The group of “Starving Jobless Homeless” people huddled outdoors next to a “Fully Robotic Coffeeshop” is jarring. The coffee shop, CafeX, features “Coffee from the best local roasters crafted with precision using recipes designed by top baristas.” It’s an image of the coming techno-dystopia in which robots take our jobs and leave everyone who isn’t a capital-owning plutocrat to starve in the streets, no?
No. There are other things at play here. One reply to the tweet tagged John Stossel and diagnosed the problem immediately: the minimum wage in San Francisco is $15 per hour. That is a wage at which, apparently, the people in the picture cannot be profitably employed and which induces firms to look harder for ways to do with capital what was formerly profitable to do with labor.
Labor and Capital
“But firms will want to innovate and adopt new technology no matter what,” you say. Maybe: it depends on what the technological possibilities are. If labor is extremely abundant, then the low-cost, most efficient production method might be labor-intensive rather than capital-intensive.
Think about why so many people don’t buy the absolute-best top-of-the-line computers or smartphones. You probably don’t. Consider the Cray XT5m supercomputer system, which “starts around $500,000, takes advantage of the hardware and software advances of the Cray XT5 supercomputer, the basis of the petascale system currently in use at the U.S. Department of Energy’s Oak Ridge National Laboratory.”
That’s a heck of a machine, and if you’re doing particle physics, it’s probably nice to have. If all you need to do is check your email and manage a few spreadsheets, then it’s overkill. Just as you wouldn’t expect a firm to buy a Cray XT5m for everyone in the office and just as you probably don’t keep one in the sewing room from which to check email and play Minecraft, firms aren’t going to go for hyper-tech when that tech is hyper-expensive.
Again, firms will choose the lowest-cost way to produce a good in the interest of maximizing profits. When we use legislation like minimum wages and workplace safety rules and other things to increase the price of labor relative to what would obtain in the free market, we nudge firms toward replacing people with machines — as CafeX does, replacing human baristas with mechanical ones.
That gives us the phenomenon in the picture: a mass of people who are either unemployed or who have given up on the labor market, huddled outside a robotic coffee bar.
The same principles also explain why they are without housing. First, building new housing in San Francisco is notoriously difficult. Reason discusses an amusing-if-it-weren’t-so-tragic case in which the owner of a laundromat is being blocked from turning it into an eight-story apartment complex because the laundromat is “historic.”
Making it difficult for people to build new housing reduces the supply of housing, which drives up prices. It also changes the composition of housing: high regulatory costs that make it hard to build any kind of housing will induce substitution away from modest housing and toward luxury housing.
Changes in Relative Prices
Economists call this the Alchian-Allen effect after the economists Armen Alchian and William Allen. Adding a fixed cost to two similar goods will induce substitution toward the higher-quality good because it changes the relative price of that good.
The average quality of oranges in Florida, for example, is lower than the average quality of oranges in Vancouver for this reason. Suppose good oranges have a price of a dollar and bad oranges have a price of 50 cents. This means good oranges cost two bad oranges; a bad orange costs half a good orange. If it costs 50 cents to ship an orange — any orange — from Florida to Vancouver, it changes the relative price. Good oranges are relatively cheaper: with a total cost of $1.50 including shipping compared to $1 for bad oranges, good oranges only cost 1.5 bad oranges. The relative price of bad oranges rises, from half a good orange to 2/3 of a good orange. (The numbers in this example are from an example in Steven Landsburg’s textbook Price Theory and Applications.)
People substitute toward higher-quality oranges and away from lower-quality ones. Before you say, “Wouldn’t people always buy the highest-quality oranges?,” note that there is a price difference. Then look in your own fridge or on your own kitchen counter. You probably don’t have the absolutely highest-quality produce imaginable on hand.
Now, replace good and bad oranges with luxury and modest apartments and replace the fixed cost of shipping with a fixed cost of building. Costly regulations make all housing absolutely more expensive, but they make luxury housing relatively cheaper.
If you’re still not convinced, think about hiring a babysitter for $40 and going on a date. Would you go to Taco Bell? Or would you go somewhere nicer? Adding the price of the babysitter means going to Taco Bell and spending $10 each would cost you $60. Or you could go to a very nice restaurant and spend $40 each for a total of $120.
Without the cost of the babysitter, a trip to the very nice restaurant costs you four trips to Taco Bell. But the trip to the very nice restaurant is cheaper in terms of forgone trips to Taco Bell once you add the cost of the babysitter, which will cost $40 no matter what you do.
As the San Francisco Tenants Union explains, “In San Francisco, most tenants are covered by rent control.” Rent control is a standard example in introductory economics classes of a policy that hurts the people we ostensibly want to help. The Swedish economist Assar Lindbeck has said that “in many cases rent control appears to be the most efficient technique presently known to destroy a city — except for bombing.”
By holding prices below what the market will bear, rent-control ordinances ensure housing shortages, where, at the controlled price, people want more housing than firms and landlords are willing to provide.
Furthermore, they find themselves in a cat-and-mouse game with regulators because landlords and tenants move toward competition on non-price margins. Quality, to use just one example, falls because of rent control and necessitates, in the eyes of many activists, even more regulation.
The additional regulation raises the cost of providing housing, which reduces the supply of housing, which puts pressure on prices and thus leads to more and more calls for rent control. The outcome is grotesque: all the new construction is high-end luxury housing while the rent-controlled housing deteriorates more quickly.
Adam Smith famously wrote that “there is a great deal of ruin in a nation.” Does the picture of a huddled mass of homeless people outside a robotic coffee shop suggest the ruins of late-stage capitalism? I think not.
It represents instead the “great deal of ruin” policymakers create when they make policy as if the laws of supply and demand are optional.
via ZeroHedge News http://bit.ly/2UWVI0X Tyler Durden
Amid a rising legislative chorus demanding a halt to corporate buybacks (an activity which was illegal until 1982), with Congress realizing that most of the funds released by Trump’s tax cut and offshore tax repatriation were used not for capex or hiring but merely to levitate stock prices, last week Goldman’s chief equity strategist published the most “inspired” defense of buybacks, in which he said that from a portfolio strategy perspective, “the potential restriction on buybacks would likely have five implications for the US equity market: (1) slow EPS growth; (2) boost cash spending on dividends, M&A, and debt paydown; (3) widen trading ranges; (4) reduce demand for shares; and (5) lower company valuations.”
Or, as we summarized it, if Congress were to ban buybacks, it would likely crash the market. Hence Goldman’s increasingly vocal defense of corporate buybacks, which incidentally are the biggest source of stock demand in the past decade.
Then, just a few days later, Goldman – clearly worried that the anti-buyback push is gathering steam in Congress – published yet another research report discussing the “Buyback Realities”, in which it paradoxically tried to mitigate the role buybacks have on price formation and capital misallocation just one week after it explained how banning buybacks would have disastrous consequences for stocks.
Of note, one of the charts in the defensive report had the following informative summary on the history of buybacks, in which Goldman explained that “in the past buybacks were not illegal [ZH: they were illegal prior to 1982] but were typically avoided because US companies feared government charges of market manipulation.” As a result, for decades US companies returned cash to shareholders almost exclusively via dividends, and from 1880 to 1980, the dividend payout ratio averaged 78% of earnings (companies also had the option to repurchase shares via tender offers, in which they would buy a certain amount of shares at a pre-determined price/time, however the price moving impact of such operations was virtually nil).
Then, everything changed in 1982 with the passage of Rule 10b-18, which provided companies a safe harbor against charges of market manipulation when repurchasing their shares.
In short, buybacks were illegal until 1982 for a reason – market manipulation – and then they gradually became mainstream, with stock buybacks and dividends rising to 90% of the cumulative payout ratio of S&P 500 earnings in the 2002-2018 period. The cherry on top: in 2019, Goldman forecasts companies will spend a record $940 billion on buybacks (with $1.1 trillion in buyback announcements) up 16% from the prior record hit in 2018.
Some more staggering context: since the 2008 financial crisis, the S&P 500 companies have repurchased about $5 trillion of their own shares, which represents approximately 20% of the current market capitalization.
So while it remains to be seen if Congress will ban buybacks, one thing is certain: as Goldman’s David Kostin cautioned last week, without company buybacks, demand for shares would fall dramatically, for one simple reason: repurchases have consistently been the largest source of US equity demand. Since 2010, corporate demand for shares has far exceeded demand from all other investor categories combined. Net buybacks for all US equities averaged $420 billion annually during the past nine years. In contrast, during this period, average annual equity demand from households, mutual funds, pension funds, and foreign investors was less than $10 billion for each category – despite the fact these categories collectively own 83% of corporate equities. Buybacks represented the largest source of equity demand in 2018. This is shown in the table below.
Then, overnight, Kostin reiterated this point, saying that “buybacks remain the largest source of net demand for US equities. Other ownership categories have been generally reducing equity exposure, including mutual funds.”
What this means is the following: with buybacks having become the most important marginal buyer of stocks, the one trading desk that dominates the daily flow of buybacks – which amount to just under $3 billion in gross purchases each and every day – has more influence on the overall market than even the NY Fed. And the person who controls that trading desk will be the most powerful person on Wall Street.
Meet Neil Kearns.
Kearns, a name few have ever heard of – certainly not a name on par with Stevie Cohen, Israel Englander, Larry Fink, Lloyd Blankfein, Jamie Dimon, Bill Dudley or any other hedge fund billionaire that is part of the Wall Street folklore – is the head of Goldman Sachs’ corporate trading desk: the desk the executes hundreds of billions in corporate buyback orders for clients all around the world. And with Goldman sporting the largest buyback trading desk on Wall Street, it wouldn’t be a stretch to say that – with the fate of the stock market in the hands of corporate buybacks – Neil is the most powerful man on Wall Street right now.
In its latest “Top of Mind” publication, Goldman sat down with Kearns, this “master of the buyback universe”, to address the size, impact, and outlook for US share repurchases. Since Neil is the man that sees more buyback dollars executed in any year than anyone else, he is just the right man to answer all buyback related questions.
Q: How large is the corporate bid in the stock market?
A: US corporates have been the largest net buyers of US equity for the last decade, repurchasing $5tn+ since the financial crisis. Last year, roughly $1.1 trillion of repurchases were authorized, with about $900 billion actually repurchased. As a share of the
overall trading footprint, that’s around 6-7% of average composite volume, which might be viewed as a slightly underwhelming
number. But companies repurchase stock under rule 10b-18, a safe harbor enacted by the SEC in 1982 to provide companies an
affirmative defense against accusations of stock price manipulation. This rule provides volume, timing and price limitations on how
companies buy back stock. Pulling out the non-eligible volume, the trading footprint increases to about 10% on average, and into
the teens during market weakness.
Q: What is the major driver of volatility in share repurchases?
A: The largest driver of share repurchase volatility is broader equity market performance. In particular, the corporate bid tends to become more aggressive in a falling market as fundamental investors move to the sidelines. In periods of extreme dislocation, like we witnessed at the end of last year, repurchase activity can temporarily spike by multiples of average levels, as companies take advantage of attractive price points/valuations, and which may ultimately also have a secondary effect of tempering price volatility. That said, companies are cognizant of their trading footprints and generally aim to be less than 10% of trading volume.
Q: How much seasonality is there in share repurchases?
A: There is not a great deal of seasonality. Q1 tends to be the lightest quarter of activity—about 23% of total annual notional—
given that companies have the least visibility on what earnings will look like that year. Q2 tends to be a little bit more active at around 24%, while the last two quarters average around 26 to 27%, as companies feel more confident in repurchase levels given greater clarity on earnings strength/cash flow generation in the second half of the year.
Q: We are in the midst of a blackout window for share repurchases, which occurs four times a year around quarterly earnings. Does that mean companies can’t buy stock?
A: No. The other rule relevant to share repurchase programs is 10b5-1. The SEC enacted this rule in 2000 to provide senior executives, who have a desire to sell equity, an affirmative defense to any charge of insider trading, by adopting a written plan to sell at a time when they are not in possession of material non-public information (MNPI). The plan is a written contract between the individual and their broker, and contains very specific instructions on trade dates, sale parameters, etc. Though the plan may extend through a blackout window when the individual possesses MNPI, because it’s ultimately on auto-pilot, the executive is protected. Companies have applied this same safe harbor to buyback programs, enacting plans before the blackout window that will run on auto-pilot during the window. Very little public information is available on 10b5-1s, but an internal analysis of 350 companies suggests that approximately 85% of companies utilize them to continue to purchase stock during closed windows. Companies do tend to be more conservative than in the open window (when they have access to real time information); we
observe a notional spend reduction of ~30% during the blackout window.
Q: How do companies judge the success of their stock repurchase programs?
A: From an execution standpoint, most companies judge the success of their program by comparing the average price at which they’ve purchased their shares on any given day, to the volume weighted average price (VWAP)—a daily benchmark that is readily available on Bloomberg. If their purchase price is below VWAP, they’ve “saved” money. Given the billions of dollars spent annually on share buybacks today, senior management and more frequently, corporate boards, have become increasingly focused on execution performance versus the daily benchmark, in some cases adjusting the structure of their program to specifically achieve this. In my view, this narrow focus on daily VWAP has the potential risk of missing more attractive valuation opportunities.
Q: How would you judge investor focus on stock buybacks today?
A: Focus from the buy side community is at an all-time high, with investors frequently questioning whether the very strong corporate bid we’ve observed over the past decade will persist, and looking at this as a potential harbinger of equity market performance. But if investors are looking to share repurchases for market direction, they are probably one or two quarters behind; corporate earnings drive share repurchases—not the other way around.
Q: Do you see any evidence that the corporate bid is diminishing, especially given increased focus in Washington, DC?
A: Not currently. Share repurchase authorizations are up approximately 13% yoy, which is remarkable given the surge in buybacks last year. And more broadly, the US economy continues to do reasonably well, the Fed appears to be on pause, and US-China trade negotiations are moving in the right direction. So we have little reason to believe that US corporates will not continue to generate strong free cash flow, which, as I mentioned, has historically been the primary driver of stock repurchases.
via ZeroHedge News http://bit.ly/2VI5aST Tyler Durden
The synchronized global slowdown has hit Apple’s iOS App Store downloads for the first time in years, according to a new report from Morgan Stanley, first reported by 9to5Mac.
The research note reveals that the App Store saw a 5% drop in app and game downloads in 1Q19 versus the same period in 2018. This is the first time a deterioration in downloads has been observed since the 2015 Chinese stock market turbulence that slowed global growth.
In a series of Twitter posts, CNBC’s Kif Leswing published some of the investment bank’s findings:
“For the first time since at least 1Q15 (as far back as we have the data), the number of quarterly [App Store] downloads declined, falling 5% Y/Y.”
While the decline shows some signs of consumer weakness, the bank noted that App Store revenue is growing and is more closely tied to spend per download, and not just overall download numbers.
“While the decline in downloads is something investors should monitor, it’s not necessarily indicative of consumer app usage trends, since App Store net revenue is correlated more so with spend per download (driven by in-app purchases).”
The note also revealed how the App Store’s Entertainment category has started to slow in recent quarters.
“In the December quarter, Entertainment net revenue growth decelerated … the deceleration could be a direct result of the actions taken by some large entertainment companies that no longer support Apple’s payment platform as a method of payment for new subscribers.”
The majority of app revenue comes from entertainment apps with in-app purchases. Allegedly, the Chinese mobile gaming app market is one of the largest in the world. With a synchronized global slowdown in play for much of the developed and emerging countries, it makes sense why app downloads have recently come under pressure.
Historically, the App Store and the Google Play trend in similar directions, although the Play store has about half the revenues as Apple’s. Therefore, it’s likely that a much broader slowdown of all app marketplaces could be seen in the coming quarters.
Apple’s Tim Cook issued a rare warning at the start of the year, which said, revenues would disappoint.
To make matters worse, Samsung’s preliminary earnings report is showing a 60% collapse in 1Q19 profit compared to last year.
Apple and Samsung are expected to report on April 30th – a day that will surely be disappointing to investors around the world.
The smartphone bubble is deflating.
via ZeroHedge News http://bit.ly/2IgrYpT Tyler Durden
As Democrats prepare to introduce ‘No Ban Act’ legislation to end what they say is President Donald Trump’s racist Muslim ban they should take a moment to read the new Government Accountability Office report issued Thursday. It shows that under President Obama the travel ban rate for security reasons in 2015 was 16 times higher than under Trump in 2017 based on the one year data that was available to GAO.
It also indicates a very significant finding: that the Trump administration’s executive orders not only did not increase its refusal rate -for terrorism and security related reasons- but it was lower for the respective years studied.
“GAO’s analysis indicates that, out of the nearly 2.8 million NIV applications refused in fiscal year 2017, 1,338 applications were refused specifically due to visa entry restrictions implemented per the executive actions,” stated the report.
In fact, the nonimmigrant visa refusal rate rose under Obama’s tenure from about “14 percent in fiscal year 2012 to about 22 percent in fiscal year 2016, and remained about the same in fiscal year 2017; averaging about 18 percent over the time period,” according to the report. “The total number of NIVs issued peaked in fiscal year 2015 at about 10.89 million, before falling in fiscal years 2016 and 2017 to 10.38 million and 9.68 million, respectively.”
For example, in 2015, “CBP data showed that it identified and interdicted over 22,000 high-risk air travelers through these programs” according to the most recent data available at the time of GAO’s report it stated.
ONLY 1,338 VISA APPLICATIONS WERE REFUSED BECAUSE OF THE PRESIDENT TRUMP’S VISA ENTRY RESTRICTIONS FOR PEOPLE FROM CERTAIN COUNTRIES IN 2017 – THESE REFUSALS WERE TERRORISM OR SECURITY RELATED CONCERNS.
Nonimmigrant visa’s are those issued to foreign nationals seeking admission into the United States. Some examples are visas issued to tourists, students and businessmen seeking temporary status.
According to the GAO, “the number of adjudications peaked at about 13.4 million in fiscal year 2016, and decreased by about 880,000 adjudications in fiscal year 2017.”
State Department Stats
From the time period above, the State Department denied roughly 18 percent of adjudicated applications “of which more than 90 percent were because the applicant did not qualify for the visa sought” and only “0.05 percent were due to terrorism and security-related concerns.”
The report noted that previous successful and attempted terrorist attacks against the United States raised questions about the U.S. vetting system. One example listed in the report was the December 2015, terrorist attack in San Bernardino, California, which led to the deaths of 14 people with dozens more injured. One of the attackers was admitted into the United States under a nonimmigrant visa, stated the report.
Lack of Vetting
President Trump issued his executive travel ban in 2017 based on the apparent lack of vetting and what some security analysts described as an “open gateway” for applicants from nations affiliated with terrorist organizations.
“Trump’s ban was not targeting Muslims it was using common sense to keep dangerous persons from entering the country through the visa system based on factual evidence of past attempted attacks and ones that we couldn’t stop,” said a DHS official, who was not authorized to speak to the media.
“The failure was that system tied the hands of adjudicators in many cases – they just didn’t have all the information necessary to appropriately vet those entering the United States,” the DHS official added. “For nations like Syria, Libya and Yemen it’s almost impossible to know the intentions of those being vetted because those nations are not stable or have well functioning governments.”
The report noted that an August 2018, analysis of State data “indicates that relatively few applicants— approximately 0.05 percent—were refused for terrorism and other security-related reasons from fiscal years 2012 through 2017.”
It also shows that in 2017, under President Trump there was not a significant increase in refusals because State Department “data indicate that 1,256 refusals (or 0.05 percent) were based on terrorism and other security-related concerns, of which 357 refusals were specifically for terrorism-related reasons.”
From 2012 To 2017 Most NIVS Were Denied For Reasons Other Than Security or Terrorism
State data indicate that more than 90 percent of NIVs refused each year from fiscal years 2012 through 2017 were based on the consular officers’ determination that the applicants were ineligible nonimmigrants—in other words, the consular officers believed that the applicant was an intending immigrant seeking to stay permanently in the United States, which would generally violate NIV conditions, or that the applicant otherwise failed to demonstrate eligibility for the particular visa he or she was seeking. For example, an applicant applying for a student visa could be refused as an ineligible nonimmigrant for failure to demonstrate possession of sufficient funds to cover his or her educational expenses, as required.
Under former President Obama the numbers were much higher. For example, “in fiscal year 2015 DHS’s predeparture programs stopped 22,000 high-risk travelers from entering the country.”
The Numbers and and Ilhan Omar’s “No Ban Act”
The numbers are important. Why? Because some Democrats, led by Minnesota Rep. Ilhan Omar, have introduced “The No Ban Act,” which directly targets the Trump administration’s travel ban policy. The policy prevents persons from nations such as Iran, Libya, Syria, Yemen and Somalia from entering the country. The reason being, is that the majority of these nations do not have a functioning government capable of documenting or clearing those traveling to the United States and concern that some of these countries are safe-havens for terrorist organizations, as listed by the State Department.
Last year, Trump’s third executive travel ban order was upheld in a 5-4 ruling by the Supreme Court.
Chief Justice John Roberts, who authored the majority opinion, noted that the president was within his authority to impose the ban. Trump based the ban on extensive national security concerns regarding travelers from these nations.
Roberts opinion noted it was not the court’s place to pass judgment on Trump’s previous comments during the campaign regarding immigrants.
Justice Sonia Sotomayor, wrote the dissenting opinion, and said Trump’s comments targeting Muslims should have been the reason to strike down his travel ban.
Omar’s bill, however, will face a steep battle in Congress and the Senate. It would effectively end Trump’s policies to limit entry from these unstable and mostly ungoverned nations. It would also limit the government ability to conduct extreme vetting of immigrants who attempt to comet to the U.S. from countries designated as a threat because of ties to terrorism.
Here’s what Omar had to say:
“The Muslim ban is a moral stain on our country’s history,” Omar said.
“Proud to have joined my colleagues in introducing the #NoBanAct yesterday to put an end to this discriminatory ban,” Omar said on Twitter.
Omar could not be immediately reached for comment.
The Muslim ban is a moral stain on our country’s history. Proud to have joined my colleagues in introducing the #NoBanAct yesterday to put an end to this discriminatory ban. https://t.co/fV9jXYRwiQ
About 2.8 million nonimmigrant visa applications were refused in fiscal year 2017—over 90% of which were because the applicant di 0.05% of applications were refused for security-related concerns
1,338 visa applications were refused because of the President’s visa entry restrictions for people from certain countries.
In fiscal year 2015 DHS’s predeparture programs stopped 22,000 high-risk travelers from entering the country
FROM THE GAO
In August 2018, GAO reported that the total number of nonimmigrant visa (NIV) applications that Department of State (State) consular officers adjudicated annually increased from fiscal years 2012 through 2016, but decreased in fiscal year 2017 (the most recent data available at the time of GAO’s report).
GAO’S ANALYSIS INDICATES THAT, OUT OF THE NEARLY 2.8 MILLION NIV APPLICATIONS REFUSED IN FISCAL YEAR 2017, 1,338 APPLICATIONS WERE REFUSED SPECIFICALLY DUE TO VISA ENTRY RESTRICTIONS IMPLEMENTED PER THE EXECUTIVE ACTIONS.
NIVs are issued to foreign nationals, such as tourists, business visitors, and students, seeking temporary admission into the United States. The number of adjudications peaked at about 13.4 million in fiscal year 2016, and decreased by about 880,000 adjudications in fiscal year 2017. State refused about 18 percent of adjudicated applications during this time period, of which more than 90 percent were because the applicant did not qualify for the visa sought and 0.05 percent were due to terrorism and security-related concerns. In 2017, two executive orders and a proclamation issued by the President required, among other actions, visa entry restrictions for nationals of certain listed countries of concern. GAO’s analysis indicates that, out of the nearly 2.8 million NIV applications refused in fiscal year 2017, 1,338 applications were refused specifically due to visa entry restrictions implemented per the executive actions.
Nonimmigrant Visa Adjudications, Fiscal Years 2012 through 2017
In January 2017, GAO reported that the Department of Homeland Security’s (DHS) U.S. Customs and Border Protection (CBP) operates predeparture programs to help identify and interdict high-risk travelers before they board U.S.- bound flights. CBP officers inspect all U.S.-bound travelers on those flights that are precleared at the 15 Preclearance locations at foreign airports—which serve as U.S. ports of entry—and, if deemed inadmissible, a traveler will not be permitted to board the aircraft. CBP also operates nine Immigration Advisory Program and two Joint Security Program locations, as well as three Regional Carrier Liaison Groups, through which CBP may recommend that air carriers not permit identified high-risk travelers to board U.S.-bound flights.
CBP Data High Risk
CBP data showed that it identified and interdicted over 22,000 high-risk air travelers through these programs in fiscal year 2015 (the most recent data available at the time of GAO’s report). While CBP tracked some data, such as the number of travelers deemed inadmissible, it had not fully evaluated the overall effectiveness of these programs. GAO recommended that CBP develop a system of performance measures and baselines to better position CBP to assess program performance. As of December 2018, CBP set preliminary performance targets for fiscal year 2019, and plans to set targets for future fiscal years by October 31, 2019. GAO will continue to review CBP’s actions to address this recommendation.
Why GAO Did This Study
Previous attempted and successful terrorist attacks against the United States have raised questions about the security of the U.S. government’s screening and vetting processes for NIVs. State manages the visa adjudication process. DHS seeks to identify and interdict travelers who are potential security threats to the United States, such as foreign fighters and potential terrorists, human traffickers, drug smugglers and otherwise inadmissible persons, at the earliest possible point in time. DHS also has certain responsibilities for strengthening the security of the visa process. In 2017, the President issued executive actions directing agencies to improve visa screening and vetting, and establishing nationality-based visa entry restrictions, which the Supreme Court upheld in June 2018.
This statement addresses (1) data and information on NIV adjudications and (2) CBP programs aimed at preventing high-risk travelers from boarding U.S.-bound flights. This statement is based on prior products GAO issued in January 2017 and August 2018, along with selected updates conducted in December 2018 to obtain information from DHS on actions it has taken to address a prior GAO recommendation.
What GAO Recommends
GAO previously recommended that CBP evaluate the effectiveness of its predeparture programs. DHS agreed with GAO’s recommendation and CBP has actions under way to address it.
Speaking Friday in Chile upon the start of his three-day South American tour, Secretary of State Mike Pompeo called out China and Russia for spreading “disorder” in Latin America through failing investment projects that only fuel corruption and undermine democracy, especially in places like Venezuela.
According to Bloomberg, Pompeo specifically listed a failing dam project in Ecuador, police advisory programs in Nicaragua, and Chinese loans to the Maduro government, which goes further back to Chavez.
Pompeo with Chilean President Sebastian Pinera, via Reuters
Pompeo asserted Chinese loans in Latin America “often injects corrosive capital into the economic bloodstream, giving life to corruption, and eroding good governance.” Both Beijing and Moscow have ultimately spread their economic tentacles into the region to “spread disorder,” he added.
In what appears an effort to sustain momentum toward pressuring regime change in Caracas, America’s highest diplomat met Chilean President Sebastian Pinera earlier Friday, and will hit Paraguay, Peru next, and finally on Sunday will travel to a Colombian town on the border with Venezuela.
Pompeo and Piñera also generally discussed the U.S.-China trade war and Beijing’s “Belt and Road” initiative, with Pompeo suggesting he was optimistic about solving the tariff war with China. But the focus remained finding a US-desired outcome to the Venezuela crisis.
As part of the broader pressure campaign on Maduro, Pompeo said the U.S. has revoked visas for 718 people and sanctioned over 150 individuals and entities. On Friday, the U.S. sanctioned four companies it says transport much of the 50,000 barrels of oil that Venezuela provides to Cuba each day.
Late last month Pompeo had even more directly addressed Moscow, calling on Russia to “cease its unconstructive behavior” after it deployed a small troop contingency to Caracas to service existing military equipment contracts. Notably, Venezuela also has Russia’s S-300 air defense missile system, which over the past month have been reported deployed to a key airbase south of the capital of Caracas.
And in February Pompeo claimed in an interview with Fox News that “Hezbollah has active cells in Venezuela” — an assertion that has seemed to disappear from the spotlight of late.
China, for its part, has proactively offered to help Venezuela with its failing power grid, after a series of devastating mass outages over the past month has resulted in “medieval” conditions amidst an already collapsing infrastructure. Beijing also recently denied it has deployed troops to Venezuela after media reports a week ago cited online photos which appeared to show a Chinese military transport plane deployed to Caracas.
via ZeroHedge News http://bit.ly/2GkB0zQ Tyler Durden
Back in January 2018, just weeks ahead of the infamous VIXtermination event on Feb. 5 2018 that wiped out virtually all inverse VIX ETPs in seconds, we predicted that such an event was imminent as a result of a sharp spike in the total outstanding Vega across the entire levered and inverse volatility derivative space, which had reached an all time high. Since then, while the VIX ETP market had been relatively quiet as a result of last year’s fireworks which wiped out countless retail investors and other vol sellers, another VIX “event” is coming, and it will be the result of a silent war being waged between retail and institutional investors.
As we noted two weeks ago, JPMorgan’s Bram Kaplan recently pointed out that after a year of relative quiet, the net exposure among VIX ETPs recently spiked to their largest net long position in 1.5 years, tilted long by ~$150Mn vega, which is just shy of the record vega exposure hit in early 2018 and which precipitated the VIX ETP implosion. However, unlike 2018, this time the trade is in the other direction as investors piled into long and levered VIX ETPs beginning in February, as soon as the VIX index fell below 16, to as JPM suggests. “position for/speculate on the next volatility spike.”
However, when it comes to asset flows in 2019 – which has seen the S&P rise back to all time highs even as equity investors have been pulling money from equity funds week after week – here too the situation is not nearly as simple.
Commenting on the latest VIX flows, Deutsche Bank’s Parag Thatte reiterates JPMorgan’s point, observing that long VIX ETPs have seen significant inflows totaling $2bn YTD, as retail investors hedge equity gains. This record inflow into VIX ETPs, amounting to $2 billion in notional, is shown on the chart below.
Yet while retail investors, which traditionally prefer ETPs to hedge exposure, have been loading up on crash bets, institutional investors which traditionally prefer the greater liquidity of the futures market, are taking the other side of the volatility trade and as the latest CFTC commitment of traders report shows, the speculative net short position in VIX futures is approaching a record,
If one believes institutions, one look at the chart above confirms that not only is market complacency greater than its was either ahead of the Q4 mini bear market and February 2018 Volmageddon, but it is just shy of a record.
And so the question emerges: who is right – retail investors, who are not only pulling billions from equity funds but have pushed their crash bets to all time highs via VIX ETPs, or institutions, who oddly are on the other end of the spectrum, and not are complacent to an almost record degree, but in their pursuit of yield and carry trades have pushed the net VIX futs short position to unprecedented levels. And while conventional wisdom would say that institutions, i.e., the smart money is always right, for the 9th year in a row, hedge funds and their peers are underperforming the market (with macro funds getting demolished once again).
So who will be right – retail or institutions. Since both positions are at or near record levels, the answer should emerge in the very near future.
via ZeroHedge News http://bit.ly/2VHGASn Tyler Durden
Forget debt and deflation: the biggest threat to the global economy and the future of modern civilization as we know it, may be demographics, according to a recent Euromonitor study.
Whereas over the past decade policymakers have been mostly focused on how to reverse the global infatuation with debt and how to reverse what appears to be a structural decline in inflation (assuming the economist-accepted definition of CPI which conveniently “hedonicaly adjusts” such surging costs as shelter, healthcare, education and in many cases food), an even more troubling trend has been observed in recent years: due to a culmination of factors including falling fertility rates, rising divorce rates and expensive real estate, family sizes across the world are shrinking.
And unlike in the past where this phenomenon was largely contained to Japan and a handful of developed nations, RBC notes that almost all countries are set to experience a decline in the number of children per household in the 2000 – 2030 period. More specifically, looking from 2015 out to 2030, Euromonitor expects developed markets to have a ~20% decline in the number of children per household and developing markets a ~15% decline. In fact, as the Canadian bank points out, it was as recently as 2012 when the number of couples without children globally surpassed the number of those with children.
While this trend is troubling, it is only set to deteriorate, and RBC’s Nike Modi writes that he expects the US and other developed markets to take after Japan. Japan’s population is older, more tech focused, more urban and according to Euromonitor is a market where couples with children are expected to decline 5% from 2018 – 2030.
This demographic decline has widespread consequences across all aspects of the global economy: as family sizes decline, it will ultimately impact living space. In developed markets, large cities will likely see increased pressure on real estate and rent prices for apartments adaptable to childless couples and smaller families. This, RBC predicts, will likely in turn lead to demand for smaller household goods, smaller pack sizes overall and less space for small appliances, among other types of more discretionary items.
Another notable consequence of this global “Japanification” is that fewer kids will result in a world with more “indulegence”, adversely affecting commoditized providers of goods and services. With no or fewer children, RBC’s proposes that “premiumization” will emerge as a likely outcome. What this means is that for couples who have children, they will concentrate their spending on the one child they have, driving increased demand for premium diapers and natural and organic foods and beverages, among other categories. And since the couples have few children or no children at all, they are also more likely to indulge themselves – driving premiumization across categories, particularly in beverage alcohol and beauty where we have noticed this trend for some time and would only expect it to continue.
In short, a (shrinking) world of growing extreme polarization – across wealth, income, ideology and political views – will also soon lead to a growing schism between the brand leaders and all the aspirational providers of goods and services who fail to become category leaders. This will ultimately accelerate the world’s shift to monopolization as those companies that dominate market share will further flex their ability to redirect discretionary cash flow toward carving out even more defined “premium” niches, resulting in an increasingly challenging world for those who hope to attract the consumer’s dollar with a race to the bottom in pricing terms. Whether this subtle shift to further entrench aspiring category monopolies will result in an sudden upward inflection point in prices remains to be seen, however if the bigger, and far more troubling trend of global “demographic doom” is left unreversed, it will have profound consequences on all aspects of modern life.
via ZeroHedge News http://bit.ly/2UfQtFl Tyler Durden
Wall Street strategist and co-founder of Fundstrat Global Advisors Thomas Leerevealed on April 11 that his “Bitcoin Misery Index” (BMI) recently hit its highest figure since June 2016. He suggested the data could be a good or a bad sign.
The BMI — which Lee designed with the aim of informing investors of how “miserable” Bitcoin (BTC) holders are based on the coin’s price and volatility — reportedly hit a value of 89 on April 2. The Index assigns a value of 100 to positive sentiment and 0 to outright misery.
Historical BMI chart 2011-2019, with Tom Lee’s analysis. Source: Thomas Lee’s Twitter, April 11
According to Lee, the fact that Bitcoin has reported its highest reading since June 2016 provides a mixed signal. He proposed two interpretations of the index, writing that:
“Good–> Since 2011, BMI >67 only seen during $BTC bull markets. More evidence bull starting. Bad –> BMI >67 after peak, $BTC falls ~25% = Profit taking ST.”
In a further tweet in the same thread, the strategist argued that “the main takeaway is that BMI reaching 67 is further evidence the bear market for Bitcoin likely ended at $3,000.”
As Cointelegraph has previously reported, Lee — a well-known Bitcoin bull — has used the BMI as a measure of investor sentiment as well as to assess Bitcoin’s price resilience and immediate prospects since he first launched the index in March 2018.
Bitcoin is currently up half a percent on the day and is trading around $5,079 by press time, having hit a multi-month price high of over $5,420 earlier this week on April 10.
via ZeroHedge News http://bit.ly/2ZaSYfG Tyler Durden
As we’ve reported, the greatest long-term threat to the Japanese economy is a profusion of sexless men – termed “soshoku danshi”, or herbivores, the modern parlance – who are more interested in anime and used panty vending machines than they are in living, breathing women.
But although Japan’s increasingly sexless society has led to the lowest birthrate in the developed world, sending the number of live births below 1 million last year, the lowest level in modern history, it’s the rising number of deaths that are causing the rate at which Japan’s population is shrinking to accelerate.
According to the FT, those born during a pre-WWII baby boom, which was fostered by the Imperial government during the run-up to the war, are rapidly reaching the end of their lives. And the death rate in the country, which last year outstripped the number of births by roughly 430,000, is expected to accelerate through 2030.
“The reason Japan’s population is now falling so fast is not the low birth rate but rather an increase in the number of deaths,” said Akihiko Matsutani, professor emeritus in applied economics at the National Graduate Institute for Policy Studies.
[…]
Japan had a baby boom before the second world war because of military pressure to increase the birth rate, he added. “Those people are now reaching the age of passing away,” said Prof Matsutani.
Even Prime Minister Shinzo Abe’s decision to loosen restrictions on immigration, a controversial subject in Japan, wasn’t enough to offset the number of deaths:Japan recorded a record net inflow of more than 161,000 migrants, but the overall pace of decline still hit a new high of minus 0.21%.
The decelerating pace of population decline has made Japan, once a thriving empire and global economic powerhouse, the country with the highest rate of natural population decline in the world. Some European countries, including Bulgaria and Romania, are seeing their populations decline at a faster rate, but this is mostly driven by immigration. The pace at which Japan’s population is declining has even outpaced Venezuela, even as widespread starvation and societal collapse have driven millions of people out of the country over the past five years.
Since the beginning of the devastating economic crisis currently gripping Venezuela, prosperous Japan, which still boasts the world’s third-largest economy, has lost about as many people.
Not unlike the US, where the migration of people to urban centers has caused the rural population to shrink, Japan’s demographic shifts are hitting rural areas particularly hard.
In some places, like the northern prefectures of Aomori and Akita, the population is declining at a rate of 1% per year, leaving some villages devoid of people under the age of 70. These towns feature “shutter streets” of shops that never open.
Even after 2030, when the rate of population decline is expected to level off as most of the older generation will have already died off, growth will still likely be negative thanks to low birth rates.
And again, these low birth rates are driven by the fact that Japanese culture puts such an intense emphasis on economic success in the workplace, that men who fail to achieve it feel too ashamed to try and court a woman.
By 2050, the National Institute of Population and Social Security Research projects that by the middle of the century, Japan will be losing about 900,000 people a year – roughly the population of Austin, Texas. By 2100, projections suggest Japan’s population will shrink to 50 million – its level from a century ago.
In 2018, there were 944,146 births through October, compared with 1,368,632 deaths. By comparison, in 2011, there were 1,073,663 births and 1,256,387 deaths during the same period.
This has triggered a fraught debate about whether Abe, who has relaxed rules for guest workers, leading Japan’s foreign born population to boom to 2.2 million people in 2018, also a modern record, should start offering a path to permanent residency for foreign workers and – crucially – their families.
That could fill in the economic gaps that might strain Japan’s social services in the coming decades as the country struggles to care for its booming population of senior citizens.
Of course, if coaxing young Japanese men and women to have procreative sex wasn’t Panda-level difficult, then the country wouldn’t have this problem to begin with. Even some Japanese couples are sexless as more men devote themselves to their hobbies, while women are becoming more devoted to work. The last Japanese baby boom was spurred by pressure from the Imperial government. But in the modern era, what can the government do to change a culture that has made it acceptable to be an “herbivore?”
What’s the solution? Ban hentai and tentacle porn? Take away their “Waifu pillows?”
A Japanese man, probably a virgin, carrying a “Waifu” pillow.
Or maybe high levels of soy in their diet combined with the frosty sex relations of the #MeToo era have created a population of ultra-feminized men afraid to make the first move?
via ZeroHedge News http://bit.ly/2Dd7s5o Tyler Durden
Russophobia, as psycho-social-political pathology, is diagnosed as a disorder in The West since before the 1000-year-old Roman-Orthodox religious schism and most recently manifested with a vengeance in the course of the 2013-14 with Edward Snowden’s revelations of mass surveillance by the US and its covert activities leading to the Ukraine coup with Russophobia used thereafter as a weapon of mass deception to inflame this latent pathology in the public.
After more than a year since we first heard the BBC “breaking news” about the “Russians Poisoning the Skipals”, all we have are allegations, but there is still no real evidence to present before a judge and jury for a just trial, only media propaganda which has provoked even more fear and hysteria meant to distract people from the government’s bungling and high level of anxiety over Brexit by once again blaming Russia. Never-the-less, it prompted politicians to administer instant sanctions against Russia as punishment. That first day, the “evidence”, presented in the usual clipped, “authoritative” British accents, included interviews with a conservative British MP, then the former US Ambassador to Russia, Alexander Vershbow (2001-05), now with the notoriously hawkish US-based think tank, the Atlantic Council. Thus, the three of them: the BBC “journalist” and the two “experts”, colluded to transform false allegations into “facts”… fueled, as always, by their perpetual prejudice, RUSSOPHOBIA, in the course of their propaganda war to force Russia to surrender to American-led Western Domination or else: have their economy destroyed & their people suffer. Indeed, it is a threat to the whole world played to the discord of rattling nuclear swords with a chorus of vindictive Russian oligarchs, whom Putin expelled for robbing the Russian people. So, now living in London as expats, they would seem to be the more likely culprits. All the while elsewhere in London, thanks to our “special US-UK relationship”, Julian Assange has been excommunicated and imprisoned in a tiny “cell” at the Ecuador embassy for revealing embarrassing American secrets via Wikileaks.
There we have it: the poisoning of our minds by the media and politicians which are owned and controlled by the US-UK-EU 1%, who benefit from Western Hegemony. So, these deluded few are now desperately defending it from the rising powers led by Russia and China with India not far behind demanding a multi-polar, democratic world order.
My search for the roots of this particularly vicious and extremely dangerous hate campaign began in a Dartmouth College Russian Foreign Policy course, which led me to the book, “Russophobia: Anti-Russian Lobby and American Foreign Policy” by San Francisco State University Professor Andrei P. Tsygankov (2009). And there, the detoxification of my mind began as I studied his deft, well-documented deconstruction of the political propaganda disseminated “by various think tanks, congressional testimonials, activities of NGOs and the media” (preface p. XIII)
Then in Italy the following winter, I discovered the work of the Swiss journalist, Guy Mettan, in the Italian geopolitical journal, LiMes: an excerpt from his book, “Creating Russophobia: From the Great Religious Schism to Anti-Putin Hysteria” (2017). There, Mettan informs us that this psycho-social pathology in Western Civilization” goes back more than 1000 years: to the division of Christendom between the Orthodox and Roman churches. Indeed, his research into the depths of history confirms the diagnosis by our renowned American psychiatrist, Robert Jay Lifton, in his 2003 book, “Superpower Syndrome: America’s Apocalyptic Confrontation with the World”. Therein, Lifton states: “More than merely dominate, the American superpower now seeks to control history. Such cosmic ambition is accompanied by an equally vast sense of entitlement, of special dispensation to pursue its aims.” (p.3) And Mettan’s analysis of Russophobia also underscores the work of University of Chicago Professor John J. Mearsheimer, our leading international relations “realist” in his three Henry L. Stimson lectures at Yale University November 2017: “The Roots of Liberal Hegemony”, “The False Promises of Liberal Hegemony” and “The Case for Restraint”: with his book, “The Great Delusion: Liberal Dreams, International Realities” published in 2018.
But what about “Russian Aggression” in Ukraine & Crimea?
In the first place, it was the astute Mearsheimer, who, in the Sept-Oct 2014 Foreign Affairs, informed us “Why the Ukraine Crisis is the West’s Fault: The Liberal Delusions That Provoked Putin” (pp 77-89), but the American foreign policy establishment, together with ambitious politicians and the me-too media, paid no heed and continues to repeat its fabricated “facts”.
Never-the-less, Mearsheimer is backed up by Richard Sakwa, Professor of Russian and European Politics at the University of Kent. In Sakwa’s book, “Russia Against the Rest: The Post-Cold War Crisis of World Order”, 2017, we turn to the section on “Reality Wars and American Power” on p. 217 to read: “It does indeed seem that Russia and Western elites live in totally different worlds, divided by different epistemological understandings of the nature of contemporary reality. The Ukraine crisis crystallized the profound differences between Russian and Atlanticist understandings of the breakdown and its causes.” And he continues on p. 218: “Elite and policy-maker perceptions and attitudes forged in the Cold War years sustain these legacies and frame the discussions of such crucial issues as NATO enlargement, democracy promotion in the post-Soviet area, and strategic arms talks.” Adding that these “are no longer so much legacies as self-regenerating narratives and modes of discourse that preclude a more open-ended understanding of the dynamics and concerns of Russia today.”
Karl Rove: “We’re an empire now; we create our own reality.”
[In 2004, journalist Ron Suskind wrote in The New York Times magazine that a top White House strategist for President George W. Bush—identified later as Karl Rove, Bush’s Deputy White House Chief of Staff—told him, “We’re an empire now, we create our own reality.”]
Thus, we’ve become trapped in a contrived “reality” promulgated by neo-conservative warriors under cover of neo-liberal “democracy-spreading-humanitarian-interventionists” to justify an American Empire promoting itself as the indispensable “Liberal World Order”. However, under that global order, as Sakwa points out on p. 219: “If a foreign power is considered to have violated ‘international order’, then it can be overthrown” as a rationale for American “regime change” anywhere around the world: whether to control the supply of copper in Chile or oil in Iran. And, with its eye on Russia’s vast oil, gas and other natural resources, America claims the right to threaten Russia by ringing it with weapons which we would not abide were the Russians to place missiles in Mexico…as the Soviets did in Cuba to defend it after our “Bay of Pigs” invasion that brought humanity to the brink of nuclear war. Thus, Russia was defending itself in Ukraine against further NATO expansion while Crimean citizens, by majority vote in a democratic referendum, chose to rejoin Russia as they had been one country ever since Catherine the Great…except for an interval in the ’50s when Crimea was” gifted” to Ukraine while they were all members of the Soviet Union.
“Ditching Solzhenitsyn, Defender of Russia”
And not to forget that in 1974, after being expelled from the Soviet Union, Alexandr Solzhenitsyn and his family fled first to Zurich then to Vermont in 1976 and lived on a farm near Cavendish, where he continued to write and publish his work. Meanwhile, Mettan, as a journalist covering events related to Russia, became quite distressed over “the widespread prejudices, cartloads of clichés and systematic anti-Russian biases of most western media.” And he went on to say that “the more I traveled, discussed and read, the wider I perceived, the more the gap of incomprehension and ignorance between Western Europe and Russia became evident.
“That was why, during the 1990s, I was shocked by the way the West treated Solzhenitsyn. For decades, we had published, celebrated, and acclaimed the great writer as bearing the torch of anti-Soviet dissidence. We had praised Solzhenitsyn to the skies as long as he criticized his native country, communist Russia. But as soon as he emigrated, realizing that he preferred to isolate himself in his Vermont retreat to work rather than attending anticommunist conferences, western media and academics began to distance themselves from the great writer.
“The idol no longer matched the image they had built and was becoming a hindrance to their academic and journalistic career plans. And once Solzhenitsyn had left the United States to go back to Russia and defend his humiliated, demoralized motherland that was being sold at auction, raising his voice against the Russian ‘Westernizers’ and pluralist liberals who denied the interests of Russia to better revel in the troughs of capitalism, he became a marked man, an outdated, senile writer, even though he himself had not changed in the least, denouncing with the same vigor the defects of market totalitarianism as those of communist totalitarianism.
“He was booed, despised, his name was dragged through the mud for his choices, often by the very people who had praised his first fights. Despite that, against all odds, against the most powerful powers that were trying to dissuade him, Solzhenitsyn defended his one and only cause, that of Russia. He was not forgiven for having turned his pen against that West that had welcomed him and felt it was owed eternal gratitude. A dissident today, a dissident wherever truth compelled, such was his motto. This deserves to be remembered.” Mettan, pp. 15-16 in “Creating Russophobia”.
Russophobia: akin to Racism
From another perspective: Mettan’s chapter on “German Russophobia” set me thinking that this “Western Supremacy” political-cultural pathology known as Russophobia is like the racism which I knew growing up in totally segregated Oklahoma. Until in high school, I became so perplexed and appalled by the curtain of hate and “justifications” in which we were smothered: the Negro schools on the other side of town? and why were there separate waiting rooms, drinking fountains & restrooms in bus and train stations?…that I began poking holes in the curtain to see what was outside…and found a book in the library: “South of Freedom” by Carl Rowan, an African-American Minneapolis Star Tribune journalist, describing his journey from South to North. So, thanks to what I learned from Rowan, I began to tear the whole damned curtain down…at least in my mind.
Whom the Gods would destroy, they first drive mad?
So, here’s a Swiss journalist punching a hole in this wall of Russophobic Western Supremacy… and through that gaping hole, we are reminded that the Russians are Europe’s neighbors who sacrificed more than 26 million of their own lives to save Europe, America and Russia from the Nazis. These are not poor “niggers” from the Eurasian ghetto we’ve been trying to club into submission as second-class citizens of “The Liberal World Order” dominated by US; they’re nuclear-armed and no longer willing to sit at a separate, inferior table with no vote and no voice over who makes the rules…nor are China, India and Brazil. And last year, while the wave of Russophobic hysteria over alleged “Russian poisoning” was rolling out of the UK and engulfing the Western world in the latest siege of mass madness…with only Jeremy Corbyn, leader of the British Labor party, having the courage to stand up in Parliament on the Ides of March and demand Evidence! only to be pilloried by the mindless politicians and media…led by the once esteemed BBC. And the week following the August 7, 2018 Trump-Putin Helsinki summit, will surely go down in psychiatric circles as another case of mass media-political delusions led by cheer-leader-in-chief, Rachel Maddow of MSNBC.
Meanwhile, not to forget that it was Hearst newspaper propaganda that whipped the American public into a war frenzy to support our first step in empire-building: our 1898 intervention in Cuba’s war for independence from the Spanish Empire which had dominated all of Latin America for 500 years. As the former NYTimes journalist/bureau chief in Istanbul, Berlin & Central America, Stephen Kinzer reminds us in his latest book “The True Flag: Theodore Roosevelt, Mark Twain, and the Birth of American Empire”, Twain, Booker T. Washington and even Andrew Carnegie leading a handful of other anti-imperialists…were not able to prevail against Roosevelt with his Rough Riders and the Hearst newspapers’ war propaganda.
Regime Change Comes Home
Never-the-less, after a very long run of American “regime change” abroad leaving a bloody trail of destruction, dictatorships and chaos from Iran in 1953, when we joined with the British to overthrow the democratically-elected President Mohammad Mossadegh to maintain the Brit-US control of its oil…on through Guatemala, Vietnam and Chile…to name a few of our interventions…we were back for a second round with “coalitions of the willing” or not? in the Middle East where our regime-change machine managed to plow its way through Afghanistan, Iraq and Libya…before breaking down in Syria. Until now it’s been brought home again, renovated and renamed “RussiaGate” for another attempt at removing a President for trying to mend US relations with Russia. Though even after more than a year of Special Prosecutor Robert Mueller’s investigations accompanied by such cinematic support as the movie, “Felt”, another “Watergate” re-run. Did anyone else notice the resemblance between “Felt” and Mueller? And despite the media’s commemoration of its 44-year-old “moment of courage” with the movie “The Post” to promote Trump’s ouster, our democratically-elected President, as of this writing, remains in power. However, in this rush to “regime change”, didn’t the our “ruling elite” read Jane Mayer’s “The Danger of President Pence” in the 10/23/17 New Yorker? At least the 70s’ “ruling class” was smart enough to remove an unqualified Vice President Spiro (who?) Agnew…before “regime changing” Nixon and replacing him with the more or less benign Gerald Ford.
A Florentine Epiphany
But back to last January in Florence, Italy, when I was hiking in the hills beyond the Piazzale Michelangelo, with its spectacular view of that Renaissance city and its centerpiece, the Duomo, I came across the Villa Galileo, which had been his last home after his trial as a “heretic”, during which to save himself from torture and execution, he was forced to deny his helio-centric vision and henceforth lived under “villa arrest”, from 1631 until his natural death in 1642. While pondering his fate, I continued walking along the gently rising, ever-narrowing road between ancient stone walls overlooking villas and olive groves until I reached the peak, where I felt as if I were standing on top of the world as I contemplated both the Arno and Ema river valleys far below and where I swear I heard Galileo declare: “The world does not turn on an American axis!”
The 21st Century Inquisition
So how is it that we now have contemporary Inquisitors persecuting so many truth tellers…such as Edward Snowden, our electronic age “Solzhenitsyn?” in Russian exile; Chelsea Manning, imprisoned some 7 years for revealing US brutality in Iraq; Julian Assange confined to his Ecuadorian Embassy exile in London since August 2012; Katharine Gun, a whistleblower attempting to stop the Iraq invasion, who faced 2 years of British imprisonment before her case was dropped; James Risen, former New York Times journalist who was persecuted by our “justice” system for revealing our government’s surveillance of US!
Any Good Sense Left?
So, do we the people have enough good sense & independent thinking left to follow the advice of Henry David Thoreau?
“Let us settle ourselves, and work and wedge our feet downward through the mud and slush of opinion, and prejudice, and tradition, and delusion, and appearance, that alluvion which covers the globe, through Paris and London, through New York and Boston and Concord, through church and state, through poetry and philosophy and religion, till we come to a hard bottom and rocks in place, which we can call reality.”
“Walden” 1854
If not, the Doctor prescribes Shock Therapy:
For a week, a month, or however long it takes to cleanse and open the mind, one must adhere to strict abstinence from Mainstream Media propaganda, junk news, pseudo analysis, fake photos, TV & videos including absolutely NO phony “for, by & of the people” NPR, PBS, BBC or other Government-funded Neo or LibCon Imperial tranquilizer.
via ZeroHedge News http://bit.ly/2X3ozOy Tyler Durden
