Category: zerohedge

Authored by Chris Hailton via Econimica blog,

2019 saw US population growth at its lowest percentage level in US history aside from the pandemic years of 1918/1919 (when the Spanish flu took the lives of nearly 700,000 Americans).  The 0.5% annual growth meant US population grew by approx. 1.55 million persons in 2019.

Today, I just wanted to focus on the implications of low population growth on the largest sector of the US economy, housing and in particular new housing starts.  The chart below shows annual total US population growth in millions (red line, million), the next line is the US population growth among the under 70 year old population (yellow line, million), then annual housing starts (blue line, million), and finally the Federal Reserve set federal funds rate driving interest rates (black line, %).

Really take a minute to check to understand these relationships…its really important.

From 1960 to 2008, annual population growth (red line) varied from about 1.8 to 3.5 million a year and the vast majority of that growth came among the under 70 year old population (yellow line).  During this nearly five decades, housing starts (blue line) varied from about 1 to 2 million units annually, with sharp inverse swings based on the cost of money represented by the changes in the federal funds rate (black line). 

But starting in 2008, housing starts fell below 1 million units and would remain there through 2012 despite the cost of money (federal funds rate) sitting at zero for nearly a decade.  The NAR and others suggest there is a housing shortage due to this period of significantly below trend housing starts…but if you happen to look at the red line (decelerating total population growth) and the yellow line (collapsing population growth among the under 70 year old population), perhaps something else is happening.

70+ year-old elderly folks have the highest home ownership rates, are least likely to undertake new loans, and have the lowest labor force participation rates among the adult population at something like 1 in 10 working versus 8 in 10 among 50 year-olds.  In 2019, the 70+ population grew by about 1.3 million.  Point is, 70+ year-olds are not net home buyers but net sellers as they pay down/pay off their mortgages, downsize, move to managed care, or pass away.

It is the annual growth of the under 70 year-old population that drives demand for new housing, that has high levels of employment, and the willingness to undertake long term mortgage debt.  In 2019, the under 70 year-old population grew by less than 300 thousand.  The 90%+ annual deceleration in the potential buyers versus a ten-fold rise in the annual growth of elderly has turned the housing market upside down.

But last year, more new homes were started than the total population increased…something that had not happened since the early 1970’s.  The chart below shows annual starts as a percentage of annual population growth moving inverse the federal funds rate.  The sharp increase in housing starts amid a population growth slowdown is definitely noteworthy.

While the total annual population growth is decelerating, all the deceleration is among the under 70 year-old population (declining births, declining immigration) while the 70+ year-old population growth is still accelerating.  The chart below details the annual housing starts as a ratio of annual under 70 year-old population growth from 1960 through 2015.  Nearly 40 years of interest rate cuts have mitigated the deceleration in housing starts as a percentage of under 70 year-old population growth, until…

That is until now…2018 and particularly 2019 saw new housing starts surge while population growth of the under 70 year old population took another leg down.  The result was more than five new housing starts per every new under 70 year-old in the US…aka, the hockey stick chart below.

Now, go back and look at the first chart again.  You will notice that for the whole of the 2020’s, what projected population growth there is, is among the 70+ year-old population and, so long as the declining birth rates / total births and decelerating immigration continue, we should expect little to no growth among home buyers.  The idea that America needs more housing seems strange indeed.  Far more realistic is that the 2020’s will see a period of replacement level new housing rather than outright growth.  Of course, real estate is local.  On a micro level, there is likely to be a surge of rural inventory, and inversely, increasingly tight urban inventory in select cities.  This is due to a likely ongoing outflow of young adults from rural locales to select urban centers, in search of opportunity.  Either way, the net picture is unchanged or even worsened as urban fertility and birth rates are even lower than those seen in rural areas.

Or, then again, maybe the Federal Reserve can just print new buyers…or add residential real estate to its already bloated balance sheet so America can keep on building…ever more…for ever fewer?

Fashion retailer Nordstrom gets it: Americans are becoming poorer, and it’s time for it to capitalize on recommerce, otherwise known as reverse commerce, which basically means Nordstrom is going to sell secondhand clothing. 

So, move over local consignment stores, and or Goodwill Industries, eBay, and The Salvation Army, there’s a new player in town, Nordstrom, that will jump into the recommerce industry on Jan. 31. 

Nordstrom’s “See You Tomorrow” store will have a dedicated section at its New York flagship store, opens tomorrow, and will sell secondhand luxury clothes. There’s also going to be a section on the company’s website that will list a catalog of used clothing, the company said in press release, dated Jan. 30. 

Nordstrom’s closet recommerce competitor will be The RealReal, an online and brick-and-mortar marketplace for authenticated luxury consignment, as the industry for used clothing increased to $28 billion in 2019. 

Olivia Kim, vice president of creative projects for the retailer, said many of the brands Nordstrom carries would be resold through its “See You Tomorrow” shop. 

“We want to provide a unique and elevated resale shopping experience that encourages a sense of discovery and provides access to the brands our customers know and love, while giving them a convenient opportunity to participate in the circular fashion economy,” Kim said 

She said, “so many Americans are already engaged with recommerce, whether it’s rental or retail.” 

She added that many of the items that will be carried at “See You Tomorrow” will be sourced from Nordstrom’s inventory of returned and damaged merchandise.

Nordstrom has partnered with Yerdle, which already handles resale for Eileen Fisher, Patagonia, and other top brands.

Yerdle is expected to clean and repair Nordstrom products, along with handling, inventory, processing and fulfillment.

Nordstrom’s resale items are expected to include “women’s apparel, women’s shoes, handbags, men’s apparel, accessories and shoes, children’s wear and a limited selection of jewelry and watches,” the retailer said. 

Nordstrom is diving into the recommerce industry at a time when consumers are broke, heavily leverage with auto debt, credit cards, and student debt, but for some odd reason, are feeling very optimistic about life. 

However, when the next recession strikes, consumers, who are already bound with insurmountable debts, will not enjoy the luxuries of purchasing new luxury goods and will have to opt for secondhand clothing at their local “See You Tomorrow.” 

 

 

Authored by Nick Cunningham via OilPrice.com,

“All oil-field workers are radiation workers.”

That quote comes from a blockbuster investigation by Justin Nobel writing in Rolling Stone, who has spent more than a year and a half researching and reporting on radioactivity in fracking waste.

When a well is drilled, it produces a ton of brine, a salty substance that comes out of the ground. Shale wells can produce as much as ten times more brine than they do oil and gas. While hydrocarbons prove to be useful, the brine needs to be hauled somewhere for disposal. Often it is reinjected into disposal wells, or, in some cases it is sent to water treatment plants.

The problem is that the brine can be radioactive. As Nobel writes in Rolling Stone, radioactive brine may be dramatically increasing the cancer risk for people who come in contact with it. The workers who handle the waste are most obviously at risk. But there are plenty of others. The brine is used for de-icing roads, so municipalities are essentially spreading radioactivity all over roads in various parts of the country.

Old oilfield equipment is also repurposed. Rolling Stone spoke with a Louisiana inspector who saw a child sitting on a fence that was so radioactive that someone might receive a full year’s radiation dose in a single hour.

The oil and gas industry dismisses the risk of radioactivity in the brine, which is naturally occurring, as not something that anybody should be worrying about. However, some of the experts that Nobel interviewed argue otherwise.

First of all, the notion that just because something exists naturally in the world somehow makes it benign, is odd.

“Arsenic is completely natural, but you probably wouldn’t let me put arsenic in your school lunch,” one nuclear-forensics scientist told Rolling Stone.

Second, the industry is barley regulated, if at all, when it comes to handling radioactive substances. Officials at EPA and the Nuclear Regulatory Commission sounded perplexed when Nobel presented questions to them about the risk, each indicating that they were not responsible for regulating radioactivity in the oil and gas industry.

Nobel profiled several people who have come in contact with brine and have suffered from an array of worrying health problems.

“The workers are going to be the canaries,” Raina Rippel of the Southwest Pennsylvania Environmental Health Project, told Rolling Stone.

“The radioactivity issue is not something we have adequately unpacked. Our elected leaders and public-health officials don’t have the knowledge to convey we are safe.”

This is not just an environmental story or a public health story, but it could also be a financial one. This is a whole aspect of the oil and gas industry that is mostly unregulated, underreported and largely unknown to the public. And it could yet turn into a massive liability for the industry if local, state or the federal government ever decided to get serious about it.

The industry would be directly impacted if it had to pay for remediation somehow, or even if the standards on the disposal of toxic brine were tightened up. It could spell financial “disaster” for oil and gas drillers if the EPA began regulating brine as a hazardous waste, one legal scholar told Rolling Stone. Reckoning with the public health fallout from radiation is not something anybody seems willing to take on at the moment.

But as Rolling Stone notes, public awareness of the problem itself could be a big problem for the industry. Oil and gas is already starting to see its “social license to operate” erode over climate change concerns. But the threat from climate change is diffuse in both space and time. The damage from fossil fuels is somewhat abstract in that sense.

In contrast, the extraction of toxic radioactive waste from beneath the earth, and then spreading it on roads, for example, is arguably more menacing. Or, at the very least, the direct health threat to the public is easier to understand. Certain types of cancers are cropping up, and scientists say there is a lot of evidence that points in the direction of exposure to brine and proximity to other oil and gas processes.

It seems as if the unconventional oil and gas industry has been around forever, as if it’s a fact of life that everyone has to live with. But the story of fracking is only a little over a decade old, and with each passing year the science surrounding the health risks grows more damning. Some presidential candidates are already calling for a ban on fracking. As the evidence of radioactivity becomes more known, the momentum for a crackdown on the industry could continue to grow.

The medical journal ‘The Lancet’ has published several pieces of cutting-edge research about the coronavirus, including the first reports that infected individuals can become contagious before symptoms appear. Now, the journal is one-upping itself by publishing research showing that men are more susceptible to the coronavirus than women.

According to a study of 99 patients treated in Wuhan’s Jinyintan Hospital, along with researchers from Shanghai Jiao Tong University and Ruijin Hospital in Shanghai, men – particularly those with preexisting health problems – are more prone to the virus. It confirmed a similar finding from an earlier study.

The study also warned – somewhat unnecessarily – that early identification and treatment of the pneumonia-like illness was important, since complications like organ failure are common. So far, the virus has killed more than 170 people, all of them in China.

Of the patients studied by the researchers, more than half were infected in “clusters”, a sign of just how rapidly the virus can jump from an infected person to a non-infected person.

“We observed a greater number of men than women in the 99 cases of 2019-nCoV infection. Mers-CoV and Sars-CoV have also been found to infect more males than females,” the study said, referring to Middle East respiratory syndrome and severe acute respiratory syndrome, which are also coronaviruses.

“The reduced susceptibility of females to viral infections could be attributed to the protection from X chromosome and sex hormones, which play an important role in innate and adaptive immunity,” it said.

Another alarming finding from the study: The mortality rate among the group studied was 11%. While that number is well above the 2%-3% official death toll, other epidemiologists have suggested that the true death toll for the virus is closer to 11%.

The study also offered a glimpse of the virus’s more serious symptoms. One-third of the patients studied developed organ failure and other complications. Some 17% developed acute respiratory distress syndrome.

Given the potential consequences should the virus be left untreated, seeking care early after symptoms emerge is crucial, the researchers said. Of course, that doesn’t bode well for people in Wuhan who have reportedly been turned away from overcrowded hospitals.

As researchers debate the genesis of the virus, a separate study of nine coronavirus patients published in The Lancet on Wednesday found that only one of them had not been to the Hunan seafood market in Wuhan where the virus has been traced to the market’s illegal trade in wild animals. Many of them worked at the market.

And with that, the ‘bat soup’ theory lives on.

Authored by Emma Fiala via TheMindUnleashed.com,

Manhattan-based Clearview AI is collecting data from unsuspecting social media users and the Chicago Police Department (CPD) is using the controversial facial recognition tool to pinpoint the identity of unknown suspects, reads a report from the Chicago Sun-Times.

And according to a bombshell New York Times report, it is also being used by the FBI and the Department of Homeland Security.

“Until this week, I had not heard of Clearview AI,” Gurbir Grewal, New Jersey’s attorney general, said in an interview. “I was troubled.”

Read the full investigation on Clearview AI from @kashhill: https://t.co/3jOFOxzs5X

— The New York Times (@nytimes) January 25, 2020

The software’s creator, Hoan Ton-That, maintains that it is purely “an after-the-fact research tool for law enforcement, not a surveillance system or a consumer application.” However, privacy advocates are saying this technology is so intrusive and ripe for abuse its use should be immediately halted. And earlier this month, a lawsuit was filed in federal court seeking to do just that.

Chicago attorney Scott Drury who filed the lawsuit describes CPD’s signing of a two-year, $49,875 contract with Illinois tech firm CDW Government to use Clearview AI’s software as “frightening.”

Conversely, Chicago police spokesman Anthony Guglielmi explains:

“Our obligation is to find those individuals that hurt other people and bring them to justice. And we want to be able to use every tool available to be able to perform that function, but we want to be able to do so responsibly.”

According to police, some CPD officials at the Crime Prevention and Information Center used the software for two months on a trial basis prior to the signing of the contract in January.

Despite the two month trial and the contract having been signed for approximately one month, CPD spokesman Howard Ludwig has declined to explain if and when Clearview AI has been used by the department thus far. Ludgwig explained:

“Any information about ongoing investigations can only come from cases that have been thoroughly adjudicated. We haven’t had Clearview long enough for any of the cases to have gone through the courts.”

Clearview AI’s database includes three billion photos taken from social media and network platforms such as Facebook, YouTube, and Twitter. The software searches its massive database for matches after users, including CPD, upload a photo of a suspect. The user is then provided with links for each image returned in the search that the company once told Green Bay police to “run wild” with in a marketing email.

Ton-That told the Sun-Times, “Our software links to publicly available web pages, not any private data.” It is clear he doesn’t seem to think the software poses any problems. But just this month, New Jersey’s attorney general Gurbir Grewal “put a moratorium on Clearview AI’s chilling, unregulated facial recognition software.”

BREAKING: @NewJerseyOAG put a moratorium on Clearview AI’s chilling, unregulated facial recognition software.

It scraped 3 billion photos online, including from social media, into an index of names + faces for police department subscribers.

This step is unequivocally good news.

— ACLU of New Jersey (@ACLUNJ) January 24, 2020

The ACLU of New Jersey responded to the move in a tweet last Friday:

“Technology like this opens a Pandora’s Box for constant warrantless searches, pretty much of anyone with a photo and name online.

It’s a tool that could make an already-unequal criminal justice system truly dystopian.

New Jersey is right to slam this Pandora’s Box shut.”

Technology like this opens a Pandora’s Box for constant warrantless searches, pretty much of anyone with a photo and name online.

It’s a tool that could make an already-unequal criminal justice system truly dystopian.

New Jersey is right to slam this Pandora’s Box shut.

— ACLU of New Jersey (@ACLUNJ) January 24, 2020

The ACLU also rightfully pointed out that tendency of facial recognition technology to have a bias against “people of color, women, and non-binary people.” In fact, as TMU has previously reported, self-driving cars are less likely to detect black people and artificial intelligence (AI) is sending the wrong people to jail.

Critics of Clearview AI and facial recognition software extend far beyond those involved in the lawsuit mentioned above and the ACLU of New Jersey. In what is the one of the biggest efforts to date in the battle against the use of facial recognition technologies, 40 organizations signed a letter to the Department of Homeland Security’s Privacy and Civil Liberties Oversight Board calling for the banning of the U.S. government’s use of such technology “pending further review.” The letter notes that this technology could be exploited and used to “control minority populations and limit dissent.”

However, as Fast Company points out, not everyone feels the same. In fact, some view actions like the letter mentioned above “an overreaction.”

Jon Gacek, head of government, legal, and compliance for Veritone—a company that provides technology like Clearview AI for law enforcement in both Europe and the U.S.—says all the software does is use “technology to do what police already do, except far faster and at less cost.”

Twitter responded to the bombshell NYT report by sending a letter to Clearview AI last week. In a follow-up report, the NYT explained:

“Twitter sent a letter this week to the small start-up company, Clearview AI, demanding that it stop taking photos and any other data from the social media website “for any reason” and delete any data that it previously collected, a Twitter spokeswoman said. The cease-and-desist letter, sent on Tuesday, accused Clearview of violating Twitter’s policies.”

While those concerned with privacy are typically focused on their photos and data being used by social media companies for profit, the situation with Clearview AI is an excellent reminder that what we post online generally can and will be used in ways we do not consent to despite our best efforts to keep up with Terms of Service updates and checking as many “opt-out” boxes as possible.

Carter Page is suing the DNC and the Perkins Coie law firm for their roles in funding the infamous Steele dossier, which was used as the foundation for controversial surveillance warrants used by the Obama administration to spy on him during and after the 2016 US election.

The former Trump campaign adviser filed a lawsuit Thursday in the Northern District of Illinois’ Eastern Division, which his attorneys described as the “first of multiple actions in the wake of historic” Foreign Intelligence Surveillance Act (FISA) abuse, according to Fox News.

“Defendants developed a dossier replete with falsehoods about numerous individuals associated with the Trump campaign—especially Dr. Page. Defendants then sought to tarnish the Trump campaign and its affiliates (including Dr. Page) by publicizing this false information,” reads the lawsuit, which adds “Even the DOJ and the FISC have recognized that the false information spread by Defendants led to invalid FISA warrants against Dr. Page.“

Justice Department Inspector General Michael Horowitz announced in a December report that the FBI made repeated errors and misrepresentations to the FISA court in the agency’s ham-handed efforts to surveil Page and those in his orbit in 2016 and 2017.

Horowitz confirmed that the FBI’s FISA applications to monitor Page heavily relied on the dossier and news reports rooted in Steele’s unverified research.

Just last week, the FISC released a newly declassified summary of a Justice Department assessment revealing at least two of the FBI’s surveillance applications to monitor Page lacked probable cause. -Fox News

“This is a first step to ensure that the full extent of the FISA abuse that has occurred during the last few years is exposed and remedied,” said attorney John Pierce on Thursday, adding “Defendants and those they worked with inside the federal government did not and will not succeed in making America a surveillance state.”

“This is only the first salvo. We will follow the evidence wherever it leads, no matter how high. … The rule of law will prevail.“

Page first filed a defamation suit on his own against the parties in October 2018 in federal court in Oklahoma, but that suit was dismissed in January 2019 after the judge ruled the court lacked jurisdiction over the case because neither Page nor the DNC had strong enough ties to the state.

Page is now represented by Pierce, the global managing partner of Pierce Bainbridge Beck Price & Hecht LLP. They filed in Illinois because they allege the relationship with the firm behind the dossier, Fusion GPS, was “orchestrated” through law firm Perkins Coie’s Chicago office. The suit also claims the DNC “has a historical pattern” of making Chicago its principal place of business. –Fox News

Read the complaint below:

Authored by Steve Watson via Summit News,

In a move that is sure to please President Trump, a State Representative in Tennessee has introduced legislation that would officially designate CNN, as well as The Washington Post, as fake news.

Republican Rep. Micah Van Huss filed the bill Wednesday, with the summary describing it as “A RESOLUTION to recognize CNN and The Washington Post as fake news and condemn them for denigrating our citizens.”

Taking to social media, Van Huss, a former Marine who served tours in Iraq and Afghanistan, declared “I’ve filed HJR 779 on behalf of a constituency that’s tired of fake news and Republicans who don’t fight.”

The State of Tennessee recognizes CNN and The Washington Post as fake news and part of the media wing of the Democrat Party.

I’ve filed HJR 779 on behalf of a constituency that’s tired of fake news and Republicans who don’t fight.

Follow it’s progress: https://t.co/7qp6E7q9LT pic.twitter.com/XyqQETtLKy

— Micah Van Huss (@MicahVanHuss) January 29, 2020

The legislation insists that The Washington Post and CNN have drawn a “line between Trump opponents and Trump supporters” by describing Trump voters as “cultists.”

The bill describes a specific instance where a CNN talking head “suggested that Trump supporters belong to a cult and that our president is using mind control.”

Infowars reported on the segment, aired last November on CNN, where Brian Stelter brought on ‘cult expert’, Steven Hassan, author of a book titled The Cult of Trump.

The pair urged viewers that the President is a ‘pathological liar’, and displays ‘the characteristics of destructive cult leader’.

They further suggested that ‘mind controlled’ Trump supporters need to be ‘deprogrammed’ and broken out of their ‘bubbles’.

The Tennesee bill continues:

“WHEREAS, it is fascinating to see this latest ‘cult-of-Trump’ meme coming from the left, because they are the true masters of deploying mobs to demand total conformity and compliance with their agenda; and WHEREAS, any thoughtful observer can see the cult-of-Trump meme as a classic case of psychological projection; after all, accusing someone’s perceived opponent of exactly what one intends to do is a very old tactic; and WHEREAS, the mainstream media is in a panic because President Trump has opened the eyes of many average Americans who are tired of politics as usual.”

The crux of the legislation argues that all of this “oversimplifies the way people think and feel about their own beliefs and those on the other side of that line.”

The bill reasons that therefore the media outlets pushing this agenda should be recognised as “fake news and part of the media wing of the Democratic Party.”

“BE IT FURTHER RESOLVED, that we condemn them for denigrating our citizens and implying that they are weak-minded followers instead of people exercising their rights that our veterans paid for with their blood,” the bill asserts.

The perpetually broke, deck-stacking DNC has been thrown into disarray just days before the Iowa caucus after Buzzfeed revealed that a cadre of top officials at the Democratic National Committee approved, then concealed a ‘generous exit package for the party chair, Tom Perez, and two top lieutenants,’ which has left Democrats ‘confounded over the weekend by the optics and timing of the decision on the eve of the presidential primary.”

The proposal, put forward as an official DNC resolution during a meeting of the party’s budget and finance committee last Friday, would have arranged for Perez and two of his top deputies, CEO Seema Nanda and deputy CEO Sam Cornale, to each receive a lump-sum bonus equaling four months’ salary within two weeks of the time they eventually leave their roles.

Senior DNC officers, including members of Perez’s own executive committee, learned of the compensation package after its approval, through the rumor mill, setting off a furious exchange of emails and texts over the weekend to determine what had been proposed, and by whom. –Buzzfeed

And while four-months salary might be more of a ‘bronze parachute’, Perez rejected the “extra compensation” package for himself and his two lieutenants in an email to officials.

Perez says he will serve through the end of the 2020 election, while all three officials have denied having any prior knowledge of, or involvement in the pay package resolution.

“One-hundred percent of our resources are going towards beating Donald Trump,” said DNC communications director Xochitl Hinojosa, who added “DNC leadership will not accept any extra compensation recommended by the budget committee, which didn’t operate at the direction of DNC leadership. The resolution was crafted by the budget committee and did not involve the Chair, CEO, or Deputy CEO.”

Taking the fall for the resolution are two members of the DNC’s budget and finance committee – Daniel Halpern and Chris Korge, who described it as the first step in a “smooth transition” for Perez.

Halperin, an anti-minimum wage lobbyist, was appointed by Perez in 2017. He previously chaired Atlanta Mayor Kasim Reed’s 2009 moyoral campaign, and was a trustee for Barack Obama’s 2008 inaugural committee.

Chris Korge is a Florida attorney hired in May of 2019. He was one of the top fundraisers for Andrew Gillum, Hillary Clinton, Bill Clinton, and served as the co-chairman for the Kerry Edwards campaign in 2004.

For years, the 64-year-old attorney, developer and one-time county hall lobbyist has been an important fundraiser for Democrats. He has raised millions for both Hillary and Bill Clinton, served as national co-chairman for Kerry Edwards Victory in 2004 and this year was co-chairman of Miami’s unsuccessful bid to bring the Democratic convention to South Florida next summer. –Miami Herald

According to Buzzfeed, Halpern and Korge both said the resolution was above-board and a common business practice. 

The resolution, which only applies to the 2021 transition, states that the outgoing chair, CEO, and deputy CEO will help facilitate donor and “stakeholder” relations, and convey “institutional knowledge” to the next chair, but is less specific about the requirements of the transition than the details of the compensation package: a lump sum of four months’ pay, paid within two weeks, unless either Perez, Nanda, or Cornale is terminated for “gross misconduct.”

On Tuesday, Halpern said the resolution was meant to serve only as a “nonbinding” starting point to ensure “continuity” between Perez’s tenure and the next party chair. –Buzzfeed

Top Democrats within the DNC’s leadership speaking on condition of anonymity said that they were shocked to learn of the compensation package on the eve of a presidential primary, amid a massive fundraising defecit. 

“I think it is completely short-sighted and really stupid,” said one senior official.

The package would have paid Perez around $69,000, Nanda around $61,000, and Cornale $39,000.

Authored by James Bovard via JimBovard.com,

The campaign to convict and remove President Donald Trump in the Senate hinges on delays in disbursing U.S. aid to Ukraine. Ukraine was supposedly on the verge of great progress until Trump pulled the rug out from under the heroic salvation effort by U.S. government bureaucrats. Unfortunately, Congress has devoted a hundred times more attention to the timing of aid to Ukraine than to its effectiveness. And most of the media coverage has ignored the biggest absurdity of the impeachment fight.

The temporary postponement of the Ukrainian aid was practically irrelevant considering that U.S. assistance efforts have long fueled the poxes they promised to eradicate – especially kleptocracy, or government by thieves.

A 2002 American Economic Review analysis concluded that “increases in [foreign] aid are associated with contemporaneous increases in corruption” and that “corruption is positively correlated with aid received from the United States.”

Then-President George W. Bush promised to reform foreign aid that year, declaring, “I think it makes no sense to give aid money to countries that are corrupt.” Regardless, the Bush administration continued delivering billions of dollars in handouts to many of the world’s most corrupt regimes.

Then-President Barack Obama, recognizing the failure of past U.S. aid efforts, proclaimed at the United Nations in 2010 that the U.S. government is “leading a global effort to combat corruption.” The following year, congressional Republicans sought to restrict foreign aid to fraud-ridden foreign regimes. Then-Secretary of State Hillary Clinton wailed that restricting handouts to nations that fail anti-corruption tests “has the potential to affect a staggering number of needy aid recipients.”

The Obama administration continued pouring tens of billions of U.S. tax dollars into sinkholes such as Afghanistan, which even its president, Ashraf Ghani, admitted in 2016 was “one of the most corrupt countries on earth.” John Sopko, the Special Inspector General for Afghan Reconstruction (SIGAR), declared that “U.S. policies and practices unintentionally aided and abetted corruption” in Afghanistan.

Since the end of the Soviet Union, the U.S. has provided more than $6 billion in aid to Ukraine. At the House impeachment hearings, a key anti-Trump witness was acting U.S. ambassador to the Ukraine, William B. Taylor Jr. The Washington Post hailed Taylor as someone who “spent much of the 1990s telling Ukrainian politicians that nothing was more critical to their long-term prosperity than rooting out corruption and bolstering the rule of law, in his role as the head of U.S. development assistance for post-Soviet countries.” A New York Times editorial lauded Taylor and State Department deputy assistant secretary George Kent as witnesses who “came across not as angry Democrats or Deep State conspirators, but as men who have devoted their lives to serving their country.”

After their testimony spurred criticism, a Washington Post headline captured the capital city’s reaction: “The diplomatic corps has been wounded. The State Department needs to heal.” But not nearly as much as the foreigners supposedly rescued by U.S. bureaucrats.

The Wall Street Journal reported on Oct. 31 that the International Monetary Fund, which has provided more than $20 billion in loans to Ukraine, “remains skeptical after a history of broken promises [from the Ukraine govt]. Kiev hasn’t successfully completed any of a series of IMF bailout packages over the past two decades, with systemic corruption at the heart of much of that failure.”

The IMF concluded that Ukraine continued to be vexed by “shortcomings in the legal framework, pervasive corruption, and large parts of the economy dominated by inefficient state-owned enterprises or by oligarchs.” That last item is damning for the U.S. benevolent pretensions. If a former Soviet republic cannot even terminate its government-owned boondoggles, then why in hell was the U.S. government bankrolling them?

Transparency International, which publishes an annual Corruption Perceptions Index, shows that corruption surged in Ukraine in the late 1990s (after the U.S. decided to rescue them) and remains at abysmal levels. Ukraine is now ranked as the 120th most corrupt nation in the world — a lower ranking than received by Egypt and Pakistan, two other major U.S. aid recipients also notorious for corruption.

Actually, the best gauge of Ukrainian corruption is the near-total collapse of its citizens’ trust in government or in their own future. Since 1991, the nation has lost almost 20% of its population as citizens flee abroad like passengers leaping off a sinking ship.

And yet, the House impeachment hearings and much of the media gushed over career U.S. government officials despite their strikeouts. It was akin to a congressional committee resurrecting Col. George S. Custer in 1877 and fawning as he offered personal insights in dealing with uprisings by Sioux Indians (while carefully avoiding awkward questions about the previous year at the Little Big Horn).

Foreign aid is virtue signaling with other people’s money. As long the aid spawns press releases and photo opportunities for presidents and members of Congress and campaign donations from corporate and other beneficiaries, little else matters. Congress almost never conducts thorough investigations into the failure of aid programs despite their legendary pratfalls. The Agency for International Development ludicrously evaluated its programs in Afghanistan based on their “burn rate” – whether they were spending money as quickly as possible, almost regardless of the results. SIGAR’s John Sopko “found a USAID lessons-learned report from 1980s on Afghan reconstruction but nobody at AID had read it.”

After driving around the world, investment guru Jim Rogers declared: “Most foreign aid winds up with outside consultants, the local military, corrupt bureaucrats, the new NGO [nongovernmental organizations] administrators, and Mercedes dealers.” After the Obama administration promised massive aid to Ukraine in 2014, Hunter Biden jumped on the gravy train – as did legions of well-connected Washingtonians and other hustlers around the nation. Similar largesse assures that there will never be a shortage of overpaid individuals and hired think tanks ready to write op-eds or letters to the editor of the Washington Post whooping up the moral greatness of foreign aid or some such hokum.

When it comes to the failure of U.S. aid to Ukraine, almost all of Trump’s congressional critics are like the “dog that didn’t bark” in the Sherlock Holmes story. The real outrage is that Trump and prior presidents, with Congress cheering all the way, delivered so many U.S. tax dollars to Kiev that any reasonable person knew would be wasted. If Washington truly wants to curtail foreign corruption, ending U.S. foreign aid is the best first step.

*  *  *

James Bovard is the author of “Attention Deficit Democracy,” “The Bush Betrayal,” “Terrorism and Tyranny,” and other books. Bovard is on the USA Today Board of Contributors. He is on Twitter at @jimbovard. His website is at www.jimbovard.com

You know it’s bad when…

The share price of the company you are were CEO of soars after you’re replaced…

IBM named Arvind Krishna as chief executive officer, replacing longtime CEO Virginia Rometty..

Krishna is currently the head of IBM’s cloud and cognitive software unit and was a principal architect of the company’s purchase of Red Hat, IBM said in a statement Thursday. Rometty will continue as executive chairman and serve through the end of the year, when she will retire after almost 40 years with the company.

Full (very lengthy) statement from IBM:

The IBM Board of Directors has elected Arvind Krishna as Chief Executive Officer of the company and a member of the Board of Directors, effective April 6, 2020.  Krishna is currently IBM Senior Vice President for Cloud and Cognitive Software, and was a principal architect of the company’s acquisition of Red Hat.  James Whitehurst, IBM Senior Vice President and CEO of Red Hat, was also elected by the Board as IBM President, effective April 6, 2020.  Virginia Rometty, IBM Chairman, President and Chief Executive Officer, will continue as Executive Chairman of the Board and serve through the end of the year, when she will retire after almost 40 years with the company.

“Arvind is the right CEO for the next era at IBM,” said Rometty.

“He is a brilliant technologist who has played a significant role in developing our key technologies such as artificial intelligence, cloud, quantum computing and blockchain.  He is also a superb operational leader, able to win today while building the business of tomorrow.  Arvind has grown IBM’s Cloud and Cognitive Software business and led the largest acquisition in the company’s history. Through his multiple experiences running businesses in IBM, Arvind has built an outstanding track record of bold transformations and proven business results, and is an authentic, values-driven leader.  He is well-positioned to lead IBM and its clients into the cloud and cognitive era.”

“Jim is also a seasoned leader who has positioned Red Hat as the world’s leading provider of open source enterprise IT software solutions and services, and has been quickly expanding the reach and benefit of that technology to an even wider audience as part of IBM,” Rometty continued.  “In Arvind and Jim, the Board has elected a proven technical and business-savvy leadership team.”

Virginia Rometty, 62, became Chairman, President and Chief Executive Officer of IBM in 2012. 

During her tenure she made bold changes to reposition IBM for the future, investing in high value segments of the IT market and optimizing the company’s portfolio.  Under Rometty’s leadership, IBM acquired 65 companies, built out key capabilities in hybrid cloud, security, industry and data, and AI both organically and inorganically, and successfully completed one of the largest technology acquisitions in history.  She reinvented more than 50% of IBM’s portfolio, built a $21 billion hybrid cloud business and established IBM’s leadership in AI, quantum computing and blockchain, while divesting nearly $9 billion in annual revenue to focus the portfolio on IBM’s high value, integrated offerings.

Rometty also established IBM as the industry’s leading voice in technology ethics and data stewardship, working relentlessly to usher new technologies safely into society, and enabling people of diverse backgrounds and education levels to participate in the digital future.  She has been committed to building talent and skills around the world.  She created thousands of New Collar jobs and championed the reinvention of education around the world, including the explosive growth of the six-year Pathways in Technology Early College High Schools, or P-TECHs, which are helping prepare the workforce of the future, serving hundreds of thousands of students in 200 schools and 24 countries.

“Ginni has provided outstanding leadership for IBM, substantially transforming the company and ushering in a new cloud and cognitive era,” said Michael Eskew, Lead Director of the IBM Board of Directors.  “She has taken bold strategic actions to reposition IBM for the future, shedding businesses and growing new units organically and through acquisition, all while achieving record diversity and employee engagement and setting the industry standard for responsible technology ethics and data stewardship.”
“With the strong foundation now established by Ginni for IBM’s future, the Board is confident that Arvind is the right CEO to lead IBM,” Eskew continued.  “The Board ran a world-class succession process and found in Arvind a leader with the business acumen, operational skills, and technology vision needed to guide IBM in this fast-moving industry.”

“Arvind thinks and executes squarely at the intersection of business and technology,” said Alex Gorsky, Chairman of the Board’s Executive Compensation and Management Resources Committee.  “He is an ideal leader to succeed Ginni and take IBM and its clients into the next chapter of the cloud and cognitive era.  Jim has been a great addition to IBM’s leadership team.  His considerable business and leadership skills will help IBM grow and flourish, and as President he will help Arvind and IBM continue to accelerate and scale the benefits of Red Hat, while ensuring that Red Hat also preserves its unique culture and commitment to open source innovation.”

“I am thrilled and humbled to be elected as the next Chief Executive Officer of IBM, and appreciate the confidence that Ginni and the Board have placed in me,” said Krishna.  “IBM has such talented people and technology that we can bring together to help our clients solve their toughest problems.  I am looking forward to working with IBMers, Red Hatters and clients around the world at this unique time of fast-paced change in the IT industry.  We have great opportunities ahead to help our clients advance the transformation of their business while also remaining the global leader in the trusted stewardship of technology.  Jim will be a great partner in the next step of this journey.”

“I am truly honored to be elected as IBM’s President,” said Whitehurst.  “I look forward to working with Arvind, and with IBMers and Red Hatters alike, to continue to bring together the best of our companies and cultures.  I’ve had the opportunity to interact with IBMers across the company over the past few months, and I have been so impressed with the talented and dedicated team we have.  When I first joined, I said that I believe we have the opportunity to be the defining technology company of the twenty-first century.  After working with our clients, IBMers and Red Hatters over the past months, I am even more convinced of that opportunity today.”

Krishna, 57, is IBM Senior Vice President for Cloud and Cognitive Software, where he leads the IBM business unit that provides the cloud and data platform on which IBM’s clients build the future.  His current responsibilities also include the IBM Cloud, IBM Security and Cognitive Applications business, and IBM Research.  Previously, he was general manager of IBM’s Systems and Technology Group’s development and manufacturing organization.  Prior to that he built and led many of IBM’s data-related businesses.  He has an undergraduate degree from the Indian Institute of Technology, Kanpur, and a PhD. in electrical engineering from the University of Illinois at Urbana-Champaign.  He joined IBM in 1990.

Whitehurst, 52, is IBM Senior Vice President and CEO of Red Hat, which was acquired by IBM in 2019. He has been an avid advocate for open software as a catalyst for business innovation.  During his tenure at Red Hat, revenue grew over eight times and market capitalization by more than 10 times.  He joined Red Hat from Delta Airlines, where he drove significant international expansion and as Chief Operating Officer oversaw all aspects of airline operations.  Prior to that he was a partner at The Boston Consulting Group.  Mr. Whitehurst earned a bachelor’s degree in Computer Science and Economics from Rice University, and holds an MBA from Harvard Business School.