You know we have crossed a fiscal Rubicon when a presidential administration does not attempt to justify its spending, instead simply claiming that because of the COVID-19 pandemic, Americans must now welcome with joy and gratitude any spending bill, no matter how big, frivolous, or cronyist.
Based on that belief, President Joe Biden first backed a $1.9 trillion coronavirus relief bill that could not be justified by any broadly accepted economic theory. He then announced a $2.3 trillion “infrastructure” package that he described as a “once-in-a-generation investment in America unlike anything we’ve done since we built the interstate highway system and the space race decades ago.”
A closer look reveals that the plan is instead a jackpot for public unions and big business. Coming after two decades of spending indulgence under the last three presidents, culminating in an explosion of outlays during Washington’s COVID-fighting efforts, Biden’s spending extravaganza is in effect the final stage of an effort to centralize power in the federal government, which will fund ever more private, state, and local government -functions.
Gesturing toward fiscal responsibility, Biden plans to pay for most of his latest plan with a $2 trillion increase in corporate taxes, arguably the largest hike since World War II. The combined tax hikes, according to the Tax Foundation, likely will reduce private infrastructure investment by $1 trillion. A corporate tax increase from 21 to 28 percent, for instance, would reduce the after-tax rate of return on corporate investment in America and in turn reduce the amount of investment. The hikes will nevertheless please the anti-corporate wing of the Democratic Party. Never mind that the price will be paid by workers whose wages won’t grow and small-business owners who will have less access to capital.
The infrastructure bill creates an interesting tension. On one hand, Wall Street will hate these tax increases, the full effect of which will be felt in the next decade and a half. On the other hand, corporate titans probably are banking on their ability to fight these taxes while enjoying Biden’s $2 trillion corporate welfare handout today.
How else to explain the stock market upswing after Biden’s Pittsburgh speech announcing that trillions more dollars will be spent and taxed by Washington? Could it be that years of Federal Reserve liquidity injections, the promise of rescue, and artificially low interest rates have permanently transformed Wall Street into a corrupt moocher? It is as if corporate America believes the Fed will never let the market correct, guaranteeing growing corporate profits in perpetuity.
But there’s a reason we economists always remind people that the stock market isn’t the economy and the economy isn’t the market. In the short run, the stock market’s success tells you little about the soundness of policy decisions made by people in Washington. The reality is that one day, all that debt, cronyism, and lack of accountability will explode in our faces. It might take some time, but when the time draws near, don’t assume that interest rates will alert us to the impending disaster or that the Fed can save us without inflicting massive pain.
When we look back and wonder how we got there, we will see that there is a lot of blame to go around. By recklessly monetizing the public debt and suppressing interest rates, the Federal Reserve allowed deficit spending to become the norm. The party of small government, meanwhile, simply gave up the small part. Congressional Republicans remained mostly silent while the Trump administration ran up the public debt by nearly $9 trillion in just four years, slowed down the economy with protective tariffs, and imposed disgusting and costly immigration restrictions. Some Republicans offered their own central planning proposals in the name of fighting China; others endorsed plans for a federal paid leave law and a universal basic income for kids.
On the other side of the aisle, even the Keynesians seem lost in our brave new world. Lawrence Summers—secretary of the treasury in the Clinton administration, director of the National Economic Council in the Obama administration, and president of Harvard in the interregnum—fought a good fight to reduce the size of the $1.9 trillion coronavirus relief bill. He argued that economic theory could not justify the package’s size. He lost.
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You know we have crossed a fiscal Rubicon when a presidential administration does not attempt to justify its spending, instead simply claiming that because of the COVID-19 pandemic, Americans must now welcome with joy and gratitude any spending bill, no matter how big, frivolous, or cronyist.
Based on that belief, President Joe Biden first backed a $1.9 trillion coronavirus relief bill that could not be justified by any broadly accepted economic theory. He then announced a $2.3 trillion “infrastructure” package that he described as a “once-in-a-generation investment in America unlike anything we’ve done since we built the interstate highway system and the space race decades ago.”
A closer look reveals that the plan is instead a jackpot for public unions and big business. Coming after two decades of spending indulgence under the last three presidents, culminating in an explosion of outlays during Washington’s COVID-fighting efforts, Biden’s spending extravaganza is in effect the final stage of an effort to centralize power in the federal government, which will fund ever more private, state, and local government -functions.
Gesturing toward fiscal responsibility, Biden plans to pay for most of his latest plan with a $2 trillion increase in corporate taxes, arguably the largest hike since World War II. The combined tax hikes, according to the Tax Foundation, likely will reduce private infrastructure investment by $1 trillion. A corporate tax increase from 21 to 28 percent, for instance, would reduce the after-tax rate of return on corporate investment in America and in turn reduce the amount of investment. The hikes will nevertheless please the anti-corporate wing of the Democratic Party. Never mind that the price will be paid by workers whose wages won’t grow and small-business owners who will have less access to capital.
The infrastructure bill creates an interesting tension. On one hand, Wall Street will hate these tax increases, the full effect of which will be felt in the next decade and a half. On the other hand, corporate titans probably are banking on their ability to fight these taxes while enjoying Biden’s $2 trillion corporate welfare handout today.
How else to explain the stock market upswing after Biden’s Pittsburgh speech announcing that trillions more dollars will be spent and taxed by Washington? Could it be that years of Federal Reserve liquidity injections, the promise of rescue, and artificially low interest rates have permanently transformed Wall Street into a corrupt moocher? It is as if corporate America believes the Fed will never let the market correct, guaranteeing growing corporate profits in perpetuity.
But there’s a reason we economists always remind people that the stock market isn’t the economy and the economy isn’t the market. In the short run, the stock market’s success tells you little about the soundness of policy decisions made by people in Washington. The reality is that one day, all that debt, cronyism, and lack of accountability will explode in our faces. It might take some time, but when the time draws near, don’t assume that interest rates will alert us to the impending disaster or that the Fed can save us without inflicting massive pain.
When we look back and wonder how we got there, we will see that there is a lot of blame to go around. By recklessly monetizing the public debt and suppressing interest rates, the Federal Reserve allowed deficit spending to become the norm. The party of small government, meanwhile, simply gave up the small part. Congressional Republicans remained mostly silent while the Trump administration ran up the public debt by nearly $9 trillion in just four years, slowed down the economy with protective tariffs, and imposed disgusting and costly immigration restrictions. Some Republicans offered their own central planning proposals in the name of fighting China; others endorsed plans for a federal paid leave law and a universal basic income for kids.
On the other side of the aisle, even the Keynesians seem lost in our brave new world. Lawrence Summers—secretary of the treasury in the Clinton administration, director of the National Economic Council in the Obama administration, and president of Harvard in the interregnum—fought a good fight to reduce the size of the $1.9 trillion coronavirus relief bill. He argued that economic theory could not justify the package’s size. He lost.
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Nigerian Influencer “Hushpuppi” Funded Life Of Luxury With Complex Email Schemes, FBI Alleges
For Instagram “influencer” Hushpuppi, also referred to as the “Billionaire Gucci Master” Ramon Olorunwa Abbas, living a life of private jet setting and luxury on Instagram in front of his 2 million followers turned out to not only be his claim to fame, but also the straw that broke the camel’s back for his empire. While many looked on at his life of luxury in awe, questions started to arise about how he obtained, and maintained his wealth. The answer lied in the evolution of the often mocked “Nigerian email scam” that we have all become used to.
Hushpuppi always maintained the questions about his wealth were “the jealousy of so many haters”, a lengthy new Bloomberg profile notes. “As I turn a year older into my 30s today, I want to celebrate all of you out there,” the influencer said to his fans on his 37th birthday. “Those of you who mostly I have never met, spoken to or anything but have been a strong supporter of me through every situation until this point and still riding for me, I want you to know wherever you are that I celebrate and appreciate you today, today is OUR DAY!”
It was one of many posts he made flaunting his wealth and engaging with his followers who supported him while he jet-setted, beefed with celebrities online, and did his best to side-step questions about where, exactly, his success came from.
His captions to his photos would make his life of luxury look like the honest success of the son of a taxi driver and bread salesman from Nigeria. But of those who he likely didn’t celebrate or appreciate was the FBI, who is the driving force behind United States of America v. Ramon Olorunwa Abbas, which alleged in a California federal court that Abbas engaged in “conspiracy to launder money obtained from business email compromise frauds and other scams”.
For example, a small sliver of the cash he received as part of these schemes was $922,857.76 sent by a New York law firm that was supposed to be sending it to one of its clients. A paralegal at the firm received a fax from “someone in Abbas’ orbit” directing her to send the payment to a Chase bank account and initiated the transfer without even thinking twice. The firm didn’t even notice the cash had been misallocated until later in the month.
The transfer was part of a relatively sophisticated “business email compromise” scheme that Abbas and his co-conspirators implemented around the world, the FBI alleged.
BEC attacks started appearing roughly a half-dozen years ago, escalating each year until they surpassed all other forms of internet fraud. The FBI reports there were almost 20,000 such scams against American businesses in 2020 alone, accounting for $1.8 billion in losses, though the variety of BEC crimes can make totals hard to pin down. Crane Hassold, the senior director of threat research at the cyberdefense company Agari Data Inc. and a former FBI analyst, likes to define a BEC as “a response-based impersonation attack that’s requesting something of value”—basically, posing as a legitimate business to trick people into giving away their money.
No matter the flavor, a BEC scam generally begins with someone hacking into a corporate email account often using social engineering tactics like phishing. Once inside, the perpetrators don’t steal anything, not at first. Instead they quietly begin forwarding copies of incoming and outgoing email to themselves. Then they wait. “They watch it for a number of weeks or months, looking for details of certain payments that are going out, understanding who their customers are, looking at communication patterns,” Hassold says. When they spot an invoice coming in or out, they “use that intelligence to insert themselves into an actual payment that is supposed to be due.”
Those who participate in the scheme are loosely networked and work together. There’s different roles for the scheme too: your hackers, your money mules, and even people tasked with controlling international bank accounts that can accept millions of dollars in transfers.
Crane Hassold, the senior director of threat research at the cyberdefense company Agari Data Inc. and a former FBI analyst, told Bloomberg: “These attacks are so realistic-looking, most people don’t give it a second thought. Because when you’re involved in payments like these, you see a lot of these emails every single day. And when it doesn’t raise any red flags, you are not going to go up the chain and do any confirmation. One would expect that when you get into larger and larger and larger amounts of money that are exchanging hands, that there would be some process that requires secondary authorization or something like that. But in many cases, that’s not what actually happens.”
He continued: “I think that most people think of BEC attacks as just basic, boring attacks, and most people don’t think it’s as big a problem as it actually is. When you look at the amount of money that is actually lost to ransomware, it’s a drop in the bucket compared to what’s lost in BEC attacks.”
“A lot of the same concepts that go into these BEC attacks, criminals and scammers in West Africa have been doing for decades at this point. Those were all individually targeted social engineering attacks. And essentially what happened was, around 2015, cybercriminals started seeing that they could make more money targeting businesses than they could targeting individuals,” he continued.
People from the neighborhood where Abbas grew up in Nigeria “began to drift into online scamming in the early 2000s”, the report notes. But since no one would associate with them once they revealed themselves as Nigerian, the schemes evolved. “Scams evolved over a decade from money-order fraud to check-cashing scams to romance scams to BECs,” the report notes.
In terms of motivation, aside from the obvious, Abbas appeared to take exception with the system where he grew up, saying in one Snapchat video: “My mother is from the Niger Delta part of Nigeria, where Nigeria’s oil comes from. She has never benefited one dollar. One dollar! And she is over 60 years old.”
Olayinka Akanle, a sociology professor at the University of Ibadan who’s studied youth and cybercrime said: “Cybercrime is a metaphor for a more deep-seated and deep-rooted problem in Nigeria. When people face survival challenges, they innovate. And when they innovate, if there is no system to address their innovation in a very decisive way, it becomes the norm.”
He started to show off the money he was making on Instagram as far back as 2012. Several years later, one of his close associates, Samson Oyekunle, after moving to Houston in 2017, was arrested and charged with “participating in multiple BEC frauds” and was sentenced to 5 years in jail. Abbas had moved to Dubai by then and the walls were closing in him, too. With evidence mounting about how he was making his income, his time ran out in 2020.
When Dubai police raided his hotel room and arrested him in 2020, they were so proud of the takedown, they took a page out of Abbas’ book: they posted the raid on social media.
Each week the Pacific is getting even more crowded with military ships, submarines and aircraft from countries in the region and from outside. NATO countries — United Kingdom, France, Germany and the Netherlands — are sending military vessels and aircraft. The Russian navy conducted military maneuvers off Hawaii. The US is on the verge of creating a permanent Pacific naval task force as a part of its aggressive response to China’s naval presence in the Pacific. The largest land exercise in Asia and the Pacific is taking place in Australia with 17,000 U.S. and Australian military.
In March, President Joe Biden directed the Pentagon to establish a China Task Force to examine China-related policies and processes and give its recommendations to Defense Secretary Lloyd Austin. The creation of a Pacific Naval Task Force would allow the secretary of defense to provide more of the Pentagon’s budget for challenging China’s presence in the Pacific. The Pacific task force would also include NATO allies such as Britain and France, that have already sent their warships into the Pacific, as well as Japan and Australia.
At the recent NATO meeting in Brussels, most leaders agreed with Biden’s confrontational stance with China, declaring that Beijing is undermining global order and is a security challenge. A similar NATO naval task force, the Standing Naval Forces Atlantic, composed of six-to-10 ships, destroyers, frigates and support vessels from multiple NATO nations, has operated for decades in Atlantic waters.
Russian War Practice Near Hawaii
It’s not only China that is causing the US concerns in the Pacific. A US missile defense test was delayed at the missile test facility on the Hawaiian island of Kauai in May due to the presence of a Russian surveillance ship 13 miles off the island, at the edge of US territorial waters.
The Kareliya, a Russian Navy Vishnya-class auxiliary general intelligence, or AGI, ship is based in the Russian Pacific port of Vladivostok and is one of seven AGIs specializing in signals intelligence. For several weeks it sailed off the coast of Kauai, 100 miles from the massive US naval facility at Pearl Harbor on the island of Oahu.
The Missile Defense Agency (MDA), in cooperation with the US Navy, conducted on Kauai what it called Flight Test Aegis Weapon System 31 to demonstrate the capability of a ballistic missile defense (BMD)-configured Aegis ship to detect, track, engage and intercept a medium-range ballistic missile target with a salvo of two Standard Missile-6 Dual II (BMD-initialized) missiles.
To the chagrin of the MDA, with the Russian signals ship as a witness, the May 29 missile test eventually was carried out with ship-fired missiles but they failed to intercept a medium-range ballistic missile target.
The U.S. Pacific Fleet at Pearl Harbor made this statement at the time, saying it was-
“aware of the Russian vessel operating in international waters in the vicinity of Hawai’i, and will continue to track it through the duration of its time here. Through maritime patrol aircraft, surface ships and joint capabilities, we can closely monitor all vessels in the Indo-Pacific area of operations.”
A few days later, US Air Force F-22 jets made two sudden flights out of Hawaii with the Indo-Pacific Command eventually acknowledging that “several Russian ships and aircraft” were 200 miles to the west of the Hawaiian Islands and the F-22s had been sent out to keep watch on them.
The “several ships and aircraft” turned out to be the largest Russian naval maneuvers in the Pacific since the end of the Cold War. As reported by the Honolulu Star Advertiser on June 23, prior to the meeting of the Russian President Vladimir Putin and President Joe Biden in Geneva on June 16, the Russian Ministry of Defense publicized the Russian naval maneuvers off Hawai’i as a naval and air exercise that practiced “destroying the aircraft carrier strike group of the mock enemy” and delivering a simulated strike with cruise missiles against “critically important” military infrastructure. The Russian press release described the military exercise as two detachments of ships, operating about 2,500 miles southeast of the Kuril Islands, that detected, countered and delivered missile strikes against an aircraft carrier strike group.
The missile strike practice was conducted by the flagship of the Pacific Fleet, the missile cruiser Varyag, the frigate Marshal Shaposhnikov and multiple corvettes. Twenty surface warships, including a submarine and support vessels, were involved in the exercise with 20 aircraft, including long-range antisubmarine aircraft Tu-142M3, anti-submarine aircraft Il-38, high-altitude fighter-interceptors MiG31BM, deck anti-submarine and search-and-rescue helicopters Ka-27.
The deployment of Russian “Bear” bombers as part of the exercise twice resulted in missile-armed Hawaii Air National Guard F-22 fighters scrambling to possibly intercept the turboprop planes — which headed in the direction of Hawaii but never came close, according to US officials. No US intercepts of the Russian aircraft were made.
The two long-range Tu-142MZ anti-submarine aircraft that provided support to the exercise had flown from Kamchatka Peninsula, spending more than 14 hours in the air and covering about 10,000 kilometers during the exercise, according to the news report.
Rounding out the air component of the Russian exercise were six Il-38 and Il-38N anti-submarine aircraft that searched for and tracked submarines of the “mock enemy.” The anti-submarine aircraft were escorted by MiG-31BM high-altitude interceptor fighters of the Pacific Fleet with refueling capability provided by II-78 aircraft of the Russian Aerospace Forces. An open-source satellite view of the Russian flotilla was taken on June 19 when it was 35 nautical miles (40 statute miles) south of Honolulu and was being escorted by three U.S. Navy destroyers and a Coast Guard cutter.
A spokesman for U.S. Indo-Pacific Command at Camp H.M. Smith in Honolulu said on June 21 that the Russian vessels operated in international waters throughout the exercise and at the closest point, some Russian ships operated approximately 20 to 30 nautical miles (23 to 34 statute miles) off the coast of Hawaii and that they were tracked very closely by U.S. forces.
US & Russian Vessels Around Hawaii
Making for a crowded area around Hawai’i, the USS Carl Vinson aircraft carrier strike group based in San Diego was operating off the east side of the Hawaiian Islands at the same time the Russian fleet was off the west side of the islands. The Carl Vinson, the flagship of the carrier strike group, conducted exercises with Carrier Air Wing 2, Destroyer Squadron 1, the guided-missile destroyers USS O’Kane, USS Howard, USS Chafee, USS Dewey and USS Michael Murphy. The Chafee and Michael Murphy are based at Pearl Harbor.
French Air Force Arrives
On Sunday, June 27, in their first visit to Hawai’i, the French government sent 170 Air and Space Force personnel, three Rafale fighter aircraft, two A330 Phenix refueling tankers and two A400M Atlas transports to Joint Base Pearl Harbor-Hickam in Honolulu for training with Hawai’i-based U.S. F-22 fighters, C-17 cargo aircraft and KC-135 refuelers. The French squadron will depart Hawai’i on July 5 for Nellis Air Force Base in Nevada for more training with U.S. military units. U.S. Pacific Air Force command emailed that “It is imperative that the U.S. accelerates change in synchronization with allies like France to ensure we are ready for the next fight.”
British Defense Secretary Ben Wallace said on April 26 that “even as the Pacific’s importance to our future economy continues to rise — so the challenges to the freedom of navigation in that region continue to grow. Our trade with Asia depends on the shipping that sails through a range of Indo-Pacific choke points, yet they are increasingly at risk.”
HMS Queen Elizabeth, the centerpiece of Britain’s Royal Navy, departed the U.K. in May for a world voyage including stops in 40 nations and steaming through the South China Sea. Defense Minister Wallace said that while China is “increasingly assertive, we are not going to the other side of the world to be provocative. We will sail through the South China Sea. We will be confident, but not confrontational.”
Adding to the numbers of naval vessels in the crowded South China Sea will be the nine escort vessels of HMS Queen Elizabeth: destroyers HMS Defender and HMS Diamond, anti-submarine frigates HMS Kent and HMS Richmond, the Royal Fleet Auxiliary’s RFA Fort Victoria and RFA Tidespring, Dutch frigate HNLMS Evertsen and U.S. Navy destroyer USS The Sullivans.
US & the ‘International Rules-Based Order’
The State Department said the United States, which has maintained what it calls the “international rules-based order” in the Pacific since the end of World War II, is “committed to upholding a free and open Indo-Pacific in which all nations, large and small, are secure in their sovereignty and able to pursue economic growth consistent with international law and principles of fair competition.” In 2019, the U.S. Department of Defense wrote in its strategy document that the Indo- Pacific region is the single most consequential region for America’s future.
Admiral Phil Davidson said on April 30 when he relinquished leadership of the massive U.S. Indo-Pacific Command, “Make no mistake, the Communist Party of China seeks to supplant the idea of a free and open international order with a new order — one with Chinese characteristics — where Chinese national power is more important than international law.”
Davidson added that strategic competition in the Indo-Pacific “is not between two nations, it is a contest between liberty — the fundamental idea behind a free and open Indo-Pacific — and authoritarianism, the absence of liberty.”
China Responds
On May 27, at a China Ministry of National Defense press conference, Senior Colonel Tan Kefei said America keeps “stepping up military deployments in the Asian Pacific region, frequently conducts close-in reconnaissance against China, and even deliberately initiates dangerous circumstances between Chinese and U.S. military aircraft and vessels.”
He added that a strategy emphasizing military presence and military competition “will only heighten regional tensions and undermine world peace and stability. No strategy should instigate countries to establish selective and exclusive military alliances, or to create a ‘New Cold War’ of confrontational blocs.” In relation to Taiwan, Tan said, “there is only one China in the world, and Taiwan is an integral part of China,” and that currently China-Australia relations “face serious difficulties.”
G7 & Quad Support Status Quo on Taiwan
The Group of Seven, or G7 —made up of leaders from Canada, France, Germany, Italy, Japan, the United Kingdom and United States —said on June 13 that, “We underscore the importance of peace and stability across the Taiwan Strait,” adding that “we remain seriously concerned about the situation in the East and South China Seas and strongly oppose any unilateral attempts to change the status quo and increase tensions.”
Three months earlier, on March 12, the first leaders’ meeting of the Quadrilateral Security Dialogue, or “Quad” — the United States, Japan, Australia and India — issued a statement saying they are:
“united in a shared vision for the free and open Indo-Pacific…We support the rule of law, freedom of navigation and overflight, peaceful resolution of disputes, democratic values and territorial integrity.”
Largest Land-War Maneuvers in Region
The largest land war practice in the region, the U.S.-Australian war maneuvers Talisman Sabre 2021 began in June in Australia. Scaled down from 30,000 due to Covid, over 17,000 military personnel from the U.S., Canada, Japan, Republic of Korea, New Zealand and the U.K. will conduct war maneuvers including combined Special Forces operations, parachute drops, amphibious (marine) landings, land-force maneuvers, urban and air operations and the coordinated firing of live ammunition from late June until mid-August. France, India and Indonesia will participate as observer nations. The U.S.-Australian hypersonic weapon, capable of flying at speeds greater than five times the speed of sound (Mach 5), may be tested during Talisman Sabre 2021 at the Australian rocket range near the town of Woomer, South Australia.
In one month alone, this June, the US IndoPacific Command military forces participated in over 35 war maneuvers with other countries. Read more about the war preparations with these countries here.
UK Secures Financial Sector Carve Out In Global Tax Talks To Protect Struggling Banks
In what’s being heralded as a major diplomatic victory for the UK, British diplomats have reportedly succeeded in securing an exemption for the financial services industry from the global corporate tax framework that’s being hammered out by the OECD. With talks set to end Thursday, the OECD is expected to soon publicize “Pillar 1” of what would be the most comprehensive overhaul of international corporate tax rules in a century.
But while Washington likes to talk about the new framework as a foregone conclusion, there’s plenty of reason to doubt that it will ever be implemented.
One reason is that countries like Ireland, Singapore, Indonesia and island island tax havens like Bermuda all oppose the new scheme. Why would these countries want to surrender a policy that has in almost every case been a tremendous boon for economic growth, just to accept whatever tax crumbs the Americans toss their way? Adding salt to their wounds, while these countries haven’t played much of a role in the talks so far, the UK has already succeeded a critical carveout, something that even Amazon hasn’t managed to accomplish.
Their biggest fear, of course, is that everybody gets an exemption but them.
Britain’s financial services industry has been left in shambles since Brexit. This exemption is an example of the UK scrambling to protect what’s left of its imploding banking sector. And as the FT reported, UK Chancellor Rishi Sunak only managed to secure the exemption by making a critical tax concession to the US.
The talks at the Paris-based OECD, which are due to conclude on Thursday, have accepted Britain’s case that the financial services industry be carved out of the proposed new global tax system, according to two people briefed on the negotiations.
But UK chancellor Rishi Sunak’s victory in haggling over the details of new corporate levies came at a cost, said these people. He had to make concessions to the US on dismantling Britain’s digital services tax that is focused on American technology companies.
Meanwhile, the FT also shared some new details from the negotiations. In the first part of the talks, the UK and France have pushed to ensure that American tech giants will pay more in taxes wherever they operate, in exchange for countries raising their minimum corporate tax to 15%. While Washington initially pushed back against the exemption for financial services, Britain manage to persuade the US with a commitment to “early removal” of the digital tax mentioned above. The timing of the removal would be “carefully choreographed.”
The US agreed to the focus on taxing multinationals more based on where they operate so long as other countries committed to removing their digital taxes, but shocked the UK by saying that the pillar one tax rules had to apply to all sectors including financial services.
“This was a pure game between the US and the UK and France,” said one person close to the negotiations.
The UK believed financial services would be carved out from the new global tax rules because regulation forces banks to be separately capitalised in every jurisdiction they operate in, so that they declare profits and pay tax in the countries in which they do business.
Without the exemption, the UK Treasury risked seeing City banks paying less tax to it and more to other countries.
Washington initially insisted that Italy, France, the UK and any other country with a digital tax targeting American tech firms abolish those levies as soon as a deal on a new global framework was struck. Ultimately, it appears even the UK refused immediate elimination. As Sunak said: “I think it’s a fairly obvious point the Americans want domestic digital services taxes removed. They will be, but the whole thing has to be looked at in the round.”
The Ohio Supreme Court has ruled school employees may carry guns on the job only if they have “satisfactorily completed an approved basic peace-officer training program” or have “20 years experience as a peace officer.” The ruling overturns a Madison Local School District policy that allowed school employees to carry guns at work if they had a concealed carry license and had passed active-shooter response training, a background check, and a mental health exam.
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The Ohio Supreme Court has ruled school employees may carry guns on the job only if they have “satisfactorily completed an approved basic peace-officer training program” or have “20 years experience as a peace officer.” The ruling overturns a Madison Local School District policy that allowed school employees to carry guns at work if they had a concealed carry license and had passed active-shooter response training, a background check, and a mental health exam.
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Brits squirrelled away their wages, profits, and pandemic handouts during this year’s spring lockdown, taking household savings to near-record levels, according to official figures.
The data from the Office for National Statistics also show that GDP contracted during that first quarter of the year by more than expected, dropping by 1.6 percent compared with the previous 1.5 percent estimate.
The drag of the 2021 lockdown kept GDP below pre-pandemic levels by 8.8 percent, but it was less marked than during the 2020 spring lockdown when it dropped by 20 percent.
But the finer-grained monthly data give a more positive picture, showing that growth jumped from 0.8 percent in February to 2.4 percent in March. In April the jump was 2.3 percent and the Bank of England’s outgoing Chief Economist Andy Haldane recently said the economy was going “gangbusters.”
The latest data come amid growing pressure on the government to stick to its pledge on removing all pandemic restrictions on July 19, and as the government prepares to wind down the furlough scheme from tomorrow.
Martin Beck, senior economic adviser to the EY ITEM Club, said GDP will recover strongly in the second quarter as households spend some of the savings built up in lockdowns.
He said, “The delay to removing remaining restrictions and any effect to confidence from the recent rise in COVID-19 infections present potential risks to this forecast though.”
Julian Jessop, economics fellow at free market think tank the Institute of Economic Affairs, said the figures showed that “pent-up demand may prove to be even stronger.”
“More timely business surveys already suggest that overall economic activity (as measured by GDP) will be back to pre-COVID levels as soon as the third quarter, with employment picking up well,” he said in a statement.
Jessop said that means the government should press ahead with winding down the furlough scheme as planned from July 1.
“It is increasingly clear that the furlough scheme is now contributing to staff shortages and actually holding back the recovery, including in hospitality. With most of the economy open again, people should be encouraged to find new jobs, instead of being locked into their old ones.”
Jonathan Athow, deputy national statistician at the ONS, said: “Today’s updated GDP figures show the same picture as our earlier estimate, with schools, hospitality, and retail all hit by the reimposition of the lockdown in January and February, with some recovery in March.
“With many services unavailable, households again saved at record levels with only last spring seeing more saved.”
Google Mistakenly Uses Photo Of Swiss Engineer On Wikipedia Entry For Notorious Bulgarian Rapist
Today in “Skynet rewrites history” news, a Google algorithm has been responsible for mixing up an engineer based in Switzerland with a notorious serial killer online.
The mix up happened when algorithms mistakenly took a photograph of engineer Hristo Georgiev and placed it into a Wikipedia entry for Hristo Georgiev, who is described by the same entry as “a Bulgarian rapist and serial killer who murdered five people, mainly women, between 1974 and 1980”.
The software engineer seemed to take the news in stride.
Seems like Google falsely associated a photo of mine with a Wikipedia article of a serial killer. I don’t know if this is hilarious or terrifying. pic.twitter.com/rmAL7uQYy4
He even wrote a blog post called “Google turned me into a serial killer”.
“As I was scrolling through my inbox today, I stumbled upon an e-mail from a former colleague of mine who wanted to inform me that a Google search of my name yields a picture of me linked to a Wikipedia article about a serial killer who happens to have the same name as mine,” he wrote.
“I quickly popped out my browser, opened Google and typed in my name. And indeed, my photo appeared over a description of a Bulgarian serial killer,” his blog says. “My first reaction was that somebody was trying to pull off some sort of an elaborate prank on me, but after opening the Wikipedia article itself, it turned out that there’s no photo of me there whatsoever.”
Georgiev concluded:
“It turns out that Google’s knowledge graph algorithm somehow falsely associated my photo with the Wikipedia article about the serial killer. Which is also surprisingly strange because my name isn’t special or unique at all; there are literally hundreds of other people with my name, and despite of all that, my personal photo ended up being associated with a serial killer. I can’t really explain to myself how this happened, but it’s weird.”
Several days later, the engineer reported the that problem had been fixed.
Google fixed the problem. No harm done (or none that I‘m aware of). Blog post updated – https://t.co/rOeQoQnZK7
This month marked the 80th anniversary of Nazi Germany’s invasion of the Soviet Union which took place on June 22, 1941. Hitler’s witting or unwitting pre-emptive attack against the Red Army, which were massed on the borders of eastern Germany, western Poland, Hungary, and Romania poised for their own invasion, enabled the Germans to capture or destroy tens of thousands of Soviet tanks and aircraft. Some authors who have examined Soviet archives have suggested the offensive was scheduled to take place a mere two and a half weeks after Hitler’s attack.
Despite the fact that the Soviet Union had joined with Nazi Germany in invading Poland and starting World War II as co-aggressors, President Franklin Delano Roosevelt and British Prime Minister Winston Churchill responded to the German invasion of its former Soviet ally by pledging their unqualified support for the Soviet war effort no matter what the consequences of their unqualified political and military support might be. U.S. and U.K government war propagandists went to work to deceive their citizens into believing that the world’s greatest mass murderer, Soviet dictator Josef Stalin, was, in fact, a gallant ally of democracy and freedom in the fight against Nazi Germany.
This massive U.S.-U.K. military aid provided the Red Army with the ability to engage in mobile counteroffensives, which succeeded many times in encircling German forces, that it otherwise would have largely lacked. The 430,000 US trucks and jeeps provided under Lend-Lease constituted the bulk of Soviet motorized capabilities of the Red Army and enabled the Red Army to overrun half of Europe and much of Asia while annexing parts or all of nine countries and conquering half a dozen more during and after the war.
While a reasonable argument could have been made for providing the Soviets with some military aid to help them halt the German advance in the east, by 1943, the rationale for this enormous U.S.-U.K. military-industrial assistance had largely evaporated. This is due to the fact that, after the Battle of Kursk, the German Army was never again able to mount an offensive in the east and began a rapid retreat culminating in the Soviet capture of the German capital of Berlin less than two years later along with the eastern half of Europe.
After the fall of Nazi Germany, the Soviet Blitzkrieg continued in the Far East in what later came to be known as Operation “August Storm” as the USSR entered the war against Imperial Japan exactly one week before it surrendered, claiming Manchuria, northern Japan and North Korea in a rapid armored advance that lasted scarcely more than two weeks. Inexplicably, the U.S. continued its Lend-Lease military-industrial assistance program to the Soviets including about sixty U.S. warships and dozens of amphibious landing ships until September 1945 — a month after Imperial Japan had surrendered.
U.S., U.K., helped create Iron Curtain
Shortly after the war, Winston Churchill feigned surprise when he announced in his famous speech at Fulton, Mo. in March 1946 that an “Iron Curtain” now divided Europe and claimed that he alone had foreseen this unfortunate event. His claim was questionable given that he and FDR had authored the Yalta Agreement and previous agreements which had ceded virtually all of eastern Europe and much of Central Europe to the Soviets, thereby creating the Iron Curtain, leading to the Cold War between the Western and Soviet blocs that lasted half a century. Of course, for any educated observer of international affairs and world history at the time, the end result of the U.S.-U.K. decision to provide massive military-industrial aid to the Soviet Union was clear from the onset.
When the war began, the Soviet Union was the largest and most heavily armed nation in the world by far — more than 33 times larger than Nazi Germany at its greatest extent — and it spanned two continents. The decision of the U.S. and U.K. to ally themselves with the Soviet Union along with the enormous amount of direct military and military industrial aid they provided the Soviets ensured that the Soviet Union, not the Western Powers, would be the dominant power in postwar Europe.
Rather than merely liberating it from Nazi control and rebuilding postwar Germany as an ally of freedom against totalitarian aggression, at the Yalta Conference, the Big Three — FDR, Churchill, and Stalin decided to destroy and dismember Germany into six pieces and starve millions of its citizens as part of their implementation of the Soviet-inspired Morgenthau Plan. This decision proved to have devastating consequences for U.S. national security, let alone the hundreds of millions of captive peoples enslaved in the newly expanded Communist bloc.
Following Germany’s defeat, General George S. Patton was very upset with the Truman-Eisenhower continuation of FDR’s appeasement policy of the Soviet Union and their decision to unjustly hold 70 million Germans collectively responsible for the crimes of Hitler and top Nazi leaders. He resolved to resign his commission and go on a speaking tour of the United States to urge a patriotic call to support a policy designed to confront, contain and, possibly even roll back, Soviet tyrannical control of Central and Eastern Europe. Tragically, Patton was assassinated in a joint OSS-NKVD conspiracy mere days before he was able to do so, depriving the free world of one of its most visionary leaders.
European balance of power tilted
One of the main results of the war was that the balance of power in Europe was destroyed and the Soviet Union became the new hegemon of continental Europe and, for a time following the Communist takeover of mainland China, Asia as well. Visionary anti-Communist statesmen such as former President Herbert Hoover, predicted this tragic and apocalyptic outcome if the Western Powers chose to ally with the Soviet Union. The U.S. and U.K. could have won the war against Nazi Germany and liberated Europe without their Unholy Alliance with what President Ronald Reagan later rightly termed “an evil empire”, let alone without providing massive military aid to it. It would have been far better for the U.S. to have simply signed a non-aggression pact with the Soviet Union and raced them to see which of the two countries could liberate the Nazi-occupied countries first. That way, the U.S. and U.K. would not have been complicit in the many horrific Soviet war crimes including the mass murderers of millions of people who dared resist the Soviet Communist onslaught helping to extinguish the flames of freedom from nearly a dozen nations in Eastern Europe, which yearned to be liberated from their enslavement by tyrannical dictators.
During the Pacific war, the Chinese National Revolutionary Army, led by Chiang Kai Shek, fought gallantly against the Japanese. By tying down nearly 80 percent of Japan’s Army divisions in China enabled the U.S. to engage in a Pacific island-hopping campaign that defeated Japan in three and a half years. They were able to accomplish this great feat despite being provided with only about 1 percent of the military assistance that the U.S. had given to the Soviet Union.
In 1946, the year after World War II ended, America’s Chinese Nationalist allies seemed on the verge of defeating Mao’s Soviet-backed Red Army and winning the Chinese Civil War. Then, General George C. Marshall, who had been sent by President Truman to lead U.S. foreign policy with regards to China, decided to cut off all military and logistical support to Chinese Nationalist forces, depriving them of the fuel and ammunition they needed to prevent China from being taken over by murderous Communist forces.
In the end communism prevailed
In response to this unprecedented gift by the Truman Administration to Stalin and CCP leader Mao Zedong, the U.S. Congress voted to approve $1 billion in military aid to help the Nationalists avert total defeat. Sadly, President Truman and Secretary Marshall ordered the U.S. Pacific Fleet to dump all of the tanks, aircraft and other U.S. weapons that Congress had been earmarked for the Nationalist freedom fighters into the Pacific Ocean rather than allow them to fall into Chinese Nationalist hands. In the meantime, Stalin had, since August 1945, been arming and equipping Mao’s Red Army forces with the latest tanks and other weapons in the Manchurian sanctuary we granted to him to help Mao Communize all of mainland China. When Mao proclaimed victory in the Chinese Civil War on Oct. 1, 1949, the only surprising thing about it is that it took them so long to finalize their victory.
While claiming to be fighting a war for democracy against totalitarian tyranny, U.S. leaders enabled the Soviet and Chinese Communists to double the amount of territory under their control from 16 percent to 30 percent of the world’s landmass. Thanks to FDR and Truman, the number of people enslaved by godless Communism increased by nearly 430 percent from 170 million in 1939 to 730 million a mere decade later — 30 percent of the world’s people. Communist tyrants have since mass murdered nearly a billion people including forced abortions and infanticide — lives that otherwise might have been spared.
Had Truman not cut off all U.S. military support to Chinese Nationalist forces from 1946-49, Communist China and North Korea (with whom we remain technically in a state of war due to the fact no peace treaty ending the Korean War was ever signed) would not exist today. China and Korea would be united and free, having fought as allies in our Cold (and sometimes ‘hot’) War against the Soviet Union and its Communist vassal state allies. Meanwhile, had the U.S. not provided such vast amounts of military industrial assistance to the Soviet Union helping them conquer or annex vast territories during and after the war, Russia might be considerably weaker today and might pose a significantly lower nuclear threat.
Certainly, the decision of U.S. leaders from President George H.W. Bush to Barack Obama to unilaterally disarm America of over 94 percent of its Cold War-era nuclear arsenal, while leaving its citizens largely defenseless against the existential threats of nuclear missile and Electro-Magnetic Pulse (EMP) attack in the face of a massive nuclear buildup by our Sino-Russian alliance enemies, bodes ill for America’s future prospects. However, if the U.S. ends up fighting another major war against Russia and its Communist Chinese and North Korean allies in the near future, and goes down to defeat, an outcome which is more likely than not, future generations of Americans may recall that it was the decisions of two U.S. presidents — Roosevelt and Truman — over 75 years ago, that sowed the seeds of America’s demise and helped ensure we would lose the war for our very national existence.
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David T. Pyne, Esq. is a former U.S. Army combat arms and H.Q. staff officer with a M.A. in National Security Studies from Georgetown University. He currently serves as Deputy Director of National Operations for the EMP Caucus on National and Homeland Security and as a Vice President of the Association of the United States Army’s Utah Chapter.
