(ZH) Germany has given its military a 5.7 billion Euro ($6.5 billion USD) boost after Defense Minister Ursula von der Leyen refused to sign off on the previous draft, reports Reuters.
Finance Minister Olaf Scholz on Monday proposed adding 5.7 billion euros (£5 billion) to the planned military budget from 2020, to buy more ships, fighter jets and other weaponry over several years, on top of a more modest 323 million euro boost in 2019. –Reuters
The boost in spending comes amid pressure from US President Donald Trump, who has encouraged Germany to increase its military budget to 2% of its 3.67 trillion (USD) GDP from its current 1.2% – a proposal which has sparked great debate within the country’s ruling coalition. The United States spends approximately 3.1% of its much larger 19.39 trillion GDP on the military.
Experts say the military budget – now slated to reach around 43 billion euros in 2019 – would have to increase by 2 billion euros a year through 2021 and 3 billion euros a year after that even to meet Chancellor Angela Merkel’s promise to hit 1.5 percent of GDP by 2024.
It was not immediately clear how the extra funding, set out in a 290-page list of proposed budget revisions seen by Reuters, would affect the military budget’s share of GDP. –Reuters
Von der Leyen of Chancellor Angela Merkel’s conservative CDU party would like to satisfy long-standing shortfalls in the German military’s personnel and equipment.
Scholz’s center-left Social Democrats, however, have been hesitant to increase military spending out of fear of alienating German voters as their polling numbers “are collapsing,” according to Reuters.
The new revisions first reported in part by the Handelsblatt newspaper will be a topic of debate during this week’s parliament meeting, and is subject to changes by the budget committee.
The document called for 5.6 billion euros to be spent on a new heavy-lift helicopter whose funding had been called into question, a sign that a formal competition will likely proceed next year between Boeing and Lockheed Martin. –Reuters
The budget also envisions additional spending on the new MKS180 multi-role warship, along with brand new Eurofighter Typhoon jets and the TLVS missile defense program which will be built by European munitions maker MBDA in conjunction with Lockheed.
(NYT) WASHINGTON — President Trump fired Attorney General Jeff Sessions on Wednesday, replacing him with a loyalist who has echoed the president’s complaints about the special counsel investigation into Russia’s election interference and will now take charge of the inquiry.
Mr. Sessions delivered his resignation letter to the White House at the request of the president, who tapped Matthew G. Whitaker, Mr. Sessions’s chief of staff, as acting attorney general, raising questions about the future of the inquiry led by the special counsel, Robert S. Mueller III.
Mr. Whitaker, a former college football tight end and United States attorney in Iowa, and a onetime Senate candidate in that state, has previously questioned the scope of the investigation. In a column for CNN last year, he wrote that Mr. Mueller would be going too far if he examined the Trump family’s finances. “This would raise serious concerns that the special counsel’s investigation was a mere witch hunt,” Mr. Whitaker wrote, echoing the president’s derisive description of the investigation. Mr. Mueller has subpoenaed the Trump Organization for documents related to Russia.
Until now, Rod J. Rosenstein, the deputy attorney general, oversaw the investigation because Mr. Sessions recused himself in March 2017, citing his active role in Mr. Trump’s 2016 presidential campaign.
Democrats quickly demanded on Wednesday that Mr. Whitaker also remove himself from taking charge of the inquiry, citing potential conflicts of interest, including his criticisms of the Mueller investigation, as well as his connections to a witness in that investigation, Sam Clovis, a former Trump campaign aide. In 2014, Mr. Whitaker was the chairman of Mr. Clovis’s unsuccessful campaign to become Iowa state treasurer.
“Given his previous comments advocating defunding and imposing limitations on the Mueller investigation, Mr. Whitaker should recuse himself from its oversight for the duration of his time as acting attorney general,” Senator Chuck Schumer of New York, the Democratic leader, said in a statement.
Justice Department ethics advisers may be asked to weigh whether Mr. Whitaker should recuse himself. If he were to agree to do that, Mr. Rosenstein would continue to oversee the special counsel.
Mr. Whitaker had no immediate plans to publicly comment about Mr. Mueller or to take actions regarding the Russia inquiry, an administration official said.
“I am committed to leading a fair department with the highest ethical standards that upholds the rule of law and seeks justice for all Americans,” Mr. Whitaker said on Wednesday in a statement in which he also called Mr. Sessions “a man of integrity.”
But as acting attorney general, Mr. Whitaker would be in a position to impede or undermine the investigation or to block Mr. Mueller from delivering a final report on whether Mr. Trump’s campaign advisers conspired with Russia to influence the 2016 campaign, and whether the president tried to cover it up.
Any such step could set off a dramatic clash with the new Democratic majority in the House. Representative Jerrold Nadler, Democrat of New York, who will become the chairman of the House Judiciary Committee, was one of several Democrats to promise investigations once the party takes control in January.
“The American people understand that no person is above the law and have demanded accountability from their government,” Mr. Nadler said. “The firing of Jeff Sessions will be investigated and people will be held accountable. This must begin immediately, and if not, then a Democratic Congress will make this a priority in January.”
Representative Adam B. Schiff, Democrat of California, who could become the new chairman of the House Intelligence Committee, said that any interference with the Mueller investigation “would cause a constitutional crisis and undermine the rule of law.”
But Republicans in Congress appeared less concerned by the president’s move. Senator Lindsey Graham, Republican of South Carolina, who said in 2017 that there would be “holy hell to pay” if Mr. Trump fired his attorney general, offered no criticism of the president on Wednesday.
“I look forward to working with President Trump to find a confirmable, worthy successor so that we can start a new chapter at the Department of Justice,” Mr. Graham said. He had in recent months begun to ease off his stance of last year, saying in August that it had become clear that Mr. Sessions had lost the president’s confidence.
The firing of Mr. Sessions came a day after midterm elections that handed control of the House to Democrats, dealing a major blow to Mr. Trump for the final two years of his term. Republicans preserved their hold on the Senate and increased their majority slightly, making it likelier that Mr. Trump would be able to confirm a replacement.
But House Democrats have made clear that they plan to use the subpoena power that will come with their majority to reopen the lower chamber’s own investigation into the Russia matter.
The abrupt ouster of Mr. Sessions resembled in some ways the decision by President George W. Bush to oust Defense Secretary Donald H. Rumsfeld in 2006 the day after a similar electoral defeat in midterm elections. In that case, Mr. Bush was attempting to mollify his critics. Mr. Trump’s decision to fire Mr. Sessions appeared likely to inflame his adversaries on Capitol Hill.
John F. Kelly, the White House chief of staff, called Mr. Sessions before the president’s postelection news conference on Wednesday to tell the attorney general that Mr. Trump wanted him to step down, the administration official said. Mr. Trump, who did not speak with Mr. Sessions himself, then ducked questions about Mr. Sessions’s fate at the news conference.
Mr. Sessions then had his letter, which was undated, delivered to the White House. “Dear Mr. President, at your request I am submitting my resignation,” he wrote. He added, “Most importantly, in my time as attorney general we have restored and upheld the rule of law,” and thanked the president.
Mr. Trump announced the resignation and Mr. Whitaker’s assignment on Twitter. “We thank Attorney General Jeff Sessions for his service, and wish him well!” he wrote. “A permanent replacement will be nominated at a later date.”
Though Mr. Trump has said for months that he wished to replace Mr. Sessions, lawmakers and administration officials believed that firing the attorney general before the midterm elections would have had negative consequences for Republicans in tight races. So it came as little surprise when Mr. Sessions was asked to resign the day after the midterms were over.
The president’s decision ended a partnership that soured almost from the start of the administration and degenerated into one of the most acrimonious public standoffs between a commander in chief and a senior cabinet member in modern American history.
Only weeks after he was confirmed as the United States’ top law enforcement officer, Mr. Sessions recused himself from overseeing the Justice Department investigation in March 2017, after revelations that he had failed to report encounters with Ambassador Sergey I. Kislyak of Russia during the 2016 campaign.
At the time, Mr. Sessions said there was nothing nefarious about those meetings, though he acknowledged that he “should have slowed down” and been more thoughtful in denying any contacts with Russian officials during his Senate confirmation process. His recusal was one of his first public acts as attorney general.
Mr. Trump never forgave him. At various points, he called Mr. Sessions “beleaguered,” “VERY weak” and “DISGRACEFUL.” In private, he referred to him derisively as “Mr. Magoo,” after the befuddled cartoon character.
In an interview with The New York Times in July of 2017, Mr. Trump first publicly revealed his anger with Mr. Sessions, kicking off 16 months of public fury toward his attorney general by saying he would not have hired Mr. Sessions had he known he would hand off oversight of the Russia inquiry.
“How do you take a job and then recuse yourself?” Mr. Trump said in the Oval Office interview. “If he would have recused himself before the job, I would have said, ‘Thanks, Jeff, but I can’t, you know, I’m not going to take you.’ It’s extremely unfair, and that’s a mild word, to the president.”
Mr. Trump also publicly badgered Mr. Sessions to open investigations into his defeated rival, Hillary Clinton, and other Democrats. Critics from both parties said the president was shredding the traditional independence of the law enforcement agencies in seeking what appeared to be politically motivated prosecutions.
For the most part, Mr. Sessions made no public retort. But after the president chided him in February for leaving an inquiry into the F.B.I.’s handling of the Russia investigation to an inspector general rather than conducting his own review, Mr. Sessions pushed back. “As long as I am the attorney general,” he said, “I will continue to discharge my duties with integrity and honor.”
When Mr. Trump said in August that Mr. Sessions “never took control of the Justice Department,” Mr. Sessions fired back, saying in a rare public rebuke that “the Department of Justice will not be improperly influenced by political considerations.”
Mr. Sessions tried to quit at least twice. In June 2017, shortly after his recusal, Mr. Trump berated Mr. Sessions during a private meeting in the Oval Office and accused him of “disloyalty.” Mr. Sessions grew emotional and agreed to resign. Reince Priebus, then the White House chief of staff, later said he ran out of the building to find the attorney general in the parking lot and stop him from leaving.
The deputy attorney general, now Mr. Rosenstein, would normally be in line to become the acting attorney general, but Mr. Trump has complained publicly about Mr. Rosenstein, too.
Installing Mr. Whitaker could clear the way for Mr. Trump to force out Mr. Mueller. To dismiss a special counsel, the president has to order the attorney general or, in the case of a recusal, the deputy attorney general, to carry it out. Mr. Rosenstein has said that he sees no justification to dismiss Mr. Mueller. Mr. Trump fired James B. Comey, the F.B.I. director originally overseeing the investigation.
During his new conference on Wednesday, Mr. Trump again insisted that he had the right to order an end to the investigation. “I could’ve ended it anytime I wanted,” he said. “I didn’t. There was no collusion. There was no anything.” But he did not rule it out. “It should end because it’s very bad for our country,” he said.
Mr. Whitaker’s ascendance to the top of the Justice Department shows how much loyalty means to Mr. Trump. The president has long regarded Mr. Whitaker as his eyes and ears inside a department that he considers an enemy institution.
Mr. Whitaker has been a frequent White House visitor and served as what one White House aide called a “balm” on the relationship between the president and the Justice Department.
In pushing out his attorney general, the president cast aside one of his earliest and strongest supporters.
In February 2016, Mr. Sessions became the first sitting senator to endorse Mr. Trump’s presidential campaign, and in the months leading up to the election, he became one of the candidate’s closest national security advisers and a key architect of the president’s hard-line immigration agenda.
As attorney general, Mr. Sessions has been instrumental in putting that agenda into practice, leading the assault on protections for young immigrants, ordering a “zero tolerance” crackdown on migrant families at the border, and helping to orchestrate changes aimed at severely reducing legal and illegal immigration.
Working with Stephen Miller, the president’s top domestic policy adviser, Mr. Sessions helped shape the president’s dark immigration message during the midterm elections, pushing for new efforts to separate families at the border, elimination of birthright citizenship, and more aggressive efforts to counter a caravan of migrants heading toward the United States from Central America.
He also fought for tougher sentencing for criminals, challenged so-called sanctuary cities and pursued the MS-13 gang.
But despite arguably being the most effective of Mr. Trump’s cabinet members on issues that the president deeply cared about, Mr. Sessions never recovered from Mr. Trump’s anger over his recusal in the Russia investigation.
Mr. Sessions, 71, got his start in politics as a United States attorney in Alabama, but his nomination for a federal judgeship was blocked by the Senate amid charges of racial insensitivity. He mounted a comeback by winning election as the state attorney general and then, in 1996, to the Senate.
The US Capitol building is seen reflected in a puddle at sunrise on the day of the US midterm election as voters go to the polls across the country to elect 33 US senators and all 435 members of the US House of Representatives in Washington, US, November 6, 2018. REUTERS/Jim Bourg.
Democrats rode a wave of dissatisfaction with President Donald Trump to win control of the US House of Representatives on Tuesday, Fox News and NBC Newsprojected, giving Democrats the opportunity to block Trump’s agenda and open his administration to intense scrutiny.
In midterm elections two years after he won the White House, Trump and his fellow Republicans were set to maintain their majority in the US Senate, CNN, NBC and ABC News said, following a divisive campaign marked by fierce clashes over race, immigration and other cultural issues.
At last count, Democrats had gained a net 14 of the 23 Republican-held seats needed to capture a majority.
With a House majority, Democrats will have the power to investigate Trump’s tax returns and possible conflicts of interest, and challenge his overtures to Saudi Arabia, Russia and North Korea.
Americans cast votes on Tuesday to decide whether Donald Trump’s Republicans maintain their grip on the US Congress, or if…
They also could force Trump to scale back his legislative ambitions, possibly dooming his promises to fund a border wall with Mexico, pass a second major tax-cut package or carry out his hardline policies on trade.
S&P equity index futures erased most of their gains on expectations Democrats would seize the House.
A simple House majority would be enough to impeach Trump if evidence surfaces that he obstructed justice or that his 2016 campaign colluded with Russia. But Congress could not remove him from office without a conviction by a two-thirds majority in the Republican-controlled Senate.
Democrats in the House could be banking on launching an investigation using the results of US Special Counsel Robert Mueller’s already 18-month-old probe of allegations of Russian interference on Trump’s behalf in the 2016 presidential election. Moscow denies meddling and Trump denies any collusion.
Tuesday’s result was a bitter outcome for Trump, a 72-year-old former reality TV star and businessman-turned-politician, after a campaign that became a referendum on his leadership.
Down the stretch, Trump hardened his rhetoric on issues that appealed to his conservative core supporters, issuing warnings about a caravan of Latin American migrants headed to the border with Mexico and condemnations of liberal American “mobs.”
Democrats turned out in droves to register disapproval of his policies on such issues as immigration and his travel ban targeting several Muslim-majority countries.
A record number of women ran for office this election, many of them Democrats turned off by Trump’s policy agenda.
The election results mean Democrats will resume House control in January for the first time since the 2010 election, beginning a split-power arrangement with the Republican-led Senate that may force Trump to scale back his legislative ambitions and focus on issues with bipartisan support, such as an infrastructure improvement package or protections against prescription drug price increases.
It also will test Trump’s ability to compromise, something he has shown little interest in over the last two years with Republicans controlling both chambers of Congress.
The loss of power will test Trump’s political hold on House Republicans, most of whom had pledged their support for him lest they face the wrath of the party’s core supporters, who remain in his corner.
Most Democratic candidates in tight races stayed away from harsh criticism of Trump during the campaign’s final stretch, focusing instead on bread-and-butter issues like keeping down healthcare costs, maintaining insurance protections for people with pre-existing medical conditions and safeguarding the Social Security retirement and Medicare healthcare programs for senior citizens.
The final weeks before the election were marked by the mailing of pipe bombs to his top political rivals, with a political fan of Trump arrested and charged, and the mass shooting at a Pittsburgh synagogue in which 11 people died, sparking a debate about Trump’s biting rhetoric and whether it encouraged extremists.
In the House, Democrats picked up seats across the map, ousting incumbent Republican Barbara Comstock in suburban Virginia and sending Donna Shalala, a former Cabinet secretary under President Bill Clinton, to the House in south Florida.
In the Senate, where Republicans were heavily favored to keep control heading into Tuesday’s voting, Republican Mike Braun captured incumbent Joe Donnelly’s seat in Indiana and Republican Kevin Cramer beat incumbent Democratic Senator Heidi Heitkamp in North Dakota.
Some of the biggest Democratic stars of the campaign season were struggling. Liberal House member Beto O’Rourke became a national sensation with his underdog US Senate campaign but fell short in conservative Texas, and Andrew Gillum was trailing Republican Ron DeSantis in his quest to become the first African-American governor of the key swing state of Florida.
Incumbent Democratic Senator Joe Manchin won a hotly contested race in conservative West Virginia, and conservative Marsha Blackburn held a Senate seat for Republicans.
Senators Bernie Sanders of Vermont, a 2016 Democratic presidential contender, and Tim Kaine of Virginia, Hillary Clinton’s vice presidential nominee in 2016, easily won re-election, news networks projected. Democratic Senator Sherrod Brown was projected to hold his seat in Ohio.
All 435 seats in the House, 35 seats in the 100-member Senate and 36 of the 50 state governorships were up for grabs.
(ZH) US equity markets ramped into the green (even Nadaq recovered from its AAPL-beating) as the final Rasmussen Reports Generic Congressional Ballot before Election Day shows Republicans edging ahead by one point…
The latest Rasmussen Reports national telephone and online survey of Likely U.S. Voters finds that 46% would choose the Republican candidate if the elections for Congress were held today. Forty-five percent (45%) would vote for the Democrat. Three percent (3%) prefer some other candidate, and six percent (6%) remain undecided.
A week ago, Democrats held a 47% to 44% lead.
This is the first poll showing a GOP lead, and it may matter: while often accused of bias, Rasmussen was the only major pollster in 2016 to predict a Trump victory; Rasmussen was also the only major pollster whose prediction was proven correct.
Stocks are suddenly reassured…
With Nasdaq soaring…
… because as SocGen noted earlier, a “Red Wave” outcome (such as the one suggested by the GOP retaining the house), and which also happens to be “the least expected scenario for the market”, would probably trigger a short-lived strong rebound in US equities and a drop in the VIX. Whether or not this result holds into tomorrow night, of course, is another matter.
(Reuters) Iran will sell its oil and break sanctions reimposed by the United States on its vital energy and banking sectors, Iranian President Hassan Rouhani said on Monday.
“America wanted to cut to zero Iran’s oil sales … but we will continue to sell our oil … to break sanctions,” Rouhani told economists at a meeting broadcast live on state television.
The United States said on Friday it will temporarily allow eight importers to keep buying Iranian oil when it re-imposes sanctions on Monday aimed at forcing Tehran to curb its nuclear, missile and regional activities.
China, India, South Korea, Japan and Turkey – all top importers of Iranian oil – are among eight countries expected to be given temporary exemptions from the sanctions to ensure crude oil prices are not destabilised.
The restoration of sanctions is part of a wider effort by U.S. President Donald Trump to force Iran to curb its nuclear and missile programs as well as its support for proxy forces in Yemen, Syria, Lebanon and other parts of the Middle East.
“Today the enemy (the United States) is targeting our economy … the main target of sanctions is our people,” Rouhani said.
In May, Trump exited Iran’s 2015 nuclear deal with six powers and Washington reimposed first round of sanctions on Iran in August.
The deal had seen most international financial and economic sanctions on Iran lifted in return for Tehran curbing its disputed nuclear activity under U.N. surveillance.
U.S. Secretary of State Mike Pompeo said on Sunday the penalties set to return on Monday “are the toughest sanctions ever put in place on the Islamic Republic of Iran.”
However, Iran’s clerical rulers have dismissed concerns about the impact of sanctions on the country’s economy.
“This is an economic war against Iran but … America should learn that it can not use the language of force against Iran … We are prepared to resist any pressure,” Rouhani said.
To keep the deal alive, the remaining parties to the Iran nuclear deal are trying to maintain trade with Tehran despite scepticism this is possible despite U.S. sanctions to choke off Iranian oil sales.
Khashoggi probe will exonerate leader: Alwaleed
Diplomats told Reuters last month that the new EU mechanism to facilitate payments for Iranian oil exports should be legally in place by Nov. 4 but not operational until early next year.
They cautioned, however, that no country had volunteered to host the entity, which was delaying the process.
“We are in regular contact with other signatories of the nuclear deal … setting up (a) mechanism to continue trade with the European Union will take time,” Iran’s Foreign Ministry spokesman Bahram Qasemi told a weekly news conference on in Tehran.
He also said the reimposed U.S. sanctions were part of a psychological war launched by Washington against Tehran, adding that “America’s economic pressure on Iran is futile.”
COMBO – This combination of two pictures shows U.S. President Donald Trump, left, on July 22, 2018, and Iranian President Hassan Rouhani on Feb. 6, 2018. The Trump administration is announcing the reimposition of all U.S. sanctions on Iran that had been lifted under the 2015 nuclear deal. The Trump administration is announcing the reimposition of all U.S. sanctions on Iran that had been lifted under the 2015 nuclear deal. (AP Photo)
WASHINGTON (AP) — The Trump administration on Friday restored U.S. sanctions on Iran that had been lifted under the 2015 nuclear deal, but carved out exemptions for eight countries that can still import oil from the Islamic Republic without penalty.
The sanctions take effect Monday and cover Iran’s shipping, financial and energy sectors. They are the second batch the administration has re-imposed since Trump withdrew from the landmark accord in May.
The 2015 deal, one of former President Barack Obama’s biggest diplomatic achievements, gave Iran billions of dollars in sanctions relief in exchange for curbs on its nuclear program, which many believed it was using to develop atomic weapons. Trump repeatedly denounced the agreement as the “worst ever” negotiated by the United States and said it gave Iran too much in return for too little.
But proponents as well as the other parties to the deal — Britain, China, France, Germany, Russia and the European Union — have vehemently defended it. The Europeans have mounted a drive to save the agreement without the U.S., fearing that the new sanctions will drive Iran to pull out and resume all of its nuclear work.
Friday’s announcement comes just days before congressional midterm elections in the U.S., allowing Trump to highlight his decision to withdraw from the deal — a move that was popular among Republicans.
Shortly after the announcement, Trump tweeted what looks like a movie poster image of himself that takes creative inspiration from the TV series “Game of Thrones” with the tagline “Sanctions are Coming, November 5.”
This image taken from the Twitter account of President Donald J. Trump @realDonaldTrump, shows a movie-style poster to announce the re-imposition of sanctions against Iran. (Donald J. Trump Twitter account via AP)
In a statement issued Friday night, Trump said, “Our objective is to force the regime into a clear choice: either abandon its destructive behavior or continue down the path toward economic disaster.”
Secretary of State Mike Pompeo said the sanctions are “aimed at fundamentally altering the behavior of the Islamic Republic of Iran.” He has issued a list of 12 demands that Iran must meet to get the sanctions lifted that include an end to its support for terrorism and military engagement in Syria and a halt to nuclear and ballistic missile development.
Pompeo said eight nations will receive temporary waivers allowing them to continue to import Iranian petroleum products as they move to end such imports entirely. He said those countries, which other officials said would include U.S. allies such as Turkey, Italy, India, Japan and South Korea, had made efforts to eliminate their imports but could not complete the task by Monday.
The waivers will be valid for six months, during which time the importing country can buy Iranian oil but must deposit Iran’s revenue in an escrow account. Iran can spend the money but only on a narrow range of humanitarian items.
Pompeo defended the oil waivers and noted that since May, when the U.S. began to press countries to stop buying Iranian oil, Iran’s exports had dropped by more than 1 million barrels per day.
He said the Iranian economy is already reeling from the earlier sanctions, with the currency losing half its value since April and the prices of fruit, poultry, eggs and milk skyrocketing.
Some Iran hawks in Congress and elsewhere said Friday’s move should have gone even further. They were hoping for Iran to be disconnected from the main international financial messaging network known as SWIFT.
With limited exceptions, the re-imposed U.S. sanctions will hit Iran as well as countries that do not stop importing Iranian oil and foreign firms that do business with blacklisted Iranian entities, including its central bank, a number of private financial institutions, and state-run port and shipping firms, as well as hundreds of individual Iranian officials.
“Our ultimate aim is to compel Iran to permanently abandon its well-documented outlaw activities and behave as a normal country,” Pompeo told reporters in a conference call with Treasury Secretary Steven Mnuchin.
Mnuchin said 700 more Iranian companies and people would be added to the sanctions rolls. Those, he said, would include more than 300 that had not been included under previous sanctions.
Israel, which considers Iran an existential threat and opposed the deal from the beginning, welcomed Friday’s announcement.
“Thank you, Mr. President, for restoring sanctions against an Iranian regime that vows and works to destroy the Jewish state,” Israeli Ambassador to the U.S. Ron Dermer said in a tweet.
Mnuchin defended the decision to allow some Iranian banks to remain connected to SWIFT, saying that the Belgium-based firm had been warned that it will face penalties if sanctioned institutions are permitted to use it. And, he said that U.S. regulators would be watching closely Iranian transactions that use SWIFT to ensure any that run afoul of U.S. sanctions would be punished.
What we know today as the First Amendment was first proposed by the Virginia state ratifying convention during its approval of the Constitution in June 1788. The Virginia resolution declared that the free exercise of religious worship could not “be cancelled, abridged, restrained or modified” by the new federal Congress, nor could any other essential rights, including “liberty of conscience and of the press.” James Madison drafted the formal amendment to adopt these principles, and the addition was finally ratified by the states on March 1, 1792:
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.
Madison believed that the freedoms guaranteed by the First Amendment were the source “for all the triumphs which have been gained by reason and humanity, over error and oppression.” Even so, the new nation experienced backslides into censorship from the very beginning. The Alien and Sedition Acts were passed in 1798, and mobs gathered to suppress political speech in New York and Baltimore in 1804, 1810, 1811, and 1815. In 1835 alone, there were 147 political riots in the United States, leading to the deaths of 63 people. An 1837 riot in Alton, Illinois, caused the death of the abolitionist editor Elijah Lovejoy and prompted the first great political speech of the up-and-coming Illinois lawyer Abraham Lincoln. Not until after World War I did the U.S. Supreme Court finally and unambiguously prohibit censorship, saying in Abrams v. United States (1919) that “the best test of truth is the power of the thought to get itself accepted in the competition of the market.”
Nearly a century after free speech became the unambiguous law of the land, it is nonetheless losing its sway over public opinion. Today, many people who claim to support freedom of expression regularly turn around to suppress the views of others. In her Constitution Day lecture at Princeton University last September, anthropology professor Carolyn Rouse called free speech a political illusion, a baseless ruse to enable people to “say whatever they want, in any context, with no social, economic, legal, or political repercussions.” There are, Rouse said, varieties of speech, and not all of them should be deemed deserving of the protections of freedom. What, then, serves to sort out the speech that does from the speech that does not deserve the shield of the First Amendment? Rouse’s answer is culture: “culture is what helps us determine the appropriateness of speech by balancing our rights as enshrined in the Constitution with understandings of context.” And by culture, Rouse means her vision of culture. A climate-change skeptic, she explained, has no right to make “claims about climate change, as if all the science discovered over the last X-number of centuries were irrelevant.”
Climate change is not the only topic for which many are seeking to censor open debate. In December 2016, Rouse organized a walkout of a lecture by sociologist Charles Murray, charging in a flyer that Murray represented the “normalization of racism and classism in academia.” This is the same Charles Murray who was later shouted down and physically attacked by student activists at Middlebury College. In an even more sensational confrontation, campus authorities at Evergreen State College refused to protect biology professor Bret Weinstein from physical threat by angry student activists after Weinstein, a self-avowed progressive in politics, questioned the wisdom of a day of racial “absence” that excluded white students from the Evergreen campus. In a foreshadowing of Rouse’s Constitution Day rationalization, the Evergreen activists insisted that Weinstein’s questioning violated the norms of Evergreen’s culture. “He has incited white supremacists and he has validated white supremacists and Nazis in our community and in the nation. And I don’t think that should be protected by free speech,” said one student in a Vice News interview on the protest.
This bleak view of open speech is not merely the reserve of a dismissible fringe. More college students than ever claim to have reservations about free expression. Forty-four percent of surveyed students told the Brookings Institution that they do not believe that the First Amendment protects free speech, compared with the 39 percent who believe that it does. A full 20 percent of respondents maintained it acceptable to inflict physical harm on those deemed to have made “offensive and hurtful statements.”
The rights that Madison worked to preserve in the name of reason and humanity now yield to the dictatorship of “culture.” Professors, students, and their intellectual allies act as though our country were a tribe rather than a republic, in which any unapproved remark becomes an illicit defection from the mandated social order.
There may be some relief in realizing that the attacks on free speech have a history of their own, one that has, from time to time, gained a measure of temporary credibility, only to have its underlying folly pull it back out to sea. The Puritans of Massachusetts Bay were confident enough of their culture to insist that any deviation from it was a violation of truth itself. In this worldview, toleration of different beliefs would only sow confusion among the believers, who needed no further enlightenment. “He that is willing to tolerate any religion,” wrote Nathaniel Ward in 1647, “or discrepant way of religion, besides his own, unless it be in matters merely indifferent, either doubts of his own, or is not sincere in it.” Supporters of the 1798 Alien and Sedition Acts were no less confident in the axioms of their political culture and likewise felt no need to learn anything from what they regarded as palpable error. “Truth has but one side and listening to error and falsehood is indeed a strange way to discover truth,” wrote the Pennsylvania lawyer Alexander Addison, in what might have passed for a parody of Rouse’s Princeton lecture. Contempt and fear of free speech also characterized defenders of slavery. In 1835, Postmaster General Amos Kendall yielded to demands by slaveholders to censor the mail and justified his decision by appealing to cultural values over political liberty: “We owe an obligation to the laws, but a higher one to the community in which we live and, if the former be perverted to destroy the latter, it is patriotism to disregard them.”
“Professors, students, and their intellectual allies act as though our country were a tribe rather than a republic.”
Today’s despisers of free speech have their roots in a different ideology from the tribal sort that was used to justify slaveholding and Puritanism. This newer ideology began with Karl Marx—or rather, with the struggle of Marxist intellectuals to explain the failure of the European proletariat to rise in violent revolution at the outbreak of World War I. Rather than joining in solidarity with the working classes of other nations, European workers rallied in dismaying numbers to their national flags, exhausted themselves in a four-year killing spree that beggared all previous descriptions of war, and then succumbed to waves of populist fascism. The only revolution that Marxists could tease out of the charnel house of the Great War was a coup d’état in the most backward and least industrially developed empire of Europe and, even then, only by the substitution of what Vladimir Lenin called a “vanguard” of Marxist elites rather than a spontaneous uprising of the workers.
It became the task of Italian Marxist Antonio Gramsci to reconcile the oddity of this situation with Marx’s larger worldview, and he did so by conceding that Marx had missed an important detail: the working class is oppressed, not just by the political and economic power of the European ruling classes but by ruling-class culture, which entices or persuades the working class to adopt the cultural values and attitudes of its rulers. For class revolution to work, nations would first have to rid themselves of the oppressive speech of the bourgeoisie. Gramsci’s ideas crossed the Atlantic in the 1930s and 1940s, and won their biggest following among Americans of the New Left in the 1960s, who declared that freedom of speech was merely the tool that the dominant class used to drown revolutionary messages in a flood of meaningless and distracting blather about freedom and tolerance. Under the plea of free speech, wrote New Left doyen Herbert Marcuse, “tolerance is extended to policies, conditions, and modes of behavior which should not be tolerated because they are impeding . . . the chances of creating an existence without fear and misery.” This argument is practically indistinguishable from the plea of censors from days past, but it reclothes that plea in the more appealing garb of resisting oppression.
It does, however, allow us to draw a bright line between the attacks on free speech and the recent craze for monument removals that began in New Orleans in May 2017 and peaked after the Charlottesville riot a few months later, in August. In the world of Marxist ideology, there is nothing but political power in play; considerations of reason, debate, and discussion are merely the cultural shams that Gramsci and Marcuse identified as tricks to oppress the downtrodden. The Confederate statues in New Orleans and Charlottesville that have been at the eye of this storm cannot merely be statues; they must be statements of power, because everything is a statement of political power. “The monuments,” declared one University of North Carolina professor, “made a very pointed statement about the rule of white supremacy: All who enter the courthouse are subject to the laws of white men.” No, actually it was the laws of the Jim Crow era that did that; no one has yet shown that General Lee descended from his monumental horse in Charlottesville to burn crosses along the Blue Ridge at night. But if culture is politics, and politics is power, then monuments do indeed acquire dangerous capacities of locomotion.
In this way, the removal of offensive speakers and public art is a strategy for eliminating political dissent, which is why the activists so often shade over into furious condemnations of the entirety of American history. On the other hand, the genuinely oppressed—as opposed to the hustlers of faux outrage—have always known freedom of speech to be their best friend.
Witness the account of Frederick Douglass. “Liberty is meaningless where the right to utter one’s thoughts and opinions has ceased to exist,” Douglass said in 1860, adding that “slavery cannot tolerate five years of free speech.” Or George Orwell: “If liberty means anything at all it means the right to tell people what they do not want to hear.” Or John Milton: “Give me the liberty to know, to utter, and to argue freely according to conscience, above all liberties.” Or even the pre-Gramscian Marxist Rosa Luxemburg: “Freedom is always and exclusively freedom for one who thinks differently . . . because all that is instructive, wholesome and purifying in political freedom depends on this essential characteristic.”
Argue with them, if you like, but do not expect Americans to believe that freedom of speech is some disguised puppetry of the powerful. It is, to the contrary, an indispensable ingredient in the recipe for preventing tyrannies, be they of the left or right, be they in the name of the Fatherland, the Volk, or the workers. To say otherwise is merely to perform what Michael Polanyi called a “moral inversion”—an intellectual juggling act in which we are asked, in Orwellian terms, to regard freedom as slavery, discrimination as nondiscrimination, and truth as power.
There has never been a freedom, of course, that someone has not proved ingenious enough to abuse. And Carolyn Rouse is certainly correct in one respect: cultures do inhibit speech. She learned this, to her own surprise, in February, when fellow professor Leonard Rosen’s use of the N-word in his Anthropology of Law class as an instruction-example of offensive speech triggered a dramatic student walkout; Rouse’s defense of her colleague caused her to be attacked herself, for failing to understand that “expecting the dissenting students to dispassionately debate amid hate speech is tantamount to silencing their experience.” Some speech is rude and some is foolish, and culture encourages people to censor their rudeness and their foolishness. But what Rouse and the Gramscians ignore is that cultural inhibitions are vague, consensual, and easily liable to transgression and shifting. Culture made the use of the F-bomb on television unthinkable in 1965; 40 years later, HBO would be lost without it. And the reason for this is that the culture shifted, steadily, imperceptibly, like dunes in the desert. When subjected to the contrary, cultural inhibitions can be embarrassed, challenged, and cast aside in the course of a few years. They become lethal only when political power is invoked to terminate the competition for cultural expression and it takes sides. The real crime of white supremacy was not that it put up statues, or even that it made speeches, but that it attacked citizens and passed laws.
Rouse is also correct to say that there are different arenas of speech and that suppression of free speech in some of those arenas is accepted as perfectly natural without any thought of the First Amendment. I do not regard children talking back to parents as necessarily a shining example of free speech, and even Oliver Wendell Holmes, the author of the Abrams decision, recognized the serious public harm that can result from someone “falsely shouting fire in a theatre and causing a panic.” But the line that separates some arenas of speech from others—and that permits suppression—is also a shifting one. Rouse believes that “hate speech” has no place in academic speech, and since academic speech permits the suppression of some speech so that others may thrive, some forms of censorship can be imposed. If academia is indeed a private arena, there is some merit to that argument.
But in practice, the limiting of academic speech has become more and more suspect. For one thing, the exclusion of certain forms of speech from the academy ought to come as the result of debate, but generally not before the debate. We have now arrived at the point where the debate itself is deemed insufferable, in something akin to the spirit of Lewis Carroll’s Red Queen: sentence first, verdict afterward. Moreover, academic speech can no longer truly be called private or even communal. State-authorized and supervised higher education has long been bound from restricting or controlling academic speech. But the wall of separation between public and private higher education has been eroding for the last half-century. Funding from public sources now constitutes the bulk of higher-education resources in the United States, whether in the form of government subventions for research and programs, or in the much vaster influx of government-guaranteed student loans. For all realistic purposes, the distinction between public and private higher education has ceased to exist. Further, the vast numbers of young American adults being drawn in to the college and university system (some 20.4 million, up by 25 percent from 2000 alone)—on the assumption that college degrees are virtually a sine qua non of entrance into profitable commerce or lucrative professions—has evaporated what little is left of the pretense that academe constitutes some monastic realm, beyond the orbit of civil society.
Ironically, some of the vilest examples of bona fide “hate speech” have occurred within the very groves of academe, committed by students who seek to oppose, rather than expand, free-speech rights. On November 12, 2015, 150 Black Lives Matter activists invaded the Baker-Berry Library at Dartmouth, shouting to students in the library, “Fuck you, you filthy white fucks!” “Fuck you and your comfort!” and “Fuck you, you racist shits!” as a way of expressing solidarity with “our brothers and sisters across the country who are staring terrorism and assault directly in the face,” and assaulting one female student. The college’s Office of Communications subsequently released a statement affirming Dartmouth’s loyalty “to the principles of free speech, public protest, and inclusivity.” However, the college also declined to take any action against the invasion because “there were no specific violations of the Standards of Conduct. In essence, no rules for which there are recorded and communicated sanctions were broken.” Perhaps not, but it is difficult to interpret these tirades as anything but hateful.
The Dartmouth affair was swiftly followed by the “Demands of Black Voices” incident at Duke University, where the target shifted from intimidating students to intimidating faculty. Among the “Demands” was the requirement that “Professors will be in danger of losing their jobs, and non-tenure track faculty will lose tenure status if they perpetuate hate speech that threatens the safety of students of color.” This fall, Reed College’s Humanities 110 course began with student demonstrations in the classroom that attacked assistant professor Lucía Martínez Valdivia as a “race traitor,” “anti-black,” and “ableist,” driving Valdivia to admit: “I am scared to teach courses on race, gender or sexuality or even texts that bring these issues up in any way . . . especially since many of these students don’t believe in historicity or objective facts.” I would like to be able to say that college students simply will be college students, and not to worry. But that is no longer the luxury it once was, when colleges really were private institutions, and no longer a luxury at all when we chart the subsequent outbursts of speech suppression at Berkeley, Middlebury, and Evergreen State.
To make this worse, because college has become the narrow strait through which young adults must pass—or think that they must pass—to gain admission to economic opportunity, this suppression of speech is fast becoming the norm throughout civil society. Recently, Mozilla CEO Brendan Eich was forced to resign after donating to a campaign to ban same-sex marriage, and Google engineer James Damore was fired for drafting a memo that questioned his company’s policies regarding gender. As a senior software engineer at a Fortune 100 company wrote, “Like all working Americans, I have bills to pay. So I always have to think about what I can and cannot say to people at work.” What galls this engineer is that this is not the dictate of prudence or civility, but fear, because “my colleagues on the left had complete freedom to loudly discuss their views.” As certain forms of speech become increasingly suppressed—including stances that were, until yesterday, commonplace—our intellectual culture will grow more and more rigid and ruthlessly hostile.
In September 2017, the University of California at Berkeley, home of the 1960s Free Speech Movement, was slated to host a “Free Speech Week,” featuring the alt-right provocateur Milo Yiannopoulos. The event was eventually canceled by its sponsors, who cited “extraordinary pressure and resistance, if not outright hostility,” from the university’s administration. A Berkeley chalk artist perfectly articulated the sentiments of the free-speech opponents when he wrote, without irony, “Free Speech Kills.” I am moved to agree that free speech does indeedkill, but in a very different manner from what its opponents have in mind: it kills stupidity, sloth, corruption, small-mindedness, pride, overconfidence, and self-righteousness. It embarrasses, disrupts, and exposes—and therein lies its real offense to the cadres of academic administrators, who have, in the last half-century, become the single most powerful component of campus cultures.
There are always two great questions to be asked in moments of crisis: Who is to blame and what is to be done? We have now seen how many hands are soiled with blame for the present crisis of free speech. But what is to be done? The great instinct of humanity, even when facing catastrophe, is to do nothing rather than something. But the choir of the deranged is not content with people merely agreeing to do nothing; as we have seen in case after case, the demands to silence free speech always come with the requirement of explicit acquiescence on our part. We will not make ourselves safe by doing as the greengrocer described by Václav Havel in his great 1978 essay “The Power of the Powerless” did: every morning during Soviet rule in Eastern Europe, he hung out a sign, WORKERS OF THE WORLD, UNITE! It was a slogan that the grocer knew was untrue but that he hung out, anyway, “because these things must be done in order to get along in life” and to “guarantee him a relatively tranquil life ‘in harmony with society.≈’” But this, Havel warned, allows him only to “conceal from himself the low foundations of his obedience.” The grocer has chosen to live in self-deception—he is lying to himself, not only about the workers of the world but about his own powerlessness. But he has another choice. Truth, said Havel, is “a bacteriological weapon, so to speak, utilized when conditions are ripe by a single civilian to disarm an entire division.”
Those who resolve to stand for the truth in the face of a culture of censorship should consider three important short-term steps. The first is to make common cause. In his recent book, The Once and Future Liberal, Mark Lilla warns fellow progressives not to be seduced by the air horns and pepper spray of the silencers. “Democratic politics is about persuasion, not self-expression,” he writes, “and the priority of citizenship over group or personal identity.” We are all voices “in a democratic chorus” of citizens, pleads Lilla; people on the Left must stop thinking of themselves as the “vanguard of a movement” whose goal is to replace arguments with taboos, and run “conservative political speakers . . . off campus in a purging ritual.” Last fall, 15 distinguished academics from Yale, Princeton, and Harvard—including Princeton’s Robert George and John Londregan, Harvard’s Adrian Vermeule, and Yale’s David Gelernter—published a letter in defense of this sort of open inquiry, urging incoming students to remember that “the central point of a college education is to seek truth and to learn the skills and acquire the virtues necessary to be a lifelong truth-seeker.” Reverence for free speech is deeply embedded in American life, but speech cannot be protected unless those who acknowledge its value set aside their partisan differences for a moment and trust one another enough to say that the outrages against free speech must end.
The second step is to defund the institutions causing the damage. The institutions of higher education where the most visible suppressions of free speech have taken place are not fully private institutions but, rather, depend on the support of government and private donors. And in today’s financial environment, they are acutely responsive to the slightest puff of philanthropic disapproval. Out of the 40 biggest university endowments, 35 experienced declines in 2016, even at a time when the overall market rose by 13 percent. Middlebury College suffered a 9 percent loss in its endowment value, Dartmouth lost 4.1 percent, and Reed College’s modest endowment lost 5.4 percent. And this only speaks to the distress of the endowed. By the end of 2017, Moody’s Investment Services was predicting that the closure rate of small colleges could easily triple over that of the previous decade. These are not, in other words, institutions that can afford to ignore inquiry into their records of speech suppression. It is time to press on that weakness.
Withholding support for misbehaving schools is not a happy notion for those who are used to donating each year out of love for alma mater. I ask only whether alma mater must weigh more heavily in your minds than freedom of thought and expression. We are not talking here about mere bad frat-boy behavior or professorial eccentricity but about orchestrated campaigns to assault the fundamental liberties of the American republic, tolerated by campus administrators who, in equal measure, fear confrontations with student activists as a threat to their career advancement, and hope that no news of their cravenness leaks out to the press and the alumni. Target your giving as intelligently and purposefully as you target your personal investing. Stand with those who stand for liberty, defund those who will not, and do not pass by on the other side.
The final step to salvage free speech is to cultivate a spirit of resolute opposition to its suppression. The stakes here are not minor ones. Last October, Black Lives Matter activists stormed a stage at William & Mary, where the director of the American Civil Liberties Union was to speak on “Students and the First Amendment,” and shouted her down, crying, “ACLU, you protect Hitler, too” and “the revolution will not uphold the Constitution.” It surely will not. But you must. The anti-free-speech fanatics on campuses and throughout the country have raised their hand against the idea that guarantees us life, liberty, and the pursuit of happiness. So I say: when the black-maskers finally feel emboldened enough to come with baseball bats, whether for Charles Murray or Carolyn Rouse, or for Pentecostal bakers, Mormons, Jews, or Catholics—resist. That is the answer of Madison, of the First Amendment, and the only worthwhile answer of the free spirit.
Allen C. Guelzo is the Henry R. Luce Professor of the Civil War Era, Director of Civil War Era Studies at Gettysburg College, and the author of Abraham Lincoln: Redeemer President and other books.
(GUA) President’s positive remarks about a call with Xi Jinping, and a report that he has asked officials to draw up terms, lift markets
Asian shares have surged on reports that Donald Trump wants to reach an agreement with Chinese president Xi Jinping about the trade dispute that has dogged markets for months.
The US president spoke to Xi on Thursday and later tweeted that trade talks with China were “moving along nicely” ahead of face-to-face talks between the pair at the G20 summit in Argentina later this month.
But Bloomberg later reported that the phone call – in which Trump and Xi both expressed optimism about resolving their bitter trade disputes – prompted Trump to ask officials to begin drafting potential terms.
China’s foreign ministry said on Friday that the telephone call between the two leaders was quite positive and that the pair believed they should “enhance trade relations”.
The reports lit a fire under stock markets that have beset by fears of a full-blown trade war between the world’s two biggest economies.
The Nikkei was up 2.5% in Tokyo, the Hang Seng climbed 3.7% in Hong Kong and the Shanghai Composite was up 3.3%. In South Korea, where the export-oriented economy has showed signs of a downturn, the Kospi index had its best day for seven years, jumping 3.5%. The ASX200 in Sydney had already closed up a more modest 0.14% when news of a possible deal came through.
US stock futures rose 0.7% and the FTSE100 is set for a jump of almost 1% when it opens in London on Friday morning. France’s CAC and Germany’s DAX are expected to enjoy similar gains.
In currencies the dollar eased, signalling some relief for emerging markets, while the pound climbed above $1.30.
Trump administration officials have said that trade talks with China cannot resume until Beijing comes up with specific actions it is willing take to meet US demands for sweeping changes to policies on technology transfers, industrial subsidies and market access.
The two countries already have imposed tariffs on hundreds of billions of dollars of each other’s goods and Trump has threatened to slap tariffs on the remainder of China’s $500 billion-plus exports to the United States if the disputes cannot be resolved.
The trade dispute has also forced the yuan to fall in value but on Friday it was stronger for the first time this week, also helped by Xi’s pledge on Thursday of more support for private firms.
Tai Hui at JPMorgan Asset Management said a stabilising trade relationship between US and China and more stimulus from Beijing would be the key ingredients to revive market confidence in Asia.
“While we are still cautious over a full resolution of recent tensions in the medium term, resumption of dialogue between Washington and Beijing would be good enough to investors for now,” he told Bloomberg.
(Newsweek) North and South Korean personnel have completed disarming an important section of the massive demilitarized zone that lies between them, an unprecedented step amid a warming of relations between the longtime foes.
Officials from both sides of what has been described as the world’s most heavily fortified border—alongside members of the U.S.-led United Nations Command—completed the removal of defense posts, landmines and armed soldiers Thursday from the Joint Security Area, where troops from both Koreas have stood face-to-face since the ceasefire that ended their mid-20th-century conflict. Despite technically remaining at war, North and South Korea have embarked on a series of top-level meetings this year aimed at settling their decades-long feud.
In the most recent inter-Korea summit last month, North Korean supreme leader Kim Jong Un and South Korean President Moon Jae-in agreed to begin scaling down their countries’ military presence on the border. As a result, personnel began demining activities at the beginning of the month.
“The military authorities of the two Koreas and the UNC will make joint efforts to ensure that the JSA disarmament, stated in the Sept. 19 military agreement, will be implemented normally,” South Korea’s Defense Ministry said Thursday in a statement, according to the official Yonhap News Agency.
A South Korean soldier (center) carries a coffin containing a piece of bone believed to be the remains of an unidentified South Korean soldier killed in the Korean War in the Demilitarized Zone (DMZ), in Cheorwon, South Korea, on October 25. The excavation project is part of a comprehensive military agreement that the two Koreas signed last month.JUNG YEON-JE/AFP/GETTY IMAGES
The U.S. has cautiously supported peace efforts between its ally South Korea and foe North Korea. The U.S.-led U.N. Command that assisted in the recent demilitarization efforts fought alongside South Korea in battles against North Korea and its Chinese allies in the 1950s, a war that ended in an armistice along the border that stands today. With the Cold War long over, however, Washington’s main concern is North Korea’s possession of nuclear weapons.
After a year of challenging Kim, President Donald Trump ultimately embraced the young ruler’s peace overture toward Moon in January, a move that led to two inter-Korean summits before Trump himself in June became the first sitting U.S. president to meet a North Korean head. In exchange for peace, Kim vowed to give up the weapons of mass destructions his country has long argued were necessary for its protection.
The U.S. and North Korea have accused one another in recent months of making insufficient progress toward their pledge of bettering relations. Washington wants North Korea to completely shutter its nuclear program before lifting international sanctions and making peace. Meanwhile, Pyongyang argues that the suspension of nuclear and missile tests, the return of U.S. soldiers’ remains and prisoners as well as the partial or whole destruction of certain key military sites was enough to warrant concessions.
Despite U.S. apprehensions, South Korea has moved forward with an ambitious plan to forge ties with its northern neighbor. Moon has green-lit the restoration of cross-border military communications, the linking of the two countries’ railroad systems and various projects designed to unify the economies of the Koreas.
North Korea’s leader Kim Jong Un and South Korean President Moon Jae-in (from left) walk together during a visit to the Samjiyon guesthouse in North Korea, on September 20. Since the beginning of this year, the two countries have met more times than in any previous period in their history.PYONGYANG PRESS CORPS/POOL/GETTY IMAGES
In a reminder of the bloodshed that took the lives of millions on the Korean Peninsula, personnel demilitarizing the border this month discovered what the South Korean Defense Ministry said Thursday was likely the remains of at least two soldiers who died fighting in the Korean War. One of them was found with dog tags intact, reading “Pak Je Kwon,” who was believed to be a South Korean sergeant.
Both Koreas have pledged to conduct joint searches for other war casualties once they complete the removal of mines from the area.
The company has upped its spending on original content in recent months.
The release comes with Apple’s fourth-quarter earnings report released Thursday.
Apple beat on earnings and revenues, but weaker guidance hit the stock—here’s what three experts had to say
Apple now has $237.1 billion in cash on hand the company reported in its fourth-quarter earnings report on Thursday.
It now has about $6 billion less cash on hand than last quarter, when it reported $243.7 billion. Apple’s cash hoarding has led to M&A speculation although the company has more recently shelled out on content creation, emerging markets and creating U.S. jobs.
Apple said in January it would contribute $350 billion to the U.S. over the next five years, in part through taxes for cash it plans to bring back from overseas. It also announced plans to create 20,000 new jobs in the U.S., including on a new campus.
(BBG) The first official gauge of China’s economy in October showed manufacturing activity continued to worsen, as the effects of an ongoing trade war with the U.S. hit home.
The manufacturing purchasing managers index fell to 50.2 this month, lower than projected in a Bloomberg survey of forecasters. A gauge of new orders for export, which gives an indication of demand, fell further into contraction territory, dropping to the lowest reading since early 2016.
A level of 50 marks the dividing line between expansion and contraction. Most sub-indexes in the data declined from September, indicating that the slowdown was widespread.
China’s government is trying to balance competing forces, attempting to support growth while also continuing the policy of slowing debt expansion which has made credit to companies more scarce. Domestic economic growth is slowing, sentiment has followed the stock market down, and while exports are still strong now, they are expected to slow as higher U.S. tariffs kick in.
“Today’s PMI confirms that China’s economy is under strain and this is despite policy easing, export front-loading, a still-strong housing market and a relaxation of the anti-pollution campaign,” said Rob Subbaraman, head of emerging markets economics at Nomura Holdings Inc. in Singapore. “We believe the worst is yet to come. Payback from export front-loading, continued deleveraging and a property market correction will lead to a sharper deceleration in the economy in the first quarter next year.”
The government and central bank this month introduced a raft of measures to stabilize sentiment, adding to steps to boost liquidity in the financial system, tax deductions for households and targeted measures aimed at helping exporters. Those measures have yet to have much effect, and in particular the export orders gauge signals that the economy will see more downward pressure in the months to come.
WHAT OUR ECONOMISTS SAY…
The much weaker-than-expected manufacturing result suggest the economy took a sharper turn for the worse, and while the slowdown in non-manufacturing data is partly due to the week-long holiday in October, it highlights the risk of an accelerated slowdown.
The economy is unlikely to bottom out in the next few months, as more time needed for recent policies to have an effect and recent export strength may dissipate.
Japanese and Korea industrial output in September both fell more than expected, with a series of natural disasters in Japan cutting production and the autumn holidays in Korea reducing the number of days factories were open.
China’s non-manufacturing PMI, which reflects activity in the construction and services sectors, also worsened to 53.9 from September’s 54.9 reading. The service-sector component dropped 1.3 points to 52.1, the lowest level since mid-2016, while the construction component rose to 63.9, matching the December 2017 record high.
Officials Talk Up Market
Top officials including President Xi Jinping have also sought to bolster investor confidence, commenting on the fundamental strength of the economy and attempting to talk up the stock market, which has fallen 9 percent this month.
A set of early indicators compiled by Bloomberg Economics prior to the official PMI report suggested that sentiment among executives and investors continued to deteriorate in October.
“China-U.S. trade tensions have impacted some industries,” said Wen Tao, an analyst with China Logistics Information Center, which releases the PMI data. “Looking ahead, with the environment cleanup campaign in winter set to kick in, and no positive shift in China U.S. trade frictions, domestic demand will be relatively stable in November, but external demand will continue to decline,” Wen said in a statement on the organization’s website.
On Tuesday, China’s currency slid to its lowest level against the U.S. dollar in more than a decade following a report that U.S. President Donald Trump plans to expand tariffs to cover the full range of imports from China if he is unable to extract concessions from Xi during a Group of 20 summit of world leaders in Argentina at the end of November.
The yuan traded onshore at 6.9659 per dollar at 10:56 a.m. in Shanghai. The benchmark stock index was up 0.7 percent in morning trading, but looked set to close the month down, having lost more than 8 percent of its value since the end of September.
“It’s important to keep China’s deceleration in perspective,” said Frederic Neumann, co-head of Asian economics research at HSBC Holdings Plc in Hong Kong. “While growth is slowing the latest numbers suggest that the manufacturing sector continues to expand. Therefore, policy support will likely remain incremental and targeted, not the big, sudden jolt that investors may expect.”
BEIJING — As the United States and China swap threats and mete out increasingly punishing tariffs, the world is watching to see whether Beijing turns to one of its most potent economic weapons. It involves the number 7.
China’s currency, the renminbi, has been gradually losing value since mid-April, and on Tuesday it was at its weakest point in a decade. If the currency weakens any further, it could fall below the psychologically important level of 7 renminbi to the dollar. The last time it took more than 7 renminbi to buy a dollar was in May 2008, as the world was slipping into a financial crisis.
The Trump administration doesn’t like the idea of a weaker Chinese currency. That could give what it considers an unfair advantage to China’s exporters. In the arsenal of trade disputes, currencies can be potent weapons.
But China has good reason to keep its currency from weakening, and it appears to have acted in recent weeks to prop it up. Currencies may be potent weapons, but they are blunt ones — and they can boomerang against those who use them.
What happens if the renminbi falls past 7 to the dollar?
There is nothing particularly threatening about the number 7 itself. The renminbi at 7.002 to the dollar is pretty similar to the currency at 6.998 to the dollar.
But passing that number would be significant symbolically. It would suggest China is prepared to let its currency weaken further still. That would give China’s factory owners an advantage when they sell their goods in the United States. It would also undermine the tariffs the Trump administration has levied on more than $250 billion in Chinese-made products.
How would that help China?
Say you own a Chinese factory making lawn ornaments, and you sell a lot of pink flamingos to an American retailer. You price each at $1 — they may sell for far more in the United States, but shipping and storage account for most of that. When the renminbi is 6 to the dollar, that translates to 6 renminbi in sales.
But when the currency depreciates to 7 to the dollar, that $1 flamingo is worth 7 renminbi in sales to you. Or you can cut the price — say, from $1 to 85.7 cents — and still make your original 6 renminbi in sales. Your American competitor, who has to buy and sell in dollars, has to grudgingly cut prices to compete.
(It’s a lot more complicated in the real world. The plastic and metal for the plastic flamingo may have been imported to China and are priced in dollars. But bear with us.)
A weaker currency can also help Chinese exporters beat President Trump’s tariffs. Right now, the United States imposes tariffs of about 10 percent on a wide variety of Chinese goods that arrive at an American port. If the renminbi has fallen 10 percent, the tariff is basically nullified.
What’s driving the decline?
Some politicians in the United States and elsewhere have long said that China manipulates its currency, even though Washington officials — including in the Trump administration — have stopped short of official accusations. But in this case, many of the forces weakening the currency are beyond Beijing’s immediate control.
China’s financial system is firmly controlled by the government, giving the country’s leaders a great degree of control over how much the renminbi is worth. Officials set a daily benchmark rate for the renminbi and allow its value to move a smidgen above or below that level in currency markets. Chinese officials say each day’s trading activity helps determine the value they set for the renminbi the next day, but they disclose few details about how that works.
On Tuesday, Beijing set that guidepost at 6.9574, just a hair’s breadth stronger than 7. In the world of foreign exchange, a higher number means a weaker currency.
Right now, traders are sending Beijing a single message: The renminbi should be worth less. The people and companies that hold the currency have become increasingly nervous about China’s slowing economic growth, slumping stock market, fragile real estate market and seemingly intractable trade war with the United States. Inflation has begun to tick upward, and rising prices tend to make holding the relevant currency less attractive.
There are other reasons. Since late July, Beijing has tried to prop up the economy by having the state-controlled banking sector increase lending, making money more available. That means even more renminbi sloshing around, weakening the currency’s value.
While China hasn’t raised interest rates, the Federal Reserve in Washington has. That makes it attractive for many people to sell their renminbi and buy dollars. Would you rather have a one-year renminbi certificate of deposit that pays 1.5 percent interest now, or a one-year dollar C.D. that pays out 2.6 percent or more?
Is the drop deliberate on Beijing’s part?
Not quite. If anything, Beijing is trying to keep the renminbi from falling too fast.
China has a number of ways to bolster the currency’s value. One option is to follow the Fed’s example and raise interest rates. That would give Chinese families and companies more incentive to keep their money in China. But that would raise the cost of borrowing in China, just as the economy is slowing.
Beijing could buy up its own currency instead. Like anything else, the renminbi’s value rises when it is scarcer.
Thanks to the way it has managed its currency over the years, China has amassed the world’s largest foreign exchange reserves — a $3 trillion stash of money it keeps in dollars, euros, pounds, yen and other currencies. It has begun to tap that stash. When China’s central bank released its monthly balance sheet a week ago, it showed a drop of almost $20 billion in foreign currency just during September.
“Selling almost $20 billion in a month won’t break the bank,” said Brad W. Setser, an economist at the Council on Foreign Relations in New York. “But it does indicate the direction of current market pressure.”
What are the broader risks?
Three years ago, as its economy slowed, China devalued the renminbi in part to give its factories a helping hand. The financial world was shocked. Markets plunged.
As Chinese officials hurried to explain themselves, people and companies began shifting their money — money that China’s economy needed — outside the country. A year later, China had spent more than $500 billion from its reserves in an effort to shore up the renminbi. It later tightened controls on the financial system to shut off many ways people used to get money out of the country.
Should the trade war intensify, China may look to make more aggressive moves with its currency. But as history shows, there can be a price to pay.
WASHINGTON — The United States said on Monday that it would block a Chinese state-owned technology company from buying American components because it posed a national security threat, the latest volley in an escalating dispute between the world’s two largest economies.
The company, Fujian Jinhua Integrated Circuit, a manufacturer of semiconductors, “poses a significant risk” of becoming involved in activities that might infringe on national security, the Commerce Department said.
The move could cripple Jinhua, which relies on American components for its semiconductors, and followed similar action taken by the Commerce Department this year to block sales of components to ZTE, a Chinese telecom company. The ZTE ban was rescinded after President Trump — responding to a request from President Xi Jinping of China in May — asked the department to lighten the penalty. ZTE agreed to pay a large fine, reshuffle its leadership and undergo compliance monitoring by the United States.
But relations between the United States and China have worsened since then, and the Trump administration is taking an increasingly hard line on transactions involving Chinese entities. It is eager to prevent China’s ascendance as an economic and technological powerhouse and has begun aggressively scrutinizing foreign deals to prevent Beijing from gaining access to valuable American intellectual property.
This month, the Treasury Department outlined how it would use new powers that allow the United States to review a wider range of foreign transactions, including those in sensitive industries like technology and telecommunications.
“When a foreign company engages in activity contrary to our national security interests, we will take strong action to protect our national security,” said Wilbur Ross, the commerce secretary. “Placing Jinhua on the entity list will limit its ability to threaten the supply chain for essential components in our military systems.”
Jinhua has been on the Trump administration’s radar for several months. Micron Technology, a computer memory company in Idaho, accused Jinhua last year of stealing intellectual property. In July, Micron was barred from selling some of its products in China after Jinhua and its Taiwanese partner, United Microelectronics, accused Micron of violating their patents.
Jinhua is opening $5.7 billion factory in China’s Fujian Province and has become increasingly ambitious in its desire to become a global player in the memory chip business.
The United States and China have been engaged in a trade war, with Mr. Trump imposing tariffs on $250 billion worth of Chinese goods and threatening to hit all imports from China with levies. China has responded with its own tariffs, and the two countries have exchanged increasingly heated words in recent weeks.
How Trump’s Trade War Went From 18 Products to 10,000
The battle began when the United States imposed tariffs on solar panels and washing machines. It has led to a global tit-for-tat targeting billions of dollars of goods.
The United States wants China to open its market to American businesses and end its longstanding practice of pressuring American companies to hand over valuable technology as a condition of doing business there. Mr. Trump and Mr. Xi are expected to meet in Argentina next month at the Group of 20 summit meeting, where they plan to discuss trade, North Korea and other issues.
While Mr. Trump’s tariffs have proved to be unpopular with both Republican and Democratic lawmakers, his efforts to stop the theft of intellectual property have drawn praise even from his skeptics on trade.
“China’s state-owned & directed companies lie, cheat & steal at government’s behest,” Senator Marco Rubio, a Republican from Florida, said on Twitter on Monday. “Fujian Jinhua must be held accountable for being part of that illegality. This was the right move today to protect our tech knowledge.”
People mourn the loss of life as they hold a vigil for the victims of Pittsburgh synagogue shooting, Oct. 27, 2018. Photo: Reuters / John Altdorfer.
The Shabbat morning massacre at a synagogue in Pittsburgh — in which 11 Jews were murdered by a white supremacist gunman — has drawn condemnation from an interfaith range of religious figures and groups across the world.
At St. Peter’s Square in the Vatican on Sunday, Pope Francis said, “All of us are wounded by this inhuman act of violence,” and he asked God “to help us to extinguish the flames of hatred that develop in our societies.”
Hindu Swayamsevak Sangh USA (HSS) said in a statement, “We, the Hindu American community know all too well what it is to be a victim of hate crimes and terrorism. We relate with the Jewish community as it experiences such extraordinary pain and anguish. Accepting and respecting differences, a hallmark of democracy and a proud American tradition, must guide our actions.”
The Muslim Public Affairs Council (MPAC) tweeted, “Our hearts are broken at the news of a shooting and casualties at the Tree of Life synagogue in Pittsburgh, PA. We pray for strength and healing for the congregation and Jewish communities nationwide. We offer our sympathies for and solidarity with the American Jewish community.”
Tributes to the victims of Saturday’s shooting massacre at the Tree of Life Synagogue in Pittsburgh continued to pour in…
Our hearts are broken at the news of a shooting and casualties at the Tree of Life synagogue in Pittsburgh, PA. We pray for strength and healing for the congregation and Jewish communities nationwide. We offer our sympathies for and solidarity with the American Jewish community.
Wasi Mohammed — executive director of the Islamic Center of Pittsburgh — called the attack “really heartbreaking.”
Pastor John Hagee — founder and chairman of Christians United for Israel – said in a video statement, “Our Jewish brothers and sisters are hugging their children close in anguish as they try to grapple with this evil. Every Jewish mother and father in America faces the daunting task of telling their sons and daughters there are some in this country who want to kill them because they are Jewish. It is an unthinkable pain and an intolerable reality.”
“Now is the time to pray for our friends, to reach out personally with words of comfort and love, and to visibly stand with them against the antisemitic poison that fueled this attack,” he added.
(Epoch Times) The middle-class American family is on the rise with the median household income for 2017 reaching a record high, a Census Bureau survey has shown.
The median income rose to $61,372, from $60,309 a year earlier, when adjusted for inflation (xls).
President Donald Trump celebrated the news on Twitter on Sept. 13, saying middle-class income “will continue to rise (unless the Dem[ocrat]s get in and destroy what we have built)”—alluding to the significance of the upcoming midterm elections that will decide the power balance in Congress.
Donald J. Trump
“Middle-Class Income Hits All-Time High!” @foxandfriends And will continue to rise (unless the Dems get in and destroy what we have built).
Trump has been credited with accelerating economic growth with his tax cuts and deregulation.
The poverty rate declined to 12.3 percent in 2017, down from 12.7 percent the year before and significantly lower than the 15 percent it lingered at between 2010 and 2014.
“More great economic news!” Commerce Secretary Wilbur Ross wrote in a Sept. 12 tweet.
The share of Americans without health insurance remained at a steady 8.8 percent.
While the 2017 median household income is indeed the highest since the Census Bureau started measuring it in 1967, the data isn’t completely comparable, since the survey methodology has been updated multiple times.
In 2013, for example, the bureau updated “questions on retirement income and the income generated from retirement accounts and all other assets.” Using the new questions with part of the respondents resulted in median income 3.2 percent higher than from responses to the old questions.
The results are based on the bureau’s annual survey of about 60,000 households. The bureau also measures median household income on another survey, which polls over 2 million housing units a year. That data reaches back to only 2005 and has reported a somewhat lower 2017 figure—$60,336. This one too is the highest on record compared to past data from both surveys.
Lineup of Records
The improving income follows a pattern of historic economic indicators.
Meanwhile, congressional Republicans are working on “Tax Reform 2.0,” a legislative package that would make permanent the Trump’s individual tax cuts that are set to expire after 2025. The package also addresses retirement savings and tax incentives for start-up businesses.
The legislation, however, is opposed by Democrats because it lets the wealthy keep more of their earnings and may force the government to cut its welfare spending, most of which goes to Social Security and Medicare.
To push through Trump’s agenda, Republicans need to keep control of both the House and Senate in the upcoming midterm elections.
Including two special elections, there will be 35 Senate seats up for grabs come election day on Nov. 6. Of those, 23 are currently held by Democrats and two by independents—Bernie Sanders and Angus King, who are allied with the Democrats. Republicans hold eight seats.
In addition, voters will decide on all 435 seats in the House of Representatives, where Republicans currently hold 235 seats versus the Democrats’ 193.
If the elections were to be held now, 44 percent of registered voters would choose a Democrat, while 41 percent would choose a Republican, according to The Economist/YouGov Poll conducted on Sept. 9-11 (pdf).
The overall split, however, could be misleading, since congressional races will be decided district by district.
Federal authorities investigating a spate of pipe bombs sent this week to several prominent critics of President Trump have turned their attention to southern Florida, believing that a number of the devices were mailed from there, two people briefed on the matter said Thursday.
The focus on Florida came as three more devices were found, the F.B.I. said. Two were addressed to former Vice President Joseph R. Biden Jr. in Delaware and a third to the actor Robert De Niro, who lives and works in Lower Manhattan.
All 10 of the similar-looking packages discovered since Monday bore return addresses from Representative Debbie Wasserman Schultz, a Democrat whose district is in southern Florida. And Kirstjen Nielsen, secretary of the Department of Homeland Security, told Fox News on Thursday that some of the packages were sent from within the state.
Information collected by the United States Postal Service focused attention on certain Florida postal centers, including one in Opa-locka that the Miami-Dade Police Department’s bomb squad and K-9 unit swept on Thursday as a “precautionary measure.”
The continuing wave of bombs has prompted an intense nationwide investigation into whether Trump critics or others vilified by the right are being targeted.
None of the devices have so far exploded on their own, and investigators have been trying to determine whether any were even capable of detonating. Striking a note of caution, the New York City police commissioner, James P. O’Neill, said at a news conference that the packages contained “live devices” that should be “treated with the utmost seriousness.”
“The devices should be considered dangerous,” Mr. O’Neill said.
A law enforcement official said the envelope and printed address labels on the packages sent to Mr. Biden and Mr. De Niro were similar to those sent to the CNN offices in New York and to former President Barack Obama, former Secretary of State Hillary Clinton and others. An X-ray showed the package sent to Mr. De Niro contained a device that seemed to be a pipe bomb.
Federal, state and local investigators in New York, Washington, Florida and Los Angeles have all joined forces in the rapidly widening case, which has sent a shock through the nation’s political and news media establishments.
Though investigators initially believed that some of the packages were delivered by hand or courier, they have now concluded that all 10 were likely sent through the mail, a person briefed on the matter said.
The Postal Service records images of mail that comes into its system. As part of the inquiry, officials have been searching those images in an effort to determine where the packages originated, as well as to identify and catch any other possible explosive devices.
In addition to conducting a forensic examination of the packages and explosive devices, federal authorities were seeking to determine where the envelopes, mailing labels and bomb components were purchased.
Several law-enforcement officials said that investigators would likely obtain data from cell towers in the areas where they believe the packages were mailed. The data from each area could then be cross-referenced to create lists of phone numbers — and, ultimately, phone users — who were in the areas around the times the packages were mailed, the officials said.
The devices sent to Mr. Biden were intercepted at a United States Postal Service facility in Delaware, a law enforcement official said. Similar to one that had been sent to Eric H. Holder Jr., the former attorney general, the envelopes were misaddressed and were redirected to Ms. Wasserman Schultz’s return address.
The package sent to Mr. De Niro had been sitting in a mailroom at his movie company, TriBeCa Productions, since at least Tuesday, according to a person briefed on the investigation. Security personnel at the company discovered it about 5 a.m. Thursday and called the New York Police Department, whose bomb squad responded, officials briefed on the matter said.
Before dawn, a swarm of police vehicles and ambulances on standby choked the streets of the TriBeCa neighborhood. The police closed off several blocks around the building that houses the film company and Mr. De Niro’s restaurant, the TriBeCa Grill.
The package was removed about 6:30 a.m. and taken to the Police Department’s range in the Bronx. It was later driven to the F.B.I. lab in Quantico, Va., along with the device found at CNN and those intercepted in Delaware.
Mayor Bill de Blasio of New York said on Thursday that an “eagle-eyed security employee” at TriBeCa Productions had noticed similarities between the package the company received and photos of envelopes that were discovered on Wednesday.
“There is somebody, by definition, who is a serial bomber, yes, and a terrorist,” Mr. de Blasio said in an appearance on CNN, whose New York office also received an explosive device on Wednesday.
In anticipation of additional packages being found on Thursday, the New York Police Department deployed additional officers outside news media companies and elected officials’ offices, Mr. de Blasio said.
Tension continued to run high throughout the day. Just after 7:30 p.m., some people inside the Time Warner Center shops were asked to leave as the police investigated a pair of unattended packages. A law enforcement official said it appeared to be a “routine suspicious package” call unrelated to the pipe bombs. The building, which also houses CNN’s New York offices, was not evacuated.
The first bomb was found on Monday at the home of George Soros, the billionaire advocate of liberal causes, in Westchester County, north of New York City. In recent days, some on the right have falsely speculated that he funded the caravan of migrants moving north from Honduras.
On Wednesday, several new bombs were discovered, one after the other. First, there was word that the Secret Service had intercepted packages addressed to Mrs. Clinton and Mr. Obama. Then a package addressed to John O. Brennan, a former C.I.A. director, was found in the offices of CNN in Midtown Manhattan.
(NYT) The internet giant paid Mr. Rubin $90 million and praised him, while keeping silent about a misconduct claim.
SAN FRANCISCO — Google gave Andy Rubin, the creator of Android mobile software, a hero’s farewell when he left the company in October 2014.
“I want to wish Andy all the best with what’s next,” Larry Page, Google’s chief executive then, said in a public statement. “With Android he created something truly remarkable — with a billion-plus happy users.”
What Google did not make public was that an employee had accused Mr. Rubin of sexual misconduct. The woman, with whom Mr. Rubin had been having an extramarital relationship, said he coerced her into performing oral sex in a hotel room in 2013, according to two company executives with knowledge of the episode. Google investigated and concluded her claim was credible, said the people, who spoke on the condition that they not be named, citing confidentiality agreements. Mr. Rubin was notified, they said, and Mr. Page asked for his resignation.
Google could have fired Mr. Rubin and paid him little to nothing on the way out. Instead, the company handed him a $90 million exit package, paid in installments of about $2 million a month for four years, said two people with knowledge of the terms. The last payment is scheduled for next month.
Mr. Rubin was one of three executives that Google protected over the past decade after they were accused of sexual misconduct. In two instances, it ousted senior executives, but softened the blow by paying them millions of dollars as they departed, even though it had no legal obligation to do so. In a third, the executive remained in a highly compensated post at the company. Each time Google stayed silent about the accusations against the men.
The New York Times obtained corporate and court documents and spoke to more than three dozen current and former Google executives and employees about the episodes, including some people directly involved in handling them. Most asked to remain anonymous because they were bound by confidentiality agreements or feared retribution for speaking out.
The transgressions varied in severity. Mr. Rubin’s case stood out for how much Google paid him and its silence on the circumstances of his departure. After Mr. Rubin left, the company invested millions of dollars in his next venture.
Sam Singer, a spokesman for Mr. Rubin, disputed that the technologist had been told of any misconduct at Google and said he left the company of his own accord.
“The New York Times story contains numerous inaccuracies about my employment at Google and wild exaggerations about my compensation,” Mr. Rubin said in a statement after the publication of this article. “Specifically, I never coerced a woman to have sex in a hotel room. These false allegations are part of a smear campaign by my ex-wife to disparage me during a divorce and custody battle.”
Mr. Rubin’s exit from Google after an inappropriate relationship was previously reported, but the nature of the accusation and the financial terms have not been disclosed.
In settling on terms favorable to two of the men, Google protected its own interests. The company avoided messy and costly legal fights, and kept them from working for rivals as part of the separation agreements.
When asked about Mr. Rubin and the other cases, Eileen Naughton, Google’s vice president for people operations, said in a statement that the company takes harassment seriously and reviews every complaint.
“We investigate and take action, including termination,” she said. “In recent years, we’ve taken a particularly hard line on inappropriate conduct by people in positions of authority. We’re working hard to keep improving how we handle this type of behavior.”
After publication of this article, Sundar Pichai, Google’s chief executive, and Ms. Naughton wrote in an email to employees that the company had fired 48 people for sexual harassment over the last two years and that none of them received an exit package.
“We are committed to ensuring that Google is a workplace where you can feel safe to do your best work, and where there are serious consequences for anyone who behaves inappropriately,” Mr. Pichai and Ms. Naughton wrote.
Some within Google said that was not enough.
“When Google covers up harassment and passes the trash, it contributes to an environment where people don’t feel safe reporting misconduct,” said Liz Fong-Jones, a Google engineer for more than a decade and an activist on workplace issues. “They suspect that nothing will happen or, worse, that the men will be paid and the women will be pushed aside.”
‘I Was the Liability’
Google, founded in 1998 by Mr. Page and Sergey Brin when they were Stanford University graduate students, fostered a permissive workplace culture from the start.
In Silicon Valley, it is widely known that Mr. Page had dated Marissa Mayer, one of the company’s first engineers who later became chief executive of Yahoo. (Both were single.) Eric Schmidt, Google’s former chief executive, once retained a mistress to work as a company consultant, according to four people with knowledge of the relationship. And Mr. Brin, who along with Mr. Page owns the majority of voting shares in Google’s parent, Alphabet, had a consensual extramarital affair with an employee in 2014, said three employees with knowledge of the relationship.
David C. Drummond, who joined as general counsel in 2002, had an extramarital relationship with Jennifer Blakely, a senior contract manager in the legal department who reported to one of his deputies, she and other Google employees said. They began dating in 2004, discussed having children and had a son in 2007, after which Mr. Drummond disclosed their relationship to the company, she said.
Google then took action. Ms. Blakely said Stacy Sullivan, then the head of human resources and now chief culture officer, told her that Google discouraged managers from having relationships with subordinates.
“One of us would have to leave the legal department,” Ms. Blakely said. “It was clear it would not be David.”
Since the affair, Mr. Drummond’s career has flourished. He is now Alphabet’s chief legal officer and chairman of CapitalG, Google’s venture capital fund. He has reaped about $190 million from stock options and awards since 2011 and could make more than $200 million on other options and equity awards, according to company filings.
Ms. Blakely was transferred to sales in 2007 and left Google a year later. The company asked her to sign paperwork saying she had departed voluntarily. She said she “signed waivers, releases and whatever else they wanted.”
In late 2008, she said, Mr. Drummond left her. They later fought a custody battle for their son, she said, which she won.
How Mr. Drummond, 55, was treated “amplifies the message that for a select few, there are no consequences,” said Ms. Blakely, 54. “Google felt like I was the liability.”
Google’s sexual harassment policy states that violators may be terminated — but it was flexible in how it enforced the rules.
In 2013, Richard DeVaul, a director at Google X, the company’s research and development arm, interviewed Star Simpson, a hardware engineer. During the job interview, she said he told her that he and his wife were “polyamorous,” a word often used to describe an open marriage. She said he invited her to Burning Man, an annual festival in the Nevada desert, the following week.
Ms. Simpson went with her mother and said she thought it was an opportunity to talk to Mr. DeVaul about the job. She said she brought conservative clothes suitable for a professional meeting.
At Mr. DeVaul’s encampment, Ms. Simpson said, he asked her to remove her shirt and offered a back rub. She said she refused. When he insisted, she said she relented to a neck rub.
“I didn’t have enough spine or backbone to shut that down as a 24-year-old,” said Ms. Simpson, now 30.
A few weeks later, Google told her she did not get the job, without explaining why.
She waited two years to report the episode to Google after she said she wrestled with talking about it. A human resources official later told her that her account was “more likely than not” true and that “appropriate action” was taken. She said the official asked her to stay quiet about what had happened, which she did — until Mr. DeVaul’s public profile began rising in articles in The New York Times and The Atlantic.
“We would never tell a complainant to stay quiet,” Chelsea Bailey, the head of human resources at X, said in a statement, adding that officials investigated and “took appropriate corrective action.” She declined to say what that was, citing employee confidentiality.
In a statement, Mr. DeVaul apologized for an “error of judgment.” He said X decided not to hire Ms. Simpson before she went to Burning Man and that he did not realize she had not been informed.
In another harassment case, Google paid Amit Singhal, a senior vice president who headed search, millions of dollars on the way out.
In 2015, an employee said Mr. Singhal groped her at a boozy off-site event attended by dozens of colleagues, said three people who were briefed on the incident. Google investigated and found that Mr. Singhal was inebriated and there were no witnesses, they said.
Google found her claim credible, they said. The company did not fire Mr. Singhal, but accepted his resignation and negotiated an exit package that paid him millions and prevented him from working for a competitor, said the people.
In a blog post in February 2016, Mr. Singhal said he wanted to focus more on philanthropy and his family.
Uber and Mr. Singhal declined to comment. In a statement last year, he said that “harassment is unacceptable in any setting” and that he had not engaged in any such behavior.
The $350 Million Man
Mr. Rubin joined Google in 2005 when it acquired his start-up, Android, for $50 million. Over the next few years, he helped build Android — the software now used in 80 percent of the world’s smartphones — into a huge success.
Search had positioned Google as a dominant player on desktop computers, but Android extended its reach and put Google’s maps, email and web browser on devices that people carry every day. The ads and mobile apps running on Android also generated tens of billions of dollars in profit.
That success gave Mr. Rubin more latitude than most Google executives, said four people who worked with him.
Mr. Rubin often berated subordinates as stupid or incompetent, they said. Google did little to curb that behavior. It took action only when security staff found bondage sex videos on Mr. Rubin’s work computer, said three former and current Google executives briefed on the incident. That year, the company docked his bonus, they said.
Mr. Singer, the spokesman for Mr. Rubin, said the executive “is known to be transparent and forthcoming with his feedback.” He said Mr. Rubin never called anyone incompetent.
Mr. Rubin, 55, who met his wife at Google, also dated other women at the company while married, said four people who worked with him. In 2011, he had a consensual relationship with a woman on the Android team who did not report to him, they said. They said Google’s human resources department was not informed, despite rules requiring disclosure when managers date someone who directly or indirectly reports to them.
In a civil suit filed this month by Mr. Rubin’s ex-wife, Rie Rubin, she claimed he had multiple “ownership relationships” with other women during their marriage, paying hundreds of thousands of dollars to them. The couple were divorced in August.
The suit included a screenshot of an August 2015 email Mr. Rubin sent to one woman. “You will be happy being taken care of,” he wrote. “Being owned is kinda like you are my property, and I can loan you to other people.”
In 2011, Mr. Rubin was appointed a Google senior vice president and started receiving about $20 million a year in salary, bonus and stock-based compensation, said two former Google executives with knowledge of the terms. In 2012, Google also lent Mr. Rubin $14 million to buy a beach estate in Japan. The loan was offered at below 1 percent interest, said people briefed on the transaction.
When Google combined management of Android with its Chrome division in 2013, Mr. Rubin lost a power struggle to Mr. Pichai, Google’s current chief executive.
He remained highly valued. That year, Google offered Mr. Rubin a one-time bonus of $40 million in stock and an additional $72 million of stock over the next two years, said two people with knowledge of the terms.
Around that time, Mr. Rubin was casually seeing another woman he knew from Android, according to two company executives briefed on the relationship. The two had started dating in 2012 when he was still leading the division, these people said.
By 2013, she had cooled on him and wanted to break things off but worried it would affect her career, said the people. That March, she agreed to meet him at a hotel, where she said he pressured her into oral sex, they said. The incident ended the relationship.
The woman waited until 2014 before filing a complaint to Google’s human resources department and telling officials about the relationship, the people said. Google began an investigation.
In September 2014, a few weeks into the inquiry, Google’s board awarded Mr. Rubin a stock grant worth $150 million, to be paid out over several years, said three people briefed on the decision. It was an unusually generous sum, even by Google’s standards.
Mr. Page typically recommends how much senior executives are paid, said three former Google executives. Over the years, Mr. Page had told people he felt Mr. Rubin was never properly compensated for his contribution to Android, two people who spoke to him said.
The $150 million stock grant to Mr. Rubin was approved by the Google board’s leadership development and compensation committee — composed of Paul Otellini, Intel’s former chief executive who died in 2017, and two of Google’s earliest investors, John Doerr of the venture capital firm Kleiner Perkins and Ram Shriram of the venture firm Sherpalo Ventures.
It is unclear if Mr. Page or the board knew of the investigation into the harassment complaint when Google approved the $150 million grant for Mr. Rubin. Mr. Page, 45, did not respond to a request for a comment; Mr. Doerr and Mr. Shriram declined to comment.
Google’s inquiry ultimately found the complaint against Mr. Rubin credible, said the two company executives familiar with the incident. Mr. Rubin denied the accusation, but it became clear that — at the very least — the relationship was inappropriate, they said. Mr. Page decided Mr. Rubin should leave, they said.
The $150 million stock grant gave Mr. Rubin an enormous bargaining chip when he started negotiating his exit package about a month later. That is because an executive’s stock compensation — and how much of it they would leave behind — is often taken into consideration during settlement talks.
When Google fires lower-level employees, it typically marches them out immediately and pays little, if any, severance. But for senior executives, Google weighs other factors, said former executives. A wrongful termination lawsuit could mean unwanted media attention for Google and the victims of a misconduct case, with a loss resulting in significant damages.
In the end, Google paid Mr. Rubin $90 million, said two people with knowledge of the terms. The package was structured so that he received $2.5 million a month for the first two years and $1.25 million a month for the following two years.
A provision in the separation agreement precluded Mr. Rubin from working for rivals or disparaging Google publicly, they said. Google also delayed repayment of the $14 million loan.
The company then went out of its way to make Mr. Rubin’s departureseem amicable, including Mr. Page’s public statement of gratitude.
Afterward, Google invested in Playground Global, a venture firm Mr. Rubin started six months after leaving the company. Playground has raised $800 million. He also founded Essential, a maker of Android smartphones.
Last November, after the technology news site The Information reported that Google had investigated Mr. Rubin for an inappropriate relationship, he took a leave of absence from Essential. He has since returned to run it and is busy with speaking engagements and investments.
Mr. Rubin’s wealth, fueled by Google, has increased by 35 times in less than a decade. According to his ex-wife’s suit, his net worth is now about $350 million, up from $10 million in 2009.
Officials told the Times that Beijing’s goal is to use the information they’ve gathered to help prevent a full-blown trade war between the U.S. and China.
The Times reported that through China’s espionage, the country has compiled a list of the president’s most important confidantes, which reportedly includes Blackstone CEO Steve Schwarzman and casino magnate Steve Wynn. Beijing plans to deliver its views on trade to Trump through these trusted contacts.
One official told the Times that China wants Trump to meet with President Xi Jinping as often as possible, in hopes that a strong personal relationship between the leaders will end the trade tensions between their countries.
The Times reported that Trump has three iPhones: two that have had their capabilities limited by the National Security Agency, and one that has not been altered at all. The newspaper reported that despite warnings from aides of the security vulnerabilities, the president refuses to give up his iPhones.
Apple declined to comment to the Times on the president’s iPhones.
(NYT) The former Fed chairman, whose memoir will be published this month, had a feisty take on the state of politics and government during an interview.
Paul Volcker, wearing a blue sweatsuit and black dress socks, stretched out on a recliner in the den of his Upper East Side apartment on a Sunday afternoon. His lanky 6-foot-7 frame extended beyond the end of the chair’s leg rest. He added an ottoman to rest his feet.
“I’m not good,” said Mr. Volcker, 91, the former Federal Reserve chairman, who came to prominence after he used shockingly high interest rates to help end the runaway inflation of the late 1970s and early ’80s. Long one of finance’s wise men, he has been sick for several months.
But he would rather not talk about himself. Instead, Mr. Volcker wants to talk about the country, the economy and the government. And if he had seemed lethargic when I arrived, he turned lively in his laments: “We’re in a hell of a mess in every direction,” he said.
Hundreds of books surrounded Mr. Volcker — filling shelves and piled high on virtually every flat surface — as did pink pages of The Financial Times, folded into origami. “Respect for government, respect for the Supreme Court, respect for the president, it’s all gone,” he said. “Even respect for the Federal Reserve.
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“And it’s really bad. At least the military still has all the respect. But I don’t know, how can you run a democracy when nobody believes in the leadership of the country?”
Before Mr. Volcker fell ill, he finished his memoir, “Keeping at It: The Quest for Sound Money and Good Government.” The book was supposed to be published in late November, but given Mr. Volcker’s health, its publisher, PublicAffairs, a unit of Hachette, moved its release up to Oct. 30.
“I had no intention of writing a book, but there was something that kind of was irritating me,” he said. “I’m really worried about this governance thing.”
The book, which Mr. Volcker wrote with Christine Harper, editor in chief of Bloomberg Markets, is a telling memoir about a man who not only redefined the role of Fed chairman but, after the financial crisis, conceived of a namesake rule that eliminated some of the most blatant risk-taking by Wall Street banks. The Volcker Rule, which was part of the Dodd-Frank regulatory legislation, is being chipped away at by Republicans, which doesn’t sit well with him.
“There is no force on earth that can stand up effectively, year after year, against the thousands of individuals and hundreds of millions of dollars in the Washington swamp aimed at influencing the legislative and electoral process,” he wrote in the book.
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The memoir is at times a dishy tale of Mr. Volcker’s years in Washington. For example, while President Trump has complained in recent months about the Fed’s plan to raise interest rates, he isn’t the first to try to influence the independent Federal Reserve. Mr. Volcker recounts being summoned to meet with President Ronald Reagan and his chief of staff, James Baker, in the president’s library next to the Oval Office in 1984.
Reagan “didn’t say a word,” Mr. Volcker wrote. “Instead Baker delivered a message: ‘The president is ordering you not to raise interest rates before the election.’” Mr. Volcker wasn’t planning to raise rates at the time.
“I was stunned,” he wrote. “I later surmised that the library location had been chosen because, unlike the Oval Office, it probably lacked a taping system.”
The book is not limited to tales of the past, however. It addresses current policy, like the 2 percent inflation target that has become the goal of the Federal Reserve.
“I puzzle at the rationale,” he wrote. “A 2 percent target, or limit, was not in my textbook years ago. I know of no theoretical justification.”
With a laugh, he told me that he believed the policy was driven by fears of deflation. “And we haven’t had any deflation in this country for 90 years!”
But there is something more worrisome affecting policy than fear, he told me. Money.
Over the din of traffic outside an open window, Mr. Volcker hoarsely sounded an alarm on the power it has to shape our culture and our politics.
“The central issue is we’re developing into a plutocracy,” he told me. “We’ve got an enormous number of enormously rich people that have convinced themselves that they’re rich because they’re smart and constructive. And they don’t like government, and they don’t like to pay taxes.”
Washington, when he arrived, “was a city filled with bureaucrats,” he said. “It didn’t make them bad.” At the time, civil servants — like his father, the township manager of Teaneck, N.J. — were respected. “I grew up in a world in which good government was a good term,” he said.
But things have changed. Today, he said, Washington is overrun by lobbyists and think tanks. Mr. Volcker, who started a nonprofit to improve education for public service, contends that our educational system has been perverted by money.
Schools like the John F. Kennedy School of Government at Harvard and the Woodrow Wilson School of Public and International Affairs at Princeton, he said, have failed to educate a new generation of civil servants. He said they no longer taught governing but policy — a shift that he contended allowed them to hold forums and discussions with generals and under secretaries.
“Rich guys,” he said, “like to go.” He called it “hobnobbing wholesale.”
“They can argue war and peace and poverty and everything else,” he said. “But when you go to a school of public policy, you’re not learning how to run the goddamn government. You’re learning how to debate political issues.”
Unlike President Barack Obama, who invited Mr. Volcker to consult on economic and regulatory policy — and asked him if he would be willing to be Treasury secretary, he said — this White House hasn’t called him. Even so, he has met Mr. Trump twice, both times before he took office.
The first meeting was after Mr. Volcker left the Federal Reserve in 1987. “I was walking down the street, somebody calls out: ‘Hey, Paul! Hey, Paul!’ He comes running across the street and says, ‘Hi, I’m Donald Trump.’”
The other was an unsuccessful attempt by Mr. Volcker to get Mr. Trump to use “The Apprentice” to raise money for a charitable organization. “We had a very nice lunch, and he said, ‘Interesting idea,’ but put me off otherwise,” Mr. Volcker said.
Mr. Volcker is no great fan of the president, but he acknowledged that Mr. Trump had cannily recognized the economic worries of blue-collar workers. Mr. Trump “seized upon some issues that the elite had ignored,” he said. “I don’t think there’s any question about that, in kind of an erratic way, but there it is.”
He wondered how many lectures and presentations he had sat through with economists “telling us open markets are wonderful, everybody benefits from open markets.”
Eventually, Mr. Volcker said, someone in those lectures would always ask, “What about that poor manufacturer in my town?” But that concern was dismissed too easily, with talk of worker retraining or some other solution far easier said than done.
Today, Mr. Volcker is already starting to worry about the next financial crisis. Asked about the stability of the banks, he said, “They’re in a stronger position than they were, but the honest answer is I don’t know how much they’re manipulating.”
That, he said, is the real challenge facing economic policymakers. “Everybody talks about monetary policy,” he said, “but the lesson of all this is we need better, stronger supervisory powers.”
Even as our conversation came to an end, Mr. Volcker looked as if he could keep talking for hours. I told him that, rather than look sick or depressed about the state of the world, he appeared energized. Or, I told him, that was at least the impression he left.
(Newsweek) As President Donald Trump appeared to back away from his claim that people of Middle Eastern descent had joined a caravan of Central American asylum seekers making their way toward the U.S.-Mexico border on Tuesday, the Department of Homeland Security doubled down, asserting that citizens from the Middle East were”traveling through Mexico toward the U.S.”
Homeland Security made the assertion shortly after Trump acknowledged that there was “no proof” that anyone from the Middle East had joined the 7,000-person strong caravan currently making its way through Mexico, after he claimed earlier in the week that “Middle Easterners” were likely to be found among those traveling with the caravan.
“You’re going to find MS-13, you’re going to find Middle Easterners, you’re going to find everything. And guess what? We’re not allowing them in our country,” the president told ABC’s Jonathan Karl on Monday.
Pressed on his comments the next day, Trump admitted that there was “no proof” to support his claims, though he maintained that “there could very well be” people of Middle Eastern descent among those traveling with the caravan.
Honduran migrants who are part of a caravan heading to the U.S. raise Honduran and Guatemalan national flags in Quezaltepeque, Chiquimula, Guatemala on October 22. Despite President Donald Trump backing off on the claim, a Department of Homeland Security spokesman said that citizens of countries outside Central America had joined the caravan.ORLANDO ESTRADA/AFP/GETTY
Not long after the president’s admission, Homeland Security spokesperson Tyler Houlton tweeted that there were indeed “citizens of countries outside Central America, including countries in the Middle East…currently traveling through Mexico toward the U.S.”
“@DHSgov can confirm that there are individuals within the caravan who are gang members or have significant criminal histories,” Houlton wrote, before adding in a second tweet: “Citizens of countries outside Central America, including countries in the Middle East, Africa, South Asia and elsewhere are currently traveling through Mexico toward the U.S.”
Houlton said in a third tweet: “Stopping the caravan is not just about national security or preventing crime, it is also about national sovereignty and the rule of law. Those who seek to come to America must do so the right and legal way.”
Tyler Q. Houlton
.@DHSgov can confirm that there are individuals within the caravan who are gang members or have significant criminal histories.
Tyler Q. Houlton
Citizens of countries outside Central America, including countries in the Middle East, Africa, South Asia, and elsewhere are currently traveling through Mexico toward the U.S.
While Houlton appeared to imply that people from the Middle East, Africa and South Asia were traveling with the caravan, which began the arduous journey to the U.S. in San Pedro Sula, Honduras, on October 13, he did not explicitly say as much.
Therefore, it is unclear whether the Homeland Security has found evidence that people from countries in the Middle East, Africa and South Asia “and elsewhere” are traveling with the caravan or traveling separately “through Mexico toward the U.S.”
Homeland Security has not immediately responded to a request for comment from Newsweek seeking clarification.
Honduran migrants take part in a new caravan heading to the U.S. with Honduran and Guatemalan national flags in Quezaltepeque, Chiquimula, Guatemala on October 22, 2018.ORLANDO ESTRADA/AFP/GETTY
The majority of people traveling with the caravan come from Honduras, Guatemala and El Salvador, with many seeking to escape violence and economic and political instability in their home countries.
As the caravan made its way into Mexico, continuing its journey toward the U.S. border earlier this week, Trump vowed to “begin cutting off” or “substantially reducing” U.S. foreign aid to all three Central American countries, arguing that they had not done enough to stop people “from leaving their country and coming illegally to the U.S.”
The president has also railed against the Mexican government over its alleged failure to stop the caravan from making progress in its bid to reach the U.S.
Mexico had maintained that it would allow anyone with appropriate documentation, including a visa, to enter and move freely through the country.
The North American nation said it would also be working with the United Nations’ refugee agency (UNHCR), to process anyone wishing to make an asylum request within the country.
“In any situation like this, it is essential that people have the chance to request asylum and have their international protection needs properly assessed before any decision on return/deportation is made,” the UNHCR said.