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

Has Trump Gone Over The Edge On Negotiating With Canada?

Has Trump Gone Over The Edge On Negotiating With Canada?

He may well have.  Facing the  deadline for submitting his deal with Mexico to Congress on Friday, he did so.  However, he did so without Canada signed on, the apparently intense negotiations in Washington between Canadian Foreign Minister, Chrystia Freeland and US Trade Representative, Robert Lighthizer having failed to come to an agreement.  With both the Mexican leaders and major Republican senators saying they will not approve without Canada on board, this makes for a very dicey situation.  There is still time: the ultimate deadline for having a fully detailed agreement to the Senate in time for it to approve it prior to the change of Mexican government on Dec. 1 is Sept. 29. So if US and Canadian leaders can come to an agreement by then in full details, it might still fly.

Needless to say, it looks like the giant fly in the ointment is Donald Trump.  Lighthizer is hardline, but experienced in trade negotiations, and Freeland is highly competent by all accounts. There is even an obvious deal to be made if each side is willing to give.  The two hardest issues seem to involve the dairy industry and the lumber industry.  Dairy has always been outside of NAFTA because it is so difficult, and Trump has made demands on the Canadians to loosen and let in more US dairy products.  OTOH, lumber involves the dispute  resolution mechanism, which is easy to  invoke, and the US regularly does so to block Canadian imports on grounds of alleged dumping.  There have been rumbles of possible give on each side, Canadians give some on dairy and US gives some on lumber.  It is just obvious (there are also issues of patents and the steel and aluminum tariffs, but these seem minor compared to the politically fraught dairy and lumber issues).

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Mohammed Bin Salman Of Saudi Arabia In Trouble?

Mohammed Bin Salman Of Saudi Arabia In Trouble?

This is what Juan Cole reports today from several sources.  Supposedly, as I reported here earlier, even though it was supposedly denied, the Saudi ARAMCO IPO deal is off.  The new reports have it that the final decision on this came from King Salman of Saudi Arabia, the father of the power hungry Crown Prince, Mohammed bin Salman (MbS), who has been the main advocate of the IPO as part of his Vision 2030 plan.  The king has up until now pretty much let MbS have his way on many matters, from economics, to foreign policy, to social policies (some of this good, e.g. letting women drive and putting the religious police in a book), and to dissent, including jailing lots of leading Saudi figures as well as womens’ rights advocates, including havint a 29 years female Shia activist beheaded.

In terms of the IPO, supposedly Salman was unhappy about the required transparency on financial and oil reserves issues. There are rumbles that he is unhappy about some of the other matters, with indeed MbS making major messes of a number of things, such as the disastrous war in Yemen and the failed embargo against Qatar, still stupidly in place.  He is also probably not happy about some of those arrests last year, although much of this is murky.  However, the most important bit in these rumors is that King Salman iis reportedly so unhappy that he is contemplating replacing MbS with somebody else as Crown Prince.  Indeed, MbS is in trouble.

Now probably this last part is just wishful thinking by some in Saudi Arabia, leaking such rumors. Very likely the family link will dominate, unless Salman were to replace MbS with one of his full brothers.  But it is believable that MbS may be facing some reining in, especially if indeed Salman was responsible for the ultimate cancellation of the ARAMCO IPO deal.

OTOH, given the nasty history of MbS, I admit to being a bit concerned about Salman’s future, with, for example, MbS’s predecessor as Crown Prince, Mohammed bin Nayef, finding himself arrested and held in his own palace until he agreed to step aside as CP.  I note that Salman is old and reported not to be in the best of health.  It may well be that we shall learn soon that his health has worsened, and that he has somehow suddenly decided to abdicate in favor of his Crown Prince…

Barkley Rosser

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Marrying NAFTA and The TPP: The US-Mexico “Trade Agreement”

Marrying NAFTA and The TPP: The US-Mexico “Trade Agreement”

I really am not sure where to begin with this latest farce, Trump’s announcement yesterday of a supposed US-Mexico Free Trade Agreement.  Of course there was the farce of him trying to make the announcement with a live phone call between him and outgoing Mexican President Pena-Nieto (to be replaced on Dec. 1 by leftist populist Obrador), which took awhile to get going.  There is the problem that some details appear to be unresolved, but most importantly that Pena-Nieto insisted four times that Canada needed to be part of the deal for it to be accepted in Mexico, including with his last words to Trump, while Trump seems fine with just having a tow-nation deal leaving Canada in the dust, or perhaps hoping that Canada will simply be forced to sign onto this deal as is, which it might.  But for Congress to approve it prior to Obrador coing into office, given Congress’s 90-day waiting period on such legislation, Trump has four (now only three) days to get Canada to sign on.  Prospects for that and Mexico also passing it before Dec. 1 do not look too good, maybe not much better than the prospects of actually getting North Korea to denuclearize.

So what is in this deal?  Most of the publicity has been about its automobile section, which some in the US hope will increase automobile production in the US, although that is not definitely the case.  The two main parts are to increase the  portion of parts made in North America from 62.5% to 75% in order to avoid facing tariffs.  This apparently would affect Toyota, Nissan, and Mazda most severely, but hardly any other  non-North American producer.  Maybe some of those companies might shift some production to North America, maybe at least production of parts, but there is no reason to believe any such increase will go to the US rather than to Mexico, although probably some would.

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Are We Alone In The Galaxy (Or Maybe Even The Universe?)

Are We Alone In The Galaxy (Or Maybe Even The Universe?)

In 1938 Orson Welles put on a radio show in New York City that dramatized the famous novel by H.G. Wells, _The War of the Worlds_. This novel is about an invasion of Planet Earth by intelligent beings from Planet Mars, with this invasion just  barely being defeated.  Several movies have been made of this famous novel, probably the first to present this now long-running sc-fi theme of our planet being invaded by aliens from outer space.  However, whar was especially important about this particular radio performance 80 years ago is that many people turning on their radios and hearing ongoing reports of a Martian invasion of New Jersey is that many people believed it and a temporary panic ensued.  Lots of people thought it highly likely that Mars was inhabited by intelligent beings who were a threat to us.

How things change.  Now we have sent several vehicles to Mars, where not only are there not dangerously threatening intelligent beings, but we have yet to find any signs of even single-cell life, although the recent discovery of some actual water there may yet possess the possibility that some simple form of life is there, or perhaps was, although increasingly the search for probably only single-cell life to moons of Jupiter and Saturn, with no luck so far.  If there are intelligent space aliens, they are on planets in other star systems.  However, until recently, given over 100 billion stars in our Milky Way galaxy, various estimates of the probabilities involved had it as near certain there is life elsewhere in the galaxy, and also highly likely that there is intelligent life of some source, probably on multiple planets.  And we have indeed discovered “exo-planets” around many stars (I note that my brother-in-law, Michael Werner, has long been a major leader of the search for these exo-planets using the Spitzer infrared telescope).

These calculations suggesting a high probability of intelligent life elsewhere triggered the initiation of the Search for Extra-Terrestial Intelligence (SETI) about a half century ago, sending out various messages hoping to get a reply from somebody out there.  So far there have been no replies.  This has begun to shift views to the point that now we have flipped to the opposite view of that held in 1938: now we have commentators suggesting that the probability of life is much lower than previously thought, that we arose from a very curious and special set of circumstances, these so weird we may in fact be alone in the galaxy, and even possibly in the entire observable universe.

 

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Hannity as Goebbels

Hannity as Goebbels

Joseph Goebbels famously said that if you want to convince a populace of A Big Lie (fake news), then you do it by repeating it, over and over and over again.  For a long  time I have been keeping an eye on Hannity, reportedly nightly conversing with Trump after his show.  What struck me some time ago how repetitive the core pats of his introductory monologue are.  I have increasingly noticed that pro-Trump people seem to believe pretty much all of this super-repeated core Hannity-Trump lies. And I have seen no systematic or regular effort to offset this Goebbelsian Big Lie repetition.  So, here I am going to make a small attempt to point out some of the worst lies Hannity Big Lies about.

Almost all of it has to do with Hillary Clinton, a “whataboutism,” argument; Trump may have done some questionable things, but whatabout Hillary and her emails and so much more?  After all, at Trump rallies they still chant “Lock her up,” although reportedly in West VA a few days ago there was less enthusiasm and a lot of empty chairs.

A caveat is that this is not some super defense of Hillary.  One more or less accurate bit in the usual Hannity rant is that Hillary and the DNC treated Bernie Sanders badly and unfairly.  But I simply note for now that Bernie himself totally supported her, even as we know some people who voted for him voted for Trump. And, of course, she should have spent more time in Wisconsin and MIchigan rather than such effluvia as Arizona and (gag) Utah.  She was not on top of things, although in the case of the third surprise swing state, Pennsylvania, that was where she was on the last night of the campaign in Philadelphia, trying to get the vote out.  She knew that one was crucial, and she lost it.

So now we must deal with crucial issues.

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Saudi ARAMCO IPO Definitely Cancelled

Saudi ARAMCO IPO Definitely Cancelled

Reuters reports that the proposed IPO by Saudi ARAMCO, which would have been the world’s largest, has definitely been canceled.  I have posted previously posted about delays in the IPO and rumors it would be cancelled.  Now it has been.

The reports say that there were multiple factors.  There were problems with finding a venue for the IPO, with the last candidate being the exchange in Riyadh.  There were reports that what was originally planned to be a public offering had turned into a private one.  But even with this there were issues about transparency, especially regarding oil reserves.  At the heart of the problem in the end were unresolvable conflicts between the Saudi government and the  company Saudi ARAMCO, ironic given that the government owns the company supposedly.  The report did not specify which part of the Saudi government was involved, although one would assume the Ministry of Petroleum.  But in the end probably the crucial decisionmaker was the arrogant and incompetent Crown Prince, Mohammed bin Salman (MbS).

Barkley Rosser

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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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