Quote of the Week : “ I work for a government I despise for ends I think criminal” (John Maynard Keynes, December 17th, 1917) – This is, unfortunately, not unlike the sentiment I encounter far too often these days among much younger people who still work in the public sector at the senior management/policy-advisory level in both federal & provincial governments. Their jobs & colleagues have been politicized & they are being demeaned to the point that morale has suffered & job satisfaction is a thing of the past, by politicians whose policies are personal agenda-, rather than community best interest-, driven (although few, if any – & they are right for Keynes’ sentiment was was a bit over the top – would go as far as he did in using the word “criminal”) – small wonder that the absenteeism rate in the federal public service is 2½x, & the incidence of stress leave twice, that in the private sector (encouraged, no doubt, by what by private sector standards are overly generous sick leave provisions in their union contracts).
Obama’s first-ever visit to Israel unfortunately looks like a missed opportunity in geopolitical terms. By spending two days in Israel & just a few hours on the West Bank, and making a big deal about how important Israel was to America’s national security (is it really?), he sent a deeply negative message to the Palestinians & the rest of the Arab world in order to play to an audience back home that he really doesn’t have to please anymore. And he missed two great PR opportunities. One to address, over the head of what is now deemed the most settler-friendly Israeli government ever, to the Israelis themselves (while he made an effort to do so, he wasn’t anywhere near firm enough in doing so). And the other by traveling to the West Bank by air, rather than over its roadblock-choked roads.
Library and Archives Canada, of all places, has issued a new 23-page Code of Conduct for its staff. The drift of it can be gauged from the fact it says somewhere along the way that “As public servants, our duty of loyalty to the Government of Canada … extends beyond our work place to our personal activities.” – The choice of the word “duty” says it all. It seeks to endow “The Government” with absolute monarch-like status while, in theory at least, it is supposed to be the servant of the people. And producing this must have wasted at least one man year’s of public servants’ time &, worse still, upwards of $100,000 of tax payers’ money, to a not just useless, but potentially evil, end. One would not wish working for an employer with an attitude like this onto one’s worst enemy. But this is the Harper government’s modus operandi : some time ago it ordered scientists in its employ to limit their active involvement & participation in scientific gatherings. Small wonder that morale in the public service is lower than a snake’s belly, absenteeism high & ‘stress leave’ common.
Beppo Grillo, one of the two ‘clowns’ in Italian politics, he by profession & the other by behaviour, scandalized, & has paralyzed, it by garnering 25% voter support in last month’s elections with a basically nihilist platform. On March 14th he told the German newspaper Handelsblatt “The Northern European countries are only holding onto us until their banks have recouped their investments in Italian souvereign bonds. Then they’ll drop us like a stone”, compared former Prime Minister Mario Monti to to “a bankruptcy trustee acting on behalf of the banks” & called his Five Star Movement “the French Revolution – without the guillotine.” His success is evidence of growing chasms developing Eurozone-wide that increasingly pit “North” against “South”, probity against profligacy, the work ethic-driven against the shirkers, & the young against the old, and, at the national level, the better-off regions against the rest (meanwhile, more generally speaking, in global replay of the Titanic episode almost exactly 101 years ago & the pre-WW I mood generally, the band plays on & those in charge, plumed & feathered, dance to its music, willingly oblivious to the rising waters around them). Meanwhile, Italian politics is at a standstill, as no viable coalition government has emerged as yet but everyone wants to avoid another election for fear that Beppo would get even more support. It may be relevant in this context to note that in a survey conducted earlier this month on the occasion of the 75th anniversary of the Anschluss (the annexation of Austria by Germany) by Der Standard, a ‘social liberal’ newspaper with a 5% total-, but 20% college-educated, reader market share in Austria, 42% of the 502 respondents said “not everything was bad under Adolf Hitler”, 54% that in a democratic election held today a Nazi party would have some success, & 61% that they supported the ideas of a “strong man” as their leader (this must have been music to the ears of Frank Stronach who left Austria as a teenager to go to Canada & became a multi billionaire, who recently, at age 80, returned to the country of his birth to found a political movement, that six months ago morphed into (an also pretty nihilist) political party to take part in the next election).
On the subject of Cyprus, the Austrian Minister of Finance, Maria Fekter, said on Monday March 18th that “the mistake can be fixed … (but) what happened last weekend has put a big dint in the trust factor”, & a senior source in the EC/IMF/ECB troika likely engaged in some ass-covering when he said that dealing with Cyprus had been even more of an exercise in frustration than with Greece since “The Greeks would try to cheat you all the time … they knew what they wanted. The Cypriots are leaving us confused.”. Moody’s view is that the loss inflicted on Cypriot bank depositors classifies as a “default” & constitutes a “significant step towards limiting or removing systemic support for bank creditors across Europe.” It is now common knowledge that the Greek banks in Cyprus were protected from losses because if they hadn’t, it would have cost the Eurogroup more money still. On Tuesday night the Cypriot parliament rejected the idea of a tax on bank depositors with not a single member voting for it, 36 rejecting it & the remaining 19 abstaining, and at last report the Cypriot Finance Minister’s attempt in Moscow to get a deal whereby Gazprom would get control of the Aphrodite gas fields offshore Cyprus discovered in 2011 by Houston, Texas-based Noble Energy in exchange for a bailout had gone nowhere.
There is a dichotomy on the Comex Gold Futures market. The traders acting for “Processors, Merchants & Users” are the least short they’ve been since late 2008 & those acting for “Managed Money” (i.e. hedge funds & other short term investors and/or speculators) the most short they’ve been since the ‘Lehman Moment’ in September 2008 (while since 2009 the hedge funds have, on average, been short 13,714 contracts, on March 5th they were short a record 67,182). Both of these in the past have often signaled turning point lows in the price of gold. And to seemingly validate this, the “Other Reportables”, who trade for their own account, are unusually long.
According to research done by Eve Ellis of the Matterhorn Group at Morgan Stanley Wealth Management Fortune 500 companies with the most women in top management had far better financial performances than those with the fewest. So now the firm is starting a “Parity Portflio” fund that will only invest in companies with at least three women on their board – money managers continually target specific niches that they hope will (temporarily at least) give them an edge. While often these fill a real need, this isn’t one of them : her research focused on women in “top management” & boards are not top management so this merely panders to the prejudices of a few biased investment illiterates. And, while on the subject of funds, most people know about, & in their choice of equity mutual funds may take into account of, their MERs. But few people are aware that these are only the visible part of a fund’s costs that they bear : what is never visible are the so-called “trading costs”, i.e. the cost of buying & selling securities. A recent study by Roger Edelen of the University of California (Davis) & others, entitled Shedding Light on “invisible” Costs : Trading Costs and Mutual Fund Performance, found that, while the average MER of a sample US equity funds was 1.19% (they are much smaller in the US than Canada where they are among the highest in the world), their trading costs averaged 1.44% – as the saying goes, ‘it is the mutual fund manager, not the poor sucker who owns the capital, that owns the yacht & drives a Mercedes’.
Another “hunger strike” record was set recently, this time in Israel, when a 53 year-old West Bank resident, Ayman Sharawneh, after having been on a ‘hunger strike’ in an Israeli jail since last July, say for 200+ days, agreed to a deal with the Israeli authorities under which he would confine himself to living 24/7/365 in Gaza for ten years – the Israelis must have desperate. For he was in one of their jails last summer when he became one of the hundreds freed in exchange for the release by Hamas of an Israeli soldier it had captured years earlier, & had been re-arrested one year ago January for breaking the terms of his release by having made contact with Hamas.
In the early morning hours of March 19th the Syrian National Council, meeting in Istanbul, elected an “interim’ Prime Minister-in-Exile. Of the four ‘front runners’ among the dozen candidates, one was a former Syrian agriculture minister & the other three recent residents of Dallas, Texas, London, Ontario, & Dubai. The ultimate winner was Ghassan Hitto, a Kurd with connections to the Muslim Brotherhood, who has spent most of his life in Texas, most recently as an IT manager in Dallas. Afterwards the chap from London told the press his bid had failed for a lack of support from the Canadian government (it hasn’t recognized the Council, with Foreign Minister John Baird questioning whether it “represents all Syrians” – Duh – if it did, there would be no civil war). Meanwhile, elsewhere in the region, Iran on March 18th launched a naval destroyer for use in the Caspian Sea (a serious bit of naval hardware for an inland sea), and the next day Syrian jets fired three rockets at a building on the Lebanese side of their border in what a State Department spokeswoman called a “significant escalation” (time for a long overdue ‘no-fly zone’, anyone?) & the day thereafter was alleged to have used chemical weapons (for the first time).
The Vice Governor of the People’s Bank of China, Yi Gang, said on March 13th that the gold component of the country’s FX reserves had remained static at 1,054 tonnes (i.e the amount it had reported in 2009), saying “We can only invest1-2 percent of the foreign exchange reserves into gold because the market is too small.” This seems like a somewhat dubious number since China produces 400+, & imports another 500+, tonnes of gold a year (i.e. it accounts for almost one-third of total global newly-mined gold output).
The number of people on welfare in Japan in December hit an all-time high of 2,151,165, up 1.8% MoM, two out of five of them aged 65 or over. And in the US the number of people on food stamps hit an all-time high of 47,791,966 on December 31st, 2012. And yet both their stock markets are hitting new highs (albeit with a difference : for the DJ Composite’s 14,500 was an all-time record, whereas 12,200 on the Nikkei was just a 4 ½-year high & a mere shadow of its all-time high of 39,000 in 1989).
Further to Japan, there is a scenario out there with potentially major geopolitical & economic implications that goes as follows. Prime Minister Abe is bound & determined to end the deflation that has plagued, & held back, the Japanese economy for three decades. So the Bank of Japan is going to have a fire sale on Yen to get the inflation rate up to 2%. More supply means a lower yen (no one is quite sure yet how much lower, but it might well be made to go a lot lower than people now generally surmise). This will make Japanese goods more, possible a lot more, competitive in global markets (depending on how much value the Yen is made to lose) , thereby increasing their competitiveness & boosting their sales abroad, and (hopefully) reinvigorating the economy in a way it hasn’t been for decades. But the pursuit of market share is a ‘zero sum game’. And among the most important export markets for both German & Japanese goods are those of the China & the US (both increasingly so for Germany as the economies of some of its main export markets in Europe are lacklustre at best). So any cheaper Yen-driven increase in Japanese exports could not only be bad for the German economy in the long run, but in the short run threaten the end of the German economic miracle, undermine its ‘bully position’ in the Eurozone & compound its problems.
Spain’s Banco Santander is said to have sold to have sold 300MM Euros-worth of troubled consumer loans to Elliott Management, a New York City-based ‘vulture fund’ at a 96% discount.
New Zealand’s central bank has been engaged in contingency planning on how best to deal with a possible bank failure (one can only wonder why). It was being pushed by Finance Minister Bill English to opt for something official referred to as Open Bank Resolution (OBR) that envisages that in such an even depositors would have their savings reduced to help fund the bank’s bailout. But in the aftermath of last weekend’s events in Cyprus, the authorities have been falling all over themselves in damage control efforts reassuring the hoi polloi that, of course, OBR would be nothing like what the troika sought to shove down th the Cypriot government’s throat – Bad timing! But have they all lost their senses?
GLEANINGS II – 504
Thursday March 28th, 2013
WHY BIG BANKS ARE RIGHT TO FEAR ELIZABETH WARREN (BW, Joshua Green)
-She, the brand-new freshman, bur now senior, Senator from Massachusetts, made a big splash at her first meeting of the Senate Finance Committee. For she went hammer & tongs after officials supposedly responsible for just fining HSBC US$1.9BN after it admitted having laundered US$881MM (which she implied might only be the tip of the iceberg) in drug money for Mexican & Columbian drug cartels (and having done so for years, even after having been warned by the regulators to quit doing so).
In one video clip she was repeatedly unable to extract an opinion from two senior officials, one an Treasury Under-Secretary of the Treasury & the other a Fed Governor, both with money laundering as part of their mandate) how big money laundering had to be before a jail term would ensue, encountering just bureaucratic bafflegab & buck passing. But she got to the heart of the matter when she said ‘you are telling me that in this country, when you get caught with an ounce of cocaine you go to jail, & if it happens more than once possibly for life, but when you get caught laundering US$881MM of dirty money, you get a fine & sleep in your own bed?” (it is worse than that; a fine is just shareholders’ money & doesn’t come out of the pockets of the doers who, even in the unlikely event they are fired, just walk off into the sunset with millions stuffed in their jeans). Warren previously was Obama’s Consumer Protection Chief, but beat Republican Scott Brown, the surprise winner in the special 2010 election to replace the late Ted Kennedy & now a news commentator for Fox News, who just announced he will return to the practice of law rather than going, in a another special election later this year, after the Senate seat vacated by John Kerry. And she is in the rather unusual position of having become, with Sen. Kerry’s resignation, the senior Senator from Massachusetts after only 28 days from taking her sea for her first term.
JPMORGAN MISLED INVESTORS (Bloomberg, Dawn Kopecki)
-The March 15th report by the Senate Permanent Subcommittee on Investigations found that CEO Jamie Dimon & others had sought to hide trading losses as they grew for three months straight, mislead investors, dodge regulators & “mischaracterize high-risk trading as hedging”, while withholding key information from its primary overseer (sometimes at Mr. Dimon’s request who “has not acknowledged that what the SCP (Synthetic Credit Portfolio) morphed into was a high-risk proprietary trading operation”. Chairman Carl Levin (D.-Mich) told reporters that, after 9 months of reviewing 90,000 documents & interviewing current & former executives, “We found a trading operation that piled risk on risk, ignored limits on risk taking, hid losses and misinformed the public”. Meanwhile, according to JPMorgan spokesman Mark Kornblau it has “repeatedly acknowledged mistakes … (and) our senior management acted in good faith and never had any intent to mislead anyone.”
Kornblau is calling the Subcommittee members who signed off on the report liars? Throughout history there have time & again be such events. And time & again the pattern is the same. When things go swimmingly, everybody knows about it, the head honcho doesn’t have the heart to “take the punchbowl away” when money pours in & nobody further down the line wants to risk his neck by yelling “the Emperor ain’t wearing no clothes”. And once it turns sour, no one, incl. Man at the top, has the common sense to act on the old market adage that “the first loss is the easiest to take” & instead resorts to hoping, almost against hope, that the market will get them back onside (which in all fairness it occasionally does; but those cases don’t maker the headlines), and all the way down the line everyone starts passing the buck as the top dog starts looking for people to throw under bus. Be that as it may, greed, stupidity & poor management have now besmirched the once beyond stellar reputation of the Morgan bank. Meanwhile, Jamie Dimon, the man on whose desk the buck stopped, still occupies the corner office & his Board abdicated its fiduciary responsibility when, two months ago it praised him for “forcefully responding to the trading loss” (he himself had allowed to evolve) & just rapped him across the knuckles with a wet noodle by cutting his pay by 50% to a US$11.5MM. And, unlike Mrs. Warren’s cocaine afficionado, he won’t spend one night in jail! – the very next day Dimon’s former CIO, Ina Drew and other current & former JPM executives spent an uncomfortable four hours in front of the Senate panel without any of its members becoming any the wiser about the inner workings of the bank, & what had really happened.
FED ORDERS BANKS TO FIX PLANNING ‘WEAKNESSES’ (Bloomberg, Micael J. Moore)
-After its now annual Comprehensive Capiatl Analysis Review (aka “stress tests”) of the capital plans of 18 major banks, it gave 14 of them a clean bill of health, rejected two (Ally, the privately-owned, Detroit-based former GMAC & NYSE-listed, Winston Salem-based BB&T Corp.) & ordered Goldman & Morgan Stanley to submit new capital plans by the end of the Third Quarter that would address “weaknesses (related to their revenue & loss projections) … significant enough to require immediate attention, even though those weaknesses do not undermine the quantitative results of the stress tests for that firm or the overall reliability of the firm’s planning process.” For in a sharp downturn, the Fed said, these firms would probably be left with Tier 1 common equity ratios of just 5.26% & 5.56% respectively, lower than that of the banks whose plans had been approved outright.
Despite, or perhaps because of, the financial gobbledegook language, one can only wonder about the contradiction between the “weaknesses … are significant enough to warrant immediate attention” (bolding added for emphasis) & giving these two banks 6½ months to get their act together (unless of course their problems are more serious than the the Fed lets on & it doesn’t want to run a red flag up the flagpole). And allowing them to ‘immediately implement dividend and (share) buyback plans’ when they are supposedly short Tier 1 common equity capital?
GEITHNER SIGNS DEAL ON BOOK ABOUT FINANCIAL CRISIS (Bloomberg, M. Jamrisko)
-Having rejoined the New York-based Council on Foreign Relations, now headed by Robert Rubin, as a Distinguished Fellow, Timothy Geithner, until the end of January Obama’s Secretary of the Treasury, has cut a deal with a Randow House unit to publish a book that would “chronicle how decisions were made during the most harrowing moments of the post-2008 financial crisis” as as a ‘guide for future policy makers’.
Once upon a time in the UK it was common practice to retain the greatest local poacher around as one’s gamekeeper; for no one better knew the ins & outs of the trade. In similar fashion Geithner may well be the ideal choice to chronicle this era. For the seeds for the financial crisis were planted by the Robert Rubin cum Larry Summers’ coterie in the Treasury (in which he was a major second tier player) that prevailed upon Bill Clinton during his hapless Monica Lewinski years to agree to repealing the Glass-Steagall Act that for 60+ years had separated US commercial & investment-banking. Then, while Rubin & Summers went on to get wealthy in the subsequent free-for-all in the financial markets (the former joined Citigroup in 1999, ‘earned’ US$126MM there in the next decade & left under a cloud in 2009 with a ‘golden handshake), Geithner became President of the New York Fed in 2003 (whose salary historically has been paid by the investment banking community). There as ex officio Vice Chairman of the FOMC he had a ringside seat as the market free-for-all morphed into the financial crisis. Then, after it hit, he collaborated with the then Treasury Secretary Hank Paulson & the then new Fed Chairman Ben Bernanke in some financial policy decisions that, with the benefit of hindsight, were sub-optimal for the nation, but great for the banks, first & foremost Paulson’s alma mater, Gold man Sachs. Finally, as Secretary of the Treasury he collaborated with Larry Summers, his old mentor at US Treasurer in the Clinton years, & then the White House Economic Adviser, to dish out more sub-optimal advice to another President who was even less of an economic & financial giant than Clinton. So while he should be encourage to write the book as a guide to future policy makes how not to do things, a case can be made that he should be prevented, in RICO-like fashion, from financially benefitting thereof.
MICHIGAN TAKES OVER DETROIT RESTRUCTRING (Reuters, Steve Neavling)
-On March 14th Michigan Gov. Rick Snyder announced the state was taking over its finances, appointing as ‘emergency manager’ an Afro-American bankruptcy expert, Kevyn Orr, with experience in the Chrysler restructuring. Michigan state law grants such people broad powers, incl. the power to recommend bankruptcy. And a law passed last December further expanded their powers & will allow him to terminate the collective bargaining agreements with the city’s 48 unions (which is being challenged as “unconstitutional” by among others & not surprisingly, one of those unions). At the news conference introducing him, Mr. Orr referred to the task ahead as “the Olympics of restructuring”, maybe not so apt a description since the silver medal in this case will be the biggest municipal bankruptcy in US history, & said that, while his contract is for 12-16 months, he hopes to do the job faster & that, if the emergency takeover is successful, “it will be one of the greatest turnarounds in U.S. history.”
-He faces a daunting task. Detroit’s population is down one-third from when it was the US’ fifth-largest city (with 700,000 remaining it now is No. 18). Over one-third of its residents are below the poverty line & unemployment, at 18.2%, is 2½ x the national rate. Only one major car assembly plant remains in the city. The city has incurred deficits for a decade, is starved for cash & has huge benefit commitments to past & present city workers. Basic services, such as street lighting & police protection, have broken down, and mismanagement & corruption are rife (Kwame Kilpatrick, its mayor for seven years ending in 2008, was just convicted on two dozen federal charges of corruption & bribery & faces 20 years in jail).
-The mayor, a former pro basketball player & steel executive, has pledged he will work with Mr. Orr & the President of the City Council he will try to do so but does “think the City Council should have a significant role in restructuring and prioritizing for the city.” But some on the City Council opposed the idea & have called on Detroiters to fight the move on the grounds the state is usurping their right to choose their own leaders. And while it the move in state court, but similar attempts in the last have always failed, December’s emergency law is about to be challenged as “unconstitutional” by a group that includes, surprise, surprise, some of the city workers’ unions.
Major US cities rarely come this close to bankruptcy. The last cases were in 1991 when Philadelphia was managed for a while by the state of Pennsylvania & in 1975 when New York City had run up huge debts & New York state had to appoint an Oversight Board.
CORPORATE CEOs : WASHINGTON CAN CREATE CONDITIONS FOR STRONG GROWTH NewsMaxMoneyNews, Dan Weil)
-A group of them said at a roundtable session at a conference in Washington recently that, while they want to see a budget agreement, and tax- & immigration reform, they don’t see it happening. Cisco CEO John Chambers claimed progress in these areas would create 15MM jobs over 7 years & make for 4% growth, and said, according to Politico, “Consistency of policy is the No. 1 takeaway.” Many CEOs said the budget is the top priority, with John Doerr of the venture capital firm Kleiner Perkins Caufield & Byers observing “What we are doing with the budget is no way to run a company, let alone a country.”
-They want to see the tax burden lightened & they want a tax holiday for their foreign profits. Steve Case, CEO of Revolution Inc. & founder of AOL, regretted that the politicians are focused on “what is separating them”, not what they have in common. Former GE CEO Jack Welch wants fewer regulations because this Administration in its first four years had proposed 1,200 new regulations, 5x as many as Bush 43, & 3½x as Clinton, in their first terms, & said that, if the government were only to give companies a break on the regulatory front, “the economy is ready to go”.
Another bunch looking for an easy solution by promoting action on someone else’s part. If really serious about wanting to change the political process, they could do so overnight by going on a political contribution makers’ strike. And at least some, if not many, of the proliferating regulations are all but necessitated by a lack of moral & ethical fibre, & of fiduciary responsibility towards society, and an excess of self-dealing by that selfsame CEO ‘class’.
WHEN TO SAY NO (NYT, Editorial)
-The State Department’s latest environmental (but not definitive) assessment of the Keystone XL pipeline is silent on whether the President should approve it. We don’t think he should. He should see through the argument that it would ensure a supply of oil from a reliable supplier. Saying NO won’t stop Canada from developing the tar sands (although it will slow its development); but it will force the building of new pipelines in Canada & thus require Canadians themselves to decide if a massive tarsands expansion is prudent. After the State Department releases a fuller review in early summer, the White House’s decision will say much about whether the President & his Secretary of State are willing to assume global leadership, & walk the walk, not just talk the talk, on climate change.
In response, the now about to be debt-ridden Alberta government spent $30,000 of taxpayers’ money on a lame half page ad in the same paper that claimed among others that the pipeline “will create 42,100 (not 42,000, or 42,200?) direct and spin-off jobs during construction … (and) an average 138,000 American spin-off jobs per year for Americans for the next 25 years”, and that Canada is an “ally with a strong environmental record”. The former is an even greater exaggeration than that in a 2010 press release by TransCanada, the line’s sponsor, which said a new study had shown it would create 13,000 jobs & a 118,000 spin-off jobs, numbers which since then have become increasingly disputed & reduced. And the latter too is a laughable claim, if not an outright misrepresentation of fact. Canada’s Environment Minister faithfully parrots Prime Minister Harper’s ‘environmental Neanderthal’ line that environrnentalists are ‘radicals bent on destroying the Canadian economy”. And while it is true that since Mr. Harper became Prime Minister Canada’s greenhouse gas emissions have declined on a total-, per capita-, & GDP-intensity basis, this was from very high levels, relatively speaking Canada has done no better than the US (which ain’t saying much), and on a per capita basis its green house gas emissions are still twice those of Japan & 3½ x those of the EU.
OBAMA NOMINATES JUSTICE OFFICIAL TO TOP LABOR SPOT (msnnews, Jim Kuhnhenn)
-Assistant Attorney-General Thomas Perez is of Puerto Rican descent & would be the second Latino Labor Secretary (Obama’s first term choice, California Congresswomen Hilda Solis was the first). Perez, like Obama, has a Harvard law degree, enjoys ‘vigorous’ support from Latino-, labour-, & civil rights groups, and since 2009 has been in charge of Justice’s Civil Rights Division (with his nomination for that position at that time confirmed by a 72-22 vote in the Senate) where he played a leading role in fighting voter ID laws in Texas & North Carolina. This nomination had been expected for weeks, is central to the President’s plans to implement a number of worker-related initiatives in the laws ruling immigration & minimum wages, and came in the wake of a report by the Justice Department Inspector-General that, while once he had given ‘incomplete testimony’ in front of the US Commission on Civil Rights, he had not intentionally misled the Commission (i.e. he hadn’t lied but just hadn’t known what he was talking about on a subject within his bailiwick?).
This was like waving a red flag at a bull. Sen. Jeff Sessions (R.-Ala.), the Republicans’ senior member on the Senate Budget Committee, called the nomination “needlessly divisive”. Things weren’t help by the fulsome praise of the President’s move by the head of the AFL-CIO, Richard Trumka, who said “At a time when our politics tilt so heavily towards corporations and the very wealthy, our country needs leaders like Tom Perez to champion the cause of ordinary working people.” And some Republicans claim that, while in Justice, he had advocated the outlawing of employers’ background checks of prospective employees as ‘racial discriminatory’ (purportedly since they would turn up the criminal convictions that blacks have 6x as often as whites).
BREAKING UP IS NOT HARD TO DO (Foreign Affairs, Hussan Haqqani)
-For decades the US has tried to change Pakistan’s strategic focus from India & Afghanistan to its own internal stability & economic development. But Pakistan just took its money & ignored the advice, with Pakistanis thinking the US is a bully that makes its aid too conditional & doesn’t appreciate that thousands of the military & security personnel havew died fighting terrorists.
-In both countries the public has no use for the other country. In 2002 a Pew poll found that for Americans Pakistan was the fifth most disliked country in the world (after Columbia, Saudi Arabia, Afghanistan & North Korea) at a time that 70% of Pakistanis disapproved of America. And in 2012 80% of Pakistanis have an unfavourable view of the US (with the overwhelming majority of them considering it an “enemy”) while a 2011 Gallup poll found it only ahead of Iran & North Korea in unpopularity.
-Given the decades-long history of failure to put their relationship on a more positive basis, it’s time to consider whether the US-Pakistan alliance is worth preserving. The US won’t accept the Pakistani military’s vision of a Pakistani pre-eminence in South Asia & of equality with India (which no amount of monetary aid will change & the relationship between thetwo countries is at a dead end (or rather a fork in the road?). A break-up would have two possible outcomes. Either Pakistan’s security elite will decide it needs the US & trim its sails, or the nation’s civilian leadership will decide that moving forward with the US will be OK. And both could lay the basis for a mutually more fruitful relationship.
The writer was US Ambassador to Pakistan from 2008 to 2011.