As the Trump DOJ attempts to sift through exactly what the Obama administration was pulling during the 2016 US election, Attorney General William Barr and his team of investigators are pursuing the following information, according to RealClear Investigations‘ Paul Sperry.
Agendas for former CIA chief John Brennan’s secret interagency task force meetings on alleged Trump-Russia collusion in the spring, summer and fall of 2016, which he sent in envelopes to FBI Director James Comey, Attorney General Loretta Lynch, and National Security Adviser Susan Rice.
A series of papers that task force, known as the “fusion cell,” drafted for the White House.
A classified August 2016 document Brennan hand-delivered in a sealed envelope to Obama containing information from someone Brennan described as “a critical informant close to Putin.” The informant is believed to have beeen a Russian source recycled from a largely debunked dossier compiled by ex-British agent Christopher Steele for the Hillary Clinton campaign.
An email exchange from December 2016 between Brennan and Comey in which Brennan is said to have argued for using the Steele dossier in early drafts of the task force’s January 2017 intelligence assessment, which spread the narrative that Vladimir Putin personally ordered a hacking operation to harm Hillary Clinton’s election chances against Donald Trump.
All drafts of the Russia intelligence assessment, or ICA, along with classified footnotes revealing the sourcing behind it.
Confidential source reports, known as FD-1023s, summarizing briefings between FBI agents and the informants and assets they jointly handled with the CIA, including Christopher Steele, Felix Sater, Azra Turk, and ex-Cambridge professor Stefan Halper, who apparently lured Trump campaign advisers George Papadopoulos and Carter Page overseas, where he secretly tape-recorded them.
Transcripts of conversations Halper recorded prior to July 31, 2016, in which Papadopoulos allegedly “denies any illegal conspiracy between the Trump campaign and Russia,” according to Florida Republican Rep. Matt Gaetz.
Copies of all FBI, CIA and State Department records related to Joseph Mifsud, the mysterious Maltese professor whose statements regarding Papadopoulos allegedly triggered the original Russia-collusion probe.
Diplomatic cables between Australia and the U.S. that mention former Australian diplomat Alexander Downer’s tip to the FBI that Papadopoulos allegedly bragged about Mifsud telling him the Russians had dirt on Hillary Clinton.
Queries former Obama National Security Adviser Susan Rice and U.N. Ambassador Samantha Power made to the NSA between January 2016 and January 2017 to unmask the identities of Trump figures caught up in upstream collections, or intercepts, of foreign nationals — including logs that remain under lock and key at an Obama Foundation storage site outside Chicago.
An Obama “interagency memorandum of understanding” signed by the FBI and CIA enabling outside contractors — including possibly Clinton campaign contractor Fusion GPS — to gain “improper access” (per a court opinion) to raw FISA data from November 2015 to April 2016.
Classified notes from late spring 2016 of Comey briefing White House officials on “the [Carter] Page information.”
At least four previously undisclosed, sealed Comey memos memorializing his conversations with Trump that are said to document the investigative steps taken by the FBI, as well as the codename and true name of a “confidential human source” — and evidence obtained from this source, including the identification of at least one Trump target.
Allegedly rejected FISA applications for warrants to spy on Page filed in June and July of 2016.
FISA applications to monitor Papadopoulos, former Trump national security adviser Michael Flynn, and former Trump campaign manager Paul Manafort in 2016 — in addition to all versions of the Page applications that were approved from October 2016 to June 2017, along with supporting materials.
All summaries of interviews the FBI conducted with Steele in 2016, known as FD-302s, as well as the unredacted 302 reports of the FBI’s dozen interviews with Justice official Bruce Ohr, who provided back-channel briefings from Steele after the FBI terminated him in November 2016.
FBI 302 reports summarizing 2016 meetings with Russian oligarch (and FBI informant) Oleg Deripaska, who reportedly scoffed at the idea that Trump colluded with Moscow when agents visited him in New York.
FBI 302s of agents’ Feb. 10, 2017, interview with Mifsud during which the Mueller Report says Mifsud lied to agents.
via ZeroHedge News https://ift.tt/2ZweJJS Tyler Durden
Over the past few decades, the central banks, including the Federal Reserve (Fed), have relied increasingly on interest rates to help modify economic growth. Interest rate management is their tool of choice because it can be effective and because central banks regulate the supply of money, which directly effects the cost to borrow it. Lower interest rates incentivize borrowers to take on debt and consume while dis-incentivizing savings.
Regrettably, a growing consequence of favoring lower than normal interest rates for prolonged periods is that consumers, companies, and nations grow increasingly indebted as a percentage of their respective income. In many cases, consumption is pulled from the future to the present day. Accordingly, less consumption is needed in the future and a larger portion of income and wealth must be devoted to servicing the accumulated debt as opposed to productive ventures which would otherwise generate income to help pay off the debt.
Today, interest rates are at historically low levels around the globe. Interest rates are negative in Japan and throughout much of Europe. In this article, we expound on the themes laid out in Negative is the New Subprime, to discuss the mechanics of negative-yielding debt as well as the current mindset of investors that invest in negative-yielding debt.
Is invest the right word in describing an asset that when held to maturity guarantees a loss of capital?
Negative Yield Mechanics
Negative yields are not only bestowed upon sovereign debt, as investment grade and even some junk-rated debt in Europe now carry negative yields. Even stranger, Market Watch just wrote about a Danish bank offering consumers’ negative interest rate mortgages (LINK).
You might be thinking,
“Wow, I can take out a negative interest rate loan, receive payments every month or quarter and then pay back what was lent to me?”
That is not how it works, at least not yet.
Below are two examples that walk through the lender and borrower cash flows for negative-yielding debt.
Some of the bonds trading at negative yields were issued when yields were positive and therefore have coupon payments. For example, in August of 2018, Germany issued a 30 year bond with a coupon of 1.25%. The price of the bond is currently $143, making the yield to maturity -0.19%. Today, it will cost you $14,300 to buy $10,000 face value of the bond. Going forward, you will receive coupon payments of $125 a year and ultimately receive $10,000 in 2048. Over the next 29 years you will receive $3,625 in coupon payments but lose $4,300 in principal, hence the current negative yield to maturity.
Bonds issued with a zero coupon with negative yields are similar in concept but the mechanics are slightly different than our positive coupon example from above. Germany issued a ten-year bond which pays no coupon. Currently, the price is 106.76, meaning it will cost an investor $10,676 to buy $10,000 face value of the bond. Over the next ten years the investor will receive no coupon payments, and at the end of the term they will receive $10,000, resulting in a $676 loss. The lower the negative yield to maturity, the higher premium to par and the greater loss of principal at maturity.
We suspect that example two, the zero-coupon bond issued at a price above par, will be the issuance model going forward for negative yielding bonds.
Why?
At this point, after reviewing the cash flows on the German bonds, you are probably asking why an investor would make an investment in which they are almost guaranteed to lose money. There are two predominant reasons worth exploring.
Safety: Investors that store physical gold in a gold vault pay a fee for safe storage. Individuals with expensive jewelry or other keepsakes pay banks a fee to use their vaults. Custodians, such as Fidelity or Schwab, are paid fees for the safekeeping of our stocks and bonds.
Storing money, as a deposit in a bank, is a little different from the prior examples. While banks are a safer place to store money than a personal vault, mattress, or wallet, the fact is that deposits are loans to the bank. Banks traditionally pay depositors an interest rate so that they have funds they can lend to borrowers at higher rates than the rate incurred on the deposit.
With rates negative in Europe and Japan, their respective central banks have essentially made the storing of deposits with banks akin to the storage of gold, jewelry, and stocks – they are subject to a safe storage fee. Unfortunately, many people and corporations have no choice but to store their money in negative-yielding instruments and must lend money to a bank and pay a “storage fee.”
On a real return basis, in other words adjusted for inflation, whether an investor comes out ahead by lending in a negative interest rate environment, depends on changes to the cost of living during that time frame. Negative yielding bonds emphatically signal that Germany will be in a deflationary state over the next ten years. With global central bankers taking every possible step, legal and otherwise, to avoid deflation and generate inflation, betting on deflation via negative yielding instruments seems like a poor choice for investors.
Greater Fool Theory:Buying a zero-coupon bond for 101 today with the promise of receiving 100 is a bad investment. Period. Buying the same bond for 101 today and selling it for 102 tomorrow is a great investment. As yields continue to fall further into negative territory, the prices of bonds rise. While the buyer of a negative-yielding bond may not receive a coupon, they can still profit, and sometimes appreciably as yields decline.
This type of trade mindset falls under the greater fool theory. Per Wikipedia:
“In finance and economics, the greater fool theory states that the price of an object is determined not by its intrinsic value, but rather by irrational beliefs and expectations of market participants. A price can be justified by a rational buyer under the belief that another party is willing to pay an even higher price. In other words, one may pay a price that seems “foolishly” high because one may rationally have the expectation that the item can be resold to a “greater fool” later.”
More succinctly, someone buying a bond that guarantees a loss can profit if they can find someone even more willing to lose money.
Scenario Analysis
Let’s now do a little scenario analysis to understand the value proposition of holding a negative-yielding bond.
For all three examples we use a one year bond to keep the math simple. The hypothetical bond details are as follows:
Issue Date: 9/1/2019
Maturity Date: 9/1/2020
Coupon = 0%
Yield at Issuance: -1.0%
Price at Issuance: 101.00
Greater fool scenario: In this scenario, the bondholder buys the new issue bond at 101 and sells it a week later at 101.50. In this case, the investor makes a .495% return or almost 29% annualized.
Normalization: This next scenario assumes that yields return to somewhat normal levels and the holder sells the bond in six months.If the yield returns to zero in six months, the price of the bond would fall to 100. In this case, our investor, having paid 101.00, will lose 1% over the six month period or 2% annualized.
Hold to maturity: If the bond is held to maturity, the bondholder will be redeemed at par losing 1% as they are paid $100 at maturity on a bond they purchased for $101.
Summary
Writing and thinking about the absurdity of negative yields is taxing and unnatural. It forces us to contemplate basic financial concepts in ways that defy common sense and rational thought. This is not a pedantic white paper discussing hypothetical central bank magic tricks and sleight of hand; this is about something occurring in real-time.
Excessive monetary policy has been the crutch of growth for decades spurred by an intense desire to avoid and minimize otherwise healthy and routine economic corrections. It was fueled by the cult of personality which took over in the 1990s when Alan Greenspan was labeled “The Maestro”. He, Robert Rubin, and Lawrence Summers were christened “The Committee to Save the World” by Time magazine in February 1999. Greenspan was then the subject of a biography by famed Watergate journalist Bob Woodward infamously titled Maestro in 2000.
Under Greenspan and then Bernanke, Yellen and now Powell, rational monetary policy and acknowledgement of naturally occurring business cycles has taken a back seat to avoidance of these economic cycles at all cost.
As a result, central bankers around the world are trying to justify the inane logic of negative rates.
via ZeroHedge News https://ift.tt/2ZqYm1h Tyler Durden
For years, it was conventional wisdom that the most financial challenged state in the US – whether it comes to overall debt burden, outlays, tax collections, underfunded pension and retirement obligations, or simply credit rating – was Illinois, followed closely by New Jersey.
However, at least according to New Jersey’s Senate president, conventional wisdom is wrong.
In an interview with Bloomberg, Senator Stephen Sweeney, a Democrat, said that that credit-rating companies may be underestimating the severity of the state’s financial strains by giving it the second-lowest grade after Illinois.
“We are in worse shape than Illinois,” Sweeney said. “We are not investing in education, we are not investing in the areas that we want because all the money is going to pensions and health care.”
As Bloomberg notes, these comments underscore the persistent fiscal pressure on New Jersey, a high-tax state contending with massive debts to employee pension funds after years of failing to set aside enough to cover the $212 billion of benefits that have been promised. As extensively discussed in the past, New Jersey’s retirement system had about $82 billion of assets in 2018, only 38% of what it needs to cover checks that are owed in the decades ahead. That’s lower than any other state system in the U.S., according to data compiled by Bloomberg. The state’s obligation for retirees’ health care benefits adds another $90.5 billion. The state’s solution? Raise expected pension fund returns from 7.0% to 7.5%!
Wall Street and rating companies have expressed concern that funding for state services is being consumed by the pensions, which investors have said aren’t even at the tread water level. That’s the amount that the state needs to put in each year to keep up the liabilities from growing. But with the state’s taxes already among the highest in the U.S., it’s difficult to raise new revenue.
Adding insult to injury, the state is banned from borrowing to balance its budget, and it can only issue general obligation bonds through voter approval.
The outspoken Sweeney, New Jersey’s highest-ranking state lawmaker and career ironworker, has clashed with Governor Phil Murphy, his fellow Democrat, on several issues, successfully blocking the governor’s pitches for higher income-tax rates on millionaires, a smart move in light of several prominent departures by some of the state’s richest citizens such as David Tepper, who moved to less tax burdensome pastures in recent years.
Ironically, it is Sweeney who also pushed for less costly employee benefits, a hard sell with unionized employees who were key to Murphy’s election. In 2017, Sweeney resisted a push to unseat him by the New Jersey Education Association in what campaign-finance officials aptly enough, called the most expensive legislative race in state history. In May, after Sweeney proposed a series of cost-cutting health and pension bills, the teachers union vowed to fight “a terrible trend” and work with the governor.
As a result of this ongoing financial and political chaos, and absent some form of state bailout, the worst case scenario awaits the millions of state retirees. Karel Citroen, head of municipal-bond research at Conning, said he could foresee a situation in Illinois or New Jersey where “its pension fund essentially has no assets to cover its liabilities and benefits are paid from its annual budget.”
“I wouldn’t be surprised if one of the states ended up in a situation like Puerto Rico in terms of their pensions,” he said, referring to the bankrupt island’s depleted retirement system. “The way it has been going over the last ten years clearly hasn’t worked. States have pushed out their amortization but haven’t really addressed the benefits or made real step ups in their contributions.”
As shown in the top chart, New Jersey remains rated A3 by Moody’s, as well as A- by S&P A by Fitch. Those are the second-lowest ratings for a U.S. state after Illinois, which is one level above junk by Moody’s and S&P.
“Why am I yelling fire in a crowded theater and everyone else is saying that we’re fine,” Sweeney said. “We’re not. And it’s going to go up in flames. I would rather not go down in memory as the guy that told everyone the pension system was going to collapse and be found that I was correct.”
Well, maybe Sweeney won’t be “that” guy, but someone else will unfortunately have to deliver the very bad news to what will soon be a lot of furious retirees who learn that their retirement eggs has been suddenly cut in half… or worse.
via ZeroHedge News https://ift.tt/2zr1F9Z Tyler Durden
Authorities in Hong Kong are considering whether to impose draconian martial law powers in a bid to crush pro-democracy protests.
According to a report in the South China Morning Post, Chief Executive Carrie Lam Cheng Yuet-ngor is not ruling out invoking the Emergency Regulations Ordinance for the first time in half a century.
The ordinance would grant the government sweeping powers, including authorizing the entry and search of properties, censoring the media and imposing maximum terms of life imprisonment.
Lawmaker Au Nok-hin warned that imposing emergency powers would lead to the “total destruction” of Hong Kong’s capitalist system, while law professor Simon Young of the University of Hong Kong said the ordinance meant “basically a state of martial law.”
With the government refusing to meet the five demands of the protesters, which includes withdrawing a bill that would allow suspects in Hong Kong to be extradited to China, escalation seems inevitable.
Beijing still has troops massing nearby, but experts agree that they are unlikely to be deployed inside Hong Kong.
As we previously highlighted, riot police deployed water cannons for the first time during violent demonstrations on Sunday, protesters also being hit with tear gas and rubber bullets.
* * *
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via ZeroHedge News https://ift.tt/2HvvbzJ Tyler Durden
India, the land of Mahatma Gandhi, the patron saint of pluralism, peace, and tolerance, is on the cusp of achieving a dubious distinction: It is poised to launch the biggest disenfranchisement drive in human history by stripping up to 4 million predominantly Muslim residents in Assam, an eastern province bordering Bangladesh, of their citizenship starting August 31. And as if this weren’t bad enough, Prime Minister Narendra Modi plans to go national with this crackdown.
This is shocking but not surprising. Modi, a Hindu nationalist, is riding the nativist wave around the world to advance his faith-cleansing agenda.
The Assam issue dates back to 1971 when Bangladesh, then East Pakistan, broke away from Pakistan with India’s assistance and established itself as an independent country. Pakistani atrocities at the time caused some 10 million Bangladeshis, the vast majority Muslims, to flee to Assam and other Indian border states in what was the single largest displacement of people in the second half of the 20th century. Although around 7 million of these refugees returned to their new homeland immediately after Pakistan retreated, some stayed behind in India.
This wasn’t a major problem in states such as West Bengal that, except for religion, share Bangladesh’s ethnic, cultural, and linguistic heritage. But in Assam, a remote and poor state in the mountains known for its tea estates, the presence of Bangladeshis who didn’t speak the language and practiced a different religion created tensions with locals. The conflict escalated when the ruling Congress Party led by Prime Minister Indira Gandhi handed voting rights—and, by extension, quasi-citizenship—to the refugees in what was considered a cynical move to expand her Muslim vote bank. Incensed, Assamese students in 1983 went on a killing spree, hacking nearly 2,000 Muslims—refugees and nationals alike—in six hours, one of the worst massacres in modern India, rivaling the pogrom on Modi’s watch in his home state of Gujarat in 2002.
The Congress government, deeply spooked, signed the Assam Accords with the student union in 1985, promising to update the defunct 1951 National Register of Citizens (NRC). This meant that all the 30 million-plus Assamese residents, equivalent to the population of Canada, were required to prove that their ancestors had lived in Assam from before 1971 or face not just being purged from the voter rolls, but the country. Since Assam was granted an exemption from the rest of India’s birthright citizenship, millions of people who were born in Assam and have known no other country could be rendered stateless.
Creating the register is a herculean exercise in a state (and country) with a high illiteracy rate and where many people don’t know their birth dates, let alone keep copious ancestry records. That, combined with the fact that the Congress Party had no political incentive to ensure compliance, meant that the project didn’t make much headway until the Supreme Court got aggressively involved.
Remarkably, the court didn’t see its role as protecting due process rights, in order to stop individuals from being unfairly disenfranchised, but as throwing out as many alleged foreigners as possible. A 2005 ruling scrapping a law that it said constrained the Indian government too much in expelling foreigners actually quoted the U.S. Supreme Court’s notorious and largely discarded 1889 Chinese Exclusion decision that declared “the highest duty of a nation” is to “give security against foreign aggression and encroachment” including from “vast hordes” of foreigners “crowding in upon us.” (Those who doubt America’s effect on the world’s moral compass should ponder that a U.S. Supreme Court decision was informing the Indian Supreme Court a century and a quarter later!) But impatient with the slow progress, in 2014, India’s Supreme Court, whose chief justice is an Assamese who grew up in the heyday of anti-foreigner agitation and shares its goals, established a tentative deadline and a complicated process for completing the NRC.
One of the most chilling aspects of the NRC is that it requires individuals to prove they are citizens rather than the government to prove they are not, effectively scrapping the presumption of innocence even though rendering someone stateless means that they have no home nor hearth. It’s a fate arguably worse than death.
But the court’s aggressive timetable was manna from heaven for Modi who got elected that same year. Modi latched on to NRC as a campaign issue, promising to kick Bangladeshis, most of whom are Muslim, out of Assam. “They should be prepared with their bags packed,” he told the gathered Hindu throngs at election rallies. Meanwhile, Home Minister Amit Shah, echoing Trump’s harsh anti-Mexican language, recently compared Bangladeshis to “termites” and “infiltrators.”
The Assam government, which is controlled by Modi’s party, finally released the NRC last year and set off a wave of panic because a whopping 4 million—13 percent of the state’s population—Assamese residents didn’t make it on the list. But the NRC is so riddled with errors thanks to the omnipresent incompetence of Indian authorities that even the Modi government isn’t eager to see it implemented in its current form. Even though the vast majority of those excluded are Muslim, there were more Hindus left out than it had expected. The court has given the government until the end of this month to release a final, cleaned up list.
What will happen to those who still don’t make the cut?
The Modi government is trying to pass a bill that would hand automatic citizenship to all Hindu, Buddhist, Parsee, and Christian migrants from neighboring countries—everyone, that is, except for Muslims. Muslims, the only ones left if the bill goes through, will have to appear before foreign tribunals for a final determination.
The tribunals are notorious for holding sham trials where officers who fail to convict the vast majority of petitioners are summarily fired. A Vice News investigation found that these kangaroo courts have no unified process to adjudicate petitions. Each tribunal makes up its own evidentiary rules, which are hard to fathom for petitioners, especially the poor ones who can’t afford lawyers. Muslims especially have no chance of prevailing, given that nine of 10 were branded as foreigners in the sample of tribunals Vice investigated. One tribunal even convicted a veteran officer who had served in the Indian army for 30 years and had long ancestral roots in the state because he happened to be Muslim. Widespread outrage secured his release, but those who aren’t so lucky are sent away to detention camps indefinitely because Bangladesh refuses to take them, especially if they weren’t even born on its soil. Unsurprisingly, scores of people who didn’t find their names on the NRC have committed suicide.
But that isn’t stopping Modi from allowing Assam to add 200 new tribunals to the existing 100 and is planning 800 more for the future. He has also authorized 10 more detention camps.
And Assam is just a pilot test given that Modi’s administration has already signaled that it wants to use the NRC process to give more states Assam’s tools to root out “doubtful voters” and “illegal infiltrators” from the country. This may mean requiring every one of the 1.3 billion men, women, and children in India to prove their citizenship and would dwarf what is happening elsewhere in the world.
Modi’s ambitions would not have reached such epic proportions if the nativist virus hadn’t been raging in the West, particularly America. If a country like America that has long regarded itself as a nation of immigrants and has relatively strong institutional checks against government abuse can snatch infants from the breasts of migrant moms, it becomes very hard to restrain the Modis of the world. “When strong democracies resort to such harsh tactics against migrants,” the London-based Amal de Chickera of the Institute of Statelessness and Inclusion lamented over the phone, “what India is about to do in Assam begins to seem normal, not exceptional.”
The West may have developed the current nativist contagion, but India has come down with a more virulent strain. And the consequences are going to be tragic.
India, the land of Mahatma Gandhi, the patron saint of pluralism, peace, and tolerance, is on the cusp of achieving a dubious distinction: It is poised to launch the biggest disenfranchisement drive in human history by stripping up to 4 million predominantly Muslim residents in Assam, an eastern province bordering Bangladesh, of their citizenship starting August 31. And as if this weren’t bad enough, Prime Minister Narendra Modi plans to go national with this crackdown.
This is shocking but not surprising. Modi, a Hindu nationalist, is riding the nativist wave around the world to advance his faith-cleansing agenda.
The Assam issue dates back to 1971 when Bangladesh, then East Pakistan, broke away from Pakistan with India’s assistance and established itself as an independent country. Pakistani atrocities at the time caused some 10 million Bangladeshis, the vast majority Muslims, to flee to Assam and other Indian border states in what was the single largest displacement of people in the second half of the 20th century. Although around 7 million of these refugees returned to their new homeland immediately after Pakistan retreated, some stayed behind in India.
This wasn’t a major problem in states such as West Bengal that, except for religion, share Bangladesh’s ethnic, cultural, and linguistic heritage. But in Assam, a remote and poor state in the mountains known for its tea estates, the presence of Bangladeshis who didn’t speak the language and practiced a different religion created tensions with locals. The conflict escalated when the ruling Congress Party led by Prime Minister Indira Gandhi handed voting rights—and, by extension, quasi-citizenship—to the refugees in what was considered a cynical move to expand her Muslim vote bank. Incensed, Assamese students in 1983 went on a killing spree, hacking nearly 2,000 Muslims—refugees and nationals alike—in six hours, one of the worst massacres in modern India, rivaling the pogrom on Modi’s watch in his home state of Gujarat in 2002.
The Congress government, deeply spooked, signed the Assam Accords with the student union in 1985, promising to update the defunct 1951 National Register of Citizens (NRC). This meant that all the 30 million-plus Assamese residents, equivalent to the population of Canada, were required to prove that their ancestors had lived in Assam from before 1971 or face not just being purged from the voter rolls, but the country. Since Assam was granted an exemption from the rest of India’s birthright citizenship, millions of people who were born in Assam and have known no other country could be rendered stateless.
Creating the register is a herculean exercise in a state (and country) with a high illiteracy rate and where many people don’t know their birth dates, let alone keep copious ancestry records. That, combined with the fact that the Congress Party had no political incentive to ensure compliance, meant that the project didn’t make much headway until the Supreme Court got aggressively involved.
Remarkably, the court didn’t see its role as protecting due process rights, in order to stop individuals from being unfairly disenfranchised, but as throwing out as many alleged foreigners as possible. A 2005 ruling scrapping a law that it said constrained the Indian government too much in expelling foreigners actually quoted the U.S. Supreme Court’s notorious and largely discarded 1889 Chinese Exclusion decision that declared “the highest duty of a nation” is to “give security against foreign aggression and encroachment” including from “vast hordes” of foreigners “crowding in upon us.” (Those who doubt America’s effect on the world’s moral compass should ponder that a U.S. Supreme Court decision was informing the Indian Supreme Court a century and a quarter later!) But impatient with the slow progress, in 2014, India’s Supreme Court, whose chief justice is an Assamese who grew up in the heyday of anti-foreigner agitation and shares its goals, established a tentative deadline and a complicated process for completing the NRC.
One of the most chilling aspects of the NRC is that it requires individuals to prove they are citizens rather than the government to prove they are not, effectively scrapping the presumption of innocence even though rendering someone stateless means that they have no home nor hearth. It’s a fate arguably worse than death.
But the court’s aggressive timetable was manna from heaven for Modi who got elected that same year. Modi latched on to NRC as a campaign issue, promising to kick Bangladeshis, most of whom are Muslim, out of Assam. “They should be prepared with their bags packed,” he told the gathered Hindu throngs at election rallies. Meanwhile, Home Minister Amit Shah, echoing Trump’s harsh anti-Mexican language, recently compared Bangladeshis to “termites” and “infiltrators.”
The Assam government, which is controlled by Modi’s party, finally released the NRC last year and set off a wave of panic because a whopping 4 million—13 percent of the state’s population—Assamese residents didn’t make it on the list. But the NRC is so riddled with errors thanks to the omnipresent incompetence of Indian authorities that even the Modi government isn’t eager to see it implemented in its current form. Even though the vast majority of those excluded are Muslim, there were more Hindus left out than it had expected. The court has given the government until the end of this month to release a final, cleaned up list.
What will happen to those who still don’t make the cut?
The Modi government is trying to pass a bill that would hand automatic citizenship to all Hindu, Buddhist, Parsee, and Christian migrants from neighboring countries—everyone, that is, except for Muslims. Muslims, the only ones left if the bill goes through, will have to appear before foreign tribunals for a final determination.
The tribunals are notorious for holding sham trials where officers who fail to convict the vast majority of petitioners are summarily fired. A Vice News investigation found that these kangaroo courts have no unified process to adjudicate petitions. Each tribunal makes up its own evidentiary rules, which are hard to fathom for petitioners, especially the poor ones who can’t afford lawyers. Muslims especially have no chance of prevailing, given that nine of 10 were branded as foreigners in the sample of tribunals Vice investigated. One tribunal even convicted a veteran officer who had served in the Indian army for 30 years and had long ancestral roots in the state because he happened to be Muslim. Widespread outrage secured his release, but those who aren’t so lucky are sent away to detention camps indefinitely because Bangladesh refuses to take them, especially if they weren’t even born on its soil. Unsurprisingly, scores of people who didn’t find their names on the NRC have committed suicide.
But that isn’t stopping Modi from allowing Assam to add 200 new tribunals to the existing 100 and is planning 800 more for the future. He has also authorized 10 more detention camps.
And Assam is just a pilot test given that Modi’s administration has already signaled that it wants to use the NRC process to give more states Assam’s tools to root out “doubtful voters” and “illegal infiltrators” from the country. This may mean requiring every one of the 1.3 billion men, women, and children in India to prove their citizenship and would dwarf what is happening elsewhere in the world.
Modi’s ambitions would not have reached such epic proportions if the nativist virus hadn’t been raging in the West, particularly America. If a country like America that has long regarded itself as a nation of immigrants and has relatively strong institutional checks against government abuse can snatch infants from the breasts of migrant moms, it becomes very hard to restrain the Modis of the world. “When strong democracies resort to such harsh tactics against migrants,” the London-based Amal de Chickera of the Institute of Statelessness and Inclusion lamented over the phone, “what India is about to do in Assam begins to seem normal, not exceptional.”
The West may have developed the current nativist contagion, but India has come down with a more virulent strain. And the consequences are going to be tragic.
As Puerto Ricans batten down the hatches in the face of Tropical Storm Dorian, which is drawing dangerously close to the island’s shores, President Trump issued a pair of tweets bashing the island’s broken political system (its governor resigned earlier this month amid as anger about public corruption came to a head) and reminding the world that he’s “the best thing that’s ever happened” to Puerto Rico as Congress approved billions for disaster relief in the aftermath of Hurricane Maria.
As Trump said, Puerto Rico is “one of the most corrupt places on earth…Congress approved Billions of Dollars last time, more than anyplace else has ever gotten, and it is sent to Crooked Pols.”
Puerto Rico is one of the most corrupt places on earth. Their political system is broken and their politicians are either Incompetent or Corrupt. Congress approved Billions of Dollars last time, more than anyplace else has ever gotten, and it is sent to Crooked Pols. No good!….
The tweets came just before the latest National Hurricane Center storm advisory forecast that Dorian would strengthen into a Cat 3 hurricane as it heads for the east of Florida, and that the state should prepare for a major storm. Before it hits Florida, the storm is projected to make land fall in Eastern Puerto Rico and move across the island Wednesday evening. A Tropical Storm Warning has been issued for Puerto Rico, while a Tropical Storm Watch is in place for the Dominican Republic.
NHC rolling with a Cat 3 off the FL coast, weakening to a 100mph Cat 2 pre-landfall north of Cape Canaveral… #dorian#flwxhttps://t.co/n1Uo8RPH6Q
— Ed Vallee | Empire Weather LLC (@EdValleeWx) August 28, 2019
Tropical Storm #Dorian could be near Hurricane Strength before it makes landfall & moves across Puerto Rico. Hurricane Watches & Tropical Storm Warnings have been issued for Puerto Rico.A Tropical Storm Watch is in place for Dominican Republic @CBSMiami#CBS4#TropicalStormDorianpic.twitter.com/tQjRXrOgp8
“Nowhere has our public discourse failed us more egregiously than on the environment and climate change,”I wrote last year while reviewing the first sketches of a proposed Green New Deal. It’s since become a buzzword, but until now it remained only vaguely defined.
Now Senator and Democratic presidential candidate Bernie Sanders has significantly upped the ante. Sanders’ Green New Deal proposal is very specific, earmarking $16 trillion over 10 years to initiatives from “reaching 100 percent renewable energy for electricity and transportation by 2030” to reauthorizing the New Deal-era Civilian Conservation Corps to “coming together in a truly inclusive movement that prioritizes young people, workers, indigenous peoples, communities of color, and other historically marginalized groups.”
The opening to the Sanders campaign’s new page on the Green New Deal encapsulates the candidate’s view of the issue:
The climate crisis is not only the single greatest challenge facing our country; it is also our single greatest opportunity to build a more just and equitable future, but we must act immediately.
Sanders and I wouldn’t disagree that his plan represents a sea change in the way our government, society, and economy interact. The plan is gigantic. I want to fill page after page with factoids about how big it is, but just a few will suffice:
The proposal’s total cost is $16 trillion, over 20 times the cost of the New Deal (in today’s dollars, just under $700 billion).
If the proposal succeeded in creating 20 million jobs, it would raise the percentage of the workforce employed by the government to around a third, double what it is now.
Remember that goal of 100 percent renewables by 2030? We’re only at 15 percent now, meaning almost the entire U.S. energy system would be overhauled.
I rarely post my articles on my personal Facebook page. I’d say most of my friends are somewhere on the left, and I haven’t yet learned how to not get sucked into multi-day social media debates. This one goes out to them, because setting aside all the proxy wars fought about climate change, Bernie Sanders’ proposed Green New Deal is a really, really bad idea.
The Four Fallacies
I approach climate change from the presumption that it is real, that a significant portion is caused by humankind, and that it’s potentially a very big problem. I don’t doubt the intentions of Senator Sanders or especially supporters of his proposal. And I’m not funded by anyone with a net worth even a penny over $1 billion. I’m just an economist living in the woods.
So, in the harsh, occasionally scathing criticism that follows, I want everyone to remember it’s not because of any of the things above. But then how do I reach conclusions so different than Sanders? I think Sanders’ view of the problem is based on four major fallacies, incorrect assumptions so hardwired that he doesn’t even know he’s making them.
What are the four fallacies?
Climate change is a binary (0/1) variable.
Climate change is primarily the fault of a few people rather than a complex, emergent phenomenon.
Planning from the top down is a good way to solve climate change.
Planning from the top down is the only means to solve climate change.
A plan like Sanders’ Green New Deal will not successfully achieve the goals it lays out, and is likely to cause significant damage to the economy. I’m not so naive as to think this article will change minds, but if it gets a few people to stop and question their assumptions in the midst of a public debate with more bad blood than ever, I’ll take it.
Fallacy 1: Climate change is a binary (0/1) variable
In his proposal Sanders writes:
The UN Intergovernmental Panel on Climate Change released a report last year issued a dire warning to the world: we have no time left to come together as a global force and aggressively reduce our carbon pollution emissions. It also made a strong case for limiting warming at or below 1.5 degrees Celsius if we hope to continue to have a habitable planet.
The October 2018 report Sanders references is a massive document, but even a quick read of the boldface statements in the Summary for Policymakers is eye-opening. For example:
Climate-related risks for natural and human systems are higher for global warming of 1.5°C than at present, but lower than at 2°C (high confidence). These risks depend on the magnitude and rate of warming, geographic location, levels of development and vulnerability, and on the choices and implementation of adaptation and mitigation options (high confidence).
The Intergovernmental Panel on Climate Change scientists frame climate change as a deeply complex issue nested in the way we live in which more efforts at mitigation now will reduce the incidence and risk of a host of adverse weather and environmental events. The table below was my best attempt last fall to summarize how the authors view the changing consequences as global warming increases.
Sanders mischaracterizes the scientists’ findings, framing the issue as a choice between massively overhauling society and doing nothing, with the latter posing a serious risk of human extinction (“habitable planet” leaves a bit more wiggle room than extinction, but I don’t know another way to read it).
This sword-of-Damocles view of climate change, common in today’s discussions, will not get us anywhere. In addition to not being true, it takes people who are open to taking significant action and forces them to choose sides. It helps fuel the denialist movement and has likely prevented many smaller actions, both government and individual, that would have left us in a better spot than where we find ourselves.
Fallacy 2: Climate change is the fault of a few people
Climate change is an emergent phenomenon, not one caused by a small group of people.
Sanders sees climate change as a problem primarily caused by a small group of people. Their motivation is greed and a Sanders presidency will be different because he will fight those people.
Or, as stated in Sanders’ Green New Deal proposal:
We cannot accomplish any of these goals without taking on the fossil fuel billionaires whose greed lies at the very heart of the climate crisis. These executives have spent hundreds of millions of dollars protecting their profits at the expense of our future, and they will do whatever it takes to squeeze every last penny out of the Earth.
Billionaires and corporate executives do bad things. Sometimes they have bad intentions. But climate change is an emergent phenomenon, primarily the product of billions if not trillions of decisions made every day by everyone in an increasingly complex global network. From Americans’ decisions about what kind of car to buy to urbanization in the developing world, causes of climate change are all around us and frequently not separable.
Sanders proposes a top-down solution to what he envisions as a top-down problem. His analogy to the Second World War speaks volumes:
The scope of the challenge ahead of us shares similarities with the crisis faced by President Franklin Delano Roosevelt in the 1940s. Battling a world war on two fronts — both in the East and the West — the United States came together, and within three short years restructured the entire economy in order to win the war and defeat fascism.
The challenge posed by climate change is nothing like winning a war, which is about focusing a nation’s efforts into one or a few points of conflict. Instead, one has to focus on thousands or millions of “fronts” in addressing climate change, and as I’ll argue below federal governments just aren’t good at that, especially in an increasingly networked and technological society.
A far more apt comparison for Sanders’ formulation of climate change is to the U.S. government’s War on Drugs. Drugs are another emergent phenomenon, embedded in poverty, mental health, and global politics. And large-scale government action has proven futile if not counterproductive.
Fallacy 3:We Can Control the Environment and Economy From The Top Down
Attempting to control a complex system from the top down is not effective and is likely to do considerable economic damage.
Why can’t we solve climate change from the top down?
I want to think about your self-awareness — the volume of information you’ve learned about yourself, what products you like, what you consider fulfilling, how you might perform or react in different situations. Now imagine going out and trying to find a job, or a good investment, without the use of that self-awareness or similar awareness of the person with whom you’re doing business.
Supporters of Sanders’ proposals might say they have no intention for this model to take over the economy but in one fell swoop are seizing control of 8 percent of GDP and about 16 percent of the U.S. workforce.
The analogy is not to suggest that Sanders is after socializing the entire labor market, but rather how easy good or decent outcomes collapse under the weight of information. You couldn’t possibly even write down most of your intuition about yourself to pass up the chain of command to an economic planner.
When economic decisions are centrally made, as they ultimately are in the Green New Deal, planners must throw out an incalculably large store of information. That’s why we’re usually better off letting people make their own decisions. It’s why we need markets and why socialist economies are known for odd and vexing shortages of goods.
Sanders’ proposal takes a considerable chunk of society’s resources out of people’s hands and leaves them at the White House door. When Sanders writes, “We will spend $1.52 trillion on renewable energy and $852 billion to build energy storage capacity,” how on earth does he know how to spend it?
That brings us to one more shortcoming of top-down responses to bottom-up problems. They rely on several smart people in a room whose intelligence may be formidable but is put to shame by the most creative force we know, evolution. We need thousands of small private firms, informed or incentivized by the price mechanism, to develop technology to both mitigate and address the impacts of climate change.
Fallacy 4: Nation-states are our only hope to address climate change
This may leave you saying, “Okay, Gulker, then what are we supposed to do?” I’m not going to pretend that’s an easy question, and I wish there were more people focused on it. A climate policy that relies more heavily on the evolution inherent in markets as a bottom-up force for change can’t really be presented as a “plan” like what we’ve gotten from Sanders.
To get there, though, we must free ourselves from the flawed idea that only nation-states are big, powerful, and well-informed enough to have a meaningful impact on global issues. Virtually everyone on any side of the climate issue makes this final mistake. Take the money and time spent lobbying, campaigning, and waiting for the government to catch up to one’s view on climate change. Invest in a prominent technology with a GoFundMe instead.
A plan like Sanders’ proposal may actually suck some of that creative energy out of the market by making massive, centrally planned investments in technologies picked by the best and brightest to win.
Sounds like a drop in the bucket, but think about if hundreds of millions of people did that. Nobody would oppose or care enough to stop someone’s volunteerism, and economic and cultural change would happen if more people were simply demanding firms they do business with follow certain rules.
More than any other takeaway, we do not face a choice between the Sanders’ proposal reshuffling our economic deck (I’ve argued for the worse), and certain doom. It might not give environmentalists everything they want, but think if we’d deployed this decentralized strategy 20 years ago, how much better a spot we’d be in.
Climate change is but one example of how our society and technology have evolved faster than our governance institutions. And that is something we ignore at our own peril.
via ZeroHedge News https://ift.tt/348CZRB Tyler Durden
A decade ago, single payer health care—the government-run health care system that Sen. Bernie Sanders (I–Vt.) refers to as Medicare for All—was a fringe idea in the Democratic Party. President Obama positioned his health care law as an alternative to the notion of a fully government-run system, and the few Democrats in Congress who supported single payer tended to do so softly, believing that most Americans would reject the idea.
When former Sen. Max Baucus (D–Mont.) led negotiations over the legislation that would become the Affordable Care Act, he had one rule: All options would be up for discussion—except for single payer. As Baucus tells Robert Draper of The New York Times in a sharply reported feature on the rise of single payer as a force in Democratic politics, the senator was sympathetic to the idea, but didn’t believe America was ready. Given how difficult it was to pass the comparatively less radical plan that became Obamacare, I’d say he was right.
Over the last decade, however, single payer has become a widely held policy preference on the left—what Draper describes as a “litmus test for progressives,” with more than a hundred backers in the House, and multiple top-tier supporters in the race for the Democratic presidential nomination. Medicare for All, Draper writes, has gone mainstream.
Yet in recent weeks, there are also signs that the momentum has slowed, and that some Democrats are retreating—or at least proceeding with caution.
Most prominently, there is Sen. Kamala Harris (D–Calif.), one of the original co-sponsors of Sanders’ Medicare for All bill in 2017. After months of backtracking and flip-flopping on whether she supports eliminating most private health insurance, as the Sanders plan calls for, she appears to have fully reversed course, expressing discomfort with the Sanders plan and releasing her own (confused) competing plan.
The party’s old guard meanwhile, continues to think Medicare for All is a bad idea, with House Speaker Nancy Pelosi (D–Calif.) repeatedly questioning it, and former Senate Majority Leader Harry Reid (D–Nev.) saying last week that it would be a problem for Democrats to back it in the 2020 election because it couldn’t pass. Former Vice President Joe Biden, who represents this wing of the Democratic Party and is the primary field’s most prominent critic of Medicare for All, remains at the top of the polls.
Sanders himself, meanwhile, recently modified his plan in response to concerns from unions, suggesting that even Sanders is not completely unmoved by criticism of his plan, at least if it comes from the left.
Meanwhile, it appears that there’s little enthusiasm for single payer legislation where it matters—among the Senate Democrats positioned to exert the most influence over any future legislation.
Ezra Klein of Vox recently spoke to a quartet of upper chamber Democrats about their health policy plans. He found that they had ambitious expansions of Obamacare in mind, and no plans to seek Republican votes, assuming that their opponents would oppose any plan Democrats put forward. So these Democrats are feeling ambitious and expansive about health policy and unburdened by the need to compromise with Republicans. Yet even now they remain wary of the sort of full-fledged single payer system called for in Sanders’ plan, largely because it would abolish most private coverage:
Which isn’t to say Senate Democrats are prepared to abolish private health insurance. As in Wyden’s comment, the word “choices” came up a lot in my conversations.
“As a practical matter, the way we move forward on health care has to be recognizing people’s current insurance system and allowing people to make choices,” says Stabenow. “If everyone chose the Medicare public option, then it would be very clear what the public wanted.”
“I understand the aspirational notions around Medicare-for-all, but if there’s one thing that I think we still have to wrestle with, it’s that Americans want to see more of their fellow citizens covered but they are very nervous about losing what they have,” says Sen. Mark Warner (D-VA). “There’s a huge risk aversion.”
Brown, who has long supported single-payer, agreed. “I think you want people to have choice still,” he says. “You don’t want to take people’s insurance away. A lot of people don’t want government insurance. I understand that.”
Single payer supporters like to argue that the energy is on their side, that the public broadly supports their plans, and that incrementalism has proven disastrous as both politics and policy. And they can point to polls like the one released this morning reporting that about two-thirds of Democratic primary voters are more likely to back a candidate who supports Medicare for All versus one who wants to expand Obamacare.
But while there’s certainly truth to the notion that Medicare for All has risen in prominence and popularity, especially among the left, it also seems clear that there are limits to its rise. A separate poll from Monmouth released this week finds that less than one-quarter of Democratic voters want a system that replaces private insurance with a government-run plan—which is exactly what Medicare for All as envisioned by Bernie Sanders would do. And remember: This poll result is limited to self-described Democrats, who are almost certainly more favorable to wiping out private insurance than others.
Even if Democrats somehow managed to win control of the White House and both chambers of Congress—which looks unlikely at this point—it would be a real struggle to pass the sort of radically disruptive plan that Sanders has called for. And it’s not just obstructionist Republicans who won’t stand for it; it’s Democrats themselves. A decade after Obamacare, it seems that Baucus’ intuition that most Americans aren’t ready for single payer remains correct.
So yes, Medicare for All has gone mainstream, and yes, it will likely remain a prominent part of the Democratic Party’s policy vernacular going forward, and worthy of discussion and criticism as a result. But for the foreseeable future, at least, it will probably remain out of reach.
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A decade ago, single payer health care—the government-run health care system that Sen. Bernie Sanders (I–Vt.) refers to as Medicare for All—was a fringe idea in the Democratic Party. President Obama positioned his health care law as an alternative to the notion of a fully government-run system, and the few Democrats in Congress who supported single payer tended to do so softly, believing that most Americans would reject the idea.
When former Sen. Max Baucus (D–Mont.) led negotiations over the legislation that would become the Affordable Care Act, he had one rule: All options would be up for discussion—except for single payer. As Baucus tells Robert Draper of The New York Times in a sharply reported feature on the rise of single payer as a force in Democratic politics, the senator was sympathetic to the idea, but didn’t believe America was ready. Given how difficult it was to pass the comparatively less radical plan that became Obamacare, I’d say he was right.
Over the last decade, however, single payer has become a widely held policy preference on the left—what Draper describes as a “litmus test for progressives,” with more than a hundred backers in the House, and multiple top-tier supporters in the race for the Democratic presidential nomination. Medicare for All, Draper writes, has gone mainstream.
Yet in recent weeks, there are also signs that the momentum has slowed, and that some Democrats are retreating—or at least proceeding with caution.
Most prominently, there is Sen. Kamala Harris (D–Calif.), one of the original co-sponsors of Sanders’ Medicare for All bill in 2017. After months of backtracking and flip-flopping on whether she supports eliminating most private health insurance, as the Sanders plan calls for, she appears to have fully reversed course, expressing discomfort with the Sanders plan and releasing her own (confused) competing plan.
The party’s old guard meanwhile, continues to think Medicare for All is a bad idea, with House Speaker Nancy Pelosi (D–Calif.) repeatedly questioning it, and former Senate Majority Leader Harry Reid (D–Nev.) saying last week that it would be a problem for Democrats to back it in the 2020 election because it couldn’t pass. Former Vice President Joe Biden, who represents this wing of the Democratic Party and is the primary field’s most prominent critic of Medicare for All, remains at the top of the polls.
Sanders himself, meanwhile, recently modified his plan in response to concerns from unions, suggesting that even Sanders is not completely unmoved by criticism of his plan, at least if it comes from the left.
Meanwhile, it appears that there’s little enthusiasm for single payer legislation where it matters—among the Senate Democrats positioned to exert the most influence over any future legislation.
Ezra Klein of Vox recently spoke to a quartet of upper chamber Democrats about their health policy plans. He found that they had ambitious expansions of Obamacare in mind, and no plans to seek Republican votes, assuming that their opponents would oppose any plan Democrats put forward. So these Democrats are feeling ambitious and expansive about health policy and unburdened by the need to compromise with Republicans. Yet even now they remain wary of the sort of full-fledged single payer system called for in Sanders’ plan, largely because it would abolish most private coverage:
Which isn’t to say Senate Democrats are prepared to abolish private health insurance. As in Wyden’s comment, the word “choices” came up a lot in my conversations.
“As a practical matter, the way we move forward on health care has to be recognizing people’s current insurance system and allowing people to make choices,” says Stabenow. “If everyone chose the Medicare public option, then it would be very clear what the public wanted.”
“I understand the aspirational notions around Medicare-for-all, but if there’s one thing that I think we still have to wrestle with, it’s that Americans want to see more of their fellow citizens covered but they are very nervous about losing what they have,” says Sen. Mark Warner (D-VA). “There’s a huge risk aversion.”
Brown, who has long supported single-payer, agreed. “I think you want people to have choice still,” he says. “You don’t want to take people’s insurance away. A lot of people don’t want government insurance. I understand that.”
Single payer supporters like to argue that the energy is on their side, that the public broadly supports their plans, and that incrementalism has proven disastrous as both politics and policy. And they can point to polls like the one released this morning reporting that about two-thirds of Democratic primary voters are more likely to back a candidate who supports Medicare for All versus one who wants to expand Obamacare.
But while there’s certainly truth to the notion that Medicare for All has risen in prominence and popularity, especially among the left, it also seems clear that there are limits to its rise. A separate poll from Monmouth released this week finds that less than one-quarter of Democratic voters want a system that replaces private insurance with a government-run plan—which is exactly what Medicare for All as envisioned by Bernie Sanders would do. And remember: This poll result is limited to self-described Democrats, who are almost certainly more favorable to wiping out private insurance than others.
Even if Democrats somehow managed to win control of the White House and both chambers of Congress—which looks unlikely at this point—it would be a real struggle to pass the sort of radically disruptive plan that Sanders has called for. And it’s not just obstructionist Republicans who won’t stand for it; it’s Democrats themselves. A decade after Obamacare, it seems that Baucus’ intuition that most Americans aren’t ready for single payer remains correct.
So yes, Medicare for All has gone mainstream, and yes, it will likely remain a prominent part of the Democratic Party’s policy vernacular going forward, and worthy of discussion and criticism as a result. But for the foreseeable future, at least, it will probably remain out of reach.
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