Jayant Bhandari On Marc Faber, Freedom Of Speech, & Capitalism

Authored by Jayant Bhandari via Acting-Man.com,

Political Correctness Hampers Honest Debate

What would the world be like today had Europeans never colonized Americas, Africa, the Middle East, Australia, New Zealand, and South Asia?

Jayant speaks about Democracy, Welfare and Migration: The West’s March to Self-Destruction

Most of these societies would still not have discovered the wheel. It takes a huge amount of reality-avoidance and ineptitude for outsiders who travel there not to realize that a billion or more people in the Third World still wouldn’t have discovered the wheel. There is absolutely no evidence to suggest that the Third World would have independently found, discovered, or invented even a fraction — if any at all — of the sciences and technologies that exist today.

Without Europeans, lives in what were once colonized countries would have been brutish and much shorter than they are. These countries would have had nothing remotely resembling the concept of the rule of law.

After the end of the World War II, countries in the Third World started to gain their so-called independence. One the largest waves of immigration of Indians to the UK happened soon after the process of British decolonization started. Locals in those days knew that once the British were gone, India and Africa would enter a phase of chaos. After almost 70 years, this chaos shows little sign of abating. It is getting worse.

Institutions of the Third World have continued to deteriorate, degrade and fall apart over time. The level of immorality in social and political affairs in these countries is such that most western travelers simply do not have the background to properly comprehend what they are experiencing. As I propose in the article “The Future of the Third World”, the only hope these countries have of averting a  reversion to their precolonial, medieval existence, is for Europeans to return and once again manage them.

The irony is that the international media and global organizations — CNBC, Bloomberg, the World Bank, and the IMF — are brimming with optimism when they talk about the polluted, backward, superstitious and tribal societies of the Third World.

One might ask why the international media and global organizations have a viewpoint about the Third World that is so completely contrary to the reality. The reason is quite simple. A culture of political correctness pervades these organizations. Anyone who does not go along is considered a bigot and is immediately fired.

Marc Faber recently wrote in his newsletter that the USA was lucky to have been populated by people from Europe. This is a no-brainer. Of course, given the prevailing culture of political correctness, he had to step down from his directorships at Sprott, Ivanhoe Mines and Nova Gold Resources.

I wish these organizations had supported him and encouraged freedom of speech, particularly when people of color in the USA have a free license to be bigots nowadays, and can accuse ethnically European people of committing all kinds of real or imagined crimes.

What Marc Faber wrote is of such huge importance to my mind, that it is criminal to ignore it. As a corollary to this, the failure to understand the underlying cultural issues means that the West is bringing in far too many people with irrational, tribal mindsets, who are corroding Western civilization.

*  *  *

Addendum by PT – A Look at African Culture Through the Lens of Sargon

When we recently wrote in defense of Marc Faber, we used the example of a society living under the rules of Salafist Islam, because we felt it would be more familiar to most readers, making it easier to imagine what colonization by such a society would imply. The question boiled down to whether it would it be considered bigoted to call the customs of a strict medieval shariah dispensation undesirable. In short, what precisely is the political correctness threshold? At what point is one no longer “allowed” to discuss such things and call a spade a spade?

Before we continue, let us briefly take a step back. Europe, the US, Canada, Australia and New Zealand were very lucky, as the best European ideas have largely prevailed and the cultural, institutional, technological and economic advances we are familiar with today were firmly established over time. Several Asian countries have adopted these ideas as well, with a predictable outcome: they very quickly reached levels of development similar to those in the industrialized nations of the West. No charities are asking for donations to relieve famines in Japan or South Korea.

As noted, societies adopting these ideas were lucky. We don’t claim it has anything to do with race and things may well have turned out differently. Feudal medieval Europe was a horrible place for a great many people (particularly the large rural population), and for a long time indications that an Age of Enlightenment would eventually arise and win the day were scant. In the 17th century a three decades-long religious war raged and either left vast areas depopulated or threw them back into a state of quasi-barbarism.

The nomadic Germanic tribes that were among the ancestors of many of today’s Europeans for centuries were mainly known for being superstitious and brutal pillagers and rapists. Not the kind of people anyone would want to be colonized by (it should be noted that their manners improved greatly once they settled down, which they did soon after the Visigoths sacked Rome in AD 410. They even bequeathed a famous legal code to posterity, which remained in use for another six centuries after the once feared conquerors of Rome had quietly disappeared into the dustbin of history).

One could certainly speculate about what precisely led to European culture eventually embracing individual freedom, democracy and free markets, but one would also do well to remember that it was not exactly a straightforward affair. Bad ideas and the atrocious ideologies they produced (such as fascism and Marxism) resulted in setbacks of genocidal proportions. It is hard to claim one is civilized while wiping out tens of millions of people. But not unlike the Visigoths of yore, we got better.

Sometimes it doesn’t take much for societies to veer from a spirit of relative openness and scientific advancement onto a far less productive path. Science flourished during Islam’s Golden Age (as Steven Weinberg and Neil de Grasse Tyson point out here, it is no coincidence that around two thirds of the named stars in our skies have Arabic names), but this ended with the complete destruction of Baghdad and its famed House of Wisdom by Mongols in the mid 13th century. The Mongols definitely weren’t avid readers, but they were certainly good at mass-slaughter (rumor has it they got better too, but we will reserve judgment for now).

The decline of Islam’s Golden Age was already set into motion 150 years earlier though, when Persian theologian Abu Hamid Al-Ghazali wrote a scathing critique of Muslim scientists who had adopted the ideas of Aristotle and other ancient Greek philosophers. His work turned out to be enormously influential among his  fellow Muslim scholars and reportedly remains so to this day.

Some modern-day scholars assert that that a careful reading of Al-Ghazali’s most important work (titled The Incoherence of the Philosophers) reveals that it is not an anti-science screed. That may be true, but in that case most of his contemporaries and successors must have misinterpreted his work. Clearly he was lauded for centuries for his strong defense of the tenets of Sunni Islam rather than his support of scientific inquiry.

Moreover, he seemed to deny the very existence of laws of nature by asserting that even the most mundane observable cause-effect chains represented specific “acts of divine intervention” akin to miracles. Obviously, there is no longer a good reason to investigate them if that is the case; in fact, too much scientific curiousness may be seen as coming dangerously close to blasphemy. Of course, science and religion were frequently in conflict in Europe as well, but the conflict wasn’t resolved by abandoning science.

A few days after writing about the controversy caused by Marc Faber’s remarks, we came across an interesting video by an political commentator on You-Tube, Sargon of Assad. By way of background, Sargon is actually a liberal (in the sense of the US definition), but he stands out by being dead set against assorted cultural Marxists, the identity politics they propagate and their abominable crusade to silence free speech via enforcing political correctness.

He recently went to “explore Africa” at the American Museum of Natural History in New York. His short summary of the descriptions on display there reads: “Africans good, Europeans bad. Islam good, Christianity bad”. The texts were evidently compiled by a leftist academic who decided that reality urgently needed to be upgraded to a PC 2.0 version and Sargon has a great time making fun of this. In conjunction with his commentary, the vignettes also provide interesting insights into African history and culture.

Sargon learns about African history and culture at the American Museum of Natural History. Regardless of whether one considers Dr. Faber’s remarks insensitive, it can hardly be doubted that they were correct in the context they were made in.

 

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NY Rep Peter King: “We Have Enough ‘No’ Votes To Block Budget”

In a pronouncement that confirms the worst fears of Paul Ryan and the rest of the Republican Congressional leadership, New York Republican Peter King told a group of reporters that he has enough 'no' votes to block ratification of the senate version of the federal budget – a crucial step in the process toward tax reform that could potentially sink the White House's plan before the bill has even been written.

King's declaration follows a Politico report from earlier that Gary Cohn told a bipartisan group of legislators that the final bill would scrap a deduction for state and local taxes – known as the SALT deduction. Scrapping the deduction would lead to a dramatic increase in the federal tax bill for taxpayers in blue states, which tend to have higher taxe rates. Treasury Secretary Steven Mnuchin, who is managing the bill on behalf of the White House along with Cohn, has characterized the deduction as an unfair subsidy from the federal government, and has said the final bill would make it up to taxpayers in other ways.

“How anybody from New York and New Jersey can vote for this budget without knowing what is in the tax bill is beyond me," King said. He later reaffirmed his opposition by exorting Republicans from New Jersey and New York to vote against the Senate budget.

 

King alleged that he and fellow GOP Rep. Dan Donovan, also of NY, weren’t invited to several meetings with Republican leaders on the tax issue – suggesting that little has been done to hammer out a compromise.

“They are trying to pick us off one by one," King said.

In a rare feat of political honesty, King admitted that sitting back and letting the deduction be scrapped without a fight would be political suicide, because eliminating the deduction would be financially devastating for his constituents.

“The rest of the country is getting a tax cut and the best they are offering my folks is you will break even? I can’t go back to my district and say re-elect me, it could have been worse," he said. “This proposal will devastate my district forever.

One state over, New Jersey Rep. Frank LoBiondo tweeted his opposition to the bill….

Tom MacArthur, another New Jersey Congressman, met with Vice President Mike Pence to discuss tax reform, and hinted that Republicans would be able to work out a compromise with the holdouts. Some have speculated that a deal preserving the deduction for middle- and working-class families might satisfy the blue-state resistors.

Finally, New York Congressman Tom Reed, who's a member of the influential Ways and Means committee, which has authority over the budget, insisted during an appearance on Bloomberg TV that Republicans would find a way to preserve the SALT deduction.

Passing the Senate budget would unlock the reconciliation provisions that would allow Senate Republicans to circumvent a Democratic filibuster and pass tax reform with a simple majority. After Mitch McConnell on Sunday reassured the public that tax reform was progressing on schedule, and President Donald Trump and his Republican peers in the senate gushed about their productive lunch meeting earlier today, the doubts about whether the budget will pass seem to be emerging right on schedule. This is hardly the first time the administration and Republican leaders have talked up their chances of winning a vote, only to see it fall apart at the last minute.

With a vote on the budget set to take place tomorrow morning, we wait to see if Ryan will move ahead with the vote and risk an embarassing defeat, or delay it.

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New Zealand To Foreigners – Get Out!

Authored by Martin Armstrong via ArmstrongEconomics.com,

The New Zealand Prime Minister that took the country back into Marxism, has fired its first shot across the bow. 

Thirty-seven-year-old Jacinda Ardern, a member of the New Zealand Labour Party, became the world’s youngest female leader. Hillary must be crying in her martini.

The Labour party have formally signed a coalition agreement, introducing all new policies focusing on climate change, regional development, and poverty which translates into hunting the hated rich.

Nevertheless, PM Ardern has just fired the first shot across the bow and this is a serious warning that foreign investment better cross New Zealand off the list of places that will be up-and-coming.

She has banned foreigners from buying property in New Zealand.

As The BBC reports, the rise in New Zealand house prices over recent years has been fuelled by strong immigration, low interest rates and limited housing supplies.

House price growth in the country, home to about 4.6 million people, has moderated over the past year, but remains among the highest in the world.

 

A recent survey by property consultants Knight Frank found annual house price growth in New Zealand was 10.4%, pushing it from 3rd to 10th place in the ranking of 55 housing markets.

 

Prices in the capital, Wellington, rose 18.1% in the year to June 2017. Residential prices in Auckland, the country's largest city, rose 9.8% over the same period.

 

The median price for residential property in Auckland is $845,000 ($582,662; £443,554), according to data from the Real Estate Institute of New Zealand.

The first proposal was to ban any migration to New Zealand as well. That they had to back off of given the refugee impression and that would have agreed with Trump – OMG!

"We have agreed on banning the purchase of existing homes by foreign buyers," Ms Ardern said on Tuesday, while also announcing plans to slash immigration and focus on job creation.

She thinks banned foreign property ownership will cool off the property market. The problem will be, a property crash. When home values decline, people feel they lost money and they spend less.

With rising property values, people feel they are better-off and spend more assuming they have equity even if they do not borrow against it.

She may be the youngest female leader in the world, but she also is clueless about economics.

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US Deploys Third Aircraft Carrier To Western Pacific Ahead Of Trump’s Visit

Ahead of Trump’s Asian tour, which in addition to a trip to Beijing also includes a visit to the Korean Peninsula and perhaps a surprise visit to the DMZ, the US navy is bringing out the big guns, and has deployed a third nuclear-powered aircraft carrier, the Nimitz-class USS Theodore Roosevelt and its strike group which on October 23, to the Western Pacific Ocean amid increasing tensions between the U.S. and North Korea the US Navy announced in a statement.

On Monday, the carrier strike group entered the U.S. Navy’s 7th Fleet area, which is the Navy’s biggest forward-deployed fleet, with its area of operations stretching from the International Date Line to the India-Pakistan border, and from the Kuril Islands in the north to the Antarctic in the south.


The USS Roosevelt strike group has arrived in the west Pacific

The 100,000-ton warship and its strike group joins two other carriers located in the 7th Fleet area amid fears of war with North Korea: in addition, the U.S. Navy announced that the USS Nimitz strike group consisting of the Arleigh Burke-class guided-missile destroyers USS Howard, USS Shoup, USS Pinckney, USS Kidd, and the Ticonderoga-class guided-missile cruiser USS Princeton returned to the 7th Fleet area of operations on October 25 following a deployment to the Persian Gulf.

While it is unclear if the final rendezvous of the three ships is North Korea, it is still largely unprecedented to allocate three aircraft carriers in the region at one time, and is a huge gathering of US sea power according to naval experts. Ultimately, the USS Theodore Roosevelt is expected to make its way to the Persian Gulf to replace the USS Nimitz. The U.S. Navy has not announced any specific missions for the two carriers.

According to the Diplomat, the USS Ronald Reagan carrier strike group, operating out of Yokosuka Naval Base in Japan’s Kanagawa Prefecture and currently the U.S. Navy’s only forward-deployed carrier strike group in the Asia-Pacific region, recently completed a major naval exercise in the waters off the Korean Peninsula.

The USS Ronald Reagan is currently anchored off the port of Busan. Republic of Korea (ROK) Army General Jeong Kyeong-doo, chairman of the Joint Chiefs of Staff (JCS), and the commanding officer of U.S. Forces Korea General Vincent Brooks met aboard the carrier on October 24 to discuss ongoing tension on the Korean Peninsula, according to Yonhap news agency.

 

“Amid an unprecedentedly grave security situation, the deployment of Ronald Reagan and its carrier strike group to the Korean Peninsula and their joint exercise with South Korea is part of the increased deployment of U.S. strategic assets here. It must have been a strong warning to North Korea,” Jeong was quoted by the JCS as saying aboard the carrier.

In early June, two carriers, the USS Ronald Reagan and USS Carl Vinson, conducted joint naval exercises off the Korean peninsula in the Sea of Japan in response to North Korean ballistic missile tests. It was the first time that two U.S carriers were operating near the Korean Peninsula since the 1990s.

The USS Theodore Roosevelt will conduct maritime security operations, theater security cooperation, and port visits while deployed in the Asia-Pacific. “USS Theodore Roosevelt is prepared to carry out the full spectrum of possible missions, from humanitarian relief to combat operations,” said the ship’s commanding officer Cpt Sardiello. “When a carrier leaves on deployment, we have to be ready for anything.”

For now, the region is surprisingly quiet: Kim has not fired missile or tested a nuclear bomb since September 15.

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Jeff Sessions Says MS-13 Is a Major Player in the Narcotics Trade. The DEA Disagrees.

Attorney General Jeff Sessions announced Monday that a gang called La Mara Salvatrucha, or MS-13, will now be “a priority” for the Justice Department’s Organized Crime Drug Enforcement Task Forces.

These inter-agency task forces “all have one mission,” Sessions said this week at a gathering of the International Association of Chiefs of Police this week. “To go after drug criminals and traffickers at the highest levels.”

Historically, MS-13 has not trafficked drugs at the “highest levels.” Founded in the 1980s by El Salvadoran immigrants in Los Angeles, the group’s original purpose was to protect other El Salvadoran refugees of the country’s 1980s civil war (in which the U.S. played an ugly role) from Southern California street gangs. It has since evolved into a more sinister and violent organization. But according to the Drug Enforcement Administration and other groups, MS-13 is still a small fry in the drug trafficking business.

In a post pushing back against Sessions’ remarks, Sarah Kinosian of the human rights group Washington Office on Latin America writes that MS-13 focuses mostly on extortion, street-level drug sales, and inter-gang violence in El Salvador and in the U.S. Federal indictments of MS-13 members reflect that claim. The State Department’s 2017 International Narcotics Control Strategy report, released in March of this year, says that “[c]riminal street gangs such as Mara Salvatrucha (MS-13) and 18th Street [another El Salvadoran gang with an American presence, and the sworn enemies of MS-13] do not yet appear to be a formal part of the transnational drug logistics chain, except as facilitators of trafficking through Honduras.”

The DEA, meanwhile, says in its 2017 Threat Assessment—which the agency released on the same day that Sessions announced MS-13 was now drug enemy number one—that Mexico’s Transnational Criminal Organizations (TCOs) “remain the greatest criminal drug threat to the United States; no other group is currently positioned to challenge them.” (If that sounds familiar, recall that a DEA spokesperson said this to the Post in August: “Mexican cartels, Mexican transnational organizations are the greatest criminal threat to the United States. There’s no other group currently positioned to challenge them. Whenever drug investigations that we do involve MS-13, we respond, but right now the No. 1 drug threat in the U.S. is the Mexican cartels.”)

MS-13 not harmless, in other words, but they also aren’t driving the heroin and fentanyl crises.

We’ve known for several months now that the DEA and Sessions are at odds about which transnational drug groups to prioritize. In August, the Washington Post reported that acting DEA Administrator Chuck Rosenberg and Sessions went head to head over the focus on MS-13 “despite warnings from Rosenberg and others at the DEA that the gang, which draws Central American teenagers for most of its recruits, is not one of the biggest players when it comes to distributing and selling narcotics.” (Though Rosenberg left the DEA earlier this month, he wrote the 2017 Threat Assessment introduction.)

Why does any of this matter?

Because Mexican CTOs are somehow stronger now than ever before. After two decades of splitting the U.S. heroin market with Colombia—Mexico used trucks to get black tar heroin to the west coast, Colombia used planes and boats to get white powder heroin to the eastern seaboard—the DEA says Mexico is now the dominant supplier to the eastern U.S.:

Mexico also sends us a substantial amount of fentanyl, which it obtains from China.

It also matters because more than 80,000 people have died in Mexico since 2006, when then-newly elected Mexico President Felipe Calderon kicked off a U.S.-funded offensive against his country’s drug lords. In the decade since then, the U.S. has spent tens of billions of dollars on the Merida Initiative while also doubling the number of U.S. Customs and Border Patrol agents. The most notable result of all this spilled blood and spent treasure is that Mexico’s cartels are now doing business with relative impunity from sea to shining sea.

So why is Sessions talking about MS-13 instead?

The cynical explanation is that the gang is an easy target. MS-13 has somewhere between 30,000 and 50,000 members in the United States. Most of them are poor El Salvadoran immigrants who are loosely managed by local honchos. As the Washington Post has reported, MS-13 grows its ranks by recruiting vulnerable El Salvadoran teenage immigrants here in the U.S.

Many of these kids are undocumented, or the children of undocumented parents, and are thus likely apprehensive about seeking protection from U.S. law enforcement. MS-13 also lacks the organizational and personal discipline of Mexico’s U.S.-based cartel members who, the DEA says, “strive to maintain low visibility and generally refrain from inter-cartel violence so as to avoid law enforcement detection and scrutiny.” MS-13 tattoos its members, making them easier to identify (and to deport even when they’ve left the gang).

Sessions has basically changed the scoring system to favor the DOJ’s strengths. Rounding up MS-13 members won’t stop the overdoses nor change the volatile nature of the U.S. heroin supply, but it’ll be easier than taking on the cartels and it will look like a win.

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FEC Complaint Alleges Hillary, DNC Broke Election Law By Not Disclosing Trump-Russia Dossier Funding

Today the Campaign Legal Center (CLC) filed a complaint with the Federal Election Commission (FEC) alleging the Democratic National Committee (DNC) and Hillary Clinton’s 2016 campaign committee violated campaign finance law by failing to accurately disclose the purpose and recipient of payments for the dossier of research alleging connections between then-candidate Donald Trump and Russia.  The CLC’s complaint asserts that by effectively hiding these payments from public scrutiny the DNC and Clinton “undermined the vital public information role of campaign disclosures.”

On October 24, The Washington Post revealed that the DNC and Hillary for America paid opposition research firm Fusion GPS to dig into Trump’s Russia ties, but routed the money through the law firm Perkins Coie and described the purpose as “legal services” on their FEC reports rather than research. By law, campaign and party committees must disclose the reason money is spent and its recipient.

 

“By filing misleading reports, the DNC and Clinton campaign undermined the vital public information role of campaign disclosures,” said Adav Noti, senior director, trial litigation and strategy at CLC, who previously served as the FEC’s Associate General Counsel for Policy. “Voters need campaign disclosure laws to be enforced so they can hold candidates accountable for how they raise and spend money. The FEC must investigate this apparent violation and take appropriate action.”

 

“Questions about who paid for this dossier are the subject of intense public interest, and this is precisely the information that FEC reports are supposed to provide,” said Brendan Fischer, director, federal and FEC reform at CLC. “Payments by a campaign or party committee to an opposition research firm are legal, as long as those payments are accurately disclosed. But describing payments for opposition research as ‘legal services’ is entirely misleading and subverts the reporting requirements.”

Hillary

While details of the payment arrangements remain scarce, FEC records indicate that the Hillary campaign and the DNC paid a total of $12 million to Perkins Coie for “legal services.”  Marc Elias, a Perkins partner and general counsel for Hillary’s campaign, then used some portion of those funds to turn around an hire Fusion GPS who then contracted with a former British spy, Christopher Steele, to compile the now-infamous dossier.  Per the Daily Caller:

It was revealed on Tuesday that the Clinton campaign and DNC began paying Fusion GPS, the research firm that commissioned the dossier, last April to continue research it was conducting on Trump. The Washington Post reported that Fusion approached lawyers at Perkins Coie, the firm that represented the campaign and DNC, offering to sell its investigative services.

 

Marc Elias, a Perkins Coie partner, and the general counsel for the campaign and DNC, oversaw the operation, according to The Post.

 

It is not clear how much Democrats, through Perkins Coie, paid Fusion for the project, which lasted until early November. Federal Election Commission records show that the campaign and DNC paid the law firm $12 million during the election cycle.

Of course, we have no doubt that Hillary was in the dark about all of these arrangements.

Here is the full complaint filed by CLC:

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Muni Investors Celebrate “Juicy” 3.74% Yield On New Illinois Bonds As State Hurdles Toward Bankruptcy

Muni investors seem to be absolutely elated today by the opportunity to scoop up their fair share of $4.5 billion worth of new Illinois bonds due in 2028 at a “juicy” yield of 3.74%…which makes a ton of sense if you can look beyond the fact that the state looks to be on an inevitable collision course with bankruptcy. 

Be that as it may, Wells Fargo Portfolio Manager Garbriel Diederich insists that the new issue “offers a tremendous amount of yield in a pretty yield-starved environment.” Per Bloomberg

As the state marketed $4.5 billion of bonds Wednesday, securities due November 2028 are being offered at a preliminary yield of 3.74 percent, according to four people with knowledge of the pricing who requested anonymity because the yields aren’t final. That’s lower than the 3.78 percent yield for the November 2029 portion of last week’s $1.5 billion deal, even though bond prices have slid since then.

 

Investors said the yields are alluring, with benchmark 11-year tax-exempt debt paying about 2.1 percent.

 

“The issuer still offers a tremendous amount of yield in a pretty yield-starved environment,” said Gabriel Diederich, fixed income portfolio manager at Wells Fargo Asset Management, which holds $41 billion in municipal bonds, including those issued by Illinois. “Outside of this little supply hump here with this deal, there really hasn’t been much muni issuance before this or likely in the weeks ahead.”

Of course, just a few months ago in July, the state of Illinois narrowly avoided a junk bond rating with a last minute budget deal that included a 32% hike in income taxes.  Republican Governor Bruce Rauner vetoed the budget and called it a “disaster,” but both houses of the state legislature voted to override his veto.  Meanwhile, S&P and Moody’s were apparently both convinced that the budget deal was sufficient for the state to remain an investment grade credit and all lived happily ever after…

The deal comes after Illinois avoided becoming the first junk-rated state because lawmakers overrode Governor Bruce Rauner’s veto of tax hikes to end a two-year budget impasse in July. The proceeds from Wednesday’s deal, as well as the borrowing last week, will pay down $16.6 billion of unpaid bills that piled up during the budget stalemate.

 

“Clearly the passage of a budget, the performance of the revenue enhancements with the income-tax, paired with the ability to refinance high-cost payables at much lower levels, is positive for the state,” Diederich said. “But the need for expense and pension reform remains and will be a limiter on this name trading substantially tighter.”

…with bondholders expressing their approval via an insatiable demand for 18-year Illinois risk.

Of course, if all of Illinois’ financial problems were solved via one simple tax hike, then someone is going to have to explain to us why the state’s unpaid payables balance continues to balloon higher with each passing day and now stands at a record $16,559,494,396.60 according the comptroller’s office… 

…which is only a 3-fold increase over the past two years.

Oh, and lets not forget that pesky little $130 billion pension underfunding that will rank pari passu with holders of Illinois’ latest “juicy” bond offering when the state inevitably collapses at some point in the not so distant future…

IL Pension

But sure, 3.74% is a great yield relative to other muni issuers…

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Harvey Weinstein’s Downfall Marks the Rise of Sexual Equality: New at Reason

As disgraced movie mogul Harvey Weinstein half-asses his way through sex-addiction rehab, more and more women, ranging from Oscar winner Lupita Nyong’o to former teen star Molly Ringwald, keep coming forward with stories about his abusive and sometimes criminal behavior. Even his brother and longtime business partner Bob Weinstein has disowned him, calling him “indefensible,” “crazy,” and “remorseless.”

But the Weinstein story is not just about the end of a career. It’s about the end of an era.

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Trolls vs. Velvet Ropers

Stop what you’re doing right now, and look at the political chatter in your Twitter feed. I would put chances near 100 percent that you will soon see examples of both right-of-center trolling, which I’ll loosely define here as saying something designed specifically to irritate and/or outrage the sensibilities of the dominant media/entertainment/Democratic culture; and also left-of-center boundary-drawing, in which a moralist will define virtue or acceptability in such a way that a right-of-center person of interest will inevitably find himself on the outside looking in.

I found these two examples within 60 seconds:

To answer the wags’ questions (hey, they’re just asking ’em!), in order: 1) Transmitting highly classified military secrets in wartime to a murderously expansionist world power while also recruiting other Americans for espionage is indeed considerably worse than whatever Hillary Clinton is being accused of. And 2) here’s a not-hard-to-find CBS News headline: “Jeff Flake says Republicans should speak out on Roy Moore’s past comments.”

But reality-checking such arguments kinda misses the point of 2017 politics. The subtext of these tweets is more important than the text. It is Look at those arrogant hypocrites and He’s not one of us. Responses like mine above can be thus answered with the classic, Musta struck a nerve!

Once you see major-party political discourse as largely a mutually reinforcing game of Trolls vs. Velvet Ropers, you can’t unsee. It’s “deplorables” vs. the “politically correct”; a president who crows that “46% OF PEOPLE BELIEVE MAJOR NATIONAL NEWS ORGS FABRICATE STORIES ABOUT ME,” and media people who almost dutifully overreact with statements like: “That poll result…is perhaps the saddest moment in this tragic administration’s brief and terrible history.” It’s Roy Moore‘s 5,000-pound Ten Commandments courthouse sculpture (one of the heaviest acts of trolling this century) vs. New York Gov. Andrew Cuomo’s exclusionary assertion that “extreme conservatives who are right-to-life, pro-assault-weapon, anti-gay” have “no place” in his state.

The Velvet Rope Left is forever policing the boundary between permissible and disqualifying behavior, language, and political positions (luckily for the likes of Bill Maher, those who are good on the latter are granted leeway on the former, particularly when the usually disqualifying language is used against people with bad politics). The Troll Right is forever treating that boundary like an arbitrage opportunity for selling books at CPAC.

(Both trolling and boundary-drawing are in bountiful supply outside the two-party scrum as well, and very much so within libertarianism, but I’ll set that aside for a future post.)

Like all good tragedies, the activity of both camps contains some logic and even a splash of righteousness. Trolls were absolutely correct to criticize the way Mitt Romney was unfairly declared ungood for having binders full of women and shaggy dog/car stories. Velvet Ropers, meanwhile, were certainly quicker to detect some collective demonization of minorities lurking within the Tea Party movement than I was.

But that has always been the upside in organized political hatreds, in having “the right enemies”—you can get to unpleasant truths quicker than those who are still laboriously sifting through the facts. Less happily (at least for those still troubled by conscience), you will also quickly pile up falsehoods, while dismissing the individualism of whole swaths of humanity. “Why bother with the never ending, genuinely hopeless search for truth,” Václav Havel wrote in a classic 1985 essay, “when a truth can be had so readily, all at once”?

Though the in-group/out-group policework is often attached in the moment to ideology (if rarely with the acknowledgement that the standards of such are constantly shifting), the style at heart ultimately has more to do with temperament. Jeff Flake is not philosophically very far removed from Sen. Ted Cruz (R-Texas), but one’s a bombthrower and the other drinks milk. Sen. Rand Paul (R-Ky.) is in alignment with Flake about the long-term debt crisis and the necessity for new Authorizations for Use of Military Force, but has no qualms backing a sharia-fearing paranoiac as long as he wears the letter “R.” Flake, on the other hand, sent words of encouragement to his own potential Democratic opponent after Arizonans starting hurling anti-Muslim invective in her general direction.

Velvet Ropers, meanwhile, have had a busy 10 days excoriating anyone left of center insufficiently hostile to anti-Trump Republicans such as Flake, Sen. John McCain (R-Ariz.), Sen. Bob Corker (R-Tenn.) and George W. Bush. This Ring of Fire Network headline gets straight to the language-policing point: “Stop Praising Horrible Republicans Just Because They Don’t Like Trump.” It’s as if the anti-Trump left is trying to prove the pro-Trump right’s point: They will hate us no matter what we do.

||| AmazonThe Troll Right in 2016 finally crossed from media success (what is Fox News Channel’s “Fair and Balanced” slogan if not one of modern media history’s most clever trolls?) to political muscle within the GOP. Ann Coulter went from writing bestselling troll jobs like Treason and Demonic to reportedly helping craft Donald Trump’s first big policy white paper. The 32-year-old who helped push through the administration’s historically restrictive new refugee policy reportedly got his political start in high school criticizing Latinos for speaking Spanish and noting their comparative academic deficiencies. The sitting president of the United States was until recently the country’s biggest birther.

That just ain’t Jeff Flake’s style. He criticized birtherism early and often, calling it “ridiculous” and “unfortunate.” He said in June 2016 that Trump “ought to apologize” for his statement that the “Mexican heritage” of Federal Court Judge Gonzalo Curiel is “an inherent conflict of interest.” He was disgusted by the Access Hollywood tape. Some of this lines up with Flake’s real policy differences with Trumpism, such as on immigration, trade, and debt; some of it speaks to his temperamental tendency to criticize his own political team when it goes astray.

But the real dividing line separating Jeff Flake not only from the ascendant Trump/Steve Bannon/populist wing of the Republican Party, but from the purity police in the Democratic Party, may be contained in this sentence last week from George W. Bush: “Too often, we judge other groups by their worst examples while judging ourselves by our best intentions—forgetting the image of God we should see in each other.” Even if Bush had been the perfect messenger—and he most definitely is not—that sentiment these days is in full retreat. Collectivist conflict, in all its belligerent stupidity, is the rule, not the exception. The best that some of us on the sidelines can hope for is that it be as pointless as possible.

I know, I know, Musta struck a nerve!

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Stagnation Nation: Middle Class Wealth Is Locked Up In Housing And Retirement Funds

Authored by Charles Hugh Smith via OfTwoMinds blog,

The majority of middle class wealth is locked up in unproductive assets or assets that only become available upon retirement or death.

One of my points in Why Governments Will Not Ban Bitcoin was to highlight how few families had the financial wherewithal to invest in bitcoin or an alternative hedge such as precious metals.

The limitation on middle class wealth isn't just the total net worth of each family; it's also how their wealth is allocated: the vast majority of most middle class family wealth is locked up in the family home or retirement funds.

This chart provides key insights into the differences between middle class and upper-class wealth. The majority of the wealth held by the bottom 90% of households is in the family home, i.e. the principal residence. Other major assets held include life insurance policies, pension accounts and deposits (savings).

What characterizes the family home, insurance policies and pension/retirement accounts? The wealth is largely locked up in these asset classes.

Yes, the family can borrow against these assets, but then interest accrues and the wealth is siphoned off by the loans. Early withdrawals from retirement funds trigger punishing penalties.

In effect, this wealth is in a lockbox and unavailable for deployment in other assets.

IRAs and 401K retirement accounts can be invested, but company plans come with limitations on where and how the funds can be invested, and the gains (if any) can't be accessed until retirement.

Compare these lockboxes and limitations with the top 1%, which owns the bulk of business equity assets. Business equity means ownership of businesses; ownership of shares in corporations (stocks) is classified as ownership of financial securities.

These two charts add context to the ownership of business equity. Note that despite the recent bounce off a trough, the percentage of families with business equity has declined for the past 25 years. The chart is one of lower highs and lower lows, the classic definition of a downtrend.

The mean value of business equity is concentrated in the top 10% of families. While the value of the top 10%'s biz-equity dropped sharply in the global financial crisis of 2008-09, it has since recovered and reached new heights, while the value of the biz equity held by the bottom 90% has flatlined.

Assets either produce income (i.e. they are productive assets) or they don't (i.e. they are unproductive assets). Businesses either produce net income or they become insolvent and close down. Family homes typically don't produce any income (unless the owners rent out rooms), and whatever income life insurance and retirement funds produce is unavailable.

This is the key difference between financial-elite wealth and middle class wealth: the majority of middle class wealth is locked up in unproductive assets or assets that only become available upon retirement or death.

The income flowing to family-owned businesses can be spent, of course, but it can also be reinvested, piling up additional income streams that then generate even more income to reinvest.

No wonder wealth is increasingly concentrated in the hands of the top 5%: those who own productive assets have the means to acquire more productive assets because they own income streams they can direct and use in the here and now without all the limitations imposed on the primary assets held by the middle class.

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