Tag: news

“A Big Wake Up Call”: Chinese Bond Market Roiled By First Ever Bank Failure

Late last Friday, we reported that several hours after the market close, China’s financial regulator and central bank made a shocking announcement: for the first time in nearly 30 year, China would take control of a bank, in this case the troubled inner Mongolia-based Baoshang Bank, due to the serious credit risks it poses.

The news which highlights the potential for increased stress at regional lenders that piled into off-book financing in recent years, was strategically timed to hit ahead of the weekend, and with the market closed, it avoided an immediate panic selling waterfall. However, the fact that in China banks are now fair game for failure, and will soon join the record surge in Chinese corporate defaults…

… slammed the country’s financial sector on Monday, sending funding costs sharply higher and underscoring the potential for increased stress at regional lenders that piled into off-book financing in recent years.

Unfortunately for Beijing, Bloomberg writes overnight that despite the strategically timed news, it wasn’t enough to prevent turmoil from sweep across the nation’s bond market, where funding costs for lenders surged and yields on government debt jumped. The seven-day repurchase rate jumped 30 basis points to 2.85%, the highest in a month, as of late Monday in Shanghai, while the yield on 10Y sovereign bonds climbed 5 bps to 3.35%.

“Baoshang’s case is a big wake-up call,” said Becky Liu, head of China macro strategy at Standard Chartered. “Participants in the interbank market, who didn’t differentiate credit when lending to banks on the belief that they will never go bankrupt, have now become more cautious. That has helped drive up funding costs and thus sovereign yields.”

Meanwhile, citing traders, Bloomberg also noted that the market is getting increasingly concerned that smaller banks may sell or refrain from buying government bonds because of difficulty getting funding, pressuring sovereign debt further, Liu said.

While a full-blown bank run has yet to emerge, Baoshang Bank’s negotiable certificates of deposits and other bonds were suspended from trading Monday morning. Analysts said the takeover will hurt market sentiment on debt and shares of smaller banks and their issuance of NCDs could be harder from now on. The outstanding bonds of other city and rural commercial banks in similar situations could be sold off, China Merchants Bank said in a note.

For those who missed our prior post on the bank collapse, here is some context:

Founded in 1998, Baoshang has more than 8,000 staff and reported total assets of 576 billion yuan ($83 billion) at the end of September 2017 — a fraction of CCB’s 23 trillion yuan last year. The smaller bank’s so-called investment receivables, which analysts have said are often loans disguised as investments, stood at 153 billion yuan, accounting for more than a quarter of total assets.

Yet despite promises of recovery, with the Mongolian bank now insolvent, China’s Caixin reported that interbank creditors with deposits above 50m yuan may get back 70% of principal payment and corporate creditors may get no less than 80% at early stage. More concerning is that depositors will also be burned: while small, individual savings at the bank will be guaranteed by the government, corporate deposits and interbank liabilities above 50 million yuan will be negotiated, the regulators said on Sunday.

Finally, the cost on China’s one-year interest-rate swaps, a measure of traders’ expectations for liquidity conditions, surged 7 basis points to 2.82%. That’s largest increase in a month.

In short, what has just transpired is a bail-out with Chinese bail-in characteristics, and in other words, this may well have been the first domino to fall in China’s banking sector which earlier today reported a record 268.5 trillion yuan ($38.9 trillion) in liabilities and 246.2 trillion yuan ($35.6 trillion) in assets, both up roughly 8% Y/Y, and well over double the size of the American banking sector.

Perhaps the market is waking up that once the dominoes start falling, It will be next to impossible for Beijing to prevent a crash in the world’s largest banking system. It’s also why the debt sold offshore by Chinese small banks to help meet capital requirements also fell, with Bank of Chongqing’s $750 million Additional Tier 1 note was down 0.8 cents on the dollar, the biggest fall since March 20, to 94 cents. Securities from Bank of Zhengzhou and Huishang Bank also dropped.

If or rather when more banks suffer Baoshang’s fate, the drops will be far greater.

Ironically, Baoshang which was once seen “as a model for funding China’s regional economies” according to Bloomberg, is one of many smaller Chinese lenders that obscured its exposure to risky borrowers by tapping into the country’s shadow-financing system. And while China has been cracking down on such behavior, but UBS Group AG analyst Jason Bedford said the country is rife with regional banks that used special-purpose vehicles to circumvent lending restrictions and hide the true state of their bad loans.

What is even bizarre, is that as we noted last week, the bank’s “official” non-performing loan ratio then was only 1.68% as of December 2016. That, in itself, would never have been sufficient to force a takeover, and suggests that not only was the bank’s real bad debt ratio much higher, but that China continues to chronically under-represent the true state of its NPLs to avoid bank runs.

Whatever the underlying ugly truth may be, it’s not as if investors and depositors weren’t warned.

As discussed here extensively in 2016 and 2017 (see “Some Chinese Banks Suspend “Interbank Business” As Regulator Demands That Collateral “Actually Exists“), regional banks in China’s rust belt drove the rapid expansion of non-traditional lending that peaked in early 2018. As a result, smaller firms, who used shadow-loan instruments to diversify from their struggling home provinces, exposed themselves to a much wider spectrum of Chinese corporate risk.

Now that the “shadow bubble” has popped, banks are now getting squeezed as Chinese companies default at a record pace and financing costs for shadow-lending activities increase. As part of the government clampdown, banks have been forced to reclassify loans overdue for more than 90 days as non-performing, a move that led to a record surge in soured debt and wiped out capital at some small lenders, Bloomberg reports.

And now that Baoshang is insolvent, and the de facto canary in Chinese bank failure coalmine (there will be many more) the question is how to restructure its insolveny balance sheet: the bank has more than 60 billion yuan of negotiable certificates of deposit and 6.5 billion yuan of subordinated bonds outstanding, according to data compiled by Bloomberg. Trading in the the company’s NCDs and other bonds was suspended on Monday, people familiar with the matter said.

Why do NCD’s matter? Because as we explained as far back as two years ago, in the most recent troubling trend involving Chinese banks, numerous smaller banks had become acutely reliant on such shadow banking funding mechanism as Certificates of Deposit, which had become the primary source of short-term funding for many of China’s banks mid-size and smaller banks.

As Deutsche Bank further explained, the banks most exposed to a shut down in this “shadow funding” pathway are medium-sized and small banks, for whom as of 1H16, wholesale funding made up 31% and 23%, a number that has risen substantially in the interim period.

And with the Baoshang domino now down, and the interbanking funding market suddenly freezing, Friday’s announcement will put shares of other Chinese banks under pressure, according to Sanford C. Bernstein. A Bloomberg Intelligence index of Chinese lenders dropped 0.9% on Monday to a four-month low. Predictably, ICBC, the nation’s largest lender, slipped 0.5% in Hong Kong.

Some tried to put a positive spin on the shocking failure: “Low quality, small regional banks are unlikely to pose systematic risks to the financial system or the operations of the big SOE and joint stock banks,” said analysts Linda Sun-Mattison and Jason Li in a note on Monday. “However, the bail out of Baoshang Bank, a rare move by the government, and the involvement of CCB will no doubt heighten investor concerns over SOE banks’ risk exposure to national service.”

Translation: nobody knows yet if this bank failure will result in a bank run, even as the market is clearly recoiling from the bail out. If a bank run does indeed materialize, and some of those $35 trillion in Chinese bank liabilities (i.e. deposits) flee… well, not only are all bets off, but Trump can celebrate an early victory in the US-China trade war.

via ZeroHedge News http://bit.ly/2WmNSOX Tyler Durden

Some Tesla Superchargers Now Limit Your Car’s Charge To 80%

It seems like all parts of the once “too good to be true” Tesla narrative are – well, turning out to be too good to be true.

Today on the docket: Superchargers. Yes, believe it or not, the idea of free, unlimited supercharging for life that would essentially make driving free in Tesla vehicles has succumb to reality, much like Tesla as a whole of late. Now, the latest bad news for Tesla owners is that some Superchargers in busy areas will be limiting charges to 80% of batteries to “reduce wait times”. The news was first reported on by electrek.

We’re not sure whether or not Tesla knows that this will simply have these people back at a Supercharger quicker than they normally would have been, but again, as usual, we digress. 

Tesla sent out a memo to employees over the last couple of days announcing the change:

Today, we released a new Supercharger feature that will limit owners’ State of Charge (SOC) to 80% at select high-traffic sites.

The change is going to affect 17% of all Supercharger stations in the United States. The limit will apply to 8% of stations at all times and another 9% will have the limitation only during busy times. Owners will be alerted to the change when they are at a corresponding Supercharger.

Tesla went one step further to explain why the limit was being enforced:

“80% SOC Limit will be enforced 24/7 at all impacted sites. Please note, some sites will have 80% SOC limits enforced on a permanent basis while others will only be enforced on national holidays and to accommodate large regional events (e.g. Coachella).”

Of course, as many skeptics predicted would happen a long time ago, Supercharger stations get busy on holidays and heavy travel days, resulting in long wait times. Tesla claims that the new “feature”, which isn’t really a “feature” at all, should result in a “34% improvement in throughput” at the stations:

“When combined with the recently released On-Route Battery Warmup feature and V2 Supercharger upgrades (to 150 kW), we expect 80% SOC Limit enforcement to result in a 34% improvement in throughput at our busiest Supercharging locations – creating a better, more efficient Superching experience for our owners.”

Tesla has reportedly bypassed the limitation for owners that are on long-distance trips – but if a Supercharger is your end destination, you may not be able to give your car a 100% charge anymore.

And despite being “OK” with the new feature, electrek couldn’t help but muse:

The only thing that I think they should change is having the limitation be 24/7 at some stations. It should only be based on how busy the station is at the moment you are charging.

Even the busiest stations have downtime.

It would be frustrating if you get to one of those stations wanting a 90% charge and you get limited to 80% even though there are a bunch of free charge points.

via ZeroHedge News http://bit.ly/30OcHmg Tyler Durden

Some Gave All – Let’s Call It Enough

Authored by Scott Cosenza via LibertyNation.com,

Let’s reduce the future population of the memorialized…

All those members of the United States military who have perished in service are honored today, as they should be – from the 18 lost in the invasion of Grenada to the hundreds of thousands who fought and died in World War II.

The history of Memorial Day is an interesting read, filled with facts and legends. One of my favorites is that the day’s placement at the end of May was decided so that all America has flowers in bloom to lay on the graves of her war dead. Another is that remembrances take place at 3 p.m. local time around the country. Attending one of these events is a sober reminder of those who we ask, or so tragically force, to go and kill and die for us.

The scandal of Memorial Day is that too many of the memorials have been unnecessary. Too many gravestones are there not because they were needed to secure peace and liberty at home, but instead to advance some interest not found in the Constitution and likely not supported by most Americans, who would only learn the facts later. Once again, we are perhaps on the brink of creating more souls to memorialize and need to think thrice before we do so.

Trump – For Or Against War?

President Trump seems quite willing at this time to engage in a war with Iran. He should not, without a declaration of war from Congress. The U.S. Constitution – Article 1 Section 8, lays out the enumerated powers of Congress; amongst those are to declare war. Just as Congress should be forced to confine its activity to the powers granted and defined in the Constitution, so should the executive. The fantastically high cost of war, first in blood, then in treasure, is too great for any one person to exercise, be they George Washington, Barack Obama, or Donald Trump.

Smedley Darlington Butler

Trump himself campaigned as an anti-war candidate and succeeded. Not just marginally anti-war, either. During the primary, Donald Trump called the Iraq War both a “disaster” and a “mistake.”  In the South Carolina Republican presidential primary debate, he said “We can make mistakes, but that one was a beauty. We should have never been in Iraq.” Talk about speaking truth to power. That a Republican hopeful went on an anti-war screed at a primary debate in South Carolina of all places means Americans are ready for a retreat from the notion that patriotism requires supporting just about any war in which the current commander-in-chief puts us.

War Is A Racket

Smedley Darlington Butler must be in the running for one of the greatest soldiers America has ever seen.  He was twice awarded the Medal of Honor and at the time of his death was the most decorated Marine in U.S. history. He was also a passionate anti-war warrior. He saw the military-industrial complex for what it was back in the 1930s, when he wrote a book called “War is a Racket.”  In 1933, he said:

“War is just a racket. A racket is best described, I believe, as something that is not what it seems to the majority of people. Only a small inside group knows what it is about. It is conducted for the benefit of the very few at the expense of the masses.”

Wars of necessity are the only ones we should engage in, and those must be simple enough for all Americans to understand. The young people who will die to be memorialized on our future holidays deserve nothing less. President Trump should reclaim his anti-war posture and save us from unnecessary foreign wars.

Body counts from our ongoing campaigns in Iraq and Afghanistan can be found here.

via ZeroHedge News http://bit.ly/2W4NwgA Tyler Durden

Senator Josh Hawley is becoming a first-class demagogue

President Trump nominated attorney Michael Bogren for a position as a federal district court judge. As an attorney in private practice, Bogren represented the City of East Lansing in litigation against Country Mill Farms. The city excluded Country Mill from its farmers’ market because its owner publicly announced that he would not host a same-sex wedding on his farm, and the city therefore deemed Country Mill to be out of compliance with its public accommodations antidiscrimination statute, which prohibits discrimination based on sexual orientation. Country Mill sued, arguing that East Lansing was violating the religious freedom of the company and its owner.

As VC readers know, I have no sympathy for the ever-expanding scope of public accommodations law, and I generally believe that in disputes like this the government should err on the side of religious freedom. Indeed, I wrote a whole book arguing that civil liberties should be protected against the ever-growing antidiscrimination legal edifice.

Nevertheless, precedent generally favored the city (and indeed it won a motion to dismiss), and Bogren’s brief in support of East Lansing’s motion to dismiss makes an unremarkable argument: if the government is required to refuse to enforce antidiscrimination laws based on what many see as mainstream, sincere and relatively benign religious beliefs, the government will also have to accommodate discriminatory actions based on sincere religious belief that almost everyone recognizes as noxious, such as the beliefs of the Nation of Islam and the KKK.

Two things should be obvious here. First, that Bogren was acting as an attorney making the best legal argument he can on behalf of his client, which doesn’t necessarily represent his personal beliefs. Bogren may very well think that East Lansing should lay off Country Mill Farms and similarly-situated business, and it’s unreasonable to think that an attorney always agrees with the position he asserts on behalf of his client. It’s not proper to publicly ask an attorney to state that he personally disagrees with an argument made in court on behalf of a client. Second, the argument Bogren made is the standard legal argument anyone would make in his position, and does not reflect any demonstrated hostility to Country Mill Farms’ owners religious beliefs.

I assume that as an attorney and former law professor, all this was obvious to Senator Hawley as well. Nevertheless, at Bogren’s confirmation hearing, Hawley chose to demagogue the issue, accusing Bogren of comparing traditional Catholic beliefs to those of the KKK, and more generally of exhibiting hostility toward Catholicism. There’s no excuse for (a) misrepresenting Bogren’s arguments; and (b) treating arguments made on behalf of a client in a brief as if they represent the attorney’s personal opinion.

You can watch a video of Hawley’s appalling performance here, and I’ve reprinted Bogren’s argument on behalf of East Lansing below as well. This is not the first time Hawley has demagogued a judicial nomination, and the trend doesn’t bode well.

The argument from Bogren’s brief:

There can be no constitutionally sound argument that sincerely held religious
beliefs would permit a secular business to avoid the prohibitions against racial
discrimination or gender discrimination found in Federal, State and local laws. The Bob Jones Univ. decision put such an argument to rest. Similarly, other courts have held the gender anti-discrimination provision of Title VII could be constitutionally enforced against religious entities. E.E.O.C. v. Fremont Christian School, 781 F.2d 1362, 1369 (9th Cir. 1986)(“Because the impact on religious belief or practice is minimal and the interest in equal employment opportunities is high, the balance weighs heavily in favor of upholding Fremont Christian’s liability under Title VII for its sexually discriminatory health insurance compensation program.”); E.E.O.C. v. Tree of Life Christian Sch., 751 F. Supp. 700, 711 (S.D. Ohio 1990)(“However, although the application of the Equal Pay Act would burden Tree of Life’s freedom to select the manner in which it will bear witness to the belief that the husband is the head of the household, in the Court’s view the burden imposed upon defendant’s central religious beliefs would be limited. . . . Congress’ purpose to end discrimination is equally if not more compelling than other interests that have been held to justify legislation that burdened the exercise of religious convictions.”).

One of the tenets of the religious group Nation of Islam is: “We believe that
intermarriage or race mixing should be prohibited.” http://bit.ly/2EzTM4U There can be doubt that if a member of that faith ran a business similar to the plaintiffs’ business, but instead of refusing to accommodate same sex couples (or in addition to), refused to accommodate interracial couples, such a refusal would be subject to the antidiscrimination laws of the Federal, State and local governments. The other side of that discriminatory coin is found on the website of the White Camelia Knights of the KKK, which is “a Texas based KKK organization composed of White Christian Men and Women dedicated to the advancement and protection of the same Christian beliefs that were the foundation of this once great nation.” http://bit.ly/2X8nZQ7 That group states: “The Klan has always taken a strong stance against interracial marriage. What most people don’t understand is
it’s against our Heavenly Father’s law.” http://bit.ly/2EzTBXi Again, an adherent of that particular brand of Christianity who ran a business similar to the plaintiffs’ business would not be able to invoke the free exercise clause to avoid the antidiscrimination  provisions of Federal, State and local laws that apply to public accommodations if interracial couples were refused service.

Certain imams of the Islamic faith have opined that women may not drive
automobiles. Shaykh Ibn ‘Uthaymeen was asked to explain that ruling. His lengthy
response concluded: “Based on these two principles, the ruling on women driving should be clear, because women driving includes a number of evils . . .”
http://bit.ly/2X8o0Ub If a practitioner of the Islamic faith who was a follower of that rule operated a business that taught driver’s education, he could not refuse to accept a female customer on the basis that doing so would interfere with his right to freely exercise his religion.

None of these propositions are in any way remarkable from a constitutional
standpoint. Thus, the plaintiffs’ only response to why the City of East Lansing’s
antidiscrimination policy would not fall within this unremarkable constitutional
proposition must be that the subject of the nondiscrimination policy (sexual orientation) is not worthy of the same level of protection as race or gender. Plaintiffs might well believe that – and such a belief might be based on their religion – but those beliefs are certainly no more sincere than the beliefs held by the religious adherents in the prior examples. The plaintiffs’ beliefs themselves, or their degree of sincerety, cannot be the deciding factor. Since the Supreme Court has explicitly stated the States (which includes local governments) have the power to enact legislation banning sexual orientation discrimination, Hurley, supra, it is difficult to conceive of a viable rationale that would support plaintiffs’ position. In point of fact, there is no rationale that supports plaintiff’s position. To the contrary, the courts have utterly rejected any suggestion that sexual orientation is not entitled to the same level of protection as other protected classes:
The Council determined that a person’s sexual orientation, like a person’s
race and sex, for example, tells nothing of value about his or her attitudes,
characteristics, abilities or limitations. It is a false measure of individual
worth, one unfair and oppressive to the person concerned, one harmful to
others because discrimination inflicts a grave and recurring injury upon
society as a whole. To put an end to this evil, the Council outlawed sexual
orientation discrimination . . . Gay Rights Coal. of Georgetown Univ. Law Ctr. v. Georgetown Univ. supra, 536 A.2d at 32.

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Senator Josh Hawley is becoming a first-class demagogue

President Trump nominated attorney Michael Bogren for a position as a federal district court judge. As an attorney in private practice, Bogren represented the City of East Lansing in litigation against Country Mill Farms. The city excluded Country Mill from its farmers’ market because its owner publicly announced that he would not host a same-sex wedding on his farm, and the city therefore deemed Country Mill to be out of compliance with its public accommodations antidiscrimination statute, which prohibits discrimination based on sexual orientation. Country Mill sued, arguing that East Lansing was violating the religious freedom of the company and its owner.

As VC readers know, I have no sympathy for the ever-expanding scope of public accommodations law, and I generally believe that in disputes like this the government should err on the side of religious freedom. Indeed, I wrote a whole book arguing that civil liberties should be protected against the ever-growing antidiscrimination legal edifice.

Nevertheless, precedent generally favored the city (and indeed it won a motion to dismiss), and Bogren’s brief in support of East Lansing’s motion to dismiss makes an unremarkable argument: if the government is required to refuse to enforce antidiscrimination laws based on what many see as mainstream, sincere and relatively benign religious beliefs, the government will also have to accommodate discriminatory actions based on sincere religious belief that almost everyone recognizes as noxious, such as the beliefs of the Nation of Islam and the KKK.

Two things should be obvious here. First, that Bogren was acting as an attorney making the best legal argument he can on behalf of his client, which doesn’t necessarily represent his personal beliefs. Bogren may very well think that East Lansing should lay off Country Mill Farms and similarly-situated business, and it’s unreasonable to think that an attorney always agrees with the position he asserts on behalf of his client. It’s not proper to publicly ask an attorney to state that he personally disagrees with an argument made in court on behalf of a client. Second, the argument Bogren made is the standard legal argument anyone would make in his position, and does not reflect any demonstrated hostility to Country Mill Farms’ owners religious beliefs.

I assume that as an attorney and former law professor, all this was obvious to Senator Hawley as well. Nevertheless, at Bogren’s confirmation hearing, Hawley chose to demagogue the issue, accusing Bogren of comparing traditional Catholic beliefs to those of the KKK, and more generally of exhibiting hostility toward Catholicism. There’s no excuse for (a) misrepresenting Bogren’s arguments; and (b) treating arguments made on behalf of a client in a brief as if they represent the attorney’s personal opinion.

You can watch a video of Hawley’s appalling performance here, and I’ve reprinted Bogren’s argument on behalf of East Lansing below as well. This is not the first time Hawley has demagogued a judicial nomination, and the trend doesn’t bode well.

The argument from Bogren’s brief:

There can be no constitutionally sound argument that sincerely held religious
beliefs would permit a secular business to avoid the prohibitions against racial
discrimination or gender discrimination found in Federal, State and local laws. The Bob Jones Univ. decision put such an argument to rest. Similarly, other courts have held the gender anti-discrimination provision of Title VII could be constitutionally enforced against religious entities. E.E.O.C. v. Fremont Christian School, 781 F.2d 1362, 1369 (9th Cir. 1986)(“Because the impact on religious belief or practice is minimal and the interest in equal employment opportunities is high, the balance weighs heavily in favor of upholding Fremont Christian’s liability under Title VII for its sexually discriminatory health insurance compensation program.”); E.E.O.C. v. Tree of Life Christian Sch., 751 F. Supp. 700, 711 (S.D. Ohio 1990)(“However, although the application of the Equal Pay Act would burden Tree of Life’s freedom to select the manner in which it will bear witness to the belief that the husband is the head of the household, in the Court’s view the burden imposed upon defendant’s central religious beliefs would be limited. . . . Congress’ purpose to end discrimination is equally if not more compelling than other interests that have been held to justify legislation that burdened the exercise of religious convictions.”).

One of the tenets of the religious group Nation of Islam is: “We believe that
intermarriage or race mixing should be prohibited.” http://bit.ly/2EzTM4U There can be doubt that if a member of that faith ran a business similar to the plaintiffs’ business, but instead of refusing to accommodate same sex couples (or in addition to), refused to accommodate interracial couples, such a refusal would be subject to the antidiscrimination laws of the Federal, State and local governments. The other side of that discriminatory coin is found on the website of the White Camelia Knights of the KKK, which is “a Texas based KKK organization composed of White Christian Men and Women dedicated to the advancement and protection of the same Christian beliefs that were the foundation of this once great nation.” http://bit.ly/2X8nZQ7 That group states: “The Klan has always taken a strong stance against interracial marriage. What most people don’t understand is
it’s against our Heavenly Father’s law.” http://bit.ly/2EzTBXi Again, an adherent of that particular brand of Christianity who ran a business similar to the plaintiffs’ business would not be able to invoke the free exercise clause to avoid the antidiscrimination  provisions of Federal, State and local laws that apply to public accommodations if interracial couples were refused service.

Certain imams of the Islamic faith have opined that women may not drive
automobiles. Shaykh Ibn ‘Uthaymeen was asked to explain that ruling. His lengthy
response concluded: “Based on these two principles, the ruling on women driving should be clear, because women driving includes a number of evils . . .”
http://bit.ly/2X8o0Ub If a practitioner of the Islamic faith who was a follower of that rule operated a business that taught driver’s education, he could not refuse to accept a female customer on the basis that doing so would interfere with his right to freely exercise his religion.

None of these propositions are in any way remarkable from a constitutional
standpoint. Thus, the plaintiffs’ only response to why the City of East Lansing’s
antidiscrimination policy would not fall within this unremarkable constitutional
proposition must be that the subject of the nondiscrimination policy (sexual orientation) is not worthy of the same level of protection as race or gender. Plaintiffs might well believe that – and such a belief might be based on their religion – but those beliefs are certainly no more sincere than the beliefs held by the religious adherents in the prior examples. The plaintiffs’ beliefs themselves, or their degree of sincerety, cannot be the deciding factor. Since the Supreme Court has explicitly stated the States (which includes local governments) have the power to enact legislation banning sexual orientation discrimination, Hurley, supra, it is difficult to conceive of a viable rationale that would support plaintiffs’ position. In point of fact, there is no rationale that supports plaintiff’s position. To the contrary, the courts have utterly rejected any suggestion that sexual orientation is not entitled to the same level of protection as other protected classes:
The Council determined that a person’s sexual orientation, like a person’s
race and sex, for example, tells nothing of value about his or her attitudes,
characteristics, abilities or limitations. It is a false measure of individual
worth, one unfair and oppressive to the person concerned, one harmful to
others because discrimination inflicts a grave and recurring injury upon
society as a whole. To put an end to this evil, the Council outlawed sexual
orientation discrimination . . . Gay Rights Coal. of Georgetown Univ. Law Ctr. v. Georgetown Univ. supra, 536 A.2d at 32.

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“The Most Destructive Breach In History”: Hackers Use NSA Code To Grind Baltimore To A Halt

The United States is no longer supplying its enemies only with conventional weapons – that list now also includes cyberweapons. While Baltimore has been struggling with an aggressive cyber-attack over the last three weeks, previously profiled here , it has now been revealed that a key component of the malware used by cyber-criminals was actually developed just a short drive from Baltimore – at the NSA, according to the New York Times.

The tool used – called EternalBlue – has been used by hackers in North Korea, Russia and China to “cut a path of destruction around the world”, and resulted in billions of dollars in damages.

Now, it has come full circle and is back in the US, wreaking havoc just miles from Washington. In fact, security experts say that attacks using EternalBlue have soared and cyber-criminals are honing in on vulnerable towns and cities, using it to paralyze governments. The NSA’s connection to the attacks had previously not been reported and the NSA hasn’t commented about it since an unidentified group leaked the weapon online in April 2017.

The NSA and the FBI still don’t know whether or not it was leaked by foreign spies or US insiders.

The leak has been referred to as “the most destructive and costly N.S.A. breach in history,” by Thomas Rid, a cybersecurity expert at Johns Hopkins University. He continued: “The government has refused to take responsibility, or even to answer the most basic questions. Congressional oversight appears to be failing. The American people deserve an answer.”

An answer that we’re sure they won’t get. 

Commenting on the leak in April 2017, Edward Snowden said that the “NSA just lost control of its Top Secret arsenal of digital weapons; hackers leaked it.“

Since the April 2017 leak, foreign intelligence agencies and hackers have used the software to paralyze places like hospitals, airports, rail and shipping operators, ATMs and factories. In the United States, hackers are using the software to hit local governments with outdated infrastructure and few resources to defend themselves.

The software used to be one of the most useful exploits in the NSA’s arsenal. Former NSA analysts spent almost a year finding a flaw in Microsoft’s software and writing the code to target it. The tool was initially called “EternalBlueScreen” because it had a penchant for crashing computers. In fact, it was so valuable that the agency never even alerted Microsoft to the security flaw and instead, held onto the tool for five years before the breach in 2017 forced them to talk about it.

The May 7 Baltimore attack saw city workers’ screens suddenly lock up and a message in broken English demanding $100,000 in Bitcoin ransom. And, as Baltimore has not yet paid the ransom, the city’s computers remain handicapped. Without the former NSA tool, the damage wouldn’t of been as bad.

North Korea was the first to allegedly use the tool in 2017 when they attacked the British healthcare system, German railroads and 200,000 additional organizations around the world. Then, Russia reportedly used the tool on Ukraine and companies that did business in the country. The assault cost FedEx more than $400 million and Merck $670 million. Over the past year, Russian hackers have also used it to compromise hotel Wi-Fi networks, while Iranian hackers have used it to hack airlines in the Middle East. Of course, there is no evidence that any of these actors were behind the reported hacks.

Vikram Thakur, Symantec’s director of security response said: “It’s incredible that a tool which was used by intelligence services is now publicly available and so widely used.” 

When the tool was leaked in 2017, the NSA finally reached out to Microsoft, who developed a patch – but by then, it was too late and many systems still remained unprotected.

Meanwhile, hackers continue to target areas like Baltimore, San Antonio and Allentown, Pennsylvania – governments that use out of date software. This prompted the Department of Homeland Security last July to issue a warning about the software, urging municipalities to update their infrastructure.

The Allentown attack cost about $1 million to fix, in addition to $420,000 per year in new spending. Matthew Leibert, the city’s chief information officer called the attack “commodity malware” and said: “There are warehouses of kids overseas firing off phishing emails, like thugs shooting military-grade weapons at random targets.”

San Antonio was also hit with an attack last September when a computer inside the sheriff’s office tried to spread EternalBlue across the government’s network. And now, researchers at Palo Alto Networks discovered just last week that a Chinese state group had hacked into Middle Eastern governments using the tool.

Jen Miller-Osborn, a deputy director of threat intelligence at Palo Alto Networks said: “You can’t hope that once the initial wave of attacks is over, it will go away. We expect EternalBlue will be used almost forever, because if attackers find a system that isn’t patched, it is so useful.”

Until about a decade ago, these tools belonged to the NSA only. In fact, they had coined the term “NOBUS”, which stood for “nobody but us” – meaning the NSA thought the vulnerabilities were theirs alone to exploit. But that advantage wore off due to the leaks and because of the fact that anyone can grab the code to a cyber-weapon once it’s posted online.

FBI and Homeland security officials told the New York Times that more accountability at the NSA was needed. A former FBI official said that the leak was akin to the government failing to lock it up “a warehouse of automatic weapons”.

Unfortunately, there doesn’t seem to be accountability at the NSA. Adm. Michael S. Rogers, who was director of the N.S.A. during the leak said: “If Toyota makes pickup trucks and someone takes a pickup truck, welds an explosive device onto the front, crashes it through a perimeter and into a crowd of people, is that Toyota’s responsibility? The N.S.A. wrote an exploit that was never designed to do what was done.”

Microsoft views the situation very differently. Tom Burt, the corporate vice president of consumer trust said: “I disagree completely. These exploits are developed and kept secret by governments for the express purpose of using them as weapons or espionage tools. They’re inherently dangerous. When someone takes that, they’re not strapping a bomb to it. It’s already a bomb.”

via ZeroHedge News http://bit.ly/2WpP04h Tyler Durden

Are Democrats an Anti-Immigrant Party Too?

In recent years, the Republican Party has increasingly become known for its hostility to immigration, both legal and illegal. The Democrats, by contrast, are generally seen as champions of immigrants. But recent articles by New York Times columnist Farhad Manjoo and my George Mason University colleague economist Tyler Cowen suggest that reputation isn’t deserved. They highlight the ways in which zoning and labor policies championed by Democrats have the effect of excluding immigrants from many of the nation’s largest cities. Here’s Manjoo:

To live in California at this time is to experience every day the cryptic phrase that George W. Bush once used to describe the invasion of Iraq: “Catastrophic success.” The economy here is booming, but no one feels especially good about it. When the cost of living is taken into account, billionaire-brimming California ranks as the most poverty-stricken state, with a fifth of the population struggling to get by. Since 2010, migration out of California has surged….

And there is no end in sight to such crushing success. At every level of government, our representatives, nearly all of them Democrats, prove inadequate and unresponsive to the challenges at hand. Witness last week’s embarrassment, when California lawmakers used a sketchy parliamentary maneuver to knife Senate Bill 50, an ambitious effort to undo restrictive local zoning rules and increase the supply of housing….

Reading opposition to SB 50 and other efforts at increasing density, I’m struck by an unsettling thought: What Republicans want to do with I.C.E. and border walls, wealthy progressive Democrats are doing with zoning and Nimbyism. Preserving “local character,” maintaining “local control,” keeping housing scarce and inaccessible — the goals of both sides are really the same: to keep people out.

“We’re saying we welcome immigration, we welcome refugees, we welcome outsiders — but you’ve got to have a $2 million entrance fee to live here, otherwise you can use this part of a sidewalk for a tent,” said Brian Hanlon, president of the pro-density group California Yimby. “That to me is not being very welcoming. It’s not being very neighborly.”

Cowen makes similar points:

State and local governments are making immigration policy all the time, mostly for the worse, and often Democrats are more restrictionist than Republicans…

Which leads me to what recently happened in California, which is controlled by Democrats. The state legislature last week shelved a bill known as SB 50, which would have partially deregulated building and led to much denser construction. It was an “anti-NIMBY” bill that would have lowered rents, or at least stopped them from rising so rapidly.  In essence, SB 50 was a pro-immigration bill. By turning it down, California lawmakers essentially engaged in restrictionist immigration policy, whether or not that was their intent….

There are striking parallels between the philosophies of Trump and NIMBY urbanists. Trump asserts that America is “full” and so wants to restrict the flow of immigrants. The urbanists, who tend to be Democratic and highly educated, assert that their cities are too crowded and so want to restrict the supply of housing. The cultural valence of the two views is quite different, but the practical implications have a lot in common — namely, a harder set of conditions for potential low-skilled migrants to the U.S.

As Cowen suggests, zoning and immigration restrictions both reflect zero-sum thinking, which often leads to harmful and unjust policies on both left and right. Advocates of both policies assume that we must exclude some people from opportunity in order to secure it for others. In reality, both cutting back on zoning and reducing immigration restrictions would create vast new wealth that can benefit not only migrants themselves, but the rest of the country.

Cowen also highlights the anti-immigrant impact of high minimum wage policies favored by many Democrats:

The minimum wage is another tool of anti-immigration policy, at least for less skilled immigrants. Say a city sets a minimum wage of $15 an hour. That means a potential migrant whose work is worth only $12 an hour won’t be able to get a legal job in that city. That will deter migration, both legal and illegal. Furthermore, a worker in, say, Honduras may not find it possible to improve his or her skills to be worth $15 an hour, at least not without arriving in the U.S.

So higher minimum wages are also a restrictionist immigration policy, at least for the poorest class of migrants. This is one of those truths that is inconvenient for people at both ends of the political spectrum. Many Republicans want tighter immigration, but they are not so crazy about higher minimum wages. Many Democrats face this dilemma in reverse.

Research by economists confirms the prediction that high minimum wages deter immigrants from settling in jurisdictions that adopt them.

The restrictive NIMBY zoning policies favored by many Democrats’ don’t just shut out many immigrants. They also close off housing and job opportunities to millions of native-born Americans, both the minority poor and working-class whites. While Republicans’ zoning policies are far from perfect, Cowen is right to point out that conservative “red” jurisdictions are, on average, significantly better than liberal “blue” ones on this issue.

This is not just a matter of Democrats’ failing to affirmatively help immigrants and the poor as much as they could. It is a case of their using the coercive power of government to actively  impede them. Zoning restrictions prevent willing developers from building housing for these people, willing landowners from renting to them, and willing employers from hiring them. The effect is similar to that which would happen if state or local governments passed laws directly restricting the number of international and domestic migrants allowed to live and work in a given area. It is a tragic irony that the party that claims to champion the interests of immigrants, minorities, and the poor also adopts policies that massively harm these very same groups.

Despite the parallels noted by Cowen and Manjoo, the Democrats’ restrictionist policies are, on the whole, less awful than those of the Republicans. One key difference is that restrictive zoning merely bars migrants from particular areas, not the entire country. By contrast, Republicans’ efforts to cut legal migration and deport undocumented migrants exclude people from living anywhere in the US, thereby in many cases condemning them to lifelong poverty and oppression. There is also no Democratic analogue to the cruelty of some of the more extreme GOP policies, such as Trump’s family separation order (which continues to separate thousands of children from their parents even many months after its official end) and the 2018 Justice Department ruling denying refugee status to escaped slave laborers on the grounds that their forced labor amounts to providing “material support” for terrorists.

It is also important to recognize that Democrats are far from monolithic on zoning. Over the last few years, many on the left have begun to reconsider the policy, and point out the ways in which it harms the very groups progressives seek to help. In recent months, several liberal Democratic jurisdictions have enacted significant reforms loosening zoning restrictions, most notably the city of Minneapolis. Cowen and Manjoo justifiably point to the recent defeat of California Senate Bill 50—a bill that would have lifted restrictions on new construction in much of the state –  as an indictment of the Democrats. But SB 50 itself was a liberal Democratic initiative, sponsored by progressive state Sen. Scott Wiener. There is at least an active debate over zoning on the left, and Democratic opposition to exclusionary policies is gradually growing. Many liberals have come to recognize that exclusionary zoning is at odds with their principles.

At the state and local level,  many of the same Democratic jurisdictions that often exclude immigrants with their zoning and minimum wage policies also protect them by adopting “sanctuary city” restrictions on cooperation with federal deportation efforts. They deserve praise for the latter, as well as criticism for the former.

Meanwhile, the GOP is actually moving in the wrong direction on immigration, becoming more hostile to immigration rather than less so. Too many on the right simply ignore the contradictions between restrictionist policies and their professed commitment to liberty, free markets, and color-blindness.

But Democrats should not pat themselves on the back for being somewhat less lawful than Trump-era Republicans on these issues. A truly progressive party should have higher aspirations. When it comes to expanding opportunities for both domestic and international migration, both parties have a great deal of room for improvement.

 

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Tariffs: As American As Apple Pie

Authored by James Rickards via The Daily Reckoning,

Listening to hysterical commentary from the mainstream media about President Trump’s tariffs, one would think his policies were in violation of the U.S. Constitution. Nothing could be further from the truth.

America grew rich and powerful from 1787–1962, a period of 175 years, using tariffs, subsidies and other barriers to trade to nurture domestic industry and protect high-paying manufacturing jobs.

In fact, tariffs are as American as apple pie.

Trump is using the same basic playbook that predominated in U.S. policy from George Washington forward. Washington’s secretary of the Treasury, Alexander Hamilton, drafted a report to Congress called the Report on Manufactures presented in 1791. Hamilton proposed that in order to have a strong country, America needed a strong manufacturing base with jobs that taught skills and offered income security.

To achieve this, Hamilton proposed subsidies to U.S. businesses so they could compete successfully against more established U.K. and European businesses.

These subsidies might include grants of government land or rights of way, purchase orders from the government itself or outright payments. This was a mercantilist system that encouraged a trade surplus and the accumulation of gold reserves.

Hamilton’s plan was later proposed on a broader scale by Kentucky Sen. Henry Clay. This new plan began with the Tariff of 1816. Clay’s plan was called the American System. Abraham Lincoln adopted the American System as his platform in the election of 1860, and it became a bedrock principle of the new Republican Party.

The 19th and early 20th centuries were a heyday of the American System. This period was characterized by enormous economic growth and population expansion by the U.S. The American System was also accompanied mostly by low inflation or even deflation (which increases the purchasing power of everyday citizens) despite occasional financial panics and some inflation during the Civil War.

Trump is simply returning to that tradition.

Against this mercantilist system was a theory of free trade based on comparative advantage as advocated by British economist David Ricardo in the early 19th century. Ricardo’s theory said that trading nations are endowed with attributes that gave them a relative advantage in producing certain goods versus others.

These attributes could consist of natural resources, climate, population, river systems, education, ports, financial capacity or any other factor of production. Nations should produce those goods as to which they have a natural advantage and trade with other nations for goods where the advantage was not so great.

Countries should specialize in what they do best, and let others also specialize in what they do best. Then countries could simply trade the goods they make for the goods made by others. All sides would be better off because prices would be lower as a result of specialization in those goods where you have a natural advantage.

It’s a nice theory often summed up in the idea that Tom Brady should not mow his own lawn because it makes more sense to pay a landscaper while he practices football.

For example, if the U.K. had an advantage in textile production and Portugal had an advantage in wine production, then the U.K. and Portugal should trade wool for wine.

But if the theory of comparative advantage were true, Japan would still be exporting tuna fish instead of cars, computers, TVs, steel and much more.

The same can be said of the globalists’ view that capital should flow freely across borders. That might be advantageous in theory but market manipulation by central banks and rouge actors like Goldman Sachs and big hedge funds make it a treacherous proposition.

The problem with this theory of comparative advantage is that the factors of production are not permanent and they are not immobile.

If labor moves from the countryside to the city in China, then suddenly China has a comparative advantage in cheap labor. If finance capital moves from New York banks to direct foreign investment in Chinese factories, then China has the comparative advantage in capital also.

Before long, China has the advantage in labor and capital and is running huge trade surpluses with the U.S., putting Americans out of work and shutting down U.S. factories in the process.

Worse yet, countries such as China can pull comparative advantage out of thin air with government subsidies, exactly as Hamilton proposed 227 years ago. The most famous example of this is Taiwan Semiconductor.

In the 1970s, Taiwan had no comparative advantage in semiconductor production. But with government subsidies to a national champion, today Taiwan Semiconductor is the largest supplier of semiconductors in the world.

When did the U.S. abandon the system that worked so well for so long?

Beginning in 1962, the U.S. turned its back on a successful legacy of protecting its jobs and industry and embraced the free trade theory. This was done first through the General Agreement on Tariffs and Trade, or GATT, one of the original Bretton Woods institutions in addition to the World Bank and IMF.

Beginning in 1995, the World Trade Organization, WTO, displaced GATT and has been the main venue for U.S. free trade policy ever since. China became a member of WTO on Dec. 11, 2001, but has notoriously broken many WTO rules since joining.

The globalist approach might work if everyone were a free trader and no one resorted to tariffs, subsidies, nontariff barriers to trade and theft of intellectual property. Unfortunately, that’s not the world we live in.

We live in a world where the U.S. is a free trade sucker and everyone else breaks the rules. In a world where a few parties are free traders but most are mercantilists, the mercantilists win every time. They are like parasites sucking the free traders dry.

If open trade, and open capital flows are flawed ideas, why do elites support them?

The switch in U.S. policy from quasi-mercantilism to free trade was driven partly by academics who embrace the simple version of free trade without understanding the flaws (exemplified by China and Taiwan).

Others understand the flaws in free trade well enough but value the world at large over the U.S. Their agenda is to diminish the power of the United States, and the U.S. dollar, in world affairs and to enhance the power of rising nations especially China.

If several hundred million Chinese can be pulled from poverty by leaving the U.S. market open while China subsidies its companies, imposes its own tariffs, steals intellectual property, and limits U.S. foreign direct investment, then that’s fine. If U.S. workers lose their jobs in the process, that’s fine too.

The globalists consider that a form of progress toward their “one world” utopia. They don’t care about the U.S.; they only care about their “one world” vision.

Globalists are often supported by major international firms in the pharmaceutical and other businesses that profit from global supply chains even as Americans lose their jobs.

But Trump is a thorn in the globalists’ side. Trump focuses on restoring lost U.S. jobs even if the cost to China is high. That’s China’s problem, not ours. Trump’s policy is “America First,” and he means it.

Now the battle is heating up again. Whoever wins the war of the globalists versus the nationalists could decide the world system for decades to come.

via ZeroHedge News http://bit.ly/2X9W6qy Tyler Durden

Are Democrats an Anti-Immigrant Party Too?

In recent years, the Republican Party has increasingly become known for its hostility to immigration, both legal and illegal. The Democrats, by contrast, are generally seen as champions of immigrants. But recent articles by New York Times columnist Farhad Manjoo and my George Mason University colleague economist Tyler Cowen suggest that reputation isn’t deserved. They highlight the ways in which zoning and labor policies championed by Democrats have the effect of excluding immigrants from many of the nation’s largest cities. Here’s Manjoo:

To live in California at this time is to experience every day the cryptic phrase that George W. Bush once used to describe the invasion of Iraq: “Catastrophic success.” The economy here is booming, but no one feels especially good about it. When the cost of living is taken into account, billionaire-brimming California ranks as the most poverty-stricken state, with a fifth of the population struggling to get by. Since 2010, migration out of California has surged….

And there is no end in sight to such crushing success. At every level of government, our representatives, nearly all of them Democrats, prove inadequate and unresponsive to the challenges at hand. Witness last week’s embarrassment, when California lawmakers used a sketchy parliamentary maneuver to knife Senate Bill 50, an ambitious effort to undo restrictive local zoning rules and increase the supply of housing….

Reading opposition to SB 50 and other efforts at increasing density, I’m struck by an unsettling thought: What Republicans want to do with I.C.E. and border walls, wealthy progressive Democrats are doing with zoning and Nimbyism. Preserving “local character,” maintaining “local control,” keeping housing scarce and inaccessible — the goals of both sides are really the same: to keep people out.

“We’re saying we welcome immigration, we welcome refugees, we welcome outsiders — but you’ve got to have a $2 million entrance fee to live here, otherwise you can use this part of a sidewalk for a tent,” said Brian Hanlon, president of the pro-density group California Yimby. “That to me is not being very welcoming. It’s not being very neighborly.”

Cowen makes similar points:

State and local governments are making immigration policy all the time, mostly for the worse, and often Democrats are more restrictionist than Republicans…

Which leads me to what recently happened in California, which is controlled by Democrats. The state legislature last week shelved a bill known as SB 50, which would have partially deregulated building and led to much denser construction. It was an “anti-NIMBY” bill that would have lowered rents, or at least stopped them from rising so rapidly.  In essence, SB 50 was a pro-immigration bill. By turning it down, California lawmakers essentially engaged in restrictionist immigration policy, whether or not that was their intent….

There are striking parallels between the philosophies of Trump and NIMBY urbanists. Trump asserts that America is “full” and so wants to restrict the flow of immigrants. The urbanists, who tend to be Democratic and highly educated, assert that their cities are too crowded and so want to restrict the supply of housing. The cultural valence of the two views is quite different, but the practical implications have a lot in common — namely, a harder set of conditions for potential low-skilled migrants to the U.S.

As Cowen suggests, zoning and immigration restrictions both reflect zero-sum thinking, which often leads to harmful and unjust policies on both left and right. Advocates of both policies assume that we must exclude some people from opportunity in order to secure it for others. In reality, both cutting back on zoning and reducing immigration restrictions would create vast new wealth that can benefit not only migrants themselves, but the rest of the country.

Cowen also highlights the anti-immigrant impact of high minimum wage policies favored by many Democrats:

The minimum wage is another tool of anti-immigration policy, at least for less skilled immigrants. Say a city sets a minimum wage of $15 an hour. That means a potential migrant whose work is worth only $12 an hour won’t be able to get a legal job in that city. That will deter migration, both legal and illegal. Furthermore, a worker in, say, Honduras may not find it possible to improve his or her skills to be worth $15 an hour, at least not without arriving in the U.S.

So higher minimum wages are also a restrictionist immigration policy, at least for the poorest class of migrants. This is one of those truths that is inconvenient for people at both ends of the political spectrum. Many Republicans want tighter immigration, but they are not so crazy about higher minimum wages. Many Democrats face this dilemma in reverse.

Research by economists confirms the prediction that high minimum wages deter immigrants from settling in jurisdictions that adopt them.

The restrictive NIMBY zoning policies favored by many Democrats’ don’t just shut out many immigrants. They also close off housing and job opportunities to millions of native-born Americans, both the minority poor and working-class whites. While Republicans’ zoning policies are far from perfect, Cowen is right to point out that conservative “red” jurisdictions are, on average, significantly better than liberal “blue” ones on this issue.

This is not just a matter of Democrats’ failing to affirmatively help immigrants and the poor as much as they could. It is a case of their using the coercive power of government to actively  impede them. Zoning restrictions prevent willing developers from building housing for these people, willing landowners from renting to them, and willing employers from hiring them. The effect is similar to that which would happen if state or local governments passed laws directly restricting the number of international and domestic migrants allowed to live and work in a given area. It is a tragic irony that the party that claims to champion the interests of immigrants, minorities, and the poor also adopts policies that massively harm these very same groups.

Despite the parallels noted by Cowen and Manjoo, the Democrats’ restrictionist policies are, on the whole, less awful than those of the Republicans. One key difference is that restrictive zoning merely bars migrants from particular areas, not the entire country. By contrast, Republicans’ efforts to cut legal migration and deport undocumented migrants exclude people from living anywhere in the US, thereby in many cases condemning them to lifelong poverty and oppression. There is also no Democratic analogue to the cruelty of some of the more extreme GOP policies, such as Trump’s family separation order (which continues to separate thousands of children from their parents even many months after its official end) and the 2018 Justice Department ruling denying refugee status to escaped slave laborers on the grounds that their forced labor amounts to providing “material support” for terrorists.

It is also important to recognize that Democrats are far from monolithic on zoning. Over the last few years, many on the left have begun to reconsider the policy, and point out the ways in which it harms the very groups progressives seek to help. In recent months, several liberal Democratic jurisdictions have enacted significant reforms loosening zoning restrictions, most notably the city of Minneapolis. Cowen and Manjoo justifiably point to the recent defeat of California Senate Bill 50—a bill that would have lifted restrictions on new construction in much of the state –  as an indictment of the Democrats. But SB 50 itself was a liberal Democratic initiative, sponsored by progressive state Sen. Scott Wiener. There is at least an active debate over zoning on the left, and Democratic opposition to exclusionary policies is gradually growing. Many liberals have come to recognize that exclusionary zoning is at odds with their principles.

At the state and local level,  many of the same Democratic jurisdictions that often exclude immigrants with their zoning and minimum wage policies also protect them by adopting “sanctuary city” restrictions on cooperation with federal deportation efforts. They deserve praise for the latter, as well as criticism for the former.

Meanwhile, the GOP is actually moving in the wrong direction on immigration, becoming more hostile to immigration rather than less so. Too many on the right simply ignore the contradictions between restrictionist policies and their professed commitment to liberty, free markets, and color-blindness.

But Democrats should not pat themselves on the back for being somewhat less lawful than Trump-era Republicans on these issues. A truly progressive party should have higher aspirations. When it comes to expanding opportunities for both domestic and international migration, both parties have a great deal of room for improvement.

 

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Lindsey Graham Asks Trump To Invade Venezuela: “Do Exactly What Reagan Did” In Grenada

Likely frustrated over the fact that the crisis in Venezuela has by and large retreated from the headlines over the past weeks following the failed US-backed coup attempt against Maduro at the end of April, Sen. Lindsey Graham went on one of his characteristic jingoistic rants during a Fox News Sunday appearance.

Operation “Urgent Fury” began on October 25, 1983 following the execution of Marxist Prime Minister Maurice Bishop. The intervention came at the request of Governor-General Paul Scoon, held under house arrest. It was a “no-notice” invasion of Grenada and ended in swift takeover. Historical file photo in the invasion’s aftermath.

The well-known hawk from South Carolina directly appealed to Trump to initiate a US invasion akin to the one executed by Ronald Reagan in Grenada back in 1983.

“Trump said rightly, Maduro’s not the legitimate leader of Venezuela. The entire region supports the Trump approach, that Guaidó is the legitimate leader,” Graham said.

“I would do exactly what Reagan did. I would give Cuba the ultimatum to get out of Venezuela. If they don’t, I would let the Venezuelan military know, you’ve got to choose between democracy and Maduro.”

And it’s here that Graham called for direct invasion of the oil-rich but cash poor socialist country: “And if you choose Maduro and Cuba, we’re coming after you. This is in our backyard,” he said.

During the interview Graham had repeated the unproven claim that Maduro “wouldn’t be in power without six or seven thousand security forces in Venezuela.”

Leading up to the 1983 US Marine invasion of Grenada, an action which defense planners saw as a crucial “check on communist influence”, Reagan told the American people “when the thugs tried to wrest control of Grenada, there were 30 Soviet advisers and hundreds of Cuban military and paramilitary forces on the island.”

However, unlike the tiny island of Grenada, which had a population of less than 100,000 – Venezuela has a population size approaching 30 million with about 160,000 active military troops plus many hundreds of thousands more in national guard and reserve forces. 

Earlier this month, Graham had questioned on Twitter: “Cuba, Russia send troops to prop Maduro up in Venezuela…..while we talk/sanction… Where is our aircraft carrier?”

via ZeroHedge News http://bit.ly/2ExAKMv Tyler Durden