Paul Ranson Apple tree with red fruit 1902
One tool left: lower interest rates.
• Global Recession Fears Mount As Manufacturing Shrinks Across Asia (R.)
Factory activity contracted in most Asian countries last month as an escalating trade war between Washington and Beijing raised fears of a global economic downturn and heaped pressure on policymakers in the region and beyond to roll out more stimulus. Such growth indicators are likely to deteriorate further in coming months as higher trade tariffs take their toll on global commerce and further dent business and consumer sentiment leading to job losses and delays in investment decisions. Some economists predict a world recession and a renewed race to the bottom on interest rates if trade tensions fail to ease at a Group of 20 summit in Osaka, Japan at the end of June, when presidents Donald Trump and Xi Jinping could meet.
In China, Asia’s economic heartbeat, the Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) showed modest expansion at 50.2, offering investors some near-term relief after an official gauge on Friday showed contraction. The outlook, however, remained grim as output growth slipped, factory prices stalled and businesses were the least optimistic on production since the survey series began in April 2012. PMIs were below the 50-point mark separating contraction from expansion in Japan, South Korea, Malaysia and Taiwan, came below expectations in Vietnam and improved slightly in the Philippines. “The additional shock from the escalated trade tensions is not going to be good for global trade and if demand in the U.S., China and Europe continues to soften, which is very likely, it will bode ill for Asia as a whole,” said Aidan Yao, senior emerging markets economist at AXA Investment Managers.
And because of those lower interest rates, very few Americans will be able to retire, let alone at 65. Which makes this St. Louis Fed article outright insane, insulting even.
• How Many People Will Be Retiring in the Years to Come? (St.L.Fed)
In this post, I will describe a preliminary estimate of the number of people retiring each month over the next 20 years. I started with the population of workers between the ages of 40 and 65 in 2018 using data gathered by IPUMS-USA. I then used age- and gender-specific mortality rates from the Human Mortality Database to compute how many people are expected to still be alive the next year (at only one year older). I continued iterating this procedure for a few years, assuming that the age-specific mortality rates remain constant over the years I specify. Finally, I counted the number of people reaching age 65 each year, further breaking it down to the averages of those reaching 65 each day and each month. The figure below shows the result of this calculation.
Initially, it is evident that there will be around 10,000 people (taking the total of retiring males and females) turning 65 each day for the next two decades. The right axis indicates the number of people turning 65 each month, which is an easier number to compare with the BLS monthly report on the current employment situation in the U.S. Not surprisingly, the peak corresponds to the retiring of the baby boomers. From 2025 onward, the trend is declining, which is likely because of the baby bust that followed the baby boom.
Don’t worry, growth will soon be a thing of the past.
• Economic Growth Is An Unnecessary Evil (TLE)
In 2012, writing as a lone economics blogger, I put forward a case for why countries should ditch economic growth as a political priority. Long revered as a stalwart of a capitalist society the need to grow has come to overshadow everything else. We prioritise it over our personal health, we prioritise it over the health of the planet and we prioritise it over our happiness. But given that the function of any economy is to provide an environment of subsistence, that could be little short-sighted. Economist Kenneth Boulding once said that we eat in order to achieve the state of being well-fed, and moving our jaws is simply the ‘cost’ of getting there.
We would therefore be mistaken to focus our attention on the act of chewing as the desired end-state when it is simply the price we pay to become fed. But as long as growth is the target of our economic systems people will continue to focus on chewing, which is neither a sustainable nor desirable trait of an economy. Which is why I welcomed news that New Zealand’s Prime Minister Jacinda Ardern has put out a national budget where spending is dictated by what best encourages the “well-being” of citizens, rather than focussing on traditional bottom-line measures like productivity and economic growth.
The government will put an emphasis on goals like community and cultural connection and equity in well-being across generations in what has been described as a “game-changing event” by LSE professor Richard Layard. As part of the framework Ardern has set aside more than $200 million to bolster services for victims of domestic and sexual violence and included a promise to provide housing for the homeless population. New guidance on policy suggests all new spending must advance one of five government priorities: improving mental health, reducing child poverty, addressing the inequalities faced by indigenous Maori and Pacific islands people, thriving in a digital age, and transitioning to a low-emission, sustainable economy.
But he said he wouldn’t say another word…
• Mueller Must Testify Publicly To Answer Three Critical Questions (Turley)
In that twinkling zone between man and myth, Robert Mueller transcends the mundane. Even in refusing to reach a conclusion on criminal conduct, he is excused. As Mueller himself declared, we are to ask him no questions or expect any answers beyond his report. But his motivations as special counsel can only be found within an approved range that starts at “selfless” and ends at “heroic.” Representative Mike Quigley defended Mueller’s refusal to reach a conclusion as simply “protecting” President Trump in a moment of “extreme fairness.” Yet, as I noted previously, Mueller’s position on the investigation has become increasingly conflicted and, at points, unintelligible.
As someone who defended Mueller’s motivations against the unrelenting attacks of Trump, I found his press conference to be baffling, and it raised serious concerns over whether some key decisions are easier to reconcile on a political rather than a legal basis. Three decisions stand out that are hard to square with Mueller’s image as an apolitical icon. If he ever deigns to answer questions, his legacy may depend on his explanations. One of the most surprising disclosures made by Attorney General William Barr was that he and Deputy Attorney General Rod Rosenstein expressly told Mueller to submit his report with grand jury material clearly marked to facilitate the release of a public version.
The Justice Department cannot release grand jury material without a court order. Mueller knew that. He also knew his people had to mark the material because they were in the grand jury proceedings. Thus, Barr and Rosenstein reportedly were dumbfounded to receive a report that did not contain these markings. It meant the public report would be delayed by weeks as the Justice Department waited for Mueller to perform this basic task. Mueller knew it would cause such a delay as many commentators were predicting Barr would postpone the release of the report or even bury it. It left Barr and the Justice Department in the worst possible position and created the false impression of a coverup.
Why would a special counsel directly disobey his superiors on such a demand? There is no legal or logical explanation. What is even more galling is that Mueller said in his press conference that he believed Barr acted in “good faith” in wanting to release the full report. Barr ultimately did so, releasing 98 percent of the report to select members of Congress and 92 percent to the public. However, then came the letter from Mueller.
“..the Supreme Court. “I suspect that is where this case is headed as well..”
• Alan Dershowitz: US ‘Overplayed Its Hand’ on Assange (NM)
Bringing charges against WikiLeaks founder Julian Assange under the Espionage Act is one thing, but legal extradition is going to be far more difficult for merely publishing stolen material, not actually stealing it, according to legal expert Alan Dershowitz. “I think the Trump administration has overplayed its hand, so did the Justice Department,” Dershowitz told “The Cats Roundtable” on 970 AM-N.Y.. “They had a very strong case for extradition when they initially accused him of breaking into a password [-protected machine] to try to get classified material, that’s a crime. “But publishing materials? That’s very different. That’s The New York Times and The Washington Post, and I think Great Britain is going to have a lot of difficulty extraditing Assange to the U.S. to face trial for merely publishing material stolen not by him but by others.”
The case will not be one of espionage but a case of free speech and the First Amendment, according to Dershowitz. I think we’re in for a very interesting First Amendment case, probably the most interesting First Amendment case involving national security since Pentagon Papers.” Dershowitz was one of the lawyers of the Pentagon Papers case related to Watergate and the ultimate impeachment proceedings and resignation of former President Richard Nixon, taking the case to the Supreme Court. “I suspect that is where this case is headed as well,” Dershowitz told host John Catsimatidis.
“Schiff was gung-ho to declassify “as much as possible about Russia hacking our elections” back in the summer of 2016, but now describes attempts to declassify information about the reasons for the probe as an attempt to “weaponize law enforcement.”
• The Intelligence Community Needs A House-Cleaning (Matt Taibbi)
CIA director Gina Haspel crowed to the Washington Post a year ago that disclosing the name of informant Stefan Halper “could risk lives.” It turned out Halper had been outed as a spook in the pages of the New York Times back in 1983, and openly traded on his intelligence past as a professor in England. Where were lives at risk, in the Cambridge University Botanical Garden? We also saw reports that revealing the name of former British spy Christopher Steele would imperil his life. When the Wall Street Journal outed him in January of 2017, Steele responded by telling British media that he was “terrified for his safety.” He added he was going into hiding because he feared a “potentially dangerous backlash against him from Moscow.”
We later found out Steele had more media contacts than the Kardashian family, meeting with (at minimum) the Times, Post, Yahoo!, The New Yorker, CNN and Mother Jones in the space of about seven weeks in September-October 2016. In the years since his report became public, Steele fought through his terror to keep commiserating with the media. He invited a sprawling, laudatory 2018 profile in The New Yorker that described him answering “one of his two phones” in Farnham, a Surrey town with a “beautiful Georgian high street,” where he and his four children live on “nearly an acre of land.” He’s given depositions, negotiated to testify before congress, and been a primary source in several bestselling books. Thanks to such elaborate precautions, he’s managed somehow to avoid assassination since 2016.
[..] The release of the Page warrant turned out to not to compromise anything but the reputation of the FBI and other agencies. The major revelation was the FBI had indeed used Steele, a “compensated” FBI informant as well as a private oppo researcher, as a source despite having “suspended its relationship” with him in October 2016, ostensibly over failure to disclose media contacts. House Intel committee ranking member Adam Schiff knew this information when he conducted his “bombshell” hearing” on March 20, 2017. That was the one in which he and other members questioned not-yet-fired FBI chief James Comey and Rogers, and read out information from the Steele report as if it were factual, not giving any hint that there might be issues with it.
Schiff was gung-ho to declassify “as much as possible about Russia hacking our elections” back in the summer of 2016, but now describes attempts to declassify information about the reasons for the probe as an attempt to “weaponize law enforcement.” The hemming and hawing about “sources and methods” is really a pre-emptive ass-covering campaign. A bunch of these people are about to be highlighted in the upcoming review by Justice IG Michael Horowitz, as well as the larger probe led by former Connecticut U.S. Attorney John Durham. This is why we’ve seen stories that essentially show James Comey and Brennan pointing fingers and blaming the other for using the Steele material.
“..a million euro per Commissioner, for relocation, staff and the lifelong pension which every Commissioner gets, no matter how long he or she has been in office..”
• Juncker: Not Enough Work To Keep 28 EU Commissioners Busy (EuA)
European Commission President Jean-Claude Juncker has urged member states not to name short-term replacements for the Commissioners that have been elected as MEPs, insisting there is not enough work for 28 Commissioners anyway. Five of Juncker’s Commissioners have been elected as MEPs: First Vice President Frans Timmermans, vice-presidents Andrus Ansip and Valdis Dombrovskis, and Commissioners Corina Cretu and Mariya Gabriel. In an interview with BILD am Sontag yesterday (2 June), Juncker made a strong appeal that the member states should not replace them until the end of the mandate in November.
The elected MEPs must decide whether to take their seats before 1 July. If some of the elected Commissioners take their MEP seats, their countries will be without a Commissioner for four months. “Each member state has the right to appoint a new Commissioner for the remaining four months,” Juncker said, adding that “this would cost the European taxpayer a million euro per Commissioner, for relocation, staff and the lifelong pension which every Commissioner gets, no matter how long he or she has been in office, because the member states have decided that this is so. I’m trying to stop this.”
“If it is in the air by Christmas (Dec. 25) I’ll be surprised – my own view..”
• US Regulators Say Some Boeing 737 MAX Planes May Have Faulty Parts (R>)
The U.S. Federal Aviation Administration on Sunday disclosed a new problem involving Boeing Co’s grounded 737 MAX, saying that more than 300 of that troubled plane and the prior generation 737 may contain improperly manufactured parts and that the agency will require these parts to be quickly replaced. The FAA said up to 148 of the part known as a leading-edge slat track that were manufactured by a Boeing supplier are affected, covering 179 MAX and 133 NG aircraft worldwide. Slats are movable panels that extend along the wing’s front during takeoffs and landings to provide additional lift. The tracks guide the slats and are built into the wing.
[..] In a statement issued after the FAA announcement, Boeing said it has not been informed of any in-service issues related to this batch of slat tracks. Boeing, the world’s largest plane maker, said it has identified 20 737 MAX airplanes most likely to have the faulty parts and that airlines will check an additional 159 MAXs for these parts. Boeing said it has identified 21 737 NGs most likely to have the suspect parts and is advising airlines to check an additional 112 NGs. The NG is the third-generation 737 that the company began building in 1997. The affected parts “may be susceptible to premature failure or cracks resulting from the improper manufacturing process,” the FAA said.
[..] Boeing in April said the two fatal crashes had cost it at least $1 billion as it abandoned its 2019 financial outlook, halted share buybacks and lowered production. The company’s shares have fallen by nearly 20 percent since the Ethiopian Airlines crash in March. Some international carriers are skeptical the plane will resume flying by August as some U.S. airlines have suggested. Tim Clark, president of Emirates, told reporters in Seoul that it could take six months to restore operations as other regulators re-examine the U.S. delegation practices. “If it is in the air by Christmas (Dec. 25) I’ll be surprised – my own view,” he said.
And there’s Monsanto again.
• Science Institute That Advised EU and UN ‘Actually Industry Lobby Group’ (G.)
An institute whose experts have occupied key positions on EU and UN regulatory panels is, in reality, an industry lobby group that masquerades as a scientific health charity, according to a peer-reviewed study. The Washington-based International Life Sciences Institute (ILSI) describes its mission as “pursuing objectivity, clarity and reproducibility” to “benefit the public good”. But researchers from the University of Cambridge, Bocconi University in Milan, and the US Right to Know campaign assessed over 17,000 pages of documents under US freedom of information laws to present evidence of influence-peddling.
The paper’s lead author, Dr Sarah Steele, a Cambridge university senior research associate, said: “Our findings add to the evidence that this nonprofit organisation has been used by its corporate backers for years to counter public health policies. ILSI should be regarded as an industry group – a private body – and regulated as such, not as a body acting for the greater good.” In a 2015 email copied to ILSI’s then director, Suzanne Harris, and executives from firms such as Coca-Cola and Monsanto, ILSI’s founder Alex Malaspina, a former Coca-Cola vice-president, complained bitterly about new US dietary guidelines for reducing sugar intake.
“These guidelines are a real disaster!” he wrote. “They could eventually affect us significantly in many ways; Soft drink taxations, modified school luncheon programs, a strong educational effort to educate children and adults to significanty [sic] limit their sugar intake,, curtail advertising of sugary foods and beverages and eventually a great pressure from CDC [the US Center for Disease Control and Prevention] and other agencies to force industry to start deducing [sic] drastically the sugar we add to processed foods and beverages.”
And more Monsanto. Europe is losing.
• EU Candidate To Run UN Food Body Will ‘Not Defend’ EU Stance On GMO (G.)
Europe’s candidate to run the UN’s Food and Agriculture Organisation (FAO), which guides policymakers around the world, has promised the US she will “not defend the EU position” in resisting the global spread of genetically modified organisms (GMOs). In a bid for US support, Catherine Geslain-Lanéelle told senior US officials at a meeting in Washington on 15 May that under her leadership the FAO would be more open to American interests and accepting of GMOs and gene editing, according to a US official record of the meeting seen by the Guardian. The issue has been a longstanding point of conflict in trade talks with the EU, which has adopted a far more cautious approach to biotechnology in food and agriculture.
All GMO imports are subject to strict safety assessments imposed on a case-by-case basis. Plants and animals whose genome has been manipulated through gene editing are deemed to be GMOs and are subject to similar restrictions. The US portrays such restrictions as trade barriers and has demanded they be dropped. In the meeting with officials from the US agriculture and state departments, Geslain-Lanéelle, a former director general of the French agriculture and food ministry who also ran the European Food Safety Authority, signalled she would veer to the US side if she ran the FAO. “She is proud to be European, who she is, and where she comes from; however, she will promote FAO from a global perspective rather than with European Union or French views,” said a US government internal memo.
“She will not defend the EU position on biotechnology and genetically modified organisms. This is not what agriculture needs. She will defend a global project that includes US interests.”
“..you don’t need to solve your problems before you get a home. Instead, a home should be the secure foundation that makes it easier to solve your problems.”
• Helsinki’s Radical Solution To Homelessness (G.)
As in many countries, homelessness in Finland had long been tackled using a staircase model: you were supposed to move through different stages of temporary accommodation as you got your life back on track, with an apartment as the ultimate reward. “We decided to make the housing unconditional,” says Kaakinen. “To say, look, you don’t need to solve your problems before you get a home. Instead, a home should be the secure foundation that makes it easier to solve your problems.” With state, municipal and NGO backing, flats were bought, new blocks built and old shelters converted into permanent, comfortable homes – among them the Rukkila homeless hostel in the Helsinki suburb of Malminkartano where Ainesmaa now lives.
Housing First’s early goal was to create 2,500 new homes. It has created 3,500. Since its launch in 2008, the number of long-term homeless people in Finland has fallen by more than 35%. Rough sleeping has been all but eradicated in Helsinki, where only one 50-bed night shelter remains, and where winter temperatures can plunge to -20C. The city’s deputy mayor Sanna Vesikansa says that in her childhood, “hundreds in the whole country slept in the parks and forests. We hardly have that any more. Street sleeping is very rare now.” In England, meanwhile, government figures show the number of rough sleepers – a small fraction of the total homeless population – climbed from 1,768 in 2010 to 4,677 last year (and since the official count is based on a single evening, charities say the real figure is far higher).
But Housing First is not just about housing. “Services have been crucial,” says Helsinki’s mayor, Jan Vapaavuori, who was housing minister when the original scheme was launched. “Many long-term homeless people have addictions, mental health issues, medical conditions that need ongoing care. The support has to be there.”
It’s discouraging to think how many people are shocked by honesty and how few by deceit.
– Noel Coward
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