Monday, July 25, 2016

Today's links

1--Debate Over U.S. Debt Changes Tone

So what accounts for the shifting political dynamic?
First, an expanding economy and the budget agreements of recent years have returned near-term deficits to their long-run averages. Second, health-care cost growth, a major driver of projected deficits, has slowed. Third, markets indicate borrowing costs may be lower for longer than anyone expected just a few years ago amid weaker global growth prospects.

The national debt as a share of gross domestic product has more than doubled since 2007, to around 75%, but net interest payments on the debt have actually declined. They fell to 1.25% of GDP last year, the lowest level since 1968....

some economists who say that stronger demand from abroad for U.S. Treasurys could keep interest rates lower for longer....

Mr. Summers has warned of “secular stagnation,” a chronic deficiency of investment that leaves the world stuck in a low-growth rut. But even if he’s wrong, aging workforces in Europe and Japan and other global developments that boost foreign demand for Treasurys mean the U.S. could remain “in a low-interest-rate, high-saving, challenge-of-absorbing-savings world for at least years to come,” he said. (Thus, policy is aimed at keeping capital flowing into US debt, which may explain why Japan and EU have gone "negative")

2--Failed monetary policy leads Japan to more of the same.

The nation’s exports fell 11.3% in May from a year earlier, the eighth consecutive decline. Another decline is expected for June....

FRIDAY: The Bank of Japan, under pressure from sinking inflation readings, is scheduled to announce its monetary policy decision. A majority of private economists surveyed expect some form of additional easing, whether it be through more asset purchases or a rate cut, or both. But BOJ officials have expressed a reluctance to take broad action, so they may announce more targeted policies.

3--What America's $1.35 trillion corporate cash hoard means for the economy (video)  (Don't mention corporate debt)

Corporations are looking for "clearer fiscal policy from Washington" (to boost earnings) before repatriating money from abroad for stock buybacks and dividends. That should push stocks higher.

4--Trump Surges In Latest CNN Poll, Takes 3 Point Lead Over Hillary

5--Liberal Democrats to Play Major Role at Convention’s Opening Night

Hillary Clinton’s campaign plans to open her nominating convention Monday with a full-throated overture to the Democratic Party’s liberal wing, hoping to mend rifts and put to rest grievances that have jeopardized party unity.

Two of the speakers on the convention’s opening night are U.S. senators whose fiery denunciations of corporate power and wealth have made them darlings of the left: Bernie Sanders of Vermont, Mrs. Clinton’s rival in the presidential primaries, and Elizabeth Warren of Massachusetts.

Another is Astrid Silva, the daughter of undocumented Mexican immigrants who has become a leading advocate for a path to citizenship for people living in the U.S. illegally. An overhaul of the nation’s immigration laws is a galvanizing issue for the party’s Hispanic constituents, some of whom were disappointed Mrs. Clinton didn’t choose a Hispanic as a running mate.

6--Cash-Strapped Governments Enjoy a Windfall in Low Borrowing Costs

“Market enthusiasm for the idea of ‘helicopter money’ is growing,”

The European Central Bank and Bank of Japan 8301 -0.42 % respectively buy €85 billion ($93.3 billion) and 9 trillion yen ($84.8 billion) worth of assets monthly, most of it government bonds.
Yields on government bonds have been pressured even further by investors seeking safe places to park their money. Yields fall as prices rise....

In the U.S., the drop in government borrowing costs have helped push the budget deficit down to less than 3% of GDP, where it was before the financial crisis, official figures show.
Some economists believe that the decline in yields suggests that the U.S. should consider taking on more debt to spend money on things that might boost economic growth, such as infrastructure or research and development...

The U.S. Federal Reserve was supposed to be an exception. At its inception in 1913, it was meant to provide financial stability at arm’s length from Washington. Still, supporting the market for government debt became its primary mission less than a year later, when World War I broke out.
“Central banks are always hybrid, typically more government bank in wartime and more bankers’ bank in peacetime,” said Perry Mehrling, money and banking professor at Columbia University.

Many investors and analysts now expect the Chinese walls between central banks and treasuries could be breached again. This month, speculation has mounted that the Bank of Japan was considering a policy called “helicopter money,” by which the central bank could directly finance government spending, despite BOJ Governor Haruhiko Kuroda ruling out this possibility.

“Market enthusiasm for the idea of ‘helicopter money’ is growing,” British bank Standard Chartered STAN 0.60 % said in a note to their clients Thursday. “We believe it is no longer a taboo policy option.”

7--Failed Turkish Coup’s Big-Power Impact

(Erdogan) fears, most of all, that America is intent on creating a Kurdish autonomous state, firstly in northern Syria – and a then to follow, possibly, a Kurdish state at the heart of the Middle East. There are deep suspicions across the Middle East about U.S. motives in this respect.

And Western plans to establish five military bases in Kurdish northern Syria are fuelling suspicions that America is engaged in more than a little “autonomy-building,” if not actual “state-building” there. It makes sense, therefore, for Turkey to find common ground with Moscow, Damascus, Baghdad and Tehran, to put a stop to any such American notions.

As Abdulkadir Selvi, a veteran journalist with the Turkish daily Hurriyet quoted by Foreign Policyconcluded just prior to the “coup”: “The territorial integrity of Syria is now more important for the Turkish state than the fate of the Assad regime.”...

Although Erdogan attributes the July 15 plot to Fethullah Gulen specifically, the Prime Minister and other officials are explicit in saying that it was also a NATO and CIA plot. They are pointing the finger fairly plainly toward Incirlik, America’s main regional NATO base housing at least 50 of America’s nuclear bombs.

The base has been sealed from the outside world, its staff and their families inside; it has had its electricity cut since July 15; it has been searched by the Turkish police looking for “coupists,” and had its Turkish commanding officer arrested (together with nine other senior officers). The inference of Incirlik is quite clear: Ankara is tying the NATO and American base to being the suspected epicenter of the July 15 plot....

Were Turkey fully to close the border between Turkey and Syria – as the Russians are insisting – then the effect would be strategic in terms of the conflict in Syria and also in terms of the balance of power in the Middle East.
For Saudi Arabia and Israel, a closing of the Turkish border to insurgents would be regarded as a major setback. Saudi policy in Syria would be crippled by the border closure (the southern crossing – in open desert – is highly vulnerable to air attack and Jordan already holds itself aloof from deeper engagement in Syria ).

8--Chechen leader blames US for bloodshed in Afghanistan & other Muslim nations 

Ramzan Kadyrov has accused the US authorities of instigating the civil war in Afghanistan and other Muslim countries, and called on senior politicians in these states to set aside their differences and unite in the face of what he sees as a common enemy.
During the 37 years of the war in Afghanistan peace has not become closer, not even by a single step. The United States used the excuse of fighting their own Bin Laden to unleash a decades-long civil war there. America and NATO could have solved the Afghan problem in just two years, but they need this eternal bloody cauldron in Afghanistan that takes the lives of many thousands of young Muslims,” the acting head of the Chechen Republic stated in comments on the latest terrorist attack in Kabul...

In the message, he emphasized that the United States and its NATO allies have artificially created the instability in the region. “Step by step they start wars in Muslim countries. Iraq, Syria, Libya, Egypt, Yemen are now facing the threat of losing their sovereignty,” Kadyrov wrote.
The Chechen leader also called on all Afghanistan’s leaders to set aside personal ambitions and ethnic and religious differences to unite in the face of the common threat. “Once Pashtu, Uzbeks, Tajiks, Sunnis, Shia all join their ranks, no one would ever be able to impose some external will on you,” he wrote....

9--The Kaine mutiny--Clinton's choice is a hat-tip to Wall Street, GOP rebels and the MIC

The selection of Kaine is also clearly aligned with Clinton’s desire to repudiate any association with the issues of social inequality that dominated her primary contest with Bernie Sanders in favor of appealing to sections of the Republican Party establishment who are opposed to the candidacy of Trump. ..

Kaine’s last budget proposal, which was eventually passed with amendments after he left office, called for a 26 percent cut to funding for public colleges and universities and $419 million in cuts from the state Medicaid budget. Kaine was rewarded for his services with an appointment by Obama to chair the Democratic National Committee, a post he held for two years before running for Senate in 2012.
Kaine is a law-and-order figure who supports the augmenting of the repressive powers of the police....

Clinton’s selection of Tim Kaine, the senator and former governor of Virginia, is a clear indication of the right-wing character of Clinton’s strategy in the US elections. Clinton is basing her campaign on an appeal to the military/intelligence apparatus and to disaffected sections of the Republican Party on the grounds that she, in contrast to the “unreliable” and “temperamentally unfit” Donald Trump, would make the most reliable commander-in-chief for American imperialism.

In Miami on Saturday, in their first joint appearance since the announcement the previous night, Clinton introduced Kaine as a “progressive.” To the extent that this nebulous term signifies support for social reforms, it bears no relation to the actual political record of Kaine, a tried and tested supporter of big business and the military, or of Clinton herself, a war criminal and millionaire representative of Wall Street....

Kaine has also repeatedly called for a congressional resolution officially authorizing war against ISIS in order to lend political legitimacy to a significant expansion of the US war for regime change in Syria. “The framers of the Constitution understood then, as now, that the decision of whether to place citizens in harm’s way in defense of this nation—to declare war—must be made by the people through their elected representatives,” Kaine declared in a statement last October, after the administration’s deployment of US forces to Syria. In other words, Kaine’s principal concern is that the war in Syria, a war crime which has turned half of the country into refugees, be provided a pseudo-democratic cover.
Kaine supports the Obama administration’s pivot to Asia. He released a statement backing the politically-motivated ruling by the Permanent Court of Arbitration against Chinese territorial claims in the South China Sea, a case brought by the Philippines at the prodding of the United States. Kaine is also a longstanding supporter of the Trans-Pacific Partnership trade agreement. While the TPP has been attacked by Bernie Sanders and others on protectionist grounds, its principal aim is to serve as the economic component of the pivot to Asia, creating a trading bloc in the Asia-Pacific region directed against China

8--Democratic convention opens: An agenda of militarism and war

... the central aim of political initiatives such as the New Deal and, under Lyndon Johnson, the Great Society, was to prevent the emergence of an independent political movement of the working class against capitalism and for socialism.

In the half-century that has passed since the apogee of the Great Society, the Democratic Party has systematically repudiated its association with liberal reformism. Hillary Clinton and former President Bill Clinton played a pivotal role in the 1990s in the severing of all residual links to the policies of the New Deal and Great Society. As leading members of the Democratic Leadership Council in the 1980s and 1990s, they helped realign the Democrats with the program of social counterrevolution of the Reagan administration....

For whom do Clinton and the Democratic Party really speak? Her campaign and the party she heads represent an alliance of the mainstream military/intelligence establishment and powerful sections of corporate America, especially in the financial industry. Behind all the empty rhetoric that will reverberate in and around Philadelphia’s Wells Fargo Center over the next four days, the central issues of concern to the ruling class have to do with the escalation of American imperialism’s global military agenda.
This is clearly spelled out in the lead editorial of Sunday’s New York Times, the newspaper that functions as the unofficial mouthpiece of the Clinton campaign and the Democratic Party. The editorial argues in favor of Clinton over her Republican opponent Donald Trump on the grounds that Trump’s foreign policy predilections are not in line with the strategic interests of US imperialism...

The program of global militarism at the heart of the Clinton campaign is combined with the ferocious promotion of racial and gender politics. The purpose of this ideological offensive is to broaden the base of support for imperialist war to include privileged sections of the upper-middle class, black and white, who are intent on carving out for themselves a bigger share of the economic spoils from the impoverishment of workers in the US and around the world.

Hence the relentless promotion of identity politics, and especially racial politics, by the media in general and, in particular, the New York Times. The Times hardly allows a day to go by without an article, editorial or op-ed piece declaring race to be the overriding issue in American society and depicting a nation seething with white racism. As always, racism and racial politics are weapons in the war of the ruling class to divide and demobilize the working class

9---Doubling Down on Wall Street: Hillary and Tim KaineWilliam K. Black

10--"Russia Is Reportedly Set To Release Clinton's Intercepted Emails" - Republished

"Reliable intelligence sources in the West have indicated that warnings had been received that the Russian Government could in the near future release the text of email messages intercepted from U.S. Presidential candidate Hillary Clinton’s private e-mail server from the time she was U.S. Secretary of State. The release would, the messaging indicated, prove that Secretary Clinton had, in fact, laid open U.S. secrets to foreign interception by putting highly-classified Government reports onto a private server in violation of U.S. law, and that, as suspected, the server had been targeted and hacked by foreign intelligence services.

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