- Criminalizing Childhood: School Safety Measures Aren't Making Students Any Safer
Authored by John Whitehead via The Rutherford Institute,
“Every day in communities across the United States, children and adolescents spend the majority of their waking hours in schools that have increasingly come to resemble places of detention more than places of learning. From metal detectors to drug tests, from increased policing to all-seeing electronic surveillance, the public schools of the twenty-first century reflect a society that has become fixated on crime, security and violence.”—Investigative journalist Annette Fuentes
It used to be that if you talked back to a teacher, or played a prank on a classmate, or just failed to do your homework, you might find yourself in detention or doing an extra writing assignment after school.
Of course, that was before school shootings became a part of our national lexicon.
Nowadays, as a result of the government’s profit-driven campaign to keep the nation “safe” from drugs, weapons and terrorism, students are not only punished for minor transgressions such as playing cops and robbers on the playground, bringing LEGOs to school, or having a food fight, but they are being punished with suspension, expulsion, and even arrest.
Welcome to Compliance 101: the police state’s primer in how to churn out compliant citizens and transform the nation’s school’s into quasi-prisons through the use of surveillance cameras, metal detectors, police patrols, zero tolerance policies, lock downs, drug sniffing dogs, strip searches and active shooter drills.
If you were wondering, these police state tactics have not made the schools any safer.
Rather, they’ve turned the schools into authoritarian microcosms of the police state, containing almost every aspect of the militarized, intolerant, senseless, overcriminalized, legalistic, surveillance-riddled, totalitarian landscape that plagues those of us on the “outside.”
If your child is fortunate enough to survive his encounter with the public schools, you should count yourself fortunate.
Most students are not so lucky.
From the moment a child enters one of the nation’s 98,000 public schools to the moment he or she graduates, they will be exposed to a steady diet of draconian zero tolerance policies that criminalize childish behavior, overreaching anti-bullying statutes that criminalize speech, school resource officers (police) tasked with disciplining and/or arresting so-called “disorderly” students, standardized testing that emphasizes rote answers over critical thinking, politically correct mindsets that teach young people to censor themselves and those around them, and extensive biometric and surveillance systems that, coupled with the rest, acclimate young people to a world in which they have no freedom of thought, speech or movement.
By the time the average young person in America finishes their public school education, nearly one out of every three of them will have been arrested.
More than 3 million students are suspended or expelled from schools every year, often for minor misbehavior, such as “disruptive behavior” or “insubordination.”
Black students are three times more likely than white students to face suspension and expulsion.
Zero tolerance policies that were intended to make schools safer by discouraging the use of actual drugs and weapons by students have turned students into suspects to be treated as criminals by school officials and law enforcement alike, while criminalizing childish behavior.
For instance, 9-year-old Patrick Timoney was sent to the principal’s office and threatened with suspension after school officials discovered that one of his LEGOs was holding a 2-inch toy gun.
David Morales, an 8-year-old Rhode Island student, ran afoul of his school’s zero tolerance policies after he wore a hat to school decorated with an American flag and tiny plastic Army figures in honor of American troops. School officials declared the hat out of bounds because the toy soldiers were carrying miniature guns.
A 7-year-old New Jersey boy, described by school officials as “a nice kid” and “a good student,” was reported to the police and charged with possessing an imitation firearm after he brought a toy Nerf-style gun to school. The gun shoots soft ping pong-type balls.
Things have gotten so bad that it doesn’t even take a toy gun to raise the ire of school officials.
A high school sophomore was suspended for violating the school’s no-cell-phone policy after he took a call from his father, a master sergeant in the U.S. Army who was serving in Iraq at the time.
A 12-year-old New York student was hauled out of school in handcuffs for doodling on her desk with an erasable marker.
In Houston, an 8th grader was suspended for wearing rosary beads to school in memory of her grandmother (the school has a zero tolerance policy against the rosary, which the school insists can be interpreted as a sign of gang involvement).
Six-year-old Cub Scout Zachary Christie was sentenced to 45 days in reform school after bringing a camping utensil to school that can serve as a fork, knife or spoon.
Even imaginary weapons (hand-drawn pictures of guns, pencils twirled in a “threatening” manner, imaginary bows and arrows, even fingers positioned like guns) can also land a student in detention.
Equally outrageous was the case in New Jersey where several kindergartners were suspended from school for three days for playing a make-believe game of “cops and robbers” during recess and using their fingers as guns.
With the distinctions between student offenses erased, and all offenses expellable, we now find ourselves in the midst of what Time magazine described as a “national crackdown on Alka-Seltzer.” Students have actually been suspended from school for possession of the fizzy tablets in violation of zero tolerance drug policies.
Students have also been penalized for such inane “crimes” as bringing nail clippers to school, using Listerine or Scope, and carrying fold-out combs that resemble switchblades.
A 13-year-old boy in Manassas, Virginia, who accepted a Certs breath mint from a classmate, was actually suspended and required to attend drug-awareness classes, while a 12-year-old boy who said he brought powdered sugar to school for a science project was charged with a felony for possessing a look-alike drug.
Acts of kindness, concern, basic manners or just engaging in childish behavior can also result in suspensions.
One 13-year-old was given detention for exposing the school to “liability” by sharing his lunch with a hungry friend. A third grader was suspended for shaving her head in sympathy for a friend who had lost her hair to chemotherapy. And then there was the high school senior who was suspended for saying “bless you” after a fellow classmate sneezed.
In South Carolina, where it’s against the law to disturb a school, more than a thousand students a year—some as young as 7 years old—“face criminal charges for not following directions, loitering, cursing, or the vague allegation of acting ‘obnoxiously.’ If charged as adults, they can be held in jail for up to 90 days.”
Another 12-year-old was handcuffed and jailed after he stomped in a puddle, splashing classmates.
Things get even worse when you add police to the mix.
Thanks to a combination of media hype, political pandering and financial incentives, the use of armed police officers (a.k.a. school resource officers) to patrol school hallways has risen dramatically in the years since the Columbine school shooting (nearly 20,000 by 2003).
What this means, notes Mother Jones, is greater police “involvement in routine discipline mattersthat principals and parents used to address without involvement from law enforcement officers.”
Funded by the U.S. Department of Justice, these school resource officers (SROs) have become de facto wardens in the elementary, middle and high schools, doling out their own brand of justice to the so-called “criminals” in their midst with the help of tasers, pepperspray, batons and brute force.
As a result, students are not only being ticketed, fined and sent to court for behavior perceived as defiant, disruptive or disorderly such as spraying perfume and writing on a desk, but they are also finding themselves subjected to police tactics such as handcuffs, leg shackles, tasers and excessive force for “acting up.”
In the absence of school-appropriate guidelines, police are more and more “stepping in to deal with minor rulebreaking: sagging pants, disrespectful comments, brief physical skirmishes. What previously might have resulted in a detention or a visit to the principal’s office was replaced with excruciating pain and temporary blindness, often followed by a trip to the courthouse.”
The horror stories are legion.
One SRO is accused of punching a 13-year-old student in the face for cutting in the cafeteria line. That same cop put another student in a chokehold a week later, allegedly knocking the student unconscious and causing a brain injury.
In Pennsylvania, a student was tased after ignoring an order to put his cell phone away.
On any given day when school is in session, kids who “act up” in class are pinned facedown on the floor, locked in dark closets, tied up with straps, bungee cords and duct tape, handcuffed, leg shackled, tasered or otherwise restrained, immobilized or placed in solitary confinement in order to bring them under “control.”
Roughly 1500 kids are tied up or locked down every day by school officials in the United States.
At least 500 students are locked up in some form of solitary confinement every day, whether it be a padded room, a closet or a duffel bag. In many cases, parents are rarely notified when such methods are used.
In almost every case, these undeniably harsh methods are used to punish kids for simply failing to follow directions or throwing tantrums.
Very rarely do the kids pose any credible danger to themselves or others.
For example, a 4-year-old Virginia preschooler was handcuffed, leg shackled and transported to the sheriff’s office after reportedly throwing blocks and climbing on top of the furniture. School officials claim the restraints were necessary to protect the adults from injury.
A 6-year-old kindergarten student in a Georgia public school was handcuffed, transported to the police station, and charged with simple battery of a schoolteacher and criminal damage to property for throwing a temper tantrum at school.
Unbelievably, these tactics are all legal, at least when employed by school officials or school resource officers in the nation’s public schools.
According to a ProPublica investigative report, such harsh punishments are part of a widespread phenomenon plaguing school districts across the country.
Indeed, as investigative reporter Heather Vogell points out, this is a local story everywhere.
It’s happening in my town.
It’s happening in your town.
It’s happening in every school district in America.
This is the end product of all those so-called school “safety” policies, which run the gamut from zero tolerance policies that punish all infractions harshly to surveillance cameras, metal detectors, random searches, drug-sniffing dogs, school-wide lockdowns, active-shooter drills and militarized police officers.
Mind you, this is all part of the government’s plan to “harden” the schools.
What exactly does hardening the schools entail?
More strident zero tolerance policies, greater numbers of school cops, and all the trappings of a prison complex (unsurmountable fences, entrapment areas, no windows or trees, etc.).
Schools acting like prisons.
School officials acting like wardens.
Students treated like inmates and punished like hardened criminals.
Even in the face of parental outrage, lawsuits, legislative reforms, investigative reports and endless cases showing that these tactics are not working and “should never be used for punishment or discipline,” full-grown adults—police officers and teachers alike—insist that the reason they continue to handcuff, lock up and restrain little kids is because they fear for their safety and the safety of others.
“Fear for one’s safety” has become such a hackneyed and threadbare excuse for behavior that is inexcusable.
Dig a little deeper and you’ll find that explanation covers a multitude of sins, whether it’s poorly trained police officers who shoot first and ask questions later, or school officials who are ill-equipped to deal with children who act like children, meaning they don’t always listen, they sometimes throw tantrums, and they have a hard time sitting still.
Unfortunately, advocates for such harsh police tactics and weaponry like to trot out the line that school safety should be our first priority lest we find ourselves with another Sandy Hook. What they will not tell you is that such shootings are rare. As one congressional report found, the schools are, generally speaking, safe places for children.
In their zeal to crack down on guns and lock down the schools, these cheerleaders for police state tactics in the schools might also fail to mention the lucrative, multi-million dollar deals being cut with military contractors such as Taser International to equip these school cops with tasers, tanks, rifles and $100,000 shooting detection systems.
Indeed, the transformation of hometown police departments into extensions of the military has been mirrored in the public schools, where school police have been gifted with high-powered M16 rifles, MRAP armored vehicles, grenade launchers, and other military gear. One Texas school district even boasts its own 12-member SWAT team.
According to one law review article on the school-to-prison pipeline, “Many school districts have formed their own police departments, some so large they rival the forces of major United States cities in size. For example, the safety division in New York City’s public schools is so large that if it were a local police department, it would be the fifth-largest police force in the country.”
The ramifications are far-reaching.
The term “school-to-prison pipeline” refers to a phenomenon in which children who are suspended or expelled from school have a greater likelihood of ending up in jail.
As if it weren’t bad enough that the nation’s schools have come to resemble prisons, the government is also contracting with private prisons to lock up our young people for behavior that once would have merited a stern lecture. Nearly 40 percent of those young people who are arrested will serve time in a private prison, where the emphasis is on making profits for large megacorporations above all else.
This profit-driven system of incarceration has also given rise to a growth in juvenile prisons and financial incentives for jailing young people.
Indeed, young people have become easy targets for the private prison industry, which profits from criminalizing childish behavior and jailing young people. For instance, two Pennsylvania judges made headlines when it was revealed that they had been conspiring with two businessmen in a $2.6 million “kids for cash” scandal that resulted in more than 2500 children being found guilty and jailed in for-profit private prisons.
So what’s the answer, not only for the here-and-now—the children growing up in these quasi-prisons—but for the future of this country?
Peter Gray, a professor of psychology at Boston College, believes that school is a prison that is damaging our kids, and it’s hard to disagree, especially with the numbers of police officers being assigned to schools on the rise.
Clearly, the pathology that characterizes the American police state has passed down to the schools. Now in addition to the government and its agents viewing the citizenry as suspects to be probed, poked, pinched, tasered, searched, seized, stripped and generally manhandled, all with the general blessing of the court, our children in the public schools are also fair game.
Instead of raising up a generation of freedom fighters, however, we seem to be busy churning out newly minted citizens of the American police state who are being taught the hard way what it means to comply, fear and march in lockstep with the government’s dictates.
After all, how do you convince a child who has been routinely handcuffed, shackled, tied down, locked up, and immobilized by government officials—all before he reaches the age of adulthood—that he has any rights at all, let alone the right to challenge wrongdoing, resist oppression and defend himself against injustice?
Most of all, how do you persuade a fellow American that the government works for him when for most of his young life, he has been incarcerated in an institution that teaches young people to be obedient and compliant citizens who don’t talk back, don’t question and don’t challenge authority?
What can be done?
Without a doubt, change is needed, but that will mean taking on the teachers’ unions, the school unions, the educators’ associations, and the police unions, not to mention the politicians dependent on their votes and all of the corporations that profit mightily from an industrial school complex.
As we’ve seen with other issues, any significant reforms will have to start locally and trickle upwards.
As I point out in my book Battlefield America: The War on the American People, with every school police raid and overzealous punishment that is carried out in the name of school safety, the lesson being imparted is that Americans—especially young people—have no rights at all against the state or the police.
If we do not rein in the police state’s influence in the schools, the future to which we are sending our children will be characterized by a brutal, totalitarian regime.
- Hong Kong Dethrones NYC As Mecca For The Uber-Wealthy
In what will almost certainly be remembered as an important milestone in Asia’s march to global domination, a recent study revealed that the population of ultra-wealthy individuals in Hong Kong has for the first time surpassed that of New York City. According to Wealth-X, Hong Kong now has the largest population of individuals worth at least $30 million thanks to a 31% increase over the last year that has pushed its total to about 10,000. By comparison, New York has 9,000. Tokyo took third place, while Paris beat out London (largely thanks to the Brexit-related concerns).
At a time when the richest 1% of the population own half the world’s wealth (according to the Credit Suisse annual global wealth report), the number of ultra-wealthy individuals worldwide climbed 13% last year to 256,000 who own an aggregate $31 trillion. Asia’s share of this total climbed from 18% a decade ago to roughly a quarter today. Analysts from Wealth-X project that the number of ultra-wealthy will rise by 8.3% compounded in the coming years.
“Asia-Pacific is forecast to close the ultra-wealth gap with other regions over the next five years, but is expected to remain behind Europe, the Middle East and Africa in absolute terms,” the report’s authors wrote. The number of ultra-wealthy in Asia-Pacific is expected to rise at a compound rate of 8.3 percent a year, they said.
In a development that will no doubt thrill the neo-liberal social-justice warriors who constantly gripe about the lack of female representation among corporate CEOs, women accounted for about 35,000 of the ultra-rich last year – a record-high share of nearly 14%.
Unsurprisingly, China and Hong Kong propelled most of Asia’s gains, according to the survey. However, no city in mainland China cracked the top ten, even as China ranked third overall in the list of nations with the most ultra-wealthy residents. Wealth-X attributed this to the fact that China’s wealthy are dispersed across the country, exhibited by the fact that China was home to 26 of the 30 fastest-growing cities for the ultra-rich.
Just as China’s rise has benefited its neighbors (something that has made them beholden to the vicissitudes of Chinese growth and trade, as Goldman explained earlier), the ultra-wealthy in Hong Kong owe their success to the debt-fueled economic boom happening on the mainland.
“The dynamism of wealth creation across China’s vast landscape is nevertheless staggering,” the authors wrote.
Just as a rising tide lifts all boats, relatively placid markets in 2017 caused the ranks of the ultra-wealthy expand in every region. Still-low oil prices left the Middle East in last place, with 4.4% growth. Interestingly, the richest people still held most of their wealth in liquid assets like cash.
Still, the ultra-rich held more of their wealth — 35 percent — in liquid assets such as cash than anything else, the study found. Private holdings accounted for about 32 percent, while public holdings were 26 percent. Alternative investments such as real estate, art and yachts made up 6.6 percent of total assets.
But with the S&P 500 continuing its rapid divergence from the MSCI, we imagine these gains won’t be so evenly distributed in 2018.
- With Battle For Idlib Imminent, Russia Releases Video Of Massive "One Of A Kind" Military Drills In Syria
With the US military announcing that it is preparing for “options” in Syria ahead of what appears to be an imminent battle for Syria’s last rebel stronghold of Idlib – which may or may not include another false flag chemical attack to justify the US presence – and which could involve such proxy foreign powers as Russia, the US, Turkey and Iran, today Russia announced that it has staged large-scale military exercises in the Mediterranean Sea near Syria, involving both its Navy and Air Force.
Footage released by Russia’s Defense Ministry showed marine special forces equipped with the latest Russian gear landing on the shores of the Syrian Latakia province. As part of the staged invasion, the marines used helicopters, fast attack craft and armored vehicles while landing from major amphibious ships under cover of dozens of Russian combat aircraft.
The purposefully dramatic display was part of a week-long exercise, which is said to be the “first of its kind” in this part of the Mediterranean. Apart from the naval infantry training, in which the marines also practiced protecting Russian Navy ships from sabotage activities, the war games also involved maritime live fire drills.
Held between September 1 and September 8, the drills also involved establishing a foothold on the territory controlled by a “simulated” enemy. In total, 26 vessels from all Russian fleets, including two submarines, as well as 34 aircraft took part in the war games.
In the full-blown combat simulation, more than two dozen battleships, including the ‘Marshal Ustinov’ cruiser and three of Russia’s newest frigates, launched anti-ship missiles and fired high-caliber guns. The drills also saw Russian strategic Tu-160 Blackjack bombers and long-range Tu-142 Bear submarine hunters train simulated missile launches.
Spoiling the suspense, on Saturday a Kremlin spokesman explained that the drills were partly linked to the situation in Syria’s Idlib province. Idlib is “a hotbed of terrorism and nothing good may come from it, unless action is taken,” Dmitry Peskov said in late August ahead of the drills, adding that some “additional safety measures” are “justified.”
The drill comes amid heightened tensions in the region (read “Everything you need to know about the looming battle for Idlib“) as Moscow warns that the US is deploying additional military assets towards Syria for a potential missile attack against Syrian government forces. As previously reported, the missile destroyer USS Ross was deployed to the Mediterranean, carrying 28 Tomahawk cruise missiles; at roughly the same time the USS The Sullivans was deployed to the Persian Gulf and a B-1B Lancer strategic bomber was relocated to an air base in Qatar.
The Russian ministry said the preparations are “the latest evidence of the US intention” to strike after what it says will be a false flag chemical attack in Syria.
The Pentagon also announced that it has already compiled a list of preliminary targets in Syria, which the US military are planning to hit in case of a “chemical weapons attack.” And, It has also “routinely” briefed the White House on “military options” in case of such incident.
The Russian Defense Ministry has repeatedly warned that the militants in Idlib have been preparing a false flag attack using chemical weapons to justify the US strike against the forces loyal to the Syrian government. On Saturday, the ministry’s spokesman, Major General Igor Konashenkov, said that these preparations entered their “final stage.”
Local sources have speculated that a “chemical attack” could take place as soon as the next few hours, after which events will accelerate rapidly, as both US and Russian military forces are likely to engage in what has the potential to be a conflict that quickly spirals out of control.
- The Most Important Asset Class In The World (Is Not What You Think)
Authored by David Robertson via RealInvestmentAdvice.com,
Here we are, ten years after the bankruptcy of Lehman Brothers, and one would be hard pressed to find evidence of meaningful lessons learned.
“As long as the music is playing, you’ve got to get up and dance,” – Chuck Prince, Citigroup
Chuck’s utterance now sounds more like a quaint remembrance than a stark reminder. Ben Bernanke’s proclamation also sounds more like an “oopsie” than a dangerous misjudgment by a top official.
“We believe the effect of the troubles in the subprime sector on the broader housing market will be limited and we do not expect significant spillovers …”
One of the most pernicious aspects of the financial crisis for many investors was that it seemed to come out of nowhere. US housing prices had never declined in a big way and subprime was too small to show up on the radar. Nonetheless, the stage was set by rapid growth in credit and high levels of debt. Today, eerily similar underlying conditions exist in the Chinese residential real estate market. Indeed, a lot of investors might be surprised to hear it called the most important asset class in the world.
China certainly qualifies as important based on rapid credit growth and high levels of debt. The IMF’s Sally Chen and Joong Shik Kang concluded [here],
“China’s credit boom is one of the largest and longest in history. Historical precedents of ‘safe’ credit booms of such magnitude and speed are few and far from comforting.”
The July 27, 2018 edition of Grants Interest Rate Observer assesses,
“Following a decade of credit-fueled stimulus, China’s banking system is the most bloated in the world.”
Jim Chanos, the well-known short seller, adds his own take on RealvisionTV [here], “So comparing Japan [in the late 1980s] to China, I would say Japan was a piker compared to where China is today. China has taken that model and put it on steroids.”
One of the lessons that was laid bare from the financial crisis of 2008 (and from Japan in the 1980s) was the degree to which easily available credit can inflate asset prices. This is especially true of real estate since it is so often financed (at least partially) with debt. The cheaper and easier credit is to attain, the easier it is to buy homes (or any real estate), and the higher prices go.
These excesses provide the foundation for one of the bigger (short) positions of Jim Chanos. He describes:
“China is building 20 million apartment flats a year. It needs about 6 to 8 to cover both urban migration and depreciation of existing stock. So 60% of that 25% is simply being built for speculative purposes, for investment purposes. And that’s 15% of China’s GDP of $12 trillion. Put another way, it’s about $2 trillion. That $2 trillion is 3% of global GDP.”
And so I can’t stress enough of just how important that number is and that activity is to global growth, to commodity demand, and a variety of different things. It [Chinese residential real estate] is the single most important asset class in the world.”
Chanos is not the only one who sees building for “speculative purposes” as an impending problem. Leland Miller, CEO of China Beige Book, describes in another RealvisionTV interview [here],
“The heart of the Chinese model is malinvestment. It’s about building up non-performing loans and figuring out what to do with them.”
The WSJ’s Walter Russell Mead captured the same phenomenon [here],
“Chinese leaders know that their country suffers from massive over-investment in construction and manufacturing, [and] that its real-estate market is a bubble that makes the Dutch tulip frenzy look restrained. Chinese debt is the foundation of the system.”
Increasingly too, household debt is becoming a problem. As the Financial Times reports [here], apparently China’s young consumers have:
“…rejected the thrifty habits of their elders and become used to spending with borrowed money. Outstanding consumer loans — used to buy cars, holidays, household renovations and other household goods — grew nearly 40 per cent last year to Rmb6.8tn, according to the Chinese investment bank CICC. Consumer loans pushed household borrowing to Rmb33tn by the end of 2017, equivalent of 40 per cent of gross domestic product. The ratio has more than doubled since 2011.”
Again, there are striking parallels to the financial crisis in the US. As Atif Mian and Amir Sufi report in their book, House of Debt, “When it comes to the Great Recession, one important fact jumps out: The United States witnessed a dramatic rise in household debt between 2000 and 2007—the total amount doubled in these seven years to $14 trillion, and the household debt-to-income ratio skyrocketed from 1.4 to 2.1.”
The inevitable consequence of unsustainable increases in household debt is that eventually those households will have to cut spending. When they do, “the bottom line is that very serious adjustments in the economy are required … Wages need to fall, and workers need to switch into new industries. Frictions in this reallocation process translate the spending decline into large job losses.”
In addition, just as the composition of consumers of debt affects the ultimate adjustment process, so too does the composition of its providers. For example, debt provided outside of the conventional banking system, such as from shadow banks, is not subject to the same reporting or reserve requirements.
Once again, the landscape of Chinese debt is problematic. Russell Napier states,
“The surge in non-bank lending in China has clearly played a key role in the rise of the country’s debt to GDP ratio and also its asset prices.”
Zerohedge adds [here] that the Chinese central government has become “alarmed at its [shadow banking’s] vast scale, and potential for corruption.”
Further, nebulous practices are not confined to the “shadows” in China. The FT reports [here],
“These [small] banks are quite vague and blurry when it comes to investment receivables … There’s so much massaging of the balance sheet, and they won’t tell you about their internal manoeuvrings.”
As it happens, “Problems at small banks matter because their role in China’s financial system is growing.” While China surpassed the eurozone last year to become the world’s largest banking system, “small and mid-sized banks have more than doubled their share of total Chinese banking assets to 43 per cent in the past decade.”
Nor is the lack of transparency confined to the financial system; it also extends to the entire economy. Millerdescribes,
“We’re constantly asked about how good Chinese data are. Is it all bad? It’s all bad, but it’s bad and different variations.”
Chanos shared his opinion as well:
“As much as the macro stuff has intrigued me … what’s so interesting about China is the lower down you get, the more micro you get, the worse it looks, in that the companies don’t seem to be profitable, the accounting is a joke.”
Miller makes clear what the challenge is:
“[China] is the second largest economy in the world. This is probably the most mysterious big economy in the world. And people have been so willing to work on it based on guestimates.”
Normally, investors prefer certainty and discount uncertainty. The pervasive lack of discipline and due diligence echoes that of the structured debt products of the financial crisis.
Just as in the financial crisis, all of these excesses and shortcomings are likely to have consequences. Many of them will sound familiar [here]:
“[A] crisis of some kind is likely. The salient characteristics of a system liable to a crisis are high leverage, maturity mismatches, credit risk and opacity. China’s financial system has all these features.”
That said, the “flavor” of China’s crisis will depend on uniquely Chinese characteristics. Miller identifies an important one:
“I think the problem is that people didn’t understand that this is not a commercial financial system. That’s one of the major takeaways we stress all the time. This [China’s] is not a commercial financial system. What that means is when the Chinese are threatened, they can squash capital from one side of the economy to the other.”
In other words, China has substantial capability to manage liquidity and contagion risks.
As a result, according to Miller,
“We don’t spend a lot of time worrying about an acute crisis. If China falls and China does have the hard landing that a lot of people predicted, it’s not going to look like it did in the United States or in Europe. You have a state system, a state-led system in which almost all the counter-parties are either state banks or state companies. They’re not going to have the same freeze-up of credit that you did in some of these other Western economies.”
That said, there are still likely to be severe consequences. Miller reports,
“China has gotten themselves into a real difficult situation, because you have an enormous economy awash in credit that is leading to lesser and less productivity based on that capital. And that is why, rather than some sort of implosion, which could happen, or any type of miraculous continued prosperity indefinitely — we think that China’s economy is, for the most part, headed towards stasis.” More specifically he says, “So I think that we’re heading towards a Chinese economy which is going to slow down quite dramatically when we’re talking about 10, 15 years time.”
Indeed, it appears that process has started. As noted [here],
“Housing sales in China will peak this year and then begin a long-term decline, an inflection point that will drag on growth in the construction-heavy economy and hit global commodity demand, say economists.”
Throughout the process, Miller expects China to pursue a policy agenda designed to get the country “on a more sustainable track.” In particular, “that means cracking down on some of these bad debt problems, cracking down on shadow lending, becoming more transparent, injecting risk and failure into the system, and trying to build a stronger economy from that.” He is careful to note, however, “But it’s not easy.”
Neither will it be easy for investors to judge the puts and takes of various policy measures in a dynamic and opaque system. Henny Sender at the FT warns international investors [here]
“To take heed as Beijing continues a war against non-bank lenders and fintech companies that is tightening liquidity and spooking investors in mainland China.”
The FT also notes [here],
“New rules for recognising bad loans in China are set to obliterate regulatory capital at several banks” which will disproportionately affect small and mid-sized banks. Further, as reported [here], “the paring back of a state subsidy programme that provided Rmb2tn ($300bn) in cash support to homebuyers since 2014 is adding to structural factors weighing on the market.”
The good news is that investors can take several lessons from China and its residential real estate market. The first is that, like the US subprime market was, the Chinese real estate market is understated and under-appreciated. Perhaps it is because the numbers don’t seem that big. Perhaps it is because so few people have much clarity at all on what the numbers really are. Or perhaps it is just that people are making enough money that they don’t really care to look too hard. Regardless, just like with subprime in the US a decade ago, there are real problems.
Second, those problems will have consequences; investors should expect spillovers. As excesses in the country are unwound, the slowdown in Chinese economic growth will be felt around the world. China has driven global growth for at least a couple of decades. Further, residential real estate, with its strong economic multiplier and high degree of speculation, has been the rocket fuel for that growth. Reversal of those trends will feel like a substantial headwind. Further, lest US investors feel smug at the prospect of Chinese troubles, David Rosenberg warns [here],
“There is not a snowball’s chance in hell [the Chinese weakness] will not flow through to the US stock market.”
Where does all of this leave Chanos?
“Interestingly, we’re less short China now than we have been in eight years in our global portfolio. Because the rest of the world’s catching up. Although China’s been on a tear recently, Chinese stocks over the eight years are basically flat. And I’ve noticed that some of the other stocks have sort have tripled.”
Fundamentals are important, but so are prices paid.
A major complication of figuring out China will be determining the degree to which it’s domestic policy agenda influences actions on tariffs and trade and currency. Almost Daily Grants reported the findings of Anne Stevenson-Yang, co-founder of J Capital Research, on July 27, 2018:
“China’s credit-saturated economy … is the primary force behind the recent gyrations in FX. The reality is that China’s currency is most intimately connected, as with any currency, to the domestic economy – debt, asset prices, real estate prices, and efficiency gains and losses rather than just trade.”
In other words, don’t get distracted by the smaller stuff.
Despite all of these challenges, investors are not without tools to monitor the situation, however. Russell Napier reports [here],
“In general the copper price provides a good lead indicator to the market’s assumptions in relation to global growth. When it [the copper price] weighs the negative impact from an RMB devaluation and the positive impact from a Chinese reflation … the current indications are more negative for global growth than positive.”
The FT goes even further [here]:
“The metal [copper] is giving western investors a clear signal to sell risk assets or at least reduce their portfolio weighting.”
Perhaps the biggest lesson of all is that increasingly we live in a world of debt-fueled growth that shapes the investment proposition of financial assets. That means business cycles are increasingly overwhelmed by credit cycles. It means wider swings in financial assets — from euphoric highs to catastrophic lows. When the debt spigot turns off, it means the only “safe” assets are cash and precious metals. When the sparks fly, it’s hard to tell where they might land. And it means that whichever market has the highest debt and the fastest credit growth will be the “most important asset class in the world”.
Right now, that is Chinese residential real estate.
- Trump's "Obsessive" Hunt For The NYT OP-Ed Writer Narrowed Down To "A Few Individuals"
The noose around the neck of the anonymous author of the infamous NYT op-ed is growing tighter…or at least that’s what the Trump administration wants us to think.
After all the furor over Rand Paul’s suggestion that everybody in the West Wing with a security clearance should be made to take a lie-detector test, the White House may not need to go to the trouble, if recent stories in CNN and the New York Times are to be believed (which…we’ll get to that later). According to these stories, the hunt to expose the anonymous
authorsaboteur behind the NYT op-ed detailing the internal “resistance” to President Trump is closing in on a suspect. In just two days, the administration has narrowed down the list of suspects from a list of 18 names to just “a few individuals.”By his own admission, Trump is still “obsessed” with smoking out the author of the op-ed and has mostly ignored pleas from Chief of Staff John Kelly and others to abandon it (Kelly allegedly believes that any more headlines about the op-ed will do little good and only remind the public of its contents). According to CNN, senior administration figures including Kellyanne Conway believe the author handles duties pertaining to national security.
So far, more than 25 senior administration officials, including Vice President Mike Pence (who was one of the earliest suspects) , have publicly denied being the author. Still, suspicions persist that either Pence, or a member of his staff, was the source. During comments to reporters aboard Air Force One on Thursday, and later during a rally in Montana, Trump has made it clear that he’s determined to uncover the source and considers the issue a matter of national security (or possibly an act of treason).
For what it’s worth, CNN has said it doesn’t know the identity of the report’s author.
CNN is not aware of the identity of the individuals White House aides have zeroed in on. In an interview with CNN’s Christiane Amanpour, White House counselor Kellyanne Conway said Trump believes the individual is someone from the national security sector of the government.
The op-ed published Wednesday afternoon, just a day after excerpts from veteran journalist Bob Woodward’s new book, “Fear: Trump in the White House,” were published. The book passages published in The Washington Post and by CNN showed a White House consumed by chaos and disarray, including stories of aides insulting Trump behind his back and going so far as to steal documents off his desk in order to keep him from signing them.
The anonymous writer of the op-ed said the resistance inside Trump’s administration is not the same as the resistance from the political left. The author wrote that the resistance inside the government wants “the administration to succeed … But we believe our first duty is to this country, and the president continues to act in a manner that is detrimental to the health of our republic.”
“That is why many Trump appointees have vowed to do what we can to preserve our democratic institutions while thwarting Mr. Trump’s more misguided impulses until he is out of office.”
While these reports could be genuine, it’s interesting that Conway and others had initially suggested that the author’s “senior” status might’ve been an exaggeration, and that the author may instead be a relatively high-ranking staffer from inside one of the federal agencies. If that were the case, the author could be one of potentially hundreds of individuals, Conway had said. This begs the question: Are these leaks merely a preamble for the administration setting up a patsy, perhaps Attorney General Jeff Sessions, who will be made to take the fall for the op-ed as an excuse to clean house during one of the most sensitive periods of the Trump presidency?
Whatever the reason, we imagine the White House will produce the “culprit” in short order.
- Global Trade Hit By Rare Decline As "Supply Chains Seize Up"
With the Trump administration about to slap tariffs of up to 25% on an additional $200 billion in Chinese goods, new data suggests that the global slowdown has already begun. Confirming our observations from two weeks ago, in which we showed that the latest freight data indicated global trade volumes are slowing…
…on Friday Bloomberg highlighted that the world trade monitor compiled by the CPB Netherlands Bureau for Economic Policy Analysis showed the rolling three-month trade volumes are not only in decline but have entered into negative territory, an ominous harbinger of economic trouble.
As Bloomberg notes, “the drop is particularly striking given that commodities, one of the largest and most volatile subsets of globally traded goods, have been doing quite well – the CPB’s indexes of fuels and non-fuel commodities both reached the highest levels since 2014 in May.”
Instead, confirming the ominous recent developments in Brazil, where a clustering of supply-chain linked problems has resulted in a near paralysis in the country’s shipping industry, Bloomberg notes that “the weakness is coming not from materials but from manufactured goods, as global supply chains seize up.“
With the CPB index printing negative throughout the second quarter of the year, that echoes the numerous reports of a slowdown in the US. Manufactures “reported higher prices and supply disruptions that they attributed to the new trade policies,” according to the Federal Reserve’s July Beige Book, in addition to “higher input prices and shrinking margins.”
Next Wednesday, another Beige Book is due, and it is likely to show more evidence of slowing trade as a result of escalating trade wars.
While the stimulative effect of debt-fueled tax cuts and favorable fiscal policy have created a “Goldilocks economy” in the US, resulting in near record freight volumes in US ports, that temporary sugar high is most likely coming to an end, as a substantial portion of the increased volumes were related to businesses pulling forward consumption from future quarters to beat the tariffs, according to the National Retail Federation, an industry group.
Another shipping market index that tends to be an economic bellwether is the Baltic Dry Index (BDI), a composite of the Capesize, Panamax and Supramax Timecharter Averages rates. The index surged mid-summer thanks to companies getting ahead of tariffs, but following a late-July peak, the index has been steadily declining.
The fact that previous trade slumps have often coincided with a slowdown in domestic economic activity does not bode well for either the Trump administration and or republicans, with just two months left until the midterm elections.
- There Goes The Credit Impulse: Why Chinese Consumption Is On The Verge Of Collapse
Recently we discussed how in addition to the widely manipulated Chinese GDP data, new concerns had emerged about official data involving Chinese industrial profits, because while China’s National Bureau of Statistics has traditionally reported positive year-on-year growth rates in percentage terms, growth in absolute yuan terms has been negative. This deviation, which barely happened in the past, has reinforced scepticism over the quality of Chinese “data” and fueled fresh suspicion that the NBS generates data outcomes that match the policy goals of the Chinese government leadership instead of reflecting the true state of the economy.
More recently, similar worries have been noted over China’s consumption data, which have been sending what Goldman politely calls “mixed signals lately”, and which a more cynical take would dub “massaged”, if not outright fabricated. Which, with China’s economy increasingly turning into a consumption-driven model like that of the US, is a problem if economists, analysts and investors are unable to get an accurate grasp on consumption trends in the world’s second largest economy.
The problem in a nutshell: NBS retail sales slowed in Q2 and also in July, while NBS household consumption expenditure and GDP final consumption contribution (quarterly data) rebounded relatively strongly in Q2. Other widely observed consumption data include 100 major retailers’ sales, with the data painting a bearish picture in recent months and showing negative year-over-year growth in July.
This, as Goldman notes in a Saturday report, has led many investors to ask: where does the divergence come from and how has consumption been growing in reality?
Goldman then spills a lot of digital ink to offer various politically correct explanations for why the government’s stronger data may be accurate, although even the bank is not fully able to justify the variation between government data, and private reported data from 100 major retailers, whose sales growth has been a lot weaker than the official NBS goods retail sales report.
Specifically, the bank notes that when plotted against listed department store revenues, the 100 major retailers’ sales move relatively closely with listed companies’ data. In fact, as shown in the chart below, the retail sales reported by China’s 100 major retailers has been flat at best over the past 4 years, and most recently, has sunk into contraction.
One possible explanation for this stark divergence between the “too pessimistic” private vs optimistic public retail sales data is that the the former does not capture the consumers’ shift to online stores for purchases.
Online sales showed much faster goods consumption growth – NBS online goods retail sales data and package delivery data (our proxy for online goods sales) both suggest online goods sales have probably been growing at close to 30% yoy so far this year, in contrast to the negative year-over-year growth recorded in the offline goods sales channel.
Assuming the truth is somewhere in the middle, something which Goldman has attempted to do with its own proprietary Chinese goods consumption tracker, still shows a sharp decline in annual sales growth on a Y/Y basis, hardly encouraging for an economy that hopes to becomes less reliant on fixed asset investment and transition into a consumption driven model.
Which brings us to the core of the report: what is behind the slowdown in China’s goods consumption – this key driver of Chinese GDP – and what is the outlook going forward.
As Goldman explains, there are multiple reasons behind the softer goods consumption trend – unfavorable wealth effects from the property and equity market, income-related drags such as fewer subsidies from shanty town redevelopment plans, but the biggest driver is the slower growth of consumer credit, and higher debt service burdens due to larger mortgages and greater consumer credit.
Of these, the bank estimates that the key catalyst explaining the slowdown in Q2 consumption is the fading credit impulse and higher debt service costs, and that these could further shave goods consumption growth later this year. As for the culprit, the most likely suspect is Beijing’s recent crackdown on Chinese P2P lending: recall that one month ago we reported that as part of China’s crackdown on peer-2-peer online lending which had grown at a blistering pace heading into 2018 only to suffer a waterfall of defaults, social unrest had broken out in some parts of the nation as China scrambled to avoid the bursting of yet another credit bubble.
So where does that leave us? Well, as Goldman writes, the trend of softer goods consumption may continue as loans via P2P platforms are now more than 10% of consumer credit (this includes all loans via P2P in consumer credit, while P2P loans could also be invested in corporate bonds and property markets), and recent P2P defaults have prompted large-scale redemptions by investors (P2P loans outstanding amount shrank from 1.3 trillion RMB in June to around 900bn RMB in August, based on WIND data) as investors perceive higher risks and regulations tightened.
This has resulted in a sharp consumer deleveraging, and loss of purchasing power, as ordinary Chinese found one relatively easy debt channel shuttered.
Factoring in this slowdown and assuming other categories of consumer credit continue to grow at the speed seen in 1H 2018, overall net credit flows (as a share of disposable income) would slow even more in 2H 2018.
How much more?
When combing with the lagged effects from the recent slower consumer credit growth, Goldman estimates that the fading credit impulse and associated debt service costs will shave goods consumption growth by a whopping 3% in 2H 2018, resulting some time in late 2018 and early 2019 in the most negative print since the financial crisis. This, as shown in the chart below, would lead to the fastest slowdown in Chinese consumption this decade.
Needless to say, such a sharp contraction in consumption would lead to broad, adverse spillover effects affecting everything from China’s GDP (which would be severely impacted), to China’s reflationary impulse which has been so critical for the past decade, and which would go into reverse, sparking another global deflationary shockwave and sharply lower interest rates.
What is most concerning is the timing: all of this is set to take place just as Trump’s $1.5 trillion fiscal stimulus reaches its one year anniversary (i.e. the base effect fades), and what until now has been a sugar high for the economy on a Y/Y growth basis, will result in contraction absent another round of fiscal stimulus. It would also impact global asset prices and markets, many of which are already suffering from sharp, “rolling bear market” selloffs as a result of emerging market turmoil which has so far spared the US.
In short, and as always: keep an eye on China’s collapsing credit impulse for hints on what happens next going into 2019, a year in which many economists and pundits believe the US recession will finally make a repeat appearance.
- Pat Buchanan Exposes Regime Change – American Style
Authored by Patrick Buchanan via Buchanan.org,
The campaign to overturn the 2016 election and bring down President Trump shifted into high gear this week.
Inspiration came Saturday morning from the altar of the National Cathedral where our establishment came to pay homage to John McCain.
Gathered there were all the presidents from 1993 to 2017, Bill Clinton, George W. Bush and Barack Obama, Vice Presidents Al Gore and Dick Cheney, Secretaries of State Hillary Clinton, John Kerry and Henry Kissinger, the leaders of both houses of Congress, and too many generals and admirals to list.
Striding into the pulpit, Obama delivered a searing indictment of the man undoing his legacy:
“So much of our politics, our public life, our public discourse can seem small and mean and petty, trafficking in bombast and insult and phony controversies and manufactured outrage. … It’s a politics that pretends to be brave and tough but in fact is born of fear.”
Speakers praised McCain’s willingness to cross party lines, but Democrats took away a new determination: From here on out, confrontation!
Tuesday morning, as Senate Judiciary Committee hearings on Judge Brett Kavanaugh’s nomination to the Supreme Court began, Democrats disrupted the proceedings and demanded immediate adjournment, as scores of protesters shouted and screamed to halt the hearings.
Taking credit for orchestrating the disruption, Sen. Dick Durbin boasted, “What we’ve heard is the noise of democracy.”
But if mob action to shut down a Senate hearing is the noise of democracy, this may explain why many countries are taking a new look at the authoritarian rulers who can at least deliver a semblance of order.
Wednesday came leaks in The Washington Post from Bob Woodward’s new book, attributing to Chief of Staff John Kelly and Gen. James Mattis crude remarks on the president’s intelligence, character and maturity, and describing the Trump White House as a “crazytown” led by a fifth- or sixth-grader.
Kelly and Mattis both denied making the comments.
Thursday came an op-ed in The New York Times by an anonymous “senior official” claiming to be a member of the “resistance … working diligently from within to frustrate parts of his (Trump’s) agenda.”
A pedestrian piece of prose containing nothing about Trump one cannot read or hear daily in the media, the op-ed caused a sensation, but only because Times editors decided to give the disloyal and seditious Trump aide who wrote it immunity and cover to betray his or her president.
The transaction served the political objectives of both parties.
While the Woodward book may debut at the top of The New York Times best-seller list, and “Anonymous,” once ferreted out and fired, will have his or her 15 minutes of fame, what this portends is not good.
For what is afoot here is something America specializes in — regime change. Only the regime our establishment and media mean to change is the government of the United States. What is afoot is the overthrow of America’s democratically elected head of state.
The methodology is familiar. After a years-long assault on the White House and president by a special prosecutor’s office, the House takes up impeachment, while a collaborationist press plays its traditional supporting role.
Presidents are wounded, disabled or overthrown, and Pulitzers all around.
No one suggests Richard Nixon was without sin in trying to cover up the Watergate break-in. But no one should delude himself into believing that the overthrow of that president, not two years after he won the greatest landslide in U.S. history, was not an act of vengeance by a hate-filled city that ran a sword through Nixon for offenses it had covered up or brushed under the rug in the Roosevelt, Kennedy and Johnson years.
So, where are we headed?
If November’s elections produce, as many predict, a Democratic House, there will be more investigations of President Trump than any man charged with running the U.S. government may be able to manage.
There is the Mueller investigation into “Russiagate” that began before Trump was inaugurated. There is the investigation of his business and private life before he became president in the Southern District of New York. There is the investigation into the Trump Foundation by New York State.
There will be investigations by House committees into alleged violations of the Emoluments Clause. And ever present will be platoons of journalists ready to report the leaks from all of these investigations.
Then, if media coverage can drive Trump’s polls low enough, will come the impeachment investigation and the regurgitation of all that went before.
If Trump has the stamina to hold on, and the Senate remains Republican, he may survive, even as Democrats divide between a rising militant socialist left and the Democrats’ septuagenarian caucus led by Hillary Clinton, Joe Biden, John Kerry, Bernie Sanders and Nancy Pelosi.
2019 looks to be the year of bellum omnium contra omnes, the war of all against all. Entertaining, for sure, but how many more of these coups d’etat can the Republic sustain before a new generation says enough of all this?
- NYT Answers 9 Questions About Anonymous Op-Ed After Trump Demands DOJ Investigation
After publishing a highly controversial anonymous Op-Ed Wednesday purportedly written by a senior White House official who claims to be part of an internal “resistance” that is actively undermining the President, the New York Times has taken heat from all sides.
The author has been generally deemed a coward – with the right knocking him or her for their pre-midterm “hit-job,” while many on the left have suggested that the author should have published the piece under their real name in order to attach more credibility to a series of anonymous complaints about the President that the New York Times just doesn’t have the journalistic credibility to pull off anymore.
Indeed, the piece appears to have backfired – while President Trump has demanded that the Justice Department launch an investigation into the article for the sake of national security.
Speaking at a Thursday night campaign rally in Billings, Montana, Trump said:
for the sake of our national security, the New York Times should publish his name at once. I think their reporters should go and investigate who it is. That would actually be a good scoop.
That would be a good scoop. Unelected deep state operatives who defy the voters to push their own secret agendas are truly a threat to democracy itself. And I was so heartened when I looked
And as The Intercept co-founder Glenn Greenwald points out: “The irony in the op-ed from the NYT’s anonymous WH coward is glaring and massive: s/he accuses Trump of being “anti-democratic” while boasting of membership in an unelected cabal that covertly imposes their own ideology with zero democratic accountability, mandate or transparency”
Perhaps to try and win some points in the court of public opinion (and other possible courtrooms down the road), The Times has published answers to questions from nine readers out of 23,000 who submitted questions about the essay.
Why did you publish this piece?
Why publish this? What purpose does it serve, other than to enrage its target and assuage the guilt of a collaborator? We have a mad king and a shadow government. This is a coup, not a heroic attempt to save democracy.
— Henry Matthews, New York
Henry:
In our view, this Op-Ed offered a significant first-person perspective we haven’t presented to our readers before: that of a conservative explaining why they felt that even if working for the Trump administration meant compromising some principles, it ultimately served the country if they could achieve some of the president’s policy objectives while helping resist some of his worst impulses.
We’ve certainly read excellent news stories that quoted anonymous officials making similar points and criticizing the president’s temperament and chaotic style. What distinguished this essay from those news articles was that it conveyed this point of view in a fleshed-out, personal way, and we felt strongly that the public should have a chance to evaluate it for themselves.
The only way that could happen was for us to publish the essay without a byline. That was an extraordinary step for us, but the piece touched off what we believe to be an important national debate about whether the writer, and similarly situated Trump administration officials, are making the right choice (many of our readers clearly think they are not).
— Jim Dao
***
How did you find this writer?
Did The New York Times seek out the author of this piece, or did the author seek out The New York Times?
— Norma Buchanan, Billings, Mont.
Norma:
The writer was introduced to us by an intermediary whom we know and trust.
— Jim Dao
***
How do you vet a piece like this?
How are you certain of the author’s identity?
— Martin Trott, Jackson Hole, Wyo.
Through direct communication with the author, some background checking and the testimony of the trusted intermediary.
— Jim Dao
***
What does ‘senior administration official’ really mean?
Who qualifies as a “senior administration official” for The New York Times? How many individuals are there in the administration who fit the bill?
— Daniel Burns, Hyattsville, Md.
Daniel:
I understand readers’ frustration that we didn’t provide a more precise description of the official. But we felt strongly that a broader categorization was necessary to protect the author from reprisal, and that concern has been borne out by the president’s reaction to the essay. The term we chose, senior administration official, is used in Washington by both journalists and government officials to describe positions in the upper echelon of an administration, such as the one held by this writer.
— Jim Dao
***
Would you ever reveal your source?
Under what conditions would The New York Times be forced to disclose the source of the Op-Ed?
— Stephanie Genkin, Brooklyn, N.Y.
Stephanie:
It is difficult to imagine a situation where The Times could be forced to disclose the author’s identity. The First Amendment clearly protects the author’s right to publish an essay criticizing the president, and absolutely nothing in the Op-Ed involves criminal behavior. We intend to do everything in our power to protect the identity of the writer and have great confidence that the government cannot legally force us to reveal it.
— Jim Dao
***
Were the writer’s motives considered?
Were the motives of the author considered when deciding whether to publish the Op-Ed?
— Samantha Combs, Pensacola, Fla.
Samantha:
Our first step in evaluating any submission is to look at the background of the writer and the quality and significance of the piece itself. But we do also take into consideration a writer’s motives as part of the vetting process.
It can of course be difficult to discern what those motives are, and in this case a combination of motives were undoubtedly in play, including the writer’s desire to defend the integrity of the president’s internal critics.
But we concluded that the author’s principal motivation was to describe, as faithfully as possible, the internal workings of a chaotic and divided administration and to defend the choice to nevertheless work within it. The resulting essay, we believe, is an important piece of opinion journalism.
— Jim Dao
***
Why now?
Why did you publish it now? At a time when the country should be focused on the Kavanaugh hearings, the outcome of which will affect us for the next 30 years or more, you totally distracted everyone with a guessing game. This administration is placing our democracy in enough danger. Do you really need to play along?
— Paul Birkeland, Seattle
Paul:
The simple answer is that we published when we did because the piece was ready to go and we saw no reason to wait. It certainly was not our intention to start a guessing game or draw the nation’s attention away from the Kavanaugh hearings.
The Op-Ed section considers the Supreme Court nomination to be of the utmost importance and, for that reason, has published numerous Op-Eds and columns about Judge Kavanaugh since he was nominated (including several just this week).
It was always our expectation that even if the Op-Ed created a splash, that the Kavanaugh hearings would remain a focus of media attention. And indeed, though the Op-Ed was the big news on Wednesday and Thursday, the hearings remained front-page news in The Times throughout the week. I should also point out that the actual vote on Judge Kavanaugh’s nomination could be more than a week away, leaving plenty of time for additional coverage.
— Jim Dao
***
Has this happened before?
You said publishing an anonymous Op-Ed essay is a “rare step.” So does it mean that it was not unprecedented? Then what were other times when you made a call to run anonymous Op-Eds? What were your rationales back then?
— Dien Luong, Vietnam
Dien:
It has happened before. Earlier this year, we published an anonymous essay by an asylum seeker whose name we withheld because she was concerned about gang violence against her family in El Salvador. In 2016, we published this Op-Ed by a Syrian refugee in Greece, using her first name only because her family in Syria faced threats. We also published in 2016 an account of the Syrian civil war by a writer in Raqqa using a pen name to protect him from being targeted by the Islamic State.
— Jim Dao
Did you consider the effect this piece might have?
To what extent did The Times consider the effect that publication of the piece would have in bolstering conspiracy theories about the “deep state” or QAnon, etc.?
— James Apps, Berlin
James:
We did not take that into consideration. It is difficult to ever know what reportage might feed into a conspiracy theory. But the essay included a passage that indicates the author suspected the piece might be viewed as part of a “deep state” theory: “This isn’t the work of the so-called deep state. It’s the work of the steady state.”
— Jim Dao
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