Month: November 2016

Multiple Simultaneous Threats: Nexit Next?

Submitted by Michael Shedlock via MishTalk.com,

The nannycrats in Brussels face yet another attack on the anti-immigration front: Geert Wilders’ Far-Right Party Tops Polls in the Netherlands.

Geert Wilders, chairman of the Party for Freedom (PVV), has been celebrating on Twitter today. The reason? His party is now the biggest party in the Dutch polls. With elections coming up in March 2017, the populist politician seems to be on track to become the Netherlands’ next prime minister.

 

According to the latest poll of Maurice de Hond, the Netherlands’ most famous pollster, the PVV would become the biggest party in parliament if elections were held today they’d get 33 seats in the 150-seat lower chamber.

 

Wilders is especially well-known for his criticism of Islam and Europe’s open-borders policy, which he routinely — and accurately — describes as suicidal. His main goal is to end “the Islamization” of Europe generally and of the Netherlands specifically.

 

Additionally, Wilders and his party are the most Eurosceptic of all the parties currently in parliament. He is the Netherlands’ very own Nigel Farage, which he once again proved earlier this year when he and his allies won the Dutch referendum on the EU’s upcoming treaty with Ukraine. Wilders campaigned hard against the deal, arguing that it would eventually lead to the poor (and not entirely democratic) Eastern European country joining the European Union. Although proponents of the treaty said that would not be the case, the Dutch voter wasn’t convinced. Wilders and the “no” campaign won.

Poll Results

netherlands-poll-2016-11-27

Above results from Wikipedia: Dutch General Election Polls.

  • Since October,  PPV is in a range of 21 to 33
  • Since October,  VVD is in a range of 25 to 30
  • Since October, PvdA is in a range of 9 to 18
  • Since July,  PPV ranged from 21 to 36
  • Since July,  VVD ranged from 21 to 30.
  • Since July, PvdA ranged from 9 to 19

These results are so volatile and polls in general have been so inaccurate it is difficult to assess.

That said, volatility now appears to be between Geert Wilders’ anti-immigration PVV, and Diederik Samsom’s Labour Party PvdA, with PVV having clear momentum.

The election is planned for March 15, 2017

Current Setup

The 2012 elections saw the Labour Party (PvdA) and People’s Party for Freedom and Democracy (VVD) go head-to-head for the position of prime minister, gathering enough seats in the process to form an absolute majority. The VVD’s Mark Rutte formed a coalition government with the PvdA, ousting the Christian Democratic Appeal (CDA) from government, while the Party for Freedom (PVV) went back to full opposition.

 

 

 

Wilders on Trial

Wilders in currently on trial for charges of inciting discrimination and hatred of Moroccans.

Wilders’ charges relate to an evening in March 2014 when his Freedom party (PVV) narrowly failed to become the largest group on the city council in The Hague.

 

Wilders asked a room packed with supporters and activists if they wanted to have more or fewer Moroccans in the country. To the response of “fewer”, Wilders replied: “Well, we’ll take care of that.”

 

More than 6,000 people filed official complaints to the police about Wilders’ comments and, nine months later, he was formally charged with racial discrimination and inciting hatred. The maximum sentence is two years in prison, although fines and community service orders are more common.

 

On Monday in court, the panel of judges watched video footage of the speech and read out a list of questions that they wanted to put to the PVV leader, such as “What did you intend to gain?”

 

A sample of the 6,474 police complaints was read out in court, with some people saying they had felt “sick”, “angry” and “treated like pariahs” by Wilders’ statements.

 

It is not the first time that Wilders’ public statements have landed him in court. In 2011, he was acquitted of discriminating against, and inciting hatred towards, Muslims in interviews in which he denounced Islam as a “fascist” religion. But the case is stronger this time because his comments were directed against a racial group, according to Henny Sackers, professor of administrative criminal law at Radboud University in Nijmegen.

 

“The European court says you can criticise religion in public even if it shocks, hurts or disturbs,” he said. “In the case of discrimination on grounds of nationality, you can be guilty of an offence in Dutch law if you provoke social unrest. So I see the chances of a conviction for Wilders as being considerably higher than three years ago.

Final Statement

Consider this Final Statement of Geert Wilders at his Trial on November 23.

Members of the court, you are passing judgment on the future of the Netherlands. And I tell you: if you convict me, you will convict half of the Netherlands. And many Dutch will lose their last bit of trust in the rule of law.

 

Of course, I should not have been subjected to this absurd trial. Because this is a political trial. It is a political trial because political issues have to be debated in Parliament and not here. It is a political trial because other politicians — from mostly government parties — who spoke about Moroccans have not been prosecuted. It is a political trial because the court is being abused to settle a political score with an opposition leader whom one cannot defeat in Parliament.

 

This trial here, Mr. President, it stinks. It would be appropriate in Turkey or Iran, where they also drag the opposition to court. It is a charade, an embarrassment for the Netherlands, a mockery of our rule of law.

 

And it is also an unfair trial because, earlier, one of you — Mrs. van Rens — commented negatively on the policy of my party and the successful challenge in the previous Wilders trial. Now, she is going to judge me.

 

What have I actually done to deserve this travesty? I have spoken about fewer Moroccans at a market, and I have asked questions of PVV members during a campaign event. And I did so, members of the court, because we have a huge problem with Moroccans in this country. And almost no-one dares to speak about it or take tough measures. My party alone has been speaking about this problem for years.

 

Just look at these past weeks: Moroccan fortune-seekers stealing and robbing in Groningen, abusing our asylum system, and Moroccan youths terrorizing entire neighborhoods in Maassluis, Ede and Almere. I can give tens of thousands of other examples — almost everyone in the Netherlands knows them or has personally experienced nuisance from criminal Moroccans. If you do not know them, you are living in an ivory tower.

 

I tell you: If we can no longer honestly address problems in the Netherlands, if we are no longer allowed to use the word “alien,” if we, Dutch, are suddenly racists because we want Black Pete to remain black, if we only go unpunished if we want more Moroccans or else are dragged before a criminal court, if we sell out our hard-won freedom of expression, if we use the courts to silence an opposition politician, who threatens to become Prime Minister, then this beautiful country will be doomed. That is unacceptable, because we are Dutch and this is our country.

 

And again, what on earth have I done wrong? How can the fact be justified that I have to stand here as a suspect, as if I robbed a bank or committed murder?

 

I only spoke about Moroccans at a market and asked a question at an election-night meeting. And anyone who has the slightest understanding of politics, knows that the election-night meetings of every party consist of political speeches full of slogans, one-liners and making maximum use of the rules of rhetoric. That is our job. That is the way it works in politics.

 

Election nights are election nights, with rhetoric and political speeches; not university lectures, in which every paragraph is scrutinized for 15 minutes from six points of view. It is simply crazy that the Public Prosecutor now uses this against me, as if one would blame a football player for scoring a hattrick.

 

Indeed, I said at the market, in the beautiful Hague district of Loosduinen: “if possible fewer Moroccans.” Mark that I did so a few minutes after a Moroccan lady came to me and told me she was going to vote PVV because she was sick and tired of the nuisance caused by Moroccan youths.

 

And on election night, I began by asking the PVV audience “Do you want more or less EU,” and I also did not explain in detail why the answer might be less. Namely, because we need to regain our sovereignty and reassert control over our own money, our own laws and our own borders. I did not do that.

 

Then, I asked the public “Do you want more or less Labour Party.” And, again, I did not explain in detail why the answer might be less. Namely, because they are the biggest cultural relativists, willfully blind and Islam-hugging cowards in Parliament. I did not say that.

 

And then I asked, “Do you want more or fewer Moroccans,” and again, I did not explain in detail why the answer might be fewer. Namely, because people with Moroccan nationality are overrepresented in the Netherlands in crime, benefit dependency and terror. And that we want to achieve this by expelling criminals with Moroccan nationality after denaturalizing them of their Dutch nationality, by a stricter immigration policy and an active voluntary repatriation policy. Proposals that we have made in our election manifesto from the day I founded the Party for Freedom.

 

I explained this in several interviews on national television, both between the statement at the market and election night, as well as on election night a few moments after I had asked the said questions. It is extremely malicious and false of the Public Prosecutor to want to disregard that context.

 

Disgusting — I have no other words for it — are the actions of other politicians, including the man who for a few months may still call himself Prime Minister. Their, and especially his, actions after the said election night constituted real persecution, a witch hunt. The government created an atmosphere in which it had to come to trial.

 

Prime Minister Rutte even told small children during the youth news that I wanted to expel them, and then reassured them that this would not happen. As if I had said anything of that kind. It is almost impossible to behave viler and falser.

 

….

 

Two representative polls, one commissioned by the PVV, the other commissioned by De Volkskrant, showed that, apart from the government and media elite, 43% of the Dutch people, around 7 million people, agree with me. Want fewer Moroccans. You will be very busy if the Public Prosecutor is going to prosecute all these 7 million people.

 

People will never understand that other politicians — especially from government parties — and civil servants who have spoken about Moroccans, Turks and even PVV members, are being left alone and not prosecuted by the Public Prosecutor.

 

Like Labour leader Samsom, who said that Moroccan youths have a monopoly on ethnic nuisance.

 

Or Labour chairman Spekman, who said Moroccans should be humiliated.

 

Or Labour alderman Oudkerk, who spoke about f*cking Moroccans.

 

Or Prime Minister Rutte, who said that Turks should get lost.

 

And what about police chief Joop van Riessen, who said about me on television — I quote literally: “Basically one would feel inclined to say: let’s kill him, just get rid of him now and he will never surface again”?

 

And in reference to PVV voters, van Riessen declared: “Those people must be deported, they no longer belong here.” End of quote. The police chief said that killing Wilders was a normal reaction. That is hatred, Mr. President, pure hatred — and not by us, but against us. And the Public Prosecutor did not prosecute Mr. Van Riessen.

 

But the Public Prosecutor does prosecute me. And demands a conviction based on nonsensical arguments about race and concepts that are not even in the law. It accuses and suspects me of insulting a group and inciting hatred and discrimination on grounds of race. How much crazier can it become? Race. What race?

 

I spoke and asked a question about Moroccans. Moroccans are not a race. Who makes this up? No-one at home understands that Moroccans have suddenly become a race. This is utter nonsense. Not a single nationality is a race. Belgians are no race, Americans are no race. Stop this nonsense, I say to the Public Prosecutor. I am not a racist and neither are my voters. How do you dare suggest that? Wrongly slandering millions of people as racists.

 

And now the Public Prosecutor also uses the vague concept of “intolerance.” Yet another stupidity. The subjective word intolerance, however, is not even mentioned in the law. And what for heaven’s sake is intolerance? Are you going to decide that, members of the court?

 

…

 

By asking for a conviction, the Public Prosecutor, as an accomplice of the established order, as a puppet of the government, asks to silence an opposition politician. And, hence, silence millions of Dutch. I tell you: The problems with Moroccans will not be solved this way, but will only increase.

 

For people will sooner be silent and say less because they are afraid of being called racist, because they are afraid of being sentenced. If I am convicted, then everyone who says anything about Moroccans will fear to be called a racist.

 

And I tell you, the battle of the elite against the people will be won by the people. Here, too, you will not be able to stop this, but rather accelerate it. We will win, the Dutch people will win, and it will be remembered well who was on the right side of history.

 

Common sense will prevail over politically correct arrogance. Because everywhere in the West, we are witnessing the same phenomenon.

 

The voice of freedom cannot be imprisoned; it rings like a bell. Everywhere, ever more people are saying what they think. They do not want to lose their land, they do not want to lose their freedom.

 

They demand politicians who take them seriously, who listen to them, who speak on their behalf. It is a genuine democratic revolt. The wind of change and renewal blows everywhere. Including here, in the Netherlands.

 

As I said:

 

I am standing here on behalf of millions of Dutch citizens.
I do not speak just on behalf of myself.
My voice is the voice of many.

And, so, I ask you, not only on behalf of myself, but in the name of all those Dutch citizens:

Acquit me! Acquit us!

Political Witch Hunt

Like Wilders or not, this trial is a sham, a political witch hunt so that prime minister Mark Rutte can stay in power.

It may even backfire.

Many questions remain, and there has been scant news on this political witch hunt since he made his closing statement.

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15 Former Church Committee Staffers Want Leniency for Edward Snowden

In the wake of Watergate, a Senate committee chaired by the Idaho Democrat Frank Church launched a lengthy investigation into the crimes and other misbehavior of the U.S. intelligence community. Its revelations ranged from CIA assassination plots to politically motivated IRS audits, from the deliberate disruption of dissident groups to the surveillance of the U.S. mail. Now, four decades later, 15 former Church Committee staffers have sent outgoing president Barack Obama and outgoing attorney general Loretta Lynch a memorandum. The letter urges them to “negotiate a settlement of the charges against Edward Snowden,” the federal contractor whose leaks exposed the National Security Agency’s domestic spying.

Obama clearly has little interest in doing any such thing. But the memo is well worth reading anyway. It outlines some of the most important information that Snowden revealed, and it links his efforts to the committee’s earlier exposés of the national security state. “Without Snowden, it would have been decades, if ever, until Americans learned what intelligence agencies acting in our name had been up to,” the staffers write. “We know first hand that lack of disclosure can cause just as many, if not more, harms to the nation than disclosure.”

It also notes the double standard at work when the government throws the book at whistleblowers like Snowden. Even if he violated the law, they note, “many in the national security establishment who committed serious crimes have received little or no punishment”:

CIA Director David Petraeus, who also had been a top general, violated the law and his obligation to protect national security information when he provided his biographer, who was also his close friend, with voluminous notebooks documenting Top Secret military and intelligence operations, as well as sharing classified information with reporters. He also made false statements to the FBI to avoid accountability for his actions. Yet he was allowed to plead guilty to just one misdemeanor for which he received no jail time. Former National Security Advisor Sandy Berger broke the law when he removed several highly classified documents sought by the 9/11 Commission from the National Archives and then destroyed them. He too was allowed to plead guilty to a misdemeanor and received a fine and probation. President Bill Clinton pardoned former CIA Director John Deutch before the Justice Department filed a misdemeanor charge against him for improperly taking hundreds of files containing highly classified information and storing them on an unprotected home computer….

There are, of course, differences between these cases and Snowden’s. But the crucial point is that only in Snowden’s case was the motivation behind his illegal activity to benefit America. The three others involved efforts to gain glory or avoid criticism, or simple convenience and simple disregard for the law…

As you might guess from that euphemism “close friend”—a more direct description would be “lover”—the authors are striking as subdued and conciliatory a tone as they can. Often they give more ground to the national security state and its arguments than I’d be willing to concede myself. That approach may be wise, given the intended audience, but it will probably be fruitless anyway: While the president has acknowledged that Snowden “raised some legitimate concerns,” he also declared that those issues shouldn’t “come into play” until “the point at which Mr. Snowden wants to present himself before the legal authorities and make his arguments.”

The memo points out a problem with the president’s position:

Some argue that Snowden should surrender to U.S. authorities, face trial under the Espionage Act and make his argument that he acted in the public interest in a courtroom. But, under the Espionage Act, a defense of acting in the public interest is not allowed. Snowden also could not tell a jury that his actions spurred reform.

To read the whole letter, go here. For more from me on the Church Committee, go here. For Reason‘s interview with Snowden, go here.

[Via Mike Masnick.]

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Gold Extends Losses Below $1200 As Dollar Soars

Gold futures prices dropped to $1,171 this morning as the dollar surged into the European closed and the OPEC deal sent oil prices spiking. The precious metal is now unchanged since October 2014, but as UBS notes is dramatically oversold at current levels.

 

 

Gold is unchanged since Oct 2014…

 

UBS notes that last week’s break below $1200 does not change our view on gold. The recent undershooting below $1240 and $1200 we continue to see as an extension of the summer correction (based on the overshooting in rates and therefore rising real rates), instead of starting a new major breakdown. With the break of the 2012 downtrend in US inflation expectations but expecting a pullback in yields into Q1, it should be just a question of time to see a new bounce/rally starting in gold/gold mines.

A re-break above $1200 would suggest increasing evidence that a more important tactical bottom is in place.

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The Two-Party System Is a Shambling Zombie: New at Reason

America’s major parties are like zombies. What can they do about it?

Terry Michael writes:

Reporter: “Are they slow moving, Chief?” Officer: “Yeah, they’re dead. They’re all messed up.”

Dialogue from the 1968 pop-cult classic Night of the Living Dead sums up the condition of America’s two venerable political parties. Like Zombies, Democrats and Republicans brainlessly plod along, barely hanging on as organizers of choice in our campaign and governance politics. Impotent shells of their former selves, they spawn no new committed partisans, with the upcoming millennial demographic seeking more than just two choices, declaring independence from one-size-fits-all politics. The parties are two old oak trees, providing some shade but rotting at their cores.

View this article.

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Angry Mobs Lock Up Indian Bankers As Cash Chaos Escalates: “We Are Fearing The Worst”

India’s demonetization campaign is not going as expected.

Overnight, banks played down expectations of a dramatic improvement in currency availability, raising the prospect of queues lengthening as salaries get paid and people look to withdraw money from their accounts the Economic Times reported. 

While much of India has become habituated to the sight of people lining up at banks and cash dispensers since the November 8 demonetisation announcement, bank officials said the message from the Reserve Bank of India is that supplies may not get any easier in the near future and that they should push digital transactions.  “We had sought a hearing with RBI as we were not allocated enough cash, but we were told that rationing of cash may continue for some time,” said a banker who was present at one of several meetings with central bank officials.

“Reserve Bank has asked us to push the use of digital channels to all our customers and ensure that we bring down use of cash in the economy,” said a banker. This confirms a previous report according to which the demonstization campaign has been a not so subtle attempt to impose digital currency on the entire population.

Bankers have been making several trips to the central bank’s headquarters in Mumbai to get a sense of whether currency availability will improve.  Some automated teller machines haven’t been filled even once since the old Rs 500 and Rs 1,000 notes ceased to be legal tender, they said.  Typically, households pay milkmen, domestic helps, drivers, etc, at the start of the month in cash. The idea is that all these payments should become electronic, using computers or mobiles.

This strategy however, appears to not have been conveyed to the public, and as Bloomberg adds, “bankers are bracing for long hours and angry mobs as pay day approaches in India.”

“Already people who are frustrated are locking branches from outside in Uttar Pradesh, Bihar and Tamil Nadu and abusing staff as enough cash is not available,” said CH Venkatachalam, general secretary of the All India Bank Employees’ Association. The group has sought police protection at bank branches for the next 10 days, he added.

Joining many others who have slammed Modi’s decision, the banker said that “this is the fallout of one of the worst planned and executed government decisions in decades.” He estimates that about 20 million people – almost twice the population of Greece – will queue up at bank branches and ATMs over the coming week, when most employers in India pay their staff. In an economy where 98 percent of consumer payments are in cash, banks are functioning with about half the amount of currency they need.

As Bloomberg notes, retaining public support is crucial for Modi before key state elections next year and a national contest in 2019, however it appears he is starting to lose it.

“We are bracing ourselves for payday and fearing the worst,” said Parthasarathi Mukherjee, chief executive officer at Chennai-based Laxmi Vilas Bank Ltd. “If we run out of cash we will have to approach the Reserve Bank of India for more. It is tough.”

* * *

The ongoing cash shortages follow Modi’s Nov. 8 unexpected decision to ban 500 and 1,000 rupee ($15) notes, a decision that sucked out 86% of currency in circulation and blindsided the nation. Bank officials reported that most top banks in the financial heart of Mumbai are now starting the day with anywhere between 800 million rupees to 1.2 billion rupees of cash, instead of the typical 1.5 billion rupees. 

These currency chests are then shared with several branches, which are rationing supplies. Withdrawals are capped at 10,000 rupees per person instead of the 24,000 rupees limit set by the government, said a manager at a state-run Bank of India branch in the eastern state of Jharkhand.

In a Mumbai suburb, a branch of the nation’s largest lender, State Bank of India, was starting the day with about 600,000 rupees of cash that will run out in about an hour, compared with the 1.5 million they’d typically have, the manager said. in what has clearly become a physical cash run.

Shortage of cash in ATMs continues

* * *

To be sure, many employers are scrambling to adapt to the new cash-lite regime: “with pay day around the corner a lot of small and medium-sized companies are opting for prepaid cards over cash payments,” said Naveen Surya, managing director of payments solutions company Itz Cash Card Ltd., who’s also chairman of the representative body Payments Council of India. “More than five million of these cards have been sold in India in the last one week” and sales of 40 million more are expected through December, he said.

Ride-sharing service Ola has partnered with fuel companies to help drivers get e-vouchers to fill up their tanks at Bharat Petroleum Corp. pumps in Bengaluru, the company said in a statement. Paytm, India’s largest digital wallet startup, has noticed a doubling in online recharges including a trend where individuals top up multiple mobile phones to help friends and family, the company said in its statement. Additionally, as Goldman notes, Paytm has experienced a 500% surge in daily user
growth since the currency reform, according to The Indian Express.

Searches on ‘Paytm’ and ‘ATM queues’ still elevated

The government, too, is urging electronic payments. Card payment facilities were introduced in parliament’s dining hall on Wednesday, the Press Trust of India reported, citing Parliament’s Food Committee Chairman A P Jithender Reddy.

While large companies such as Hindustan Petroleum Corp. make 99 percent of their pay outs electronically, it still needs to work out a system with smaller sub-contractors, said finance director J. Ramaswamy. Indian Oil Corp. is opening State Bank of India accounts for all laborers at its Paradip refinery, Dharmendra Pradhan, India’s oil minister, said on Nov. 29 in New Delhi.

“I will request all our companies to encourage bank transfers for all such payments,” Pradhan said.

Alas, as we warned previously, for a nation that remains vastly cash-based – and where 98% of consumer payments are in cash – any transition from physical to digital money will take far, far longer than the timeframe Modi has allotted himself for the demonetization transformation and, as we reported previously, it is only a matter of time before India’s economy becomes crippled by money shortages to the point where not only India’s economic output but the government itself will be in jeopardy.

To get a sense of India’s now-three week long cash-run realitys, courtesy of one of our contacts on the ground in India, here are photos of lines in front on Indian ATMs and banks, taken this morning between 10 and 10:30 am.

via http://ift.tt/2glxYyK Tyler Durden

Mortgage Refinancings Collapse To 2016 Lows As Rates Top 4.00%

Mortgage applications tumbled 9.4% from the prior week as mortgage rates soared above 4.00% to the highest level since July 2015. The biggest driver of the decline in mortgage demand was a 16% crash in refinances – tumbling to their lowest level since the first week of January (a seasonally dismal time).

 

 

This plunge is notably worse than seaonal norms would suggest and also implies more is to come…

 

None of which bodes well for the soaring homebuilder stocks…

 

Just don't tell Janet.

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Yes, We Should Worry About Donald Trump’s Business Conflicts of Interests—and His Whole Approach to the Interaction Between Government and Business

As a real estate developer, Donald Trump made and sought special deals designed to use the power of government to improve his personal bottom line.

The first building project he ever developed, the Grand Hyatt hotel in Manhattan, was completed using a multi-decade tax abatement obtained using his father’s connections. This was not a broad-based tax cut so much as a state-granted subsidy that granted Trump’s project the financial wherewithal to proceed. In 1994, Trump proposed that the city of Bridgeport, Connecticut, become a partner with him on a $350 million theme park project, allowing him to get access to land by declaring a number of businesses as condemned properties. Over the course of his career as a developer, he repeatedly pressured the government to use eminent domain to clear private property owners out of the way, including one instance in 1994 in which he requested that the government kick an Atlantic City widow out of her home in order to replace it with a limousine parking lot. While campaigning for president, he aggressively defended the use of eminent domain, calling it a “wonderful thing,” and describing it as necessary for construction projects that create jobs.

For Trump, this is not merely a business strategy. It amounts to a working theory of how government and the private sector should interact. And it is one that should worry anyone concerned about maintaining a fair and proper division between the state and the private sector.

Because what’s evident in Trump’s background is that he is both a believer in and practitioner of a very direct and open kind of crony capitalism, in which government officials grant certain businesses favorable treatment, deciding which projects to approve and which to deny. He doesn’t believe that the government’s role is to set clear ground rules and let market competition work things out. Instead, he thinks that the government should work directly with private interests, picking winners and losers—and that his own projects, in particular, deserve to be on the winning side.

That is a disturbing enough belief when held by a powerful private developer seeking to curry favor with the government. It is cause for further alarm now that Trump sits on the other side of the table, controlling the levers of executive power, even as he continues to maintain a vast global real estate empire.

As President of the United States, Trump will have unique global political influence, and it is already apparent that Trump will use it to personally advantage his own business interests. At the end of last year, Trump lost a lengthy legal battle over the placement of a wind farm within view of a golf course resort he developed in Scotland. Since then, the issue has been a recurring obsession; Trump has tweeted about it 60 times. Now, as president-elect, Trump is continuing to raise the issue: According to The New York Times, in a post-election meeting with British politician Nigel Farage, Trump pressed the foreign official to oppose the sort of wind farms he unsuccessfully fought as private developer.

All else being equal, this is a fairly small issue; Trump lost the legal fight against the Scottish wind farms. But Trump similarly mixed his private business with his public aspirations on the campaign trail as well, hawking Trump branded products like wine and steaks—some of which were long discontinued—at a bizarre victory speech during the primary, and dangling the possibility of making a major announcement about his position on birtherism to advertise the opening of his new D.C. hotel.

All of this is indicative of Trump’s extreme comfort with mixing political power with personal, private business interests. Trump is now arguably the most powerful and influential politician on the planet. And as The New York Times recently reported, Trump-branded properties now exist all over the world, with multiple major projects in various stages of development, often in countries where large developments rely on government cooperation in order to succeed.

Trump’s seems to believe that this is a non-issue. He recently told The New York Times that he believes that, regarding the mixing of his private projects and his public role, “the law is totally on my side, meaning, the president can’t have a conflict of interest.” Given his history, though, it is not unreasonable to worry that he might seek to use his political position to advance his business interests.

Moreover, it’s not necessary for Trump to actively pursue his own private interests via public office; even if Trump scrupulously avoids doing so, the possibility remains that foreign interests will attempt to curry favor with the American president by giving special, favorable treatment to his businesses. This is already visible on a small scale with Trump’s newly opened hotel in Washington, D.C. As an Asian diplomat told The Washington Post, “Why wouldn’t I stay at his hotel blocks from the White House, so I can tell the new president, ‘I love your new hotel!’ Isn’t it rude to come to his city and say, ‘I am staying at your competitor?'” It is more than plausible that even in the absence of any action on Trump’s part, his new hotel—and other properties across the globe as well—will benefit simply from the fact that he is the president. The government of Bahrain has already decided to hold a national holiday celebration at Trump’s D.C. hotel. Is this a coincidence? Or an effort to curry favor with the incoming president? It’s impossible to tell.

And in that respect, despite Trump’s claims to the contrary, the law may not be on his side. A little-known provision of the Constitution known as the Emoluments Clause prohibits U.S. politicians from receiving gifts from foreign officials. The clause is rarely if ever invoked, but as Adam Liptak recently reported, it is at least conceivable that some of Trump’s dealings could run afoul of its rules. In particular, the state-owned Bank of China occupies space in one of Trump’s buildings; when the lease is renegotiated, any payment above the market rate could be in violation of the constitution.

The Wall Street Journal, among others, has called on the president-elect to liquidate his holdings and place them in a blind trust, and Trump initially resisted. But he may move to separate himself from these conflicts after all. He tweeted this morning that on December 15 he would hold a press conference to explain how he would leave his “great business in total,” though he did not detail any particular steps that he would take.

But even if Trump completely divests himself of his personal business conflicts, we should still be worried about the theory of government-business interaction under which he operates. That’s because Trump appears to believe that the job of both businessman and politicians is to work in partnership—to make deals that benefit the political and private sector operators and insiders on both sides.

Indeed, it looks more than likely that this is what happened this week with the Carrier air conditioning manufacturer in Indiana. Earlier this year, the company announced plans to move 2,000 jobs from the U.S. to Mexico. Today, however, the company said that it had reached an agreement with Trump to keep about 1,000 of those job in the country. It’s not clear what Trump’s role in brokering the deal was, or whether any special treatment was involved, but Trump and Vice President-elect Mike Pence (who, as the outgoing governor of Indiana, may have been the key player) are expected to appear at the factory tomorrow to announce specifics.

Even if there was no overt favoritism or special privelage, the move is indicative of Trump’s approach to freely mixing business and politics, his insistence on casting himself as the critical dealmaker, and the likelihood of government playing favorites in the Trump era. As The Washington Post reports, the company that owns Carrier separately owns other companies that do business with the federal government. The owners may be seeking to curry favor with the incoming president now by giving him a political victory he can tout as he transitions into office.

This sort of arrangement is both unseemly and dangerous to prosperity in the long term. It creates incentives for other businesses to threaten to move in order to receive inducements to stay. As University of Chicago economist Luigi Zingales pointed out earlier this year in a column on Trump’s cronyist instincts, it also muddles the distinction between pro-market and pro-business (Trump is the latter, not the former).

Perhaps worst of all, it creates a system in which corporations succeed and fail not based on their value in the marketplace, but based on their facility at making friends in the government, and friendly deals with the political class. It is an approach built on harnessing political power for special private gain, and for directing the economy based on elite political whims rather than consumer-driven market forces. That is the approach that Trump took to building his empire a businessman. And it looks increasingly as if it is an approach he will bring to his public dealings from his new perch in the highest office in the land.

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Beige Book Finds Modest Economic Slowdown: Strong Dollar “Headwinds” Cited

The Fed’s latest Beige Book released Wednesday found seven regional Fed districts reporting economic activity as growing at a modest or moderate pace, a decline from 11 in the last report, with strong dollar headwinds among one of the more frequently cited reasons for the weakness.

While the Beige Book information was collected up until Nov. 18, 10  days after the U.S. elections, uncertainty about the influence on politics on economic activity was cited eight times in the report. 

“Reports from the twelve Federal Reserve Districts indicate that  the economy continued to expand across most regions from early October  through mid-November,” the Current Economic Conditions report known as  the Beige Book said. The report will be presented at the upcoming  Federal Open Market Committee meeting Dec. 13-14.

The Beige Book did shed light on some issues the FOMC will take into consideration as they chart the path of the fed funds rate into the coming year.

The report showed “demand for manufactured products was mixed during the current reporting period, with the strong dollar being cited as a headwind to more robust demand in a few districts.”

Of note, echoing recent comments by Fed officials, the strong dollar was cited as a headwind to more robust demand in a few districts. Some more examples:

  • Outlooks were generally positive, although the strong dollar continued to depress exports of manufactured goods in some Districts
  • For steel, demand fell in the Cleveland District and production weakened in the San Francisco District, where contacts noted that the elevated dollar, strong global production, and weak economic growth held back exports.
  • The strength of the dollar reduced spending by international customers in the Boston, Atlanta, and Dallas Districts. Reports on automobile sales were mixed.
  • One contact had poor results in stores near the Canadian border because of the strong U.S. dollar but experienced mid-to-upper single digit sales increases in locations where the exchange rate was not a factor.
  • Factors tempering output growth for other manufacturing industries include lower business fixed investment, the strong dollar, and weakness in the energy sector.
  • A transportation source reported that truck and railroad services experienced sluggishness due to excess capacity and the strong dollar.
  • District retailers reported relatively flat sales growth compared with the same time period last year. Some contacts noted that international customers were spending less due to the strength of the dollar.
  • Contacts continued to point to lower exports as a headwind, citing challenges with international demand due to the strong dollar.
  • Gulf Coast chemical producers saw mixed demand, in line with the headwinds of a strong dollar and moderating international demand.
  • Contacts noted slowing sales growth in border cities due to the sustained impact from the strong value of the dollar, and one contact noted continued sales declines at stores in the oil patch.
  • E-commerce sales continued to boost domestic shipping volumes, while demand from the export sector remained weak due to the elevated dollar.
  •  Steel production weakened over the reporting period as the elevated dollar, strong global production, and weak global economic growth held back exports
  • On balance, the elevated dollar continued to slow most exports, particularly for raisins, where global inventories remain elevated.

Elsewhere, Richmond and St. Louis contacts suggested “softening vehicle sales might be attributed to uncertainty surrounding the presidential election,” the report said. A staffing firm in the Cleveland district cited election uncertainty as a reason placement was down, while Cleveland area retailers are looking for sales to improve “with the presidential election behind them and the holiday shopping season approaching.”

The Federal Reserve also Wednesday announced changes to the report’s format beginning in January. The changes are designed to “standardize specific core topics included in each of the 12 Federal Reserve Bank District reports, provide a more consistent presentation of the national summary, and enhance the design of the publication,” the Fed said in a separate press release.

A tightening in labor market conditions was reported by seven Districts, with modest employment growth on balance

Here are select anecdotes from various districts covered by the beige book:

Boston: Contacts expressed some uncertainty about whether the strong international travel numbers will continue in 2017, especially for leisure travelers, if the U.S. dollar remains strong against other major currencies. A specialty chemical manufacturer, said that finding hourly workers was exceedingly difficult. This contact said that only one out of every three or four hourly hires works out; the problem is absenteeism, with many workers unable or unwilling to work five days in a row. Another respondent said that eight out of ten potential hourly hires either cannot pass a drug test or cannot pass a simple math test.

New York: New York City’s rental market has been mostly steady, except at the high end, where the inventory has risen and rents have drifted down. Landlord concessions have grown increasingly prevalent, especially in Manhattan and Brooklyn

Philadelphia: Mountain resort areas reported strong bookings for the remainder of the year, while convention bookings are reported as strong for the first quarter of next year.

Cleveland: Two contacts said that firms are postponing investment decisions until more is known about the tax policies of the incoming president.Input costs rose since our last report primarily because of increasing prices for raw materials and employee health insurance.

Richmond: A port official said that flooding in the Carolinas caused by Hurricane Matthew had delayed some agricultural exports. Since the opening of the new Panama Canal locks, some ports reported a decline in vessel calls while container volume increased. The general manager at an inland hotel reported that all hotels in town were fully booked during the hurricane and remained booked with FEMA personnel several weeks after the storm.

Atlanta: Contacts from the medical field noted accelerating nursing shortages. In response to the challenges finding workers, a number of firms continued to engage in partnerships with community colleges and workforce development organizations to develop customized training programs and internship opportunities, or to invest in automation to replace difficult-to-fill jobs.

Chicago: Contacts continue to indicate that the labor market is tight and that it is getting more and more difficult to fill positions at any skill level.

St. Louis: Over half of contacts reported wages were higher or slightly higher than during the same period last year, and 60 percent reported increasing wages and salaries to attract or retain employees, particularly those in professional and technical, production, and administrative positions.

Minneapolis: Tourism activity was strong overall for this transitional season. In Helena, Mont., big game hunting licenses sold out for nonresident hunters, a change from previous years. The increase was attributed to higher numbers of deer and elk, along with improvements in the overall economy, according to a state official.

Kansas City: Due to weaker agricultural credit conditions and increased risk in the farm sector, District contacts reported notable increases in collateral requirements and slight increases in interest rates on farm loans.

Dallas: Energy firms noted that layoffs were mostly done, however there is little hope for recovery in employment levels in 2017 if oil prices do not increase above $50.

San Francisco: Contacts reported that demand for health-care services remained strong, but the election outcome had greatly increased uncertainty around the Affordable Care Act and raised concerns about the possibility of slower industry growth and cutbacks in the near term.In response to recent minimum wage increases, some restaurants in Southern California are actively considering replacing tips with a mandatory service charge that would be distributed equitably among staff. Contacts expect real estate investment by foreign buyers to pick up in the Pacific Northwest following the recent enactment of a tax on foreign buyers in Vancouver, Canada.

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Trump Reportedly Considering Sarah Palin To Run Veterans’ Affairs

Following chatter that former Alaska governor Sarah Palin was in line for Interior Secretary, ABC News reports that President-Elect Trump is considering her to lead Veterans Affairs.

Palin was previously a strong supporter of the president-elect throughout his campaign. She endorsed the billionaire in January during his primary campaign, ahead of the Iowa state caucuses.

As The Right Scoop reports, earlier it was reported and confirmed by Kellyanne Conway that Sarah Palin was NOT in consideration for any position in the Trump administration:

NY POST – Sarah Palin’s isn’t in the running for a cabinet job in the Trump administration — at least as far as the senior adviser to his transition team is aware.

 

“I know that they’re close and that she’s been a great, loyal friend and adviser to him throughout the campaign, but I haven’t seen her as part of the cabinet mix,” Kellyanne Conway told Fox News’ “The Kelly File” on Monday night.

 

Conway quickly added: “But that doesn’t mean that she’s not.”

 

Either way, Conway suggested, the former vice presidential candidate’s voice would be heard.

But she’s not the only one in consideration for VA Secretary. It was also reported today that Pete Hegseth is also in consideration:

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You Don’t Have to Be British to Be Extremely Worried About U.K.’s New Surveillance Law

encryption keyQueen Elizabeth gave her assent to the British Investigatory Powers Bill on Tuesday, the last step needed before the massive surveillance authorization bill becomes law in 2017. A new, deeper analysis of the final law by tech experts suggests there’s more to fear than simply government access to citizens’ browser history. This law may ultimately put everybody’s data privacy and security at risk.

To refresh everybody’s memory, the Investigatory Powers Bill—nicknamed by critics the “Snooper’s Charter”—formally legally increases the power of the British government to engage in online surveillance, provides rules to allow for the bulk collection of citizen metadata, and the authority to hack into devices remotely. The law requires Internet Service Providers to store information about users’ browser history for a year and hand over this information to government officials when provided a warrant. Essentially the law formalizes some secretive surveillance methods already being used by government that were exposed by Edward Snowden, but it also provides for some judicial oversight.

While the law is being sold as a way to keep the United Kingdom “safe” and to fight terrorism, the reality is that a whole host of government agencies who have nothing to do with national defense will also have access to this information. These are agencies that investigate fraud and deal with taxation and licensing issues. It is abundantly clear to anybody familiar with the law that it is designed and intended to be used to investigate domestic crime, not just terrorism.

But there’s more. Privacy advocates and tech companies had been fighting with the British government over the crafting of the law, particularly about the inclusion of mandates for encryption “back doors” so that government officials would not be stymied in their surveillance efforts.

While the new law doesn’t officially mandate encryption back doors, U.K.-based tech media site The Register scoured the 300-page law and discovered buried deep within something just as bad. Government leaders will be able to give a company what they’re calling a “technical capability notice” that can impose obligations and changes upon the products (software, apps, whatever) that may demand “removal by a relevant operator of electronic protection applied by or on behalf of that operator to any communications or data.”

That is to say: The law doesn’t mandate encryption back doors outright, but it gives the government the authority to demand that specific companies remove the encryption protecting data. That means the British government expects that all of these companies will have the capacity to break their own encryption on the demand. So in reality, the law does mandate encryption bypasses and back doors for communication tools, but it’s allowing the companies to maintain control over the “keys.”

If this sounds familiar to Americans, this line of the law has the same impact as the widely mocked terrible legislation proposed by Sens. Diane Feinstein (D-Calif.) and Richard Burr (R-N.C.) in the spring. In response to Apple’s refusal to help the FBI decrypt the iPhone that was in the possession of one of the San Bernardino terrorists, the senators crafted the technologically illiterate “Compliance with Court Orders Act of 2016.” Like the text of the British law, it doesn’t order tech companies to create back doors for the government to bypass encryption, but it does require that the tech companies themselves bypass their own encryption when given a court order to do so.

What’s the big deal? There is a simple truth that everybody who works within the tech industry or writes about technology understands that many government officials are either choosing to ignore or unwilling to accept: When a company creates encryption methods that have built-in bypass methods, there is no guarantee it will stay in the hands of the company or that only the “right people” will gain access. Accidents happen. Espionage happens. We saw an example of it earlier in the year when an internal security bypass used for testing operating systems at Microsoft accidentally got out into the hands of hackers. The hackers, who apparently had no malicious intent, used it try to demonstrate to government officials and the FBI the flaws in demanding that software and tech devices have encryption that can be bypassed.

For everybody else who isn’t a citizen of the United Kingdom, they will have to worry that the security of their own tech devices and communication tools will be deliberately compromised by tech companies with encryption back doors so that they will be prepared to comply with demands for data by the British government. The law also permits sending these letters to tech companies based outside the United Kingdom but who operate within its borders. These demands affect people outside the United Kingdom in very significant ways.

Oh, and one other important detail: The company that receives one of these orders cannot tell anybody they’ve gotten an order unless the government gives them permission. So a company could be made to compromise its own security and encryption and not warn its own customers.

Since the law is not yet in operation, it’s not yet clear what will happen to tech companies who are implementing “end-to-end” encryption, designed so that the company itself cannot access the data or information being communicated through its apps or tools. The law does require the government official to consider the “technical feasibility of complying” with the demand.

Perhaps the law will serve to push more tech companies into instituting end-to-end encryption in order to be able to tell the United Kingdom that it’s simply not “feasible” for them to comply with a decryption order? If so, it’s appropriate, given the broad surveillance power the United Kingdom has claimed for itself, to start worrying whether the next step will be to prohibit end-to-end encryption on communication tools within the country.

Ultimately, such a law isn’t going to be effective in stopping smart criminals who are insistent on secrecy. There are so many third-party encryption tools out there created outside the United Kingdom and realistically out of their control, and they’re advertising the fact that they don’t have back doors to bypass. That means those who are really at risk of government snooping under this system are the average joes who don’t think they’ll ever be a target of this law because they aren’t terrorists and don’t realize this law is much, much broader than what they’ve been told.

This is perhaps why Snowden, in response to Donald Trump’s election, noted that surveillance and online privacy issues are bigger than one particular politician or government.

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