success”.

  And just how might a medieval monk be somehow relevant to our secular époque? Because, says the moral philosopher Alasdair MacIntyre, they show that it is possible to construct “new forms of community within which the moral life could be sustained” during a Dark Age – including perhaps, an age like our own.

  MacIntyre offers the “disquieting suggestion” that the tenor of today’s moral debate (its shrillness and its interminability) is the direct outcome of a catastrophe in our past: a catastrophe so great, that moral inquiry was very nearly obliterated from our culture and its vocabulary exorcised from our language. He refers to the European ‘Enlightenment’. What we possess today, he argues, are nothing more than fragments of an older tradition. And as a result, our moral discourse, which uses terms like good, and justice, and duty, has been robbed of the context that makes it intelligible.

  “For MacIntyre”, Rod Dreher, the author of The Benedict Option writes: “we too are living through a Fall of Rome-like catastrophe, one that is concealed by our liberty and prosperit”. Dreher continues, “In his influential 1981 book, After Virtue, MacIntyre argued that the Enlightenment project cut Western man off from his roots in tradition, but failed to produce a binding morality based on Reason alone. Plus, the Enlightenment extolled the autonomous individual. Consequently, we live in a culture of moral chaos and fragmentation in which many questions are simply impossible to settle. MacIntyre says that our contemporary world is a dark wood, and that finding our way back to the straight path will require establishing new forms of community”.

  “The “Benedict Option” thus refers to [those] in contemporary America who cease to identify the continuation of civility and moral community with the maintenance of American Empire, and who therefore are keen to construct local forms of community as loci of Christian resistance against what the Empire represents. Put less grandly, the Benedict Option — or ‘Ben Op’ — is an umbrella term for Christians [and American conservatives], who accept MacIntyre’s critique of modernity”.

  The Ben Op is no call to monasticism. It is envisaged, as it were, as a more practical way for this American constituency to manage being ‘in’, but not ‘of’, today’s modernity. And… where have we heard something like this before? Well – in Italian political philosopher, Julius Evola’s post-war, reflections of a radical traditionalist – Men Among the Ruins – in which he argues for a defence and a resistance against the disorder of our age. It was the writings of Evola, and others of a similar ilk, who sustained Russian intellectuals through their ‘dark ages’ of late communism and then, of full-blown neo-liberalism. Similar broad impulses helped impel the concept of Eurasianism (though its roots extend back to the 1920s in Russia).

  The latter reflects the contemporary trend, manifested most particularly by Russia, but which reaches well beyond Russia, towards the endorsement of pluralism (the main plank in contemporary ‘populism’); or in other words, the ‘diversity’ that precisely privileges one’s culture, narratives, religiosity, and ties of blood, land and language. This notion comports exactly with MacIntyre’s point that it is cultural tradition alone which provides sense to terms such as good, justice and telos. “In the absence of traditions, moral debate is out of joint and becomes a theatre of illusions in which simple indignation and mere protest occupy centre stage”.

  The idea here, rather, is of a grouping of ‘nations’ and ‘communities’, each reaching back to its primordial cultures and identities – i.e. America being ‘American’ in its own ‘American (or Russian, in its own) cultural way’ – and not permitting itself to be coerced into succumbing to the coercion of a diversity-shorn, cosmopolitan empire.

  Clearly this sits ill at ease with the mainstream Americannotion of a compliant, rules-based globalist ‘order’. It is a clear rejection too, of the idea that ‘melting pot’ cosmopolitanism can procreate any true identity, or any moral grounding. For, “without the notion of telos (directionality, and purposiveness to human life) serving as a means for moral triangulation, moral value judgments lost their factual character. And, of course, if values become ‘factless’, then no appeal to facts can ever settle disagreements over values”.

  Dreher is explicit about this radical opposition. He says of Ben Op, “you might even say that it’s a story about the progressive possibilities of tradition, and a return to roots – in defiance of a rootless age”.

  And just to be clear, US conservatives who think they have found an ‘easy’ ally in MacIntyre, “fail to attend to his understanding of the kind of politics necessary to sustain the virtues [any quality that is required for discharging one’s path in life]. 

  MacIntyre makes clear that his problem with most forms of contemporary conservatism is that conservatives mirror the fundamental characteristics of liberalism. The conservative commitment to a way of life structured by a free market results in an individualism, and in particular a moral psychology, that is as antithetical to the tradition of the virtues as is liberalism. Conservatives and liberals, moreover, both try to employ the power of the modern state to support their positions in a manner alien to MacIntyre’s understanding of the social practices necessary for the common good”.

  What is so interesting to an outsider, is how the Ben Op’s author, Dreher, situates it within the US political context:

  “Many of us on the Right who have been dismayed by the Trumpening (sic), and have been hard hit by the Kavanaugh debacle, have concluded that [nonetheless], we have no choice but to vote Republican this November – if only out of self-defense. (He refers to November 2018)

  “But let me quote two passages from The Benedict Option:

  “The cultural Left—which is to say, the American mainstream— has no intention of living in post-war peace. It is pressing forward with a harsh, relentless occupation, one that is aided by the cluelessness of Christians [i.e. those mirroring liberalism], who don’t understand what’s happening. Don’t be fooled: the upset presidential victory of Donald Trump has at best given us a bit more time to prepare for the inevitable (emphasis added).

  [Those] who believe that politics alone will be sufficient – are not going to be prepared for what’s going to come when the Republicans lose the White House and/or Congress, which is inevitable. Our politics have become so sulfurous that there will be a vicious backlash, and that backlash will fall primarily on social and religious conservatives. When the Democrats regain power, conservative Christians are going to be in very bad shape”.

  The Ben Op, in other words, is another important window into what Professor Mike Vlahos has described as the gathering, next chapter to America’s unresolved ‘civil war’:

  “America today fissuring into two visions of the nation’s future way of life: “Red” virtue imagines a continuity of family and community within a publicly affirmed national community. “Blue” virtue imagines personally chosen communities mediated through the individual’s relationship with the state. So, even though these two divided visions of America have been opposed for decades, and so far have controlled the urge to violence, there is in their bitter contest [of today] a sense of gathering movement toward an ultimate decision”.

  “Today, two righteous paths are gridlocked in opposition … Red and Blue already represent an irreparable religious schism, deeper in doctrinal terms even than the 16th-century Catholic-Protestant schism. The war here, is over which faction successfully captures the (social media) flag, as true inheritor of American virtue. Both perceive themselves as champions of national renewal, of cleansing corrupted ideals, and of truly fulfilling America’s promise. Both fervently believe that they alone – own virtue.” 

  We might conclude that this Ben Op is just a uniquely American manifestation, of little wider import to the world at large. But if we did, we would wrong. Firstly, Macintyre traces the moral tradition from its origin in Traditionalist Homeric literature (i.e. to its Pre-socratic roots) and to this ‘heroic society’ becoming the repository for moral stories about eternal values: Narratives that have the peculiar ability of becoming embodied in the life of the community that cherishes them. And seeing community per seas ‘a character’ of sorts, in an historically-extended, moral narrative.

  In other words, Ben Op is not founded exclusively in Christianity at all. Rather, MacIntyre suggests that narrative provides a better explanation for the unity of a particular human life. The self has continuity because it has played the single and central character in a particular story: the narrative of a person’s life. He puts it this way: “In occupying these roles we simultaneously become subplots in the stories of others’ lives, just as they have become subplots in ours. In this way, the life stories of members of a community are enmeshed and intertwined. This entanglement of our stories is the fabric of communal life … For the story of my life is always embedded in the story of those communities from which I derive my identity”. Here, we are being directly returned to Homer.

  But secondly, we would be missing something essential which links the Ben Op impulse to the wider push-back against today’s millenarian globalists who root their ‘redemption’ in a teleological process of ‘melting’ away cultural identity, of making ethnicity and gender matters of personal choice (and therefore never definitive).

  This critique, coming from an important American conservative constituency which votes Trump yet is aware of his drawbacks, is one that may resonate more widely with other non-American constituencies. But as Rod Dreher, who initiated this campaign as far back as 2006 notes, its members in fact already comprehend its wider import. Dreher says:

  “Hey, I’m not Catholic either. So what? We Orthodox claim him [Benedict] as one of our own, as all the pre-schism saints are. But never mind. [Christians] need to look deeply into Church history to find the resources to withstand the pressures of modernity. St. Benedict is one of them. Because of our varying ecclesiologies, a Catholic Ben Op is going to look different from a Protestant one, and an Orthodox one will look different too. That’s okay. Depending on the telos of the Ben Op institution, we may be able to work together ecumenically”.

  

• This Paper Map Shows The Extent Of The Entire Internet In 1973

  Before the modern internet, there was ARPANET.

  As Visual Capitalist’s Frank Cardona explains, ARPANET was the first internet-like network, and it was developed to allow multiple computers to share data across vast geographical distances. Interestingly, the researchers that worked on ARPANET are credited with developing many of the communication protocols that the internet still uses today.

  Today’s map comes from David Newbury, who shared a keepsake from his father’s time as a computer science business manager at Carnegie Mellon University in the 1970s. We added a legend to help explain the symbols on the map.

  

  A BRIEF HISTORY OF ARPANET

  ARPANET was funded in the late 1960s by a branch of the U.S. Military called The Advanced Research Projects Agency (ARPA), with the original purpose being to allow researchers at different universities to use their limited computing resources more efficiently.

  Before ARPANET, if a researcher at Harvard wanted to access a database at Stanford, they had to travel there and use it in person. ARPANET was used to test out a new communication technology known as packet-switching, which broke up data into smaller “packets” and allowed various computers on the network to access the data.

  With ARPANET researchers could:

  • Login to another computer miles away
  • Transfer and save files across the network
  • Send emails from one person to several others

  On the map below, you can see the network only had computers in the United States, but later that same year, a satellite link connected the ARPANET to the United Kingdom, creating the beginnings of a global network.

  

  A NETWORK OF NETWORKS

  In 1983, ARPANET adopted the TCP/IP protocol standards which paved the way for a “network of networks”, and the internet was born. Several years later, ARPANET would be decommissioned and the new internet would begin to flourish.

  Below you can see what the early internet looked like in 1984:

  

  A BIG JUMP

  These maps take us back to a simpler time when social networks, mobile phones, and unlimited access to the world’s information did not yet exist. Even 12 years after the first message was transmitted on the ARPANET, there were still only 213 computers on the network.

  Fast forward a few decades later and the change in scale is mind-boggling – the modern internet has 1.94 billion websites and 4.1 billion internet users globally, resembling a digital universe.

  One can only imagine how quaint the ARPANET will look a few more decades from now.

  

• Doug Casey On The Climate-Change Hoax, Part 2

  Via CaseyResearch.com,

  Today, I continue my conversation with Doug Casey and Strategic Investoreditor E.B. Tucker on the great climate change hoax. If you missed part one, click here to catch up.

  Below, the guys take a closer look at what’s really going on… and why all of the hysteria is actually a big threat…

  

  Justin: Why peddle this idea that the Earth is warming rapidly? What’s the motive?

  E.B.: Bigger government.

  I mean, climate change has become a pop culture drumbeat. If you watch the Oscars, somebody is going to say, “We’ve got to do something about the climate.”

  But no one, of course, knows what to do. All they know is that we should give the government more money to do something about this. And that money is obviously going to come from the developed world. I mean you’re not going to get any money if you implement a carbon tax in the Democratic Republic of the Congo.

  So it’s basically just a giant tax scheme. I mean carbon taxes brought in $82 billion last year. That’s a big number. And no one even knows where this money goes. You can’t question it because everybody has the best of intentions.

  Justin: It’s just one big money grab?

  E.B.: It’s about more than just money. Carbon taxes give government much more control over commerce. When you buy an airline ticket to fly over Kansas, you’ve got to pay a bunch of money to a U.N. organization to mitigate the effect you have on the lower atmosphere or whatever as you fly through it in an airplane.

  It’s stupid, but people go for it. I was in Mexico two weeks ago and took a domestic Aeroméxico flight. When I bought the ticket there was an option to “fly green” for an extra fee. The airline takes the money and buys carbon offset credits. It’s very popular actually. But no one really knows where that money goes.

  And it’s only just the beginning. Now, you have Alexandria Ocasio-Cortez [AOC] saying the world will end in 12 years if we don’t do something about climate change. She’s proposing that we build trains across the ocean and rebuild every building in America to prevent this from happening. Somebody clearly benefits from all of this.

  And it’s only going to get worse. You’ve got to put yourself in the mind of government bureaucrats, who are just businesspeople in government. Think of them as a government version of businesspeople.

  They want their business to get as big as possible. And the U.S. government has never really collected more than roughly 18% to 20% of gross domestic product in taxes. But that’s not enough.

  Let’s say that carbon taxes reach just 2% of economic output. For the developed world alone, that would mean around $1 trillion. It’s a serious amount of money.

  So I think that climate change is a cover for big government. And it’s a great one. People will go for it. That’s why they’re pushing it so hard.

  Justin: It’s clear neither of you thinks AOC’s Green New Deal is the answer. So what should be done about climate change? Anything?

  Doug: Absolutely nothing should be done about it. As I’ve tried to indicate, the climate has a life of its own. If it’s affected at all by humans, our effect may be dwarfed by that of ants and termites – but that’s a whole other can of worms, as it were.

  That’s not to say man can’t have a major effect on the Earth. Humans have wiped out a number of major species, from passenger pigeons to the buffalo. Both of those species once practically covered North America. And yes, we could probably pave the planet, and wipe out most life. But the exact opposite of that is more likely to happen.

  The fact is that as technology improves – which is happening at the rate of Moore’s Law practically across the board – things become vastly more efficient, with much less waste. Not to mention the human population of the developed world is in an accelerating downtrend. CO2, which should be viewed as no more than necessary plant food, is a complete non-problem.

  So, sure. Humans can have an effect on the planet, but not as major as the sun, volcanism, and other natural processes. The big danger isn’t climate change, it’s hysteria. And government, and the types who manipulate it, destroying the economy. I’m afraid that many scientists on the global warming bandwagon are there for purely selfish economic reasons. Unfortunately most science funding today is done directly and indirectly through the government. It’s a political process.

  And if you’re a scientist who’s considered politically unreliable, who believes politically incorrect things, you’re not going to get the funding. You’re not going to get journals to publish your articles. You’re not going to get positions in universities, which are universally controlled by leftists. It’s interesting that the people who believe in AGW [anthropogenic global warming] are almost all leftists, and the people who don’t believe in it tend to be non-leftists.

  Climate science has been turned from a legitimate branch of knowledge into a new age religion, where heretics are persecuted. It’s become a means to centralize even more power in the State. After all, the fate of the Earth is at stake!

  So, it’s very advantageous to join the crowd if you’re a scientist, or at least not fight against it. It’s evidence of the corruption of science itself, which is really serious.

  That’s another argument for getting the U.S. government 100% out of science of all types. The will, and the capital, to fund scientific projects will still exist. It just shouldn’t be allocated by the political process of government.

  Justin: What threat does climate change pose to capitalism?

  Doug: Climate change itself poses zero threat to capitalism. But the hysteria about it is a big threat. Why? Because the only way to alter something as major as the climate is through the government. You have to force people to do certain things and forbid them from doing other things. Power-hungry statists are using the hysteria as an excuse to do that.

  Climate change has got an aura of moral righteousness about it. Marxists, socialists, and leftists are making Greenism into a new religion. Of course, it’s not designated as such; but these things are actually secular religions. They’re sold on the basis of being morally correct. They have dogmas, sins, saints, devils, clergy, heretics, crusades – the whole nine yards.

  That’s a major reason why Greenism and global warmism are so popular. People always want to feel morally righteous, and that God is on their side. These things appeal to emotion, not reason. It’s all about psychology, not science.

  Some of these people are actually saying it’s going to be the end of life on Earth – so you even have the religious idea of apocalypse. If there’s ever been any excuse for the people that hold these views to take control of everybody else, this is it.

  It’s just further proof that there are two kinds of people in the world: people who like to control physical reality, and people who like to control other people.

  It’s very clever on the part of these people to have harnessed pseudoscience and herded many scientists – although I don’t think it’s only a tiny but vocal minority – into the belief we’re all going to die because the oceans are going to drown us as the Earth turns into a giant steam bath.

  How much warmer can things get than they’ve been since the last ice age ended 11,000 years ago? I don’t know and neither do they. How much longer is it going to be before we go into another ice age? I don’t know – and neither do they.

  The real argument isn’t about earth science. It’s about political science.

  And it’s very clever on the part of the people who are pushing it.

  Justin: Great stuff. Thanks for speaking with me today, guys.

  Doug: You’re welcome.

  E.B.: No problem. It was a great conversation.

  

• Thousands Fired By Chinese Tech Companies Amid Sudden Breakout In Austerity

  It’s not just Silicon Valley which is suddenly scrambling to monetize its VC investments after years of harvesting private company gains in hopes of top-ticking the market ahead of a broader crash: so is China’s tech scene.

  After years of buoyant excess reminiscent of the craziest west coast startups, thousands of Chinese tech employees are suddenly finding themselves without a job, while those who remain find that perks like free snacks and travel, gym memberships, new year bonuses, and yes, even fruit bowls, are now gone as the new mood across China’s tech heartland, from Shenzhen to Hangzhou, is one of painful austerity.

  The math is simple: as the FT reports, with the Chinese economy slowing and foreign capital flows shrinking, start-ups are cutting costs. “For an internet start-up you need people, capital and customers. And they are going to see erosion in every one of these categories,” says one disappointed Chinese tech investor.

  Whether or not it is tied to Trump’s trade war with Beijing is debatable, but China’s pain clearly started in the second half of 2018 when capital began drying up resulting in tumbling valuations of formerly flying tech companies. Not helping are local consumers who have become more thrifty, as seen in China’s plunging car sales, resulting in advertisers rethinking budgets. But it’s the workers who are bearing the brunt of cutbacks.

  Tao Jiali, a recent casualty of what gaming group NetEase euphemistically dubbed “structural optimisation”, sums up the mood. “Everyone is jittery,” she said. The latest blow came on Friday, with reports that Dianrong, a peer-to-peer lender, would shed 2,000 staff.

  To get a sense of the worker unease and in some cases, desperation, Zhaoping.com, an online recruitment site that boasts 180m registered users, said that record numbers of resumes are doing the rounds. “Changes in the market environment have brought the development of the internet industry back to a rational state,” said Li Qiang, executive vice-president. He cited two other issues: after years of growth, internet user numbers have reached a plateau, escalating competition and hurting margins. And regulatory clampdowns are hurting everything from gaming to ecommerce to social media.

  

  To be sure, China’s economic slowdown is also hitting the broader economy, and as we reported last night, for the first time ever, China’s working population shrank in 2018.

  

  But nowhere is the pain more acute than in the highest paying tech jobs; for proof look no further than China’s private valuation titan Didi, which despite successfully chasing Uber out of China in 2016, has more recently faced fierce government pressure after two women were murdered using its carpooling service, and is now laying off 2,000 employees, or 15% of the workforce. For the remaining employees, year-end bonuses were cut in half in December and perks such as free snacks and subsidised gym membership have gone.

  “We recently made adjustments to these [workplace] benefits, however we have no plans to make any major cuts,” said a spokesman for the company.

  Another formerly high-flying Chinese tech giant is JD.com, whose recent problems have been compounded by internal issues — its founder and chief executive Richard Liu was arrested in the US last year on suspicion of rape, although no charges were brought. Even so, the company is suddenly laser focused on maximizing profits and is trumming its ranks of middle management, planning to cut about 10% of those at vice-president level and above.

  Yet while both companies vow to hire enough workers to offset those who were laid off, a more ominous shift in the industry is taking place: advertising budgets – the bread and butter of most tech names not only in China but around the globe – will grow just 17% this year, just a bit more than half the rate of the past two years, according to Jefferies estimates.

  Even this, the FT writes, may be optimistic. Industry players point to “a big step down” in actual ad budgets compared with expectations that were set a the start of last year, when advertisers’ revenues were still surging ahead. That, said analysts, will hurt the likes of fast-growing ByteDance, which scrimped on the money it stuffed in workers’ hongbao, the red money packets traditionally given out at Chinese new year.

  Then, in typical Chinese fashion, CEO Zhang Yiming sent out a memo urging staff to temper their disappointment, blaming the smaller bonuses on the “external environment, industry competition and our own errors and deficiencies in management, decision making and implementation”.

  While the group, which includes the massively popular short video app Douyin, has grown to a value of $75BN in seven years and started hiring across the world, its best years appear to be behind it: the group’s woes suggest growing pains are starting to bite. Like its peers, it has chafed with regulators over content, both at home, and in the US — and its reliance on ads make it vulnerable to the weaker economy, the FT notes.

  The punchline: as periods of austerity go, this one is unlikely to be short.

  “It’s just the beginning of the lay-offs we are going to see for the next two or three years,” one tech investor told the FT, while Wang Xing, whose food delivery app Meituan Dianping has so far resisted talk of job cuts, took to social media with an even more blatant example of gallows humor: “I heard a joke that 2019 may be the worst in the past 10 years, but it may be the best in the next 10 years.”

  One thing is clear: China’s domestic workers know their economy best, and it certainly does not appear that the world’s second biggest economy is set for a sharp rebound. In fact, if Trump were to delay rushing a trade deal with Beijing, it certainly appears that any incremental leverage and negotiating advantage would be solely in his favor as Beijing scrambles to keep its economy from disintegrating any more.

  

• Electoral Suicide: Beware The Radical Left

  Authored by Mike Shedlock via MishTalk,

  6 months ago I figured a recession would kill Trump’s chances in the next election. But Radical socialism could save him

  

  Wirepoints founder Mark Glennon says Radicals Positioning To Destroy Illinois If Its Fiscal Crisis Doesn’t.

  “Socialists win big in Chicago” was The Nation’s headline on last week’s [Chicago Mayoral] elections. Jacobin, a leading socialist publication, proclaimed that the “left’s victories in Tuesday’s Chicago elections are tangible and undeniable. Few could have imagined such an unquestionably positive night for leftist candidates.” The Chicago Teacher’s Union is headed by socialist Jesse Sharkey. Their influence on elections is huge, and their longstanding efforts in schools are now showing up in election results. “CTU knows how to put a mayor in place,” said one of its vice president’s recently.

  Nationally, some Democrats are beginning to question the party’s leftward shift. Even a liberal columnist in the Washington Post askedlast week if the party is committing electoral suicide.

  Illinois Plans

  • Progressive real estate transfer tax. It’s best seen as an exit tax on wealthier homeowners fleeing. It’s supported by both Chicago mayoral candidates who won a place in the runoff election, Toni Preckwinkle and Lori Lightfoot. The heavily Democratic City of Evanston is already implementing it.

  • Rent control. Illinois politicians should be setting the rent, we’re told. A bill authorizing rent control is pending in the General Assembly and Governor Pritzker has indicated approval in concept. Preckwinkle supports rent control; Lightfoot hasn’t indicated her position.

  • Universal basic income in Chicago. Just give at least $500 to every family in Chicago, no strings attached. Mayor Rahm Emanuel evidently saw enough force behind the idea that he authorized a task force to look into a pilot program. It’s leading proponent, Alderman Ameya Pawar, may well become Chicago’s new treasurer, having just won his way into the runoff election. Its cost to the city if fully implemented would be about $12.6 billion annually. Chicago’s annual budget for fiscal 2018 was $8.6 billion.

  • 100% renewable energy. Both Governor Pritzker and a many Illinois lawmakers (including at least one Republican) want Illinois to commit to reaching that goal by 2050. It’s the core feature of Alexandria Ocasio Cortez’s Green New Deal for the nation, albeit with a longer deadline – 30 years instead of 10. But a Greenpeace co-founder recently wrote, “You are delusional if you think fossil fuels will end any time soon, maybe in 500 years,” and said the Cortez plan would “bring about mass death.” The Green New Deal’s price tag has been estimated as high as $93 trillion, or $600,000 per household. Illinois supporters haven’t bothered to place a price tag on meeting the goal over their longer time period. That’s a common aspect of the new left’s policy agenda – numbers mean nothing.

  • Statewide $15 per hour minimum wage. Governor Pritzker made this a top priority and already signed the new law raising the minimum to $15 by 2025, statewide. That might seem reasonable around Chicago, but opposition came largely from lower income communities across the state. The Rockford Park District, for example, gives hundreds of teenagers and young adults get their first jobs at a lower wage, and the new law will open a $2 million per year hole in its budget.

  Socialist Idiocy Abounds

  For sure, socialist idiocy abounds in Illinois. But Glennon has the cure:

  Margaret Thatcher’s famous quote needs amendment when it comes to Illinois. “The trouble with socialism is that eventually you run out of other people’s money,” she said. But in Illinois, the trouble is you run out of other people. If the fiscal crisis doesn’t ensure that Illinois’ population loss accelerates, the new left will.

  Numbers Mean Nothing

  Glennon accurately states “[fiscal] numbers mean nothing”.

  That was the subject of a post I wrote yesterday: Ben Bernanke – The Father of Extreme US Socialism

  The radical Left wants to hijack the Democratic party and perhaps they have already succeeded.

  Although such actions may prevail at the state level until states like Illinois blow sky high.

  However, at the national level the nomination of someone like Elizabeth Warren or Kamala Harris may very well mean four more years of Trump.

  

• Deflationary Red Alert: Chinese Car Dealers Are Slashing Prices, And It's Not Helping

  A new deflationary tide is rising amid the battleground that is China’s auto industry, where manufacturers and dealers are scrambling to try and find a solution to tumbling demand, and while many have resorted to generous incentives and loan offers for consumers to regain market shares, Bloomberg reports  that so far none of the measures have succeeded in stimulating the moribund local car markets.

  Incentives and reductions totaling more than 10% of the sticker price are now common, while interest free loans are also being offered to try and lure car buyers to showrooms, especially outside of China’s major cities. For now, however, buyers still aren’t taking the bait and car sales continue to decline this year in China, after their first annual drop in more than two decades.

  

  Making matters worse, amid the slowdown of the world’s second largest economy consumers are starting to do away with big purchases in general. There’s also an argument surfacing that heavy incentivizing could wind up doing more harm than good to automakers’ finances, possibly setting up for more layoffs, restructurings and mergers in the industry.  Shi Jianhua, a deputy secretary general of China Association of Automobile Manufacturers, said: “2019 should be a year of the survival of the fittest and we may see more merger and reorganization cases in the auto industry.” 

  The changes may negatively affect smaller Chinese manufacturers more than larger ones, who can offset poor Chinese sales with sales from other countries. But customers of cheaper brands in China tend to live in smaller cities and are often more easily affected by the slowing economy.

  Cui Dongshu, secretary general of China Passenger Car Association told Bloomberg that “the sales slump is adding more pressure on Chinese brands. The speed of the industry reshuffle will be accelerated.” By reshuffle he also means a potential wave of mass corporate defaults.

  Smaller companies like Chongqing Changan Automobile., Brilliance China Automotive Holdings and BAIC Motor have seen their stock prices get cut in half or more over the past year. But that doesn’t mean global brands aren’t facing headwinds as well. Companies like Hyundai Motor Co. and Jaguar Land Rover parent Tata Motors Ltd. blamed China for slipping to quarterly losses last year while Suzuki Motor Corp. pulled out of China altogether.

  Meanwhile, desperate to put a price floor below the rapidly deflating Chinese auto market, in late January Beijing urged authorities to roll out measures to help boost vehicle sales in rural areas, noting that a similar effort about a decade ago helped revive demand. While local governments have yet to make any announcements, automakers are moving ahead with offers their own.

  For instance, BAIC cut about $1000 off the price of its Senova Zhidao sedan. Buyers also have the option of choosing a $149 down payment or 0% interest for three years. Volkswagen said this month that it will offer an incentive package valued as much as $1800 for rural consumers that need to replace their aged models with new ones. Chongqing Changan said it would provide up to $3300 worth of incentives, as well.

  Translation: sharply lower prices, which for those not versed in macroeconomics has a very ominous synonym: deflation, something China simply can not allow.

  A BAIC motor dealership employee, Tom Feng, said he and his colleagues are doing everything they can to reach out to rural customers, including handing out flyers at shopping malls and supermarkets. They are also driving around in new vehicles to spur interest. Confirming the worst case scenarion, Xu Haidong, an assistant secretary general at CAAM, said that “there is no easy solution to revive car demand. Car consumption hinges on the overall economic development.”

  And that “development”, as we know, isn’t going well. 

  

• Why The Boom-Bust Cycle Keeps Repeating

  Authored by Frank Shostak via The Mises Institute,

  In a free, unhampered market, we could envisage that the economy would be subject to various shocks but it is difficult to envisage a phenomenon of recurrent boom-bust cycles.

  

  According to Rothbard,

  Before the Industrial Revolution in approximately the late 18th century, there were no regularly recurring booms and depressions. There would be a sudden economic crisis whenever some king made war or confiscated the property of his subjects; but there was no sign of the peculiarly modern phenomena of general and fairly regular swings in business fortunes, of expansions and contractions.

  The boom-bust cycle phenomenon is somehow linked to the modern world. But what is the link? The source of the recurring boom-bust cycles turns out to be the alleged “protector” of the economy — the central banks themselves.

  A loose central bank monetary policy, which results in an expansion of money out of “thin air” sets in motion an exchange of nothing for something, which amounts to a diversion of real wealth from wealth-generating activities to non-wealth-generating activities.

  In the process, this diversion weakens wealth generators, and this in turn weakens their ability to grow the overall pool of real wealth.

  The expansion in activities that are based on loose monetary policy is what an economic “boom” (or false economic prosperity) is all about. Note that once the central bank’s pace of monetary expansion has strengthened the pace of the diversion of real wealth is also going to strengthen.

  Once however, the central bank tightens its monetary stance, this slows down the diversion of real wealth from wealth producers to non-wealth producers. Activities that sprang up on the back of the previous loose monetary policy are now getting less support from the money supply; they fall into trouble — an economic bust or recession emerges.

  Irrespective of how big and strong an economy is, a tighter monetary stance is going to undermine various non-productive or bubble activities that sprang up on the back of the previous loose monetary policy.

  This means that recessions or economic busts have nothing to do with the so-called strength of an economy, improved productivity, or better inventory management by companies.

  For instance, because of a loose monetary stance on the part of the Fed, various activities emerge to accommodate the demand for goods and services of the first receivers of newly injected money.

  Now, even if these activities are well managed, and maintain very efficient inventory control, this fact cannot be of much help once the central bank reverses its loose monetary stance. Again, these activities are the product of the loose monetary stance of the central bank.

  Once the stance is reversed, regardless of efficient inventory management, these activities will come under pressure and run the risk of being liquidated.

  The central bank is the key factor behind recurrent boom-bust cycles

  The central bank’s ongoing policies that are aimed at fixing the unintended consequences that arise from its earlier attempts at stabilizing the so-called economy are key factors behind the repetitive boom-bust cycles.

  Because of the difference in the time lags from changes in money to changes in prices and real economic activity data, Fed policy makers are confronted with economic data that could be in conflict with the Fed’s targets. (Also, note that the time lags are variable).

  The time lag from changes in money and changes in price inflation tends to be much longer than the time lag between changes in money and changes in real economic activity. For instance, as a result of the previous loose monetary policy, price inflation begins to strengthen. To counter this strengthening the Fed decides to tighten its stance. However due to the differences in the time lags, the real economy is likely to weaken rather quickly in response to the recent tighter monetary stance while price inflation is still gaining strength on account of the longer lag effects of past loose monetary policies. To counter the rising price inflation the Fed tightens further. Hence, what we have here is a situation whereby central bank officials responding to the effects of their own previous monetary policies.

  Fed policy makers regard themselves as being the responsible entity authorized to bring the so-called economy onto the path of stable economic growth and stable price inflation. Consequently, any deviation from the growth path sets the Fed’s response in terms of either a tighter or a looser stance. These responses to the effects of previous policies on economic data give rise to the fluctuations in the growth rate of the money supply and in turn to the recurrent boom-bust cycles.

  The uptrend in the yearly growth rate in the adjusted money supply (AMS) between May 2007 and October 2011 is still dominating the US economic scene. However, a declining trend in the yearly growth rate of AMS between October 2011 and January 2019 is starting to gain strength (see chart). Consequently, we suggest that in the months ahead the influence of the declining trend in the growth rate of AMS is going to assert its dominance on economic activity, all other things being equal.

  

  What will determine the severity of the downturn is the state of the pool of real wealth. Prolonged reckless monetary and fiscal policies have likely severely undermined the real wealth generation process.

  This in turn raises the likelihood that the pool of real wealth is hardly growing.

  

• China Cuts Taxes, GDP Target To 6-6.5%: Key Highlights From The People's Congress

  On Tuesday, as part of its National Party Congress, China cut its economic growth target for 2019 once again, this time to 6.0-6.5%, down from last year’s target of “about 6.5 per cent.” The figure was revealed in the government work report to be delivered by Premier Li Keqiang as the National People’s Congress opens.

  According to Bloomberg, the shift to a band from the previous practice of using a point figure gives policy makers room for maneuver and compares with last year’s “about” 6.5 percent goal. The lower bound of the GDP target would be the slowest pace of economic growth in almost three decades, a consequence of China’s long deceleration as policy makers prioritize reining in debt risks, fixing up the environment and alleviating poverty. Economist consensus sees output growth slowing to 6.2% this year from 6.6% in 2018, before easing further in 2020 and 2021.

  

  This annual gathering of China’s political elite – which we discussed earlier – comes a year after President Xi Jinping amended the constitution to remove a presidential term limit and ahead of the 70th anniversary of Communist Party rule later this year.

  

  China also announced a cut of 3% to the top bracket of value added tax in a move aimed at benefiting the manufacturing sector: such a cut could deliver a boost worth up to 600 billion yuan ($90 billion) or 0.6% of GDP, according to Morgan Stanley.

  The target budget deficit for 2019 was set at 2.8% of GDP, higher compared to last year’s goal of 2.6%. The more modest growth target paired with further targeted stimulus measures typifies the government’s attempt to steady the economy after a bruising 2018 and marks a shift from last year’s edition, when the emphasis was on reining in financial risks and trimming budget outlays.

  Below are the key highlights of what has been revealed so far:

  On economic outlook

  • GDP target 6%-6.5%
  • Budget deficit 2.8%
  • Consumer inflation at about 3.0%
  • Aims to cut tax, social security fees by 2t yuan this year
  • 3% cut to the top bracket of VAT
  • Faces more challenges, risks
  • Needs to brace for “tough” battle (doesn’t sound like a trade deal is imminent)
  • Seeks stable trade while improving quality
  • To further cut RRR for smaller banks to support private sector
  • Will reduce population living in poverty by at least 10 million
  • Fiscal policy will be proactive, stronger and more effective
  • China plans to sell 2.15 trillion yuan in special local government bonds

  On monetary policy

  • Money supply growth, aggregate financing will keep pace with nominal GDP growth and be roughly in line with the 2018 actual growth rates
  • Monetary policy will be prudent, paying attention to balance between tightening and loosening

  On military:

  • The defense budget growth target came in at 7.5% lower than 2018

  On financial risks

  • To keep macro leverage level “basically stable” (doesn’t sound like January’s record credit injection will be repeated)
  • Will stick to structural deleveraging, pay attention to its strength and pace
  • To prevent abnormal fluctuations in financial market
  • To include more financial activities, markets, institutions and infrastructure in macro-prudential policy framework

  On trade talks

  • To continue pushing forward trade talks with U.S.

  On opening up

  • Steadily promote financial sector opening, attract more long-term capital inflows
  • To improve opening measures for bond market
  • To expedite making rules for outbound investment
  • Enhance supervision of capital flows, risks in financial markets
  • To deepen SOE reform in power, oil, rail sectors
  • To increase imports of advanced technology equipment, energy and agriculture products

  On economic development:

  • To build a national oil and natural gas pipeline corporation
  • Will create at least 11 million new urban jobs
  • Will keep the urban jobless rate at about 5.5%
  • Will keep the registered jobless rate at about 4.5%
  • Premier Li warns tax cuts will create a “huge burden” for governments at all levels, which will now need to tighten their belts, and state-owned enterprises will have to hand in more profits

  On property market:

  • Decisively prevent and resolve property market risks; stabilize land and home prices and property expectations

  On consumption:

  • To consider policies to boost consumption of autos and home appliances

  On FX:

  • To increase flexibility of yuan FX rate, keep the rate ‘basically stable’ at a reasonable equilibrium level
  • To keep FX reserves at a reasonable size

  On market stability

  • Encourage banks to lend mid and long-term to private companies, reduce funding difficulties for manufacturers, expand bond issuance by quality companies
  • To keep stock, bond and FX markets steady; tackle abnormal markets in a timely manner

   

  

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