Kerry: Migrants are Existential Threat, but to the GDP?

Even NASDAQ has confirmed: EU Warns on China Slowdown, Migration as Threats to Economic Growth

Davos, Economic Forum: Europe on the verge of collapse: Soros

Months After Welcoming 100,000 Refugees To The U.S. John Kerry Warns Migrants Pose An “Existential Threat” To Europe

Zerohedge: How quickly the official narrative changes.

Just several months ago, in October, we reported that the now-rattled largest European bank, Deutsche Bank, boosted its forecast for German 2016 GDP to 1.9% from 1.7% saying that “although the external and the financial environment have deteriorated we have lifted our 2016 GDP call… drivers are stronger real consumption growth due to lower oil prices/stronger EUR and the surge in immigration.”

Little did DB know that crashing oil and commodity prices would lead to existential concerns about its own viability manifesting in a record blow out in its subordinated DB CDS, a record plunge in its stock price and ever louder comparisons between Deutsche Bank and Lehman Brothers. As for the boost to German GDP from the influx of refugees, maybe DB had in mind the soaring pepper spray sales following the infamous Cologne New Year’s “celebration” events.

But even prior to that, on September 18, in an editorial piece the NYT wrote that “Europe Should See Refugees as a Boon, Not a Burden” and goalseeked its liberal conclusion as follows:

Many European leaders have described the refugees who are risking their lives to get to the Continent as a burden. But there is good reason to believe that these immigrants will contribute more to Europe economically than they will take from it.

 

Numerous studies have found that immigrants bolster growth by increasing the labor force and consumer demand. Rather than being a drain, immigrants generally pay more in taxes than they claim in government benefits. Even a large influx of immigrants does not mean fewer jobs for the existing population, since economies do not have a finite number of jobs. Immigrants often bring skills with them, and some start new businesses, creating jobs for others. The less skilled often take jobs that are hard to fill, like in child care, for example, which allows more parents to work.

The left-wing push for sympathy even prompted US Secretary of State to announce, just two days later that the United States would significantly increase the number of worldwide migrants it takes in over the next two years.

The U.S. will accept 85,000 refugees from around the world next year, up from 70,000, and that total would rise to 100,000 in 2017, Kerry said at news conference with German Foreign Minister Frank-Walter Steinmeier after they discussed the mass migration of Syrians fleeing their civil war.

This followed a prior commitment from the White House to accept 10,000 Syrian refugees over the coming year.

Those plans are likely dead and buried now, following the latest U-turn in U.S. policy, which brings us to evens from this weekend, when the same John Kerry, speaking at  the Munich Security Conference, praised German Chancellor Angela Merkel for showing “great courage in helping so many who need so much” and European communities who are taking in those fleeing the violence and “rejecting intolerance and racism” within their societies.

However it was here, that for the first time Kerry uttered a warning which until recently would have been branded as borderline xenophobic by the same abovementioned left-wing media, when Kerry warned that the mass influx of refugees and other migrants into Europe spells a “near existential threat” to the continent.

We are facing the gravest humanitarian crisis in Europe since World War II,” he said at the conference. “The United States understands the near existential nature of this threat to the politics and fabric of life in Europe,” he told the meeting as reported by The Local.

The core problem is well-known: Europe has been deeply split by how to handle the mass influx of people fleeing war-torn Syria, Iraq, Afghanistan and other countries. Germany has taken over 1.1 million refugees last year, while Italy and Greece have been overwhelmed as the main arrival points from the Middle East and Africa. The result is a collapse in Merkel’s until recently unshakable popularity and loud whispers that Merkel political career may not last too long if the refugee problem is not promptly addressed.

Sweden and Austria have also taken in large numbers, but many EU members, especially in the east, have been deeply reluctant to open their doors.

So what does Kerry believe now? Kerry said about the refugee influx: “We are not saying, ‘This is your problem, not ours’. This is our problem. And that is why we are joining now and enforcing a NATO mission to close off a key access route,” he said of an alliance naval surveillance mission off Turkey and Greece.” And we will join you in other ways to stem this tide because of the potential of its damage to the fabric of a united Europe,” he added.

Which is not to say he is incorrect: after all none other than the architect of Europe’s “open society” George Soros, now openly warns about the collapse of the EU if the refugee influx, something he himself has been advocating, is not fixed. Here is a brief excerpt of an interview between George Soros and Gregor Peter Schmitz of the German magazine WirtschaftsWoche.

Schmitz: You have been so involved in promoting the principles of open society and supporting democratic change in Eastern Europe. Why is there so much opposition and resentment toward refugees there?

 

Soros: Because the principles of an open society don’t have strong roots in that part of the world. Hungarian Prime Minister Viktor Orbán is promoting the principles of Hungarian and Christian identity. Combining national identity with religion is a powerful mix. And Orbán is not alone. The leader of the newly elected ruling party in Poland, Jaros?aw Kaczy?ski, is taking a similar approach. He is not as intelligent as Orbán, but he is a canny politician and he chose migration as the central issue of his campaign. Poland is one of the most ethnically and religiously homogeneous countries in Europe. A Muslim immigrant in Catholic Poland is the embodiment of the Other. Kaczy?ski was successful in painting him as the devil.

Soros’ solution? Money, of course. “My foundations do not engage only in advocacy; they seek to make a positive contribution on the ground. We established a foundation in Greece, Solidarity Now, in 2013. We could clearly foresee that Greece in its impoverished state would have difficulty taking care of the large number of refugees that are stuck there.”

Schmitz: Where would the money for your plan come from?

 

Soros: It would be impossible for the EU to finance this expenditure out of its current budget. It could, however, raise these funds by issuing long-term bonds using its largely untapped AAA borrowing capacity. The burden of servicing the bonds could be equitably distributed between member states that accept refugees and those that refuse to do so or impose special restrictions. Needless to say, that is where I remain at odds with Chancellor Merkel.

In other words, Soros advocates adding cultural diversity injury to even more debt in an already insolvent European continent – debt which hedge funds could trade and profit from when the time for yet another bailout comes – to fix a problem that would not have been there had Merkel not listened to the likes of Soros, and the NYT editorial board, whose only advocacy of liberal ideals was merely a placeholder to promote their own selfish agendas.

As for Kerry, we find it ironic that the person now warning about refugees posing “a near existential threat” to an entire continent, was just five months ago so very eager to welcome 100,000 Syrian refugees to the US. We wonder if his policy on accepting those same refugees with open arms has changed as of this moment… and who gets to profit this time?

Texas Sheriff, Immigration Truths

Texas Sheriffs, Jails on Immigration Front Line

TexasTribune: With a $6 billion budget and more than 20,000 employees, U.S. Immigration and Customs Enforcement stands poised to seize and deport immigrants — undocumented or not — who commit serious crimes in the United States.

Provided someone else catches them.

The behemoth agency at the center of the nation’s immigration enforcement efforts has no proactive way — watch lists, data mining or the like — to systematically search for dangerous undocumented immigrants, including those who have returned to the United States after being deported for committing crimes.

Instead, if an immigrant criminal is caught and thrown out of the country, the process most likely begins when a local police officer or sheriff’s deputy pulls them over for a traffic stop or arrests them as part of a criminal investigation.

The success of federal deportation policy in Texas and nationwide depends for the most part on a heads up from county sheriffs. They run the jails where people are taken when arrested and where the culling of criminal immigrants begins.

Being at the bottom of the enforcement pyramid places tremendous pressure on them — political, legal and otherwise — sheriffs say, and with federal policy increasingly targeting serious, repeat criminal offenders, their role in the process has grown.

“When some of these sheriffs talk about bringing in an undocumented, it may be one a month,” said Dallas County Sheriff Lupe Valdez. “With us, it’s several a day.”

The legal tool federal authorities use to take custody of immigrants they want is the detainer. Around in some form or fashion since the 1950s, detainers are notices sent to jails asking them to hold on to an immigrant once local authorities are done with them so federal agents can come by and get them.

In its latest incarnation, the detainer is reserved for the most serious convicted immigrant criminals. This new, narrower restriction, imposed in November 2014, has caused the number of detainers to drop. As of October 2015, the latest monthly figure available, 7,117 detainers were issued. That’s down from an all-time monthly high of 27,755 in August 2011, according to voluminous Freedom of Information Act requests made by the Transactional Records Access Clearinghouse at Syracuse University.

Texas is central to the federal agency’s deportation efforts. Nationwide, only eight jails received more than 1,000 detainer requests in the last year, according to clearinghouse data. Four were in Texas — Harris, Travis, Dallas and Hidalgo counties.

A report last year on the federal agency’s enforcement operations shows it plucked 139,368 people from the nation’s jails and prisons during the fiscal year ending Sept. 30, 2015. That accounted for about 59 percent of the total number of people ICE removed from the country that year for a variety of reasons.

Many came from Texas, screened out of state prisons or found among the approximately 71,000 people who are booked into local Texas jails each month, according to the Texas Department of Public Safety. On average, 3,724 undocumented immigrants were detained in Texas jails each month in 2015, according to a Texas Tribune analysis of immigration detainer reports from the Texas Commission on Jail Standards.

Between December 2012 and October 2015, undocumented immigrants who sat in Texas county jails cost taxpayers a total of $210.6 million, according to reports filed with the Texas Commission on Jail Standards that were released to The Texas Tribune.

In 2015, the federal government provided about $12 million to Texas to care for incarcerated undocumented immigrants. Most of that – more than $8 million – went to the Texas prison system, not jails.

Yet for all the statistics, no federal, state or local agency can claim it has a handle on the number of criminal aliens in the country, how many crimes they are responsible for and what share the system catches.

Local options

In Harris, the state’s most populous county, 135,000 inmates each year come through the jailhouse doors. It and the city of Carrollton are the only two Texas jurisdictions that contract with the federal government to have immigration agents stationed at its jail helping pinpoint criminal immigrants. Nine federal officers and nine Harris County deputies schooled in federal procedures comb booking documents and interview inmates suspected of being in the country illegally.

A guard inside the Webb County Jail in Laredo, TX, on Nov. 5, 2015.

A guard inside the Webb County Jail in Laredo, TX, on Nov. 5, 2015.

By contrast, in Brewster County, the state’s geographically largest — as in, bigger than some states — things work a bit differently. About 9,200 people live in the West Texas county, and its jail in Alpine has no official policy for handling undocumented immigrants.

How does it strive to alert federal authorities when a criminal immigrant is arrested? “We’ve got a sign on the wall,” jail administrator Lora Nussbaum told the Tribune, referring to a torn ICE flier taped on a jail wall that lists the agency’s phone number.

County jails may be the front line of efforts to keep undocumented immigrants who commit serious crimes from slipping through the cracks, but the state of Texas has no uniform method of going about that task, or measuring the scope of the problem.

To gain a better picture of crimes committed by undocumented immigrants and how counties handle them, the Tribune asked for booking data and immigration procedure policies from 26 Texas counties, including the state’s 10 most populous.

Almost none would provide it. Some, like Montgomery and Presidio counties, insisted that providing booking information, including an inmate’s date of birth, violated the inmate’s right to privacy. Harris County claimed that releasing a list of noncitizens was essentially creating new information — something the Texas Public Information Act does not require a governmental body to do.

Some counties argued that that federal law specifically prohibits releasing information about immigrants.

Attorney General Ken Paxton‘s office upheld most of the counties’ arguments, saying state open records laws don’t compel release of the information.

The Dallas County Sheriff’s Office went a step further and insisted that booking records are court records and, as such, are not subject to the state’s open records law. The attorney general’s office agreed, blocking their release.

Five counties responded to the Tribune’s request for booking data: Brewster, Nueces, Fort Bend, Travis and Tarrant. Of those, only Travis responded with enough detailed information to analyze.

“We don’t want to be in a position where somebody loses their life because of something we didn’t do that was legal for us to do.”— Maj. Wes Priddy, chief administrator for Travis County jails

The numbers show that Travis County booked about 20,000 inmates with federal immigration detainers between 2008 and 2015, facing charges that were roughly evenly divided between felonies and misdemeanors. More than 7,000 of those inmates faced drunk driving charges, the most common charge by far. That was followed by family violence-related assault charges, which about 1,900 inmates faced. An estimated 2,400 of the total inmates were repeat offenders.

Maj. Wes Priddy, chief administrator for Travis County jails, said local law enforcement’s primary concern was public safety, not investigating immigration status. But he said that part of keeping dangerous people off the streets involved close cooperation with federal authorities.

“We don’t want to be in a position where somebody loses their life because of something we didn’t do that was legal for us to do,” Priddy said.

After arresting someone, the Department of Public Safety, county sheriffs, and even the Texas Department of Criminal Justice — the nation’s largest prison system — all have to rely on the federal government to inform them who is in the United States illegally.

“What our obligation is, is to provide ICE with the population information,” said Tarrant County Sheriff Dee Anderson. “They go through it. They determine who they’re going to put a hold on and who they’re not, and our people don’t really have a way to further investigate are they truly here legally or not.”

That typically happens during the booking process, when a suspect’s fingerprints are sent to the Federal Bureau of Investigation, a procedure used for every new inmate. If the fingerprints match a profile in the federal database of non-U.S. citizens with previous criminal histories, ICE can decide to ask for a detainer. Texas jail officers do ask arrestees to name their country of birth as a part of the booking process, but an arrested immigrant’s answer is written down without being verified.

The same holds true for inmates in Texas prison. As of Nov. 30, 2015, three-fourths of the 9,135 inmates in the Texas prison system with ICE detainers were in the United States illegally. The remainder include those serving time for crimes who had legal immigration status.

“Ultimately, ICE will make the determination whether that person is in country illegally,” said Texas prisons spokesman Jason Clark. In 2010, the agency began asking for ICE help verifying those among the system’s 148,000 inmates who were illegally in the country.

But the federal tracking system of verifying what law enforcement refers to as “criminal aliens” is less than precise. It relies on someone’s fingerprints being in the system because they have been arrested before. If an undocumented immigrant has never encountered law enforcement, the federal tracking system might not notice their first arrest.

Jumbled numbers

There is no definitive data showing that undocumented immigrants commit crimes at a higher rate than the citizen population, and a few indications that in Texas they do not.

The Pew Research Center estimates undocumented immigrants comprise about seven percent of the Texas population. On average, 3,724 undocumented immigrants were detained in Texas jails each month in 2015, according to a Texas Tribune analysis of immigration detainer reports from the Texas Commission on Jail Standards.

Of the 148,000 inmates held in 100 Texas prison units, about 9,135 inmates have federal detainers asking that they be handed to federal officials when their sentences are complete. Not all were in the country illegally when arrested. Those that were illegal account for about 6 percent of the prison population.

Nationwide, almost 60 percent of immigrants who are deported had some previous criminal charges, according to 2015 numbers from ICE.

A group of undocumented Mexican nationals who were convicted of crimes in the U.S. enter Mexico at the US-Mexico border crossing at Brownsville/Matamoros after being deported from the United States on Nov 4, 2015.

A group of undocumented Mexican nationals who were convicted of crimes in the U.S. enter Mexico at the US-Mexico border crossing at Brownsville/Matamoros after being deported from the United States on Nov 4, 2015.

The Pew Center, relying on 2012 U.S. Census numbers, estimated that Texas has 1.7 million undocumented immigrants, ranking second in the nation. What portion of that 1.7 million is responsible for crimes is a tougher calculus.

Estimates from the Texas Department of Public Safety, which gets the information from jails, are considered inaccurate because there’s no uniform requirement to verify citizenship during the jail booking process.

In 2014, then-Gov. Rick Perry was criticized for relying on DPS’ first attempts to calculate the impact of crimes committed by immigrants. That year, Perry repeated the department’s claim that “criminal aliens” had committed more than 642,000 crimes in Texas since 2008. It was later revealed that “criminal aliens” referred to all foreign-born immigrants in Texas, not just those in the state illegally, and the “crimes” counted included charges, not convictions, some dating back decades.

One year later, DPS tried to clarify the numbers, but even director Steve McCraw, appearing before the Texas House Committee on State Affairs in December, tried to lower expectations about the “criminal alien statistic” his agency featured on its website.

“It’s an undercount,” McCraw testified on Dec 10. “We acknowledge it woefully undercounts the amount, but it does accurately count the ones who are in fact here and the ones who have committed crimes.”

The DPS statistics continue to confuse both the public and lawmakers.

ICE officials consider a foreign national — here legally or otherwise — a “criminal alien” if they’ve been convicted of a crime. DPS broadens the definition to include foreign nationals who have only been arrested.

“Criminal alien is a foreign national with a criminal record,” explained DPS Assistant Director Skylor Hearn, who oversees the agency’s law enforcement support division, which includes the state’s crime records. “There was probable cause to arrest them for something, and it would apply to the rest of us as well, generally speaking. If you’ve been arrested, you have a criminal record; you are not a criminal, but you have a criminal record.”

By DPS’s count, 177,060 foreign-born individuals were charged with crimes from 2011 through Jan. 31. That’s a much larger number than those foreign nationals actually convicted during the same time frame in Texas: 84,182 non-U.S. citizens. Of those, 58,128 were determined to be in the United States unlawfully.

State Rep. Cesar Blanco, D-El Paso, says the DPS numbers on “criminal aliens” are artificially pumped up by counting the number of criminal charges filed against undocumented immigrants instead of actual convictions. Charges are routinely dismissed for lack of evidence or other reasons, he noted.

But by hyping the number of charges, the agency bolsters the argument for more border security money. Last year, the Texas Legislature approved an additional $800 million for border security.

“When crime rates were higher in this state, did the legislature move this much money?” Blanco asked.

Adding to the mathematical murkiness, immigration status can be fluid. A foreign-born Texas jail inmate could be legally in the country at the time of one arrest but have an expired visa by the next arrest and be undocumented the second time around, further bedeviling Texas’ attempts at measuring unauthorized immigrants’ impact on the state’s criminal justice system.

Attempts by DPS to connect criminal aliens to their crimes also fall short.

The agency’s data, obtained by the Tribune, shows that 177,060 non-U.S. citizens arrested from 2011 through Jan. 31 were charged with 252,083 offenses during that time. This is less than what DPS reports on its own website because the agency counts crimes committed over a U.S. citizen’s lifetime, outside the five-year span.

DPS officials insist that its criminal alien counts, based on federal immigration data, are not an attempt to construe that foreign-born criminals are a greater threat than U.S. citizens.

“The department has not made that statement and does not have information to support that statement,” DPS spokeswoman Summer Blackwell said in a statement. “The Department of Public Safety believes any individual who has committed a violent crime or is party to criminal activities — no matter their citizenship status or country of origin — is considered a potential threat to public safety and the security of Texas.”

Just say no

Even when federal immigration authorities decide they want to take immigrants from the state criminal justice system into custody, there can be obstacles.

Federal records obtained by the Tribune show that in more than 18,000 cases over the past two years, local jails across the country failed to hand over deportable immigrants to federal authorities. Jurisdictions in many states, including Pennsylvania, California and Colorado, have become reluctant to honor the detainers after facing a series of lawsuits from inmates challenging the constitutional legitimacy of the extended detention.

Further information about the outcomes in cases where local officials declined to detain someone — whether those inmates, many with previous criminal histories, had been released to the public — proved difficult to come by, even in Texas, where there were only 146 such cases.

Of the 11 state jails contacted by the Tribune, only one could provide definitive answers about what had happened with declined detainers in its jurisdiction.

In Collin County north of Dallas, where agency records show two declined detainers, one for an inmate with a criminal history, a spokesman for the sheriff’s office said it “would literally be too manpower-intensive and potentially impossible to locate the reasons they were released.”

The Texas county with the most declined detainers — Travis, which had 72 instances, including 33 on inmates with a prior criminal history — referred all questions about the records to the federal government.

“I do not know how ICE came up with those numbers and we do not keep stats for ICE,” Travis County Sheriff’s office spokesman Roger Wade said in an email. “You will have to ask ICE how they arrived at those numbers and what their definition is of declining detainers.”

The federal agency itself could not verify further details about the cases. An ICE official, who lacked authorization to comment and thus spoke on condition of anonymity, said a small number of the cases could be a result of administrative errors at the federal or local level.

But beyond that, the official said it would be “resource-prohibitive” to determine what exactly happened in the individual circumstances.

Step away from the direct cost to jails to house undocumented immigrants — and the troubling lack of standardized record keeping — and there’s the added pressure of keeping up with the federal government’s ever-shifting parameters of who in local jails is eligible for deportation.

On Nov. 20, 2014, ICE’s parent, the U.S. Department of Homeland Security, discontinued a policy known as Secure Communities in favor of a new plan called the Priority Enforcement Program. Secure Communities — which targeted anyone in the United States illegally — had faced fierce pushback from local officials across the country who feared legal liability under the program.

With the new program, the federal agency decided to focus its deportation efforts on undocumented immigrants who committed the most serious crimes.

In congressional testimony and internal documents detailing the new policy’s implementation, ICE officials have stressed the importance of local cooperation. A 2015 memo from the federal immigration agency describes “expansive efforts to encourage state and local law enforcement partners” to collaborate with the agency.

The program was developed to “bring back on board those state and local jurisdictions that had concerns with, or legal obstacles to, assisting us,” said ICE Director Sarah Saldaña in July testimony before a congressional committee.

But the federal agency has opposed requiring local authorities to honor immigration detainers. Homeland Security Secretary Jeh Johnson told members of the House Judiciary Committee in July that it would a “huge setback” to mandate compliance with immigration policy.

“I do not believe that mandating through federal legislation the conduct of sheriffs and police chiefs is the way to go,” he said. “I think it will be hugely controversial. I think it will have problems with the Constitution. I want to see us work cooperatively with state and local law enforcement, and I believe they are poised to do that.”

The voluntary guidelines from federal authorities can leave local officials in a politically precarious position — often, no matter what decision they make will land them in hot water.

Jurisdictions in Democratically controlled urban areas face intense pressure from activists critical of federal immigration policy to cease any cooperation with ICE.

“Our ideal situation would be for there to be no ICE collaboration whatsoever,” said Carolina Canizales, the San Antonio-based deportation defense director of United We Dream, a national immigrant rights organization, which regularly stages protests at jails in the state, in an October interview. “I think they shouldn’t condemn thousands of undocumented immigrants for one crime that has been committed.”

At the same time, state lawmakers are on the watch for any sign that county sheriffs are failing to hold unauthorized immigrants singled out by ICE for deportation until federal ICE officers can pick them up and return them to their home country.

Take the case of Dallas County Sheriff Valdez, who throughout her time in office has most often found herself in the crosshairs of immigrant rights activists. She currently faces a lawsuit alleging her jail has held immigrants for unconstitutionally long periods of time even after they received bond.

But recently, she has become better known for the harsh public denunciation she received from Gov. Greg Abbott, who wrote her a letter saying that what he viewed as lacking enforcement of federal immigration policy posed a “serious danger to Texans.”

Abbott’s letter came after Valdez told reporters in October she would review federal detainers placed on inmates in her jail on a case-by-case basis and would not hold immigrants arrested for minor crimes for up to 48 hours for ICE officers.

Her comments seemed to mirror ICE’s changed focus on the most serious immigrant criminals — but before she had a chance to clarify, Abbott blasted her stance and threatened to cut off grants to any sheriff’s office choosing to not abide by federal immigration detainers.

Valdez said late last year that her statement was taken out of context.

“What I said was, when there’s a disagreement (over whether a jail inmate was undocumented or not) we look at it case-by-case,” Valdez told the Tribune in December. “But in this whole time we haven’t had a disagreement … The feds and I are great. ICE and I are fine.”

Strategic Implications of the Transpacific Partnership

Document: Report to Congress on Strategic Implications of the Trans-Pacific Partnership

Screen Shot 2016-02-16 at 7.15.29 AM

 

R44361

Summary

 
On October 5, 2015, Ministers of the 12 Trans Pacific Partnership (TPP) countries announced conclusion of their free trade agreement (FTA) negotiations. The agreement is one of the Obama Administration’s signature trade policy initiatives, an effort to reduce and eliminate trade and investment barriers and establish new rules and disciplines to govern trade and investment among the 12 countries. TPP proponents, including Administration officials, argue that the proposed TPP would have substantial strategic benefits for the United States in addition to its direct economic impact. They argue that the agreement would enhance overall U.S. influence in the economically dynamic Asia
Pacific region and advance U.S. leadership in setting and modernizing the rules of commerce in the region and potentially in the multilateral trading system under the World Trade Organization (WTO).
 
Congress plays a key role in the TPP. Through U.S. trade negotiating objectives established in Trade Promotion Authority (TPA) legislation and informal consultations and oversight, Congress has guided the Administration’s negotiations. Ultimately, Congress would need to pass implementing legislation if the concluded agreement is to take effect in the United States. The geo- political arguments surrounding TPP are widely debated, as are the arguments about its  potential economic impact. To some, the TPP is an important litmus test of U.S. credibility in the Asia-Pacific region. As the leading economic component of the Administration’s “strategic rebalancing” to the region, the TPP, proponents argue, would allow the United States to reaffirm existing alliances, expand U.S. soft power, spur countries to adopt a more U.S. friendly foreign  policy outlook, and enhance broader diplomatic and security relations. Many Asian policymakers  – correctly or not – could interpret a failure of TPP in the United States as a symbol of the United States’ declining interest in the region and inability to assert leadership. Some critics argue that TPP backers often do not identify specific, concrete ways that a successful deal would invigorate U.S. security partnerships in the region, and that an agreement should be considered solely for its economic impact. They maintain that past trade pacts have had a limited impact on broad foreign policy dynamics and that U.S. bilateral relations are based on each country’s broader national interests.
 
The Administration is also pursuing strategic economic goals in the TPP. Through the agreement,  proponents argue, the United States can play a leading role in “writing the rules” for commerce with key trading partners, addressing gaps in current multilateral trade rules, and setting a  precedent for future regional and bilateral FTA negotiations or multilateral trade talks at the World Trade Organization (WTO). The core of this argument is the assertion that the TPP’s  potential components – including tariff and non tariff liberalization, strong intellectual property rights and investment protections, and labor and environmental provisions – would build upon the U.S. led economic system that has expanded world trade and investment enormously since the end of World War II.
 
Although most U.S. observers agree it is in the U.S. interest to lead in establishing global and regional trade rules, less consensus exists on what those rules should be, yielding some criticism on the strength and breadth of various TPP provisions. In addition, some argue that crafting new rules through “mega regional” agreements rather than the WTO could undermine the multilateral trading system, create competing trading blocs, lead to trade diversion, and marginalize the countries not participating in regional initiatives.

The Constitutional Jurist, Scalia has Been Called Home

A man who understood every word of the U.S. Constitution and applied them in their original context. The law does not follow the mood or attitude of the country, rather the country must follow the mood and the attitude of the Constitution.

Two Texas news sources, confirmed by CBS and Fox News, report the sad news that Supreme Court Associate Justice Antonin Scalia is dead:

Scalia, 79, was a guest at the Cibolo Creek Ranch, a resort in the Big Bend region south of Marfa.

According to a report, Scalia arrived at the ranch on Friday and attended a private party with about 40 people. When he did not appear for breakfast, a person associated with the ranch went to his room and found a body.

Chief U.S. District Judge Orlando Garcia, of the Western Judicial District of Texas, was notified about the death from the U.S. Marshals Service.

U.S. District Judge Fred Biery said he was among those notified about Scalia’s death…

Texas Gov. Greg Abbott released a statement Saturday afternoon, calling Scalia a man of God, a patriot and an “unwavering defender of the written Constitution.”

“He was the solid rock who turned away so many attempts to depart from and distort the Constitution,” Abbott said. “We mourn his passing, and we pray that his successor on the Supreme Court will take his place as a champion for the written Constitution and the Rule of Law. Cecilia and I extend our deepest condolences to his family, and we will keep them in our thoughts and prayers.”

Scalia was nominated to the U.S. Supreme Court in 1986 by President Ronald Reagan.

Here is an interview our own Peter Robinson did with Justice Scalia about three years ago:

NationalLawJournal: U.S Supreme Court Justice Antonin Scalia, the intellectual leader of the court’s conservative wing, is dead at age 79. According to official reports from Texas, he died overnight at a ranch in west Texas where he had gone quail hunting.

His sudden death came as he was about to mark his thirtieth year on the court; he is the longest-serving current member. Appointed by President Ronald Reagan, Scalia is the father of nine and a former law professor.

Scalia’s death sets up a major battle over his successor. Because of Scalia’s pivotal role on the court’s right wing, Republicans could block almost any nominee put forward by President Barack Obama. Scalia once said he would never retired during the tenure of any president whose nominee would try to dismantle his jurisprudence.

Chief Justice John G. Roberts Jr. issued a statement Saturday afternoon: “On behalf of the Court and retired Justices, I am saddened to report that our colleague Justice Antonin Scalia has passed away. He was an extraordinary individual and jurist, admired and treasured by his colleagues. His passing is a great loss to the Court and the country he so loyally served. We extend our deepest condolences to his wife Maureen and his family.

Scalia was perhaps the court’s most bombastic and colorfulmember, with caustic dissents in some of the court’s most landmark decisions.

In the 2013 United States v. Windsor case, he dismissed the majority’s rationale for striking down the Defense of Marriage Act as “legal argle-bargle.” But his dissent proved prescient, forecasting the series of rulings that struck down state bans on same-sex marriage. “It is just a matter of listening and waiting for the other shoe,” Scalia wrote in his dissent.

Asked frequently about Bush v. Gore, the 2000 ruling that resolved the 2000 presidential election, Scalia would just say, “Get over it.”

Read more: http://www.nationallawjournal.com/id=1202749702587/Justice-Antonin-Scalia-Leader-of-Courts-Conservative-Wing-Dies-at-79#ixzz405lGu8O6

 

Pay Your Bills Years in Advance, Negative Interest Rate

Primer: 

The Federal Reserve System‍—‌also known as the Federal Reserve or simply as the Fed‍—‌is the central banking system of the United States. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, largely in response to a series of financial panics, particularly a severe panic in 1907. Over time, the roles and responsibilities of the Federal Reserve System have expanded, and its structure has evolved. Events such as the Great Depression in the 1930s were major factors leading to changes in the system.[10]

The U.S. Congress established three key objectives for monetary policy in the Federal Reserve Act: Maximizing employment, stabilizing prices, and moderating long-term interest rates. The first two objectives are sometimes referred to as the Federal Reserve’s dual mandate. Its duties have expanded over the years, and as of 2009 also include supervising and regulating banks, maintaining the stability of the financial system and providing financial services to depository institutions, the U.S. government, and foreign official institutions. The Fed conducts research into the economy and releases numerous publications, such as the Beige Book.

Negative 0.5% Interest Rate: Why People Are Paying to Save

When you lend somebody money, they usually have to pay you for the privilege.

NYT’s: That has been a bedrock assumption across centuries of financial history. But it is an assumption that is increasingly being tossed aside by some of the world’s central banks and bond markets.

A decade ago, negative interest rates were a theoretical curiosity that economists would discuss almost as a parlor game. Two years ago, it began showing up as an unconventional step that a few small countries considered. Now, it is the stated policy of some of the most powerful global central banks, including the European Central Bank and the Bank of Japan.

On Thursday, Sweden’s central bank lowered its bank lending rate to a negative 0.5 percent from a negative 0.35 percent, and said it could cut further still; European bank stocks were hammered partly because investors feared what negative rates could do to bank profits. The Federal Reserve chairwoman, Janet Yellen, acknowledged in congressional testimony Wednesday and Thursday that the American central bank was taking a look at the strategy, though she emphasized no such move was envisioned.

But as negative rates — in which depositors pay to hold money in bank accounts — become a more common fixture, there are many unknowns about what these policies mean for finance, for the economy and even for the definition of money.

These are some of the key questions, and, where we have them, the answers.

So how do negative interest rates work?

It depends. In the cases of interest rate targets set by central banks like the E.C.B. and Swedish Riksbank, they set a negative target rate for banks, and banks in turn pass it along to their customers. The E.C.B., for example, currently has a negative 0.3 percent rate, meaning that when banks deposit money at the central bank overnight, they pay for the privilege.

Banks have different ways of passing the negative rates on to depositors, often framed as fees for keeping money in an account, which is basically negative interest rates by another name.

Bond markets reflect these negative rates, too, including for longer-term government debt. For example, if you bought a two-year Swiss government bond on Thursday, you would have needed to pay a price that resulted in a yield of negative 1.12 percent. Even 10-year Swiss bonds have a negative rate, a sign markets expect below-zero rates to persist in Switzerland for many years to come.

Generally companies that borrow money are viewed as riskier than governments, so they have to pay higher interest rates. Therefore negative-rate corporate debt is still rare. But it has happened, including with corporate bonds issued by the Swiss food giant Nestle.

But don’t people just withdraw cash rather than pay to deposit it at their bank or buy a government bond that will give them back less than they paid?

You’d think, right? This was exactly why economists had long thought that negative interest rates were impossible. It helps explain why central banks first turned to other tools, including quantitative easing, when they saw a need to ease monetary policy despite interest rates that were already near zero.

But it looks as if the convenience of keeping money in a bank account is worth a small negative interest rate or fees for most consumers and businesses, at least at the only slightly negative rates currently in place. Storing and providing security for cash may be more expensive than a small bank charge.

When initial experiments in Switzerland and Sweden didn’t result in mass withdrawals from the banking system, larger central banks in need of easier money moved gingerly in the same direction. They’ll stop when either their economies start to grow or they see more concrete evidence that negative rates are doing more harm than good.

How is this supposed to help the economy?

Pretty much the same way it always is supposed to help the economy when a central bank cuts rates. Lower rates encourage business investment and consumer spending; increase the value of the stock market and other risky assets; lower the value of a country’s currency, making exporters more competitive; and create expectations of higher future inflation, which can induce people to spend now.

We have decades of experience with central banks trying to manage the economy by, for example, cutting bank rates to 2 percent from 3 percent when there is an economic downturn. The shift to negative rate policies is, hypothetically at least, the same, but with a starting point of rates already around zero.

So does it work?

It’s hard to say with any certainty yet. At a minimum, it seems to have an effect of lowering the value of a currency, which makes export industries very happy. It’s less clear whether it can help create sustained economic growth, particularly when the hard-to-calculate downsides are factored in.

What are those downsides?

The global financial system is built on an assumption of above-zero interest rates. Going below zero could cause damage to the very architecture by which money and credit zoom through the economy, and in turn inhibit growth.

Banks could cease to be viable businesses, eliminating a key way that money is channeled from savers to productive investments. Money market mutual funds, widely used in the United States, could well cease to exist. Insurance companies and pension funds could face their own major strains.

In a speech last year, Hervé Hannoun, then the deputy general manager of the Bank for International Settlements, even argued that this could “over time encourage the use of alternative virtual currencies, undermining the foundations of the financial system as we know it today.”

Is the Federal Reserve going to do this in the United States?

Janet Yellen doesn’t think so. But in two days of congressional testimony this week, she also didn’t rule it out.

For one thing, the United States economy, and particularly its labor market, looks to be in stronger shape than that of many others around the world. So the Fed expects to be in interest-rate raising mode this year (though exactly how fast is very much in question). But even if the economy does take a turn for the worse, there’s no certainty that negative rates are the path the Fed would take.

There is a question of whether that would even be legal. It’s not clear if the language of the Federal Reserve Act allows negative bank rates (J.P. Koning, a financial commentator, runs through the legal issues here). Ms. Yellen said in testimony this week that the legality of negative rates “remains a question that we still would need to investigate more thoroughly.”

She also said that “it isn’t just a question of legal authority.”

“It’s also a question of could the plumbing of the payment system in the United States handle it?” she said. “Is our institutional structure of our money markets compatible with it? We’ve not determined that.”

Financial markets do not now price in meaningful odds of negative rates in the United States. Want one modest clue that negative rates can’t be ruled out, though? In its annual stress test of major banks, the Fed asked the firms to figure out what would happen to their finances in a “severely adverse” scenario that included a sharp rise in unemployment and a rate of negative 0.5 percent rate on short-term Treasury bills — in other words, what you’d expect to see if there were a recession and the Fed cut rates well below zero.

Ms. Yellen noted that the rates on Treasury bills could go negative even in the absence of a policy shift by the Fed, as has happened a few times in the past.

So what are some of the weird things that could happen in a world in which negative rates become routine?

The policies in Europe and Japan are still relatively new and involve rates only slightly below zero. But if the policies become long-lasting, or negative rates go much lower, there are a lot of mind-bending ways it could affect routine transactions.

For example, would people start prepaying years’ worth of cable bills to avoid having money tied up in a money-losing bank account? How about property taxes? Would companies and governments put in place new policies prohibiting people from paying their bills too early?

Or consider this: Many commercial transactions now take place with some short-term credit attached — for example, a company that gets a 60-day grace period to pay bills from its suppliers. Would that flip, and suddenly suppliers would prohibit upfront payment and insist that their customers wait 60 days to pay?

Might new businesses sprout up that allow people to securely store thousands of dollars in bundles of $100 bills, or could people buy physical objects as stores of value that the banks can’t charge a negative interest rate on?

“Negative interest rates in Japan is blowing my mind,” said Jose Canseco, the provocative retired baseball player not normally known for his economic musings, on Twitter. And the truth is, he’s not the only one.