Month: June 2018

A new report using property searches and census data from realtor.com reveals which states Californians are moving to when they realize that a $1.4 million McMansion on 1/16th of an acre while staring into their fat neighbor’s bedroom window just isn’t all it’s cracked up to be. 

Silicon Valley residents in particular are leaving in droves – more so than any other part of the state. Nearby San Mateo County which is home to Facebook came in Second, while Los Angeles County came in third.

“They’re looking for affordability and not finding it in Santa Clara County,” said Danielle Hale, chief economist for realtor.com.

A tight housing supply combined with nearly a decade of exploding home values have pushed housing prices and rents through the roof. Take, for example, this 848 square foot home on Plymouth Drive in Sunnyvale, CA (which in the 90’s was the “poor” part of town vs. nearby Mountain View and Los Altos). 

After being listed in March for $1.45 million, it sold within 48 hours for $2 million, or $2,358 per square foot. With Sunnyvale’s 1.25% property tax, the new owners are paying $2,083 per month, or $250,000 every 10 years. 

The housing crunch has inspired a flurry of state legislation designed to boost new home construction and eventually lower prices, “including a sweeping proposal to add millions of homes by public transit. It died in April, but its author, Sen. Scott Wiener, D-San Francisco, has vowed to try again next year,” writes Kathy Murphy in the Mercury News.

As Michael Snyder of the Economic Collapse Blog pointed out in May…

Reasons for the mass exodus include rising crime, the worst traffic in the western world, a growing homelessness epidemic, wildfires, earthquakes and crazy politicians that do some of the stupidest things imaginable.  But for most families, the decision to leave California comes down to one basic factor…

Money.

It’s not just housing prices driving the exodus, of course. Punitive taxes – more than twice as much as some other states, are eating away at disposable income. Nearby Arizona’s income tax rate is 4.54% vs. California’s 9.3%, while the new tax bill may accelerate the exodus.

As Snyder notes:

“But now the new tax bill has made some major changes, and some experts believe that this will actually accelerate the exodus out of the state of California.  The following comes from CNBC…”

In an op-ed in the Wall Street Journal headlined “So Long, California. Sayonara, New York,” Laffer and Moore (who have both advised President Donald Trump) say the new tax bill will cause a net 800,000 people to move out of California and New York over the next three years.

The tax changes limit the deduction of state and local taxes to $10,000, so many high-earning taxpayers in high-tax states will actually face a tax increase under the new tax code.

So where are people going?

The top destination for Bay Area residents is either a cheaper part of the state such as Alameda, Sacramento, San Juaquin or Placer counties, where homes can be found for $500K – $894K less than Santa Clara. Silicon Valley residents heading out of state are setting up camp in Arizona, Nevada, Idaho and Texas. 

And as South Bay Silicon Valley residents in particular are flocking to nearby Alameda County – one of the top destinations for in-state moves, Alameda County residents are being pushed further east to lower-cost Contra Costa, San Juaquin, Sacramento and Placer counties. 

Meanwhile, the median home price in Sacramento County — $357,000 — has risen each month for the past six years, the Sacramento Bee reported last week, jumping by 12 percent in the past year. –Mercury News

Here are the top 10 California counties that people are leaving, and where they’re headed... (realtor.com via the Mercury News.)

1. Santa Clara County

Out of state destinations: Arizona, Nevada, Texas and Idaho

In state destinations: Alameda, Sacramento, San Joaquin, Santa Cruz and Placer counties

2. San Mateo County

Out of state destinations: Arizona, Nevada, Texas and Washington

In state destinations: Alameda, Contra Costa, Santa Clara, Sacramento, and San Francisco counties

3. Los Angeles County

Out of state destinations: Nevada, Arizona, and Idaho

In state destinations: San Bernardino, Riverside, Ventura and Kern counties

4. Napa County

Out of state destinations: Arizona, Idaho, Nevada, Florida and Oregon

In state destinations: Solano, Sonoma, Sacramento, Lake and El Dorado counties

5. Monterey County

Out of state destinations: Arizona, Nevada, and Idaho

In state destinations: San Luis Obispo, Fresno, Santa Cruz, Sacramento and San Diego counties

6. Alameda County

Out of state destinations: Arizona, Nevada, Idaho, and Hawaii.

In state destinations: Contra Costa, San Joaquin, Sacramento, Placer, and El Dorado counties

7. Marin County

Out of state destinations: Nevada, Arizona, Oregon and Idaho.

In state destinations: Sonoma, Contra Costa, Solano and San Francisco counties

8. Orange County

Out of state destinations: Arizona, Nevada and Idaho

In state destinations: Riverside, Los Angeles, San Bernardino, San Diego and San Luis Obispo

9. Santa Barbara County

Out of state destinations: Arizona, Nevada and Idaho.

In state destinations: San Luis Obispo, Ventura, Los Angeles, Riverside and Kern counties

10. San Diego County

Out of state destinations: Arizona and Nevada

In state destinations: Riverside, San Bernardino, Imperial, Orange County and Los Angeles

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Via Swiss Propaganda Research,

Largely unbeknownst to the general public, executives and top journalists of almost all major US news outlets have long been members of the influential Council on Foreign Relations (CFR). 

Established in 1921 as a private, bipartisan organization to “awaken America to its worldwide responsibilities”, the CFR and its close to 5000 elite members have for decades shaped U.S. foreign policy and public discourse about it. As a well-known Council member once explained, the goal has indeed been to establish a global Empire, albeit a “benevolent” one.

Based on official membership rosters, the following illustration for the first time depicts the extensive media network of the CFR and its two main international affiliate organizations: the Bilderberg Group(covering mainly the U.S. and Europe) and the Trilateral Commission (covering North America, Europe and East Asia), both established by Council leaders to foster elite cooperation at the international level.

In a column entitled “Ruling Class Journalists”, former Washington Post senior editor and ombudsman Richard Harwood once described the Council and its members approvingly as “the nearest thing we have to a ruling establishment in the United States”.

Harwood continued:

“The membership of these journalists in the Council, however they may think of themselves, is an acknowledgment of their active and important role in public affairs and of their ascension into the American ruling class. They do not merely analyze and interpret foreign policy for the United States; they help make it. 

They are part of that establishment whether they like it or not, sharing most of its values and world views.”

However, media personalities constitute only about five percent of the overall CFR network. As the following illustration shows, key members of the private Council on Foreign Relations have included:

• several U.S. Presidents and Vice Presidents of both parties;

• almost all Secretaries of State, Defense, and the Treasury;

• many high-ranking commanders of the U.S. military and NATO;

• almost all National Security Advisors, CIA Directors, Ambassadors to the U.N., Chairs of the Federal Reserve, Presidents of the World Bank, and Directors of the National Economic Council;

• some of the most influential Members of Congress (notably in foreign & security policy matters);

• many top jounalists, media executives, and entertainment industry directors;

• many prominent academics, especially in key fields such as Economics, International Relations, Political Science, History, and Journalism;

• many top executives of Wall Street, policy think tanks, universities, and NGOs;

• as well as the key members of both the 9/11 Commission and the Warren Commission (JFK)

Eminent economist and Kennedy supporter, John K. Galbraith, confirmed the Council’s influence: “Those of us who had worked for the Kennedy election were tolerated in the government for that reason and had a say, but foreign policy was still with the Council on Foreign Relations people.”

And no less than John J. McCloy, the longtime chairman of the Council and advisor to nine U.S. presidents, told the New York Times about his time in Washington: “Whenever we needed a man we thumbed through the roll of the Council members and put through a call to New York.”

German news magazine Der Spiegel once described the CFR as the “most influential private institution of the United States and the Western world“ and a “politburo of capitalism”. Both the Roman-inspired logo of the Council (top right in the illustration above) as well as its slogan (ubique – omnipresent) appear to emphasize that ambition.

In his famous article about “The American Establishment”, political columnist Richard H. Rovere noted:

“The directors of the CFR make up a sort of Presidium for that part of the Establishment that guides our destiny as a nation.

[I]t rarely fails to get one of its members, or at least one of its allies, into the White House. In fact, it generally is able to see to it that both nominees are men acceptable to it.”

Until recently, this assessment had indeed been justified. Thus, in 1993 former CFR director George H.W. Bush was followed by CFR member Bill Clinton, who in turn was followed by CFR “family member” George W. Bush. In 2008, CFR member John McCain lost against CFR candidate of choice, Barack Obama, who received the names of his entire Cabinet already one month prior to his election by CFR Senior Fellow (and Citigroup banker) Michael Froman. Froman later negotiated the TTP and TTIP free trade agreements, before returning to the CFR as a Distinguished Fellow.

It was not until the 2016 election that the Council couldn’t, apparently, prevail. At any rate, not yet.

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New tariffs on imported automobiles and parts under consideration by President Trump could threaten more than 157,000 American jobs, according to a recent policy briefing published by the Trade Partnership WorldWide, an international trade and economic consulting firm.

President Donald Trump talks with auto industry leaders, including General Motors CEO Mary Barra (4th L) and United Auto Workers (UAW) President Dennis Williams (4th R) at the American Center for Mobility in Michigan in March 2017. (Source: Reuters) 

The six-page policy report said automobile tariffs introduced by President Trump would ultimately be detrimental to American workers. The organization analyzed the potential net impacts on American jobs and the economy from a 25 percent tariffs imposed on U.S. imports from all trading partners of automobiles, lightweight trucks, other vehicles, and parts.

“We find that the tariffs would have a very small positive impact on high-skilled workers in the motor vehicle and parts sectors, but very large negative impacts on workers – both high- and lower-skilled – in other sectors of the economy. Overall, U.S. economic output would decline,” the report warned.

The organization’s models indicate that Trump’s auto tariffs would boost employment in the auto sector by about 92,000, however, then eliminate 250,000 jobs across many industries throughout the broad economy. On top of that, American consumers will dish out about $6,400 more for an imported automobile that would cost around $30,000, which accounts for nearly a 21 percent increase in overall price. All in all, the report stated the economy would lose about .01 percent of its value if the auto tariffs were enacted. The study found:

• The tariffs would result in a net loss of 157,000 U.S. jobs. A net loss of 250,000 jobs in the rest of the economy would more than offset an increase in U.S. motor vehicle and parts sector employment of 92,000 jobs.

• About three jobs would be lost for every job gained in the motor vehicle and parts sector.

• GDP would decline by 0.1 percent as higher costs, net job losses, and declines in producer and consumer spending power work their ways through the economy

• Tariffs would add about $6,400 to the price of an imported $30,000 car.

The briefing notes that its trade analysts did not take into account any potential retaliation measures by American trade partners for the tariffs.

Table 1. U.S. Macroeconomic Effects of 25% Tariffs on Motor Vehicles and Parts

“Table 1 shows that the tariffs are estimated to cause a net decline in the output of the U.S. economy of 0.1 percent in the time frame considered here. The decline results from higher costs that ripple through the economy, making U.S. exports less competitive, and new car purchases more expensive, for example.”

 (Source: Trade Partnership WorldWide)

“Tariffs would reduce GDP by $18 billion and overall U.S. exports by nearly 2 percent annually,” the report stated.

Tariffs will increase prices for both imported vehicles and the U.S.- made cars with foreign components.

 (Source: Trade Partnership WorldWide)

Table 2. Net Number of U.S. Jobs Impacted by 25% Tariffs on Motor Vehicles and Parts (Number). 

“Table 2 summarizes the estimated net job impacts. Overall, 157,291 net jobs would be lost, including 45,450 jobs in nonmotor vehicle manufacturing sectors. Most job losses would come from services sectors that feel the impacts of the tariffs as the U.S. economy slows. Many of those services jobs are tied to production in manufacturing sectors that are negatively impacted by higher costs for motor vehicles and parts – trade and distribution, construction, and high-skilled business and professional services. Within the motor vehicle and parts increase, just 17,676 of them – or 19 percent – are the higher-skilled jobs the Administration cited in launching the review.”

The report concludes that President Trump’s automobile tariffs would be an overall “net negative” for American jobs and the economy.

“Motor vehicle and parts tariffs of 25 percent would have serious net negative impacts on the U.S. economy overall. They would adversely impact many workers in manufacturing sectors, and hundreds of thousands of workers in services sectors that depend on the health of manufacturing. The tariffs would boost automobile prices, both domestic and imported. If supporting jobs and strengthening the economy are the motivations for invoking national security reasons for imposing protection, such tariffs would have the opposite impact from that intended.”

President Trump’s threat of stoking a trade war between its trading partners is unsettling. The administration has threatened 25 percent tariffs on Chinese products, steel and aluminum tariffs on Europe, and has attempted to renegotiate the North American Free Trade Agreement (NAFTA) with Canada and Mexico.

Trade organization and politicians who back free trade have been radically opposed to the administration’s trade tariff proposals.

“Extending the reach of these tariffs and quotas to additional countries is certain to provoke widespread retaliation from abroad and would put at risk the economic momentum achieved through the administration’s tax and regulatory reforms. We urge the administration to take this risk seriously,” U.S. Chamber of Commerce Executive Vice President Myron Brilliant said Wednesday.

The cautionary tale of the Smoot–Hawley Tariff Act of 1930 exacerbated the Great Depression as retaliatory tariffs by America’s trading partners reduced global growth. In a Central Bank induced economic expansion that is now entering the second longest cycle — and nearing the latter innings of the credit cycle. President Trump’s proposed trade war with trading partners might not be the best solution this late in the game if history means anything.

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Authored by Jack Matlock via The Nation,

We must end this Russophobic insanity…

“Whom the gods would destroy, they first make mad.”

That saying – often misattributed to Euripides – comes to mind most mornings when I pick up The New York Times and read the latest “Russiagate” headlines, which are frequently featured across two or three columns on the front page above the fold. This is an almost daily reminder of the hysteria that dominates our Congress and much of our media.

A glaring example, just one of many from recent months, arrived at my door on February 17. My outrage spiked when I opened to the Times’ lead editorial: “Stop Letting the Russians Get Away With It, Mr. Trump.” I had to ask myself:

“Did the Times’ editors perform even the rudiments of due diligence before they climbed on their high horse in this long editorial, which excoriated ‘Russia’ (not individual Russians) for ‘interference’ in the election and demanded increased sanctions against Russia ‘to protect American democracy’?”

It had never occurred to me that our admittedly dysfunctional political system is so weak, undeveloped, or diseased that inept internet trolls could damage it. If that is the case, we better look at a lot of other countries as well, not just Russia!

The New York Times, of course, is not the only offender. Their editorial attitude has been duplicated or exaggerated by most other media outlets in the United States, electronic and print. Unless there is a mass shooting in progress, it can be hard to find a discussion of anything else on CNN. Increasingly, both in Congress and in our media, it has been accepted as a fact that “Russia” interfered in the 2016 election.

So what are the facts?

1. It is a fact that some Russians paid people to act as online trolls and bought advertisements on Facebook during and after the 2016 presidential campaign. Most of these were taken from elsewhere, and they comprised a tiny fraction of all the advertisements purchased on Facebook during this period. This continued after the election and included organizing a demonstration against President-elect Trump.

2. It is a fact that e-mails in the memory of the Democratic National Committee’s computer were furnished to Wikileaks. The US intelligence agencies that issued the January 2017 report were confident that Russians hacked the e-mails and supplied them to Wikileaks, but offered no evidence to substantiate their claim. Even if one accepts that Russians were the perpetrators, however, the e-mails were genuine, as the US intelligence report certified. I have always thought that the truth was supposed to make us free, not degrade our democracy.

3. It is a fact that the Russian government established a sophisticated television service (RT) that purveyed entertainment, news, and—yes—propaganda to foreign audiences, including those in the United States. Its audience is several magnitudes smaller than that of Fox News. Basically, its task is to picture Russia in more favorable light than has been available in Western media. There has been no analysis of its effect, if any, on voting in the United States. The January 2017 US intelligence report states at the outset, “We did not make an assessment of the impact that Russian activities had on the outcome of the 2016 election.” Nevertheless, that report has been cited repeatedly by politicians and the media as having done so.

4. It is a fact that many senior Russian officials (though not all, by any means) expressed a preference for Trump’s candidacy. After all, Secretary of State Hillary Clinton had compared President Putin to Hitler and had urged more active US military intervention abroad, while Trump had said it would be better to cooperate with Russia than to treat it as an enemy. It should not require the judgment of professional analysts to understand why many Russians would find Trump’s statements more congenial than Clinton’s. On a personal level, most of my Russian friends and contacts were dubious of Trump, but all resented the Clinton’s Russophobic tone, as well as those made by Obama from 2014 onward. They considered Obama’s public comment that “Russia doesn’t make anything” a gratuitous insult (which it was), and were alarmed by Clinton’s expressed desire to provide additional military support to the “moderates” in Syria. But the average Russian, and certainly the typical Putin administration official, understood Trump’s comments as favoring improved relations, which they definitely favored.

5. There is no evidence that Russian leaders thought Trump would win or that they could have a direct influence on the outcome. This is an allegation that has not been substantiated. The January 2017 report from the intelligence community actually states that Russian leaders, like most others, thought Clinton would be elected.

6. There is no evidence that Russian activities had any tangible impact on the outcome of the election. Nobody seems to have done even a superficial study of the effect Russian actions actually had on the vote. The intelligence-community report, however, states explicitly, “the types of systems we observed Russian actors targeting or compromising are not involved in vote tallying.” Also both former FBI director James Comey and NSA director Mike Rogers have testified that there is no proof Russian activities had an effect on the vote count.

7. There is also no evidence that there was direct coordination between the Trump campaign (hardly a well-organized effort) and Russian officials. The indictments brought by the special prosecutor so far are either for lying to the FBI or for offenses unrelated to the campaign such as money laundering or not registering as a foreign agent.

So, what is the most important fact regarding the 2016 US presidential election?

The most important fact, obscured in Russiagate hysteria, is that Americans elected Trump under the terms set forth in the Constitution. Americans created the Electoral College, which allows a candidate with the minority of popular votes to become president. Americans were those who gerrymandered electoral districts to rig them in favor of a given political party. The Supreme Court issued the infamous Citizens United decision that allows corporate financing of candidates for political office. (Hey, money talks and exercises freedom of speech; corporations are people!) Americans created a Senate that is anything but democratic since it gives disproportionate representation to states with relatively small populations. It was American senators who established non-democratic procedures that allow minorities, even sometimes single senators, to block legislation or confirmation of appointments.

Now, that does not mean that Trump’s presidency is good for the country just because Americans elected him. In my opinion, the 2016 presidential and congressional elections pose an imminent danger to the republic. They have created potential disasters that will severely try the checks and balances built into our Constitution. This is especially true since both houses of Congress are controlled by the Republican Party, which itself represents fewer voters than the opposition party.

I did not personally vote for Trump, but I consider the charges that Russian actions interfered in the election, or – for that matter – damaged the quality of our democracy ludicrous, pathetic, and shameful.

“Ludicrous” because there is no logical reason to think that anything that the Russians did affected how people voted. In the past, when Soviet leaders tried to influence American elections, it backfired—as foreign interference usually does everywhere. In 1984, Yuri Andropov, the then Soviet leader made preventing Ronald Reagan’s reelection the second-most-important task of the KGB. (The first was to detect US plans for a nuclear strike on the Soviet Union.) Everything the Soviets did—in painting Reagan out to be a warmonger while Andropov refused to negotiate on nuclear weapons—helped Reagan win 49 out of 50 states.

“Pathetic” because it is clear that the Democratic Party lost the election. Yes, it won the popular vote, but presidents are not elected by popular vote. To blame someone else for one’s own mistakes is a pathetic case of self-deception.

“Shameful” because it is an evasion of responsibility. It prevents the Democrats, and those Republicans who want responsible, fact-based government in Washington, from concentrating on practical ways to reduce the threat the Trump presidency poses to our political values and even to our future existence. After all, Trump would not be president if the Republican Party had not nominated him. He also is most unlikely to have won the Electoral College if the Democrats had nominated someone—almost anyone—other than the candidate they chose, or if that candidate had run a more competent campaign. I don’t argue that any of this was fair, or rational, but then who is so naive as to assume that American politics are either fair or rational?

Instead of facing the facts and coping with the current reality, the Russiagate promoters in both the government and the media, are diverting our attention from the real threats.

I should add “dangerous” to those three adjectives. “Dangerous” because making an enemy of Russia, the other nuclear superpower—yes, there are still two—comes as close to political insanity as anything I can think of. Denying global warming may rank up there too in the long run, but only nuclear weapons pose, by their very existence in the quantities that are on station in Russia and the United States, an immediate threat to mankind—not just to the United States and Russia and not just to “civilization.” The sad, frequently forgotten fact is that since the creation of nuclear weapons, mankind has the capacity to destroy itself and join other extinct species.

In their first meeting, President Ronald Reagan and then General Secretary Mikhail Gorbachev agreed that “a nuclear war cannot be won and must never be fought.” Both believed that simple and obvious truth and their conviction enabled them to set both countries on a course that ended the Cold War. We should think hard to determine how and why that simple and obvious truth has been ignored of late by the governments of both countries.

We must desist from our current Russophobic insanity and encourage Presidents Trump and Putin to restore cooperation in issues of nuclear safety, non-proliferation, control of nuclear materials, and nuclear-arms reduction. This is in the vital interest of both the United States and Russia. That is the central issue on which sane governments, and sane publics, would focus their attention.

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The world’s push towards de-dollarization continues to accelerate as Americans go about their daily lives worrying more about blasphemous comedians, participation trophies, and Kim and Kanye’s traitorous behavior.

From yuan-denominated oil futures (and soon to be yuan-denominated metals contracts) to Europe’s decision to use Yuan to pay for Iranian oil; and from non-dollar settlement systems for Russia/Chinese trade to Turkey’s call for citizens to dump the dollar, it appears each action of the Trump administration deepens the distrust in the dollar hegemony, coalescing the world against Washington’s reserve currency unipolar order.

All of which leads to this…

In a well-placed interview in China’s Xinhua news – the official press agency of the People’s Republic of China – officials from Africa are seen calling for more yuanification of the massive continent’s economies.

There has been a general consensus among some eastern and southern African countries that there should be more usage of the Chinese yuan in the region because of China’s growing influence in business and trade, a financial expert said Thursday.

Executive director of the Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI) Caleb Fundanga said a forum for financial experts earlier in the week had agreed that there was need to use the Chinese yuan as a reserve currency because China was playing an active role in their economies.

The forum was attended by deputy central bank governors and deputy permanent secretaries of finance from 14 countries that fall under MEFMI.

“The general conclusion is that we should use the yuan more because its time has come. We are doing more business (with China) so it’s natural that we use the currency of the country with which we are trading.

“Just the way we have been using the (U.S.) dollar and the Euro, we want to use the Chinese currency more in our transactions because it is to our benefit,” he said.

He said use of the yuan could protect the region from currency volatilities.

The forum had also discussed the implications of using the Chinese currency and agreed that there was need for more information on markets and products on which it could be invested.

“At the moment that information is not freely available,” he said, suggesting further that Chinese financial experts should make the information available at such fora.

Fundanga said the coming in of the yuan would give the region more options for managing its reserves.

The use of the yuan also came in handy because China was giving loans to the region and other African countries.

“One of the issues we discussed though was that sometimes if you have borrowed from China they want to bill you in U.S. dollars. Now we are saying our government must start discussing with Chinese enterprises (and) government so that we’re billed in yuan and then we can pay in yuan. Because there is no point if we start keeping our reserves in yuan but we’re billed in dollars. It is no good,” he said.

He acknowledged, however, that some countries were already being billed in yuan for Chinese goods and services.

Fundanga said there was also discussion on possible currency swaps like what China had done with Nigeria, where Nigerians travelling to China could easily access the yuan from their local banks.

MEFMI argues that the bulk of reserves for most countries in the region are invested in U.S. dollars, yet their composition has not kept pace with the large shifts in the world economy. This is particularly so since China and India continue to shape global economic trends as they remain major trade partners for the region.

MEFMI countries comprise Angola, Botswana, Burundi, Kenya, Lesotho, Malawi, Mozambique, Namibia, Rwanda, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.

*  *  *

Bear in mind that we began to warn of China’s growing ‘colonization’ of Africa back in 2010, noted China’s increasing militarization of Africa in 2015, and recent warnings from US Generals that China and US are “on a collision course in Africa,” it appears President Trump’s “old friend” Xi is quietly making massive moves against the prevailing status quo.

Is the tide turning on the USDollar’s reserve status? Remember, nothing lasts forever…

Even The World Bank’s former chief economist wants to replace the US dollar with a single global super-currency, saying it will create a more stable global financial system.

“The dominance of the greenback is the root cause of global financial and economic crises,” Justin Yifu Lin told Bruegel, a Brussels-based policy-research think tank. “The solution to this is to replace the national currency with a global currency.”

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Authored by Jason Ditz via The American Conservative,

Their latest recruitment scheme would allow the military to collect metadata from players to spot talent…

In late May, the U.S. Air Force announced its intention to release an advanced video game simulation. The theory is that the game, if successful, will be an effective recruitment tool among high school students.

If this sounds familiar, it’s because the U.S. Army already did the exact same thing with a game called “America’s Army,” launched in 2002. That one was for a while relatively popular, but as a recruitment tool there’s little doubt it failed. Indeed, it was panned early and often for claiming to offer a realistic soldiering experience while glamorizing it as an exciting and largely consequence-free adventure. The game, of course, never showed the tedium or the dark side of military service in conflict—but what proper recruitment propaganda ever does?

Not content to merely copy a failed program, the so-far untitled Air Force game seeks to combine the allure of video games with the Orwellian realities of modern “big data” applications that the government is so fond of.

In this case, officials have suggested they are literally going to monitor players to spot particularly talented ones they can recruit.

Call it recruitment recon.

As an example, imagine that the Air Force identifies a player who is particularly good at controlling the game’s simulated planes, so they offer him/her a $100,000 signing bonus to sign up for the real thing. But isn’t it possible that video game talent might not translate into real-life skills in combat? Incredibly, that seems to have been lost on the USAF.

Which is why this could be an even bigger disaster than the “America’s Army” folly – and much more expensive, too. While the Army’s gambit cost millions to design, it at least had a limited return on investment. The Air Force is prepared to throw major bonuses at good video game players on the notion that, like the 1984 movie The Last Starfighter, that’s where you’re going to find real talent.

The reason this makes sense to the Air Force (but nobody else) is because, with the advent of drone operations (i.e. remote control targeting), a number of people actually are employed in joystick-based warfare. It’s not clear whether the game will feature a drone operator mode (based in some outpost in the Nevada desert), as it seems to be focused on advanced warplanes in the heat of battle, not blowing up Pakistani wedding parties from thousands of miles away. This should come as no surprise because the life of an actual drone operator is reportedly pretty miserable, and the point of the Air Force’s game is to get kids to play so you can collect all sorts of data from them.

So far, Air Force officials aren’t providing a lot of specifics, just ambitions. They’ve also avoided estimating what the program will cost. Creating a game advanced enough to reliably attract an audience gets more expensive every year. At this point just developing a game can be counted on to cost a minimum of $100 million, to say nothing of all of the server and metadata processing costs, and the costs associated with marketing the game.

This is precisely why high-end video games don’t attempt to survive as advertising platforms. The cost of developing games has grown precipitously over the years, and players are focused on playing. They don’t want to be sold anything—not by companies, not by Uncle Sam.

This is why using a war simulation video game as a marketing tool is a terrible idea. Even in the highly unlikely event that the U.S. Air Force actually does make a popular video game, that doesn’t mean its fan base is going to be inclined toward military service, let alone suited to it. This is what happens when you combine lofty recruitment goals with a bottomless pit of taxpayer money: the military is encouraged to make reckless attempts to engage the public. The Air Force now appears to be lining up one of the most reckless of blunders yet.

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In the race for autonomous driving and “autonomous driving as a service,” Google’s Waymo is lapping its competitors including Uber and Tesla.

According to media reports,  Waymo is going to be launching 62,000 Chrysler Pacifica minivans, which it will be adding to its fleet in anticipation of launching its self driving transportation service as soon as this year. These minivans will be equipped with the company’s autonomous driving software, which puts Waymo ahead of companies like Uber and Tesla, both of which are also working on pushing into the new, burgeoning self-driving industry.

The push to launch these vans comes as a result of a partnership with Chrysler and as the company looks to create an autonomous ride sharing program that can be hailed with an app. The Daily Mail reports:

Google-owned Waymo is adding as many as 62,000 Fiat Chrysler minivans to its autonomous fleet in an expanded collaboration announced by the companies on Thursday. Delivery of the Chrysler Pacifica minivans was expected to begin later this year, with the automaker also exploring the potential to build Waymo technology into a self-driving car it might add to its model line-up for consumers.

‘FCA is committed to bringing self-driving technology to our customers in a manner that is safe, efficient and realistic,’ chief executive officer Sergio Marchionne said. ‘Strategic partnerships, such as the one we have with Waymo, will help to drive innovative technology to the forefront.’

The article then notes that Waymo will likely be the first company, before Uber and Tesla, to launch the first truly self-driving vehicle later this year, and that Uber and Waymo could eventually wind up working together to get Waymo’s software into Uber vehicles:

Waymo plans to launch the ‘world’s first self-driving transportation service’ this year, with people able to summon rides from driverless vehicles using a smartphone application. The announcement came a day after Uber chief executive Dara Khosrowshahi reportedly said at a Code technology conference that the company is speaking with Waymo about putting its cars to work at the smartphone-summoned ride service.

Uber early this year negotiated a settlement with Waymo over trade secrets purportedly purloined from the self-driving unit of Google-parent Alphabet. Uber suspended its own autonomous car testing in April after an accident that killed a woman pushing a bicycle in a street in Arizona.

Waymo CEO John Krafcik has publicly contended that the fatal accident involving a self-driving Uber car would not have occurred with his company’s technology.

In addition to Waymo working on its partnership with Chrysler, the company is also collaborating with Jaguar Land Rover, which is said to be toying with the idea of launching a higher-end, self-driving electric car service (just in case not everyone wants to be seen being ushered around in a Chrysler Pacifica): 

Fiat and Waymo first announced a self-driving car partnership two years ago, and said that engineers from their companies have been working together since then. Fiat has delivered 600 Pacifica Hybrid minivans to Waymo so far, the companies said. Earlier this year the companies said ‘thousands’ more would be added.

Waymo and Jaguar Land Rover in March announced they have joined forces on a posh, self-driving electric car tailored for a ride-hailing service run by the Google-owned firm.

…

Waymo and Jaguar said they aim to develop a ‘premium self-driving electric vehicle’ based on a new I-PACE model.

The news about Waymo’s surprising progress comes in the wake of recent disturbing headlines from Tesla and Uber regarding their cars‘ self driving capabilities. Tesla has been dealing with the media fallout from several deadly accidents linked to the the “autopilot”, while Uber has reportedly suspended its self-driving tests after a woman was killed in Arizona some months back after being stuck by an autonomous vehicle.

Waymo has so far been luciky to sidestep any bad press and has been silently executing on this partnership and pushing its software forward. 

Meanwhile, the great race to be the first to roll out a truly self-driving vehicles is only accelerating, and just yesterday SoftBank announced that it would make a $2.25 billion investment into General Motors’ autonomous driving technology.  On Thursday morning, tech-investing giant SoftBank Vision Fund announced it would invest $2.25 billion in General Motors Co.’s driverless-car unit valuing it at $11.5 billion, creating a new player in the ongoing fierce battle between tech companies and startups to become the first to commercialize autonomous vehicles.

The deal will provide not only a major financial backer – a la what Uber tried to do with Warren Buffett and failed – but will also “afford GM increased flexibility with respect to capital allocation” as it plows more money into developing a network of autonomous ride-share vehicles, targeted for sometime next year, GM said.

Opening the Cruise subsidiary to SoftBank’s giant fund allows it to access capital that investors have been reluctant to grant the 110-year-old auto maker. GM will retain an 80.4% stake in GM Cruise and invest $1.1 billion in the business.

During a press conference Thursday morning, GM Chief Executive Mary Barra called it a “landmark” investment that  gives GM Cruise the capital it needs to get its driverless-car business to market.

With the Softbank investment and the news that Waymo is working with Chrysler and could be working with both Uber and Jaguar, there is no doubt that the race for full autonomous has now officially been put into high gear. 

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Authored by EconomicPrism.com’s MN Gordon, annotated by Acting-Man.com’s Pater Tenebrarum,

Friends and Enemies

Do citizens of the United States trust their government will do what’s right?  It depends who you ask. By and large, the esteem the American populace holds its government in is likely a small fraction of what it was roughly 65 years ago.  That was when Lieutenant General William Kelly Harrison Jr. signed the Korean Armistice Agreement.  Certainly, in days gone by representatives of other nations held the U.S. government in higher regard.

The most austere signing ceremony ever: Lieut. Gen. William K. Harrison, Jr. (seated left), and Korean People’s Army and Chinese People’s Volunteers delegate Gen. Nam Il (seated right) sign the Korean War armistice agreement at P’anmunjŏm, Korea, July 27, 1953. No-one seems really happy – presumably, no-one was. [PT]

Several weeks ago, President Donald Trump decided to pull the U.S. out of the Iran nuclear deal and reimpose sanctions on Iran. This action, and its implications for various European companies with business interests in Iran, stuck like a chicken bone in the craw of European Council President Donald Tusk.  “With friends like that who needs enemies,” tweeted Tusk.

Indeed, President Trump is an erratic fellow.  He’s a master table-pounder.  He goes about his business with passion and the appearance of purpose.  His emotions run hot.  Yet, he has ice in his veins.

Moreover, his strategy for making America great again is unclear.  One day he starts a trade war.  The next day he lends a helping hand to Chinese telecom company ZTE. If you recall, ZTE’s the company that was busted for illegally exporting U.S. technology to Iran and North Korea in violation of trade sanctions.  Are Trump’s actions all part of his art of the deal?  Or are they the ambiguities of a lunatic?

Tusk meets the “Trump threat” to search for a lost contact lens in Brussels. [PT]

Whatever they may be, Trump better have his act together.  In less than a fortnight, he’ll begin negotiating what may be the most important deal of his life – sparking up a new bromance with North Korean leader Kim Jong-un. What follows is a scratch for clarity…

The Korean Bell of Friendship

Angel’s Gate Park sits high upon the bluffs at the southern tip of the Palos Verdes Peninsula, in the San Pedro district of Los Angeles. Winds gusts off the Pacific Ocean from three directions, explode up the face of the sea cliffs, and wildly swirl about the park’s crest.

Sweeping views of the mega Port of Los Angeles / Port of Long Beach shipping complex fill the eastern scenic scape.  To the west, sits the posh homes of Rancho Palos Verdes, and Trump National Golf Course.  Periodically, the 18th hole slides into the sea.

Catalina Island rises from the waters like a mountain berg to the south.  Peering over the bluff, past Point Fermin Lighthouse, the vertical expanse of the island appears to be just a short swim away.  Lastly, to the north are the seedy streets of San Pedro; the former stomping grounds of the late poet Charles Bukowski.

At the center of Angel’s Gate Park, just south of the youth hostel, sits the Korean Bell of Friendship.  The massive bronze bell is positioned over a stone pavilion.  The imposing pyramidal roof structure, supported by twelve columns, is etched with ornate Korean zodiac animals and vibrant color patterns.

Korean bell of friendship at Angel’s Gate Park.

Immediately, beneath the ground where the bell sits are the old abandoned World War I bunkers of Fort MacArthur, named after Lieutenant General Arthur MacArthur – father of World War II General Douglas MacArthur.  Several remnants of massive gun battery emplacements are located immediately adjacent.  This site falls within the area of The Great Los Angeles Air Raid of 1942, where Los Angeles fell under – real or imagined? – attack from a squadron of Japanese bombers.

Apparently, the Korean Bell of Friendship was given to the U.S. government to celebrate the bicentennial of the U.S. and to symbolize friendship between the two countries.  A big part of that friendship has been the protection the U.S. has afforded South Korea over the decades.  South Korea, in turn, has flourished, while North Korea has flagged.

Who’s That Ringing the Korean Bell of Friendship?

No doubt, ‘Rocket Man’ Kim Jong-un is a madman.  And a madman with nuclear missiles is trouble in the making.  But so is U.S. airmen overseeing ICBMs while on hallucinogenic drugs.  Either one could unleash a paranoid fury of barbarism on the world.

Over the Memorial Day weekend a delightful picture of Kim Jong-un and South Korean President Moon Jae-in cascaded across the World Wide Web.  Following a surprise summit at the truce village of Panmunjom, the two partook in what The Telegraph has called, “a triple hug.”

Kim and Moon meet at the 38th parallel.

Could it be that Kim Jong-un has come to his senses?  Or is he positioning for his own art of the deal?  His rapid change of heart seems rather improbable.

The once off, June 12 meeting in Singapore between President Trump and Kim Jong-un is currently back on.  Maybe this will be the spark of a new bromance.  Who knows?  Unlike Moon Jae-in, Trump’s not much of a hugger.  But he’s always good for a lengthy grip and grin.

Illegal border crossing in progress.

For better or for worse, the world is a vastly different place than it was when the Korean Armistice Agreement was signed on July 27, 1953.  The U.S. can no longer afford to hold the DMZ line.  Perhaps the time has come for America to close up shop and vacate its military operations on the Korean Peninsula.

Surely, China would like Washington out of its backyard.  Hence, via their pal Kim Jong-un, China rings the Korean Bell of Friendship.  What in the world will Trump do?

Extensive summit search… [PT]

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With Trump refusing to back down and slapping Section 232 tariffs on steel and aluminum imports from the EU, Canada and Mexico, which were enacted at midnight on June 1, the G-7 meeting taking place in Whistler, also known as Canada’s Davos, ended up being one big “bash America” routine, with French finance minister Bruno Le Maire saying that “it has been a tense and tough G-7. I would say it has been far more a G-6 plus one than a G-7” singling out the US  which on Friday he said was “alone against everyone and running the risk of economic destabilization.”

Seemingly unable to grasp that Trump would dare break with decades of politically correct tradition and turn his back on allies who continue to impose tariffs on US exports yet balk when the US retaliates in kind, Le Maire said on Saturday that Washington has just a few days to take urgent measures if it wants to avoid unleashing a full-scale trade war with its European allies.

“We still have a few days to avoid an escalation. We still have a few days to take the necessary steps to avoid a trade war between the EU and the US, and to avoid a trade war among G7 members,”  Le Maire told journalists after the conclusion of the G-7 meeting, according to Reuters.

He added that it is up to the US to make the first move:

“The ball is in the camp of the United States, it is up to the American administration to take the right decisions to smooth the situation and to alleviate the difficulties.”

On Friday, Le Maire echoed a statement made first by president Macron, saying “we won’t negotiate under pressure. We will never accept to negotiate under pressure,” adding that the EU should be granted an exemption to the metal tariffs.

Other top officials of the world’s leading economies joined the French minister in his call for urgent actions. In the “chair’s summary” of the meeting, Canadian Finance Minister Bill Morneau said “the international community is faced with significant economic and security issues, which are best addressed through a united front from G-7 countries” adding that “members continue to make progress on behalf of our citizens, but recognize that this collaboration and cooperation has been put at risk by trade actions against other members.”

Meanwhile, German Finance Minister Olaf Scholz said the U.S. levies on imported metals from the European Union, Mexico and Canada are probably illegal:  “The decision by the U.S. government to unilaterally implement tariffs is wrong, and – from my point of view – also illegal,’’ Scholz told reporters. “We have clear rules, which are determined at the international level, and this is a breach of those rules.”

Without naming the US, the summary statement of the ministerial meeting criticized the US, saying that “collaborative partnerships to promote free, fair, predictable and mutually beneficial trade” should be restored.

The ministers of the G7 countries also urged the US Treasury Secretary Steven Mnuchin convey their “unanimous concern and disappointment” over the recent US decisions to impose tariffs on metals imports from the EU as well as from Canada and Mexico.

“Ministers and Governors agreed that this discussion should continue at the Leaders’ Summit in Charlevoix, where decisive action is needed. The aim of this should be to restore collaborative partnerships to promote free, fair, predictable and mutually beneficial trade,” the group said in a summary statement written by Canada.

The ministers also “requested that the United States Secretary of the Treasury communicate their unanimous concern and disappointment,” according to the statement.

As Bloomberg adds, Morneau’s summary came after an acrimonious three days of talks – with Treasury Secretary Steven Mnuchin on the receiving end of much of the frustration – in which America’s allies raged against Trump’s decision to proceed with the steel and aluminum tariffs, after previously granting temporary exemptions. Japan had already been subject to the tariffs, which the U.S. said were necessary to protect its national security.

Japanese Finance Minister Taro Aso even said he almost ‘felt sorry’ for the U.S. finance chief.

“He’s not directly in charge of the metal tariffs, so in that sense it was very tough for him,” Aso told reporters after the second day of G-7 finance minister meetings in Whistler, British Columbia. “I felt sorry for him, but I guess it’s not the sort of issue I should sympathize with.”

Aso then added that Mnuchin deflected some of the criticism, urging his counterparts to talk to Trump.

“He was in a tough spot, tough, tough,” the Japanese minister said. “In all honesty, this issue, I can’t do anything about it, you have to say it directly to Trump otherwise nothing will change.”

* * *

However, if the G-7 minus one, or as the French now call it, G-6 hoped to make a favorable impression on Trump, they failed: shortly before the meeting ended, Trump tweeted that “the United States must, at long last, be treated fairly on trade.”

“If we charge a country ZERO to sell their goods, and they charge us 25, 50 or even 100 percent to sell ours, it is UNFAIR and can no longer be tolerated. That is not Free or Fair Trade, it is Stupid Trade!” the president said.

The United States must, at long last, be treated fairly on Trade. If we charge a country ZERO to sell their goods, and they charge us 25, 50 or even 100 percent to sell ours, it is UNFAIR and can no longer be tolerated. That is not Free or Fair Trade, it is Stupid Trade!

— Donald J. Trump (@realDonaldTrump) June 2, 2018

And while the frictions at the just concluded G-7 summit were to be expected, there was little drama with Mnuchin doing everything in his power to calm his G-6+1 peers, as the following BBG soundbites reveal:

• MNUCHIN: WE BELIEVE IN THE G-7; MANY AREAS THAT WE AGREE ON
• MNUCHIN: CLEARLY A CONSENSUS FROM OTHER G-7 MINISTERS
• MNUCHIN: WON’T COMMENT ON WHETHER THERE WILL BE EXEMPTIONS
• MNUCHIN: NOT GOING TO SPECULATE ON WHAT WILL HAPPEN AT G-7
• MNUCHIN: U.S. NOT ABANDONING ROLE AS LEADER OF WORLD ECONOMY
• MNUCHIN: OUR OBJECTIVE IS TO ENSURE WE HAVE FAIR/BALANCED TRADE
• MNUCHIN: TRUMP HAS BEEN CLEAR IN WANTING TO ADDRESS TRADE ISSUE
• MNUCHIN: TRADE WAS ONE OF MAIN AREAS OF FOCUS AT G-7 MEETING
• MNUCHIN: SPOKE TO TRUMP TO REFLECT G-7 MEETING CONCERNS

Expect far more fireworks at next week’s G-7 leaders’ summit in Quebec, one which Trump will attend.

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Vladimir Dorofeyev, CEO of Russia’s Malakhit Marine Engineering Design Bureau, told TASS in 2015 that “the work on the fifth-generation of submarines is already underway.” Now an anonymous source deep within the Russian defense sector told TASSon Thursday that the Husky-class fifth-generation nuclear-powered submarine will be armed with Zircon hypersonic missiles with a deployment date of 2027.

“The Husky has been included in the state armament program for 2018-2027. There are plans to start the experimental design work on the construction of submarines of this class from 2023 and deliver the lead vessel by the end of 2027,” the unnamed source said.

“Zircon hypersonic anti-ship missiles will become the main armament of the newest multipurpose submarine,” the source added.

Malakhit Marine Engineering Bureau, a shipbuilding company and segment of United Shipbuilding Corporation based in Saint Petersburg, Russia, announced in early 2014 that it started designing a fifth-generation nuclear-powered submarine. In 2016, Malakhit signed an R&D contract with Russia’s Defense Ministry for further designs of the sub, dubbed Project Husky. Last month (April), Head of Russia’s United Ship-Building Corporation Alexei Rakhmanov said the project would be finalized entirely regarding compliance requirements from the Russian Navy. TASS expects the Severnoye Machine-Building Enterprise (Severodvinsk) to be the builder of the new submarines starting in 2023.

TASS nor their anonymous defense source shared any information relating to design characteristics of the submarine.

“The future submarine’s performance characteristics have been classified. According to open sources, the Husky will feature a two-hull design traditional for the Russian Navy and displace 12,000 tonnes. The submarine will be furnished with the most advanced combat information and control system, a sonar and a system of integration into the unified information space of the Russian Armed Forces,” TASS said.

The defense source told TASS that the Zircon hypersonic missile system would be one of the main armaments on the sub. Currently, the West does not have any missile defense systems to thwart a Russian hypersonic attack. That is why President Trump and the Pentagon are scrambling with record amounts of military spending in modernization efforts to prepare for the modern battlefield, in which, a world where Russia and China have superior weapons. Even Air Force Gen. John Hyten, commander of U.S. Strategic Command recently said the U.S. is powerless against hypersonic missile attacks from Russia.

Russia’s future development of a fifth-generation nuclear-powered submarine coupled with hypersonic missiles could be more evidence that Russia is attempting to counter America’s naval superiority. While the Zircon hypersonic missile has already entered service, it seems like Russia is gaining an edge when it comes to hypersonic technologies versus the West.

The shiny new military weapons for the next war are being designed and manufactured today, which includes fifth-generation vehicles and hypersonic weapons. War remains on the horizon.

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