Aug. 15, 2019
Permission to republish original opeds and cartoons granted.
Venezuela, China and Russia — Oh My
President Trump has wisely imposed additional economic sanctions on
Venezuela which pressures the Chinese and Russians to end their financing of the
Maduro terror machine, the country hangs in the balance. While the sanctions
impact the Venezuelan oil company, Petroleos de Venezuela, American companies
which have been working in Venezuela since the 1920s developing the original
fields, have a sanctions waiver in place until October. And while the
temptation might exist in some quarters to let these waivers for U.S. oil
interests to expire, the net effect would be to hand over a turnkey oil
operation to the Chinese which would cement Maduro’s hold on power. This is why
the United States should indefinitely extend these waivers so that there is
certainty in this unstable region, allowing the hoped for Guaidó government to
hit the ground running when they gain control over the levers of power without
having to uproot entrenched Chinese interests.
Video: By falsely painting Trump as a white supremacist, are Dems inciting the next wave of political violence?
Have the leading Democratic candidates for president lost their minds? By falsely
calling President Donald Trump and his 63 million supporters white supremacists,
they have adopted the language of Antifa, proponents of which view their
political opponents as Nazis and white supremacists who should be brutalized or
even killed. How does that help the nation heal after the tragedies of El Paso
and Dayton?
No need to panic, the 10-year, 2-year treasuries spread was bound to invert eventually. But why did the Fed wait until after 2016 to hike rates?
The 10-year, 2-year treasuries spread was bound to invert eventually. It’s
been a full 12 years since the last inversion, after all, and a full 10 years
since the last recession. Is anyone really surprised? The economy is not a
perpetual motion machine. Every recession is different, and the next one may
not even hit until after the 2020 election is all over with. We’ll see. We’ve
been here before, and we’ll survive it. But with talk of negative interest
rates or policies like universal basic income in the wake of the next downturn,
what we need to make certain of is that liberty, limited government and
capitalism survive, as well.
Fox News: Anti-sex trafficking leader praises ICE, Trump: 'No question' he's done more than previous presidents
“Director and activist Jaco Booyens touted President Trump's historic work
in fighting sex trafficking and defended Immigration and Customs Enforcement
(ICE) as ‘incredible people’ who helped keep children safe. Fox News host Mark
Levin asked Booyens whether Trump did more to address the issue than other
presidents, including former President Barack Obama. ‘No question,’ Booyens
responded on ‘Life, Liberty, and Levin,’ airing Sunday. Booyens said that
despite all the criticism surrounding ICE, the agency has become a vital
partner in combatting sex trafficking.”
Venezuela, China and Russia — Oh My
By Rick Manning
The world is a complicated place.
Most people don’t associate the devastation of the Venezuela by communist leader Nicolas Maduro with China, yet Venezuelan oil lies at the heart of China’s interests and as a result, they have been propping up the murderous South American leader.
Shockingly, Venezuela has the largest known reserves of oil in the world, and in 1950 had the fourth largest Gross Domestic Product in the world and second highest GDP per capita. Venezuela’s economy was six times the size of China, and as late as 1982, they were still the largest GDP in South America. However, by 2017 Venezuela’s per capita GDP had shrunk back to levels last seen at the turn of the century, and they continue to shrink in spite of its impressive oil reserves.
In a couple of decades, the country has receded from relative affluence to scenes of desperate people eating their pets to stay alive, as Maduro’s repressive communist regime continues to destroy all capital investment in the country. With their eye on both Venezuela’s oil riches and the ability to project short-and medium range missile threats to the United States from the Caribbean country, China and Russia have been sending billions of dollars to prop up the Maduro madness.
Into this mix, earlier this year, the national legislature of Venezuela declared that Juan Guaidó was the legitimate President of Venezuela and that Maduro was a usurper and the country has had street protests supporting Guaidó. The United States has recognized Guaidó along with sixty other countries, while China and Russia recognize their puppet Maduro in the hopes of getting their hands on the Venezuelan oil reserves.
Now that President Trump has wisely imposed additional economic sanctions on Venezuela which pressures the Chinese and Russians to end their financing of the Maduro terror machine, the country hangs in the balance.
While the sanctions impact the Venezuelan oil company, Petroleos de Venezuela, American companies which have been working in Venezuela since the 1920s developing the original fields, have a sanctions waiver in place until October. These U.S. based oil companies have used their expertise and capital to keep the flagging Venezuelan oil production alive and are essential to offsetting any move by Maduro to turn over his countries oil wealth to the Chinese in exchange for capital to keep his repressive regime in power.
And while the temptation might exist in some quarters to let these waivers for U.S. oil interests to expire, the net effect would be to hand over a turnkey oil operation to the Chinese which would cement Maduro’s hold on power. This is why the United States should indefinitely extend these waivers so that there is certainty in this unstable region, allowing the hoped for Guaidó government to hit the ground running when they gain control over the levers of power without having to uproot entrenched Chinese interests.
The world is a complicated place, but one lesson that America does not need to have to re-learn is that cutting off our own noses to spite our face is never a good policy. Keeping China and Russia from having a strategic and economic foothold in what is the most oil rich nation in the world which lies less than 3,000 miles from our Gulf Coast is what ultimately matters for our national and economic security, and extending the waivers for U.S. oil companies to operate in Venezuela serves that greater interest. President Trump has wisely issued the waivers, and now he should create regional certainty in this one area by extending them indefinitely.
Rick Manning is president of Americans for Limited Government.
Video: By falsely painting Trump as a white supremacist, are Dems inciting the next wave of political violence?
To view online: https://www.youtube.com/watch?v=cKAINlDo8Mc
No need to panic, the 10-year, 2-year treasuries spread was bound to invert eventually. But why did the Fed wait until after 2016 to hike rates?
By Robert Romano
The 10-year, 2-year treasuries spread was bound to invert eventually.
It’s been a full 12 years since the last inversion, after all, and a full 10 years since the last recession. Is anyone really surprised? The economy is not a perpetual motion machine.
Still, that didn’t stop equities markets from suddenly dumping shares on the news that the 10-year, 2-year treasuries spread — the difference between the interest rates of the 10-year and 2-year treasuries that usually precedes the next recession — briefly dropped below zero, although remained positive for the rest of the day.
How long until it fully inverts is a question as it went negative overnight again but is slightly positive as of this writing, and yetlooking at the long-term chart, it won’t take much for it to go negative and then stay there for some time. We’re simply getting near the end of the business cycle.
The fact is, we’ve been sitting on the precipice for many years now. The U.S. economy is long overdue for another recession. It averages one every 5.3 years since World War II, according to data compiled by the U.S. Bureau of Economic Research. After 10 years without one, we’ve been living on borrowed time.
Now, how steep the recession, when it does happen — which on average is about 16 months after this key inversion, which would put a potential recession somewhere around the end of 2020 — is another matter entirely. Maybe a better question is, what should we be doing to prepare for it?
Of course, good luck getting politicians to discuss it rationally with political season upon us. Seeing a potential recession signal, Democrats will automatically want to pin blame on the incumbent Trump.
Republicans will urge caution and point to strong economic indicators such as the near-50-year-low unemployment rate at 3.7 percent, and that’s all well and good. After all, sometimes you get false signals.
In Jan. 2016, I would have sworn to you that we were on the cusp of another downturn (in fact, I did). Stocks were taking a hit, China was crashing, oil was down to $29 a barrel and 10-year treasuries had crashed below 2 percent in a flight to safety. By July 2016, the 10-year, 2-year spread was all the way down to 0.76 as the 10-year treasury hit 1.36 percent, the lowest it had been in decades.
In my Jan. 2016 piece, I wrote, “Heck, it’s been eight years since the last recession. Why not another one now? In that sense, you almost feel bad for the next president, considering the cyclical nature of these things. The U.S. averages a recession once every 6 to 7 years, and we’re due.”
Of course, as I noted then, it’s a crapshoot trying to predict the next downturn. Turns out the timing was wrong. At that point, the Federal Reserve had only just begun normalizing the federal funds rate from its near-zero percent levels left over from the financial crisis beginning in Dec. 2015. And just with their quarter percent uptick, markets panicked. When the Fed forestalled any more rate hikes until after the election, and after Trump won, the 10-year treasury did a swift turnaround, the stock market boomed, oil prices had recovered along with Chinese stocks, and the inversion was averted that year.
Was that politically timed until after the election? It looks that way. And in terms of timing the next recession, 2020 is a real possibility now. We can argue about what might have happened had the Fed normalized in, say, 2015 when the economy grew at 2.9 percent. We might have already experienced the next recession for all we know. I certainly thought at the time that the federal funds rate was long overdue for normalization and that the Fed had waited too long. In fact, it waited until after the election to fully hike the rates.
But it’s impossible to know the counterfactual. All we can do is see where we are now.
And right now, Former Federal Reserve Chairman Alan Greenspan is already talking up the possibility of negative interest rates. With such little wiggle room, and interest rates already quite low — rates tend to drop in recessions in a flight to safety — it seems likely the Fed could follow Japan’s lead and utilize negative interest rates in the next downturn. What will that mean for our economic system and the future of economic growth?
Interest rates are an indicator of future expected growth. If somebody as smart as Greenspan thinks they’re going negative, watch out. Not only will it hurt growth, it raises questions about incentives to lend and borrow.
Elsewhere, President Donald Trump has delayed some implementation of his additional 10 percent tariff on $300 billion of goods until Dec. 15, a three-month delay, giving China more time to consider what it wants to do on a trade agreement.
On Twitter on Aug. 14, Trump wrote, “Good things were stated on the call with China the other day. They are eating the Tariffs with the devaluation of their currency and ‘pouring’ money into their system. The American consumer is fine with or without the September date, but much good will come from the short… deferral to December. It actually helps China more than us, but will be reciprocated. Millions of jobs are being lost in China to other non-Tariffed countries. Thousands of companies are leaving. Of course China wants to make a deal. Let them work humanely with Hong Kong first!”
Also, Beijing has certainly devalued the yuan in response to the tariff threat from Trump as China experienced its slowest growth in almost three decades. And the dollar could be a little too strong relative to other currencies, something the President has been concerned about.
I’m concerned about that, too. Having a strong currency is a choice. It didn’t help during the Great Depression when the federal government stuck to the interwar gold standard while the rest of the world was abandoning it as unemployment spiked. My thinking is nobody’s talking about negative interest rates as a solution if the dollar isn’t so strong. Trump is wise to continue talks with China, because we need to resolve this issue before events shift beyond either Beijing or Washington, D.C.’s control and only bad choices are presented to us.
All these factors could very well weigh on the economy. But there’s no need to panic. Every recession is different, and the next one may not even hit until after the 2020 election is all over with. We’ll see. We’ve been here before, and I suspect we’ll survive it. But with talk of negative interest rates or policies like universal basic income in the wake of the next downturn, what we need to make certain of is that liberty, limited government and capitalism survive, as well.
Robert Romano is the Vice President of Public Policy at Americans for Limited Government.
ALG Editor’s Note: In the following featured report from Foxnews.com, director and activist Jaco Booyens praises President Donald Trump’s work to combat sex trafficking compared to prior administrations:
Anti-sex trafficking leader praises ICE, Trump: 'No question' he's done more than previous presidents
By Sam Dorman
Director and activist Jaco Booyens touted President Trump's historic work in fighting sex trafficking and defended Immigration and Customs Enforcement (ICE) as "incredible people" who helped keep children safe.
Fox News host Mark Levin asked Booyens whether Trump did more to address the issue than other presidents, including former President Barack Obama. "No question," Booyens responded on "Life, Liberty, and Levin," airing Sunday.
Booyens said that despite all the criticism surrounding ICE, the agency has become a vital partner in combatting sex trafficking.
"These are incredible men and women that help us ... incredible people who actually go and keep America's children safe. This president has empowered them to do so," he told Levin.
His movie "8 Days" tells the story of a 15-year-old girl who's forced into sex trafficking after attending a party with her friends. Booyens said the film is available on Netflix and other places.
Booyens claimed that he tried taking his story to CNN and MSNBC but faced "closed doors." "I say that not to point finger or blame, that's just a fact. This crime doesn't ask 'are you conservative or liberal?'"
Levin asked Booyens whether CNN and MSNBC were too focused on their own "ideological agenda" to cover the issue. "You want to believe they're too busy to pay attention and yes they are because they're busy with silly stuff -- accusing the president," Booyens responded.
He also argued that sex trafficking was rooted in sex addiction fueled by mass media. "It is sex addiction that in its core is fueled ... it starts with a pornographic culture, soft porn, it's the objectification of women -- which we as a country have done a great job at completely objectifying women." Specifically, Booyens said, Hollywood was to blame along with the Internet.
