San Francisco’s Economically Ignorant COVID-19 Response

Have you ever wondered why it seems like some places have a high concentration of elected officials with little to no economic knowledge whatsoever? I have. While I don’t have a solution for this deficiency, I’d like to highlight one city in particular where this seems to be the case: San Francisco.

The COVID-19 pandemic now underway in the United States is, of course, wreaking havoc throughout our economy. Fortunately, entrepreneurs and corporate managers have been trying to figure out how to transform their operations in order to keep their businesses afloat. Thank goodness for the profit motive!

One industry has moved impressively fast: food service. It didn’t take long for restaurants to shift their energy and resources toward selling food for pickup or delivery. Throughout the country, consumers are now as never before ordering food from their favorite joints—fancy and greasy spoons alike—to enjoy in the comfort of their homes.

This has caused a surge in demand for drivers to deliver the food. Pre-coronavirus, many restaurants didn’t deliver at all, so they had to create home-delivery capacities from scratch. Others have had to step up capacity by adding more drivers. And many restaurants now increasingly rely on delivery services like UberEats and Grubhub. Following this sharp increase in demand for driving services, delivery fees have risen. This increase in fees is exactly what economics predicts will happen and recommends should happen. The higher fees reflect the increased demand for delivery services while simultaneously giving stronger incentives to more people to become delivery drivers.

However, San Francisco legislators don’t get it. On April 10, the city of San Francisco issued an emergency order mandating that delivery companies that wish to continue to operate in the city cap the fees they charge restaurants at 15 percent of each order’s amount. Mayor London Breed explained, “These fees typically range from 10 percent to 30 percent and can represent a significant portion of a restaurant’s revenue, especially at a time when the vast majority of sales are for delivery. This commission fee can wipe out a restaurant’s entire margin.”

Yes, these fees will eat up some of the restaurants’ profits if restaurants decide not—or are unable—to shift at least some the higher costs on to their customers. But having too few or no delivery drivers won’t help their business either, and this government-imposed cap on fees will reduce the number of drivers. Unable to charge higher fees, delivery services cannot pay drivers higher wages. This results in fewer drivers and longer delivery times.

Capping these fees also reduces incentives for entrepreneurs to start new delivery services—new services that would ensure fees stay as low as possible over time.

Meanwhile, following San Francisco’s emergency order, companies like Grubhub and UberEats explained why the fee cap would force them to reduce the scope of their services. UberEats noted that the limit on fees makes it difficult to cover operating costs, so they would need to stop delivering food to Treasure Island, a lower-income neighborhood further away from the city center. This predictable response triggered an equally predictable but economically ignorant outrage from politicians.

San Francisco Supervisor Matt Haney tweeted, “This is DESPICABLE, outrageous behavior from @UberEats.” According to him, “The caps on commissions are to protect small businesses and ensure they can survive during a GLOBAL PANDEMIC.” Haney’s disregard for the law of supply and demand underscores the fact that when governments make it impossible for companies to cover the costs of supplying some service, they’ll stop supplying that service.

San Francisco politicians constantly treat reality as if it’s optional. For instance, through strict zoning and other land-use regulations, they have artificially inflated the wealth of single-family homeowners by obstructing the building of multifamily homes. As a result, San Francisco is one of the least affordable cities for younger and lower-income people. Its politicians then double down with rent-control regulations to try to fix the negative impacts of their zoning rules. Yet these regulations only further reduce the supply, and further raise the price, of housing in the city. Yet to this day, elected officials there persist in their misguided policymaking, against the advice of every economist.

If politicians in San Francisco really want to help their citizens, they may want to brush up on basic economics. That would be a treat.

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San Francisco’s Economically Ignorant COVID-19 Response

Have you ever wondered why it seems like some places have a high concentration of elected officials with little to no economic knowledge whatsoever? I have. While I don’t have a solution for this deficiency, I’d like to highlight one city in particular where this seems to be the case: San Francisco.

The COVID-19 pandemic now underway in the United States is, of course, wreaking havoc throughout our economy. Fortunately, entrepreneurs and corporate managers have been trying to figure out how to transform their operations in order to keep their businesses afloat. Thank goodness for the profit motive!

One industry has moved impressively fast: food service. It didn’t take long for restaurants to shift their energy and resources toward selling food for pickup or delivery. Throughout the country, consumers are now as never before ordering food from their favorite joints—fancy and greasy spoons alike—to enjoy in the comfort of their homes.

This has caused a surge in demand for drivers to deliver the food. Pre-coronavirus, many restaurants didn’t deliver at all, so they had to create home-delivery capacities from scratch. Others have had to step up capacity by adding more drivers. And many restaurants now increasingly rely on delivery services like UberEats and Grubhub. Following this sharp increase in demand for driving services, delivery fees have risen. This increase in fees is exactly what economics predicts will happen and recommends should happen. The higher fees reflect the increased demand for delivery services while simultaneously giving stronger incentives to more people to become delivery drivers.

However, San Francisco legislators don’t get it. On April 10, the city of San Francisco issued an emergency order mandating that delivery companies that wish to continue to operate in the city cap the fees they charge restaurants at 15 percent of each order’s amount. Mayor London Breed explained, “These fees typically range from 10 percent to 30 percent and can represent a significant portion of a restaurant’s revenue, especially at a time when the vast majority of sales are for delivery. This commission fee can wipe out a restaurant’s entire margin.”

Yes, these fees will eat up some of the restaurants’ profits if restaurants decide not—or are unable—to shift at least some the higher costs on to their customers. But having too few or no delivery drivers won’t help their business either, and this government-imposed cap on fees will reduce the number of drivers. Unable to charge higher fees, delivery services cannot pay drivers higher wages. This results in fewer drivers and longer delivery times.

Capping these fees also reduces incentives for entrepreneurs to start new delivery services—new services that would ensure fees stay as low as possible over time.

Meanwhile, following San Francisco’s emergency order, companies like Grubhub and UberEats explained why the fee cap would force them to reduce the scope of their services. UberEats noted that the limit on fees makes it difficult to cover operating costs, so they would need to stop delivering food to Treasure Island, a lower-income neighborhood further away from the city center. This predictable response triggered an equally predictable but economically ignorant outrage from politicians.

San Francisco Supervisor Matt Haney tweeted, “This is DESPICABLE, outrageous behavior from @UberEats.” According to him, “The caps on commissions are to protect small businesses and ensure they can survive during a GLOBAL PANDEMIC.” Haney’s disregard for the law of supply and demand underscores the fact that when governments make it impossible for companies to cover the costs of supplying some service, they’ll stop supplying that service.

San Francisco politicians constantly treat reality as if it’s optional. For instance, through strict zoning and other land-use regulations, they have artificially inflated the wealth of single-family homeowners by obstructing the building of multifamily homes. As a result, San Francisco is one of the least affordable cities for younger and lower-income people. Its politicians then double down with rent-control regulations to try to fix the negative impacts of their zoning rules. Yet these regulations only further reduce the supply, and further raise the price, of housing in the city. Yet to this day, elected officials there persist in their misguided policymaking, against the advice of every economist.

If politicians in San Francisco really want to help their citizens, they may want to brush up on basic economics. That would be a treat.

COPYRIGHT 2020 CREATORS.COM

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Your Freedoms Don’t Have To Be Muzzled Just Because You’re Wearing A Mask

Your Freedoms Don’t Have To Be Muzzled Just Because You’re Wearing A Mask

Authored by John Whitehead via The Rutherford Institute,

If 2019 was the year of the street protest, of tear gas and rubber bullets, 2020 might be the year the street protest died, or perhaps fell into a deep sleep, and went online.”

– Journalist Christopher Miller

Despite all appearances to the contrary, martial law has not been declared in America.

We still have rights.

Technically, at least.

The government may act as if its police state powers suppress individual liberties during this COVID-19 pandemic, but for all intents and purposes, the Constitution – especially the battered, besieged Bill of Rights – still stands in theory, if not in practice.

Indeed, while federal and state governments have adopted specific restrictive measures in an effort to lockdown the nation and decelerate the spread of the COVID-19 virus, the current public health situation has not resulted in the suspension of fundamental constitutional rights such as freedom of speech and the right of assembly.

Mind you, that’s not to say that the government has not tried its best to weaponize this crisis as it has weaponized so many other crises in order to expand its powers and silence its critics.

All over the country, government officials are using COVID-19 restrictions to muzzle protesters.

It doesn’t matter what the protest is about (church assemblies, the right to work, the timing for re-opening the country, discontent over police brutality, etc.): this is activity the First Amendment protects vociferously with only one qualification—that it be peaceful.

Yet even peaceful protesters mindful of the need to adhere to social distancing guidelines because of this COVID-19 are being muzzled, arrested and fined.

For example, a Maryland family was reportedly threatened with up to a year in jail and a $5000 fine if they dared to publicly protest the injustice of their son’s execution by a SWAT team.

If anyone had a legitimate reason to get out in the streets and protest, it’s the Lemp family, whose 21-year-old son Duncan was gunned down in his bedroom during an early morning, no-knock SWAT team raid on his family’s home.

Imagine it.

It was 4:30 a.m. on March 12, 2020, in the midst of a COVID-19 pandemic that has most of the country under a partial lockdown and sheltering at home, when this masked SWAT team—deployed to execute a “high risk” search warrant for unauthorized firearms—stormed the suburban house where 21-year-old Duncan, a software engineer and Second Amendment advocate, lived with his parents and 19-year-old brother.

The entire household, including Lemp and his girlfriend, was reportedly asleep when the SWAT team directed flash bang grenades and gunfire through Lemp’s bedroom window.

Lemp was killed and his girlfriend injured.

No one in the house that morning, including Lemp, had a criminal record.

No one in the house that morning, including Lemp, was considered an “imminent threat” to law enforcement or the public, at least not according to the search warrant.

Now what was so urgent that militarized police felt compelled to employ battlefield tactics in the pre-dawn hours of a day when most people are asleep in bed, not to mention stuck at home as part of a nationwide lockdown?

According to police, they were tipped off that Lemp was in possession of “firearms.”

So instead of approaching the house by the front door at a reasonable hour in order to investigate this complaint—which is what the Fourth Amendment requires—police instead strapped on their guns, loaded up their flash bang grenades and acted like battle-crazed warriors.

This is the blowback from all that military weaponry flowing to domestic police departments.

This is what happens when you use SWAT teams to carry out routine search warrants.

This is what happens when you adopt red flag gun laws, which Maryland did in 2018, painting anyone who might be in possession of a gun—legal or otherwise—as a threat that must be neutralized.

These red flag gun laws allow the police to remove guns from people merely suspected of being threats.

While in theory it appears perfectly reasonable to want to “stop dangerous people before they act,” where the problem arises is when you put the power to determine who is a potential danger in the hands of government agencies, the courts and the police.

Remember, this is the same government that uses the words “anti-government,” “extremist” and “terrorist” interchangeably.

This is the same government whose agents are spinning a sticky spider-web of threat assessments, behavioral sensing warnings, flagged “words,” and “suspicious” activity reports using automated eyes and ears, social media, behavior sensing software, and citizen spies to identify potential threats.

This is the same government that keeps re-upping the National Defense Authorization Act (NDAA), which allows the military to arrest and detain American citizens with no access to friends, family or the courts if the government believes them to be a threat.

This is the same government that has a growing list—shared with fusion centers and law enforcement agencies—of ideologies, behaviors, affiliations and other characteristics that could flag someone as suspicious and result in their being labeled potential enemies of the state.

Let that sink in a moment.

If you believe in and exercise your rights under the Constitution (namely, your right to speak freely, worship freely, associate with like-minded individuals who share your political views, criticize the government, own a weapon, demand a warrant before being questioned or searched, or any other activity viewed as potentially anti-government, racist, bigoted, anarchic or sovereign), you are most likely at the top of the government’s terrorism watch list.

Moreover, as a New York Times editorial warns, you may be an anti-government extremist (a.k.a. domestic terrorist) in the eyes of the police if you are afraid that the government is plotting to confiscate your firearms, if you believe the economy is about to collapse and the government will soon declare martial law, or if you display an unusual number of political and/or ideological bumper stickers on your car.

Needless to say, if you happen to be passionate about the Constitution and a vocal critic of government corruption, you’ve already been flagged in a government database somewhere.

Likely, Lemp was, too.

Now Lemp is dead and his family is devastated, outraged and desperate to make sense of what appears to be an insensible act of violence resulting in an inexcusable loss of life.

As usual in these kinds of shootings, government officials have not been forthcoming with details about the shooting: police have refused to meet with family members, the contents of the warrant supporting the raid have not been revealed, and bodycam footage of the raid has not been disclosed.

So in order to voice their objections to police violence and demand answers about the shooting, Lemp’s family and friends planned to conduct an outdoor public demonstration—adhering to social distancing guidelines—only to be threatened with arrest, a year in jail and a $5000 fine for violating Maryland’s stay at home orders.

Yet here’s the thing: we don’t have to be muzzled and remain silent about government corruption, violence and misconduct just because we’re wearing masks and social distancing.

That’s not the point of this whole COVID-19 exercise, or is it?

While there is a moral responsibility to not endanger other lives with our actions, that does not mean relinquishing all of our freedoms.  

Be responsible in how you exercise your freedoms, but don’t allow yourselves to be muzzled or your individual freedoms to be undermined.

Understandably, no one wants to talk about individual freedoms when tens of thousands of people the world over are dying, and yet we must.

The decisions we make right now—about freedom, commerce, free will, how we care for the least of these in our communities, what it means to provide individuals and businesses with a safety net, how far we allow the government to go in “protecting” us against this virus, etc.—will haunt us for a long time to come.

At times like these, when emotions are heightened, fear dominates, common sense is in short supply, liberty takes a backseat to public safety, and democratic societies approach the tipping point towards mob rule, there is a tendency to cast those who exercise their individual freedoms (to freely speak, associate, assemble, protest, pursue a living, engage in commerce, etc.) as foolishly reckless, criminally selfish, or outright villains.

Sometimes that is true, but not always.

As I make clear in my book Battlefield America: The War on the American People, there is always a balancing test between individual freedoms and the communal good.

What we must figure out is how to strike a balance that allows us to protect those who need protecting without leaving us chained and in bondage to the police state.

We must find ways to mitigate against this contagion needlessly claiming any more lives and crippling any more communities, but let’s not lose our heads: blindly following the path of least resistance—acquiescing without question to whatever the government dictates—can only lead to more misery, suffering and the erection of a totalitarian regime in which there is no balance.


Tyler Durden

Thu, 04/30/2020 – 00:05

via ZeroHedge News https://ift.tt/2YiklGB Tyler Durden

Portland To Ban Cars On 100 Miles Of Roadway To Promote Safe Distancing

Portland To Ban Cars On 100 Miles Of Roadway To Promote Safe Distancing

The city of Portland, Oregon will ban cars from 100 miles of roadway in order to encourage social distancing for people walking, biking or running during the coronavirus pandemic.

Photo: Will Vanlue

They closures will primarily affect streets along designated neighborhoods which have lower car traffic in general, according to KGW8. Temporary barricades and signage will be installed to alert drivers of the closures.

The plan also includes expanding space for pedestrians along streets that are “narrow or missing sidewalks,” and provide more room with pop-up walking and biking lanes.

In business districts, PBOT said they’ll establish space so customers can line up with enough physical distance, and create dedicated loading zones for pickup and delivery.

The city of Portland has seen a dramatic spike in speeding since the pandemic began and a major decrease in traffic congestion. 

Further details about the plan can be found online. It’s unclear when the closures will begin. –KGW8

When we reach the point that we can re-open, we want to make sure our transportation system is ready,” announced Portland Bureau of Transportation Director Chris Warner.

Portland residents attend the annual ‘World Naked Bike Ride,” 2019

“Portlanders have made great use of their neighborhood streets to walk, bike, and roll during the pandemic. We’ve designed the Slow Streets|Safe Streets initiative to make sure they can continue to do this safely as we get back closer to normal.”


Tyler Durden

Wed, 04/29/2020 – 23:45

via ZeroHedge News https://ift.tt/3f7m9YT Tyler Durden

Being Afraid & Eliminating Exposure To Germs Leads To Death by Fear & Germs…

Being Afraid & Eliminating Exposure To Germs Leads To Death by Fear & Germs…

Authored by Gary Barnett via LewRockwell.com,

“Do you begin to see, then, what kind of world we are creating? It is the exact opposite of the stupid hedonistic Utopias that the old reformers imagined. A world of fear and treachery and torment, a world of trampling and being trampled upon, a world which will grow not less but more merciless as it refines itself. Progress in our world will be progress toward more pain.”

~ George Orwell (1961). “1984”

Death is inevitable, so never hide from life, and never allow a moment of life to be taken from you by tyrants. All government is tyrannical, and all government seeks power and control, and today it is using a purposely-created crisis in order to gain that control. We are being told by false rulers to abandon our lives, and hide away from those we care about in order to stop a virus. This is the highest form of deception, and is only meant to divide us so sinister agendas can be accomplished in the shadows.

It has been forgotten in this day and age of total fear that our bodies, not governments, are our defense against viral agents. Maybe a few will learn from this fakery that germs are our friends. Unless our bodies are exposed to germs and viruses, natural defenses against sickness disappear, leaving the body vulnerable to every sort of germ and virus. Listening to these political trimmers therefore is detrimental to our health.

Coronaviruses are not a threat to healthy humans with strong immune systems. Viruses cannot replicate in that environment, which means symptoms and sickness are rarely present. In addition, sunshine and high vitamin D levels are of great importance, as is diet, exercise, sleep, and relaxing calm. What this means is that government and its idiotic mandates are actually killing many people, and those deaths are due to the very governing body that is lying about how to protect your health. They are in fact causing much death, much more so than this so-called Covid-19.

Virtually everything mandated by government to combat this virus is extremely detrimental to life, and this may be by design. As more deaths are falsely attributed to this coronavirus, more power and control will be concentrated in the hands of the State. One major factor in helping a virus to replicate and cause harm is stress. The more stress evident, the weaker the immune system of its host. When the immune system has to go into action in order to alleviate mental and physical symptoms due to stress on the body, this leaves the body undefended, and viruses take immediate advantage of this opportunity. In other words, people will get sick simply because of undue stress, stress now intentionally caused by this incompetent government.

Unemployment causes stress, fear causes stress, financial problems cause stress, foreign agents in the form of vaccines causes stress, hunger causes stress, worry, isolation, and lack of physical activity causes stress, self-imprisonment causes stress, and any relationship or family problems due to these factors causes extreme stress.

In addition, wearing a mask causes immediate stress to the body due to restricting airflow, and anyone with a weak immune system or with any respiratory issues whatsoever, is very susceptible to harm in this circumstance. Also, the state and health idiots claim that one should not touch their face, but wearing a mask vastly increases that touching due to the many obvious reasons to do so. Since viruses do not have the ability to jump from one person to another, masks then are not only ineffective, but may actually cause more viral spread than if not worn at all.

Then there is the ventilator issue, which is very suspect. Ventilators are actually killing those that have a viral infection.

“Some hospitals have reported unusually high death rates for coronavirus patients on ventilators, and some doctors worry that the machines could be harming certain patients. Mechanical ventilators push oxygen into patients whose lungs are failing. Using the machines involves sedating a patient and sticking a tube in the throat. Deaths in such sick patients are common, no matter the reason they need the breathing help. Generally speaking, 40% to 50% of patients with severe respiratory distress die while on ventilators, experts say. But 80% or more of coronavirus patients placed on the machines in New York City have died, state and city officials say.

That is quite a statistic, given that the state and its so-called health “experts” in the administration, at the WHO, and at the CDC, have been pushing the use of ventilators since the beginning, and have used massive resources not only to greatly step up production and purchase of such machines, but have propagated far and wide on a daily basis the effectiveness of these machines in treating coronavirus patients. But with 80% of those patients dying while on ventilators, is another agenda being worked forward? Are hospitals gaining a financial advantage for putting patients on these ventilators? Is this a way to increase the death count, just as is coding any and every death as Covid, regardless whether the patient died due to other factors?

All of the federal and state mandates to supposedly combat this virus have caused more undue death and sickness. While the extreme stress caused by these government mandates has been devastating as far as virus susceptibility is concerned, many more sicknesses, disease, and deaths are occurring simply due to government action. Stress and isolation cause any number of adverse problems, and many of those cause higher death rates than normal. The psychological harm alone is alarming and has been felt nationwide, and due to this harm, suicides have increased as well. While suicide has been increasing every year, with the onslaught of government interventions due to coronavirus, many risk factors that cause suicide have been greatly enhanced, and this will most likely not only lead to many more suicides this year, but will also lead to higher suicide rates for years to come. How many more will kill themselves in the future due to measures initiated by government during this so-called crisis? There is no way to know for certain, but indications are that it will far exceed the deaths of this 2020 virus scam.

The bottom line is this; sickness and death due to the government response to this manufactured pandemic will be multiple times greater than the death toll due to this coronavirus. But it is much worse than that, because the deaths due to this response will continue to rise for years to come, as people struggle to stay afloat in a country whose economy has been destroyed. Early and unnecessary death, suicide, family abuse, violence, despair, starvation, and loneliness will continue to reek havoc on Americans, causing any number of continuing health problems and death.

Population control through higher mortality and sterilization is evident in the government’s agenda, and distancing, isolation, forced vaccination, and undue stress are sought in order to facilitate this plan. The only viable solution as I see it is to eliminate government at every level possible.

“The state lies in all the tongues of good and evil, and whatever it says is lies, and whatever it has, it has stolen, everything it is, is false, it bites with stolen teeth, and it bites often, it is false down to its bowels.”

Friedrich Wilhelm Nietzsche, Thus Spoke Zarathustra [1896]


Tyler Durden

Wed, 04/29/2020 – 23:25

via ZeroHedge News https://ift.tt/2W8PoC9 Tyler Durden

New Report Reveals DaVita Engaged In “Lobbying Scheme” To Target Legislation Threatening Billing Loophole

New Report Reveals DaVita Engaged In “Lobbying Scheme” To Target Legislation Threatening Billing Loophole

One more iron has been thrown into the fire in the ongoing skepticism of kidney dialysis company and Buffett portfolio name DaVita, which has already drawn criticism from well known short sellers like Jim Chanos and media outlets like the New York Times.

Critics have raised numerous questions about DaVita’s business practices, but none more important than the company’s relationship with the American Kidney Fund, who has been accused of helping DaVita intentionally steer dialysis patients from lower cost government insurance to high cost commercial payors – a move that has had a profoundly positive effect on DaVita’s bottom line.

This morning, research firm Hindenburg Research released a new investigative report highlighting that DaVita also appears to be the main funding entity behind a powerful lobbying group in California that has been set up to oppose state legislation targeting the AKF loophole. The report also exposes that many groups whose names are being used, allegedly in support of voting down the bill, had little to no knowledge that they were involved.

The report states:

“DaVita’s most lucrative scheme is finally becoming obvious to insurers, patients and legislators following multiple media exposés. As a result, legislation is starting to specifically target the company’s primary remaining profit center. We intend to highlight the legislative challenges currently facing DaVita at both the state and national level that we believe will persist until the loophole driving this scheme has been closed.

As DaVita works against one of its main legislative challenges of the moment, California Assembly Bill 290, we sought to understand the company’s lobbying effort. We found that DaVita is, in characteristic fashion, engaging in what looks to be underhanded lobbying tactics in order to defend its charity scheme.”

The report highlights that the state of California is estimated to account for 15-20% of the company’s dialysis business and that the assemblyman who introduced the California bill “called DaVita’s charity loophole a ‘self-serving scam’ and ‘a scheme to bankroll patients’ healthcare premiums'”.

A coalition that was formed to oppose the bill claims the support of many groups in California, but the report says, of these groups: “most readily admitted to not knowing anything about the bill and/or simply taking their cues from lobbyists or other organizations. Some didn’t even know they opposed it at all.”

For instance, the Commander of the State of California American GI Forum told Hindenburg:

“As far as I’m concerned, I haven’t been informed about anything that’s out there or stance that we take, etc., so I can’t really say why are we opposed to it.”

The report also reveals that about 90% of the funding for the lobbying group has come from large for-profit dialysis corporations such as DaVita and Fresenius. DaVita is said to have represented about 60% of the group’s funding over the last 2 years, having donated over $67 million to the group in that period.

Hindenburg writes that despite not having a position in the company’s stock, they “thought it would be important to shed light on the ridiculous abuse of the medical system that continues under a cloak of legitimate lobbying efforts.”

You can read the full report here:

 


Tyler Durden

Wed, 04/29/2020 – 23:05

via ZeroHedge News https://ift.tt/2SkOBwM Tyler Durden

No Tanks For Old Marines – Why America’s Most Powerful Fighting Force Is Restructuring

No Tanks For Old Marines – Why America’s Most Powerful Fighting Force Is Restructuring

Authored by Tim Kirby via The Strategic Culture Foundation,

By 2030 the U.S. Marine Corps will have gone through a major restructuring, most notably eliminating tanks from usage all together and reducing its total number of men. America’s military at home has gone from an expensive but mostly unseen protector during the Cold War to a post 9/11 icon of mandatory worship by the Mainstream Media. So it is very surprising just how little attention this massive restructure is getting outside the veteran blogosphere. The elite of the largest, most expensive and arguably most powerful military in the World is rethinking its strategy, but why and where is this all going?

There is NO conspiracy

One of the natural reactions to the U.S. government “downsizing” a branch of the military and cutting tanks will be the usual panic-based reaction that “the end is nigh” and that this “is a sign” of the end of America. This is highly unlikely to be the case. The Armed Forces have gotten from Trump everything that they want and the “checks are going through”. There is currently no lack of funding for the U.S. military so we shouldn’t pretend this is the first sign of it. Furthermore, the new 173,000 man force is only slightly smaller than its 2010 record of 200,000+ men. So is a reduction in manpower of roughly 13% a sign of an upcoming collapse? No. Does this save a massive amount of money for the military budget? No.

The same is true for tanks, they are not being cut for financial reasons. Even with a safe overestimate of the cost of one M1 Abrams tank being $10 million there is plenty of room in the $750+ billion dollar budget for them. Cost is not the issue.

Sorry accelerationists but this is not a sign of an upcoming collapse.

The Cold War is finally dead

The cliché that we are always planning to fight our “father’s war” is proven be true time and again over the course of history. The conservatively-minded well-trained generals of the Confederacy expected a purely Napoleonic campaign of musket and bayonet, and what they got was the dawn of industrialized war. The French were sure that WWI would involve volley fire and cavalry looking sharp in their bright red “pantaloons”. And, the U.S. entered Vietnam with the mindset and strategies of fighting the Axis powers, “if we just drop enough bombs, they’ll surrender for sure”.

This is all an aspect of simple human nature as we plan for what we know and understand, not something theoretical. However, this restructure of the Marines could be the exception to the rule.

During the Iraq War(s) it became apparent that the U.S. with forces designed to fight a Cold War were perfect for crushing Saddam Hussein’s traditional army within days. Now holding the very same country during an insurgency with those forces, that is another story.

Photo: The Abrams is a good soldier but terrible policeman.

The Abrams which performed brilliantly against Iraq’s tanks became a sitting duck in tight urban environments where it could be hit and crippled by local yokels with primitive RPGs. Urban environments provide opportunities to strike a tank from angles that reduce the effectiveness of its armor. Similar musings have been made about the U.S. Navy with its big brilliant ships that could be easily sunk by missiles or attacks from garbage quality boats crewed by those willing to take casualties.

Essentially, big armored targets are not is useful for war in the 21st century, when the offensive weapons that can take them out are extremely cheap by comparison, and new generations of cheap(er) anti-tank weapons continue to be developed.

So, dumping tanks is probably a logical step. To be honest we should all give the men who made these plans a round of applause for not repeating the same mistakes of history by continuing to fight ISIS with a force designed to break the Warsaw Pact. Except, there remains one issue…

Video: A great explanation of what the new Marine Corps is going to look like from “Matsimus”.

China, really?

The official logic for the restructuring claims that the real threat the Marine Corps is being designed to fight is actually China and by extension Russia, not the Taliban/Al Nusra/ISIS etc. Perhaps because hating China has become the hip cool thing to do under the Trump administration it is was easier to sell these reforms as a means to counter the dragon, but an infantry focused force with some new-fangled drones and tech is not going to be what brings down China. Infantry is what is needed to hold positions, but good luck trying to Guangzhou on foot like some Hollywood D-Day fantasy.

What they probably mean, when stating Beijing as the real target, is that they want to counter China in some proxy conflicts in fights with small numbers where tanks are weak to today’s long range weaponry. This logic makes much more sense.

The core of the decision to restructure seems to have come from wargames in 2018-2019. These exercises played out a proxy style conflict between the U.S. and other entities in the sands of the Middle-East. The Marine Times broke down the results of the wargames as follows…

“But tanks and armored vehicles have had trouble surviving against the threat of precision strike and the plethora of drone and reconnaissance systems flooding conflict zones across the Middle East.”

They also presented experience from Turkey’s moves in Syria that support the theory that tanks are going out of fashion quickly…

“Turkey posted videos highlighting a mixed role of drones, Paladin artillery systems and aircraft pounding Syrian armor from the skies over the course of several days. The Syrian army appeared helpless to defend from the onslaught of long range systems. Even tanks camouflaged by buildings and bushes were no match for sensors and thermal imaging watching from the skies.”

These exercises probably were the nail in the coffin for the Abrams and a big motivation to buy more drones. The Marine Times sums it up this way…

The Corps instead is looking for mobile systems and units that can survive within the reach of precision fires to “attrit adversary forces,” create dilemmas for the enemy and “consume adversary ISR resources,” according to the report.

In summation what does this restructure mean?

It is not part of some way to mask the fall of the “American Empire” as the military is still well funded and the reduction of troops is minor. Tanks’ costs will be replaced by drones and other tech.

The Marine Corps is actually trying structure itself to fight today’s war and today’s enemy.

Based on recent wargames, the Iraq/Afghanistan Conflicts and the Syrian Civil War tanks are becoming obsolete quickly and this move to dump them may be copied by other nations.

A 170,000+ mostly infantry force with drones will not scare China, but it will have better chances at success in occupational actions against insurgents/terrorists, or in proxy conflicts against China.

For the contingent that believes that non-military people cannot write about the military I’d like to remind you that the governments that send armies off to die generally don’t serve, yet they make all the big military decisions. I await your hate mail.


Tyler Durden

Wed, 04/29/2020 – 22:45

via ZeroHedge News https://ift.tt/2Sikgz2 Tyler Durden

“The Truce Is Over”: Trump Considering Ways To Punish China, Convinced Beijing “Will Do Anything” To Make Him Lose Re-election

“The Truce Is Over”: Trump Considering Ways To Punish China, Convinced Beijing “Will Do Anything” To Make Him Lose Re-election

And to think just three months ago things between the US and China, which had just signed ‘Phase 1’ of the long-awaited trade deal were going “so well.”

In an Oval Office interview with Reuters published Wednesday night, Trump said he thinks that China is determined to see him lose the November election based on Beijing’s response to the coronavirus, and that he is considering various ways to punish the Chinese government which he he again blamed for allowing the virus to spread across the world.

“China will do anything they can to have me lose this race,” Trump said in the interview and said he was looking at different options in terms of consequences for Beijing over the virus. “I can do a lot,” he said.

Trump has heaped blame on China for a global pandemic that has killed at least 60,000 people in the United States and thrown the U.S. economy into a deep recession, putting in jeopardy Trump’s hopes for another four-year term.

Worried that an attempt to reopen the economy would be hindered by a second infection wave in the fall, forcing the US to shutter again and sending the economy into an even deeper depression, Trump said he believed China should have been more active in letting the world know about the coronavirus much sooner.

Asked whether he was considering the use of tariffs or even debt write-offs for China, Trump would not offer specifics. “There are many things I can do,” he said. “We’re looking for what happened.”

“They’re constantly using public relations to try to make it like they’re innocent parties,” he said of Chinese officials.

One example is Global Times Editor in Chief who is engaged in a daily stream of propaganda on twitter, vilifying Trump and the US as the following example demonstrates:

“China will do anything they can to have me lose this race,” said Trump. He said he believes Beijing wants Joe Biden to win the race to ease the pressure Trump has placed on China over trade and other issues.

A senior Trump administration official told Reuters that an informal “truce” in the war of words that Trump and Xi essentially agreed to in a phone call in late March now appeared to be over.

Earlier Wednesday, Secretary of State Michael Pompeo said that China posed a threat to the world by hiding information about the origin of the coronavirus: “The Chinese Communist Party now has a responsibility to tell the world how this pandemic got out of China and all across the world, causing such global economic devastation,” Pompeo told Fox News on Wednesday morning, during an interview in which he repeatedly criticized China’s government. “America needs to hold them accountable.”

The comments came after China Central Television’s top evening news program on Wednesday questioned the transparency and accuracy of U.S. data on Covid-19 infections; they also followed a US government report which concluded that the Wuhan lab is the “most likely source” of the coronavirus outbreak.

 


Tyler Durden

Wed, 04/29/2020 – 22:30

via ZeroHedge News https://ift.tt/3bKQ5rP Tyler Durden

The White House’s Most Influential China Hawk Suspects COVID-19 Leaked From Wuhan Lab

The White House’s Most Influential China Hawk Suspects COVID-19 Leaked From Wuhan Lab

Casual readers of American political reporting probably wouldn’t recognize the name, but Washington reporters and other “insiders” almost certainly know not only his name, but his reputation for being perhaps the most influential White House figure that most Americans haven’t heard of.

His name is Matthew Pottinger, and in addition to serving as Deputy National Security Advisor in the Trump Administration, he has served as a top advisor on China policy and “the White Houses foremost China expert”, an expertise Pottinger honed while reporting for the Wall Street Journal from Beijing, where he learned the perfected his language skills.

And in a profile published in Wednesday’s paper, the Washington Post explored Pottinger’s rise to becoming one of the most influential foreign policy voices in the West Wing began in the late 1990s, when he moved to Beijing to cover a rising China as a foreign correspondent.

After 9/11 and the start of the wars in Iraq and Afghanistan, Pottinger decided to leave WSJ  at the age of 31 to enlist in the Marines.

He was modestly older than many of his fellow recruits, but in an op-ed published explaining his decision, Pottinger recounted how seeing up close how Beijing treats its citizens helped instill in him a newfound respect for the US, and an intense wariness of the CCP. In one incident, Pottinger said, he was punched in the face by a government goon who attacked him while he was reporting on some sketchy business dealings involving a Chinese company.

He also covered the SARS outbreak in 2003-2004.

But living in China also shows you what a nondemocratic country can do to its citizens. I’ve seen protesters tackled and beaten by plainclothes police in Tiananmen Square, and I’ve been videotaped by government agents while I was talking to a source. I’ve been arrested and forced to flush my notes down a toilet to keep the police from getting them, and I’ve been punched in the face in a Beijing Starbucks by a government goon who was trying to keep me from investigating a Chinese company’s sale of nuclear fuel to other countries.

To give credit where credit is due, WaPo was one of the first MSM organizations to seriously consider the possibility that the novel coronavirus could have leaked from a lab in Wuhan, a theory that Pottinger has been investigating since the outbreak began. Surprisingly, the paper reports that Pottinger was one of the first Trump Administration officials to push the president to call the virus the “Wuhan Virus” instead of the coronavirus, a move that was blasted as “racist” by both China and many American leftists. That recommendation, WaPo said, was based on intel obtained by Pottinger claiming Beijing was in the early stages of a misinformation campaign to try and deflect blame for the outbreak to the US.

Pottinger’s push to use the term “Wuhan virus” has reverberated. Trump, eager to deflect blame of his own handling of the virus, escalated the rhetoric by using “Chinese virus.” Secretary of State Mike Pompeo angered allies in March when he pressured Group of Seven nations to sign a collective statement employing “Wuhan virus,” a demand they refused. Liberals called the language racist.

To Pottinger, the critics missed the point: China’s state media had named the virus for Wuhan for weeks before suddenly pressuring the World Health Organization to formally name it covid-19. Beijing needed to own it.

And while Pete Navarro is still unquestionably the administration’s most visible China hawk, Pottinger is heavily involved in the Trump Administration’s plan to chart a new course for the US-China relationship that would take us closer to a “decoupling”. Globalists cringe at the thought of untangling the complicated web of interconnected economic interests tying the two countries together. But the virus has undermined the view that globalization is inevitable and de-globalization would be inherently catastrophic.

When asked who is responsible for the severity of the global coronavirus outbreak, Pottinger insists that China is to blame. Because by the time the US was receiving the first information about the virus from China in January, it was already likely too late – something that surveillance testing, as well as reports that the earliest COVID-19 death might have happened as early as Feb. 6, seem to suggest.

Pottinger believes Beijing’s handling of the virus has been “catastrophic” and “the whole world is the collateral damage of China’s internal governance problems,” said a person familiar with his thinking, who, like others, spoke on the condition of anonymity to discuss his views.

After first joining the Trump administration in 2017 as senior director of the National Security Council’s Asia division, Pottinger, 46, is now a pivotal player in the Trump administration’s attempts to reorient U.S. policy on China toward a more confrontational approach, according to multiple people familiar with his role.

WaPo noted in a lengthy piece explaining the ‘failings’ of the Trump Administration during the early days of the outbreak that Pottinger was the first to push for travel bans from China and Europe. Trump’s decision to drag his feet on the European bans might have directly contributed to the explosion of cases in New York. One study found similarities between the coronavirus strain spreading in New York, and a strain spreading in Northern Italy that researchers said could explain the excessive mortality in both areas.

Most importantly, Pottinger has pushed intelligence agencies to explore the theory that the virus may have been accidentally released from a Wuhan lab, a suspicion that was borne out in a recent government report.

Behind the scenes, Pottinger has pushed intelligence agencies to explore the theory, popular among conservatives, that the pathogen was accidentally released by a virology lab in Wuhan, rather than a wild animal market. So far, that theory has not been proved, but Pottinger believes there is more circumstantial evidence in favor of the lab explanation, said people with knowledge of his views.

He and like-minded State Department aides have warned outside China experts, who had criticized the administration’s use of “Wuhan virus,” that they should remain skeptical of Beijing’s motives. Their message amounted to a warning that more damaging information would come out about Beijing’s handling of the pandemic, according to four people on the calls.

Long before the outbreak, Pottinger reportedly kept a ‘scorecard’ in his office with a ‘highly detailed’ accounting of all the ways China is undermining the US.

As Asia director, Pottinger kept in his office a large whiteboard mapped out with a highly detailed accounting of China’s growing global influence. The diagram was labeled with military-style buzzwords such as “Lines of Effort” and “Strategic Goals,” according to people who saw it.

A former NSC colleague called it a scorecard of all the ways “the Chinese Communist Party was attacking the West — and how we could fight back.”

During a recent security forum, Pottinger was asked to explain why he supports ‘decoupling’ the US and China. His answer:

“Decoupling,” he replied, “is when you have a Great Firewall where not a single Western Internet company has been able to prosper or survive in China, by design. When Christian churches are torn down and ethnic minorities are put into reeducation camps, that’s ‘decoupling.’ So the ‘decoupling’ is something that’s been underway for quite a long time – and it is not driven by the United States.”

For all the pro-China liberals in the US, the message from Pottinger is clear: If you spend more time criticizing ‘oppression’ by the US government, you should try living in Beijing for a few years. That should be enough to change your mind.


Tyler Durden

Wed, 04/29/2020 – 22:25

via ZeroHedge News https://ift.tt/2KLc4TF Tyler Durden

6 Central Banks & The Ponzi Scheme That Will Bankrupt The World

6 Central Banks & The Ponzi Scheme That Will Bankrupt The World

Authored by Egon von Greyerz via GoldSwitzerland.com,

The destiny of the world is now in the hands of 6 central banks, Fed, ECB, BoE (England), PBOC (China), BoJ (Japan), SNB (Swiss). This in itself bodes extremely badly for the global financial system. This is like putting the villains in charge of the judicial system. For decades these central banks have totally abused their power and taken control of the world monetary system for the benefit of their banker friends and in some cases their private shareholders. 

The central banks have totally corrupted and destroyed the financial system, by printing money and extending credit that doesn’t exist. Everyone knows that creating money out of thin air makes the money totally worthless. These bankers know, that if you stand next to the printing press and get the money first, it does have some value before it circulates. And this is exactly what they have done. Once the money reaches the people, it devalues rapidly. As Mayer Amschel Rothschild said over 200 years ago: 

“Permit me to issue and control the money of a nation, and I care not who makes its laws.”

WORTHLESS MONEY PRINTING LEADS TO WORTHLESS ASSETS 

But the bankers are not just in charge of the printing press, they are also in control of the cost of money in the form of interest rates. By manipulating rates, they are setting aside the natural laws of supply and demand. So they can print unlimited amounts of money and price it at 0%. The effect of this is a debt bubble that can never be repaid and an asset bubble that is so fake that not a single asset is worth a fraction of the value it is priced at. 

The central banks are now panicking and are creating trillions of dollars, euros etc. Add to that additional bank lending and government debt and we are in the tens of trillions.

Just looking at the 6 biggest banks mentioned above, their balance sheets have gone  up by $3 trillion from $21 trillion at the end of February 2020 to $24T today. 

But this is just the beginning. We must remember that it wasn’t the Coronavirus that started the money printing. It all began back in late July 2019 when the ECB warned the world that something was seriously wrong by saying, we will do whatever it takes. A few weeks later the Fed started daily Repos of $100s of billions. This was the time when serious problems in the financial system started. 

$5 TRILLION CREATED WITH ZERO INTRINSIC VALUE

At the end of Sep 2019, the Fed balance sheet was $3.8T and today it is $6.6T, an increase of $2.8T most of which occurred since March 2020. During the same period (Sep 2019-April 2020) US debt grew by $2T from $22.7T to $24.7T. 

So between the Fed and the US government, they have created almost $5T since the end of Sep 2019. Most of this increase has taken place in April 2020. Remember that this is not real money but just money fabricated out of thin air. It involved no work, no service in return and no production of goods. Thus this money has ZERO intrinsic value. It is just a computer entry of one 5 and 12 zeros. Therefore the recipients of these funds are getting fake and worthless money. 

WHY DOESN’T THE FED JUST PRINT THE ANNUAL US GDP OF $21.5T

If the Fed or the US government claims that they are issuing real money that has a real value, why don’t they just print $21.5 trillion annually. This equates to US annual GDP. So instead of having to work and produce goods, every US adult and child is just given $65,000 each. ($21.5T divided by 331 million population). Nobody would need to work and everyone can just spend the money as they like and live in total bliss just like in Shangri-La. Obviously someone would need to produce food and provide essential services but that could all be bought in from low cost countries.

If the US government and the Fed really believe that they are solving all problems by printing money, why don’t they then go full out and print the annual GDP. But why then stop at $21.5T which is the current GDP? Why not print $43T to double the standard of living. Or why not go to $100T so everyone can really get wealthy. If the current system of printing $ trillions or even $10s of trillions works, I would like the Fed and the government to explain why they can’t print $100s of trillions. Are they saying that printing $10T represents real money but not $100T which would be fake? Can any serious observer believe that these 6 central banks will save the world by printing worthless money?  How far do they think they can take their Ponzi scheme before the world discovers their bluff?

FED TO PRINT $9.5 TRILLION AND BUY ALL THE GOLD IN THE WORLD

To test the value of the printed money, I suggest that the Fed prints $9.5 trillion and buys all the gold in the world, including jewellery, of 170,000 tonnes at the current price of $55.6 million per tonne. If they don’t understand what will happen, I can tell them. They would have real problems getting hold of 1 tonne of physical gold at that price. By the time they buy the second tonne, the market will value the dollar at its intrinsic value of ZERO and gold measured in worthless dollars will go to infinity. 

THE END OF THE DOLLAR

The Fed is of course not stupid. They understand the consequences of their actions. They know they are playing a very dangerous game that could fail at any time. They are also aware that the dollar since 1971 has fallen 98% in real terms, which is versus gold. By introducing the Petrodollar combined with policing the global financial system, the US has managed to maintain an artificially high value of their currency for decades. But that is now coming to an end. The combination of collapsing oil prices and countries like China and Russia abandoning the dollar will start the dollar ball rolling. Also, the unlimited printing that the US has started will soon accelerate as companies and financial institutions default, leading to a dollar crash.

THE CURRENCY RACE TO THE BOTTOM

In a few months time, nobody will want to hold dollars as the greenback collapses. The problem is that there is not a single solid currency today. The Euro is toast and so is the Yen and the Pound. These countries are all into massive money printing as a result of the current global crisis. So what about the Swiss franc. It has always been seen as a safehaven in periods of crisis. Well, the Swiss might be a currency to flee to for a very brief period. But if we analyse Switzerland’s National Bank, the SNB, as well as the Swiss banking system we will find big problems here like anywhere else in the world. 

As Swiss I don’t like criticising a country which has the best political system in the world and has had very sound finances and a strong currency. But sadly the conservative Swiss banker is gone and the SNB and the whole Swiss banking system are taking risks that are hair-raising. 

SWISS NATIONAL BANK – THE WORLD’S BIGGEST HEDGE FUND

If we start with the SNB, it has a balance sheet which is CHF 852B ($878B) or 122% of Swiss GDP. This is the most leveraged balance sheet of any major central bank. But not only that, if we analyse the holdings of the SNB, we find that it is the biggest hedge fund in the world. Just over 76% of the holdings are in US dollars and Yen with 24% in other currencies like Yen, GBP and CAD. Almost $100B are in US stocks like Apple, Microsoft, Google etc. 

So we find that the SNB is a massive speculator in currencies with 92% of the assets in non Swiss franc investments. This is a massive bet by a national bank against its own currency. The official reason why they are doing it is to keep the Swiss franc low against its main trading nations, the EU and the US. But it is extremely dangerous and irresponsible against the country and the shareholders to leverage the balance sheet to this extent. The biggest shareholders are the Cantons (local States) who own 55%. In Q1 2020, the SNB lost CHF38B ($39B) on its investments, mainly in the US stock market. The Cantons are dependent on the dividends from the SNB so this is a big blow. 

But this is just the beginning for the SNB. When the US stock market falls another 30% or more, which is likely, the losses will mount. But still worse are the currency positions. For every 10% the dollar and euro fall against the Swiss, it means another $80B loss for the SNB. That will of course lead to more Swiss money printing and the Swiss franc weakening which in theory could offset the currency losses. But it is difficult to predict who wins the currency race to the bottom. Most likely is that the dollar will win closely followed by the euro and yen. And if that will be the case, the SNB will incur substantial losses before the Swiss franc loses value. 

It is not only the SNB which is a timebomb. So is the Swiss banking system which is 5x Swiss GDP.  That is too big for a small country when debt markets come under pressure, which is already starting to happen. Relative to the size of the country the SNB will have to print massive amounts of Swiss francs which will have zero value just like all printed money. 

The conclusion is clear. No banking system in the world is safe, including Switzerland’s. So anyone who holds major assets within the financial system be it cash or securities, is exposed to an unacceptable risk in coming months and years. 

MARKETS

Stocks are in a correction up in a secular downtrend which started in February. In the Dow we might be near the end of this correction or it could last slightly longer. But the risk is to the downside and anyone invested in the stock markets is likely to lose the majority of his wealth in coming months and years.

Bonds are extremely vulnerable as credit deteriorates on a daily basis. All debt will come under pressure including Sovereign. Central banks will do what they can to hold rates down but in the end the market will win as bonds sell off and rates climb rapidly. 

GOLD

Gold (and silver) will be the obvious winner as currency debasement accelerates. My 18 year old target of $10,000 in today’s money is virtually guaranteed. 

The chart below shows gold against US money supply (FMQ – Fiat Money Quantity). It shows that gold is as cheap today as it was in 1970 when the price was $35 or in 2000 when gold was $290. 

With massive pressure in the physical market where both the LBMA bullion banks and Comex are unable to meet their obligations to deliver physical gold, it is only a matter of time before gold breaks out properly. I don’t like making sensational forecasts of the gold price since that attracts the wrong buyers. Still 10x today’s price or $17,000 is certainly realistic with just normal inflation. The attached chart by goldchartsrus confirms that level. Gold adjusted for real inflation would be at $18,100 to be equal to the 1980 top of $850.

Hyperinflation will of course add many zeros to the gold price even though that price would be meaningless since it would only reflect the debasement of currencies. But it won’t be meaningless to the people who are still holding on to worthless dollars or euros instead of holding the only money that has survived in history which is gold. 

Just speak to people who have lived in Venezuela, Zimbabwe, Hungary or Yugoslavia to take recent hyperinflationary examples. These people lost all their money and so will the ones who are not protected against the coming hyperinflation.

Remember that hyperinflation does not arise as a result of demand led increases in prices but as a result of collapsing currencies. And as I have explained above, this is what we will see next as money printing accelerates. 

Physical gold must not be seen as a speculative investment but as the only money that has survived throughout history and maintained its purchasing power. So gold is insurance and gold is wealth protection. That is why we must hold gold against a financial system and currency system which will not survive in their present form. 


Tyler Durden

Wed, 04/29/2020 – 22:05

via ZeroHedge News https://ift.tt/2xnXAWM Tyler Durden