Eurointelligence has finally come around to my long-held four-point stance.
Boris Johnson is not bluffing.
He will deliver Brexit.
The EU would be wise to make a deal.
Germany and the Eurozone will be in a world of hurt if they don’t.
From Eurointelligence
Forget the cabinet reshuffle. The one single appointment we take very seriously is that of Dominic Cummings. The head of the Vote Leave campaign has been given the position of special adviser to the PM, with responsibility for Brexit and the civil service. He is essentially the CEO of Number 10, Downing Street.
Cummings has been immortalised by the Cumberbatch movie The Uncivil War, in which he was portrayed as the mastermind behind the Vote Leave victory. We rate him as probably the smartest political operator in the UK right now, somebody who often works outside the policy consensus. He was the first campaign manager to use modern Big Data methods in political polling and campaigning. His elevation underlines our expectation that Boris Johnson will do his utmost to deliver Brexit by the end of October. And that he is getting ready for an election at some point in the autumn.
We don’t know what Cummings is plotting, but we do know that this a guy who is gaming the scenarios in a way that Theresa May’s people didn’t. And we know that he will be operating from different data sets than those of most pollsters.
The strategy will be to take the negotiations with the EU to the brink, and then either agree a deal at the last minute or walk away. We have argued from the beginning that the UK parliament massively overestimates its own role in being able to micro-manage the stages of the Art. 50 process. Its ability to force an extension is far more limited than is widely acknowledged in the UK. A no-deal Brexit will be a consequence of the EU not agreeing to a deal, or of the UK parliament not voting in favour of a deal that Johnson presents. At no point will he advocate no deal himself. All he needs to do is not to seek an extension.
This is a dynamic process. MPs will think twice before openly rebelling against Johnson if only because the result of any rebellion is highly uncertain. We suspect that the much-predicted Tory rebellion of 10-20 MPs voting against the government in a no-confidence motion is going to wither – especially once Remain MPs start to think it through, which they have not done yet.
Key Points
Rise of Dominic Cummings
UK parliament massively overestimates its own role in being able to micro-manage the stages of the Art. 50 process.
Johnson is getting ready for an election at some point in the autumn.
Boris Johnson has caused a major stir with his one of his first appointments as the new Conservative leader, after asking the highly controversial “mastermind of Brexit” to be his senior adviser in government.
Cummings is seen by many as the evil genius who delivered Brexit, a role that became the basis of Channel 4 drama The Uncivil War about the referendum campaign. To others, he is a brilliant thinker with a record of driving through radical policy changes.
Cummings was the brains behind the notorious “£350m-a-week for the NHS” claim emblazoned on bright red buses, despite it being proven to be false, and the winning “take back control” slogan.
As the head of Vote Leave, he also made a show of refusing to work with Brexit bad boys Nigel Farage and Arron Banks – while admitting his campaign relied on their toxic anti-immigration messages.
Intriguingly, just one year after the referendum that turned Britain on its head, he was branding it a “dumb idea” and admitting that future generations might well view leaving the EU as “an error”.
Cummings was found in contempt of parliament in 2018 after MPs said he had refused to appear in part of a Commons committee to give evidence about Vote Leave campaign as part of an investigation into fake news.
With that explanation out of the way, let’s return to my four-point stance.
It’s not that Euroiintelligence ever strongly disagreed with any of my points.
Rather, Eurointelligence wavered greatly and never strongly endorsed that set of viewpoints until now.
In addition, there is one more point below that is a huge change in their stance.
What Should the EU Do?
It is no secret that Boris Johnson is held in contempt by the chancelleries of Europe. But, whatever EU leaders think of him personally, they will soon be confronted with a formal request to re-open negotiations on the withdrawal treaty.
EU unity has held up extraordinarily well during the entire Brexit negotiations, but this is because the EU was confronted by a weak negotiator. Olly Robbins gave the game away when he said that either the Commons would vote for the treaty, or Brexit would be postponed for a long time. From the EU’s perspective, this was a game of head-I-win, tails-you-lose.
But, when confronted with a partner willing to accept a no-deal Brexit, the situation changes. The EU will need to consider, for the first time in earnest, the political dynamics in the European Council in the days and hours before a no-deal Brexit. Are they really prepared for it as they say? Politically and technically?
We don’t think so. The German media has spent the last two years in denial that Brexit is happening, focusing much of its reporting on the second-referendum campaign. Lately they switched to portraying Johnson as a buffoon or, in the case of Spiegel, as a madman. But what will happen once they realise that Germany is about to face tariffs in the two largest export markets for its cars, the US and the UK? We think that complacency will turn to panic overnight, as it so often does in European politics. The EU will need a strategy to deal with the Johnson administration. EU leaders will need to explore among themselves how far they will go in opening up the discussion on the Irish backstop. And they will need a no-deal strategy that goes beyond the regulatory preparations of the European Commission.
“We Don’t Think So”
Eurointelligence fully expected Theresa May would deliver her pathetic deal. I didn’t.
But what is most striking is this Q&A:
Q: Are they [the EU] really prepared for it as they say? Politically and technically?
A: We think that complacency will turn to panic overnight, as it so often does in European politics.
Complacency Will Turn to Panic
A prediction of “panic” is one heck of a change in stance from a publication that repeated at every turn the EU would never make any changes or even consider them.
And perhaps the EU won’t. But the EU will hold serious closed door discussions despite what they say they will do.
And that has been my position from the moment Theresa May was outed.
EU in Recession
Germany is in recession right now. That’s my call but it is a minority view.
By October 31, the entire Eurozone is likely to be in recession.
Johnson will deliver Brexit. And there is not a damn thing the UK parliament can do about it.
Trigger elections? So what?
Labour leader Jeremy Corbyn threatens trigger elections via a motion of no confidence. But he doesn’t have the votes or her would have done so already.
I am sticking with my assessment that Johnson or Parliament will trigger elections in September and they will be held shortly after Brexit is delivered.
October 31, a Thursday, would be fitting. But I opt for November 7 as the most likely date.
via ZeroHedge News https://ift.tt/2On3P4H Tyler Durden
As if the Cathedral of Notre Dame hasn’t already been through enough this year.
The latest heat wave to ravage Europe could also cause the fire-ravaged roof of Paris’s Notre Dame Cathedral to collapse entirely, France’s chief architect of historical sites has warned.
Three months after the incident that nearly destroyed one of Europe’s oldest and most popular landmarks, the cathedral’s chief architect, Philippe Villeneuve, has warned that the heat wave is the latest threat to Notre Dame.
“I am very worried about the heatwave,” Philippe Villeneuve, the cathedral’s chief architect, told reporters at a press conference on Wednesday.
“What I fear is that the joints or the masonry, as they dry, lose their cohesion and their structural qualities, and that all of a sudden, the vault gives way…”
Much of the cathedral’s stone walls are still waterlogged from the day that firefighters had to put out the April blaze. Sensors placed throughout the structure have not yet detected any movement, but Villeneuve worries that the cathedral’s vaulted ceiling “could very well” collapse as the hot weather accelerates the drying process.
Temperatures in Paris set a new record for the highest on record at 42 degrees Celsius, though the heat had broken as of Friday, according to BBC.
Notre Dame remains covered in scaffolding and its roof is covered in tarpaulin. More than 100 workers have been clearing out debris and building reinforcements in the structure every day since the fire was extinguished.
via ZeroHedge News https://ift.tt/2JVtWeX Tyler Durden
It is ironic that the setting for his speech was London. The UK, of course, never gave up the pound in favor of adopting the euro. Still, as the years drag on the biggest menace to Europe’s common currency isn’t a profligate Greek government nor the unfavorable productivity of Club Med. The euro may not disappear all at once, but it is in danger of withering.
In the land of future Brexit, Mario Draghi promised in the hot summer of 2012 to do whatever it took to save his currency. Had he actually been successful, would there have been a Brexit? Would Italian and Dutch populists be entrenched where they are? Would Germany have been poised to follow the same path?
It was not supposed to be about bringing the borrowing costs of PIIGS governments down. That was his immediate concern, sure, and it was the method behind his madness, but Step 2 was actual, meaningful recovery. Changing the dynamic of Europe’s credit situation was intended to create sufficient space so that rock-solid economic growth could be returned to the entire landscape.
To the extent that the size of these sovereign premia hamper the functioning of the monetary policy transmission channel, they come within our mandate.
Did anyone imagine on July 26, 2012, Draghi’s ECB would be committing to even more “stimulus” and “accommodation” seven years later? Of course they didn’t.
“Believe me, it will be enough,” he claimed. By enough, did he mean unlimited by time?
As usual with everything central banks do, or claim that they will do in the future, the plan was celebrated far and wide. It was cheered when at first Draghi made his promise lacking any specifics, and then it was cheered again in September 2012 when specifics were finally released.
One market commentator quoted in the Wall Street Journal echoed what many were thinking/hoping about what a few months later were called OMT’s.
We had a solid rally going into this, and Draghi has ticked every box in terms of relatively bullish expectations. The ECB said it will do whatever it takes. This is putting meat on those bones.
And then came NIRP, QE, and several more years that supposedly led to globally synchronized growth. Finally, in 2018 after six years, the exit.
The ECB’s official statement released at today’s meeting was everything you’d expect, unless you still expect an exit. Short on facts and substance, a lot like Draghi’s promise made almost exactly seven years earlier. Draghi is, it seems, still promising.
The Governing Council also underlined the need for a highly accommodative stance of monetary policy for a prolonged period of time, as inflation rates, both realised and projected, have been persistently below levels that are in line with its aim.
Is any policy “highly accommodative” if it is needed “for a prolonged period of time.” The Governing Council means September 2019 moving forward, the time which more rate cuts (with the MRO midpoint already at zero, and the Deposit Rate “floor” still -40 bps) will be undertaken and will be almost certainly augmented by a restart to QE (with tiered penalties on future reserves!)
But don’t we have to question “highly accommodative stance” going back at least to 2012 if not years yet before? Another of putting it, we’ve seen enough constant “stimulus” to know what it isn’t. There’s been no accommodation nor has anything been stimulated.
The ECB merely confuses transitory reflation between eurodollar events for burgeoning recovery. That’s why they went bonkers in 2017 over globally synchronized growth instead of heeding the bond market, especially in Germany, which can and does tell the difference. Draghi was warned by bunds not to take 2017 so seriously.
He did anyway because of emotion, almost surely because he’ll be remembered for his promise whether he delivers or not. Figuring it was his last chance, he grabbed globally synchronized growth and hyped it as much as anyone. It didn’t matter if there was any real data behind it, as he even said in January 2018:
The strong cyclical momentum, the ongoing reduction of economic slack and increasing capacity utilisation strengthen further our confidence that inflation will converge towards our inflation aim of below, but close to, 2%. At the same time, domestic price pressures remain muted overall and have yet to show convincing signs of a sustained upward trend.
Had there been “strong cyclical momentum” instead of mere global eurodollar reflation there would have been inflationary pressures evident right then. The ECB admitted there weren’t; but Draghi still believed they would show themselves because…he believed that they would show themselves.
Hardly a convincing basis, what has unfolded over the year and a half since perfectly in keeping with the official hype and misreading of the overall situation. As such, it wasn’t just bonds which were unenthused about the global recovery; euro money markets largely rejected it, too.
Quite tellingly, only the 12-month Euribor rate ever moved toward the fantasy of exit and normalization – and even then it was a mere +8 bps. European banks weren’t seeing what Draghi was seeing.
In July 2019, the ECB has even bigger problems than they thought. Euro money rates have absolutely plunged. This dive includes the 1- and 2-week Euribor maturities both fractionally fixed underneath the Deposit Rate “floor.” As noted earlier this week in another context, whether central bankers anywhere can tell what is or is not a floor is constantly in doubt.
This kind of technical proficiency should matter. It does in bonds if not in the financial media fixated on charismatic promises and showmanship.
What does this euro money market mess mean? In general terms, something changed around the end of April – for the worse. Perhaps it was the lack of green shoots especially in Germany’s economy, or maybe it was concern becoming alarm about something going on in terms of global funding conditions outside of euros.
Before the ECB ever confessed to thinking about renewed “stimulus” (in late June), European banks became a whole lot more willing to dump “liquidity” in this one market and pay the penalties (negative rates) for doing so. They’ve suddenly become very shy about doing anything else with it, no matter the growing costs.
Many people even today see these dovish turns as being overly cautious, far too pessimistic for an economic situation that may not be ideal but isn’t really all that bad. Having made his famous promise so long ago those people may not remember or have been adults when it was made, Dr. Draghi looks at the bond and euro money markets and can’t help but dread how it may not have been just the idea of recovery which suddenly disappeared.
via ZeroHedge News https://ift.tt/2GxfAPH Tyler Durden
Last May, reality TV mega-celebrity Kim Kardashian arrived at the White House and successfully lobbied President Donald Trump to grant clemency to Alice Marie Johnson, a grandmother then serving life in federal prison for a nonviolent drug crime.
It would be easy to read that sentence as an encapsulation of the deeply absurd times we’re living through, but 2018 was full of similarly unexpected and encouraging turns in the fight to reform the criminal justice system. Along with Kardashian getting lifers out of prison, Republicans and Democrats hugged on the Senate floor to celebrate the passage of a bill rolling back some mandatory minimum sentences, and former Obama green jobs czar Van Jones stood in the White House with conservative and evangelical Christian leaders to applaud the signing of that bill. Johnson, who served 21 years in federal prison before Kardashian got her released, was an honored guest at Trump’s State of the Union speech this January and published a book about her experiences.
The U.S. criminal justice system railroads innocent people and petty offenders every day. People die in jails and prisons due to neglect or plain malice by public officials. Even if the U.S. released every single nonviolent drug offender currently behind bars, it would still have the highest prison population in the world by a wide margin. These are problems that won’t be completely resolved any time soon. Yet ever so slowly, thanks to a combination of criminal justice advocates, budget-conscious legislators, and voter demand—not to mention the devastating testimony of people like Johnson—some of the system’s most glaring problems are being addressed. Solutions may still be a long way off, but real progress is being made.
Cross-partisan efforts are happening around the country—at the federal, state, and local levels—to change the way people interact with every facet of the criminal justice system, from initial police encounters to sentencing to prisoner re-entry back into society. Some of those efforts will fail. Others will be misguided or ineffectual. But the fact that policy makers are considering alternatives to the lock-’em-up mentality that dominated much of the latter half of the 20th century, and are working with their usual political opponents to make it happen, is a cause for optimism.
Congress Took a Baby Step
In December, federal lawmakers passed the first major criminal justice bill in nearly a decade: the FIRST STEP Act. Although a small cadre of Republicans tried to scuttle the bill, it passed by overwhelming bipartisan majorities in the House and Senate. Some of the GOP senators who shepherded it through Congress, such as Chuck Grassley (R–Iowa), had previously been among the staunchest supporters of harsh drug laws and mandatory minimum sentences.
The legislation was almost painfully modest in scope. It reduced, but didn’t eliminate, several mandatory minimum sentences, and it provided retroactive sentencing reductions to about 3,000 federal inmates serving time under draconian crack cocaine laws. It was riddled with exceptions to appease law enforcement groups, but considering how long it had been since Congress had done, well, anything worth celebrating, it was a notable success.
The biggest lift for those backing the bill was securing the support of Donald Trump, who had made fearmongering about crime one of the highlights of his stump speeches as a 2016 candidate. A bipartisan group of lawmakers and advocates, including White House adviser and Trump son-in-law Jared Kushner, worked for months to convince the president that unjust laws were putting nonviolent offenders in prison for far too long and giving inmates far too few opportunities to succeed when they re-entered society.
For his part, Trump seems to enjoy the positive press he’s received on the issue. The White House bragged in an April press release that the FIRST STEP Act had already resulted in 573 federal inmates being released early from prison. That list included people who were serving life sentences for nonviolent drug offenses, who had expected to die behind bars.
There are many more people languishing in prison under indefensible mandatory minimum sentences who deserve to be freed. But for the former inmates and their families who have been reunited, the benefit has been unquantifiable.
Many civil liberties groups worried that the first step would turn out to be the only step—that the Trump administration and Congress would pat themselves on the back and declare the criminal justice system fixed. The American Civil Liberties Union and the Leadership Conference on Civil & Human Rights, both of which had opposed earlier, weaker versions of the FIRST STEP Act, wrote in a joint statement that the bill was “an important but modest step forward for justice and human dignity. But it is not the end of our fight.” The same advocates who got the law passed are now keeping pressure on the Trump administration to fully implement its provisions.
States Are Pushing Ahead With Reforms
Over the last decade, the bulk of criminal justice reforms have happened at the state level. That trend shows no sign of slowing down. Responding to the promising bipartisan developments in Congress, the Florida, Missouri, and North Carolina legislatures all considered state-level versions of the FIRST STEP Act this year.
One reason many states are looking for ways to reform their criminal justice systems is that their prisons are overcrowded, understaffed, wildly expensive, and dangerous. In Florida, legislators are grappling with how to draw down the third-largest incarcerated population in the country. That population is growing older and more expensive to care for, due to the mandatory minimum sentences many inmates are serving.
“The truth is the state can’t afford 96,000 inmates, not without spending hundreds and hundreds of millions of dollars a year and pulling that money from education or health care, which it doesn’t want to do,” says Florida state Sen. Jeff Brandes, a Republican.
Meanwhile, California is using algorithms to automatically expunge the criminal records of tens of thousands of marijuana offenders, freeing them from the lifelong stigma that a rap sheet carries. If this pilot program spreads, it could go a long way toward rolling back some of the damage wrought by the drug war.
In April, the New York state legislature eliminated cash bail for misdemeanors and nonviolent felonies, which had been needlessly trapping poor people behind bars. The Marshall Project reported that 33,000 criminal defendants in the state spent time in jail in 2017 because they couldn’t afford to post bail. New York legislators also reformed the state’s discovery rules, which previously allowed prosecutors to withhold evidence from defense attorneys until the very eve of trial. (Public defenders called it “trial by ambush.”) Together, these reforms help level the playing field for defendants in what has traditionally been one of the most backward states in the U.S. when it comes to criminal justice policies.
Meanwhile, capital punishment continued its slow decline last year. The Death Penalty Information Center reported that executions remained near historic lows in 2018, while the number of death penalty sentences imposed dropped for the 18th straight year. Only eight states now perform executions. Last year, Washington’s supreme court ruled the state’s death penalty law unconstitutional, and earlier this year California Gov. Gavin Newsom declared a moratorium on executions.
Voters Are Holding Prosecutors Accountable
In major cities across the country, district attorney (D.A.) elections have gone from sleepy, often-uncontested affairs to high-profile races that have drawn attention to the powerful role the prosecutor plays in mass incarceration.
In many of these races, candidates running on explicit reform platforms have unseated incumbents and launched ambitious programs to change the way prosecutors’ offices operate.
Philadelphia District Attorney Larry Krasner, a former civil rights lawyer who was elected to be the city’s top prosecutor in 2017, ordered his line prosecutors to stop bringing charges for minor marijuana violations, to request more lenient sentences for a number of crimes, and to not seek bail for 25 minor offenses. A February study by researchers at the University of Pennsylvania and George Mason University found that the bail policy led to an immediate 22 percent decline in defendants who spent at least one night in jail. And according to a presentation Krasner gave to the Philadelphia City Council in April, the estimated total time to which defendants were sentenced during the last three months of 2018 dropped by 46 percent compared to the first three months of 2014.
In Suffolk County, Massachusetts, which includes Boston, District Attorney Rachael Rollins was elected in 2018 on promises to stop prosecuting 15 different minor crimes and to largely end cash bail. And in Birmingham, Alabama, District Attorney Danny Carr is proposing a “cite-and-release” plan for simple marijuana possession.
These reform-minded D.A.s face pushback from law enforcement as well as, in some cases, from judges, who are often former prosecutors. For example, judges rejected Krasner’s recommendations in the resentencing of defendants who had been given life without parole as juveniles, a practice the Supreme Court later ruled was unconstitutional.
Yet the trends are positive. In Queens, New York, seven candidates are running for district attorney—all of them on reform platforms. And in Philadelphia, activists have turned their attention to the next public office they want to target: judges.
Violent Crime and the Prison Population Are Declining
Despite a two-year increase in violent crime in 2015 and 2016, with murders spiking dramatically in several major cities, overall crime rates in the U.S. remain at historic lows and now appear to be holding steady or continuing their decadeslong decline.
Nationally, the violent crime rate in 2017 fell by 0.9 percent from the previous year, while the murder rate fell by 1.4 percent, according to the FBI’s annual crime report. Property crime continued a more-than-20-year slowdown. Aggravated assault and rape rates both increased, by 2.2 percent and 0.3 percent, respectively—but for context, the total number of crimes per 100,000 people in major American cities has fallen precipitously from just under 10,000 in 1990 to fewer than 4,000 in 2018, according to a report by the Brennan Center for Justice.
As the crime rate has fallen, the U.S. prison population has also continued to decline, albeit slowly. A report released in April by the Vera Institute of Justice found that there were just under 1.5 million people incarcerated in federal and state prisons across the country in 2018—a nine-year low and a drop of 1.3 percent from 2017.
“Since 2008, the incarceration rate in the country has dropped 15 percent,” says Jacob Kang-Brown, a senior research associate at the pro-reform Vera Institute. “And underneath that number you see quite a few states have dropped over 30 percent during that time. I think that those states that are really leading the way can be an example to the states that are still putting more and more people in their prison systems.”
There are several troubling trends lurking beneath that topline number, Kang-Brown says. While the prison population decreased in 31 states, including California, Louisiana, and Pennsylvania, it rose in 19 others—many of them places that have traditionally had low incarceration rates, such as Iowa, Indiana, and Wyoming. In Indiana, the legislature several years ago passed reforms meant to reduce the state’s prison population. Instead, they diverted low-level inmates to county jails, which are now severely overcrowded. In Wyoming, officials say tough sentences for drug and sex crimes are driving the increase.
The overall number of incarcerated women has climbed as well. And in some states where prison populations are falling, those reductions haven’t reached minorities.
“We may want to celebrate reform efforts that have led to the drop in the prison rate in Minnesota,” Kang-Brown says. “However, a closer look at the data shows that this downward trend only affected white people and does not adequately address the racial disparities that we know exist in our justice system. Better data will help us interrogate not just the effectiveness of reform but who benefits from reform.”
A Positive Trajectory
Even though the criminal justice system remains problem-plagued, we can take some heart from the trajectory toward shorter sentences and less taxpayer money spent on caging people whose so-called crimes haven’t hurt anyone.
Eternal vigilance will be required to ensure that new prison sentences aren’t the default answer to every new problem, but it’s significant that many conservative groups are now urging Republicans to resist their most punitive instincts.
Even if Congress reneges on its newfound love for bipartisan criminal justice reforms, activists will continue to work around them, as they have for decades. And if all else fails, Kim Kardashian is now reportedly studying for the California bar exam.
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Last May, reality TV mega-celebrity Kim Kardashian arrived at the White House and successfully lobbied President Donald Trump to grant clemency to Alice Marie Johnson, a grandmother then serving life in federal prison for a nonviolent drug crime.
It would be easy to read that sentence as an encapsulation of the deeply absurd times we’re living through, but 2018 was full of similarly unexpected and encouraging turns in the fight to reform the criminal justice system. Along with Kardashian getting lifers out of prison, Republicans and Democrats hugged on the Senate floor to celebrate the passage of a bill rolling back some mandatory minimum sentences, and former Obama green jobs czar Van Jones stood in the White House with conservative and evangelical Christian leaders to applaud the signing of that bill. Johnson, who served 21 years in federal prison before Kardashian got her released, was an honored guest at Trump’s State of the Union speech this January and published a book about her experiences.
The U.S. criminal justice system railroads innocent people and petty offenders every day. People die in jails and prisons due to neglect or plain malice by public officials. Even if the U.S. released every single nonviolent drug offender currently behind bars, it would still have the highest prison population in the world by a wide margin. These are problems that won’t be completely resolved any time soon. Yet ever so slowly, thanks to a combination of criminal justice advocates, budget-conscious legislators, and voter demand—not to mention the devastating testimony of people like Johnson—some of the system’s most glaring problems are being addressed. Solutions may still be a long way off, but real progress is being made.
Cross-partisan efforts are happening around the country—at the federal, state, and local levels—to change the way people interact with every facet of the criminal justice system, from initial police encounters to sentencing to prisoner re-entry back into society. Some of those efforts will fail. Others will be misguided or ineffectual. But the fact that policy makers are considering alternatives to the lock-’em-up mentality that dominated much of the latter half of the 20th century, and are working with their usual political opponents to make it happen, is a cause for optimism.
Congress Took a Baby Step
In December, federal lawmakers passed the first major criminal justice bill in nearly a decade: the FIRST STEP Act. Although a small cadre of Republicans tried to scuttle the bill, it passed by overwhelming bipartisan majorities in the House and Senate. Some of the GOP senators who shepherded it through Congress, such as Chuck Grassley (R–Iowa), had previously been among the staunchest supporters of harsh drug laws and mandatory minimum sentences.
The legislation was almost painfully modest in scope. It reduced, but didn’t eliminate, several mandatory minimum sentences, and it provided retroactive sentencing reductions to about 3,000 federal inmates serving time under draconian crack cocaine laws. It was riddled with exceptions to appease law enforcement groups, but considering how long it had been since Congress had done, well, anything worth celebrating, it was a notable success.
The biggest lift for those backing the bill was securing the support of Donald Trump, who had made fearmongering about crime one of the highlights of his stump speeches as a 2016 candidate. A bipartisan group of lawmakers and advocates, including White House adviser and Trump son-in-law Jared Kushner, worked for months to convince the president that unjust laws were putting nonviolent offenders in prison for far too long and giving inmates far too few opportunities to succeed when they re-entered society.
For his part, Trump seems to enjoy the positive press he’s received on the issue. The White House bragged in an April press release that the FIRST STEP Act had already resulted in 573 federal inmates being released early from prison. That list included people who were serving life sentences for nonviolent drug offenses, who had expected to die behind bars.
There are many more people languishing in prison under indefensible mandatory minimum sentences who deserve to be freed. But for the former inmates and their families who have been reunited, the benefit has been unquantifiable.
Many civil liberties groups worried that the first step would turn out to be the only step—that the Trump administration and Congress would pat themselves on the back and declare the criminal justice system fixed. The American Civil Liberties Union and the Leadership Conference on Civil & Human Rights, both of which had opposed earlier, weaker versions of the FIRST STEP Act, wrote in a joint statement that the bill was “an important but modest step forward for justice and human dignity. But it is not the end of our fight.” The same advocates who got the law passed are now keeping pressure on the Trump administration to fully implement its provisions.
States Are Pushing Ahead With Reforms
Over the last decade, the bulk of criminal justice reforms have happened at the state level. That trend shows no sign of slowing down. Responding to the promising bipartisan developments in Congress, the Florida, Missouri, and North Carolina legislatures all considered state-level versions of the FIRST STEP Act this year.
One reason many states are looking for ways to reform their criminal justice systems is that their prisons are overcrowded, understaffed, wildly expensive, and dangerous. In Florida, legislators are grappling with how to draw down the third-largest incarcerated population in the country. That population is growing older and more expensive to care for, due to the mandatory minimum sentences many inmates are serving.
“The truth is the state can’t afford 96,000 inmates, not without spending hundreds and hundreds of millions of dollars a year and pulling that money from education or health care, which it doesn’t want to do,” says Florida state Sen. Jeff Brandes, a Republican.
Meanwhile, California is using algorithms to automatically expunge the criminal records of tens of thousands of marijuana offenders, freeing them from the lifelong stigma that a rap sheet carries. If this pilot program spreads, it could go a long way toward rolling back some of the damage wrought by the drug war.
In April, the New York state legislature eliminated cash bail for misdemeanors and nonviolent felonies, which had been needlessly trapping poor people behind bars. The Marshall Project reported that 33,000 criminal defendants in the state spent time in jail in 2017 because they couldn’t afford to post bail. New York legislators also reformed the state’s discovery rules, which previously allowed prosecutors to withhold evidence from defense attorneys until the very eve of trial. (Public defenders called it “trial by ambush.”) Together, these reforms help level the playing field for defendants in what has traditionally been one of the most backward states in the U.S. when it comes to criminal justice policies.
Meanwhile, capital punishment continued its slow decline last year. The Death Penalty Information Center reported that executions remained near historic lows in 2018, while the number of death penalty sentences imposed dropped for the 18th straight year. Only eight states now perform executions. Last year, Washington’s supreme court ruled the state’s death penalty law unconstitutional, and earlier this year California Gov. Gavin Newsom declared a moratorium on executions.
Voters Are Holding Prosecutors Accountable
In major cities across the country, district attorney (D.A.) elections have gone from sleepy, often-uncontested affairs to high-profile races that have drawn attention to the powerful role the prosecutor plays in mass incarceration.
In many of these races, candidates running on explicit reform platforms have unseated incumbents and launched ambitious programs to change the way prosecutors’ offices operate.
Philadelphia District Attorney Larry Krasner, a former civil rights lawyer who was elected to be the city’s top prosecutor in 2017, ordered his line prosecutors to stop bringing charges for minor marijuana violations, to request more lenient sentences for a number of crimes, and to not seek bail for 25 minor offenses. A February study by researchers at the University of Pennsylvania and George Mason University found that the bail policy led to an immediate 22 percent decline in defendants who spent at least one night in jail. And according to a presentation Krasner gave to the Philadelphia City Council in April, the estimated total time to which defendants were sentenced during the last three months of 2018 dropped by 46 percent compared to the first three months of 2014.
In Suffolk County, Massachusetts, which includes Boston, District Attorney Rachael Rollins was elected in 2018 on promises to stop prosecuting 15 different minor crimes and to largely end cash bail. And in Birmingham, Alabama, District Attorney Danny Carr is proposing a “cite-and-release” plan for simple marijuana possession.
These reform-minded D.A.s face pushback from law enforcement as well as, in some cases, from judges, who are often former prosecutors. For example, judges rejected Krasner’s recommendations in the resentencing of defendants who had been given life without parole as juveniles, a practice the Supreme Court later ruled was unconstitutional.
Yet the trends are positive. In Queens, New York, seven candidates are running for district attorney—all of them on reform platforms. And in Philadelphia, activists have turned their attention to the next public office they want to target: judges.
Violent Crime and the Prison Population Are Declining
Despite a two-year increase in violent crime in 2015 and 2016, with murders spiking dramatically in several major cities, overall crime rates in the U.S. remain at historic lows and now appear to be holding steady or continuing their decadeslong decline.
Nationally, the violent crime rate in 2017 fell by 0.9 percent from the previous year, while the murder rate fell by 1.4 percent, according to the FBI’s annual crime report. Property crime continued a more-than-20-year slowdown. Aggravated assault and rape rates both increased, by 2.2 percent and 0.3 percent, respectively—but for context, the total number of crimes per 100,000 people in major American cities has fallen precipitously from just under 10,000 in 1990 to fewer than 4,000 in 2018, according to a report by the Brennan Center for Justice.
As the crime rate has fallen, the U.S. prison population has also continued to decline, albeit slowly. A report released in April by the Vera Institute of Justice found that there were just under 1.5 million people incarcerated in federal and state prisons across the country in 2018—a nine-year low and a drop of 1.3 percent from 2017.
“Since 2008, the incarceration rate in the country has dropped 15 percent,” says Jacob Kang-Brown, a senior research associate at the pro-reform Vera Institute. “And underneath that number you see quite a few states have dropped over 30 percent during that time. I think that those states that are really leading the way can be an example to the states that are still putting more and more people in their prison systems.”
There are several troubling trends lurking beneath that topline number, Kang-Brown says. While the prison population decreased in 31 states, including California, Louisiana, and Pennsylvania, it rose in 19 others—many of them places that have traditionally had low incarceration rates, such as Iowa, Indiana, and Wyoming. In Indiana, the legislature several years ago passed reforms meant to reduce the state’s prison population. Instead, they diverted low-level inmates to county jails, which are now severely overcrowded. In Wyoming, officials say tough sentences for drug and sex crimes are driving the increase.
The overall number of incarcerated women has climbed as well. And in some states where prison populations are falling, those reductions haven’t reached minorities.
“We may want to celebrate reform efforts that have led to the drop in the prison rate in Minnesota,” Kang-Brown says. “However, a closer look at the data shows that this downward trend only affected white people and does not adequately address the racial disparities that we know exist in our justice system. Better data will help us interrogate not just the effectiveness of reform but who benefits from reform.”
A Positive Trajectory
Even though the criminal justice system remains problem-plagued, we can take some heart from the trajectory toward shorter sentences and less taxpayer money spent on caging people whose so-called crimes haven’t hurt anyone.
Eternal vigilance will be required to ensure that new prison sentences aren’t the default answer to every new problem, but it’s significant that many conservative groups are now urging Republicans to resist their most punitive instincts.
Even if Congress reneges on its newfound love for bipartisan criminal justice reforms, activists will continue to work around them, as they have for decades. And if all else fails, Kim Kardashian is now reportedly studying for the California bar exam.
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The opinion, from Judge William O. Bertelsman, is here; I hope to be able to blog more about it tomorrow, but for now I just thought I’d pass it along. Check out the table on pp. 30-36, where the court lists the statements mentioned by the plaintiff and briefly explains the court’s reasoning for each statement.
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The opinion, from Judge William O. Bertelsman, is here; I hope to be able to blog more about it tomorrow, but for now I just thought I’d pass it along. Check out the table on pp. 30-36, where the court lists the statements mentioned by the plaintiff and briefly explains the court’s reasoning for each statement.
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Today’s world is at war on many fronts. The rules of international law and order put in place toward the end of World War II are being broken by U.S. foreign policy escalating its confrontation with countries that refrain from giving its companies control of their economic surpluses. Countries that do not give the United States control of their oil and financial sectors or privatize their key sectors are being isolated by the United States imposing trade sanctions and unilateral tariffs giving special advantages to U.S. producers in violation of free trade agreements with European, Asian and other countries.
This global fracture has an increasingly military cast. U.S. officials justify tariffs and import quotas illegal under WTO rules on “national security” grounds, claiming that the United States can do whatever it wants as the world’s “exceptional” nation. U.S. officials explain that this means that their nation is not obliged to adhere to international agreements or even to its own treaties and promises. This allegedly sovereign right to ignore on its international agreements was made explicit after Bill Clinton and his Secretary of State Madeline Albright broke the promise by President George Bush and Secretary of State James Baker that NATO would not expand eastward after 1991. (“You didn’t get it in writing,” was the U.S. response to the verbal agreements that were made.)
Likewise, the Trump administration repudiated the multilateral Iranian nuclear agreement signed by the Obama administration, and is escalating warfare with its proxy armies in the Near East. U.S. politicians are waging a New Cold War against Russia, China, Iran, and oil-exporting countries that the United States is seeking to isolate if cannot control their governments, central bank and foreign diplomacy.
* Keynote Paper delivered at the 14th Forum of the World Association for Political Economy, July 21, 2019.
The international framework that originally seemed equitable was pro-U.S. from the outset. In 1945 this was seen as a natural result of the fact that the U.S. economy was the least war-damaged and held by far most of the world’s monetary gold. Still, the postwar trade and financial framework was ostensibly set up on fair and equitable international principles. Other countries were expected to recover and grow, creating diplomatic, financial and trade parity with each other.
But the past decade has seen U.S. diplomacy become one-sided in turning the International Monetary Fund (IMF), World Bank, SWIFT bank-clearing system and world trade into an asymmetrically exploitative system. This unilateral U.S.-centered array of institutions is coming to be widely seen not only as unfair, but as blocking the progress of other countries whose growth and prosperity is seen by U.S. foreign policy as a threat to unilateral U.S. hegemony. What began as an ostensibly international order to promote peaceful prosperity has turned increasingly into an extension of U.S. nationalism, predatory rent-extraction and a more dangerous military confrontation.
Deterioration of international diplomacy into a more nakedly explicit pro-U.S. financial, trade and military aggression was implicit in the way in which economic diplomacy was shaped when the United Nations, IMF and World Bank were shaped mainly by U.S. economic strategists. Their economic belligerence is driving countries to withdraw from the global financial and trade order that has been turned into a New Cold War vehicle to impose unilateral U.S. hegemony. Nationalistic reactions are consolidating into new economic and political alliances from Europe to Asia.
We are still mired in the Oil War that escalated in 2003 with the invasion of Iraq, which quickly spread to Libya and Syria. American foreign policy has long been based largely on control of oil. This has led the United States to oppose the Paris accords to stem global warming. Its aim is to give U.S. officials the power to impose energy sanctions forcing other countries to “freeze in the dark” if they do not follow U.S. leadership.
To expand its oil monopoly, America is pressuring Europe to oppose the Nordstream II gas pipeline from Russia, claiming that this would make Germany and other countries dependent on Russia instead of on U.S. liquified natural gas (LNG). Likewise, American oil diplomacy has imposed unilateral sanctions against Iranian oil exports, until such time as a regime change opens up that country’s oil reserves to U.S., French, British and other allied oil majors.
U.S. control of dollarized money and credit is critical to this hegemony. As Congressman Brad Sherman of Los Angeles told a House Financial Services Committee hearing on May 9, 2019: “An awful lot of our international power comes from the fact that the U.S. dollar is the standard unit of international finance and transactions. Clearing through the New York Fed is critical for major oil and other transactions. It is the announced purpose of the supporters of cryptocurrency to take that power away from us, to put us in a position where the most significant sanctions we have against Iran, for example, would become irrelevant.”
The U.S. aim is to keep the dollar as the transactions currency for world trade, savings, central bank reserves and international lending. This monopoly status enables the U.S. Treasury and State Department to disrupt the financial payments system and trade for countries with which the United States is at economic or outright military war.
Russian President Vladimir Putin quickly responded by describing how “the degeneration of the universalist globalization model [is] turning into a parody, a caricature of itself, where common international rules are replaced with the laws… of one country.” That is the trajectory on which this deterioration of formerly open international trade and finance is now moving. It has been building up for a decade. On June 5, 2009, then-Russian President Dmitry Medvedev cited this same disruptive U.S. dynamic at work in the wake of the U.S. junk mortgage and bank fraud crisis.
Those whose job it was to forecast events … were not ready for the depth of the crisis and turned out to be too rigid, unwieldy and slow in their response. The international financial organisations – and I think we need to state this up front and not try to hide it – were not up to their responsibilities, as has been said quite unambiguously at a number of major international events such as the two recent G20 summits of the world’s largest economies.
Furthermore, we have had confirmation that our pre-crisis analysis of global economic trends and the global economic system were correct. The artificially maintained uni-polar system and preservation of monopolies in key global economic sectors are root causes of the crisis. One big centre of consumption, financed by a growing deficit, and thus growing debts, one formerly strong reserve currency, and one dominant system of assessing assets and risks – these are all factors that led to an overall drop in the quality of regulation and the economic justification of assessments made, including assessments of macroeconomic policy. As a result, there was no avoiding a global crisis.
That crisis is what is now causing today’s break in global trade and payments.
Warfare on many fronts, with Dollarization being the main arena
Dissolution of the Soviet Union 1991 did not bring the disarmament that was widely expected. U.S. leadership celebrated the Soviet demise as signaling the end of foreign opposition to U.S.-sponsored neoliberalism and even as the End of History. NATO expanded to encircle Russia and sponsored “color revolutions” from Georgia to Ukraine, while carving up former Yugoslavia into small statelets. American diplomacy created a foreign legion of Wahabi fundamentalists from Afghanistan to Iran, Iraq, Syria and Libya in support of Saudi Arabian extremism and Israeli expansionism.
The United States is waging war for control of oil against Venezuela, where a military coup failed a few years ago, as did the 2018-19 stunt to recognize an unelected pro-American puppet regime. The Honduran coup under President Obama was more successful in overthrowing an elected president advocating land reform, continuing the tradition dating back to 1954 when the CIA overthrew Guatemala’s Arbenz regime.
U.S. officials bear a special hatred for countries that they have injured, ranging from Guatemala in 1954 to Iran, whose regime it overthrew to install the Shah as military dictator. Claiming to promote “democracy,” U.S. diplomacy has redefined the word to mean pro-American, and opposing land reform, national ownership of raw materials and public subsidy of foreign agriculture or industry as an “undemocratic” attack on “free markets,” meaning markets controlled by U.S. financial interests and absentee owners of land, natural resources and banks.
A major byproduct of warfare has always been refugees, and today’s wave fleeing ISIS, Al Qaeda and other U.S.-backed Near Eastern proxies is flooding Europe. A similar wave is fleeing the dictatorial regimes backed by the United States from Honduras, Ecuador, Colombia and neighboring countries. The refugee crisis has become a major factor leading to the resurgence of nationalist parties throughout Europe and for the white nationalism of Donald Trump in the United States.
Dollarization as the vehicle for U.S. nationalism
The Dollar Standard – U.S. Treasury debt to foreigners held by the world’s central banks – has replaced the gold-exchange standard for the world’s central bank reserves to settle payments imbalances among themselves. This has enabled the United States to uniquely run balance-of-payments deficits for nearly seventy years, despite the fact that these Treasury IOUs have little visible likelihood of being repaid except under arrangements where U.S. rent-seeking and outright financial tribute from other enables it to liquidate its official foreign debt.
The United States is the only nation that can run sustained balance-of-payments deficits without having to sell off its assets or raise interest rates to borrow foreign money. No other national economy in the world can could afford foreign military expenditures on any major scale without losing its exchange value. Without the Treasury-bill standard, the United States would be in this same position along with other nations. That is why Russia, China and other powers that U.S. strategists deem to be strategic rivals and enemies are looking to restore gold’s role as the preferred asset to settle payments imbalances.
The U.S. response is to impose regime change on countries that prefer gold or other foreign currencies to dollars for their exchange reserves. A case in point is the overthrow of Libya’s Omar Kaddafi after he sought to base his nation’s international reserves on gold. His liquidation stands as a military warning to other countries.
Thanks to the fact that payments-surplus economies invest their dollar inflows in U.S. Treasury bonds, the U.S. balance-of-payments deficit finances its domestic budget deficit. This foreign central-bank recycling of U.S. overseas military spending into purchases of U.S. Treasury securities gives the United States a free ride, financing its budget – also mainly military in character – so that it can taxing its own citizens.
Trump is forcing other countries to create an alternative to the Dollar Standard
The fact that Donald Trump’s economic policies are proving ineffective in restoring American manufacturing is creating rising nationalist pressure to exploit foreigners by arbitrary tariffs without regard for international law, and to impose trade sanctions and diplomatic meddling to disrupt regimes that pursue policies that U.S. diplomats do not like.
There is a parallel here with Rome in the late 1st century BC. It stripped its provinces to pay for its military deficit, the grain doleand land redistribution at the expense of Italian cities and Asia Minor. This created foreign opposition to drive Rome out. The U.S. economy is similar to Rome’s: extractive rather than productive, based mainly on land rents and money-interest. As the domestic market is impoverished, U.S. politicians are seeking to take from abroad what no longer is being produced at home.
What is so ironic – and so self-defeating of America’s free global ride – is that Trump’s simplistic aim of lowering the dollar’s exchange rate to make U.S. exports more price-competitive. He imagines commodity trade to be the entire balance of payments, as if there were no military spending, not to mention lending and investment. To lower the dollar’s exchange rate, he is demanding that China’s central bank and those of other countries stop supporting the dollar by recycling the dollars they receive for their exports into holdings of U.S. Treasury securities.
This tunnel vision leaves out of account the fact that the trade balance is not simply a matter of comparative international price levels. The United States has dissipated its supply of spare manufacturing capacity and local suppliers of parts and materials, while much of its industrial engineering and skilled manufacturing labor has retired. An immense shortfall must be filled by new capital investment, education and public infrastructure, whose charges are far above those of other economics.
Trump’s infrastructure ideology is a Public-Private Partnership characterized by high-cost financialization demanding high monopoly rents to cover its interest charges, stock dividends and management fees. This neoliberal policy raises the cost of living for the U.S. labor force, making it uncompetitive. The United States is unable to produce more at any price right now, because its has spent the past half-century dismantling its infrastructure, closing down its part suppliers and outsourcing its industrial technology.
The United States has privatized and financialized infrastructure and basic needs such as public health and medical care, education and transportation that other countries have kept in their public domain to make their economies more cost-efficient by providing essential services at subsidized prices or freely. The United States also has led the practice of debt pyramiding, from housing to corporate finance. This financial engineering and wealth creation by inflating debt-financed real estate and stock market bubbles has made the United States a high-cost economy that cannot compete successfully with well-managed mixed economies.
Unable to recover dominance in manufacturing, the United States is concentrating on rent-extracting sectors that it hopes monopolize, headed by information technology and military production. On the industrial front, it threatens disrupt China and other mixed economies by imposing trade and financial sanctions.
The great gamble is whether these other countries will defend themselves by joining in alliances enabling them to bypass the U.S. economy. American strategists imagine their country to be the world’s essential economy, without whose market other countries must suffer depression. The Trump Administration thinks that There Is No Alternative (TINA) for other countries except for their own financial systems to rely on U.S. dollar credit.
To protect themselves from U.S. sanctions, countries would have to avoid using the dollar, and hence U.S. banks. This would require creation of a non-dollarized financial system for use among themselves, including their own alternative to the SWIFT bank clearing system. Table 1 lists some possible related defenses against U.S. nationalistic diplomacy.
As noted above, what also is ironic in President Trump’s accusation of China and other countries of artificially manipulating their exchange rate against the dollar (by recycling their trade and payments surpluses into Treasury securities to hold down their currency’s dollar valuation) involves dismantling the Treasury-bill standard. The main way that foreign economies have stabilized their exchange rate since 1971 has indeed been to recycle their dollar inflows into U.S. Treasury securities. Letting their currency’s value rise would threaten their export competitiveness against their rivals, although not necessarily benefit the United States.
Ending this practice leaves countries with the main way to protect their currencies from rising against the dollar is to reduce dollar inflows by blocking U.S. lending to domestic borrowers. They may levy floating tariffs proportioned to the dollar’s declining value. The U.S. has a long history since the 1920s of raising its tariffs against currencies that are depreciating: the American Selling Price (ASP) system. Other countries can impose their own floating tariffs against U.S. goods.
Trade dependency as an aim of the World Bank, IMF and US AID
The world today faces a problem much like what it faced on the eve of World War II. Like Germany then, the United States now poses the main threat of war, and equally destructive neoliberal economic regimes imposing austerity, economic shrinkage and depopulation. U.S. diplomats are threatening to destroy regimes and entire economies that seek to remain independent of this system, by trade and financial sanctions backed by direct military force.
Dedollarization will require creation of multilateral alternatives to U.S. “front” institutions such as the World Bank, IMF and other agencies in which the United States holds veto power to block any alternative policies deemed not to let it “win.” U.S. trade policy through the World Bank and U.S. foreign aid agencies aims at promoting dependency on U.S. food exports and other key commodities, while hiring U.S. engineering firms to build up export infrastructure to subsidize U.S. and other natural-resource investors. The financing is mainly in dollars, providing risk-free bonds to U.S. and other financial institutions. The resulting commercial and financial “interdependency” has led to a situation in which a sudden interruption of supply would disrupt foreign economies by causing a breakdown in their chain of payments and production. The effect is to lock client countries into dependency on the U.S. economy and its diplomacy, euphemized as “promoting growth and development.”
U.S. neoliberal policy via the IMF imposes austerity and opposes debt writedowns. Its economic model pretends that debtor countries can pay any volume of dollar debt simply by reducing wages to squeeze more income out of the labor force to pay foreign creditors. This ignores the fact that solving the domestic “budget problem” by taxing local revenue still faces the “transfer problem” of converting it into dollars or other hard currencies in which most international debt is denominated. The result is that the IMF’s “stabilization” programs actually destabilize and impoverish countries forced into following its advice.
IMF loans support pro-U.S. regimes such as Ukraine, and subsidize capital flight by supporting local currencies long enough to enable U.S. client oligarchies to flee their currencies at a pre-devaluation exchange rate for the dollar. When the local currency finally is allowed to collapse, debtor countries are advised to impose anti-labor austerity. This globalizes the class war of capital against labor while keeping debtor countries on a short U.S. financial leash.
U.S. diplomacy is capped by trade sanctions to disrupt economies that break away from U.S. aims. Sanctions are a form of economic sabotage, as lethal as outright military warfare in establishing U.S. control over foreign economies. The threat is to impoverish civilian populations, in the belief that this will lead them to replace their governments with pro-American regimes promising to restore prosperity by selling off their domestic infrastructure to U.S. and other multinational investors.
There are alternatives, on many fronts
Militarily, today’s leading alternative to NATO expansionism is the Shanghai Cooperation Organization (SCO), along with Europe following France’s example under Charles de Gaulle and withdrawing. After all, there is no real threat of military invasion today in Europe. No nation can occupy another without an enormous military draft and such heavy personnel losses that domestic protests would unseat the government waging such a war. The U.S. anti-war movement in the 1960s signaled the end of the military draft, not only in the United States but in nearly all democratic countries. (Israel, Switzerland, Brazil and North Korea are exceptions.)
The enormous spending on armaments for a kind of war unlikely to be fought is not really military, but simply to provide profits to the military industrial complex. The arms are not really to be used. They are simply to be bought, and ultimately scrapped. The danger, of course, is that these not-for-use arms actually might be used, if only to create a need for new profitable production.
Likewise, foreign holdings of dollars are not really to be spent on purchases of U.S. exports or investments. They are like fine-wine collectibles, for saving rather than for drinking. The alternative to such dollarized holdings is to create a mutual use of national currencies, and a domestic bank-clearing payments system as an alternative to SWIFT. Russia, China, Iran and Venezuela already are said to be developing a crypto-currency payments to circumvent U.S. sanctions and hence financial control.
In the World Trade Organization, the United States has tried to claim that any industry receiving public infrastructure or credit subsidy deserves tariff retaliation in order to force privatization. In response to WTO rulings that U.S. tariffs are illegally imposed, the United States “has blocked all new appointments to the seven-member appellate body in protest, leaving it in danger of collapse because it may not have enough judges to allow it to hear new cases.”[5] In the U.S. view, only privatized trade financed by private rather than public banks is “fair” trade.
An alternative to the WTO (or removal of its veto privilege given to the U.S. bloc) is needed to cope with U.S. neoliberal ideology and, most recently, the U.S. travesty claiming “national security” exemption to free-trade treaties, impose tariffs on steel, aluminum, and on European countries that circumvent sanctions on Iran or threaten to buy oil from Russia via the Nordstream II pipeline instead of high-cost liquified “freedom gas” from the United States.
In the realm of development lending, China’s bank along with its Belt and Road initiative is an incipient alternative to the World Bank, whose main role has been to promote foreign dependency on U.S. suppliers. The IMF for its part now functions as an extension of the U.S. Department of Defense to subsidize client regimes such as Ukraine while financially isolating countries not subservient to U.S. diplomacy.
To save debt-strapped economies suffering Greek-style austerity, the world needs to replace neoliberal economic theory with an analytic logic for debt writedowns based on the ability to pay. The guiding principle of the needed development-oriented logic of international law should be that no nation should be obliged to pay foreign creditors by having to sell of the public domain and rent-extraction rights to foreign creditors. The defining character of nationhood should be the fiscal right to tax natural resource rents and financial returns, and to create its own monetary system.
The United States refuses to join the International Criminal Court. To be effective, it needs enforcement power for its judgments and penalties, capped by the ability to bring charges of war crimes in the tradition of the Nuremberg tribunal. U.S. to such a court, combined with its military buildup now threatening World War III, suggests a new alignment of countries akin to the Non-Aligned Nations movement of the 1950s and 1960s. Non-aligned in this case means freedom from U.S. diplomatic control or threats.
Such institutions require a more realistic economic theory and philosophy of operations to replace the neoliberal logic for anti-government privatization, anti-labor austerity, and opposition to domestic budget deficits and debt writedowns. Today’s neoliberal doctrine counts financial late fees and rising housing prices as adding to “real output” (GDP), but deems public investment as deadweight spending, not a contribution to output. The aim of such logic is to convince governments to pay their foreign creditors by selling off their public infrastructure and other assets in the public domain.
Just as the “capacity to pay” principle was the foundation stone of the Bank for International Settlements in 1931, a similar basis is needed to measure today’s ability to pay debts and hence to write down bad loans that have been made without a corresponding ability of debtors to pay. Without such an institution and body of analysis, the IMF’s neoliberal principle of imposing economic depression and falling living standards to pay U.S. and other foreign creditors will impose global poverty.
The above proposals provide an alternative to the U.S. “exceptionalist” refusal to join any international organization that has a say over its affairs. Other countries must be willing to turn the tables and isolate U.S. banks, U.S. exporters, and to avoid using U.S. dollars and routing payments via U.S. banks. To protect their ability to create a countervailing power requires an international court and its sponsoring organization.
Summary
The first existential objective is to avoid the current threat of war by winding down U.S. military interference in foreign countries and removing U.S. military bases as relics of neocolonialism. Their danger to world peace and prosperity threatens a reversion to the pre-World War II colonialism, ruling by client elites along lines similar to the 2014 Ukrainian coup by neo-Nazi groups sponsored by the U.S. State Department and National Endowment for Democracy. Such control recalls the dictators that U.S. diplomacy established throughout Latin America in the 1950s. Today’s ethnic terrorism by U.S.-sponsored Wahabi-Saudi Islam recalls the behavior of Nazi Germany in the 1940s.
Global warming is the second major existentialist threat. Blocking attempts to reverse it is a bedrock of American foreign policy, because it is based on control of oil. So the military, refugee and global warming threats are interconnected.
The U.S. military poses the greatest immediate danger. Today’s warfare is fundamentally changed from what it used to be. Prior to the 1970s, nations conquering others had to invade and occupy them with armies recruited by a military draft. But no democracy in today’s world can revive such a draft without triggering widespread refusal to fight, voting the government out of power. The only way the United States – or other countries – can fight other nations is to bomb them. And as noted above, economic sanctions have as destructive an effect on civilian populations in countries deemed to be U.S. adversaries as overt warfare. The United States can sponsor political coups (as in Honduras and Pinochet’s Chile), but cannot occupy. It is unwilling to rebuild, to say nothing of taking responsibility for the waves of refugees that our bombing and sanctions are causing from Latin America to the Near East.
U.S. ideologues view their nation’s coercive military expansion and political subversion and neoliberal economic policy of privatization and financialization as an irreversible victory signaling the End of History. To the rest of the world it is a threat to human survival.
The American promise is that the victory of neoliberalism is the End of History, offering prosperity to the entire world. But beneath the rhetoric of free choice and free markets is the reality of corruption, subversion, coercion, debt peonage and neofeudalism. The reality is the creation and subsidy of polarized economies bifurcated between a privileged rentier class and its clients, eir debtors and renters. America is to be permitted to monopolize trade in oil and food grains, and high-technology rent-yielding monopolies, living off its dependent customers. Unlike medieval serfdom, people subject to this End of History scenario can choose to live wherever they want. But wherever they live, they must take on a lifetime of debt to obtain access to a home of their own, and rely on U.S.-sponsored control of their basic needs, money and credit by adhering to U.S. financial planning of their economies. This dystopian scenario confirms Rosa Luxemburg’s recognition that the ultimate choice facing nations in today’s world is between socialism and barbarism.
via ZeroHedge News https://ift.tt/2ydxItl Tyler Durden
Productivity in the US has been a hot topic among economists over the past few years, as the Fed and other academics have puzzled over how the longstanding correlations between unemployment & inflation have unraveled in the years since the financial crisis.
Americans are working longer hours than ever before. Yet, wage growth remains stagnant, and automation is killing more jobs than ever before.
Still, the US has perennially ranked as one of the hardest-working countries in the world as American workers clock in more hours than almost any of its peers in both the developed and developing world classifications.
But, in order to drill down and collect more data on the subject, Kempler Industries carried out a study to rank the 200 hardest working cities in the US. In order to compare apples to apples, Kempler ignored cities with populations below 150,000.
A map below shows the top 10 hardest working cities.
Washington DC takes the top spot, scoring 90 points out of 100. But although DC takes the top spot, seven out of the top ten hardest-working cities on the list could be found in the Lone Star state.
One reason why Texas had so many of the hardest working cities: Across Texas, roughly 20% of the state is of retirement-age.
And not only were workers in these cities working longer hours than Americans elsewhere, they were also commuting longer. With the exception of Irving, every Texas city within the top 10 had an average commute that is longer than the national average.
In terms of population, the largest cities on our list are Chicago and New York City while Pembroke Pines, Florida and Grand Prairie, Texas are the smallest cities on our list.
Theories about the underlying causes of this slowdown in productivity abound: one explanation holds that institutions and corporations are not deploying the new technologies very effectively for a variety of reasons: the cost of integrating legacy systems, insufficient training of their workforce, and finally, ill-planned investments by some companies utilizing these technologies scaring off others from following suit (perhaps more successfully).
To be sure, after years of declines, productivity posted its best quarterly growth during Q4 of 2018, according to BLS.
Remember: Productivity is important because producing more value with every unit of energy, every tool and every hour of labor helps drive higher wages, profits, taxes and general prosperity.
Then again, there’s another explanation that has been catching on recently: Social media is helping to distract workers at unprecedented rates. According to one study, Americans are spending nearly 6 hours a day on their phones, facebooking, snap-chatting, insta-graming and interacting with their friends and others via social media networks.
That time has got to come from somewhere.
via ZeroHedge News https://ift.tt/2K0La9m Tyler Durden
On July 12, a 13-year-old boy blew himself up in a suicide bombing at a wedding in eastern Afghanistan’s Nangarhar province, killing five people and injuring 40, local officials said.
The issue of child radicalization has become a global horror-show.
Radicalization is now easy for the extremists,thanks to technology, the new weapon being brandished by Islamist terrorists in accordance with the mandate of the Muslim Brotherhoodto “weaken the West from within”.
Kids today, as early as three years old, are on YouTube watching videos. Unfortunately, it has never been easier for extremists — from white supremacists to radical Islamists — to target vulnerable children and penetrate a child’s consciousness.
According to the UN, there are more than 250,000 child soldiers fighting around the world in more than 20 different conflicts. The Combating Terrorism Center reports that ISIS had more than 1,500 kids on the front lines and trained 1,000 kids to become suicide bombers in the first six months of 2015.
This problem has spilled over into North America. CNN reported last year that about 1,000 investigations of connections with ISIS were open in all 50 states.
In August 2018, 11 children were found in a compound in New Mexico being trained by an American radical Islamist to commit school shootings
In Minneapolis, 45 boys and young men have left the local Somali community to join al-Shabab or ISIS. Dozens more were stopped in 2018 from traveling.
In June 2019, a 22-year-old Bangladeshi living in New York was arrested for plotting an attack on Times Square
These are only a part of the statistics that tell us we are facing a huge crisis; very few people are willing to speak about the dangers of the radicalization of youths.
On July 18, leaders and experts with the Clarion Project gathered in Washington DC to hold an exclusive pre-release Congressional screening of the new documentary, “Kids Chasing Paradise” (currently in post-production). The organization flew in key experts and other leaders fighting against radical extremism and who are affiliated with the film to educate Congress, hold media briefings and present its program to Prevent Violent Extremism at the National Press Club.
Kids Chasing Paradise tells the incredible story of ordinary people that have been directly affected by this radicalization and are now trying to prevent it from happening to others.
Apart from some in-depth coverage of youths being taught hate, violence and radicalization, the film features:
Christianne Boudreau, a Canadian mother who was personally affected by the impact of the violent radicalization process; her son, Damian, was killed while fighting for ISIS. She now coordinates the Mothers for Life Network, which brings together mothers of radicalized jihadis to support one another and combat radicalization.
Tania Joya, a former extremist who is now working out of Texas on deradicalization. Tania Joya’s ex-husband was radicalized in Texas as a teenager and became ISIS’ main propagandist in Syria. Originally British, Tania Joya and her four children now live in Texas. Tania used to want her children to grow up to be jihadists. Now she embraces human rights and Western values.
Nicola Benyahia is a British woman who founded Families for Life, a nonprofit organization focused on deradicalization and support for families of young extremists. When Nicola’s son, Rasheed, unexpectedly joined ISIS, she found Christianne and they started both a professional collaboration and personal friendship
The movie is accompanied by a workshop called Preventing Violent Extremism, based on the concept that no one is born a terrorist or extremist. Individuals are manipulated into being radicalized. Therefore, we feel that prevention is possible. The workshop is a way of understanding the path to youth radicalization and suggestions on how to prevent it before it happens.
As people who care deeply about human rights, we are extremely concerned about the way these children are being subverted and abused, as well as about the future of our next generation, and creating awareness is of utmost importance.
via ZeroHedge News https://ift.tt/2yhatig Tyler Durden
