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Arizona Challenges the Fed’s Money Monopoly

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A police officer keeps watch in front of the U.S. Federal Reserve building in Washington, DC, U.S. on October 12, 2016. REUTERS/Kevin Lamarque/File Photo

Arizona Challenges the Fed’s Money Monopoly

By: Ron Paul | Sun, Mar 5, 2017


History shows that, if individuals have the freedom to choose what to use
as money, they will likely opt for gold or silver.

Of course, modern politicians and their Keynesian enablers despise the gold
or silver standard. This is because linking a currency to a precious metal
limits the ability of central banks to finance the growth of the welfare-warfare
state via the inflation tax. This forces politicians to finance big government
much more with direct means of taxation.

Despite the hostility toward gold from modern politicians, gold played a role
in US monetary policy for sixty years after the creation of the Federal Reserve.
Then, in 1971, as concerns over the US government’s increasing deficits led
many foreign governments to convert their holdings of US dollars to gold, President
Nixon closed the gold window, creating America’s first purely fiat currency.

America’s 46-year experiment in fiat currency has gone exactly as followers
of the Austrian school predicted: a continuing decline in the dollar’s purchasing
power accompanied by a decline in the standard of living of middle- and working-class
Americans, a series of Federal Reserve-created booms followed by increasingly
severe busts, and an explosive growth in government spending. Federal Reserve
policies are also behind much of the increase in income inequality.

Since the 2008 Fed-created economic meltdown, more Americans have become aware
of the Federal Reserve’s responsibility for America’s economic problems. This
growing anti-Fed sentiment is one of the key factors behind the liberty movement’s
growth and represents the most serious challenge to the Fed’s legitimacy in
its history. This movement has made “Audit the Fed” into a major national issue
that is now closer than ever to being signed into law.

Audit the Fed is not the only focus of the growing anti-Fed movement. For
example, this Wednesday the Arizona Senate Finance and Rules Committees will
consider legislation (HB 2014) officially defining gold, silver, and other
precious metals as legal tender. The bill also exempts transactions in precious
metals from state capital gains taxes, thus ensuring that people are not punished
by the taxman for rejecting Federal Reserve notes in favor of gold or silver.
Since inflation increases the value of precious metals, these taxes give the
government one more way to profit from the Federal Reserve’s currency debasement.

HB 2014 is a very important and timely piece of legislation. The Federal Reserve’s
failure to reignite the economy with record-low interest rates since the last
crash is a sign that we may soon see the dollar’s collapse. It is therefore
imperative that the law protect people’s right to use alternatives to what
may soon be virtually worthless Federal Reserve notes.

Passage of HB 2014 would also send a message to Congress and the Trump administration
that the anti-Fed movement is growing in influence. Thus, passage of this bill
will not just strengthen movements in other states to pass similar legislation;
it will also help build support for the Audit the Fed bill and legislation
repealing federal legal tender laws.

This Wednesday I will be in Arizona to help rally support for HB 2014, speaking
on behalf of the bill before the Arizona Senate Finance Committee at 9:00 a.m.
I will also be speaking at a rally at noon at the Arizona state capitol. I
hope every supporter of sound money in the Phoenix area joins me to show their
support for ending the Fed’s money monopoly.


Buy Ron Paul’s latest book, Swords into Plowshares, here.


Ron Paul

Dr. Ron Paul
The Foundation for Rational Economics & Education

Ron Paul

Congressman Ron Paul of Texas enjoys a national reputation as the premier
advocate for liberty in politics today. Dr. Paul is the leading spokesman
in Washington for limited constitutional government, low taxes, free markets,
and a return to sound monetary policies based on commodity-backed currency.
He is known among both his colleagues in Congress and his constituents for
his consistent voting record in the House of Representatives: Dr. Paul never
votes for legislation unless the proposed measure is expressly authorized
by the Constitution. In the words of former Treasury Secretary William Simon,
Dr. Paul is the “one exception to the Gang of 535” on Capitol Hill.

Copyright © 2006-2017 Dr. Ron Paul

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Published at Sun, 05 Mar 2017 15:11:10 +0000

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What Wall Street wants to hear from Trump

What Wall Street wants to hear from Trump

  @mattmegan5

 President Trump’s pro-business promises have helped lift the Dow an incredible 2,500 points since the election.

Now Wall Street wants him to deliver.

Investors will be watching very closely when Trump addresses Congress on Tuesday night. They crave details about the timing and specifics of Trump’s plans to slash taxes, rip up regulations and unleash infrastructure spending.

On the other hand, signs that the Trump platform is being delayed or scaled back could leave Wall Street bummed.

The stock market has made the stakes clear: The Dow has closed at a record high 12 days in a row and is going for a 13th on Tuesday, a feat that has never happened before.

“Expectations are phenomenally high,” Peter Boockvar, chief market analyst at The Lindsey Group, wrote in a note to investors.

Here’s a guide to what investors want to hear from Trump.

Taxes, taxes, taxes, taxes…

A CNNMoney survey of economists on Monday found that what they want most is details on Trump’s tax plan: When will it happen? How big will it be?

Hopes for big tax cuts have been at the heart of the post-election rally. Wall Street is betting that enormous tax savings will translate to juicier profits.

“Unfortunately I’m going to have to torture myself and watch Tuesday night in search of some comments on tax reform,” Boockvar said, adding that he normally skips these types of speeches.

Border adjustment tax?

A big key will be whether Trump throws his weight behind an idea from House Republicans called the border adjustment tax as a way to bring jobs back to the United States.

The complex proposal would give tax breaks to American companies that ship products to other countries and strip tax breaks from American companies that import goods.

“What I hope to hear from Trump is some well-reasoned policy proposals, and not just more … babble about ‘winning’ or making ‘better deals,'” said Bernard Baumohl, chief global economist at The Economic Outlook Group.

dow trump rally election

 

Obamacare timing

The overhaul of the health care system is extremely important to many Americans, but investors are paying particular attention because of its implications for the rest of the Trump agenda.

Trump has said repealing and replacing the Affordable Care Act must come before taxes.

“This is a giant obstacle blocking the path to the rest of the president’s agenda,” Jaret Seiberg, analyst at Cowen & Co., wrote in a research report.

Fair trade, not trade wars

Economists and market strategists surveyed by CNNMoney say their biggest fear is that Trump will erect barriers to trade.

The new president has already withdrawn the United States from the Trans-Pacific Partnership and started renegotiating the NAFTA trade deal with Mexico and Canada. Economists’ concern is that Trumps will impose high tariffs that slow the economy and provoke a tit-for-tat response from trading partners.

“Wall Street is not opposed to reviewing trade deals, but Wall Street doesn’t want to see that turn into a trade war,” said David Joy, chief market strategist at Ameriprise Financial.

What happened to infrastructure spending?

Since he took office, Trump hasn’t focused much on his promise to spend $1 trillion on infrastructure. Investors hope Trump will follow through by releasing a plan to build or rebuild roads, bridges and airports. Infrastructure stocks like U.S. Steel(X) and U.S. Concrete(USCR) have soared since the election.

Will Trump give clues about the timing and structure of an infrastructure plan and how it can be paid for without blowing up the U.S. deficit?

Ripping up bank regulation

Big bank stocks like Goldman Sachs(GS) have skyrocketed, partly because of Trump’s promise to “do a big number” on the Wall Street reforms known as Dodd-Frank. But few specifics are known here, either.

Seiberg, the Cowen analyst, said one risk is that Trump will repeat a call for a 21st century version of the Glass-Steagall Act, which would force a separation between commercial banking and trading. That could be a signal that Trump wants to break up big banks.

Investors would probably react better if Trump said his focus is on allowing banks to lend more — even though they are already lending a ton.

What Wall Street doesn’t want to hear

Markets took a brief tumble in late January as investors grew concerned that controversy over Trump’s immigration order could derail the rest of his agenda.

Look for a similar reaction if Trump’s speech veers off course.

“If he focuses on the evil press or some other nonsense, markets may get impatient,” Michael Block, chief market strategist at Rhino Trading, wrote in a research note.

–CNNMoney’s Heather Long contributed to this report.
Published at Tue, 28 Feb 2017 18:44:48 +0000

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Trump seeks ‘historic’ U.S. military spending boost, domestic cuts

Trump seeks ‘historic’ U.S. military spending boost, domestic cuts

By Steve Holland | WASHINGTON

President Donald Trump is seeking what he called a “historic” increase in defense spending, but ran into immediate opposition from Republicans in Congress who must approve his plan and said it was not enough to meet the military’s needs.

The proposed rise in the Pentagon budget to $603 billion comes as the United States has wound down major wars in Iraq and Afghanistan and remains the world’s strongest military power.

The plan came under fire from Democratic lawmakers, who said cuts being proposed to pay for the additional military spending would cripple important domestic programs such as environmental protection and education.

A White House budget official, who outlined the plan on a conference call with reporters, said the administration would propose “increasing defense by $54 billion or 10 percent.” That represents the magnitude of the increase over budget caps Congress put in place in 2011.

But Mick Mulvaney, the White House budget director, said the plan would bring the Pentagon’s budget to $603 billion in total, just 3 percent more than the $584 billion the agency spent in the most recent fiscal year, which ended on Sept. 30, 2016.

The rise would be slightly higher than the country’s current 2.5 percent rate of inflation.

“President Trump intends to submit a defense budget that is a mere 3 percent above President (Barack) Obama’s defense budget, which has left our military underfunded, undersized, and unready to confront threats to our national security,” John McCain, the Republican chairman of the Senate Armed Services Committee, said in a statement.

The defense boost would be balanced by slashing the same amount from non-defense spending, including a large reduction in foreign aid, the White House budget official said.

Trump does not have the final say on federal spending. His plan for the military is part of a budget proposal to Congress, which, although it is controlled by his fellow Republicans, will not necessarily follow his plans. Budget negotiations with lawmakers can take months.

McCain told reporters he would not vote for a budget with the slight military increase and thought it would face opposition in the Senate.

Trump told state governors at the White House his budget plan included a “historic increase in defense spending to rebuild the depleted military of the United States of America.”

He said his proposal was a “landmark event” and would send a message of “American strength, security and resolve” to other countries.

BIG CUTS TO STATE DEPARTMENT

Officials familiar with Trump’s budget blueprint said the plan would call for cuts to agencies including the State Department and the Environmental Protection Agency.

One official familiar with discussions over State’s budget said the agency could see spending cut by as much as 30 percent, which would force a major department restructuring and elimination of programs.

The United States spends about $50 billion annually on the State Department and foreign assistance.

More than 120 retired U.S. generals and admirals urged Congress on Monday to fully fund U.S. diplomacy and foreign aid, saying such programs “are critical to keeping America safe.”

Trump has vowed to spare middle-class social programs such as Social Security and Medicare from any cuts.

Nancy Pelosi, the top Democrat in the House of Representatives, said Trump’s plan to slash funding for federal agencies to free up money for the Pentagon showed he was not putting American working families first.

“A $54 billion cut will do far-reaching and long-lasting damage to our ability to meet the needs of the American people and win the jobs of the future,” Pelosi said. “The president is surrendering America’s leadership in innovation, education, science and clean energy.”

SHORING UP ‘CHOKE POINTS’

An official familiar with the proposal said Trump’s request for the Pentagon included more money for shipbuilding, military aircraft and establishing “a more robust presence in key international waterways and choke points” such as the Strait of Hormuz and South China Sea.

That could put Washington at odds with Iran and China. The United States already has the world’s most powerful fighting force and it spends far more than any other country on defense.

About one-sixth of the federal budget goes to military spending.

Trump has said previously he would expand the Army to 540,000 active-duty troops from its current 480,000, increase the Marine Corps to 36 battalions from 23 – or as many as 10,000 more Marines – boost the Navy to 350 ships and submarines from 276, and raise the number of Air Force tactical aircraft to 1,200 from 1,100.

He has not said where he would place the extra hardware and forces or made clear what they would be used for. The United States has been shutting some of its military bases in recent years.

Trump has also said he would bolster the development of missile defenses and cyber capabilities. Last week, he told Reuters the United States had “fallen behind on nuclear weapon capacity.” He pledged to ensure that “we’re going to be at the top of the pack.”

(Additional reporting by Tim Ahmann, Doina Chiacu, Andy Sullivan, Idrees Ali, David Alexander, and Patricia Zengerle; Writing by Alistair Bell and Lisa Lambert; Editing by Nick Tattersall and Peter Cooney)

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Trump budget plan boosts Pentagon, trims State Dept, EPA: officials

U.S. President Donald Trump makes a toast during the Governor’s Dinner in the State Dinning Room at the White House in Washington, U.S., February 26, 2017. REUTERS/Joshua Roberts

Trump budget plan boosts Pentagon, trims State Dept, EPA: officials

The White House will send federal departments a budget proposal on Monday containing the defense spending increase President Donald Trump promised, financed partly by cuts to the U.S. State Department, Environmental Protection Agency and other non-defense programs, two officials familiar with the proposal said.

One of the officials said Trump’s request for the Pentagon included more money for shipbuilding, military aircraft and establishing “a more robust presence in key international waterways and chokepoints” such as the Strait of Hormuz and South China Sea.

A second official said the State Department’s budget could be cut by as much as 30 percent, which would force a major restructuring of the department and elimination of programs.

The officials requested anonymity because the draft budget had not been made public yet.

Trump, in a speech to conservative activists on Friday, promised “one of the greatest military buildups in American history.”

Some defense experts have questioned the need for a large increase in U.S. military spending, which already stands at roughly $600 billion annually. By contrast, the United States spends about $50 billion annually on the State Department and foreign assistance.

The amounts that Trump is proposing to add to the Pentagon budget and trim elsewhere are not yet publicly known.

John Czwartacki, a spokesman for the White House’s Office of Management and Budget, said the budget blueprint would be released in mid-March.

“It would be premature for us to comment – or anyone to report – on the specifics of this internal discussion before its publication,” he said in a statement.

The budget plans that the White House is expected to send to departments and agencies on Monday are just one stage in a lengthy process.

The agencies can argue for more funding, and final spending plans must be approved by the U.S. Congress.

Trump’s budget assumes annual economic growth of 2.4 percent, the second official said. While campaigning for the presidency last year, Trump called for a “national goal” of 4 percent economic growth.

Treasury Secretary Steven Mnuchin, speaking on Fox News earlier on Sunday, said Trump’s budget would not seek cuts in federal social programs such as Social Security and Medicare.

(Reporting by Washington Newsroom; Additional reporting by Roberta Rampton.; Writing by Warren Strobel; Editing by Peter Cooney and Paul Tait)

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Trump wants to make sure U.S. nuclear arsenal at ‘top of the pack’

Trump wants to make sure U.S. nuclear arsenal at ‘top of the pack’

By Steve Holland | WASHINGTON

President Donald Trump said on Thursday he wants to ensure the U.S. nuclear arsenal is at the “top of the pack,” saying the United States has fallen behind in its weapons capacity.

In a Reuters interview, Trump also said China could solve the national security challenge posed by North Korea “very easily if they want to,” ratcheting up pressure on Beijing to exert more influence to rein in Pyongyang’s increasingly bellicose actions.

Trump also expressed support for the European Union as a governing body, saying “I’m totally in favor of it,” and for the first time as president expressed a preference for a two-state solution to the Israeli-Palestinian conflict, but said he would be satisfied with whatever makes the two sides happy.

Trump also predicted his efforts to pressure NATO allies to pay more for their own defense and ease the burden on the U.S. budget would reap dividends. “They owe a lot of money,” he said.

In his first comments about the U.S. nuclear arsenal since taking office on Jan. 20, Trump was asked about a December tweet in which he said the United States must greatly strengthen and expand its nuclear capacity “until such time as the world comes to its senses regarding nukes.”

Trump said in the interview he would like to see a world with no nuclear weapons but expressed concern that the United States has “fallen behind on nuclear weapon capacity.”

“I am the first one that would like to see … nobody have nukes, but we’re never going to fall behind any country even if it’s a friendly country, we’re never going to fall behind on nuclear power.

“It would be wonderful, a dream would be that no country would have nukes, but if countries are going to have nukes, we’re going to be at the top of the pack,” Trump said.

Russia has 7,000 warheads and the United States, 6,800, according to the Ploughshares Fund, an anti-nuclear group.

“Russia and the United States have far more weapons than is necessary to deter nuclear attack by the other or by another nuclear-armed country,” said Daryl Kimball, executive director of the independent Arms Control Association non-profit group.

The new strategic arms limitation treaty, known as New START, between the United States and Russia requires that by February 5, 2018, both countries must limit their arsenals of strategic nuclear weapons to equal levels for 10 years.

The treaty permits both countries to have no more than 800 deployed and non-deployed land-based intercontinental and submarine-launched ballistic missile launchers and heavy bombers equipped to carry nuclear weapons, and contains equal limits on other nuclear weapons.

Analysts have questioned whether Trump wants to abrogate New START or would begin deploying other warheads.

In the interview, Trump called New START “a one-sided deal.”

“Just another bad deal that the country made, whether it’s START, whether it’s the Iran deal … We’re going to start making good deals,” he said.

“WE’RE VERY ANGRY”

The United States is in the midst of a $1 trillion, 30-year modernization of its aging ballistic missile submarines, bombers and land-based missiles.

Trump also complained that the Russian deployment of a ground-based cruise missile is in violation of a 1987 treaty that bans land-based American and Russian intermediate-range missiles.

“To me it’s a big deal,” said Trump, who has held out the possibility of warmer U.S. relations with Russia.

Asked if he would raise the issue with Putin, Trump said he would do so “if and when we meet.” He said he had no meetings scheduled as of yet with Putin.

Speaking from behind his desk in the Oval Office, Trump expressed concern about North Korea’s ballistic missile tests and said accelerating a missile defense system for U.S. allies Japan and South Korea was among many options available.

“There’s talks of a lot more than that,” Trump said, when asked about the missile defense system. “We’ll see what happens. But it’s a very dangerous situation, and China can end it very quickly in my opinion.”

China has made clear that it opposes North Korea’s nuclear and missile programs and has repeatedly called for denuclearization of the Korean peninsula and a return to negotiations between Pyongyang and world powers.

But efforts to change Pyongyang’s behavior through sanctions have historically failed, largely because of China’s fear that severe measures could trigger a collapse of the North Korean state and send refugees streaming across their border.

Trump’s meeting with Japanese Prime Minister Shinzo Abe earlier this month in Florida was interrupted by a ballistic missile launch by North Korea.

Trump did not completely rule out possibly meeting North Korean leader Kim Jong Un at some point in the future under certain circumstances but suggested it might be too late.

“It’s very late. We’re very angry at what he’s done, and frankly this should have been taken care of during the Obama administration,” he said.

According to Japanese news reports, the Japanese government plans to start debate over the deployment of a U.S. missile defense system known as the Terminal High Altitude Area Defense, or THAAD, and the land-based Aegis Ashore missile defense system to improve its capability to counter North Korean ballistic missiles.

The strength of Trump’s remarks in favor of the EU took some Brussels officials by surprise after his support for Britain’s vote last summer to exit from the EU.

“I’m totally in favor of it,” Trump said of the EU. “I think it’s wonderful. If they’re happy, I’m in favor of it.”

Statements by him and others in his administration have suggested to Europeans that he sees little value in the Union as such, which Trump last month called a “vehicle for Germany.”

(Additional reporting by Jeff Mason, Roberta Rampton, Emily Stephenson, John Walcott, Matt Spetalnick, Arshad Mohammed and David Brunnstrom in Washington and Alastair Macdonald in Brussels; editing by Ross Colvin)

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There’s one thing going right for Trump

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President Trump lashes out at media in press conference
President Trump lashes out at media in press conference

  @byHeatherLong

President Trump is probably saying: “TGIF.”

Headlines claim the White House is in “chaos” after an extremely turbulent week. But there’s one big thing going right for Trump right now: The U.S. economy.

A slew of economic data came out this week. Almost all of it was positive. Americans are still going to stores and spending big (retail sales came in better than expected for January). They’re also buying houses. And cars. And using their credit cards.

On top of that, small and medium-sized business owners are giddy. The NFIB Small Business Optimism Index is at its highest level since 2004.

Heck, even manufacturing has made a pretty big turnaround and looks almost healthy again. The Philly Fed Index, a survey on how well manufacturers are doing, just hit its highest level since 1984. And anyone with money in the market likely noticed the U.S. stock market set even more records this week. In fact, American stocks are on their best winning streak in 25 years.

There’s still a belief on Wall Street — and many parts of Main Street that CNNMoney has recently visited — that Trump is going to get the economy surging again. Yes, there are some red flags — household debt is back at 2008 levels and prices are rising. But overall, things look good.

“The economy is better than you think,” says Chris Rupkey, chief financial economist at MUFG Union Bank in New York. “President Trump inherited the best economy since President Bush, so let’s hope things continue to run smoothly.”

The bullish scenario: Trump gets back on track

But the reason consumers and CEOs are so excited is because they expect Trump to get going on his “pro-growth agenda.” Business leaders — big and small — want tax cuts, not lengthy press conferences hammering the press and his former rival Hillary Clinton.

As a Trump supporter in Kentucky told CNNMoney recently, “He already won the election. Just shut up about the votes.”

Business CEOs have been clear: They want lower taxes, infrastructure spending and some regulations scaled back (or just not as strictly enforced).

Trump voters have also been clear: They want jobs, jobs, jobs that pay more than minimum wage.

The question is whether Trump can get back on track to focus on these issues with Congress. If he does that, a lot of the “chaos” of his first weeks in office will likely fade.

“The bullish scenario is that Trump comes to realize quickly that he must use most of his political capital to fast-track tax cuts, tax reform, repatriated earnings, and deregulation,” wrote economist Ed Yardeni of Yardeni Research in a note this week.

Yardeni went on to say, “If that path lifts economic growth, as it should, the strength of the economy should boost Trump’s political capital and strength — both at home and abroad.”

Even one of Trump’s biggest critics — billionaire mogul Mark Cuban — tweeted some praise Friday of the president’s economic plans: “Trump is trying to do some things right. Taxes, lobbyists, bureaucracy, FCC, SEC. If he can get the changes passed, they are positives.”

Trump’s ‘Game of Thrones’ could hurt economy

But the biggest threat to this bullish scenario unfolding is probably Trump himself. He has turned Washington into a “Game of Thrones” right now, argues Yardeni.

One Republican lawmaker put it even more bluntly to CNN Thursday after listening to Trump’s wild 75-minute press conference: “We’re just trying to manage this s***.”

The more time Trump spends fighting with the media or having to stabilize his cabinet, especially the role of National Security Adviser, the less time he is spending on the economy.

At some point, stocks will do a big U-turn if Wall Street doesn’t think Trump and Congress will come through on his economic agenda. Optimism can also reverse quickly, stalling spending and growth.

If the president fails to deliver a better economy, it may be the biggest let down of all to many of his supporters.
Published at Fri, 17 Feb 2017 17:47:10 +0000

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States’ rights? Not so much, when it comes to retirement savings

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By Mark Miller| CHICAGO

So much for states’ rights.

The Republican-controlled Congress took aim this week at states that are creating retirement saving programs for workers who do not already have 401(k)s through their jobs. Seven states – including populous California, Illinois and Maryland – are implementing government-sponsored auto-IRA plans, and another 30 are considering their own, according to AARP, which has been supporting and tracking the initiatives.

Saving for retirement should not be all that controversial, but state plan opponents in the business community object to an expansive government role and the mandatory features of some of the state plans.

The House of Representatives approved a resolution on Wednesday that would invalidate an important rule handed down last year by the U.S. Department of Labor (DoL) in support of the state plans. The measure now goes to the Senate. The rule exempts state plans from the Employee Retirement Income Security Act of 1974 (ERISA) if they meet certain conditions. That provides important reassurance to employers participating in the plan, who worry about compliance cost and legal liability under ERISA.

The House resolution is an especially aggressive reach into the business of states – and one rich in irony, considering Republicans’ frequent worship at the altar of states’ rights. But the auto-IRA programs have powerful opponents in the financial services industry who do not want to see a lower-cost government-sponsored “public option” to the retirement products they sell.

“This is a payoff to the financial services industry,” said Joshua Gotbaum, a guest scholar at the Brookings Institution who is serving as chairman of the Maryland auto-IRA program.

“They are afraid of competition that would come from a huge program like this that forces them to cut their own fees,” said Gotbaum, who is a former director of the Pension Benefit Guaranty Corporation, the federally sponsored agency that insures private sector pensions.

The resolution adds the auto-IRA to an anti-consumer hit list that already includes the DoL fiduciary rule governing advice to retirement savers. (reut.rs/2lP6l1v).

Repeal would not stop the states that have already enacted programs, Gotbaum said. But it will create uncertainty. “It might mean that states will need to get opinions from lawyers or the courts on whether the plans are subject to ERISA or not.” And repeal could well slow down the momentum among states still considering the idea.

The state initiatives started after the Obama administration’s proposal for a national auto-IRA program was shot down by the Republican Congress.

And support for the idea across the country has been strong. Just last week, a telephone poll of 800 Americans by the National Institute on Retirement Security found a 75 percent public approval rating for state plans.

 

LESS GOVERNMENT?

Opponents’ objections – summarized in a letter to lawmakers this week from a business coalition led by the U.S. Chamber of Commerce – include opposition to the mandatory participation feature of some state plans, although the mandate is to simply require employers to enable payroll deductions (but not contributions) for uncovered workers. They also worry about the administrative burden of managing plans with differing standards in multiple states.

The Chamber letter also argues that states cannot be trusted to run these programs in light of underfunding of public-worker pension funds in some states. That argument does not hold water, since pooled pension plans funded by taxes and worker contributions bear no resemblance whatever to the auto-IRA plans, which envision individual accounts held by a third party custodian.

So this really is an ideological attack on the idea that government should take steps to help people save more money. “Our nation faces difficult retirement challenges, but more government isn’t the solution,” said U.S. Representative Tim Walberg, a Michigan Republican who co-sponsored the House resolution.

Never mind that the private sector has failed to deliver on coverage: 401(k)s have existed since the 1980s, yet only half of U.S. private-sector workers participate in a retirement plan at any given time, according to the Center for Retirement Research at Boston College.

Republicans are coalescing around a different approach to expanded retirement plan coverage. The Retirement Enhancement and Savings Act (RESA), approved by the Senate Finance Committee last year, aims to expand saving through enhanced tax credits for small employers who start workplace plans. The bill also would make it easier for businesses to create shared retirement plans – sometimes called Multiple-Employer Plans (MEPs) – as a way to cut costs and administrative burden.

MEPs have enjoyed bipartisan support, but they would be voluntary. Few experts think they would have as much impact on coverage levels as the mandatory state IRA plans. “There is a lot of skepticism that if these plans don’t have a required participation feature of some sort, it won’t be enough to shift the tide,” said Shai Akabas, director of fiscal policy at the Bipartisan Policy Center. “There needs to be more of a gentle nudge in that direction.”

AARP, which has been a major lobbying force in favor of state plans, agrees that these plans may not be the perfect solution – and it does not object to the Republican MEP initiative. But it holds that some action is better than none.

“We do have a preference for things like auto-enrollment and payroll deduction, because behavioral economics tell us that these things work,” said Cristina Martin Firvida, AARP’s director of financial security. “But letting the perfect be the enemy of the good doesn’t expand coverage for anyone. We don’t want to keep waiting for the perfect solution to come along.”

 

(Editing by Matthew Lewis)
Published at Thu, 16 Feb 2017 12:10:00 +0000

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Goldman Sachs rises to 1st record since crisis

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Trump fills top spots with Goldman Sachs employees
Trump fills top spots with Goldman Sachs employees

Goldman Sachs rises to 1st record since crisis

  @mattmegan5

Goldman Sachs has finally recovered from the 2008 financial crisis. Ironically, the main catalyst is President Trump’s promises to undo safeguards put in place to prevent another meltdown.

Goldman Sachs stock closed on Tuesday at a new all-time high, taking out the prior record that was set in October 2007.

Virtually all bank stocks have been on fire since Trump’s victory in anticipating of lighter regulation, higher interest rates and faster growth. But Goldman Sachs(GS) has been particularly hot, surging an incredible 37% since the election. That’s quadruple the S&P 500’s post-election advance.

Clearly, Goldman Sachs has already emerged as a big winner of Trump’s pledge to “do a big number” on Dodd-Frank, the 2010 Wall Street reform law.

“If you really think deregulation is coming and banks are going to be cut loose, who’s going to win? It’s going to be them. We’ve seen that time and again,” said Michael Block, chief market strategist at Rhino Trading.

Goldman’s market value surged by $4 billion on the day that Trump signed an executive order beginning the process of rolling back Dodd-Frank.

goldman sachs stock record high

The irony is that Trump slammed Wall Street and Goldman Sachs during the campaign. He even used an image of Goldman Sachs CEO Lloyd Blankfein during his closing campaign ad while condemning the “global power structure.”

But Trump has gone from criticizing Wall Street and Goldman Sachs to hiring Goldman veterans to help him govern. Trump’s two biggest economic hires are Treasury Secretary Steven Mnuchin, a former Goldman Sachs partner, and top economic adviser Gary Cohn, who stepped down in December as chief operating officer of Goldman Sachs.

Analysts say those hires may actually be helping Goldman stock.

“With so many Goldman Sachs alums in the administration, maybe some think that policies will skew in the bank’s favor,” said Michael Wong, a Morningstar analyst who covers Goldman Sachs.

Wong cautioned that he doesn’t think “anyone should make an investment thesis based on that.”

Mnuchin, who was confirmed on Monday as treasury secretary, is in favor of reforming the Volcker Rule, which prevents big banks like Goldman Sachs from making risky bets with their own money.

Goldman’s post-election surge can’t really be explained by higher interest rates. Higher rates provide a bigger boost to the profits of consumer-focused lenders like Bank of America and Wells Fargo(WFC) than investment banks like Goldman.

“Higher interest rates is not playing that much into Goldman Sachs’ valuation,” said Wong.

But Goldman Sachs would benefit from faster growth and increased CEO confidence that could spark a wave of lucrative M&A and IPO deals.

Goldman shares have made a remarkable rebound from the 2008 crisis when many investors feared the complete collapse of the financial system. Goldman is up 380% since its low of $52 in November 2008.

While JPMorgan Chase returned to its pre-crisis high in 2013, it wasn’t until now for Goldman stock. Other big banks like Bank of America(BAC), Citigroup(C) and Morgan Stanley(MS) are nowhere near their all-time highs.

But is the Goldman rally overdone?

After all, not even Trump is talking about completely repealing Dodd-Frank and efforts to water regulation down are running into resistance, including from Federal Reserve chief Janet Yellen.

Yellen: U.S. banks are lending and globally competitive
Yellen: U.S. banks are lending and globally competitive

Wong thinks Goldman shares are “slightly overvalued” at this point.

“They’re pricing in a lot of perfection in terms of deregulation and the ability to take advantage of that,” Block said.
Published at Tue, 14 Feb 2017 21:40:53 +0000

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Carl Icahn poses ‘unacceptable risk’ of conflicts

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Icahn: I'm against the stupidity of some regulations
Icahn: I’m against the stupidity of some regulations

  @mattmegan5

President Trump has tapped Carl Icahn to help him get rid of “strangling regulations” that are hurting the American economy.

Of course, gutting some of those federal rules will also mean big profits for Icahn.

Icahn’s new role as Trump’s special adviser on regulatory reform may already be boosting his vast fortune. Shares of CVR Energy, the oil refiner Icahn controls, spiked 10% the day after Trump announced his appointment.

Icahn has been a vocal critic of EPA rules that require refiners like CVR(CVI) to either blend their oil with renewable fuels or buy credits. Icahn told CNN in December the EPA’s renewable fuel standard rules are “natural stupidity.”

Icahn’s new role as Trump’s regulation-buster has given him a powerful platform to push for getting rid of this EPA rule. The legendary investor has said he was even consulted on Trump’s selection of Scott Pruitt as the new head of the EPA.

Now, Senate Democrats including Elizabeth Warren and Al Franken are flagging concerns over just how closely Icahn’s business interests align with his role in the Trump administration.

The CVR episode suggest a “conflict of interest between Mr. Icahn and advice he gave President Trump on the nomination of Mr. Pruitt,” the senators wrote in a letter on Monday to White House Counsel Donald McGahn II.

Icahn’s “sprawling business empire and potentially unlimited portfolio in the administration” present an “unacceptable risk” of “real or potential conflicts of interest,” the lawmakers said.

Five other Democratic senators signed the letter: Sheldon Whitehouse, Sherrod Brown, Tammy Baldwin, Amy Klobuchar and Debbie Stabenow.

The lawmakers note that his firm, Icahn Enterprises, invests in a broad range of industries regulated by the federal government, including auto, railcars, and mining.

The letter asked the White House to respond to a series of questions before Wednesday on Icahn’s role, including whether he is a federal employee, if he’s been barred from providing advice on any specific regulations and whether he’ll be required to divest any of his holdings.

The senators also want to know whether Icahn has recused himself from any matters and if any steps have been taken to “prevent his access to non-public, confidential or otherwise privileged information.”

The White House didn’t respond to a request for comment.

Before he was elected, Trump suggested Icahn would be his choice as treasury secretary. Ultimately, Trump selected Icahn to help him overhaul federal regulations — one of the president’s major priorities to unleash the U.S. economy.

“He is not only a brilliant negotiator, but also someone who is innately able to predict the future especially having to do with finances and economies,” Trump said when he announced Icahn’s new role.

But even Icahn couldn’t have predicted how his 2012 purchase of CVR stock would turn into a controversy in a Trump White House. Icahn’s firm Icahn Enterprises owns an 82% stake in the oil refiner, making it one of his biggest positions.

Icahn has warned that the EPA’s renewable fuel standard rule will cost CVR $200 million this year. CVR has even filed a lawsuit against the EPA over the law, according to press reports.

Pruitt, Trump’s pick to lead the EPA, has been critical of the rule, calling it “unworkable” in its current form during his Senate confirmation hearing.

Wall Street is betting CVR will emerge as a big winner of Trump’s deregulation push. Shares of CVR have surged 68% since Trump’s victory.

CVR’s success has helped lift Icahn Enterprises(IEP) too. Shares of Icahn’s firm have soared 18% since Trump’s victory.
Published at Mon, 13 Feb 2017 20:14:45 +0000

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Auto CEOs want Trump to order review of 2025 fuel rules

FILE PHOTO – The GM logo is seen in Warren, Michigan, U.S. on October 26, 2015. REUTERS/Rebecca Cook/File Photo

 

Auto CEOs want Trump to order review of 2025 fuel rules

By David Shepardson| WASHINGTON

The chief executives of 18 major automakers and their U.S. units urged President Donald Trump to revisit a decision by the Obama administration to lock in vehicle fuel efficiency rules through 2025.

In a letter sent late Friday and viewed by Reuters, the chief executives of General Motors Co (GM.N), Ford Motor Co, Fiat Chrysler Automobiles NV, along with the top North American executives at Toyota Motor Corp (7203.T), Volkswagen AG (VOWG_p.DE), Honda Motor Co (7267.T), Hyundai Motor Co (005380.KS), Nissan Motor Co (7201.T) and others urged Trump to reverse the decision, warning thousands of jobs could be at risk.

On Jan. 13, the head of the U.S. Environmental Protection Agency finalized a determination that the landmark fuel efficiency rules instituted by then President Barack Obama should be locked in through 2025, a bid to maintain a key part of his administration’s climate legacy.

As part of a 2012 regulation, EPA had to decide by April 2018 whether to modify the 2022-2025 model year vehicle emission rules requiring average fleet-wide efficiency of more than 50 miles per gallon through a “midterm review.” The agency in November moved up the timetable for proposing automakers could meet the 2025 standards.

The auto CEO letter asked Trump to reopen the midterm review “without prejudging the outcome” and praised Trump’s “personal focus on steps to strengthen the economy in the United States and your commitment to jobs in our sector.”

Days after Trump was elected, automakers quickly appealed to Trump to review the rules, saying they impose significant costs and are out of step with consumer preferences.

Gloria Bergquist, a spokeswoman for the Alliance of Automobile Manufacturers, said Sunday, automakers are “seeking a restoration of the process — that’s all. This is a reset.”

The chief executives of Ford, GM and Fiat Chrysler also raised the issue in a White House meeting with Trump last month.

The letter warned the rules could “threaten future production levels, putting hundreds of thousands and perhaps as many as a million jobs at risk.”

Environmentalists say the rules are working, saving drivers thousands in fuel costs and shouldn’t be changed. Luke Tonachel of the Natural Resources Defense Council, said lowering the standards would “cost consumers more, increase our dependence on oil and put Americans at greater risk from a changing climate.”

Trump EPA nominee Scott Pruitt told a Senate panel he will review the Obama administration’s decision.

In 2011, Obama announced an agreement with automakers to raise fuel efficiency standards to 54.5 miles per gallon. This, the administration said, would save motorists $1.7 trillion in fuel costs over the life of the vehicles, but cost the auto industry about $200 billion over 13 years.

The EPA said in July that because Americans were buying fewer cars and more SUVs and trucks, it estimated the fleet will average 50.8 mpg to 52.6 mpg in 2025.

 

(Reporting by David Shepardson; Editing by Andrea Ricci)
Published at Sun, 12 Feb 2017 16:53:37 +0000

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Senators question Goldman Sachs on its role in Trump banking policy

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 Senators question Goldman Sachs on its role in Trump banking policy

By Sruthi Shankar

Two U.S. senators are seeking details from Goldman Sachs Group Inc’s (GS.N) chief executive on the extent to which the bank’s employees were involved in drafting of the recent executive orders on banking and fiduciary regulations.

In a letter to CEO Lloyd Blankfein dated Feb. 9 and made public on Friday, Democratic Senators Elizabeth Warren and Tammy Baldwin asked for details on “lobbying” activities in the bank related to review of the Dodd-Frank Act and the Obama-era fiduciary rule on financial advice.

Blankfein was also asked to detail the profits Goldman would make if these reforms came into effect.

“We’ve had no involvement in the drafting of any executive orders,” a Goldman spokesman said on Friday.

In December, Trump appointed Gary Cohn, former Goldman president and chief operating officer, to head the White House National Economic Council, a group that coordinates economic policy across agencies.

Trump last week ordered reviews of major banking rules that were put in place after the 2008 financial crisis, drawing fire from Democrats who said his order lacked substance and squarely aligned him with Wall Street bankers.

“The executive orders released by President Trump on Friday last week raise our concerns about the degree to which Cohn’s advice to Trump is good for Wall Street, but bad for Americans,” the senators wrote on Thursday.

“Goldman Sachs would be a major beneficiary of these efforts to deregulate the financial industry,” they added in the letter.

Trump also named former Goldman partner Steven Mnuchin as his pick for Treasury secretary in December.

The senators have asked for any communication between the bank’s employees and Cohn, Mnuchin, nominee for the SEC chair Jay Clayton and chief strategist Steve Bannon.

(Editing by Sandra Maler)
Published at Fri, 10 Feb 2017 21:41:26 +0000

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San Francisco is taxing the rich to pay for free community college

by tpsdave from Pixabay

San Francisco is taxing the rich to pay for free community college

  @KatieLobosco

San Francisco will be the first city in the nation to offer free community college to all residents starting this fall, Mayor Ed Lee announced this week.

The city will pay for it by taxes on properties selling for more than $5 million.

The real estate transfer tax, as it’s called, was increased last year for both residential and commercial properties. The hike was approved by voters in November.

The tax starts at 2.25% and goes up to 3% for properties worth at least $25 million. It’s expected to bring in an average of $45 million a year, according to the city controller. But the money goes into the city’s general fund and is also expected to be used for affordable housing and senior support services.

The free tuition plan is expected to impact about 28,000 residents who currently take classes at City College of San Francisco and encourage more people to sign up. Chancellor Susan Lamb said the school has the capacity for 85,000 students.

It’s difficult to predict how many more people will enroll, and how much the free-tuition plan will end up costing. San Francisco has committed $5.4 million a year for the next two years, and then will have to reassess. That includes a one-time $500,000 stipend to City College to help handle an influx of students.

San Francisco’s tuition-free plan is more progressive than others round the country. First, everyone is eligible as long as they have resided in San Francisco for at least one year.

It covers the $46 cost per credit no matter how rich you are, “even to the children of the founders of Facebook,” said city lawmaker Jane Kim.

You don’t have to be enrolled full-time or be a recent high school graduate. This means that people who are seeking job retraining or want to take a few foreign language courses won’t have to pay for the cost of the credits.

Students will still be on the hook for the mandatory $17 per semester fee at City College and the cost of books, so college won’t necessarily be free.

What also sets apart San Francisco’s plan is that it offers the poorest students additional money to help pay for these other expenses. An individual has to earn less than $17,000 a year to qualify for the aid, or less than $37,000 for a family of four. Eligible full-time students will get $500 a year and part-time students will get $200 a year.

“We have the fastest growing income gap than any city across the nation,” Kim said on Monday at a press conference.

“Making city college free is going to provide greater opportunities for more San Franciscans to enter into the middle class and more San Franciscans to stay in the middle class if they currently are,” she said.

The push for free tuition is gaining support across the country. Tennessee started offering free community college to residents in 2015, and will expand the program this year to include adults returning to school. Lawmakers in New York are discussing a program that would make four-year and two-year public colleges tuition-free for residents who earn less than $125,000 a year. And Rhode Island’s governor is pushing for two free years at public colleges for recent high school graduates.

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Mexico doubles down on Trump ‘contingency plan’

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Top Mexico official eyes 'openness' in Trump stance
Agustin Carstens, Governor, Bank of Mexico, eyes ‘openness’ in Trump stance

  @CNNMoney

Mexico is pulling out all the stops to shield itself from President Trump’s looming policies.

The country’s central bank raised interest rates Thursday for the third time since the U.S. election in an effort to save Mexico’s currency, the peso, which is near an all-time low. It raised rates by 0.5%.

Mexican leaders are very worried about all of Trump’s threats — a potential 20% tax on Mexican imports, a wall on the border, and renegotiating a trade deal.

In the big picture, Mexico’s leaders want — as best they can — to ease Trump’s impact on their economy and the peso’s diminishing value.

On Thursday, the peso did jump up a bit after the announcement. However, Trump has largely dictated its fate of late. The currency is down 10% since Trump’s election victory.

“The peso movement has mostly been a reaction to Trump” says Rodrigo Aguilera, an economist at the Economist Intelligence Unit. “Mexico hasn’t really had a huge influence in how the peso has behaved.”

Mexico’s central bank governor, Agustin Carstens, told CNN in November that Trump’s policies, if enacted, would be like a “hurricane” for the Mexican economy.

Mexico sends 80% of its exports north of the border, and its economy heavily relies on the northern neighbor.

The interest rate hikes are a part of what Carstens has called Mexico’s “contingency plan” to deal with Trump. However, Carstens announced late last year that he’ll be resigning from the central bank in June. It’s unclear who will take over for him and see through the contingency plan.

The contingency plan didn’t go well initially. Carstens and his colleagues tried rate hikes and selling dollars to international investors to prop up the peso, but none of it worked. Only recently, has the peso stopped bleeding despite being very low. One dollar equals 20.30 pesos. Before Trump’s election it was 18.30 pesos.

CNNMoney (Mexico City)First published February 9, 2017: 3:23 PM ET

Published at Thu, 09 Feb 2017 20:39:26 +0000

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Trump gives America’s ‘poorest white town’ hope

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Can President Trump win the War on Poverty?
Can President Trump win the War on Poverty?

Trump gives America’s ‘poorest white town’ hope

Published at Mon, 06 Feb 2017 12:48:19 +0000

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Trump begins dismantling Obama financial regulations

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Trump signs plan to roll back financial regulations
Trump signs plan to roll back financial regulations

Trump begins dismantling Obama financial regulations

  @mattmegan5

With the stroke of a pen, President Trump has begun the push to dismantle the sweeping Dodd-Frank reform of Wall Street.

Published at Fri, 03 Feb 2017 18:47:59 +0000

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Goldman CEO takes lead on Wall Street in slamming Trump travel ban

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Goldman Sachs Chairman and CEO, Lloyd Blankfein, waits to speak at the 10,000 Women/State Department Entrepreneurship Program at the State Department in Washington, March 9, 2015. REUTERS/Gary Cameron

 

Goldman CEO takes lead on Wall Street in slamming Trump travel ban

By Olivia Oran

Goldman Sachs Group Inc Chief Executive Lloyd Blankfein became the first major Wall Street leader to speak out against President Donald Trump’s order to halt arrivals from several Muslim-majority countries.

In a voicemail to employees on Sunday, Blankfein said diversity was a hallmark of Goldman’s success, and if the temporary freeze became permanent, it could create “disruption” for the bank and its staff.

“This is not a policy we support, and I would note that it has already been challenged in federal court, and some of the order has been enjoined at least temporarily,” Blankfein said, according to a transcript seen by Reuters.

In Silicon Valley, the heads of companies such as Apple and Facebook swiftly denounced Trump’s immigration ban. But the rest of corporate America has been more circumspect in speaking out, underscoring the sensitivities around opposing policies that could provoke a backlash from the White House.

Tepid responses from many of Blankfein’s peers made his comments all the more potent, especially because Goldman has gotten attention for the number of its alumni who have joined Trump’s administration.

Top BlackRock Inc executives including CEO Larry Fink, sent a memo to staff on Monday saying Trump’s order presented “challenges” to its goals of diversity and inclusion. BlackRock is examining the direct impact on its employees, as well as the broader implications of the order, they said.

“We, of course, all want to promote security and combat terrorism, but we believe it needs to be done with respect for due process, individual rights and the principle of inclusion,” they wrote.’

 

Citigroup CEO Mike Corbat said in a memo to employees on Monday the bank is concerned about “the message the executive order sends” as well as the impact immigration policies might have “on our ability to serve our clients and contribute to growth.”

JPMorgan Chase & Co’s operating committee, which includes CEO Jamie Dimon, avoided directly criticizing the policy. In a note to staff over the weekend, the firm said it was reaching out to all employees affected and noted that the country was “strengthened by the rich diversity of the world around us.”

Bank of America Corp CEO Brian Moynihan wrote in an internal memo obtained by Reuters and confirmed by a spokesman that the bank is “closely monitoring” the order and connecting with staff who may be affected and have questions.

“We depend upon the diverse sources of talent that our teammates represent,” the memo stated.

 

Other banks, including Morgan Stanley and Wells Fargo & Co, said they were reviewing the executive order and its implication on staff.

Representatives for stock exchange operators Bats Global Markets, Nasdaq Inc and New York Stock Exchange parent Intercontinental Exchange Inc all declined to comment.

The U.S. hedge fund industry was also virtually silent on the immigration restrictions. Representatives for most major firms —including Bridgewater Associates, Renaissance Technologies, Millennium Management and Two Sigma Investments — did not respond to requests for comment over the weekend.

Private equity firms, including Blackstone Group LP, whose CEO, Stephen Schwarzman, chairs Trump’s advisory panel of business leaders, also would not comment on the travel ban.

 

People familiar with some of the banks’ and firms’ decisions in making public statements said a fear of riling Trump was inhibiting most CEOs’ responses.

Since the election, he has taken to Twitter to excoriate certain companies, causing stock price swings. And because Wall Street is hoping for an easing of financial reform regulations, most firms want to stay in Trump’s good graces, they said.

The most high-ranking Goldman executive to have joined the Trump administration is former Chief Operating Officer Gary Cohn, who left the bank in December to become head of the White House National Economic Council. Others include Treasury Secretary nominee Steven Mnuchin and Trump advisers Steve Bannon, Anthony Scaramucci and Dina Powell.

Those recruits have put the Goldman back in the spotlight as a bank that long had influence in government and public policy, from the days of the Great Depression to the 2008 financial crisis.

But after the bank was embroiled in scandals over its mortgage-market bets, it embarked on a campaign to improve its image. Blankfein has promoted its focus on philanthropy and diversity initiatives, as well as Goldman’s role in job creation.

(Reporting by Olivia Oran in New York; additional reporting by Richa Naidu in Bengaluru and Lawrence Delevingne, David Henry and Trevor Hunnicutt in New York; Editing by Nick Zieminski and Tom Brown)
Published at Tue, 31 Jan 2017 00:05:48 +0000

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Goldman Sachs CEO warns of ‘disruption’ from Trump travel ban

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Protesters storm airports nationwide
Protesters storm airports nationwide

Goldman Sachs CEO warns of ‘disruption’ from Trump travel ban

  @mattmegan5

Goldman Sachs CEO Lloyd Blankfein fired off a companywide voicemail Sunday night saying he does not support President Trump’s travel ban and warned it could cause “disruption” to the Wall Street bank.

“This is not a policy we support,” Blankfein said in the message sent out to the firm’s global staff.

The comments followed a weekend of confusion and protests over Trump’s ban on travelers from seven Muslim-majority countries and a freeze on the U.S. refugee program.

“I recognize that there is potential for disruption, and especially to some of our people and their families,” the Goldman Sachs (GS) boss said in the voicemail, a transcript of which the bank provided to CNNMoney.

Like other global banks, Goldman has a significant presence in the Middle East. The Wall Street firm has offices in Israel, Qatar, Saudi Arabia and the United Arab Emirates — none of which are part of the ban.

Blankfein said Goldman executives will “work to minimize such disruption to the extent we can within the law and are focused on supporting our colleagues and their families who may be affected.”

In a subtle rebuke to Trump, Blankfein also quoted from Goldman’s business principles that preach the importance of diversity.

“We must attract, retain and motivate people from many backgrounds and perspectives. Being diverse is not optional; it is what we must be,” Blankfein quoted the principles as saying.

“Now is a fitting time to reflect on those words,” the CEO said.

Interestingly, a former Goldman employee is said to have played a role in the Trump travel ban: Steve Bannon. Trump’s chief strategist worked at Goldman in the 1980s as an M&A banker and has since emerged as a critic of Wall Street. Bannon was among the senior White House advisers who helped interpret the meaning of the executive order amid widespread confusion in the government, sources told CNN.

Bannon is one of several former Goldman execs who Trump has tapped for senior roles in his administration, including treasury secretary nominee Steven Mnuchin and top economic adviser Gary Cohn.

Goldman is the latest global company to raise concern over Trump’s travel ban.

The response has been the loudest from Silicon Valley, where Lyft donated $1 million to the ACLU, Google launched a $4 million fund that will also partly benefit ACLU, Airbnb offered free housing to those impacted and a slew of executives donated money to fighting the travel ban.

Elsewhere, Starbucks (SBUX) announced plans to hire 10,000 refugees over five years and General Electric (GE) CEO Jeff Immelt said in a blog post that he shares the “concern” felt by his employees.

JPMorgan Chase (JPM)CEO Jamie Dimon pledged “unwavering commitment to the dedicated people” who work at the bank and said the company has reached out to impacted employees.

Morgan Stanley (MS) CEO James Gorman sent an email to all employees Sunday afternoon saying he is “concerned” for employees who may be impacted by the new U.S. travel restrictions.

Gorman didn’t expressly say he opposes the travel ban, but the Australia native said Morgan Stanley “immensely” values the contributions of “all our employees from all over the world.”

–CNNMoney’s Jill Disis and Cristina Alesci contributed to this report.

 CNNMoney (New York)First published January 30, 2017: 9:45 AM ET

Published at Mon, 30 Jan 2017 14:45:16 +0000

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Trump travel ban stirs faint corporate outcry beyond Silicon Valley

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By Devika Krishna Kumar and Ross Kerber
| NEW YORK/BOSTON

Most U.S. corporate bosses have stayed silent on President Donald Trump’s immigration curbs, underscoring the sensitivities around opposing policies that could provoke a backlash from the White House.

While the leaders of Apple Inc APPL.O, Google (GOOGL.O) and Facebook Inc (FB.O) emailed their staff to denounce the suspension of the U.S. refugee program and the halting of arrivals from seven Muslim-majority countries, many of their counterparts in other industries either declined comment or responded with company statements reiterating their commitment to diversity.

The difference in response shows the pressure large swathes of corporate America faces to avoid tussling publicly with the new administration.

Companies such as aircraft maker Boeing Co (BA.N) and automakers Ford Motor Co (F.N) and General Motors Co (GM.N) have already had run-ins with Trump over other issues, and they have much at stake in policy decisions that the administration will make on tax, trade and regulatory matters.

Before office, Trump attacked Boeing over the cost of the future Air Force One program. Boeing Chief Executive Officer Dennis Muilenburg met with him earlier this month and said he and Trump had made progress on the Air Force One issue and the potential sale of fighter aircraft.

Representatives from Boeing, General Motors and Ford declined to comment on Trump’s immigration curbs.

Wall Street, meanwhile, is hoping the new administration will ease some of the regulations introduced in the wake of the 2007-08 financial crisis and adopt a lighter touch in their enforcement.

Industries including banking, healthcare and auto manufacturing “see themselves on the cusp of a new era of deregulation, and they do not want to do anything that would offend the new emperor,” said Cornelius Hurley, director of Boston University’s Center for Finance, Law & Policy.

Trump had targeted both the tech industry and Wall Street during his presidential campaign, but once elected, he tapped former investment bankers, hedge fund managers and private equity investors to join his administration.

With friends in high places, Wall Street may have less reason to be as outspoken about the new restrictions.

“Bankers have direct access to this White House,” said Erik Gordon, who teaches at the University of Michigan’s Ross School of Business. “They don’t have to protest publicly.”

 

Representatives of Goldman Sachs Group Inc (GS.N), Citigroup Inc (C.N), Bank of America Corp (BAC.N) and Morgan Stanley (MS.N) declined to comment on Trump’s immigration order.

Wells Fargo & Co (WFC.N) said in a statement that it was reviewing the executive order and its implications for staff and its business.

JPMorgan Chase & Co’s (JPM.N) Operating Committee, which includes CEO Jamie Dimon, sent a note to staff saying it was reaching out to all employees affected and noted that the country was, “strengthened by the rich diversity of the world around us.”

To be sure, some CEOs were more outspoken.

Nike Inc (NKE.N) CEO Mark Parker said the company did not support the executive order.

“Nike believes in a world where everyone celebrates the power of diversity,” he said in a statement. “Those values are being threatened by the recent executive order in the U.S. banning refugees, as well as visitors, from seven Muslim-majority countries.”

 

Brent Saunders, CEO of U.S. drugmaker Allergan Plc (AGN.N), tweeted: “Oppose any policy that puts limitations on our ability to attract the best & diverse talent.”

But many boardrooms kept quiet. Representatives for some energy companies, including Exxon Mobil Corp (XOM.N), for example, declined to comment.

GOOD CORPORATE CITIZENS

As the idea of corporate social responsibility has taken root, so companies have increasingly championed a range of causes, including gay rights, diverse workplaces and a global view.

Many in corporate America are still trying to work out how to deal with a new government that takes a more conservative stance on some social issues and has an anti-globalization platform.

 

Those non-tech companies that did issue statements over the weekend tended to emphasize their role as good corporate citizens rather than openly criticize Trump’s policies.

Starbucks Corp (SBUX.O) CEO Howard Schultz has put the coffee chain in the national spotlight before, asking customers not to bring guns into stores and urging conversations on race relations.

In a letter to employees, he said Starbucks was developing plans to hire 10,000 refugees over five years across dozens of countries, but he did not directly criticize Trump’s order.

“I am hearing the alarm you all are sounding that the civility and human rights we have all taken for granted for so long are under attack,” he wrote.

In his statement, General Electric Co (GE.N) CEO Jeff Immelt told staff that the company would engage with the U.S. government.

“We will continue to make our voice heard with the new administration and Congress, and reiterate the importance of this issue to GE and to the business community overall,” he wrote.

One of the most immediate ways for corporate bosses to communicate with Trump about the immigration order will be the first meeting of his advisory panel of business leaders next week.

Of the 19 leaders on that panel, only two, Elon Musk, who founded Tesla Motors Inc (TSLA.O) and SpaceX, and Travis Kalanick, CEO of Uber Technologies Inc [UBER.UL], have spoken out against Trump’s immigration curbs.

A spokeswoman for Stephen Schwarzman, the billionaire chief executive of Blackstone Group LP (BX.N) whom Trump tasked to set up and chair the panel, declined to comment.

(Additional reporting by Olivia Oran, Dan Freed, Lauren Hirsch, Lawrence Delevingne and Gui Qing Koh in New York, Joe White in Detroit and David Shepardson in Washington; Writing by Carmel Crimmins; Editing by Lisa Von Ahn)
Published at Mon, 30 Jan 2017 05:01:00 +0000

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RPT-WRAPUP 6-Chaos, anger as Trump order halts some Muslim immigrants

by b1-foto from Pixabay

RPT-WRAPUP 6-Chaos, anger as Trump order halts some Muslim immigrants

By Yeganeh Torbati, Jeff Mason and Mica Rosenberg
| WASHINGTON/NEW YORK

President Donald Trump’s order to restrict people from seven Muslim-majority countries from entering the United States sparked confusion and anger on Saturday after immigrants and refugees were kept off flights and left stranded in airports.

In his most sweeping decision since taking office a week ago, Trump, a Republican, put a four-month hold on allowing refugees into the United States and temporarily barred travelers from Syria and six other countries.

Civil rights and faith groups, activists and Democratic politicians were furious and vowed to fight the order.

Capping a day of confusion and chaos and protests in several airports across the country, a federal judge in Brooklyn, New York, granted a temporary reprieve. The American Civil Liberties Union successfully argued for a temporary stay that allowed detained travelers to stay in the United States.

Supporters outside the Brooklyn courtroom and at protests at airports in Dallas, Chicago, New York and elsewhere cheered the decision, but a bigger fight lay ahead.

The court action does not reverse Trump’s order, which was criticized by some of America’s closest allies.

Trump, a businessman who successfully tapped into American fears about terror attacks during his campaign, had promised what he called “extreme vetting” of immigrants and refugees from areas the White House said the U.S. Congress deemed to be high risk.

He told reporters in the White House’s Oval Office on Saturday that his order was “not a Muslim ban” and said the measures were long overdue.

“It’s working out very nicely. You see it at the airports, you see it all over,” Trump said.

Along with Syria, the ban affects travelers with passports from Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen.

The Department of Homeland Security said about 375 travelers had been affected by the order, 109 of whom were in transit and were denied entry to the United States. Another 173 were stopped by airlines before boarding.

The order “affects a minor portion of international travelers,” the department said in a statement, saying the measures “inconvenienced” less than 1 percent of travelers.

The new rules blindsided people in transit and families waiting for them, and caused havoc for businesses with employees holding passports from the targeted nations and colleges with international students.

Pegah Rahmani, 25, waited at Washington’s Dulles airport for several hours for her grandparents, both Iranian citizens with U.S. green cards. “They weren’t treating them very well,” she said.

Rahmani’s grandfather is 88 and legally blind. Her grandmother is 83 and recently had a stroke. They were released to loud cheers and cries.

 

‘TIP OF THE SPEAR’

Several Democratic governors said they were examining whether they could launch legal challenges, and other groups eyed a constitutional challenge claiming religious discrimination.

“I don’t think anyone is going to take this lying down,” said Cleveland immigration lawyer David Leopold. “This is the tip of the spear and more litigation is coming.”

The White House did not respond immediately to a request for comment.

The Department of Homeland Security said the order would stay in place.

“No foreign national in a foreign land, without ties to the United States, has any unfettered right to demand entry into the United States,” the department statement said.

Mark Krikorian, the director of the conservative Center for Immigration Studies, called lawsuits challenging the order “last ditch efforts” that would only apply to a few individuals, and he said a broader constitutional argument would be hard to win.

“The first amendment doesn’t apply to foreigners living abroad. The law explicitly says the president can exclude any person or class of people he wants,” Krikorian said.

 

Some leaders from the U.S. technology industry, a major employer of foreign workers, issued warnings to their staff and called the order immoral and un-American.

“This ban will impact many innocent people,” said Travis Kalanick, chief executive of Uber Technologies Inc UBER.UL, who said he would raise the issue at a White House meeting on Friday.

Arab travelers in the Middle East and North Africa said the order was humiliating and discriminatory. Iran vowed to retaliate.

Sudan called the action “very unfortunate” after Washington lifted sanctions on the country just weeks ago for cooperation on combating terrorism. A Yemeni official expressed dismay at the ban.

Iraq’s former ambassador to the United States, Lukman Faily, told Reuters that Trump’s ban was unfair to a country that itself has been a victim of terror attacks, and could backfire.

“We have a strong partnership with U.S., more so in the urgent fight against terrorism. This ban move will not help, and people will start questioning the bond of this partnership, Faily said.

Allies in the United Kingdom, France and Germany were critical. Canadian Prime Minister Justin Trudeau tweeted a photo of himself welcoming Syrian refugees.

 

GREEN CARD CONFUSION

Confusion abounded at airports as immigration and customs officials struggled to interpret the new rules. Some legal residents with green cards who were in the air when the order was issued were detained at airports upon arrival.

However, senior administration officials said it would have been “reckless” to broadcast details of the order in advance.

Other officials said green card holders from the affected countries would require extra screening and would be cleared on a case-by-case basis.

Airlines were blindsided and some cabin crew were barred from entering the country.

Travelers were handled differently at different points of entry and immigration lawyers advised clients to change their destination to the more lenient airports, said Houston immigration lawyer Mana Yegani.

At Chicago O’Hare International Airport, brothers Bardia and Ayden Noohi waited for four hours for their father Kasra Noohi – who has an Iranian passport and a U.S. green card – to be allowed through.

They knew Trump had pledged tougher rules but did not expect the problems. “I didn’t think he’d actually do it,” Bardia Noohi, 32, said. “A lot of politicians just talk.”

Thousands of refugees seeking entry were thrown into limbo. Melanie Nezer of the Hebrew Immigrant Aid Society said she knew of roughly 2,000 who were booked to come to the United States next week.

Trump’s order indefinitely bans refugees from Syria. In a television interview, he said he would seek to prioritize Christian refugees fleeing the war-torn country.

U.S. officials, speaking on condition of anonymity, said they were not consulted on the action and in some cases only learned the details as they were made public.

At the State Department, a senior official said lawyers were working to interpret the executive order, which allows entry to people affected by the order when it is in the “national interest.”

However, a federal law enforcement official said: “It’s unclear at this point what the threshold of national interest is.”

(Reporting by Yara Bayoumy, Jeff Mason, Roberta Rampton, Doina Chiacu, Lesley Wroughton, Yeganeh Torbati in Washington; Mica Rosenberg, Jonathan Allen, Melissa Fares, Daniel Trotta and David Ingram in New York; Robert Chiarito in Chicago; Brendan O’Brien in Milwaukee; Lisa Maria Garza in Dallas; Alissa Greenberg, Joseph Menn, Julia Love and Kristina Cook in San Francisco; Jeffrey Dastin in Redwood City, California; Alex Dobuzinskis in Los Angeles; Khalid Abdelaziz in Khartoum; Parisa Hafezi in Dubai; Andrea Hopkins, Anna Mehler Paperny in Toronto; Writing by Doina Chiacu and Roberta Rampton; Editing by Grant Mary Milliken, Bill Rigby and Paul Tait)
Published at Sun, 29 Jan 2017 08:10:47 +0000

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U.S. tech leaders sound alarm over Trump immigration ban

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Published at Sat, 28 Jan 2017 21:49:17 +0000

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