Saturday, December 14, 2019

At This Point Richard Nixon Resigned

Richard Nixon resigned as president after the House Judiciary Committee recommended he  be impeached, the vote that just happened yesterday for President Trump.  In the case of Nixon that vote was followed by a famous visit from three poerful GOP senators, including Barry Goldwater, who informed Nixon that he had lost the support of the GOP in the Senate.  Of course now we have the GOP Senate Majority Leader McConnell going on Sean Hannity to promise that Trump will not be convicted and that he will "coordinate" with Trump's lawyers to make sure there is no conviction.

Curiously, public polling support for impeaching Nixon only got ahead of opposition to it after the SCOTUS ruling that led to the public  release of the so-called "smoking gun" tape about a month before Nixon resigned.  In contrast, support for impeaching Trump has exceeded opposition to it since soon after it was announced the impeachment hearings would happen and appears to be holding steady, even as the Trumpists run all over the place declaring how he is  going to gain or is gaining from the impeachment proceedings.  It may be that his base is all riled, but so are those who do  not like Trump.

I find it also a bit weird that Trump and his supporters are running around threatening that the next time they control the House under a Dem prez, well, they will just go and impeach him.  They seem to forget that we have already seen this show with the Clinton impeachment, also a thoroughly partisan affair, which never had support from more than about 30 percent of the population.  That one went to trial with all the GOPs voting for conviction, with one Dem also voting for it, Mr. Clean Russell Feingold of Wisconsin.  Of course the current GOPS say Clinton committed a crime, perjury, while they claim Trump has not, although last time I checked, bribery is a felony.

Now they did not try to impeach Obama, for which I suppose we should be grateful, although he was largely squeaky clean.  But they certainly did endlessly harass him over nonsense, 8 separate hearings on the nothing that was Benghazi, lots of time and millions of dollars, not to mention endless aggrieved ranting by Sean Hannity, although somehow we never hear a whisper about that now.

Ass a final comment on the changed attitude of the GOP, I can look at my congressional representative.  In 1974, that was GOP M. Caldwell Butler of  Roanoke, a member of the House Judiciary committee, who voted in support of recommending to impeach Nixon.  As successor (after a six year spell with Dem Jim Olin) was a former staffer of Butler's, Richard Goodlatte, who also was on the Judiciary committee, eventually becoming its Chair in recent years. He just stepped down and was replaced in the  2018 election by one of his staffers, the mostly mild-mannered Ben Cline. However, not only did Cline not vote for impeaching Trump, he even joined the gang led by Matt Gaetz that raided the House Intelligence committee during one of its hearings.

Needless to say, Ben Cline is no M. Caldwell Butler, even though he sits in Butler's old seat.

Barkley Rosser

Friday, December 13, 2019

Is The Trump Trade War Over?

Probably not, but maybe.

The basic problem is that Trump has long wanted t beat up on other nations in a trade war, but now he is getting impeached and he needs positive news, and the stock markets like word that he is making trade deals. So now we get trade deals, but it is all sort of a mess.

So there are two matters here. One involves China, discussed in a new post here by pgl, which I shall comment on later. But my quick take on it is that he has made essentially similar proclamations in May, April, and even Dec. 2018. Sure, China will buy lots of US ag products and will respect intellectual property rights.  The number of times the la tter has been promised, I havelost count of.  As for the former, well, Trump is still trying to pay off his farmer losers with US taxpayer money.

So, the iiem not mentioned by pgl, although I konw he is konwledgeable on this, is the USMCA, or NAFTA++ whatever number.  The situation with this has become completely absurd. So on the day the House Judiciary comm called for impeachment of Trump, House Pseaker Pelosi came out for a modified version of Trump's USMCA.  Seveeral changes were made, incuding putting a limit on pharma price protections and a demand for Mexicans to allow union organizing. There were siine other minor changes frm the earlier versions. Anyway, it was enough for Pelosi o get the AFL-CIO to support it. She supported it.

So now McConnell and GOPs in the Senate do not support it. They do not like something because the AFL-CIO supports it?  Given that Trump wants this, I am really quite mystified.  I do not know what is going on here on this weird Senate oppo to this deal.

Just to review, this deal is mostly just the old NAFTA.  Some of it is an improvement; it needed an updating  Most of the changes in it were simply TPP items that both Canada and Mexico had previously agreed to.  This included most of the environmental and labor changes in the deal, but not a problem for Can and Mex.  Curiously one of the recently revised view by House Dems undoes part of the TPP deal, wich involved major protection for US pharma, with this being undone by the Pelosi/Hose Dems revision.  I am not clear id this  is the item that has McConnell upset or the matter of demanding that Mexico allow more union organizing.

As for the China matter, well, the new statement does not look all that much different from the May, April, and Dec. 18 stateements. Wow. We shall have China respecting US intellectual property rights and will buy lots  of US ag products.  Some tariffs will be reduced, but not many.  The big thing with the tariffs is not that some are being reduced, but that those that were supposed to come on Dec. 15 will not happen. Not much here, and the stock market yesterday barely moved.  Trump's ability to goose up the market with these nearly vacuous pronouncements seems to be coming to an end.

Barkley Rosser


Exaggerated Benefits for U.S. Farmers from the China Trade News

How gullible is Reuters?
China will likely hit $50 billion in purchases of U.S. agricultural products, U.S. President Donald Trump said on Friday after earlier announcing that he would roll back scheduled tariffs on Chinese imports as Washington and Beijing finalized an initial trade deal.
That was their opening paragraph. Fortune had a different take:
The Markets Have Spoken: Phase One Trade Deal Between the U.S. and China Is “No Victory” - From Shanghai to London, stocks rallied on Friday morning as a “Phase One trade deal” was reached between China and the Trump Administration—that is, until the details were announced. By noon in New York, the major indices still trading were swooning, with the S&P 500 and Dow Jones Industrial Average in negative territory, ceding big early gains. What happened? ... Later in the day, the markets' exuberance was largely dashed by what's not in the deal. "I think we're pretty much where we were in May," says Usha Haley, W. Frank Barton distinguished chair in international business and professor of management at Wichita State University.
From 2012 to 2014, we exported less than $20 billion of agricultural goods according to this reliable source. In 2017, this figure had declined to less than $17 billion while it dropped to less than $7 billion by 2018 thanks to Trump’s stupid trade war. All this deal accomplished was to temporarily avoid even more trade war stupidity. The stock market does not believe there will be any real improvement in the trading between the U.S. and China. Even if there was a complete reversal of the damage done to our agricultural sector from Trump’s idiotic trade policy – the best we could hope for would be $20 billion in agricultural exports to China and not some absurd $50 billion from our Liar-in-Chief. Of course, Lawrence Kudlow is supposed speak today so maybe he can mansplain to us how Trump’s stupid trade policy will lead to some massive agricultural boom. Update: On occasion one gets a comment that is too good to pass up:
"From 2012 to 2014, we exported less than $20 billion of agricultural goods according to this reliable source." That is yearly, if I understand. What period of time does the agreement cover, so that $50 billion could make sense? Surely not in a year.
Brilliant and here was my reply:
I was referring to exports per year with that near $20 billion. But Trump's babbling? Huh! So maybe Trump has one of those Leninist 5-year plans where we declare success if annual exports are only $10 billion per year. Yes Trump does follow Putin's lead!

Thursday, December 12, 2019

Stealing The 2016 Election?

I have been watching the later stages of the still-ongoing House  Judiciary Comm hearing on impeaching Trump.  I have seen Republicans repeatedly ranting on about how this is an effort to undo the "popular election" of Trump, the will of the "63 million" who voted for Trump.

Really, how dumb are these people? Hillary had three million more than Trump, 66 million.  He was not the popular winner.  What a joke.

Of course impeachment is explicitly an undoing of an election result.  The person elected, even ones who actually won the popular vote such as Nixon and Clinton, is charged with having engaged in conduct meaning they should be removed.  Quite aside from the hypocritical idiocy of ranting over Trump's "popular" election, this claim about elections and impeachment is simply ridiculous.

Barkley Rosser


Tuesday, December 10, 2019

Smoking At The Fed

This is about the now late Paul Volcker, but I shall come in from an odd and particular persprctive. Upfront, I did meet the late Paul Volcker several times, although never in an official situation.  Much of "inside" stuff I shall say comes from others.

I do not know the details of the Fed prior to the 1970s, but at least as of the Chairmanship of Milton Friedman's major prof, Arthur Burns, who capitulated to the  demands of Nixon for his 1972 reelection,  But it was clear that Burns was carrying on a long established tradition in the Board of Govs of the Fed: they smoked their behinds off in their supersecret meetings in the old days (not the "openness" of now).

What really went on in the earlier days is myth, but then in the 1970s Fed Chairs came to be required to testify on a regular basis to various Congressional committees.  Burns was the Chair then and the first of them who had to do this, and he set the precedent: obfuscating smoking in public.  Burns smoked a pipe, and he became notorious s the Congressional reps pressed in with their generally populist questions pushing for lower interest rates, he smoked his pipe at length before answering inquiries, to the point of actually shrouding himself in actual smoke, something no longer allowed.

From my old inside info, this matter of smoking was a big deal in the late 1970s when Jimmy Carter appointe G. William Miller to be Fed Chair, a corporate CEO with zero experience with either banking or the Fed.  His was one of the worst and most disastrous Fed chairmanships ever, maybe the absolutely worst ever.  To really nail this down, I have been told by insiders of the day that Miller not only did not smoke, but he imposed a no-smoking ruole on Bd of Govs meetings (not sure about FOMC ones, but probably them too).  I have been told that this reallyt seriously ticked off various decades-long Bd members who had long been used to smoking during Board meetings.  As it was, inflation soared shortly after Miller arrived, who was viewed as not only incompetent, but a jerk.

It is frequently forgotten that Jimmy Carter put Volcker in 1979 as inflation accelerated and accepted that Volcker might engage in polices that would end his presidency.  There were other factors in Reagan's victory over Carter, but the bad economy, not totally due to Volcker, and beyod the economy, that did Carter in.

So, to further the smoking story, which is very much about closedness vs openness at the Fed, a matter  of ongoing dispute, when Carter removed the blazingly incompetent Miller, the Board was most pleased when the then NY Fed prez Volcker came in, the biggest in all meaning smoker of them all ever. At 6'7 tall he was indeed a most imposing and formidable individual. He  also smoked the biggest cigars I have ever seen, reportedly from odd local sources (he lived in simple circumstances most of his professional time in DC, longtime base in NYC).  So his elevstion from NY Fed Prez was most welcomed by all reports I have reported.

The pubic smoking tradition continued with Volcker and beyond hin to his successor, Alan Greenspan, who was in for the next two decades, only with Bernanke coming in mid-noughties, after when the current PC no-smoking rule came in not only for pubiiic presentations but also in Board meetings. But the old system was in place for the Volcker regime, preceded ty Burns's obscurantis  pipres, followed by t he massively pahllic cigsrs of Volcker, and then the long reign of  Greensapna with his cigarettes.  All of them used their smoking in Congresinoial appearances to help confuse all with their caefullyd-do-not-disturb-the-markets public testimony, which was simply supported by their caeefully obfuscatory remarks, with =an entire industry arising that  still exists, somewhat resembling the old "Kremnilolgy"of the old days. In the old days ,especially with Burns and Volcker, they literally would envelepe themselves in smoke while testifying to Cpngrsss, and Greenspan in bad moments did a passable imitation of what they could do more effectively with pipes and vthe large cigars of Volcker.

The big question on this meme is transparency at the Fed.  The smoking by Fed Chairs  in the old days symbolized the old secrecy of Fed discussions.  Now we have transparency, more or less coming in with Bernanke in the mid-noughtties, just ii time fot the big crash and the Great Recession.  I do not know if Fed secrecy is better than the current everry-Fed-official-shoots-off-his/her mouth or not. But that is where we are now: the Fed is  open, no more smoke-filled rooms.

As for Volcker himself, he had a long life and career..  Apparently he was the key person bringing the final end of the remnants of the gold standards under Nixon.  There was much more.

Clearly this is much debate over his inflation-crushing policy, 79-82, which helped end Carter's presidency and brought the sharp and deep recessinon of 1982, when the uneployment rate got higher than in the latest Great Recession, both over 10 percent. Phillips Curve  was positive in much of the 70s with stagflation, and the ratex crowd said P'c vertical, although that was for expectations being fulfilled and that was a period of great upheaval.

A final more private report from old friends/Fed staffers is that when a staff person made a presentation to the Board in the Volcker era he usually said nothing, while sitting there with all his size and smoking huge cigars.  Fine. But if staff person messed up, he would arise and the speaker was in deep trouble with Volcker destroying the presenter as if he had burned his cigar into them.

But, the bottom line is that for his many flaws this man who lived for 92 years and had hug influence over the history of global monetary and economic developments, I ultimately have deep respect for him, despite his various flaws, although in the end this might get down to how incredibly impressive he was in person, so tall and bald and smoking a humongous cigar, all with a calm smile.

Barkley Rosser





Thursday, December 5, 2019

How Long Will US Foreign Net Income Dark Matter Continue?

The United States became a net foreign debtor in 1985.  With current account deficits every year since that net foreign indebtedness has steadily increased since, reaching a reported total of -$10.56 trillioin as of Sept. 30 this year, a substantial total.

However, while many have long predicted that this mounting net foreign indebtedness would eventually lead to the US having also having a net negative capital income flow, it has not happened.  In 1985 when the US initially into net indebtedness, the US had a net surplus on capital income of about $30 billion.  Rather than shrinking, that surplus has increased somewhat apparently in the subsequent 34 years.  As of the  second quarter of this year it appears that the annual surplus of capital income was running in the neighborhood of $100 billion. 

While there are serious sources of uncertainty and noise in much of this data, it certainly seems that US-owned assets abroad are earning far higher rates of return than what foreigners are earning from their assets in the US.  This has for quite a long time been labeled the "dark matter" phenomenon.

The question arises: how long can this odd situation continue?

Barkley Rosser

Wednesday, December 4, 2019

Liz Cheney Loves Traitors

Dick Cheney lied a lot so I guess his daughter feels compelled to do the same:
So I would just ask people to remember that they have failed despite the fact that they had a process that basically put everything tilted in their direction. The Democrats were able to act as judge and prosecutor. The Democrats were able to select every single witness. The Democrats were able to prevent, and did prevent, witnesses from answering Republican questions. The Democrats decided what the American people would see and when. The Democrats decided the timing on the release of important pieces of transcripts, they still have not released the transcript of the IC Inspector General, and so the Democrats essentially stacked the deck in their favor and despite the fact that they did this, and even with every unfair advantage and unprecedented advantage they gave themselves, including preventing the President from having any access to the proceedings, preventing his counsel from having any participation in the proceedings, they now have come out of this and fundamentally failed to prove their case.
My Lord – more whining about the process? And yes the case was proven overwhelmingly. There is a lot more BS in her little rant but who gives a damn what she said. Why is she defending a traitor? Oh wait PlameGate:
Four and a half years ago, after reading the Robert Novak column that outed Valerie Plame Wilson as a CIA operative specializing in counter-proliferation work, I wrote an article in this space noting that this particular leak from Bush administration officials might have been a violation of a federal law prohibiting government officials from disclosing information about clandestine intelligence officers and (perhaps worse) might have harmed national security by exposing anti-WMD operations. That piece was the first to identify the leak as a possible White House crime and the first to characterize the leak as evidence that within the Bush administration political expedience trumped national security.
Of course this leak was from the Office of the Vice President. Who was the Vice President back then? Oh yea – Liz Cheney’s daddy. Yes Dick Cheney committed treason and he got away with it. So now Liz Cheney wants the traitor Donald Trump to get away with it too!

Tuesday, December 3, 2019

The End Of The Harris Candidacy

I should probably not waste time on this, but I was a fan of Kamala Harris, and her ending her candidacy while still in fifth  place in the polls, if in a long slide, has me disappointed.  As it is, given her declining polls, lack of money, and reportedly internally divided campaign staff, there, her chances of actually getting the nomination had falle n to effectively zero.   It is actually an act of class on her part to get of the overly crowded Dem field.

In light of  the recent sharp decline of Warren as well who is now running #4 among Dems, we now have three white males on top.  As it is I confess that I favored both Warren and Harris over all three oof those and the rest as well.  How is it these problematic three whilte males are on top (I reocgnize that especially supporters of Sanders and Buttiegieg will dispute this and may well show up here to properly correct me and tell us of their virtues, and they as well as Biden do have virtues).

I am going to put it out there: I think both Warren and Harris, especially the latter, have been held to a higher standard as women and Harris as a minority woman, than the white males. They are not allowed to make any errors or even appear to make an error.  The white males can bungle and have serious issues, but hey, not a problem, or at least not a fatal problem.  They can go on for the next day.

Soomething that played a role in the decline of both Warren and Harris (and Warren may yet make a comeback) has been their effort to overcome the split among Dems over what to do about health care.  Both of them initially, or at least at some point, signed on to the "Medicare-for-all" label for a single payer government run health insurance system that would eliminate all private insurance, following Bernie's lead from 2016 and maintained now, all of this being part of a fight over who was the "most progresive" candidate.  Of course, neither Warren nor Harris could beat Bernie for that title, and Bernie's true believers have stuck with him, even if his support has not expanded.

As it is, "Medicare-for-all" is a label that is not great if one looks at it closely.  That is because, frankly, Mwdicare by itself sucks.  It is crappy coverage.  Pretty much everybody actually on Medicare also has supplemental private insurance od some sort as well. So in fact this was a misleasing label for what really should probably be called "Canadian-style single payer."  But this is a minor point.

The more important point was all the pollls showing that while a majority says they support "Medicare-for-all" when asked that, if one adds "with all private insurance ended," the support has always plunged.  Most people have private insurance and most of them like their  insurance  or are afraid of losing it.  So both Harris first and then Warren tried to deal with this, tried to deal with this, only to fall on both of their faces.

So first it was Harris, saying while she was for Medicare-for-all, she would not immediately abolish private insurance.  It was a bomb.  Both sides dissed her.  Big surprise, same thing happened when Warren not unreasonably also sought a middle way, go slowly on Medicare-for-all.  Ironic  As ir is, I think both of them took reasonable positions, but they have been political disasters.  As it is, I think this internal Dem arguing over this issue is just stupid.

On the matter of Harris, I am now too late going to mount a defense of her on the the other matter that she got hurt badly on.  Well, a further matter was what put her briefly on top: that her attack on Biden on the race issue in the first debate was overdone and problematic as people came to think about it, and her  attack failed to move African Americans away from supporting Biden.  But the matter that really hurt her was the attack by Tulsi Gabbard near the end of the second debate of her record as a DA and AG, and she never really recovered from that.

Here is where I wish to mount the defense I now feel guilty of not making publicly earlier, especially as I was aware of the response.  I think the reason Harris did not respond clearly in the debate is that Gabbard's attack was filled with so many fale or misleading atatements that Harris could not on the spot in the time given respond to all of them.  As it is, the very next day that Gabbard was shown to be full of it, but that report involved subtlrlirs and complications and was simply not picked up widely.  It became unknown, with the publicity being that Gabbard had successfully exposed terrible problems with Harris's record.  She was not perfect, so, bring on the white males!

I have reason to believe I shall not get this link right, but it can be tracked down on Politifact from Aug. 1, 2019.  It is at politifact.com/california/article/2019/aug/01/were-tulsi-gabbard-attacks-kamala-harris-record-c .  Since that  will probably not work, let me lay out the points made in it.

So Gabbard made a string of accusations.  The one that actually sticks to some extent is that Harris was in a hypocritical position given thaat she admitted  to having smoked pot but was putting pot smokers in jail, while later supporting legalization.  Well, of course she was enforcing the law, but apparently there  was a dramatic decline in the arrest rate on this during her time as AG, from 817 in the first year  down to 137 in the final year. She was accused of not allowing new evidence to be applied for Kevin Cooper.  That did happen, but it happened before she was in and done by people she had not control over.  She was accused of supporting tightening punishment of famillies, but that was lower level officisls and she made them stop.  Another issue involved raising cash bails.  This was put in place while she was DA in SF by certain judges for violent crimes.  She was not responsible for this and in the Senate supported reducing bail.  The bottom line is that almost all of what Gabbard accused her of was either exaggerated or just plain false.  But, hey, a black woman cannot make any mistakes.

One positive here is that I think this may raise the chance Harris might become VP nominee.  If Warren gets the nomination, it wll not happen: two women ia too much.  Biden might not pick her, both because he may still be angry over what she did in the first debate and also does not need her to increase his support among African Americans, but he also may need more to pick Warren to unify with the left wing of the party.  But for Both Sanders and Buttigieg, especially the latter, she looks like the obvious VP pick. We shall see.

BTW, one reason I have been for her is that I know her dad, retired Post Keynesian Stanford economist, Donald J. Harris of Jamaica originally, whom I had in grad school and greatly respect.  ironicallly he and his daughter fell out during her campaiign over the pot issue, when she jokingly replied to an interviewer, "Of course I am for pot legalization; I am a Jamaican," which her old man did not appreciate at all.

Barkley Rosser

Saturday, November 30, 2019

Bicycles and Wine Tariffs

Jeffrey Frankel has a must read blog over at Econbrowser:
The “bicycle theory” used to be a metaphor for international trade policy. Just as standing still on a bicycle is not an option — one has to keep moving forward or else the bike will fall over – so it was said that international trade negotiators must continue to engage in successive rounds of liberalization, or else the open global trading system would be pulled down by protectionist interests. I don’t know if the theory was ever right. (And, to be honest, I don’t entirely understand why forward movement keeps a bicycle from falling over.) But if we had stood still on trade policy over the last three years we would be a lot better off than where we are now.
It may be cold in New York City but after all that Thanksgiving wine, maybe a bicycle ride is in order. Just after that infamous phone call with the President of Ukraine, Trump opined on trade policy regarding wine:
Mr Trump, who is teetotal, said: "I've always liked American wines better than French wines. Even though I don't drink wine. I just like the way they look." The US is the world's largest consumer of wine and the largest import market, with France consistently among the top origin countries for imported wine.
He was angry over something called the digital sales tax but here is a more related reason for this weird tweet:
High tariff rates constitute the single most restrictive barrier to U.S. wine exports. According to the World Bank, the average simple-applied import tariff including all products worldwide in 2015 is 6.8%; without including the preferential rates the average is 30.4%. Virtually all U.S. wine exports to the major markets, other than Canada, face tariffs that are double or triple those rates. For example, the EU import tariff per 750 bottle can range from $0.11 to 0.29, depending on the type alcoholic content of the wine. Japan’s tariff is 15% by value of the product. U.S. exports to India are hindered by a 150% tariff set on the value of the wine. By comparison, the U.S. import tariff on a 750 ml bottle is $0.05 for still wine and $0.14 for sparkling wine. Over the last 30 years of multilateral wine negotiations through the General Agreement on Tariffs and Trade (now the WTO), the U.S. import tariff for wine shrank from 31.5 cents to 6.3 cents per liter. Unfortunately, other countries’ wine tariffs only slightly decreased, if at all. For several emerging markets those rates are still high with China at 14%, Russia at 12.5%, Brazil at 20%, Vietnam at 50% and India at 150%. Wine Institute takes the position that trading partners must first reduce their tariff rates for all wine products (e.g., HTS Codes 2204, 2205 and 2206) to the current U.S. tariff levels before the U.S. further reduces its rates. This policy is based on decades of international trade negotiations that have materially aided the wine industries of other countries and harmed the U.S. industry. The U.S., which has some of the lowest wine tariffs of any major wine producing country, lowered its wine tariffs to a very low rate in the Uruguay Round while other countries maintained much higher tariff rates. This disparity in tariffs has directly resulted in a significant loss of U.S. market share and a negative balance of trade for U.S. wineries that continues to increase.
The Wine Institute discussion continues by noting EU subsidies for European wine. One might presume this would be an excuse for Trump’s proposal of wine tariffs but fortunately the Wine Institute would rather get back on that bicycle.

Friday, November 29, 2019

The Current State of the U.S. Dairy Industry

I had to endure a discussion of the plight of American dairy farmers where Trump’s trade policies were somehow to blame. Stephanie Mercier confirmed some of the facts:
According to data reported by the National Farmers Union (NFU), the average dairy farm has shown a positive net income only once in the last decade, in 2014. In 2018, the average value of production exceeded the total cost of producing each hundredweight of milk in only one state, California, and nationwide, dairy farmers lost an average of $3.21 per hundredweight of milk produced. For 2019, total dairy production is expected to increase modestly over 2018, by less than 0.3 percent, and the average all-milk price is expected to increase as well, from $16.26/cwt in 2018 to $18.40/cwt. While the projected 13 percent increase in price for this year is welcome news for U.S. dairy farmers, that level still falls below the average total cost of production for farmers in most of the country.
But she had a very different take on the international issues involved:
This situation is largely a result of a persistent mismatch between the supply of dairy products and the demand for them, and is not isolated to the U.S. domestic market. Within the European Union, low dairy prices prompted some Italian, German, and Belgian producers to dump their product in protest during the summer of 2019. The combination of low prices and a severe drought in 2018 has pushed many Australian dairy operations to the brink of collapse. The farmer-owned Fonterra dairy cooperative, serving both Australia and New Zealand farmers, has seen its share values decline by about 50 percent since the beginning of 2018.
Look – we can criticize Trump’s stupid trade war for a lot of things but low milk prices are being driven by other factors:
In many ways, the current supply/demand conditions in the global dairy market, at least in developed countries, seem to represent an example of the “treadmill theory of technology adoption” in agriculture, posited by Dr. Willard Cochran (University of Minnesota) in the 1950s. Farmers adopt new technologies to reduce their costs, but if most farmers do the same thing, it often leads to over-production of that commodity. Prices drop, so they end up generating less revenue.
So what has been the U.S. policy response?
In the 2018 farm bill, enacted late in the year, Congress tried to respond to the dairy crisis by making significant changes to the dairy safety net system. Under the new legislation, Dairy producers will be able to cover their production with both the Dairy Margin Coverage (DMC) program (the replacement for the Margin Protection Program) and Livestock Gross Margin insurance for dairy offered under the crop insurance program. Dairy producers will be eligible to claim a refund of some of the premiums they paid under the Margin Protection Program, a benefit estimated to cost $58 million for all producers. Dairy farmers who commit to maintaining the same DMC coverage level over the lifetime of the farm bill will receive a 25 percent discount on their premiums. Congress set the stage for bolstering these programs with provisions in the Bipartisan Budget Act of 2018 (passed in February of 2018), with policy changes that were projected to cost $1.1 billion over and above baseline spending levels for the period of 2018 through 2028. Under the DMC program, 37,468 dairy operations were enrolled for 2019, accounting for 85 percent of all operations. Payouts under the program for 2019 have totaled $306 million to date. Enrollment is now open for 2020 participation in the program, and the enrollment period ends on December 13, 2019. There were also 1,237 livestock gross margin insurance policies sold for dairy cattle operations in 2019, covering $128 million worth of liability.
As consumers, we are enjoying low milk prices but then we are paying a bit more in taxes. This link has more on this Dairy Margin Coverage program. Update: Free trade with China could help the dairy products surplus problem according to this report:
With the development of China’s economy and the rise in Chinese people’s living standards, the per capita consumption of dairy products in China keeps rising. Despite the increasing demand for dairy products, the domestic production of dairy products sees a rather anemic growth. In 2017, the apparent consumption of dairy products in China reached about 31.79 million tons, representing a CAGR of about 2.7% from 2013 to 2017, according to the researcher. However, the production volume of dairy products in China grew at a CAGR of only 2.1% during the same period. The main reasons for the sluggish growth include: (1) The costs of domestic dairy production in China are higher than the global average as affected by the costs of feed, labor and land, and the low profitability inhibits the production growth; and (2) Chinese people lack confidence in domestic dairy products as safety incidents occurred frequently in China's dairy product industry in the recent decade. The above factors drive the growth of dairy product imports in China. According to China Customs, in 2018, the import volume of dairy products in China reached 2.74 million tons, up by 7.80% YOY; the import value reached USD 10.65 billion, up by 14.80% YOY, the researcher concludes.
Of course, Team Trump and their stupid trade war philosophy might screw this up for American farmers.

Why Did Oil Prices Plunge This Black Friday?

Nothing to do with the American super big shopping day after Thanksgiving, but several items, some of which may reverse themselves.  As it is, it was a pretty big drop, nearly 5 percent for the day for both West Texas and Brent crude, with the latter now just above $60 per barrel.

The big headline is the resignation of Iraqi prime minister Adil Abdul Mahdi. The immediate trigger of that was that it was demanded by Iraq's most influential cleri, Ali Sistani.  This came after weeks of mounting protests in Iraq against the government, both in Baghdad, but also among Shia in the South, with Sistani a Shia cleric. He is based in Najaf, the Shia holy city where Imam Ali is buried, the son-in-law of the Prrophet Muhammed.  Protestors had just torched an Iranian consulate there. The supposed reason this might justify a fal in oil prices is that it is thought that the protests have reduced exports from Iraq, which is currently the second largest oil exporter in OPEC. I do  not know if that will result, but if indeed this leads to Iraqi oil exports rising, then indeed a price drop is justified.

While lless headline-generating but arguably more important are rumors regarding a major OPEC meeting in Vienna next week.  Supposedly the Saudis have gotten tired of cutting oil production to offset increases by other OPEC members. This may not help out the ARAMCO IPO going on, with falling oil prices resulting.  But that would certainly portend a reasonable basis for them to fall.

On top of that there are also reports that non-OPEC member Russia is now withdrawing from agreements over the last three years, largely with the Saudis, to restrain their production, especially of condensates.  This too would reasonably push oil prices down.

There are also reports of snags in US-China trade talks, a less important item that might reveese tomorrow, but one that makes all the markets nervous, and indeed stock markets were down today also.

So, while "Black Friday" in the US means businesses supposedly coming out of negative red territory on their profit accounts, in the the oil patch it looks more like something unwanted, black indeed.

Barkley Rosser

Wednesday, November 27, 2019

Putin Beating Up People At Russia's Top University

That would be Moscow State University, the "Harvard" of Russia.

Not in the MSM at all, but I have mu sources, and apparently sometime last week the FSB, the successor to the domestic  arm of the old  KGB, raised Moscow State (whose main building is one of those "Stalin Gothic" skyscrapers) to capture a student who had been posting leaflets on walls protesting recent government actions.  He was reortedly taken into the library and severely beaten to the point of torture.

Oh yes, VV Putin is such a lover of knowledge and science, just like his flunky, Donald J. Trump.

Happy Thanksgiving, you all.

Addendum: Apparently the student was accused of "terrorism."

Barkley Rosser

Tuesday, November 26, 2019

Complicating The ARAMCO IPO

Thee Saudi ARAMCO IPO is happening on the Saudi exchange just for Saudi citizens, where apparently there is a not-so-subtle campaign on well off and connected citizens who wish to remain that way to buy into the IPO.  But there continues to be delays in opening it up to the rest of the world, with this partly reflecting fears of demands that might be made for more openness, and all that, with various Saudis not keen on that, especially apparently at ARACO itself.

However there are now reports of another development that might encourage domestic purchases but may further put off foreigners.  This is a nw round of arrests of alleged dissidents, up to at least nine in the last week.  These are all fairly prominents leading citizens, a philosopher, journalists, businessmen.  What is curious and sisturbing about this round is that badically all of these have reportedly been supportive of the regime and of the recent initiatives, at least the economic ones, by MbS, the Crown Prince.  But they are being swept up?  Why?  Apparently the only thing that at least some of them have in common is that back in 2011 many of them (not clear all of them) made public statements sympathetic to the initial Araab Sprinbg uprisings, a position never shared by the Saudi government.  The theory is that thanks to Trump's support and the apparent end of the mild disapproval  by many foreigners after the murder og WaPo columnist, Jamal Khashoggi, MbS feels he can get away with clearing out even potential critics.

But then this new round of such conduct may further sour the prospects for obtaining outside investors in the ARAMCO IPO.  The company may currently have the world's highest net income, well ahead of Apple, at $110 billion.  But worries about the future of the oil industry, not to mention the stability of the Saudi royal family.  Of course part of the high net income is that KSA continues to be one of the lowest cost locations in the world to pump oil, with ARAMCO officials claiming that if indeed oil disappears from the world economy, the last to be pumped will be out of Saudi Arabia.

Of course, given worries about the foreigners, not rushing in, it may be that this outburst of arrests may be to encourage more domestic purchases.  So it may be a contest: do the arrests encourage more domestic purchases than it discourages by the foreigners.  Or maybe MbS is not thinking, which he seesms to have done previous, e.g. the Khashoggi murder.

Barkley Rosser

Monday, November 25, 2019

Have the Transfer Pricing Experts at KPMG Heard of the Repo Ruckus?

If one thinks Trump’s economic advisors are the dumbest people on the planet, I have a new candidate for that award – a few supposed experts on intercompany loans that work for KPMG:
In 2017, the ARRC selected the Secured Overnight Financing Rate (SOFR) as the alternative that represents the best replacement rate for USD-denominated LIBOR. SOFR is based on overnight transactions in the U.S. dollar Treasury repo market, the largest rates market at a given maturity in the world ... In the time since the Federal Reserve Bank of New York began daily publication of SOFR in 2018, significant progress has been made in building liquidity in SOFR-linked markets (which include dollar-based derivatives and loans) … SOFR is fundamentally different than LIBOR in a number of key elements. SOFR is (currently) an overnight rate, is secured and is designed to reflect a (virtually) risk-free rate. LIBOR has forward-looking term options, is unsecured and is designed to reflect a bank’s cost of funding. All of these characteristics factor into how SOFR will perform under certain circumstances and how it can be used by market participations. For example, the following figure compares 3-month LIBOR, one the most commonly used LIBOR benchmarks, to the 3-month simple average of SOFR. SOFR is generally both lower and, depending on the methodology applied to derive a term structure, less volatile as compared with LIBOR. This is to be expected given the lower risk profile of SOFR, since it represents borrowings collateralized by U.S. Treasury securities while LIBOR reflects interbank credit risk.
The purpose of their ramblings was to advise multinationals on what to do with a set of their intercompany loans once LIBOR disappears, which is sort of making an easy issue hard so their arrogant and overpriced clowns can charge lots of fees for virtually nothing. But hey – that is what the Big Four does. Any financial economist with half a brain would spot two serious problem with their comparison of SOFR (an overnight rate) with the 3-month LIBOR. Of course the latter tends to be higher than the former as we have been living in a world of an upward sloping term structure for the last decade. There is an overnight LIBOR rate, which closely tracks SOFR for most dates. In fact, the average overnight LIBOR rate over the April 3, 2018 to current period has been a few basis points less. But to claim SOFR has been less volatile? I guess they did not read The Repo Ruckus where Barkley Rosser wrote:
This is now about three weeks old news, but it is increasingly clear that it is not clear why it happened or if it will happen again. There was an outbreak of completely unexpected volatility in the repo market, where in the past the Fed had carried out open market operations, although that had largely passed. Indeed in more recent years when the Fed has intervened in markets it has been in the reverse repo market. In any case, interests rates shot up as high as 9 or 10 percent at one point
Now SOFR only shot up to 5.25 percent. LIBOR showed no such volatility during this period. Now one would think the experts at KPMG would have noticed this market development but it appears they did not. Now who on earth would hire people so utterly clueless? Update: This dumb idea of comparing an overnight rate (SOFR) to the 3-month LIBOR rate may have originated with BDO:
SOFR is a secured interbank overnight interest rate. As a result, SOFR rates are lower than LIBOR rates because SOFR is secured by collateral. The table below shows a comparison between historical LIBOR and SOFR since the introduction of the SOFR in April 2, 2018.
Well not quite. One reason why SOFR is lower than this 3-month LIBOR rate has something to do with the term structure as well. Those who know – avoid BDO!

Sunday, November 24, 2019

Chaos Theory And Global Climate Change

I am currently attending the Southern Economic Association meetings in Fort Lauderdale, where the street facing the hotel was underwater during the most recent hurricane to pass through.

Anyway, I saw a talk today that took me back to when I first learned about chaos theory, actuallly in the early 1970s before the word "chaos" was used for it. I learned about it and the butterfly effect, aka sensitive dependence on initial conditions, while working on a combined model of global climate change and food production.  It was called "irregular dynamics" back then, and the model showing it was climatologist Edward Lorenz, published in 1963.  Blew my mind then.  Anyway, it is widely accepted that the global climate system is chaotic, which is why one can only make weather forecasts for fairly short periods of time into the future, although one can forecast longer run average changes of averages such as average global temperature.

Anyway, I saw a talk by Emmanuele Masssetti of Georgia Tech that reminded me of all that, a talk thet explicitly drew on this chaotic effect.  So he has been simulating future climate using different assumptions for the various climate models the UN has been using for its IPCC reports.  What he found was that indeed the overall average temperature change projected did not vary as he varied initial conditions by small amounts. But what the projection for particular regions of the world did vary, indeed very much so as in the butterfly effect. So, for exmple, the Great Plains of the US would warm a lot under one simulation, but then actually cool for a simulation following a slightly changed initial conditions.  This is atunning, but not really surprising given the underlying chaotic nature  of th global climate system.

Another talk was a keynote  by Richard Zeckhauser of Harvard, who was pushing for us to study geoengineering.  He made a strong case for it.

Barkley Rosser

Wednesday, November 20, 2019

The End Of Decades Having Identities In The USA?

We are closing on the centennial of the beginning of decades having identities in the USA, the "Roaring 20s" of the 20th century.  It may be that this centennial will clearly mark the end of this odd phenomenon that we had been used to, but which was always a bit odd.  Why did this start and why might ibe ending?  I have a few thoughts on this.

My theory oon why it started in the 1920s is that this was the first appearance of national news media in the form of radio, which was the first time we could really have aunified discusson and consciousness in a way not possible previously.  Certainly there were decades earlier that had the potential for having identities. The 1860s had arguably the most dramatic event of US history, the Civil War, but nobody has ever talked about "the 60s" meaning the 1860s rather than the 1960s. Likewise, there serious economic downturns through most of both the 1870s and 1890s, but nobody has ever talked about the 70s or 90s referring to those decades.

Indeed this continued into the beginning of the 20th century, with many dramatic events in the first decade and, of course, WW I in the second, although the US was in that war for less than two years.  But it was the 1920s that got an identity for the first time in US history.  Maybe it is not the spread of radio, maybe it is the spread of automobiles, which became the dominant form of personal transport in that decade, which helped increase social mobility and communication.  So add the auto to radio, and maybe some other things, jazz, although we also got the spread of records and movies also.  So, there we had that roaring decade.

So for the rest of the 20th century people talked about each decade as something with an identity, even as some had less clear identities than others.  The 30s were dominated by the Great Depression.  The 40s were clearly dominated by WW II, and  its aftermath in the latter half of the decade.  The 50s was that golden time of US dominance with big cars and suburbs and I Like Ike.  The 60s, well, from civil rights to the Vietnam War, not to mention sex, drugs, and rock and roll.  The 70s were more complicated, marked after 73 by economic stagflation and much pulling back from excesses of the 70s, while certain movements that barely began (or started up again) got going  more seriously in the 70s, notably both the womens' movement and the gay rights movement (the latter only really getting going with Stonewall in 69).  The 80s saw the major shift associated with Reagan, the 90s had the foloowup to the end of the Cold War with an economic boom under Clinton in its latter part.  Indeed, the 90s may have been the last decade with a clear identity, with the US arguably reaching some sort of optimistic peak of world standing at the end of the millennium/century, although in fact the US was more globally dominant in the late 40s and 50s.

Here is where things get complicated, and I would argue that neither the Noughties, as the first decade of this century tends to get called when somebody bothers to call it anything, and the current nearly ending teens, do not have strong identities.. Of course the early part of the Noughties was dominated by 9/11 and the following War on Terror, including the awful war in Iraq.  But then we got someting that spilled over into the teens, the Great Recession, which began at the en of 2007.  Ironically the teens have not had a single period of time when the US economy was officially in recession, but certainly the first part of the decade was dominated by the recession that happened at the endo of the prvious decade.  Somehow by the end of the decade we had come back to reasonably growing and full employment economy, but the long dragging aftermath of the Great Recession soured our society, with the nationalist, racist, populist attitudes that brought us Trump, but have also spread across the world.  And while ISIS has been defeated, we continue to be "fighting terror" in many places.  In short, it is hard to separate these two decades.  When we look at it hard, we may be in a situation where we have been in period where we have a kind of two decade period that has its own identity, with in effect the Great Recession and its long aftermath being the unifying factor spilling across from the latter part of the first of them into the early and mif part of the second one.

I shall comment on one other reason why we may be coming to a time when the decades lose their identities, if in fact we may have already done so as I have suggested just above.  If this is the case, it may be due to an undoing of what happened a century ago, a disintegration of the unified mediia based story that emerged with radio.  As has been noticed for quite some time we have had an increasing diversity of media into ever more fragmented parts, which has allowed for large groups to simply live in different worlds, with the polarization between those who watch Fox News versus most of the rest of us symbolic of it. But watching the current situation I am struck that I have never seen such a divide in the nation in terms of fundamental perceptions about the nature of reality.

So what this centennial of the Roaring 20s brings I do not know, but it may well be that 2020s will have no more decadal identity than did the 1820s in the USA.

Barkley Rosser

Friday, November 15, 2019

Is Venezuela Stabilizing?

Maybe.
ry It looks the inflation ratei in Venezuela maxed  out in January at an annuualized rate of 192,000 % , whiich fell by September to 4,600% rate, still in hyperinflationary teritoryy, but  clearly coming down substantially.  I am not  a fan of this regime and never was, unlike some prominent economists saying nice t8ings about tueir economic performance, especially back in 2007, just berofe  the  world crash, when indeed their  numbers  looked prtty good.  But, not more recently unfortunately.  But maybe they are slowly returning to a more functional economy now, with still a long way to go.

There are also reports that oil production in Venezuela has recently risen.  Reportedly some of the recent possible stabilization in Venezuela may reflect influence of Russian advisers.

Barkley  Rosser

Thursday, November 14, 2019

"Are Robots Stealing Your Job?" is the Wrong Question

Andrew Yang says, "Yes, Robots Are Stealing Your Job" in an op-ed at the New York Times. Paul Krugman thinks they're not and advises, "Democrats, Avoid the Robot Rabbit Hole." This is, of course, a classic case of asking the wrong question.

The real question is: will robots burn down your house and kill your grandchildren? Let's imagine that all those self-driving trucks and the computers needed to guide them will run on electricity generated by wind turbines and solar panels. Will the robots in the truck factories and the robots in the computer factories also run on wind and sunshine? How about the robots in the wind turbine factories and the solar panel factories and so one ad infinitum? I know an old lady who swallowed a fly...

Let's assume that it is feasible to phase out all current fossil fuel consumption by 2050 and replace it with renewable, zero-carbon energy. Does that mean it is equally feasible to provide the additional energy needed to run all those job-stealing robots? Or to put the question in proper context, would it be feasible to do it without an uncorruptable, omniscient global central planning authority?

The hitch in all this robot speculation is a little paradox known as Jevons paradox conjoined at the hip, so to speak, with it's counterpart, "Say's Law." The former paradox says that greater fuel efficiency leads to more fuel consumption, the latter paradox tells us that labor-saving machines create more jobs than they destroy. Here are two inseparable positive feedback loops that together generate an incongruous outcome. "Yes the planet got destroyed. But for a beautiful moment in time we created a lot of value for shareholders." Or lots of jobs, jobs, jobs. Or a monthly $1,000 payment to every adult "so that we can build a trickle-up economy," Choose your poison.

There is, they say, "a certain quantity of work to be done." Who says that? Good question. In the beginning, it was the political economists -- even proto political economists -- who said it. But around 1870 economists realized that the maxim conflicted with other things they had in mind so instead of professing it they began to condemn it and to attribute the idea to others -- to Luddites, Malthusians or Lump-of-Laborers. The idea that a people could always do more work was just too great a temptation. In principle, the amount of work that could be done is infinite! The robots will not replace us! The robots will not replace us!

What this job-stealing robot debate is really all about is an economics version of theodicy. "Why does evil exist if God, the creator, is omnipotent, omniscient and good?" This theological question is echoed in the puzzle about poverty in the midst of plenty and in Mandeville's "Fable of the Bees," where private vices promote public virtues. If it seems like robots are stealing your job, have faith, all is for some ultimate purpose in this best of all possible worlds, as Candide's tutor Dr. Pangloss would assure him.

Taking the Panglossian philosophy into account, it becomes clear that both Andrew Yang and Paul Krugman are on the same page. They are just reading different paragraphs. Although they disagree on what the solution is, they agree that there is a solution and it doesn't really require a fundamental change in the way we think about limits to the "certain quantity of work to be done."




Ukraine Corruption and Transfer Pricing

As I listened to the testimony of Bill Taylor and George Kent, I was also reading up on some South African transfer pricing case involving iron ore:
Kumba Iron Ore will pay less than half of the tax bill it received from the SA Revenue Service (Sars) last year following audits of its export marketing practices during the commodities boom. The settlement of R2.5bn significantly overshot the R1.5bn Kumba had set aside as a contingent liability. It is, however, a fraction of the taxes, penalties and interest payments Sars was pursuing the country’s dominant iron ore producer for. The existence of a potential tax liability was first reported to shareholders in June 2014, but Kumba could only put a number on it early last year when it received a tax assessment of R5 billion for the years 2006 to 2010.
If this account sounds like a lot of accounting gibberish, one might check with other accounts including whatever BDO wrote but these other accounts were even less informative. To paraphrase one commercial “people who know” avoid BDO. I think what happened is that the South African tax authority objected to what it saw as a lowball transfer pricing paid to the South African mining affiliate by a tax haven marketing affiliate and decided to completely disallow any commission income for the tax haven affiliate. This account at least notes that Kumba Iron Ore eventually told its shareholders that there might be some transfer pricing risk and that the issue was eventually resolved with a more modest commission rate booked by the marketing affiliate. So what does this have to do with Ukraine?
There is high public interest in the topic of “offshores” in both Ukraine and the EU. It is of particular importance for Ukraine which is categorized as an “open economy”, meaning a country with a high share of exports and imports relative to GDP. In particular, iron and steel production and exports from Ukraine are very significant even by the scale the global iron and steel markets. These sectors have also become the single largest source of wealth for the richest Ukrainians ... It is intriguing that even the Ukrainian authorities publicly declare that there is significant profit shifting occurring to avoid corporate taxation. For instance, according to the State Fiscal Service of Ukraine the usage of transfer pricing within all types of operations results in 100 billion hryvnia tax avoidance annually (around 3.3 billion euros), which leads to almost 20-25 billion hryvnia loss of the national state budget (Riabych, Vakulchyk 2015). This budgetary loss is equivalent to 660–750 million euros, which is comparable to the scale of the annual macro-financial assistance received by Ukraine from the European Union in the last several years to fill the budgetary gap.
The authors spend considerable effort attempting to document the extent of transfer pricing manipulation involving Ukraine’s exports of iron ore and steel. While I’m not convinced they have the right metrics, let’s admit that such tasks are difficult without the multinationals providing information on their business and transfer pricing policies. Of course, multinationals involved with the type of tax avoidance suggested in this document are reluctant to provide such clarity unless they were compelled to do so. It was funny yesterday when the Trump sycophants whined about second hand information with the obvious reply being to demand the testimony of those with first hand information. Now if we could get Rudy Giuliani under oath, not only should he be asked about UkraineGate but he should also be compelled to tell us what he knows about Ukrainian iron ore transfer pricing.

Wednesday, November 13, 2019

What quid did the president quo and when did he quo it?

Aside from the headline news about a July 26 phone call, I learned four big things from the impeachment inquiry hearing this morning. First, the specific corruption surrounding Burisma Holidings had to do with self dealing by company founder Mykola Vladislavovich Zlochevsky -- issuing oil and gas licences to his own company when he was Minister of Ecology and Natural Resources. In other words, Zlochevsky did exactly what Donald J. Trump attempted to do with his Doral Golf Club and the G7 summit.

The second thing I learned is that President Trump was nursing a grudge against Ukraine because some Ukrainian politicians said some nasty things about him after he made a comment about letting Russia have Crimea. That's why he felt Ukraine "owed" him. The third thing is that the Ukraine shit made fanfall just about exactly the time that Trump was extemporizing about Hurricane Dorian hitting Alabama. Who knew Trump could multi-task?

The fourth thing I learned is the big one. There was not one quid pro quo but two. One involved Zelensky, the other Putin. That's the significance of the timing of the Trump-Zelensky phone call -- the day after Robert Mueller's congressional testimony was a dud. Humiliating Zelensky by forcing him to make a public announcement of a politically-motivated investigation of Biden-Burisma-2016 would hand to Putin his reward -- a weakened negotiating partner -- for the favor of having helped put Trump in the White House. The art of the deal, indeed.

Sunday, November 10, 2019

OK, Who Approved Of The Ads Here Now?

And not only that, presumably they are paying money to put them on, so who is getting that money?  I am not, although it may not amount to much.  Hey, I see there  are not nearly as many as on Angry Bear, where I find them to be obnoxiously in one's face, and they are pretty low key.  But, personally, I would rarther not have them and I sure as hell was never asked by anybody if I did want them.

This is also a message to those who may think I should be getting rid of weird stuff showing up in posts that I am not the person in charge of that.  So I guess I also have no say on whether we get ads, much less what they will be for.  Heck, I saw some survey about Trump.  I do not even want to see his m--f--g face here at all.

Barkley Rosser

Friday, November 8, 2019

"ok boomer " or "gas all boomers"

Within the last week or so there seems to have been an explosion of yattering over "ok boomer." Over the last few years in various parts of the internet there was a self-righteous meme pushing "gas all boomers."  Yeah. This never made it to the MSM, I suspect  because it was just too extreme for the MSM to publicize.  But now we have the MSM allover this milder "ok boomer" meme, now a big deal.  I think I have an original view of this,that the "gas all boomers"  is an idealistic millennial view, reflecting their boomer parents. This new milder meme reflects the view of the Gen-Z group, \

My view is that the former nastier "gas all boomers" meme was from the idealistic millennials, strongly rebutting their boomer parents,  We failed them, and them wanted us gassed for our  failures to deliver for them, especially in the Great Recession, which in their view at least of several years ago, was our boomer fault, although that is a pretty weak argument.

But now w come to this milder meme of "ok boomer," how polite.  Word is  that this is coming from Gen-Z sources, a groups younger than the angst-ridden millennials., who seem to have come up with the "gas all boomers" meme that went nowhere.

Obviously younger generations in the US have reasons  for being unhappy. The US economy, along with the  world economy, is slowing down.  Both the milllennials and the Gen-Z group face higher college costs and housing costs than their predecessors.  That the boomer gen is responsible for this outcome is a highly unreasonable view.

The middle portion of the millennials have  indeed been big victims of the Great Recession, and will for the rest of their lives will have lower incomes the MSM, was just too shocking, while arguably idealistic hard core in its formulation

But the new less shocking "ok boomer" meme is  coming from the new rising Gen-Z gen. Most commentary has lumped them in with the millennials, but this is crap.  They are following the "ironic" meme of their  parents, the supposedly loser Gen-X, with their irony.

So indeed that is this new "ok boomer" meme  that  is ironic, coming from the Gen-Z gen, following their  Gen-X "ironic' parents.  This contrasts with the hard line millennial "gas all boomers" view, ironically following the idealistic view of their boomer parents.

Barkley Rosser
 

Thursday, November 7, 2019

Mankiw’s Ideal Democrat (Bloomberg Alert)

Greg Mankiw has always been a Never Trumper:
I just came back from city hall, where I switched my voter registration from Republican to unenrolled (aka independent). Two reasons: First, the Republican Party has largely become the Party of Trump. Too many Republicans in Congress are willing, in the interest of protecting their jobs, to overlook Trump's misdeeds (just as too many Democrats were for Clinton during his impeachment). I have no interest in associating myself with that behavior. Maybe someday, the party will return to having honorable leaders like Bush, McCain, and Romney. Until then, count me out. Second, in Massachusetts, unenrolled voters can vote in either primary. The Democratic Party is at a crossroads, where it has to choose either a center-left candidate (Biden, Buttigieg, Klobuchar, Yang) or a far-left populist (Warren, Sanders) as their nominee for president. I intend to help them choose the former. The latter propose to move the country too far in the direction of heavy-handed state control. And in doing so, they tempt those in the center and center-right to hold their noses and vote for Trump's reelection.
In a way I get this and a lot of other centrist Republicans are saying similar things. Enter Michael Bloomberg:
Michael Bloomberg is taking steps to enter the 2020 Democratic presidential campaign, a person familiar with his plans tells CBS News. Bloomberg, 77, has dispatched aides to Alabama to file paperwork in the state to run as a Democrat. The Cotton State doesn't hold an early Democratic presidential primary, but has the earliest filing deadline for the presidential campaign. Taking steps to file paperwork is the most serious signal yet that the former New York mayor and billionaire is seriously planning for a White House run. Howard Wolfson, a longtime Bloomberg adviser, said in a statement that Bloomberg "is increasingly concerned that the current field of candidates is not well positioned" to defeat President Trump.
I guess Bloomberg thinks Biden, Buttigieg, Klobuchar, and Yang are way too liberal for his America. Hey Never Trumpers – more tax cuts for rich people! Now of course, we need to pay for all of this and something tells me that proposals to slash Social Security and Federal health care payments are not exactly going to win the Bloomberg ticket a lot of votes. Oh wait – tax the little guy. Of course, Bloomberg has long proposed a soda tax. Let’s hope Mankiw convinces to go for a carbon tax instead. But addressing income inequality in a Bloomberg Administration? Not going to happen if the Mayor of Manhattan (mainly the Upper West Side and Upper East Side) becomes President!

Tuesday, November 5, 2019

The ARAMCO IPO Stumbles Out The Door

Finally after numerous delays, the potentially largest Initial Public Offering (IPO) of stock has finally become for fully state-owned ARAMCO in the Kingdom of Saudi Arabia (KSA).  MOst of the delays had involved an unwillingness by the Saudi royal family to publicize financial and other factual details about the company, although issuing an IPO for 5 percent of the company was a part of the Vision 2030 plan of Crown Prince Mohammed bin Salman (MbS). 

As it is, for the time being the IPO is only available to Saudi nationals through the Riyadh stock exchange.  It is unclear how long or even if it will open up to foreigners.  Reportedly the Saudis are hoping for it to value  the company at $2 trillion, which would put it well ahead of Apple and Microsoft, both of which are around $1 trillion.  But some observers think this is overly optimistic on the part of the Saudis for a variety of reasons.

Along with that, the US has this past month for the first time since 1978 recorded a trade surplus in petroleum products.  This will continue to put  downward pressure on global oil prices, and also depress the prospects for how much money this IPO will raise in the end.

Barkley Rosser 

Monday, November 4, 2019

Has Tyler Cowen or John Cochrane Ever Heard of Monopsony Power?

I’m going to replicate one portion of a long winded rant about alleged cognitive dissonance:
The argument for a minimum wage is that labor demand is inelastic -- employers will hire the same number of workers. They will just absorb the higher wages or pass along the costs to customers. Workers get all the benefit. If labor demand is elastic, employers cut back on the number of employees.
Of course, labor economists would recognize that John Cochrane’s entire post assumes a perfectly competitive labor market. One has to wonder about economists who have never even considered monopsony power.

Saturday, November 2, 2019

Republican Senators Suggest Trump’s Treason is Legal

Yes – we know President Clinton cheated on his wife while in office. And yes some Republicans such as Trump sycophant Lindsey Graham passed Articles of Impeachment over adultery. Graham was rewarded by being able to move from the House to the Senate where he repeatedly suggested that the Whistle Blower complaint was nothing more than “hear say”. My have things changed:
An increasing number of GOP senators are preparing to acknowledge that there was a quid pro quo in President Trump’s leveraging of military aid with Ukraine as a means to urge the country to investigate former Vice President Joe Biden, The Washington Post reported Friday. While some Senate Republicans have defended Trump’s insistence that there was no quid pro quo, a growing number of GOP officials in the chamber are adopting the stance that what Trump did was a quid pro quo but that his actions weren’t illegal and don’t constitute impeachment, the Post reported.
Since when did treason become AOK? Yea I know these same Republicans will say “treason” is a harsh word for this holding up of military aid authorized by Congress to Ukraine which needs it to fend against Putin’s invasion in exchange for political dirt on Joe Biden. Of course, Trump’s sycophants say a lot of really stupid things. I listened to two proponents of impeachment debate on what to stress: (a) that Trump was selling out the national interest to our enemy Putin; or (b) Trump was gaining a corrupt benefit. Both statements are clearly true. But we can summarize (a) and (b) into a single and very understandable word – TREASON! Just in case these Republican Senators are confused as to what our Founding Fathers wrote when they gave us the Constitution, let’s remind them about Article II, Section 4 which states:
The President, Vice President and all civil officers of the United States, shall be removed from office on impeachment for, and conviction of, treason, bribery, or other high crimes and misdemeanors.
Donald Trump did commit treason. Treason is an impeachable event. The only question is whether these Senators will fulfill their Constitutional roles or will simply remain Trump sycophants. Update: Mike Schupp has a rather weak argument to dismiss my use of the word treason. Yes he cites Article III section 3 but I would argue withholding military aid from Ukraine gave aid and comfort to the Russians who have invaded Ukraine. Mike also wrote this:
But we can't convict someone simply for being a rogue, we try them at law for specific criminal acts.
Sorry Mike but a lot of learned people would disagree. I would also remind people that Senator Trent Lott argued people had committed treason for a lot less than what Trump has done. Speaking of Senator Lott:
Senate Majority Leader Trent Lott (R-Miss.) said Tuesday that Congress need not prove that President Clinton committed a crime to impeach him. “I think bad conduct is enough, frankly, for impeachment,” said Lott, who has provided guidance to Speaker Newt Gingrich (R-Ga.) as the House grapples with perjury and other allegations against Clinton. But that is a far different standard from what Lott advocated during the Watergate hearings in 1974, when he was one of President Nixon’s staunchest congressional defenders. Lott and nine other Republicans on the House Judiciary Committee argued then that even proof of criminal conduct by a president was not necessarily enough to proceed with impeachment--precisely the position now taken by the White House and Clinton’s Democratic defenders. “It is our judgment . . . that the framers of the United States Constitution intended that the president should be removable by the legislative branch only for serious misconduct dangerous to the system of government established by the Constitution,” Lott and the other Republicans wrote in a minority report.
Adultery is neither a crime nor “serious misconduct dangerous to the system of government established by the Constitution. What Trump has done does represent the Lott 1974 standard for impeachment.

Thursday, October 31, 2019

The Death Of Abu Bakr Al-Baghdadi And Related Matters

The self-proclaimed "Caliph" of Da'esh/ISIL/ISIS, Ibrahim Ali al-Badri al-Samarri, who took the name Abu Bakr al-Baghdadi, has blown himself up after US special forces successfully attacked his compound in Idlib province of Syria near the Turkish border after a US military dog attacked him. (His nom de guerre was chosen for its links to historical caliphs, the leaders of global Sunni Islam after the death of the Prophet Muhammed supposedly in his place, with Abu Bakr being the first such after the death of his son-in-law the Prophet and al-Baghdadi invoking the capital of the most powerful of all the caliphates, the Abbasid that ruled for 500 years from their capital in Baghdad).  A few observations.

While President Trump Trump bragged about this success of the US military for 46 minutes as a personal success of his own, the event was delayed for nearly a week and almost did not happen as al-Baghdadi was reportedly on the verge of moving again from the compound he was caught in because Trump had allowed Turkey to invade northeastern Syria, disrupting the Syrian Kurds there who had been the main US allies against Da'esh and al-Baghdadi, thus disrupting temporarily the planned attack.

While Trump most prominently thanked Russia and secondarily Turkey for their assistance in his speech while barely mentioning the US Kurdish allies, it was the latter who not only were largely responsible for ending the self-proclaimed caliphate as an entity ruling over people and territory in Syria, but also reportedly according to the Washington Post developed the mole within al-Baghdadi's circle who provided the crucial intelligence on al-Baghdadi's whereabouts and the details of his compound that made it possible to carry out this attack successfully.  The only thing Russia did was allow this attack to go forward as they reportedly control the airspace over Idlib province.  I am unaware of anything Turkey did to help this at all and in fact had in the past allowed goods to flow to Da'esh across the Turkish-Syrian border and most recently has been de facto supporting the al-Qaeda-related groups controlling Idlib province on the ground, with al-Baghdadi's compound near the Turkish border and the remnants of Da'esh apparently forming an alliance with those groups after having split from al-Qaeda in Iraq originally, with al-Qaeda considering them to be too violent.

In his bragging account of the successful operation Trump appears to have made up some details out of whole cloth in order to heighten the drama of it all, including perhaps most importantly a claim that al-Baghdadi was crying and screaming in a cowardly way at the end, something that has not been supported or verified at all by anybody publicly having primary knowledge of the events there.

Obviously Trump's decision to let Turkey invade Syria against the Kurds there and to describe these allies without whom al-Baghdadi would not have been found to be "worse terrorists then ISIS" as well as "no angels" as well as approving the entry of Russian and Syrian national troops into northeastern Syria reflects his admiration for the leaders of Turkey and Russia, where has major hotels in Istanbul and long has had financial relations with Russian oligarchs and desires to have a Trump Tower in Moscow.  His willingness to nearly botch this operation by betraying the Kurds (language used by Putin's press secretary, Peskov, regarding his actions) seems best explained by Trump's ongoing view of himself as "being primarily in the hospitality business" as his Acting Chief of Staff, Mick Mulvaney inadverdently put it in an interview on TV.

We finally have the absurd spectacle of Trump deciding to keep 200 troops in Syria to control a small group of oil wells there that Da'esh had gotten money from selling oil from until the SDF took control of them, but with the largely Syrian Kurdish SDF (which includes Christian Arabs) on the run thanks to the Turkish invasion, control of those wells might fall into the hands of either Da'esh agaiin, who will probably gain from this invasion given the freeing of over 100 fighters, despite the death of its leader, al-Baghdadi, or Syrian national troops backed by the Russians or maybe even the Turks.  Trump is under the fantasy that this oil might be developed and sold by an American company, but none will do so given that they are actually in Syrian national territory and thus this would be illegal internationally, as well as the area being a war zone.  Trump is simply delusional on this matter.

While I do not wish any particular person dead and oppose the death penalty, I do not mourn the horrible al-Baghdadi and am glad to see him no longer around to lead the remnants of Da'esh/ISIL/ISIS (I continue to be appalled by the insistence of western media of calling this renegade murderous outfit "the Islamic State" thus spreading the group's own propaganda).  But rather than deserving praise for this outcome, President Trump deserved the booing and "Lock Him Up" chants he experienced at the fifth game of the World Series given his betrayal of the Kurds that nearly made this operation impossible.

A final note is that in the wake of this, for the first time ever, the US House of Representatives has passed a resolution condemning Turkey for its refusal to recognize and apologized for the genocide carried out by the Turkish-dominated Ottoman Empire in 1915 against the Armenians.  This resolution, likely not to be passed in the Senate, had strong bipartisan support in the House.  It is about time, and the credibility of  Turkey's claims of innocence in the 1915 matter are as good as their  claims that the SDF was carrying out terror attacks against them, which is basically near zero in both cases.

Oh, Happy Halloween everybody.  I figures this makes for an appropriate post on Halloween.

Barkley Rosser

Thursday, October 24, 2019

The Famous Baseball-Watching Equality-Equity Graphic, Scrutinized

Here’s the graphic, widely used to explain why equity outcomes require unequal treatment of different people.



Benjamin Studebaker (hat tip Naked Capitalism) doesn’t like it at all: “I hate it so much.”  But his complaints, about the way the graphic elides classic debates in political theory, strike me as being too redolent of grad school obsessions.  The graphic is not trying to advance one academic doctrine over another; it just makes a simple case for compensatory policy.  I agree in a general way with this perspective.

Consider the Americans with Disabilities Act of 1990, which mandates special facilities in public buildings to accommodate people in wheelchairs or facing other mobility challenges.  This is unequal treatment: extra money is spent to install ramps that only a few will use, rather than for amenities for everyone.  But it’s a great idea!  Yes, compensation is concentrated on a minority, but it aims to allow everyone to participate in public activities, and in doing this it embodies a spirit of solidarity that ought to embrace all of us.  By making a simple, intuitive case for focused compensation, the graphic captures the spirit behind the ADA and many other policies that take account of inequalities that would otherwise leave some members of the community excluded and oppressed.

Unfortunately, however, there are serious limitations to the graphic; above all, it embodies assumptions that beg most of the questions people ask about compensatory programs.  Some are challenges from conservatives of a more individualistic bent, others might be asked by friendly critics on the left, but all are worthy of being taken seriously.

1. Watching the game over the fence is binary: either you can see it or you can’t.  In the real world, however, most activites are matters of degree.  You can learn more or less of a particular subject in school, have a better or worse chance of getting the job you want, live in a bigger or smaller house or apartment.  How much compensation is enough?  At what point do we decide that the gains from ex post equity are not large enough to justify the other costs of the program, not only monetary but possible conflicts with other social objectives?  Every teacher who has thought about how much extra attention to give those students who come to the classroom with extra needs has faced this problem.

2. Watching the game is passive, an act of pure consumption.  Things get more complex when inequalities involve activities that produce goods of value to others.  For instance, how would the graphic address compensatory programs for the baseball players?  Yes, a player from an underserved, overlooked community should get an extra chance to show they should be on the team.  But should the criteria for who makes the team be relaxed?  How and how much?  In case you haven’t noticed, this gets to the core of debates over affirmative action.  Again, I am in favor of the principle of taking extra steps to compensate for pre-existing inequalities, but the graphic offers no guidance in figuring out how far to go in that direction.

3. Height is a largely inherited condition, but what about differences in opportunity that are at least partly the result of the choices we make ourselves?  This is red meat to conservatives, who denounce affirmative action and other compensatory policies on the grounds that they undermine the incentive to try hard and do one’s best.  I think this position is too extreme, since inherited and environmental conditions are obviously crucial in many contexts, but it would also be a mistake to say that individual choices play no role at all.  Again we are facing questions of degree, and the graphic, with it’s clear intimation that inequality is inborn and ineluctable, doesn’t help.

4. The inequality depicted in the graphic is height, which is easily and uncontroversially measured.  Most social inequalities are anything but.  Student A went to a high school with a library; student B’s high school didn’t have one.  That’s a meaningful inequality, and if an opportunity can be awarded to only one of them, like entrance into a selective college program, it ought to be considered.  But how big an effect should we attribute to it?  Damned if I know.

5. There is no real scarcity facing the three game-watchers in the graphics.  There are enough boxes to allow everyone to get a good view and enough fence space for everyone to share.  In the real world neither tends to be true.  Resources that can be devoted to compensatory programs are limited, especially on a global scale, which, if you’re really an egalitarian, is how you should think about these things.  Even locally, the money often runs short.  The college I used to teach at could be criticized for not doing enough for students from low income and rural backgrounds with weak K-12 systems (I certainly did), but even with the best of intentions the money was not there.  Of course, where the goods to be distributed are competitive, like slots in a school or job openings at a company, the problem is that there’s not enough fence space to go around.  Yes, we should take action to provide more opportunities and reduce the competitive scarcity.  No, this won’t make the scarcity go away completely.

6. The graphic shows us three individuals and asks us to visually compare their heights.  America has a population of over 320 million, and even “small” communities can have a cast of thousands.  Surely we are not expected to make individual calculations for every person-by-person comparison.  No, those using the graphic usually have in mind group comparisons—differences requiring compensatory interventions according to race, class, gender, ability status, etc.  But while that makes things easier by reducing the number of comparisons, it makes everything else much harder to figure out: How do we measure group advantages and disadvantages?  How do we account for intersections?  Are they additive, multiplicative or something else?  Do all members of the group get assigned the same advantage/disadvantage rankings?  If not, on what criteria?  These are tremendously difficult questions.  I am not suggesting that they force us to abandon an egalitarian commitment to substantive, ex post equality—quite the contrary, in fact.  We do have to face them if we want to reduce the inequality in this world.  My point here is that, by depicting just these three fans watching a baseball game over a fence, one tall, one medium, one short, the graphic is a dishonest guide to navigating actual situations.

My bottom line is that, while I agree with the spirit of the graphic that policies, whether at a single office, a large institution or an entire country, should take account of the inequalities people face in real life and try to compensate for them, how and how far to go is difficult to resolve.  Achieving ex post equality is complicated in the face of so many factors that affect our chances in life, and on top of this, equality is only one of many values we ought to respect.  The real world politics of affirmative action, targeted (as opposed to universal) benefit programs and the like reside in these complexities.  The equity graphic conveys the initial insight, but the assumptions packed into its story make it harder rather than easier to think through the controversies that bedevil equity politics.

Whither Lebanon?

Yeah, yeah, yeah.  I should probably write about the "big successs" we have in Northeastern Syria thanks to Vladdie Putin talking the Turkish president, Erdogan, into holding back some from his nation's invasion of Kurdish territory.  But, heck, it is still hard to know what is going on there.  So instead I am going to look at events happening in Lebanon mostly under the radar, but that are both connected to the broader war in Syria as Lebanon has been challenged by receiving over a million refugees from that war, but also is experiencing something that resembles events happening in several other nations and that may lead to deep changes in that complicated and  long-suffering nation, things that may actually be hopeful for an improved future, more likely than what is happening to the Kurds in Northeastern Syria.  Lebanon is experiencing massive street demonstration involving hundreds of thousands of people.

Lebanon became independent from French rule in 1943, having been carved out of the Ottoman province of Syria by them following the 1916 Sykes-Picot Agreement with the British in order to favor the elite Christian Maronite group, who follow eastern rites but are under the Catholic Church, with the wealthy Maronites having had close relations with the French dating back to the Crusades.  With 18 recognized ethnic/religious commuities, the French set up a system based on these groups, but favoring the the Maronites, then the largest group.  The president, as well as the Chief of Staff of the military and the Head of the central bank, were to be Maronites.  The premier would be from the then-second largest group, a Sunni Muslin, and the Speaker of the parliament would be from the poorest group, the Shi'a, who were predominant in the South next to Israel.  The Sunnis would increase in population as waves of Palestinian refugees entered, fist in 1948, and then in 1970 after the failure of the Black September uprising in Jordan, with the PLO taking power in various parts of Lebanon then.  However, the poor Shi'a would become the largest group in population. 

In 1975 civil war broke out initially between the Maronites and the PLO, but various groups sided up up with each other, with some ethnic groups split among themselves, including the Maronites.  The war lasted until 1990, when entry by Syrian forces largely brought it to an end following the 1989 Taif Agreement, which promised that a Senate would be formed that would be led by someone from the nation's fourth largest group, the Druze, but this never  happened.  An important group coming out of the civil war was Hezbollah, the Shi'a group backed by Iran and founded in 1982 to oppose both Israel and the PLO.  Over time it would become the strongest militia and political group in Lebanon, long led by Hassan Nasrallah, and now the most important group in the government, operating through an alliance with current Maronite president, Michel Aoun.  The premier is Saad Hariri, son of a premier assassinated in 2005 by the Syrians, which led to the Cedar Revolution, a massive uprising that led to the Syrians largely leaving, although now the population has surged due to the arrival of many mostly Sunni Syrian refugees from the war.  The current premier also was briefly detained by Saudi Arabia's Crown Prince, Mohammed bin Salman, nominally his  ally.

Out of the war and its aftermath, the barely-ruled nation came to be dominated by a corrupt elite from a small group of families from each of the main ethnic groups.  The economy long ago fell into a kind of permanent stagnation, with many public services barely functioning and one of the largest foreign debts/GDP in the world, with these elites siphoning off massive via their corruption.  Anger over this erupted over a week ago fallowing a proposal to raise taxes on phone calls on Whats App.  The demonstrations have crossed party and ethnic lines, with hundreds of thousands in the streets and now calling for a complete replacement of the current regime and all its main leaders and groups, including Aoun, Nasrallah, and Hariri.  This is profoundly potentially hopeful, although where all this will lead remains unknown and unclear.

Curiously this parallels similar demonstrations going on in quite a few nations, nearly all of them initiated by a proposed or actual tax increase, with the Gilets Jaunes ("yellow vests") in France arguably an earlier inspiration.  Such demonstrations, most of them also massive and ongoing, are going on in Ecuador, Chile, Haiti, with also the somewhat related but also somewhat distinct ones in Hong Kong as well.  In short, this is a globally widespread movement that looks to shake up  governments and systems in many nations.  However, the one in Lebanon next to Syria that is still experiencing war that directly impacts it may have the largest demonstrations with those making maybe the most serious demands of any of them.  The long troubled nation of Lebanon now stands at the epicenter of a global upheaval of potentially enormous significance.

Barkley Rosser

Sunday, October 20, 2019

Mike Pompeo Reminds Me of Al Capone

How to say in Latin that our Secretary of State is pompous and dishonest as it gets? Oh yea – if one says “quid pro quo” in English, it never happened. These unbelievable stupid excuses for denying what is plainly true – that Trump extorted dirt on Democrats from Ukraine by withholding military aid – is insulting as they are treating us like “chumps” to paraphrase Leon Penatta. But even more insulting is this:
Secretary of State Mike Pompeo fiercely criticized the House impeachment inquiry, saying his department is being treated unfairly as Democrats seek to remove President Donald Trump from office ... “They’re not letting State Department lawyers in the room ... they have not let State Department lawyers be part of these hearings,” Pompeo said. “That’s unheard of ... I haven’t seen you all report that.”
First of all, we do know that the brave members who served the State Department honorably have turned down Pompeo’s lawyers in lieu of bringing their own so this last sentence of his is a lie as this fact has been reported on. Secondly, Pompeo is whining that HE is being treated unfairly. Look Pompeo is clearly a mobster style criminal – hence my reference to Al Capone. Can you imagine a grand jury investigation of a mob boss where the mob boss gets to send his own lawyer into the testimony before the grand jury? Witnesses might be reluctant to appear out of fear that the mob lawyer would tell his client who to knock off. Pompeo is all about witness intimidation as he fears the truth. And yea – I bet Pompeo and his boss (Trump) would stoop to killing anyone who dares to stand up to their treasonous crimes.

Friday, October 18, 2019

The Ultimate Solution

Yes, Trump really said that.  The Syrian Kurds, who have been where they are about to be ethnically cleansed out of, are welcoming "the ultimate solution," just like Jews in you know where were welcoming "the final solution."  Of course they must accept this because they are "no angels," "communists," and "worse then ISIL." So much for a "post-socialist" Bookchinite cooperative system.  But, hey, they are all so fortunate to have "the ultimate solution."   What else is there to say?

Barkley Rosser