Some of hedge fund billionaire George Soros’s short positions dating back to 2012 were published on the Dutch financial market regulator’s website this week due to “human error,” according to the regulator AFM.
The short positions, bets on a stock declining, were “between 0.2 percent and 0.5 percent,” of shares outstanding in the companies shorted, AFM spokesman Ward Snijders said by phone on Thursday. The Dutch regulator publishes shorts of 0.5 percent or higher on its website on a daily basis. The smaller amounts were posted by mistake, he said.
The Financial Times earlier reported that some of the positions, including bets against Dutch banks, including ING Groep NV, appeared briefly on the website on Tuesday evening. ING declined to comment on Thursday.
Soros, whose fortune is estimated at $25.2 billion by the Bloomberg Billionaires Index, is in the same league as Warren Buffett when it comes to investors copying their trades as they try to ride the coattails of the super successful. Short positions, which are typically closely guarded, in Deutsche Bank AG jumped when it was revealed in June that Soros had bet that the stock would fall after the U.K. voted to leave the European Union. The German bank fell 14 percent on the first day after the ballot.
The Dutch regulator’s spokesman couldn’t disclose whether there has been contact with Soros following Tuesday’s error. A spokesman for Soros didn’t respond to an e-mail seeking comment.
The 86-year-old investor lost about $1 billion by betting against the market after the election of U.S. President Donald Trump, according to the Wall Street Journal this month. The hiring of a chief investment officer may reduce Soros’s role, the paper reported.
Soros has managed as much as $30 billion as founder and chairman at New York-based Soros Fund Management LLC. Currency bets on the pound in 1992, the Thai baht five years later and the yen in 2012-13 helped Soros attain a fortune ranked 26th globally by Bloomberg. He’s donated $8 billion to charities since founding the pro-democracy Open Society Foundations in 1979.
Regulators have pushed for more transparency around short positions. The European Union imposed rules in 2012 on short bets against some securities in the political bloc to reduce the risk of destabilizing sovereign-debt markets. The U.K.’s Financial Services Authority introduced a regulation in June 2008 requiring disclosure of short positions of more than 0.25 percent for companies that are selling new shares in rights offerings.
By Ellen Proper & Colin McClelland
China’s escalating crackdown on capital outflows is sending shudders through property markets around the world.
In London, Chinese citizens who clamored to purchase flats at the city’s tallest apartment tower three months ago are now struggling to transfer their down payments. In Silicon Valley, Keller Williams Realty says inquiries from China have slumped since the start of the year. And in Sydney, developers are facing “big problems” as Chinese buyers pull back, according to consultancy firm Basis Point.
“Everything changed’’ as it became more difficult to send money offshore, said Coco Tan, a broker associate at Keller Williams in Cupertino, California.
Less than a month after China announced fresh curbs on overseas payments, anecdotal reports from realtors, homeowners and developers suggest the restrictions are already weighing on the world’s biggest real estate buying spree. While no one expects Chinese demand to disappear anytime soon, the clampdown is deterring first-time buyers who lack offshore assets and the expertise to skirt tighter capital controls.
“If it’s too difficult, I’m out,’’ said Mr. Zheng, 66, a retired civil servant in Shanghai who declined to give his first name to avoid attracting regulatory scrutiny. He may abandon a 2.4 million yuan ($348,903) home purchase in western Melbourne, even after shelling out a 300,000 yuan deposit last August. He’s due to make another big payment next month.
The change spooking Zheng and his compatriots came in a statement from the State Administration of Foreign Exchange on Dec. 31, hours before the reset of Chinese citizens’ annual foreign currency quotas. Among other requirements, SAFE said all buyers of foreign exchange must now sign a pledge that they won’t use their $50,000 quotas for offshore property investment. Violators will be added to a government watch list, denied access to foreign currency for three years and subjected to money-laundering investigations, SAFE said.
“A lot of clients are worried and have started hesitating,’’ said Wang Ning, vice president of the international department at Fang Holdings Ltd., China’s most popular property website. While the regulator has long banned the use of foreign currency for real estate, its call for additional documentation was seen as a signal that the government is serious about cracking down.
At The Spire in London, a 67-story tower with sweeping views of the River Thames and flats starting at 595,000 pounds ($751,901), prospective buyers were caught off guard by the new rules. Less than 70 percent of clients who signed purchase contracts last year have made their initial payments, with the rest now facing “problems,’’ a press official at Greenland Holdings Corp., the project’s Shanghai-based developer, said on Jan. 12. The official asked not to be named, citing company policy.
While Beijing’s policy tweak may appear symbolic on the surface, it’s likely to cause a “notable reduction” in Chinese purchases of Australian property, according to Christopher Todd ‘CT’ Johnson at Basis Point, a consulting firm that specializes in business relations between the two nations. Australia approved A$24 billion ($18.1 billion) of real estate investments from China in the fiscal year ended June 2015, the most recent figures available, making the country by far the biggest source of foreign buyers.
China clamped down further on corporate outflows late Thursday, asking firms with outbound investment plans to clarify the source of their funding for purchases and give additional details on their spending.
Even with tightened capital controls, brokers say motivated Chinese investors can usually find ways around them. In any case, many already have money parked offshore, according to Michael Finger, the head of Ray White Double Bay, a real estate agency in Sydney’s eastern suburbs. Just before Christmas, he sold a multi-million dollar home to Chinese citizens who had moved money to Australia before the clampdown. Finger says he’s seeing more e-mail inquiries from buyers eager to buy offshore assets before authorities clamp down any further.
A more complete picture of Chinese demand may only emerge after the Lunar New Year holiday, when wealthier buyers often combine overseas property hunting with sightseeing. Agents surveyed by Chinese property portal Juwai.com say they’re expecting a busier holiday season than in 2016.
Still, broad measures of China’s capital flight suggest government curbs were having an effect even before SAFE’s Dec. 31 rule changes. For the first time since the yuan’s devaluation in August 2015, Chinese banks last month registered net inflows under the capital account, the currency regulator said on Jan. 19. Offshore payments in yuan have also moderated, while the currency has strengthened 1.2 percent against the dollar since touching an eight-year low on Dec. 28.
“There will certainly be an impact,’’ Eric Lam, chief executive at the overseas broker unit of Shenzhen World Union Properties Consultancy Inc., China’s largest realtor for new-home sales, said by phone from Hong Kong.
For Zheng, the decision on whether to walk away from his Melbourne property or risk breaking China’s foreign-exchange rules is fast approaching. He’s scheduled to wire another 800,000 yuan to Australia in late February to cover the rest of his down payment.
“I can probably meet future mortgage payments with rental income from the villa, but a more imminent problem is whether to wire money abroad now,” Zheng said. “I’m not too sure about that. It’s safer not to stick my neck out.”
By Bloomberg News
“Chinese and Western experts” say a blockade by the U.S. in the South China Sea of China’s artificial islands would be an “act of war” according to breathless Wall Street Journal reporters. The New York Times says unnamed “American Navy experts” are calling a blockade “tantamount to war”. Association of a U.S. blockade with war is an incomplete truth at best, and a scare tactic that plays into China’s hands.
Overblown fears of war illustrate a weakness of democracy when opposing an autocracy that controls state media. While U.S. media is hyping the fear of war, in part because it increases viewers and ad revenues, Chinese media can deliver a sense of resolve and willingness to negotiate, which increases U.S. popular fear and presents China as the reasonable party. Fear of war in democracies leads citizens to prematurely pressure politicians into backing down in international disputes with powerful autocratic adversaries adept at brinkmanship. Citizens in autocracies have no such influence, and their views are nevertheless conditioned to be hawkish by state-controlled media. Democracies are thereby at a disadvantage to autocracies in negotiating and strategic messaging under conditions of brinkmanship.
Associating the Trump Team’s mooting of a blockade with war is therefore a self-defeating half-truth at best, and leaves China’s own culpability hidden. From a normative perspective, was it not an “act of war” when China constructed the islands in the Philippines’ EEZ in the first place? Was it not an “act of war” when China ignored the Permanent Court of Arbitration in the Hague and refused to vacate its military from those islands that are within the Philippines’ EEZ? Is the conclusion of the quoted experts then that China’s acts of war should be answered with silence and continued back-sliding, including in the case of the U.S. defense treaty with the Philippines?
The Philippines has been thunderously silent on Tillerson’s comments, and Foreign Minister Perfecto Yasay could even be read to support the idea of a blockade, but without putting the Philippines’ thin neck on the line. I don’t blame him.
“They [the Trump Team] said that they would prevent China from doing or undertaking these kind[s] of activity. If it wants to do that, they have the force to do so, let them do it,” Yasay said, referring to Tillerson’s remarks on Wednesday to U.S. senators.
Yet the Philippines’ seeming support of the blockade, from a foreign minister who is usually pro-China, is not being widely reported. Rather, the focus of Western media is on fear of war and the reasonableness of China. The Wall Street Journal article ends with an ominous quote.
While it remained to be seen if the Trump administration would back up its words with action, Mr. Spicer’s remarks threatened to seriously upset U.S.-China relations, said Zhu Feng, an expert on the South China Sea at Nanjing University. “It’s a very, very significant concern,” Mr. Zhu said on Tuesday, calling for measured negotiation. “For the Trump administration to unexpectedly and suddenly slam its fist down on the table and say, ‘No, no, you can’t go there,’ I think it’s tactless,” he said. “China isn’t likely to back off, no matter how high the pressure is.”
China Daily couldn’t have done a better job of presenting China’s strategic messaging. The U.S. has for years warned against China’s island building. There is nothing sudden about a new administration mooting the idea of increased military pressure on China. President Obama’s good cop routine didn’t work, and there is a new sheriff in town.
Measured negotiation without backbone is exactly what got us into the South China Sea imbroglio. We should have nipped China’s maritime aggression in the bud by opposing its 1995 occupation of Mischief Reef with a blockade, or better yet economic sanctions, at its inception. When faced with a sophisticated adversary that simultaneously uses incrementalism on the ground while seeking more negotiations, we need to hold the line. Negotiating with China from a position of weakness has killed us in Southeast Asia, and our allies are scattering into disorder.
If we are lucky, Trump will put much-needed spine into U.S. diplomacy in Southeast Asia. Many diplomats in the Philippines, Vietnam, Indonesia, Malaysia, and Brunei want this, but keep quiet publicly for fear of drawing China’s ire. U.S. strength gives us a unique ability to publicly negotiate for what is right. Remember it was Tillerson the diplomat, not “Mad Dog” Mattis the warrior, who so far made the toughest comments on the South China Sea. Don’t panic. Let Tillerson do his job, which is to negotiate from a position of strength.
By Anders Corr
Soon after Donald Trump was sworn in as president, his administration undid one of Barack Obama’s last-minute economic-policy actions: a mortgage-fee cut under a government program that’s popular with first-time home buyers and low-income borrowers.
The new administration on Friday said it’s canceling a reduction in the Federal Housing Administration’s annual fee for most borrowers. The cut would have reduced the annual premium for someone borrowing $200,000 by $500 in the first year.
The reversal comes after Trump’s team criticized the Obama administration for adopting new policies as it prepared to leave office. In the waning days of the administration, the White House announced new Russia sanctions, a ban on drilling in parts of the Arctic and many other regulations.
Last week, Obama’s Housing and Urban Development secretary, Julian Castro, said the FHA would cut its fees. The administration didn’t consult Trump’s team before the announcement.
Republicans have argued in the past that reductions put taxpayers at risk by lowering the funds the FHA has to deal with mortgage defaults.
Shares of private mortgage insurance companies, including MGIC Investment Corp. and Radian Group Inc., erased earlier losses, trading up about one percent as of mid-afternoon. They closed little changed from the day before. Private insurers, which back loans guaranteed by mortgage-finance companies Fannie Mae and Freddie Mac, compete with the FHA for market share and have been critics of fee cuts in the past.
A letter Friday from HUD to lenders and others in the real-estate industry said, “more analysis and research are deemed necessary to assess future adjustments while also considering potential market conditions in an ever-changing global economy that could impact our efforts.”
Senate Democratic leader Chuck Schumer of New York took to the chamber’s floor to denounce the reversal.
“It took only an hour after his positive words on the inaugural platform for his actions to ring hollow,” Schumer said. “One hour after talking about helping working people and ending the cabal in Washington that hurts people, he signs a regulation that makes it more expensive for new homeowners to buy mortgages.”
Mark Calabria, director of financial regulation studies for the libertarian Cato Institute, said it was appropriate for the administration to examine last-minute decisions by its predecessor, “especially when those decisions appear to be purely motivated by politics.”
Ben Carson, Trump’s nominee to lead HUD, FHA’s parent agency, said at his confirmation hearing last week that he was disappointed the cut was announced in Obama’s final days in office.
The FHA sells insurance to protect against defaults and doesn’t issue mortgages. It is a popular program among first-time home buyers because it allows borrowers to make a down payment of as low as 3.5 percent with a credit score of 580, on a scale of 300 to 850.
The Obama administration announced last week it would cut the insurance premium by a quarter of a percentage point to 0.60 percent, effective on Jan. 27.
Some housing industry groups lauded the change, saying it could increase home buying by offsetting recent rises in mortgage rates. Supporters of the reduction were disappointed that the Trump administration reversed course.
“This action is completely out of alignment with President Trump’s words about having the government work for the people,” said John Taylor, president of the National Community Reinvestment Coalition, through a spokesman. “Exactly how does raising the cost of buying a home help average people?”
Sarah Edelman, director of housing policy for the left-leaning Center for American Progress, in an e-mail wrote, “On Day 1, the president has turned his back on middle-class families — this decision effectively takes $500 out of the pocketbooks of families that were planning to buy a home in 2017. This is not the way to build a strong economy.”
The FHA came under severe stress after the financial crisis. In 2013, it needed $1.7 billion from the U.S. Treasury, its first bailout in 79 years, due to a wave of defaults. To replenish the FHA’s coffers, the Obama administration several times increased the fees the agency charges. The law requires the FHA’s capital reserve ratio to stay above 2 percent, and the agency hit that level in 2015 for the first time since the bailout.
“It is important to ensure that the FHA fund remains strong to support homeownership in the future while minimizing taxpayer risk,” Teresa Bryce Bazemore, president of Radian Group, said in a statement.
By Joe Light
Xi Jinping will address the World Economic Forum on Tuesday in Davos, the first time a Chinese leader has done so.
Chinese state media tells us he will speak strongly in favor of globalization. That message will be difficult to accept, however, as his country is closing off its market, restricting outbound capital flows, and delinking from the world.
Yet there is a more important storyline about the trip to the Swiss Alps. Xi will be begging for foreign investment. His country needs cash.
Xi, according to Chinese officials in Geneva, will advocate “inclusive globalization.” Jiang Jianguo, the chief of the State Council Information Office, said China’s president hopes for “a human community with shared destiny.” As People’s Daily said Saturday, he “will present a confident, open, responsible, and positive Chinese voice to the world.”
Xi may be “confident,” “responsible,” and “positive,” but “open” he most certainly is not. He has, after all, been closing off the Chinese economy with enhanced state subsidies, unnecessarily restrictive national security rules like last November’s cyber security law, and highly discriminatory prosecutions of multinationals. His tenure has been marked by the increased favoritism toward state enterprises.
Xi’s general approach is embodied in his signature phrase, “Chinese dream.” That dream, unfortunately, contemplates a state-dominated society, and a state-dominated society does not sit easy with the notions of an open economy. Call it China for Chinese competitors only.
Moreover, since the fall of 2015 he has informally restricted outbound transfers of cash. Last fall, Xi began applying those restrictions in earnest to foreign companies. For instance, multinationals can no longer “sweep” $50 million worth of currency out of the country using expedited procedures. The limit for this popular procedure is now only $5 million.
The concern in the foreign business community is that Beijing will further restrict cash transfers, and this, of course, discourages not only inbound money transfers but also additional foreign investment.
This is a particularly bad time for Xi to do that. Last year, foreign direct investment, which for decades has powered the Chinese economy, increased only 4.1% in yuan terms. When measured in dollars—what really counts—FDI fell. The renminbi in the onshore market last year plunged 6.95% against the greenback.
Continued depreciation of the “redback” is another significant disincentive to invest in China, of course.
And while China’s leader talks about globalization in Davos, his economy is in fact de-globalizing. In 2015, China’s two-way trade fell 8.0%. Last year, exports tumbled 7.7% and imports fell 5.5%.
The decline in imports could have been even more severe last year because the Chinese have been using fake import documentation to smuggle cash out of the country. Net capital outflow might have increased in 2016 from the year before.
For 2015, the highest estimate of outflow was Bloomberg’s $1 trillion. So far, the biggest number for last year comes from Christopher Balding of Peking University’s HSBC Business School. He has gone on record saying there may have been $1.1 trillion of outflow in 2016.
The only significant sign of China’s increasing integration with the world is outbound investment, but acquisitions of foreign assets, it appears, are primarily driven by a desire to minimize in-country risk. Many of the deals suggest money is permanently leaving China.
So outflows are increasing while inflows are decreasing. No wonder Xi Jinping is going to Davos. Like all Chinese leaders, he wants others to come to him, a sign of strength. So he surely thinks that his going to the foreign gathering is a humiliation, especially because he is on the hunt for cash.
The good news about Beijing’s new mindset is that the central government is being forced to grant market access, unilaterally. At the end of December, the powerful National Development and Reform Commission promised to liberalize rules for foreign participation in the financial, gas, and infrastructure sectors. The pledge followed a State Council announcement on increased access to certain types of manufacturing.
Yet it is not clear who would want to invest even if Beijing makes good on its market-opening pledges. For one thing, there is the slowing economy. The National Bureau of Statistics on the 20th of this month will report something like 6.7% growth for 2016, but in reality China was expanding in the low single digits. Slow growth poses the risk of a systemic financial crisis because China is now accumulating debt at least five times faster than GDP.
Moreover, China investments carry far higher political risk these days. For one thing, Xi Jinping’s Beijing is generally threatening to use its economic might to achieve expanding geopolitical ambitions. That jeopardizes China’s hard-won reputation for being a reliable member of global supply chains.
And then there is Donald J. Trump. The president-elect has announced the appointment of trade hawks—most notably Peter Navarro as the chief of the newly formed National Trade Council, Wilbur Ross to head the Commerce Department, and Robert Lighthizer as U.S. Trade Representative—signaling a far tougher line on China’s mercantilist practices. Beijing is bound to react poorly, and it has, according to a Bloomberg report this month, already threatened to scrutinize the business dealings of American multinationals, looking especially for tax and anti-trust violations.
Yet China is already doing that. On December 23, the Shanghai Municipal Development and Reform Commission announced it had imposed a fine of 201 million yuan ($28.9 million) on SAIC General Motors Corp., the joint venture of General Motors and Shanghai Automotive Industries Corp. The alleged sin? Setting minimum prices for dealer sales of Cadillacs, Chevrolets, and Buicks.
So someone at Davos should ask Xi, once he utters his last generalization on globalization, to explain why anyone should invest in his country.
Xi may look powerful, but he is going to Davos as a beggar—and he’s got a lot of ‘splainin to do.
By Gordon G. Chang
Chinese President Xi Jinping’s upcoming Swiss visit will present a confident, open, responsible and positive Chinese voice to the world, Ma Zhaoxu, China’s Permanent Representative to the United Nations Office at Geneva (UNOG) and Other International Organizations in Switzerland, wrote in a signed article published on People’s Daily on Friday.
During Xi’s three-day visit at the beginning of 2017, he is scheduled to attend the World Economic Forum Annual Meeting to be held in Davos which is themed “Responsive and Responsible Leadership”. He will also visit the Geneva-based headquarters of the United Nations, World Health Organization and International Olympic Committee.
Xi’s visit will showcase China’s progressive diplomatic image, and contribute Chinese wisdom and solutions for world’s long-term stability, sustainable development and common prosperity.
The international order and pattern are experiencing profound changes as a result of the slow recovery of world economy, rapid development of anti-globalization, intensive geopolitics and rising terrorism, Ma said, adding that a series of black swan events have astonished the globe.
The world has lost its direction in a lack of efficient leadership and governance as a result. Amid such backdrop, the international community is now in desperate need of a solution, the diplomat said.
He further said that faced with the complex and changing world’s arena, China has injected more confidence and played a bigger role in global governance under the leadership of the CPC Central Committee with Xi as the core.
Ma noted that China not only advocates the establishment of a community of common destiny for all mankind, but also makes efforts for a new model of international relations centered on win-win cooperation.
Xi expounded the idea of the community of common destiny for all mankind while attending the summits marking the 70th anniversary of the founding of the UN in 2015, the ambassador illustrated.
Xi’s ideas stemmed from the profound wisdom of Chinese culture, which are also in accordance with Chinese diplomatic traditions such as the Five Principles of Peaceful Coexistence, Ma pointed out, adding that Xi’s proposals not only keep abreast with the progress of human society, but also meet global aspiration for peace, development and cooperation.
The concept of community of common destiny for all mankind will expand its influence with China’s in-depth participation in global governance, he added.
China is also taking a lead in world economy and global governance, Ma noted. The success of G20 Hangzhou Summit has offered China’s remedy to the root causes of the sluggish world economy and charted a course for global governance.
Faced with global challenges like de-globalization, protectionism and fragmentation of regional cooperation, Xi put forward the idea of a more inclusive economic globalization during the APEC meeting held in Lima, he added in the article.
These proposals have all played a positive role in increasing global confidence and consensus, Ma concluded.
The diplomat stressed that China has been making efforts to benefit its people and the people around the world as well. The country, for instance, has taken a lead to implement the 2030 Agenda for Sustainable Development, and also align China’s development concepts and 13th Five-Year Plan with international agendas, he explained.
Ma added that China has placed high attention on the undertakings of public health, fought against AIDS and tuberculosis, and contributed to world peace and development by rendering strong support to Olympics.
The gradual connection between China’s “Belt and Road” initiative and strategies of the countries along the route has linked Chinese dream with the dream of the world.
Following the principle of achieving shared growth through discussion and collaboration, China will inject new power and hope to the economic development of Eurasian continent, and even the world at large, Ma concluded at last.
By People’s Daily
China’s President Xi Jinping will promote “inclusive globalization” at this month’s World Economic Forum (WEF) in Davos and will warn that populist approaches can lead to “war and poverty”, Chinese officials said on Wednesday.
This year’s forum, from Jan. 17-20, is expected to be dominated by discussion of a surge in public hostility toward globalization and the rise of U.S. President-elect Donald Trump, whose tough talk on trade, including promises of tariffs against China and Mexico, helped win him the White House. Trump will be sworn in on Jan. 20.
Xi is the first Chinese president to ever attend the WEF’s annual forum in Davos, which brings together top-level political and business leaders.
Jiang Jianguo, head of the State Council Information Office, told a symposium hosted by the World Trade Organization in Geneva that President Xi would go to Davos to push for development, cooperation and economic globalization in order to build “a human community with shared destiny.”
“With the rise of populism, protectionism, and nativism, the world has come to a historic crossroad where one road leads to war, poverty, confrontation and domination while the other road leads to peace, development, cooperation and win-win solutions,” Jiang said.
At a briefing in Beijing on the Davos visit, Vice Foreign Minister Li Baodong said China would respond to the international community’s concern over globalization by putting forward Beijing’s opinions on how to “steer economic globalization toward greater inclusiveness.”.
Li said criticism of trade protectionism leveled at China, by Trump and others, was unjust. “Trade protectionism will lead to isolation and is in the interest of no one,” he said.
“Channels of communication are open” between China and Trump’s transition team at the forum, Li said, but warned that scheduling a meeting might be difficult.
Days after Trump’s victory, Xi vowed to fight protectionism and to push forward with multilateral trade deals. Foreign businesses in China have long complained about a lack of market access and protectionist Chinese policies.
Xi will attend the Davos forum on Jan. 17, part of a three-day state visit to Switzerland from Jan. 15 to 18.
The United States will be represented at Davos by Vice President Joe Biden and Secretary of State John Kerry, days before they leave office, as well as someone from the Trump transition team, the WEF said on Tuesday.
By Christian Shepherd and Tom Miles
Hungary plans to crack down on non-governmental organizations linked to billionaire George Soros now that Donald Trump will occupy the White House, according to the deputy head of Prime Minister Viktor Orban’s party.
The European Union member will use “all the tools at its disposal” to “sweep out” NGOs funded by the Hungarian-born financier, which “serve global capitalists and back political correctness over national governments,” Szilard Nemeth, a vice president of the ruling Fidesz party, told reporters on Tuesday. No one answered the phone at the Open Society Institute in Budapest when Bloomberg News called outside business hours.
“I feel that there is an opportunity for this, internationally,” because of Trump’s election, state news service MTI reported Nemeth as saying. Lawmakers will start debating a bill to let authorities audit NGO executives, according to parliament’s legislative agenda.
Orban, the first European leader to publicly back Trump’s campaign, has ignored criticism from the European Commission and U.S. President Barack Obama’s administration for building a self-described “illiberal state” modeled on authoritarian regimes including Russia, China and Turkey. In 2014, Orban personally ordered the state audit agency to probe foundations financed by Norway and said that civil society groups financed from abroad were covers for “paid political activists.”
Orban and his administration have frequently singled out NGOs supported by Soros, a U.S. Democratic Party supporter with a wide network of organizations that promote democracy in formerly communist eastern Europe.
Trump also accused the 86-year-old billionaire of being part of “a global power structure that is responsible for the economic decisions that have robbed our working class, stripped our country of its wealth and put that money into the pockets of a handful of large corporations and political entities.”
In a pre-election commercial, he showed images of Soros along with Federal Reserve Chair Janet Yellen, and Goldman Sachs Group Inc. CEO Lloyd Blankfein, all of whom are Jewish. The Anti-Defamation League criticized the ad for touching on “subjects that anti-Semites have used for ages.”
By Zoltan Simon
Former U.S. Treasury Secretary Lawrence Summers attacked the policy proposals of Donald Trump on several fronts, saying the president-elect’s plans for deregulation were setting the stage for the next financial crisis.
“The deregulation in some areas like finance is hugely dangerous,” Summers said Sunday in an interview on Fox News Channel. “Who wants to go back to the era of predatory lending? Who wants to go back to the era of vastly over-levered banks?”
Members of Trump’s transition team have vowed to dismantle the 2010 Dodd-Frank Act, the principal legislative response to the 2008-09 global financial crisis, although Trump himself has given mixed signals on Wall Street regulation. During his campaign, he railed against Dodd-Frank, which greatly increased restrictions on banks operating in the U.S., but also said he would reinstate a separation between bank lending and securities underwriting, which was removed in 1999.
Summers, former chief economic adviser to President Barack Obama and Treasury secretary under President Bill Clinton, also took aim at Trump’s protectionist rhetoric. That’s already caused a plunge in the Mexican peso, giving Mexican manufacturing an extra advantage over U.S. competitors.
“Every business deciding whether to locate in Ohio or Mexico is finding Mexico 20 percent cheaper,” said Summers, who’s now a Harvard University professor. “That’s a huge tilt against the United States.”
The peso has lost 14 percent against the dollar since the Nov. 8 election.
Trump, via Twitter, has jawboned a number of companies, including automakers General Motors Co. and Toyota Motor Corp., on their plans for expansion in Mexico. “Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for U.S. NO WAY! Build plant in U.S. or pay big border tax,” Trump said in a Twitter post on Jan. 5.
Trump’s plans to reduce corporate taxation, Summers said, would “hugely increase inequality” and could also help strengthen the dollar, further hurting U.S. exporters and the people who work for them.
While Summers favors a big increase in infrastructure spending in the U.S. as a way to boost productivity and growth, he called Trump’s plans on that front “a Potemkin village of nothing.”
Trump’s proposal called for filling an estimated $1 trillion “10-year funding gap” of spending on bridges, highways and airports through private investment and tax credits. Prospects for the plan in Congress among Republican lawmakers are unclear.
By Christopher Condon
China’s foreign currency holdings remained above $3 trillion in December even as the yuan capped its steepest annual decline in more than two decades.
Reserves fell $41.08 billion to $3.01 trillion, the People’s Bank of China said in a statement Saturday. That matched a $3.01 trillion estimate in a Bloomberg survey of economists.
China may take measures to keep its foreign-currency stockpile from slipping too far below the key $3 trillion mark to avoid hurting investor confidence and spurring further declines in the yuan, according to economists at major banks. Policy makers have recently rolled out extra requirements for citizens converting yuan into other currencies after the annual $50,000 quota for individuals reset Jan. 1.
“China’s government is well positioned to control outflows more effectively if it wants to, though it may not want to be seen as reversing China’s ‘opening’ strategy,” Wang Tao, head of China economic research at UBS Group AG in Hong Kong, wrote in a recent note. “In the long run, it may not have much choice if FX reserves fall more sharply on the back of intensifying capital outflow pressures.”
The decline of foreign exchange reserves in December was mainly because the central bank supplied funds to maintain balance in the foreign exchange market and the depreciation of non-U.S. dollar currencies, the State Administration of Foreign Exchange said in a separate statement on Saturday. For the full year of 2016, the SAFE said the central bank’s effort to stabilize the yuan was the key reason for the drop in reserves.
“The combination of policy-induced yuan stabilization and higher reporting requirements for households buying FX will buy the PBOC a little breathing room, preventing escalating outflows in the first month of the year,” Tom Orlik, chief Asia economist at Bloomberg Intelligence in Beijing, wrote in a note.
Policy makers intensified new measures at the beginning of the new year to choke capital outflow including extra requirements for citizens converting yuan into foreign currencies. Last week, the currency posted greater volatility, with the offshore rate notching up its biggest two-day gain on record just days after completing its worst yearly performance against the dollar.
The yuan fell 0.9 percent last month, capping a 6.5 percent drop over the year.
Policy makers now may prefer using capital controls instead of burning through foreign exchange reserves to defend the yuan, said Gao Yuwei, a researcher at the Bank of China Ltd.’s Institute of International Finance in Beijing.
There are still uncertainties facing the yuan as to whether the resurgent dollar will continue its rally in January and the Federal Reserve’s future U.S. interest-rate hikes, said Wen Bin, a researcher at China Minsheng Banking Corp. in Beijing.
China’s gold reserves stood at $67.9 billion by the end of December, compared with $69.8 billion a month earlier. The nation kept gold reserves unchanged at 59.24 million troy ounces for a second month in December, the first time it halted purchases for two consecutive months since disclosing holdings as of June 2015.
By Bloomberg News
China has studied possible scenarios for the yuan and capital outflows this year and is preparing contingency plans, according to people familiar with the matter. The offshore yuan surged the most in a year.
The authorities have used stress tests, models and field research, said the people who asked not to be identified as the studies haven’t been made public yet. Financial regulators have already encouraged some state-owned enterprises to sell foreign currency and may order them to temporarily convert some holdings into yuan under the current account if necessary, they added. The State Administration of Foreign Exchange didn’t immediately reply to a fax seeking comment.
The reported plans come amid increasing pressure on the yuan from a resurgent dollar, rising capital outflows and concern that U.S. President-elect Donald Trump may make good on his threats to take punitive measures on China’s exports. Policy makers in Beijing have recently taken a slew of measures to tighten control of the currency market, including placing higher scrutiny on citizens’ conversion quotas and stricter requirements for banks reporting cross-border transactions.
“China has been challenged by capital outflows and declining foreign-exchange reserves, and policy makers are taking measures to solve the problem,” said Eddie Cheung, a Hong Kong-based foreign-exchange strategist at Standard Chartered Plc, the most accurate forecaster for Asian emerging-market currencies according to a Bloomberg ranking. “Funds will continue to exit in the first half due to individuals’ purchases of the dollar and on concerns of U.S. political uncertainty.”
The offshore yuan jumped 0.9 percent to 6.8958 per dollar as of 7:20 p.m. Hong Kong time. That’s the biggest increase since January 2016. The currency traded in Shanghai climbed 0.3 percent, the most since July, to 6.9400. The Bloomberg Dollar Spot Index fell 0.4 percent.
China may also further sell U.S. Treasuries in 2017 if needed to keep the yuan’s exchange rate stable, the people said, adding that the size of the reduction will depend on capital outflows and market intervention. The nation’s holdings of Treasuries declined to the lowest in more than six years in October as the world’s second-largest economy used its currency reserves to support the yuan.
China’s currency stockpile has probably shrunk further after hitting a five-year low of $3.05 trillion in November, according to the median estimate in a Bloomberg survey before data due as early as this week.
Capital outflows from China accelerated in recent months as the yuan suffered its worst year of losses against the U.S. dollar since 1994, declining 6.5 percent. About $760 billion left the country in the first 11 months of 2016, according to a Bloomberg Intelligence gauge. The yuan will decline 2.7 percent the rest of this year, according to the median estimate in a Bloomberg survey.
“The policies, if implemented, can help increase foreign-exchange supply in the onshore market, and hence help defend the yuan in the short term,” said Carol Pang, vice president for fixed income, currency and commodities at Zhongtai International Holdings Ltd. in Hong Kong. “However, it won’t change market expectation of further depreciation.”
By Bloomberg News
SoftBank Group Corp. Chief Executive Officer Masayoshi Son told President-elect Donald Trump this month he would create 50,000 jobs in the U.S. Money for the first 3,000 positions was announced on Monday.
Satellite startup OneWeb Ltd. said it raised $1.2 billion from SoftBank and existing investors, with the Japanese technology company providing $1 billion. The round will fund the development of small, low Earth orbiting satellites and pay for the construction of a facility in Florida that will churn out 15 of these devices a week, said OneWeb, based at Exploration Park, Florida, an area near Kennedy Space Center. The investment is expected to create almost 3,000 new engineering, manufacturing and support jobs in the U.S. over the next four years, the startup added in a statement.
“Earlier this month I met with President-elect Trump and shared my commitment to investing and creating jobs in the U.S.,” SoftBank’s Son said in the statement. “This is the first step in that commitment.”
When they met on Dec. 6, Trump and Son exhibited their usual flair for the dramatic. The Japanese billionaire promised to invest, through SoftBank’s technology fund, $50 billion in the U.S. and create jobs. That helped to burnish Trump’s job-creating credentials, and may also smooth the way for a merger between SoftBank-controlled U.S. wireless carrier Sprint Corp. and T-Mobile US Inc. SoftBank shares fell less than 1 percent on Tuesday in early trading in Tokyo.
OneWeb is the latest creation of Greg Wyler, who has spent more than a decade trying to connect poorer, less-developed parts of the world to the internet. He hopes to launch a constellation of satellites that will extend the networks of mobile operators and internet service providers to serve new coverage areas at a lower cost.
SoftBank’s investment “accelerates our strategic growth plan,” Wyler said in the statement. “We look forward to working together as we execute on our mission to build a global knowledge infrastructure that provides affordable broadband to the over four billion people across the globe without internet access.”
By Alistair Barr
Campaigners say licensing system designed for ‘less sensitive’ trade deals is being abused,
The UK is secretly selling arms to Saudi Arabia and other countries under an opaque type of export licence, it has been reported.
The military and defence industry is a major player in the UK economy, worth about £7.7bn a year.
But many of the countries buying British arms are run by governments with dubious human rights records, even though the destinations of such exports are supposed to meet human rights standards.
Now, according to the i newspaper, an increasing number of military consignments are being sold under the Open Individual Export Licence (OIEL) after quiet Government encouragement in 2015, despite criticism from MPs.
Under the OIEL licences, numerous consignments can be exported to one destination under a single licence for up to five years after initial scrutiny. They are supposed to be “less sensitive goods” but campaigners say this vague requirement is often flouted.
Furthermore, the value of OIEL licenced goods does not need to be publicly declared, meaning it is difficult to determine their volume, though it is estimated to be in the tens of millions.
For instance, using just 32 OIEL licences, 150 different types of defence and military goods – including technology and parts for fighter aircraft – have been exported to Saudi Arabia, the newspaper reported.
Other British goods that have been exported around the world under OIEL licences reportedly include rifles, crowd control weapons and helicopters.
While proponents say OIEL licences help efficiency and cut red tape, opponents say they allow inappropriate sales to go through.
Andrew Smith, of Campaign Against the Arms Trade, which obtained the data, said: “Open licences only exacerbate the lack of transparency in the arms trade. UK arms are playing a central role in the devastation of Yemen, and this means the scale of arms exports could be even higher than we already thought.
“Arms exports aren’t just numbers on a spreadsheet, they can have deadly consequences and send a message of support to some of the most abusive regimes in the world.”
Exports under OIEL licences have increased in recent years, i reported. While there were just 761 granted in 2009, there were 1,866 in 2015. And the figure is set to increase in 2016, when there were 1,100 OIEL licences in the first six months.
Anti-arms trade campaigners claimed this means the UK could be more deeply involved in the international arms trade than previously thought and that the exports send a “message of support” to despotic regimes.
By Will Worley
TEHRAN (FNA)- The Russian General Staff announced that over 3,400 terrorists have surrendered themselves to the Syrian authorities since the beginning of the military operations in the city of Mosul.
“A total number of 3,406 militants of the so-called moderate opposition groups have surrendered during the liberation of Eastern Aleppo, and over 3,000 of them have been pardoned,” Chief of the Russian General Staff Main Operational Directorate Sergei Rudskoy said.
General Rudskoy added that some 108,000 civilians who had not been allowed by militants to leave Eastern Aleppo, are currently in shelters, while only the Syrian government and Russia are providing them with humanitarian aid.
The Russian military official also said that over 7,000 civilians have returned to the newly-liberated areas in Eastern Aleppo.
“The terrorists have destroyed a majority of vital facilities in the city and left behind a large number of mines and booby-trapped buildings, which impedes the safe return of local residents,” the Russian official stressed.
He said that while the US under different pretexts declined to evacuate al-Nusra Front (recently changed its name to Fatah al-Sham Front) terrorists, Russia has done it itself.
“During a year of meeting and negotiations with the Americans, we were trying to convince them to separate ‘moderate opposition’ from terrorists. However, the US refused to do that under different pretexts. Then Russia proposed to take joint action to evacuate al-Nusra Front from Eastern Aleppo. It as well was not supported by the US. Now we did it by ourselves,” he added.
Rudskoy said that the separation of terrorists and “moderate opposition” has been completed, adding that it turned out that some 4,500 fighters in Eastern Aleppo were radicals and most of them had already been evacuation.
Aleppo is to be declared a completely liberated city by Damascus any moment now as the Syrian authorities and terrorists stationed in the Eastern parts of Aleppo reached an agreement to evacuate militants from the region.
The Syrian army units started special operations in Aleppo after several humanitarian pauses declared by Damascus and Moscow to give a chance to the civilian population as well as the militants to leave the Eastern parts of the city through 8 corridors.
District after district have fallen into the hands of the Syrian army soldiers and their allies in the city of Aleppo, as the pro-government troops have recaptured most of the blocks and districts in the Northern and Southern parts of Eastern Aleppo.
Also, tens of thousands of civilians, including hundreds of children and newborn babies, have also left the Eastern part of the besieged Syrian city of Aleppo in recent days, while thousands of militants laid down their arms and left Eastern Aleppo through the special corridor.
An informed source close to the Syrian government said earlier on Saturday that Damascus will allow the remaining terrorists to leave Eastern Aleppo city only when the injured people are transferred from the besieged towns of Fua’a and Kafraya in Idlib province.
The evacuation of the militants from Aleppo had been suspended after the terrorist groups violated the ceasefire and started firing at civilians who were being evacuated through al-Ramouseh corridor.
“Resuming the evacuation of the terrorists from Eastern Aleppo now depends on the exit of the injured people from Kafraya and Fua’a towns,” a source close to the Syrian government said.
According to the agreements between the Syrian authorities and the terrorist groups, the terrorists had agreed to allow a group of residents of Fua’a and Kafraya who are in emergency conditions to leave the two towns, but terrorists have not allowed the buses and ambulances to get out of either of the towns.
Tens of buses and ambulances have been dispatched to the two towns but al-Nusra Front terrorists prevented the buses from entering the two towns and did not allow the civilians to get out of there.
The Syrian authorities and terrorist groups stationed in the Eastern parts of Aleppo reached an agreement on December 15 to evacuate militants from the region in return for relocating thousands of besieged civilians from Fua’a and Kafraya in Idlib to government-ruled territories.
Tens of ambulances and Green Buses arrived at militant-held territories on Thursday morning to evacuate militant groups and their families from Aleppo.
On Thursday about 20 buses and 10 ambulances started carrying carry out evacuation of the militants from the Eastern districts of the city of Aleppo.
The evacuation operation was monitored by web cameras that the Russian Defense Ministry has installed along the corridors, as well as surveillance drones.
The Syrian authorities guaranteed that all members of armed groups who decide to leave Eastern Aleppo would be safe.
Meanwhile, buses and ambulances are on their way to Idlib to evacuate the wounded, women and children from Faua’a and Kafraya to government-held territories via Northern Hama, as according to official statements, the evacuation will take place in several phases.
Syria’s state TV reported on Thursday – before the first group of militants left Eastern Aleppo – that terrorists restarted artillery attacks on residential areas in the Eastern districts of Aleppo city, breaching the truce.
The terrorists had also in a similar case earlier jeopardized the agreement on Tuesday night after they received some messages from Ankara about Turkey’s increasing pressures on Damascus through military intervention in Northern Aleppo province combined with the western states’ mounting pressures on Syria and its allies that accused the latter of war crimes in Eastern Aleppo. The ceasefire agreement that was reached on Tuesday went off after the terrorists violated its terms, making the warring sides to initiate a new round of talks that resulted in an agreement on Wednesday.
The first group of militants, including 1,500 armed men and their families, left Eastern Aleppo on Thursday afternoon on buses and ambulances under the ceasefire agreement.
The Russian Defense Ministry said in a statement that ambulances and buses with militants leaving Aleppo were accompanied by Russian servicemen and Red Cross staff.
In the first stage, a sum of 1,500 militants, including most the wounded rebels and their family members, left Aleppo on Thursday. A sum of 4,000 to 5,000 militants and an estimated number of 10,000 people who are said to be their family members were to leave Eastern Aleppo under the deal.
“To allow the militants leave the city, a 21km humanitarian corridor has been set up. Of those, 6km lie across Aleppo’s territories controlled by government troops and the other 15km to the West of the city go through militant-held areas,” Chief of Russia’s General Staff Valery Gerasimov said.
He added that 20 buses and 10 ambulances were being used for the evacuation in addition to over 100 vehicles belonging to the militants themselves.
Representatives of the International Committee of the Red Cross (ICRC) confirmed on Thursday afternoon that the first group of 5,000 militants moved out of Eastern Aleppo.
The ICRC reported that a sum of 1,500, including wounded militants and their family members, left Aleppo for Idlib on Thursday.
The Russian general Staff also said Thursday that a total number of 105 neighborhoods have been completely taken back from the terrorists as a result of the anti-terror operation in Eastern Aleppo.
Media sources said on Friday morning that at least 8,079 militants and their families had been evacuated from Eastern neighborhoods of Aleppo city to Southwestern countryside of the city in last 24 hours.
10 cargos of vehicles have evacuated 8,079 militants and their family members from the neighborhoods of Salahuddin, al-Ansari, al-Mashhad, and al-Zobaydiyeh to the Southwestern countryside of Aleppo via al-Ramouseh corridor under the supervision of the Syrian Red Crescent Society and the International Red Cross Committee.
A total of over 2300 terrorists and their families left Eastern neighborhoods on Thursday.
Before the departure, many terrorist groups blew up their main headquarters and weapons and ammunition depots and burned their offices and documents that reveal their sources of funds, armaments and intelligence information.
Terrorist groups’ artillery units shelled heavily al-Ramouseh corridor in the Southern parts of Aleppo city on Friday regardless of the ceasefire, blocking once again exit of remaining militants and their families from the city.
The terrorists violated the ceasefire and shelled al-Ramouseh corridor through which militants and their families were leaving the Eastern neighborhoods of the city, while terrorist snipers also targeted al-Ramouseh corridor and captured a number of civilians.
Green buses that were in al-Ramouseh left the scene after terrorists targeted the corridor and blocked evacuation of militants.
Based on reports, just before shelling of al-Ramouseh corridor by terrorist groups over 150 vehicles left militant-held neighborhoods in Aleppo city to the Southwestern countryside of the city via al-Ramouseh corridor.
In the meantime, more groups of militants left Aleppo’s Eastern districts with their families. 3,475 men, 3,137 women, 2,359 children and 108 wounded left Aleppo before midday on Friday.
According to more reports, the terrorist groups have swapped a number of abducted people with captured terrorists.
Local sources in Eastern Aleppo disclosed that most of the Saudi, Turkish or Egyptian commanders of al-Nusra Front have left the Eastern neighborhoods, while tens of militant that are still in these neighborhoods are to turn themselves in to the army and apply for amnesty.
Terrorist groups also targeted a key passageway in Northwestern Hama on Friday and blocked the movement of a convoy of the Syrian Arab Red Crescent (SARC) heading towards Northern Idlib to evacuate injured people from the two militant-besieged towns of Fua’a and Kafraya.
Terrorist groups’ missile units targeted al-Soqaylbiyeh passageway connecting Northwestern Hama to Southern Idlib to stop the SARC’ convoy and buses’s movement to Fua’a and Kafraya in Northern Idlib to transfer the injured, patients and the elderly to government-held areas
The SARC convoy and buses that were to go through al-Soqaylbiyeh passage way were pushed to a stop at Tal Baqlo-Al-Madiq Fort in Northwestern Hama.
Syrian Army troops forwarded several groups of forces to al-Ramouseh corridor in the Southern part of Aleppo city after terrorists launched several rounds of attacks on the corridor to block exit of militants and their families from the city
According to military sources, while violation of ceasefire and shelling of al-Ramouseh by terrorist groups pushed the newly-concluded agreement on evacuation of militants from Eastern Aleppo to the rims of failure, the army dispatched fresh forces to al-Ramouseh.
Some of the field commanders said that the entire options are on the table for restart of military operations after terrorists’ targeted al-Ramouseh corridor
Meanwhile, some people who were originally from Fua’a and Kafraya and their families and friends are trapped inside the two towns came to Ramouseh to Southern Aleppo to block the relocation of Aleppo militants and their families to Idlib through Ramouseh. They stressed that they would continue to block al-Ramouseh corridor till the militants allow the injured and patients leave Fua’a and Kafraya as militants have not allowed civilians to leave the besieged towns of Fua’a and Kafraya in Northern Idlib.
Arab media outlets added that militants opened fire at those people who had closed al-Ramouseh corridor to prevent exit of militant and their families in a retaliatory move.
Al-Nusra Front and Ahrar al-Sham in Northern Idlib keep blocking exist of the injured or patients from Fua’a and Kafraya despite an agreement concluded between militant groups and Damascus officials for their evacuation to government-controlled regions.
Fatah al-Sham and Ahrar al-Sham did not allow any ambulance or bus to leave Fua’a and Kafraya, while an agreement reached by the Syrian government and Jeish al-Fatah coalition of terrorist groups allows evacuation of militants and their families from Aleppo in return for transferring the injured, patients and the elderly trapped in the predominately Shiite towns to army-controlled regions.
The Russian Defense Ministry announced Friday afternoon that Syrian Army troops started cleansing operation in Eastern Aleppo to hunt the remaining pockets of Jeish al-Fatah terrorists in the city after militants violated the ceasefire again and opened fire at defenseless citizens.
“In some areas, there are still groups of militants who are firing at Syria troops,” the Russian Defense Ministry said, adding that Syrian Army units are continuing the liberation of the militant-held districts of the city”.
The Russian Reconciliation Center for Syria announced on Tuesday that 98 percent of Aleppo city was under the control of the Army soldiers and popular force on verge on conclusion of agreement for evacuation of militants.
The Russian Defense Ministry also announced on Friday afternoon that all women and children have been evacuated from militant-controlled parts of Eastern Aleppo, and only militants now remain there and are firing at the Syrian army forces.
The Russian Center for Reconciliation said that over 4,500 militants have been evacuated along with their families, as well as 337 wounded, adding that more than 9,500 people have been evacuated from Eastern Aleppo by Friday evening.
The center said that liberation of the Eastern neighborhoods of Aleppo city has been completed, adding that Syrian government forces are now tackling separate pockets of militants’ resistance.
“The operation by the Syrian Army aimed at liberating the militant-controlled neighborhoods of Eastern Aleppo has been completed,” the center said, adding that the Syrian government forces continue to hit and destroy isolated pockets of militant resistance.
According to the latest figures from the Russian Defense ministry, only 2 percent of Aleppo is still controlled by a few militants.
On Thursday, the 28 leaders of the European Union gathered in Brussels at their final summit of the year. The EU is in deep crisis. Following the British decision to leave the EU, the election of Donald Trump as US president, and the rise of right-wing nationalist forces in many European countries, it is paralyzed and divided.
The member states are hopelessly divided over many issues–the distribution of refugee quotas, the attitude towards Turkey, the austerity policy dictated by Berlin and Brussels, the creation of a European army, the response to incoming President Trump, and, above all, the stance towards Russia.
In addition, the leaders of the larger member states, who have thus far set the course in the EU, have been weakened by internal political crises.
Britain is on its way out of the EU and its government is arguing over what Brexit means. French President Francois Hollande leaves office in May. Italian Prime Minister Matteo Renzi resigned last week and his successor, Paolo Gentiloni, is at best a transitional figure. Spanish Prime Minister Mariano Rajoy rests on an uncertain majority. German Chancellor Angela Merkel, who is seeking her fourth term in office next year, confronts growing resistance both within her own Christian Democratic Union (CDU) and within its coalition partner, the Social Democratic Party (SPD).
Shortly before the summit, EU Commission President Jean-Claude Juncker described the situation in the EU with the words: “This time we are dealing with a multiple crisis. It is burning all over, not just in Europe. But wherever there is fire outside Europe, the conflagration moves toward Europe.”
For these reasons, the summit was to be limited to a few hours on Thursday. To avoid intensifying the crisis, the discussion was supposed to avoid controversial issues. Over dinner, the participants planned to discuss preparations for the Brexit negotiations in the absence of British Prime Minister Theresa May.
But things turned out differently. Council President Donald Tusk decided “spontaneously” to invite a Syrian anti-Assad activist–something unprecedented in the history of the EU–and the summit was extended by hours. Brita Hagi Hasan, introduced as the “mayor of Aleppo,” described the situation in the east of the city in dramatic terms. Speaking to the assembled heads of government, he claimed 50,000 civilians were “soon to be massacred.”
Hasan is one of those Syrian “oppositionists” who travel round the world promoting imperialist military intervention and are dragged into the limelight for that purpose. He has met several times with the French foreign minister, Jean-Marc Ayrault, most recently at the end of November.
During the summer, he attended a meeting in Paris together with Maryam Rajavi of the Iranian People’s Mujahedin and Michel Kilo, another Syrian regime opponent, who three years ago called for an American military strike against Syria. The People’s Mujahedin are fighting the regime in Tehran from abroad and have been listed by the EU since 2009 as a terrorist organization.
Tusk, Hollande and Merkel used Hasan’s appearance to call for the fractious EU members to unite on an anti-Russian line. While in US ruling circles there is fierce struggle over relations with Russia, the EU is siding with that wing which is pushing for a confrontation with Russia. Merkel and Hollande fear that the new president, Donald Trump, is moving closer to Moscow at the expense of the Europe, and that the EU, and possibly NATO as well, could break apart as a result.
In an editorial just before the summit, the Financial Times wrote: “Europe’s diplomats are at a loss over how to prepare for his [Trump’s] incoming administration… With any US pivot on Russia policy, the bloc’s hard-won consensus on how to respond to Moscow could change, tipping the balance between the EU’s hawks and doves.”
The European leaders did not waste any words talking about Mosul or Yemen, where they, the US and Washington’s regional allies are bombing civilians as ruthlessly as the Russians and the Syrian army in Aleppo. But they shed buckets of crocodile tears over the fate of the civilian population of Aleppo–and this on the day when the fighting there had stopped.
Chancellor Merkel said the report delivered by Hasan was “very depressing.” She accused Russia and Iran of responsibility for crimes against the civilian population in Aleppo and demanded that they be punished. She accused the United Nations Security Council of “failure.”
British Prime Minister Theresa May spoke in identical terms. “We must ensure that those who are responsible for these atrocities will be held accountable,” she said.
President Hollande said the EU’s raison d’être was in question if it could “not even unite on something as basic” as “condemning the massacres that are being initiated by the Syrian regime and its supporters.”
The cynicism of this feigned indignation was underscored by the fact that just hours before, Merkel’s government had begun the first mass deportations to Afghanistan. This initiates a process that will result in forcibly ejecting up to 12,500 refugees from Germany and sending them back to a country reduced to rubble by war and civil war.
Based on the surge of emotions that was staged with Hasan’s appearance, the summit agreed a number of controversial decisions either directed against Russia, providing for an accelerated military buildup, or serving to repel refugees.
The summit decided that despite billions in losses for various European countries, the sanctions against Russia for the Ukraine conflict should be extended until at least July 31 of next year. The day before the summit, the Slovak prime minister and current EU council president, Robert Fico, had described the sanctions as nonsense.
At the same time, the summit paved the way for the ratification of the partnership agreement with Ukraine, whose rejection by then-Ukrainian President Yanukovych had led to the 2014 putsch. This past spring, the agreement was blocked by Dutch voters, who rejected it in a referendum. The summit adopted a legally binding supplementary declaration allowing Dutch Prime Minister Mark Rutte to submit it again to parliament. All other EU countries have already ratified it.
The summit also agreed on closer military cooperation. It ratified the construction of a centre for the planning of civil and military missions. The British government, which previously blocked all moves toward a European army, dropped its resistance.
The summit also welcomed the Commission’s plans for a multi-billion-euro fund to finance military research. Decisions about it are to be made in the first half of next year.
While the summit huffed and puffed about the misery in Aleppo, Merkel, Hollande, Gentiloni and Rajoy met with the president of Niger, Mahamadou Issoufou, and other African leaders to persuade them to halt the flow of refugees and keep them in camps, in return for large sums of money.
Officially, this project is called “Migration Partnership.” For the sum of 100 million euros, half of which will come from Germany, camps are to be built along the escape routes where up to 60,000 people can be detained.
Berlin also prevailed at the summit when it came to dealing with Turkish President Recep Tayyip Erdogan. The German government refuses to cool relations with Ankara as a result of Erdogan’s authoritarian methods of rule because it fears a failure of the refugee deal the EU struck with Ankara to prevent refugees travelling on to Europe.
Now the EU has taken a step toward Erdogan by holding out the prospect of a refugee summit in the spring of 2017, with the participation of Commission President Juncker and EU President Tusk.
By Peter Schwarz
David Friedman opposes two-state solution, backs undivided Jerusalem as capital and has acted for Trump’s failing hotels.
Donald Trump has named as his ambassador to Israel a pro-settler lawyer who has described some US Jews as worse than concentration camp prisoner-guards.
David Friedman, a bankruptcy lawyer who represented the president-elect over his failing hotels in Atlantic City, served Trump’s advisory team on the Middle East. He has set out a number of hardline positions on Israeli-Palestinian relations, including fervent opposition to the two-state solution and strong support for an undivided Jerusalem as Israel’s capital.
He has called President Barack Obama an antisemite and suggested that US Jews who oppose the Israeli occupation of the West Bank are worse than kapos, Nazi-era prisoners who served as concentration camp guards.
Liberal Jewish groups in the US denounced the appointment as “reckless” and described Friedman – a man with no experience of foreign service – as the “least experienced pick” ever for a US ambassador to Israel.
Yossi Dagan, a prominent Israeli settler leader and friend of Friedman, welcomed the news, describing him as “a true friend and partner of the state of Israel and the settlements”. Morton Klein, the president of the Zionist Organization of America, said Friedman had “the potential to be the greatest US ambassador to Israel ever”.
An indication of how Friedman views Israel came in a 16-point action plan he issued with another Trump adviser in November. It included “ensur[ing] that Israel receives maximum military, strategic and tactical cooperation from the United States” and a declaration of war on the Boycott, Divestment and Sanctions (BDS) movement and pro-Palestinian campus activism.
Friedman, 57, has worked with Trump for more than 15 years and advised the president-elect on the Middle East during his election campaign. He represented Trump after the umbrella company for his three Atlantic City casinos, Trump Entertainment Resorts, went into bankruptcy in 2009.
He said he was looking forward to taking up his post in “the US embassy in Israel’s eternal capital, Jerusalem”, indicating Trump’s determination to overturn years of US policy and move the embassy from Tel Aviv. The change would be a potentially explosive gesture in the Middle East, as the status of Jerusalem is one of the issues in the long-stalled Israeli-Palestinian negotiations.
Also controversial is Friedman’s presidency of the American Friends of Bet El Institutions, an organisation that supports a large illegal West Bank settlement just outside Ramallah.
His links with Bet El, along with recent revelations that the family charity of Jared Kushner, Trump’s son-in-law, gave money to one of the West Bank’s most hard-line ideological settlements, suggests the settler movement will have an unprecedented number of advocates in the heart of Washington.
Announcing the appointment in a statement, Trump said: “[Friedman] has been a long-time friend and trusted adviser to me. His strong relationships in Israel will form the foundation of his diplomatic mission and be a tremendous asset to our country as we strengthen the ties with our allies and strive for peace in the Middle East.”
The announcement appears to have caught Israeli analysts by surprise. The Haaretz columnist Chemi Shalev said Friedman made Israel’s rightwing prime minister, Benjamin Netanyahu, “seem like a leftwing defeatist”.
“From where Friedman stands,” he said, “most Israelis, never mind most American Jews, are more or less traitors.”
Friedman disagrees with the general international consensus that the settlements are illegal and he opposes a ban on settlement construction on the West Bank and in East Jerusalem.
He wrote in the Jerusalem Post during the US election campaign that Israel would feel “no pressure” under a Trump administration. “America and Israel will enjoy unprecedented military and strategic cooperation, and there will be no daylight between the two countries,” he said.
In a column for the Israel National News website, he compared the liberal Jewish US lobby group J Street to concentration camp prisoner-guards and described its supporters as “smug advocates of Israel’s destruction delivered from the comfort of their secure American sofas – it’s hard to imagine anyone worse”.
He went further at the Saban forum earlier this month, saying J Street’s supporters were “not Jewish, and they’re not pro-Israel”.
The J Street president, Jeremy Ben Ami, said in a statement on Thursday: “J Street is vehemently opposed to the nomination of David Friedman. This nomination is reckless, putting America’s reputation in the region and credibility around the world at risk.”
The National Jewish Democratic Council tweeted: “Trump must stand for a strong US-Israel relationship and take it seriously. [There] hasn’t ever been a less experienced pick for US ambassador to Israel.”
Lara Friedman, of Americans for Peace Now, tweeted: “I don’t know about the Palestinians, but I know Jews who truly care about Israel’s security, democracy & place in the world are outraged.”
Like Trump, Friedman is an admirer of Vladimir Putin, and has portrayed the Russian president as fighting Islamic State in Syria despite little of the Russian war effort being focused on Isis.
“Vladimir Putin gets it,” Friedman wrote in November last year. “He may be a ‘thug,’ as he was recently described by Senator [Marco] Rubio, but he knows how to identify a national objective, execute a military plan, and ultimately prevail.”
By Peter Beaumont & Julian Borger
Despite the CIA’s uninspiring record for the past 70 years, the media are defending the agency for all it’s worth.
In 1977, Carl Bernstein published an exposé of a CIA program known as Operation Mockingbird, a covert program involving, according to Bernstein, “more than 400 American journalists who in the past 25 years have secretly carried out assignments for the Central Intelligence Agency.” Bernstein found that in “many instances” CIA documents revealed that “journalists were engaged to perform tasks for the CIA with the consent of the managements of America’s leading news organizations.”
Fast-forward to December 2016, and one can see that there isn’t much need for a covert government program these days. The recent raft of unverified, anonymously sourced and circumstantial stories alleging that the Russian government interfered in the US presidential election with the aim of electing Republican Donald J. Trump shows that today too much of the media is all too happy to do overtly what the CIA had once paid it to do covertly: regurgitate the claims of the spy agency and attack the credibility of those who question it.
On Friday, December 9, The Washington Post, fresh from publishing a front-page story that promoted a McCarthyite blacklist, published a piece that claimed that the CIA “concluded in a secret assessment that Russia intervened in the 2016 election to help Donald Trump win the presidency.” The Post also claimed that “Intelligence agencies have identified individuals with connections to the Russian government who provided WikiLeaks with thousands of hacked e-mails,” including those of John Podesta.
That same day, The New York Times reported that “the Russians hacked the Republican National Committee’s computer systems in addition to their attacks on Democratic organizations, but did not release whatever information they gleaned from the Republican networks.” The implication being that the Russians released the DNC e-mails to hurt Clinton, but held off on releasing the RNC e-mails in order to protect Trump.
The bombshell reports—and Trump’s quick dismissal of them as “ridiculous”—have dominated the news cycle in the days since their publication.
The current fight between Trump and the CIA is of potentially of historic consequence. Never before has the intelligence establishment shown so much hostility to a newly elected president. Never before has a president shown so little deference to the CIA.
And while the battle between Trump and the CIA continues to play out publicly, there remains the very real need for the public disclosure of as much evidence as possible, given the severe ramifications a successful foreign intervention in a US election would have on American democracy.
A Slam Dunk?
While Trump’s sin in committing an act of lèse majesté against the CIA has been treated as a grave transgression in the eyes of the media, serious questions remain over the veracity of the CIA’s finding. After all, several aspects of the Times and Post reports that actually undermine the dominant narrative of “Russian interference” are often carefully cropped out of the mainstream media’s portrayal of the controversy.
For example, The Washington Post noted, almost as an aside, that “intelligence agencies do not have specific intelligence showing officials in the Kremlin ‘directing’ the identified individuals to pass the Democratic emails to WikiLeaks,” while the Times reported that the RNC had “issued a statement denying that it had been hacked.” Indeed, the FBI has yet to make a determination on whether the RNC was hacked, something that the RNC itself denies.
The lack of clarity over whether or not the Russian government hacked the RNC is a critical part of the story, since the CIA’s “secret assessment” that alleged that the Russians interfered in the election in order to elect Trump was, according to a US official who spoke to Reuters this week, “based on the fact that Russian entities hacked both Democrats and Republicans and only the Democratic information was leaked.”
Meanwhile, much of the media has ignored the rather salient fact that the FBI is by no means in agreement with the anonymous and secret CIA assessment that Russia interfered with the election in order to help elect Donald Trump.
Nor, for that matter, is the Office of the Director for National Intelligence (ODNI), which has declined to endorse the CIA report. This is perhaps less surprising than it first might seem, considering that as recently as November 17 ODNI Director James Clapper testified before the House Intelligence Committee and acknowledged that “as far as the WikiLeaks connection, the evidence there is not as strong and we don’t have good insight into the sequencing of the releases or when the data may have been provided.”
Indeed, evidence of a connection between the Russian government and the hackers that are believed to have stolen the DNC/John Podesta e-mails remains illusory. Cyber-security expert Jeffrey Carr has observed that “there is ZERO technical evidence to connect those Russian-speaking hackers to the GRU, FSB, SVR, or any other Russian government department.” The very real possibility that non-state actors carried out the hack of the DNC has been conspicuously absent from the mainstream narrative of “Russian interference.”
And so, while the Russian government certainly could have been behind the DNC/Podesta e-mail hack, the possibility that it originated elsewhere should not be so easily dismissed. After all, Wikileaks founder Julian Assange has repeatedly denied that Russia was the source of the DNC/Podesta emails, while a former British ambassador who is close to Assange has said the source of the e-mails is “an insider. It’s a leak, not a hack.”
But that hasn’t prevented the media from treating the anonymous, unverified claims of both The Washington Post and The New York Times, both based on a CIA “secret assessment,” as gospel.
Media Rushes to Defend The CIA
Last weekend, the influential Sunday morning talk shows took Trump to task for his dismissal of the CIA’s “secret assessment.” An incredulous George Stephanopoulos asked incoming White House Chief of Staff Reince Priebus: “How is a President Trump going to work with intelligence agencies if he doesn’t trust their work?”
“I want to know,” Stephanopoulos demanded, “why President-elect Trump doesn’t believe the conclusions of 17 intelligence agencies.”
On Face the Nation, Time magazine’s Michael Duffy said the CIA’s finding was “deeply disturbing” because “it means that Russia attacked the United States.” Duffy also expressed “shock” that Trump has “drawn a fairly dark cloud over his relationship with the intelligence community on whom he will rely and need as president.”
And over at NBC’s Meet the Press, moderator Chuck Todd warned viewers that the issue of Russian interference “is not about the results of the election, it’s about a hostile foreign government trying to influence our election.” Todd thought it “remarkable” that Donald Trump decided “to side with a foreign government over our own chief intelligence agency.”
“Donald Trump,” he concluded, has “declared war on the intelligence community.”
The respected liberal columnist E.J. Dionne also sprung to the defense of the CIA’s honor in his column for The Washington Post on Monday. “When The Post revealed the CIA’s conclusions about Russia,” Dionne opined, “Trump’s response was to insult the CIA.” Still more alarming to Dionne, is that Trump would have the audacity to “happily trash our own CIA.”
Meanwhile, on Tuesday, December 13, liberal stalwart Keith Olbermann went much further. In a commentary for GQ he warned that “the nation and all of our freedoms hang by a thread. And the military apparatus of this country is about to be handed over to scum who are beholden to scum, Russian scum.” He then tweeted his considered belief that “If @realDonaldTrump will ignore CIA to listen instead to Russians, it’s treason.”
The working assumption here seems to be that the job of the president (and apparently of media outlets like CNN and The Washington Post) is to stand, salute, and never question Langley.
In Langley We Trust?
The high-profile anchors and analysts on CNN, CBS, ABC, and NBC who have cited the work of The Washington Post and The New York Times seem to have come down with a bad case of historical amnesia.
The CIA, in their telling, is a bulwark of American democracy, not a largely unaccountable, out-of-control behemoth that has often sought to subvert press freedom at home and undermine democratic norms abroad.
The columnists, anchors, and commentators who rushed to condemn Trump for not showing due deference to the CIA seem to be unaware that, throughout its history, the agency has been the target of far more astute and credible critics than the president-elect.
In his memoir Present at the Creation, Truman’s Secretary of State Dean Acheson wrote that about the CIA, “I had the gravest forebodings.” Acheson wrote that he had “warned the President that as set up neither he, the National Security Council, nor anyone else would be in a position to know what it was doing or to control it.”
Following the Bay of Pigs fiasco, President John F. Kennedy expressed his desire to “to splinter the CIA into a thousand pieces and scatter it to the winds.”
The late New York Senator Daniel Patrick Moynihan twice introduced bills, in 1991 and 1995, to abolish the agency and move its functions to the State Department which, as the journalist John Judis has observed, “is what Acheson and his predecessor, George Marshall, had advocated.”
A democracy, it is true, cannot function if its elections are the target of outside powers which seek to influence it. To see what a corrosive effect outside powers can have on democratic processes, one need look no further than the 1996 Russian presidential election, in which Americans like the regime-change theorist Michael McFaul (who was later to become US Ambassador to Russia from 2012–14) interfered in order to keep the widely unpopular Boris Yeltsin in power against the wishes of the Russian people.
For its part, the CIA has a long history of overthrowing sovereign governments the world over. According to the historian William Blum, the CIA has “(1) attempted to overthrow more than 50 governments, most of which were democratically-elected, (2) attempted to suppress a populist or nationalist movement in 20 countries, (3) grossly interfered in democratic elections in at least 30 countries, (4) dropped bombs on the people of more than 30 countries, (5) attempted to assassinate more than 50 foreign leaders.”
Perhaps if it was doing the job of intelligence gathering rather than obsessively plotting regime change, the CIA would have amassed a record worthy of the establishment media’s incessant fawning.
But alas. Consulting the CIA’s historical record, one is confronted by a laundry list of failures, which includes missing both the break-up of the Soviet Union (during the 1980’s a CIA deputy director by the name of Bob Gates called the USSR “a despotism that works”) and the 9/11 attacks.
In the years following 9/11, the CIA has been caught flat-footed by, among other things, the lack of WMD in Iraq (2003); the Iraqi insurgency (2003); the Arab Spring (2010); the rise of ISIS (2013); and the Ukrainian civil war (2014).
More recently, CIA Director John Brennan made false statements before Congress over the CIA’s hacking into the computers of Congressional staffers.
And yet, despite its uninspiring record of the past 70 years, the media has driven itself into a self-righteous frenzy over what it perceives to be President-elect Trump’s grave show of disrespect to the CIA.
By James Carden
The rising hysteria about Russia is best understood as fulfilling two needs for Official Washington: the Military Industrial Complex’s transitioning from the “war on terror” to a more lucrative “new cold war” – and blunting the threat that a President Trump poses to the neoconservative/liberal-interventionist foreign-policy establishment.
By hyping the Russian “threat,” the neocons and their liberal-hawk sidekicks, who include much of the mainstream U.S. news media, can guarantee bigger military budgets from Congress. The hype also sets in motion a blocking maneuver to impinge on any significant change in direction for U.S. foreign policy under Trump.
Some Democrats even hope to stop Trump from ascending to the White House by having the Central Intelligence Agency, in effect, lobby the electors in the Electoral College with scary tales about Russia trying to fix the election for Trump.
The electors meet on Dec. 19 when they will formally cast their votes, supposedly reflecting the judgments of each state’s voters, but conceivably individual electors could switch their ballots from Trump to Hillary Clinton or someone else.
On Thursday, liberal columnist E.J. Dionne Jr. joined the call for electors to flip, writing: “The question is whether Trump, Vladimir Putin and, perhaps, Clinton’s popular-vote advantage give you sufficient reason to blow up the system.”
That Democrats would want the CIA, which is forbidden to operate domestically in part because of its historic role in influencing elections in other countries, to play a similar role in the United States shows how desperate the Democratic Party has become.
And, even though The New York Times and other big news outlets are reporting as flat fact that Russia hacked the Democratic email accounts and gave the information to WikiLeaks, former British Ambassador Craig Murray, a close associate of WikiLeaks founder Julian Assange, told the London Daily Mail that he personally received the email data from a “disgusted” Democrat.
Murray said he flew from London to Washington for a clandestine handoff from one of the email sources in September, receiving the package in a wooded area near American University.
“Neither of [the leaks, from the Democratic National Committee or Clinton campaign chairman John Podesta] came from the Russians,” Murray said, adding: “the source had legal access to the information. The documents came from inside leaks, not hacks.”
Murray said the insider felt “disgust at the corruption of the Clinton Foundation and the tilting of the primary election playing field against Bernie Sanders.” Murray added that his meeting was with an intermediary for the Democratic leaker, not the leaker directly.
[Update: Murray subsequently said his contact with the intermediary at American University was not for the purpose of obtaining a batch of the purloined emails, as the Daily Mail reported, since WikiLeaks already had them. He said the Mail simply added that detail to the story, but Murray declined to explain why he had the meeting at A.U. with the whistleblower or an associate.]
If Murray’s story is true, it raises several alternative scenarios: that the U.S. intelligence community’s claims about a Russian hack are false; that Russians hacked the Democrats’ emails for their own intelligence gathering without giving the material to WikiLeaks; or that Murray was deceived about the identity of the original leaker.
But the uncertainty creates the possibility that the Democrats are using a dubious CIA assessment to reverse the outcome of an American presidential election, in effect, making the CIA party to a preemptive domestic “regime change.”
All of this maneuvering also is delaying the Democratic Party’s self-examination into why it lost so many white working-class voters in normally Democratic strongholds, such as Pennsylvania, Michigan and Wisconsin.
Rather than national party leaders taking the blame for pre-selecting a very flawed candidate and ignoring all the warning signs about the public’s resistance to this establishment choice, Democrats have pointed fingers at almost everyone else – from FBI Director James Comey for briefly reviving Clinton’s email investigation, to third-party candidates who siphoned off votes, to the archaic Electoral College which negates the fact that Clinton did win the national popular vote – and now to the Russians.
While there may be some validity to these various complaints, the excessive frenzy that has surrounded the still-unproven claims that the Russian government surreptitiously tilted the election in Trump’s favor creates an especially dangerous dynamic.
On one level, it has led Democrats to support Orwellian/ McCarthyistic concepts, such as establishing “black lists” for Internet sites that question Official Washington’s “conventional wisdom” and thus are deemed purveyors of “Russian propaganda” or “fake news.”
On another level, it cements the Democratic Party as America’s preeminent “war party,” favoring an escalating New Cold War with Russia by ratcheting up economic sanctions against Moscow, and even seeking military challenges to Russia in conflict zones such as Syria and Ukraine.
One of the most dangerous aspects of a prospective Hillary Clinton presidency was that she would have appointed neocons, such as Assistant Secretary of State for European Affairs Victoria Nuland and her husband, Project for the New American Century co-founder Robert Kagan, to high-level foreign policy positions.
Though that risk may have passed assuming Clinton’s Electoral College defeat on Monday, Democrats now are excitedly joining the bash-Russia movement, making it harder to envision how the party can transition back into its more recent role as the “peace party” (at least relative to the extremely hawkish Republicans).
The potential trading places of the two parties in that regard – with Trump favoring geopolitical détente and the Democrats beating the drums for more military confrontations – augurs poorly for the Democrats regaining their political footing anytime soon.
If Democratic leaders press ahead, in alliance with neoconservative Republicans, on demands for escalating the New Cold War with Russia, they could precipitate a party split between Democratic hawks and doves, a schism that likely would have occurred if Clinton had been elected but now may happen anyway, albeit without the benefit of the party holding the White House.
The first test of this emerging Democratic-neocon alliance may come over Trump’s choice for Secretary of State, Exxon-Mobil’s chief executive Rex Tillerson, who doesn’t exhibit the visceral hatred of Russian President Vladimir Putin that Democrats are encouraging.
As an international business executive, Tillerson appears to share Trump’s real-politik take on the world, the idea that doing business with rivals makes more sense than conspiring to force “regime change” after “regime change.”
Over the past several decades, the “regime change” approach has been embraced by both neocons and liberal interventionists and has been implemented by both Republican and Democratic administrations. Sometimes, it’s done through war and other times through “color revolutions” – always under the idealistic guise of “democracy promotion” or “protecting human rights.”
But the problem with this neo-imperialist strategy has been that it has failed miserably to improve the lives of the people living in the “regime-changed” countries. Instead, it has spread chaos across wide swaths of the globe and has now even destabilized Europe.
Yet, the solution, as envisioned by the neocons and their liberal-hawk understudies, is simply to force more “regime change” medicine down the throats of the world’s population. The new “great” idea is to destabilize nuclear-armed Russia by making its economy scream and by funding as many anti-Putin elements as possible to create the nucleus for a “color revolution” in Moscow.
To justify that risky scheme, there has been a broad expansion of anti-Russian propaganda now being funded with tens of millions of dollars in taxpayer money as well as being pushed by government officials giving off-the-record briefings to mainstream media outlets.
However, as with earlier “regime change” plans, the neocons and liberal hawks never think through the scenario to the end. They always assume that everything is going to work out fine and some well-dressed “opposition leader” who has been to their think-tank conferences will simply ascend to the top job.
Remember, in Iraq, it was going to be Ahmed Chalabi who was beloved in Official Washington but broadly rejected by the Iraqi people. In Libya, there has been a parade of U.S.-approved “unity” leaders who have failed to pull that country together.
In Ukraine, Nuland’s choice – Arseniy “Yats is the guy” Yatsenyuk – resigned amid broad public disapproval earlier this year after pushing through harsh cuts in social programs, even as the U.S.-backed regime officials in Kiev continued to plunder Ukraine’s treasury and misappropriate Western economic aid.
But the notion of destabilizing nuclear-armed Russia is even more hare-brained than those other fiascos. The neocon/liberal-hawk assumption is that Russians – pushed to the brink of starvation by crippling Western sanctions – will overthrow Putin and install a new version of Boris Yeltsin who would then let U.S. financial advisers return with their neoliberal “shock therapy” of the 1990s and again exploit Russia’s vast resources.
Indeed, it was the Yeltsin era and its Western-beloved “shock therapy” that created the desperate conditions before the rise of Putin with his autocratic nationalism, which, for all its faults, has dramatically improved the lives of most Russians.
So, the more likely result from the neocon/liberal-hawk “regime change” plans for Moscow would be the emergence of someone even more nationalistic – and likely far less stable – than Putin, who is regarded even by his critics as cold and calculating.
The prospect of an extreme Russian nationalist getting his or her hands on the Kremlin’s nuclear codes should send chills up and down the spines of every American, indeed every human being on the planet. But it is the course that key national Democrats appear to be on with their increasingly hysterical comments about Russia.
The Democratic National Committee issued a statement on Wednesday accusing Trump of giving Russia “an early holiday gift that smells like a payoff. … It’s rather easy to connect the dots. Russia meddled in the U.S. election in order to benefit Trump and now he’s repaying Vladimir Putin by nominating Exxon Mobil CEO Rex Tillerson as secretary of state.”
Besides delaying a desperately needed autopsy on why Democrats did so badly in an election against the also-widely-disliked Donald Trump, the new blame-Russia gambit threatens to hurt the Democrats and their preferred policies in another way.
If Democrats vote in bloc against Tillerson or other Trump foreign-policy nominees – demanding that he appoint people acceptable to the neocons and the liberal hawks – Trump might well be pushed deeper into the arms of right-wing Republicans, giving them more on domestic issues to solidify their support on his foreign-policy goals.
That could end up redounding against the Democrats as they watch important social programs gutted in exchange for their own dubious Democratic alliance with the neocons.
Since the presidency of Bill Clinton, the Democrats have courted factions of the neocons, apparently thinking they are influential because they dominate many mainstream op-ed pages and Washington think tanks. In 1993, as a thank-you gift to the neocon editors of The New Republic for endorsing him, Clinton appointed neocon ideologue James Woolsey as head of the CIA, one of Clinton’s more disastrous personnel decisions.
But the truth appears to be that the neocons have much less influence across the U.S. electoral map than the Clintons think. Arguably, their pandering to a clique of Washington insiders who are viewed as warmongers by many peace-oriented Democrats may even represent a net negative when it comes to winning votes.
I’ve communicated with a number of traditional Democrats who didn’t vote for Hillary Clinton because they feared she would pursue a dangerous neocon foreign policy. Obviously, that’s not a scientific survey, but the anecdotal evidence suggests that Clinton’s neocon connections could have been another drag on her campaign.
I also undertook a limited personal test regarding whether Russia is the police state that U.S. propaganda depicts, a country yearning to break free from the harsh grip of Vladimir Putin (although he registers 80 or so percent approval in polls).
During my trip last week to Europe, which included stops in Brussels and Copenhagen, I decided to take a side trip to Moscow, which I had never visited before. What I encountered was an impressive, surprisingly (to me at least) Westernized city with plenty of American and European franchises, including the ubiquitous McDonald’s and Starbucks. (Russians serve the Starbucks gingerbread latte with a small ginger cookie.)
Though senior Russian officials proved unwilling to meet with me, an American reporter, at this time of tensions, Russia had little appearance of a harshly repressive society. In my years covering U.S. policies in El Salvador in the 1980s and Haiti in the 1990s, I have experienced what police states look and feel like, where death squads dump bodies in the streets. That was not what I sensed in Moscow, just a modern city with people bustling about their business under early December snowfalls.
The police presence in Red Square near the Kremlin was not even as heavy-handed as it is near the government buildings of Washington. Instead, there was a pre-Christmas festive air to the brightly lit Red Square, featuring a large skating rink surrounded by small stands selling hot chocolate, toys, warm clothing and other goods.
Granted, my time and contact with Russians were limited – since I don’t speak Russian and most of them don’t speak English – but I was struck by the contrast between the grim images created by Western media and the Russia that I saw.
It reminded me of how President Ronald Reagan depicted Sandinista-ruled Nicaragua as a “totalitarian dungeon” with a militarized state ready to march on Texas, but what I found when I traveled to Managua was a third-world country still recovering from an earthquake and with a weak security structure despite the Contra war that Reagan had unleashed against Nicaragua.
In other words, “perception management” remains the guiding principle of how the U.S. government deals with the American people, scaring us with exaggerated tales of foreign threats and then manipulating our fears and our misperceptions.
As dangerous as that can be when we’re talking about Nicaragua or Iraq or Libya, the risks are exponentially higher regarding Russia. If the American people are stampeded into a New Cold War based more on myths than reality, the minimal cost could be the trillions of dollars diverted from domestic needs into the Military Industrial Complex. The far-greater cost could be some miscalculation by either side that could end life on the planet.
So, as the Democrats chart their future, they need to decide if they want to leapfrog the Republicans as America’s “war party” or whether they want to pull back from the escalation of tensions with Russia and start addressing the pressing needs of the American people.
By Robert Parry
The Electoral College’s 538 members gather Monday at 50 state capitols to cast the ballots that matter the most when it comes to electing a U.S. president.
Normally sedate affairs that pass with little notice, this year’s proceedings have been injected with a bit of drama and a dash of uncertainty with an unprecedented campaign by a small group of electors to overturn the results of Election Day.
The attempt to deny Donald Trump the presidency by trying to convince Democratic and Republican peers to back someone else is almost sure to fail. But it injects still more rancor in what already has been a divisive political season and serves as a capstone for a 2016 presidential election that will go down as one of the oddest in U.S. history.
Behind the drive is a group calling itself Hamilton Electors, led by two Democratic electors from western states. The name is a nod to Alexander Hamilton and his explanation of the need for the Electoral College, an entity the first U.S. Treasury secretary said existed to make sure that “the office of the president will never fall to the lot of any man who is not in an eminent degree endowed with the requisite qualifications.”
Bret Chiafalo, an Electoral College member from Washington state who is a Hamilton Electors organizer, calls the institution the nation’s “emergency brake” in a video that outlines the group’s goals. “If only 37 Republican electors change their vote, Donald Trump will not have the 270 electoral votes he needs to be president,” he says. “Thirty-seven patriots can save this country.”
Chiafalo and others who have joined the effort want the Electoral College returned to what they say is its original concept: a deliberative body that uses the popular vote as a guide.
Lawrence Lessig, a Harvard University law professor working with the stop-Trump effort, told reporters on a conference call Thursday afternoon that there are likely “at least” 20 Republican electors who are “seriously considering” defections.
He provided no documentation. Lessig said that the nature of the situation prevents him from providing evidence because electors are speaking to organizers on the “condition of absolute anonymity.” Whether the movement reaches its goal, he said, depends on how viable that goal appears to be.
“If it’s clear that it doesn’t make any sense to come out and vote against Donald Trump, I’m sure many of those people won’t,” he said. “If it’s close to 37, or people believe that it is 37, then I think that will give people the courage they need to step up.”
The Associated Press reported Thursday that it has interviewed more than 330 electors and that “Republican electors appear to be in no mood for an insurrection in the presidential campaign’s last voting ritual.”
The turmoil among electors was stirred last week after President Barack Obama directed U.S. intelligence agencies to deliver a report on Russian hacking of Democratic Party e-mails, and the Washington Post reported that the CIA concluded the meddling was intended to benefit Trump.
Those developments have prompted 62 electors — all but one of them Democrats in states Democrat Hillary Clinton won — to sign onto a letter requesting a briefing about the hacking. Some Democrats have also called for the Electoral College voting to be pushed back until more is known, something that would take an act of Congress.
None of the 62 — more than a quarter of the Democrats forming this year’s Electoral College — have necessarily joined in the call for Republican electors to back a consensus candidate that Republican and Democratic electors might support.
That doesn’t have to be Clinton. Members of the Hamilton Electors have mentioned former Secretary of State Colin Powell, former Utah Governor Jon Huntsman and Ohio Governor John Kasich as potential alternatives.
Yet another effort to persuade electors is playing out in full-page newspaper ads this week in states that voted for Trump. Paid for by an online fundraising drive started by a California man opposed to Trump, the ads call for electors to reject Trump because he would “present a grave and continual threat to the Constitution, to the domestic tranquility, and to international stability.”
There’s no constitutional requirement that binds electors to the candidates who won their state, but most are required to do so under state laws. That’s never mattered or been seriously tested because there have been few cases of so-called “faithless electors” — the last occurrence was in 2004.
“That’s never happened for a live candidate ever before,” said George Edwards III, a Texas A&M University political science professor who has studied the Electoral College. “It’s very much a long shot.”
Edwards said he stressed “live candidate” because in 1872 Democratic candidate Horace Greeley died after a landslide election loss to incumbent Ulysses S. Grant, before the Electoral College met. Three electors who still voted for Greeley had their ballots invalidated because their candidate, obviously, could not serve in office.
If the effort to flip 37 Republican electors were to succeed, it could send the final decision to the Republican-controlled House of Representatives.
Trump supporters and Republican establishment figures say it’s all an academic conversation because there’s zero chance of success and is being pushed by Democrats as a way to undermine the billionaire businessman’s legitimacy for the office.
“There are some people who will just not let go,” said John Hammond, a Republican National Committee member from Indiana. “It will be a fruitless effort.”
The goal of trying to block Trump at the Electoral College has some similarities to a failed bid to persuade enough delegates to the Republican National Convention in July to block his nomination as the party’s standard-bearer. Unlike at the convention, the electors are spread across the country.
“I know people are getting a plethora of calls,” said Steve House, chairman of the Colorado Republican Party. “I also suspect many people are going to be pushing as much bad news as possible about Trump this week.”
While calling the lobbying effort “massive,” House also predicts total failure. “There may be a few defectors, maybe six or seven, who are bound to Donald Trump who may not vote for him, but I don’t think it will alter the outcome,” he said.
House was one of those in a Denver courtroom Monday where two Colorado electors lost their bid to be free from a state requirement that they cast their ballots for presidential and vice-presidential candidates based on the results of the general election. The two Democratic electors, in a state Clinton won, have said they think Trump is unfit for office and have sought to encourage his electors in other states to vote their conscience.
The quirky institution was created by the nation’s founders as a compromise between those who favored a direct popular vote and those who wanted lawmakers to pick the president. This year, Trump won the popular vote in 30 states that have 306 electoral votes, 36 more than the 270 needed to win. Clinton carried 20 states and the District of Columbia with 232 electors.
One of the drivers for the attempt to negate the Electoral College result is that by running up big margins in populous states like California and New York, Clinton beat Trump by at least 2.8 million ballots in the nationwide popular vote. That’s the largest gap for a candidate who didn’t win the White House. Clinton is only the fifth presidential candidate in U.S. history to win the popular vote and finish second in electoral votes, joining Andrew Jackson in 1824, Samuel Tilden in 1876, Grover Cleveland in 1888 and Al Gore in 2000.
The Electoral College is more popular with Republicans than Democrats. A Bloomberg National Poll earlier this month found that 54 percent of American adults say the president should be picked by the popular vote, a number that jumps to 80 percent among Democrats and those who lean that way. Among Republicans and those who lean that way, 68 percent back the Electoral College.
By John McCormick
Israel agreed on Tuesday to sell nearly $5 billion of its infamous ‘Iron Dome’ defence system to Iran’s northern neighbour, Azerbaijan, in a mutually beneficial trade deal.
Azerbaijan’s President Ilham Aliyev told reporters that historical trade between the two countries was strong, as Israel buys a large proportion of its oil from Azerbaijan.
“So far the contracts between Azerbaijani and Israeli companies with respect to purchasing defence equipment have been close to $5 billion,” Aliyev said.
“More precisely, $4.85 billion.”
Azerbaijan was forced to cut its defence budget in February, after low oil prices hit its overall revenues.
It had previously been a big buyer in the defence industry, purchasing helicopters and tanks from Russia and missiles from Israel.
Azerbaijan has historically directed much of its defence spending towards a potential conflict with its neighbour Armenia.
The two countries were engaged in a bloody conflict in 1992 which many people on both sides feel was never resolved.
“Azerbaijan’s armed forces need better equipment as Armenia continues its occupation policy in defiance of international law,” said Azerbaijan’s finance minister, Samir Sharifov.
Doubts surround the true size of the reported arms deals however, as Azerbaijan has a history of exaggerating its defence budget – due in part to a perceived arms race with Armenia.
In January 2015, Emil Sanamyan, an analyst at the Economist Intelligence Unit, found that the army had bloated arms sales claims between 2010 and 2015 by $13 billion.
The army had claimed receipts of $20bn, whereas the true figure was closer to $7 billion – a 65 percent reduction.
“Judging by itemized spending since 2011, Azerbaijan may have overstated its actual military spending by more than $1 billion annually so that this spending would appear larger than Armenia’s budget,” said Sanamyan.
By The New Arab
A WikiLeaks figure is claiming that he received leaked Clinton campaign emails from a “disgusted” Democratic whistleblower, while the White House continued to blame Russian hackers Wednesday for meddling in the presidential election and asserted that Donald Trump was “obviously aware” of Moscow’s efforts on his behalf.
Craig Murray, a former British ambassador to Uzbekistan and a close associate of WikiLeaks founder Julian Assange, said in the report by the Daily Mail that he flew to Washington for a clandestine handoff with one of the email sources in September.
He said he received a package in a wooded area near American University.
“Neither of [the leaks] came from the Russians,” Mr. Murray told the British newspaper. “The source had legal access to the information. The documents came from inside leaks, not hacks.”
WikiLeaks published thousands of emails stolen from Clinton campaign chairman John Podesta, providing a steady stream of negative news coverage of the Democratic presidential nominee during the final weeks of the campaign. Mr. Murray said the leakers were motivated by “disgust at the corruption of the Clinton Foundation and the tilting of the primary election playing field against Bernie Sanders.”
The Daily Mail report noted that Mr. Murray was removed from his diplomatic post amid allegations of misconduct.
The White House said Wednesday that Mr. Trump was “obviously aware” of Russian hacking to benefit his presidential campaign and suggested that the administration didn’t retaliate against Moscow because the U.S. has more to lose than Russia does in an all-out cyberwar.
Referring to Mr. Trump’s offhand snark last summer that Moscow might be able to locate missing emails from Hillary Clinton’s private server, White House press secretary Josh Earnest said the Republican might have viewed Russia’s cyberattacks as helpful to his presidential campaign.
“There was ample evidence that was known long before the election, and in most cases long before October, about the Trump campaign in Russia, everything from the Republican nominee himself calling on Russia to hack his opponent,” Mr. Earnest said. “It might be an indication that he was obviously aware and concluded, based on whatever facts or sources he had available to him, that Russia was involved and their involvement was having a negative impact on his opponent’s campaign.”
Mr. Trump has openly rejected the idea that Russia was behind the attacks or that the cyberintrusions were intended to help him win the election.
He also accused the administration and liberal news outlets of trying to delegitimize his election. There is no evidence that the election process was hacked, by the Russians or anyone else.
Meanwhile on Wednesday, the House Permanent Select Committee on Intelligence had to cancel a closed-door classified briefing on the issue of suspected Russian interference after U.S. intelligence agencies refused to cooperate.
Rep. Devin Nunes, California Republican and committee chairman, requested that the FBI, CIA, Office of the Director of National Intelligence and National Security Agency provide witnesses, in part in response to reports last week in The Washington Post and The New York Times that intelligence agencies think the Kremlin deliberately tried to push the election to Mr. Trump, something not supported by postelection testimony to the panel.
But according to Fox News, “agencies refused to provide representatives for the session.”
“It is unacceptable that the Intelligence Community directors would not fulfill the House Intelligence Committee’s request to be briefed tomorrow on the cyber-attacks that occurred during the presidential campaign,” Mr. Nunes said in a statement. “The Committee is deeply concerned that intransigence in sharing intelligence with Congress can enable the manipulation of intelligence for political purposes.”
Kellyanne Conway, Mr. Trump’s campaign manager, accused people within intelligence agencies of trying to undermine the U.S. election results to curry favor with liberal media and are now ducking accountability.
“We should all be very concerned about that,” she said in an appearance on Fox News Channel.
The Democratic National Committee, essentially an arm of the Obama White House, compounded the friction Wednesday by accusing Mr. Trump of giving Russia “an early holiday gift that smells like a payoff” with the nomination of Exxon Mobil CEO Rex Tillerson to be secretary of state. The DNC warned that Mr. Tillerson would be too cozy in his dealings with Russian President Vladimir Putin.
“It’s rather easy to connect the dots,” the DNC said. “Russia meddled in the U.S. election in order to benefit Trump, and now he’s repaying Vladimir Putin by nominating Exxon Mobil CEO Rex Tillerson as secretary of state.”
It was the latest broadside by the White House and its allies against the president-elect in an increasingly tense transition debate over the impact of the cyberintrusions, which mainly targeted Democrats such as Mr. Podesta.
Departing Senate Minority Leader Harry Reid, Nevada Democrat, compared the alleged Russian hacking to terrorist attacks that killed nearly 3,000 people on U.S. soil. “I think this is as big a deal as Watergate, as 9/11,” he said.
Democrats in hindsight have accused the administration of failing to warn the public about Russia’s alleged hacking as early as May, when private assessments pinned the blame on Moscow. In October, the administration released a statement from Director of National Intelligence James R. Clapper that identified Russia as the culprit.
The White House said Mr. Obama waited until October, just weeks before the election, to raise concerns about Russia’s involvement because he didn’t want to appear to be playing politics with the issue.
“It would have been inappropriate for White House figures, including the president of the United States, to be rushing the intelligence community to expedite their analysis of this situation, because we were concerned about the negative impact it was having on the president’s preferred candidate in the presidential election,” Mr. Earnest said.
The president’s spokesman also said the administration tried to get bipartisan cooperation from Congress this fall to warn state election officials about Russian interference, but top Republicans balked.
“Leader [Mitch] McConnell and Speaker [Paul D.] Ryan did not readily agree to it,” Mr. Earnest said. “We didn’t get the kind of prompt cooperation we would have liked.”
The administration eventually did issue warnings to state election officials and said there was no evidence of Russian interference via the internet on Election Day.
The White House still won’t say whether the U.S. has retaliated against what it describes as Russian efforts to influence the election of Donald Trump. “It merits a proportional response. I am not in a position to confirm whether we have initiated it or not,” Mr. Earnest said.
He said “the United States is particularly vulnerable” to cyberattacks because of its heavy reliance on the internet.
“Given the interconnected nature of our society and our economy, the United States is in a unique position, vis-a-vis the rest of the world, because we rely on 21st-century communications technology for just about everything, in a way that lots of other societies and economies and countries don’t,” he said.
By Dave Boyer
On Thursday, the Senate passed a bill that puts every American who travels by plane at risk. It is among the stupidest pieces of legislation ever written and it explains– to a great extent– why the US Congress has a public approval rating of 13 percent and is among the most loathed institutions in America.
The 2017 National Defense Authorization Act (NDAA) passed the House last Friday in a 375-34 vote. On Thursday, it cleared the senate with a 92 to 7 margin. The bill will now be sent to Obama where it is expected to be signed into law. According to an article on SOFREP titled “Congress authorizes anti-aircraft missiles for Syrian opposition”:
“Congress for the first time authorized the Department of Defense to provide vetted-Syrian rebels with anti-aircraft missiles. The provision is contained within the $619 billion Fiscal Year 2017 National Defense Authorization Act, which passed the Senate on Dec. 8 and the House on Dec. 2.
Under the bill, the Secretaries of Defense and State must submit a report to Congress explaining why they determined Syrian groups need man-portable air defense systems (MANPADS).”
You read that right, Congress just passed a bill that will provide shoulder-launched ground-to-air missiles to lunatic jihadists who will undoubtedly use them to take down American or Israeli jetliners. The argument that these Islamic militants are fully vetted is complete nonsense as both the New York Times and the Wall Street Journal have repeatedly shown. According to a recent article in the New York Times, rebel groups supported by the USG “have entered into battlefield alliances with the affiliate of al Qaida in Syria formerly known as al Nusra.” The Wall Street Journal reports that rebel groups are “doubling-down on their alliance with al Qaida. This alliance has rendered the phrase ‘moderate rebels’ meaningless.”
Everyone who has followed developments on the ground in Syria knows that the distinction between the “good” terrorists and the “bad” terrorists is pure bunkum. The various militias are merely the many heads of the same homicidal anti-government hydra that has killed over 400,000 Syrians and decimated a large part of the country. The CIA should not be assisting any of these madmen let alone providing them with lethal state-of the-art weapons that will inevitably be used to take down US aircraft.
Here’s more from the same article:
“The inclusion of the provision represents a departure from previous versions of the NDAA. The original House bill specifically prohibited the transfer of MANPADS to “any entity” in Syria, while the Senate bill did not address it.”
So, the original bill forbid “the transfer of MANPADS” to Syrian militants because it was considered too dangerous. But now that Obama’s proxy-army is getting pulverized in Aleppo, Congress has taken off the gloves and gone into full-revenge mode. Isn’t that what’s really going on?
And it looks like Obama has already given this crazy policy a big thumbs up. Check out this “Presidential Determination and Waiver ….on the Arms Export Control Act to Support U.S. Special Operations to Combat Terrorism in Syria” that the White House issued late Thursday:
“By the authority vested in me as President by the Constitution and the laws of the United States, including section 2249a of title 10, United States Code, sections 40 and 40A of the Arms Export Control Act (AECA) (22 U.S.C. 2780 and 2781), and section 301 of title 3, United States Code, I hereby:
- determine that the transaction, encompassing the provision of defense articles and services to foreign forces, irregular forces, groups, or individuals engaged in supporting or facilitating ongoing U.S. military operations to counter terrorism in Syria, is essential to the national security interests of the United States.” (Presidential Determination and Waiver)
It looks to me like our Nobel prize-winning president just gave Congress’s idiot plan his ringing endorsement.
Fortunately, there’s one member of congress who has spoken out forcefully against the NDAA. Representative Tulsi Gabbard from Hawaii released the following statement following the voting on December 2:
“This bill contains the same deeply concerning and dangerous Syria train and equip measures that I’ve fought against since the program’s inception.
“First, it creates the potential for dangerous ground-to-air missiles getting in the hands of ISIS, al-Qaeda, and other terrorist groups.
“Second, the bill reauthorizes and extends the Syria train and equip program for two years. When the Department of Defense brought this program to Congress two years ago, I strongly opposed it due to a weak vetting process,…instead of fighting against ISIS, al-Qaeda, or other terrorist groups—(the vetted militants) ended up joining these terrorist groups in their battle to overthrow the Syrian government.
“Over the past 2 years, the Department of Defense has made several improvements to the vetting process and clarified the program’s objectives. These improvements have helped to ensure that we work solely with forces that share our common goal of defeating ISIS. However, the bill that passed today leaves out all of these improvements, allowing these authorizing provisions to be used once again to further the illegal, counterproductive regime change war against the Syrian government. If successful, this war will strengthen groups like ISIS and al-Qaeda, worsen the humanitarian crisis, and cause even greater destruction and suffering in Syria. I will continue to do all I can to end this devastating war, focus our resources on nation building here at home, and defeat terrorist groups like al-Qaeda and ISIS who threaten the American people.” (“Rep. Gabbard votes against Defense Authorization Bill”, Hawaii 24/7)
Rep. Gabbard has authored a “Stop Arming Terrorists bill” that “prohibits U.S. government funds from being used to support al-Qaeda, ISIS or other terrorist groups. … It would also prohibit the Federal government from funding assistance to countries that are directly or indirectly supporting those terrorist groups.” (“Rep. Tulsi Gabbard Introduces Legislation to Stop Arming Terrorists”, Tulsi Gabbard)
Booyah, Tulsi. You are the lone voice of sanity in a country that has gone stark raving mad.
By Mike Whitney
Western politicians, “experts” and journalists are going to have to reboot their stories over the next few days now that Bashar al-Assad’s army has retaken control of eastern Aleppo. We’re going to find out if the 250,000 civilians “trapped” in the city were indeed that numerous. We’re going to hear far more about why they were not able to leave when the Syrian government and Russian air force staged their ferocious bombardment of the eastern part of the city.
And we’re going to learn a lot more about the “rebels” whom we in the West – the US, Britain and our head-chopping mates in the Gulf – have been supporting.
They did, after all, include al-Qaeda (alias Jabhat al-Nusra, alias Jabhat Fateh al-Sham), the “folk” – as George W Bush called them – who committed the crimes against humanity in New York, Washington and Pennsylvania on 11 September 2001. Remember the War on Terror? Remember the “pure evil” of al-Qaeda. Remember all the warnings from our beloved security services in the UK about how al-Qaeda can still strike terror in London?
Not when the rebels, including al-Qaeda, were bravely defending east Aleppo, we didn’t – because a powerful tale of heroism, democracy and suffering was being woven for us, a narrative of good guys versus bad guys as explosive and dishonest as “weapons of mass destruction”.
Back in the days of Saddam Hussein – when a few of us argued that the illegal invasion of Iraq would lead to catastrophe and untold suffering, and that Tony Blair and George Bush were taking us down the path to perdition – it was incumbent upon us, always, to profess our repugnance of Saddam and his regime. We had to remind readers, constantly, that Saddam was one of the Triple Pillars of the Axis of Evil.
So here goes the usual mantra again, which we must repeat ad nauseam to avoid the usual hate mail and abuse that will today be cast at anyone veering away from the approved and deeply flawed version of the Syrian tragedy.
Yes, Bashar al-Assad has brutally destroyed vast tracts of his cities in his battle against those who wish to overthrow his regime. Yes, that regime has a multitude of sins to its name: torture, executions, secret prisons, the killing of civilians, and – if we include the Syrian militia thugs under nominal control of the regime – a frightening version of ethnic cleansing.
Yes, we should fear for the lives of the courageous doctors of eastern Aleppo and the people for whom they have been caring. Anyone who saw the footage of the young man taken out of the line of refugees fleeing Aleppo last week by the regime’s intelligence men should fear for all those who have not been permitted to cross the government lines. And let’s remember how the UN grimly reported it had been told of 82 civilians “massacred” in their homes in the last 24 hours.
But it’s time to tell the other truth: that many of the “rebels” whom we in the West have been supporting – and which our preposterous Prime Minister Theresa May indirectly blessed when she grovelled to the Gulf head-choppers last week – are among the cruellest and most ruthless of fighters in the Middle East. And while we have been tut-tutting at the frightfulness of Isis during the siege of Mosul (an event all too similar to Aleppo, although you wouldn’t think so from reading our narrative of the story), we have been willfully ignoring the behaviour of the rebels of Aleppo.
Only a few weeks ago, I interviewed one of the very first Muslim families to flee eastern Aleppo during a ceasefire. The father had just been told that his brother was to be executed by the rebels because he crossed the frontline with his wife and son. He condemned the rebels for closing the schools and putting weapons close to hospitals. And he was no pro-regime stooge; he even admired Isis for their good behaviour in the early days of the siege.
Around the same time, Syrian soldiers were privately expressing their belief to me that the Americans would allow Isis to leave Mosul to again attack the regime in Syria. An American general had actually expressed his fear that Iraqi Shiite militiamen might prevent Isis from fleeing across the Iraqi border to Syria.
Well, so it came to pass. In three vast columns of suicide trucks and thousands of armed supporters, Isis has just swarmed across the desert from Mosul in Iraq, and from Raqqa and Deir ez-Zour in eastern Syria to seize the beautiful city of Palmyra all over again.
It is highly instructive to look at our reporting of these two parallel events. Almost every headline today speaks of the “fall” of Aleppo to the Syrian army – when in any other circumstances, we would have surely said that the army had “recaptured” it from the “rebels” – while Isis was reported to have “recaptured” Palmyra when (given their own murderous behaviour) we should surely have announced that the Roman city had “fallen” once more under their grotesque rule.
Words matter. These are the men – our “chaps”, I suppose, if we keep to the current jihadi narrative – who after their first occupation of the city last year beheaded the 82-year-old scholar who tried to protect the Roman treasures and then placed his spectacles back on his decapitated head.
By their own admission, the Russians flew 64 bombing sorties against the Isis attackers outside Palmyra. But given the huge columns of dust thrown up by the Isis convoys, why didn’t the American air force join in the bombardment of their greatest enemy? But no: for some reason, the US satellites and drones and intelligence just didn’t spot them – any more than they did when Isis drove identical convoys of suicide trucks to seize Palmyra when they first took the city in May 2015.
There’s no doubting what a setback Palmyra represents for both the Syrian army and the Russians – however symbolic rather than military. Syrian officers told me in Palmyra earlier this year that Isis would never be allowed to return. There was a Russian military base in the city. Russian aircraft flew overhead. A Russian orchestra had just played in the Roman ruins to celebrate Palmyra’s liberation.
So what happened? Most likely is that the Syrian military simply didn’t have the manpower to defend Palmyra while closing in on eastern Aleppo.
They will have to take Palmyra back – quickly. But for Bashar al-Assad, the end of the Aleppo siege means that Isis, al-Nusra, al-Qaeda and all the other Salafist groups and their allies can no longer claim a base, or create a capital, in the long line of great cities that form the spine of Syria: Damascus, Homs, Hama and Aleppo.
Back to Aleppo. The familiar and now tired political-journalistic narrative is in need of refreshing. The evidence has been clear for some days. After months of condemning the iniquities of the Syrian regime while obscuring the identity and brutality of its opponents in Aleppo, the human rights organisations – sniffing defeat for the rebels – began only a few days ago to spread their criticism to include the defenders of eastern Aleppo.
Take the UN High Commissioner for Human Rights. After last week running through its usual – and perfectly understandable – fears for the civilian population of eastern Aleppo and their medical workers, and for civilians subject to government reprisals and for “hundreds of men” who may have gone missing after crossing the frontlines, the UN suddenly expressed other concerns.
“During the last two weeks, Fatah al-Sham Front [in other words, al-Qaeda] and the Abu Amara Battalion are alleged to have abducted and killed an unknown number of civilians who requested the armed groups to leave their neighbourhoods, to spare the lives of civilians…,” it stated.
“We have also received reports that between 30 November and 1 December, armed opposition groups fired on civilians attempting to leave.” Furthermore, “indiscriminate attacks” had been conducted on heavily civilian areas of government-held western as well as ‘rebel’ eastern Aleppo.
I suspect we shall be hearing more of this in the coming days. Next month, we shall also be reading a frightening new book, Merchants of Men, by Italian journalist Loretta Napoleoni, on the funding of the war in Syria. She catalogues kidnapping-for-cash by both government and rebel forces in Syria, but also has harsh words for our own profession of journalism.
Reporters who were kidnapped by armed groups in eastern Syria, she writes, “fell victim to a sort of Hemingway syndrome: war correspondents supporting the insurgency trust the rebels and place their lives in their hands because they are in league with them.” But, “the insurgency is just a variation of criminal jihadism, a modern phenomenon that has only one loyalty: money.”
Is this too harsh on my profession? Are we really “in league” with the rebels?
Certainly our political masters are – and for the same reason as the rebels kidnap their victims: money. Hence the disgrace of Brexit May and her buffoonerie of ministers who last week prostrated themselves to the Sunni autocrats who fund the jihadis of Syria in the hope of winning billions of pounds in post-Brexit arms sales to the Gulf.
In a few hours, the British parliament is to debate the plight of the doctors, nurses, wounded children and civilians of Aleppo and other areas of Syria. The grotesque behaviour of the UK Government has ensured that neither the Syrians nor the Russians will pay the slightest attention to our pitiful wails. That, too, must become part of the story.
By Robert Fisk
The overseers of the U.S. intelligence community have not embraced a CIA assessment that Russian cyber attacks were aimed at helping Republican President-elect Donald Trump win the 2016 election, three American officials said on Monday.
While the Office of the Director of National Intelligence (ODNI) does not dispute the CIA’s analysis of Russian hacking operations, it has not endorsed their assessment because of a lack of conclusive evidence that Moscow intended to boost Trump over Democratic opponent Hillary Clinton, said the officials, who declined to be named.
The position of the ODNI, which oversees the 17 agency-strong U.S. intelligence community, could give Trump fresh ammunition to dispute the CIA assessment, which he rejected as “ridiculous” in weekend remarks, and press his assertion that no evidence implicates Russia in the cyber attacks.
Trump’s rejection of the CIA’s judgment marks the latest in a string of disputes over Russia’s international conduct that have erupted between the president-elect and the intelligence community he will soon command.
An ODNI spokesman declined to comment on the issue.
“ODNI is not arguing that the agency (CIA) is wrong, only that they can’t prove intent,” said one of the three U.S. officials. “Of course they can’t, absent agents in on the decision-making in Moscow.”
The Federal Bureau of Investigation, whose evidentiary standards require it to make cases that can stand up in court, declined to accept the CIA’s analysis – a deductive assessment of the available intelligence – for the same reason, the three officials said.
The ODNI, headed by James Clapper, was established after the Sept. 11, 2001, attacks on the recommendation of the commission that investigated the attacks. The commission, which identified major intelligence failures, recommended the office’s creation to improve coordination among U.S. intelligence agencies.
In October, the U.S. government formally accused Russia of a campaign of cyber attacks against American political organizations ahead of the Nov. 8 presidential election. Democratic President Barack Obama has said he warned Russian President Vladimir Putin about consequences for the attacks.
Reports of the assessment by the CIA, which has not publicly disclosed its findings, have prompted congressional leaders to call for an investigation.
Obama last week ordered intelligence agencies to review the cyber attacks and foreign intervention in the presidential election and to deliver a report before he turns power over to Trump on Jan. 20.
The CIA assessed after the election that the attacks on political organizations were aimed at swaying the vote for Trump because the targeting of Republican organizations diminished toward the end of the summer and focused on Democratic groups, a senior U.S. official told Reuters on Friday.
Moreover, only materials filched from Democratic groups – such as emails stolen from John Podesta, the Clinton campaign chairman – were made public via WikiLeaks, the anti-secrecy organization, and other outlets, U.S. officials said.
The CIA conclusion was a “judgment based on the fact that Russian entities hacked both Democrats and Republicans and only the Democratic information was leaked,” one of the three officials said on Monday.
“(It was) a thin reed upon which to base an analytical judgment,” the official added.
Republican Senator John McCain said on Monday there was “no information” that Russian hacking of American political organizations was aimed at swaying the outcome of the election.
“It’s obvious that the Russians hacked into our campaigns,” McCain said. “But there is no information that they were intending to affect the outcome of our election and that’s why we need a congressional investigation,” he told Reuters.
McCain questioned an assertion made on Sunday by Republican National Committee Chairman Reince Priebus, tapped by Trump to be his White House chief of staff, that there were no hacks of computers belonging to Republican organizations.
“Actually, because Mr. Priebus said that doesn’t mean it’s true,” said McCain. “We need a thorough investigation of it, whether both (Democratic and Republican organizations) were hacked into, what the Russian intentions were. We cannot draw a conclusion yet. That’s why we need a thorough investigation.”
In an angry letter sent to ODNI chief Clapper on Monday, House Intelligence Committee Chairman Devin Nunes said he was “dismayed” that the top U.S. intelligence official had not informed the panel of the CIA’s analysis and the difference between its judgment and the FBI’s assessment.
Noting that Clapper in November testified that intelligence agencies lacked strong evidence linking Russian cyber attacks to the WikiLeaks disclosures, Nunes asked that Clapper, together with CIA and FBI counterparts, brief the panel by Friday on the latest intelligence assessment of Russian hacking during the election campaign.
By Mark Hosenball & Jonathan Landay
Washington, D.C. – Congress for the first time authorized the Department of Defense to provide vetted-Syrian rebels with anti-aircraft missiles.
The provision is contained within the $619 billion Fiscal Year 2017 National Defense Authorization Act, which passed the Senate on Dec. 8 and the House on Dec. 2.
Under the bill, the Secretaries of Defense and State must submit a report to Congress explaining why they determined Syrian groups need man-portable air defense systems (MANPADS).
The Fiscal Year 2015 NDAA, which originally authorized the Defense Department’s Syria Train and Equip Program, did not contain any explicit bans on the provisions of anti-aircraft weapons to the vetted Syrian opposition. Critics of the provision have raised concern that in providing such weapons, they could end up in the hands of groups that oppose the United States, such as Al-Nusra Front.
The Defense and State Department reports must contain several elements, as described by the NDAA. They include,
- A detailed description of each element of the vetted Syrian opposition receiving MANPADS
- The justification for providing those elements with MANPADS
- The number and type of MANPADS provided
- The logistics plan for resupplying approved elements with MANPADS
- The duration of support
The inclusion of the provision represents a departure from previous versions of the NDAA. The original House bill specifically prohibited the transfer of MANPADS to “any entity” in Syria, while the Senate bill did not address it.
As Syrian fighters push toward the Islamic State’s de-facto capital of Raqqa in northern Syria, Defense Secretary Ashton B. Carter announced Saturday that additional U.S. Special Operations forces will head into the country to help the fledgling offensive.
The additional 200 troops will bolster the 300 or so already in the country, although the number is likely to fluctuate as forces move between Syria and neighboring Iraq. Carter, speaking at a conference in Bahrain, said the forces would include trainers, advisers and explosives specialists.
Other western countries, such as France, also have Special Operations units in the country.
“The increase is tied to the growing number of local forces now willing to participate in this fight, and our efforts to enable them,” a senior defense official, speaking on the condition of anonymity to discuss troop deployments, said in an email before Carter’s remarks.
It is unclear which particular U.S. Special Operations forces are operating in Syria, however the bulk of the U.S. troops in Syria are probably Army Special Forces from Fifth Special Forces Group along with a mixture of Air Force forward air controllers and other Special Operations units. Fifth Group’s primary area of responsibility is the Middle East and North Africa, and it has helped train Syrian fighters in the past. The unit was the first conventional military force to enter Afghanistan after the 9/11 attacks.
Last month, Navy Senior Chief Petty Officer Scott Dayton, an explosive ordnance disposal technician, was killed by a roadside bomb northwest of Raqqa. A tribute to Dayton posted on Facebook identified him as being part of Fifth Group in Syria. His attachment to the unit was confirmed by a U.S. military official familiar with the matter.
A recent article in the Washington Times also pointed to some members of Fifth Group that are growing increasingly frustrated toward their higher-ups for their propensity to micromanage from afar. In an email to the Times, Fifth Group’s commander, Col. Kevin C. Leahy addressed the complaint, saying his troops were right to say their mission is “top heavy” with support personnel.
“There is a sizable amount of people required to provide intel, fires, logistics and vetting of rebels/groups, liaison with host nation partners, U.S. country teams, etc.,” Leahy said in the email. “The teams really are the tip of an inverse triangle of support/[headquarters] needed to enable the mission.”
In May, after images on social media of U.S. Special Operations forces in Syria wearing Kurdish patches surfaced, the Pentagon made the troops remove them to avoid angering Turkey.
Special Forces, or Green Berets, specialize in training and advising local forces, a mission known as Foreign Internal Defense, or FID. Images sporadically posted online from local media and individuals on the ground often show what appear to be American forces driving in suburbans and pickup trucks alongside their Syrian counterparts, easily identifiable by their equipment and camouflage patterns.
These troops are “training, advising and assisting,” according to the Pentagon, a line that is often emphasized to reiterate that Americans are not on the front lines fighting the Islamic State and are instead guiding local troops. This approach often runs contrary to how U.S. forces have advised in the past, such as in Iraq, Afghanistan and Vietnam, where U.S. troops would operate directly alongside those who they had been tasked to advise.
Despite the Pentagon’s insistence, footage routinely appears of U.S. troops on or near the front guiding airstrikes. In some cases, it is clear that U.S. Special Operation forces are using specific antitank weapons to take out approaching explosive-laden suicide vehicles.
The newest tranche of Special Operations forces headed to Syria represents the third time since October 2015 that the Pentagon has committed more troops there. The initial deployment was billed as a small group of about 50 that would look for local forces that could potentially fight the Islamic State. The second deployment, announced in April, was for 250 troops that would partner with the forces identified and initially assisted by the first detachment. Now, with approximately 500 of the elite forces in Syria, it means U.S. forces will be able to better manage the local forces they are embedded with, meaning troop movements probably will go smoother, and targeting for airstrikes could occur in more places than before.
The local forces fighting alongside the Americans and other western troops are an amalgamation of Kurdish and Arab fighters known as the Syrian Democratic Forces, or SDF. From its inception in late 2015, the SDF has primarily comprised Kurdish People’s Protection Units, or YPG. The SDF’s predominantly Kurdish composition has been worrying for neighboring Turkey, who sees the YPG as being directly aligned with the Kurdistan Workers’ Party, or PKK — which is recognized by both the United States and Turkey as a terrorist group.
Recruiting and training Arab fighters into the SDF has been one of the top priorities for U.S. forces, as taking back Raqqa from the Islamic State with a mostly Kurdish force could be potentially problematic to the city’s residents and Turkey.
Turkish-backed Syrian fighters, along with Turkish troops, are also fighting in Syria, but they are concentrated to the west around the town of al-Bab.
By Thomas Gibbons-Neff
The “fake news” hysteria has become the cover for the U.S. government and mainstream media to crack down on fact-based journalism that challenges Official Washington’s “Group Thinks.”
A key reason why American foreign debacles have been particularly destructive mostly to the countries attacked but also to the United States is that these interventions are always accompanied by major U.S. government investments in propaganda. So, even when officials recognize a misjudgment has been made, the propaganda machinery continues to grind on to prevent a timely reversal.
In effect, Official Washington gets trapped by its own propaganda, which restricts the government’s ability to change direction even when the need for a shift becomes obvious.
After all, once a foreign leader is demonized, it’s hard for a U.S. official to explain that the leader may not be all that bad or is at least better than the likely alternative. So, it’s not just that officials start believing their own propaganda, it’s that the propaganda takes on a life of its own and keeps the failed policy churning forward.
It’s a bit like the old story of the chicken that continues to run around with its head cut off. In the case of the U.S. government, the pro-war or pro-intervention “group think” continues to run amok even after wiser policymakers recognize the imperative to change course.
The reason for that dilemma is that so much money gets spread around to pay for the propaganda and so many careers are tethered to the storyline that it’s easier to let thousands of U.S. soldiers and foreign citizens die than to admit that the policy was built on distortions, propaganda and lies. That would be bad for one’s career.
And, because of the lag time required for contracts to be issued and the money to flow into the propaganda shops, the public case for the policy can outlive the belief that the policy makes sense.
Need for Skeptics
Ideally, in a healthy democracy, skeptics both within the government and in the news media would play a key role in pointing out the flaws and weaknesses in the rationale for a conflict and would be rewarded for helping the leaders veer away from disaster. However, in the current U.S. establishment, such self-corrections don’t occur.
A current example of this phenomenon is the promotion of the New Cold War with Russia with almost no thoughtful debate about the reasons for this growing hostility or its possible results, which include potential thermonuclear war that could end life on the planet.
Instead of engaging in a thorough discussion, the U.S. government and mainstream media have simply flooded the policymaking process with propaganda, some of it so crude that it would have embarrassed Joe McCarthy and the Old Cold Warriors.
Everything that Russia does is put in the most negative light with no space allowed for a rational examination of facts and motivations – except at a few independent-minded Internet sites.
Yet, as part of the effort to marginalize dissent about the New Cold War, the U.S. government, some of its related “non-governmental organizations” and large technology companies are now pushing a censorship project designed to silence the few Internet sites that have refused to march in lockstep.
I suppose that if one considers the trillions of dollars in tax dollars that the Military Industrial Complex stands to get from the New Cold War, the propaganda investment in shutting up a few critics is well worth it.
Today, this extraordinary censorship operation is being carried out under the banner of fighting “fake news.” But many of the targeted Web sites, including Consortiumnews.com, have represented some of the most responsible journalism on the Internet.
At Consortiumnews, our stories are consistently well-reported and well-documented, but we do show skepticism toward propaganda from the U.S. government or anywhere else.
For instance, Consortiumnews not only challenged President George W. Bush’s WMD claims regarding Iraq in 2002-2003 but we have reported on the dispute within the U.S. intelligence community about claims made by President Barack Obama and his senior aides regarding the 2013 sarin gas attack in Syria and the 2014 shoot-down of Malaysia Airlines Flight 17 over Ukraine.
In those two latter cases, Official Washington exploited the incidents as propaganda weapons to justify an escalation of tensions against the Syrian and Russian governments, much as the earlier Iraqi WMD claims were used to rally the American people to invade Iraq.
However, if you question the Official Story about who was responsible for the sarin gas attack outside Damascus on Aug. 21, 2013, after President Obama, Secretary of State John Kerry and the mainstream media pronounced the Syrian government guilty, you are guilty of “fake news.”
Facts Don’t Matter
It doesn’t seem to matter that it’s been confirmed in a mainstream report by The Atlantic that Director of National Intelligence James Clapper advised President Obama that there was no “slam-dunk” evidence proving that the Syrian government was responsible. Nor does it matter that legendary investigative journalist Seymour Hersh has reported that his intelligence sources say the more likely culprit was Al Qaeda’s Nusra Front with help from Turkish intelligence.
By straying from the mainstream “group think” that accuses Syrian President Bashar al-Assad of crossing Obama’s “red line” on chemical weapons, you are opening yourself to retaliation as a “fake news” site.
Similarly, if you point out that the MH-17 investigation was put under the control of Ukraine’s unsavory SBU intelligence service, which not only has been accused by United Nations investigators of concealing torture but also has a mandate to protect Ukrainian government secrets, you also stand accused of disseminating “fake news.”
Apparently one of the factors that got Consortiumnews included on a new “black list” of some 200 Web sites was that I skeptically analyzed a report by the Joint Investigation Team (JIT) that while supposedly “Dutch-led” was really run by the SBU. I also noted that the JIT’s conclusion blaming Russia was marred by a selective reading of the SBU-supplied evidence and by an illogical narrative. But the mainstream U.S. media uncritically hailed the JIT report, so to point out its glaring flaws made us guilty of committing “fake news” or disseminating “Russian propaganda.”
The Iraq-WMD Case
Presumably, if the hysteria about “fake news” had been raging in 2002-2003, then those of us who expressed skepticism about Iraq hiding WMD would have been forced to carry a special marking declaring us to be “Saddam apologists.”
Back then, everyone who was “important” in Washington had no doubt about Iraq’s WMD. Washington Post editorial page editor Fred Hiatt repeatedly stated the “fact” of Iraq’s hidden WMD as flat fact and mocked anyone who doubted the “group think.”
Yet, even after the U.S. government acknowledged that the WMD allegations were a myth – a classic and bloody case of “fake news” – almost no one who had pushed the fabrication was punished.
So, the “fake news” stigma didn’t apply to Hiatt and other mainstream journalists who actually did produce “fake news,” even though it led to the deaths of 4,500 U.S. soldiers and hundreds of thousands of Iraqis. To this day, Hiatt remains the Post’s editorial-page editor continuing to enforce “conventional wisdoms” and to disparage those who deviate.
Another painful example of letting propaganda – rather than facts and reason – guide U.S. foreign policy was the Vietnam War, which claimed the lives of some 58,000 U.S. soldiers and millions of Vietnamese.
The Vietnam War raged on for years after Defense Secretary Robert McNamara and even President Lyndon Johnson recognized the need to end it. Part of that was Richard Nixon’s treachery in going behind Johnson’s back to sabotage peace talks in 1968, but the smearing of anti-war dissidents as pro-communist traitors locked many officials into support for the war well after its futility became obvious. The propaganda developed its own momentum that resulted in many unnecessary deaths.
A Special Marking
In the Internet era, there will now be new-age forms of censorship. Your Web site will be excluded from major search engines or electronically stamped with a warning about your unreliability.
With the tens of millions of dollars now sloshing around Official Washington to pay for propaganda, lots of entrepreneurs will be lining up at the trough to do their part. Congress just approved another $160 million to combat “Russian propaganda,” which will apparently include U.S. news sites that question the case for the New Cold War.
Even if a President Trump decides that these tensions with Russia are absurd and that the two countries can work together in the fight against terrorism and other international concerns, the financing of the New Cold War propaganda will continue.
The well-funded drumbeat of anti-Russian propaganda will seek to limit Trump’s decision-making. After all, this latest New Cold War cash cow can be milked for years to come and nothing – not even the survival of the human species – is more important than that.
By Robert Parry
Trump’s pick for commerce secretary has a track record of saving American jobs. Whether he can bring many back to the Rust Belt remains to be seen.
A decade ago, cheap Chinese cloth was hammering American textile makers. Companies like Burlington Industries and Cone Mills, two big U.S. makers of denim, mattress coverings, upholstery, and carpets, were bankrupt and shedding jobs.
That’s when Wilbur Ross, a billionaire corporate raider who cut his teeth at Rothschild, the famed British investment bank, spotted an opportunity. He snapped up Burlington and Cone Mills, both of which had filed for bankruptcy, and bundled them together into a new company, the International Textile Group (ITG). Then he drafted a blueprint to compete with low-wage Chinese workers: move up the value chain to sew more specialized textiles. He ended up saving hundreds of jobs, even as rival textile firms continued to hemorrhage jobs and, still now, go belly up.
“The jury would say Wilbur Ross was a very good thing for those companies,” said Augustine Tantillo, the president of the National Council of Textile Organizations, the industry’s trade association.
Ross is now President-elect Donald Trump’s choice for commerce secretary. “Nobody has made better deals than Wilbur Ross,” a spokesman for the real estate magnate said on Wednesday when announcing Ross’s nomination.
Together with Steven Mnuchin, a former Goldman Sachs trader who served as Trump’s campaign finance chief and has been tapped to be Treasury secretary, the Wall Street duo is tasked with fulfilling Trump’s campaign promises to his blue-collar supporters. That includes somehow bringing back manufacturing jobs to the Rust Belt and doubling recent U.S. economic growth rates while also scrapping or renegotiating trade deals like the North American Free Trade Agreement and threatening destructive trade disputes with America’s biggest trading partners.
It’s a tall order. Manufacturing makes up but a tiny slice of the U.S. workforce, and most of the 5 million manufacturing jobs lost since the turn of the century are due more to automation than trade deals or globalization. The structure of the global economy has also changed since Ross’s revival of textile mills and other industries in the 2000s. Now, the aftershocks of China’s economic slowdown rather than its rise pose a direct threat to the kind of blue-collar workers Trump pledged to protect; Chinese overcapacity in steel production, for instance, has swamped the global market and driven down prices.
Meanwhile, few economists consider GDP growth of 4 percent a year likely, when it has only averaged half that since the 2008-2009 fiscal crisis. Many experts do worry, though, that Trump’s tax cuts and spending plans will increase the budget deficit. Muddying the waters even further, it’s not even clear that Trump’s prospective cabinet picks are fully in step with him on economic policies: According to the Palm Beach Post, Ross was a registered Democrat until two weeks ago.
Democrats in Congress are already raising the alarm about Trump’s nominees. Sens. Elizabeth Warren and Bernie Sanders issued a joined statement blasting Trump’s choice for Treasury secretary. “Steve Mnuchin is just another Wall Street insider. That is not the type of change that Donald Trump promised to bring to Washington — that is hypocrisy at its worst,” they said. Mark Paustenbach, a spokesman for the Democratic National Committee, added, “Donald Trump continues to stack his administration with the same insiders and financial elites he railed against during the campaign.”
Those concerns echo much of what worries big labor organizations. The AFL-CIO has long warned of the dangers of a Trump presidency to its working-class members and endorsed his Democratic rival, Hillary Clinton. So did the American Federation of State, County, and Municipal Employees; the Service Employees International Union; and the National Education Association.
But many union voters ignored their leadership, particularly in the Rust Belt. Trump had the best showing among union workers by a Republican since Ronald Reagan in 1984. The acid test for them will be whether, when it comes to saving traditional manufacturing jobs, Trump and his team, including Ross, can deliver.
Trump can already point to some early successes before he even takes office. Air-conditioner manufacturer Carrier said this week that it would keep 1,000 factory jobs in Indiana, rather than move them to Mexico. That announcement came after Vice President-elect and current Indiana Gov. Mike Pence dangled $7 million in state tax breaks before Carrier’s parent company, United Technologies.
“This is about the president-elect and vice president-elect making good on their promise to go to bat for American workers,” Trump spokesman Jason Miller said during a conference call with reporters Thursday.
A decade ago, in textile plants in North Carolina and South Carolina, Ross opted to transform U.S. mills into more sophisticated operations. Instead of competing with low-wage Chinese workers on basic piecework, he shifted ITG’s focus to more complicated products, like uniforms for the U.S. military and other entities. That gave them a competitive edge over cheap but less-skilled overseas workers.
The results of his investment are mixed. From 2004 to 2014, North Carolina gained 1,945 jobs making nonwoven textile products and $719 million in nonwoven textile factory investment. But Ross hasn’t been able to save all the jobs at ITG.
In 2012, Bloomberg reported that in the 1970s, before widespread automation, 2,800 workers were employed at a Cone Mills factory in White Oak, North Carolina. In 2012, that same facility had 300 workers. Smaller payrolls beat shuttered factories, argued Tantillo, the industry lobbyist.
“When you look at our situation in 2016 compared to 10 years ago, it’s exponentially better,” he said. “The industry was contracting at a rate where people were honestly concerned about whether there would be an industry. But he stuck in there for the better part of 12 to 14 years [and] made those companies much more stable.”
Ross also sought to stabilize the troubled U.S. steel industry, but with even more mixed results, said Scott Paul, the president of the Alliance for American Manufacturing, a partnership between manufacturers and U.S. steelworkers advocating more job-friendly policies. In 2002, Ross bought bankrupt American steelmaker LTV just before then-President George W. Bush slapped steep tariffs on foreign steel, which would act as a shield of sorts for U.S. producers.
Ross then bought a handful of other struggling firms — Bethlehem Steel, Weirton Steel, and Acme Steel — to form the International Steel Group, a smaller rival to behemoth U.S. Steel. To turn them around, he slashed costs. Ross cut retirement benefits for more than 190,000 steelworkers and retirees by moving private pensions to the federal Pension Benefit Guaranty Corp. At one Acme site in the Midwest, he cut the number of salaried personnel from 200 to 25. At Bethlehem Steel, he got rid of 3,000 jobs through buyouts and voluntary departures.
A year later, in 2003, he took the company public and then sold it for $4.5 billion to Indian billionaire Lakshmi Mittal in 2004. Mittal merged the International Steel Group into what is now ArcelorMittal, the world’s largest steel producer. Since then, the company has cut jobs around the world, but American employees have been largely spared.
It might be hard for Ross to re-create, in government, even the moderate success he had in textiles and steel. American manufacturing is not ailing — output is at an all-time high and has doubled since 1984. It just requires fewer and fewer workers. In many cases, there is little need to create new jobs to keep production booming. Even as Carrier jobs were saved, bearings maker Rexnord, which has operations near the Carrier plant in Indianapolis, plans to lay off about 350 workers while electronics manufacturer CTS will get rid of more than 200 jobs at its Elkhart plant.
And plenty of other factors shape firms’ employment decisions: governmental regulations, infrastructure, proximity to supply chains and final markets, and the cost and education of the local workforce. Carrier’s parent company required a subsidy from state coffers to keep jobs in Indiana that by market logic would have fled abroad — but that’s hardly a model for boosting manufacturing employment nationwide.
And the ArcelorMittal acquisition of Ross’s steel group underscored the increasingly globalized nature of a heavy industry like steelmaking, where cheaper labor costs and lax environmental regulations make it easier for overseas factories to undercut U.S. producers — and make it all the harder to shake the rust out of the Rust Belt.
According to the U.S. Bureau of Labor Statistics, America has lost 48,000 steel jobs since Ross dove into the sector. It might have been even worse; according to the Philadelphia Inquirer, a steel union boss in 2005 called the deal a “good [arrangement] for Wilbur Ross and his return on investment, and it’s been a good deal for us.”
“Were it not for Wilbur Ross, there would be thousands upon thousands fewer steelworker jobs in the United States than there are today,” Paul said, but conceded that U.S. manufacturers are still swimming upstream when it comes to job creation.
“He was able to save some jobs, not all the jobs,” Paul said.
By David Francis
The investment bank’s network reaches the White House, again.
Consider just this very partial list: Henry Fowler, Robert Rubin, and Hank Paulson, former US Treasury secretaries. Mark Carney, governor of the Bank of England. Mario Draghi, European Central Bank president. Malcolm Turnbull, prime minister of Australia. Bill Dudley, president of the New York Federal Reserve bank. Romano Prodi, former Italian prime minister. Josh Bolten, former White House chief of staff. Robert Zoellick, former president of the World Bank.
Before or after these men had their turn with the levers of power, they worked for Goldman Sachs. No other company can boast such an alumni network with anywhere near this level of influence on world affairs. It seems the pattern will be not be broken under a Trump administration. The president-elect has tapped Steven Mnuchin, a former partner at the investment bank, to be his Treasury secretary.
Put aside, for a moment, the political implications of Mr Trump’s choice. There are good reasons why Goldman has the network it does, and there are reasons to be glad a Goldmanite will be in the cabinet. It is very hard to succeed at Goldman. Those who do tend to be hard working and competent, and to have a good understanding of financial markets.
Goldman Sachs is also, in a broad sense, moderate. Its alumni take roles in parties of the right and left. Its economists tend to be Keynesian and respectable. Goldman people take care to understand how the system works, and try to keep it working. Doing anything else would be a serious obstacle to profit. All of these characteristics make them useful to the executive branch.
Mr Mnuchin is not, it must be said, a Goldmanite of anywhere near the rank of Mr Rubin or Mr Paulson, who were co-chair and chief executive of the firm, respectively. Mr Mnuchin rose to chief information officer before striking out on his own as an investor in banks and films. But he is a natural choice for Mr Trump, who in selecting deputies has overwhelmingly favoured people he trusts and who were vocal supporters of his campaign — starting with his strategist Stephen Bannon, another Goldman alumnus. Mr Trump is a property developer and reality TV star. A New York banker turned movie producer fits perfectly.
The president-elect’s opponents on the left argue that Mr Trump’s embrace of Mr Mnuchin and assorted other billionaires is a betrayal of the working-class voters who gave him the presidency. On the campaign trail Mr Trump took aim at hedge funds and bankers “getting away with murder” and criticised Hillary Clinton for giving speeches for Goldman Sachs. His actions make nonsense of his rhetoric.
This liberal indignation fundamentally misunderstands the Trump phenomenon. If working class Trump voters had a problem with billionaires, or with the president-elect’s casual approach to facts, they would not have voted as they did.
They heard Mr Trump’s fundamental promise on growth and jobs, and his withering disdain for the niceties of the liberal elite. That was enough. That his tough talk about the financial elite was empty posturing will cost him nothing politically.
That does not mean Mr Trump and Mr Mnuchin will have a free ride. They will have to deliver the growth and the jobs. Although they will be handed a US economy in rude health, the goals they set out remain ambitious. The Goldman reputation for hard work and competence will be tested. If things go wrong this time, though, the world’s most powerful professional network will, without any doubt, have another chance in the next administration.
By FT View
State-sponsored hackers who unleashed a digital bomb in key parts of Saudi Arabia’s computer networks over the last two weeks damaged systems at the country’s central bank, known as the Saudi Arabian Monetary Agency, according to two people briefed on an ongoing investigation of the breach.
The central bank said in a statement late Friday that its systems hadn’t been breached and that it has continuous surveillance to protect against cyberthreats.
The attacks, which afflicted at least eight government entities, used a computer-killing malware known as Shamoon that is linked to Iran, the two people said. They had the potential to inflict damage on targets across several critical sectors, including finance and transportation.
The investigation is still in its early stages and the determination of responsibility could change, the two people said. The number of entities where damage occurred is likely to grow as the probe continues, a third said.
Iranian officials didn’t respond to repeated requests for comment on the attack. Calls placed to the Saudi Interior Ministry about the targeting of the country’s central bank weren’t returned.
Central Bank Hits
The monetary agency joins the ranks of central banks that have suffered digital attacks in the past year. Russia’s central bank said Friday that hackers have stolen more than 2 billion rubles — a little more than $30 million at current rates — from correspondent accounts at there and from client accounts at Russian banks, without specifying the breakdown. In February, hackers stole $81 million by manipulating the international payment system at the central bank in Bangladesh.
Along with the General Authority of Civil Aviation, which runs Saudi airports, the hackers also hit the Ministry of Transportation, which oversees the kingdom’s road network, one of the people said.
The central bank is a most sensitive target. It manages the kingdom’s foreign-exchange reserves, supervises commercial banks, and runs the country’s electronic-payments system.
It’s unclear what part of the central bank’s information systems were damaged in the attack. There haven’t been reports of outages in the electronic-payments system or other parts of the banking sector.
The Shamoon malware used in the attacks is the same one that was used in a devastating attack on Saudi Aramco in 2012 that destroyed 35,000 computers within hours. U.S. officials have said Iran was behind that attack.
Although hackers usually add enhancements to malware to advance its capabilities and make it harder to detect, in this case they used the same file as in the Aramco incident, the people familiar with the investigation said. The malware, which overwrites the master boot record of a computer, rendering it inoperable, has destroyed thousands of computers across multiple government agencies, two people familiar with the probe said.
The software that destroyed the Aramco computers four years ago was programmed to leave an image of a burning American flag before making the computer inoperable. In this attack, the software displayed an image of Alan Kurdi, the three-year-old Syrian boy who drowned fleeing the conflict in Syria, said Dmitri Alperovitch, chief technology officer at the security firm Crowdstrike, whose team has examined the malware.
By Michael Riley