Relevant and even prescient commentary on news, politics and the economy.

Is Aretha The Equal Of Michelangelo?

Is Aretha The Equal Of Michelangelo?

In the Washington Post of August 17, Chris Richards declared that the performance by Aretha Franklin of the title cut on her 1972 gospel-soul album, “Amazing Grace” “deserves to be compared to everything Michelangelo ever painted.”  Now  I am not prepared to go that far, but  when I learned she had died, it as this particular song by her on that album (which I have in vinyl from when it first came out) that I wanted to hear and played prior to seeing this over-thee-top remark by Richards.

Nevertheless, it is an incredible performance. She has been underappreciated for some time partly because she has been so widely imitated for so long. Her basic sound has become simply what most singers, especially female ones, do all the time, with even the cheesy pop Idol shows turning what has become a cliche into a joke.

So her great innovation was to introduce  into US pop music melisma, the making multiple notes out of a single syllable of text. This has become an overdone cliche.  But it was Aretha who moved this standard of gospel music with its African origins into pop music, with possibly only southern Indian Carnatic vocal music matching this tradition.

In any case, Aretha’s 1972 album version of  “Amazing Grace” is the ultimate expression of gospel Melisma, far beyond what anybody else has ever done, even if it does not quite match “everything Michelangelo painted.”

Barkley Rosser

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Kevin Hassett In Lie Lie Land

Kevin Hassett In Lie Lie Land

I feel sorry for Kevin Hassett.  Of course he made a complete fool of himself two decades ago with his book on Dow 36,000 (still some ways away) with James Glassman, but he has had a good amount of time to get over that embarrassment.  When he was appointed CEA Chair for Trump, he was of the few appointments Trump made that received praise, especially in the  area of economics.  Pretty much everybody else appointed was some combination of corrupt (a bunch of those), incompetent (see abysmal forecasting record of Lawrence Kudlow, NEC Chair), or just plain insane (see warmongering Peter Navarro).  A longtime economist at the AEI and a former adviser of earlier GOP presidential candidates, Hassett had a conservative but mostly pretty respectable record, as well as being known as a nice guy.  Even many people on the left said nice things about him at the time of his appointment.  Indeed, he was not obviously corrupt, incompetent, or insane, despite some mistakes here and there (see Dow 36,000in particular).

Anyway, after getting appointed and Trump becoming president, Hassett has largely disappeared.  Near  as I can tell, the main time he surfaces  was when the CEA put out the Economic Report of the President, the main ongoing official function of the CEA.  For decades the CEA was viewed as the main body providing economic policy advice to presidents, and often the CEA Chair  actually was the top individual economic adviser to the president, although who that is at any point in time has always ultimately been a matter of personalities.  But then for reasons that remain mysterious to me, Bill Clinton created this new body when he came in, the NEC. It  (and especially its Chair) was supposed to communicate to the media and Congress, it apparently being viewed that CEA Chairs were too abstract or in the clouds or whatever to engage in such communications.  But the question became which of these  would have the presidential ear, and more often than not these NEC Chairs have been closer to presidents than CEA Chairs, even though more often than not the case has been that the CEA Chairs have known more about economics than the NEC Chairs.  This is ceetainly the case now, with the incompetent Kudlow regularly identified as being Trump’s “top economic adviser,” while the much more competent Hassett has been largely invisible.

Before getting into more recent events, let me note that the Economic Report of the President Hassett and his CEA staff put out avoided making actually incorrect statements, at least that I am aware of. Of course data favorable to the administration was emphasized and arguably overly optimistic projections were made regarding the future impacts of policies, especially the tax cut.  But then this is normal CEA behavior in most administrations, putting as positive  spin on actual data and making optimistic, but not off-the-wall projections of policies.  So far so good, or at least not too bad.

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Real Wages Decline

Real Wages Decline

Trump and his allies have been loudly bragging about the second quarterly GDP growth rate of 4.1%.  It is quite possible that a growth rate of this sort may be maintained for another quarter or so, given the large fiscal stimulus put in place at the beginning of the year. How curious it is that that coincided with the peak of the US stock market, at least as measured by the Dow.

However, this is seriously overblown for the simplest of reasons: the rate of inflation is rising.  It has now gotten to rising at a 2.9% rate while nominal wages are rising at a 2.8%.  So real wages have declined by a 0.1% rate.  Real wages rose throughout nearly all of the Obama presidency, except for a couple of quarters.  But if one pays attention to Trump and his allies, one would have no idea of this development. Needless to say, as the price increases from the trade war kick in, this situation is  not likely to improve.

Barkley Rosser

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Trump’s Illegal Economic Sanctions Against Iran Start Up

Trump’s Illegal Economic Sanctions Against Iran Start Up

Today, President Trump’s promised abjuration of President Obama’s hard-negotiated nuclear deal with Iran,the JCPOA, jointly agreed with Russia, China,  UK, France, Germany, the EU, and the Security Council of the United Nations. All parties agree that Iran has held to the agreement, so Trump’s move is completely internationally illegal.  His move is supported by exactly four other nations on the planet, and only them: Israel, Saudi Arabia, UAE, and Bahrain, a group that contains about 0.5% of the world’s population.  Of course the percentage rises by a couple of percent when we add Trump supporters who applaud him keeping a campaign promise, even though most of them have no idea what this is really all about.

It is clear that Trump has mostly done this to undo something Obama did, although he also very much likes pleasing the leaders of three of those nations,who have managed to get his ear. But it is not even obvious that the undoing of this agreement will actually help these nations, even though they clearly think so. The least important of them, Bahrain, might get a slight gain given that it is a majority Shia nation ruled by an oppressive Sunni elite.  Maybe putting Iran under economic pressure will reduced Iranian support for restive Bahraini Shia. But then, maybe the Iranians will respond by increasing their support. Both the KSA and UAE view themselves as jousting with Iran in the Persian Gulf, although Iran has never invaded or militarily threatened either.  They were not in danger, so they will not  be better off.  of course, the Saudis blame Iran for the success of the Houthi rebels in Yemen, where the Saudis have been heavily bombing for three years, killing many civilians. But most serious sources say that the Iranians support for the Houthis has been minimal in material terms, if not nonexistent.  But given how low that is, even a worsened economic situation in Iran seems unlikely to make them halt that minimum aid, and mostly the Saudis are scapegoating the Iranians for their failure to defeat the Houthis.

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Is The World’s Largest Planned IPO Kaput?

Is The World’s Largest Planned IPO Kaput?

That would the long planned and widely advertised IPO to sell 5% Saudi-government-owned ARAMCO, estimated at being worth US $2 trillion, making the planned IPO being at about $100 billion, well ahead of any that has happened in the past, the largest being $25 billion by AliBaba. This has been a crucial part of Crown Prince Mohammed bin Salman (MbS) has had this as a central part of his Vision 2030 plan to privatize and diversify off oil the Saudi Arabian economy.  Most of the publicity about it over the last year or so has focused on which exchange would get all the fees (easily up to $1 billion, still real money), NewYork, London, Frankfurt, or maybe even Riyadh, for hosting this massive IPO.

Now in the last few days there are numerous reports floating around the internet declaring that at a minimum this IPO has been postponed, with quire a few now saying that the IPO is completely off, that the Saudis are now looking at a different approach, although exactly what that is or will be is very much up in the air. Sorry I have been unable to make the link,but this can easily googled, a story out today on this from Oil.Price.com by Kurt Cobb, “Was ARAMCO IPO Destined to  Fail?” which obviously suggests that it is kaput, although the article recognizes it may simply have been postponed. He provides links to some other reports engaging in various bits of speculation.  So what has happened?

Cobb provides two leading reasons why the IPO may be off.  One is that they may not need the revenue as much as they did a year ago  because of the roughly 50% increase in oil prices.  This makes sense.  Going along with that is that apparently they seriously do not want to be open to some external audit of their reserves and finances and so on.  This also also looks reasonable, with certainly all of the non-Saudi exchanges would make such a demand.  Maybe they might not have this demanded on the Riyadh exchange, but it is not a large exchange, and even there such a demand might be made.

Now it might be that their finances are fine and they do not need the money the IPO would have brought in. However, some of the sources Cobb links to report that the Saudis are contemplating various peculiar schemes for, well, raising money.  One of these involves a scheme to have ARAMCO take over a Saudi refining company and then issue a bunch of bonds on it.  This  all sounds a bit fantastic and not too likely, but the hard fact is that Saudi finances are highly opaque, which is a main reason they supposedly do not want to do the IPO, and there certainly have been a variety of efforts by them to reign in public spending.  Higher oil prices have certainly loosened some of this pressure, but exactly what is going on is far from clear. But at a minimum, it appears that the ARAMCO IPO has at least been postponed and may be totally kaput.

Barkley Rosser

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Germany Organizing Anti-Trump Coalition

Germany Organizing Anti-Trump Coalition

Mark Thoma th other day links to a story in Der Spiegel about a visit to Japan by new German Foreign Minister, Heike Maas.  He met with PM Shinzo Abe, and apparently the two of them agreed on the need for creating a network of like-minded nations that wish to maintain portions of the “post-war order,” especially in the areas of trade policy rules and climate change agreements.  All of this is in reaction to actions by Donald Trump in both areas.  While Maas is fairly new in his office, reportedly the planning for this started under his predecessor and in conjunction with discussions in Paris and Brussels.  Supposedly the last straw was Trump’s performance at the NATO summit.

Supposedly non-EU nations that may be joining this erstwhile coalition include beyond Japan: South Korea, South Africa, Australia, Argentina, Mexico, and Canada, with the foreign minister of the latter about to visit Berlin.  I guess we shall have to see how this works out.

Of course, much of the US media that should know better is still oohing and ahhing over the sjupposedly great deal cut between Trump and Juncker, which happened apparently on the same day as this meeting between Maas and Abe.  Today’s WSJ had a headline quoting Kudlow that US-EU negotiations on “agriculture” are about to start.  Almost certainly, to the extent this is true at all, this will involve only to get more specific about Juncker’s promise that the EU will increase soybean imports from the US (see pgl’s recent post here on all that).  It absolutely will not go beyond soybeans, even if somehow Trump thinks it will.

An earlier Der Spiegel article reported that Trump specifically requested of Juncker that the increase in ag imports go beyond soybeans, and Juncker firmly said no, soybeans only.  Anybody fantasizing that some big and general US-EU ag negotiation is about to start is seriously ignorant.  The Common Agricultural Policy (CAP) of the EU is both expensive and extremely politically and diplomatically complicated and controversial, having developed after many heated disputed among EU nations.  No way is Trump going to be allowed to just barge into that mess, where he might get sprayed with manure by French farmers (they did that once to an earlier French leader they were unhappy with).  The only reason soybeans are not such a big deal in the EU is that few countries grow them and they are just not that much used in European cuisines, for better or for worse.

Addendum:  I have just checked on EU soybean production.  No EU member is among the top 11 producers, and no EU member is among the 53 soybean oil producers.  Really. Some other European nations are in on the latter, including Norway and Switzerland, and Russia is 11th in soybean production. My bet on which one is the largest soybean producer in the EU is probably Italy, which is among the top three in soybean yields, with Turkey tops in that category.

Barkley Rosser

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Has Trump Won This Easy Trade War With Our Greatest Foe, The European Union?

Has Trump Won This Easy Trade War With Our Greatest Foe, The European Union?

So Sean Hannity would have us believe this evening after the press conference earlier today by Trump and EU Commissioner Jean-Claude Juncker.  According to Hannity they have signed a “deal” that will help US businesses, workers, and farmers. Yowzah!

As it is, what appears to have been agreed to (no signed deal) is that the US will not impose tariffs on autos imported from the EU as he had threatened to,  a proposal not supported by the US auto industry, the erstwhile beneficiary of such an action.  This means that the EU in turn will not impose a bunch of retaliatory tariffs against various American products.  So, the trade war sits where it is, with US tariffs in place on foreign steel and aluminum, with a set of retaliatory tariffs on a variety of US goods all still in place.  The war has not been won, merely that its momentum has slowed.

Ah, but then there was the dramatic announcement by Trump that there will be negotiations with the EU that will move to end all tariffs, subsidies, and other non-tariff trade barriers in all non-auto industrial sectors.  He then reeled off a set of other sectors in which negotiations would occur, although with not quite such a strong promise regarding what might result, with at the end of the list being soybeans, which Trump declared “is very important.”  Indeed.

What all this brings up is how does this relate to the long-running negotiations over trade and investment that went on between the US and the EU that Trump shut down last year?  This would be the Transatlantic Trade and Investment Plan (TTIP, or T-TIP for some parties).  This negotiation began under Obama in 2013.  Between July 2013 and October 2016 there were 15 weeklong rounds of negotiation regarding 28 topic areas, some of them those mentioned in today’s press conference by President Trump.  On none of those 28 was there a full agreement as of the final round of negotiations, although some were further along than others. It had been estimated that it might take until 2021 to complete this negotiation, and that made back when there still were negotiations.

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Meanwhile, Saudis Stuck On Oil Thanks To MbS Crackdown

Meanwhile, Saudis Stuck On Oil Thanks To MbS Crackdown

Saudi Crown Prince Mohammed bin Salman (MbS) has a plan to get Saudi Arabia off oil, with an immediate push to create 1.2 million private sector jobs by 2020.  However, as Juan Cole reports, his political crackdown last year in which over 300 people were tossed in jail  for various supposed crimes, with many of them now having frozen bank accounts and other restrictions placed on them, has somewhat scuttled this project badly.  700,000 foreign workers have left,and foreign direct investment has fallen from $7.42 billion in 2016 to $1.32 billion in 2017.  Oooops!  This is not the way to  wean the nation off oil.  Nobody wants to invest because they fear MbS will go on another rampage, seizing money and putting people in prison.

Of course, it is now clear that Trump and his son-in-law, Jared Kushner, encoureaged MbS in his coup against his cousin, former Crown Prince Mohammed bin Nayef.  They also supported his stupid war in Yemen and initially encouraged him in his campaign against Qatar, still ongoing although a total flop, although on that one Trump has figured out that the largest US air base in the Persian Gulf, al-Ubeid, is there, so he has lost his enthusiasm for this particular stupid project of MbS’s.  Unfortunately, there is little prospect this 32 year old leader will be removed from power any time soon.

Barkley Rosser

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Screenwriter Dies at Age 100, Of “Rashomon,” 1950, Greatest Film of Japan Ever.

Shinobu Hashmoto just died at age 100. His original screenplay for the greatest movie ever made in Japan was initially written while he was recovering in a Japanese hospital for war veterans.with him having tuberculosis. It is famous for showing how different observers of reality may have different views of that reality. The film’s director was Kurowsawa, who worked closely with Hashimoto on many of his films. Regarding the greatest of them all, “Rashomon,” even though now many see it as the ultimate inside view of Japanese culture, not to mention its far broader philosophical implications, when the film was being made,three assistant directors objected to the making of as they “did not understand” what the film was about. The following is an English translation of Kurowoawa’s reply to his assistant directors, as reported by Harrison Smith in his WaPo obit of Hashimoto:

“Human beings are unable to be honest with themselves about themselves. They cannot talk about themselves without embellishing. This script portrays such human beings — the kind who cannot survive without lies to make them feel they are better people than they really are . . . You say that you can’t understand this script at all, but that is because the human heart itself is impossible to understand. If you focus on the impossibility of truly understanding human psychology and read the script one more time, I think you will grasp the point of it.”

Barkley Rosser

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The Most Important Issue At Helsinki

The Most Important Issue At Helsinki

No, folks, it was not the much ballyhooed issue of Russian election interference in 2016, which got so much attention because of Trump’s bungled and false statements at the press conference. Oh yes, for those of us who are convinced he is a bought out stooge of Putin, this all was very delicious, but it was far from the most important issue dealt with in Helsinki.

As always, the most important issue between Russia and the US is nuclear weapons, not Ukraine or NATO expansion eastward or even Putin murdering innocent opponents. Of course we have this awful problem that we in the US do not know what was discussed for 2 hours privately between Trump and Putin in Helsinki. We are getting claims out of Moscow about supposed deals made, mostly about Syria in terms of specifics, but there remains zero knowledge among US authorities supposedly responsible for these matters of what the deals are or their details. As it is, most of the Syrian stuff looks like basically status quo arrangements made on the ground between US and Russian military, most of this dating back to the Obama era. We needed a summit for this?

Anyway, getting back to the most important issue, nuclear weapons, what we have been provided with is a vague and confused statement: that the INF and “new” START treaties “will be extended.” Well, that sounds nice, but it has some problems, especially with the INF part, although given that START was an Obama treaty with Medvedev, this is some solace given Trump’s propensity to simply end anything that Obama did, just because.

The Intermediate Nuclear Force (INF) was agreed to in Dec. 1987 by US President Ronald Reagan and Soviet President Gorbachev. It is a permanent treaty requiring no special extension. It bans missiles of intermediate range of especial danger to NATO nations in western Europe. Until 2014 it was followed by both sides. Then in 2014 Putin adopted the RS-26 missile that violates the treaty, although he has denied it does. But US SecDef Mattis thinks it does.

So, what Trump should have had as his top priority in Helsinki and before while visiting NATO allies, whom he dissed, including the EU as our “worst foe,” would have been to demand that Putin get rid of the RS-26 missile that violates the INF treaty. Instead we are told that he and Putin have agreed to “extend” it and the START. This is plain awful, but not surprising.

Barkley Rosser

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