Taiwan Warns Of Possible Invasion If China’s Economy Continues To Deteriorate
As the global synchronized slowdown intensifies, Taiwan is now warning if Beijing can’t create a soft landing in its economy, the threat of a Chinese invasion would be on the horizon.
Taiwan’s Foreign Minister Joseph Wu sounded the alarm in a Reuters interview on Wednesday, when he said, Chinese officials would likely invade self-ruled Taiwan to divert domestic economic pressures if a soft landing cannot be achieved.
“If the internal stability is a very serious issue, or economic slowdown has become a very serious issue for the top leaders to deal with, that is the occasion that we need to be very careful,” Wu said.
“We need to prepare ourselves for the worst situation to come…military conflict,” he warned.
Taiwan’s top diplomat Joseph Wu on threat from Beijing: “If the internal stability is a very serious issue…that is the occasion that we need to be very careful…We need to prepare ourselves for the worst situation to come…military conflict.”@MOFA_Taiwanhttps://t.co/qtAlhefldJ
China’s untenable debt load and Beijing’s resulting inability to boost the credit impulse has certainly frightened Wu, who knows that if China’s economy, already near a 30-year low, continues to implode, that military conflict with mainland China would be nearing.
Wu noted that China’s economy is on shaky grounds at the moment, but nothing that would suggest a conflict to be imminent.
“Perhaps Xi Jinping himself is called into question of his legitimacy, by not being able to keep the Chinese economy growing,” Wu said, referring to Chinese President Xi.
“This is a factor that might cause the Chinese leaders to decide to take external action to divert domestic attention.”
China’s growing military presence in the Taiwan Strait, the South China Sea, the East China Sea, and the Philippine Sea has become “very serious,” Wu said.
“We certainly hope that Taiwan and China could live peacefully together, but we also see there are problems caused by China, and we will try to deal with it,” he said.
And to make things more complicated, the US House of Representatives foreign affairs committee recently voted unanimously to approve a new bill that would strengthen ties between Washington and Taipei.
The bill is called the Taiwan Allies International Protection and Enhancement Initiative would allow the US to defend Taiwan from Chinese diplomatic pressures.
The Trump administration has been selling Taiwan billions of dollars in fighter jets, tanks, and other military weapons, to beef up defenses if Beijing attempts to invade.
And with macroeconomic headwinds that continue to flourish across the world, this means China will likely slow into 2020. Every downtick in China’s GDP should be correlated to the increasing probability of a Chinese invasion of Taiwan.
“Ah, excuse me. Oh, will ya excuse me. I’m just trying to find the recession. Has anybody seen the recession?”
Ask that question in a roomful of forecasters, and you’ll hear plenty of reasons why the next recession is dead ahead: the inverted yield curve, the tariff war, weak PMIs, the global manufacturing downturn.
Events might eventually prove those recession forecasts to be correct, although I would say not until mid-2020 at the earliest, and a recession at that time remains just a possibility. I say that because we haven’t yet seen enough cause for alarm in the three areas that most reliably predict recessions. Before every recession, we see at least one, usually two and often every one of the following three precursors:
Deterioration in the housing sector
Restrictive public policies
Significant damage to the real spending capacity of households, businesses or both
In other words, when trouble emerges across some combination of housing activity, public policies and real spending capacity, we’ll know to expect a recession. Trouble in one of those areas should put us on alert, whereas two or three would mean we should bank on it. So what’s missing from today’s popular recession narratives is adequate support from the “Big-3” precursors, and without that support, it’s probably too soon to bet on a recession. The U.S. economy always expands when the housing sector is stable, public policies are growth-supportive and real spending capacity is increasing. Simply put, no sign of the Big-3 means no recession.
But isn’t there a first time for everything? Can it really be so simple?
There is, and I don’t expect to convince anyone the economy is that simple without first providing some evidence, so I’ll continue. I’ll focus mostly on spending capacity, which is where I stray furthest from traditional, mainstream methods.
Why spending capacity?
Behavioral research, empirical data and casual observation all point towards households and businesses increasing their spending for as long as they have the capacity to do so. Changes in spending capacity predict changes in spending with remarkable accuracy, notwithstanding the Keynesian idea that spending follows the mysterious ebbs and flows of “animal spirits.” In fact, the spirits described by Keynesians might not be all that mysterious—they’re always present in some degree, they just happen to flow in proportion to spending capacity. They don’t disappear for no particular reason and then later reappear.
So I suggest closing your Keynesian textbook and looking instead to natural human behavior for clues about spending. Behavioral research tells us we’re naturally overconfident, believing our ventures will succeed with a certainty that defies the true probability of success. It also tells us we’re at least partially blind to certain obstacles to success, such as basic randomness. We’re naturally wired to have an illusion of control and an optimism bias alongside hindsight and confirmation biases, all of which encourage us to spend for as long as we have the capacity to do so.
But that’s not all. We’re also prone to a lack of self control that researchers have termed present bias and a tendency to spend like drunken sailors whenever in the company of other free-spending drunken sailors, thanks to our natural herding bias. I could go on, but you get the idea—once we consider human nature, it’s easier to appreciate why spending capacity is the economy’s driving force.
What Exactly Is Spending Capacity?
All that being said, I still need to define spending capacity, and my definition is broader than you might think. It starts with earnings—both household and business earnings—which of course help determine the resources available to be spent. It also includes risky asset prices, because spending depends partly on house price cycles and investment portfolio values. In fact, spending is more exposed to asset price volatility than ever before, with assets owned by households and nonprofits currently valued at 608% of annual GDP, compared to averages of 385% in the 1970s, 407% in the 1980s, 454% in the 1990s and 537% in the first decade of the 2000s.
Finally, there’s a third piece that’s usually overlooked, and I blame the economics profession for that. Spending depends not only on what households and businesses earn and own, as noted, but also on what they can borrow. And it depends not just on what they can borrow, but on what they can borrow from banks, in particular.
Why banks as opposed to other types of lenders?
Because banks are the only lenders that create spending power from “thin-air.” That’s not something you’ll learn in mainstream economics, which mangles the mechanics of money and banking, but if you’re trying to understand business cycles, it’s an essential fact. The key insight is that new bank credit expands the circular flow of income and spending (see the chart below), whereas other types of credit mostly sustain the existing flow by passing spending power from one party to another.
In other words, only banks increase spending power on a net basis, because they can make loans without requiring prior savings from past income. Apart from a small allocation of bank capital, banks conjure loan proceeds from thin air—that’s the crux of what their charters allow them to do. The monetary expansion authorized by bank charters explains why new bank credit is 69% correlated with spending in the same period and 58% correlated with spending in the next period, whereas corresponding figures for credit financed by prior domestic savings (not banks) are negligible (see the chart below).
(As obvious as the charts above might be to those who’ve either worked as bankers or studied banking from up close, mainstream economists tell a different story, teaching that banks are mere intermediaries and only central banks determine the money supply. Those mainstream claims have been called out repeatedly by practitioners, heterodox economists and even central bankers—the Fed, Bank of England and Bank for International Settlements have all provided information refuting textbook money and banking theory—but to no avail. Schools continue to teach money and banking incorrectly at both undergraduate and graduate levels.)
What Do the Big-3 Say about the Next Recession?
So spending capacity depends on real earnings, asset prices and the availability of new bank credit. Getting back to the Big-3 precursors that always materialize in some combination (again, not necessarily all three at once) before recessions, we can expand the third precursor using the determinants of spending capacity. Here’s the expanded list:
Deterioration in the housing sector
Restrictive public policies
Significant damage to the real spending capacity of households, businesses or both, which could mean any of the following:
Earnings that fail to keep pace with inflation
Falling real asset prices
Restrictive bank credit
We can then expand the list further with more subcategories and by adding the foreign sector, which I include as a less influential input but one that could contribute to a recessionary process. The expanded list includes separate readings for:
fiscal and monetary policies
household and business earnings
house and stock prices, and
bank credit conditions for households and businesses
Below are my assessments for each item, with comments on at least one of the indicators that support each assessment. (My email subscribers know that this is the same list that drops out of the 6-cycle forecasting approach described in my book, I’ve just tweaked the terminology to match the language used here.)
Housing sector: Not recessionary. Indicators such as new home sales and the NAHB housing market index show housing activity recovering nicely from a period of weakness in 2018.
Fiscal policy: Not recessionary. Government spending is growing at a decent clip in 2019, while taxes and net transfer receipts dropped to a new six-year low as a percentage of GDP in the first half of the year, which can only help household and business spending capacity. Also, July’s debt ceiling deal freed up more federal spending in the 2020 fiscal year.
Monetary policy: Not recessionary. I often use the yield curve slope as a guide to monetary policy, and today’s inverted curve might suggest that monetary policy is recessionary, but I’ve overridden that for three reasons: 1) the Fed barely lifted the inflation-adjusted fed funds rate in the 2015–18 tightening cycle, and therefore, fell far short of the typical recessionary tightening, 2) we’re now 11 months removed from the last rate hike, and 3) we’re three rate hikes into an easing cycle.
Business earnings: Slightly recessionary. With the Q3 earnings season over 70% complete, S&P projects GAAP earnings for the S&P 500 to be 2% lower than the matching year-ago figure, compared to increases of 3% in Q2 and 6% in Q1. S&P 500 operating earnings by I/B/E/S from Refinitiv tell approximately the same story—lower by 0.8% in Q3 (as of Nov. 5) after increasing by 1% in Q2 and 3% in Q1. Factset, by comparison, shows three consecutive year-over-year declines, but the changes are small (-0.3% in Q1, -0.4% in Q2 and likely to be somewhere between -1% and -3% in Q3). So however you look at it, the Q3 earnings dip is shallow. It’s significantly less severe than the 2015–16 earnings recession, although not as easily explained away as being a reflection of oil price volatility—this time the global manufacturing downturn is also part of the story. Factset expects the dip to continue in Q4, whereas projections from S&P and Refinitiv show positive year-over-year growth. All things considered, I have to call business earnings slightly recessionary, but the numbers aren’t yet convincing. Stay tuned.
Household earnings: Not recessionary. Using average hourly earnings as a guide, household earnings growth outpaced inflation by 1.2% over the past 12 months, while real disposable income increased by 3.2% over the same period. By either measure, household earnings are growing strongly enough to support continued gains in consumer spending.
Business credit conditions: Not recessionary. Although demand for C&I loans has stalled of late, ample credit remains available. The Fed’s Senior Loan Officer Opinion Survey (SLOOS) shows that business lending standards haven’t significantly changed in either direction.
Household credit conditions: Not recessionary. Again, lending standards haven’t significantly changed in either direction. Also, bank balance sheets are expanding at a healthy pace—recent data shows banks adding enough real estate loans and mortgage bonds to grow thin-air spending power despite the dip in C&I loan demand.
Stock prices: Not recessionary. Record stock prices have boosted investment portfolio values and should help to support spending.
House prices: Not recessionary but on watch for a possible downgrade. House price growth is decelerating but remains slightly above the CPI inflation rate according to the S&P Case-Shiller 20-city index. It would have to drop another 2% or 3%, depending on changes in consumer inflation, before I would call it a recessionary reading.
Foreign sector: Not recessionary. Although slowing exports have weighed slightly on GDP, imports have dropped as a percentage of GDP (a measure of import penetration) in the first three quarters of 2019. On balance, data fail to support a “recessionary” assessment, although that could change in 2020 with either a steeper drop in exports or a rising propensity to import.
All Big-3 precursors considered, the near-term outlook is weaker than normal but not yet recessionary—the expansion appears to have enough policy support, spending capacity growth and overall momentum to continue through at least the first quarter or two of 2020.
Deeper into the year, the outlook could darken as many forecasters predict, especially if corporate earnings continue to slide. But we could just as easily see more of the same—an economy that grinds slowly higher as real incomes grow, asset prices trend upwards and bank balance sheets expand. To gauge which of the scenarios is becoming more likely, I suggest watching the Big-3 and tuning out most everything else.
“Have you seen the recession? I ain’t (yet) seen the recession!”
Fed Warns Climate Change Is A Major Threat To The Economy
What is a good way for the Fed to deflect attention from the fact that after a decade of liquidity injections it has created the world’s largest asset bubble? Why point to another, even bigger – in its view – threat. And with green bonds, unlimited fiscal deficits and MMT all the rage (if not today, then soon), what better bogeyman for the Fed to wave in front of the public than the hottest topic, so to speak, of the day: climate change.
Speaking at the GARP Global Risk Forum, NY Fed executive vice president Kevin Stiroh warned in his prepared remarks, that climate change – not, say, asset bubbles created by his employer – is a major threat that risk managers can’t ignore.
“The U.S. economy has experienced more than $500 billion in direct losses over the last five years due to climate and weather-related events. In addition, climate change has significant consequences for the U.S. economy and financial sector through slowing productivity growth, asset revaluations and sectoral reallocations of business activity” he
That was how Stiroh framed the one danger that, according to the Fed, is emerging as the biggest threat to the US economy.
But why is the Fed, whose only concern should be the cost of money, suddenly preoccupied with the weather? Because as the EVP says in his speech, “as supervisors, we can consider climate-related risks in terms of both microprudential and macroprudential objectives.”
In other words, it’s only a matter of time before the Fed blames the weather for the next great, “unexpected” crisis… which like the bubbles of 2001 and 2008 was entirely the Fed’s doing.
Lulckily, the Fed apparatchik did stop before providing advice on how to combat climate change – of which it is the primary enabler, as its loose money policy allows zombie corprorations with outdated emissions standards to stay in business – and said that “supervisors should take a risk management perspective, not a social engineering one. It is beyond our mandate to advocate or provide incentives for a particular transition path.”
Rather, Stiroh said, “supervisors should focus on the risks that emerge along the path decided by the public at large and their elected governments. Supervisors can use our tools to ensure financial institutions are prepared for and resilient to all types of relevant risks, including climate-related events.”
It wasn’t clear what tools he was referring to (the Fed certainly has plenty of those), but he did break down the climate change risk into two main categories for risk managers:
Physical risk is the potential for losses as climate-related changes disrupt business operations, destroy capital and interrupt economic activity.
Transition risk is the potential for losses resulting from a shift toward a lower-carbon economy as policy, consumer sentiment and technological innovations impact the value of certain assets and liabilities. These effects will be felt across business sectors and asset classes, and on the strategies, operations and balance sheets of financial firms.
But wait, in a world in which asset managers only care about their year-end bonus and anything that happens on Jan 1 of next year is someone else’s problem, why should anyone on Wall Street give a rat’s ass about the weather, unless of course it is to capitalize on it? The Fed’s response: “climate change is a long-term issue where actions today are likely to have an impact over many decades. This exceeds the typical life span of a bank exposure, as well as the typical control and planning horizon of a financial institution. Risk management tools, models and scenarios are not designed to capture the long-term nature of climate-related risks. Nonetheless, real impacts are already being felt and we must develop the tools to assess and manage them.”
Impacts… like a 16-year-old girl with Asperger’s syndrome dictating monetary, fiscal and social policy?
One more thing: the Fed vice president’s remarks did not venture into a discussion on another hot topic: green QE, or central banks boosting bond issuance by refocusing their asset purchase programs toward “green bonds”, as the new ECB President Christine Lagarde suggested recently, when she hinted that the ECB might be open to the idea once she had more information.
It was not clear just how monetizing a “green” bond is any different than monetizing any other bonds. In fact, with the Fed already doing so to the tune of $60 billion in monthly Bill purchases as part of its “Not QE”, the only question is how will the Treasury rebrand 10 or 30Y bonds as “green”, in the process greenlighting even more debt and deficit monetization by the Fed, whose ultimate goal is clear to most by now: using “climate change” and “green bonds” as scapegoats behind a “Green New Deal” type of arrangement, in which the Fed basically adopts helicopter money, and becomes a de facto agent of the Treasury, monetizing almost every piece of debt sold by the US, making the Japanification of the US complete just as the final fiat currency devaluation experiment gets going.
At least Greta Thunberg will be happy for a few years before the social catalysm that results from the Fed’s final act of idiocy means that eating the rich – and just about anyone else – will be more than just a figure of speech.
The Intercept‘s Glenn Greenwald was assaulted during a live broadcast Thursday by a right-wing Brazilian journalist and defender of the country’s far-right President Jair Bolsonaro.
Greenwald, whose reporting this year hasexposed unethical and possibly criminal behavior by Bolsonaro and his government, repeatedly called journalist and columnist Augusto Nunes a “coward” during a segment on Jovem Pan News, one of Brazil’s largest right-wing radio and Youtube outlets.
In a tweet ahead of his appearance, Greenwald said he had “many questions” for Nunes, who suggested in September that a juvenile judge should investigate Greenwald and his husband, Brazilian lawmaker David Miranda, for neglecting their adopted children.
“We have a lot of political differences, I have no problem being criticized for my work, I criticize him too, but what he did was the ugliest and dirtiest thing I’ve ever seen in my career as a journalist,” Greenwald said of Nunes’ comments during Thursday’s show.
This is genuinely horrifying, as have been all the threats/intimidation Bolsonaro and his goons have directed towards Glenn and his Intercept colleagues. https://t.co/9s4A6KnVQI
Not Just Billionaires: Now Democrats Want To Hit Millionaires With 10% Surtax
With 2020 Democratic candidates Elizabeth Warren and Bernie Sanders threatening to separate billionaires from their money, two other Democrats have proposed tax hikes that would hit the wealthy with a 10% surtax on income above $2 million according to Bloomberg.
Introduced by Maryland Democrat Sen. Chris Van Hollen and Rep. Don Beyer of Virginia, the new plan would raise the effective top rate on wages to 47%, while capital gains would taxes would top out at 33.8%. The proposal “could raise $635 billion over 10 years,” according to surtax.org.
Van Hollen calls it “a simple system to ensure the wealthy are doing their part to invest in strengthening America’s future for everyone.”
The idea is the latest in a long string of Democratic plans to make wealthy Americans pay more. But with 2020 presidential candidates and members of Congress envisioning expensive programs to reshape U.S. health care, confront climate change, and offer free college educations there has been a greater urgency to find ways to finance these ambitions — and that involves higher taxes on the rich.
The arsenal of proposals includes wealth taxes, financial transaction levies and capital gains changes.
The Van Hollen-Beyer surtax would raise about $635 billion over a decade, according to projections from the Urban-Brookings Tax Policy Center. By comparison, Senator Elizabeth Warren, one of the party’s leading presidential candidates, estimates that her wealth tax would raise $3.75 trillion over 10 years. –Bloomberg
The surtax is being framed as a more moderate approach of raising taxes on the top 0.2% of taxpayers, or around 329,000 Americans, and could be legislatively piggybacked on top of the existing tax code – which would make it easier for a Democratic-controlled Congress to pass under the next Democratic president.
“This is something moderates can support,” said Frank Clemente, executive director of Americans for Tax Fairness. “I don’t think we are going to see a wealth tax anytime soon.”
Warren’s plan would impose a 2% levy on fortunes over $50 million and 6% on those above $1 billion, while Sanders’ plan would kick in a $32 million in assets and would top out at 8%.
Establishment Democrats and those who amplify them continue to project blame for the public’s doubt in the U.S. election process onto outside influence, despite the clear history of the party’s subversion of election integrity. The total inability of the Democratic Party establishment’s willingness to address even one of these critical failures does not give reason to hope that the nomination process in 2020 will be any less pre-ordained.
The Democratic Party’s bias against Sen. Bernie Sanders during the 2016 presidential nomination, followed by the DNC defense counsel doubling down on its right to rig the race during the fraud lawsuit brought against the DNC, as well as the irregularities in the races between former DNC Chairwoman Debbie Wasserman Schultz and Tim Canova, indicate a fatal breakdown of the U.S. democratic process spearheaded by the Democratic Party establishment. Influences transcending the DNC add to concerns regarding the integrity of the democratic process that have nothing to do with Russia, but which will also likely impact outcomes in 2020.
The content of the DNC and Podesta emails published by WikiLeaks demonstrated that the DNC acted in favor of Hillary Clinton in the lead up to the 2016 Democratic primary. The emails also revealed corporate media reporters acting as surrogates of the DNC and its pro-Clinton agenda, going so far as to promote Donald Trump during the GOP primary process as a preferred “pied-piper candidate.” One cannot assume that similar evidence will be presented to the public in 2020, making it more important than ever to take stock of the unique lessons handed down to us by the 2016 race.
Sen. Bernie Sanders and former Secretary of State Hillary Clinton during a 2016 Democratic primary debate. (YouTube/Screen shot)
Social Media Meddling
Election meddling via social media did take place in 2016, though in a different guise and for a different cause from that which are best remembered. Twitter would eventually admit to actively suppressing hashtags referencing the DNC and Podesta emails in the run-up to the 2016 presidential election. Additional reports indicated that tech giant Google also showed measurable “pro-Hillary Clinton bias” in search results during 2016, resulting in the alleged swaying of between 2 and 10 millions voters in favor of Clinton.
On the Republican side, a recent episode of CNLive! featured discussion of the Cambridge Analytica scandal, in which undecided voters were micro-targeted with tailored advertising narrowed with the combined use of big data and artificial intelligence known collectively as “dark strategy.” CNLive! Executive Producer Cathy Vogan noted that SCL, Cambridge Analytica’s parent company, provides data, analytics and strategy to governments and military organizations “worldwide,” specializing in behavior modification. Though Cambridge Analytica shut down in 2018, related companies remain.
The Clinton camp was hardly absent from social media during the 2016 race. The barely-legal activities of Clintonite David Brock were previously reported by this author to have included $2 million in funding for the creation of an online “troll army” under the name Shareblue. The LA Times described the project as meant to “to appear to be coming organically from people and their social media networks in a groundswell of activism, when in fact it is highly paid and highly tactical.” In other words, the effort attempted to create a false sense of consensus in support for the Clinton campaign.
In terms of interference in the actual election process, the New York City Board of Elections was shown to have purged over one hundred thousand Democratic voters in Brooklyn from the rolls before the 2016 primary, a move that the Department of Justice found broke federal law. Despite this, no prosecution for the breach was ever attempted.
Though the purge was not explicitly found to have benefitted Clinton, the admission falls in line with allegations across the country that the Democratic primary was interfered with to the benefit of the former secretary of state. These claims were further bolstered by reports indicating that voting results from the 2016 Democratic primary showed evidence of fraud.
DNC Fraud Lawsuit
The proceedings of the DNC fraud lawsuit provide the most damning evidence of the failure of the U.S. election process, especially within the Democratic Party. DNC defense lawyers argued in open court for the party’s right to appoint candidates at its own discretion, while simultaneously denying any “fiduciary duty” to represent the voters who donated to the Democratic Party under the impression that the DNC would act impartially towards the candidates involved.
“Bernie or Bust” protesters at the Wells Fargo Center during Democrats’ roll call vote to nominate Hillary Clinton. (Becker1999, CC BY 2.0, Wikimedia Commons)
In 2017, the Observer reported that the DNC’s defense counsel argued against claims that the party defrauded Sanders’ supporters by favoring Clinton, reasoning that Sanders’ supporters knew the process was rigged. Again: instead of arguing that the primary was neutral and unbiased in accordance with its charter, the DNC’s lawyers argued that it was the party’s right to select candidates.
The Observer noted the sentiments of Jared Beck, the attorney representing the plaintiffs of the lawsuit:
…“People paid money in reliance on the understanding that the primary elections for the Democratic nominee —nominating process in 2016 were fair and impartial, and that’s not just a bedrock assumption that we would assume just by virtue of the fact that we live in a democracy, and we assume that our elections are run in a fair and impartial manner. But that’s what the Democratic National Committee’s own charter says. It says it in black and white.”
The DNC defense counsel’s argument throughout the course of the DNC fraud lawsuit doubled down repeatedly in defense of the party’s right to favor one candidate over another, at one point actually claiming that such favoritism was protected by the First Amendment. The DNC’s lawyers wrote:
“To recognize any of the causes of action that Plaintiffs allege would run directly contrary to long-standing Supreme Court precedent recognizing the central and critical First Amendment rights enjoyed by political parties, especially when it comes to selecting the party’s nominee for public office.” [Emphasis added]
The DNC’s shameless defense of its own rigging disemboweled the most fundamental organs of the U.S. body politic. This no indication that the DNC will not resort to the same tactics in the 2020 primary race,
Tim Canova’s Allegations
If Debbie Wasserman Schultz’s role as disgraced chairwoman of the DNC and her forced 2016 resignation wasn’t enough, serious interference was also alleged in the wake of two contests between Wasserman Schultz and professor Tim Canova in Florida’s 23rd congressional district. Canova and Wasserman Schultz first faced off in a 2016 Democratic primary race, followed by a 2018 general congressional election in which Canova ran as an independent.
Tim Canova with supporters, April 2016. (CanovaForCongress, CC BY-SA 4.0, Wikimedia Commons)
Debacles followed both contests, including improper vote counts, illegal ballot destruction, improper transportation of ballots, and generally shameless displays of cronyism. After the controversial results of the initial primary race against Wasserman Schultz, Canova sought to have ballots checked for irregularities, as the Sun-Sentinel reported at the time:
“[Canova] sought to look at the paper ballots in March 2017 and took Elections Supervisor Brenda Snipes to court three months later when her office hadn’t fulfilled his request. Snipes approved the destruction of the ballots in September, signing a certification that said no court cases involving the ballots were pending.”
Ultimately, Canova was granted a summary judgment against Snipes, finding that she had committed what amounted to multiple felonies. Nonetheless, Snipes was not prosecuted and remained elections supervisor through to the 2018 midterms.
Republicans appear no more motivated to protect voting integrity than the Democrats, with The Nation reporting that the GOP-controlled Senate blocked a bill this week that would have “mandated paper-ballot backups in case of election machine malfunctions.”
Study of Corporate Power
A 2014 study published by Princeton University found that corporate power had usurped the voting rights of the public: “Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.”
In reviewing this sordid history, we see that the Democratic Party establishment has done everything in its power to disrespect voters and outright overrule them in the democratic primary process, defending their right to do so in the DNC fraud lawsuit. We’ve noted that interests transcending the DNC also represent escalating threats to election integrity as demonstrated in 2016.
Despite this, establishment Democrats and those who echo their views in the legacy press continue to deflect from their own wrongdoing and real threats to the election process by suggesting that mere discussion of it represents a campaign by Russia to attempt to malign the perception of the legitimacy of the U.S. democratic process.
Hillary Clinton’s recent comments to the effect that Congresswoman Tulsi Gabbard is being “groomed” by Russia, and that the former Green Party Presidential candidate Dr. Jill Stein is a “Russian asset”, were soon echoed by DNC-friendly pundits. These sentiments externalize what Gabbard called the “rot” in the Democratic party outward onto domestic critics and a nation across the planet.
Newsweek provided a particularly glaring example of this phenomenon in a recent op-ed penned by columnist Naveed Jamali, a former FBI double agent whose book capitalizes on Russiagate. In an op-ed titled: “Hillary Clinton Is Right. Tulsi Gabbard Is A Perfect Russian Asset – And Would Be A Perfect Republican Agent,” Jamali argued:
“Moscow will use its skillful propaganda machine to prop up Gabbard and use her as a tool to delegitimize the democratic process.” [Emphasis added]
Jamali surmises that Russia intends to “attack” our democracy by undermining the domestic perception of its legitimacy. This thesis is repeated later in the piece when Jamali opines: “They want to see a retreat of American influence. What better way to accomplish that than to attack our democracy by casting doubt on the legitimacy of our elections.” [Emphasis added]
The only thing worth protecting, according to Jamali and those who amplify his work (including former Clinton aide and establishment Democrat Neera Tanden), is the perception of the democratic process, not the actual functioning vitality of it. Such deflective tactics ensure that Russia will continue to be used as a convenient international pretext for silencing domestic dissent as we move into 2020.
Given all this, how can one expect the outcome of a 2020 Democratic Primary — or even the general election – to be any fairer or transparent than 2016?
* * *
Elizabeth Vos is a freelance reporter, co-host of CN Live! and regular contributor to Consortium News.
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NASA Gas Detector Plane Identifies “Super-Emitters” Across California
NASA has made a surprising discovery in California after it flew a plane across the state outfitted with specialized gas-imaging sensors. The new data, published this week in the scientific journal Nature, found that a third of California’s methane emissions can be traced to several “super-emitters.”
In the last several years, NASA teamed up with the California Air Resources Board (CARB) and the California Energy Commission, discovered most methane emissions in California are from industrial facilities, such as landfills, large dairy farms, and oil and gas fields.
NASA’s Jet Propulsion Laboratory in Pasadena, California, flew a plane with the Airborne Visible InfraRed Imaging Spectrometer – Next Generation (AVIRIS-NG) over 300,000 facilities across California.
The team found 550 sources emitting highly concentrated methane into the atmosphere. At least 55 of these sources were considered “super-emitters” because of the high-volume of methane that was detected.
The study said the 55 “super-emitters” were responsible for at least a third of California’s total methane emission.
Of the 270 surveyed landfills, about 30 were observed to emit high amounts of methane and responsible for 40% of all emissions detected during the survey.
“These findings illustrate the importance of monitoring point sources across multiple sectors [of the economy] and broad regions, both for improved understanding of methane budgets and to support emission mitigation efforts,” said the lead scientist on the study, Riley Duren, a research scientist at the University of Arizona and an Engineering Fellow at NASA’s Jet Propulsion Laboratory.
In total, landfills accounted for 41% of the methane emissions, dairy and manure farms were 26%, and oil and gas operations 26%.
The survey marks the first time the federal government has flown a surveillance aircraft over any state to monitor methane emissions of facilities.
The release of this report could induce lawmakers to slap businesses that are considered “super-emitters” with methane taxes.
“A prominent Republican who advises President Donald Trump called America’s 5G strategy ‘the biggest strategic disaster in U.S. history,'”wrote China-watcher David Goldman recently.
Many people will regard that as an exaggeration, but America’s failure to have a 5G strategy will almost certainly prove to have historic consequences.
“5G” is shorthand for the fifth generation of wireless communication.
“In the very near future, dominating the wireless world will be tantamount to dominating the world,” wrote Newt Gingrich in Newsweek in February. That is not an exaggeration.
Why not? With speeds 2,000 times faster than existing 4G networks, 5G will permit near-universal connectivity to homes, vehicles, machines, robots, and everything plugged into the Internet of Things (IoT).
Moreover, with just about everything connected to everything else China will filch the world’s information. That is not a theoretical concern. For instance, nightly from 2012 to 2017, China surreptitiously downloaded data from the Chinese-built-and-donated headquarters of the African Union in Addis Ababa.
Chinese parties have already been criminally taking American information, intellectual property and data for decades, worth hundreds of billions of dollars a year. This continuing crime is essential to China’s implementation of numerous industrial policies, especially the controversial “Made in China 2025” initiative, a decade-long program to achieve dominance in technology sectors, including 5G.
Theft is by no means the full extent of the harm. China, with control of 5G, will be in a position to remotely manipulate the world’s devices. In peacetime, Beijing could have the ability to drive cars off cliffs, unlock front doors, and turn off pacemakers. In war, Beijing could paralyze critical infrastructure.
“China’s game,” Goldman wrote in an e-mail, “is to control the broadband, and then the e-commerce, and then the e-finance, and then all the tech startups servicing the ‘ecosystem,’ and then the logistics.”
As he told me this year, “The world will become a Chinese company store.”
There is no mystery to how Beijing thinks it will grab control of the store. The Chinese will use Huawei Technologies.
Huawei, built on stolen U.S. technology, is the world’s leading telecom-equipment manufacturer and is fast becoming the world’s 5G provider. As Goldman writes, “Huawei has signed equipment agreements with every telecom provider on the Eurasian continent.”
Beijing, since Huawei’s founding in 1987, has been subsidizing sales of the company’s equipment and otherwise promoting its wares. No prizes for guessing why. As Senator Marsha Blackburn told Fox News in July, Huawei is Beijing’s “mechanism for spying.” For instance, Beijing pilfered data from the African Union through Huawei servers located in the building the Chinese donated.
So, Huawei is a dagger aimed at the heart of America, and as the unnamed adviser quoted by Goldman suggests, the threat is a mortal one.
There are various strategies for meeting China’s 5G challenge, but the most direct one is crippling Huawei. The Trump administration has taken steps to do so, but now that effort is on the verge of collapse.
In fact, the Commerce Department looks set to support that dangerous Chinese firm. On Sunday, in an interview with Bloomberg Television in Bangkok, Commerce Secretary Wilbur Ross said his department will “very shortly” grant exemptions from its Entity List designation to allow sales to Huawei.
“We’re in good shape, we’re making good progress, and there’s no natural reason why it couldn’t be,” Ross told the business channel.
In May, Ross’s Commerce Department added the Chinese telecom-equipment provider to its Entity List, so that American businesses needed prior approval to sell or license to Huawei the products and technology covered by U.S. export regulations. Since then, Commerce has granted two 90-day waivers from these prohibitions. The second waiver will expire November 19.
Commerce, it appears, will not issue another across-the-board waiver but will instead grant exemptions to specific companies. Ross said he has received 260 waiver requests.
Granting waivers would be a grave mistake. “The United States,” Brandon Weichert of The Weichert Report told me, “is letting China off the hook.”
Ross and others argue that the individual exemptions are justified because Huawei can obtain items either from China itself — Huawei has developed its Kirin chipset, said to be comparable to Qualcomm products — or from other countries. He argues that U.S. companies might as well be the ones making the sales. At issue are semiconductors from principally Japan, Taiwan, and South Korea.
Ross is thinking too small. The United States, instead of trying to make sales, should be stopping everyone from selling to Huawei.
America has the power to cut off all sales. Japan and South Korea are formal military allies of the United States, and Taiwan, although no longer a treaty partner, is even more dependent on Washington for its security. Because Huawei poses a critical threat to everyone, it is not clear why Washington should not pull out all the stops to get Japanese, South Korean, and Taiwanese suppliers to cut off the Chinese company.
Taipei says Washington has not asked Taiwan Semiconductor Manufacturing Co., the giant chip supplier, to end sales to Huawei. The issue, therefore, is why has the United States not even made a request.
Up to now, the Trump administration has been trying to persuade, sometimes nudging friends and partners. American officials have, for instance, said they might reduce intelligence sharing with countries maintaining Huawei gear in their 5G networks.
That is too mild. Given the importance of the issue, the Trump administration should be forcing others — Japan, South Korea, Taiwan — to make a choice: sell to Huawei or sell to the world’s largest market, America’s. Last year, America’s merchandise trade deficit with Japan was $67.2 billion. The comparable figures were $17.8 billion for South Korea, and $15.2 billion for Taiwan.
U.S. officials have been telling other countries not to buy Huawei 5G gear, but if they should not be buying Huawei, then Americans should not be supplying that Chinese company either.
Let’s put Huawei out of business, not support its efforts to harm us.
Self-Driving Uber That Killed Pedestrian In 2018 Couldn’t Detect Jaywalkers, NTSB Says
An Uber vehicle that struck and killed a pedestrian in March 2018 had what are being called “serious software flaws” that led to the tragic incident.
The vehicle reportedly didn’t have the ability to recognize jaywalkers, according to a new report from engadget, who cited a report prepared by the NTSB. The safety agency blamed Uber’s software for not being able to recognize the victim of the accident as a pedestrian crossing the street. The vehicle didn’t calculate that it could potentially collide with the woman until just 1.2 seconds before impact, at which point it was too late to brake.
The NTSB said that Uber’s system “did not include a consideration for jaywalking pedestrians.”
In fact, the report says that the system detected her about 6 seconds before impact, but didn’t classify her as a pedestrian:
Although the [system] detected the pedestrian nearly six seconds before impact … it never classified her as a pedestrian, because she was crossing at a location without a crosswalk [and] the system design did not include a consideration for jaywalking pedestrians.
After recognizing the pedestrian (too late) the vehicle then wasted a second trying to calculate an alternative path or allowing the driver to take control. Uber has since eliminated this function in a software update.
Uber vehicles have failed to identify roadway hazards in at least two other cases, the report notes. In one, a vehicle struck a bicycle lane post that had bent into a roadway. In another, a driver was forced to take control of the vehicle to avoid an oncoming vehicle. The driver still wound up striking a parked car.
In the 7 months leading up to the pedestrian accident, Uber vehicles had been involved in 37 accidents, 33 of which involved other vehicles striking Uber test cars.
Uber began using “significantly revised software” in December 2018 when it began testing again. Simulating the Arizona incident with the new software, Uber said it would have now detected the pedestrian 289 feet before impact and would have had four seconds to brake before impact at a speed of 43.2 mph.
“The average stopping distance for a human is about 130 feet at that speed, including reaction time,” the report notes. This means that the vehicle would have likely been able to stop and avoid the accident.
Meanwhile, the NTSB plans on meeting on November 19 to determine the cause of the accident. Prosecutors have absolved Uber of liability but are still weighing the idea of criminal charges against the driver.
You can read the full NTSB report on the incident here.
2012 was a big year for black holes. Or, rather, for our understanding of them. First, Scientific American published a moderately terrifying paper titled “Black Holes are Everywhere” and then a team of researchers at Princeton University numerically solved the Einstein-hydrodynamic equations in order to determine that black holes are, in fact, way easier to create than previously thought. Their findings showed that the formation of a black hole requires considerably less energy than previous calculations suggested. Meanwhile, perhaps at least partly because of these revelations, concern over the world-destroying possibility–no matter how unlikely–of a man-made particle collider opening up an Earth-swallowing black hole has remained omnipresent in the larger conversation around atomic research.
The “Ultrarelativistic Black Hole Formation” study from Princeton University, published in 2013, developed new computer models which they utilized to show that the formation of a black hole would actually require less than half the energy — 2.4 times less, to be precise — than previous research had determined. The study reports that the researchers found that “the threshold for black hole formation is lower (by a factor of a few) than simple hoop conjecture estimates, and, moreover, near this threshold two distinct apparent horizons first form postcollision and then merge.”
(Click to enlarge)
Credit: W. E. East and F. Pretorius, Phys. Rev. Lett. (2013)
As a report at Phys.org explains, “Researchers know that it is theoretically possible to create black holes because of Einstein’s Theory of Relativity—particularly the part describing the relationship between energy and mass—increasing the speed of a particle causes its mass to increase as well.” This is what drove the Princeton researchers to form a computer model based on Einstein’s original hydrodynamic equations. The model “provides a virtual window for viewing what happens when two particles collide—they focus their energies on each other and together create a combined mass that pushes gravity to its limit and as a result spawns a very tiny black hole. That result was expected—what was surprising was that the team found that their model showed that such a collision and result would require 2.4 times less energy than has been previously calculated to produce such a tiny black hole.”
And our galaxy is positively chock-full of them. It’s not just the famous supermassive black hole at the center of the Milky Way, but scores of smaller black holes as well. Scientific American’s “Black Holes are Everywhere” tells readers that “most of the holes in our galaxy are perhaps 4 or 5 solar masses, and they’re teeny, with horizons of only about 12 km in radius. But there have to be tens of thousands of them, the inevitable remnants of the short lives of huge stars.”
This news fed into fears that “Mad Scientists Performing Universe-Breaking Experiments” were flying a bit too close to the sun (so to speak) by conducting experiments at the European Organization for Nuclear Research’s (CERN) Large Hadron Collider (LHC) with the potential to open up microscopic black holes with potentially disastrous consequences. These concerns surfaced before the LHC — an underground accelerator which forms a ring with a diameter of 5 miles near Geneva, Switzerland — was ever switched on. A 2008 report from NASA succinctly titled “The Day the World Didn’t End” tells readers that bringing the accelerator online “did not trigger the creation of a microscopic black hole. And that black hole did not start rapidly sucking in surrounding matter faster and faster until it devoured the Earth, as sensationalist news reports had suggested it might.”
The fear around these larger-than-life experiments was so potent and widespread that CERN has an entire page on their website dedicated to the Frequently Asked Question “Will CERN generate a black hole?“ and even the Princeton scientists addressed it in their academic report, noting that even with the new calculations finding that black holes require much less energy to open up than previously thought, opening up a black hole big enough to collapse the earth would still require billions of times more energy than the LHC is capable of generating. What’s more, even if and when a black hole did open up in the collider, it would disappear just as quickly thanks to an effect called Hawking radiation.
While fears of the Armageddon-causing potential of these microscopic black holes may have been overblown, however, the fact that the particle can open up these tiny black holes was then and remains now an absolute truth. Even CERN’s FAQ page concedes that “The LHC will not generate black holes in the cosmological sense. However, some theories suggest that the formation of tiny ‘quantum’ black holes may be possible.” Of course, the page goes on to reassure concerned readers that “the observation of such an event would be thrilling in terms of our understanding of the Universe; and would be perfectly safe.”
Nevertheless, there are still some scientists who think we are right to be worried about these experiments that are probing the boundaries of physics. Just last year the well-respected (not to mention knighted) British scientist Sir Martin Rees published a warning to take fears around the LHC seriously in his book “On the Future.” As paraphrased by NBC’s science news site MACH, “the particles crashing about inside an accelerator could unleash bits of ‘strange matter’ that shrink Earth into a ball 300 feet across. In another [scenario], the experiments could create a microscopic black hole that would inexorably gnaw away at our planet from the inside. In the most extreme scenario Rees describes, a physics mishap could cause space itself to decay into a new form that wipes out everything from here to the farthest star.” Rees himself recognizes that these scenarios are extremely unlikely, but in the author’s own words, “given the stakes, they should not be ignored.”
And now that the Event Horizon Telescope has successfully captured the first-ever image of a black hole, scientists are dreaming up ever more radical future experiments. Let’s just hope that as scientists continue to push against the limitations of human knowledge and ability the headlines continue to read “The Day the World Didn’t End.” Or that we continue to have headlines at all.
