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How Trump’s Tax Plan Is Dividing Corporate America

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How Trump’s Tax Plan Is Dividing Corporate America

By Charles Bovaird | January 27, 2017 — 7:25 PM EST

While dozens of major U.S. exporters have been coming together to form a joint coalition supporting the Republican “border adjustment” tax plan, several large importers have also been flocking to oppose the initiative, a development that is helping divide corporate America, according to The Financial Times. The ability to enact the border adjustment plan—which would tax imports but leave exports untouched—seems to be a key ingredient of existing Republican tax reform proposals.

General Electric Company (GE), Dow Chemical Co. (DOW), Boeing Co. (BA) and dozens of other manufacturers are currently in discussions about developing a coalition so they can lobby in favor of Trump’s proposed plan, according to The Financial Times. These organizations might hire Cavalry, a political consulting firm, to run this particular campaign. Retailers such as Wal-Mart Stores Inc. (WMT) are gathering to oppose the measure. Retail companies whose goods largely come from suppliers overseas have warned that the proposed plan could severely curtail their profits. (For more, see also: Is Amazon Affected by Trump’s Border-Adjusted Tax?)

Corporate Tax Specifics

The tax plan proposed by the House of Representatives, which was recently endorsed by President Donald Trump, is meant to help produce revenue so lawmakers can sharply reduce corporate and personal income tax rates, according to The Wall Street Journal. The House plan proposes to cut the corporate income tax rate to 20% from 35%, exempt exports from taxable income and eliminate companies’ ability to deduct expenses for imported goods. (For more, see also: Parties For Taxes: Republicans Vs. Democrats.)

A New Hope

While the border adjustment proposal would allow more comprehensive tax reform, the idea has created some very strong reactions from those who support and oppose it, The Financial Times reported. Companies based in the United States have spent years attempting to change the U.S. tax code, which some have described as “broken.” Greater hopes of fixing the current corporate tax regime has been credited with fueling the recent rally in stocks, which began following Trump’s victory.
Published at Sat, 28 Jan 2017 00:25:00 +0000

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Wells Fargo complaint website has vanished

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Fmr. Wells Fargo managers: the pressure was unbearable
Fmr. Wells Fargo managers: the pressure was unbearable

Wells Fargo complaint website has vanished

  @mattmegan5

Alarmed by allegations that Wells Fargo retaliated against whistleblowers, the Labor Department set up a dedicated website last year for the bank’s workers to report abuse and seek advice.

Earlier this month, the website disappeared — and Senator Elizabeth Warren is demanding to know why.

Warren fired off a letter to the Labor Department on Thursday raising concern over the removal of the Wells Fargo website. She cited the “substantial harm done to workers” as a result of “widespread and continuing” management problems at the scandal-ridden bank.

The Democrat from Massachusetts said the website — www.dol.gov/wellsfargo — was “up and running” as of January 20, the day Trump was sworn in.

However, Stephen Barr, a Labor Department spokesman, told CNNMoney that the Wells Fargo page was taken down on January 9 while President Obama was still in office.

Barr, a four-year Labor Department veteran who called himself a “career civil servant,” said he does not know why the page was removed nor whether it will go back up.

“The current administration has given no direction whatsoever here at the Department of Labor on anything regarding Wells Fargo,” Barr said.

A search on the Internet Archive, a nonprofit digital library of archived web pages, shows that the page was available on December 21. However, the archive doesn’t indicate precisely when the page was taken down.

Warren’s office did not respond to questions over the discrepancy about when the site was removed.

Wells Fargo was unaware that the website had been taken down, a person familiar with the matter told CNNMoney. Wells Fargo declined to comment on the matter.

Click here to read an archived version of the page.

wells fargo website labor department

Wells Fargo’s fake account scandal — the bank fired 5,300 workers for creating as many as 2 million fake accounts — has revealed a toxic sales culture and allegations it mistreated workers.

The Labor Department launched the website last September as a way for Wells Fargo workers to flag potential violations and learn about their rights.

“Taking down this website enables Wells Fargo to escape full responsibility for its fraudulent actions and the Department to shirk its outstanding obligations to American workers,” Warren wrote.

In addition to launching the site, the Labor Department under former President Obama opened a “top-to-bottom review” of Wells Fargo cases, complaints and violations. That review included an inquiry into both open and closed whistleblower complaints against Wells Fargo.

The Labor Department’s focus on Wells Fargo followed a CNNMoney investigation on former employees who said they were fired after trying to put a stop to illegal practices by calling the bank’s ethics hotline.

Wells Fargo (WFC) recently admitted that a review of its ethics hotline has uncovered evidence that at least some of these whistleblower retaliation claims may have merit.

A spokeswoman for the bank emphasized that “there is no place for retaliation at Wells Fargo.”

The Labor Department was also investigating claims from hourly Wells Fargo workers who said the bank’s pressure-cooker culture forced them to work late without overtime pay. CNNMoney spoke to numerous former Wells Fargo employees who alleged wage theft.

Wells Fargo has said that its employees are compensated for all hours worked, including overtime.

Warren wrote that she hopes the Labor Department “under President Trump” will make sure Wells Fargo workers cheated out of wages or illegally retaliated against will be provided “all of the remedies available” under current law.

The letter from Warren asked Labor Department officials to respond to several questions by February 3, including whether the agency will reinstate the Wells Fargo website and if the investigation will continue despite the transition of power.

There are signs that the investigation may have hit some recent obstacles.

In mid-December, the Labor Department wrote a letter saying that an outside attorney representing Wells Fargo tried to hamper the investigation, The Wall Street Journal reported. The letter said that in addition to denying access to records and interviews, the lawyer said she could be part of the new Trump administration, the Journal reported.

Warren asked the Labor Department to expand its investigation to look into how Wells Fargo employees told The Wall Street Journal that a 24-hour heads up ahead of internal branch investigations gave them time to shred paperwork and forge documents.

Published at Fri, 27 Jan 2017 18:34:31 +0000

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Pentagon starts cost-cutting reviews of F-35, presidential aircraft

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U.S. Defense Secretary James Mattis ordered cost-cutting reviews of two major aircraft acquisition programs, the F-35 fighter jet and Boeing Co’s (BA.N) next-generation of Air Force One presidential plane, according to Pentagon memos released on Friday.

The review of Lockheed Martin’s (LMT.N) F-35 program, which President Donald Trump has derided as being too expensive, would have two parts: one looking at how to cut costs, and the other determining whether the F/A-18E/F, with improvements, could be an effective, cheaper alternative, the memo said.

Costs for Lockheed’s F-35 program had escalated to an estimated $379 billion. The program accounted for 20 percent of the company’s total revenue of $46.1 billion last year.

The review of the Air Force One replacement, which Trump has also called too expensive, would look at the plane’s requirements and systems and identify courses of action to reduce acquisition and sustainment costs.

In December, Trump extracted a promise from Boeing Chief Executive Officer Dennis Muilenburg that the cost of replacing Air Force One would not exceed $4 billion.

“We’re going to get it done for less than that,” Muilenburg told reporters last month, “and we’re committed to working together to make sure that happens.”

On Friday, a Boeing representative said the company had been providing information to the Trump administration for some weeks and was committed to providing equipment to the military as affordably as possible.

Lockheed Martin did not immediately respond to a request for comment.

(Reporting by Phil Stewart, Idrees Ali, and Mike Stone; Editing by Chizu Nomiyama and Lisa Von Ahn)

Published at Fri, 27 Jan 2017 20:44:18 +0000

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CEO who backs Trump: People must be realistic

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Building Trump's Wall: For Texans, it's complicated
Building Trump’s Wall: For Texans, it’s complicated

CEO who backs Trump: People must be realistic

  @lamonicabuzz

A CEO who voted for Donald Trump is confident that the president will get his big infrastructure plan through Congress.

But he said Wall Street might be just a little too giddy.

Bill Sandbrook, the head of U.S. Concrete (USCR), told CNNMoney that investors are ignoring the political reality in Washington. Even though President Trump is pledging to take quick action to help stimulate the stagnant U.S. economy, it may not be that simple.

“Investors are underestimating the complexity of getting deals done. There are a lot of steps between saying it and doing it,” Sandbrook said. “Things take a while. Shovel ready doesn’t mean it gets done immediately. People need to be more realistic.”

This is the third time CNNMoney has spoken with Sandbrook since the election. Trump’s win has given the company’s stock a significant boost, largely due to hopes that increased spending on roads and bridges will lead to a spike in demand for concrete.

On Election Day, shares of U.S. Concrete closed at just under $49. One week later, when CNNMoney first interviewed Sandbrook, the stock was trading at $56.25. By the time we spoke to Sandbrook again in mid-December, the stock was trading at about $65.

Shares hit an all-time high above $70 earlier this week after Trump reiterated his plans to build a wall on the border of Mexico. The stock has pulled back a bit since then. But it is still up more than 35% since Trump’s win.

Sandbrook joked that he’s really happy to have a company named U.S. Concrete at a time like this. And he continues to be impressed by what he’s heard from the new president so far.

“It is refreshing that a winning candidate is doing exactly what he said would do. Unequivocally. He’s quickly hit the ground running,” Sandbrook said.

He added that he’s confident that there will be a big increase in spending on infrastructure, even though it may take time to nail down the final details. But Sandbrook said he’s encouraged by the bipartisan support for investing in infrastructure.

To that end, a group of eight Democratic senators proposed their own $1 trillion infrastructure plan earlier this week. Even Jerry Brown, the Democratic governor of California, praised Trump’s plan in his state of the state address this week.

While Brown said he was concerned by Trump’s “disturbing” rhetoric and the use of “alternative facts,” he had no problem with the president’s infrastructure plans.

“The president has stated his firm intention to build, and build big,” Brown said. “I say ‘Amen to that, man! Amen to that, brother! We’re there with you.”

Sandbrook said statements like this are good to hear. But he concedes that getting an infrastructure plan through Congress still won’t be a slam dunk. It will take time.

“I am optimistic that things will get done. There will be tax reform. There will be increased infrastructure spending. There will be regulatory reform,” he said. “I am not worried about them not taking place.”

“But how long will it take to enact and what is the final scope? That’s still up in the air. But there will be changes. I am certain of that,” Sandbrook added.

As for the wall? Sandbrook still thinks more details need to be fleshed out before he considers how his company could be part of any construction plans. U.S. Concrete sells its products to big builders. It’s a subcontractor.

And even though a wall would be a tangible symbol of more anti-immigration polices under Trump, Sandbrook still isn’t worried that there will be a big backlash from foreign companies.

Sandbrook points out that two international cement giants — Mexico’s Cemex (CX) and Swiss-based LafargeHolcim (HCMLF) — have a significant number of workers in the U.S. They conceivably could play a role in — and benefit financially from — building a wall.

“If you have a quarry or cement plant in the U.S. you have American workers,” Sandbrook said, adding that as long as the new administration encourages global giants to do business here, that should be good for the U.S. economy.

“America first means American workers. It doesn’t preclude other companies from investing in the U.S. That’s not the focus. Trump needs to be pro-worker, not anti-foreign investment,” Sandbrook said.

Published at Fri, 27 Jan 2017 18:49:09 +0000

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A 20% Mexico tariff would pay for the wall. But it would hurt Americans

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Published at Thu, 26 Jan 2017 23:19:47 +0000

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Trump talks to U.S. automakers, pushes for new American plants

by geralt from Pixabay

 

Trump talks to U.S. automakers, pushes for new American plants

 

By David Shepardson and Roberta Rampton
| WASHINGTON

U.S. President Donald Trump urged the chief executives of the Big Three U.S. automakers on Tuesday to build more cars in the country, pressing his pledge to bring jobs to America and discourage the car industry from investing in Mexico.

Trump, who has threatened to impose 35 percent tariffs on imported vehicles, opened a White House meeting with General Motors Co CEO Mary Barra, Ford Motor Co’s Mark Fields and Fiat Chrysler Automobiles NV’s Sergio Marchionne by saying he wanted to see more auto plants in the United States.

In return, the new Republican president has vowed to cut regulations and taxes to make it more attractive for businesses to operate in the United States. He promised during his campaign to be a job-creating president and stressed that message in his inaugural address last Friday.

“We have a very big push on to have auto plants and other plants – many other plants,” he told reporters at the start of the meeting. “It’s happening. It’s happening big league.”

Matt Blunt, who heads a U.S. automaker trade association and attended the meeting, told Reuters that Trump asked what his administration could do “on domestic and trade policy that would help make the United States more competitive and strengthen the ability of automakers to add production here.”

The hour-long meeting was the latest sign of Trump’s uncommon degree of intervention for a U.S. president into corporate affairs as he has repeatedly pressured automakers and other manufacturers to “buy American and hire American.”

It was the first time the heads of the big three automakers met jointly with a U.S. president since a 2011 session with Barack Obama to tout a deal to nearly double fuel efficiency standards by 2025. Automakers have urged the Trump administration to rethink those aggressive mandates.

The auto executives on Tuesday raised the issue of the fuel efficiency rules, trade policy and other regulatory matters, another person briefed on the meeting said. Marchionne told reporters afterward that Trump did not give them specifics on what regulations he would cut.

The companies also discussed autonomous and electric vehicles and Trump asked about advanced vehicles, the person said.

 

EXCESS CAPACITY

With flattening U.S. auto sales and excess capacity in the United States, U.S. automakers have been reluctant to open new U.S. auto plants in recent years. GM and Ford last built new U.S. assembly plants in 2004, while Fiat Chrysler opened a new transmission plant in Indiana in 2014.

Kristin Dziczek, an analyst at the Michigan-based Center for Automotive Research, said automakers still had excess capacity in North America after suffering in the 1990s and 2000s from overcapacity and shifts in market share.

Building a new plant would take three or more years and cost at least $1 billion, industry experts said.

Automakers have expanded operations at existing U.S. plants to meet rising demand for trucks and SUVs. GM, Ford, Fiat Chrysler and foreign automakers have announced new U.S. jobs and investments in recent weeks.

Coinciding with Tuesday’s meeting, Toyota Motor Corp said it would add 400 jobs and invest $600 million in an Indiana plant, aiming to boost production of a popular SUV by 10 percent.

 

Ford’s Fields said automakers wanted to work with Trump to create a “renaissance in American manufacturing” and that Trump’s economic priorities were encouraging, including his move on Monday to formally bow out of the 12-nation Trans-Pacific Partnership trade pact championed by Obama.

“The mother of all trade barriers is currency manipulation. And TPP failed in meaningfully dealing with that, and we appreciate the president’s courage to walk away from a bad trade deal,” Fields told reporters after the meeting.

Barra said there was a “huge opportunity” to work together with the government to “improve the environment, improve safety and improve the jobs creation.”

U.S. automakers have collectively added more than 78,000 jobs since 2009, the year when GM and Chrysler, now a unit of Italian-American Fiat Chrysler, filed for bankruptcy as part of government bailouts during the U.S. recession. They have invested more than $40 billion in U.S. facilities during that period.

 

BUSINESS CASE

Despite the vocal pressure from Trump, the companies are unlikely to truly change their existing business plans for now, said Sam Fiorani, vice president of global vehicle forecasting with AutoForecast Solutions.

“We need to have more concrete policies from the president,” he said. “Automakers will make decisions on whether there is a solid business case. Does it make more sense to build outside the U.S. or to build in the U.S.?”

GM said in 2014 it would invest $5 billion in Mexico through 2018, a move that would allow it to double its production capacity, and Barra has said the automaker is not reconsidering the plan.

While automakers are adding U.S. jobs, they are also cutting U.S. production of small cars. On Monday, GM ended two shifts of production of small cars in Ohio and Michigan, cutting about 2,000 jobs.

Barclays auto analyst Brian Johnson said in a note on Tuesday that “automakers will be willing to make a deal that would bring back jobs to the U.S. in return for a slower ramp of (fuel efficiency) targets and related state-level mandates.”Auto stocks rose on Tuesday. U.S.-listed shares of Fiat Chrysler gained 5.84 percent to $10.88, while Ford was up 2.44 percent to $12.61 and GM rose 0.96 percent to $37.

(Additional reporting by Susan Heavey and Bernie Woodall; Editing by Frances Kerry and Peter Cooney)
Published at Tue, 24 Jan 2017 23:24:16 +0000

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Wilbur Ross pledges not to intimidate climate scientists

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Wilbur Ross in 75 seconds

Wilbur Ross pledges not to intimidate climate scientists

  @mattmegan5

The “King of Bankruptcy” just got a step closer to becoming America’s next commerce secretary. But Wilbur Ross first had to promise not to censor or intimidate climate scientists.

A U.S. Senate committee unanimously voted in favor of Ross’s nomination on Tuesday, paving the way for a vote by the full Senate. Once confirmed, the famed investor known for buying distressed companies is expected to help quarterback President Trump’s muscular trade agenda.

But Ross would also have influence over a key scientific agency housed within the Commerce Department: the National Oceanic and Atmospheric Administration. Better known as NOAA, the agency controls the National Weather Service and conducts research on matters such as the rising sea level that scientists blame on global warming.

Senator Bill Nelson, the ranking Democrat on the Senate Commerce Committee, wrote Ross a letter asking him to “safeguard the department’s scientists from political interference, intimidation and censorship.”

Ross responded in a letter on Monday night that emphasized he believes “science should be left to scientists.”

“Barring some national security concern, I see no valid reason to keep peer reviewed research from the public,” Ross wrote. He added, “To be clear, by peer review I mean scientific review and not a political filter.”

Ross said it’s his intent to make sure the Commerce Department “provides the public with as much factual and accurate data as we have available.”

He noted that public tax dollars support the scientific research and said he wants to continue to attract Nobel-prize winning scientists to the Commerce Department.

Nelson is concerned that Trump, who has said “nobody really knows” if climate change is real, could direct Ross to silence climate research.

“It’s my hope that the White House will not hamstring Mr. Ross in carrying out this pledge,” Nelson said on Tuesday.

Nelson tried to appeal to Ross’s status as a resident of Florida, which he called “ground zero for sea level rise.” He cited research showing that Florida’s rate of sea level rise has accelerated to triple the global annual average.

“It’s clear that climate change poses a grave risk to the economy and the environment of Florida and the nation,” Nelson wrote.

While Ross said that he shares “concern” about the impact of rising sea levels on coastal areas, he stopped short of blaming it on climate change.

“We put aside for now the question of what is causing these changes, and agree to focus on addressing the impact of those changes,” Ross wrote.

During his confirmation hearing, Ross used much stronger language on trade, especially to call out countries he believes are costing America jobs by cheating on trade.

The billionaire called China the “most protectionist country of very large countries” and warned that nations that don’t play by the rules should “get punished — and severely.”

If confirmed, Ross will be looked at to help Trump carry out his promise to renegotiate NAFTA. During his confirmation hearing, Ross said NAFTA is “logically the first thing for us to deal with” and will be a “very, very early topic in this administration.” He said “all aspects of NAFTA would be put on the table” and argued that trade agreements should be subject to re-opening after a few years.

The new president has already formally withdrawn from the Trans-Pacific Partnership, a controversial trade deal with Asian nations.

Published at Tue, 24 Jan 2017 19:03:06 +0000

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John Kelly

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John Kelly

By David Floyd | Updated January 24, 2017 — 11:15 AM EST

Donald Trump’s transition team probably knew what they were doing when they tipped the press off about the likely nominee for secretary of Homeland Security, General John Francis Kelly. The date was December 7, the 75th anniversary of the Japanese attack on Pearl Harbor. Kelly, 66, was confirmed in an 88-to-11 Senate vote on Inauguration Day, January 20.

Aside from the symbolic weight of its timing, Kelly’s selection delivered a message about Trump’s priorities. Kelly was in charge of U.S. Southern Command (Southcom) from November 2012 to January 2016, giving him responsibility for much of Latin America, the Caribbean and – if not directly (Mexico is Northcom’s responsibility) – the southern border that Trump has promised to wall off. Kelly told Defense One in 2014 that drug trafficking and illicit migration networks in Latin American countries are “existential” threats to the U.S.

He has drawn a link between these issues, which were central to Trump’s campaign from its inception in June 2015, and the specter of jihadist violence, another Trump priority: “terrorist organizations could seek to leverage those same smuggling routes to move operatives with intent to cause grave harm to our citizens or even bring weapons of mass destruction into the United States,” he told the Senate Armed Forces Committee in 2015. In the same testimony he mentioned Hezbollah sympathizers’ involvement in money laundering and drug trafficking in Latin America.

While he is concerned about the dangers of an unsecured border, Kelly breaks with the president in emphasizing the economic and social forces that drive migration: “if the countries where these migrants come from have reasonable levels of violence and reasonable levels of economic opportunity, then the people won’t leave to come here.” He assigns part of the blame for instability in Latin America to “the insatiable U.S. demand for drugs” and opposes the legalization of recreational marijuana. (See also: The Economic Benefits of Legalizing Weed.)

If he is confirmed as head of Homeland Security, Kelly will be in charge of Immigration and Customs Enforcement as well as Customs and Border Protection. Other agencies that fall under Homeland Security’s umbrella include the Secret Service, the Coast Guard, the Transportation Safety Administration (TSA) and the Federal Emergency Management Agency (FEMA).

Kelly’s position at Southcom put him in charge of the troops serving at Guantánamo Bay prison, which Obama pledged in 2008 to close but remains open. In testimony to Congress in 2014, Kelly said he’d “never been prouder of any troops under my command than I am of the young military professionals who stand duty day and night at Guantánamo, serving under a microscope of public scrutiny in one of the toughest and most unforgiving military missions on the planet.” Trump has expressed support for the harsh interrogation techniques employed at Guantánamo during the George W. Bush administration, telling an audience in February 2016, “torture works.”

Kelly was born in 1950 to an Irish-Catholic family in Boston. Before the age of 16 he had hitchhiked and freight-hopped the length of the country at least once. He enlisted in the Marines in 1970 and attained the rank of four-star general before retiring in 2016. His experience with the U.S.’s military involvements over the past decade is personal, and not only because he served in Iraq: his son was killed in combat in Afghanistan in 2010.
Published at Tue, 24 Jan 2017 16:15:00 +0000

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Trump Economic Goals for Jobs and GDP

Trump Economic Goals for Jobs and GDP

by Bill McBride on 1/23/2017 03:13:00 PM

 Just noting these goals for future reference. Based on demographics, I think 2.5 million jobs per year is too high. On GDP, now that the prime working age group is increasing again (by about 0.5% per year), I’d expect some pickup in GDP growth. To average 3.5% over the next four years, we’d have to see an increase in productivity too.
• Jobs: Ten Million jobs over the next four years. “Create a dynamic booming economy that will create 25 million new jobs over the next decade.” Source.

• GDP: 3.5% real annual GDP growth. “Boost growth to 3.5 percent per year on average, with the potential to reach a 4 percent growth rate.” Source.

Read more at http://www.calculatedriskblog.com/2017/01/trump-economic-goals-for-jobs-and-gdp.html#C5MffYbKmtZdbwA4.99

by Bill McBride on 1/23/2017 03:13:00 PM
Published at Mon, 23 Jan 2017 20:13:00 +0000

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Michael Flynn

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Michael Flynn

By Phyllis Lam | January 23, 2017 — 5:34 PM EST

Michael Thomas “Mike” Flynn, who accepted Donald Trump’s appointment on November 18, 2016 to serve as the National Security Advisor, is a retired Lieutenant General of the U.S. Army and a former Director of the Defense Intelligence Agency.

One of the key national security issues facing Flynn will be working with Russia and other countries to fight Islamist terrorism. His book, “The Field of Fight: How We Can Win the Global War Against Radical Islam and Its Allies,” became a New York Times Bestseller shortly after it was published in July 2016. Other global security issues include China’s expansionist policy and rising threat from Russia, which has been suspected of hacking the 2016 U.S. presidential election. Recently, U.S. counterintelligence agents have begun investigating Flynn’s communications with Russian officials to determine if there was any law violation.

During the presidential campaign, Flynn advised Donald Trump on national security issues and was one of the most high-profile surrogates of the Republican presidential candidate. Like Trump, Flynn is a frequent user of Twitter. Via the social media platform, Flynn has interacted with alt-right members, posted Islamophobic tweets, and circulated pro-Trump comments and fake news that mostly targeted the Democratic presidential candidate Hillary Clinton.

Flynn, 57, graduated from the University of Rhode Island and completed his MBA at Golden Gate University before starting his career in the military. He completed the Advanced Military Studies Program of the School of Advanced Military Studies in 1994 and earned a master’s degree in National Security Studies, National Security Policy Studies and International Relations from the U.S. Naval War College in 2001.

In the past decade, Flynn has held numerous roles in military intelligence, including the Directors of Intelligence for the U.S. Central Command, which oversaw military efforts against the Middle East and Central and South Asia, and for the International Security Assistance Forces in charge of an allied and coalition group in Afghanistan. He also served as the advisor to the Chairman of the Joint Chiefs of Staff and for the U.S. Army intelligence unit G-2. He moved on to policy development in the Office of the Director of National Intelligence of the Executive Branch before serving as the 18th Director of the Defense Intelligence Agency from 2012 to 2014.

Flynn Intel Group, the business that Flynn has been running since October 2014, later raised concerns about his potential conflicts of interest. The company was assisting a Turkish client with lobbying efforts in the U.S. during the Trump campaign when Flynn had access to intelligence briefings, according to CNN. In a statement on November 17, 2016, Flynn told The Wall Street Journal that he would eliminate ties with his company upon serving in the Trump administration.

As a member of the Executive Office of the President, Flynn’s role as the National Security Advisor does not require Senate confirmation. Nevertheless, Democratic senators have urged the Obama administration to check the security clearance level of Flynn on suspicion that he mishandled classified intelligence.
Published at Mon, 23 Jan 2017 22:34:00 +0000

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Trump’s Foreign Policy: An Unwise Inconsistency?

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Trump’s Foreign Policy: An Unwise Inconsistency?

By: Ron Paul | Mon, Jan 23, 2017


Throughout the presidential campaign, Donald Trump’s foreign policy positions have been anything but consistent. One day we heard that NATO was obsolete and the US needs to pursue better relations with Russia. But the next time he spoke, these sensible positions were abandoned or an opposite position was taken. Trump’s inconsistent rhetoric left us wondering exactly what kind of foreign policy he would pursue if elected.

The President’s inaugural speech was no different. On the one hand it was very encouraging when he said that under his Administration the US would “seek friendship and goodwill with the nations of the world,” and that he understands the “right of all nations to put their own interests first.” He sounded even better when he said that under Trump the US would “not seek to impose our way of life on anyone, but rather to let it shine as an example. We will shine for everyone to follow.” That truly would be a first step toward peace and prosperity.

However in the very next line he promised a worldwide war against not a country, but an ideology, when he said he would, “unite the civilized world against radical Islamic terrorism, which we will eradicate from the face of the Earth.” This inconsistent and dangerous hawkishess will not defeat “radical Islamic terrorism,” but rather it will increase it. Terrorism is not a place, it is a tactic in reaction to invasion and occupation by outsiders, as Professor Robert Pape explained in his important book, Dying to Win.

The neocons repeat the lie that ISIS was formed because the US military pulled out of Iraq instead of continuing its occupation. But where was ISIS before the US attack on Iraq? Nowhere. ISIS was a reaction to the US invasion and occupation of Iraq. The same phenomenon has been repeated wherever US interventionist actions have destabilized countries and societies.

Radical Islamic terrorism is for the most part a reaction to foreign interventionism. It will never be defeated until this simple truth is understood.

We also heard reassuring reports that President Trump was planning a major shake-up of the US intelligence community. With a budget probably approaching $100 billion, the intelligence community is the secret arm of the US empire. The CIA and other US agencies subvert elections and overthrow governments overseas, while billions are spent spying on American citizens at home. Neither of these make us safer or more prosperous.

But all the talk about a major shake up at the CIA under Trump was quickly dispelled when the President visited the CIA on his first full working day in office. Did he tell them a new sheriff was in town and that they would face a major and long-overdue reform? No. He merely said he was with them “1000 percent.”

One reason Trump sounds so inconsistent in his policy positions is that he does not have a governing philosophy. He is not philosophically opposed to a US military empire so sometimes he sounds in favor of more war and sometimes he sounds like he opposes it. Will President Trump in this case be more influenced by those he has chosen to serve him in senior positions? We can hope not, judging from their hawkishness in recent Senate hearings. Trump cannot be for war and against war simultaneously. Let us hope that once the weight of the office settles on him he will understand that the prosperity he is promising can only come about through a consistently peaceful foreign policy.


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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.

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Published at Mon, 23 Jan 2017 14:33:15 +0000

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Japan’s PM says will keep seeking Trump’s understanding on TPP

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Japanese Prime Minister Shinzo Abe said on Monday he believed U.S. President Donald Trump understood the value of free trade and that he would keep pitching a multinational trade pact that Trump’s administration has vowed to exit.

“I believe President Trump understands the importance of free and fair trade, so I’d like to pursue his understanding on the strategic and economic importance of the TPP (Trans-Pacific Partnership) trade pact,” Abe told a session of parliament’s lower house.

Abe also said he wanted to strengthen the U.S.-Japan security alliance, based on mutual trust with Trump.

“When we met last time, I believed him to be trustworthy, this belief has not changed today,” Abe added, referring to his November meeting with then-president-elect Trump.

Abe also said Tokyo wanted to explain how its companies have contributed to the U.S. economy, a stance the Japanese government has adopted to try to fend off threats of a “border tax” on imports into the United States.

Japanese Chief Cabinet Secretary Yoshihide Suga said separately that Tokyo would closely monitor any impact of the new U.S. administration’s policies on its companies and that he wanted to deepen economic ties between the two countries.

Trump took office as the 45th president of the U.S. on Friday and pledged to end what he called an “American carnage” of rusted factories and crime in an inaugural address that was a populist and nationalist rallying cry.

The new Trump administration said on Friday its trade strategy to protect American jobs would start with withdrawal from the 12-nation Trans-Pacific Partnership (TPP) trade pact.

The trade deal, which the United States signed but has not ratified, was a pillar of former president Barack Obama’s pivot to Asia, and Abe has touted it as an engine of economic reform, as well as a counter-weight to a rising China.

(Reporting by Kaori Kaneko and Oliview Fabre; writing by Linda Sieg; Editing by Kim Coghill)
Published at Mon, 23 Jan 2017 09:26:46 +0000

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What Are the Duties of the US Secretary of Labor?

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What Are the Duties of the US Secretary of Labor?

By Kevin Johnston | Updated January 21, 2017 — 4:32 PM EST

The United States Department of Labor is part of the executive branch of the federal government of the United States. This Cabinet-level department has the responsibility of dealing with issues that arise concerning standards for:

  • wages and hours worked
  • occupational safety
  • re-employment services
  • unemployment insurance benefits
  • economic statistics
  • work-related rights and benefits
  • conditions in the workplace.

The Labor Department’s purpose is also to uphold, endorse and advance the well-being of United States citizens by implementing regulations and directives that impact wage earners, citizens seeking employment and retirees. (See also: What Are the Pros and Cons of Raising the Minimum Wage?)

The Department of Labor is authorized to enforce and administer over 180 federal laws and thousands of federal regulations, affecting at least 125 million wage earners and 10 million employers.

Duties of the Secretary of Labor

As the head of the Department of Labor, the Secretary of Labor seeks to improve the lives of working individuals by:

  • Overseeing and managing the functions of the Department of Labor with regard to laws affecting the workplace, unions, and issues pertaining to business-to-employee relationships
  • Enforcing current laws
  • Making recommendations for new laws
  • Enforcing safety standards for the workplace
  • Facilitating the analyzing and recording of job statistics
  • Overseeing the dispensing of unemployment compensation benefits
  • Testifying to the United States Congress on matters having to do with employment and labor
  • Generating legislation and presenting it to Congress through the President.

How Does a Person Become Secretary of Labor?

The way a person gets this position is as a candidate nominated by the President of the United States. A majority vote by the U.S. Senate must confirm the nomination. Once sworn in, the Secretary of Labor reports directly to the President.

What Experience Does the Secretary Need to Have?

The President can choose nominees for Secretary of Labor with any type of experience. For example, the person nominated may have had a background in law, economics, education, business, the military or previous government service. Though the pool of nominees tends to contain seasoned bureaucrats, the President is under no obligation to choose a Washington “insider.”

However, there is at least one restriction. It is important to note that in order to prevent any sitting members of Congress from serving in the Cabinet, there is a clause in the United States Constitution called the Ineligibility Clause. It says that no person may be a cabinet member while serving in Congress. This is part of the separation of powers enshrined in the Constitution.

How Much Does a Secretary of Labor Make?

According to the federal website federalpay.org, in 2015 outgoing Labor Secretary Thomas Perez (who was nominated by President Barack Obama) had an annual salary of $199,700.

How Long Does a Secretary Stay in Office?

Traditionally, Secretaries of Labor resign when a new President is elected and takes office. The President has the right to dismiss the Secretary at any time and appoint a replacement.

The purpose of the position of Labor Secretary is to improve the quality of life for citizens working in the United States. However, the Secretary has great leeway in determining what would improve the quality of life for citizens, and may work closely with the President in interpreting the mandate of the office of Secretary of Labor.

The Secretary may work for or against healthcare benefits in the workplace, may foster or inhibit overtime pay, and may take actions that encourage higher-paying jobs or create lower-paying jobs. In addition, the Secretary weighs in on conflicts regarding businesses regulations.

In other words, the Secretary of Labor does not enter office with an agenda that is handed down, and may in fact reverse the positions of the previous Secretary. This position is one that may create and enforce policy. (See also: Buffett “Overwhelmingly” Supports Trump Cabinet Appointees.)
Published at Sat, 21 Jan 2017 21:32:00 +0000

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Trump vows 25 million jobs, most of any president

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Moments from Pres. Trump's inaugural address
Moments from Pres. Trump’s inaugural address

Trump vows 25 million jobs, most of any president

  @byHeatherLong

President Donald Trump laid out a clear vision for the United States in his inaugural address: “Buy American and hire American.”

He calls it the “America First” doctrine.

It’s not just a slogan. The new president promises his plans will create 25 million new jobs in the next decade. It would be the most jobs created under any U.S. president ever, topping even the nearly 23 million jobs added under President Bill Clinton during the boom years of the 1990s.

“We will bring back our jobs. We will bring back our borders. We will bring back our wealth, and we will bring back our dreams,” Trump said. That line generated the most fervent applause.

It might as well be called Trump’s economic red line.

Trump has tapped into the economic anxiety so many Americans feel. While many acknowledge they are better off than they were in the worst days of the Great Recession — when 1 in 10 Americans were unemployed, and millions had lost their homes — too many still do not feel fully recovered.

For Trump, no place exemplifies the struggles of Americans than the Rust Belt. He won the election by turning many counties in Wisconsin, Michigan and Pennsylvania — key manufacturing states — from blue to red.

Trump’s manufacturing promise

“Rusted out factories are scattered like tombstones across the landscape of our nation,” Trump said. “The wealth of our middle class has been ripped from our homes and redistributed all cross the world.”

It’s true that the U.S. has lost 5 million manufacturing jobs since 2000. Almost all the 11 million jobs added under President Obama came in the service sector, which entails everything from technology and business to retail, hotels and home health aides.

While jobs came back under Obama, the pay did not rebound. Middle class incomes are still below where they were in the late 1990s. It’s why Trump spent much of his inaugural address promising, “We will make America wealthy again.”

So how will Trump deliver 25 million jobs? A lot of economists say that would be nothing short of miraculous.

Trump’s plan: the details

The only specifics he mentioned in his inaugural address were building new highways, bridges, railways and airports “all across our wonderful nation.”

Trump has outlined the rest of his plan on his website and during the campaign. In addition to infrastructure spending, he wants a massive tax cut for businesses and individuals, a rollback of regulations and renegotiating trade deals and actions, especially with China and Mexico.

Wall Street is giddy about most of these ideas (as long as his plans don’t cause a trade war). The stock market has rallied about 6% since Trump won the election.

And it’s not just Wall Street that’s optimistic: Consumer confidence is at a 9-year high. Small business confidence is the best in 12 years.

But optimism about Trumponomics now meets with economic reality. Here are the key problems Trump now faces that will make it very difficult to achieve what he vows:

Trump’s big challenges

1. America’s population is getting older and grayer. Trump hit Obama hard for having the lowest percentage of adults in the workforce since the 1970s (the so-called labor force participation rate is only 62.7%). But now it’s Trump’s problem. Revising the retiring Baby Boomer trend will be tough, especially without a lot more immigration of younger workers.

2. The robots are here. Trump spends a lot of time talking about jobs going overseas, but many jobs have also been lost to technology.

As GM auto worker Robert Sheridan told CNNMoney this week, “I see more and more robots coming. Someone used to put a spare tire in the trunk. Now a robot does it.”

Manufacturing output in the U.S. is actually at record levels. It’s just the U.S. no longer needs as many factory workers to make all those items. Economists predict what’s already happened in manufacturing is now likely to spread to the service sector as well, taking away more jobs.

3. The $19 trillion U.S. debt. America’s debt is already high. The country has spend a lot of money waging wars in the Middle East and to dig America out of the Great Recession. Trump will have a hard time doing massive tax cuts and more spending without adding an alarming amount to the debt.

Some Congressional Republicans are already balking at Trump’s plan to spend $1 trillion on infrastructure.

4. Economic growth has slowed in the U.S. and much of the world. Alongside his promise of 25 million jobs, Trump has also said he can get America growing at 4% a year again. That would be almost double what Obama achieved. The U.S. hasn’t seen consistent 4% economic growth since the tech boom of the late 1990s.

The reality is the U.S. and many other parts of the world aren’t growing nearly as fast as they once did. The best explanations are that the workforce has aged (there simply aren’t as many prime age workers) and sluggish productivity. It’s not that people aren’t working hard, it’s just that they aren’t able to make the great leaps in productivity that were happening in the 1960s through 1990s.

5. No trade war. The biggest fear CEOs, investors and experts have is that Trump will start a trade war. He has talked about putting tariffs — another word for taxes — 35% or more on goods coming from Mexico and China. Already Mexico has threatened to retaliate and China is sending strong signals to keep trade open. During the Great Depression, similar tariffs were imposed. It didn’t end well for the U.S. — or other nations.

The bottom line

Exit polls from the election indicate that Americans who voted for Trump — over 80% of them — overwhelmingly did so because they feel he can “bring change.”

Trump promised big change for the economy. Delivering on those claims will be monumental.

 CNNMoney (New York)First published January 20, 2017: 2:36 PM ET

Published at Fri, 20 Jan 2017 19:37:07 +0000

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Cognitive Dissonance

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Cognitive Dissonance

by THE MOLEJANUARY 20, 2017

I had to think long and hard about what exactly to post today without insulting at least half my readership. As you know I have kept political discussions to a minimum as a rule here at Evil Speculator. First up it’s awfully distracting and secondly it rarely has any bearing on our core activities which mainly revolve around banking coin and surviving our extended swim in the mirky shark infested waters of the U.S. financial markets.

And quite frankly there is little I could say about President-elect Trump that would most likely not immediately trigger an avalanche of emotionally charged exchanges. But – and there is always a but at Evil Speculator – there is a very important lesson that can be learned as part of our ongoing journey to become the best traders we can possibly be. So instead of talking about the man who will be inaugurated sometime today let’s take a moment to talk about everyone else. Meaning the nation of people who elected Mr. Trump as the 45th president of these United States.

Playing By The Rules

And right away I can already hear the screams insisting that the popular majority of the country did not vote for Mr. Trump. And that is absolutely true – at last count Hillary Clinton won the popular vote by roughly 2.83 million votes. But she did not win the presidential election for the very reason that the United States is not a direct democracy, in the sense of a country in which laws (and other government decisions) are made predominantly by majority vote like for example Switzerland. Yes, some lawmaking is done this way, particularly on the state and local levels, but it’s only a tiny fraction of all lawmaking. Rather we (and this lowly expat counts still counts himself as part of your proud nation) are a representative democracy, which of course is only one form of democracy. And that is a fact, whether we like it or not.

And here we are the crux of the matter. Which is the ability to accept and abide by clearly defined rules which were agreed upon before deciding to participate in whatever type of activity. It doesn’t matter if it’s a board game, a sports competition, a spelling bee contest, or a national election. All these activities have one single thing in common, which is that they are clearly defined by rules and reglations. So if you choose to engage in said activity then your acceptance as a participant is contingent on you abiding and accepting those very rules, no matter if you like them or not.

Now that does not mean that you don’t have the right to criticize those rules or even seek to change them. More specifically if you are unhappy with the United States being a representative democracy then you are free to convince your fellow citizens to join you in your quest to convert to a direct democracy. Last time I checked the constitution of the United States allows for addenda and changes. Yes, it would take time but if the majority of the country agrees with you then there is nothing preventing a democratic nation of citizens to affect constitutional changes.

Cognitive Dissonance

Wikipedia defines cognitive dissonance as the mental stress or discomfort experienced by an individual who holds two or more contradictory beliefs, ideas, or values at the same time; performs an action that is contradictory to their beliefs, ideas, or values; or is confronted by new information that conflicts with existing beliefs, ideas or values.

And obviously you already know where I’m taking this. Assume for a moment an alternate reality in which Donald Trump would have won the popular vote but Hillary Clinton would have gathered more delegate votes. Would any of the current protesters be on the street demanding for Donald Trump to be declared the legitimate president of the United States? Of course not – for the simple reason that self interest remains to be the basis of all reasoning. And the same token it’s quite possible that many Trump supporters would be on the streets of Washington D.C. right now chanting angry slogans and rejecting Hillary Clinton as ‘their’ president.

But as the old saying goes – you can’t have your cake and eat it too. Rules are rules and what would have happened in a direct democracy has little bearing to our current reality. Now you may forgive people for reacting emotionally after having supported their favorite political candidate for months or perhaps even years. A lot of money and hard work goes into even regional elections and the stakes of political power are high. However we should always remind ourselves that fairness and a system of law, among all other things, used to be part and parcel of what it meant to be an American. And it was that very aspect of our nation that many others wound up admiring as a model for the rest of the world. So ask yourself if you are truly ready to throw out the baby with the bathwater.

Of course I have seen signs of cognitive dissonance many times on the trading front as well. People routinely engage in pertinent activities but often seem to be unable to accept the final outcome. Which is a rabbit hole that goes as deep as you are able to chase it. Maybe your stop got touched overnight as a result of a widened spread, or perhaps you got a margin call which you couldn’t satisfy, or an FOMC event robbed you out of significant paper profits. Instinctively we want to blame external factors for our failure but this is exactly the very moment when we should remind ourselves that we agreed to abide by those very rules ahead of time. You may remember the stack of documents you were asked to sign when opening your trading account. Right, that one. Which, had you taken the time to read it, would have explained to you in exhausting detail all the rules and ramification as well as the financial risk to which you were about to expose yourself. And any lawyer worth his/her salt will be first to tell you: Ignorance does not give you license to skirting the rules.

Mental discipline and rational thinking is not something we are granted at birth. Some of us are more predisposed to separating our emotions from our daily decision making than others. Most of us fail constantly and have to work on it every single day of our lives. It is an arduous process that requires constant personal vigilance and mental effort. Relenting into simply following your instincts and emotions usually leads to stark long term consequences – on the political as well as on the trading front. And just because everyone around you seem to be doing it doesn’t mean so should you.

Evil Speculator Rule #134: Accept the outcome and learn from it, whether you like it or not. 
Published at Fri, 20 Jan 2017 14:36:46 +0000

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Wilbur Ross, Trump’s Commerce pick, offshored 2,700 jobs since 2004

FILE PHOTO: Republican presidential nominee Donald Trump arrives for his election night rally at the New York Hilton Midtown in Manhattan, New York, U.S., November 9, 2016. REUTERS/Andrew Kelly/File Photo – RTX2XSOB

 

Wilbur Ross, Trump’s Commerce pick, offshored 2,700 jobs since 2004

 

By Andy Sullivan
| WASHINGTON

 

Billionaire Wilbur Ross, chosen by Donald Trump to help implement the president-elect’s trade agenda, earned his fortune in part by running businesses that have offshored thousands of U.S. jobs, according to Labor Department data attained by Reuters.

As a high-stakes investor a decade ago, Ross specialized in turning around troubled manufacturing companies at a time when the U.S. economy was losing more than 100,000 jobs yearly due to global trade. A Senate confirmation hearing on his nomination to become commerce secretary is set for Wednesday.

Supporters say Ross saved thousands of U.S. jobs by rescuing firms from failure. Data attained by Reuters through a Freedom of Information Act request shows that rescue effort came at a price: textile, finance and auto-parts companies controlled by the private-equity titan eliminated about 2,700 U.S. positions since 2004 because they shipped production to other countries, according to a Labor Department program that assists workers who lose their jobs due to global trade. [For a graphic click tmsnrt.rs/2iYIJWa]

The figures, which have not previously been disclosed, amount to a small fraction of the U.S. economy, which sees employment fluctuate by the tens of thousands of jobs each month. But Ross’s track record clashes with Trump’s promise to protect American workers from the ravages of global trade.

Recently, Trump claimed credit for saving 800 jobs at a Carrier Corp. factory in Indiana, even touring the plant to shake hands with employees. He has targeted Ford Motor Co (F.N) and other automakers to keep hundreds of jobs inside the U.S. borders.

That disconnect could draw attention at his hearing, one of many scheduled this week for Cabinet nominees ahead of Trump’s Jan. 20 inauguration.

“He is not the man to be protecting American workers when he’s shipping this stuff overseas himself,” said Don Coy, who lost his job at the end of 2016 when a company Ross created – International Automotive Components Group – closed a factory in Canton, Ohio and shifted production of rubber floor mats to Mexico, eliminating the final 16 jobs in a factory that once employed 450 workers.

Ross resigned from the IAC board of directors in November 2014 and was named chairman emeritus.

Ross did not respond to several requests for comment. His offshoring activities are not unusual in an era when globalization has lowered international trade barriers. Auto-parts maker Delphi Corp., for example, has offshored 11,700 U.S. jobs since 2004, while textile makers have offshored at least 17,000 jobs since then, the Labor Department said.

As IAC shuttered its Canton plant in the final months of 2016, Ross argued on behalf of Trump that free-trade agreements hurt the United States.

“When Ford offshores new production facilities to Mexico, that both boosts the Mexican economy and reduces investment in this country,” he wrote in September in a Washington Post opinion piece penned with Peter Navarro, another Trump economic adviser who has been tapped to direct a White House trade council.

In a bid to reverse offshoring, Trump has threatened to impose “a big border tax” on automakers that choose to build cars in Mexico rather than the United States and has talked of resetting free-trade deals such as the North American Free Trade Agreement (NAFTA).

A Trump transition spokesperson said personnel decisions at Ross’s auto-parts and textile companies were driven by the need to put operations near customers and keep U.S. plants competitive, echoing arguments made by other auto industry executives who face pressure from Trump.

“Few people have done as much to defend American jobs and negotiate good deals for American workers as Wilbur Ross,” said the spokesperson, who asked not to be named.

The offshoring figures for Ross’s companies came from the Labor Department’s Trade Adjustment Assistance (TAA) program, which provides retraining benefits to some workers who lose their jobs due to outsourcing or cheap imports. The program does not cover everybody who is hurt by global trade: service-sector workers were not eligible until 2009, and those who don’t apply for the program don’t show up in its records.

Only 1.6 million factory workers qualified for TAA benefits between 2001 and 2010, a time when the United States shed 6 million manufacturing jobs.

Despite Trump’s campaign rhetoric about countries like Mexico and China taking U.S. jobs, the TAA figures show globalization has claimed fewer jobs in recent years. The program covered roughly 80,000 workers last year, down from about 340,000 in 2009. [For a graphic, click tmsnrt.rs/2iYGJgR]

 

CUTTING JOBS TO SAVE OTHERS

Ross amassed a fortune, estimated by Forbes magazine at $2.5 billion, by buying up companies in struggling industries and returning them to profitability. Labor leaders such as United Steelworkers president Leo Gerard have said that Ross over the years saved thousands of manufacturing jobs.

In one case, Ross bought two struggling North Carolina fabric makers out of bankruptcy to create International Textile Group (ITG) in 2004, as textile import quotas were being phased out. Between 2005 and 2011, the company laid off 1,268 U.S. workers as it set up operations in Mexico, China and Nicaragua, TAA records show. ITG CEO Ken Kunenberger told Reuters that those job reductions were primarily due to competition from cheap imports.

ITG now operates six U.S. plants, down from nine in 2007, according to its annual reports. Ross sold the company in October for an undisclosed sum.

Ross also created International Automotive Components Group in 2007 to buy up auto-parts makers around the world as the industry struggled with overcapacity and slowing sales. TAA filings show IAC eliminated 853 U.S. jobs because it shifted work from the United States to Mexico.

“We tried every trick in the book to get them to stay but they just weren’t interested,” said Tim Scott, who served on the city council in Carlisle, Pennsylvania when IAC decided to close its plant there in 2009, shifting work to Mexico and Tennessee.

An IAC spokesperson said the company has expanded in Mexico to be near the automakers that buy its parts, a common business strategy in the sector.

IAC has expanded its workforce in Mexico and Canada by 42 percent to 8,500 since 2008, and by 10 percent in the United States to 11,000 over the same period, spokesman David Ladd said.

In another venture, Ross combined several mortgage lenders into Homeward Residential Holdings Inc. in 2007, just as the housing market was collapsing.

Homeward laid off 596 employees in Florida and Texas and shifted their work to India in 2012, according to TAA filings. That was a sizeable portion of the company’s global workforce, which it pegged at 2,800 a few months after the layoffs were announced.

Ross sold Homeward in October 2012 for $750 million, which delivered a further return on top of $900 million in profits the company had already generated.

“Homeward has been profitable in each year of its existence,” he said in a press release.

 

(Additional reporting by Howard Schneider; Editing by Kevin Drawbaugh and Edward Tobin)
Published at Tue, 17 Jan 2017 09:02:22 +0000

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Will Trump Continue the Bush-Obama Legacy?

U.S. President-Elect Donald Trump speaks at event at Carrier HVAC plant in Indianapolis, Indiana, U.S., December 1, 2016. REUTERS/Chris Bergin

Will Trump Continue the Bush-Obama Legacy?

By: Ron Paul | Sun, Jan 15, 2017


This week, Congress passed a budget calling for increasing federal spending and adding $1.7 trillion to the national debt over the next ten years. Most so-called “fiscal conservatives” voted for this big-spending budget because it allows Congress to repeal some parts of Obamacare via “reconciliation.” As important as it is to repeal Obamacare, it does not justify increasing spending and debt.

It is disappointing, but not surprising, that the Obamacare repeal would be used to justify increasing spending. Despite sequestration’s minor (and largely phony) spending cuts, federal spending has increased every year since Republicans took control of the House of Representatives. Some will attribute this to the fact that the Republican House had to negotiate with a big-spending Democratic president — even though federal spending actually increased by a greater percentage the last time Republicans controlled the White House and Congress than it did under President Obama.

The history of massive spending increases under unified Republican control of government is likely to repeat itself. During the presidential campaign, President-elect Donald Trump came out against reducing spending on “entitlements.” He also called for a variety of spending increases, including spending one trillion dollars on infrastructure.

One positive part of the infrastructure proposals is their use of tax credits to encourage private sector investments. Hopefully this will be the first step toward returning responsibility for building and maintaining our nation’s infrastructure to the private sector.

Unfortunately, the administration appears likely to support increased federal spending on “shovel-ready” jobs. Claims that federal spending helps grow the economy rely on the fallacy of that which is not seen. While everyone sees the jobs and economic growth created by government infrastructure projects, no one sees the greater number of jobs that could have been created had the government not taken the resources out of the hands of private businesses, investors, and entrepreneurs. Despite what some conservatives seem to think, this fallacy applies equally to Republican and Democrat spending.

President-elect Trump has criticized the past two administrations’ reckless foreign policy, and he has publicly shamed the powerful Lockheed Martin company for wasting taxpayer money. Yet, he continues to support increasing the military budget and has called for increased military intervention in the Middle East.

The fact is the United States already spends too much on militarism. Not only does the United States spend more on the military than the combined military budgets of the next eight highest spending countries, but Pentagon waste exceeds the total Russian military budget.

America can no longer afford to waste trillions of dollars on a militaristic foreign policy. Donald Trump should follow-up his attacks on wasteful military spending by dramatically changing our foreign policy and working to cut the Pentagon’s bloated budget.

If the new administration and Congress increase spending, they will need the Federal Reserve to monetize the growing debt. The need for an accommodative monetary policy gives the Federal Reserve and its allies in Congress and in the deep state leverage over the administration. This leverage could be used, for example, to pressure the administration to abandon support for the Audit the Fed legislation.

Fed action can only delay the inevitable day of reckoning. Raising levels of federal spending and debt will inevitably lead to a major economic crisis. This crisis is likely to be reached when concerns over our national debt cause more countries to reject the dollar’s status as the world’s reserve currency. The only way to avoid this crisis is to stop increasing spending and instead begin reducing spending on all aspects of the welfare-warfare state.


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


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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.

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Published at Sun, 15 Jan 2017 22:01:44 +0000

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Davos elites struggle for answers as Trump era dawns

by PeteLinforth from Pixabay

Davos elites struggle for answers as Trump era dawns

By Noah Barkin

DAVOS, Switzerland – The global economy is in better shape than it’s been in years. Stock markets are booming, oil prices are on the rise again and the risks of a rapid economic slowdown in China, a major source of concern a year ago, have eased.

And yet, as political leaders, CEOs and top bankers make their annual trek up the Swiss Alps to the World Economic Forum in Davos, the mood is anything but celebratory.

Beneath the veneer of optimism over the economic outlook lurks acute anxiety about an increasingly toxic political climate and a deep sense of uncertainty surrounding the U.S. presidency of Donald Trump, who will be inaugurated on the final day of the forum.

Last year, the consensus here was that Trump had no chance of being elected. His victory, less than half a year after Britain voted to leave the European Union, was a slap at the principles that elites in Davos have long held dear, from globalization and free trade to multilateralism.

Trump is the poster child for a new strain of populism that is spreading across the developed world and threatening the post-war liberal democratic order. With elections looming in the Netherlands, France, Germany, and possibly Italy, this year, the nervousness among Davos attendees is palpable.

“Regardless of how you view Trump and his positions, his election has led to a deep, deep sense of uncertainty and that will cast a long shadow over Davos,” said Jean-Marie Guehenno, CEO of International Crisis Group, a conflict resolution think-tank.

Moises Naim of the Carnegie Endowment for International Peace was even more blunt: “There is a consensus that something huge is going on, global and in many respects unprecedented. But we don’t know what the causes are, nor how to deal with it.”

The titles of the discussion panels at the WEF, which runs from Jan. 17-20, evoke the unsettling new landscape. Among them are “Squeezed and Angry: How to Fix the Middle Class Crisis”, “Politics of Fear or Rebellion of the Forgotten?”, “Tolerance at the Tipping Point?” and “The Post-EU Era”.

The list of leaders attending this year is also telling. The star attraction will be Xi Jinping, the first Chinese president ever to attend Davos. His presence is being seen as a sign of Beijing’s growing weight in the world at a time when Trump is promising a more insular, “America first” approach and Europe is pre-occupied with its own troubles, from Brexit to terrorism.

British Prime Minister Theresa May, who has the thorny task of taking her country out of the EU, will also be there. But Germany’s Angela Merkel, a Davos regular whose reputation for steady, principled leadership would have fit well with the WEF’s main theme of “Responsive and Responsible Leadership”, will not.

 

‘REJOICING IN THE ELEVATORS’

Perhaps the central question in Davos, a four-day affair of panel discussions, lunches and cocktail parties that delve into subjects as diverse as terrorism, artificial intelligence and wellness, is whether leaders can agree on the root causes of public anger and begin to articulate a response.

A WEF report on global risks released before Davos highlighted “diminishing public trust in institutions” and noted that rebuilding faith in the political process and leaders would be a “difficult task”.

Guy Standing, the author of several books on the new “precariat”, a class of people who lack job security and reliable earnings, believes more people are coming around to the idea that free-market capitalism needs to be overhauled, including those that have benefited most from it.

“The mainstream corporate types don’t want Trump and far-right authoritarians,” said Standing, who has been invited to Davos for the first time. “They want a sustainable global economy in which they can do business. More and more of them are sensible enough to realize that they have overreached.”

But Ian Bremmer, president of U.S.-based political risk consultancy Eurasia Group, is not so sure.

He recounted a recent trip to Goldman Sachs headquarters in New York where he saw bankers “rejoicing in the elevators” at the surge in stock markets and the prospect of tax cuts and deregulation under Trump. Both Goldman CEO Lloyd Blankfein and his JP Morgan counterpart Jamie Dimon will be in Davos.

“If you want to find people who are going to rally together and say capitalism is fundamentally broken, Davos is not the place to go,” Bremmer said.

 

PACE OF CHANGE

Suma Chakrabarti, president of the European Bank for Reconstruction and Development (EBRD), believes a “modern version of globalization” is possible but acknowledges it will take time to emerge.

“It is going to be a long haul in persuading a lot of people that there is a different approach. But you don’t have to throw the baby out with the bath water,” he told Reuters.

Still, some attendees worry that the pace of technological change and the integrated, complex nature of the global economy have made it more difficult for leaders to shape and control events, let alone reconfigure the global system.

The global financial crisis of 2008/9 and the migrant crisis of 2015/16 exposed the impotence of politicians, deepening public disillusion and pushing people towards populists who offered simple explanations and solutions.

The problem, says Ian Goldin, an expert on globalization and development at the University of Oxford, is that on many of the most important issues, from climate change to financial regulation, only multilateral cooperation can deliver results. And this is precisely what the populists reject.

“The state of global politics is worse than it’s been in a long time,” said Goldin. “At a time when we need more coordination to tackle issues like climate change and other systemic risks, we are getting more and more insular.”

(Additional reporting by Ben Hirschler; Editing by Pravin Char)
Published at Sun, 15 Jan 2017 22:06:00 +0000

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Trump says pharma ‘getting away with murder,’ stocks slide

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By Caroline Humer and Rodrigo Campos
| NEW YORK

U.S. President-elect Donald Trump on Wednesday said pharmaceutical companies are “getting away with murder” in what they charge the government for medicines, and promised that would change, sending drugs stocks sharply lower.

The benchmark S&P 500 index slipped into negative territory after his remarks at a news conference spooked investors. The Ishares Nasdaq Biotech ETF (IBB.O) dropped 4 percent at its session low and was on track for its largest daily percentage drop since late June. [nL4N1F14CH]

“When the president-elect says we’re going to negotiate drug pricing, you have to take that seriously, but at the same this is a complicated issue because there’s not going to be clarity on drug pricing reform anytime soon,” said Brad Loncar, manager of the Loncar Cancer Immunotherapy ETF (CNCR.O). “When somebody that high profile says something that negative, people do not want to invest in it.”

Trump has blasted other industries for charging the government too much, particularly defense companies, but has made only a few public statements about drug pricing since being elected. He briefly mentioned Lockheed Martin Corp (LMT.N) and Ford & Co (F.N), and United Technologies Corp (UTX.N) during the Wednesday news conference and promised a border tax for companies producing products for U.S. consumers outside the United States.

After his promise to bring down drug spending, the ARCA pharmaceutical index fell 2 percent as Pfizer Inc (PFE.N) gave up 2.6 percent and Johnson & Johnson (JNJ.N) fell 1 percent. Biotech Gilead Sciences Inc (GILD.O) fell 2.3 percent.

The drug industry has been on edge for two years about the potential for more government pressure on pricing after sharp increases in the costs of some life-saving drugs drew scrutiny in the press and among lawmakers. The government is investigating Medicaid and Medicare overspending on Mylan NV’s (MYL.O) allergy treatment EpiPen, for instance.

David Katz, chief investment officer at Matrix Asset Advisors in New York, said negative comments on drug pricing trigger selling both from algorithms and investors who suffered from share drops when Democrat Hillary Clinton campaigned against healthcare cost increases.

Options traders’ expectation for near-term volatility in shares of Health Care Select Sector SPDR Fund (XLV.P) jumped to a one-month high.

Trading volume in the healthcare fund’s options jumped to 52,000 contracts, more than twice the average daily volume, with bearish/defensive bets dominating, according to options analytics firm Trade Alert data.

Trump’s campaign platform included allowing the Medicare healthcare program to negotiate with pharmaceutical companies, which the law currently prohibits. He has also discussed making it easier to import drugs at cheaper prices.

We are going to start bidding. We are going to save billions of dollars over time,” Trump said.

Medicare, which covers more than 55 million elderly or disabled Americans, spent $325 billion on medicines in 2015.

Industry trade group Pharmaceutical Research and Manufacturers of America, or PhRMA President Stephen Ubl said “Medicines are purchased in a competitive marketplace where large, sophisticated purchasers aggressively negotiate lower prices.”

He said the industry is “committed to working with President-elect Trump and Congress to improve American competitiveness and protect American jobs.”

Daniel O’Day, CEO of Roche Pharmaceuticals, a division of Roche Holding AG(ROG.S), said in an interview on the sidelines of the JP Morgan conference that the company focuses on innovation and investing in research.

Price increases over the past several years have been “responsible” and in the range of low to mid single digits, he said.

Mylan CEO Heather Bresch said it was premature to respond to Trump’s comments, when she was asked during an investor presentation at the JP Morgan Healthcare conference in San Francisco. She said the industry should relook at how healthcare is set up as the government repeals the Affordable Care Act.

Trump said he plans to repeal the Affordable Care Act, or Obamacare, and replace it at about the same time. The news helped shares of hospitals, which are nervous about losing government payments for medical services. It hurt some health insurers, like Anthem Inc. (ANTM.N), which sell plans on the government-run health insurance exchanges.

Healthcare ETFs including the Health Care Select Sector SPDR Fund (XLV) (XLV.P) and the iShares Nasdaq Biotechnology ETF (IBB) drew their highest trading volume since Nov. 10, after the election. (GRAPHIC link here: tmsnrt.rs/2jEkkJH)

The healthcare sector .SPXHC was the largest drag on the S&P 500 .SPX and the Nasdaq 100 .NDX while all major U.S. stock indexes were lower in mid-afternoon trading on Wall Street.

(Reporting by Caroline Humer, Rodrigo Campos and Lewis Krauskopf in New York, Deena Beasley in San Francisco and Ankur Banerjee and Natalie Grover in Bengaluru; Editing by Chizu Nomiyama and David Gregorio)
Published at Wed, 11 Jan 2017 19:33:44 +0000

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Tillerson ducks Exxon climate change allegations

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Tillerson: Sanctions harm U.S. businesses 'by their design'
Tillerson: Sanctions harm U.S. businesses ‘by their design’

 Tillerson ducks Exxon climate change allegations

  @mattmegan5

Rex Tillerson just doesn’t want to talk about whether oil giant Exxon misled the public on climate change.

It was a major bone of contention during his questioning at Thursday’s confirmation hearing for secretary of state.

Exxon is currently being investigated for allegedly misleading the public about what it knew of climate change decades ago. And Tillerson led Exxon as CEO for 10 years.

Citing recent investigative journalism exposés, Democratic Senator Tim Kaine asked Tillerson whether Exxon ignored internal research going back to the 1970s on the impact of burning fossil fuels on the climate, and funded organizations that spread misinformation about the growing scientific consensus.

“Since I’m no longer with ExxonMobil, I’m in no position to answer on their behalf,” said Tillerson, who resigned as CEO at the end of 2016 to prepare for the confirmation hearings.

Noting the 42 years Tillerson spent at Exxon, Kaine asked whether Trump’s pick for secretary of state lacks the knowledge to respond — or is simply refusing to answer.

“A little of both,” Tillerson said, prompting laughs from the audience.

Kaine, Hillary Clinton’s 2016 running mate, said he had a “hard time believing” Tillerson lacked the knowledge.

Tillerson’s refusal to defend Exxon’ (XOM)climate change history stood in stark contrast with his willingness to explain other actions taken by the company he worked at for four decades.

Tillerson hearing secretary state

The back-and-forth between Tillerson and Kaine highlighted the awkwardness of Trump nominating an Exxon man who could be representing America as its key emissary on climate issues. As secretary of state, Tillerson would have the power to negotiate a U.S. exit from the Paris climate agreement and even give the controversial Keystone XL pipeline a green light.

Tillerson’s hearing was interrupted several times by outburst from protesters who urged the senators to vote against his confirmation.

While Trump has said that “nobody really knows” if climate change is real, Tillerson is not a skeptic.

During the hearing, Tillerson said he came to the conclusion years ago that “the risk of climate change does exist and the consequences could be serious enough that action should be taken.”

Asked if human activity is contributing to climate change, Tillerson said the “increase in greenhouse gas concentration in the atmosphere is having an effect.” However, he added that “our ability to predict that effect is very limited.”

Seeking to ease conflict of interest concerns, Tillerson has reached an ethics agreement that would require him to sell the $54 million in Exxon stock he owns. Exxon will also cash out Tillerson’s $181 million retirement package and put it in a trust that can’t invest in the company.

Kaine asked Tillerson if he is subject to a confidentiality agreement that continues to be enforced that would limit his ability to answer questions, such as the ones on climate change.

“To my knowledge I have no such confidentiality agreement in place, but I would have to consult with counsel,” Tillerson said.

Climate activists were quick to seize on Tillerson’s evasive answers.

“We need a secretary of state who acknowledges that the climate crisis requires bold action, not an oil industry CEO who is dedicated to spreading misinformation,” May Boeve, executive director of climate activist group 350.org, said in a statement.

During the hearing, Kaine read from a 1982 letter uncovered by Inside Climate News that was written by an Exxon scientist.

“Over the past several years a clear scientific consensus has emerged regarding the expected climatic effects of increased atmospheric CO2,” Roger Cohen, Exxon’s former director of theoretical and mathematical sciences laboratory, wrote in the letter.

Cohen noted the “consensus is that a doubling of” carbon emissions from pre-industrial revolution levels would cause a rise in temperatures that would “bring about significant changes in the earth’s climate.”

Tillerson refused to answer the questions about whether Exxon downplayed or obscured the climate research.

“The question would have to be put to ExxonMobil,” he said.

For its part, Exxon said in a statement that it rejects “long-discredited conspiracy theories that attempt to portray legitimate scientific observations and differences on policy approaches as climate denial.”

Exxon said that it provides funding to a “broad range of groups that support free market solutions.” However, the company said it discontinued funding to groups when they took “extreme positions that were distracting from the important discussions on climate policy and/or not supported by science.”

“We do not fund climate denial,” Exxon said.

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