Israeli Prime Minister Benjamin Netanyahu says he is ready to “do it alone” when it comes to the war in Gaza, as President Biden is accused of sending mixed messages on the US stance over the conflict.
Why Americans Do Not See A Strong Economy
The euphoria with the fourth quarter Gross Domestic Product (GDP) figure makes no sense. The headline champions say that real GDP increased at an annual rate of 3.3% in the fourth quarter of 2023, according to the Bureau of Economic Statistics (BES). An increase in real GDP of $1.5 trillion with an increase in public debt of more than $2 trillion is not a strong economy. It is a bloated economy. Furthermore, there is nothing positive in consumption when personal saving as a percentage of disposable personal income was only 3.7% in December and disposable personal income in 2017 has basically stagnated. American consumers are buying fewer things with their salary.
We cannot forget that one of the biggest drivers of the fourth quarter increase in real GDP was an abrupt reduction in the GDP deflator, which came at 1.5%, less than half the previous reading of 3.3%. This is a massive boost to real GDP from a reduction in the inflation estimate that most Americans have not seen at all.
Credit card debt is at an all-time high, and Americans are taking longer to pay their balances. The percentage of Americans who are in financial distress due to credit card debt has reached the same level as during the Great Recession, according to the Federal Reserve Bank of St. Louis report “Share of Americans in Financial Distress Reaches High Levels” (December 26, 2023, J. M. Sanchez, M. Mori).
The evidence of real economy stagnation is also clear in the Gross Domestic Income figure, which shows why U.S. citizens see the economy in recession when official real GDP tells us a different picture. The annual growth of real gross domestic income, with the latest figure, stands at -0.1%. The BES will not publish the fourth quarter until the next GDP revision, but if previous trends continue, the real GDI may continue to signal recession.
The same happens with inflation.
Market participants and the government may consider that the data on PCE inflation is hugely positive, but if we look at non-replaceable services, shelter in particular, these are rising above 5%.
The above-mentioned figures may seem like a dream to any eurozone citizen, where real GDP is in recession even with the massive Next Generation EU fund and all fiscal rules eliminated. However, U.S. citizens must understand that the path of its economy only leads to stagnation. If you follow European policies, you get European stagnation and elevated unemployment.
The lesson is that so-called “public stimulus” always means more debt, which in turn means more taxes, lower growth, weaker real wages for families, as well as a tougher environment for small businesses.
It is no surprise to read that six out of ten people polled by CBS News said they rated the economy as “fairly bad” or “very bad.” U.S. economic policy is increasingly detached from small businesses and families, those who feel the negative effects of inflation and subsequent rate cuts. While the size of government in the economy rises, aggregate figures seem further away from the reality that Americans live in. In Europe, it is the same: governments cheer aggregate GDP and annual inflation changes, while the average citizen sees the purchasing power of salaries decline rapidly and the ability to make ends meet more complicated. Small businesses feel the destruction of margins when inflation soars and suffer twice as much when rates rise because the entire burden of monetary policy expansion and contraction is imposed on the shoulders of the average worker and small entrepreneur.
It is important to remember that this dire situation for the majority comes after an unprecedented chain of monetary and fiscal stimulus plans imposed under the message of redistribution and helping the middle class, when reality shows that financial repression, massive government size, and bloated debt are destroying the middle class while aggregate figures tell them they should be grateful. Policies that have never worked are being implemented at an astonishing pace and with enormous levels of money printing and debt, and the government blames anyone except themselves for poor consumer and business confidence. This is not a strong economy. Deficits and massive debt will mean more taxes, fewer opportunities, weaker real wages, and weaker growth in the future. I come from the euro area, and I know it. I come from the future of America if it continues down this path: stagnation and elevated unemployment.
Daniel Lacalle (Madrid, 1967). PhD Economist and Fund Manager. Author of bestsellers “Life In The Financial Markets” and “The Energy World Is Flat” as well as “Escape From the Central Bank Trap”. Daniel Lacalle (Madrid, 1967). PhD Economist and Fund Manager. Frequent collaborator with CNBC, Bloomberg, CNN, Hedgeye, Epoch Times, Mises Institute, BBN Times, Wall Street Journal, El Español, A3 Media and 13TV. Holds the CIIA (Certified International Investment Analyst) and masters in Economic Investigation and IESE.
Sun, 01/28/2024 – 18:40
An asteroid the size of a sports stadium is currently hurdling towards the Earth, and will be joined by four other celestial near-misses this week, with the largest expected to pass within less than 2 million miles of the Blue Planet on Friday.
Tom Suozzi gives one-word answer when asked if he’ll seek President Biden’s endorsement in House race
No thanks!Former Long Island Democratic Rep. Tom Suozzi said Sunday that he’s not seeking President Biden’s endorsement.
CA Bill Would Electronically Restrict Cars With ‘Speed Governors’
California state Senator Scott Wiener (D), this guy…
…who wants to punish parents for misgendering their children up to the point of losing custody, and in 2022 suggested “offering Drag Queen 101 as part of the K-12 curriculum, and introduced a bill that grants judicial leniency to certain pedophiles, and who was accused of a hate-crime hoax…
…now wants to require any new car or truck sold in the state after 2027 to have “speed governors” which would make it physically impossible to go more than 10 miles per hour over the posted speed limits.
“I don’t think it’s at all an overreach, and I don’t think most people would view it as an overreach, we have speed limits, I think most people support speed limits because people know that speed kills,” said Wiener, who is introducing a set of new bills.
Another part of the measure would require large trucks to install side guards which would prevent pedestrians, cyclists, or other vehicles from being sucked underneath during a crash.
“I think if you ask anyone, do people need to be driving more than 10 miles an hour over the speed limit, assuming you’re not an emergency vehicle which are exempt from the bill, I think most people would say no, I don’t want people driving more than 10 miles an hour in my neighborhood,” he said.
Wiener’s second bill would require Caltrans to make upgrades to crosswalks, bike lanes and curb extensions on state-owned roads to protect pedestrians, cyclists and those who rely on public transit.
A similar bill was vetoed by Gov. Gavin Newsom in 2019 in order to give Caltrans a chance to do this work on its own. -ABC7
The bills will likely go to a committee sometime in the spring.
Sun, 01/28/2024 – 18:05
Trevor Garrett Taylor pleaded guilty to manslaughter charges last week in the cowardly May 19 beating death of Maryland dad Christopher Wright, who was defending his son from bullies.
Major Donor Calls For Cornell University President To Resign For Allegedly Promoting DEI
Authored by Aaron Pan via The Epoch Times (emphasis ours),
A major alumnus donor is pushing Cornell University to oust its president for allegedly promoting diversity, equity, and inclusion (DEI) initiatives that undermine education quality and academic freedom at the Ivy League school.
In a letter dated Jan. 23 to Cornell’s chairman Kraig Kayser and board of trustees, Jon A. Lindseth, a long-time donor and trustee emeritus, raised concerns over DEI policies and its “harmful effects” on the school and demanded Cornell fire president Martha Pollack and provost Michael Kotlikoff.
“Cornell must abandon its misguided commitment to DEI because it has yielded not excellence but disgrace,” he said. “Replace the President and the Provost.”
“DEI should never have been allowed to corrupt an institution that earned its prestige for exemplary academics based on merit,” Mr. Lindseth said.
In the letter, Mr. Lindseth said he was concerned about the DEI initiatives that have infiltrated all aspects of the university, creating a “toxic academic environment.”
“Today, the instruction Cornell offers is in DEI groupthink applied to every field of study. The result is a moral decay, some call it ‘rot,’ that falls in line with prevailing ideology and dishonors basic principles of justice and free speech,” he noted.
Mr. Lindseth listed multiple instances at Cornell that call DEI policies into question, such as allegedly race-based hiring rather than academic merit, rejecting qualified faculty candidates for not meeting DEI requirements, and punishing faculty members “for expressing minority opinions on national events and policy matters,” among others. He also accused the school of fostering “a cancel culture on campus where bullying, intolerance, and petulant behavior rule rather than academic rigor and honest debate.”
“A new campus ‘bias reporting system’ fosters a hostile Orwellian environment among neighbors, classmates, and colleagues reporting on one another. The elimination of grades and SATs has created a system in which equal outcomes rather than proven merit has become the objective,” Mr. Lindseth said. ”This is disastrous for a research university that is built upon academic achievement and aims to educate and train some of our country’s leading scientists, architects, and engineers.”
He also pointed out that Cornell’s DEI policies are being promoted by its new “Center For Racial Justice and Equitable Outcomes.”
Mr. Lindseth blamed Cornell’s poor leadership for allowing DEI to continue to hurt his alma mater, adding that many alumni share the same opinion with him.
In addition to his calling for the resignation of Cornell’s president and provost, he urged the school to terminate DEI staff and policies and made many recommendations to “put Cornell back on the path towards academic excellence.”
Mr. Lindseth said he would withhold his general donation “until the university reformulates its approach to education by replacing DEI groupthink with the original noble intent of Cornell.”
Mr. Lindseth’s letter comes after presidents of two Ivy League schools, Harvard and the University of Pennsylvania, stepped down following their controversial congressional hearings over anti-Semitism on campus.
According to the Wall Street Journal, Mr. Lindseth’s move was supported by the Cornell Free Speech Alliance, a free speech advocacy group that was created two years ago. Some wealthy alumni members also want Ms. Pollack ousted.
Russell Rickford, a history professor at Cornell, sparked controversy when he called the Oct. 7 terrorist attack on Israel by Hamas, killing 1,200 people, “exhilarating” during a pro-Palestinian rally in Ithaca on Oct. 15. The university had to cancel classes on Nov. 3 due to “extraordinary stress” from a series of divisive events on campus. The incidents followed the arrest of a third-year Cornell student for allegedly threatening to kill Jewish people.
Cornell was one of the four Ivy League schools facing investigation by the U.S. Department of Education in mid-November following allegations of anti-Semitism or Islamophobia since the start of the Israel-Hamas war.
The school, also under probe by the House Ways and Means Committee, risks losing its tax-exempt status for its “disappointing and lackluster responses” to protect Jewish students on campus after the Oct. 7 terrorist attacks.
According to the Foundation for Individual Rights and Expression, a free-speech ranking group, Cornell ranked 212 out of 242 with a below-average score.
A week ago, Elon Musk indicated that DEI inherently involves discrimination and is “fundamentally anti-Semitic” amid the growing anti-Semitism in major Western cities and on college campuses. Earlier, hedge-fund billionaire Bill Ackman, who recently pushed to oust the Harvard president, also criticized the DEI movement, calling it a “root cause” for problems at Harvard.
The Epoch Times has reached out to Cornell University for comment.
Sun, 01/28/2024 – 17:30
Alexander Stubb and former Foreign Minister Pekka Haavisto will meet in the runoff election on February 11.
US Officials Believe North Korea Will Soon Launch ‘Limited’ Attack On South
Starting last July, a US Navy nuclear-armed submarine made port call in South Korea – something which hadn’t happened since 1981. As expected, North Korea began immediately ramping up its ballistic missile tests and military drills near the border, and there have been escalating threats and counter-threats since.
The New York Times is reporting that the Kim Jong-un government has plans for escalation, saying that it will soon launch some kind of lethal military action against the south, but will still seek to avoid a full-scale war.
“North Korea’s leader, Kim Jong-un, could take some form of lethal military action against South Korea in the coming months after having shifted to a policy of open hostility, U.S. officials say,” the report began.
US officials indicated the recent spate of more aggressive statements from Kim should be taken seriously. “While the officials added that they did not see an imminent risk of a full-scale war on the Korean Peninsula, Mr. Kim could carry out strikes in a way that he thinks would avoid rapid escalation,” the report continued.
“They pointed to North Korea’s shelling of a South Korean island in 2010 as an example,” NYT noted. “The two sides exchanged artillery fire, resulting in the reported deaths of troops on both sides as well as civilians in the South, but both militaries soon stopped.”
Something which came dangerously close to the 2010 deadly exchange of fire actually happened earlier this month. On Jan.5 North Korea fired over 200 artillery rounds off its West coast which landed near the South’s Yeonpyeong and Baengnyeong Islands, as we detailed earlier.
Seoul condemned the “provocative act” while the North asserted the islands weren’t in danger due to these drills. There were no casualties, and the shells appear to have fallen harmlessly into the sea, but it quickly raised fears of a repeat of the 2010 incident wherein four people died on Yeonpyeong island. Civilians on the area islands were ordered to seek immediate shelter in the Jan.5 incident.
Interestingly, all of this also comes at a time of deepening relations between the North Korean leader and Russia’s President Putin, who is believed to be planning a trip to Pyongyang at some point in the near term. The DPRK is also widely believed to be supplying the Russian military with weapons.
VIDEO: South Korea soldiers patrol border island after North’s artillery drills.
On the remote border island of Yeonpyeong, heavily armed soldiers locked up the beaches at dusk — a reminder of the picturesque spot’s proximity to nuclear-armed North Korea pic.twitter.com/R8PGuyiiET
— AFP News Agency (@AFP) January 9, 2024
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The non-interventionist think tank Responsible Statecraft agrees that North Korea’s threats are more than just rhetoric at this point. It askedAre North Korea’s latest threats rhetorical or real? According to some of the commentary [emphasis ZH]…
Washington’s failure to remain engaged with North Korea is the primary reason that longtime North Korea watchers Robert Carlin and Siegfried Hecker believe that Kim Jong Un has abandoned the default approach of more-or-less peaceful coexistence in favor of launching an attack against South Korea. In some ways, Kim is following the logic of Hamas, an illiberal force also in charge of a largely failed entity. Kim, too, perceives his adversaries as complacent, uninterested in any real negotiations, and vulnerable to a surprise attack. Presiding over an “open air prison” in Gaza, Hamas decided it had nothing left to lose. The North Korean leadership, in charge of an impoverished country with a horrific human rights record, may well have decided that it also has run out of options.
“The literature on surprise attacks should make us wary of the comfortable assumptions that resonate in Washington’s echo chamber but might not have purchase in Pyongyang,” Carlin and Hecker write in 38North. “This might seem like madness, but history suggests those who have convinced themselves that they have no good options left will take the view that even the most dangerous game is worth the candle.”
Sun, 01/28/2024 – 16:55
The far-right party lost a district vote despite its candidate having a large lead two weeks ago. AfD has been the target of massive protests of late after a damning expose was published about its plans for governing.