September 2017 – Page 59

New York Fed Calculates Inflation Is Running Hottest Since 2007

As if inflation wasn’t “mysterious” enough to the Fed already, today the New York Fed joined the Atlanta Fed first in releasing its own measure to track underlying inflation called, simply, the Underlying Inflation Gauge. What is notable is that this latest inflation tracker shows prices behaving quite differently from traditional indexes this year.

According to the UIG’s August measure, broad inflation came in at a red hot 2.74%, the highest since November 2007, according to historical data from the Fed. That compares with just 1.9% annual inflation according to the Labor Department’s CPI and an even more paltry 1.4% as measured by the preferred PCE gauge of Fed policy makers, which matched the lowest since September 2016.

This is what the latest reading showed:

The UIG estimated on the “full data set” increased from a revised 2.64% in July to 2.74% in August.
The “prices-only” measure increased from a revised 2.09% in July to 2.17% in August.
The August CPI showed a further pick up in inflation from June. In response to the firming of CPI inflation, both UIG measures displayed a rise in trend inflation.
he UIG measures currently estimate trend CPI inflation to be in the 2.2% to 2.7% range, with both registering above the actual twelve-month change in the CPI.

Why the gap? According to Bloomberg, the full data UIG incorporates dozens of additional variables outside of prices, including the unemployment rate, stock prices, bond yields and purchasing managers’ indexes. Furthermore, if Dudley is right, and there is structural disinflation going on, then the UIG would be much higher using a ‘traditional’ supply curve. Here, as Citi cynically notes, “structural disinflation is far from permanent, as the Mayor of London’s latest regulatory action illustrated very clearly. Anti-trust or other regulatory measures can end the new supply paradigm at any time.“

Additionally, a lot of the disinflation in the New Economy may have been a function of high G10 unemployment, and urbanization in China: both of which have now ended as drivers of disinflation.

While the second, “prices-only” version of the UIG is derived from CPI data, that measure still rose a solid 2.2% in August. The New York Fed says the UIG “has shown more accurate forecasts of inflation compared with core inflation measures,” and the two UIG measures indicate that “trend CPI inflation” is currently in a range of 2.2 percent to 2.7 percent.

Meanwhile, the annualized 1 month Atlanta Fed Sticky Price CPI surged to 3.1% in August.

Still, when one central bank now has no less than three different inflation metrics to contend with, and base its decisions on, all of which show vastly different numbers, we can see why Yellen would be “confused”, and why as we said two weeks ago, what the Fed should be doing is figuring out why and how it is calculating inflation incorrectly before continuing to blow the world’s biggest asset bubble.

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Trump’s “Best Week Since Inauguration” Sends Approval Rating To 4-Month Highs

This was President Trump's best week since inauguration as his job approval rating spiked most since the first week of Feb..

A week of record-breaking hurricanes, paradigm-shattering comments at The UN, and record high stock prices has pushed President Trump's approval rating to its highest since mid-May.

One thing is for sure, President Trump seems capable of controlling the media narrative (for better or for worse)… (via Axios)

The study shows that while Trump's presidency has been action-packed, the public's attention span doesn't seem to last for long.

However, one group of people does seem to pay attention longer – FX traders…

With a one-month lag, the dollar index appears to be tracking President Trump's approval rating rather well…

So is the dollar due for the rally to continue?

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The Hillary Clinton School of Literary Criticism

The most eye-catching aspect of Hillary Clinton’s widely reviewed, reviled, and literally discounted campaign memoir, What Happened, is her take on George Orwell’s 1984. Most readers interpret the novel as imploring us all to be skeptical of those in power. Clinton argues that authoritarianism is bad not because it tortures and kills people but, well, because it

sow[s] mistrust towards exactly the people we need to rely on: our leaders, the press, experts who seek to guide public policy.

In that vein, we’re happy present to you some other, lesser-known interpretations of classic works by Secretary Clinton.

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Feminist Group Loses Fight to Declare Yik Yak App a Civil-Rights Violation

A federal court in Virginia shot down one of the sadder displays of anti-speech authoritarianism in recent memory, a demand that the social-media app Yik Yak be declared a civil-rights violation on college campuses.

The U.S. District Court for the Eastern District of Virginia this week dismissed a lawsuit filed against the University of Mary Washington (UMW) by a coalition led by the Feminist Majority Foundation. The suit contended that UMW allowing Yik Yak on campus constituted a violation of Title IX of the Civil Rights Act, which prevents sex discrimination at educational institutions receive federal funding.

“As social media has proliferated, cyberbullying has become a national problem,” and “solutions are not easy or obvious to anyone,” the court noted. “In seeking solutions, however, schools cannot ignore other rights vital to this country, such as the right to free speech.”

The whole debacle stems from Yik Yak users at UMW harassing members of a campus feminist group (and branch of the Feminist Majority Foundation) in 2015. Yik Yak is now defunct, but at the time it was a popular app on college campuses, allowing users within a certain distance to broadcast their thoughts anonymously in a Twitter-like fashion. The students complained to UMW administrators, who told them they could not ban the app on campus because of free-speech concerns.

That’s when Feminist Majority Foundation and others asked the Department of Education to intervene. In an administrative complaint against UMW, the groups charged colleges with violating students’ civil rights “by failing to adequately address the sexually hostile environment created by persistent online harassment and threats” on Yik Yak—a private platform students could download independently on their own phones or devices.

Schools exerted no control over who downloaded the app or what they posted on it. The feminist groups proposed schools get around this by installing software that would block Yik Yak on school computer networks, a “solution” that would both fail on technological grounds (anyone using their phone’s network or non-school wifi could still access the app) and First Amendment ones.

Feminist Majority Foundation also filed a civil lawsuit against the school, alleging violations of Title IX and the Equal Protection Clause. On Tuesday, the court explained its reasons for granting its motion to dismiss the suit.

“To establish a Title IX claim, a plaintiff must show that a [school] acted with deliberate indifference to known acts of sexual harassment so severe, pervasive, and offensive that the harassment deprived the plaintiff of access to educational opportunities or benefits,” explains the U.S. District Court for the Eastern District of Virginia decision. It’s a standard that focuses on action or inaction by the school, not third parties, and is limited to situations in which the school has substantial jurisdiction “over both the harasser and the context in which the known harassment occurs.”

In this case, “the Title IX discrimination claim fails because the harassment took place in a context over which UMW had limited, if any, control—anonymous postings on Yik Yak,” the court decided.

And in realms where it did have control—like holding student assemblies and having a university police officer investigate a specific threat—it took swift action. “While UMW did not take the specific action requested by the plaintiffs, Title IX does not require funding recipients to meet the particular remedial demands of its students,” especially when those demands may expose a school to liability under the First Amendment,” the court ruled.

It also noted that some of the campus feminists members received individual threats of physical and sexual violence, calling them out by name and revealing their addresses. In some cases, legitimate criminal charges may have been warranted. But instead of going after harassers directly, the aggrieved students and Feminist Majority Foundation lashed out at the school and the social-media platform.

While condemning the “thuggery” of student harassers on Yik Yak, law blogger Eugene Volokh points out that “a public university can’t block otherwise available student access to an entire privately operated communication platform, just because a few students are using that platform in ways that are rude, harmful to public debate, or even outright criminal. Such a block is a classic prior restraint — here, an attempt to categorically block all use of a communications mechanism in order to prevent some users’ misuse.”

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“Basically Destroyed” – Puerto Rico’s Back In The 18th Century

Authored by James Howard Kunstler via Kunstler.com,

Welcome to America’s first experiment in the World Made By Hand lifestyle. Where else is it going? Watch closely.

Ricardo Ramos, the director of the beleaguered, government-owned Puerto Rico Electric Power Authority, told CNN Thursday that the island’s power infrastructure had been basically “destroyed” and will take months to come back.

“Basically destroyed.” That’s about as basic as it gets civilization-wise.

Residents, Mr. Ramos said, would need to change the way they cook and cool off. For entertainment, old-school would be the best approach, he said.

“It’s a good time for dads to buy a ball and a glove and change the way you entertain your children.”

Meaning, I guess, no more playing Resident Evil 7: Biohazard on-screen because you’ll be living it – though one wonders where will the money come from to buy the ball and glove? Few Puerto Ricans will be going to work with the power off. And the island’s public finances were in disarray sufficient to drive it into federal court last May to set in motion a legal receivership that amounted to bankruptcy in all but name.

The commonwealth, a US territory, was in default for $74 billion in bonded debt, plus another $49 billion in unfunded pension obligations.

So, Puerto Rico already faced a crisis pre-Hurricane Maria, with its dodgy electric grid and crumbling infrastructure: roads, bridges, water and sewage systems.

Bankruptcy put it in a poor position to issue new bonds for public works which are generally paid for with public borrowing.

Who, exactly, would buy the new bonds? I hear readers whispering, “the Federal Reserve.”

Which is a pretty good clue to understanding the circle-jerk that American finance has become.

Some sort of bailout is unavoidable, though President Trump tweeted “No Bailout for Puerto Rico” after the May bankruptcy proceeding. Things have changed and the shelf-life of Trumpian tweets is famously brief. But the crisis may actually strain the ability of the federal government to pretend it can cover the cost of every calamity that strikes the nation — at least not without casting doubt on the soundness of the dollar. And not a few bonafide states are also whirling around the bankruptcy drain: Illinois, Connecticut, New Jersey, Kentucky.

Constitutionally states are not permitted to declare bankruptcy, though counties and municipalities can. Congress would have to change the law to allow it. But states can default on their bonds and other obligations. Surely there would be some kind of fiscal and political hell to pay if they go that route.

Nobody really knows what might happen in a state as big and complex as Illinois, which has been paying its way for decades by borrowing from the future. Suddenly, the future is here and nobody has a plan for it.

The case for the federal government is not so different.

It, too, only manages to pay its bondholders via bookkeeping hocuspocus, and its colossal unfunded obligations for social security and Medicare make Illinois’ predicament look like a skipped car payment.

In the meantime – and it looks like it’s going to be a long meantime – Puerto Rico is back in the 18^th Century, minus the practical skills and simpler furnishings for living that way of life, and with a population many times beyond the carrying capacity of the island in that era.

For instance, how many houses get their water from cisterns designed to catch rain runoff? How many communities across the island are walkable? (It looks like the gas stations will be down for quite a while.) I’ve been there and much of the island is as suburbanized as New Jersey — thanks to the desire to be up-to-date with the mainland, and the willingness of officials to make it look like that.

We’re only two days past the Hurricane Maria’s direct hit on Puerto Rico and there is no phone communication across the island, so we barely know what has happened. We’re weeks past Hurricanes Irma and Harvey, and news of the consequences from those two events has strangely fallen out of the news media.

Where have the people gone who lost everything? The news blackout is as complete and strange as the darkness that has descended on Puerto Rico.

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California Residents Stunned As Ominous “End-Of-World Prediction” Takes Over TV Broadcasts

Residents of Southern California were stunned yesterday morning when their avocado toast breakfast was suddenly interrupted by an ominous “end-of-world prediction” that took over their TV’s, interrupting their normal programming for a full minute. Among other things, the broadcast predicted that “extremely violent times will come.”

“Realize this, that in the last day extremely violent times will come.”

“The term means hard. Harsh. Hard to deal with. Vicious. Dangerous. Menacing.”

Not surprisingly, the triggered Californians flooded social media with clips of the warning and their personal horror stories which were summarized by The Orange County Register:

Erin Mireles of Diamond Bar was watching the Bravo channel on Spectrum’s cable system when her show was interrupted by the alert.

“I was definitely startled, ’cause the volume increased exponentially,” she said. “I wasn’t alarmed in the sense of thinking something was wrong, ’cause I assumed it was some sort of hack. My channel changed back to Bravo after a couple minutes.”

Stacy Laflamme of Lake Forest said she was watching the HGTV channel via Cox Communications about 11:05 a.m. when suddenly an emergency alert flashed across her screen followed by a voice.

“It almost sounded like Hitler talking,” she said. “It sounded like a radio broadcast coming through the television.”

Of course, the “Emergency Alert” was made all the more alarming given that Christian numerologist David Meade has made news throughout this week with his own prediction that the end of the world will come tomorrow…so please adjust your party plans for tonight accordingly.

According to Christian numerologist David Meade, verses in Luke 21:25 to 26 signify that recent events, such as the recent solar eclipse and Hurricane Harvey, portend the apocalypse.

The verses read:

“25: There will be signs in the sun, moon and stars. On the earth, nations will be in anguish and perplexity at the roaring and tossing of the sea. People will faint from terror, apprehensive of what is coming on the world, for the heavenly bodies will be shaken.’

“’26: Men’s hearts failing them for fear, and for looking after those things which are coming on the earth: for the powers of heaven shall be shaken.’

Saturday’s date, Sept. 23 was pinpointed using codes from the Bible, as well as a “date marker” in the pyramids of Giza in Egypt.

Unfortunately, in the end, the whole thing was just a technical glitch that resulted in a local radio broadcast being sent out over television stations during what should have been a regular test of the emergency alert system.

The problem occurred because of one or more radio stations conducting an emergency test, Joe Camero, a spokesman for Cox, said Thursday.

Cable systems pick up such alerts, and viewers should have seen just a typical emergency-broadcast test.

“With these tests, an emergency tone is sent out to initiate the test,” Camero said. “After the tone is transmitted, another tone is sent to end the message. It appears that the radio station (or stations) did not transmit the end tone to complete the test.”

Then the broadcast picked up some audio feed that bled into the alert.

Camero said Cox technicians shut down the emergency test as soon as they became aware of the problem.

“We don’t want to alarm anyone with any false emergency alerts,” he said.

That said, you should probably still plan to party tonight like the end of the world will come tomorrow…just in case.

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‘We own this property…it’s ours until we are done’

Kicked-in front door The Fourth Amendment requires police to obtain a warrant before searching a private home. It also requires that the home they end up searching is the one they actually have the warrant for.

Sheriff’s deputies in Van Buren County, Iowa, were golden on that first requirement when they raided Michael Owings’ house on June 27 for suspected drug possession. They did indeed have a warrant.

Unfortunately for them—and for Owings—their warrant allowed them to search the house of one Gary Shelley, Owings’ neighbor.

In a suit filed yesterday in U.S. District Court, Owings accuses Van Buren County Sheriff Deputy John Zane and four unnamed deputies of displaying a “gross disregard” for his constitutional rights by conducting “a flagrantly illegal entry of his private residence.”

The story began on June 26, when Zane carried out a traffic stop. In the course of the stop, he got a tip that illegal drug use and distribution might be going on at Shelley’s residence, a two-story farm house on rural Heather Avenue. Police promptly got a warrant for Shelley’s house. But they showed up at Owings’ mobile home, about a third of a mile up the road.

Owings was not home at the time, but his lawsuit says there were several signs that cops had arrived at the wrong house. One was an actual sign prominently listing the address at the gate of the property. Another was a name plate reading “Owings” located next to the front door.

Undeterred, the deputies forced their way into the home, where they encountered further evidence that they were in the wrong place, including prescription bottles and bank statements bearing Owings name. To top it all off, Owings’ mother and girlfriend arrived while police were still tearing through the place; they flat out told the officers that they had the wrong house.

According to the lawsuit, deputies responded by saying, “We own this property…it’s ours until we are done.”

The search turned up no illegal activity, and the police eventually cleared out, though not before removing items from the house and damaging the property.

Sadly, wrong-address raids are not unusual in the United States. Many of these cases lead to tragic consequences. Back in July, police in Southaven, Mississippi, killed Ismael Lopez while looking for an assault suspect at the wrong address. In 2015, Miami cops “destroyed” the home of 90-year-old woman while searching for drugs they never found. In 2012, while conducting a wrong-door raid in St. Paul, Minnesota, police killed the family dog and then forced three handcuffed children to sit by their dying pet while officers smashed up their home.

Owings is demanding compensation for the damage done to his property, for the violation of his Fourth Amendment rights, and for emotional distress. A court date has not been set.

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Are You Ready for Fall’s New Television Shows? New at Reason

'Young Sheldon' Monday marks the launch of the new fall television season, but television critic Glenn Garvin is not terribly impressed as yet. For the first of several upcoming columns previewing the new shows, he finds only one show salvageable out of four:

The hell with Charles Dickens. The new fall television season is certainly not the best of times, nor is it the worst of times (mostly, anyway, though CBS’ 9JKL certainly gives pause). It is, perhaps, the most mediocre of television times since The Sopranos and Sex and the City established cable TV as a programming force in which a Nielsen rating of 35 could not be reasonably mistaken for the average IQ of the viewing audience.

Nineteen new series will debut on broadcast television between now and November 2. (Well, 18; The Orville, Fox’s cartoon send-up of Star Trek, somehow slipped through security a couple of weeks ago, and if you’re only learning this now, count yourself lucky.) And they are nothing if not diverse.

There are American Special Forces troops in Syria (NBC’s The Brave), American Special Forces troops in Liberia (CBS’ Seal Team), and American Special Forces troops in America (The CW’s Valor). There are remakes from the 1970s (CBS’ S.W.A.T), remakes from the 1980s (The CW’s Dynasty) and remakes from the 1990s (NBC’s Will & Grace, less a remake than a desiccated zombie clawing its way back out of the grave, since it features the same cast). There are mutants battling a fascist military government (ABC’s Marvel’s Inhumans) and mutants battling a fascist civilian government (Fox’s The Gifted).

View this article.

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U.S. Troops Watch TV Shows Cops, NCIS to Train Afghan Security

Some American soldiers in Afghanistan have taken to watching shows like Cops and NCIS to figure out how to train Afghan security forces, a sobering reality nearly 16 years after the U.S. first invaded Afghanistan.

John Sopko, the Special Inspector General for Afghanistan Reconstruction (SIGAR) released a particuarly bleak 283-page report on “Reconstructing the Afghan National Defense and Security Forces: Lessons from the U.S. experience in Afghanistan.”

Sopko found the U.S. was “ill-prepared to build the war-torn country’s security forces, whose foundation is ravaged by decades of conflict, illiteracy and corruption,” as the Washington Post reported.

American troops found themselves with inadequate training to train Afghan security forces in large part because, as the SIGAR report noted, “police development was treated as a secondary mission for the U.S. government.” Troops have in some cases turned to police procedurals because they provide something familiar in a jumbled training environment.

U.S. efforts, for example, rely on cutting-edge technology and weapons systems, even though large parts of the Afghan security forces are illiterate. “We really do need to align capabilities to the needs of Afghans,” Sopko told the Post yesterday. “Effective security forces are basically the way this thing ends.”

The U.S. has been training Afghan forces since the start of the war and it remains a primary reason for the U.S. to remain in Afghanistan. That Sopko’s report criticizes U.S. soldiers for being unequipped to do this training casts a shadow on the entire project. It is also a powerful argument for ending the war in Afghanistan.

“If you’re just waiting to train the Afghans to be policemen and the military,” Rep. Walter Jones (R-NC) told Reason almost five years ago, “it’s taken 11 years already—you can train a monkey to ride a bicycle in less time.”

The U.S. is not prepared to rebuild Afghanistan, and may never be able to, but its continued presence disincentivizes locals from trying to rebuild by themselves and take their futures into their own hands.

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Pat Buchanan: “America Has No Divinely-Mandated Mission To Democratize Mankind”

Authored by Patrick Buchanan via Buchanan.org,

If a U.S. president calls an adversary “Rocket Man … on a mission to suicide,” and warns his nation may be “totally destroyed,” other ideas in his speech will tend to get lost.

Which is unfortunate.

For buried in Donald Trump’s address is a clarion call to reject transnationalism and to re-embrace a world of sovereign nation-states that cherish their independence and unique identities.

Western man has engaged in this great quarrel since Woodrow Wilson declared America would fight in the Great War, not for any selfish interests, but “to make the world safe for democracy.”

Our imperialist allies, Britain, France, Russia, Japan, regarded this as self-righteous claptrap and proceeded to rip apart Germany, Austria, Hungary and the Ottoman Empire and to feast on their colonies.

After World War II, Jean Monnet, father of the EU, wanted Europe’s nations to yield up their sovereignty and form a federal union like the USA.

Europe’s nations would slowly sink and dissolve in a single polity that would mark a giant leap forward toward world government – Alfred, Lord Tennyson’s “Parliament of man, the Federation of the world.”

Charles De Gaulle lead the resistance, calling for “a Europe of nation-states from the Atlantic to the Urals.”

For 50 years, the Gaullists were in constant retreat. The Germans especially, given their past, seemed desirous of losing their national identity and disappearing inside the new Europe.

Today, the Gaullist vision is ascendant.

“We do not expect diverse countries to share the same cultures, traditions, or even systems of government,” said Trump at the U.N.

“Strong sovereign nations let diverse countries with different values, different cultures, and different dreams not just coexist, but work side by side on the basis of mutual respect. …

“In America, we do not seek to impose our way of life on anyone, but rather to let it shine as an example for everyone to watch.”

Translation: We Americans have created something unique in history. But we do not assert that we should serve as a model for mankind. Among the 190 nations, others have evolved in different ways from diverse cultures, histories, traditions. We may reject their values but we have no God-given right to impose ours upon them.

It is difficult to reconcile Trump’s belief in self-determination with a National Endowment for Democracy whose reason for being is to interfere in the politics of other nations to make them more like us.

Trump’s idea of patriotism has deep roots in America’s past.

After the uprisings of 1848 against the royal houses of Europe failed, Lajos Kossuth came to seek support for the cause of Hungarian democracy. He was wildly welcomed and hailed by Secretary of State Daniel Webster.

But Henry Clay, more true to the principles of Washington’s Farewell Address, admonished Kossuth:

“Far better is it for ourselves, for Hungary, and for the cause of liberty that, adhering to our wise, pacific system, and avoiding the distant wars of Europe, we should keep our lamp burning brightly on the western shore as a light to all nations, than to hazard its utter extinction amid the ruins of fallen or falling republics in Europe.”

Trump’s U.N. address echoed Clay: “In foreign affairs, we are renewing this founding principle of sovereignty. Our government’s first duty is to its people … to serve their needs, to ensure their safety, to preserve their rights, and to defend their values.”

Trump is saying with John Quincy Adams that our mission is not to go “abroad in search of monsters to destroy,” but to “put America first.”

He is repudiating the New World Order of Bush I, the democracy crusades of the neocons of the Bush II era, and the globaloney of Obama.

Trump’s rhetoric implies intent; and action is evident from Rex Tillerson’s directive to his department to rewrite its mission statement — and drop the bit about making the world democratic.

The current statement reads: “The Department’s mission is to shape and sustain a peaceful, prosperous, just, and democratic world.”

Tillerson should stand his ground. For America has no divinely mandated mission to democratize mankind. And the hubristic idea that we do has been a cause of all the wars and disasters that have lately befallen the republic.

If we do not cure ourselves of this interventionist addiction, it will end our republic. When did we dethrone our God and divinize democracy?

And are 21st-century American values really universal values?

Should all nations embrace same-sex marriage, abortion on demand, and the separation of church and state if that means, as it has come to mean here, the paganization of public education and the public square?

If freedom of speech and the press here have produced a popular culture that is an open sewer and a politics of vilification and venom, why would we seek to impose this upon other peoples?

For the State Department to declare America’s mission to be to make all nations look more like us might well be regarded as a uniquely American form of moral imperialism.

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