monitoring Trump and relevant contemporary events

Despite gyrations on Wall Street this week and an associated rise in recession fears, Donald Trump is still ballyhooing the state of the U.S. economy. In private, however, the President sounded “nervous and apprehensive” when he called a number of business leaders and financiers from his New Jersey golf club to get their opinions, the Washington Post reported.

Small wonder. With his personal-approval ratings stuck in the low forties, Trump’s 2020 reëlection campaign hinges on a healthy economy. He can be pretty confident that his core supporters will turn out for him, but he also needs to win over some less committed voters. His pitch to them is one that the British Conservative Party used successfully in 2015, during a general election, when it talked up the U.K. economy and issued dire warnings about the consequences of a victory for the opposition Labour Party.

One of the Conservatives’ campaign slogans was “DON’T LET LABOUR WRECK IT.” Substitute “THE DEMOCRATS” for “LABOUR” and you have Trump’s campaign strategy in a nutshell. Addressing a campaign rally in New Hampshire on Thursday night, he portrayed the Democratic candidates for President as “a bunch of socialists or communists” and asked the crowd, “Does anybody want to pay a ninety-five-per-cent tax?” He also suggested that a Democratic victory would lead to a crash in the stock market, adding, “You have no choice but to vote for me, because your 401(k), everything is going to be down the tubes. Whether you love me or hate me, you have got to vote for me.”

The mere fact that Trump’s strategy is based on scaremongering (under Barack Obama, the Dow more than doubled) and outright lies (Joe Biden is a socialist?) doesn’t mean that it can’t work. In 2015, the British economy wasn’t doing great at all. Held back by five years of Conservative austerity policies, it hadn’t even fully recovered from the Great Recession. But the Conservatives, aided by their allies in the British media, managed to raise enough doubts about Labour’s economic competence to gain an over-all majority in the House of Commons. As long as the U.S. economy looks strong, the possibility of something similar happening in November, 2020, can’t be ruled out entirely, despite Trump’s unpopularity.

But, if the economy turns south between now and the election, Trump will almost certainly be defeated, and he knows it. Hence his delay, earlier this week, on expanding tariffs on Chinese imports, and his increasingly frantic efforts to scapegoat the Federal Reserve and its chairman, Jerome Powell. As the Dow plunged on Wednesday, Trump took to Twitter, calling Powell “clueless” and retweeting guests on Fox Business who were criticizing the Fed’s recent policy moves.

In the two days since the big fall in the stock market, we’ve received some new economic data, and it has been mixed. On Thursday, the Commerce Department reported that retail sales expanded by 0.7 per cent in July, the strongest figure since March. Economists responded by raising their estimates of third-quarter G.D.P. growth to about two per cent. That’s a long way short of the four-per-cent growth that Trump promised, but it’s also well above recession levels.

At the same time, the Fed confirmed that the manufacturing sector is in a slump. Manufacturing output fell 0.4 per cent in July, the central bank said, and it is now about 1.5 per cent below its December, 2018, level. For a President who promised to restore manufacturing to its former position of prominence, that can hardly be reassuring. Neither can the news, on Friday, that the University of Michigan’s survey-based index of consumer confidence fell sharply in August, reaching its lowest level since 2016.

The fall raised concerns about whether strong consumer spending will continue to underpin the economy, and it also illustrated that Trump’s aggressive tactics in the trade war are backfiring. “Consumers strongly reacted to the proposed September increase in tariffs on Chinese imports, spontaneously cited by 33% of all consumers in early August,” Richard Curtin, the chief economist at the Michigan survey, noted. The White House has now postponed the higher tariffs until December. That may reassure some consumers, but this week’s fluctuations in the stock market are likely to add to their jitters.

To be sure, none of this means that a recession is imminent. Most economists are predicting that the G.D.P. will continue to rise, albeit at a modest pace. Citing continued growth in jobs and household incomes, Curtain said “it is likely that consumers will reduce their pace of spending while keeping the economy out of recession at least through mid 2020.” The most recent statements from the Fed indicate that it agrees with this assessment.

As I pointed out a couple of days ago, though, economic predictions are often wrong, and nobody can be sure where things are heading. On Wall Street, there is a wide range of opinions, but there is also a general agreement that the risks of a serious downturn are rising. Ray Dalio, the head of Bridgewater Associates, the world’s largest hedge fund, said, on Wednesday, that there is a forty-per-cent chance of a recession before the election.

Despite all his bluster, Trump seems spooked. According to the Washington Post report, he has been “telling some confidants that he distrusts statistics he sees reported in the news media and that he suspects many economists and other forecasters are presenting biased data to thwart his reelection.” These sound like the ravings of an egomaniac who sees the world closing in on him.

No Wonder the Economy Has Trump Spooked

You ignored it, but that's par for your course.

KKK has killed 5000+ Americans since 1865
•Not designated as terror org

White Nationalists have killed 313+ Americans since 1995
•Not designated as terror org

18th August 2019
The Gibraltar Government has knocked back a US request to seize the Iranian supertanker Grace 1.
Gibraltar said the US was seeking to seize the ship on grounds “intrinsically linked” to US sanctions against Iran.
But it said there was no equivalent sanctions regime in Gibraltar, the UK or the rest of the EU.
“The EU sanctions regime on Iran is fundamentally different to that of the US,” the Gibraltar Government said in a statement.
“The Gibraltar Central Authority [for Mutual Legal Assistance] is unable seek an order of the Supreme Court of Gibraltar to provide the restraining assistance required by the United States of America,” it added.
“The Central Authority's inability to seek the orders requested is a result of the operation of European Union law and the differences in the sanctions regimes applicable to Iran in the EU and the US.”
At 2pm on Sunday, the tanker remained at anchorage off the east side of the Rock awaiting a new crew.
The tanker, which is carrying 2.1m barrels of Iranian crude, was seized by Gibraltar law enforcement agencies and British Royal Marines on July 4 on suspicion of violating European Union sanctions by taking oil to Syria.
But Gibraltar lifted the detention order last Thursday after Chief Minister Fabian Picardo said he had secured written assurances from Tehran that the cargo would not go to Syria.
Those assurances, in the form of diplomatic Notes Verbale from the Iranian government, were published last Thursday by Gibraltar as part of the legal notice lifting the detention order.
On Saturday, the US Government obtained a warrant from a US court in a last-ditch attempt to seize the tanker, which has now been renamed Adrian Darya 1 and re-registered under the Iranian flag.
he US was seeking to impound the ship on the grounds that it had links to Iran's Islamic Revolutionary Guard Corps [IRGC], which it designates as a terrorist organisation.
A federal court in Washington issued a warrant to seize the tanker, the oil it carries and nearly $1 million.
"A network of front companies allegedly laundered millions of dollars in support of such shipments," the U.S. attorney for the District of Columbia, Jessie Liu, said in a news release on Saturday.
"The scheme involves multiple parties affiliated with the IRGC and furthered by the deceptive voyages of the Grace 1."
But the Gibraltar government said on Sunday that the EU sanctions regime on Iran was “much narrower” than the one applicable in the US.
It said Gibraltar’s Ministry for Justice, which is the central authority that handles requests for mutual legal assistance, had considered the US request “with great care in order to be able to assist…in every way possible”, but was unable to action it.
“The principal reason for this was that the offences disclosed in the US [request for mutual legal assistance] would not constitute offences in Gibraltar had they occurred in Gibraltar,” the Gibraltar Government said in the statement.
“Notably, at the heart of the US request, were offences under the US International Emergency Economic Powers Act linked to US sanctions against Iran.”
“There are no equivalent sanctions against Iran in Gibraltar, the UK or the rest of the EU.”

Gibraltar said that under EU law, an economic resource owned or controlled by the IRGC should not be dealt with by others. But the EU regulation did not require that the resource should be confiscated or detained.

“In these circumstances, although the additional information provided [by the US] on 16 August 2019 does create a closer nexus with those elements of the EU sanctions regime against Iran that are still active, we the Central Authority do not consider that such a nexus, based on control of the economic resource, is sufficient to establish that the presence of the Grace 1 and its cargo in British Gibraltar territorial waters constitutes, by itself, an offence under the laws of Gibraltar,” the Gibraltar Government said in the statement.
“Accordingly, by virtue of the operation of EU law, the Gibraltar Central Authority is unable to provide the assistance requested."

The Gibraltar Government also noted that the IRGC is not a designated foreign terrorist organisation in Gibraltar, the UK or in the EU generally, unlike in the US. 

It added that EU legislation specifically prohibited compliance with certain US legislation, including the Iranian Transactions and Sanctions Regulations that formed a central part of the US request to seize the Grace 1.
Although the EU Blocking Regulation 2271/96 was aimed mainly at commercial operators, the Gibraltar Government said it reflected “the very different positions and legal regimes” in the US and the EU.

Thousands of union workers at a multibillion-dollar petrochemical plant being built outside Pittsburgh were given the choice of attending a speech by President Trump on Tuesday or staying away — and losing some of their pay for the week.

“Your attendance is not mandatory,” one of the construction site’s contractors wrote in rules for the speech that were shared with its employees, according to The Pittsburgh Post-Gazette, which first reported on the matter. But the rules said that only those who arrived at 7 a.m., had their work IDs scanned and then stood waiting for the president for several hours would get paid for the time.

“NO SCAN, NO PAY,” a supervisor for the contractor wrote, according to the paper.

The president’s appearance at the Royal Dutch Shell facility in Beaver County, where natural gas will be converted into plastic for a wide range of products, was publicized as a speech about energy, but it was hard to distinguish it from a standard campaign rally. Mr. Trump repeatedly targeted rivals and aired his political grievances.

At one point, Mr. Trump said he was going to speak to some of the union leaders representing the assembled workers about supporting his re-election. “And if they don’t,” Mr. Trump told the workers, “vote them the hell out of office, because they’re not doing their job.”

Ray Fisher, a spokesman for Shell, said in an email to The Times that workers who didn’t show up for the speech would still have gotten paid for their workweek, but not as much as those who scanned in and stayed on site all day.

The day “was treated as a training (work) day with a guest speaker who happened to be the president,” Mr. Fisher said in the email.

“We do these several times a year with various speakers,” he said, adding that there was a morning session before the speech that started at 7 a.m. and lasted for three hours. It “included safety training and other work-related activities,” Mr. Fisher said.

“It was understood some would choose not to attend the Presidential visit and were given the option to take paid time off” instead, he wrote. “As with any workweek, if someone chooses to take PTO,” he said, referring to paid time off, “they are not eligible to receive the maximum overtime available.”
According to The Post-Gazette, workers were told that “anything viewed as resistance” to Mr. Trump would not be tolerated at the event, which, the workers were told, was intended to foster “good will” with the building trade unions.

The decision was greeted with acceptance by some union leaders.
“This is just what Shell wanted to do, and we went along with it,” Ken Broadbent, a business manager for Steamfitters Local 449, told The Post-Gazette. He said that workers respected the office of the president, and that people could have chosen not to show up.

A White House spokesman did not respond to an email seeking comment.

WASHINGTON — When historians try to explain how opponents of immigration captured the Republican Party, they may turn to the spring of 2007, when President George W. Bush threw his waning powers behind a legalization plan and conservative populists buried it in scorn.

Mr. Bush was so taken aback, he said he worried about America “losing its soul,” and immigration politics have never been the same.

That spring was significant for another reason, too: An intense young man with wary, hooded eyes and fiercely anti-immigrant views graduated from college and began a meteoric rise as a Republican operative. With the timing of a screenplay, the man and the moment converged.

Stephen Miller was 22 and looking for work in Washington. He lacked government experience but had media appearances on talk radio and Fox News and a history of pushing causes like “Islamo-Fascism Awareness Week.” A first-term congresswoman from Minnesota offered him a job interview and discovered they were reading the same book: a polemic warning that Muslim immigration could mean “the end of the world as we know it.”

By the end of the interview, Representative Michele Bachmann had a new press secretary. And a dozen years later, Mr. Miller, now a senior adviser to President Trump, is presiding over one of the most fervent attacks on immigration in American history.

(...)

WE, MARGRETHE THE SECOND, by God's Grace Queen of Denmark, hereby announce that:
The Danish Parliament has passed the following Act, which We have ratified by giving Our assent:
Recognising that the people of Greenland is a people pursuant to international law with the right of
self-determination, the Act is based on a wish to foster equality and mutual respect in the
partnership between Denmark and Greenland.
Accordingly, the Act is based on an agreement between Naalakkersuisut [Greenland Government]
and the Danish Government as equal partners.

COPENHAGEN (Reuters) - Greenland is not for sale and the idea of selling it to the United States is absurd, Denmark’s prime minister said on Sunday after an economic adviser to President Donald Trump confirmed the U.S. interest in buying the world’s largest island.

“Greenland is not for sale. Greenland is not Danish. Greenland belongs to Greenland. I strongly hope that this is not meant seriously,” Danish Prime Minister Mette Frederiksen told the newspaper Sermitsiaq during a visit to Greenland.

Trump’s is due to visit Copenhagen early next month, when the Arctic will be on the agenda in meetings with Frederiksen and Prime Minister Kim Kielsen of Greenland, an autonomous Danish territory.

White House economic adviser Larry Kudlow on Sunday confirmed media reports earlier in the week that Trump had privately discussed with his advisers the idea of buying Greenland.

“I don’t want to predict an outcome, I’m just saying the president, who knows a thing or two about buying real estate, wants to take a look at a Greenland purchase,” Kudlow told Fox News.

Kudlow said the situation was “developing” and noted that U.S. President Harry Truman also had wanted to buy Greenland.

“And Denmark owns Greenland, Denmark is an ally, Greenland is a strategic place, up there. And they’ve got a lot of valuable minerals,” Kudlow added.

A defense treaty between Denmark and the United States dating back to 1951 gives the U.S. military rights over the Thule Air Base in northern Greenland.
Greenland, located between the North Atlantic and Arctic oceans, is dependent on Danish economic support. It handles its own domestic affairs while Copenhagen looks after defense and foreign policy.

“It’s an absurd discussion, and Kim Kielsen has of course made it clear that Greenland is not for sale. That’s where the conversation ends,” Frederiksen told the Danish broadcaster DR.

On Friday, Greenland’s foreign minister, Ane Lone Bagger, had told Reuters: “We are open for business, but we’re not for sale.”

Kudlow had credibility? The dickens you say...

President Trump, confronting perhaps the most ominous economic signs of his time in office, has unleashed what is by now a familiar response: lashing out at what he believes is a conspiracy of forces arrayed against him.

He has insisted that his own handpicked Federal Reserve chair, Jerome H. Powell, is intentionally acting against him. He has said other countries, including allies, are working to hurt American economic interests. And he has accused the news media of trying to create a recession.

“The Fake News Media is doing everything they can to crash the economy because they think that will be bad for me and my re-election,” Mr. Trump tweeted last week. “The problem they have is that the economy is way too strong and we will soon be winning big on Trade, and everyone knows that, including China!”

Mr. Trump has repeated the claims in private discussions with aides and allies, insisting that his critics are trying to take away what he sees as his calling card for re-election. Mr. Trump has been agitated in discussions of the economy, and by the news media’s reporting of warnings of a possible recession. He has said forces that do not want him to win have been overstating the damage his trade war has caused, according to people who have spoken with him. And several aides agree with him that the news media is overplaying the economic fears, adding to his feeling of being justified, people close to the president said.

The claims provide a ready target to help Mr. Trump deflect blame if the economy does tip into recession. But whether they could truly insulate the president on what could be a significant issue of the 2020 election after he has so conspicuously wrapped himself in the good economic news of the past two years remains an open question, and he and his advisers have sought to tamp down concerns that a downturn is on the way.

“Our economy is the best in the world, by far,” Mr. Trump tweeted on Sunday. “Lowest unemployment ever within almost all categories. Poised for big growth after trade deals are completed.”

“I don’t see a recession,” he told reporters later on Sunday before leaving his private golf club in Bedminster, N.J., for Washington. But he added that if the economy slowed down, “it would be because I have to take on China and some other countries,” singling out the European Union as among those treating the United States “very badly.”

The president’s broadsides follow a long pattern of conspiratorial thinking. He has claimed, without evidence, that undocumented immigrants cast millions of ballots, costing him the popular vote in the 2016 election. During the campaign, he predicted that the system might prove to be “rigged” if he did not win. He conjured up a “deep state” conspiracy within the government to thwart his election and, more recently, his agenda. And he has said reporters are trying to harm him with pictures of empty seats at his rallies.

The attacks come as the economy has begun flashing some warning signs, despite unemployment near historic lows and relatively high marks by voters on Mr. Trump’s economic stewardship. Global growth has been slowing. Last week, stock markets plunged as the yield on the 10-year Treasury note briefly fell below that of the two-year Treasury note, an unusual situation known as an inversion of the yield curve that is considered one of the most reliable leading indicators of recession in the United States.

Global markets were seized by fear last week that trade wars were slowing growth in Germany, China and the United States. But the story here is bigger than President Trump and his tariffs.

The postwar miracle is over. Since the financial crisis of 2008, the world economy has been struggling against four headwinds: deglobalization of trade, depopulation as labor forces shrink, declining productivity and a debt burden as high now as it was right before the crisis.

No major economy is growing as fast as it was before 2008. Not one is growing faster than 10 percent, the rate experienced by the Asian “miracle economies” before the crisis. In almost every country, the national discussion focuses on what must be done to revive growth and ignores the fact that the slowdown is driven by forces beyond any one government’s control. Instead of dooming ourselves to serial disappointment and fruitless stimulus campaigns, we need to redefine economic success and failure.

Germany is one of at least five major economies on the verge of a recession, which is typically defined as two consecutive quarters of negative growth. But the real issue is whether that definition still makes sense in a country with a shrinking labor force like Germany’s.

Its working population has been declining for years and is expected to fall to 47 million from 54 million by 2039. And it’s not alone in this. Forty-six countries around the world — including major powers like Japan, Russia and China — now have shrinking populations.

Demographics are usually the main driver of economic growth, so it is basically inevitable that these countries will now grow at a much slower pace. And we are not talking about minor population declines. Projections for 2040 show China’s working-age population falling by 114 million, Japan’s by 14 million. With a shrinking labor force, these economies will inevitably slow and, at times, contract. To keep calling two negative quarters in a row a “recession” implies that this outcome is somehow abnormal or unhealthy. That will no longer be the case.

To avoid overreacting, the discussion about economic health needs to shift to measures that better capture satisfaction and contentment, like per capita income growth. In countries with shrinking populations, per capita incomes can continue to grow so long as the economy is shrinking less rapidly than the population. This helps explain why, for example, Japan isn’t facing more social unrest. Its economy has grown much more slowly than that of the United States in this decade, but because the population is shrinking its per capita income has grown just as fast as America’s — around 1.5 percent per year.

Shrinking populations also help explain why unemployment is at or near multi-decade lows, even in countries with serious growth worries, like Germany and Japan. Gainfully employed Germans and Japanese won’t really feel as if their countries are in a slump until per capita G.D.P. growth turns negative — which may prove to be a more useful way to think about recessions in this new era.

The definition of success also needs to change. Many emerging countries still aspire to the double-digit growth rates experienced by what were known as the “Asian miracle economies” from the mid-1960s to the early 1990s, when populations and trade were booming. But no economy had grown so fast before then, and as population and trade surges recede, it’s unlikely any country can repeat those feats.

As growth downshifts, even little miracles are disappearing. Before the 2010s, it was common for one in every five economies to be growing at 7 percent or more annually. Now, among the world’s 200 economies, just eight, or one in 25, are on track to grow 7 percent this year. Most of those are small economies in Africa.

When the news emerged that China’s economy had slowed to just 6 percent, a new low, many investors and analysts rang the alarm bells. But the reality is that economies rarely grow as fast as 6 percent if the population is not booming too. Not only did China’s working-age population growth turn negative in 2016, but it is one of the countries hardest hit by slumping trade, declining productivity and heavy debts. If the Chinese economy really were growing at 6 percent in this environment, it would be cause for celebration, not alarm.

The benchmark for rapid growth should come down to 5 percent for emerging countries, to between and 3 and 4 percent for middle-income countries like China, and to between 1 and 2 percent for developed economies like the United States, Germany and Japan. And that should just be the start to how economists and investors redefine economic success.

This rethink is overdue. The number of countries with shrinking populations is expected to rise to 67 from 46 by 2040, and the decline in productivity growth is in many ways reinforced by heavy debt burdens and rising trade barriers. Redefining the standard of economic success could help cure many countries of irrational anxieties about “slow” growth, and make the world a calmer place.